From Democracy at Work

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[S1 E1] Primitive or Original Accumulation Prof. Harvey talks about how capital came to power, the brutality and the violence with which capital came to be, and what it is.

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The post David Harvey on Primitive Accumulation and the Enclosure of the Commons appeared first on P2P Foundation.

In 2011 Shareable organized the Share San Francisco conference to promote the city as a platform for sharing, which in turn inspired the “Sharing Cities” movement. The goal of Sharing Cities was to create horizontal linkages between local communities and serve as a platform to coordinate policies for encouraging the growth of sharing economies. Shareable itself, under the “Sharing Cities” tag, highlighted commons-based projects like open-source hailing platforms and other shared mobility projects, coworking spaces, participatory budgeting, multi-family cohousing/coliving arrangements, tool libraries, community land trusts, neighborhood gardens, shared renewable energy, municipalist projects like those in Barcelona and Jackson, hackerspaces and repair cafes, and many more.

Shareable created the Sharing Cities Network as a support platform for the project. According to the project’s website:

Fifty cities around the world began mapping their shared resources in October and November 2013 during Shareable’s first annual #MapJam. This was just the beginning of the Sharing Cities Network – an ambitious project to create one hundred sharing cities groups by 2015.

As of this writing, there are seventy-three cities worldwide listed on their Community Maps page, each one with a detailed map of sharing projects and assets. In addition, the movement led to a series of Sharing Cities Summits, the second of which in 2017 set up the Sharing Cities Alliance — which includes thirty-odd cities worldwide — as a standing body.

The book Sharing Cities is the outgrowth of these nine eventful years. Following an introduction by Gorenflo, in which he summarizes the background of the Sharing Cities movement, states its basic principles and assesses its significance, the book — a collaborative effort by fifteen people — provides over two hundred pages of case studies of local sharing economy projects in dozens of cities.

The case studies, organized topically into eleven chapters, offer fairly comprehensive and systematic coverage of sharing projects in pretty much every functional subdivision of local economies, including land ownership and housing, food, cooperative finance, micro-manufacturing, transportation — and, well, everything else.

As Gorenflo notes in the introduction, the commons “was part of, but not the core of,” the initial Share San Francisco meeting. This changed, he says, because of the realization that “sharing” functions could and would be coopted by the above-mentioned corporate Death Star model if the movement did not explicitly embrace open and commons-based models.

Even more so, it changed because of the Sharing Cities movement’s interaction and cooperative engagement with a number of other commons-based movements. From organizations like the Foundation for Peer-to-Peer Alternatives (P2P Foundation) founded by Michel Bauwens, to scholar-advocates of commons-based municipal economies like Sheila Foster and Christian Iaione (the closest thing the municipalist movement has to organic intellectuals), and even actual large-scale municipalist policy efforts (those emerging from M15 in Barcelona and Madrid, commons-based movements in Bologna and Amsterdam, older movements like Cooperation Jackson and the Evergreen Initiative in Cleveland, and the efforts that have since proliferated in hundreds of other cities), the Sharing Cities project has drawn inspiration from many areas.

In addition this ecosystem of movements includes a number of Autonomist thinkers like Massimo De Angelis who emphasize the commons as the kernel of an emerging post-capitalist society. And the role of the city in post-capitalist transition has been a theme in the work of thinkers ranging from Murray Bookchin to David Harvey.

All these things coming together amount, between them, to Steam Engine Time for commons-based municipal economies. This is more true than ever in the last couple of years. As even nominally leftist governments like Syntagma in Greece show their impotence or unwillingness to act in the face of neoliberal assault, and fascist or fascist-adjacent leaders come to power in a growing share of the West, municipal platforms and networks of such platforms have become the primary base for popular empowerment.

The importance of the urban commons to cities today is that it situates residents as the key actors — not markets, technologies, or governments, as popular narratives suggest — at a time when people feel increasingly powerless. To paraphrase commons scholars Sheila Foster and Christian Iaione, the city as a commons is a claim on the city by the people. Furthermore, a commons transition is a viable, post-capitalist way forward….

And if the various strands of municipalism add up to an ecosystem, Shareable and Sharing Cities occupy a vital niche in that ecosystem.

On the purely theoretical side, commons-based scholars of post-capitalist transition (De Angelis, for example) have done superb work on the commons as a new mode of production growing within the interstices of capitalism. But aside from general recommendations like growing the commons by incorporating a growing share of the material prerequisites of physical and social reproduction into its circuit, they have been light on the nuts and bolts of institutional examples of such practice. And activists like Chokwe Lumumba and Ada Colau have done amazing work in building local municipal platforms to promote a commons-based model of economic development. But when it comes to developing the full range of tangible alternatives and integrating them into a cohesive commons-based economy, such local movements have been quite uneven in identifying the possibilities. For example Cleveland and Jackson have focused heavily on incubating cooperative enterprises under the inspiration of Mondragon, but have in my opinion failed to take advantage of the potential of open-source information and cheap open-source micromanufacturing machinery for community bootstrapping.

The combined and coordinated development of all the possibilities for sharing economies within a community’s discretion, to the full extent of its discretion, would be revolutionary beyond anything we have seen. What if a municipality incorporated all vacant municipal land and housing into community land trusts, and acted as a cooperative enterprise incubator on the Cleveland and Jackson models, and used the surplus capacity of city and public utility fiber-optic infrastructure to provide low-cost community broadband, and made the unused capacity of public buildings available as community hubs, and implemented participatory budgeting and citizen policy platforms, and facilitated the creation of open/cooperative sharing platforms as alternatives to Uber, and facilitated the creation of hackerspaces and repair cafes and Fab Labs and garage factories, and required government offices and public education facilities to use open-source software and mandated that all publicly funded research and scholarship be in the public domain? All at the same time? It would amount to an entire commons-based economy, comprising a sizeable core of the entire local economy, with synergies and growth potential beyond imagining.

This is where Shareable comes in, and where it has done more than anyone else to kick-start needed action. Shareable took the lead not only in encouraging municipalities to become platforms for supporting and facilitating local sharing economies. It also promoted concrete mapping projects in individual cities to systematically identify and catalog all the potential assets for incorporation into a commons-based economy, and publicized concrete examples of commons-based praxis in all areas of social, economic, and political life from around the world. The subsequent emergence of other efforts at urban commons mapping and commons-based development policies in specific cities around the world (particularly notable is the P2P Foundation’s efforts in Ghent) is arguably the fruit of a seed planted by Shareable.

If scholars like De Angelis point to the commons as the core of the post-capitalist economy, and Barcelona and Madrid point to the municipality as the primary locus for facilitating commons-based projects, then Shareable has taken the lead in cataloging and sharing the full range of specific examples of such projects and encouraging others to follow their example.

Sharing Cities: Activating the Urban Commons embodies this cataloging and sharing project. Given the number of localities with municipalist movements, and the number of local activists and tinkerers worldwide developing commons-based projects, there are more projects on the ground than would fit into a thirty-volume encyclopedia, let alone one book. But the survey in Sharing Cities is a representative sample of the full range of what’s being done; every case study can be taken as a proxy for what others are doing in countless other communities around the world.

In short, this book is indispensable for anyone interested in what’s being done on the ground to build the society of the future.

The post Book of the Day: Sharing Cities: Activating the Urban Commons appeared first on P2P Foundation.

Chris Hedges: A number of the reigning oligarchs—among them Mark Zuckerberg (net worth $64.1 billion), Elon Musk (net worth $20.8 billion), Richard Branson (net worth $5.1 billion) and Stewart Butterfield (net worth $1.6 billion)—are calling for a guaranteed basic income. It looks progressive. They couch their proposals in the moral language of caring for the destitute and the less fortunate. But behind this is the stark awareness, especially in Silicon Valley, that the world these oligarchs have helped create is so lopsided that future consumers, plagued by job insecurity, substandard wages, automation and crippling debt peonage, will be unable to pay for the products and services offered by the big corporations.

The oligarchs do not propose structural change. They do not want businesses and the marketplace regulated. They do not support labor unions. They will not pay a living wage to their bonded labor in the developing world or the American workers in their warehouses and shipping centers or driving their delivery vehicles. They have no intention of establishing free college education, universal government health or adequate pensions. They seek, rather, a mechanism to continue to exploit desperate workers earning subsistence wages and whom they can hire and fire at will. The hellish factories and sweatshops in China and the developing world where workers earn less than a dollar an hour will continue to churn out the oligarchs’ products and swell their obscene wealth. America will continue to be transformed into a deindustrialized wasteland. The architects of our neofeudalism call on the government to pay a guaranteed basic income so they can continue to feed upon us like swarms of longnose lancetfish, which devour others in their own species.

“Increasing the minimum wage or creating a basic income will amount to naught if hedge funds buy up foreclosed houses and pharmaceutical patents and raise prices (in some cases astronomically) to line their own pockets out of the increased effective demand exercised by the population,” David Harvey writes in “Marx, Capital, and the Madness of Economic Reason.” “Increasing college tuitions, usurious interest rates on credit cards, all sorts of hidden charges on telephone bills and medical insurance could steal away the benefits. A population might be better served by strict regulatory intervention to control these living expenses, to limit the vast amount of wealth appropriation occurring at the point of realisation. It is not surprising to find there is strong sentiment among the venture capitalists of Silicon Valley to also support basic minimum income proposals. They know their technologies are putting people out of work by the millions and that those millions will not form a market for their products if they have no income.”

The call for a guaranteed basic income is a classic example of Karl Marx and Antonio Gramsci’s understanding that when capitalists have surplus capital and labor they use mass culture and ideology, in this case neoliberalism, to reconfigure the habits of a society to absorb the surpluses.

In the wake of World War II, for example, the capitalists’ problem was solved by heavy investments in the military and war industry, ideologically justified by Red baiting and the Cold War, and by massive infrastructure projects, including the building of highways, bridges and houses, to move people out of cities into suburbs, where consumption rose. The social engineering projects were done in the name of national security and progress. And they made the oligarchs of that day richer.

“The development of a whole new suburban lifestyle (acclaimed in popular TV sitcoms like The Brady Bunch and I love Lucy which celebrated a certain kind of ‘daily life of peoples’) along with all sorts of propaganda for the ‘American Dream’ of individualized homeownership stood at the centre of a huge campaign to construct new wants, needs and desires, a totally new lifestyle, in the population at large,” Harvey says in his book. “Well-paid jobs were required to support the effective demand. Labour and capital came to an uneasy compromise at the urging of the state apparatus in which a white working class made economic gains, even as minorities were left out.”

This phase of capitalism ended once industry moved overseas and wages stagnated or declined. The well-paying unionized jobs disappeared. Jobs became menial and inadequately compensated. Poverty expanded. The oligarchs began to mine government social services, including education, health care, the military, intelligence gathering, prisons and utilities such as electricity and water, for profit. As a publication of the San Francisco Federal Reserve reportedly noted, the country—and by extension the oligarchs—could no longer get out of crises “by building houses and filling them with things.” The United States shifted in the 1970s from what the historian Charles Maier called an “empire of production” to “an empire of consumption.” In short, we began to borrow to maintain a lifestyle and an empire we could no longer afford.

Profit in the “empire of consumption” is extracted not by producing products but by privatizing and pushing up the costs of the basic services we need to survive and allowing banks and hedge funds to impose punishing debt peonage on the public and gamble on tech, student debt and housing bubbles. The old ideology of the New Deal, of government orchestrating huge social engineering projects under the Public Works Administration or in the War on Poverty, was replaced by a new ideology to justify another form of predatory capitalism.

In Harvey’s book “A Brief History of Neoliberalism” he defines neoliberalism as “a project to achieve the restoration of class power” in the wake of the economic crisis of the 1970s and what the political scientist Samuel Huntington said was America’s “excess of democracy” in the 1960s and the 1970s. It achieved its aim.

Neoliberalism, Harvey wrote, is “a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade.”

American oligarchs discredited the populist movements of the 1960s and 1970s that had played a vital role in forcing government to carry out programs for the common good and restricting corporate pillage. They demonized government, which as John Ralston Saul writes, “is the only organized mechanism that makes possible that level of shared disinterest known as the public good.” Suddenly—as Margaret Thatcher and Ronald Reagan, two of the principal political proponents of neoliberalism, insisted—government was the problem. The neoliberal propaganda campaign successfully indoctrinated large segments of the population to call for their own enslavement.

The ideology of neoliberalism never made sense. It was a con. No society can effectively govern itself by basing its decisions and policies on the dictates of the marketplace. The marketplace became God. Everything and everyone was sacrificed on its altar in the name of progress. Social inequality soared. Amid the destruction, the proponents of neoliberalism preached the arrival of a new Eden once we got through the pain and disruption. The ideology of neoliberalism was utopian, if we use the word “utopia” as Thomas More intended—the Greek words for “no” and “place.” “To live within ideology, with utopian expectations, is to live in no place, to live in limbo,” Saul writes in “The Unconscious Civilization.” “To live nowhere. To live in a void where the illusion of reality is usually created by highly sophisticated rational constructs.”

Corporations used their wealth and power to make this ideology the reigning doctrine. They established well-funded centers of propaganda such as The Heritage Foundation, took over university economic departments and amplified the voices of their courtiers in the media. Those who questioned the doctrine were cast out like medieval heretics, their careers blocked and their voices muted or silenced. The contradictions, lies and destruction within neoliberal ideology were ignored by those who dominated the national discourse, leading to mounting frustration and rage among a populace that had been abandoned and betrayed.

Read the full text here.

Photo by Wendy Longo photography

The post The Oligarchs’ Guaranteed Basic Income Scam appeared first on P2P Foundation.

“The struggle of man against power is the struggle of memory against forgetting.” Milan Kundera, The Book of Laughter and Forgetting

Alnoor Ladha: Last week, on February 22, 2017, water protectors at the Oceti Sakowin camp, the primary camp of Standing Rock, were evicted by the Army Corps of Engineers in a military style takeover. A peaceful resistance that began with a sacred fire lit on April 1, 2016, ended in a blaze as some of the protectors, in a final act of defiance, set some of the camp’s structures on fire.

The millions of people around the world who have stood in solidarity and empathy with Standing Rock now stand in disbelief and grief, but the forced closure of the encampment is simply the latest chapter in a violent, 500-year-old history of colonization against the First Nations. It is also the latest chapter in the battle between an extractive capitalist model and the possibility of a post-capitalist world.

Of course, the ongoing struggle will not go down in the flames at Oceti Sakowin. We should take this opportunity to remember the enduring lessons of this movement, and prepare ourselves for what is to come next.

1. There is a global convergence of movements

When I visited Standing Rock in October 2016, it struck me that this was the most diverse political gathering I’d ever seen. Over 300 North American tribes had came together for the first time in history. Standing alongside them were over 100 Indigenous communities from all over the globe. A contingent from the Sami people, the Indigenous peoples of Scandinavia, had traversed the Atlantic to show their support the day I arrived. They were joined by black bloc anarchists, New Age spiritualists, traditional environmentalists, union organizers and ordinary Americans who have never attended a protest.

The media has characterized Standing Rock as a one-off protest against a pipeline in North Dakota. But the reality is that the various movements from around the world including the Umbrella Movement in Hong Kong, the Pink Tide in Latin America, the landless people’s movement from India, the anti-austerity movement in Europe, the global Occupy movement, and the countless “awakenings” spreading across the African continent are uniting as expressions of the same impulse: a belief that the neoliberal capitalist system has failed the majority of humanity and a new world is emerging.

2. A more holistic activism is emerging

With its sacred fire, daily prayers and water ceremonies, Standing Rock has helped to reanimate the sacred aspect of activism. We are seeing a shift from resistance to resistance and renewal simultaneously. Progressive movements which once internalized the Neitzchean dictum that “God is dead” are now evolving their positions. As the anarchist philosopher Hakim Bey states: “As Capital triumphs over the Social as against all spiritualities, spirituality itself finds itself realigned with revolution^.”There is a shift to embracing a more holistic activism that transcends traditional Cartesian duality and calls upon greater forces. Cedric Goodhouse, an elder at Standing Rock put it simply, saying: “We are governed by prayer.”

The particular ways in which Standing Rock embodied non-violent direct action has given many activists a new faith in the possibility of a more sacred activism. I stood with dozens of water protectors when they prayed on water in front of Energy Transfer Partners (ETP) engineers while they were laying down oil pipeline. The very act of seeing Indigenous elders praying on water said more about the implications of an extractive pipeline than any linear argument. They dropped their tools not only because they wanted to avoid confrontation, but because somehow they understood they were on the wrong side of the moral calculus.

The author Charles Eisenstein reminds us of a powerful insight about sacred activism that has been embodied in Standing Rock: “We need to confront an unjust, ecocidal system. Each time we do we will receive an invitation to give in to the dark side and hate ‘the deplorables.’ We must not shy away from those confrontations. Instead, we can engage them empowered by the inner mantra that my friend Pancho Ramos-Stierle uses in confrontations with his jailers: ‘Brother, your soul is too beautiful to be doing this work.’ If we can stare hate in the face and never waver from that knowledge, we will access inexhaustible tools of creative engagement, and hold a compelling invitation to the haters to fulfill their beauty.”

3. Occupation of space is a critical tactic

Even before Occupy there has been a renaissance in the political understanding of the value of place and space. The battlegrounds between the corporate/state nexus and people’s movements are physical realms: the places where resources are being extracted, water is being polluted and capitalist interests are expanding through what Marxist geographer, David Harvey, calls “accumulation by dispossession.”

The occupation of space creates a physical spectacle that forces the corporate media to tell the stories it would otherwise like to ignore. It creates networks of solidarity and deep relationships that span beyond the time and space of the occupation. It creates inter-generational transfers-of-knowledge, both politically and spiritually. It weaves the connective tissue for the continued resistance against corporate (and other imperialist) power.

Standing Rock will be remembered by the thousands of activists who braved blizzards to sleep in tipis, who cooked food together in the communal kitchens, and celebrated in song and ceremony with tribal elders around the sacred fire. As the activist Reverend Billy Talen recently stated: “Zuccotti Park and the stretch of sidewalk in front of the Ferguson police department and the meadow near the Sacred Stone… these three places are lived in. Here is where activists cared for each other and shared food, clothing and medicine. The force that upsets entrenched power the most is this compassionate living, this community in plain sight.”

4. We are Nature protecting itself

Part of the on-going colonial legacy of North America is a battle between the mute materialism of capitalism that seeks to dominate nature and the symbiotic approach of Indigenous thought that sees Nature as alive, and sees human beings as playing a central role in the evolution and stewardship of the broader whole. It is this very worldview that rationalists derisively call “animist” and that continues to confound the utility maximization ideals of modern thought.

Indigenous lands are increasingly going to be a battleground not only for resource extraction, but ideology itself. Although Indigenous peoples represent about 4% of the world’s population they live on and protect 22% of the Earth’s surface. Critically, the land inhabited by Indigenous peoples holds the remaining 80% of the planet’s biodiversity.

It is no coincidence that ETP moved away from its early proposal to have the DAPL project cross the Missouri river just north of Bismarck, a primarily white city, to the Standing Rock area inhabited by the Sioux tribe.

During COP 21 in Paris, Indigenous youth groups carried banners that read: “We are Nature protecting itself.” The idea that we are not protestors, but protectors of the sacred is a central theme that resonates throughout the world.

In a powerful article on the Sacred Stone blog, the camp’s founder Ladonna Bravebull Allard said: “This movement is not just about a pipeline. We are not fighting for a reroute, or a better process in the white man’s courts. We are fighting for our rights as the Indigenous peoples of this land; we are fighting for our liberation, and the liberation of Unci Maka, Mother Earth. We want every last oil and gas pipe removed from her body. We want healing. We want clean water. We want to determine our own future.”

These ideals are not just Indigenous ideals; they are ideals linked with our very survival as a species. In a world of catastrophic climate change, protecting the sacred must be the mantra of all activists and concerned citizens.

5. There is a common antagonist

Although the various social movements around the world are portrayed as separate incidents that are particular to their local context, there is a growing awareness among movements themselves that we are uniting against the same antagonist: the deadly logic of late-stage capitalism.

Whether one is fighting for land rights in India or tax justice in Kenya or to stop a pipeline in the US, the ‘enemy’ is the same: a cannibalistic global economy that requires perpetual extraction, violence, oppression, in the service of GDP growth, which in turn, benefits a tiny elite at the expense of the world’s majority.

There is a Algonquin word, wetiko, that refers to a cannibalistic spirit that consumes the heart of man. It was a common term used when the First Nations of North America initially interacted with the Western European colonialists. The spirit of wetiko, like many memetic thought-forms, has mutated and evolved, and has now become the animating force of the global capitalist system. We are not just fighting a pipeline; we are fighting the wetiko spirit that has taken hold of our planet like invisible architecture.

What Standing Rock achieved so beautifully was to provide this broader context, to ladder up a local struggle for clean water to the struggle against the forces of wetiko itself. Wetikois inherently anti-life. And what we are all fighting for is a new system that recognizes our interdependence with the Earth and with each other, and that allows our highest selves to flourish.

The sacred fire at Standing Rock may now be smoldering but it’s reverberations are only beginning to be felt. As Julian Brave NoiseCat poignantly states in his reflections on the impact of this historical movement: “They have lit a fire on the prairie in the heart of America as a symbol of their resistance, a movement that stands for something that is undoubtedly right: water that sustains life, and land that gave birth to people.”

This is the enduring power of Standing Rock. It has created inextinguishable hope, activated our historical memory and created new forms of power by the profound act of starting a global movement from a single sacred fire. The fires of Standing Rock are illuminating the transition that lies ahead and the new society that is emerging from its ashes.

Alnoor Ladha is the Executive Director of The Rules, a global network of activists, organizers, designers, coders, writers, and researchers dedicated to changing the rules that create inequality and climate change. He is also a board member of Greenpeace International USA.

Cross-posted from Common Dreams

Photo by Dark Sevier

The post Memory, Fire and Hope: Five Lessons from Standing Rock appeared first on P2P Foundation.

Once we recognise that capitalism itself is diverse, however, we may find that there are some forms of it, suitably regulated, that make a positive contribution overall to our well-being. Given this possibility, we can no longer simply dismiss all capitalism on the grounds of Marx’s spurious theory of exploitation. Instead of applying the formulaic dogma of Marx’s labour theory of value, we need to evaluate forms of capitalism by identifying their real tendencies and assessing their actual effects against explicitly stated and justified ethical standards.

Excerpted from Dave Elder-Vass:

“We could change our economy by progressively altering the mix of economic forms, steadily reducing the more harmful forms of capitalism and building more human forms of economy alongside. Indeed, it is only if we do build alternatives alongside capitalism that viable alternative economic futures can be developed, and we should welcome the work of thinkers like Erik Olin Wright and Yochai Benkler who are examining some of the ways in which this could occur.

On the other hand, however, this optimism must be qualified. As we have seen, alternative appropriative practices can themselves be entangled in capitalist forms, and ultimately the viability of alternative forms will depend not only on growing them within our existing economy but also on finding ways to criticise and curtail the role of capitalist appropriative practices. Capitalism, despite being only part of our contemporary economy, is still capable of generating massive harms – notably extreme exploitation, alienation, inequality, massive distortions in the use of resources, environmental damage and support for oppressive political regimes. It is still backed by enormous political and discursive power, and it constantly tends to subvert alternatives to its thirst for profit.

Once we recognise that capitalism itself is diverse, however, we may find that there are some forms of it, suitably regulated, that make a positive contribution overall to our well-being. Given this possibility, we can no longer simply dismiss all capitalism on the grounds of Marx’s spurious theory of exploitation. Instead of applying the formulaic dogma of Marx’s labour theory of value, we need to evaluate forms of capitalism by identifying their real tendencies and assessing their actual effects against explicitly stated and justified ethical standards. When we do so I believe we will find, for example, that forms of capitalism that rest on the provision of free content by users are considerably less harmful than those that rest on the extraction of minerals by slave labourers in Africa (Fuchs, 2014, pp. 172–81) and those that rest on the creation of unstable financial assets. These forms can be separated. They are not all parts of one monolith, and they should be treated differently: lightly regulated, heavily regulated or abolished entirely depending upon their impact on human flourishing.

Alongside the less harmful remnants of the capitalist economy, we need to support the development of other forms. The state has an important continuing role to play in the provision of essential services that are made available to all irrespective of their ability to afford them, and in the provision of public goods that we all benefit from. Non-capitalist commodity forms should also continue to be important: family businesses and co-operatives, for example. But the gift economy, particularly if we include large parts of the household economy, is already as important as these, and the digital gift economy is particularly promising. As we have seen, the gift economy is particularly suited to the distribution of digital goods, with their trivial marginal costs, and innovative forms of collaborative production have flourished there, with benefits not only for the users but also for the creators of the content that they share.

Nevertheless, there are also good reasons to restrain claims for the potential of the digital gift economy. One limitation arises from the same factors that give the digital gift economy its advantages: virtually costless distribution of gifts that entails no sacrifice by the donor is only a characteristic of digital information goods. There is little reason to believe that similar economic processes might roll back the non-digital market economy in the way that the open-source movement has generated a tendency for the decommodification of software. Indeed, the digital gift economy itself clearly depends on other sectors of the economy that are currently dominated by the market: for example, the hardware and networks that make the digital gift economy possible are themselves physical products created in the commercial economy, and independent programmers that contribute to open-source software must have other sources of income to support them, which are often derived from the commercial economy (Barbrook, 2005).

Certain elements of the digital gift economy also face attempts at outright suppression by government, acting in the interests of pre-digital media corporations. Most notably, governments have been persuaded by lobbyists for these corporations to extend copyright protection in an attempt to prevent the free distribution of vast amounts of digital media products (Gillespie, 2007, chapter 4; Lessig, 2004). Open-source software seems likely to escape this, partly because of some clever work on copyleft licensing, but perhaps more so, ironically, because of the many ways in which it has become embedded in commercial business. Many IT businesses have found ways to make money out of open-source software, and at least some major open-source software products are predominantly developed at the expense of such companies (Elder-Vass, 2015c). But this is only half of the picture: we must also recognise that commercial companies are amongst the largest beneficiaries of the financial savings that arise from using free open-source software – these savings are a major reason for the massive ‘market’ shares of products like Linux and Apache.

Such entanglements warrant scepticism towards suggestions in the literature that phenomena like open-source software herald the replacement of capitalism (Berry, 2008, p. 98). But once we recognise the diversity of the economy, we no longer need all-or-nothing alternatives to capitalism. The issue we face is not a choice between a gift economy and a commodity economy; the issues are how much of the economy will take a gift form, what kinds of gift form, how much will take a commodity form and what kinds of commodity form.

Let me end… by asking what role a book like this can play in advancing such changes. Books alone do not change the world; any impact they might have depends upon influencing people, and movements of people, but where are the movements that might back a progressive shift towards a gift economy? Part of the problem we confront is what David Harvey calls a ‘double blockage’: ‘the lack of an alternative vision prevents the formation of an oppositional movement, while the absence of such a movement precludes the articulation of an alternative’ (D. Harvey, 2011, p. 227). As Harvey rightly says, the solution to this double blockage is inevitably iterative: the relation between these two absences ‘has to be turned into a spiral’ (D. Harvey, 2011, p. 227).

That spiral is already in progress, though its overall direction is uncertain. There are already movements working towards aims compatible with the ideas expressed in this book, for example Green parties, the Occupy movement, many of the groups that combine in the World Social Forum, and the movements against austerity policies in Europe. And there are already huge numbers of people participating in gift forms of economy. Though many of them do not even recognise that they are forms of economy, these are people who could be persuaded to back further growth of these forms. There are already, too, writers expressing ideas that complement those in this book, for example those who have contributed to the Convivialist Manifesto (Clarke, 2014), and those whose work is collected in The Human Economy (Hart et al., 2010). This book and the political economy of practices that it advocates are, at best, another turn of the spiral, one that encourages a more open but more realistic alternative vision of a future that could enable more of us to flourish rather than being subjected to a logic of pointless accumulation that ultimately benefits no-one.

We cannot know exactly what kind of economy and what kind of society this will lead us to, not least because there is no end point and no single overriding logic to social development but rather a continuing process of change in a fundamentally open system. The mix of economic forms within that system will inevitably develop in response to emerging possibilities but it is up to us, collectively, to find ways to encourage those forms that seem most beneficial for all human beings in the light of ethical debate. We will only be able to engage productively in such a process by abandoning monolithic visions of nirvana and working instead towards multiple partial real utopias. This is not a step backwards but a step forwards for progressive politics: we must reject the dogmas of both of the old political economies and instead engage creatively with our diverse economy and its open future.”

[This post reproduces text from pages 228-232 of Elder-Vass, D. (2016) Profit and Gift in the Digital Economy, Cambridge: Cambridge UP.]

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There’s been plenty of talk about Thomas Piketty’s recent volume. While the attention and awareness it has generated is not a bad thing, it’s also worth exploring some constructive critiques of the book that go beyond mere defensive slander. Of these we feel that David Harvey’s review of Piketty’s study, originally published on his webpage, is specially relevant.

Thomas Piketty has written a book called Capital that has caused quite a stir. He advocates progressive taxation and a global wealth tax as the only way to counter the trend towards the creation of a “patrimonial” form of capitalism marked by what he dubs “terrifying” inequalities of wealth and income. He also documents in excruciating and hard to rebut detail how social inequality of both wealth and income has evolved over the last two centuries, with particular emphasis on the role of wealth. He demolishes the widely-held view that free market capitalism spreads the wealth around and that it is the great bulwark for the defense of individual liberties and freedoms. Free-market capitalism, in the absence of any major redistributive interventions on the part of the state, Piketty shows, produces anti-democratic oligarchies. This demonstration has given sustenance to liberal outrage as it drives the Wall Street Journal apoplectic.

The book has often been presented as a twenty-first century substitute for Karl Marx’s nineteenth century work of the same title. Piketty actually denies this was his intention, which is just as well since his is not a book about capital at all. It does not tell us why the crash of 2008 occurred and why it is taking so long for so many people to get out from under the dual burdens of prolonged unemployment and millions of houses lost to foreclosure. It does not help us understand why growth is currently so sluggish in the US as opposed to China and why Europe is locked down in a politics of austerity and an economy of stagnation. What Piketty does show statistically (and we should be indebted to him and his colleagues for this) is that capital has tended throughout its history to produce ever-greater levels of inequality. This is, for many of us, hardly news. It was, moreover, exactly Marx’s theoretical conclusion in Volume One of his version of Capital. Piketty fails to note this, which is not surprising since he has since claimed, in the face of accusations in the right wing press that he is a Marxist in disguise, not to have read Marx’s Capital.

Piketty assembles a lot of data to support his arguments. His account of the differences between income and wealth is persuasive and helpful. And he gives a thoughtful defense of inheritance taxes, progressive taxation and a global wealth tax as possible (though almost certainly not politically viable) antidotes to the further concentration of wealth and power.

But why does this trend towards greater inequality over time occur? From his data (spiced up with some neat literary allusions to Jane Austen and Balzac) he derives a mathematical law to explain what happens: the ever-increasing accumulation of wealth on the part of the famous one percent (a term popularized thanks of course to the “Occupy” movement) is due to the simple fact that the rate of return on capital (r) always exceeds the rate of growth of income (g). This, says Piketty, is and always has been “the central contradiction” of capital.

But a statistical regularity of this sort hardly constitutes an adequate explanation let alone a law. So what forces produce and sustain such a contradiction? Piketty does not say. The law is the law and that is that. Marx would obviously have attributed the existence of such a law to the imbalance of power between capital and labor. And that explanation still holds water. The steady decline in labor’s share of national income since the 1970s derived from the declining political and economic power of labor as capital mobilized technologies, unemployment, off-shoring and anti-labor politics (such as those of Margaret Thatcher and Ronald Reagan) to crush all opposition. As Alan Budd, an economic advisor to Margaret Thatcher confessed in an unguarded moment, anti-inflation policies of the 1980s turned out to be “a very good way to raise unemployment, and raising unemployment was an extremely desirable way of reducing the strength of the working classes…what was engineered there in Marxist terms was a crisis of capitalism which recreated a reserve army of labour and has allowed capitalists to make high profits ever since.” The disparity in remuneration between average workers and CEO’s stood at around thirty to one in 1970. It now is well above three hundred to one and in the case of MacDonalds about 1200 to one.

But in Volume 2 of Marx’s Capital (which Piketty also has not read even as he cheerfully dismisses it) Marx pointed out that capital’s penchant for driving wages down would at some point restrict the capacity of the market to absorb capital’s product. Henry Ford recognized this dilemma long ago when he mandated the $5 eight-hour day for his workers in order, he said, to boost consumer demand. Many thought that lack of effective demand underpinned the Great Depression of the 1930s. This inspired Keynesian expansionary policies after World War Two and resulted in some reductions in inequalities of incomes (though not so much of wealth) in the midst of strong demand led growth. But this solution rested on the relative empowerment of labor and the construction of the “social state” (Piketty’s term) funded by progressive taxation. “All told,” he writes, “over the period 1932-1980, nearly half a century, the top federal income tax in the United States averaged 81 percent.” And this did not in any way dampen growth (another piece of Piketty’s evidence that rebuts right wing beliefs).

By the end of the 1960s it became clear to many capitalists that they needed to do something about the excessive power of labor. Hence the demotion of Keynes from the pantheon of respectable economists, the switch to the supply side thinking of Milton Friedman, the crusade to stabilize if not reduce taxation, to deconstruct the social state and to discipline the forces of labor. After 1980 top tax rates came down and capital gains – a major source of income for the ultra-wealthy – were taxed at a much lower rate in the US, hugely boosting the flow of wealth to the top one percent. But the impact on growth, Piketty shows, was negligible. So “trickle down” of benefits from the rich to the rest (another right wing favorite belief) does not work. None of this was dictated by any mathematical law. It was all about politics.

But then the wheel turned full circle and the more pressing question became: where is the demand? Piketty systematically ignores this question. The 1990s fudged the answer by a vast expansion of credit, including the extension of mortgage finance into sub-prime markets. But the resultant asset bubble was bound to go pop as it did in 2007-8 bringing down Lehman Brothers and the credit system with it. However, profit rates and the further concentration of private wealth recovered very quickly after 2009 while everything and everyone else did badly. Profit rates of businesses are now as high as they have ever been in the US. Businesses are sitting on oodles of cash and refuse to spend it because market conditions are not robust.

Piketty’s formulation of the mathematical law disguises more than it reveals about the class politics involved. As Warren Buffett has noted, “sure there is class war, and it is my class, the rich, who are making it and we are winning.” One key measure of their victory is the growing disparities in wealth and income of the top one percent relative to everyone else.

There is, however, a central difficulty with Piketty’s argument. It rests on a mistaken definition of capital. Capital is a process not a thing. It is a process of circulation in which money is used to make more money often, but not exclusively through the exploitation of labor power. Piketty defines capital as the stock of all assets held by private individuals, corporations and governments that can be traded in the market no matter whether these assets are being used or not. This includes land, real estate and intellectual property rights as well as my art and jewelry collection. How to determine the value of all of these things is a difficult technical problem that has no agreed upon solution. In order to calculate a meaningful rate of return, r, we have to have some way of valuing the initial capital. Unfortunately there is no way to value it independently of the value of the goods and services it is used to produce or how much it can be sold for in the market. The whole of neo-classical economic thought (which is the basis of Piketty’s thinking) is founded on a tautology. The rate of return on capital depends crucially on the rate of growth because capital is valued by way of that which it produces and not by what went into its production. Its value is heavily influenced by speculative conditions and can be seriously warped by the famous “irrational exuberance” that Greenspan spotted as characteristic of stock and housing markets. If we subtract housing and real estate – to say nothing of the value of the art collections of the hedge funders – from the definition of capital (and the rationale for their inclusion is rather weak) then Piketty’s explanation for increasing disparities in wealth and income would fall flat on its face, though his descriptions of the state of past and present inequalities would still stand.

Money, land, real estate and plant and equipment that are not being used productively are not capital. If the rate of return on the capital that is being used is high then this is because a part of capital is withdrawn from circulation and in effect goes on strike. Restricting the supply of capital to new investment (a phenomena we are now witnessing) ensures a high rate of return on that capital which is in circulation. The creation of such artificial scarcity is not only what the oil companies do to ensure their high rate of return: it is what all capital does when given the chance. This is what underpins the tendency for the rate of return on capital (no matter how it is defined and measured) to always exceed the rate of growth of income. This is how capital ensures its own reproduction, no matter how uncomfortable the consequences are for the rest of us. And this is how the capitalist class lives.

There is much that is valuable in Piketty’s data sets. But his explanation as to why the inequalities and oligarchic tendencies arise is seriously flawed. His proposals as to the remedies for the inequalities are naïve if not utopian. And he has certainly not produced a working model for capital of the twenty-first century. For that we still need Marx or his modern-day equivalent.

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