On the giving and receiving of gifts

•August 1, 2012 • 2 Comments

By what principles can you organise social relations? In particular, how shall we remunerate people for their personal roles within our society? The book Parecon: Life After Capitalism favours remunerating people for efforts to produce a socially valued product. Now, I agree with this norm in many contexts. But I think there are contexts in which it breaks down and needs to be superseded by another principle.

In Parecon: LAC one such context is already identified – if somebody is unable to work due to some factor outside of their control (an illness, say) then the principle of compassion takes over – this person receives a share in the social product without having to put into it – because they can’t. I wonder if there are other contexts in which the usual parecon norm should be superseded by something else.

I’m thinking here about certain kinds of creative work – those which aren’t “useful” in the sense of feeding people, maintaining infrastructure, enjoying popularity etc. It’s easy to asses the social value of something “useful” and therefore reward people’s efforts towards it – “useful” is fairly objective. But what about something not “useful” in that objective sense?

What’s the use of a Beethoven symphony? Or Einstein’s theory of General Relativity? Perhaps Beethoven was popular, Einstein was understood. Is that the point though? Was that where the value of what they did lay? What if Beethoven had been unpopular in his lifetime, Einstein misunderstood in his? Could a parecon council have then remunerated each for producing a socially valued product? I guess not. Perhaps another superseding principle is needed in such cases – a kind of compassion practiced towards people of real genius?

I’ll consider theoretical science here rather than art, as it’s what I know better. If you want art considered instead, read this. What about it then? Isn’t science always “useful”? Only “useful”? Perhaps you want to say that General Relativity has helped with calculating the timings of GPS communication signals. Okay, but that is wholly missing the point of it, I feel. People that think science is merely “useful” don’t understand what it truly is, in my view. “We are a way for the Cosmos to know itself” is how Carl Sagan put it. Richard Feynman put it like this in his set of lectures The Meaning Of It All:

Yet science is still not thoroughly appreciated. To give an example, I read Faraday’s Chemical History of a Candle, a set of six Christmas lectures for children. The point of Faraday’s lectures was that no matter what you look at, if you look at it closely enough, you are involved in the entire universe. And so he got, by looking at every feature of the candle, into combustion, chemistry, etc. But the introduction of the book, in describing Faraday’s life and some of his discoveries, explained that he had discovered that the amount of electricity necessary to perform electrolysis of chemical substances is proportional to the number of atoms which are separated divided by the valence. It further explained that the principles he discovered are used today in chrome plating and the anodic coloring of aluminum, as well as in dozens of other industrial applications. I do not like that statement.

Here is what Faraday said about his own discovery: “The atoms of matter are in some ways endowed or associated with electrical powers, to which they owe their most striking qualities, amongst them their mutual chemical affinity.” He had discovered that the thing that determined how the atoms went together, the thing that determined the combinations of iron and oxygen which make iron oxide is that some of them are electrically plus and some of them are electrically minus, and they attract each other in definite proportions. He also discovered that electricity comes in units, in atoms. Both were important discoveries, but most exciting was that this was one of the most dramatic moments in the history of science, one of those rare moments when two great fields come together and are unified. He suddenly found that two apparently different things were different aspects of the same thing. Electricity was being studied, and chemistry was being studied. Suddenly they were two aspects of the same thing—chemical changes with the results of electrical forces. And they are still understood that way. So to say merely that the principles are used in chrome plating is inexcusable.

To say merely that General Relativity has been “useful” for GPS satellites is inexcusable. So, how are we to say what is to be remunerated, when it comes to theoretical physics, say? What is its social value? I think this is a question for posterity alone. Only the balance of infinite time can weigh the worth of Faraday’s or Einstein’s gifts to humanity with any degree of accuracy. How could any democratic council do so?

General Relativity – what is its social value?

That is why I think revolutionary creative work needs to operate under another principle entirely, one superseding remuneration for socially valuable output – because nobody can say what this is when it comes to that work. It’s up to the infinite future to say. Also, to the extent that the gifted tailor their gifts towards “utility” – meaning what is popularly acceptable or socially demanded – they pervert and squander them, because as Oscar Wilde put it (about art, but the same applies to science I think) :

“A work of art is the unique result of a unique temperament. Its beauty comes from the fact that the author is what he is [with science: from the fact that nature is what she is]. It has nothing to do with the fact that other people want what they want. Indeed, the moment that an artist takes notice of what other people want, and tries to supply the demand, he ceases to be an artist, and becomes a dull or an amusing craftsman, an honest or a dishonest tradesman. He has no further claim to be considered as an artist.”

I used the words “gifts to humanity” earlier quite deliberately. In a “gift economy”, of the sort anthropologists describe, the principle of social organisation is, roughly speaking:

From each according to their abilities, to each according to their needs.

In his book Debt the First 5000 Years, social anthropologist David Graeber introduces the above principle in the fifth chapter of his book, terming it “communism”. He says that:

“All of us act like communists a good deal of the time. None of us acts like a communist consistently. “Communist society” – in the sense of a society organised exclusively on that single principle – could never exist. But all social systems, even economic systems like capitalism, have always been built on top of a bedrock of actually-existing communism …

Almost everybody follows this principle if they collaborating on some common project. If someone fixing a broken water pipe says, “Hand me the wrench” his co-worker will not, generally speaking, say “And what do I get out of it?” – even if they are working for Exxon Mobil, Burger King or Goldman Sachs.”

The book is great! Think about reading it 🙂

In small-scale egalitarian communities, networks of mutual aid can develop that practice the above “from each… to each…” principle to a remarkable extent. In such a “gift economy” person A’s “needs” might be satisfied by requesting person B’s “abilities”, in the knowledge that a similar favor might be asked of person A by person B in future. One couldn’t, as David Graeber says above, organise an entire society on that basis. But within that entire society (economically organised under parecon principles perhaps?) there could be pockets that are largely operating in this way.

I think perhaps any sub-economy trading in and producing revolutionary creative ideas should be organised as a gift economy within a wider participatory economy. (I should remark in passing that I find the idea of “intellectual property” ridiculous – anyone thinking you can or should try to “own” an idea, with a view to turn it into profit, has perhaps never had one of very much value, or doesn’t understand very clearly how ideas work and where they come from. I think ideas belong with “the commons”, they are part of a collective human spirit. Parecon doesn’t make this mistake though – property, presumably including the intellectual sort, is “owned” in common – by no-one and by everyone).

If somebody happens to receive a precious gift from nature – say the all-consuming compulsion to reveal a part of that nature to society – then society at large should set them up in the capacity to perfect their gift. If instead it ties them to producing something “socially useful” – something society currently wants – then society will squander their gift, because what they are trying to give society is something that it ultimately needs. The new social need they exist to satisfy is something challenging and genuinely revolutionary. It is not wanted though, because its need  is not yet apparent. Its need will only be apparent after being weighed in the balance of infinite time.

The irony is that parecon might create a post-revolutionary economy in which truly revolutionary work becomes difficult or impossible. This is exactly the problem that the theoretical physicist Shevek has in Ursula Le Guin’s wonderful novel The Dispossessed. He wanted to give his world Anarres a gift, the General Temporal Theory. But Anarres did not want his gift (despite needing it) –  it didn’t understand and hence could not evaluate it. And so Shevek is not able to give his gift to Anarres. He has to go elsewhere, to the authoritarian planet of Urras. I would worry that if parecon can’t make exceptions for those like Shevek it will be repeating one of the most awful crimes of the present system – its squandering of human potential. It is galling to consider the wasting of human gifts under the social system we presently endure. Let us not repeat this in a revolutionary new social system. Even at the price of a few free-loaders and layabouts – “nuchnibs” in Le Guin’s novel.

As individuals we don’t always know what is best for us and the same is true of societies. I make this not as an argument for authoritarianism – no Philosopher King can or should be empowered to say what society needs in its stead – but as an argument for the communistic principle of the “gift economy” to be applied to the few who are gifted (or cursed, some might say!) with the capacity to produce revolutionary creative work. For these gifted few – a Faraday, an Einstein, or a Shevek – we must give them a home on our world. For them: From each, to each. From society to them: we should have the capacity to provide for their basic needs. From them to society:  they might then manage to give society “useless” and priceless gifts.

 

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Addendum:

A while after writing this I put a sort of “potted version” of the above ideas to Michael Albert on the IOPS website. Now I’m not at all convinced that what I wrote makes sense! I think I ought to have read and thought more about the allocation method in parecon (called “participatory planning”) before writing this post – so expect a post on that at some point! Anyway, here are Michael’s replies to my queries:

Me:

Hi Michael, about this:

“If advocates of from each to each said in some cases of consuming and even producing, the norm they favor may make sense and work okay – sure, I would agree – and then we could ask, what are those cases? And for that matter, from each to each advocates could then argue, or not, for why parecon gets some cases wrong.”

I was wondering if you thought what we might call “revolutionary creative work” could fall into that bracket – something that parecon remuneration might get wrong? Am I right in thinking you’re a fan of Ursula le Guin’s novel The Dispossessed? (there were quotes from it in Parecon: LAC). This problem is one of the major themes of that book – Shevek (and his “intellectual nuchnib” musician and playwright friends) have a lot of problems getting their society to support them in the work they do, work which doesn’t have an obvious or immediate social benefit, and is resisted by their society – because truly revolutionary work is challenging of society and hence difficult for it to initially accept or value.

Do you think maybe parecon remuneration could have a similar “blind spot” here? Do you think “from each to each” might better apply to supporting certain sub-sections of the economy – like say composers, playwrights or theoretical physicists? In these exceptional cases, might society make some gift of food and shelter and work materials to these “revolutionary creatives”, in the hope that they could return society something much more valuable, in the long run? Otherwise there might be the danger, as in Le Guin’s book, that “revolutionary creatives” are forced to simply pander to what the workers’ councils seem to want from them, squander their gifts, and revolutionary creative work gets sidelined, and people like Shevek have to go to Urras.

Michael:

David…

> I was wondering if you thought what we might call “revolutionary creative work” could fall into that bracket – something that parecon remuneration might get wrong? Am I right in thinking you’re a fan of Ursula le Guin’s novel The Dispossessed? (there were quotes from it in Parecon: LAC).

Yes, I liked the novel, now many decades old…

> This problem is one of the major themes of that book – Shevek (and his “intellectual nuchnib” musician and playwright friends) have a lot of problems getting their society to support them in the work they do, work which doesn’t have an obvious or immediate social benefit, and is resisted by their society – because truly revolutionary work is challenging of society and hence difficult for it to initially accept or value.

I don’t accept this as remotely likely in a parecon. So, what are we actually talking about? Some people want to work, for their income, on criticizing social relations and proposing alternatives, say. If a participatory society says we simply do not need or want such critical thinking and proposing to happen, so we don’t want institutions that do this type work, and people who get income for it – then, yes, there would be no place to be employed doing this. The population would be saying, it is not socially valued labor – you can do it – but you are doing activity that is like digging ditches and then filling them up…worthless.

Sometimes artists say, that will happen to art – people will say, don’t need it. Or science. Or, journalism, or, very close to that, critical commentary, and so on. There is no reason at all to expect even that our current population, much less the population of a participatory society, would have such shortsighted, and vapid views…

> Do you think maybe parecon remuneration could have a similar “blind spot” here?

No. But here is a case where it arises, in a sense. There is a music production council. You are a worker in it. The council has, via the plan, an apportionment of social product for its work – for its workers. You propose to create music that is so high pitched (or arcane) that your peers say, no, you can’t do that, and take some of the councils available income for workers, for doing it. No one wants that. It would suggest to society that our workers council is a bunch of nitwits – or whatever. So now you are stuck – you have to work in ways your peers, as a group, acknowledge to be socially valued. You can’t do what you want. And you may even be right. Maybe they are all wrong…and your product would turn out, in five years, to be great. You can keep pressing, you can find another workplace, you can try to form one – there are many options.

> Do you think “from each to each” might better apply to supporting certain sub-sections of the economy – like say composers, playwrights or theoretical physicists?

No. If society really feels this is junk activity – like my playing baseball and asking for income for it, or my painting – because society thinks music, plays, and research are junk – then so be it. People will have to do these things voluntarily, also working so they get an income.

> In these exceptional cases, might society make some gift of food and shelter and work materials to these “revolutionary creatives”, in the hope that they could return society something much more valuable, in the long run?

Well that is in fact exactly what society would do – but it is not a gift – it is an assessment that these creative people are doing something that needs and should be done, for a host of reasons…

> Otherwise there might be the danger, as in Le Guin’s book, that “revolutionary creatives” are forced to simply pander to what the workers’ councils seem to want from them, squander their gifts, and revolutionary creative work gets sidelined, and people like Shevek have to go to Urras.

There is an incredible level of classism – call it artism, or brilliancism, if you like – in this worry. The poor “uncreatives” – see what I mean – are too neanderthal to recognize the obvious value of art, science, etc. Even in our current society, where most of the population is robbed of confidence and knowledge in many ways, this would not happen. But in a participatory society – with balanced job complexes – so the composers, etc., have incomes like others, conditions like others, and so on – and where others have all the relevant information, honestly, not a chance.

So – what you are seeking – that society recognize the value of science, art, engineering, sports, or whatever and ensure the incomes of worthy practitioners of these, even when their work sometimes doesn’t pan out – is precisely what a parecon would do… very naturally, to everyone’s benefit and no one’s loss.

Me:

“There is an incredible level of classism – call it artism, or brilliancism, if you like – in this worry.”

Okay, I probably deserved that one, the wording RE “creatives” was clumsy. I didn’t mean to imply that I think “ordinary people” can’t appreciate the value of an activity like science or art, I really don’t think that. I just think it’s hard for anyone to objectively evaluate the social worth of a specific piece of art or a scientific research project, say (I’m researching particle physics myself these days and find it pretty hard even to understand what some of my colleagues are doing! I think something like baseball is easier here – do people want to watch you play or not? is fairy objective)

But it’s probably a non-problem after all – people only need to be persuaded of the general value of an activity, not the specific value of its products. I could anticipate somebody genuinely good falling through the cracks from time to time in a parecon (surely no system is perfect?), but there are always other options, like you say – do it in your spare time, proselytize it some more, or perhaps make your own workplace with similarly minded folks (in The Dispossessed Shevek and his friends started the “Syndicate of Initiative” for example – the name suggests they might have suffered from “brilliancism” also 😉 )

So the answer helped, thanks.

Michael:

David,

The public passes judgement, so to speak, in the large, not the details. The latter occurs in the council, or team.

For example, take physics department….your field. It is part of the whole physics community. Society allots resources to physics, inside the community is where the allotment to options within physics are made…then inside units like universities, teams, etc.

Same for the symphony, say – it doesn’t propose we want to work on such and such a piece for next month – and the public says yes or no. Rather the symphony does its thing, internally deciding its activity, approaches, etc. – within the overarching commitments of resources which is what planning arrives at.

Me:

Sounds good! I guess when a lot of people first hear “remuneration for effort at socially valued work” their first reaction might be to worry about how “social value” is going to be measured and by whom. With my example of theoretical physics, it might take decades for the social benefits of some speculative research project to pan out, if indeed they ever do. But you’ve reassured me than this isn’t really a problem in a parecon, since the physics (or whatever…) community will just be encouraging good physics, without seeking to micromanage everyone or solicit approval for every specific project from non-physicists. That’s just applying self-management to physics, I suppose? Thanks 🙂

Michael:

The transition is from banks and political and corporate elites deciding the overarching budgets, in accord with amassing profits and maintaining the conditions of doing so, to the broad population deciding overarching budgets in accord with needs and capacities and full social and ecological implications….and then, more proximately, from local owners or administrators deciding choices within the overarching budget that will lead to its continuation as well as utilize and maintain their own status to the workers in each field deciding proximate choices, again in accord with needs and desires and maintaining the overall support from society…

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Saving the Soul of Man: Individualism, Old and New

•July 6, 2012 • 1 Comment

I recently read Oscar Wilde’s fine 1891 essay The Soul of Man Under Socialism and would heartily recommend it (especially to my brothers and sisters in the United States!) as an excellent way to allay any fears that “socialism” inevitably means the sacrifice of the individual upon some collectivist alter of “the greater good”.

Rather, Wilde argues that libertarian forms of socialism offer the best way to realise the full potentialities of all individuals living in society. This he calls the new individualism, to contrast it with the old individualism of classical economics’ “rational hedonism” : the self-maximization of individual utility by an atomised “homus economicus” for whom “there is no such thing as society” (Margaret Thatcher) because society is merely “the sum of the interests of the several members who compose it” (Jeremy Bentham).

Oscar Wilde, photographed by Napoleon Sarony in 1882

First the “old” individualism then. The legacy of classical liberalism and the enlightenment, in my view, was to challenge the State’s co-option of the individual to serve its ends. This had traditionally been justified according to the divine right of kings – the King being God’s sanctioned representative on Earth, whose lineage should perhaps, at least in principle, be traced back to King Saul of the Israelites. The point being that you don’t argue with God, so you don’t argue with the right of the King to rule. You shut up and accept your designated place within feudal society, perhaps hoping for recompense in some presumed afterlife – George Orwell’s “Sugarcandy Mountain” perhaps?

The enlightenment subjected the doctrine of the divine right of kings to the full light of reason and found it wanting. Intellectual and popular agitations culminated in the French revolution and the concept of the individual as mere pawn in the King’s game of divine rule was finally consigned to the dustbin of history. The idea that the individual could be an end in himself was ready to take root, and so the enlightenment set itself the task of establishing its seed in the soil of classical liberalism and classical political economy.

This idea of the individual man as an end in himself is set out quite early and quite beautifully in Wilhelm Von Humboldt’s classic essay The Limits of State Action:

“…man never regards what he possesses as so much his own, as what he does; and the labourer who tends a garden is perhaps in a truer sense its owner, than the listless voluptuary who enjoys its fruits…In view of this consideration, it seems as if all peasants and craftsman might be elevated into artists; that is, men who love their labour for its own sake, improve it by their own plastic genius and inventive skill, and thereby cultivate their intellect, ennoble their character, and exalt and refine their pleasures. And so humanity would be ennobled by the very things which now, though beautiful in themselves, so often serve to degrade it…

[in contrast] Whatever does not spring from a man’s free choice, or is only the result of instruction and guidance, does not enter into his very being, but remains alien to his true nature; he does not perform it with truly human energies, but merely with mechanical exactness…”

The individual’s free development was to be safeguarded via the institution of private property, which was to secure the producer (and not the King or feudal nobility) the full rights to what was produced. Keep in mind the aim: the cultivation of free self-perfecting individuals. Private property was intended by the likes of Humboldt, Adam Smith and John Stuart Mill, amongst many others, as a mere means to this end, not as an end in itself. For example Mill writes in his book  Principles of Political Economy that:

“The laws of property have never yet conformed to the principles on which the justification of private property rests. They have made property of things which never ought to be property, and absolute property where only a qualified property ought to exist. They have not held the balance fairly between human beings, but have heaped impediments upon some, to give advantage to others; they have purposely fostered inequalities, and prevented all from starting fair in the race. …

Private property, in every defense made of it, is supposed to mean the guarantee to individuals of the fruits of their own labour and abstinence. The guarantee to them of the fruits of the labour and abstinence of others, transmitted to them without any merit or exertion of their own, is not of the essence of the institution, but a mere incidental consequence, which, when it reaches a certain height, does not promote, but conflicts with, the ends which render private property legitimate.”

Mills’ “ends which render private property legitimate” are of course the cultivation of free individuals and not mere feudal serfs (or indeed “wage slaves”) carrying out their appointed duties with a “mechanical exactness” devoid of “truly human energies”.

Such was the expressed intent of  “the old individualism”. We now fast-forward several decades to Wilde’s essay on “the new individualism”, written with the benefit of hindsight. Did a reformed institution of private property succeed in realising its (alleged) aims? Wilde thinks not. More, he thinks that in making private property and the market into Mammonite gods to replace the divine authority of the King, the liberal ideal of cultivating the free individual went completely astray:

“For the recognition of private property has really harmed Individualism, and obscured it, by confusing a man with what he possesses. It has led Individualism entirely astray. It has made gain not growth its aim. So that man thought that the important thing was to have, and did not know that the important thing is to be. The true perfection of man lies not in what man has, but in what man is.

Private property has crushed true Individualism, and set up an Individualism that is false. It has debarred one part of the community [the poor] from being individual by starving them. It has debarred the other part of the community [the rich] from being individual by putting them on the wrong road [materialism], and encumbering them.”

This “true perfection of man” Wilde terms the new individualism and for him socialism – the abolition of private ownership of productive property –  is the way of realizing it. The poor are no longer to be starved and the rich are no longer to spoil themselves through gluttony. Necessary though drudgeorous work is to be automated and performed by machines, thus freeing every individual for self-cultivation:

“At present machinery competes against man. Under proper conditions machinery will serve man. There is no doubt at all that this is the future of machinery, and just as trees grow while the country gentleman is asleep, while humanity will be amusing itself, or enjoying cultivating leisure – which, and not labour, is the aim of man – or making beautiful things, or reading beautiful things, or simply contemplating the world with admiration and delight, machinery will be doing all the  necessary and unpleasant work.”

How sad we live in a world where economic growth continues unabated and the question of whether it should be channeled into ever more production or the freeing of time for contemplation and the development of the individual cannot be asked – market systems seem incapable of suffering such a question to be asked. Bertrand Russell captured the absurdity of this situation wittily in his essay In Praise of Idleness:

“Suppose that, at a given moment, a certain number of people are engaged in the manufacture of pins. They make as many pins as the world needs, working (say) eight hours a day. Someone makes an invention by which the same number of men can make twice as many pins: pins are already so cheap that hardly any more will be bought at a lower price.

In a sensible world, everybody concerned in the manufacturing of pins would take to working four hours instead of eight, and everything else would go on as before. But in the actual world this would be thought demoralizing. The men still work eight hours, there are too many pins, some employers go bankrupt, and half the men previously concerned in making pins are thrown out of work. There is, in the end, just as much leisure as on the other plan, but half the men are totally idle while half are still overworked. In this way, it is insured that the unavoidable leisure shall cause misery all round instead of being a universal source of happiness. Can anything more insane be imagined?”

Whether machines will really be able to do “all the necessary and unpleasant work” remains an open question, but they could surely do a great deal more of it than they do today – where recall that there is an army of reserve workers who have little choice but to do this work, on pain of impoverishment and misery should they refuse – and hence the reigning oligarchy has little interest in lessening their burden through automation (if anything their inclination is the opposite – an exhausted and hence mentally debased workforce is less likely to offer them any resistance). Were humanity instead to apply itself to the task of automating drudgery in earnest, who knows how far it could be taken? Perhaps as far as is desired, or else any remaining “necessary and unpleasant work” could be fairly shared.

In order that we may produce beautiful things as well as necessary things – roses as well as bread –  Wilde’s socialism is necessarily a libertarian socialism. Wilde characterizes the individual realizing his latent potentialities most perfectly as “the artist”. His “artist” is not to be subject to the forces of supply and demand governing the production of necessities under socialism, because:

“A work of art is the unique result of a unique temperament. Its beauty comes from the fact that the author is what he is. It has nothing to do with the fact that other people want what they want. Indeed, the moment that an artist takes notice of what other people want, and tries to supply the demand, he ceases to be an artist, and becomes a dull or an amusing craftsman, an honest or a dishonest tradesman. He has no further claim to be considered as an artist. Art is the most intense mode of Individualism that the world has known. I am inclined to say that it is the only real mode of Individualism that the world has known.”

Rather, “the artist” must be let alone, left free to develop his latent potentialities, left ungoverned, because all authority is equally fatal to individualism/art:

“People sometimes inquire what form of government is most suitable for an artist to live under. To this question there is only one answer. The form of government that is most suitable to the artist is no government at all. Authority over him and his art is ridiculous. It has been stated that under despotisms artists have produced lovely work. This is not quite so. Artists have visited despots, not as subjects to be tyrannised over, but as wandering wonder-makers, as fascinating vagrant personalities, to be entertained and charmed and suffered to be at peace, and allowed to create. There is this to be said in favour of the despot, that he, being an individual, may have culture, while the mob, being a monster, has none. One who is an Emperor and King may stoop down to pick up a brush for a painter, but when the democracy stoops down it is merely to throw mud. And yet the democracy have not so far to stoop as the emperor. In fact, when they want to throw mud they have not to stoop at all. But there is no necessity to separate the monarch from the mob; all authority is equally bad.”

Hence if we desire true art then artists must be let alone to do such as they individually please. Is this then a selfish individualism? Wilde tackles that objection with aplomb:

“A man is called selfish if he lives in the manner that seems to him most suitable for the full realisation of his own personality; if, in fact, the primary aim of his life is self-development. But this is the way in which everyone should live. Selfishness is not living as one wishes to live, it is asking others to live as one wishes to live. And unselfishness is letting other people’s lives alone, not interfering with them. Selfishness always aims at creating around it an absolute uniformity of type. Unselfishness recognises infinite variety of type as a delightful thing, accepts it, acquiesces in it, enjoys it.

It is not selfish to think for oneself. A man who does not think for himself does not think at all. It is grossly selfish to require of ones neighbour that he should think in the same way, and hold the same opinions. Why should he? If he can think, he will probably think differently. If he cannot think, it is monstrous to require thought of any kind from him. A red rose is not selfish because it wants to be a red rose. It would be horribly selfish if it wanted all the other flowers in the garden to be both red and roses. Under Individualism people will be quite natural and absolutely unselfish, and will know the meanings of the words, and realise them in their free, beautiful lives.”

A red rose. Libertarian Socialism (a.k.a. anarchism) should cultivate our roses (in all colours!) as well as baking our bread, because “man cannot live by bread alone”.

One often hears (old) individualism criticised on the grounds of its selfishness, and with significant justification I feel. For example, in his excellent recent book The World We Have: A Buddhist Approach to Peace and Ecology, Buddhist Monk Thich Nhat Hanh writes:

“In modern life people think their bodies belong to them and they can do what they want to themselves. “We have the right to live our lives”, they say. The law supports such a deceleration; that is one of the manifestations of individualism. But according to the teachings of the Buddha, your body is not yours. Your body belongs to your ancestors, your parents, and future generations. It also belongs to society and to the other living beings. All of them have come together – the trees, the clouds, the soil, everything – to bring about the presence of this body. Our bodies are like the Earth. And there is the Bodhisattva Earth Holder, holding everything together.

Nhat Hanh calls this concept “inter-being”. We “inter-are” with our ancestors and our descendants. I think of people’s lives as being like a stone thrown into a pond. The stone is seen to disappear, but the ripples carry on afterwards. The pond is changed forever – the effects of the ripples play out over its surface forever. What is you and what is other people? Everything we are and do has been influenced by the “ripples” of other “stones”. We carry the lives of our ancestors within us through their influences upon our own thoughts and actions. Did they ever really die? Shall we? No, we shall all live on through our children and their children.

How long we shall all live on together depends upon our actions today – it may not be much longer if our “inter-being” remains unrecognized by most of us. A selfishly individualistic culture whose fruits are nuclear weapons and ecocide is a serious danger to our survival and as Nhat Hanh writes:

“The only alternative to co-existence is co non-existence”

So I agree with Nhat Hahn’s condemnation of “the old individualism” as well as with Wilde’s celebration of “the new individualism”. I think we can agree with both. Notice that Nhat Hahn criticizes one manifestation of individualism and not the manifestation of it per se. I interpret what is being criticised as Adam Smith’s vile maxim of the masters of mankind: “All for ourselves and nothing for other people”. I think that such a selfish individualism does not really deserve to be called individualism, because it aims at accomplishing individual fulfillment through denying it to others. It is trying to demand all flowers in “my” garden be red roses (and moreover all belong to me, not to themselves).

That, sadly, was the outcome of the classical liberal project of private property and “free” markets. As anarchist historian Rudolf Rocker lamented  some decades after Wilde’s essay, in his book Anarcho-Syndicalism: Theory and Practice:

“Democracy with its motto of equality of all citizens before the law, and Liberalism with its right of man over his own person, both were wrecked on the realities of capitalist economy. As long as millions of human beings in every country have to sell their labour to a small minority of owners, and sink into the most wretched misery if they can find no buyers, the so-called equality before the law remains merely a pious fraud, since the laws are made by those who find themselves in possession of the social wealth. But in the same way there can be no talk of a right over one’s own person, for that right ends when one is compelled to submit to the economic dictation of another if one does not want to starve.”

In contrast to the “old individualism” of the classical liberal democracies, Wilde’s “new individualism”, yet to be born from a libertarian socialism, seeks not to deny society, solidarity and “inter-being” but to employ our understanding of them to help every member of society cultivate their diverse individuality. I think it is an individualism appropriate to our 21st century civilisation. Perhaps it is also the form of individualism needed to save that civilisation from an untimely death? When we have become so many lemmings marching towards a cliff, it takes a staunch individualist to head the opposite way. But upon watching them pass, perhaps others may pause for thought and decide to follow? Therein lies my hope for humanity.

From Participatory Society to One World Consciouness

•June 24, 2012 • 1 Comment

The participatory society (parsoc) vision is outlined here. For those wondering what I mean by one world consciousness and why we need it, I’ll let astronomer Carl Sagan explain:

“As the ancient myth makers knew we’re children equally of the earth and the sky. In our tenure on this planet we’ve accumulated dangerous evolutionary baggage, propensities for aggression and ritual, submission to leaders, hostility to outsiders, all of which puts our survival in some doubt. But we’ve also acquired compassion for others, love for our children, a desire to learn from history and experience and a great soaring passionate intelligence, the clear tools for our continued survival and prosperity. Which aspects of our nature will prevail is uncertain, particularly when our visions and prospects are bound to one small part of the small planet Earth.

But up there in the Cosmos an inescapable perspective awaits. National boundaries are not evident when we view the Earth from space. Fanatical ethnic or religious or national identifications are a little difficult to support when we see our Earth as a fragile blue crescent fading to become an inconspicuous point of light against the bastion and the citadel of the stars. There are not yet obvious signs of extraterrestrial intelligence and this makes us wonder whether civilisations like ours rush inevitably headlong into self-destruction.”

The parsoc vision has focused in on the question “What might a society which does not structurally exploit people be like?”. The International Organisation for a Participatory Society (IOPS) incorporates aspects of parsoc’s “four-spheres” framework shown below:

I think IOPS needs to incorporate more than the above. I see IOPS as a broader “anti-authoritarian” movement. “Anti-authoritarian” to me denotes three related stances. It denotes opposition to domestic exploitation, in the form of a state-capitalist system (an “anti-capitalist” stance). It denotes opposition to the exploitation of foreign nations, in the form of wars of aggression over the planet’s finite and diminishing resources (an “anti-imperialist” stance). Lastly, it denotes opposition to the exploitation of the totality of human and non-human life on Earth (an “anti-ecocide” stance).

To extend parsoc’s “four-spheres” framework to incorporate these vital international and ecological aspects, I propose something like the following picture, to illustrate the commitment to furthering revolutionary one world consciousness I feel IOPS should embody:

Please note: the fact that some spheres of IOPS are drawn inside other spheres does not denote the outermost spheres as being “more important” than the innermost ones. It denotes the outermost spheres as being “more fundamental” than the innermost ones. For example, the low entropy (“organised”) energy from the sun is “more fundamental” to my life than my family are. I would immediately die without the sun. I would not immediately die without my family. The sun is therefore “more fundamental”. Which is “more important” though? I find this question meaningless.

If I say “international relations are more fundamental than parsoc” what might that mean? It means that a participatory society might well be impossible in a world torn apart by wars over resources, a world where nations become threats to be defended against, rather than our fellow human beings. As Martin Buber put it:

“One cannot in the nature of things expect a little tree that has been turned into a club to put forth leaves.”

If I say “ecology is more fundamental than international relations” what might that mean? It means that peaceful relations between nations might well be impossible if ecosystems have collapsed and human beings are fighting for survival in a world that cannot any longer sustain them. As Yann Martel put it in Life of Pi:

“When your own life is threatened, your sense of empathy is blunted by a terrible, selfish hunger for survival.”

Such fears lend a sense of urgency to the radical ecology movement (a.k.a. “dark green” environmentalism). Human societies (and especially peaceful, participatory ones!) fundamentally depend upon a well-functioning biosphere. The biosphere, however, can manage perfectly well without human beings (as it has done for billions of years). If we take many more liberties with Earth’s ecosystems, we may discover too late that the preconditions for humane existence are no longer in place. As Paul Street has recently commented:

“When I cite data on environmental collapse and argue that ecology is the top issue of our time, I sometimes get accused of advocating a politics of triage – a politics of putting forward only what I think is the single most urgent problem and thereby unduly neglecting other issues that rightly concern us on the left. But if livable ecology is a save-able triage patient – and I think it is – than it’s a triage patient of a very odd sort in that if it dies so do all other patients in the emergency room. There’s more that could be said on this analogy.”

So ecology is “more fundamental” than international relations, which in turn are “more fundamental” than parsoc’s “four spheres” of economy, polity, community and kinship. But none of these is “more important” than any of the others.

Perhaps theoretical physicist Richard Feynman can help clarify this further:

We have a way of discussing the world, when we talk of it at various hierarchies, or levels. Now I do not mean to be very precise, dividing the world into definite levels, but I will indicate, by describing a set of ideas, what I mean by hierarchies of ideas.

For example, at one end we have the fundamental laws of physics. Then we invent other terms for concepts which are approximate, which have, we believe, their ultimate explanation in terms of the fundamental laws. For instance, “heat”. Heat is supposed to be jiggling, and the word for a hot thing is just the word for a mass of atoms which are jiggling. But for a while, if we are talking about heat, we sometimes forget about the atoms jiggling- just as when we talk about the glacier we do not always think of the hexagonal ice and the snowflakes which originally fell. Another example of the same thing is a salt crystal. Looked at fundamentally it is a lot of protons, neutrons, and electrons; but we have this concept of “salt crystal”, which carries a whole pattern already of fundamental interactions. An idea like pressure is the same.

Now if we go higher up from this, in another level we have properties of substances- like “refractive index”, how light is bent when it goes through something; or “surface tension”, the fact that water tends to pull itself together, both of which are described by numbers. I remind you that we have to go through several laws down to find out that it is the pull of the atoms, and so on. But we still say “surface tension”, and do not always worry, when discussing surface tension, about the inner workings.

On, up in the hierarchy. With the water we have waves, and we have a thing like a storm, the word “storm” which represents an enormous mass of phenomena, or a “sun spot”, or “star”, which is an accumulation of things. And it is not worthwhile always to think of it way back. In fact we cannot, because the higher up we go the more steps we have in between, each one of which is a little weak. We have not thought them all through yet.

As we go up in this hierarchy of complexity, we get to things like muscle twitch, or nerve impulse, which is an enormously complicated thing in the physical world, involving an organization of matter in a very elaborate complexity. Then come things like “frog”. And then we go on, and we come to words and concepts like “man”, and “history”, or “political expediency”, and so forth, a series of concepts which we use to understand things at an ever higher level. And going on, we come to things like evil, and beauty, and hope…

Which end is nearer to God, if I may use a religious metaphor, beauty and hope, or the fundamental laws? I think that the right way, of course, is to say that what we have to look at is the whole structural interconnection of the thing; and that all the sciences, and not just the sciences but all the efforts of intellectual kinds, are an endeavor to see the connections of the hierarchies, to connect beauty to history, to connect history to man’s psychology, man’s psychology to the working of the brain, the brain to the neural impulse, the neural impulse to the chemistry, and so forth, up and down, both ways. And today we cannot, and it is no use making believe that we can, draw carefully a line all the way from one end of this thing to the other, because we have only just begun to see that there is this relative hierarchy.

And I do not think either end is nearer to God. To stand at either end, and to walk off that end of the pier only, hoping that out in that direction is the complete understanding, is a mistake. And to stand with evil and beauty and hope, or to stand with the fundamental laws, hoping that way to get a deep understanding of the whole world, with that aspect alone, is a mistake. It is not sensible for the ones who specialize at the other end, to have such disregard for each other. (They don’t actually, but people say they do.) The great mass of workers in between, connecting one step to another, are improving all the time our understanding of the world, both from working at the ends and working in the middle, and in that way we are gradually understanding this tremendous world of interconnecting hierarchies.

Ecology is the most fundamental element in the realisation of the IOPS vision, as I would have it. But it is no “nearer to God” than internationalism, economy, polity, community or kinship are. They are all equally important.

I’d love to hear what you think of my picture 🙂

It’s alright, Ma, if I can’t please him

•June 13, 2012 • 3 Comments

I’ve been spending some time over at the IOPS website recently and a comment Michael Albert posted on one of their blogs got me thinking:

“Society has a kind of Catch 22. It delivers confidence to people it has successfully socialized to employ their capacities within society’s dictates. It delivers self doubt – let’s call it – to people more likely to use confidence, if they can achieve it, against the system. You need confidence to accomplish many things. Some of those things, however, are such that if you want to achieve them, it will mean an enormous effort went into ensuring you do not have confidence.”

That got me thinking about conventional notions of “success”: how whether or not your life is deemed “a success” often hinges upon what kind of institutional role you play within society. Our friends the gatekeepers of public opinion and common decency basically define “a success” as someone that can “employ their capacities within society’s dictates” (as per Michael Albert’s comment). For example, perhaps some of you sat through some manner of university graduation speech, maybe from a “successful” big-shot entrepreneurial alumnus about “following your dreams” or some such. Just so long as those dreams involve your being extremely comfortable with today’s institutions and their attendant ideological justifications, that is.

If “following your dreams” instead involves asking any hard questions and seeking to put a stop to the violence and pillage of those same institutions, forget it. That’s not what being “a success” is about. Those of us who agree with Karl Polanyi that a self-adjusting market “could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness” and see today’s approximation to a self-adjusting market increasingly doing just this, are unlikely to find ourselves “successful” (through either accident or design) within that system.

Seeking “success” in society’s marketplace also forces damaging conceptions of self-worth upon us. Erich Fromm writes in Man For Himself:

“Since modern man experiences himself both as the seller and as the commodity to be sold on the market, his self-esteem depends on conditions beyond his control. If he is “successful,” he is valuable; if he is not, he is worthless. The degree of insecurity which results from this orientation can hardly be overestimated. If one feels that one’s own value is not constituted primarily by the human qualities one possesses, but by one’s success on a competitive market with ever-changing conditions, one’s self-esteem is bound to be shaky and in constant need of confirmation by others. Hence, one is driven to strive relentlessly for success, and any setback is a severe threat to one’s self-esteem; helplessness, insecurity, and inferiority feelings result. If the vicissitudes of the market are the judges of one’s value, the sense of dignity and pride is destroyed.”

Interpersonal relationships are likewise compromised. Fromm goes on to say that

“The way one experiences others is not different to the way one experiences oneself. Others are experienced as commodities like oneself; they to do not present themselves but their salable part. The difference between people is reduced to merely quantitative difference of being more or less successful, attractive, hence valuable.”

We may yearn for salvation through romantic relationships, where people might present their whole selves to one another and not merely their “salable part”. But Fromm does not expect us to find real love there either (at least, not to the extent we allow our behaviors to be guided by “the marketing orientation”):

“The superficial character of human relationships leads many to hope that they can find depth and intensity of feeling in individual love. But love for one person and love for one’s neighbour are indivisible; in any given culture, love relationships are only a more intense expression of the relatedness to man prevalent in that culture. Hence it is an illusion to expect that the loneliness of man rooted in the marketing orientation can be cured by individual love.”

There are further psychological costs to “success”. On top of denying our love for humanity, cognitive dissonance implies we must learn to “love big brother” instead – otherwise the beliefs “I am a good person” (“a success”) and “I am deceiving myself and others” remain irreconcilable. And so, becoming sanctioned as “successful” necessitates our buying into various flimsy justifications for both the rapidly escalating extermination of the natural world and the culmination of state capitalism’s protracted asphyxiation of the human spirit. The justifications collapse upon examination, so the trick is not to examine them. The purpose of “a good education” is to teach us “the trick”. Knowing what is safe to question and what must be left alone is a vital matter of psychological survival, at least for those who aim to be “successful”. 2 + 2 = 5.

Such psychological pressure to conform to the dictates of government can all but annihilate individual free expression and interestingly the danger of this is perhaps greatest under “kinder” and more “reasonable” forms of governemnt such as the liberal democracies. Oscar Wilde writes in his 1891 essay The Soul of Man Under Socialism that:

“All modes of government are failures. Despotism is unjust to everybody, including the despot, who was probably made for better things. Oligarchies are unjust to the many, and ochlocracies are unjust to the few. High hopes were once formed of democracy; but democracy means simply the bludgeoning of the people by the people for the people. It has been found out. I must say that it was high time, for all authority is quite degrading. It degrades those who exercise it, and degrades those over whom it is exercised. When it is violently, grossly, and cruelly used, it produces a good effect, by creating, or at any rate bringing out, the spirit of revolt and Individualism that is to kill it. When it is used with a certain amount of kindness, and accompanied by prizes and rewards, it is dreadfully demoralising.

People, in that case, are less conscious of the horrible pressure that is being put on them, and so go through their lives in a sort of coarse comfort, like petted animals, without ever realising that they are probably thinking other people’s thoughts, living by other people’s standards, wearing practically what one may call other people’s second-hand clothes, and never being themselves for a single moment. ‘He who would be free,’ says a fine thinker, ‘must not conform.’ And authority, by bribing people to conform, produces a very gross kind of over-fed barbarism amongst us.”

To aspire to “succeed” as something more than a mere “petted animal”, to have some personal, dissident concept of “success” found outside of state capitalist values and to strive to actually achieve this, is to be branded by all and sundry as “unsuccessful”. It’s something that most of us, caught out by Michael Albert’s Catch 22, can’t manage anyway. It takes a lot of self-confidence (even bloody-mindedness) to maintain your own definition of success in the face of a cacophony of voices (often including family and friends) saying “What the hell are you doing? Just do what you’re supposed to.” They can bash you over the head with that particular rock every day of your life. No wonder most people comply. You’re not supposed to have ideas of your own. A man that lives in a clay tub is not “a success”.

This seems to be a particular problem for the “well educated” amongst us (recall the purpose of “a good education” was to learn “the trick”). It goes thusly: work hard; get “a good education”; have “a good career”; become “a success”. We were breastfed on that crap and most of us never got weaned off of it. Almost every facet of our “good education” reinforced it. I hope a lot of my generation (and others) are ready to call bullshit on the whole mythology; are recognizing that pledging their allegiance to this system is destroying our futures. Radical environmental activist Derrick Jensen lays out his reaction rather bluntly:

“I’m incredibly privileged. And it’s my responsibility to use that privilege to bring down the whole system. Otherwise I’m not worth shit.”

But what might help others to declare likewise? Perhaps it will be solidarity with fellow disenfranchised humanity? Turn off your TVs and talk to your friends – really talk to them (and please, God, not on facebook!) – and perhaps you’ll find that most of us don’t really buy into the bullshit, despite the never-ending stream of the stuff elites dump onto our psyches ever day. Perhaps the outcome of those conversations could be what Bill Hicks described: confirming your voice of reason?

“You can’t put out puerile crap twenty-five hours [a day] ‘cos eventually there’s gonna be chaos in the streets, which there already is, because people are frustrated not having their voice of reason confirmed. And everyone has that voice of reason that goes, “This is bull man. What I’m watching is bull”. And yet the media does not confirm it, so after a while people get… they begin to think they’re insane. And that’s the bummer about it, but that’s why I love non-mainstream stuff, because you actually hear honest emotions, and that’s what you won’t hear on mainstream TV ever, is honest emotions.”

That’s an important insight, I’d say. Let’s agree that things are fucked up. Let’s remind each other that we aren’t insane. Let’s hear honest emotions expressed. That should help develop our confidence – the courage of our convictions. Move notions of “success” away from some horrifically skewed definition, where it equates to destroying the futures of future generations, towards a new definition where it equates to saving that future from the insanity of the present – particularly the actions of some of today’s most “successful” people.

Success is not about pleasing other people then. Particularly not when those other people are acting like psychopaths. Success is about finding out what it is you truly, individually value and trying to live up to this and bring it into the wider world. Perhaps that’s part of what Bob Dylan was driving at in his song It’s Alright Ma (I’m Only Bleeding)? So I’ll give him the last word:

Darkness at the break of noon
Shadows even the silver spoon
The handmade blade, the child’s balloon
Eclipses both the sun and moon
To understand you know too soon
There is no sense in trying.

Pointed threats, they bluff with scorn
Suicide remarks are torn
From the fool’s gold mouthpiece
The hollow horn plays wasted words
Proves to warn
That he not busy being born
Is busy dying.

Temptation’s page flies out the door
You follow, find yourself at war
Watch waterfalls of pity roar
You feel to moan but unlike before
You discover
That you’d just be
One more person crying.

So don’t fear if you hear
A foreign sound to your ear
It’s alright, Ma, I’m only sighing.

As some warn victory, some downfall
Private reasons great or small
Can be seen in the eyes of those that call
To make all that should be killed to crawl
While others say don’t hate nothing at all
Except hatred.

Disillusioned words like bullets bark
As human gods aim for their mark
Made everything from toy guns that spark
To flesh-colored Christs that glow in the dark
It’s easy to see without looking too far
That not much
Is really sacred.

While preachers preach of evil fates
Teachers teach that knowledge waits
Can lead to hundred-dollar plates
Goodness hides behind its gates
But even the president of the United States
Sometimes must have
To stand naked.

An’ though the rules of the road have been lodged
It’s only people’s games that you got to dodge
And it’s alright, Ma, I can make it.

Advertising signs that con you
Into thinking you’re the one
That can do what’s never been done
That can win what’s never been won
Meantime life outside goes on
All around you.

You lose yourself, you reappear
You suddenly find you got nothing to fear
Alone you stand with nobody near
When a trembling distant voice, unclear
Startles your sleeping ears to hear
That somebody thinks
They really found you.

A question in your nerves is lit
Yet you know there is no answer fit to satisfy
Insure you not to quit
To keep it in your mind and not fergit
That it is not he or she or them or it
That you belong to.

Although the masters make the rules
For the wise men and the fools
I got nothing, Ma, to live up to.

For them that must obey authority
That they do not respect in any degree
Who despise their jobs, their destinies
Speak jealously of them that are free
Cultivate their flowers to be
Nothing more than something
They invest in.

While some on principles baptized
To strict party platform ties
Social clubs in drag disguise
Outsiders they can freely criticize
Tell nothing except who to idolize
And then say God bless him.

While one who sings with his tongue on fire
Gargles in the rat race choir
Bent out of shape from society’s pliers
Cares not to come up any higher
But rather get you down in the hole
That he’s in.

But I mean no harm nor put fault
On anyone that lives in a vault
But it’s alright, Ma, if I can’t please him.

Old lady judges watch people in pairs
Limited in sex, they dare
To push fake morals, insult and stare
While money doesn’t talk, it swears
Obscenity, who really cares
Propaganda, all is phony.

While them that defend what they cannot see
With a killer’s pride, security
It blows the minds most bitterly
For them that think death’s honesty
Won’t fall upon them naturally
Life sometimes
Must get lonely.

My eyes collide head-on with stuffed graveyards
False gods, I scuff
At pettiness which plays so rough
Walk upside-down inside handcuffs
Kick my legs to crash it off
Say okay, I have had enough
What else can you show me?

And if my thought-dreams could be seen
They’d probably put my head in a guillotine
But it’s alright, Ma, it’s life, and life only.

Book Review: Principles of Political Economy by J. S. Mill

•May 18, 2012 • Leave a Comment

“The principle of private property has never yet had a fair trial in any country” John Stuart Mill writes in his Principles of Political Economy.

The version I read, edited by Johnathan Riley

What then is the principle of Private Property? According to Mill:

“The social arrangements of modern Europe commenced from a distribution of property which was the result, not of just partition, or acquisition by industry, but of conquest and violence: and notwithstanding what industry has been doing for many centuries to modify the work of force, the system still retains many and large traces of its origin. The laws of property have never yet conformed to the principles on which the justification of private property rests. They have made property of things which never ought to be property, and absolute property where only a qualified property ought to exist. They have not held the balance fairly between human beings, but have heaped impediments upon some, to give advantage to others; they have purposely fostered inequalities, and prevented all from starting fair in the race. …

Private property, in every defense made of it, is supposed to mean the guarantee to individuals of the fruits of their own labour and abstinence. The guarantee to them of the fruits of the labour and abstinence of others, transmitted to them without any merit or exertion of their own, is not of the essence of the institution, but a mere incidental consequence, which, when it reaches a certain height, does not promote, but conflicts with, the ends which render private property legitimate. To judge of the final destination of the institution of property, we must suppose everything rectified, which causes the institution to work in a manner opposed to that equitable principle, of proportion between remuneration and exertion, on which in every vindication of it that will bear the light, it is assumed to be grounded.”

He was writing during the mid nineteenth century and keen to respond to socialism’s challenge to private property, one he saw as arising from legitimate grievances. As Mill saw it, the institution itself was just, but had been corrupted to serve opposite ends to the intended ones. Mill goes on to describe how the produce of labour is apportioned:

“as we now see it, almost in an inverse ratio to the labour—the largest portions to those who have never worked at all, the next largest to those whose work is almost nominal, and so in a descending scale, the remuneration dwindling as the work grows harder and more disagreeable, until the most fatiguing and exhausting bodily labour cannot count with certainty on being able to earn even the necessaries of life”

Mill urges us to compare socialist proposals to limit (or communist ones to abolish wholesale) private property not with the institution as it stands today but “as it might be made”. For the rest of the book, he thus concerns himself with trying to modify the existing institutions to help them better serve their legitimate ends, but is open minded about prospects for socialistic experiments to develop a better kind of society than that which he outlines, writing in his autobiography that:

“The deep rooted selfishness which forms the general character of the existing state of society, is so deeply rooted, only because the whole course of existing institutions tends to foster it… These considerations did not make us [himself and his wife, Harriet Taylor] overlook the folly of premature attempts to dispense with the inducements of private interest in social affairs, while no substitute for them has been or can be provided: but we regarded all existing institutions and social arrangements as being (in a phrase I once heard from Austin) ‘merely provisional’ and we welcomed with the greatest pleasure and interest all socialistic experiments by select individuals (such as the cooperative societies) which, whether they succeeded or failed, could not but operate as a most useful education of those who took part in them, by cultivating their capacity of acting upon motive pointing directly to the general good, or making them aware of the defect which render them and others incapable of doing so.”

As you can see, this is not a man who would ever think to utter the notion that history had ended or that “there is no alternative” to today’s ‘neo-classical’ political economy. Perhaps he would be pleased by and interested in today’s Occupy movements and their experiments with forms of participatory democracy? Mill thus advocates private property as the means to remuneration for work done ‘merely provisionally’ and on the grounds that it will be more likely to prove ‘immediately successful’ in light of the paucity of aforementioned ‘socialistic experiments’ to educate us otherwise:

“The proportioning of remuneration to work done, is really just only in so far as the more or less of the work is a matter of choice:when it depends on natural differences of strength or capacity, this principle itself is an injustice: it is giving to those who have; assigning most to those already favoured by nature… [however] until education shall have been entirely regenerated, is far more likely to prove immediately successful, than an attempt at a higher ideal.”

A recent attempt to ‘regenerate education’ in the direction of a ‘higher ideal’, which I find promising, is the International Organisation for a Participatory Society. But back to Mill’s book! How is Private Property to be tamed to serve these legitimate (though provisional) ends? Mill proposes reforms to the law of inheritance and the ownership of land. First inheritance, about which Mill writes that:

“We may suppose, for instance … a limitation of the sum which any one person may acquire by gift or inheritance to the amount sufficient to constitute a moderate independence. Under this twofold influence society would exhibit these leading features: a well-paid and affluent body of labourers; no enormous fortunes, except what were earned and accumulated during a single lifetime; but a much larger body of persons than at present, not only exempt from the coarser toils, but with sufficient leisure, both physical and mental, from mechanical details, to cultivate freely the graces of life, and afford examples of them to the classes less favourably circumstanced for their growth.”

Mill recognizes that large fortunes have historically been built up through violence and expropriation of the land, but with a reform to the law of inheritance great inequality can be made to disappear within a generation or two, without the need for a wholesale reconstitution of society in a socialist or communistic mold, or the abandonment of the just principle of private property. The goal is a clearly more equitable society, in which education towards high culture can be cultivated freely by all. Like Adam Smith before him, Mill desires greater equality of conditions, not merely of opportunity, and greater education of the labouring classes.

Now land – why does Mill make a special exception out of property in land? For the following reason:

“When the ‘sacredness of property’ is talked of, it should always be remembered that any such sacredness does not belong in the same degree to landed property. No man made the land. It is the original inheritance of the entire species …

To me it seems almost an axiom that property in land should be interpreted strictly, and that the balance in all cases of doubt should incline against the proprietor. The reverse is the case with property in moveables, and in all things the product of labour: over these, the owner’s power both of use and of exclusion should be absolute, except where positive evil to others would result from it: but in the case of land, no exclusive right should be permitted in any individual, which cannot be shown to be productive of positive good.

To be allowed any exclusive right at all, over a portion of the common inheritance, while there are others who have no portion, is already a privilege. No quantity of moveable goods which a person can acquire by his labour, prevents others from acquiring the like by the same means; but from the very nature of the case, whoever owns land, keeps others out of the enjoyment of it. The privilege, or monopoly, is only defensible as a necessary evil; it becomes an injustice when carried to any point to which the compensating good does not follow it.”

Mill goes on to propose further measures to modify the institution of private property such that it might lift the poor out of poverty and check disproportionate riches. He proposes that taxes be levied only upon luxuries and not upon necessities:

“People should be taxed, not in proportion to what they have, but to what they can afford to spend [on luxuries]. It is no objection to this principle that we cannot apply it consistently to all cases… the difficulty of doing perfect justice is no reason against doing as much as we can.”

In line with the exceptional status of landed property he subsequently proposes a tax on land ownership:

“The ordinary progress of a society which increases in wealth, is at all times tending to augment the incomes of landlords; to give them both a greater amount and a greater portion of the wealth of the community, independently of any trouble or outlay incurred by themselves… The ascendancy of landholders in the legislature has prevented any tax from being imposed, as it so justly might, upon the very large portion of this increase which was unearned, and, as it were, accidental…

Land tax… ought not to regarded as a tax, but as a rent charge in favour of the public; a portion of the rent, reserved from the beginning by the state, which has never belonged to or formed part of the income of the landlords, and should not therefore be counted to them as part of their taxation.”

Substitute the ‘landlords’ above with today’s ‘bankers’ and you have quite a good description of our contemporary power struggle, the capture of parliament by finance and an argument in favour of a financial transaction tax! The analogy is so precise because financiers rent our vital means of exchange (money) to us in the same way that Mill’s landlords rented the vital means of subsistence (land). Money, like land, is a common inheritance that should belong to all the people, since we the people (and not the banks) give it value. We should thus create our own money debt-free, for common causes, rather than allowing banks to create it as interest bearing debt for private profit. A “rent charge in favour of the public” on money is a pretty good description of demurrage, incidentally.

Silvio Gesell in 1895. In his book “The Natural Economic Order” he argued that a use fee on money (demurrage) could prevent the accumulation of capital into fewer and fewer hands: a system he termed “free money”. Like J. S. Mill, he also argued for land reforms, proposing what he called “free land”. That his book argues equally for both reforms further emphasises the similarity between rent on land and interest on money.

As you can see, all Mills’ reforms to private property have in mind as their goal a society where greater equality of conditions and mutually beneficial cooperation between largely self-sufficient individuals becomes the norm. Mill lays this vision for the future society out towards the end of the book, stating that:

“Finally, I must repeat my conviction, that the industrial economy which divides society absolutely into two portions, the payers of wages and the receivers of them, the first counted by thousands and the last by millions, is neither fit for, nor capable of, indefinite duration: and the possibility of changing this system for one of combination without dependence, and unity of interest instead of organized hostility, depends altogether upon the future developments of the Partnership principle.”

By “Partnership principle”, Mill has in mind something like a system of cooperatives to serve the public good and quotes Henry Charles Carey’s description of the early American colonies to afford a vivid picture of such a society:

The best existing [1848] laws of partnership appear to be those of the New England States. According to Mr. Carey, “nowhere is association so little trammeled by regulations as in New England; the consequence of which is, that it is carried to a greater extent there, and particularly in Massachusetts and Rhode Island, than in any other part of the world. In these states, the soil is covered with compagnies anonymes—chartered companies—for almost every conceivable purpose. Every town is a corporation for the management of its roads, bridges, and schools: which are, therefore, under the direct control of those who pay for them, and are consequently well managed. Academies and churches, lyceums and libraries, saving fund societies, and trust companies, exist in numbers proportioned to the wants of the people, and all are corporations. Every district has its local bank, of a size to suit its wants, the stock of which is owned by the small capitalists of the neighbourhood, and managed by themselves”

It puts one in mind of the concluding passages to Wilhelm von Humboldt’s essay On the Limits of State Action, which was formative reading for Mill himself:

“The whole tenor of the ideas and arguments unfolded in this essay might fairly be reduced to this, that while they would break all fetters in human society, they would attempt to find as many new social bonds as possible. The isolated man is no more able to develop than the one who is fettered.”

Not that 1848 Massachusetts was perfect, you understand; vibrant workers’ movements of the time were readily condemning the “new spirit of the age: gain wealth forgetting all but self” as they put it. The New England  ‘utopias’ described above later fell afoul of legal changes to the structure of corporations. They went from temporary associations chartered to serve the public good (and if they couldn’t prove they were doing this, their charter could be revoked) to today’s Frankenstein-esque patchwork of legal protections affording corporations the “rights of persons” and legally obliging them to maximise private profits whatever the social costs, rather than serve local communities. Very recently, they were essentially granted permission to buy congress.

It’s a real shame that classical liberal ideas like Mills’ were thus “wrecked on the realities of capitalist economy” as anarchist historian Rudolf Rocker put it:

“Democracy with its motto of equality of all citizens before the law, and Liberalism with its right of man over his own person, both were wrecked on the realities of capitalist economy. As long as millions of human beings in every country have to sell their labour to a small minority of owners, and sink into the most wretched misery if they can find no buyers, the so-called equality before the law remains merely a pious fraud, since the laws are made by those who find themselves in possession of the social wealth. But in the same way there can be no talk of a right over one’s own person, for that right ends when one is compelled to submit to the economic dictation of another if one does not want to starve.”

I hope it’s clear from much of this post that J. S. Mill, a classical economist, would be horrified by much of what goes by the name ‘neo-classical economics’ today, which is far from a continuation of the classical economic vision that he espoused. Rather, it borrows certain notions from this vision (private property, contract law, the market) but ultimately cuts these adrift from their ethical foundations and stands in radical violation of the ends Mill laboured to make these notions serve – the foundation of a more equitable and just society, in which all members would find themselves better able to enquire, to create and to continually develop and refine their capacities as free human beings.

Economics as if the laws of thermodynamics mattered

•May 7, 2012 • 2 Comments

Have you ever considered the question: What is life? If we aim for a new economic system which will preserve and enhance life, rather than the current one, which more often than not seems to destroy and degrade it, perhaps we should consider what life is and how it is made possible? I recall learning about “living things” in high-school biology classes, but always found the definitions of these “living things” to be somewhat vague. Let me try a physicist’s definition then, which might feel unfamiliar at first. A living thing is a kind of low-entropy-maintenance machine: a configuration of differentiated parts that succeeds in performing complex, inter-dependent functions for a prolonged period of time.

I used the word “entropy” in the previous sentence, so I should try to explain what it is. All living and non-living things (and hence all human economies, whether or not economists pay attention to the fact!) obey the laws of thermodynamics. The second law, in particular, states the concept of entropy and the idea that the entropy of a closed system must either remain constant or increase, but never fall. Entropy is a measure of how “special” a particular arrangement of parts is – the lower the entropy, the more “special”. Life is “special”.

To illustrate this concept of “specialness”, imagine first a set of red and blue gas molecules, fifty of each say, bouncing around in a room. Which is more likely: that all 50 red molecules will be in one half of the room and all 50 blue in the other half, or that some roughly even mixture of red and blues will be present in both halves? The second is more likely, less “special” therefore, but why? The answer is that there are many ways of arranging the molecules to have “some roughly even mixture” of red and blue – a great many pairs of molecules can be swapped between the halves without making a difference. However, with the perfect red and blue split, if any molecule is swapped with a partner in the other half of the room, then each half gets “contaminated” with one molecule of the “wrong” color – such a swap does make a difference. Hence what we see tends to be an equal mixture of each color, just because there are vastly many more ways of seeing an equal mixture.

Now we are able to state the notion of entropy precisely – the entropy of such a set of molecules is a number that is large when there are many ways of swapping pairs of molecules and getting the same overall state and small when there are few ways of swapping them and getting the same overall state. Explicitly, an entropy S is given by Boltzmann’s entropy law:

S = k log W

Here k = 1.38 x 10−23 joule/kelvin is Boltzmann’s constant, W is the number of ways of swapping the components of a state (say red and blue molecules) without making an overall difference to that state and log W means “the natural logarithm of W” – the power you have to raise Euler’s number e = 2.718… to in order to get W (for example if W is e then log W is 1, because e to the power 1 is e – and so on).

Boltzmann’s tomb, with his famous entropy law above the bust

That little equation of Boltzmann’s explains a huge number of things. For example, why do hot things tend to get colder and cold things hotter? Easy – bring a hot thing and a cold thing into contact and it’s like the red and blue molecules all over again – there are many, many more ways for hot molecules and cold ones to all get mixed together equally than for them to stay separated into a hot part and a cold part. So the temperature equalizes.

Another example: why do balls bounce lower and lower, but never start bouncing higher and higher? Easy – after they’re done falling, ball molecules are moving more on average that floor ones. During each bounce, there are more ways of sharing out this motion randomly amongst the ball and floor than there are of keeping all the faster molecules in the ball and all the slower molecules in the floor. So this sharing out is what happens – the ball eventually stops bouncing. The opposite case – a ball spontaneously bouncing higher and higher – never happens in practice because it is so unlikely. That’s how you tell a film is being played backwards – everything that happens is so unlikely it is never seen to happen in practice. This explains the second law: the total entropy always increases and never decreases because of how incredibly unlikely a decrease is.

What about life and entropy? A living thing has a very low entropy compared to its surroundings, because there are not many ways of swapping its constituent parts and leaving it in an invariant state. For example, swapping molecules between your heart and brain wouldn’t leave you in “an invariant state” – it would kill you! In fact, coming into thermodynamic equilibrium with your surroundings is also known as “being dead”!

Next question: how is life able to maintain this low entropy state, in apparent defiance of the second law? Well, life is part of the Earth-Sun system. We can regard this as “a closed system” to a very good approximation – a vast ocean of space separates it from other systems. But the Earth alone (plus moon, of course!) is not “a closed system”: the Sun – a nuclear fusion reactor – provides the Earth with a constant input of low entropy “organised” energy in the form of high intensity photons (particles of light). Plants can use this energy to make food which animals such as ourselves can eat, keeping the low-entropy-maintenance machinery of life running.

The Earth-Sun (plus moon) system, of which the human economy is a sub-system

Save for a few ocean vent ecosystems, this low entropy input from the Sun makes all life on Earth possible – and hence all human economies (again, whether or not economists pay attention to the fact!). Even when humans are reckless enough to burn reserves of oil and coal laid down over many millions of years in a geological eye-blink (all the while giving minimal consideration to the question “what next?”) they are merely liberating the low entropy energy captured from ancient sunlight and buried deep underground.

What does the second law of thermodynamics, which I have just endeavored to explain, mean for economics and for our economies today then? We now understand why a constant stream of low entropy energy from the sun is required to maintain life’s organized state – without this “entropy gradient” the machinery of life would soon wind down, like the bounding balls or mixing molecules did. And now that we understand this, we realise that to prolong life on Earth we should try to use this vital low-entropy input as efficiently as possible, try to recycle it through all sectors of the our human economy (as the picture above hints at) – certainly not waste it wantonly and assume we will be able to increase our use of it more and more and more, forever.

Unfortunately, mainstream economists don’t seem to have heard of the second law of thermodynamics. Perhaps this isn’t really their fault, since it’s not in their textbooks. But it should be – it makes all life on Earth (hence all human economies) possible. If our economists, in their ignorance, make economic models that must defy the laws of thermodynamics to work indefinitely; worse still pay no attention to the question of how quickly their erroneous models must stop working (In ten years? One hundred? Or perhaps tomorrow?) then sooner or later it will all end in tears for the human race and much of life on Earth. I worry that the tears have already begun.

_____________________________________

My title was in homage to E. F. Schumacher’s book “Small is Beautiful: Economics as if People Mattered”. People do matter of course and our social systems should aim to make their lives better. What is economics for then? Prof. Herman Daly has introduced the idea of a means-ends spectrum:

Given the above spectrum, a possible definition of economics is the following:

Economics is how we manage our ultimate means – what the laws of thermodynamics state we can do – in the service of our ultimate ends – what a system of ethics decide we ought to do.

The above definition will look alien to many economists and to many members of the public. Today, we have an understandable aversion to the word “economics”. It has become associated with ruthless, competitive behaviors and forms of modern-day serfdom and technocratic rule: in short profoundly anti-human tendencies. But the word “economics” derives from the Greek word οἰκονομία meaning “household management”. It is how we decide to manage our global “house-hold”: the Earth’s finite resources and its vital and increasingly fragile ecosystems. Perhaps today’s “economic” orthodoxy should be called “household mis-management” instead!

Schumacher’s aim was to restore human values to the discipline of economics; to make its strivings for the ultimate ends of Daly’s spectrum explicit. This used to be the goal of economics – classical economists like Adam Smith and John Stuart Mill saw themselves as moral philosophers rather than narrow “economists”. They rejected the goal of economics as mere accumulation of material goods, to continue forever; nor was the idea of an end to growth and the ensuing steady state anathema to them. As Mill wrote more that a century and-a-half ago in his Principles of Political Economy:

“In contemplating any progressive movement, not in its nature unlimited, the mind is not satisfied with merely tracing the laws of the movement; it cannot but ask the further question, to what goal? Towards what ultimate point is society tending by its industrial progress? When the progress ceases, in what condition are we to expect that it will leave mankind? It must always have been seen, more or less distinctly, by political economists, that the increase of wealth is not boundless: that at the end of what they term the progressive state lies the stationary state, that all progress in wealth is but a postponement of this, and that each step in advance is an approach to it. …

It is scarcely necessary to remark that a stationary condition of capital and population implies no stationary state of human improvement. There would be as much scope as ever for all kinds of mental culture, and moral and social progress; as much room for improving the art of living and much more likelihood of its being improved, when minds ceased to be engrossed by the art of getting on. Even the industrial arts might be as earnestly and as successfully cultivated, with this sole difference, that instead of serving no purpose but the increase of wealth, industrial improvement would produce their legitimate effect, that of abridging labour.”

One wonders what the classical economists would make of “neo-classical” economics!

So much for ultimate ends and the need for economics to rehabilitate them. As I have argued in the remainder of this essay, any economics worth its name (and thus intending to preserve life) must also make our ultimate means – the laws of thermodynamics – explicit and build its models upon their foundations. Then we will understand how to make the wisest use of what we have to provide what we truly need as people – not what today’s economics tells us we want and what nature tells us we cannot have.

Life only exists in accordance with the second law of thermodynamics (whether or not economists pay attention to the fact!) and as John Ruskin put it so succinctly “There is no wealth but life”. Any economics cut adrift from these foundations of life on Earth, free-floating and drunk on the hubris of man’s final victory over nature, is not an ideology that can serve human beings.


“Now, why was Laputa destroyed?
I know perfectly well.
There’s a song in the valley of Gondoa:
“We need roots in the Earth;
Let’s live with the wind;
With seeds, make fat the winter;
With the birds, let’s sing of spring.”
No matter how many weapons you may have,
or how many poor robots you use,
you can’t live separated from the ground.”
— Sheeta in Hayao Miyazaki’s film Laputa: Castle in the Sky.

Why Student debt? What can we do about it?

•May 3, 2012 • Leave a Comment

A lot of students like me (and a lot of people in general) are opposed to tuition fees and the coalition government’s decision to dramatically increase them next year. This is not merely for selfish reasons. In my view, tuition fees are bad news chiefly because they turn university from an education into an investment.

We badly needs individuals who can think in new ways to solve today’s diverse problems – many of which are being caused by “business as usual”. Universities are one place where such individuals can be nurtured; but not if courses devolve into glorified job training centers at the behest of students themselves, anxious to graduate into the kind of structured careers that can repay their debts. There is such a thing as society, and tuition fees are bad for it.

When government spending falls, private ‘lending’ has to take up the slack.

But let’s put ourselves in the position of the government for a minute. The financial crisis lead to bank bailouts and a recession that reduced taxation revenue. The labour government had to step in to cover the shortfall, significantly increasing the UK national debt. Along with a lot of the electorate, the coalition government are worried about the prospect of the national debt growing further – we are currently paying about £40bn annual interest on it. If not from more government ‘borrowing’, the money to pay for higher education has to come from somewhere else. It can’t come from other vital parts of the welfare state – these are already under-funded. More student debt might look like the “least worst option” for the coalition and much of the electorate.

Don’t get me wrong. I’m not writing an apology for the government here. They should be far more worried about UK private debt (over 400% of GDP, one of the highest figures in the world!) than UK national debt (only about 60% of GDP, one of the lowest figures in the world). And they could be funding higher education through taxation. Public pressure is mounting to close down tax havens and levy a financial transaction tax and this is good.

But there is a parallel approach we can take, one that most students don’t even realise is there and one that doesn’t rely on the “generosity” of the super-rich or on international collaborations to work. Also, I think it will end up being more effective anyway, by using pre-distribution (James Robertson’s term) rather than redistribution via bureaucratic taxation measures. So what is the approach? To describe it, we must begin with a question. Fellow students, have you ever asked yourself Where does money come from?

Most of us think that the government / the Bank of England issues the money supply and it’s true that notes and coins are minted there. But what about the numbers in your bank account? Are they money? Most of us would say, yes of course, that’s my money in the bank. But who created these numbers? The answer is that private banks did, when they issued something they misleadingly call a ‘loan’. I’ve written about how it works here and how banks do not lend money, they create it. In fact banks create and allocate about 97% of our nations money supply this way – here is some proof, straight from the horse’s mouth.

So banks create and crucially allocate most money – the word “allocate” means they decide who the new money is given to first, according to whether or not they think it will make them a profit. This gives them a lot of control over the economy and where money is scarce and abundant within it. If that concerns you, good! It’s one reason why there seems to be less and less money available to fund not-for-profit state projects like the NHS and higher education.

Let me explain. In the 1960s, when univerities were almost entirely publicly funded (see top graph), cash and coins made up about 20% of the nation’s money supply. Since then, the percentage has gradually fallen and today is less than 3% – with the other 97% being digital bank deposits. So what? Well, when the government creates say a £10 note, it charges banks the face-value of £10 for this. The note only cost a fraction of this face-value to mint, so the government gets to pocket the rest, a source of income called seigniorage.

The government also gets to decide where this seignniorage income is allocated – it can stimulate the not-for-profit sector (health and education) as opposed to bank ‘loans’, which go to whatever is most profitable to banks. The fact that this debt-free part of the money supply has fallen from 20% in the 1960s to 3% today is one reason why the state is chronically short of money to fund health and education, and has to rely increasingly on the private sector.

In the 1960s, the government would receive seigniorage on about 20% of the money created above. Today banks create this 20% instead and receive interest on it – no wonder we’re so short of money for education! (a slide from Ben Dyson’s talk: http://www.youtube.com/watch?v=9K5dao1lUQ0&list=PL32339BDA75B6BFC8&feature=mh_lolz)

The important point with seigniorage is that it proves that governments (or alternatively, students!) don’t need to go into ever more debt to fund higher education. Instead we could create new digital money free of debt, and allocate this to different sectors of the economy (universities in this case). As famous inventor and monetary reform enthusiast Thomas Edison once put it:

If our nation can issue a dollar bond, it can issue a dollar bill. Both are promises to pay; but one promise fattens the usurer, and the other helps the people.”

Here’s how it could work:

Allocating government money in a locally responsive way (a slide from Ben Dyson’s talk: http://www.youtube.com/watch?v=9K5dao1lUQ0&list=PL32339BDA75B6BFC8&feature=mh_lolz)

Money could also be extracted from the economy above via taxation and destroyed. That might sound strange to you: we have been conditioned to think of taxation as the source of income for the government. But a nation creating its own money has no need for taxes as a source of income. Today’s government only needs to take so much tax because they have handed the power to create money over to private banks, without the people’s consent or awareness. So if you want to pay less tax, take this power back!

Let’s now consider two common objections to the above ideas: conflict-of-interest and inflation. Firstly, if you’re worried about the government both creating and allocating the money supply then you’re in good company and probably these functions should be separated. An independent and publicly accountable body can decide how much money the nation needs. Then the government, based on its election manifesto, will decide how to allocate this money (and banks will merely lend out the deposits of savers, in the way that most of us mistakenly think they currently do). Consider this too: if you don’t want the government both creating and allocating the money supply, surely you don’t want a cartel of private, profit making firms called banks doing so either?

The same goes for inflation. If you’re worried the government will create too much money this is another argument for separating who allocates the money and who decides the quantity. Provided the government allocates new money to productive parts of the economy, goods and services can grow with the money supply and there needn’t be inflation. Or excess money could be extracted via taxation, as mentioned earlier. Consider this too: if you don’t want the government creating as much money as they think is good for their short term re-electability (and to hell with the economy), why on Earth would you want private banks creating as much money as they think is good for their short term profitability (and to hell with the economy)?

Private banks can cause inflation and financial crises, by creating new money for speculative bubbles. “Banks don’t have to cause crises…  But they almost always do.” – Prof. Steve Keen

Hopefully you’re still with me! We’ve discussed that banks create and allocate digital bank deposits, that these increasingly constitutes the entire national money supply and that this is an important reason the government can’t find any pennies down the back of the sofa to spare for the health and education of its citizens.

But today’s system of money creation by private banks is not a law of nature! If we build enough public pressure this system can be changed to one where money is allocated for the social good by an elected government responsive to the public will; not by an “industry” that only considers its own profitability and will thus tend to gorge itself on speculative bubbles whilst starving health and education of vital funding. They caused the current crisis this way, by pumping new money into property, inflating house prices to the point where students in particular cannot afford them. So, if you ever want to move out of your parents house, perhaps we should stop private banks creating the money supply!

How can students help? You can join Positive Money, a London based monetary reform NGO, and support their campaign to take the power to create money from banks and put it where it belongs, in public hands. Money is social – we all agree to accept it and as we found out during the financial crisis, we ultimately back it. Rather than allowing private banks to create the national money supply as debt and charge us interest for its use, we the people should enjoy a “free-lunch” of seigniorage on money creation – since it is our money.

You can try to educate your MP. Most politicians are completely ignorant of how money is created and have never seriously asked questions like: Where does money come from? Why are we all in so much debt? If we are all in debt, who are we in debt to? How do we get of debt? How can getting into more debt be the answer to that question?! The current system of money creation, as interest bearing debt by private banks, presents our politicians with two choices. Either:

1 – Have more money, but also more debt (deficits).

2 – Have less debt, but also less money (recession).

We would like to have less debt and more money. But with “our” current monetary system, that option is practically impossible! It will only be possible when we decide to start creating money free of debt:

Creating debt-free money (green line) to get out of debt (red line)  (a slide from Ben Dyson’s talk: http://www.youtube.com/watch?v=9K5dao1lUQ0&list=PL32339BDA75B6BFC8&feature=mh_lolz)

Perhaps David Cameron ought to understand all this? After all, he has a 1st class honours degree in PPE from Oxford University. Unfortunately, mainstream economics courses pay little attention to how money is created and allocated to the economy. This blind spot of mainstream economics for money and debt is a big part of the reason why we are in this mess today. As economist Steve Keen (winner of the Revere Award, for “the economist who first and most cogently warned the world of the coming Global Financial Collapse”) puts it:

“The whole idea that you can model capitalism without including money and debt in your models – and that’s 99.9% of neo-classical models include neither money nor debt – is a bit like trying to model how a bird flies by assuming that it doesn’t have wings. It’s just ridiculous that it’s left out.”

Another vital thing you can do is tell your friends about who creates and allocates money and what this means for power, democracy and the future of the welfare state. Spread the news via social networking! If Kony2012 showed anything, it was that social networking gives the power to rapidly bring an issue to mass awareness. Many made the criticism that the Kony2012 campaign lacked substance or adequate understanding of the underlying issues, but I think Positive Money has spent enough time building substance and understanding behind its campaign demands. It now needs mass awareness and students can definitely help here! If as many people watch the brilliant new documentary 97% Owned as watched Kony2012, we might be onto a winner!

The campaign to give the power to create money to the public, where it belongs, will only succeed with a significant increase in public understanding and support. Politicians can’t do it on their own. Only a handful of them understand the problem anyway and those that do will have to challenge powerful vested interests. They won’t be able (or willing?) to do this without public backing. In my view, who gets to create and allocate the money supply is the critical issue for power and democracy in our times. So students, start making some noise – let’s democratise money!