On an April day in 2013, 47 year-old Inocencia Lucha walked into her bank in Almassora, near Valencia. With level gaze and a steady voice she addressed the counter staff: “You have taken everything from me.” Then she poured petrol over herself and struck a match. Crushed by Spanish austerity measures, Lucha had been trying to live on NZ$550 a month. Interest on her hefty bank debt had accrued exponentially, and she had just been evicted from her home.
In just three months of that year, Spanish media reported 14 such suicides, before which devastated people had denounced austerity and hardship. Close to a third of Spaniards were out of work at that time, and public patience with the prevailing politico-economic system was at breaking point. A cluster of anti-austerity movements – Movimiento 15-M, the Indignados and Take the Square #spanishrevolution – had been staging demonstrations and occupations across Spain since 2011. They are still active today.
These movements are not pleading for economic clemency – they seek instead to overturn not just the political party that delivered them to despair, but the entire fundamentalist capitalist system. No more tinkering, no more social experiments. Total reform.
They are not alone: the Occupy Movement, born in Manhattan and duly emulated in more than 1500 cities globally, has sworn to bring down “the corrosive power of major banks and multinational corporations over the democratic process.” The aganaktismenoi of Greece, the cacerolada of Argentina, a million people banging pots-and-pans (cacerola means casserole in Spanish) and demanding release from cloying fiscal policy. The Icelanders, demanding the resignation of Government after the collapse of that country’s banks.
From the Arab Spring to Occupy Hong Kong, people are demanding change. In the West, there is talk of the end of capitalism. Many no longer believe the true believers; the bankers, the brokers, the free market proselytisers. They are tired of waiting for wealth to trickle down, of watching opportunity and equality recede behind the rapidly widening chasm that now separates nearly 99 per cent of the global population from the power elite and the super-rich. Greed has become the central virtue of the capitalist ethos. While Lucha sank deeper into despair, the world’s wealthiest 80 people, says Oxfam, doubled their riches between 2009 and 2014.
Neoliberalism has driven other creatures to the wall, too. Earth is in the grip of a sixth great extinction – according to the IUCN, some 20,000 species are now threatened with oblivion. The planet’s capacity to absorb our waste, for critical live-giving systems to offset our harm, is coming to exhaustion. Terrestrial ecosystems, reports a recent study in Nature Geoscience, will by the end of the century be saturated with carbon dioxide, abruptly flipping from sink to source. That would mark a tipping point of no return, endorsing Sir Nicholas Stern’s observation that climate change represents capitalism’s greatest market failure.
Capitalism has long regarded Nature, as it has long regarded the labour force, as something to be mined, milked then abandoned. Extractivism operates as an open loop – what an electrician would call a total loss system. Something is generated, used, then lost forever. There is no mechanism to recharge the source, which is why we now face an unprecedented ecological, economic and social emergency.
What if we could imagine a new politico-economic order that addressed all those crises? That could reverse and restore by mimicking those very natural systems it might rescue? That’s the proposition from the non-partisan US think tank, Capital Institute, which released an alternative blueprint last month rejecting both capitalism and socialism, drawing instead upon “holism”; a natural phenomenon in which sums of parts invariably manifest as much greater wholes. In Regenerative Capitalism, Institute president and former JP Morgan managing director John Fullerton argues, as do the Indignados, not for “incremental change to a system that is fundamentally sound but for a few glitches”, but wholesale rejection of it.
First up, argues Fullerton, we must recognise that our future does not lie in one dominant dogma. Rather, holism looks for balance between seemingly diametric ambitions like efficiency and resilience, collaboration and competition, diversity and coherence. There are literally dozens of New Economy views out there: natural capitalism; sustainable capitalism; conscious capitalism; doughnut economics; circular economies; sharing economies; steady-state economies. Fullerton says the answers lie among an open appraisal of them all, drawing on the best elements of each.
Similarly, we need to discard the current economic practice of managing markets and industries in isolation: the kind of tunnel vision that allows us to drill for more oil even as the planet warms. In future, no commerce should be conducted without heed of the wider context, recognising “that the proper functioning of complex wholes, like an economy, cannot be understood without the ongoing, dynamic relationships among parts that give rise to greater wholes.”
And at the root, a new understanding that Nature must be more than a vending machine – we must enter a respectful partnership. That the fate of us all depends inextricably on the health of the environment, and that there can be no true prosperity until Nature is allowed to heal and thrive.
Right about now, critics will dismiss this is as too hippy, too hypothetical – argue that we need practical, real-world strategies, not Lennonesque appeals. Fair enough. In fact, all around the world, people have already made a start: launching sustainability initiatives and social movements that have re-imagined post-growth economies – divestment, B Corporations, ethical investing, slow food, fair trade and localism.
Pressure for change is emerging too, as a market force created, ironically, by the very corporations it will inevitably topple. Innovations in energy, communications and transport, the historical pillars of any economy, are already allowing small enterprise to compete with mega-corporations. Author Jeremy Rifkin, in his 2014 book The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism, maintains that technology and collaboration now allows individuals to produce the goods they formerly had to buy, access technology they would have otherwise had to develop themselves (think Tesla’s open-source electric car technology).
Innovations like 3D printing, and cheap, decentralised green energy will herald the collapse of centralised production and supply chains, enabling what Rifkin calls a “collaborative commons.” Imagine a company that generates its own power from the roof of its warehouse, perhaps storing it in batteries like Tesla’s new Powerwall. Right there, it’s shrugged off a suffocating shackle – dependence on a centralised wholesale electricity monopoly. Imagine too, that the company then uses that solar power to fuel its vehicles. There goes another shackle – dependence on fossil fuel companies. A decentralised, self-sufficient economy built around such businesses, argues Rifkin, would ease the burden on overloaded natural systems.
There are already working models of regionalised collective enterprise. In Inocencia Lucha’s own country thrives a model of what could have offered her hope. Arrasate-Mondragon, in Spain’s Basque region is the headquarters of Mondragon Corporation (MC), the world’s biggest workers co-operative, and a bold middle finger extended to the capitalist oligarchy.
In 2013, MC made global sales of €15bn, generated by 103 subsidiary co-operatives running four prime innovation streams – industry, finance, retail and knowledge. Each enterprise is majority owned (between 80 and 85 per cent) and directed by co-op members. They select and hire their own managing director, but make all the fundamental business decisions themselves – the reverse of mainstream company structure.
The highest-paid director at MC can earn, by regulation, no more than 6.5 times what the lowest-paid workers take home. That’s the rule. Compare that with current labour inequity of neoliberal markets, where CEOs routinely earn 300 times the pay of their workers (closer to 1000 times in the case of some fast-food chains). Mondragon now has 15 technology centres, employing almost 1,700 R&D staff. Its 2013 Annual Report lists assets of €34m, with a worker-members share capital of €1.7m. In 2013, €13.5m were set aside for social programmes, including Mondragon’s own University, with a roll of 4000 students and several vocational training and education centres.
More than 43 per cent of Mondragon’s members are women, who enjoy precisely the same mandated opportunities, benefits and responsibilities as men. If you think all this sounds too good, too idealistic to last, bear in mind that Mondragon was founded in 1956.
That doesn’t mean it’s been easy. The Spanish economy has been contracting by nearly two per cent a year since 2009, and while one of Mondragon’s operations had to close, it hasn’t laid off a single worker. Instead, everybody negotiated wage cuts – the biggest being incurred by the highest paid – some were stood down on 80 per cent pay while others were relocated with assistance packages. Those companies that had surpluses lent them to other, struggling subsidiaries. This is a world away from Wall St.
Just the same, Mondragon has had to respond, like everyone else, to competition from developing world labour markets by going offshore itself, to Vietnam, Chile, Morocco and Russia. Those 14,000 workers are not Mondragon members, but they enjoy much far pay and conditions than compatriots contracting to other western companies.
There is much in Mondragon the Indignados will applaud. For them, the political change they demanded in the town squares now has a voice in the European Parliament. Last year, the pony-tailed leader of the insurgent left-wing Podemos party and one-time Indignista, Pablo Iglesias, won 1.2 million votes from out of nowhere to take five seats in the European elections. In much of Spain, including Madrid, Podemos is now the third political force.
The Spanish are showing us that change is there for those with the courage to demand and drive it. We just have to want it badly enough. It’s for us to insist that the wealthy pay taxes at the same rate as the middle class. That corporations pay their fair share of taxes that reflect the true social and environmental costs of their profits – of the resources they appropriate from the public commons. We could stop the wholesale looting of public wealth by private interests.
We could insist that subsidies on – and investments in – fossil fuels cease forthwith: no more platitudes from Simon Bridges about “transitions.” That corporate salaries be capped. That workers get a living wage at the very least. We can and must say no to the TPPA, and to all hegemonic “free trade” artifice. We can demand the reinstatement and resuscitation of public services – health, education, transport, child care. We could insist that governments no longer use Nature as an emporium. We could all pick up a pot and start banging.
What we absolutely must not do is believe that this is as good as it gets; that there is no other way. That was the tragic undoing of Inocencia Lucha.
Last time our PSA agreement came up for renegotiation I suggested we ask that no employee be paid more than 15 times the salary of the lowest paid staff member. At that time our CEOs salary would have just fit into that restriction.
The proposal went out to members to be voted on. The staff rejected the proposal.
Sometimes people are hard to understand.
Auckland • Since Nov 2006 • 4461 posts Report
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All the above examples of the 'indignados' followed a bubble burst in one form or another. We're still to have our turn yet, so the prevailing mood is that of Nero strumming his lyre.
The southernmost capital … • Since Nov 2006 • 5446 posts Report
Great post, it's the sort of post that needs to be read widely. But before we get to this point of open appraisal...
Humanity is drowning in its own centuries old bullshit. Some need to sort thru a lot of that first. Whether enmasse we can change course is doubtful. Just ask the fredster, cause those are the minds that need to be enlightened and quickly!
raglan • Since Mar 2007 • 1891 posts Report
Dave Hansford, in reply to
Andin: whether en masse we can change course is in no doubt whatsoever. Indeed: it's the power elite's greatest fear. As I said: we just have to want it badly enough... I've lately returned from living in France, where they know only too well what it's like to be invaded, to be oppressed, to be violated.
We like to poke fun at the French for being insular, parochial, but what we mistake for arrogance is just them declaring "never again." That's why they set fire to cars. That's why they choke the Champs Elysees with tractors. That's why they strike at the drop of a hat. They know what they stand for. More importantly, they know what they WILL NOT stand for. Much like the Spanish – more precisely, the Catalans. New Zealand has yet to arrive at that point of critical mobilisation, because frankly, we've had it so sweet for so long here, we don't recognise what's at stake, what's being done to us. Maōri, on the other hand, know only too well...
Nelson • Since Apr 2008 • 28 posts Report
I bow to your greater knowledge on the subject. Many thanks
I despair that here in NZ some dont take this as seriously as it should be.
raglan • Since Mar 2007 • 1891 posts Report
and then there's pricks like this:
Christchurch • Since Dec 2006 • 7953 posts Report
Dave Hansford, in reply to
You got this excruciatingly right.
I don't pretend for a moment to any greater knowledge than anyone else, Andin. But I notice things, and they tend to get stuck... If I have any acute perception at all, it's an acuity for what really fucks me right off...
Nelson • Since Apr 2008 • 28 posts Report
Amanda Wreckonwith, in reply to
I think you'll find that they did quite a lot of that themselves. You just have to delve further back in history.
Which "never again"? - Monarchy? Revolution? WW1? WW2?
You really should mention the rural peasant population of France if you want people to understand their 'aux armes' attitude. 'Water our soil with the blood of our enemies' has a lovely ring to it
Algerians? Moroccans? Romanians?
The rise of the far right is far more pronounced in Europe than any failed movement such as Occupy. The dismantling of the capitalist status quo may not be as smooth a process as you wish for... There are many lessons to be learned from European history.
Since Sep 2012 • 171 posts Report
Dave Hansford, in reply to
That's true. There's an ugly side to French social politics, as there is in any society. But if you check the French jugular, you'll find a bounding pulse. That's a product of both healthy stimulants and harmful intoxicants. But at least they FEEL something, demand some say in their fate. They don't simply sit passively in the yards, waiting to be mustered unquestioningly into the works.
Nelson • Since Apr 2008 • 28 posts Report
I think in the US anyway - this is the lady who will make the difference;
Wellington • Since Sep 2014 • 798 posts Report
A good article – and it is rewarding to see reasoned and polite responses unlike which appear to dominate other sites
Northland • Since Apr 2015 • 3 posts Report
Good article in the main, but boy, am I amazingly tired of 3D printers being held up as a liberating force. They do not scale, yet. What they can make is limited (although some people have great ideas).
But even when their limits are solved, I fail to see how they are any different to any other means of production. Yes, if there is going to be any kind of economic revolution, the workers will have to be able to manage the latest technology.
The internet was hailed as a liberating force as well, but no, it's simply a great communications medium, and like any technology, can be used for both good and bad or indifferent, by anyone with the means to control it.
Maybe 3D printing is appealing because they are currently small devices that can be controlled by small numbers of people. So how do you scale up the current craft use for entire communities, much less countries?
I can't see any economic revolution working without some aspects of industrial/mass production. Which Mondragon actually manage, as do some factory co-ops in South America. So please, let's not just focus on cute techno-toys when discussing production in alternative economies.
(Caveat - I'm not focussing on a Marxian "all production happens in factories". Technological change has given us huge amounts of automation. Which I think is great in terms of saving labour, but not for undermining the value of the labour that remains. I don't know what Marx's approach to that would be, combined with the fact that industrial production has mostly been exported to cheap-labour countries.)
Canberra, West Island • Since Nov 2006 • 701 posts Report
The "tweaked capitalism" version of most of that involves relatively few steps.
1) Externalities must be taxed, and very heavily, such that not having any is always profitable. Which is to say, always clean up your own mess, or pay much more than is needed for someone else to at a profit.
2) Compulsory Unions, damn it all. One workplace, one workforce, end of story. This idea of handing labour laws to the state for eternal protection has lead to us having almost no labour laws worth the name, with unions forbidden from doing anything about it.
3) ACC and other universal insurance systems that are big enough to go after dangerous employers and win. Universal health and education the same way, take the cranks out of the major press at least.
4) Abundant solar electricity. It is maddening that I live in a country whose government is actively preventing the adoption of this abundance to produce an artificial scarcity of power to keep prices high.
I keep hitting on solar electric, but it's century old technology that has barely been touched for 80 years. With the push from China the price of production is now falling by 50% every two years. I don't think many people really get what that means.
We live in a society where the average person has the power of 25 others through burning fossil fuels, but the future is where the average person has the power of 25,000 others through collecting solar power.
Capitalism can surely survive the state providing it with abundant near-free power just as easily as it survives free education, roads, justice, and everything else we benefit by choosing not to make people pay for it (or at least only a token amount).
Imagine using 100 times as much power and having a bill of $20 per annum for it, with zero pollution, that's what people should have in 50 years time. Capitalism would thrive.
Since Nov 2006 • 611 posts Report