The global economic disaster, both its causes and cures, has prompted much head-scratching amongst the kept intelligencia, but also between those of us fellow travelers working in the progressive arena. I would like to therefore offer the following modest proposal about our current predicament and a plausible way out and way forward.
But first, a salutary word from John Maynard Keynes, who will be discussed further below:
Words ought to be a little wild, for they are the assaults of thoughts on the unthinking.
This shouldn’t hurt too much. Onward below the fold…
[Note: I first posted a version of this diary in March 2009, at the height of the global financial crisis. Reviewing how we seem to be heading toward an investor-initiated double-dip super-recession in what can only seem as an "austerity for thee but not for me" move to discipline the world's workers and societies into compliance with a two-tiered new world order, and with BP's negligent-to-reckless destruction of much of the Gulf of Mexico for the foreseeable future, and finally, in light of gjohnsit's diary regarding global debt and the possibility of default, which I expand upon regarding "odious debt" and it seems as fresh as ever. I hope this diary promotes thinking beyond the standard cliches we're force-fed by our lovely corporations, media and government. Enjoy!]
First, “global jubilee” is borrowed from the biblical meaning of a “time of celebration or rejoicing” and in particular of a time when “debts are forgiven” and “slaves and prisoners freed”. In this context, “global jubilee” means a wiping away of world debt, especially between rich and poor nations, as has been the project of Jubilee 2000, but also and importantly between debtors (debt slaves) and creditors (credit masters) in the industrialized world. Please note that the collapse of our financial systems of debt and credit in numerous ways at numerous levels (nobody has explained it better than billmon here) has led to the current situation of failure of money, in essence, to work anymore.
My own opinion is, I think, pretty straightforward. Basically, money, especially in its forms of credit and debt, has been used as a weapon of social control and thus ultimately of privilege and domination, instead of as a tool and instrument of economic utility, and so a public utility, and thus ultimately of liberty and freedom. This misuse and abuse of the money tool has brought us to the sorry state of affairs we see before us today. But as Keynes observed during the previous great crisis [ht to the shrill one],
This is a nightmare, which will pass away with the morning. For the resources of nature and men’s devices are just as fertile and productive as they were. The rate of our progress towards solving the material problems of life is not less rapid. We are as capable as before of affording for everyone a high standard of life—high, I mean, compared with, say, twenty years ago—and will soon learn to afford a standard higher still. We were not previously deceived. But to-day we have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand.
Keynes is, of course, correct regarding “the resources of nature and men’s devices” and the rest. We still have the resources, knowledge, ability, experience, talent and the rest, that we had before the crisis. What has collapsed are the outmoded resource allocation systems, formerly known as the financial system. I would depart from Keynes (and Krugman) at the “We were not previously deceived.” As analysts and commentators from the ultra-shrill end of the spectrum (Chomsky, Herman, Zinn, Ehrenreich, Goodman, et al.) have repeatedly demonstrated, mass deception has been part and parcel of the misuse of money as a weapon of social domination instead of as a tool for social liberation and liberty. For various reasons, including historical (by now just about all the profit that can be extracted has been extracted, aka the falling rate of return on investment) and technological (e.g. the internet as a tool liberating information and communication) as well as economic, the ruse has apparently run its course. The boss has hollered “WOLF” a few too many times to keep the sheeple in line. This isn’t to say that mass manipulation has been rendered impotent. Not in the least. Given a perilous enough threat, Goering’s law probably still applies. The rise of the Teabaggers and their enablers on Fox and rightwingnut radio are a potent validation of this. But certain lines of propaganda have, for the time being, begun rendering themselves obsolete.
I would also disagree with Keynes regarding our being in a “colossal muddle” but partially concur with his “blundered in the control of a delicate machine, the working of which we do not understand.” Adam Smith’s “masters of mankind” and their “vile maxim“,
All for ourselves and nothing for other people
have been the operant actors and principle for centuries, even millenia. Witness the favoritemaxim of John Jay, founding father and first chief justice of SCOTUS:
The people who own the country ought to govern it.
Or James Madison’s admission that he designed the Constitution to
protect the minority of the opulent from the majority.
The point is that our present situation is NOT an accident of well-meaning but blundering financial servants valiantly struggling to make our global financial systems work for the betterment all of humanity. Rather, our contemporary “masters of the universe” have consciously sought to use every instrument and institution within their reach (including but not limited to our putative democracies themselves) to defend, consolidate and advance their hegemony over as much of the material and financial wealth of this planet as they can. Just as every generation of master/ruler/pharaoh/king/boss/bully/etc., has done. Once again, Chomsky says it best, discussing the failed global hegemony project, the “Multilateral Agreements on Investment” (MAI) from the 90s as well as Madison’s regret at seeing what he had created:
The operative values of the powerful are rarely articulated with such candor and precision. To be fair, they are not a U.S. monopoly. The values are shared by state/private power centers in other parliamentary democracies, and by their counterparts in societies where there is no need to indulge in rhetorical flourishes about “democracy.”
The lessons are crystal clear. It would take real talent to miss them, and to fail to see how well they illustrate Madison’s warnings over 200 years ago, when he deplored “the daring depravity of the times” as the “stockjobbers will become the pretorian band of the government–at once its tools and its tyrant; bribed by its largesses, and overawing it by clamors and combinations.”
And though they often contest and compete amongst themselves, one would be truly deluded to think that they are not united in their vigilance against what the Trilateral Commission described in the 70′s as the threat to global order, namely “the excess of democracy” represented by the civil rights, women’s rights, and environmental movements, which struggled to participate in elite decision-making processes they saw coming into their reach. [TocqueDeville has an excellent rec'd diary on our lovely elite's response to the collapse of their most current hegemonic project.]
Part of the remedy to the accelerating global financial freakout is to simply disarm the planet’s “owners,” aka “investors,” by dismantling that form of dominant socioeconomic relationship, debtor/creditor, which has ceased to function but which Tim Geithner and Larry Summers seem intent on reanimating. Money domination has run its course. Plutocracy, rule by the rich, has again brought the world to the brink of the murder-suicide of our species and the ecocide of our environment, as it always has. Thus, global jubilee, the wiping out of debt, and concomitantly of debtors and creditors, is simply the first step in the complex transformation of the global economy. But what could justify global jubilee? Chomsky introduced me to a concept in international law called “odious debt.” Expanding this notion to include individuals and smaller human groupings such as small businesses, communities, cities, etc., as well as nations and recognizing that predatory lending has been irremediably harmful, leads to the conclusion that its fruit, odious debt, is illegitimate, and the laws permitting it without force. gjohnsit’s diaryabout why the economy isn’t recovering bravely followed this reasoning into a discussion of global debt default. The existence and preservation of this debt gives investors a whiphand to stampede governments into the global austerity movement now underway. Global jubilee and the repudiation (pace Palin I won’t use “refudiation”) of odious debt take away the whip. Further, this will open up the opportunity for a transformation of global economic relationships suggested. In fact, “transvaluation” is probably a better term because the next step, “economic democracy,” will involve just that, the transformation of value and of valuing on the local-to-global scales, moving economic relations from a basis of enabling domination to one of establishing and advancing human freedom.
And, as one friend of mine put it, it’s an invitation to one helluva world party!
“Economic democracy” is, I humbly submit, the most dangerous concept facing corporate financial capitalism today and the wage slavery that arose in its wake. As a category, it includes unions, credit unions, and cooperatives. It can also include other forms of social/economic organizations that adhere to democratic principles, including faith communities, non-governmental organizations and community organizations serving their fellow citizens. Economic democracy is intrinsically and fundamentally opposed to what Noam Chomsky has called “private tyrannies” like corporations, private financial institutions such as banks, wealthy individuals and families, powerful international business law firms and other forms of human institutions running the gamut from undemocratic to virulently antidemocratic.
An intriguing mode of economic democracy as political-economic process is the extension to taxpaying individuals of the right to control and determine where their tax dollars are invested in their democracy and society. Granting a taxpayer, say, 50% controlling authority over their taxes to be “spent” or “invested” as they see fit, with the remaining 50% given over to representative democratic appropriations. This would radically transform the relationships between citizen and democracy and taxpayer and economy. It would be a significant transfer of power from government to people and a signal move toward direct economic democracy. This is the type of idea generated by a theory of economic democracy.
Dismantling unaccountable, uncontrollable institutions of social control and domination is a primary function and goal of economic democracy, insofar as the advancement of human freedom and the retreat of human domination are desirable goals. The noted American marxist theorist, Abraham Lincoln, captured this sense brilliantly:
As I would not be a slave, so I would not be a master. This expresses my idea of democracy. Whatever differs from this, to the extent of the difference, is no democracy.
The Collected Works of Abraham Lincoln edited by Roy P. Basler, Volume II, (August 1, 1858?), p. 532.
Lincoln also pointed out that:
“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”
Lincoln’s First Annual Message to Congress, December 3, 1861.
British literary theorist and critic Terry Eagleton put the matter succinctly in his wonderful philosophical introduction to Marx:
Marx’s final vision would thus seem somewhat anarchistic: that of a cooperative commonwealth made up of what he calls “free associations” of workers, who would extend democracy to the economic sphere while making a reality of it in the political one. It was to this end – not one, after all, very sinister or alarming – that he dedicated, not simply his writings, but much of his active life. (Marx, Terry Eagleton, 1999, pp. 56-57)
The basic idea here is that democracy, its principles and practices, must become the default organizing process of humanity and its institutions, both political and economic. The vertically-integrated management (i.e. dominance) structures characterizing transnational corporations, et alia, are simply too unresponsive to material and symbolic reality and too wedded to narrow self-interest to be permitted to continue, especially in their huge merged conglomerated forms. As Michael Moore wrote, “If you’re too big to fail, then you’re too big to exist.” With the exception of humanity itself, he’s right.
On the other hand, democracy provides humanity with the organizing processes and potentials to permit and promote a new organizational structure, namely, radially-integrated cooperation and collaboration, universally egalitarian and libertarian, and ranging from the local, to the regional, to the interregional (aka national) to the international, to the global, and back again. Democracy, in this context, is much more than voting and representation. Rather, this conception can be described as “deep democracy” and includes practices derived from such sources as Saul Alinsky‘s Industrial Areas Foundation, the movement which trained President Barack Obama in community organizing and which developed the concept of “relational organizing“. Relational organizing refers to organizing people around the idea of “public relationships” in which the participants hold each other accountable to goals and objectives arrived at mutually and cooperatively. Deep democracy also includes other modes, such as participatory, situational, direct, industrial, environmental, etc. In contrast, the developmental democratic stage of most western industrialized nations can be usefully described as “polyarchy“. Though polyarchy is a democratic advance over monarchy, the rise of dominating/dominant institutional forms such as corporations has led to resistance to democratic development and stagnation of movements to alleviate the poverty and misery of much of humanity and protect and preserve our environment and thus, our survival.
Is global economic democracy a pipe dream? Some empirical evidence revealed by the current crisis gives us clues that the world’s economic system is driving to this end by itself as of this writing. First, the banks, corporations, insurance companies and others, in their financial distress and insolvency, are running to the democratic governments, i.e. the people, for support and survival. They can’t continue without money secured by the willingness of humanity to work, struggle and create. Second, the people themselves are running to democratic governments for relief from the failures of the so-called “private” alternatives, from employment to health care to education and so on. Third, every attempt to stem the crisis by the political-economic masters of the universe has so far failed to reverse the economic decline. Astute economists like Paul Krugman have repeatedly pointed out that our governments’ resistance to democratic action and ownership, such as the nationalization of banks in favor of the continuation of evermore futile bailouts, has to this point failed to restore fiscal health to these institutions and they continue to flounder in what investor Warren Buffett has described as a “shambles”. We are witness to the ghastly spectacle of servile servant governments desperately attempting voodoo economics to zombify the dead carcasses of departed businesses, their once-wealthy patrons. Monty Python’s dead parrot sketch, with John Cleese as the taxpayers, Michael Palin’s shopkeeper as Tim Geithner/Larry Summers/Ben Bernanke, etc., and the dead parrot as AIG, Citi, BofA, etc., is probably as close to a pure satirical take as is billmon’s brilliant read of Joseph Heller’s Catch 22. So, the people, our governments and the economic institutions supposedly serving both, have come to a loggerhead. Who will prevail? Which story will be told? Whatever direction is ultimately chosen, economic democracy or a more extensive, more relentless economic domination, is up to us and the power that we, as an aroused humanity and engaged citizenry, can organize and wield to secure our liberation from economic domination.
I will sketch a brief view of how I see this new economic democratic order. In it, money, a public utility and medium of exchange between otherwise variable and varying values, is no longer abstractly based upon exchange rates, gross domestic products, central bank monetary policies and the like. Instead, a new quantum of value is introduced, that of the human individual. Basing the money system on humanity itself and its discrete unit, the individual, will help to remind us that we are the ones who ultimately “value” and are the “value” that the economy runs on. After all, humanity creates all the value and worth esteemed by the market. Our desiring and choosing in the market drives demand. Our labor and struggle in the material world create the supply to attempt to meet that demand. Further, this change in the very basis of value itself will permit humanity to replace a broken economic paradigm of “growth”, which treats the world as “an infinite resource and an infinite garbage can” (Chomsky) with a new economic paradigm of “development”, an idea for more suited to sustaining and enhancing life on Earth.
The old system of dominative capitalism simply appropriated the value people created, keeping and accumulating the surplus and passing on just enough money-value to meet subsistence needs, if that, while socially and psychologically disciplining people to accept money-rule, first in the workplace and market, then ultimately throughout in society. An open philosophical question that can be posed at this juncture is whether or not human creativity, upon which domination has flourished through its exploitation, is creative enough to liberate humanity from the very means of domination that our masters have directed humanity to construct, such as money-rule. I don’t know the answer to that question, but I believe our survival depends upon how it is finally answered.
In an economic system built upon the value of the individual in the context of collective humanity on lifeboat Earth, human and civil rights form the bulwark of economic demands upon the system itself. Namely, the rights to life, health, liberty and property, to shelter, food, medicine, and education, to participation in mutual self-management of social enterprise, political determination and economic action, all form the necessities to be met by the system before any other pursuits are engaged. You have to do your chores before you can go out to play. Further, the value of the individual can be the basis for a new monetary system, where the wealth of society is equally distributed to its members, and which they can invest for the development of society and realize a new kind of profit which enhances the status of individuals but NOT at the expense of their peers. Gain in this conception can be accumulated by individuals and groups but is constrained to prevent the growth of new dominant individuals and institutions. Loss is constrained to a minimum inalienable worth that guarantees the individual all the necessities of life, if not the superfluities. And one can always start over.
To summarize, the vision I am advocating begins with the resolution of our poltical-economic dilemma by a global economic jubilee and the conclusion of this phase of dominative capitalism and the initiation of a new global economic order based upon free democracy and the intrinsic worth of the individual as described.
In close, few can put matters as candidly as Noam Chomsky, whom I will give the last words:
In this possibly terminal phase of human existence, democracy and freedom are more than just ideals to be valued – they may be essential to survival.