“The country needs and, unless I mistake its temper, the country demands, bold, persistent experimentation. It is common sense to take a method and try it; if it fails, admit it frankly and try another. But above all, try something.”
Franklin D Roosevelt, 22 May 1932
It’s five years since the collapse of Lehman Brothers, on 15 September 2008. Since then, the legitimacy of capitalism as a way of organising society has been undermined; its promises of prosperity, social mobility and democracy have lost credibility. But there has been no radical change. The system has repeatedly come under fire, but it has survived. Part of the price for capitalism’s failures has been the end of some social advances previously wrested from it. “Free-market fundamentalists have been wrong about everything – yet they now dominate the political scene more thoroughly than ever,” wrote the US economist Paul Krugman (1). But the system is still holding up, even if it is on autopilot, and that is not to the credit of its opponents. What has happened? What can be done about it?
The anti-capitalist left rejects the idea of economic inevitability because it realises the economy is shaped by political forces. It should have deduced that the financial disaster of 2007-08 would not clear an easy path to its objectives. The precedent of the 1930s suggested this: depending on national circumstances, social alliances and political strategies, the same economic crisis produced such diverse outcomes as Hitler’s rise to power in Germany, the US New Deal, the Front Populaire in France, and nothing much in Britain. In the 1980s, Ronald Reagan entered the White House and François Mitterrand the Elysée within months of each other; and in the 2010s, Nicolas Sarkozy failed and Barack Obama succeeded in being re-elected around the same time. This suggests that luck, talent and political strategy are not supplementary variables that can be trumped by a country’s social make-up or the state of its economy.
The neoliberals’ recent victory owes much to the arrival of rescue from emerging countries. When the world’s axis shifted after the financial crisis, it also marked the arrival of producers and consumers from China, India and Brazil in the capitalist game, who served as reservists just as the system appeared to be dying. In the past 10 years, the major emerging nations’ share of global output has risen from 38% to 50%. The new workshops of the world have also become some of its most important markets: since 2009 Germany has exported more to China than to the US.
The existence of national middle classes and the implementation of national solutions now encounter the obstacle of the world’s ruling classes acting in concert. Unless you still believe in 1960s anti-imperialism, it would be hard to rely on the political elites of China, Russia and India for progressive solutions to current problems, since they are just as self-serving and venal as their western counterparts.
Capitalism’s resurgence has not been universal, however. The sociologist Immanuel Wallerstein wrote: “Latin America has been the success story of the world left in the first decade of the 21st century … left or left-of-centre parties have won a remarkable series of elections during the decade. And collectively, Latin American governments have established for the first time a significant degree of distance from the United States. Latin America has become a relatively autonomous geopolitical force” (2).
Paving the way to the markets
All the same, regional integration, which bold thinkers believe to be a foretaste of “21st-century socialism”, is seen by others as just another step towards the creation of one of the world’s biggest markets (3). The game still remains more open in the US’s former backyard than within the befuddled European Union. Latin America has experienced six attempted coups in less than 10 years, in Venezuela, Haiti, Bolivia, Honduras, Ecuador and Paraguay, perhaps because the political changes driven by the left have genuinely challenged the social order and transformed daily lives.
Those changes have also demonstrated that an alternative does exist, that all is not lost, but that structural, political and economic reforms are necessary to create the conditions for success. Such reforms would re-engage the working classes, whose lack of options has consigned them to apathy, mysticism or mere survival, and they may also offer a way of combating the far right.
Which structural transformations are the right ones? The neoliberals have so successfully implanted the idea that there is no alternative that they have sometimes convinced opponents to lose sight of their own proposals. Let’s review some of these, remembering that the more ambitious they seem, the more important it is to get used to them as soon as possible, and that their possible severity has to be compared to the brutality of the social order they are intended to replace.
How can the existing order be contained and then rolled back? An extension of non-profit and no-cost sectors could rapidly respond to this challenge. The economist André Orléan has pointed out that in the 16th century “land was not a tradable commodity, but a common good, non-negotiable, which explains the strength of resistance to enclosure laws that appropriated common pasture land … The same thing applies today with the commercialisation of the human being. A limb or some blood do not seem to us to be commercial property, but how will it be in the future?” (4).
To check this trend, it might be worth defining basic needs — housing, food, culture, communication, transport — democratically, funding them collectively and providing them for all. Sociologist Alain Accordo recommends “expanding public services rapidly and continuously to the point where they cover all fundamental needs for ‘free’ in synch with their historic evolution, which is only economically conceivable if all resources and wealth used for social work and produced through collective effort are returned to common ownership” (5). Instead of translating demands into cash by raising salaries significantly, the offer would be socialised and new benefits in kind guaranteed to all.
How are we to avoid replacing the tyranny of the market with state absolutism? Sociologist Bernard Friot suggests extrapolating from the model of popular achievements that we already see working: social security, for example, which governments of all complexions now rail against. This “already-existing liberator”, thanks to the contributory principle, redistributes a significant proportion of wealth, finances pensions and sickness and unemployment benefits. Social security contributions are different from taxes collected and spent by the state, and do not lead to capital accumulation; at the outset they were mainly managed by employees themselves. Why not go further (6)?
Such a deliberately aggressive programme would bring advantages: politically, it could not be co-opted by the neoliberals or far right, although it could unite a very broad social coalition; environmentally, it would avoid a Keynesian relaunch, which would perpetuate the existing model and result in “a sum of money being injected into bank accounts to be redirected to market consumption by the advertising police” (7). It would also prioritise needs not met through the production of goods in low-salary countries and their containerised transportation across the globe. And there would be a democratic upside too: defining collective priorities (what will be free and what will not) would no longer be the preserve of politicians, shareholders and intellectuals from the same social class.
An approach of this sort is urgently required. In the present state of global social power relations, the accelerating automation of industrial labour and services risks creating a new form of profit from capital (through a reduction in labour costs) and mass unemployment with fewer benefits for the unemployed. Amazon and the big search engines daily demonstrate that hundreds of millions of customers are happy to entrust robots with their choices of leisure activities, holidays, reading matter and music. Booksellers, newspapers and travel agents pay the price. Dominic Barton, managing director of McKinsey, has pointed out that “the 10 biggest companies on the Internet, including Google, Facebook or Amazon, have created barely 200,000 jobs”, but they have earned “hundreds of billions of dollars in market capitalisation” (8).
To solve unemployment, the ruling class risks producing the scenario that philosopher André Gorz warned about — a continual encroachment in areas not yet governed by the profit motive: “Where will the transformation of all activities into profit-driven activities — which exist because of their profit, with the maximum return as their goal — cease? How much longer can the very fragile barriers hold out against the professionalisation of motherhood and fatherhood, the commercial fertilisation of embryos, the sale of children, the trade in organs?” (9).
The question of debt requires a disclosure of its political and social background. There are few things more common in history than a state being held to ransom by creditors, but slipping free of them to avoid inflicting never-ending austerity on its people. The Soviet Republic refused to honour debts incurred by its tsarist predecessor. Raymond Poincaré saved the franc through an 80% devaluation, slashing France’s debt burden, which could then be paid off in depreciated currency. Post-war, the US and UK had no austerity plan; they let inflation rise and almost halved their public debts (10).
Since then, through the domination of monetarism, bankruptcy has become anathema, inflation (even when close to zero) is to be fought, and devaluation is out of the question. Creditors have been freed from the risk of default, yet they continue to claim their “credit premium”. “In historic situations of over-indebtedness,” the economist Frédéric Lordon wrote, “the only choice is structural adjustment for the benefit of creditors or their ruin” (11). Partial or total debt cancellation would dispossess annuitants and financiers, irrespective of their nationality, after having conceded everything to them.
The noose around society’s neck would be loosened more quickly if it were possible to recover the taxes eroded by 30 years of neoliberalism — not only through challenges to the progressive nature of taxation and increases in fraud, but through the creation of a structure in which half of international trade in goods and services goes through tax havens. The beneficiaries include not only Russian oligarchs or a former French economics minister, but businesses with state protection (and sway in the media) such as Total, Apple, Google, Citigroup and BNP Paribas.
In the EU, the sums lost to society as a whole as a result of legal activities such as tax optimisation, “transfer pricing” (which enables the localisation of subsidiaries’ profits in low-tax jurisdictions), and the relocation of company headquarters, might be nearly €1,000bn ($1,300bn). In some countries lost revenue is greater than the national debt. In France, as several economists have pointed out, “even if only half of the sum concerned were recovered, the budget would be balanced without sacrificing pensions, public service jobs, or environmental investment in the future” (12). The “recovery” of this money, which has been announced and postponed repeatedly (and is worth far more than “benefit fraud”), would be popular and egalitarian, since ordinary taxpayers cannot reduce their taxable income by paying fictional royalties to subsidiaries in the Cayman Islands.
Many options already put forward in Le Monde diplomatique could be added to the priority list: a freeze on high salaries, the closure of the stock market, the nationalisation of banks, a challenge to free trade, an exit from the euro, capital controls. So why focus on the no-cost sector, the overhaul of public debt and tax recovery? Because to work out a strategy, conceive of its social base and the conditions in which it could be realised politically, it is better to choose a small number of priorities than put together a catalogue of demands which would bring an angry crowd on to the streets, who would scatter at the first storm.
Leaving the euro is undoubtedly worthy of inclusion on the list (See Frédéric Lordon, No currency without democracy). No one can be unaware now that the single currency and the institutional and legal paraphernalia that supports it (independent central bank, stability pact), rule out any policy meant to tackle growing inequalities and the erosion of sovereignty by a ruling class subordinate to the demands of finance. Challenging the single currency, however necessary, brings no guarantee of success on these fronts, as economic and social policies in the UK and Switzerland show. Leaving the euro, rather like protectionism, would depend on a political coalition whose members would include the best and the worst, and currently the worst would predominate. A universal salary, a big cut in public debt and the recovery of taxes would make it possible to achieve as great, or greater, results, while keeping undesirable allies at a distance.
It would be pointless to claim that such a “programme” would win majority support in any of the world’s parliaments. Its radical departures from the status quo infringe many rules considered inviolable. The neoliberals did not lack boldness when it came to saving their system, though. They did not balk at the prospect of a significant rise in debt, which they had previously warned would send interest rates soaring; nor at strong fiscal stimulus, which they had claimed would unleash inflation; nor at tax rises, the nationalisation of failed banks, an obligatory levy on savings or the re-establishment of capital controls in Cyprus. What goes for them should go for us, but we suffer from too much modesty… Neither fantasies of a return to the past nor hopes of a reduction in the scale of disasters will restore confidence and fight the sense of resignation at having no choice but the alternation between a right and a left who both implement more or less the same programme.
Boldness is required
So yes, boldness is required. Writing about the environment in 1974, André Gorz called for “a multi-level political attack to wrest [from capitalism] control of operations and to counter with a completely different plan for society and civilisation.” He explained it was important to avoid environmental reform bought at the expense of social conditions: “The environmental struggle may create difficulties for capitalism and force it to change; but when, having long resisted through force and cunning, it finally yields because the environmental impasse has become unavoidable, it will incorporate this constraint as it has incorporated past constraints … people’s buying power will be squeezed and everything will happen as though the cost of fighting pollution were charged on the resources which people had to buy products” (13). Since then, the resilience of the system has been shown in the creation of a market to fight pollution. In Shenzhen, low-polluting businesses sell others the right to exceed their statutory quota. Meanwhile, polluted air is killing more than a million Chinese a year.
Ideas to set the world to rights are not in short supply, but how to avoid them becoming more unaccomplished possibilities? Recently the social order has been subject to many challenges, from the Arab revolts to the movements of the “indignados”. Since the huge demonstrations against the war in Iraq in 2003, tens of millions of demonstrators have taken to the streets, from Spain to Israel and from the US to Turkey and Brazil. They have attracted attention, but gained little. Their strategic failure may help us to plan the future.
Large protest coalitions need to consolidate their numbers while avoiding divisive issues. Everyone knows the subjects likely to split alliances, which often have no more solid a base than well-intentioned but vague aims, such as better wealth distribution, a less damaged form of democracy, and an end to discrimination and authoritarianism. With the social base of support for neoliberal policies shrinking, and the middle classes now paying the price with insecurity, free trade and expensive higher education, it is becoming easier to put together a majority coalition.
But once assembled, what could it do? Demands that are too general or numerous are difficult to translate into politics and make part of any long-term plan. “At a meeting of all the leaders of the social movements,” Arthur Enrique, former president of Unified Workers’ Central, Brazil’s main union, told us: “I collected together everyone’s papers. The union organisations’ agenda had 230 points; the peasants had 77 … When I added them all up, we had over 900 items. And I asked: what can we actually do with all this?” In Egypt, the military have supplied the answer. The majority of Egyptians opposed President Morsi for good reasons, but because they lacked any common objective beyond his removal, they ceded power to the army, at the risk of becoming its hostage now, and in the future its victim. Not having a map often means depending on those who do.
Spontaneity and improvisation can favour a revolutionary moment, but don’t guarantee a revolution. Social networks have encouraged the horizontal organisation of demonstrations, and the absence of formal organisation has enabled them to avoid police surveillance, for a time. But power is still achieved through pyramid structures, money, activists, electoral machinery and a strategy: which social block and which alliance for which project? Accardo’s metaphor is relevant: “Having all the pieces of a watch on a table does not enable someone who has no assembly instructions to make it work. Assembly instructions are a strategy. In politics you can utter a series of cries or you can think about how to put the pieces together” (14).
Relationship to power
The watchmaker strategy would be to define the major priorities, reconstruct the debate around them, and stop complicating things to prove individual cleverness. A “Wikipedia-style revolution, in which everyone adds content” (15) will not fix the watch. In recent years, local, diffuse, febrile action has produced an opposition in love with itself, an impatient and impotent spectrum, and disappointments (16). Given that the middle classes often form the backbone of these movements, such fickleness is not surprising: they only ally themselves with the working classes in extremis, and on condition of quickly recovering control of operations (17).
The question of the relationship to power also arises, more and more often. Now that no one imagines that the main parties and current institutions will change the neoliberal order at all, there is a growing temptation to prioritise changing minds over changing structures and laws, and to abandon the national terrain, and re-address the local or community level to create a testing ground for future victories. “One group is betting on [social] movements, on diversity without central organisation” Wallerstein wrote; “another contends that without political power, you can’t change anything. All the governments in Latin America are having this debate” (18).
The difficulty of the first strategy is considerable. There is a coherent ruling class, aware of its interests, master of the terrain and of the use of force, set against many associations, unions and parties, all tempted to defend their turf, their uniqueness and autonomy, as they fear being swallowed up by political power. They may also suffer from the Internet illusion, which makes them imagine they count because they have a website. What they call “network organisation” becomes the theoretical mask of an absence of organisation and strategic thought, since the network has no reality beyond the circulation of electronic communications that everyone forwards and no one reads.
The relationship between social movements and institutional channels, counter-balances to power and parties, has always been problematic. Now that there is no longer a principal objective, a general line — and less than ever a party or cartel that embodies it — it is necessary to “reflect on how to create the global starting from the particular” (19). Defining priorities directly challenging the power of capital would make it possible to arm fine sentiments, attack the central system, and to identify those political forces which are also disposed to do so.
In exchange, it will always be important to demand of them that electors can, through referendums, throw out their representatives before their mandate is up; since 1999, the Venezuelan constitution has included such a provision. Many heads of government have taken major decisions (retirement age, military engagement, constitutional treaties) without a popular mandate. Thus, the people would obtain the right to take a revenge that goes beyond returning to power clones of those who have already abused their trust.
Is it enough to wait for the right moment? “In early 2011 there were only six people who still belonged to the CPR [Congress for the Republic],” recalls the Tunisian president Moncef Marzouki. “But that didn’t stop it coming second in the democratic elections held in Tunisia a few months later” (20). In the current context, the risk of waiting too passively, too idealistically, would be that those less patient, less hesitant and more formidable may seize the moment and exploit, for their own gain, a rage in search of targets, not necessarily the right ones. Since the work of social demolition never ends by itself, the focal points and centres of resistance (non-profit activities, public services, democratic rights) that may be the source of a possible reconquest risk being destroyed in the meantime, making a subsequent victory less likely.
The game is not over. The neoliberal dream has lost its status as an absolute and an ideal, without which its social projects will wither and perish. All it is capable of producing now are privileges, and cold, dead beings. A change will occur. Each of us can help it happen a little sooner.