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Juliet Schor: Plenitude

photo of Kevin Carson

Kevin Carson
3rd November 2011


Juliet Schor.  Plenitude:  The New Economics of True Wealth (Penguin, 2010).

I bought Juliet Schor’s book, Plenitude, not long after I published my own book The Homebrew Industrial Revolution. I’m sure other people have had the experience of writing a book, and finding that someone else had been developing the same ideas entirely independently. In many regards, Scor’s book is the book I wish I’d written. But if nothing else, this demonstrates that when it comes to the economy of plentitude, we’re living in “steam engine time.”

As I did in Homebrew Industrial Revolution, Schor describes a confluence of the economic pressures and incentives for self-provisioning and adoption of low-cost production technology, and the revolution in available technologies — the two of them together amounting to a “perfect storm.” She promotes a three-part agenda of

1) Building an expanding economic sector of more efficient, clean, decentralized production technologies;

2) An increase in self-provisioning and decreased hours at conventional wage employment; and

3) Increased social capital and local economic ties.

She cites the “New Work” of University of Michigan scholar Frithjof Bergmann, which entails cutting hours to 20 per week to save jobs and promoting “advanced or high-technology methods for producing the basics of life without arduous labor. His term was high-tech self-providing.”

In regard to Bergmann’s last item, Schor celebrates digital fabbing and micromanufacturing — in her book, as in mine, one of the heroes of the coming era of plenitude. She also singles out Open Source Ecology/Factor e Farm for praise — a clear sign we’re dealing with a fellow traveler here.

Schorr argues that “history is not linear,” and that that the economic diversification and relocation associated with networked micromanufacturing is “characteristic of an earlier, preindustrial era.”

New technological developments, the growth of literacy and numeracy, and ecological realities are among the factors that make a new direction possible and desirable. It’s time to think about smaller-scale enterprises, more diverse skill sets, and the proliferation of invention and creativity.

. . .

What makes these arrangements worth returning to are the avances of a preindustrial era, which have dramatically increased the potential productivity of the individual, the household, and even the local community. There is now a much wider array of technologies to choose from, some of which are quite productive. Computers and the Internet are obviously in this category, but they’re not alone. Innovations such as fabbers radically alter the cost calculus. Making shoes or clothing or even toasters in centralized factories is no longer necessary and may even lose its financial advantage, particularly once environmental costs are incorporated. Small-scale production in household sor communities avoids transport costs, which will be rising. It’s a produce-on-demand method, so it minimizes waste by avoiding overproduction….

Hear, hear! The micromanufacturing revolution is not a step backward from mass production, but rather — as Michael Piore and Charles Sabel described it in The Second Industrial Divide — the rediscovery, after more than a century, of the proper way to integrate electrical power into manufacturing. The industrial district model, of integrating general-purpose, electrically powered tools into craft production and switching frequently between short production runs on a demand-pull basis, was the most efficient way of doing things even in the 1880s. The state, with its railroad land grants and patents, simply shifted the balance artificially in favor of mass production. Today, with cheap CNC tools, micromanufacturing is even more more efficient; and the fiscally exhausted state, and the unenforceability of its “intellectual property” monopolies, mean it can no longer tip the balance as it once did.

Spontaneously occurring incentives may be sufficient to elicit many of the outcomes Schor desires.

For example, there’s no need for individuals to adopt plenitude as a consumption good, at the expense of short-term utility maximization.

Millions of people are shifting from wage-labor to self-provisioning because they have no choice. As James C’Connor noted in Accumulation Crisis, during sharp economic downturns workers have traditionally shifted toward satisfying a major part of their consumption needs through self-provisioning in the household and informal sectors. We’ve seen similar tendencies in the Great Recession; but because the downturn is more secular or structural than cyclical, the shifts in behavior are likewise likely to be long-term.

Total levels of employment, in terms of labor hours per capita, are down more than ten percent since 2000. Every day when we pick up the newspaper, we see stories about the spreading practice of vegetable gardening, or people who for the first time in their lives decided to buy store brand shampoo and found they could get just as much quality without the brand-name markup.

As Schor writes:

 …millions have had an altered equation of time and money painfully thrust upon them through unemployment or other losses of income. For that group, which already had a surfeit of time and not enough money, the advice involves moving forward with plans that are less centered on full-time employment in the [business-as-usual] economy and more oriented to the emergent sustainability sector, which includes both businesses and the parallel economy developing amid the wreckage of the collapse. This encompasses areas such as household food cultivation, home construction and renovation, and community initiatives such as barter and bulk buying.

And likewise, as Piore and Sabel have argued, mass-production industry in major cyclical downturns tends to outsource a major share of production to the craft periphery rather than meet increases in demand by expanding their own production capacity. Again, since this seems to be a permanent secular crisis, we can probably expect a permanent shift toward networked production in job shops.

And as Schor notes, “new agricultural knowledge and the invention of small-scale smart machines make it possible to turn household provisioning into a high-productivity — and economically viable — use of time. So the two long-term secular trends — self-provisioning and micro-manufacturing — are intersecting.

The same is true of the changes Schor seeks in state policy, which — although indisputably salutary for the most part — are almost impossible to get passed. For example, in general she seeks an end to the state’s role in enabling negative externalities, and in its place a full-cost pricing mechamism in which the price of goods reflects the true social cost of producing them.

To this extent Schor is in alignment with what I call the free market anticapitalist agenda:  she seeks to eliminate the state’s role in offering positive rewards to resource consumption. The problem, as I’ve written elsewhere, is that attempts to seize control of the state or attain major changes in its policy is essentially futile.

Elsewhere, though, Schor suggests that negative externalities are a result of market failure. Here I disagree. What we have, in fact, is a state failure. If market prices do not fully incorporate social costs, it is because the state has intervened — on behalf of powerful corporate actors — to protect them from bearing these costs. What Ivan Illich called “counterproductivity” — the adoption of a technology or business model beyond the point of negative returns — can only occur when a market actor does not fully internalize all effects of her decision. And the state brings about this state of affairs by shifting the costs of an action onto unwilling third parties like taxpayers or the victims of tortious behavior.

The state has artificially shifted the cost-benefit calculus. But the good news is that the terminal crises of capitalism are exhausting its resources for continuing to do so.

An end to negative externalities, even if it can’t be achieved through positive political action, is likely to come about as a result of the state’s fiscal exhaustion. The main reason for pollution and for wasteful resource consumption is that the state has actively subsidized the consumption of inputs as the main mechanism for growth. American industry, over the past century or more, has followed an extensive model of growth based on increased consumption of resource inputs, rather than an intensive model based on more efficient use of inputs. The result is that levels of productivity, in terms of output per unit of input, have been a nightmare.

But the wonderful thing about input subsidies is that they’re unsustainable. Market price, in the absence of subsidies, acts as a homeostatic mechanism — i.e., like a household thermostat — that informs actors of the true cost of their actions and causes them to adjust their activities accordingly, shifting the limited supply of inputs to their most productive use and economizing on them as much as possible. Subsidies have the same effect on the price mechanism as lighting a candle under the thermostat. They create a positive feedback loop, so that demand for subsidized energy, roads, etc., grows exponentially and the state can’t appropriate resources fast enough to keep up with it.

So we wind up with a system in which the overbuilt highway infrastructure is decaying several times faster than money can be appropriated to pay for it, planes are stacked up over airports, and the state bankrupts itself in a futile attempt to keep up with demand.

The outcome of this, combined with the enormous cost increases associated with Peak Oil, was aptly described by James Kunstler in The Long Emergency. In 2008, when energy prices hit their last peak, around a fifth of long-haul truckers were on the verge of quitting, and the major airlines were expecting to shut down some 20% of their routes. On top of all that, the higher the price of fossil fuels under Peak Oil, the higher the cost of asphalt for road repair. So in coming years we can expect the functional highway system to retreat into a progressively smaller and lower capacity network of primary routes, while the rest become impassable from potholes and disintegration; and we can expect industrial supply and distribution chains to break down as the cost of container ships and trucks becomes prohibitive for all but the most high value-added products.

Even if we can’t persuade the state to eliminate fossil fuel subsidies, the effects of the state’s fiscal exhaustion and Peak Oil may be almost as good.

In other areas, the effect is likely to be the same: it will simply become unaffordable to own a McMansion, or to make long commutes from a residential suburb, for the great majority of people who currently engage in such practices.

And as paid work hours shrink and self-provisioning becomes a necessity, many of the other practices Schor recommends — patronizing thrift stores, sharing through carpooling and Freecycle, etc. — will cease to become virtuous lifestyle choices and become imperative means of survival.

In the face of the same iron necessities, the social atomization of the past two hundred years will reverse itself and primary social units like extended family and neighborhood, fraternal lodge and collective, will become indispensible means of pooling costs and risks.

I think we are, as Schor suggests, headed for a brick wall in terms of conventional metrics of “growth.” Growth, in standard usage, refers to

1) scale of input consumption;

2) scale of monetized GDP; or

3) material standard of living (this last is by far the least significant usage).

It is a dead certainty that input consumption will decline.

Monetized GDP, for the most part, reflects the cost of inputs consumed to produce the total output of goods and services, or the cost of replacing broken windows. A car wreck results in credits to the GDP from car repairs, and from medical treatment of those involved. A serviced performed in the informal economy, like an exchange of garden tomatoes for home-baked bread, in contrast, adds nothing to GDP because it is not a cash transaction. So the fewer resources we waste and the more economic activity is shifted to the informal economy, the lower GDP will become.

It follows that, however much our private material standard of living rises, it won’t be reflected in per capita GDP. Rather, increased quality of life will be associated with more intensive use of inputs and what Bucky Fuller called “ephemeralization.”  GDP, meanwhile, will likely fall to levels we currently associate with the Third World.

One major area of disagreement I have with Schor is over her preference for a Social Democratic model of universal healthcare, along with increased funding to higher education and childcare.

I believe the Social Democratic model is fundamentally the wrong approach. I would prefer to eliminate all the state-enforced monopolies, artificial property rights, and artificial scarcities currently built into our healthcare system, and all the artificial barriers to such things as lodge practice or contract practice on the model organized by the friendly societies of the nineteenth century. Rather than use the state to share the enormous bureaucratic overhead cost of a subsidized and protected system dominated by corporate hospital chains and insurance companies, I would prefer to abolish the power of corporate hospital chains and insurance companies, and lower the cost of healthcare until paying for it is no more a problem than it was seventy years ago.

Rather than subsidizing higher education for everybody (with the practical effect of further inflating the levels of credentialing required to do any and every job), I’d prefer to break the power of corporate HR departments and their unholy alliance with the human resource processing factories (aka the public schools). We need to follow up the revolution in self-organized provisioning and small-scale production with self-organized education and credentialing.

As I wrote of Tom Geoghegan’s book Were You Born on the Wrong Continent:

Rather than using progressive taxation and social benefits to redistribute part of the artificial scarcity rents accruing to the privileged classes, we could achieve Geoghegan’s reduced inequality by ceasing to enforce artificial scarcity—that is, titles to vacant and unimproved land, barriers to competition in the supply of credit, “intellectual property,” and assorted licensing regimes.

European social democracy, like American establishment liberalism, is very Schumpeterian. That is, it has a strong affinity for large bureaucratic organizations as the building blocks of a “progressive” society. According to Joseph Schumpeter and his “de facto disciple” J. K. Galbraith, the market power of the large organization enables it to finance innovation by pricing above marginal cost. To establishment liberals, the ideal economy is that of the postwar “Golden Age” idealized by Michael Moore: an economy of giant, capital-intensive manufacturing firms that can engage in administered pricing and prevent “destructive competition” so they not only can be guaranteed reasonable profits but also can afford to provide good wages with job security.

In every case the European model deals with the destabilizing effects of abundance from the demand side. The idea is to use artificial scarcity to prop up the price of everything in order to guarantee that capital can find a profitable outlet, then prop up demand with planned obsolescence so labor can be fully employed.

Geoghegan particularly celebrates the enormous embedded unit costs of the German economy: the capital-intensiveness, the bigness, the licensing and educational barriers to entering just about any field of self-employment. You can’t just drop out and start a microenterprise on a shoestring: “[T]he Germans don’t let just anyone make jewelry. . . . Sorry, girl, you have to go get a degree.”

The basic principle of the European model is to socialize living costs and provide security through guaranteed hours and wage levels. A great many basic goods are cheap or free for most people—obtained from the State independently of wage labor. But the same results could be accomplished by eliminating artificial scarcities, allowing competition to deflate the costs of basic goods, and providing security through reduced dependence on a job.

Compare this to my own agenda, here:

1) Eliminating all artificial scarcity rents and mandated artificial levels of overhead for small-scale production, in order to reduce the overhead cost of everyday life, and to reduce the household revenue stream necessary to service it. That means, among other things:

1a) Eliminating “intellectual property” as a source of scarcity rents in informational and cultural goods, and embedded rents on patents as a component of the price of manufactured goods. See, for example, Tom Peters’ enthusiastic description in The Tom Peters Seminar that ninety percent of the cost of his new Minolta camera was “intellect” or “ephemera” rather than parts and labor.

1b) An end to local business licensing, zoning laws, and spurious “safety” and “health” codes insofar as they prohibit operating microenterprises out of family residences, or impose arbitrary capital outlays and overhead on such microenterprises by mandating more expensive equipment than the nature of the case requires. It means, for example, eliminating legal barriers to running a microbakery out of one’s own home using an ordinary kitchen oven and selling the bread out of one’s home or at the Farmer’s Market (such as, e.g., requirements to rent a stand-alone piece of commercial real estate, buy an industrial-size oven and dishwasther, etc.).

1c) Likewise, an end to local building codes whose main effect is to lock in conventional building techniques used by established contractors, and to criminalize innovative practices like the use of new low-cost building techniques and cheap vernacular materials.

1d) An end to occupational licensing, or at least an end to artificial restrictions on the number of licenses granted and licensing fees greater than necessary to fund the costs of administration. This would mean that, in place of a limited number of NYC cab medallions costing hundreds of thousands of dollars apiece, medallions would be issued to anyone who met the objective licensing requirements and the cost would be just enough to cover a driving record and criminal background check and a vehicle inspection.

2) An end to government policies aimed at propping up asset prices, allowing the real estate bubble to finish popping.

3) An increase in work-sharing and shorter work weeks to evenly distribute the amount of necessary work that remains…. I believe that, absent artificial scarcity rents to disrupt the link between effort and consumption, the average individual share of available work would provide sufficient income to purchase a comfortable standard of living. Ford explicitly denies that a part-time income would be sufficient to pay for the necessities of life, but seems to operate on the assumption that most of the mechanisms of artificial scarcity would continue as before.

4) The decoupling of the social safety net from both wage employment and the welfare state, through 4a) an increase in extended family or multi-family income-pooling arrangements, cohousing projects, urban communes, etc., and 4b) a rapid expansion of mutuals (of the kind described by Kropotkin, E.P. Thompson, and Colin Ward) as mechanisms for pooling cost and risk….

5) A shift of consumption wherever feasible, from the purchase of store goods with wage income, to subsistence production or production for barter in the household economy using home workshops, sewing machines, ordinary kitchen food prep equipment, etc. If every unemployed or underemployed person with a sewing machine and good skills put them to full use producing clothing for barter, and if every unemployed or underemployed person turned to such a producer as their first resort in obtaining clothing (and ditto for all other forms of common home production, like baking, daycare services, hairstyling, rides and running errands, etc.) the scale of the shift from the capitalist economy to the informal economy would be revolutionary;

6) A rapid expansion in local alternative currency and barter networks taking advantage of the latest network technology, as a source of liquidity of direct exchange between informal/household producers.

In fairness to Schor, however, she goes on to note:

In the nineteenth century, trade unions and mutual-aid societies took on the task of self-insuring among their members. Smaller public or nonprofit entities can manage the flows of contributions and benefits that are the backbone of health care, pension, and other social security systems. What’s essential is that some collective body — be it a government agency, a community, a union, or a nonprofit — take on the task of managing savings, dispersing benefits, and providing insurance.

I believe existing trends toward decreased employment, and the exhaustion of both state- and employer-based welfare states, will have precisely this effect: of shifting social safety net functions to primary social units like neighborhood cohousing projects, urban communes, extended family compounds, lodges, friendly societies, professional guilds, and the like.

And I can’t overstate my agreement with Schor on the need to eliminate “intellectual property” (sic) as a barrier to the transmission of knowledge and diffusion of technique lower-cost, more efficient ways of doing things. Patents prevent the increased efficiencies and reduced costs from innovation from being socialized by market competition, and enable a privileged class to instead enclose them as a source of rents. Schor quotes from Benkler’s The Wealth of Networks, and praises open-source and the knowledge commons — indicating that she, herself, is on the side of the angels.

For God’s sake, buy this book.

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One Response to “Juliet Schor: Plenitude”

  1. Todd S. Says:

    I believe existing trends toward decreased employment, and the exhaustion of both state- and employer-based welfare states, will have precisely this effect: of shifting social safety net functions to primary social units like neighborhood cohousing projects, urban communes, extended family compounds, lodges, friendly societies, professional guilds, and the like.

    I think that, as I interpret that you also do based on what you say here, that these things would eliminate – or at least greatly diminish – the need for a “social safety net” at all insofar as we think of this in an institutional context. Schor seems to be saying that there would still need to be some kind of centralized, abstract entity doling out the “safety”.

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