How can society move towards forms of economic organisation that place human creativity, including a respectful relationship to nature, at their centre?
All around us there is talk of crisis: ‘a condition,’ says the dictionary, ‘of instability or danger, leading to a decisive change’. To be able to act in such a context, to find a way out of the danger, to work for a change that will benefit the 99 per cent, we need to stand back and ask: what exactly is in crisis?
There is an asymmetry between the mass of people – that is, creative, knowledgeable human beings – on the one hand, and the financial flows and institutions of our present economic arrangements on the other. Workers or would-be workers face a crisis of livelihood, and of the means to put their capacities to use for the benefit of society. However, there is no doubt that they still have the ability to create, to design and make things, to heal, to invent, to teach, to care, to learn. In that sense, it is not the human capacity to work and thereby to create that is in crisis.
Most obviously it has been a crisis of financial markets, and the institutions that dominate them. But finance is not a world unto itself; it is part of a wider economic and political context, however autonomous its own momentum has seemed to become, and however opaque its workings undoubtedly are.
The recent near-implosion of capitalism’s most powerful financial institutions, saved only by unprecedented amounts of public money, has its origins in the political and economic problems facing US-dominated capitalism in the 1970s.
On the one hand, the exhaustion of the innovative and hence productive capacities of Fordism led capital away from fixed investment towards the mobility of finance. On the other, the pressures of both military expenditure against the Vietnamese and public spending in response to social unrest led the US president Richard Nixon to instigate an end to the international system of regulation and constraint on the transnational movement of money (Heillener 1994; Sassen 2006).
The lifting of controls on the movement of capital enabled British and American corporations especially, already champing at the bit of post-war controls, to move their funds into financial speculation and out of production, where profit rates had over time become unacceptably low (Harvey 2005).
In the decades following the breakdown of Bretton Woods, the effective privatisation of money creation, the deregulation of banks, the impact of new technology on the speed and scope of financial transactions, and the vicious spiral of inequality produced a systemic momentum of financial speculation whose exact dynamic few understood (Tett 2009).
Moving towards forms of economic organisation that place human creativity at their centre.
In this way, capitalism of the late twentieth and early twenty-first century is financialised capitalism. Not only is it unstable, but – as Keynes remarked about an earlier period of financialisation – the move from production to financial speculation strikes ‘a body blow at capitalism because it destroys the psychological equilibrium which permits the perpetuance of unequal rewards. … The businessman is only tolerable so long as his gains can be held to bear some relation to what, roughly and in some sense, his activities have contributed to society’ (quoted in Backhouse and Bateman 2011).
This chapter starts from the contrast between this impasse of capitalism as a basis for the sustainable organisation of society’s productive capacities and the realisation of the potential of human creativity for the common good. I follow this problem through several levels of analysis.
The aim is to prepare the ground for further work on ways out of the crisis by moving towards forms of economic organisation that place human creativity, including a respectful relationship to nature, at their centre.
In this first section, I try to ground this argument in an understanding of at least one of the features of the social democratic order of the post-war years that by the late 1970s had made it so vulnerable to the forces of financialisation, especially the power of the transnational corporation.
My focus is on the understandings of the role of labour in production that underpinned the industrial and political institutions of organised labour at that turning point where neoliberal economics began to take hold. My argument draws largely on recent British history (which was, after all, the incubator of neoliberalism).
Historically the British labour movement – with its separation of industrial relations and politics producing a narrowly economistic view of workers’ role in production, reinforced with a single-party monopoly of working-class representation – articulated well with the Fordist paradigm of mass production and high levels of standardised productivity in return for high wages that, in turn, underpinned mass consumption. Both the political and industrial wings of the labour movement saw labourers as wage earners whose rights to bargain over the price and conditions of work should be politically guaranteed.
The political role of Labour was understood in terms of redistribution to build the welfare state, abjuring, after the infrastructural nationalisations of 1945, any significant intervention in the organisation of production.
However, as the organisational paradigm of Fordist production, mass consumption, and a welfare state built around the nuclear family came under the pincer pressure of social movements from below and capital’s move away from production and into finance from above, social democracy’s narrow conceptions of labour and its role in production proved to be a fatal weakness in social democracy’s defences against the pressures of the corporate-dominated market.
Alternative directions were available in the mid-1970s and early 1980s, the turning point towards neoliberalism. The resistance to Fordist production and a gendered division of labour by the movements for radical democracy – including economic democracy and popular control over state institutions – could, through forms of agency based on different understanding of labour, have provided a more progressive, egalitarian basis for the changes opened up by new information and communication technologies.
Instead, much of the innovative dynamic of the radical social and trade union movements, ended up as unintended and ambivalent resources for a period of capitalist renewal. Now, as this credit-driven process of expansion faces crisis, and we are again in a period of flux in which progressive agency could made a difference to social change, it seems an opportune moment to explore an alternative notion of labour as the capacity to create, grounded in new purposes and practices.
This paper is a chapter in the book: Vishwas Satga (eds.),”Solidarity Economy Alternative – Emerging Theory and Practice” Durban, South Africa: University of KwaZulu Natal Press, 2013
picture by Sarah Ross