Toward an Equitable Economy

by Kim Petersen

January 20, 2004

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I have consulted the masters of science; I have read a hundred volumes of philosophy, law, political economy, and history: would to God that I had lived in a century in which so much reading had been useless! I have made every effort to obtain exact information, comparing doctrines, replying to objections, continually constructing equations and reductions from arguments, and weighing thousands of syllogisms in the scales of the most rigorous logic.  In this laborious work, I have collected many interesting facts which I shall share with my friends and the public as soon as I have leisure.  But I must say that I recognized at once that we had never understood the meaning of these words, so common and yet so sacred:  justice, equity, liberty; that concerning each of these principles our ideas have been utterly obscure; and, in fact, that this ignorance was the sole cause, both of the poverty that devours us, and of all the calamities that have ever afflicted the human race.


-- P.J. Proudhon


I detest communism because it is the negation of liberty and I cannot conceive anything human without liberty. I am not a communist because communism concentrates all the powers of society and absorbs them into the State, because it leads inevitably to the centralization of property in the hands of the State, while I want to see the State abolished. I want the complete elimination of the authoritarian principle of state tutelage which has always subjected, oppressed, exploited, and depraved men while claiming to moralize and civilize them. I want society, and collective or social property, to be organized from the bottom up through free association and not from the top down by authority of any kind.... In that sense I am a collectivist and not at all a communist.


-- Mikhail Bakunin


We are taught [capitalism] is a system that works; that itís a system that has brought prosperity. Weíve heard that all our lives. Now Iím going to try and convince you otherwise and Iím going to do it in two minutes. [laughter] Ö Itís very simple. Almost the entire world is capitalist and almost the entire world is poor. Capitalist Indonesia is miserably poor and getting poorer; capitalist India is miserably poor and getting poorer; so with capitalist Thailand, and capitalist Nigeria, and capitalist El Salvador, and Haiti, and Mexico, and Brazil, and Argentina. And capitalist Russia, and Poland, and Bulgaria with all the privatization and deregulation and free markets coming in: poverty, poverty, increase in crime, increase in desperation, increase in misery, increase in homelessness, increase in suicides. Itís capitalism at work -- moving in. Now not everyone suffers. The capitalists in these countries are doing quite well. These countries are getting poorer as the giant corporations move in and get richer. These [countries] are getting poorer as there is more and more deregulation, more and more so-called free market, which is really monopoly market. Itís a free market if you got money. Itís a market that works for those who have money.


 -- Michael Parenti


t is well established that money is increasingly concentrated in the hands of fewer and fewer people. Neoliberalism has accelerated the ever-widening gap between the haves and the have-nots. The developing nations are a source of massive profits for the foreign corporations that exploit the resources; meanwhile the locals become poorer. Within the rich nations, the same economic dichotomization plays out with the poor becoming increasingly worse off and the rich becoming obscenely richer.


Is this the kind of world that most people want? I think not. It is easy to inveigh against all the cupidity, corruption, and violence in the world. Many of us are avowedly anti-capitalism. But is that truly how we wish to be identified? What are the anti-capitalists for? Now that is a more difficult question to answer. Okay, many will reply that they are for socialism. Now socialism is a word that conjures up, rightly or wrongly, the systems that failed in Russia and eastern Europe, and was replaced, in all but name, in China. Many will insist that the socialism that existed in these countries was something other than socialism as embraced within their conception. The top-down dictatorships of communist regimes were anathema to true democrats. Semantics aside, the fact is that these countries didnít have the economic wherewithal to survive.


So what kind of system should replace tried-and-failed socialism and capitalism?


Robin Hahnel and Michael Albert have addressed this very question. They developed an economic model predicated on the core values of equity, solidarity, diversity, and self-management. They call their economic model participatory economics, abbreviated to parecon. Michael Albert came out with an important book in 2003 called Parecon: Life After Capitalism that elaborates further on the parecon model.


Albert describes how the ownership of the means of production leads to an inequitable distribution of wealth that becomes entrenched in society. This is intrinsically unfair and works against an egalitarian society. Replacing private ownership with state ownership as in the communist USSR removed the capitalist class but led to the development of a coordinator class, the managerial hierarchy that makes the decisions and is thus empowered over the working class. So capitalism and top-down socialism are out in a model that seeks egalitarianism.


Parecon features balanced job complexes, remuneration based on effort and sacrifice, and decision-making empowered in all the workers. Albert proposes substituting grassroots planning that converges on a consensus outcome instead of relying on highly inefficient capitalist markets.


How this will look in practice is detailed in Albertís book and in some parts this makes for plodding reading. Reading about the numerous iterations of a production and consumption plan as it makes its way from councils to regional and finally national consideration is tough slogging but the necessity of the text is recognized.


Parecon is a work in progress. It is not meant to be rigid but rather a flexible system that can respond promptly to new demands in society.


Most people will sympathize with the aims of parecon but will object that parecon is a utopian vision and unattainable. This is not a credible argument. It is easily refuted by noting that the same types of assertions were made historically for the emancipation from slavery and the rights of workers to form unions and bargain for better working conditions.


Others will argue that it runs counter to human nature. This is a claim that delves into the nature-nurture debate. Thinkers such as Thomas Hobbes and Niccolo Machiavelli held a dark view of human inclinations while French philosopher Rousseau and Chinese philosopher Mencius felt that humans were predisposed to goodness.


Nevertheless the argument is irrelevant because if we accept that human nature is motivated by selfishness then discussion is moot. Capitalism will persist and all those opposing it are either hypocrites or mutants. But surely human motivations are not uniform. The motivations of a Hitler, Stalin, or Churchill are different than a Gandhi, Jesus, or Norman Bethune.


Most people do accept that there are people who are motivated by altruism. Therefore, whatever the genetic predisposition to altruism is, it is attainable and most people would agree that it is a laudatory goal. There is, however, a logical twist here. Since only an elite minority actually reaps the windfall from capitalism, even if human nature was monolithically selfish then it would still be in the self-interest of the masses to militate against capitalism and favor parecon whereby they could improve their living standard and status. Therefore, at the very least, parecon should pander to the ethical egoism of people.


Obviously, in a parecon, the capitalists stand to see an erosion of their wealth, power, and privilege. Albert pertinently asks, ď [W]hy would the economically advantaged in any market economy not transfer their advantages in resources and leisure into disproportionate political power with which to defend market wage rates against critics?Ē


Capitalists are not about to sacrifice their cushy life. Winston Churchill once fulminated:


The rich and powerful have every right to demand that they be left in peace to enjoy what they have gained, often by violence and terror; the rest can be ignored as long as they suffer in silence, but if they interfere with the lives of those who rule the world by right, the Ďterrors of the earthí will be visited upon them with righteous wrath, unless power is constrained from within.


The millions who demonstrated against waging war in mid-February last year probably gave pause to their governments but in the end the governments ignored the strongly felt sentiments of the people. The slaughter, occupation, and theft of Iraq are the outcome.


So how then are the people to attain revolutionary change? It has been shown that one or two days of demonstrations probably are not enough. Something more sustained is needed. A wrench must be thrown into the capitalist machine. It is important for workers to realize that capitalists depend upon their labor. Without the workersí labor there is no production. No production means no profit. Therefore, to shut down capitalism, all that is required is for workers to do nothing -- just remove their labor services from the market and reduce, as much as possible, their consumption of goods from the market. For this to succeed requires, above all, solidarity.


Kim Petersen is a writer living in Nova Scotia, Canada. He can be reached at: kimpetersen@gyxi.dk.


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