Yanis Varoufakis

Yanis’ view on postcapitalism. – A contribution to mέta.
Looking beyond capitalism

Our global predicament changed radically after 2008, the year the western financial system imploded. Following twenty-five years of financialisation, under the ideological cloak of neoliberalism, global capitalism had a 1929-like spasm that nearly brought it to its knees. The immediate reaction was to use the central banks’ printing presses, but also to transfer bank losses to the working and middle classes (via bailout loans), so as to re-float financial institutions and markets. This combination of socialism for the financialised few and stringent austerity for the masses did two things.

First, it depressed real investment globally (as firms could see that the masses had little to spend on new goods and services), thus creating a gigantic gap between (a) real investment and (b) available cash and savings (boosted massively by government money printing). The result was discontent amongst the many and stupendous riches for the very few. Secondly, it gave rise initially to progressive uprisings (from the Indignados in Spain and the Aganaktismeni in Greece to the Occupy Wall Street movement and various left-wing forces in Latin America) who were, however, efficiently dealt with either by the Establishment directly (e.g. the crushing of the Greek Spring in 2015) or indirectly by the stagnation of global capitalism (e.g. the fading of leftist Latin American governments as Chinese demand for their exports collapsed due to the imbalance between global savings and global investment).

Yet that gift keeps on giving. Consider what happed on 12th August 2020, the day the news broke that the British economy had suffered its greatest slump ever. The London Stock Exchange jumped by more than 2%! Nothing comparable had ever occurred. Similar developments unfolded in Wall Street, in the United States. My interpretation is that, when Covid-19 met the gargantuan bubble with which governments and central banks have been zombifying corporations and financial institutions since 2008, financial markets finally decoupled from the underlying capitalist economy causing capitalism to evolve surreptitiously into a horrid postcapitalism – not, of course, the postcapitalism that convinced socialists once envisioned.

We need seriously to take into account the possibility that capitalism is not only worth terminating but, more pressingly, that capitalism has already undermined itself. Ιt is crucial to imagine what a postcapitalist world might be like.

To be desirable, it would feature markets for goods and services since the alternative –a Soviet-type rationing system that vests arbitrary power in the ugliest of bureaucrats – is too dreary for words. But to be crisis-proof, there is one market that market socialism cannot afford to feature: The labour market. Why? Because, once labour time has a rental price, the market mechanism inexorably pushes it down while commodifying every aspect of work (and, in the Age of Facebook, of our leisure even). The greater the system’s success in doing this, the less the exchange value of each unit of output it generates, the lower the average profit rate and, ultimately, the nearer the next systemic crisis.

Can an advanced economy function without labour markets? Of course it can. Consider the principle of one-employee-one-share-one-vote. Amending corporate law so as to turn every employee into an equal (though not equally remunerated) partner, via granting them a non-tradeable one-person-one-share-one-vote, is as unimaginably radical today as universal suffrage used to be in the 19th Century.

By granting employee-partners the right to vote in the corporation’s general assemblies, an idea proposed by the early anarcho-syndicalists, the distinction between wages and profits is terminated and democracy, at last, enters the workplace – with the new digital collaborative tools standing by to remove all inefficiencies that would otherwise hamper the prospects of a democratically-run corpo-syndicalist firm. Besides the democratisation of firms, it would bring the demise of share markets and terminate the need for gargantuan debt to fund mergers and acquisitions.

Already, some Central Banks are thinking of providing every adult with a free bank account. If this goes ahead in a society without share markets, why would you want an account with a private bank? Once debt leverage linked to share markets and personal banking disappear, so does commercial banking. Goldman Sachs and the like become extinct – without even the need to ban them.

What if we were to take this idea further, proposing that the Central Bank also credits each such account with a fixed monthly stipend (a universal basic dividend). As everyone would use their central bank account to make domestic payments, most of the money minted by the central bank will be transferred within its ledger. Additionally, the central bank can grant all new-borns a trust fund, to be used when they grow up.

Thus, persons would receive two types of income: The dividends credited into their central bank account. And earnings from working in a corpo-syndicalist company. Neither need be taxed – the end of income and sales taxes (VAT). Instead, three types of taxes fund this type of government: A 5% tax on the raw revenues of the corpo-syndicalist firms. A carbon tax. And proceeds from leasing land (which belongs in its entirety to the community) for private, time-limited, use.

Once this principle is embraced, a market-socialist blueprint almost writes itself. Freed from corporate power, unshackled from the indignity imposed upon the needy by the welfare state, and liberated from the tyranny of the profits-wages tug-of-war, persons and communities can begin to imagine new ways of deploying their talents and creativity.

As far as climate change is concerned, we know what we must do. Power generation must shift massively from fossil fuels to renewables, wind and solar primarily. Land transport must be electrified while air transport and shipping must turn to new zero-carbon fuels (e.g. hydrogen). Meat production needs to diminish substantially, with greater emphasis on organic plant crops. Strict limits on physical growth (from toxins to cement) are of the essence.

All these merely circumscribe some of the elements of a postcapitalism worth fighting, and living, for. And an escape from the dystopian postcapitalism that currently awaits us.

Professor Yanis Varoufakis is a member of the Hellenic Parliament, the Secretary-General of MeRA25, and a professor of economic theory at the University of Athens. He is the co-founder of DiEM25, member of the Progressive International’s Council, and the former finance minister of Greece. He is the author of several books, including the postcapitalist political sci-fi Another Now, as well as Adults in the Room and And The Weak Suffer What They Must?.