Joe Biden wants ‘regime change’ in Russia. Last time the US did this, the result was kleptocratic capitalism and soaring unemployment
Guy Standing
US president Joe Biden has called for ‘regime change’ in Russia, a statement that should recall previous US-led regime change crusades – in Chile, Iraq and Afghanistan, among many.
To put it mildly, these episodes have not been unmitigated successes. But the regime change initiative that deserves our scrutiny today was the United States’ most ambitious, and is the most relevant to Biden’s latest demand. This is because it concerned Russia and Ukraine themselves 30 years ago.
I witnessed what the USA, the UK and others did on the ground after the Cold War. In 1990, on behalf of the International Labour Organisation (ILO), I organised an international conference on labour policy in Moscow, which emerged as a report just as the Soviet Union was dissolving. I was then appointed director of a programme set up by the ILO to advise governments in the region on social and labour policies in what was euphemistically called the ‘transition’ from ‘communist’ to a ‘market’ economy.
Based in Budapest, for about four years I interacted with senior government ministers and officials from Russia, Ukraine and neighbouring countries. I also had numerous meetings with international economists, officials and bodies such as the World Bank, all of which were committed to their version of regime change. It was a bizarre experience. I even met the Queen, the Duke of Edinburgh and the Queen of the Netherlands, who played walk-on parts in giving a ‘respectable’ face to the expensive plans.
From the outset, I strongly opposed what was happening. I gave numerous speeches and published articles and several books to that effect. Today, I believe that the Russian invasion of Ukraine in 2022 is partly attributable to the neoliberal strategy led by the USA in that period. One way of putting it is that the US strategy failed to lay the ghost of Stalinism, and created fertile ground for its resurgence.
So what was the foreign-directed strategy? Although different proponents had variants, it enshrined a doctrine – known as ‘shock therapy’ – fostered by economists at Harvard, the London School of Economics and elsewhere.
The plan to turn Russia and Ukraine into capitalist economies was based on three premises, whose combination would turn out to be quite literally fatal.
First, it was reasoned that pro-market reforms had to be introduced very quickly, so that there would be no time for ‘socialist’ forces to regroup and block reform.
Second, a more technical premise was that priority had to be given to macro-economic policy, backed by aid conditionality to force the Russian (and Ukrainian) government to adhere to it, over and before micro-economic, or structural reform. The latter might, for instance, have involved restructuring state-owned enterprises, the establishment of market regulations, and institutions for holding people to ethical standards. But the orthodox economic view was that macro-stabilisation was a necessary prior for structural reform. This was the dominant reasoning of the International Monetary Fund.
The third premise was that the macro-economic reforms had to be introduced in a particular order: first came a removal of state price controls, then cuts to public spending, and finally privatisation of state property.
Price liberalisation came with the removal of price subsidies (except on energy). Bear in mind that production had collapsed, that strict price controls had existed for generations and that the production structure consisted of huge industrial enterprises with monopolistic characteristics, dominating whole sectors and regions.
The effect of price liberalisation was thus an extraordinary burst of hyper-inflation. While we were working in Ukraine, in one year inflation was estimated at over 10,000%, and in Russia it was estimated at over 2,300%. The impoverishment was lethal. Millions died prematurely; male life expectancy in Russia fell from 65 to 58 years, female from 74 to 68; the suicide rate jumped to over three times the high level of the USA.
In a collective state of denial, the western economic “advisers” were almost Stalinist in their zeal. Their second policy was to slash public spending, with the double objective of squeezing inflationary pressure by curbing monetary demand and weakening the state. This had the immediate consequence of intensifying the rising mortality and morbidity.
But it did something else that is still affecting the whole world today. Wages and salaries in the public sector fell so low that the state ceased to function. This created a vacuum in which the kleptocrats thrived. I recall government ministers asking for $50 bribes just so they could feed their family. They were easy prey to ruthless gangsters, who in turn were bedfellows with ex-KGB officers, such as a certain first deputy of the St Petersburg city administration, Vladimir Putin.
One cannot overemphasise the folly of the anti-state ideology at a time when what was desperately needed was the nucleus of a professional civil service, backed by a proper legal system. But all the western financial advisers wanted was full-blown capitalism, which they saw as leading to a ‘Russian Boom’, in which ‘democracy and free markets have taken root for good’.
The third plank of the shock therapy sequencing was mass privatisation. It began as a bit of a joke, with privatisation ‘shares’ being handed out like confetti. I still have a voucher somewhere, given to me by the mayor of St Petersburg. But privatisation soon became a wild-west plunder. The World Bank, USAID, the new European Bank for Reconstruction and Development (EBRD) in London and other foreign bodies allocated vast amounts to assist in speeding up the transfer to the new ‘entrepreneurs’. Over 15,000 state firms were sold off; kleptocrats became oligarchs overnight; their American and other foreign ‘advisers’ became multi-millionaires. This is when the criminality stretched across the Atlantic.
One still has to be circumspect in how one puts this. However, it was widely known that prominent economists among the western financial advisers were linked to the rising oligarchy and making millions of dollars from privatisation. Eventually, one case was brought to the Massachusetts High Court. Those involved paid hefty settlements, but were allowed to continue with their careers. Rest assured, they and others did very well.
Meanwhile, there was the awkward onset of the fourth phase of the sequencing, characterised as the ‘therapy’ after the ‘shock’.
This was touted as building a new social policy system, based on standard neoliberal lines – that is, a residual welfare state with as much privatisation as possible, beginning with pension systems and education. As some of us had argued from the outset, a universalistic social protection system should have been built before any ‘shock’ policies. Callously, implementing social policies was left to afterwards, and then only done patchily, with interminable delays.
In this period, two personal events occurred that epitomised the madness of what was happening. In 1992, I recall being invited as a ‘labour market expert’ to give a lecture to ministers of finance and ministers of education from Eastern European states, organised by the World Bank in a Dutch castle, symbolically with its own moat. There I listened while the ministers were told what policies they should be introducing if they wanted foreign loans or grants.
The other event was even more bizarre. In 1993, I was chairing a small conference in France on minimum wages and basic income policies for Eastern Europe when I received a phone call from a US ambassador inviting me to Washington to give a briefing in the State Department. After doing background checks, I accepted and found myself taken to the basement of the State Department. Sitting at a long table with a ‘minder’, I was surprised to find 12 men come in to sit on the other side. They identified themselves individually, and most said CIA. The chair of the briefing was an under-secretary of state.
I and my colleagues at the ILO were by this point conducting detailed surveys of hundreds of industrial enterprises in both Russia and Ukraine, as well as extensive household surveys covering many thousands of households in both countries. As a result, I had access to data that mapped the context and outcomes of the shock therapy doctrine.
I told the men that their policies were disastrous, that huge numbers of Russians and Ukrainians were dying as a result of ‘shock therapy’ and that, contrary to what they were reporting, real unemployment was about 25% – concealed by the fact that businesses were continuing to claim subsidies for workers who were no longer actually employed. I argued that the people with whom they were working at the political level were doomed and corrupted, and that they should focus on providing direct aid to ordinary people if a lurch to neo-fascism was to be avoided.
I argued that restructuring of enterprises and the substitution of rules of regulation and law should take precedence over macro-economic reforms and privatisation. I poured as much scorn as I could on claims being made by the World Bank and prominent economists that there was no unemployment. And I argued that it was crazy for the bank to withhold a large loan to aid the unemployed on the presumption that, as one bank report claimed, the unemployment rate was only 1%.
This was ridiculous. It was clear that the neoliberal strategy was simply creating a kleptocratic capitalism, a virulent form of rentier capitalism, whereby institutions and economic policies enable the owners of physical, financial and intellectual property to obtain more and more of the income and wealth. A new class structure emerged, with a plutocracy of oligarchs, a tiny salariat (including educated people trying to build a decent society), a lumpenised proletariat (ageing, atavistic) and a rapidly growing precariat. While the oligarchs in Ukraine were split, there were also a few Bulgarians, Romanians and others in their orbit. They all soon found they could mingle comfortably with the financial and other plutocrats in London, Wall Street and elsewhere.
Several months after the State Department meeting, I was invited back to Washington to brief the US Department of Labor. Afterwards, they gave a cocktail party, and at the back I saw two of the CIA officers who had been in the State Department briefing. I asked them what had happened after the first briefing. One said to me, conspiratorially: “Quite frankly, it went right to the top… and he doesn’t believe you.” ‘He’ referred to President Clinton.
When the 1993 Russian elections took place a few months later, the neo-Stalinist ultra-nationalist Vladimir Zhirinovsky, who advocated invasion of Ukraine, gained 23% of the vote, and the US-backed neoliberal party was reduced to a rump. I sent a one-line telegram to one of the CIA officers: “Does the State Department believe me now?” I was told later that this caused some wry amusement.
In sum, the US’s regime change strategy had generated a venal kleptocracy, and in line with that today we have globally a morally indefensible form of rentier capitalism where plutocrats are funding major political parties and politicians in their interest. It is the most unfree market economy ever conceived and it is not sufficient to see the UK as “Butler to the World”. The state is deeply corrupted, and we will not escape the quagmire until a new progressive, transformative politics emerges, one that could mobilise the precariat in all parts of the world.
The evil being perpetrated by Russia will not be defeated by military means alone. Of course, we should all admire and support the incredibly courageous Ukrainians. But it is a transformation of our own societies that must be achieved. In response to the rush towards an ecological dystopia and a grotesquely unequal and insecure existence for so many, progressives in politics must have a coherent, well-articulated strategy for dismantling rentier capitalism.
Today, neoliberalism is not the primary enemy. Today is the time for a new radicalism based on principled opposition to the global plutocracy and to the system of rentier capitalism that is based on rapacious plunder. We need a new Renaissance, to revive conviviality, commoning, republican freedom and equality. So far, in Britain and elsewhere, old-left parties are holding back that transformative vision by excessive pragmatism. However, just as nature abhors a vacuum, so does the human condition. We need a progressive revolt, one that crosses national boundaries and that is ecologically redistributive. One can see the green shoots, but must just hope there is time for them to grow.
Before the pandemic, another kind of travel ban was implemented in the US. At the end of 2017, President Trump’s Executive Order 13780 prohibited entry to nationals of Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen on the basis of protecting the US against extremist terrorism. Though this was to last 90 days, a further proclamation extended the ban indefinitely. By 2020 varying degrees of prohibition covered nationals from North Korea, Chad, Venezuela, Eritrea, Kyrgyzstan, Myanmar, Nigeria and Tanzania. Some of those not permitted to enter the US were those who already held Diversity Immigrant Visas (also known as the Green Card Lottery visas). The ban, which critics called out as anti-Muslim, was revoked in 2021.
Somewhere between these two points in time, Iranian-American artist Shirin Neshat began working on a group of works collectively titled Land of Dreams (2019–), comprising 111 black-and-white portraits, a black-and-white two-channel video and a feature film shot in colour (these last following a central character named Simin). Each of these might be looked at, or watched, separately – but they are also jigsaw pieces that, when fitted together, form a bigger picture. Neshat’s early photoworks (Unveiling, 1993, and Women of Allah, 1993–97) and videos (Turbulent, 1998, Rapture, 1999, Soliloquy, 1999, and Women Without Men, 2009) focused on providing a critical voice against the sociopolitical impacts of Islamic law on women in Iran and are informed by the artist’s experiences of returning to a home much-changed since the Iranian Revolution in 1979 (following an encounter with law enforcement officials in 1997, she has not returned). Always semiautobiographical, those early works of Neshat’s mostly reflected on her Iranian heritage alone. This latest body of work, however, might be the most representative of her status as an “American immigrant”, as she says, a position she has long held but never quite explored. In Land of Dreams she turns her lens towards what it is to live in the US as someone who is not white. Where the idea of those titular dreams (of success, money, a better life) are sold to the many, but granted to few.
Editor’s note: discussion topics include what worker self-management is, the division of labour, how to overcome rule by the professional-managerial class, whether the Towards a New Socialism model (TNS) can fulfil aspirations for worker self-management, innovation and product development, the managerial structure of a project in TNS, hiring and firing in TNS, employment, and strategic planning.
[After The Oligarchy] Hello fellow democrats, futurists, and problem-solvers, this is After The Oligarchy. Today I’m speaking with Dr. Paul Cockshott again.
Paul Cockshott is a computer engineer, Marxist economist, and author of several books, but today I’m interviewing him as co-originator with Allin Cottrell of the post-capitalist model first presented in the book Towards a New Socialism published in 1993.
This is the fourth in a series of interviews with Dr. Cockshott about Towards a New Socialism, make sure to watch the other interviews. Today we’ll be discussing some more advanced questions about Towards a New Socialism, so I recommend you read the book to understand what we’re talking about. It’s still in print and there’s free PDF available online which I’ll put in the description.
So, Paul Cockshott thank you very much for joining me again.
[Paul Cockshott] Hi.
[ATO] Today we’re going to talk about worker self-management. We’re going to talk about the relation between the centre and the periphery, or projects, in central planning and in socialism in general.
And how this started was – for viewers, to give context – is that I put a quote to Paul Cockshott from a book that was published by Robin Hahnel, who is co-originator of Participatory Economics and wrote a book called Democratic Economic Planning recently. And I read a quote which was making some criticisms of central planning on the basis that it was incompatible with worker self-management. And then we talked about that briefly, but we didn’t get a chance to go into it fully so that’s what we’re going to do now. So, since then I’ve had an interview with Robin Hahnel about this topic and Dr. Cockshott has seen that as well.
I made the same kind of preamble when talking to Robin Hahnel, just for viewers, that I’m just going to ask you to approach this with an attitude of curiosity and problem solving. That this isn’t about clinging to whatever political identities which we’ve decided that we have and trying to win a debate or score points. It’s about trying to create a better world, and in doing that to honestly look at these problems. I know that that’s how Robin Hahnel approaches this, I know that is how Paul Cockshott approaches this, and I’m just asking you, the audience, to approach it like that as well.
So, before I ask you specific questions are there any initial remarks you’d like to make in response to that interview that I did with Robin Hahnel?
[PC] I think it’ll all come up in the questions you ask.
[ATO] Okay I’d like to begin with a framing question, a general question, which is what in your view is worker self-management? Why is it important? And how is it achieved, how can it be achieved in a society?
[PC] Well it’s fundamentally a question of overcoming the division between mental and manual labour, between those who tell people what to do and those who actually do it. And that is an old basis of class hierarchy going back to the early stages of class society. And in a modern society it takes the form of less educated people being told what to do by more educated people generally. Or in some cases there may be no difference in educational level but people have a managerial authority which enables them to say what’s going to be done.
And this has the disadvantage that the ideas and initiative of people who don’t have the mark of authority and which could improve the operation of systems, whether it’s healthcare systems or industrial production systems, and their knowledge is disregarded or down-valued compared to the knowledge of those who are put in authority.
Overcoming this requires the sorts of struggles that were partially worked out during the cultural revolution in China. They didn’t end up with forms of organization that were stable to deal with that. But the issues that were being raised were relevant, and these will certainly still be a big issue in any society where you’re having radical socialist change. The issue of how do you get people who are initially educated members of the upper middle class, the professional managerial class, who have certain skills which are necessary for society but they have their own class interest. They have their interest in maintaining a higher social status, and a higher income and authority over other people. So, it’s the issue of how do you get people who are both read an expert and how do you ensure that those who may not initially ideologically support socialism will still work for the common good.
Now to the extent over time where there’s a radical improvement in educational levels and equalization of educational opportunity, that kind of issue may become less important to some extent. But given that in a market economy those with qualifications tend systematically to have a higher income and towards the upper end of that there are people who aren’t actually exploited, they’re either receiving something roughly equivalent to the labour they put in, or actually receiving part of the labour that others put in. This means that what is in the West the professional managerial class, there’s an interest in becoming a professional managerial class in a socialist economy. And they will push for the increase in their power and their authority. So, it’s basically a question of class interest. Class interest mediated through educational privilege.
[ATO] Okay let’s go into this further by moving into the next question. This is about specifically now Towards a New Socialism. In Towards a New Socialism, there’s a comprehensive plan for the production of the entire economy. And this plan is set by a planning bureau, which is overseen politically by a randomly selected body from the general population. And production is accomplished by projects, which we might think of as enterprises but they’re not exactly the same. And the projects implement the plan. So, what decisions do workers in a project have control over? And what decisions do workers in a project not have control over?
[PC] Well, let’s take an example where these social relations to an extent already exist, in terms of the production not being enterprise-based in like in the British National Health Service. In that case a hospital is equivalent to a project. Now, over time from the 1980s onwards running of hospitals was increasingly professionalized and handed over to a professional managerial elite, who are distinct from the medical staff and ancillary workers who actually provide the care.
And there was a scandal recently. You’re in Ireland, you may not have seen it. There was a scandal associated with Shrewsbury Maternity Hospital, where there was a very large number of excess neonatal deaths – or babies delivered with brain damage and other injuries. Now, in pursuing what caused that, the inquiry found that it was a managerial policy to set a target to reduce the number of caesarean sections. This was not something that was arrived at by the obstetricians or the midwives, it was a target set by professional managers. By having it set by professional managers they were overriding the clinical judgment of the medical professionals and the result was clearly proven to be deleterious for the mothers and the babies.
If the management of hospitals was made up, or policy was set, by a committee drawn from the different sections of the medical and ancillary staff that worked there, that kind of policy would not have been arrived at. Now, exactly how the supervisory board would be formed, there’s room for discussion on that. Whether it be elected, chosen by a lot, by quotas, or what. Had it been based on the people who actually were delivering the care, the policies would have been different. And these are policies related to how to treat the patients. What practices should be pursued.
Now, in terms of the resources available to it, a National Health Service hospital is entirely dependent on public resources. It’s entirely dependent on public funds to meet the the salaries of the workers there, and it’s entirely dependent on public funds to build, maintain, etc, the hospitals. So any internal democratic control in a National Health Service hospital is going to be within the constraints set by the local health board which provides the funding to it. And more generally, within the national budget that allocates a certain amount to health care as a proportion of national income.
So there is certainly room for democratic control and there’s room for replacing the professional managerial class with decisions taken by people who actually do the productive work. But it shouldn’t be seen as a matter of autonomy of the unit relative to society. It’s a question of internal class relations.
[ATO] Okay so me let me ask a more pointed question. If I had to summarize, I think Hahnel’s chief concern was that in central planning – and he said multiple times that Towards a New Socialism is the most democratic version possible – that ultimately an enterprise or project produces is determined by the planning bureau, by a central authority. Even if even if it’s very democratically constituted and regulated. The point that he’s making is that there would be room for some amount of control by the workers in a workplace, but that the production outputs and the production inputs would be set externally. So, is that the case in Towards a New Socialism?
[PC] Well, you have to have to look at what different kinds of organizations you’re talking about.
If we take a hospital again, it is not necessarily appropriate for one hospital to decide whether they’re going to have a specialist oncology unit in that hospital; or whether it would be better at the level of a city for it to be decided which hospital would have the specialist oncology unit, which hospital would might specialize in stroke rehabilitation, etc. So, to an extent, yes. The output they’re producing is likely to be decided at a higher level insofar as to do that they’re requiring public funds or public resources which have to be used in the most efficient way. Now there’s certainly a room for debate at the district level. For people to debate do you want to have specialist hospitals or do you want general hospitals.
Let’s take another economic activity like electricity generation. Whether electricity generation is going to be achieved using coal, natural gas, nuclear power, or wind, let’s say, those are not decisions which can be taken by the workers at an individual power station. These are questions of national strategy and they’re questions which require huge public investment to carry them out. The transformation of the economy that’s going to be necessary to shift from fossil capitalism to a non-fossil fuelled socialist economy is huge, and it’s not a matter of the individual workers in in one unit of production having a say on that.
Now, it’s certainly the case that workers in, for example, the electrical generator fabricating industry have an interest in having a say in and debating what kind of plants are going to be built, because that has a direct bearing on their future life and future opportunities. And back in the 70s, along with other people from the Conference of Socialist Economists, I worked with the shop stewards at Trafford Park plant on a workers plan for the power industry, advocating in the 70s but it diversified, built next generation nuclear power plants, that tidal power was put into operation, etc. And that was in in response to the specific crisis that was facing the workers in the electrical power generation sector. It could only be achieved, though, to the extent that the workers in the electrical power generation sector were able to influence the then Labour government to actually order new power plants and start new power plants. So it cannot be a matter of decision just by the workers in one sector. They can lobby for it but the critical decisions are going to come from the allocation of public funds which … I say public funds but I mean the public allocation of the labour force of society.
[ATO] So, this is a question that I put to Robin Hahnel, and I raised the case of forms of production, of enterprises, which one might say are particularly important, particularly strategic, essential. Healthcare and energy were actually the two examples that I raised. And asked the question whether it suffices for a worker council governing, for example, a hospital (or the examples that you gave) to have complete control over what’s produced? And really shouldn’t there be a way that society as a whole can determine that?
On the other hand, it’s the case that those are enterprises, or forms of production, which are of a certain class. They are are things which are life or death in the case of health care and climate change, or they’re very strategic and they involve massive investment. But there are other types of production, for example, I was just thinking off the top of my head, I’m always talking about a furniture factory as an example, or say a gym, or a supermarket, or we could list many other forms of activity. And we’d say well these are not as strategic, or not as essential, or not as large scale. And so the question there is, for example, is it appropriate for the production activities of a gym, say, to be determined entirely by a central plan? As in, all of the things that the gym is going to produce, in terms of what classes they offer, or what facilities they have; and what they use to do that, what inputs, labour, and machinery, and so forth.
[PC] There’s no reason why something like that has to be decided centrally. In practice what’s going to be doable is you’ve got a certain number of instructors available, or a certain number of clubs that want to use the facility. These clubs may well have individuals who do a lot of the teaching. But I don’t see why that requires any particular planning beyond the resources that go into it. The actual operation of a gym can be largely left to, you know, the taekwondo club, the basketball club, etc, that are actually using the gym on different days.
[ATO] Can I ask this as a clarifying question then? Just so we can understand the mechanics of Towards a New Socialism better. So, presumably then workers in a project can formulate and submit a production proposal for that project to the planning bureau?
[PC] That’s the only way the planning bureau is going to … well no it’s not the only way … I mean, once a project has been running for a while the only way that they will know of, for instance, a new product is likely to be a suggestion from there. But that’s not necessarily the case, it may be that ideas for new products come from research and development organizations. But the problem with having it done entirely by separate research and development organizations is that the transition process to production doesn’t necessarily go that well, and the step between prototype and mass-produced product may not go so well. So, there’s a lot to be said for the having a close integration between the design process and the production units.
But in some cases the ideas for what’s going to be done definitely have to come from outside. This is most obvious when you’re setting up entirely new industries like nuclear power. But any entirely new industry, either new to the country or new to the world, where it involves innovation is likely to involve an idea of what the product is going to be that’s agreed at a higher level. And then a whole set of lower-level things become necessary.
So, if you decide that you’re going to move to electric buses, that is a higher-level decision and the bus factories all have to shift to doing that. And entirely new industries have to be created, you have to have mega factories turning out lithium-ion batteries. Or it may be decided that lithium is to strategically too expensive and you’re going to put the effort into the sodium batteries. But in either case these are higher-level technological shape decisions which are being taken. And, to that extent, the fact that a lithium battery factory is going to be making lithium batteries or it’s going to be making sodium batteries, that’s a higher-level decision.
And it might be something that the people in the factory can decide, ‘okay, we reckon we could shift to making sodium batteries from lithium batteries.’ But they can only do that on the basis of scientific research which is probably carried out outside, which is part of the general world achievement of scientific advance. And it always requires considerable resources to convert a scientific advance into initially a prototype and then a manufacturable prototype. So that the society has to have some way of allocating resources, preferably close to the production units, for them to change and update their products.
But in this they’re relying on outside sources of resources. It’s relying on funding, in the end out of general taxation, to allow the factory to have, say, 10% extra people who are tasked with developing types of batteries and types of battery production which are not yet in in place. And that is not socially necessary labour in terms of the current product. It’s surplus labour, surplus to what’s socially necessary. And it’s an allocation of surplus labour that’s being made from the point of view of society in planning for the future.
[ATO] It’s basically an investment.
[PC] It’s not an investment. Investment is a subcategory of an allocation of surplus labour, but an investment is an allocation of surplus labour with a view to making a profit.
[ATO] Sure, I suppose. Okay I agree it’s not really investment. I more mean it’s labour that’s being directed towards an activity which is not going to produce something, it’s going to increase production in the future.
[PC] It’s going to open up possibilities in the future, you don’t know whether it actually will increase production in the future.
[ATO] Sure, that’s fair enough.Okay so.
[Sponsorship] This video is sponsored by ISINK the Irish Strategic Institute for National Ka-blamo!
With the Russian invasion of Ukraine these are dangerous times. And everybody who isn’t a naïve, hippie, Marxist, idiot, living in the past, knows that the Republic of Ireland needs to grow up and end its policy of neutrality. All proper countries spend loads of dosh feeding the dogs of war, and Ireland should do that too if it’s going to defend itself from … Russia … all right, who although they have no geopolitical motive or plausible means to attack Ireland remain an imminent threat. Also China who are tunnelling through the Earth’s core as we speak.
For too long Irish politicians have not had the benefit of hiding behind the words ‘support our troops’, and while bribes from the military industrial complex have been forthcoming, our leaders deserve more. For too long middle-class citizens at dinner parties have endured the humiliation of not being able to boast of Irish uniforms routinely massacring foreigners.
Let’s face it, Ireland’s neutrality is a bit like people who ‘only smoke socially’, sending Irish troops to Afghanistan, Mali, and Chad, and even turning Shannon airport into a de facto U.S. military base. So we might as well start smoking 20 John Player Blue.
Now, you might be thinking ‘isn’t of Ireland still occupied by the British state?’. ‘What about the security risk of Ireland’s de facto military alliance with the United States?’. [laughter] No offense but that’s why I work for a think tank.
Anyway, that is why Ireland must join NATO post-haste. By joining the most belligerent military bloc in modern history we will make the world a better place, and make Ireland safer at the same time by making all of NATO’s enemies Ireland’s enemies.
Ireland needs to pull its weight, clean its room, and finish its homework. Housing and hospital beds can wait. We need to buy jet fighters and a handful of light ships from the Americans and Germans. This will strike fear in the heart of our enemies, like Guernsey and the Maldives.
But that is not enough. The Irish Strategic Institute for National Ka-blamo! urges the Irish state to issue every resident with a handheld tactical nuke. Neutrality is obsolete. Let the rivers run red with blood. Céad míle fáilte núicléach.
Okay guys, you heard them, the Ka-blamo! Institute is offering a free handheld tactical nuke to one lucky viewer who can answer this question: does NATO Supreme Allied Commander Europe General Tod D. Walters like pineapple on pizza? Make sure to Like and Subscribe for the chance to win that nuke. Now back to the show.
[ATO] So just before we get into our topic which is worker self-management, balancing autonomy of production units with the social interest, and so forth, just a couple things. So, the first is that you were saying that you’re actually writing a new book about planning. Do you want to say a few words about what that is?
[PC] We were approached by a publisher, Repeater Books actually, and were approached by them a year and a bit ago to write a new book. It’s Allin Cottrell, me, and Philipp Dapprich writing it. And they wanted a book on planning that was at a bit more technical level than the stuff in Towards a New Socialism, but we have situated in the context of … Economic Planning in an Age of Climate Crisis we’re calling it, because we think that the necessity to adapt to the climate crisis is something which will force countries to start carrying out economic planning. Because there’s no other means of doing it. The need to adapt to the climate crisis is not something that is expressed through the market, it’s an existential question that operates beyond the market and requires conscious political direction. And as such it forces the economies whether they want it or not to try and grapple with the issues of economic planning.
[ATO] That sounds very interesting. You’re saying the title, at least provisionally, is Economic Planning in an Age of Climate Crisis. And when could we expect that to come out, roughly? I know that these things aren’t certain.
[PC] It’s been with the publishers in one form or another for some months. They now seem to be pushing ahead with it.
[ATO] Okay so maybe sometime this year?
[PC] I would expect so. Yes, I’d expect so.
[ATO] Great and I will check in with you at some point later yeah and …
[PC] Well, when it comes out you can read it and ask questions.
[ATO] Great, I definitely will. I’ll make sure that I get the first copy.
[PC] While I’m plugging, we’re doing another book on materialism. But in this case the authors are myself, Greg Michelson, and Katerina Kolosova, the Macedonian philosopher.
[ATO] And is that also due to come out sometime this year?
[PC] Well, we’re trying to get a publisher to agree to take that one. We’ll have finished writing it by the summer.
[ATO] Okay, very good. That sounds very interesting. I’m just going to say one thing quickly and then we’ll get into the interview questions. You just you mentioned Philipp Dapprich, and I finally got around to talking with him. I’ll be talking with him tomorrow about his work on opportunity costs values and all that, so thank you for putting me in his direction.
[PC] Well he writes about that in our joint book on planning.
[ATO] Excellent. Okay, let’s go forward. So last time we were talking about basically how do we find a balance in a socialist economy between the social interest – the interests of society as a whole – and sub units of the economy – so, projects and workers.
Let’s look at the managerial structure of a project in Towards a New Socialism. Because you were talking about the class struggle of trying to prevent a professional managerial class or coordinator class from taking over. So what would be the managerial structure of a typical project? And I’m sure it would vary.
[PC] Well it’s going to depend on the size and scale of the thing you’re dealing with. If it is a national airline, it’s a somewhat different matter from a school, or a hospital, or even at a lower level the examples you were asking me about were cafes and restaurants and things.
Now, when you were asking about the cafes and restaurants there was a sort of implicit assumption, I think, that these are like the ones that we’re used to. Models of cafes and restaurants where they’re small private businesses. You’re used to cafes and restaurants that are small private businesses but that’s obviously not what all of them are. The most successful ones are things like McDonald’s, which are huge enterprises with coordinated production and planned production, planned delivery of everything, and planned right down to the smallest detail of what goes into each type of burger, and the amount of work that’s required to do them, what means of production are used, etc. So you don’t have to assume that restaurants are going to be small self-sufficient things. They may be restaurant chains still.
Or, I mean, in an experience I had going to Soviet bloc countries some of the restaurants were, for example, people went to eat at a particular collective farm because the canteen at the collective farm was reckoned to be good. And if you were driving through that part of Bulgaria, you’d stop off at the collective farm and eat at their canteen. And in other cases, the restaurants would belong to the municipality. There’d be a whole bunch of restaurants in the town but they’d all belong to the municipality. The contents of the menus were highly specified, so if you were buying a meal it specified how many grams of fish, 150 grams of fish, etc, were in it. So that was a regulation from the point of view of guaranteeing the standards that the consumer was going to get. And the prices were controlled as well.
So you don’t have to assume that things will work the way we’re used to them working. There are lots of other models.
[AO] Sure. That’s interesting.
[PC] Now, I don’t know how the collective farm canteen was run, how they decided what they were going to cook. But let’s take a large thing like Airbus, where it’s a big employer. It’s a big employer across Europe. If Europe becomes socialist that will continue, Airbus will continue designing and developing aircraft, because it may become something that is under the control of the workers in the Airbus industry. But the fact that it is a collective labourer, it is a large group of people working together, each playing a part in it to collectively produce something vast, something bigger than any individual can comprehend, is going to stay the case.
The question then is how do you remove, on the one hand, the exploitative relationship between the owners of Airbus and the people who work in it; and, on the other hand, that the existing exploitative relationship means that you’re in a society where you have a class hierarchy, and within that you have a managerial hierarchy, and the managerial hierarchy ultimately derives its authority from the right to hire and fire. Now, if you’ve got a socialist economy, and you effectively have full employment and everyone is guaranteed a job, then the right to hire and fire is not going to be a significant factor.
[ATO] Can we talk about that then? Because that’s actually a question so that’s a very natural segue into that question. In Towards a New Socialism, workers are guaranteed employment, but not necessarily guaranteed a job at a particular project. But they are guaranteed a job. And this is presumably to balance the goal of full employment, which is extremely important, with the goal of avoiding apathy, cynicism, and inefficiency at the workplace.
[PC] But also to ensure that you have an economy that can adapt to changing requirements. I mean, as technology changes certain industries become less important others become more important and people have to move between them.
[ATO] Yes, that’s a very good point. So, in that case, how are hirings and firings handled? Who in a project decides to hire or fire someone?
[PC] Well, this is not something that we have written about enough. But if you take what I say now as being my personal opinion, not something that I’ve agreed with Allin Cottrell.
[ATO] Sure, okay.
[PC] The overriding issue is the labour budget that a project has. That the society has to allocate social labour power and it does that in two ways. It does it by allocating direct labour and embodied labour. The society has to check on the efficiency of the ways things are being done.
[ATO] Can I just clarify for viewers? You’re saying embodied labour …
[PC] In raw materials, embodied labour in the form of raw materials, buildings, plant, and equipment.
[ATO] Yeah. That’s labour that in the past has been put into creating or transforming these things. And direct labour is somebody actually turning up to work and labouring to do something.
[PC] Yes. Both of these are social resources which can potentially be used for other things. And the building that is being used to make one product at the moment might be allocated to a different use in the future. And the people who are doing it might end up doing something different in the future. And in a dynamic economy that’ll happen relatively often. The more dynamic the economy the more often people move to do new things, and during the dynamic years of the Soviet economy there were lots of people moving to new jobs in new places.
Now, how would people get jobs? Well I would imagine that’ll come through jobs being advertised online by some national register of what kind of jobs there are, and people can apply for them and it’s up to the collective that you’re going to work with how they choose people. There’d have to be some national standards to prevent systematic bias of any sort, they couldn’t just select men for interview and things like that.
[ATO] Yes, of course.
[PC] So it can’t be an entirely autonomous business of that collective.
Now, the issue becomes more difficult if there’s a labour shortage in the economy, and some line of activity has to be shrunk in order to enable something else to grow. Under those circumstances, at the level of a plan what you’re doing is you draw up a plan and say ‘how many workers can we afford to have still working in the retail sector if we’re going to have to build 10 gigawatts a year of new power stations?’ and ‘if we’re building 10 gigawatts of new power stations a year how many more building workers do we need, how many engineering workers do we need, etc?’. This gives requirements of how many jobs are going to be in that and when you balance it out certain sectors have got to be shrunk.
Suppose it’s the retail sector that’s being shrunk and there is a retail collective has taken over, let’s say, ASDA. And then the collective which, let’s say, is called the Northern Red Banner collective now and that’s on all the ASDA shops, they’re told ‘okay, I’m afraid we can’t run so many stores. We don’t have enough people in this area, we need more people working in engineering, we’re going to reduce the total labour budget that the Red Banner supermarket chain can have.’ It’s then up to the people within the Red Banner supermarket chain how they’re going to do that. Who’s going to leave? Who wants to retrain as a precision engineer? Etc. But it’s up to them to decide how to do it. They just said ‘okay, a year from now, the state plan will only allocate a certain number of people to you. You can decide who those people are going to be, and anyone you don’t decide is going to be reallocated to another activity.’
Now this is not so far different from what happens within a large firm. A big multinational allocates people to development projects. From my experience in a big computer company back in the 1970s, there were projects to which people were allocated for a year or two to develop something and then you’d be allocated to something else. You didn’t have any particular say over that, but there’s no particular reason why this couldn’t be done with people having a say over it.
[ATO] Rather than having a kind of hierarchical, managerial, process determining that you could have a participatory, democratic, process determining that.
[PC] Yeah.
[ATO] Where it’s the collective, rather than being some manager’s prerogative.
[PC] I mean, this is the point where Hahnel was saying ‘oh you could only have central planning if you appoint a manager to do it’. No that’s not the case. You can do it through a labour budget. This collective has a certain budget of a certain number of people, the people can either be direct workers or you can use the labour budget in terms of indirect labour, or products you’re using, and it’s up to you to decide how to do it.
[ATO] What it sounds to me you’re describing is there is effectively a worker council which, say, is running ASDA let’s say – which if people don’t know, that’s a supermarket chain. And what’s happening there in terms of hiring and firing is that they’re operating within a context, in a system, so there are external boundaries and parameters. In this case, say, on labour. And within that context they have autonomy or control over how they want to do that.
[PC] Yes. It’s essentially budgetary control, but demystified budgetary control. Budgetary control with the fetishism taken out, because it’s dealing with what budgets are really about which is ultimately about human time.
[ATO] I’m thinking that in every in every system … If we think about market socialism, so let’s say Varoufakis’ model Another Now, if we think about Participatory Economics, and if we think about Towards a New Socialism, in every system their production units have some kind of external constraint. There has to be by definition. In a market socialist system, it’s basically your ability to buy and sell goods on a market, and acquire capital, and so forth. In a participatory economy it is your engagement with the planning process, and the indicative prices that are generated through this balancing supply and demand of production proposals and consumption proposals. This generates prices for inputs and outputs and then the worker council can do whatever they want within that those constraints effectively. And then in Towards a New Socialism it’s similar enough, in my mind, to participatory economics in the sense that again there’s an external process. So this time rather than that being the planning procedure in participatory economics it’s a different kind of planning procedure, but that will set the external constraints and then a worker council can make their decisions within that.
[PC] I mean, yes. For example, if you’re Airbus if you’re developing a new aircraft, it’s maybe 10 years before the from the start of the project to developing it. So during that period the workers who are working on the new thing are being paid by the public. The public has to have decided that they want to invest so many hundred thousand worker years in developing a new airliner. At the same time, the planned environmental constraints will say this airliner is going to have to operate with liquid hydrogen and it’s got to have a certain range. They will be met with constraints which are partly from national resources, partly due to environment, partly due to the range that the airlines say they need, etc. And they’ve got to meet that that specification. How they do it, and how they design it, is up to them, because the planning authorities don’t have the knowledge for that.
[ATO] So back to this question of hiring firing, we can just talk about this for a few minutes and then we’ll leave it there and we’ll pick up again. Speaking of external constraints, we can stick within your time constraints. Let’s think of a situation where there emerges a kind of political struggle or a labour struggle. I suppose in the case you’re talking about, say, reducing 10 percent of the labour in a certain project because whatever way the planning process has occurred it’s been determined that it would be a better use of society’s productive capacity for that labour to be allocated to another project. Like you were saying, from retail to power generation. And so the obvious thing to think of is okay well what if the workers in that project think ‘well I don’t want to. I’m happy where I am’. And we can think of different versions of this, but I know that there are going to be a lot of socialists who are wary of central planning and it’s precisely this kind of thing they might be thinking of. I’m just interested to see how you would respond to that.
[PC] Well, if society is going to adapt, people have to move. How do you do that? Well if you’ve got a system based on labour budgets, the collective is only allowed to employ a certain number of people. Only a certain number of people are allowed to be working for it. They can nominate who those people are going to be if they want, and once they’ve nominated who those people are going to be if someone who they haven’t nominated wants to go on working there they’re not going to be credited with any labour credits. Because they’re not doing something that’s socially necessary. So, you could stay on but you’re not going to get an income. You don’t have the personal privilege of being supported by society to do something which isn’t necessary.
[ATO] One way to a worker council could resolve that which is something that many cooperatives have done, say, during economic crisis is that you just reduce hours and you spread out the work. Wait, no. Actually, no you can’t do that because this is transferring labour.
[PC] The problem is a shortage of labour.
[ATO] Yeah.
[PC] You’re dealing with the opposite situation which is a capitalist recession. You don’t get that in socialist economies. Socialist economies are tight, they’re resource constrained.
[ATO] Yes exactly. A certain number of people do actually have to move. So it’s a matter of trying to figure out who’s most willing to move. I mean, say if we compare this to – if we just forget participatory economics for a second – a market system. You were talking about fetishism of budgets and it’s interesting to think about. Often a market system is presented as a model of decentralization and autonomy, and to a certain extent it is depending how you look at it. But there is always that process that you’re existing within, which is the system of market prices and exchange. And just because there isn’t a kind of political direction saying your labour budget is reduced doesn’t mean that there isn’t an algorithm which is not under your control, which is deciding how much labour that you can use. And it is important for people to keep in mind there’s always an algorithm or a process.
[PC] Yes.
[ATO] That production users are existing within and it’s a matter of picking the one that we think is the best.
[PC] But the problem is that if you leave it to a market system you can’t guarantee full employment. There’s no reason why a system of independent cooperatives should ensure full employment.
[ATO] That is correct, with the caveat that with state intervention there can be full employment. But the market itself, the private sector, cannot necessarily. There’s no reason economical, historical, or otherwise, that the private sector will generate full employment.
[PC] Yeah and we know historically that in the one country where self-managed market socialism was tried for a prolonged period, which is Yugoslavia, it had many advantages compared to a capitalist economy, and it achieved decent growth rates, but the economy had chronic unemployment which was solved by immigration to work in Germany as Gastarbeiter. It didn’t actually solve the full employment problem, it also didn’t solve problems of regional differentials which became critical in the in the end.
[ATO] Indeed, yes, with very tragic consequences. Okay we will leave that there for now. A fantastic discussion as usual. I know people find this fascinating, I certainly do. Goodbye.
[PC] Bye for now.
[ATO] Thank you for watching.
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The centre of arts and culture of The National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute”. Photo by Kseniia Rastvorova on Unsplash
It goes without saying that these are turbulent times—politically, historically, economically, emotionally.
In times of crisis, the arts are amplified for their humanizing, and uplifting, powers. This video of a violinist performing for frightened and exhausted families hiding in an underground bomb shelter in Ukraine’s besieged city of Kharkiv exemplifies art’s power to heal and offer hope. But, in wartime, the arts are also a prime target for enemy attacks.
For example, paintings by the celebrated Ukrainian artist Maria Prymachenko came under literal fire as a museum 50 miles outside of Kyiv was bombarded and destroyed by Russian forces. Considered an iconic self-taught artist whose work epitomizes Ukraine’s national identity through her depictions of folklore and “traditional Ukrainian motifs,” as described by an article published by CNN, Prymachenko was revered throughout Europe by famous artists including Pablo Picasso. Fourteen of her paintings were allegedly taken from the museum by a Ukrainian civilian for “safekeeping” prior to the attack, but their whereabouts are currently unknown.
Ukrainian lawyer Natalia Gnatiuk, who is also a partner of the Maria Prymachenko Family Foundation, was quoted by CNN as stating, “[The museum] was the first building (destroyed in Ivankiv) and the task of the occupants is to destroy our Ukrainian roots, to destroy our Ukrainian culture — they hate it.” She goes on to identify Maria Prymachenko as “not only the symbol of Ivankiv … and not only the symbol of Ukraine but a symbol of the whole world today.”
When a country is invaded, such as Ukraine, their culture literally becomes a target for destruction. As noted in the New York Times, “Across Ukraine, scores of historic buildings, priceless artworks and public squares are being reduced to rubble by Russian rockets, missiles, bombs, and gunfire.” What happens to a society when museums and other cultural institutions are reduced to smoldering rubble? It’s a rhetorical question, of course, but the answer is so inhumane—essentially an act of cultural genocide—that it’s almost unthinkable.
Today, the technology exists to preserve the artistic achievements of countries, cultures, and individuals—even if those same groups are under active attack.
Digitization of historical archives and precious cultural objects means artifacts can resist the threat of total annihilation wrought by militaristic campaigns.
In fact, as reported by Artnet, a group of digital humanities experts has stepped up and formed an alliance to undertake the massive task of digitally preserving as much of Ukraine’s cultural heritage as possible, while the country attempts to fight off its Russian invaders. This initiative, entitled SUCHO, for Saving Ukrainian Cultural Heritage Online, was spearheaded by Quinn Dombrowski, a technologist from Stanford University, Anna Kijas, a librarian at Boston’s Tufts University, and Sebastian Majstorovic, a digital humanities expert at the Austrian Center for Digital Humanities and Cultural Heritage.
According to Artnet, “Since launching on March 1, SUCHO has made digital archives for more than 1,500 websites, digital exhibits, open access publications, and other online resources from Ukrainian cultural organizations, for a total of three terabytes of data as of Wednesday (March 9th).”
Digitizing cultural artifacts, however, is not only the work of librarians and academics.
Artists can also utilize technology to preserve the legacies of cultural heritage. The Iranian artist Morehshin Allahyari received global recognition and praise for her work Material Speculation: ISIS (2015-2016), which the artist describes as:
“…a 3D modeling and 3D printing project focused on the reconstruction of 12 selected statues from the Roman period city of Hatra and Assyrian artifacts from Nineveh that were destroyed by ISIS in 2015 in a series of highly-publicized YouTube videos. The series goes beyond metaphoric gestures and digital and material forms of the artifacts by including a flash drive and a memory card inside the body of each 3D-printed object.”
Essentially, Allahyari worked with activists on the ground in Iran to compile scans and other documentation of these 12 statues that were destroyed by ISIS. She then took that data and transformed it into 12 3D-printable files—miniatures of each sculpture.
A flash drive containing significant cultural data relative to each sculpture was then embedded in the final 3D printed miniature. This data includes “images, maps, PDF files, and videos gathered on the artifacts and sites that were destroyed,” according to the artist.
Allahyari writes that “Material Speculation: ISIS creates a practical and political possibility for artifact archiving, while also proposing 3D printing technology as a tool for resistance and documentation.” She believes these works are both time capsules and living archives, that will be protected as well as accessible to future generations.
One such artist is Olena Kharchyshyna—a painter from Zhytomyr, Ukraine—whose work is archived and published online via her Artwork Archive public profile.
Perhaps now more than ever before, we have both the urgent need and the technological means to proactively safeguard cultural heritage for future generations. Otherwise, we will lose more than our artworks, our artifacts, and our national narratives—we will lose our culture, our history, and our humanity.
Editor’s note: discussion topics include defining worker self-management, the scope for worker self-management in central planning (and Towards a New Socialism in particular), and the scope for worker self-management in Participatory Economics.
Robin Hahnel is a professor of economics in the United States, co-founder with Michael Albert of the post-capitalist model known as Participatory Economics (Parecon), and author of many books.
It’s an advanced discussion of the model proposed in that book so I recommend you familiarize yourself with participatory economics to understand what we’re talking about. You can do that by visiting participatoryeconomy.org. You can also read Of the People, By the People for a concise introduction to parecon.
The discussion will also continue on the forum of participatoryeconomy.org.
Robin Hahnel thank you very much for joining me.
[Robin Hahnel] Great to be with you.
[ATO] So you said actually that there was another book which will be published by AK Press in a few months called A Participatory Economy. Did you write that or was that written by somebody else?
[RH] No, I wrote that. What I realized was that Democratic Economic Planning, that book, can be a real challenge. Parts of that book would be a real challenge for people who do not have extensive background in economics, who haven’t studied economics, who didn’t major in economics, who aren’t professional economists. And yet obviously there are more people interested in post-capitalist economic models who are not economists than who are economists. So, the second book. And it’s published by an appropriate publisher. AK Press is a press that basically is for that audience, for libertarian minded people interested in post-capitalist visions.
So that second book is an attempt to present essentially the same ideas but not require the reader to have any extensive economic background. There are no proofs of theorems in that book, so that that’s the difference. And that that’s coming out, I think, sometime in June (2022). Both books are my attempt to get everybody up to date with what we now, after all these decades, have managed to come up with. So, they’re the most recent version of everything we have to say in response to all sorts of criticisms and questions people have raised over the years. But one book is more appropriate for one audience and the other for a different audience.
[ATO] Well Democratic Economic Planning, for what it is – as I said last time – is outstanding for people who really want something rigorous and detailed. And I will certainly read A Participatory Economy when that comes out in summer of 2022. I’m sure that it’ll be a good read as well.
So, let us begin with the questions. Our discussion today has a central theme. Last time we talked about housing and we talked about consumption, so this time I would like to talk about production units broadly, worker councils and so forth. And the first question is about worker self-management.
I have been having some discussions with Dr. Paul Cockshott about Towards a New Socialism and the model that he and Alan Cottrell put forward in that book and subsequently. And I quoted from Democratic Economic Planning a passage that you wrote about that model, and central planning more generally, which critiqued it on the basis of it inhibiting worker self-management. And so Paul Cockshott had a response, and I’d like to just put that to you and we can have a discussion.
And just before we proceed I just saw some [YouTube] comments when Paul Cockshott reposted that video on his own YouTube channel. Maybe some people seemed to misunderstand. When we’re having this discussion it’s really about two people who respect each other, who actually agree far more than they disagree, and are just having a civil, constructive, discussion about some disagreements about post-capitalist models. Some people seemed to think that it was some kind of polemic struggle. So, I just want to put that out there before beginning, so that people understand this in the right light.
So, the quote, to repeat it from page 314 of Democratic Economic Planning, was ‘as a consumer and voter, every person has as much say over what any particular group of workers produces and what inputs they will be allocated to produce it as those workers have themselves … [and thus workers] do not get to exercise meaningful self-management. [Hence] we believe it would predictably lead to the kind of worker apathy that plagued centrally planned economies in the 20th century’. I put this to Paul Cockshott, we discussed it briefly, we’re going to discuss it again subsequently. And Cockshott responded by questioning the assertion that there was worker apathy, and asked ‘what is the measuring bar that he’s using?’, and ‘where is the evidence?’. So what do you mean by apathy, by worker apathy? What is your measuring bar? And what is the evidence of work apathy in the centrally planned, socialist, states in the 20th century? And, lastly, similarly, if we can talk about what is worker self-management in concrete terms, what does it mean to possess or enact workplace self-management? It’s a big topic.
[RH] It is a big topic. First of all, I completely endorse when we have discussions about things like this they can either become sort of sectarian screaming matches and point scoring or they can be conducted more along the lines serious inquiry and probing. And this is a problem that has plagued the left from time immemorial: that too often our discussions about serious problems where people have somewhat different ideas about what the solutions are descend into scoring points and name-calling. And I always think that doesn’t serve any of us well, and I appreciate that Paul approaches these things in a better way, and I seek to do that as well. And there certainly are many, many, points of agreement between myself and Paul, and people who support his post-capitalist vision and people who support the post-capitalist vision known as participatory economics.
But there is I think a very serious difference of opinion and it’s been there for a very, very, long time. And, in some ways, the position that I endorse has long been the one associated with people who one way or another think of themselves as libertarian socialists, and who feel like that the essence of the socialist vision is one where workers finally get to manage themselves rather than be bossed around by other people. And I do sincerely believe that the essential pitfall, the essential mistake, that the Soviet Union made, and the Soviet model of socialism made … Now, I’m not talking about the political sphere, and we can really leave that aside, whether a single party state governed by a communist party whose internal rules are the ones called democratic centralism, whether that is profoundly anti-democratic and a poor way to organize political life. We can leave that aside for the moment, and we can just talk about the economic model, the economic system itself.
But I think that the economic system that the Soviet Union adopted was one where the real Achilles’ heel was it did not provide workers with the opportunity to manage their own productive activity themselves. And my sincere my most basic disagreement with Professor Cockshott, and his collaborator Alan Cottrell, is that – I think they would wish that in socialism we had full-blown and vibrant worker self-management – I think they don’t realize that the model they’ve proposed for decision-making would not provide that. And I was rather surprised, I mean I had not heard this from him but his response which was ‘well, Professor Hahnel where do you think there’s evidence that there was worker apathy in the Soviet economies?’. No, I haven’t done an exhaustive study but I do believe that there is ample evidence that over time what workers in the Soviet economies came to understand was that what went on in their workplace was they had basically no particular influence over that. They were just people who showed up and did what they were told, and what they were told to do was something that had been calculated through a planning procedure, and that planning procedure had provided them no more ability to influence what they produced and how they produced it than anybody else in the economy. Even if the entire planning procedure was incredibly democratic.
And this is something else that is one of the essential features of the entire participatory economy project. I think more than anything else our definition of what worker self-management means, or what I would propose is also my definition of what democratic economic decision-making means, is people should have influence over different economic decisions to the degree that they’re affected. So we define economic self-management as decision-making input about any particular economic decision in proportion to the degree that you were affected. So if you are more affected by some decision than somebody else is in the economy, we want institutions to provide you with more of an influence, if you want to with a greater vote, over a decision if you were affected more by that decision. And I certainly believe that what is produced in the workplace where I work and how we go about that, those are decisions that affect people in a workplace more than they do people outside in the rest of the economy.
Now of course what we produce affects all sorts of other people. It affects the consumers. If we’re producing things for other workplaces, intermediate goods, it affects them. And how we go about producing things has effects on others because if we use these inputs rather than those inputs and they are more socially costly … But nonetheless we think the goal should be – and we also think this is something that can only be imperfectly achieved – but we think the goal should be to try, as best we can possibly, arrange for decision-making procedures to provide people with the amount of influence over decisions in proportion to the degree that they’re affected. And unfortunately many economic decisions … There are some economic decisions that affect all of us equally, and then the kind of democracy that I think Cockshott and his proposal exemplifies is ‘well, if we’re all affected, we should all have the same say over the decision’. There are some decisions where we’re all affected more or less equally. There are other decisions where really only I am affected. But unfortunately most economic decisions fall in that in-between range: that this decision will affect not just one person, it will affect many people. But the effect on the many people is very unequal. Some of those people will be affected a lot more and some will be affected a lot less, so in my mind the entire trick of trying to organize our economic decision-making procedures is to try to give people power over decisions, influence over decisions, as much as we can, roughly to the degree that they’re affected,
I think that was the Achilles’ heel of even the best kind of central planning that was practiced in the Soviet economy, in the eastern European economy, for decades and decades. And I also believe that it is true that part of the lack of dynamism in those economies [was this] … So, what would motivate the Soviet Union? There was an early time period when they were motivated by revolutionary [ardour], completely immersed in the revolutionary process; we have overthrown our capitalist rulers, we have taken over the economy for ourselves; and, of course, we’re workers, and the fellow workers in the other places, we are all one, and we now have taken over, and we just need to manage this ourselves in everybody’s best interests. But I think as time went on and as workers and workplace discovered that they really had no more say over what they produced and how they produced it than anybody else did in the economy. That even the most democratic decision-making processes that do not give workers in their own workplace more influence over the decisions that affect them inevitably lead to a situation where ‘why should I get that involved? Why should I participate in making decisions about my workplace? Because those decisions are basically already made by some other process’. And I think in that situation what eventually happens is that you do experience a kind of apathy. It’s somewhat similar to the apathy that workers experience in capitalist economies. It’s the capitalist who’s making the decision. I show up, I collect my pay check, nobody listens to me, I don’t have a say, and I think something very similar happened in the Soviet Union. And it wasn’t just because the political system was anti-democratic. It was also because the economic decision-making process was one that did not give workers the degree of self-management that would encourage them to participate.
So I do think this is a real fundamental disagreement and I do believe that there is plenty of evidence. I have not written books trying to marshal the evidence but I do believe [it] and I was rather astounded that Cockshott would even ask ‘well, why do you think there was worker apathy in the Soviet Union?’. Early worker enthusiasm for socialism having overthrown capitalism I don’t think should be confused with the eventual worker apathy that I believe the Soviet economy and the eastern European economies experienced. After many, many, decades if you put people, if you put workers, in a situation where they don’t have any more say over what’s going on in their workplace than anybody else does, I think the rational response is to become apathetic. And I think that over time that happened. And I think over time that also contributed to what many, many, commentators [reported] … Now, I know these most of these commentators are anti-socialist, they’re pro-capitalist, but many, many, commentators basically commented on a lack of participation in economic decision-making, a kind of apathy, and eventually a failure to be as innovative and creative in developing new economic technologies. This became a generalized complaint about one of the features of the of the centrally planned economies. And I actually believe there was a reason for that. I think it was real and I think there was a reason for it.
And I think it’s very I think it’s very, very, important for people thinking about socialism in the 21st century to come to grips with this. And, first, we have to define the goal right, which is not everybody gets the same amount of decision making input on every economic decision. That shouldn’t be the goal. The goal should be decision making input in proportion to the degree that you’re affected by that decision, and figuring out ways to achieve that goal. I think that’s the nature of the project looking forward, and I do think that’s one area in which the Cockshott-Cottrell model has basically missed the boat. They’ve failed to learn one of the key lessons from real world socialism in the 20th century.
[ATO] So there’s a lot there. And I’d like to read out a few quotes which I think are very interesting from Democratic Economic Planning, which develops upon these points, and then we can drill into the subject even more. So, the first is from page 75 and 76 of Democratic Economic Planning and you say:
… the only “management” central planning leaves to individual production units is to “manage” to fulfil the production targets they are assigned by the Central Planning Board with the inputs they are allocated … the true relationship between the Central Planning Board and production units is … a command relationship between a superior and inferior … Moreover, the authoritarian character of the relationship between the Central Planning Board and production units is likely to spread inside production units for two reasons.
First, an authoritarian relationship requires that a superior agent have effective means for holding a subordinate agent accountable for carrying out directives. This entails establishing methods of surveillance and verification as well as incentives for subordinates to obey orders. Historical evidence suggests that it quickly became evident to Central Planning Boards that it is easier to hold a unit manager accountable for carrying out directives than to try to establish complicated methods of surveillance, verification, and incentives sufficient to hold an entire democratic council of workers in the production unit accountable … [and hence] it is only logical to grant the manager authority over the workers. In this way hierarchy spreads downward in a central planned economy, as plant manager appoint assistant managers and supervisors, creating an authoritarian hierarchy with ordinary workers at the bottom.
Second, once these hierarchies are established, they will eventually affect people’s consciousness and personalities … apathy became the salient behavioural characteristic of workers under central planning.
I know that that quote for viewers is very long but I just think it’s a very interesting argument. It’s not just saying that there is or was apathy or lack of workers self-management, but giving quite a compelling mechanism for how that occurs and how authoritarianism develops.
So there are two shorter quotes, just one sentence each. This is from page 77 (DEP):
but even in the most democratic version of central planning imaginable … this gives me no more say over choices of product or technology in my workplace than a … worker in a workplace thousands of miles away.
– what you were saying earlier. And from page 78:
… what eventually transpired in all real-world versions of central planning was far worse. Together with a vanguard political elite, a coordinator class of central planners and plant managers increasingly came to rule over ordinary workers who became ever more apathetic.
So do you want to say anything in response to that?
[RH] When you carefully write something, at least for me, I say it better when I have carefully taken the time and energy to write it and to go over it, then I can re-say it verbally. That is exactly what I believe. I think there’s ample evidence for it. I do not claim that I have published exhaustive studies that would provide the evidence that this is what occurred.
I mean, I never lived in the Soviet Union or eastern European country. I have travelled and visited a few times in Cuba. And in my view Cuba made a mistake when they, in the early 60s, basically decided ‘well, we are no longer in the capitalist orbit, [we are under attack from the United States], we’ve nationalized these U.S. companies, we’re under blockade’; when they embraced socialism their ally internationally was the Soviet Union, and when the young Cuban revolutionaries tried to figure out ‘well, how are we going to run our economy? It’s not a capitalist economy anymore’, they took the advice from Soviet experts who came and helped them build and implement the planning system that was used.
So I am somewhat familiar with the situation in Cuba and my own personal experience is an experience of discovering that Cuban workers over time became [apathetic] … Cuban workers were incredibly enthusiastic in the early years of the revolution. And I think one of the things that has happened over time is that they were put into a situation where they really didn’t have much say over what they were producing and how they were producing it. And as much as most of them have continued to support the Cuban government resisting the imperial attempts of the United States to dictate to them, I do think that the Cuban economy has increasingly suffered from sort of degrees of apathy on the part of workers. Because there was no reason for them to become involved in decision making, because the decisions were basically being made by people outside of their own workplace by a process – now it wasn’t a capitalist process, where the capitalists were making decisions trying to maximize profits. But nonetheless these were decisions about what they were going to do, what they were going to produce and how they were going to do it, in which they had no more involvement than people who didn’t work there.
So that’s really all I can say on the subject. And I would put it this way: if there is one lesson that I think the socialists need to learn from real world socialism, or what went under the name of real world socialism, in the 20th century, the Achilles’ heel was that the original vision of socialism as being workers managing themselves disappeared under systems of central planning. And that was really an Achilles’ heel. If we learn nothing else from the failures of socialism past, going forward I think that is the single thing that’s most important. Now, maybe the participatory economy has not figured out how to resolve this problem sufficiently, or maybe we’ve overdone it, but at least there’s a very self-conscious attempt here. And I can say this quite honestly, part of our thinking when we were trying figure out how we would propose that decisions be made was very self-consciously motivated by an attempt to overcome this failure of central planning. Whether or not we’ve done a good job, or the job can be improved, at least that was a primary motivation in proposing something that looked quite different from what anybody else that proposed about how planning should be done, how national economic planning should be organized.
[ATO] Could we just stay on the topic just a little bit longer? So, I’d like to get a bit more concrete about worker self-management. I asked ‘what do you mean by worker self-management?’ and you were saying that it is having influence over economic decisions in proportion to how one is affected. And I think most socialists on the face of it would say that sounds broadly agreeable but also it’s quite abstract. So, getting more concrete, what in the context of a workplace, a production unit, does control mean? What does it mean for workers to be involved? Because, for example, when I was talking to Paul Cockshott about this he replied saying ‘well, in the Soviet Union workers had guaranteed employment and they didn’t have to fear that their managers would fire them’ and you might say that that is a type of control. So, more broadly, what does it mean to have control over economic decisions?
[RH] Okay. First of all, Cockshott is right that in the Soviet Union jobs were guaranteed. And that was one of the virtues of central planning. One of the virtues of central planning was that you didn’t have to fear unemployment. I don’t think everything that central planning provided was bad.
[ATO] Of course.
[RH] And particularly compared to capitalism, knowing that there was going to be a job for everybody, whereas in capitalism you don’t know whether there’s going to be a job for you, that’s a major advantage of that system. And I would like to also say if in a participatory economy we were going to go back to a situation where there was unemployment, and people had to fear unemployment, I would consider that to be a major failure.
However, let me point out a few of the things about the annual planning process we proposed that embodied self-management or provides self-management in ways that no other proposal that I know of does. In annual planning, every worker council is responsible for making its own proposals. Nobody else can come in and make a proposal for a worker council, what they want to make and what they want to use to make it. Nobody can come in and say well this was your proposal but we now know that it’s not efficient, or it doesn’t work with something else, and we’re going to revise your proposal for you. So only worker councils get to make their own proposals during annual planning and only worker councils get to revise their own proposals during annual planning. That means that the workers in a workplace are the ones that have to be proposing and deciding what they want to produce and how they want to produce it.
[ATO] Sorry to interrupt, just to make this more vivid for people can we talk about an example of a particular workplace? You know, it could be a furniture factory or an office, or something like that, if you don’t mind.
[RH] Sure, yeah, let’s make a furniture factory. I’ve never … Well I’ve worked in steel mills. I always go to steel mills. But we’ll do a furniture factory. I haven’t worked in a steel mill since 1966, so it’s a distant memory. So we’ll think of a furniture factory. The idea would be ‘well, what kind of furniture do you want to make? And what technologies do you want to use? How do you want to organize the workplace in terms of breaks? In terms of starting times? In terms of all of that?’. That should be up to workplaces to decide for themselves.
Here’s another thing that comes into play. At some point, the question becomes ‘yeah, but what they decide in a workplace does have implications for other people.’ And remember the definition of self-management is decision-making input in proportion to the degree that you’re affected. So at some point we have to consider ‘what about those people who are not in the workplace but are affected by the proposal that the workplace is making?’. There are consumers, and so if the workplace is proposing to make furniture that nobody wants, well, that affects consumers and we want to be sure the consumers have some input. And if the workplace is saying ‘we want to use this kind of wood’ but this wood is very scarce, and this wood is also used for something else, and perhaps it is more valuable when used for something else … So the question always becomes ‘how do you incorporate decision-making impact or input for these lesser affected parties?’
The annual participatory planning process is designed to basically say this: ‘we want you to do whatever you want, but the resources you’re using are resources that belong to all of us so we want to be sure, that when you do what you want to do, that you’re also behaving in a socially responsible way’. And what a socially responsible way means [is that] you’re using resources that are scarce and could be used by others to produce things; if you’re producing things people don’t want, well then our interests are affected and we don’t want to allow you to do that; if you’re using resources that could be better used by somebody else well then we don’t want to let you do that either. And the planning procedure is designed so that as long as the social benefits that a workplace is proposing to produce and supply are at least as large as the social cost of the inputs then – think about it – it means the rest of us are no worse off for you going ahead and doing what you’ve just said you wanted to do. The rest of us have no reason to tell you not to do it.
The problem to be solved therefore becomes: well, how do we generate accurate estimates of the social benefits of the outputs from worker councils? And how do we generate accurate estimates of the social costs? But assuming we can do that – and we spent a lot of time basically arguing why certain procedures would lead to more and more accurate estimates – assuming we can do that, the basic idea is as long as what you are proposing is socially responsible, as long as it’s not making the rest of us any worse off, then why shouldn’t you go ahead and do what you want to do? That’s the kind of sort of self-managing freedom that our system is designed to give workers in their workplaces.
Here’s another thing I want to throw in at this point. There’s another way to take into account the fact that other people are affected and Pat Devine, and his co-author Fikret Adaman, what they have proposed is, well, for a workplace it’s not just the workers there who are affected by the decisions of that are made, there are other people who are affected also. For instance, suppose you’re producing something that’s used as an input in another industry. Well, then the workers in that other industry are affected. Suppose you use an input that comes from another workplace. Well then they’re affected. Their proposal for ‘how do you take into account the fact that not just the workers in the workplace are affected by what they do, there are other people affected?’ is to give representation on the board of directors of the workplace from constituencies that are the other affected constituencies. First, I’d like to say I think it’s admirable but that they have thought this problem through. It’s admirable that they have said ‘wait a minute, it’s true that the workers in a workplace are affected by what goes on there, but there are other interested parties and we need to somehow get them involved in the decision-making’. And their proposal is do it by giving them representation on the boards. And that is a way to do it.
I don’t think it’s the best way to do it, and I have two problems with it. My first problem is that ‘wait a minute, that means the workers in the workplace can’t even sit down at a meeting amongst themselves and even start to talk about what they want to do’. That meeting is not a meeting of them only, it’s a meeting of their board which includes people who don’t work there at all. And I think that’s unfortunate. I think that workers have been so disenfranchised for so many centuries that any anything that gets in the way of them having the right to sit down and talk things through, and make decisions, at least preliminary decisions, on their own, is a poor idea at this point in human history.
The second problem is a technical problem. How do you make up the list of who should be represented on the board? And how many board positions do you give them? And my argument is that the participatory annual planning process basically has an organic way, it has a better way, of allowing outside parties who are affected by decisions to affect what’s going on. It’s a better way to do it than a rather arbitrary choice of how many outside board members should there be, from what constituencies. It seems to me that when we sat down to figure that out for every enterprise there’d be sort of an endless debate about with no clear way of deciding what the right answer is. And our proposal is ‘no, we’ve actually come up with a planning procedure that takes care of allowing anybody who is outside a workplace but has an interest’. We have incorporated their influence in a way where we don’t have to face what I think is an arbitrary decision if you try and go about it in a different way.
[ATO] So let me play devil’s advocate about those last two points to further the discussion. You’re saying that if there are to be members of the boards of production units which are external to the people who actually work there that there is a choice then to be made about who is going to be represented and to what extent they’re represented (how many seats they get essentially). And you’re saying that this is an underdetermined question, that there are many different answers which could be given and that there would predictably be a political contest over what the answers to that would be. But to play devil’s advocate, somebody might say ‘yes, of course, but it’s not necessarily rocket science. And there are a lot of questions which are not uniquely determined, yet it’s a nature of life that we just need to muddle through, and try to be pragmatic, and come up with something that’s reasonably agreeable’. And so somebody might say ‘okay, sure, I see your point. But let’s say if we think about who are the interested parties. it’ll be – this is off the top of my head now, so forgive me but you might say – consumers, you might say it’s a political representation of the state which represents all of society as a political entity, you might say the ecological dimension will be represented, something like that’. You might come up with, say, three to five major constituencies that most people could look at and say ‘yeah, that makes sense’. There are some quibbles [but it is broadly acceptable]. So how do you reply to that?
[RH] This is an indirect reply. This is the way I see it. We have the Paul Cockshott, centrally planned, response to this situation. And in my view their response is – in the most democratic version of central planning I can ever imagine – what their response reduces to is everybody gets an equal say on every economic decision. You get it when you vote for the social welfare function that the planners use. And I’ve already explained why I think that is a poor solution.
I do think that [Pat] Devine and [Fikret] Adaman have at least addressed the problem, and in my view what they’ve basically proposed is sort of an old clunky can opener. We’ve got to open the can and they’ve come up with a primitive can opener. I think that our participatory planning procedure is an electric can opener, because I think that our electric can opener better resolves the inevitable debate that would arise under the [Pat] Devine and Fikret [Adaman] proposal, which is how many different board members from how many different affected constituencies? Because I’m always imagining sort of nightmare debates. And the nightmare debate I’m imagining is that there would be more and more outside affected parties that would say ‘hey, we’re affected by what that’s going on in that factory, we need representation on the board’. And then the workers there would say ‘yeah, that’s right, in principle we’re in favour of that, but now there are so many people on the board who don’t work here that you know we’re back to [not having control]’. I don’t think there are good answers to ‘who should be represented?’, ‘where do you draw the line?’.
Now, you’re right. In real life, if we overthrew capitalism and set up the [Pat] Devine-Fikret [Adaman] model, then we would basically muddle through, we would muddle through this. But what I envision is in the muddling through process we would keep getting into arguments that have no actual, objective, way of being resolved. And if the participatory planning process is taking care of this automatically and organically, then not only do we get a better outcome – the electric can opener opens the can better – we also cut back on a tremendous amount of argumentation, debate, and disagreement with one another. There are some socialists, there are some people who are attracted to socialism because they look forward to an endless debate, and there are some people who are frightened by socialism if it would turn into an endless debate. My friend Nancy Folbre, who’s a socialist feminist economist, that was her reaction to the participatory economic proposal.
[ATO] ‘The tyranny of the sociable’, wasn’t it?
[RH] That’s right. That it would degenerate into this into the ‘tyranny of the sociable’. And I am sufficiently of her mind that I am fearful of that kind of phenomena. I wrote this to her I said, you know, you’re wrong about participatory economics, it would not degenerate into the tyranny of the sociable, but if you haven’t looked at [Pat] Devine and Fikret [Adaman]’s proposal you might discover that that’s the one that you would have to fear would degenerate into that. So, I think there’s also that question about how important is it for us to avoid situations where basically endless debate would go on, ended by just who gave up first. And I’ll just say, for the record, that one of my primary motivations is to try and avoid those situations. And when I look at other proposals I often ask myself ‘would that proposal essentially fail the test of avoiding those situations as best we can?’
[ATO] I was going to ask a question about when you were saying it would be unfortunate that workers wouldn’t have a place where they, and they alone, could discuss, make decisions, formulate proposals (obviously within the constraints of the annual planning procedure). So, why would it be unfortunate if they didn’t have that? I think you’ve given an answer to that to a large extent.
[RH] Let me just summarize here. What a workers council does is they make their own first proposal, and then they discover whether it has been approved or it has not been approved. Then they, and only they, get to revise that proposal. So, they’re the only ones who ever make a proposal for what they do, they’re the only ones who get to revise that proposal. What else do they do? The only other thing they do is they look at very, very, simple information about whether other workers councils and consumer councils proposals seem to be socially responsible. And if the evaluation of those social benefit and social cost ratios for others indicates that’s not socially responsible yet, then they just say ‘hey, we object to what you’re saying because it’s not socially responsible’. So we have an easy way to say when others are doing things that aren’t socially responsible, and always get to say what we’re proposing to do. When I describe it in that way, I’m also describing exactly why I like it, and why I like it better than a lot of other proposals out there. It seems to me that it provides workers councils with control over their own situation, and yet we have a system of policing them that does not entail a central planning board at all, and the degree to which they’re self-policing one another is a really simple operation for all of them.
[ATO] Let’s leave the discussion of worker self-management there. I’m going to be talking to Paul Cockshott again, I will relay your points to him, I’ll show him this video. And I’m sure we’ll come back and talk about this, and hopefully have a fruitful exchange between the two of you again which is constructive and respectful. I think both of you, as you said, very much have that attitude. You’re both willing to consider difficult questions, criticisms of the models that you propose, and think about them honestly. And that’s what I’m trying to do with this channel. It’s really a space which is not about being polemical, like you said it’s not about being sectarian. It’s saying if we want to create a new world, we have to wrestle with these difficult problems, these quandaries, we cannot look away from reality and embrace wishful thinking, even if it’s uncomfortable for us.
[RH] Let me just say I think that the Cockshott-Cottrell model is the most democratic version of central planning you can have. Most central planning, most places in the world, including Cuba, was not done very democratically. And I think that they recognize that as being a mistake of the past that needs to be corrected. So I think they have proposed the most democratic possible version of central planning and are to be commended for that. I just think that even the most democratic possible version of central planning does not provide economic self-management, and that should be our goal rather than everybody having the same input on all economic decisions. Okay but we’ve beaten this to death, so I know you want to move on, go ahead.
[ATO] No, no, it’s good. It’s just that we’ve reached natural point and we can take this up again when Cockshott responds.
But yes, I agree with you, one of the enduring features of Towards a New Socialism is that it is such a democratic proposal, substantially democratic, and I think that’s what so many people – including you and I – find compelling about it, in a world where what we call ‘democracy’ today is really various kinds of aristocracy, electoral or appointed.
Thank you for watching. If you found this interesting, useful, or thought-provoking, then press the Like button, consider Subscribing, and if you really enjoyed it sacrifice your firstborn to Ghislaine Maxwell.
There’s a lot more such material to come. We will keep exploring the intricacies of better futures for humanity until we get there. And as always I want to read your thoughts in the comments section below.
That’s all for now. The only viable future for humanity is one After the Oligarchy.
Poster exhibition: 17, 18, 25 και 26 March. In collaboration with Decolonize Hellas.
1927_Art Space will gladly host the Poster Exhibition, the final event of the Decolonizing Salon, which was organized in collaboration with Decolonize Hellas. At the Salon, artists from all fields formed a working group and questioned, among other things, over the place of art in the broader context of neoliberal, neo-colonial politics and social choices. The the poster art was chosen as the most suitable for awareness, propaganda and motivation in action. The exhibition will present works created by the participants of the Salon since October, as well as works that were part of the research they implemented.
Opening: Thursday 17/3 | 7.00 – 10.00 pm
Opening hours of the exhibition:
Friday: 6.00 – 9.00 pm
Saturday: 3.00 – 6.00 pm
Editor’s note: discussion topics include security in commercial housing in the Another Now model (AN), taxation in AN, income and wealth inequality in AN, inheritance in AN, time-limited or depreciating money, whether divergent incomes combined with compound interest can lead to class divisions in AN, firm size in AN, monopoly in AN, workplace management structures in AN, and the argument for equal decision-making rights within enterprises.
[After the Oligarchy] Hello everybody, this is After the Oligarchy. Today I’m speaking with Professor Yanis Varoufakis.
Yanis Varoufakis, thank you very much for joining me.
[Yanis Varoufakis] Well thank you very much for having me on After the Oligarchy. We are living under the oligarchy, but anyway let’s imagine, let’s imagine.
[ATO] Exactly.
So again I have a lot of questions for you. We’ll begin with a question about housing, because after I posted the first interview and also the model summary something that kept coming up again and again from commenters was that they were worried about security in the commercial housing sector. The problem raised was basically that you’re saying that every year, or every period of time, I have to keep bidding to retain access to my house. And if somebody comes along who has more money than me then then I get kicked out.
And, of course, I certainly appreciate the ingenuity of the mechanism, to try to constantly reveal the opportunity cost of the land and the housing for society to be able to get that back so that there isn’t a rentier dynamic in housing.
How would you respond to that question of security?
[YV] Well, firstly, remember that this is about the commercial zone. In in my blueprint, every county – think of it as counties – chooses to create a space that’s not … I mean, it’s democratically determined how large this commercial zone will be. The purpose of this commercial zone is for it to be run commercially by the many, for the many, in order to extract rents from those who want to operate in the commercial zone; rents with which to build social housing, social zoning, social entrepreneurial activities, common spaces, the commons. So it is a good feature, a well-designed feature of the commercial zone, that anybody who wants to operate in it has to live in fear. If you wanted to live in a house that that you paid for, not in a social house, not in a unit within social housing, then yeah I mean live in fear.
Remember, it’s not just that once a year you bid for it, but it’s something like a perpetual auction whereby anybody can actually outbid you and throw you out. Which is great because the commercial zone is there to make money for the many, for every citizen who lives in the social zone and whose activities – whether they’re poetry readings, or paintings, or producing social goods – are being funded by the commercial enterprises within the commercial zone. So it’s okay if you if you live in fear. And the whole point of this permanent auction is to ensure that there is complete incentive compatibility. In other words, that when you declare to the authorities what you value that building or piece of land as that you’re truthful. And you will only be truthful if … you can undervalue it if you want, but then somebody can come and outbid you and throw you out. So I have no defence to those who say that ‘oh, the people who live there in commercial zone will live in fear’. We want them to live in fear.
And, you know, it’s a game for them. The crucial point here is that you don’t have to live in the commercial zone. I would live in the social zone. But if you want a fancy house, a much fancier house than you deserve, or you want to create an enterprise in a place that society does not deem that you should have it, then yes you pay for it. And if you make the money for it, yeah good it all goes back to social housing and the social zone.
[ATO] Okay, so it’s really that that the priority is being put on the redistributive function of the commercial housing zone.
To move on to something else, I’ve a series of questions about income and wealth inequality. This is also a concern for some people, it’s a concern for me as well and any kind of market system … so, for example let’s talk about taxation. In Another Now there are two taxes. I mean, maybe there could be a carbon tax but let’s not go into that. There is a corporation tax, which is a tax on the revenue of all firms, and then there’s a land tax and we were talking about that there.
[YV] Land tax only in the commercial zone, only the commercial.
[ATO] Yes exactly, on the commercial zone. One might say ‘well, are you serious? There’s no income tax?’
[YV] Yeah! There’s no income tax.
[ATO] Because there could be seriously divergent incomes, because different firms could have much different rates of profitability or revenue streams, so it’s likely, one might say, that there is a lot of inequality generated. But there’s no progressive income tax.
[YV] I’m not convinced. I don’t believe there will be. If you look at the capitalist system, or techno-feudal system, in which to live today, inequality – mind numbing and soul-crushing inequality – is the result of two things. Firstly, the private ownership of firms, of the means of production, shares, share markets. That’s one, and finance is the second one. That’s where the huge inequality that is destroying our spirit comes from. Not to mention our planet.
In Another Now there would be neither. Because shares are distributed on the basis of one employee, one member, one share, one vote. And there is no financial sector, the financial sector has been taken over by a distributed ledger of the central bank. And therefore this highly problematic toxic duet – duetto in Italian – between the banker and the mogul, the banker creating, printing, money out of thin air, lending to the mogul, who uses the printing presses of the private bank in order to corner the market in the share market and effectively own everything. And then the wealth begets wealth.
Now why is Zuckerberg so much wealthier today than he was at the beginning of the pandemic. Nothing to do with the profitability of Facebook. It’s got to do with the fact that there is this combination of financial capital – the printing presses of the central bank working for Zuckerberg, not for the people, not for the many unlike in Another Now – and ownership of Facebook. And if you break down ownership of Facebook, and Facebook is equally owned by everybody who works in Facebook, and if you end the printing presses both of the state and the private sector banks operating at full throttle on behalf of the very, very, few, then the inequality that you and I are used to goes.
Not everybody’s going to earn the same. Yes, some companies are going to make more money than others. And some people will make more money within the same company because of the bonuses system that I have envisaged. But the differences between pay and capacities of those people will be minuscule. I don’t want to live in society where everybody gets exactly the same independently what they do. But the magnitude, the order of magnitude of equality that we’re facing is simply impossible in a system like the one I describe in Another Now.
[ATO] Okay, I have two responses to that. The first is that one might say ‘yes the inequality could be much less’ – and it would be, I think it’s hard to imagine that it would be anything like it is at the moment – ‘but the levels of inequality now are so outrageously great that it’s not a reasonable point of comparison’. So we need to think about whether the inequality that would exist would be tolerable rather than whether it be less than what exists now.
This point though is very interesting. Somebody might say ‘okay I see what you’re saying but why not have any progressive income tax?’. What’s the reasoning behind that?
[YV] Well, because we want a simple society in which people don’t pay taxes. The only reason why we care about income tax today is because we have a classist, stratified, society where some have everything and the rest have nothing. And the rest of the world who don’t have much say ‘well, we really need an income tax, it’s a way of recouping something back from the bastards who have everything’. Well, if we do away with social classes based on private ownership of means of production, then that sentiment and the argument simply disappears. We will not need income taxes. And certainly not sales taxes or value added taxes (VATs). What’s the point?
[ATO] What would be a range of incomes that you think would be acceptable? We don’t need to get too particular about it, you know ‘1.7’, but roughly what do you think?
[YV] Anything that that comes out of Another Now. And let me let me be clear on this. The problem I have with inequality in capitalism is that it is the result of exploitation.
You see, liberals, free marketeers, and right wingers, present capitalism like an Olympic 100-metre sprint: some people are faster some, people are slower, and what can we do? The faster man or woman is going to win a gold medal, the others can just dream of it. But this is an awful metaphor for capitalism. Capitalism is not a race where some win and some lose. The problem is not inequality, the problem is exploitation. So, if you really want a parable for capitalism the 100-metre sprint is not a good one.
I’ll give you my parable. It’s like when the Brits went to the Himalayas as conquerors during the Raj, during the British Empire, and beyond that. They had their sherpas carrying them, and their pianos, and their desks, all the way to Mount Everest. So, if you get rid of this relationship, if the sherpas are not carrying the colonial masters on their shoulders, then I don’t mind if somebody manages to get up to Mount Everest and somebody else doesn’t.
So, if there is inequality when we do not have capital fuelling exploitation, which then results into much greater inequality, which then results into more capital that then fuels exploitation, then I don’t have a problem.
And, by the way, in Another Now, of course you never can predict. Human malice can always seep in and subvert even the most beautiful social arrangements, rules of the game. Well, there is a fallback position, there is an insurance policy. It’s the juries of citizens, randomly selected like in the Irish assembly in the case of your [2018] referendum on abortion, and those jurors have the capacity to disband a company that is misbehaving or producing exploitation of some kind of form that we are not in a position today to predict. So you have that insurance policy as well.
[ATO] That’s a very good analogy for capitalism. The exploitation that you’re talking about is very important. You’re talking primarily about the exploitation of the working class by the capitalist class, say within a firm. The pre-distribution of income from the people who do the work to those who make an income just by having some legal title, some claim to the ownership of property. And that’s crucial.
But to play devil’s advocate, would you not think that there’s also an element that a market society itself as a mode of distribution, and the competition involved in that, even through purely statistical effects, will lead to pretty big divergences in income and hence wealth over time? That it’s something that arises from the nature of the system itself rather than just the structure within a firm, and that this could over time lead to a polarization so that without a progressive income tax this would happen or it would happen even faster?
[YV] No, I don’t think so. I really don’t think so. I think that we are making the mistake of assuming, because that has been the historical reality up to now, that property rights go hand in hand with markets. If you take away property rights over means of production, then markets do not have this tendency. Yes, there will be patterns, there will be patterns. And there will be waves, ripples. Think of a pond with ripples of inequality. There will be ripples, there will not be massive waves like in Hawai’i. And they will dissipate because don’t forget – and maybe I’m preempting one of your questions here – that you will not be able to leave to your children a house, building, land, shares, means of production, capital. So the whole thing will dissipate. There will be ripples that will be lost in the sand.
[ATO] Yeah, the next question was actually about inheritance. So, very good. Just to be clear, is there any private inheritance at all?
[YV] Of course. Not of means of production.
[ATO] So what inheritance is there?
[YV] My stamp collection I can live to my daughter. My books, my writings, you know, my favorite jumper, my watch that my father gave me, I can leave all this to my kids. But I cannot leave productive resources like houses, like land, like shares, like factories.
[ATO] What about money? Can you leave money?
[YV] Yes you can leave money. But money does not breed money in Another Now. Because money cannot buy you capital – ha! – and that is the essence. It cannot buy you shares, it cannot be financialized, and therefore … it can be lent at an interest, but that’s neither here nor there in terms of inequality boosting and creation.
[ATO] Well, that was another question. To take this in two different directions: would you not think that … there’s a Legacy payment which is a large trust fund that every resident gets and that would be something that would be on the order of a year’s salary maybe two years salary (or ‘return to capital’, whatever way you want to put it). And so is private inheritance not redundant in that case? Since everybody starts off with the Legacy, private inheritance only serves to make a more uneven starting place for everybody.
[YV] Look, I wouldn’t mind a situation whereby in the revolution that begets the other now we say ‘okay, let’s all start from zero’, and we all get a Legacy payment, and then we have our Dividends (our basic income), and so on. I wouldn’t mind that.
But if you want to win over people to this idea, you want to make it maximally acceptable to them. And I don’t mind telling a rich person in person you can keep your dough, keep your money. What you are not going to be allowed to do is to use it in order to buy up productive resources by which you can exploit others who don’t have them.
And then I really do believe that even if you start with very unequal bank accounts – or accounts in our distributed ledger central bank system – the important thing from where I’m standing is that whatever inequalities in resources in monetary resources there are, they cannot buy the capacity to exploit. If means you can you can buy more stuff, buy more stuff. I mean, what are you going to do with it, with more stuff you? You’re going to end up with a garage full of rubbish. But you would not be able to create more power for yourself to exploit others. That is the essence and once you do that the whole thing is going to dissipate. You can have inequalities but you are not going to have exploitative capacities or extractive power that can generate the kind of abysmal social clashing and conflict that we live in today.
[ATO] I know you’ve talked about this before: the question is about having money which depreciates over time or is time-limited as a measure to preclude or to reduce the hoarding of wealth. Is it something that you would consider?
[YV] No, not in the Another Now, it’s not necessary. In capitalism it would be a good idea, it would be a way of doing two things: on the one hand, making it difficult for people to hoard money, and, on the other hand, to stimulate the economy when you’ve reached a serious recession. Because as we know from the last 10, 12, 13 years after 2008, when interest rates reach zero they’re going to become negative because people will simply hoard cash. But if the cash is not physical and it’s digital and you can have a negative interest rate, that’s effectively shrinking money. But these are all second-rate, sub-optimal, remedies for something that cannot be remedied: capitalism. But in Another Now you don’t need that.
[ATO] One more thing on this topic. When we’re talking about inheritance and the ability to turn money into money. So, finance would work very differently in Another Now than under capitalism. However, consider the situation where if somebody starts with one million euro and they’re earning 3% or 5% on that they’re going to gather wealth at a much faster rate than somebody who starts off with one hundred thousand or ten thousand. This is even though finance works very differently in Another Now. This is still a way that people can turn money into money. And perhaps initially all they can do is turn that into higher claims on consumption of final goods. But eventually, maybe a generation or two along the line – or who knows – that could form into class divisions. So, I’m just throwing out that question. What do you think about that?
[YV] I’m not worried about this because, firstly, the rich who transition from capitalism to Another Now – the postcapitalist Another Now – yes, they will be able to use a compound interest rate to have more and more. But that will not result in a different social class. It would result in more spending power.
The reason why we have social classes in capitalism is because it’s a zero-sum game, or constant sum game. If you have money and the other doesn’t, then you can buy means of production that the other one will not have access to. And by ensuring that the other one does not have access to it you can actually make them do things. You can grant them access to the means of production, to the tractor, to the land, to the factory, and so on. You have power over them. And that’s where society becomes abysmal and just cruel.
But if all it means is that they can buy more rubbish, let them buy more rubbish. I don’t care if some people have a capacity to fill their houses with gadgets. Let them buy gadgets. That doesn’t give them power over me, or over my daughter, or son. You see what I mean? So I’m not worried.
[ATO] Yes. Let’s move on to something a little bit different. This is about firms. The first question is that in Another Now you state that, for the most part, firms would have less than, say, 300 staff. Not all of them, but most of them. And this would be because, firstly, the flat management structure and, secondly, the lack of a share market. So, the question is could you just elaborate on, talk about, that a bit? And, also, would this really be the case? Would there not be firms which would be bigger?
[YV] Well one never knows. This is an empirical question. We have to institute Another Now and then watch what happens.
Remember, even if this happens and we don’t like it – there are two ‘if’s here – if it happens and we don’t like it – because it may happen and it may not be a problem, you may have a large corporate firm which is actually good for society – but let’s say for argument’s sake that both ‘if’s are fulfilled. Then what happens? Well, we have the Socialworthiness Index and the juries, we can break them up, those companies. There’s nothing that stops us. And it’s not the state that does it, it is the juries of citizens who are representative of the stakeholders in some kind of sector or enterprise. So, we have the means to break up companies if they get large and we don’t like that they are large.
But beyond that I don’t think they would get large, organically speaking, in an evolutionary sense, because the whole point about corpo-syndicalism – this corporate law that I have imagined, that I’ve conjured up, in Another Now – is that every member of a company, every worker, every employee, has one share and one vote. Which means that everybody who wants to participate is participating in decision-making. Now, would you want to be in a situation where you have to make collective decisions with another 20,000 people? I don’t think you would.
So, if you if you take a company like General Electric, for instance, or Facebook for that matter, any large corporation today, and you introduce corpo-syndicalism, you’ll find very quickly that people will want to spin off; that employees themselves will say ‘okay, now we’re the division making washing machines for General Electric. Why do we need to be the same company as the ones who are making jet engines? So let’s split them up’. They’ve got nothing to lose from doing that except peace of mind and a better capacity to make decisions. Why do the washing machine makers want to make decisions together with the ones who make jet engines? I don’t think they would want to do that. It would be just too unwieldy for them. It would reduce their capacity to play a significant role if they did that. If they agreed to keep the company large just to make the company large, they would then have themselves to validate and to endorse the creation of a managerial class within the company of some of their colleagues who would be doing the management, which will be too unwieldy. Why would they want to do that? Why would they want to create bosses for themselves?
[ATO] Well this leads on to the next question, which is closely related, about monopoly. Let me get into that by answering that question. Let’s say, again playing devil’s advocate, there are economies of scale which come from market size and there’s an opportunity to have greater market power and hence achieve greater rates of profit. So, you might have a workplace where they decide because of market competition that they would like to get bigger and bigger, because that’s one strategy that you can use to achieve higher profits and market share. So, whether or not that would happen, that would certainly be one motivation for this to happen.
So, there’s that, and the question is what about – you’ve kind of answered this already – what about private monopolies? Because if we’re transitioning to Another Now from this society, we’d already be starting with many markets which are monopolies and oligopolies. And then also we could imagine that they might arise from time to time. So, what’s the approach there?
[YV] Well, the key social device that stops that is a jury. The jury can break them up, say ‘you’re not in the public interest, your Socialworthiness Index is too low, and therefore we break you up. Unless you want to stop operating this way, and here is a set of conditions for you to fulfill if you don’t want to be broken up: price, quantity, quality of the product, and if you don’t want to do that then we’ll break you up’.
But there can be a positive input from the juries. The juries can say ‘society, here we need a X, Y, and Z’ and says ‘okay, who wants to bid for X, Y, and Z, to produce X, Y, and Z, under these conditions that we set?’.
[ATO] I mean, we already have anti-trust legislation, or anti-monopoly legislation. If that was actually implemented things would look very differently, even in capitalism.
[YV] But you see the reason why in capitalism they’re not being implemented is because of private ownership, the fact that there are some people who own a whole range of corporations and therefore own the government, and own the authorities that are supposed to police the anti-trust legislation. That’s why the anti-trust legislation doesn’t work. And in Another Now there’s no such problem.
[ATO] Yes, absolutely. The political process is completely captured and an instrument of class rule.
Okay, these worker-owned firms in Another Now, you say that they have a flat management structure, a fluid way of organizing themselves, pretty much as non-hierarchical as you could imagine. And something that came up in the comments a few times was that people were asking: this would certainly be appropriate in some cases, but is this appropriate in all cases? And you could add in: unless this way of organizing a firm is legislated, why would a firm necessarily choose to do this? Surely they might choose to do different ways in different firms.
[YV] That’s correct. That’s a complication which I don’t have in the book. After all, it is a novel.
[ATO] Yeah, well, that’s why we’re having these conversations. Because how can you do all that in 200 pages?
[YV] And I thank you for the opportunity to go beyond the novel.
But I think the way in which corpo-syndicalism is described in the book is a good way of describing the default, the basic case. And then, of course, you can have special cases.
Now, for instance, I was thinking myself, take a newspaper or a news website. Somebody has to decide what goes on the front page. Horizontal management is not appropriate for that. Horizontal management is appropriate for allowing anybody on this newspaper, this electronic internet newspaper, to write whatever they want, and to pursue whatever line they want to pursue, and do whatever investigation they want to do.
But then of course it is perfectly possible to have a situation where and people actually vote for the article that will go on the front page, or to even appoint an editor. But the editor would be appointed by the shareholders who happen to be everybody writing pieces in this newspaper. Not some shady person nobody knows of who owns a company, that owns another company, that owns another company, that owns the newspaper. So, there may be room, and there should be in the corporate legislation, there should be room for adjusting and amending the management style to the needs of the particular sector. But as a basis, this must be a decision that the shareholders make, in other words the workers.
[ATO] Onto something different, it’s about the Disjointedness Criterion. And just to explain to viewers, the Disjointedness Criterion in Another Now is the way of deciding who gets to have a share in the company and who doesn’t; who’s a member of the cooperative, and who provides a service or a good to the company as an outsider.
I’ve got a question from two different directions, let’s start with this one. Because I’m sure this is something that a lot of people are thinking. There were some comments about this. Somebody gave this long story, I’m not going to go into all of it. Basically the issue of ‘look, it’s a nice idea that everybody is a member but what if you have’ – I think they gave an example of – ‘a psychotherapist’s or psychiatrist’s practice, and they hire a secretary, and they’re both equal partners in the practice and they’re both making decisions, but one of them has decades of experience and the other one is, you know, a 20-year-old who doesn’t know anything about it.’ I mean I’m sure you’ve heard this a million times. But there was another example about somebody who created – I think it was – a meditation business, and they brought people on and it became a cooperative, but it was their dream and they were the most committed to it, and then other people don’t necessarily share that same commitment, and so forth. So, if you could respond to that because this is something which comes up whenever anybody, not just in Another Now, proposes worker-owned enterprises.
[YV] Well, we all have the right to retain a monopoly of ownership of our dreams. But we don’t have the right to exploit the labor of others as part of pursuing our dreams.
When it comes to, for instance, the case of the psychiatrist and the secretary, creating a hierarchy in our head is fine. There’s no doubt that without a psychiatrist there will be no psychiatric service. But when it comes to politics, the political arena, the political market – let’s put it in this awful way – you’re going to have similar arguments. And they’re very powerful arguments, arguments against democracy. You have somebody who has given their life, you know, somebody like a modern day Socrates who is a philosopher, and a wonderful citizen, and somebody who really thinks deeply about the matters of the state, the matters of society. And then you have one completely illiterate fool, you know, he’s a gambler, and a drug addict, and an idiot, and they have the same vote. How can you assume that these people have the same vote? What do you do? Because that’s democracy. That’s the beauty of it. One person, one vote. So this is my answer regarding the first example.
Regarding the second example, it’s your dream, well if it’s your dream make sure you bring in people that share your dream. And if your dream is powerful enough and you’re bringing the right people in, those people will actually share your dream, and they will serve your dream, and if, in the end, they outvote you it means that your dream has either not been particularly powerful or you were not very careful as to whom you went into association with.
[ATO] Yeah, I think that’s a good argument.
I mean one of the ways I think about this, even at the most deflationary level, is that no economic system is going to be perfect. No system, in general no machine, no anything, is perfect. There are always pros and cons. So whenever we’re considering a system and its function, we need to think about what are the errors we’re willing to tolerate. We need to pick a set of errors that are the least bad and pick them. And so a cooperative society, a socialist society, is going to have its own cons, and for me the idea is that those cons are going to be much less harmful, much less pernicious, than the ones which come from what we have today.
[YV] I don’t even think that it is a con. In other words, a disadvantage. Not a ‘con’ in the sense of being a con job. If I have a dream about something and I bring people in as wage labour, then if this is a successful enterprise I have power to force them to do things that they would rather not do. I don’t think that this is wrong, that it is wrong to remove this power from anybody who has a dream and who was the originator of the company. It forces people like me, you, the meditation expert – that guru that you mentioned before – it’s not a bad thing, I don’t think it’s a disadvantage to force us to carry people with us. To inspire them, not to force them to do as they are told because we own the business and they don’t.
[ATO] Just be clear, I agree with you. I mean, that’s really the point. What I was saying is that even when that causes problems, even when it causes inefficiencies, if something doesn’t happen, the point that I’m making is that that’s something that I think we can live with because of the benefits.
[YV] The beauty of Another Now is that the market is there, it is liberated from capitalism, but it’s not everything. So, let’s say you create this meditation centre. You bring in the wrong people, you make a mistake, and you have these very difficult characters, and you can’t get rid of them because now they are members and they are the majority. You leave. So what? You do something else. Your whole existence does not rely on this business. We are moving away from this. I try to imagine a society where we don’t need business but we do business because it’s fun. And we do it in a cooperative way and if it doesn’t work, you know, bugger it, go, we’ll do something else, we’ll find another group of people to play with. This capacity to choose your partners and without the fear that ‘my goodness, if this partnership breaks down, how am I going to put food on the table? How am I going to make the rent? How will my children go to school?’ That goes away.
[ATO] A brilliant note to end on, because we’re out of time. I want to thank you for taking the time to speak with me again. Wonderful discussion as always.
Just quickly in terms of other interviews, are you generally interested in continuing this? Because there are a lot of questions and issues to discuss.
[YV] In a month’s time. I’m quite happy, this is a very good discussion.
[ATO] Okay that’s great.
Thank you for watching. If you found this interesting, useful, or thought provoking, then press the Like button, consider Subscribing, and, if you really enjoyed it, sacrifice your first born to Ghislaine Maxwell.
There’s a lot more such material to come. We will keep exploring the intricacies of better futures for humanity until we get there. And as always I want to read your thoughts in the comments section below.
That’s all for now. The only viable future for humanity is one After the Oligarchy.
Interest rates will have to rise without jeopardising the green transition. It’s a difficult task, but it can be done.
Inflation is a disease that disproportionately afflicts the poor. Even before Vladimir Putin unleashed his brutal war on Ukraine, whose byproducts include soaring energy and food prices, inflation was already over 7.5% in the US and above 5% in Europe and the UK. Calls for its taming are, therefore, fully justified – and the interest rate rise in the US, with the same expected in the UK, comes as no surprise. That said, we know from history that the cure for inflation tends to devastate the poor even more. The new wrinkle we face today is that the supposed solutions threaten not only to deal another cruel blow to the disadvantaged but, ominously, to snuff out the desperately needed green transition.
Two influential camps dominate public discourse on inflation and what to do about it. One camp demands that the inflationary flames be smothered immediately by the monetary policy version of shock and awe: raise interest rates sharply to choke expenditure. They warn that delaying a little monetary violence now will only necessitate “Volcker shock” levels of brutality later – a reference to Paul Volcker, the Federal Reserve chair who quelled the hyperinflation of the 1970s with sky-high interest rates that scarred the American working class to this day. The second camp protests that this is unnecessary, counter-proposing a steady as she goes stance for as long as wage inflation is kept on a leash.
The two camps agree that rising wagesare the real threat, their disagreement focusing only on whether it is prudent to act before or after they start picking up. They agree also that, to fight inflation, the supply of money and credit must be dealt with in a two-step sequence: central banks must first stop creating new money and only then raise interest rates. The two camps are dangerously wrong on both counts. First, wage inflation should be welcomed, not treated like public enemy number one. Second, it is precisely when interest rates are rising that central banks should continue to create money. Except this time, they should press it into the service of green investments and social welfare.
Since 2008, inequality has been allowed to rise. A dozen years of central bank support for the rich, coupled with punitive austerity for the many, has led to chronic underinvestment and low wages. Central banks plucked the money tree ferociously to boost share and house prices, while wages languished. Asset-price inflation and mind-numbing inequality thus became the order of the day. Eventually almost everyone agreed, including many of the mega-rich, that wages had to rise not just in the interests of workers but also because low wages underpinned underinvestment and created societies bristling with low productivity, low skills, low prospects and poisonous politics.
Remarkably, all it took for this consensus to vanish was a modest, by historical standards, wage inflation brought on by a post-lockdown labour shortfall. After a decade of turning a blind eye to rampaging asset-price inflation (even celebrating it, in the case of crazy house prices and boisterous stock markets), a whiff of wage inflation threw the authorities into an almost uncontrollable panic. Suddenly, the prospect of rising wages turned from an objective to a menace – prompting Andrew Bailey, the governor of the Bank of England, to ask workers to place their wage demands under “quite clear restraint”.
But this isn’t a rerun of the 1970s, when the working class was the only casualty of interest rate rises. What’s critically different is that, today, a Volcker shock may well smother the green transition along with a large part of labour’s share of national income.
The counter-argument is, of course, that neither workers nor society’s capacity to invest in the green transition will benefit from wage rises that are overtaken by rising prices. True. What is also true, however, is that a monetary policy that prioritises the prevention of wage inflation will, even if successful at nipping inflation in the bud, only lead to another wasted decade marked by underinvestment in people and nature. While the working classes may rise up 10 years from now to claim the share of aggregate income that they deserve, it is arguable that another 10 years of underinvestment in the green transition will push us all to the brink of, if not extinction, irreparable damage to humanity’s prospects.
So how do we deal with inflation without jeopardising investment in the green transition? What is the alternative to a class war in the form of a blunt interest-rate policy that squeezes the supply of money across the board either violently (as the advocates of shock and awe propose) or more gently (the steady as she goes suggestion)?
A decent alternative policy must have three goals: first, to repress asset prices (such as house and share prices) so as to stop scarce financial resources being wasted in building up paper values. Second, to push down the prices of basic goods while allowing for higher returns to investment in green energy and transport. Third, to deliver massive investment in energy conservation and green energy, transport, agriculture – as well as social housing and care. The following threefold policy agenda can achieve these three goals.
First, raise interest rates substantially. Ultra-low interest rates have failed to boost investment – and, in any case, were never available to those who either needed to borrow money or wanted to borrow to do things society needed. All ultra-low rates did was to boost house prices, share prices, inequality and all those things that divide society.
But, second, this must be done in concert with a massive central bank-supported green public investment drive. Naturally, raising interest rates will not boost investment, even if it is true that next to zero interest rates also did little to help investment. To escape the low-investment quagmire, the central bank should announce a new type of quantitative easing: it should stop financing the financiers and, instead, promise to stand behind (by buying, if needs be) public green bonds that raise funds to the tune of 5% of national income annually – a sum that will be invested directly into the green transition, giving society a fighting chance to do what it must to stabilise the climate.
Third, extend the same public finance model (that is, getting the central bank to stand behind public bonds) to invest in social housing and care.
In short, what I am proposing is a reversal of the toxic policies implemented since 2008. Instead of central banks providing free money and low interest rates to the rich, while the rest languish in the prison of austerity, the central bank ought to make money more expensive for the rich (through significant interest rate rises) while providing cheap money for investing into the things the majority and the lived environment both need and deserve.
Summer school: Technology, society and the future
News from Nowhere is a utopian novel written in 1890 by William Morris. Morris imagined a world in which human happiness and economic activity coincided. He reminds us that there needs to be a point to labour beyond making ends meet. Capitalism, he explains, locks the capitalist into a horrible life, which leads nowhere but the grave. Morris’s utopian society has no government nor a monetary system. Craftwork has made “wage slavery” obsolete, and parliamentary democracy has given way to new forms of cooperation. The means of production are democratically controlled, and people find pleasure in sharing their interests, goals and resources. Is now the utopian vision of Morris within reach?
When
The summer school includes four full days: 20/07, 21/07, 22/07, 23/07 in 2022. It will start at 09:30 am on 20/07.
Where
The summer school will take place in Kalentzi (GR), a village at the Municipality of North Tzoumerka, 30km away from Ioannina, as well as in Frasta, a village 15km away from Kalentzi. The access to Kalentzi from Ioannina is through the provincial road Ioannina-Pramanta. Kalentzi is 20km away from the 2 big highways, which lead either to Athens or Thessaloniki, and 35 km from Ioannina’s King Pyrros airport. Soon here you will find more info about travelling and staying in the region.
The summer school is open to local and international PhD students from all disciplines with an interest in technology and societal issues. Master students who have accomplished the first year of their studies at their home university could also be enrolled in the programme. Excellent command of the English language is necessary.
Scope and aim
The summer school will use Morris’s News from Nowhere as a starting point of a spellbinding tour on what technology is and the alternative trajectories of techno-social development. We will discuss techno-determinism in its various forms, using classical technology critiques to understand, and see the power of, techno-development. We will then address ICT as a form of technology, debate the specific fields of media, gaming, and fashion, and look at digital governance and the smart city as well. Finally, we will explore how to create a sustainable economy through the commons, discussing the phenomenon of “cosmolocalism”.
Facilitators
The summer school is a theoretical and hands-on exploration of alternative techno-social trajectories. The theoretical exploration will be facilitated by Prof. Wolfgang Drechsler, Prof. Vasilis Kostakis and Dr. Christina Priavolou. The hands-on exploration will be facilitated by Boulouki and will include a workshop on traditional tar production technology and its potential implications for the commons.
Fee
There is no fee.
Application
Send your CV along with a one-page-long motivation letter to nikiforos.tsiouris AT taltech.ee. Deadline: 10 May 2022. Positions are limited (15 students). If positions are filled up before the end of the deadline, the application round will be closed. In this case, we will post an announcement on this web-page.
More about the region
Soon here you will find more info about travelling and staying in the region.
Acknowledgments
The summer school is financially supported by the European Research Council under the European Union’s Horizon 2020 research and innovation programme (grant agreement No 802512). Wolfgang Drechsler’s participation is made possible with funding from the European Union’s Horizon 2020 Research and Innovation Programme (grant agreement No 856602), see also www.finestcentre.eu. The seminars and the workshops will take place in facilities and buildings kindly provided by the Municipality of Northern Tzoumerka, the Cultural Society of Kalentzi and the Municipality of Central Tzoumerka. We thank them deeply.
Questions
Contact: nikiforos.tsiouris AT taltech.ee. The programme of the school will be announced once the students’ cohort is finalised.
Summer school: Energy as a commons
The last decade has marked a significant increase in the global conscience of the need for radical changes in our “way of life.” The issue of rethinking our energy systems –traditionally centralised and fossil-fuel-based to support mass consumption– has been prominent and contentious. Due to its complexity, proposed solutions often address the symptoms of the current socioeconomic configuration rather than tackling its core assumptions. This summer school aims to explore a radically novel energy system that could reconceptualise the material and digital infrastructure and the political economy that permeates it.
When
The summer school includes four full days: 30/08, 31/08, 01/09, 02/09 in 2022. It will start at 09:30 am on 30/08.
Where
The summer school will take place in Kalentzi (GR), a village at the Municipality of North Tzoumerka, 30km away from the city of Ioannina.The access to Kalentzi from Ioannina is through the provincial road Ioannina-Pramanta. Kalentzi is 20km from the 2 big highways, which lead either to Athens or Thessaloniki, and 35 km from Ioannina’s King Pyrros airport. Soon here you will find more info about traveling and staying in the region.
The summer school is open to local and international PhD students from all disciplines with an interest in energy transition. Master students who have accomplished the first year of their studies at their home university could also be enrolled in the programme. Excellent command of the English language is necessary.
Scope and aim
There is an urgent need to transition to an energy system that not only produces energy in an environmentally sustainable way, but also socially. The summer school will discuss solutions that challenge the very foundation of modern organisational and technological systems for truly impactful energy research. It will explore the potential of energy as a commons in terms of social and environmental sustainability. That is, energy as a communally produced and managed resource satisfying users’ needs rather than a commodity to maximise profits by producing and selling as much as possible. The summer school will provide the foundations for a novel research within the fields of science and technology studies, political ecology and economy, organisation studies, and engineering. Facilitators and students will co-create a learning environment to collaboratively investigate alternative technological and organisational trajectories under a commons-based political economy umbrella.
Facilitators
The summer school is a theoretical and hands-on exploration of alternative technological trajectories to the energy sustainability conundrum. The theoretical exploration will be facilitated by the P2P Lab and will be a blend of formal and non-formal educational techniques. Prof. Aristotle Tympas will also deliver a full-morning seminar. The hands-on exploration will be facilitated by the School of the Earth “Nea Guinea” and will include the collaborative building of parts of a small-scale wind turbine. Students will have the chance to discuss state-of-the-art findings and future scenarios with participants of the ERC project “Cosmolocalism”.
Fee
There is no fee.
Application
Send your CV along with a one-page-long motivation letter to nikiforos.tsiouris AT taltech.ee. Deadline: 15 June 2022. Positions are limited (15 students). If positions are filled up before the end of the deadline, the application round will be closed. In this case, we will post an announcement on this web-page.
More about the region
Soon here you will find more info about traveling and staying in the region.
Acknowledgments
The summer school is financially supported by the European Research Council under the European Union’s Horizon 2020 research and innovation programme (grant agreement No 802512). The seminars and the workshops will take place in facilities and buildings kindly provided by the Municipality of Northern Tzoumerka and the Cultural Society of Kalentzi. We thank them deeply.
Questions
Contact: nikiforos.tsiouris AT taltech.ee. The programme of the school will be announced once the students’ cohort is finalised.
Not since ISIS have we seen such a flurry of recruitment activity.
“Hi can you please forward a message since two of us are trying to get a carshare from germany to ukraine going,” reads a Feb. 26 message forwarded to a popular neo-Nazi Web channel.
“We are 3 french, leaving Strasbourg tomorrow morning with our car,” another message answered. “There is place for 2 german fighters.”
These are the types of conversations that have flooded Western neo-Nazi and white-nationalist venues online every day since Vladimir Putin ordered the invasion of Ukraine: users organizing carpools, plotting how to cross the Poland-Ukraine border to join the fight against Russia. Their goal is not to defend Ukraine as we know it — a multiethnic, democratically minded society led by a Jewish president. Some neo-Nazis simply see this new war as a place to act out their violent fantasies. For others, though, the force pulling them toward the conflict is a shared vision for an ultranationalist ethno-state. They see Ukraine as a golden opportunity to pursue this goal and turn it into a model to export across the world.
The would-be militants have been recruited by groups like the Azov Battalion, a far-right nationalist Ukrainian paramilitary and political movement. Azov was absorbed into the Ukrainian national guard in 2014 and has been a basis for Putin’s false claim that Ukraine’s government is run by neo-Nazis. Though Azov remains a fringe movement in Ukraine, it is a larger-than-life brand among many extremists. It has openly welcomed Westerners into its ranks via white-supremacist sites. Azov stickers and patches have been seen around the globe: from a bookbag at a July 2020 neo-Nazi counterprotest in Tennessee to the motorcycle of an attempted mosque bomber in Italy.
To be clear, not all in the far right adore Azov, which some see as having ties to Israel or Jewish funders. But since Azov publicly invited foreign fighters into its ranks on Feb. 25, the organization’s official Telegram chat group has been packed with messages from people in the United States, Britain, Germany, France, Spain, the Netherlands, Sweden, Poland and other Western countries expressing interest in joining. Neo-Nazi chat groups and channels in various languages have echoed Azov’s calls. I haven’t noticed this level of movement-wide recruitment activity since the Islamic State declared its so-called caliphate in 2014 and sought sympathizers globally to join its fold.
We at SITE, an intelligence group tracking global extremists, have noticed a surge in online activity by white nationalists and neo-Nazis in conjunction with the war in Ukraine. Among the hundreds of individuals who have announced their intent to join Azov in recent weeks are several known neo-Nazis. For instance, “MD,” an American member of Azov’s recruitment chat group, has repeatedly tried to get fellow countrymen to join the battalion in Ukraine. “Are there any Americans looking to go? We could for a group to go over there,” he said. We discovered that MD is also a member of some of the most sadistic far-right extremist chats on Telegram, where he has proposed establishing a neo-Nazi militia in the United States.
“D,” another member of the chat, is a self-described military veteran in Britain who is active in dozens of neo-Nazi venues on Telegram. Like MD, he has sought to form his own band of countrymen. “Any UK bois, I’m in Uk and leaving hopefully in 1-2 weeks,” D wrote on Feb. 27.
D’s motivations seemed even more troubling than MD’s. He wrote, “Anyway when I get to Ukraine I’m going to kill extra Jews now whenever I see them.” Another post read in part, “I’m getting my gear together, hail Hitler, glory to Ukraine and let’s all kill some [expletive] Jews for Wotan!” (Wotan is a god from Norse mythology, which many far-right extremists appeal to in their rhetoric and aesthetics.) D later indicated that he had formed a “group from UK” to head to Ukraine.
“Polish guy living in America here, looking to help out in any way I’m able,” chat member “Z” posted on Feb. 25, later adding, “i’ve got a lot of gear i can bring around, from helmets to vests of all sorts.” Z is also an active member of many neo-Nazi chat groups, we discovered. The same Z wrote in another chat group: “I hate Ukraine.”
That’s because Western white supremacists and neo-Nazis, for the most part, do not support the current Ukrainian government — and not simply because of its ban on antisemitism, President Volodymyr Zelensky’s Jewish heritage or other specific matters. Ukraine is a developing democracy, which far-right extremists oppose as contrary to the fascist governments they want to see. As the administrator of a popular German and English neo-Nazi chat group wrote while urging members to join Azov, “I am not defending Ukraine, I am defending National Socialism.”
Furthermore, while some white nationalists have expressed admiration for Putin, many Western far-right extremists oppose Russia, which they conflate with the former Soviet Union and therefore consider communist. Yet this mobilization on Ukraine’s behalf is driven by more than just a mutual enemy: The mobilizers see the Russia-Ukraine war as a major opportunity to advance white nationalism via militancy. To them, Ukraine is a sandbox for fascist state-building, ripe for the kind of armed far-right power grab they long to see in their own countries.
For the most extreme among these neo-Nazis, the plan is even more sinister. They see Ukraine as a chance to further “accelerationist” agendas, which seek to speed up a civilization-wide collapse and then build fascist ethno-states from the ashes. This school of thought is demonstrated vividly by “Slovak,” whom we at SITE consider one of the most influential accelerationist neo-Nazi voices in the far right. On Feb. 25, Slovak announced that he was leaving an unknown country to fight in Ukraine. “This war is going to burn away the physical and moral weakness of our people, so that a strong nation may rise from the ashes,” he wrote. “Our job is to ensure that conditions remain terrible enough for long enough for this transformation to happen, and happen it must. Our future is at stake and we may not get another chance, certainly not one as good as this.”
Inspired, Slovak wrote that Ukraine could see its own decades-long fight, likening it to the resistance mounted in Afghanistan against NATO or the Russians. “The Afghans did it for over 40 years against both of these forces and now they’re in control of their destiny,” he wrote. “Ukraine will have to borrow a page from their book.”
Niche as this accelerationist philosophy may seem, it must be taken seriously. Copycat attacks were plotted in California and elsewhere after a terrorist espousing accelerationist philosophies killed 51 people in Christchurch, New Zealand, in 2019.
Of course, none of these developments validate Putin’s claims that the war is about “denazifying” Ukraine. Forget about Zelensky’s Jewish background: It’s an ironic claim for Putin to make, since he gives safe haven to individuals such as Rinaldo Nazzaro, who was until recently the leader of the Base, a largely American cell-based neo-Nazi organization whose members have been linked to terrorist plots. Nazarro appears to have lived in Russia since at least 2018. Putin has also given haven to the Russian Imperialist Movement, which the State Department describes as giving “paramilitary-style training to white supremacists and neo-Nazis in Europe.” Putin gives these entities haven to help “aggravate societal fissures in the West,” a declassified U.S. intelligence report from last year suggested. Whatever sparse kernels of truth Putin is picking at regarding groups like Azov, it was he who invaded a sovereign country and created a new extremist breeding ground.
The issue at hand is not a matter of validating or invalidating narratives, though. The issue is security — for Ukraine and for the countries these extremists come from.
In many ways, the Ukraine situation reminds me of Syria in the early and middle years of the last decade. Just as the Syrian conflict served as a perfect breeding ground for groups like al-Qaeda and the Islamic State, similar conditions may be brewing in Ukraine for the far right. Syria became a plotting and training ground for terrorists to mount attacks in the West, such as the attacks in Paris in 2015 and in Brussels in 2016 attacks.
The extremists who successfully make it to Ukraine could return home with new weapons and combat experience under their belts — or stay in Ukraine, where they can further influence their countrymen online. Just because extremists are “somewhere else” does not make them any less dangerous to the countries they come from, as we’ve learned all too well. No matter where war takes place, it always amounts to opportunity for extremists.
Rita Katz is the executive director of the SITE Intelligence Group and a terrorism analyst. She is the author of the forthcoming book, “Saints and Soldiers: Inside Internet-Age Terrorism, From Syria to the Capitol Siege.”
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