Grasping dependency and under-development as structural, not simply a product of force

That some regions have to remain undeveloped so that others can develop has long been one of the obvious realities of capitalism. This is another way of pointing out that massive poverty across the Global South is not the result of some local insufficiency but rather due to the functioning of imperialism, the ongoing effects of colonialism and financial might.

This dynamic has been discussed in detail many times, most notably, in the case of Africa, in Walter Rodney’s classic How Europe Underdeveloped Africa. Latin American authors have tackled this structural inequality in works such as Eduardo Galeano’s Open Veins of Latin America. Other authors, such as Samir Amin in his many works, have looked at this from a broader global perspective. There is no shortage of books that detail, in grisly detail, how capitalism has immiserated much of the world. But what are the structural reasons for this state of affairs?

We are accustomed to thinking in terms of military conquest, invasions and coups. There is a long history here; the United States alone has invaded Latin American countries 96 times, and that total doesn’t include the coups it has sponsored and the governments it has decisively undermined. In more recent times, financial power through the control of the world economic system and the unrelenting leverage of the dominant position of the U.S. dollar, supplemented through multilateral institutions like the World Bank and International Monetary Fund that pitilessly impose austerity through their one-size-fits-all “structural adjustment programs” on behalf of multinational capital, are deployed more frequently and systematically than raw military power.

Both financial muscle and military muscle are copiously used to elevate Global North capitalist core countries at the expense of the Global South, with the U.S. doing everything it can to maintain its place — more specifically, its multinational corporations’ place — at the apex of the pyramid. Yet it is not only these levers. Capitalism is also kept in place by structural forces. We can’t fully comprehend how the world capitalist system functions without studying its structure, which operates even when financial or military muscle is not at a given moment being directly applied. This is where the Brazilian Marxist Ruy Mauro Marini has stepped in, persuasively arguing that the roles of local bourgeoisies, and not only Northern imperialism (as important as that is), as well as unequal exchange resulting from a subordinate position within a global division of labor, are indispensable to understanding the fate of Global South workers and in particular Latin American underdevelopment.

His essay The Dialectics of Dependency is not a new work, but has been newly translated into English for an audience to whom he is largely unknown. I confess I was unfamiliar with Professor Marini prior to reading a description of the book containing the eponymous essay, published by Monthly Review Press, but was immediately intrigued. I can now say I am pleased to have been introduced to his work and add him to the list of understudied Latin American theorists who should be better known. The Dialectics of Dependency* contains not only his important essay, but an introduction to the concept, a lengthy essay discussing Professor Marini’s life and extensive work as an activist, writer and professor, and a concluding essay further discussing the concept and situating it as a tool to help guide movements. The two framing essays were written by Jaime Osorio, a close comrade of Professor Marini, and the essay documenting the author’s life and work was written by the translator, Amanda Latimer. (Although Professor Marini is Brazilian, the essay was developed and written in Spanish during his two decades of exile in Mexico, Chile and Europe.)

Development and underdevelopment go together

That The Dialectics of Dependency was first published in 1973 does not lessen its impact. Dependency is understood as “a relation of subordination between formally independent nations, in the framework of which the relations of production of the subordinate nations are modified or re-created to ensure the expanded reproduction of dependency,” the outcome of which “cannot be anything other than than more dependency.” This can not be liquidated other than through “eliminating the relations of production it involves.” To be less tautological, dependency can be defined as the subordination of economies and countries to other economies and countries.

Latin America was plundered throughout the colonial period, with Christopher Columbus inaugurating slavery, forcible precious-metal extraction and the genocide of native peoples. Formal independence for Latin American countries coincided with the Industrial Revolution, during which they “came to gravitate toward England” rather than each other. “Ignoring one another, the new countries would link themselves directly to the English metropole,” Professor Marini wrote, becoming suppliers of foodstuffs and raw materials while importing manufactured products. “Latin America developed in close consonance with the dynamics of international capital.” Colonial metals and “exotic goods” contributed to increased commodity flows and “paved the way” for large-scale industry in core capitalist countries.

^{Iguazú Falls on the Brazil-Argentina border (photo by Giovita70)}

English technological advances enabled significant increases in production and the ability to flood markets with commodities. With the displacement of farmers into cities and the creation of a modern proletariat, the incorporation of this new working class into consumption was “an essential step.” In turn, the supply of food from Latin America made it increasingly possible for English capitalism to reduce the value of labor power and thus “achieve a balance between increasing surplus value and, at the same time, increasing wages.” In contrast, “super-exploitation” — a drastic lowering of wages — was the means for Latin American capital to be competitive. Because Latin American production was largely for export, local capitalists did not have to create a local market and could keep wages at extraordinarily low levels because they did not need their workers to be able to buy the products they produce.

Unequal exchange gathered momentum and super-exploitation became the route for Latin American capitalists to maintain their profitability and their places in the global capitalist system. Rather than increase productivity or invest in new machinery, Latin American capitalists have relied on intensifying exploitation, that is through suppressed wages, work speed-ups and increased working hours. While not discounting the very real role of imperialist capital, a key political conclusion of the Marxist theory of dependency is recognizing the “dominant classes’ [of Latin America] responsibility in reproducing dependency.” Local bourgeoisies earn substantial profits from this arrangement and have no incentive to change it.

Corporations from the Global North have a ferocious need to grab the resources of dependent countries, and local capitalists are happy to help them. This is not to discount other forms of plunder, such as unequal exchange, the extraction of profits through investment, interest on foreign debt and the draining of capital and knowledge by monopolies based in the capitalist core.

Global division of labor fuels unequal exchange

As industry continues to develop in the capitalist core, it becomes more productive and requires greater raw materials, further enforcing a global division of labor. Professor Marini argues that the large quantities of food exported to Latin America to industrialized countries reduced the real value of labor power in the latter, causing higher rates of surplus value and enabling Global North bourgeoisies to capture productivity increases. This aspect is somewhat counter-intuitive, so let us allow the author to explicate it.

“[W]hat determines the rate of surplus value is not the productivity of labor in and of itself, but the degree of exploitation of labor; in other words, the relation between surplus labor time (in which the worker produces surplus labor) and necessary labor time (in which the worker reproduces the equivalent of his wage). Only by altering this proposition, in a manner favorable to the capitalist (that is, by increasing surplus labor at the expense of necessary labor) can one modify the rate of surplus value.”

To make clear what the author is discussing here, surplus value is the amount (or value) produced by an employee beyond the amount that equals the amount that he or she is paid. In other words, if an employee is paid $100 for a day’s work but produces products or services worth $200, then the $100 differential represents the surplus value produced by the employee and which is taken by the capitalist. From that surplus value, once the capitalist takes care of other expenses (such as rent, mortgage, equipment, interest on loans, etc.), comes the capitalist’s profit. A capitalist can introduce a new production technique or new machinery that makes workers more productive and thus temporarily boost profits, but because the capitalist’s competitors will quickly move to introduce the same techniques or machinery, the amount of products will have increased but the surplus value extracted won’t because the price of the product or service will become uniform across the industry with the common adoption of what was originally a breakthrough for the organization that first adopted it. Because more is being produced in the same period of time, the capitalist can reduce the prices of the products or services for competitive reasons, thereby lowering the value of what is produced. To counteract that reduction in value, capitalists squeeze more out of their workforces to increase the surplus value extracted.

^{Entre Rios province, Argentina (photo by Felipe Gonzalez)}

Professor Marini, in his discussion of how Latin American food exports led to Global North bourgeoisies reaping the benefits of productivity increases, continues:

“[O]ne task assigned to Latin America, within the framework of the international division of labor, was providing the industrial countries with the food required for the growth of the working class, in particular, and of the urban population, more generally, that was taking place there. … The effect of this supply … would be to reduce the real value of labor power in the industrial countries, which allowed increases in productivity there to be translated into increasingly higher rates of surplus value. In other words, through its incorporation into the world market for wage-goods, Latin America played a significant role in increasing relative surplus value in industrial countries.”

The food exported to industrial centers by Latin America enabled more people to leave farms and migrate to the cities, and the increasing industrialization required more workers to move to where the factories are located. This migration results in more competition for jobs, putting downward pressure on wages.

Visible force, yes, but economics underlies that

Behind the use of military and diplomatic pressure, Professor Marini argues, “is an economic base that makes it possible” and failure to understand that is to obscure “the real nature of international capitalist exploitation.” He writes that rather than believe that equitable trade relations are possible in global capitalism, what is needed is the abolishment of international economic relations based on exchange value.

“Indeed, as the world market attains a more developed form, the use of political and military violence to exploit weak nations becomes superfluous, and international exploitation can rely increasingly on the reproduction of economic relations that perpetuate and amplify the backwardness and weakness of those nations. We see the same phenomenon here that is observed internally in the industrial economies: the use of force to subject the working masses to the rule of capital diminishes as economic mechanisms that enshrine that subordination come into play.”

Countries that are disadvantaged by this unequal exchange seek to compensate by greater exploitation of workforces rather than increasing productivity. In other words, doubling down on being a “low cost” producer — the Global South capitalist can only remain competitive by increasing exploitation to make their products cheap through increasing the intensity of work, lengthening working hours and/or reducing wages. Resource extraction and agricultural products, Latin America’s major contributions to the world economy, require less investment than manufacture. Thus, labor in extraction and agriculture can be intensified with little or no capital. That exploitation can be maximized because the Latin American capitalist is producing for export, and does not need a sizable domestic buying power to reap profits or maintain a market, and all the more can this be done because of ongoing high unemployment and underemployment.

This dynamic does not mean there is no industrialization in dependent countries. Industry does slowly develop, but there is insufficient funds to buy the equipment and machinery needed to produce manufactured products. Importing capital — taking out loans from the North or North-controlled supranational lending organizations — becomes a necessity. In turn, as capitalism stabilized after recovering from World War II, capital flowed preferentially to industry in the Global South, which offered attractive profits due to the low cost and super-exploitation of labor there. And as the pace of technological advancement quickens, machinery becomes outdated quicker and manufacturers in the core capitalist countries can recoup some of their costs by selling outdated equipment to manufacturers in the South.

“Latin American industrialization thus corresponds to a new international division of labor,” Professor Marini wrote. “In this framework, the lower stages of industrial production are transferred to the dependent countries … while the most advanced stages are reserved for the imperialist centers … along with a monopoly over the corresponding technology.” With wages remaining low and unequal exchange maintained through the foregoing processes, new industrialization in dependent countries remains dependent on upper class consumption and exports. Workers’ incomes are too low to buy the products they produce at the same time their productivity rises due to the machinery that is imported, even if that machinery is outdated by the standards of the capitalist core countries. Further investment will be in luxury goods while basic consumer items stagnate. Wages also stagnate, increasing inequality. And dependency on core countries is recreated.

“[T]he structure of production adapts to the structure of circulation inherent in dependent capitalism,” Professor Marini concluded. The trap of dependency can only be ended by putting an end to the global system of capitalism.

Knowledge needed, not fairy tales

The Dialectics of Dependency explicates the above arguments with much technical detail. Although putting forth a persuasive discussion, the book is not necessarily accessible to a reader not already conversant in economics and Marxist terminology. The titular essay is written in a quite abstract manner, which will likely lessen the potential audience. That would be a loss as the book is a valuable, and needed, addition to theory to help our collective understanding of unequal exchange and the roots of deep inequality among the countries of the world capitalist system. Anyone wishing to grasp this enduring international phenomenon would benefit from reading The Dialectics of Dependency. It is not always easy reading but working your way through sometimes difficult and abstract passages will be enriching for any activist seeking to understand how capitalism works.

It also explains why such stratification exists without falling back on under-developed explanations that see only military force without the very structures of capitalism and the system’s perpetual and relentless need for expansion and intensified exploitation. The concluding essay by Jamie Osorio helps explain the implications of Professor Marini’s theory. 

His analysis, Professor Osorio wrote, “has shown the naïveté and fallacies of international bodies and academic groups that make extensive descriptive studies and then conclude — like children writing letters to Santa Claus — that it would be good to have a bourgeoisie that is dynamic, autonomous, committed to technological knowledge … willing to create internal markets by paying better wages to most of the working population.”

Rather than believe in Santa Claus or fairy tales, far better that the dynamics of capitalism be grasped in their full dimensions. Only by understanding how and why, and drawing appropriate conclusions, rather than simply observing, can the world’s exploited — the vast majority of humanity — hope to see a better world come into being, a world that will have put capitalism into the history books.

* Ruy Mauro Marini, The Dialectics of Dependency [Monthly Review Press, New York, 2022]

How does an economic system so hostile to life endure for centuries?

When we conceptualize the power that maintains capitalism, violence and ideology readily come to mind. Despite the vast inequality, grotesque exploitation, contempt for life and the environment, chronic instability and the rebellions that repeatedly arise and sometimes take power, capitalism seems firmer in the saddle than ever, spreading its suffocating tentacles to virtually every place on Earth.

“How is it even possible that a social order so volatile and hostile to life can persist for centuries?” asks Søren Mau in the introduction to his book Mute Compulsion: A Marxist Theory of the Economic Power of Capital. Violence has been with capitalism since its beginning — indeed, capitalism could not have taken root without massive coercion through violence, draconian laws, slavery and colonialism. The ideological constructs that keep so many in thrall become ever more sophisticated, with a vast apparatus of mass media, “think tanks” and other institutions perpetually reinforcing bourgeois mantras, supplemented by schools, militaries, workplaces and other applicators of social conditioning.

Yet violence is not necessarily ever faced by a typical working person in the advanced capitalist countries, the core of the global system. Violence was used copiously in earlier days of capitalism, both to establish its foundation, enable its growth and to put down strikes, but today is generally reserved for those in the Global South. Ideology is ever present, but keeps bumping up against the material realities of life; that the propaganda telling us no other system is possible seems to get ever more frantic is a clue that capitalist ideologists are perhaps less certain of their mantras than they would let on in public.

Saying this is not to suggest that violence and ideology haven’t been, and still aren’t, crucial props for capitalism. Of course they are and will be. But is that all there is? Dr. Mau, a philosopher and researcher based in Copenhagen, argues persuasively there is more. That there is more beyond violence and ideology really isn’t controversial, at least for those willing to open their eyes to the realities of capitalism. But how to conceptualize this? This is the task that Dr. Mau assigned himself, and Mute Compulsion is the result. In a methodically constructed presentation, he details the concept of “mute compulsion,” the impersonal power embedded in capitalist economic processes. Because violence and ideology are not always in operation, something else must keep the system in place — specifically, keeping working people in their deeply subordinate place — and that is the indirect social forces that maintain the system.

The power of capital is “operative even when ideological and coercive domination are absent,” he writes.

The book seeks to build on Karl Marx’s description of how other forms of power take over once violence has done its job. Quoting from Capital Volume 1, Dr. Mau translates from Marx’s German-language original as follows:

“[T]he mute compulsion of economic relations seals the domination of the capitalist over the worker. Extra-economic, immediate violence is still of course used, but only in exceptional cases. In the ordinary run of things, the worker can be left to the ‘natural laws of production,’ i.e., it is possible to rely on his dependence on capital, which springs from the conditions of production themselves, and is guaranteed in perpetuity by them.”

The power to impose will in multiple dimensions

To grasp this concept, the definition of power must be expanded beyond defining it as simply referencing relations among individuals. The concept should be extended to “relations among social actors as well as the emergent properties of those relations,” Dr. Mau writes. “The power of capital can thus be defined as capital’s capacity to impose its logic on social life; a capacity which includes and ultimately relies upon, yet is not reducible to, relations among social actors in a traditional sense, such as the relationship between capitalists and proletarians or the relationship between an employer and an employee.”

Thus, he argues, power is not a simple dyad nor is it something possessed or exercised exclusively by people, groups, classes or subjects. Marx’s first breakthrough, Dr. Mau argues, is a turning from his original critique of bourgeois society based on human nature, permeated by a “Feurerbachian humanism,” following an 1845 break, “an important step forward,” after which Marx no longer criticized capitalism “in the name of the essence of the human being.” Leading thinkers among those following Marx, such as Friedrich Engels, Georgi Plekhanov and Karl Kautsky, tended to base their theories on “productive force determinism” and thus tended to see the state as the “ultimate locus of capitalist power.” Dr. Mau argues that tendency flows from the idea that capitalism had entered a monopoly state, as exemplified by Vladimir Lenin and Rudolf Hilferding, and remained influential deep into the 20th century, as exemplified by Paul Baran and Paul Sweezy.

Forms of domination beyond the violence/ideology couplet slowly were developed late in the 20th century, with Robert Brenner and Ellen Meiksins Wood, frequently cited throughout the book, discussed here. This development is seen as a break with the idea of the economy as a separate sphere. Having completed a discussion of philosophical development, Mute Compulsion then begins building its case. This construction begins with a discussion of tools. Humans use tools not for convenience but because of necessity. Because they are a necessity, tools are an organ, part of the human body, yet separated from it. Human tools are “absolutely crucial for understanding how such a thing as economic power is possible.” At the level of corporeal organization, “human individuals are caught up in a web of social relations mediating access to the conditions of their reproduction.”

^{The conquest of the Incas (mural by FUEJXJDK)}

The corporeal organization of humans “opens up an immense space of possibility” that makes “a succession of modes of production possible.” The author acknowledges the foregoing is not a full anthropology, but rather is intended to create a better understanding of what economic power is. A stress on the relations of production arises because through them people gain access to the necessities that keep them alive. This is not an “economist” view but reflects the necessity to counter the false bourgeois idea that the economy is completely separate from the rest of society.

Whatever the means used to subject workers — violence, ideology, mute compulsion — the production and extraction of surplus value is the object of capitalist production. Without the capacity of humans to produce more than what is necessary for their own survival, class society would be impossible. As Dr. Mau quotes Marx, again from Capital Volume 1:

“If the worker needs to use all of his time to produce the necessary means of subsistence for himself and his family, he has no time left in which to perform unpaid labour for other people. Unless labour has attained a certain level of productivity, the worker will have no such free time at his disposal, and without superfluous time there can be no surplus labour, hence no capitalists as also no slave-owners, no feudal barons, in a word no class of large-scale landed proprietors.”

After violence does its job, less direct means can substitute 

The possibility of surplus labor explains the possibility of class domination, but not its actuality. Tools and machines outside the body forces a need to gain access to what are means of survival. That necessity results in a concentration of economic power in the hands of those possessing those means and employing those who don’t have them. Thus the worker must sell their labor power to a capitalist to survive. No violence at all is needed here; the need to survive is sufficient to impose the relationship. But this is not a personal relationship, because nobody is bonded to any single capitalist. Capital induces a “debt relation” that binds workers to “capital as such,” not any specific capitalist. The need of capitalists for a steady supply of labor meant that, in the early period of capitalism, peasants had to be violently forced, including through the use of law, to become wage workers and dispossessed of reproducing themselves outside of the market. Once the social pattern solidifies, less direct means of power can be deployed. Dr. Mau writes:

“In opposition to violence or ideology, the ‘silent, unremitting pressure’ of property relations does not directly address the worker; it rather addresses the material environment of the worker, or, more specifically, the material conditions to reproduction. … The power of capital does not just prevent the worker from following their will (although it often does that); it also facilitates a certain way in which they can actually follow that will. Mute compulsion only works because the worker wants to live. Only because of this can capital succeed in demanding surplus labor in exchange for the means of life.”

The subjugation of everybody — especially workers but also capitalists — to the market, unique to capitalism, is inescapable. Market competition is not only a result and cause of the power of capital, “it is itself one of its mechanisms.” There are vertical market relations, skewed by the unequal power of capitalists and working people, and there is horizontal competition among proletarians and among capitalists. That production is for the sale of products in the form of commodities for exchange value in markets adds to the dependence on markets. Competition confronts workers and employers — for workers, it is an alienating form because they are “confronted with the essence of capital,” and for capitalists, it is an inescapable force that requires them to cut costs, drive their workforce to work at a pace maximizing profit and incorporate ever larger portions of social life.

^{Statue of Alice Nutter, English woman accused of witchcraft. (Photo by Graham Demaline.)}

Competition strengthens class power because, although capitalists compete with one another, it also unites them as “hostile brothers” dividing “the loot of other people’s labor.” (A phenomenon that demonstrates this clearly is the stream of lawsuits in which industrialists and financiers fight over which gets the bigger share of the pie; the two representatives of capital are in full agreement that the workers, whose work created the profits they fight over, don’t deserve any of it.) Class domination is necessary “to secure workers’ appearance on the market as sellers of labour power in the first place.” Violence is no longer necessary to secure the supply of workers, Dr. Mau writes:

“Marx points out that ‘state coercion’ was necessary in the early days of capitalism in order to ‘transform the propertyless into workers at conditions advantageous for capital,’ since at this early stage of capitalist development, those conditions ‘are not yet forced upon the workers by competition among one another.’ In other words, competition has the same function as violence had in the original creation of capitalism, and competition is an absolutely crucial part of the mute compulsion of economic relations.”

The continuation of capitalism relies on impersonal domination as well as personal relationships of domination. The authority of the capitalist within the workplace is merely the form of appearance of the impersonal power of capital, Dr. Mau argues, adding that this realization enabled Marx to move beyond his early moral critiques of capitalism. Thus it is not personal lack of morality that compels a capitalist to introduce new technologies and surveillance techniques, or to “deskill” the workforce. Rather, relentless competition forces capitalists “to live up to standards in order to stay in business.” 

As it grows, it can take over more aspects of life

As capitalism gains in power, it is able to subsume more and more of life and geography. Agriculture is now dominated by multi-national corporations, rendering most farmers subcontractors with little decision-making ability; the containerization of shipping has overhauled logistics and taken power from dock workers at a crucial choke point of distribution; and the ability of commodities to move freely while labor is constrained is detrimental to employees. Spatial expansion means increased competition, intensifying the power of capital over everything. Even the very instability of capitalism can rebound to the benefit of capitalists, as economic downturns increase unemployment and thus further disciplines workers. “The forces of capital know very well that a crisis is a splendid opportunity to strengthen capital’s grip on social life,” Dr. Mau writes. Capitalism is indeed “tremendously tenacious.”

Mute Compulsion is not easy reading but it is important reading, providing a welcome assistance toward understanding the ongoing power of capital and longevity of capitalism in all its dimensions. No book is perfect, and so it is proper to note a couple of weak points. One is that the author’s attempt to integrate racial and sex discrimination into his theory fell short, most notable in the muddled discussion of sex relations. The book gropes toward a declaration that the “hierarchical system of gender” precedes capitalism “yet nevertheless reproduces and is reproduced by it,” a certainly reasonable conclusion but one in which the preceding discussion does not lead. It is also jarring for the flippant and unwarranted one-line dismissal of “the radical feminist concept of patriarchy” (is the concept of structural male oppression of women really controversial?) and that the author believes himself to be a far better authority than feminists like Silvia Federici and Maria Mies who have written foundational books that have shaped the field. Sometimes we need to remind ourselves we are not experts on all topics. Hostility to feminism has sadly become fashionable on the Left, and it is difficult not to speculate if this phenomenon, conscious or not, has influenced this refusal to engage, uncharacteristic from the rest of the book.

The other weakness is in the brief discussion of deskilling, which is not understood in the phenomenon’s full dimension. Minimizing the tendency of deskilling, Dr. Mau writes that “capital is not interested in deskilling as such, but only in deskilling as a tool of domination.” That is true to a degree but is not quite right. Deskilling can mean changing work conditions such that skills are made irrelevant; a de facto taking away of a skill.

As I have decades of experience in the workplace, I have experienced this first hand. I once worked as an editor for a large publishing company that owned dozens of newspapers and magazines covering the legal industry. A new management decided to dismantle the staff of each publication, which were specialized in various subjects or geographical areas, and throw everybody together as one giant staff, with editors and reporters assigned to a general pool assigned to no particular publication. Thus our specialized knowledge was rendered useless by making everybody interchangeable. Unfortunately my attempts to raise this issue with my co-workers was met by blank stares and in less than a year mass layoffs began. That’s deskilling, at least in a white-collar environment.

The preceding critiques are not fatal flaws. It would be pointless to judge a book by whether we agreed with the entirety of the contents. What matters is the overall argument, content and presentation. Mute Compulsion succeeds marvelously at constructing a picture of the impersonal aspects of capitalist domination, a crucial aspect that requires full comprehension if we are to grasp the totalizing nature of capitalism. And without a full comprehension, how are we to rid ourselves of it? If you want to understand the workings of capitalism, you’ll want to read this book.

Søren Mau, Mute Compulsion: A Marxist Theory of the Economic Power of Capital [Verso, London and Brooklyn, 2023]

Must collapse be inevitable? Imagining a “half-Earth” sustainable economy

It seems vastly easier to imagine the future as a dystopian nightmare than as a time when today’s problems are mostly behind humanity. For every work of optimism, such as Star Trek, there are dozens of works imagining a nightmare world of deprivation, environmental destruction and severe repression amidst a world of people scrambling to survive anyway they can in a war of all against all.

Even if a cultural byproduct rather than an intentional construction, this depressing ratio of future scenarios is the inevitable result of capitalism. From cradle to grave, we are endlessly bombarded with propaganda incessantly telling us that humans are competitive, not cooperative, and that individualism is the highest expression of “freedom.” Cut-throat competition is the natural way of the world, as natural as the tides of the ocean, and that participation in struggles against other human beings is the only possible method of organization in a world in which countries and nations also compete fiercely because the world must be organized into “winners” and “losers” through competition. Greed is not only good, it is the primary characteristic driving human behavior because markets sort who those “winners” and “losers” are.

All in the above paragraph is nothing more than propaganda in the service of capitalist elites, the “ruling class” of any capitalist country. Markets, in a capitalist economy, are not dispassionate entities sitting loftily in the clouds making judgements. In reality, they are nothing more than expressions of the aggregate interests of the most powerful and largest industrialists and financiers. Who is this individualistic “freedom” for? It is “freedom” for industrialists and financiers to rule over, control and exploit the vast majority of humanity. “Justice” becomes the unfettered ability to enjoy this freedom, a justice reflected in legal structures. Those who have the most — obtained at the expense of those with far less — have no responsibility to the society that enabled them to amass such wealth. Working people are “free” to compete in a race to the bottom set up by capitalists.

It can’t be repeated too often that capitalism is just another system created by human beings, and everything of human creation comes to an end. It is simply one more system of exploitation, one more system to advantage a numerically tiny class at the expense of everybody else. Increasing numbers of people do realize that the days of capitalism are numbered, and with the deprivation that capitalism increasingly imposes on people, and the stunting of human potential that goes with that, it is no surprise that multiple polls have shown young people about equally in favor of capitalism and socialism. That half of respondents are able to overcome the bombardment of capitalist propaganda issued through every imaginable channel is a harbinger that the phrase “a better world is possible” is not pie in the sky.

Imagining a concrete future better world, one based on realistic prognosis using some of the bricks of today to build tomorrow because a tabula rasa is not possible, and realistically meeting human needs in a sustainable economy, is an under-appreciated task. Especially given the endless production of dystopian futures churned out by Hollywood and other corporate cultural producers, it is vital that scenarios of better future worlds be conjured and communicated widely.

That future better world will have to be socialist, in some form. It can’t be capitalist — the system that is driving humanity toward catastrophe and shows no ability to deviate from rushing toward a cliff can’t save itself. There will be new technologies in a future better world, but there won’t be magic techno-fixes. A sustainable world will also be a world in which the peoples of the advanced capitalist countries will have to consume less and more sustainably. But limits won’t be imposed by a government, socialist or otherwise; limits will be imposed by nature and the limits to resources it provides. When fossil fuels dwindle, reduced energy usage will be forced upon us. We can begin to adjust and develop renewable alternatives now on a systemic basis, or have it imposed in a more difficult fashion later.

An extraordinary solution for an extraordinary problem

A worthy addition to the literature of a better world of the future is Half-Earth Socialism: A Plan to Save the Future from Extinction, Climate Change, and Pandemics* by environmental historian Troy Vettese and environmental engineer doctoral student Drew Pendergrass. The two authors have produced a lively, interesting book that sketches out a sustainable world that is socialist. The Half-Earth in its title refers to the thesis that 50 percent of Earth’s land surface needs to be “re-wilded” — allowed to return to forests and grasslands — because that is the only way that the majority of the planet’s species can survive.

At first glance, the concept of “re-wilding” half our planet’s land sounds nearly insane. Under present political conditions, it certainly is impossible and unthinkable. Similar to working people flocking to work in oil and gas production, even tar sands and fracking, despite the environmental damage of such work because capitalist economies offer them no alternatives, who today would have any incentive to leave their homes in the service of returning land to nature? Such a concept could only be possible in a people-centric system that would incentivize people to move and do so over a timescale of decades so that those who wished to stay where they are could do so, free of any pressures, and in a time when environmental needs are at the forefront of popular thinking.

Let us acknowledge that a concept such as re-wilding half of Earth is a proposition that seems fantastic to almost all of us, myself included. An extraordinarily drastic solution, even when acknowledging that humanity faces an extraordinary problem. So let’s take a step back for the moment from this idea, and instead allow the authors to build their case and give us a sense of what such a world might look like.

^{Housatonic Meadows State Park in Connecticut (photo by Morrowlong)}

Half-Earth Socialism opens by sketching out what the world might be like in 2047 if present conditions continue unchecked. This is a future in which geo-engineering is unilaterally undertaken by the U.S. government after a catastrophic hurricane devastates the Northeast U.S., and it goes bad, causing a cascade of problems including atmospheric ozone depletion. There is a temporary planetary cooling because of the aerosols thrown into the atmosphere by the geo-engineering project, but in response fossil fuel usages begins to increase again, more climate disruptions cause more problems, ozone depletion becomes worse, agriculture is disrupted and the threat to the prevailing order by social movements peaks and subsides. Capitalist business as usual prevails.

“The problem was that the greens mistook slowing down the pace of the environmental crisis for victory, rather than merely a defeat postponed,” Dr. Vettese and Mr. Pendergrass write in imaging this business-as-usual scenario of 2047. “Despite briefly tasting power, the environmentalists accomplished little because they never elucidated how the various facets of the environmental crisis — climate change, pandemics, and mass extinctions — were interlinked; nor did they articulate what a post-crisis society might actually look like. The ruling class had long been clever and ruthless, but they were also fortunate to face such hapless opponents.”

Does that judgment seem harsh? It shouldn’t. Mainstream environmental groups, who mostly subscribe to liberal ideas and concepts, today do seek piecemeal solutions to systemic problems, staying within the “acceptable” boundaries of capitalist discourse. This is not to suggest that a typical leader of a national environmental group is insincere, but rather that imaginations are often circumscribed and that leaders often seek “practicality” in the sense of staying within accepted parameters, failing to challenge larger capitalist orthodoxies and being mindful of how far their corporate funders would be willing to go. So although a typical leader of a large environmental group likely believes that they are doing what is possible, they nonetheless often lag well behind their rank-and-file, grassroots members. Can we really expect the totalizing ideology of capitalism not to infiltrate environmental thinking?

Why is the environment outsourced to the market?

The dystopia with which Half-Earth Socialism opens is not inevitable, the authors write, saying that they seek to encourage the environmental movement to take seriously the challenge of creating a better society in a stabilized biosphere. A rapid growth of alternative renewable energy sources is not enough if fossil fuel usage doesn’t decline drastically. The authors ask: Why is the environment outsourced to the market? They then lead the reader through a discussion of neoliberalism, as most of the world calls the present stage of capitalism, tracing its birth to a conference led by Friedrich Hayek in 1947. Hayek believed that markets “communicated information” and that neoliberals are committed to “simple and powerful axioms” that enable them to offer prescriptions and act. Neoliberals can be beaten, the authors write, if socialists and environmentalists create a diverse coalition and learn from one another. In the absence of such a coalition, “racist-libertarians” such as the “alt-right,” Brexiteers and the Alternative for Germany (AfD) will be neoliberalism’s only competition.

A crucial point that Half-Earth Socialism repeatedly makes is that nature is unknowable. “Nature is more unknowable than the market” and deserving of awe as unimaginably complex. This idea is backed up by a discussion of Biosphere 2, the 1990s experiment in which a living, sustainable biosphere was created inside a dome but failed badly, with the human “biospherians” left short of food and oxygen while most life and the coral reefs died. The neoliberal goal of “humanizing” nature — in essence, turning all of nature into exploitable capital — is not realistic. The inventor of “cap and trade” carbon and pollution schemes actually believed that clean air and water were “luxury goods”! Thus “the humanization of nature must proceed in conditions of ignorance,” Dr. Vettese and Mr. Pendergrass write; with a continuation of that process, zoonotic diseases (those jumping from animals to humans) and other dangers will continue unabated.

^{Caribbean National Rain Forest of El Yunque, Puerto Rico (photo by Alessandro Cai)}

Readers are also led through a discussion of why mainstream panaceas proposed by environmentalists are not feasible or realistic. Bioenergy with carbon capture and storage (BECCS), a favorite scheme often promoted as a way of reversing atmospheric carbon dioxide buildup, is a chimera. The technology to remove carbon dioxide and store it underground sufficient to reverse global warming doesn’t exist and can’t be a solution. To do what it is advertised to do, BECCS would require land bigger than India — so much land would have to be cleared that BECCS would become a net producer of greenhouse gases. This sort of concept is an example of mainstream environmentalists seeing a “set of discrete technical problems” to be tackled through piecemeal reform while leaving capitalist foundations untouched. Nuclear energy is also no solution, despite its promotion by some environmentalists, not only because of radiation and radioactive waste, but because nuclear is more carbon-intensive than renewables. (The authors don’t mention the finances of nuclear power, but the entire industry only exists because of massive subsidies; nuclear is completely uneconomical.)

Such proposals have “almost no chance of being implemented” despite concessions that are made by proponents; BECCS, nuclear power and biofuels will fail due to “lack of utopian imagination” and because the environmental crisis can’t be understood outside the structure of the society causing the crisis.

Any half-Earth coalition “must be a broad one,” the authors stress, and suggest that the wide popularity of anti-nuclear movements would provide a firm pillar of any such coalition. Advocates of BECCS and nuclear power are trying to maintain as much of the status quo as possible. Instead, it is better to be realistic about what lies ahead and the trade-offs that must be made. Half-Earth Socialism acknowledges that giving up meat and energy quotas won’t be popular for many people, but are nonetheless better and more viable than mainstream alternatives.

Balancing human needs with planetary boundaries

So what are the specifics of half-Earth socialism? The goals, Dr. Vettese and Mr. Pendergrass write, are to prevent the sixth mass extinction, “natural geo-engineering” to draw down carbon dioxide from the atmosphere and create a fully renewable energy system. Re-wilding means re-forestation, renewed grasslands, restoring wild animals and rebuilding stocks of fish and whales. Likely the only way to accomplish all this and have enough food for 10 billion people would be through “widespread veganism” and energy quotas. A quota of 2,000 watts per person would be a significant reduction for most living in the Global North but a large increase for the Global South. Needless to say, farming would become all organic. Trade-offs are inevitable, and should be addressed honestly rather than “cooking the books” as mainstream environmentalists can do:

“We offer an honest reckoning of Half-Earth socialism because we believe that a feasible utopia is one where its costs are democratically appraised rather than hidden by the pseudorational measure of money.” [page 84]

What is proposed is half-Earth socialism, with heavy stress on socialism. This is to differentiate from reactionary promoters of half-Earth re-wilding that should be rejected. “Half-Earth must be socialist,” Dr. Vettese and Mr. Pendergrass write. That means fully democratic and publicly supported. The proposals of far-thinking economists in the former Soviet Union failed to gain ground due to lack of a democratic movement to support them and the inability of Western climate scientists’ models to be taken with the necessary seriousness follows from the absence of social movements strong enough to put them into practice.

Half-Earth socialism would need to balance human needs with planetary boundaries, working through a myriad of factors. A fully democratically accountable planning organization could offer several scenarios with differing parameters and trade-offs, with decisions made either by elected representatives or a global referendum where everybody is eligible to vote. The authors whimsically call their planning agency “Gosplant,” quickly adding “forgive us” with the introduction. (The name is a play on “Gosplan,” the name of the planning agency in the Soviet Union, but unlike Gosplan, “Gosplant” would be fully democratic and based on public input.)

This wouldn’t be easy at the start, and realistically shouldn’t be expected to be easy. The planning agency would need to determine energy quotas and to balance land use and greenhouse gas emissions. This would be made more challenging by the difficulty of electrifying transport and some industrial processes. Widespread veganism would make this much easier because animal agriculture uses up so much land and is responsible for significant greenhouse gas emissions. Trade-offs would be required in every plan or scenario. There would also be some temporary measures that would be phased out when practical.

“Wide-ranging improvements to industrial processes to reduce pollution, fuel use, and waste are undertaken in just about every industry. Large swathes of manufacturing become rationalized when ‘planned obsolescence’ itself is made obsolete. Resources are directed towards building solar panels, wind turbines, super-efficient insulation, and railways. Immediately after the Half-Earth socialist revolution, much of the world’s pasture is converted into biofuel plantations for the short-term decarbonization of transport and industry, while the remainder is rewilded, which in turn requires an expanded cadre of ecologists and foresters trained in both conventional science and traditional Indigenous knowledge.” [pages 110-111]

The planning agency does not dictate what the future should be or how the economy should be run, but rather would provide the public and its representatives with blueprints. Making economics understandable for everyone is a pre-condition for a socialist democracy. The planning agency would educate citizens on how the economy and the biosphere work. “Half-Earth socialism would not be some distant, top-down technocracy but rather a relatively simple democratic system, based on robust public education and involvement. An informed citizenry would be well-equipped to choose among the competing plans devised by the planners.”

Planning would need a balance of flexible local decision-making with some measure of central control, with continual refinement for specific outcomes. The idea here would be that an approved plan, whether approved by a world parliament or by popular referendum, would be “coarse” — it would be a general guide with local and regional economic plans based on it being more detailed and tailored to those local and regional needs. Decisions on plans would occur after copious popular discussion and would be flexible so that changes in raw materials and component allocations could be made as shortages appear in one area and excesses in another.

Building the future with tools we already possess

The technology to make this level of planning a reality already exists, Dr. Vettese and Mr. Pendergrass write:

“Every element of Half-Earth socialism’s ‘vast machine’ of planetary calculation is based on already existing technologies. The central algorithms in the model would take advantage of many of the insights and engineering designs that climate scientists have spent decades developing. Its tiered structure could draw on the nesting pattern found in environmental and atmospheric models, with global and local simulations constantly interacting and updating one another. … All this data does not mean that we fully know nature, only that Half-Earth socialist planners would have access to the vital signs of the planet so they could modify humanity’s interchange with nature when necessary.” [pages 129-130]

Lurking in the background is the experience of the Soviet Union and its Central European satellites, which collapsed. In acknowledging this history, the authors note that those failures must be reckoned with and that people must have a direct say in social and economic decisions.

“Socialism is a society emancipated from the relentless, unconscious, and irrational power of capital. Living in a planned society should feel better and freer, with a sense of solidarity and freedom from the threat of poverty. Democracy and meaningful work are not mere side effects of a socialist economy but central for planning to function.” [page 130]

Accepting limits and trade-offs is also central to such a project. Postulating that socialism leads to shortages just as capitalism leads to surplus production that results in inequality, unemployment and environmental catastrophe, disadvantages must be accepted if we want the benefits. Crucially, the sketches of the book are “starting points for a deeper discussion of how socialism should function in an age of ecological crisis.” The book concludes with a fictional chapter describing a functioning half-Earth socialist democracy in western Massachusetts, written with a nod to William Morris’ utopian novel News From Nowhere. Bicycling is the main transport method here because public transport, as is the case across the U.S., badly lags other countries, something the people of this region are coping with.

^{Downtown Amherst, Massachusetts. Might be difficult to re-wild. (Photo by AlexiusHoratius)}

Half-Earth Socialism is not a utopia, even though the authors have a practical utopian streak in them. They conclude by stating that humanity’s choices are “further humanization of nature through mad [geo-engineering] schemes” or “to plan an economy within planetary boundaries.” Everyone would have the essentials but “occasionally it might be necessary to stand in queue.” As the authors put it, there will be more comfort than what Cubans experienced during the early 1990s “special period” but “less than a typical eco-Yuppie in the Global North who installs solar panels on the roof of their McMansions … and has a $70,000 electric car in the garage.”

As I have said in previous book reviews, the judgment to be made is whether an excellent contribution to the literature has been made, not whether we agree with all the details and theses. I will say here that I do agree with a huge majority of the contents but even if I had more disagreements, I would still recommend Half-Earth Socialism. Dr. Vettese and Mr. Pendergrass have provided us with a marvelous, needed concept for how to organize a realistic better world, one recognizable from the standpoint of today. The one thing missing, however, is substantial — there are no ideas provided on how we might get from today to a half-Earth socialist democracy tomorrow. Also missing is how a transition to re-wilding half the land could be carried out, other than it would be a slow, decades-long transition.

I won’t consider these fatal flaws, for how to ignite and see through a successful revolution is something none of us possess today, nor can we alone. I have long said if I knew the secret, I’d tell everybody and not keep it to myself. What is essential is that we have practical, realistic ideas based on the limits our planet imposes on us if we are ever going to be in a position to create a better world. On that important metric, Half-Earth Socialism should be widely read.

* Troy Vettese and Drew Pendergrass, Half-Earth Socialism: A Plan to Save the Future from Extinction, Climate Change, and Pandemics [Verso, London and Brooklyn, 2022]

Envisioning a world with no bosses

Many people, especially those with eyes open to the ravages of capitalism, know what they don’t want. Fewer know what they do want. That is understandable, given that the task of building mass movements on so many fronts is daunting. But while what is meant by the creation of a better world can’t be precisely the same for everybody, movements nonetheless have to have some basic concepts of what a better world might look like.

Providing a blueprint is impossible. Having visions is a necessity. Concrete concepts, even if only outlines, need to be part of our toolboxes if we are to overcome “There is no alternative.” There are many outlines that have been sketched, naturally of varying viability. One that has been around for three decades has been the concept of “participatory economics,” often associated with one of its leading proponents, Michael Albert.

In his latest book, No Bosses: A New Economy for a Better World, Mr. Albert has organized his decades of work on this project and presented what he terms a “scaffold” as opposed to a blueprint. At 200 pages, this scaffold is perhaps sufficiently detailed to be something beyond that, but however one wishes to classify his vision of participatory economics, No Bosses provides a stimulating contribution to the literature of a better world.

As always, judgment on a book’s merit should be on how well it encourages serious thinking and provides useful material and commentary, not on whether we fully agree with the content. On the former, it is hard to imagine anyone serious about wanting a better world not giving it high marks. The latter, of course, is a much more complicated proposition. So let’s see how viable this vision might be.

Crucially, the author does not declare his presentation a finished project. His intent is to show what is necessary, not provide a blueprint, and repeatedly says the project will need improvement. “We have no other choice,” he writes. “Alone on foot in the desert, we must walk until we reach water. To curse the sun’s heat and bemoan the sand’s seeming endlessness while standing still guarantees death.” [page 16]

Seven guiding principles in a world without capitalists

The guiding values put forth are viable self-management, equity, solidarity, diversity, sustainability, internationalism and participation for all who can participate. There would be no private ownership of productive assets, and thus no capitalists or capitalism. The author emphatically rejects both capitalist markets and central planning. Both, in his view, inevitably lead to small majorities bossing around and dictating to a working majority. Capitalism creates a “coordinator class” that monopolizes empowering tasks. Even if a workplace is democratic, if a corporate division of labor is retained, coordinators dominate, subverting self-management goals. That happened in Argentina’s recovered enterprises, Mr. Albert argues, with the “old crap,” in the words of a disappointed worker, returning in many recovered, self-managed enterprises after the old capitalist bosses were kicked out.

“They were all working class before, but some began to become coordinator class by doing empowering jobs. Those doing empowering jobs began to dominate council meetings. They had the needed information. They had the confidence to develop agendas. Attendance of others began to fall because others didn’t want to attend meetings which ran according to agendas set by the coordinators and dominated by coordinator speeches and proposals. … The coordinators had come to feel they were smarter, more responsible, and more essential. They deserved more. They paid themselves more. And the wages paid the others, the workers, as decided by the coordinator class, started to deteriorate. The upshot was that the old crap didn’t return due to an inexorable outcome of human nature or of the intrinsic requirements of complicated work. The old crap returned due to a social choice that wasn’t even consciously made. The workers had routinely, reflexively, maintained the corporate division of labor. And the corporate division of labor had in turn routinely, reflexively, subverted sought results.” [pages 49-50]

If there was a management that was making basic decisions, including those of wages, rather than all members, then such an enterprise can’t really be said to be self-managed. But even when there is a real self-management in place, the dangers of a division of labor can easily assert themselves. In communist-era Yugoslavia, enterprises were not in private hands and instead run by self-management — an assembly of all workers had to approve all decisions, including setting wages. (I wrote a chapter-length discussion of Yugoslav self-management for my forthcoming book What Do We Need Bosses For? [Autonomedia].) In this system, the workers elected a workers’ council — in effect a management board that made strategic decisions — and an enterprise was headed by a director (chief executive officer) not necessarily picked by the workers. Councilors were limited to two one-year terms and were recallable, enabling large numbers of people to sit on these councils and theoretically making them accountable. But there was a central plan that constrained what enterprises could do, and a pattern began where technicians and managers would present plans to the councils, which would simply rubber-stamp them. Holding the right to veto a plan they didn’t like, as opposed to drawing up plans themselves, was enough for many councils. That the councils were instituted in a top-down fashion, rather than being the organic product of grassroots activity, did not help.

There were many headwinds faced by Yugoslav self-management, including some unique to the country and its decentralized political structures owing to ethnic rivalries, and, ultimately, the forces of capitalism and capitalist competition, which buffeted Yugoslavia ever stronger, would eventually break down the system and tear apart the country itself, although it produced perhaps the world’s fastest growing economy for its first 20 years. The consequences of market forces — of being integrated into the world capitalist system — steadily mounted, and ultimately became unsustainable. Those consequences included debt to foreign banks and institutions, punishing austerity imposed by the International Monetary Fund and World Bank, strong sensitivity to the vicissitudes of capitalist cycles, and the discovery that competing in the world market is difficult, all the more so for a medium-sized developing country.

One lesson from here is that no better world can be reliant on market mechanisms — capitalist markets will assert themselves, and as I have often noted, capitalist markets are nothing more than the aggregate interests of the world’s most powerful industrialists and financiers. That a traditional division of labor was retained in the self-management system is another factor that can’t be overlooked.

Workers’ and consumers’ councils as the core

Back to No Bosses. The core institutions of participatory economics are workers’ councils and consumers’ councils. Workers’ councils in this conception are meetings of all enterprise workers that make all decisions, whether by simple majority or a specified super-majority. (Perhaps it would be better to call these “workers’ assemblies” to match generally used terminology.) These bodies of the whole make all decisions and there are no higher bodies. There are no managers or bosses, not even elected ones. Everybody participates in all decisions. Consumers’ councils are collective decision-making bodies that would democratically make decisions on public goods and services, such as “neighborhood pools, county parks, state utilities or national security,” as well as collate individual needs. Although expertise would be listened to, decisions wouldn’t be devolved to experts; rather these councils would seek to raise levels so that all could participate.

Another key conception is a system of “balanced job complexes” to break down the division of labor. Here No Bosses offers one of the most serious proposals I’ve ever encountered to break down the division of labor, an often underappreciated contributor to inequality. Simply put, if there is not a serious effort to break down the division, inequality will remain. The book conceptualizes balanced job complexes not as short-term stints in alternative circumstances but rather having a set of tasks for all jobs that would enable comparable empowerment in all jobs. Balancing would occur not only within a given workplace, but across all workplaces, to give everybody an equal chance of participating in decision-making and provide a “steady social exchange.”

The book cautions that “balancing empowerment across jobs is not the same as balancing the amount of type of intellect required for that job.” There are numerous empowering jobs in any workplace, including how to best satisfy customers, how to plan for the future or determining how best to do other jobs. Along with equalizing job circumstances would be equalizing pay. Income would be based on duration, intensity and onerousness of socially useful work — a point repeatedly stressed. Differentials from an average, however, should be small and limited given that jobs would be balanced. The only way for pay to rise would be for the average to rise — thus, the book argues, mutual aid is built into the proposed system.

How would the average be calculated? The book doesn’t offer an answer to that important question. At one point, a complicated 20-point system is put forth, whereby every task would be assigned a number from 1 to 20 based on difficulty, with jobs being cobbled together based on averaging out the numbers and special bodies assigned with calculating these numbers. But it is then admitted that something so precise is unlikely to be put into actual practice and this detail seems to be offered more as a thought experiment. Indeed, such complications are unnecessary. There could simply be a standard wage and everybody paid it, and if an enterprise elects to allow differentiations, these should be minor (no more than, say, 20 percent) and within parameters established by law or consensus. However an average wage would be determined, having everybody make it or very close to it would uphold the ideals of solidarity and equality, as expressed thusly:

“[I]n a good economy, there should be no way to improve one’s consumption or one’s work life at the expense of others. There should be no opposed classes, nor even opposed individuals, at least in any damaging, persistent, structural sense. This can’t be achieved by market allocation where everybody buys cheap and sells dear and nice guys finish last. This also cannot be achieved by central planning where we do what others decide we must do. Equitable remuneration and solidarity instead point toward needing a new approach to allocation. It will turn out to be that we cooperatively negotiate outcomes to enjoy gains and endure losses together, even as we also seek work and consumption that is best suited to our personal fulfillment.” [pages 94-95]

If something can’t allocate products and services, it doesn’t work

And how would products and services be allocated? The seventh chapter of No Bosses, by far the longest chapter in the book, step by step builds a picture of how participatory economics would work. This is where the vision has to cohere into a workable model. Again, not a model in the sense of “this is how it will be or should be” but rather in the sense of useful ideas that can be seriously debated as we sketch out the basics of a better world. A series of “takes” provide successively more detail. “A new means of allocation that will sustain classlessness” and “foster solidarity/empathy” is the goal.

A new means of allocation would be necessary as the model rejects capitalist markets and central planning. Workers’ and consumers’ councils and federations (councils at the enterprise or neighborhood level would feed up into bodies successively representing larger territories up to the national level) would meet and preliminarily determine productive capacity and consumer needs; a national facilitation board tallies information and supplies information to the negotiators representing the councils and federations. Talks would continue until equilibrium is reached. Presumably that would necessitate multiple rounds. Plans would be done yearly.

The facilitation board would tally mismatches between worker and consumer proposals. Neighborhood consumer councils would make requests for collective goods (such as public pools, an image that repeatedly crops up; Mr. Albert perhaps likes to swim). As part of the negotiation, the facilitation board would adjust prices to reflect supply/demand mismatches to help negotiators reach agreement; the two sides would presumably adjust their proposals based in part on such price changes. There would be strict budgets — to consume more than your budget allows, the consumer council would have to approve, and if a workplace underutilizes its assets, a higher-level workers’ council would intervene and lower the workplace’s payroll. The idea is for enterprises to use their productive capacities fully and efficiently while meeting demand.

Numeric prices are presumed to “generate sufficiently accurate estimates” of costs and benefits of inputs and outputs, as well as account for environmental or other social costs. No Bosses argues that this kind of pricing would be superior to prices obtained in markets or central planning because they would be derived from cooperative social proposals that can be checked, and because aggregate social needs would be built into the system.

How would individuals meet their individual and family needs? Everybody would make a request for the coming plan year to their neighborhood council, with aggregate requests going up to higher consumer councils. Once all consumer requests and productive plans are aggregated, negotiations begin, with the previous plan’s totals as a reference point and using the information supplied by the facilitation board, including preliminary estimates of the coming plan year’s pricing changes. Rounds of talks would continue until a plan is reached; the plan would presumably be “loose” rather than “taut” so that adjustments can be made within the plan year.

A different sort of calculation problem

But here we come to a significant weakness of participatory economics. The plan would require everybody to know exactly what they will need for the coming year — shirts, automobiles, appliances, books, meals at restaurants, even theater tickets. This is impossible! Nobody knows, or can know, all they will consume for the next year, including how many movies they see in theaters. Most of the books I buy are on impulse when I see something interesting in a bookstore; how can I know what I will find ahead of time? Participatory economics presumes that if there are changes, these would cancel each other out and all would be fine in the end. But, note that we saw earlier that people had to stay within a strict budget. Despite the author’s insistence that this system would be freer than capitalist markets or central planning, neither capitalist nor Soviet-style governments constrained consumption into such a straitjacket. Sorry, you said you’d go to three theatrical performances; the neighborhood council doesn’t have excess theater tickets. Better luck next year.

These levels of negotiations would be enormously, and needlessly, complicated. Negotiations would have to begin months before the current plan year ended, so full information would not be available. Talks would have to conclude at the end of the year so it could go into effect at the start of the new plan year; this would be no simple task. There is no reason that a yearly plan couldn’t be worked out and be in place for a new plan year, but with such a complicated negotiation requiring vast sums of information, this simply isn’t realistic. The weakness of Soviet-style central planning shouldn’t be glossed over; one problem was that no group of officials, no matter how dedicated or sincere, could possibly possess all the knowledge necessary to make proper plans.

Planning is necessary to replace markets, but it should be acknowledged that Gosplan (the Soviet planning agency) proved to not be a substitute for markets, although of course central control and the decades-long emphasis (unchecked because of a lack of democratic control) on producer goods with consumer goods getting perpetually short-changed can’t be avoided as significant factors. Democratic, bottom-up planning would inevitably be a central component of any egalitarian future economy designed to meet social and individual needs and enable everybody to reach their potential. (Activists organizing workers’ councils in Czechoslovakia during the Prague Spring envisioned a democratic planning without Soviet-style hard numeric totals and held a national conference to begin codifying a new system based on workers’ control before the effort was shut down.)

I would argue that planning based on negotiations, and that it be bottom-up and not top-down, is a necessity. On that basic concept, I am in agreement with No Bosses. But it would make more sense, and be more efficient, for producers to get together and make plans, plans that would have input from consumer representatives. Put it this way: If 1.2 million shoes were produced and there was a small shortage, representatives from shoe factories (with possible participation and if not that then meaningful input from consumer representatives) could make an informed judgment and declare they need to produce 1.3 million shoes to meet projected demand. It is not as if sales figures are unavailable, and reports of shortages certainly could be collected easily. Replicating this across all industries would enable the assembly of a plan for the coming year. It would be important to know how many shoes would be needed overall; it is not necessary and not possible for hundreds of millions of people to each know precisely how many shoes or theater tickets they will need.

Moreover, one important factor is missing. How do we ensure that there is no discrimination, and that environmental, health and safety standards are upheld? Presumably, advocates of participatory economics would argue that the system would generate such high levels of egalitarianism and solidarity, and provide full employment so that nobody is stuck in a bad job, that such standards would automatically be upheld universally. Perhaps. But might it make sense to have boards that enforce standards, with real penalties for non-compliance. Participatory economics would reward cooperation rather than greed and anti-social behavior as capitalism does, but it might not hurt to have a bit of insurance.

Public goods and public detriments

Finally, the long seventh chapter circles back to collective goods. How would parks, infrastructure, recreation facilities, etc. be funded? A few ideas are kicked around. One example is if a public pool were requested by a neighborhood consumer council. A higher body would have to okay it, with the cost spread among all the areas that might benefit. If a project had a negative impact, such as causing pollution, then the affected areas would have a say in the project and if approved those affected would be compensated. This is an area of participatory economics that hasn’t been worked out, and in fairness it must be admitted that devising formulae to determine the cost of pollution or other harms would be extraordinarily difficult.

In reading this part of No Bosses, my own admittedly loose thoughts were that the average or aggregate health care costs of everyone who lives or works a specified distance, say 30 miles, downwind from a coal plant, plus the cost of sick days, be calculated against a regional or national average, and charge the plant that differential. But there is an immediate objection: How could multiple pollution sources be disentangled and quantified? So perhaps my loose idea would not be workable. No Bosses offers no plan due to the complexity and difficulty of such calculations. But it does firmly insist, properly, that environmental and health costs must be accounted for, including in pricing. That is something that would have to be worked out much closer to the arrival of a new economic system.

We can’t ask for perfection, and participatory economics is supposed to be a scaffold, not a blueprint. It would be useless to reproach it for not having all possibilities thought out, a task plainly impossible nor even desirable. Maintaining his optimism and enthusiasm, Mr. Albert concludes No Bosses with a series of answers to commonly asked questions. He rejects anarchism, social democracy and Marxism (although a cartoon version of Marxism) while offering participatory economics as “an approach … consistent with the human potential I can imagine.” I think we should employ some caution before simply dismissing all that has come before, however flawed — a tabula rasa is impossible. Nonetheless, what is proposed here certainly is imaginative. “Having vision matters for where we wind up,” he concludes. “Having vision matters for winning a new economy for a better world.”

However much we might quibble with this or that detail, having vision does matter. How could we believe a better world is possible, much less struggle for one, without vision? To restate what was written at the beginning of this review, the judgment to be made isn’t whether we agree with all details, it is whether it has made a needed contribution. No Bosses is a marvelous contribution to the growing and needed literature on the contours of a better world, of what we believe it should do. That participatory economics, or any other currently proposed system, is unlikely to actually come into being isn’t the point; what is is that we think concretely about the future and are prepared to discuss, dream and formulate serious ideas. And put them into action.

China’s winding road toward capitalism

There is perhaps no bigger controversy among partisans of the Left than the nature of China and its economy. Is it socialist? Capitalist? State capitalist? A hybrid? That so much debate swirls around this issue is its own proof that the question doesn’t have a definitive answer, at least not yet.

What can be agreed upon is that China has experienced decades of extraordinary economic growth. But the nature of that growth, and the base upon which it has been created, are also subject to intense debate, arguments that necessarily rest on how a debater classifies the Chinese economy. An additional debate is whether China’s growth is replicable or is the product of particular conditions that can’t be duplicated elsewhere. And what should be at the forefront of any debate is how China’s working people, in the cities and in the countryside, fare under a tightly controlled system that promises to bring about a “moderately prosperous society.”

Setting out to examine China from that last perspective is a new book, The Communist Road to Capitalism: How Unrest and Containment Have Pushed China’s (R)evolution since 1949. As you might guess from the pungent title, Communist Road, authored by activist Ralf Ruckus, is not only critical of the Chinese Communist Party, but comes squarely down on the proposition that China has become a capitalist society. Despite China’s increasing integration into the world capitalist system, the increasing emphasis placed on markets and widening inequalities, the proposition that China has moved to capitalism is quite controversial for many people on the Left.

Mr. Ruckus begins his argument by suggesting that a more gradated approach to Chinese history since the 1949 revolution better captures the stages of China’s development. He presents four different ideas commonly put forth that attempt to define the nature of China’s economy. These four concepts are capitalist from 1949 to now; socialist from 1949 to now; socialist and then capitalist; and a four-stage approach of transition to socialism, socialism, transition to capitalism and capitalism. There is a fifth conception not mentioned by Mr. Ruckus — that China is not classifiable as capitalist or socialist, a perspective put forth by the Marxist economist Samir Amin. Dr. Amin, in his The Implosion of Contemporary Capitalism, argued that asking if China is socialist or capitalist “is badly posed” because it is “too general and abstract.” Dr. Amin wrote that although “the Chinese project is not capitalist does not mean that it is socialist, only that it makes it possible to advance on the long road to socialism” but added that China could also “end up with a return, pure and simple, to capitalism.”

Thus there is more than one nuanced perspective. The last of Mr. Ruckus’ four offered ideas (the four-stage approach) and Dr. Amin’s hybrid approach appear the most viable among the five theories in our struggle to understand the contours of Chinese development. It is the four-stage approach that provides the spine for Communist Road. Whether or not we are in agreement that China has become capitalist (on its own terms) or is moving toward capitalism, that China is in danger of a long-term, or even permanent, turn to full-on capitalism shouldn’t be a source of heated dispute. The collapse of the Soviet Union and its Central European satellites, and their return to capitalism on disadvantageous terms, provides proof, even for those who believe China remains a socialist country, that capitalism could be its future. Nor should it be expected that deepening entanglement with the world capitalist system doesn’t present its own dangers.

Social confrontation across four periods

Early on, in the opening pages, Mr. Ruckus states that his “main focus lies on social confrontation and the ruptures and continuities they produced in the PRC since 1949,” and he does not waver from that focus in discussing his four periods (transition to socialism, socialism, transition to capitalism and capitalism) of Chinese Communist Party (CCP) rule. The coming tale of urban and rural unrest is set early when the author writes, “[T]he actually existing socialism constructed [in the first two periods] was very different from both the preceding and the following economic, political, and social systems. Furthermore, actually existing socialism was largely distinct from the socialism desired by proletarians, peasants, and women* who had been involved in revolutionary organizing since the 1920s.” [page 7]

Continuing to set out his thesis in the opening pages, Mr. Ruckus argues that “the overall character of the system qualified as capitalist from the mid- to late-1990s onward, because the main driving force of the economy was capital accumulation and the generation of profit, and because the CCP leadership and other sections of the ‘elite’ formed a reconfigured capitalist ruling class that appropriated a large part of the wealth produced through the exploitation of workers and peasants.” These reforms were successful because “they could build on the foundations socialism had created and, second, because so-called globalization, with new industrial production clusters and supply chains … offered a historical opportunity for attracting foreign capital and for developing the PRC economy the CCP regime made use of.” [page 9]

The reference to CCP cadres as a “ruling class,” and a capitalist ruling class no less, is bound to set off significant controversy. That is perhaps a technical side issue we can sidestep here. A larger issue for the reader of Communist Road is whether the author makes his overall case effectively. The four core chapters of the book cover the four defined periods, starting with the transition to socialism. In these first years after the 1949 revolution, substantial improvements were achieved in social conditions, including life expectancy, child mortality, health care, income equality and literacy.

^{Shanghai (photo by dawvon)}

At first, the CCP followed the model of the Soviet Union with an accumulation and industrialization strategy with similarities to “authoritarian capitalist late comers” using Taylorist and Fordist production techniques; the form of technology and work organization was seen as neutral. As with the Soviet Union of the 1920s and 1930s, the capital and labor power for industrialization could only come from internal sources. In the countryside, the peasant economy was left intact until the mid-1950s, with land reforms benefiting poor and middle peasants. There were benefits for women, too — a 1950 marriage law granted them equal rights with men, although full equality did not come as women workers tended to be relegated to “softer” work with lower pay and fewer work points.

With the onset of nationalizations in the mid-1950s, a brief political opening up, the “Hundred Flowers Campaign,” widened the spaces for criticism, but the window was soon shut when criticism was deeper than the CCP had anticipated. Nonetheless, the party retained significant sources of support as it launched the Great Leap Forward, a collectivization and industrial drive. The Leap failed, leading to acute shortages of food as a decline in the size of the rural workforce as urban industries rapidly expanded, mismanagement, poor weather and false reports filed by local authorities combined to create a disaster. Millions would die.

Conflicting currents in the Chinese Communist Party

Communist Road places the blame squarely on Mao Zedong. But perhaps the situation was not so clear-cut. Minqi Li, for example, in his book The Rise of China and the Demise of the Capitalist World Economy, flatly states “it was Deng Xiaoping and Liu Shaoqi who were responsible for the Great Leap Forward,” and quotes Liu as praising officials who reported implausible, wildly inflated crop yields as “having overthrown science.” At the same time, Mao cautioned against the “exaggeration wind” but party leaders, following the leads of Deng and Liu, who were in charge of party propaganda, continued to agitate for ideas to be “liberated.” (As an aside, Dr. Li’s research found that the peak of the death rate during the Great Leap Forward was lower than the normal death rate during the 1930s; by the 1970s, the death rate was about one-fourth what it had been in the 1930s.)

Dr. Li concludes his analysis of the Great Leap Forward by stating “a privileged bureaucratic group” had taken control of the party; now no longer a party committed to revolutionary ideals and willing to self-sacrifice but rather “one that included many careerists who were primarily concerned with personal power and enrichment.”

That is not different from Mr. Ruckus’ overall conclusion, although he asserts that Mao “was held responsible” for the Great Leap Forward and “pragmatic leaders” like Deng and Liu “instituted reforms that were supposed to deal with the fallout of the GLF.” [page 56] During the next period of upheaval, the Cultural Revolution of the mid-1960s, is, consistent with the book’s perspective, examined from the standpoint of workers and peasants by Mr. Ruckus. Separate from the struggles within the party hierarchy, he writes that the Cultural Revolution was a series of mass outbreaks for better working conditions and permanent jobs as part of a struggle against the “red bourgeoisie” (a term used by some Cultural Revolution participants) and the CCP that was “exploiting workers.”

^{Forbidden City, Beijing (photo by Adamantios)}

Unrest continued across the 1970s, with workers demanding more egalitarian wages and bonuses, a say in decision-making and work conditions, and fewer privileges for party cadres; the experiences gained during the Cultural Revolution were put to use by grassroots organizers. This was also a period where investments in education and health care paid off — literacy, life expectancy and child mortality all continued to improve. Unrest was met with a mix of responses, including repression, concessions, co-optation and reforms.

China, as can now be seen in hindsight, was on the brink of dramatic changes as Mao and much of the revolutionary generation were approaching their deaths. Separate from that, China had opened relations with the United States in an effort to ease its isolation and gain access to technology; the split with the Soviet Union also played a role in this development. The Deng faction would win the power struggle following Mao’s death, and then use the democracy movements to defeat their party opponents before suppressing the movements, Mr. Ruckus writes. The commune system was dismantled, farmland was leased, collective structures disappeared and local governments began to rely on taxes, fees and enclosures. Wages were increased, but the “iron rice bowl” of benefits was attacked and associated with the ousted Mao-aligned Gang of Four. The right to strike was abolished, more workers became temporary hires and rules restricting migration were eased to encourage an exodus into the new special economic zones where foreign capital could set up.

Here, Mr. Ruckus is on firm ground in characterizing the period from the mid-1970s to mid-1990s as a transition to capitalism. He writes that hopes that the Deng reforms would lead to improvements were disappointed. Changing labor relations and less job security led to continuing worker unrest and student mobilizations. The death of a prominent party reformer, Hu Yaobang, sparked mass demonstrations and the Tiananmen Square occupation of 1989, by any standard a crucial turning point.

Tiananmen Square as a turning point in Chinese history

Here, perhaps more than at any other point, is where Communist Road must make its case. The Tiananmen Square occupation “ended in failure,” Mr. Ruckus writes, because “CCP leaders were determined to keep their grip on power” and because of the movement’s weaknesses, “above all, the division between students and workers. Student leaders did not want to involve the working class.” That was, in part, because of a fear that “working class involvement would necessarily lead to a harsh response from CCP leaders.” [page 109]

One of the leaders of Tiananmen, Wang Chaohua, who wrote a series of essays on the event after escaping China, said the more important mistake was to not develop a political agenda and thus “failed to propose a political agenda that could have reflected the scale of popular engagement — and thus missed the opportunity to transform the protest into a constructive political movement,” in the words of J.X. Zhang, who reviewed in New Left Review Dr. Wang’s Chinese-language collection of Tiananmen essays. Dr. Wang laments a “lack of independent political consciousness among Chinese workers” who “as a whole still partly identified their collective interests with those of the ruling party, which claimed to be ‘the vanguard of the working class.’ ”

Activist workers who did participate nonetheless would bear a heavy share of the crackdown that followed the military attack that put an end to the occupation. It is possible that thousands were killed in the military crushing of the occupation and a certainty that thousands more landed in prison. What was to come next?

“At this point,” Mr. Ruckus writes, “the PRC was just a final step away from its transition from socialism to capitalism. This step might not have happened if not for the global transformation of the Cold War confrontation between the capitalist West and the socialist East and the dialectic of economic crisis, investment relocation, and industrial development that had shifted the global manufacturing center to East Asia over the course of the 1980s and 1990s.” [page 110]

^{Tiananmen Square (photo by そらみみ (Soramimi))}

Similarly, Naomi Klein, in The Shock Doctrine: The Rise of Disaster Capitalism, argued that as the Tiananmen Square protests were getting underway, the Chinese government “was pushing hard to deregulate wages and prices and expand the reach of the market.” She even reported that Milton Friedman, the notorious godfather of Chicago School economics, was invited to China in 1980 and again in 1988 to provide advice! Ms. Klein quotes another Tiananmen leader, Wang Hui, who said popular discontent against Deng’s economic changes that included lower wages, rising prices and “a crisis of layoffs and unemployment … were the catalyst for the 1989 social mobilization.” The violent end to the occupation, according to Professor Wang, “served to check the social upheaval brought about by this process, and the new pricing system finally took shape.”

What were the results once the Deng-led CCP was able to resume its restructuring? Mr. Ruckus doesn’t hold back from a catalog of negative changes: The use of special economic zones to draw in foreign direct investment (FDI), job security guarantees replaced with contracts, welfare provisions scrapped, privatizations, state-run companies converted to state-owned enterprises expected to maximize profits, 50 million laid off and an intensification of work. “Growing job insecurity, unemployment, low wages, the loss of welfare protection, and higher work pressure led to discontent,” he wrote. “[State-owned enterprise] workers started organizing a wave of protests against the restructuring of the state sector that would last into the 2000s. Moreover, the deterioration of living conditions in the countryside triggered peasant unrest in the mid- and late-1990s. These two cycles of struggle marked the beginning of the capitalist period in the PRC,” which the author dates from the mid-1990s. [page 114]

“Crossing the river by feeling the stones”

This transition need not be seen as either inevitable or the result of a plot by some party leaders, according to Communist Road. “This transition was not the result of a detailed master plan or blueprint but of a series of — often experimental — reform steps taken to improve the country’s economic performance, save the socialist system, and stabilize CCP rule. This is the meaning of the phrase ‘crossing the river by feeling the stones’ that Deng Xiaoping allegedly used to describe his understanding of the course of reform.” [page 115]

Restructuring of state-owned enterprises would further develop as the 1990s drew to a close and China joined the World Trade Organization in 2001. Another crucial milestone in China’s path toward capitalism Mr. Ruckus could have explored further is Jiang Zemin’s “theory of the three represents.” Only a passing reference to then-President Jiang’s allowing private capitalists to become party members in 2001 hints at this development. But this development went beyond a mere widening of party intake. The “Three Represents” reference is an official line announced in 2001 the party should represent the most advanced productive forces, the most advanced culture and the broadest layers of the people. Promulgated by President Jiang, it is a declaration that the interests of different classes are not in conflict and that the party can harmoniously represent all classes simultaneously. One can of course enunciate such a program if one wishes, but such a theory has nothing in common with Marxism.

Another piece of evidence that the book could have cited but didn’t is the party’s increasing stress on the use of markets. The Communist Party leadership switched the role of the market from “basic” to “decisive” in 2013 at a key Central Committee plenum, and continuity with this course was laid down by the party at the October 2017 party congress that again stressed the “decisive role” of the market. Communist Road focuses on social movements and grassroots activities, and spends little time on party developments, and although not discussing these party declarations is perhaps consistent with the intent of the book, more reportage of party debates would have enriched the text and provided further underpinning for its central thesis.

The book does document continuing unrest across the 2000s; much of the strikes during this period were wildcat actions as organized actions were prohibited. Since Xi Jinping became party general secretary and president in 2012, the party has tightened control and increased surveillance, and although unrest and wildcat actions have not ceased, there is support for the government from the middle class, which has seen benefits from the reforms, and wages have increased.

Conceptualizing socialism beyond a narrow definition

In trying to unravel the complexities of how the Chinese economy might best be conceptualized, a basic question that should be asked is: What is socialism? Is socialism merely the absence of capitalism? Or is it something more? A definition frequently put forth by socialists (and not only them) is that state ownership of the means of production constitutes socialism, understood as a transitional stage toward communism, to use the classical formulation of Karl Marx. This was the foundation on which the Soviet Union, from the 1930s on, could proclaim itself a socialist society, updating that to referring to itself as a “developed socialist society” in the Brezhnev years as an additional developmental step.

But is that all there is? I would argue that the elimination of a bourgeois social class as the owners of the means of production and the replacement of that social relation with common or state ownership is a pre-condition of socialism, not the actual content. Nor does it have to mean state ownership of all enterprises, although it is inconceivable for a socialism to exist that doesn’t place in state hands banking and a few, large key industries. If socialism means political and economic democracy in a society where everybody has a voice in the decisions that affect them, their communities and/or the enterprises in which they work; wages and other compensation reflect contributions to the work performed; and there are no centers of power built on the accumulation of capital, then neither China nor any other country can be classified as achieving socialism.

In his writings on the Soviet Union, the Marxist historian Isaac Deutscher developed the term “post-capitalist” for the Soviet Union and its Central European satellites. This provides a neutral term that acknowledges that capitalist economic relations had been abolished without suggesting a transition to a higher state had been completed. That has long seemed to me to be a highly useful way to conceptualize the Soviet economy. It certainly wasn’t capitalist, or the United States and other Western capitalist powers wouldn’t have poured so much time, energy and money into attempting to defeat the Soviet bloc with such sustained intensity.

^{People’s Grand Hall in Chongqing (photo by Chen Hualin)}

It is reasonable to draw some parallels with Dr. Amin’s conceptualization of China as neither capitalist nor socialist. He pointed to the communal nature of land in rural China, which is not a commodity that farmers can sell, as “absolutely prevent[ing] us from characterizing contemporary China (even today) as ‘capitalist,’ because the capitalist road is based on the transformation of land into a commodity.” Other commentators point to the fact that banking and finance remain firmly in state hands to buttress their arguments that China is not capitalist. Dr. Amin in his analysis noted that transnational capital can’t pillage China’s natural resources and China’s integration into the world system is “partial and controlled.” Land, however, is frequently taken by city or other local governments and sold to commercial interests; one estimate made in 2017 is that 4 million farmers were losing land annually. Moreover, that China is one of two countries large enough to enter the world capitalist system on its own terms (India being the other although neither the Hindu fundamentalist neoliberal BJP nor the ever rightward-moving Congress chooses to do so) doesn’t mean capitalist relations are absent from the workplace.

The analogy with the Soviet Union is not a snug fit, given that Soviet Union retained a post-capitalist, or at any rate, a non-capitalist, form of government through the early years of Mikhail Gorbachev, not beginning to introduce elements of capitalism until a series of reforms rammed through the parliament in 1990.

On balance, then, although Dr. Amin presented a learned and serious interpretation (and who was clear about the danger of a return to capitalism even while believing market openings were justified), Mr. Ruckus’ four-stage conception gives us the best understanding of the Chinese economy and where it, at least for now, is going. One more opinion popularly floated that we haven’t discussed is that China has indeed moved to capitalism, but only as a temporary expedient to develop faster, and will one day expropriate private capital and become a socialist power strong enough to fend off the capitalist powers. Given the opaqueness of the CCP, none of us outside the party are in any position to know with authority its leadership’s long-term intentions.

What we can do is analyze the actions and words of CCP leadership, which has carried out a slow progression toward capitalism. President Xi has recently begun taking steps to reign in certain Chinese capitalists and has more frequently talked about Marxism, but whether these are the opening moves of a reversal of policies or simply an assertion of party rule will not be known for some time. And even if it were true that the moves toward capitalism are intended to be a temporary expedient, becoming more deeply entangled in markets and the capitalist world system carries its own momentum, a drift not at all easy to check. There are industrial and party interests that favor the path China has been on since the 1990s, and those interests represent another social force that would resist structural moves toward socialism.

An ambivalent and contradictory path

In its summation, Communist Road acknowledges that the four-stage conception “has its limitations.” There are not clear borders between the stages nor is there a straight historical direction. “The long transition from socialism to capitalism in particular was not only gradual and intermittent but also ambivalent and contradictory,” Mr. Ruckus writes. “[M]any of those subperiods [within the stages] overlapped, as unrest from below was often vibrant and erratic and took years to develop and grow, while containment measures and reforms from above were also staggered and long-lasting.” [page 166]

A corollary is a rejection of the idea that “so-called capitalist roaders in the CCP leadership” executed a master plan. “There is no evidence for such a master plan, and blaming the transition mostly on deviant CCP leaders ignores structural factors, both domestic and global. … [I]t was the result of structural features of the form the CCP regime took in the 1950s and 1960s and of social, political, and economic dynamics that made the transition to capitalism in the following decades possible and likely (though not inevitable).” [page 173]

The book concludes with “lessons for the left” that offers “elements of a left-wing strategy.” Two necessities, the author writes, are analysis of the process of class recomposition from the perspectives of proletarians and other oppressed peoples, and forms of organizing that break down divisions among proletarians, activists and intellectuals. Open discussion of the strengths and weaknesses of movements, resistance and organization, and of socialist governments, are vital as well as that movements should be in the hands of those struggling and should represent themselves. Finally, movements must organize globally; the social struggles around the world of recent years occurred simultaneously but were “divided along North-South lines and by national markets, sexism, racism, and migration regimes. These divisions can be overcome, and it is one of the tasks of left-wing organizing to provide resources and create bridges that connect struggles.”

We must base analyses on material reality, not on what our hopes or dreams wish nor on the name of the organization presiding over a country. No single book can be the last word, and some of the conclusions of Communist Road are sure to draw some strong disagreements. Regardless of where you stand on the central questions under discussion, Ralf Ruckus has provided a strong argument, backed by ample evidence, for the thesis that China has become capitalist, as well as a useful, brisk history from below of China since 1949. Both are welcome contributions.

Is 20th century social democracy really the best we can do?

Predictions are difficult to make, especially, as the old joke goes, when they are about the future. Particularly fraught have been predictions of the demise of capitalism. Conventional wisdom would have us believe that because capitalism remains the world’s dominant economic system, predictions of the system’s demise are not only wrong, but destined to be wrong in the future.

“Conventional wisdom” here, of course, is nothing more than a display of the axiom that the intellectual ideas of a society are those of the dominant class. Certainly, both industrialists and financiers would like us to believe that nothing fundamental can change. Bourgeois ideology proclaims that through every possible channel every day.

Yet what is of human creation is not permanent; everything of human creation has an expiration date. Capitalism will be no different.

When will capitalism be transcended and what will follow? That central question has been asked for two centuries and, given the increasing intensity of economic crises, mounting inequality and looming environmental catastrophe, is as important as ever. The unending series of protests, uprisings and movements dedicated to either forcing systemic reform or outright replacement are eloquent testament to how capitalism fails most of the world’s population.

^{Night view of the Gate of Enlightenment in Madrid (photo by Luis García (Zaqarbal))}

Nonetheless, there is no arguing that capitalism remains firmly in the saddle, with no existing social movement anywhere near strong enough today to put the system at risk. Does that mean we should regard past predictions of capitalism’s demise as mistaken or wishful thinking? Perhaps only an ambiguous answer, at least preliminary, is appropriate. For those who wish to see capitalism continue indefinitely — those who benefit and those so frightened by propaganda that anything else is literally unimaginable — there is an easy answer: Yes. For those who wish for a better world, an economic system based on human need and in harmony with the environment, the answer is no. 

Whether yes, no, maybe or let’s wait and see, an examination of why predictions of capitalism’s demise are thus far off the mark is a healthy exercise. I thus was interested in a new book wrestling with these issues, Foretelling the End of Capitalism: Intellectual Misadventures since Karl Marx by Francesco Boldizzoni. Foretelling is a curious hybrid as the author is quite critical of capitalism but also has a pessimistic outlook regarding its replacement; it is rare for a book to receive praise from a Wall Street Journal reviewer and New Left Review contributor Wolfgang Streeck. Foretelling provides a strong challenge to the thinking of critics of capitalism and those who subscribe to leading theories, particularly Marxist, of the end of capitalism.

Such a challenge is healthy, and those who are interested in a basic history of economic thought for the past 200 years would do well with this book. Whether it succeeds in its core intention, however, is a separate matter, although any conclusions will partly depend on a reader’s perspective. 

Capitalism will end, as do all products of history

We get a good sense of Professor Boldizzoni’s perspective in his introduction, where he writes that capitalism will end, or slowly turn into something new, like all products of history, although there is no guarantee it will be something better. The brutality of prior systems lives on in capitalism. The slow growth rates of a more service-oriented economy has led to more “distributional conflicts,” and the Left must find effective tools to deal with it or the “populist right” will take its place. To all but capitalism’s more fervent apologists, this can hardly be considered controversial. But we also read here a foreshadowing of pessimism with a passage declaring “this battle to ‘overthrow the system’ is lost from the start” — believing it raises false hopes and thus “does not do progressivism any service.”

Capitalism isn’t going anywhere in the near future and past predictions have not been borne out, so a hard look, if we are intellectually honest, is warranted. It is healthy to have ideas challenged, so let us engage with these ideas.

Before getting to the heart of its argument, the first four of the six chapters of Foretelling the End of Capitalism are a wide-ranging survey of thinkers from the early 19th century to the early 21st, across the full political spectrum. These are not deep excavations but do provide basic understandings. These are mostly solid introductions to the evolution of thinking on the topic of political economy and important theories that have arisen, except for weaknesses with some Marxist writers. For example, a brief discussion of fin de siècle German social democracy — Eduard Bernstein vs. Karl Kautsky vs. Rosa Luxemburg — is shallow; the author only sees the surface of Kautsky’s writings and does not grasp what lies below the surface, nor how to interpret the evolution of Kautsky’s thinking, without which it is impossible to understand why Kautsky would come to draw close to Bernstein, an outcome the book entirely misses.

That is no more than a minor point. More serious is what this reviewer considers among the most bizarre interpretations of fascism he has ever come across. Professor Boldizzoni writes that fascism, or more specifically, Nazism, was “the middle ground between the liberal and Soviet worlds.” He presents the ideas of several writers on fascism, but all but one are hopelessly confused and serve only to obfuscate. Incredibly, there is not one word from Leon Trotsky, the preeminent analyzer of Nazism during the 1930s — an inexcusable omission. Nor is the orthodox communist conception as handed down by Josef Stalin presented. Although that conception was badly mistaken with tragic circumstances, it should have been discussed, given the consequences of that line being put into action.

It is true that fascism is notoriously difficult to diagnose, but if approached from a class standpoint, it becomes understandable. At its most basic level, fascism is a dictatorship established through and maintained with terror on behalf of big business. It is a phenomenon squarely at the far right of the political spectrum; it is not an ersatz “third way” precursor. Fascist movements have a social base, which provides support and the terror squads, but which is badly misled since the fascist dictatorship operates decisively against the interest of its social base, rooted in middle class white-collar professionals and small business owners. (That is still true today; look at the profile of the Trump followers who have been arrested for participating in the January 6 attack on the U.S. capitol building.)

“In National Socialism, everything is as contradictory and as chaotic as in a nightmare,” Trotsky wrote in a vivid 1932 essay, using the intentionally misleading formal name for the Nazis. “Hitler’s party calls itself socialist, yet it leads a terroristic struggle against all socialist organizations. It calls itself a worker’s party, yet its ranks include all classes except the proletariat. It hurls lightning bolts at the heads of capitalists, yet is supported by them. … The whole world has collapsed inside the heads of the petit bourgeoisie, which has completely lost its equilibrium. This class is screaming so clamorously out of despair, fear and bitterness that it is itself deafened and loses sense of its words and gestures.”

Militarism, extreme nationalism, the creation of enemies and scapegoats, and, perhaps the most critical component, a rabid propaganda that intentionally raises panic and hate while disguising its true nature and intentions under the cover of a phony populism, are among the necessary elements. Despite national differences that result in major differences in the appearances of fascism, the class nature is consistent. Big business is invariably the supporter of fascism, no matter what a fascist movement’s rhetoric contains, and is invariably the beneficiary even though its beneficiaries will not directly control the dictatorship; it is a dictatorship for them, not by them. The massive profits pocketed by industrialists in Hitler’s Germany, Mussolini’s Italy, Pinochet’s Chile and elsewhere speak volumes, as do the draconian anti-labor laws implemented. Fascism is capitalism stripped of all democratic veneers.

Are the reasons behind capitalism’s staying power psychological?

Nonetheless, these early chapters are useful for other theorists who are discussed, including John Stuart Mill, Joseph Schumpeter, John Maynard Keynes, Jürgen Habermas and several writers of the late 20th century. The author skillfully dismantles the apologia for capitalism’s inequality offered by publicists masquerading as economists. In the final two chapters, Professor Boldizzoni explicates his core arguments. Here we find no illusions about the nature of capitalism nor misunderstandings of its social relations. Capitalism is a socio-economic system, not a type of economic activity, imposed by force; an “institutionalized social order” in which even human labor is reduced to a commodity. Capitalism is kept together through hierarchy and individualism, upholding new forms of previous master/slave and lord/serf relations.

So why have forecasts of capitalism’s demise been so far off the mark thus far? Or, perhaps, we might better phrase this question as: Why does capitalism persist despite the misery and opposition it continually spawns? Foretelling the End of Capitalism begins to answer this question by offering three factors — “cognitive distortions that affect the forecasting process,” faults in the construction of social theories and, decisively, “the faith in progress that underlies modern thought.” This is further teased out through two mistakes — overgeneralization through drawing overly broad conclusions or magnifying specific events and “black and white thinking,” an example of which is ignoring that there are “many varieties” of capitalism. Seeing the next system only in terms of the negatives of capitalism and, finally, a misunderstanding of culture underlie mistaken forecasts, the book asserts.

All this comes down to “cognitive distortions” and “theoretical flaws,” working together and in conjunction with “a more general mental disposition” common to those who attempt to predict what may happen in the future. “The entire history of social forecasting and its mistakes is intertwined with faith in progress,” Professor Boldizzoni writes. All of his reasons are psychological. There is nothing material!

^{A garment factory (photo by Fahad Faisal)}

This is the reasoning of someone who believes the current world is the only possible world that can be, whether that belief is conscious or hidden in the unconscious. Capitalism has not fallen; therefore those who forecast its eventual end are dreamers outside reality. It is as if there are no material reasons for the continued life of capitalism, some of which have to do with the very pillars of capitalism that the author himself explicates well.

It is certainly possible to draw up a list of theoretical failings far more specific than flawed enlightenment thinking. No single or small group of developments can possibly encompass all the factors that have kept the world economic system in place. I have previously written that no serious discussion of this question, however, should exclude these factors:

• The early pioneers of the socialist movement seriously underestimated the ability of capitalism as a system to adapt and therefore did not foresee the ability of working people to extract concessions for themselves. 
• The early pioneers failed to understand the buoying effect that would be provided by imperialism (for the leading capitalist countries). 
• Many of the early pioneers clung to an overly mechanical (mis)understanding of social development that led to a passive belief in an automatic unfolding of revolution that implied, incorrectly, that powerful capitalists would simply sit back and allow themselves to be overthrown. (Kautsky and Bernstein are emblematic here.)
• Many leaders during the Soviet era continued to hold to a similar overly mechanical belief in future revolution while at the same time failing to grasp the nuances of capitalist development. 
• An overly centralized world movement that retarded the theoretical developments needed for local conditions, blocking the creation of innovative leadership while at the same time discouraging existing local leaderships from attempting revolutions. 
• A too narrow conception of “working class” or “working people” — a tendency to visualize only blue-collar manual workers as working people, a declining percentage of the population in increasingly technological capitalist societies. Such narrow horizons served to exclude a large proportion of wage workers, with the result that movements purporting to be organizations of working people instead divided them at the start. 

I am under no illusion that the above list exhausts the catalogue of factors. Obviously, the ability and willingness of the governments over which capitalists hold decisive sway to use violence to keep industrialists and financiers in power; the ability to disseminate propaganda in a variety of forms through an array of media, schools and institutions; and the willingness to invade, overthrow and impose military violence and sanctions against any country that challenges capitalism’s masters so as to make life there difficult are indispensable factors as to capitalism’s staying power. The last of this paragraph’s factors goes a long way in itself as to why alternatives to capitalism have faltered. 

Every attempt at constructing a post-capitalist economy has been met with overwhelming military, financial and other forms of force, putting them on a war footing. We can not know what might have been created if those countries had been allowed to peacefully develop, and this factor is indispensable if we are to seriously ponder the acceptance of “there is no alternative” propaganda. Despite the acknowledgements of bourgeois culture’s orientation toward wealth accumulation and cultural processes, Foretelling the End of Capitalism offers lectures on the weaknesses of enlightenment thinking rather than analyzing material conditions.

Culture as the glue holding together capitalism

Professor Boldizzoni puts forth the thesis that political, economic and social structures are all held together by “a powerful glue”: culture. Capitalism, he writes, is the product of a particular Western family of cultures, with hierarchy and individualism the most important factors. Behavior standards “change slowly”; it “may take several centuries” for culture to transform. He writes, “The emergence of a new system will be possible when the circumstances under which the old one was formed have eventually ceased to exist. It will reflect the changes in the material circumstances as well as in the culture sphere that are to occur over the next few centuries. The transition, however, will be so gradual that it will be barely noticeable.”

There is plenty to unpack in the preceding paragraph. That culture is a “powerful glue” keeping capitalism is indisputable, and that changes in “material circumstances” will facilitate a transition to a new system is also not in dispute. But these assertions, which certainly would not be controversial to a Marxist, are odd in light of the author’s criticisms of Karl Marx. It is unavoidable to note that those criticisms are rooted in a shallow understanding of Marx’s body of work. The author makes the common mistake of seeing Marxism as overly mechanical, teleological and offering a “perfect society,” nor does he grasp the subtlety of the “dictatorship of the proletariat,” admittedly a confusing phrase that might better be retired. (“Dictatorship of the proletariat” simply means the predominance of working people, the vast majority of people in capitalist society, without reference to any particular governmental form. All capitalist societies constitute a “dictatorship of the bourgeoisie,” the predominance of industrialists and financiers, which has taken many forms, including formal democracy and fascist.)

^{Meeting at the Putilov Factory (1917)}

These misunderstandings are possible because Marxism’s 20th century practitioners in the Soviet bloc presented it in overly simplified terms, seeing it themselves in a mechanical manner. And that was not new. Friedrich Engels, in an 1890 letter to Joseph Bloch, lamented that he and Marx had put so much emphasis on economics. “Marx and I are ourselves partly to blame for the fact that younger writers sometimes lay more stress on the economic side than is due to it,” Engels wrote. “We had to emphasize this main principle in opposition to our adversaries, who denied it, and we have not always had the time, the place or the opportunity to allow the other elements involved in the interaction to come into their rights. … Unfortunately, however, it happens only too often that people think they have fully understood a theory and can apply it without more ado from the moment they have mastered its main principles, and those even not always correctly.”

We can conceptualize Marxist materialist philosophy like this: The flow and movement of any phenomenon or idea takes varying directions, and far from always in an expected direction. As the concept of “flow” implies, history and social development do not consist of discrete steps or stages. Philosophical, political and religious ideas (which are built on the materials of their predecessors); the prevailing culture (which include traditions shaped in the conditions of the past that have survived into the present); and local geographic factors influence not only each other but also influence economic conditions. What was a cause can become an effect, and an effect can become a cause. These forces are given concrete form within a state, the form of which (including its legal structure) is based on the material conditions of life — the economic structure is the foundation on which society is built and which therefore shapes social consciousness. 

Properly understood, Marxism is not, and has never been, a reach for utopia; its founders were scornful of the utopians of their time. Still more puzzling is Professor Boldizzoni’s bizarre aside that Swedish social democrats were “seeking the achievement of a perfect society.” That would certainly be news to them. The post-World War II Swedish model sought full employment, equality and the transfer of excess profits to the collective ownership of employees. Better than ordinary capitalism and envisioned as an evolutionary route to a future socialist society, but hardly nirvana.

How high should movements aim? 

Nordic social democracy is what the author seems to have in mind when he references “many varieties” of capitalism. Yes, there are national differences in capitalism, sometimes significant, but given the domination of the United States and its ability to dictate to the rest of the world, it is unrealistic to see that there is anything other than a single world system. And Swedish capitalism is far removed from any “perfect society” — dominated by corporate power and subject to the pressures of corporate globalization the same as other small or midsized capitalist country, Sweden today has inequality and poverty levels above the European Union average. 

Sweden’s failure to institute even the most rudimentary beginnings of an evolutionary path to a socialist economic democracy under the 1970s “Meidner plan” of forcing companies to issue stock to public agencies until the public had majority control succumbed not only to the might of local capitalists and the pressures of corporate globalization, but because of the failure of working people to organize. Without a massive movement, no project of socialism, or, if you prefer, economic democracy, can succeed.

^{Blockupy 2013: Securing the European Central Bank (photo by Blogotron)}

If we are dwelling on disagreements here, it is because these areas of dispute are central to the author’s thesis. What should be done? Professor Boldizzoni forecasts that although capitalism will be replaced, it will last for centuries to come. No mention of the environmental crisis — humanity doesn’t have one full century, never mind several, to wait! There is also the matter of the inability to achieve endless growth on a finite planet, and capitalism’s need for continual growth in a world into which it has expanded to almost every corner. (But it should be acknowledged that he has the intellectual honesty to make his own forecast and thus risk being as wrong as those he’s discussed.) He concludes by lamenting “we must come to terms with the limits of the possible” and declaring “the social democratic experience” the height of achievement. This conclusion brings into sharper relief why he is so insistent on seeing any attempt to move past capitalism as utopian.

What is the possible? A standard list of social democratic reforms, such as the “power to tax,” the power to pursue industrial policy and “monetary sovereignty,” offered as counters to European Union policy and centralization. Public ownership of infrastructure and banking is also put forth. These would be welcome reforms, but more than a century of working for reforms within capitalism rather than overcoming it has put the world in precisely the place it is today. Reforms can be won through social struggle, but once movements stand down, the reforms are taken back. Movements must aim higher.

If we believe the world can’t be better, that it can’t be meaningfully changed, that we have no choice other than tinkering around the edges as capitalism destroys the environment, then nothing will get better. Our conditions will actually get worse because there is no stasis. A better world is possible and speculating on what some basic concepts of a better world might look like is necessary if we are to get there. Giving up is not an option. Study of material conditions and the multitude of factors as to why predictions of capitalism’s demise have yet to come to pass — or, to put it in a better way, why capitalism has proven so resilient — are indispensable to achieving an understanding of our present and providing ourselves with the tools necessary to build the movement of movements, working across borders, that is the path toward any possible better world. Lamenting the weight of enlightenment thinking isn’t that route.

Foretelling the End of Capitalism is correct that there won’t be a sudden collapse of capitalism. If no social movement intervenes, capitalism has several more decades of life and would likely be followed by something worse, in a world of environmental disaster, rising seas and dwindling resources. Decades, not centuries — the present path of humanity is unsustainable. There is no substitute for a post-capitalist future, and the past need not dictate the future.

As always, the value of a book isn’t measured by whether we agree with everything in it. If Foretelling didn’t have much of interest to offer, I wouldn’t have written this essay. The question the book attempts to answer is a challenge that must be confronted because it is a question that remains all too relevant. But although the author in good faith sought to interrogate the predictions of the past to provide an understanding of today, he instead produced a cry of defeat and despair.

Work is inevitable but its organization is not

All human societies, from the most primitive to the most modern, have an important commonality — the need to work. Water, food, shelter and other basics of life don’t arrive as gifts. Work is required to secure them and to raise the next generation.

So fundamental is this basic principal of human life that generations of Marxist theorists have based analyses of social societies and structures on the economic base of a given society. The base-and-superstructure framework is controversial to most other schools of thought, although it ought to be obvious that capitalist organization of an economy puts strong parameters on how that capitalist country can organize itself politically and culturally. Nonetheless, can traditional Marxist understandings be stretched to wider interpretations?

Computer engineer Paul Cockshott, in his latest book, How the World Works: The Story of Human Labor From Prehistory to the Modern Era,* answers with an emphatic yes. His premise is that Western Marxism has been too dominated by “people with a training in the humanities or social studies” who have a “reluctance to use mathematical quantitative analysis.” He intends to infuse the term “mode of production” with a “much more technological interpretation.” In other words, a study of technology is a better basis for understanding the organization of labor in the various modes of production over the course of human history.

This stress on technology is a strength of the book, but also, at times, a weakness. This perspective does enable fresh thinking about subjects as disparate as why agriculture supplanted the hunting-gathering stage, the inefficiency of capitalism and the cause of the weaknesses of the Soviet Union that culminated in its collapse. How the World Works is a book full of interesting ideas — I took double the amount of notes I ordinarily take to review a book, a good measure of its content.

How the World Works takes the reader through all the basic modes of production of human history — lengthy chapters each on “pre-class society,” slave economy, peasant economy, capitalist economy and socialist economy, plus a final brief chapter on “future economy” that revolves around the impending exhaustion of fossil fuels and the decrease in available energy that post-fossil fuel societies will likely face. Crucially, the book argues that the “idea of abstract labor” applies to all economies, not only capitalist ones.

Transitions to agriculture despite the extra work

Professor Cockshott demonstrates that agriculture required more work hours than did hunting-gathering, and asks the question: Why was the transition made? He argues that hunters wiped out big game and the population of hunter-gatherers became too large for available land to support. Although agriculture required more work, more food per unit is also produced. This change came with a crucial development — there was now a surplus. Hunter-gatherers had no storage facilities and had to be mobile; what was taken was quickly eaten. These were often egalitarian societies (although not always, based on studies of isolated societies that survived into the 20th century).

With the new phenomenon of surplus, the ability and, given the cyclical nature of agriculture, the necessity, of storing food for future use enabled the rise of hierarchy and significantly deepened the subordination of women that had its roots in hunting-gatherer societies’ tendency for women to move to other settlements for marriage, putting those young women, cut off from their original community, in subordinate positions to their husbands and mothers-in-law. But although a surplus is necessary for a nonproductive elite to arise, the book argues that a surplus on its own is insufficient to develop the social stratification that would develop:

“A class society requires a surplus, but the converse does not hold. A food surplus does not necessitate an exploiting class. Establishing that seems to have required other misfortunes: war, patriarchy, and religion.” [page 45]

Authoritarian ideologies must be developed to justify unequal status, and human sacrifice fuels high social stratification. Ideologies of superior and inferior human beings justified slavery, but Professor Cockshott additionally argues that slave economies were dependent on transport and urban markets. Labor is the source of value in slave economies. The next stage, feudalism, also featured exploitation but in a different form. A lack of transport and limited circulation characterized feudalism. Lords did not have to engage in systematic trade and peasants were self-sufficient; coercion was the glue that kept this economy in place.

The shift from feudal farming to capitalist farming required that peasants “be deprived both of security of tenure and access to communal lands” [page 93]. And that brings the book to its longest chapter, the discussion of work in a capitalist economy. Here is where the author’s technological perspective more fully comes into play. The price of labor regulates product pricing and profitability, and, crucially, if workers were paid the full value of their work in a capitalist enterprise there would be no profit for the capitalist — “in a capitalist society, there will be a markup” [page 111].

Advance of mechanical energy under capitalism

Where capitalism differs from feudal and slave economies is far greater use of mechanical energy and scientific research. In contradiction to a commonly accepted theory that the use of slave labor in the Roman Empire prevented the primitive steam engine that was developed then from being introduced into production because using machines would have been much more expensive than continuing to use slave labor, Professor Cockshott argues that Hero’s turbine was vastly inefficient to be of any industrial use. Even the first steam engines of the 18th century were exponentially more powerful and could greatly expand industrial capacity. He argues that it was this new capacity that was the catalyst for industrial capitalism: “Existence of commodity relations and wage labor would not have been sufficient to generate the capitalist mode of production” [page 123].

Limitations on productive capacity were overcome with the rise of fossil fuels and in turn advances in technology arising from more efficient fossil fuels led to innovation and new products that beget more new products. In turn, the capital required to build and operate large industrial factories was beyond the reach of workers and previously independent artisans, forcing small independent producers out of business due to the scale of competition. “[T]he application of powered machines and fossil fuels allowed rising labor productivity that closed off whole branches of production from the self-employed artisan” [page 128].

An English watermill (photo by Martin Bodman)

The capitalist who innovates early reaps an increased profit, but such benefits are always temporary as competitors will soon adopt the innovation. Perpetual competition forces increased reliance on technology, although the author argues that innovation for a capitalist is only worthwhile when wages are high. An example not examined in the book that also serves as a partial explanation for why so much production has been shifted to low-wage, developing countries is the ability to pay drastically lower wages. That is an “innovation” that competition dictates be swiftly copied. The book argues that the ability of capitalists to innovate “shouldn’t be overrated,” but the continual shifting of production and the development of global supply chains is grim evidence of considerable capitalist innovation, one of course deeply negative for working people. Control of the means of production also gives capitalists control of the technology necessary to make these transformations in production possible — yet more innovation that is bad for working people.

The mathematical approach of How the World Works does serve the author well in his theory of why the wage gap between men and women persists: Professor Cockshott argues that it is because women work fewer hours then men and as a consequence are less likely then men to be the sole wage earner in a family; he believes the wage gap won’t be closed until it is equally likely that women will be the sole family wage earner as men. The level of such a wage earner can’t fall below starvation level for the basic reason that mortality rates would skyrocket; it is the ensuing shortage of workers that would occur rather than any morality that put an ultimate lower limit on wages.

That natural lower limit of course does not prevent wages from falling to deeply exploitative levels. On top of that, finance produces still more inequality — it is not only unproductive but a huge drain of money. “Since so little finance goes into increasing real production, these rents [windfall profits] can only be sustained by depressing the real living standards of much of the population” [page 196]. Concomitant to that is the ever increasing cost of housing, which is a product of inefficiency. Because housing is an asset subject to speculation, it appreciates in price and thus speculation becomes more profitable than engaging in productive activity, which in turns draws in more speculative capital, further fueling the process. Loans by banks in turn go disproportionally to real estate. Yet more exploitation.

Judging socialism by actual conditions, not ideals

The chapter on “socialist economies” is likely to be the most controversial for many readers; certainly it was for myself. The chapter opens by noting, quite correctly, that there is no uniform definition of socialism. How the World Works argues that “as social scientists, we cannot judge the real world by the standards of an ideal one. It is not the job of reality to materialize our ideals. Reality just is in all its glories, horrors, and contradictions” [page 209]. To that, there is nothing to do except agree. Material reality is what we have to go by.

Interpreting that reality, on the other hand, leaves room for debate. How the World Works shoots down various theories of why the Soviet Union and the model it imposed on Central European countries wasn’t socialist, including that is used money, you can’t have socialism in a single country and there was scarcity rather than the plenty that socialism is supposed to provide. So far so good, although these arguments are presented in a somewhat cartoonish fashion rather than in their full complexity. Having ably dispensed with these arguments, and reiterating that there was a “common understanding” that those countries were socialist, the author offers his concept of what socialism actually is, based on what did exist.

Although he writes that “What distinguishes them are the forms of property and the way in which the surplus product is determined,” he concludes that socialism is characterized by machine industry and agriculture, the same as capitalism. His definition rests on, inter alia, a mix of technical achievements such as “widespread use of electricity” and “widespread use of machinery and applied science” interspersed with social relations such as “the absence of a class of wealthy private proprietors” and “public or cooperative ownership of most of the economy” [pages 209-201].

German hydroelectric power plant

To be sure, claims that the Soviet Union was “capitalist” is ultra-left phrase-mongering that sheds little light. But is socialism simply expropriation and building industry? If so, then one would have to agree with Josef Stalin’s boast in the 1930s that socialism had been built and Nikita Khrushchev’s follow-up boast in the 1950s that the Soviet Union was in the process of building communism, the successor to socialism. But is that all there is? A fuller definition of socialism mandates that democracy be extended to economic matters and strengthened in political matters, beyond what is possible in capitalism. It would follow then that expropriating capitalists and establishing state or cooperative ownership of most of the economy is a precursor to socialism, not the actual content in itself.

An alternative theory, not discussed in the book, is that the Soviet model represented a post-capitalist economy (certainly not capitalist) in transition to socialism, a transition never completed. Perhaps this can be seen as edging toward idealism and in contradiction to the agreement above that those countries had to be judged based on their material reality, which obviously included the fact that they had to expend so much of their resources on defense against never-ending attacks from the capitalist world. But to put forth this position is not to dismiss those experiences but rather to lament what could have been. The grassroots movement in late 1960s Czechoslovakia to keep the economy in state hands but have it managed by the workers through councils and coordinating bodies in a system of democratic social accountability was the advancement to socialism that never developed because of the Warsaw Pact invasion. That invasion was a function of closed-minded ideological prescriptions that had become calcified in one particular form, which evolved in chaotic fashion in one country (the Soviet Union) that cannot be extricated from the specific absolutist cultural heritage of that country’s dominant nation (Russia).

Socialism should be not only industrial development and an end to private capital but a democratic system that grows, develops and changes with the rise in consciousness and development of a society’s members, not a rigid formula.

Fiscal imbalances through imbalanced taxation

The term “actually existing socialism” was often used for the Soviet bloc, and despite the clumsiness of the term, perhaps that is a reasonable compromise. Those countries have reverted to capitalism, and so a discussion of their economies inevitably moves toward determining the reasons for why. Professor Cockshott puts forth an original theory on this: the system of taxation. Specifically, he argues that reliance on sales taxes and taxes on enterprise revenue rather than assessing income tax on wages hid the cost of free social services, forced up the cost of machinery and thereby discouraged mechanization and made the relative cost of providing free services more expensive. As a result, managerial hoarding of labor was encouraged with concomitant overstaffing and lack of efficiency measures. This thesis is related to his belief that the Soviet use of money was a mistake; rather, people should have been paid in “labor hours.” To this last point, we will return.

Mathematics are used to explain this theory. The economy is divided into three parts — production of the means of production (or what are called producer goods), production of consumer goods and the provision of uncharged services, such as education, health care and public infrastructure. The money for the third category has to come from some revenue stream, and the need to pay for those and the necessity of the first category of producer goods constrains what is available for consumer goods. Assuming that what is available for consumer goods must be limited to the money-equivalent of the hours spent producing consumer goods, the author suggests there were three possible methods of taxation: an income tax on employees, a sales tax or VAT, or by pricing all goods at a markup or profit.

Blockupy 2013: Securing the European Central Bank (photo by Blogotron)

Because there was no income tax in the Soviet Union, revenue for social services was raised from taxes on enterprise revenue, those producing for consumer goods and those producing for producer goods, and from sales taxes. Because of that, the costs of machinery is much greater, thereby making the provision of social services far more expensive that it would have been. It was “short-term populism that hampered efficiency” [page 256] and made labor cheap and machinery expensive.

Concomitantly, the author argues that Soviet workers should have been paid in labor hours rather than rubles. This would have been a fairer way of paying people and would have made any imbalances easier for all to see; money was necessary to disguise that, for example, collective farmers were underpaid relative to their labor. In essence, the argument is that one hour of work should have been compensated by one hour of labor credit. Doing so would have immediate egalitarian effect:

“The significance of labor tokens is that they establish the obligation on all to work by abolishing unearned incomes; they make the economic relations between people transparently obvious; and they are egalitarian, ensuring that all labor is counted as equal. Is it the last point that ensured labor tokens were never developed under the bureaucratic state socialisms of the twentieth century. What ruler or manager was willing to see his work as equal to that of a mere laborer?” [page 263]

This arrangement would also eliminate black markets because the labor credits could not be circulated or transferred to someone else; they could only be used at communal stores. But “it is absolutely essential” that prices reflect the work value put into them to avoid imbalances. This would in turn make planning more responsive because deviations of sales from actual production would send a signal that production levels should be adjusted to real demand.

What caused the Soviet Union to collapse?

The foregoing were serious weaknesses in the Soviet economy, Professor Cockshott argues, in addition to the most skilled technical and professional employees becoming dissatisfied because their gains were not comparable to elites in the capitalist West. That social group’s dissatisfaction mattered because it was disproportionally represented in the Communist Party. The structural changes made by Mikhail Gorbachev had the effect of disorganizing an economy in which enterprises were strongly interlinked and enabling the rise of black-market criminals as state revenues plunged because declines in production resulted in less revenue due to the reliance on taxes on enterprises and sales taxes.

The author makes a strong case for his thesis that the taxation system underlaid Soviet economic crisis. I found much merit in it and considering it enriches our understanding of Soviet economics. But this is an instance where a heavy reliance on mathematics and technology leaves out some of what is a bigger picture. Left out is the over-centralization of the economy, the inability of central planners and the distribution system to have the knowledge necessary to ensure that raw materials and supplies were delivered properly and a rigid production quota system based on physical output. Base wages in the Soviet Union were low; workers counted on the bonus to be paid for fulfilling quotas. Managers and directors were responsible for fulfilling quotas handed down from ministries and their jobs were on the line if they didn’t. Thus both management and floor workers had incentives to hide capacity and keep quotas as low as possible, and keep extra materials and personnel on hand to “storm the plan” if they had fallen behind.

Surpluses of material somewhere meant shortages somewhere else; the difficulties in distributing sufficient supplies enhanced these tendencies. And because quantity and not quality was what mattered, shoddy products could be produced without real penalty. A full description of the Soviet economy can’t exclude these factors. Although the author dates the start of the imposition of capitalism to 1986, which should properly be dated to 1990, when General Secretary Gorbachev rammed through the legislature a series of measures that introduced elements of capitalism, including laws that ended working peoples’ limited ability to defend themselves and mechanisms to enable privatizations, that is a minor technical point. Reforms instituted from 1986 did place the burdens squarely on workers because of their one-sided implementation, and Professor Cockshott is entirely correct in writing that Gorbachev’s reforms ultimately disorganized the economy, precipitating a collapse.

Ultimately, the measure of a book isn’t whether we agree on all points; disagreement with some points of a book with such a large volume of interesting theories and analyses is inevitable. What is pertinent is stimulation of thought and the challenge of worthy ideas. A book that intends nothing less than to reveal the workings of the world from the earliest prehistory to the present day and beyond has set itself a sweeping goal. How the World Works succeeds marvelously.

* Paul Cockshott, How the World Works: The Story of Human Labor From Prehistory to the Modern Era [Monthly Review Press, New York, 2019]