Few ideas have more profoundly poisoned the minds of more people than the notion of a “free market” existing somewhere in the universe, into which the government “intrudes.” In this view, whatever inequality or insecurity the market generates is assumed to be natural and the inevitable consequences of impersonal “market forces.” … If you aren’t paid enough to live on, so be it. If others rake in billions, they must be worth it. If millions of people are unemployed or their paychecks are shrinking or they’ll have to work two or three jobs and have no idea what they’ll be earning next month or even next week, that’s unfortunate but it’s the outcome of “market forces.”

Reich’s point is that market forces aren’t the result of a free market, which doesn’t exist, never has existed, and probably never will exist. What we do have is a highly engineered marketplace with hundreds of thousands of rules–rules most often created behind closed doors by people who will benefit from every word and comma they put into place. These rules take endless form–the tax code, appropriations bills, new laws, court rulings, executive orders, and administrative guidance to name just a few.

Democrats and Republicans alike–at all levels of government and in all three branches–design these market forces. They grant favors to local businesses, friends, and favored industries, as well as emerging and dying technologies. While these rules are more likely to limit the liability from the disastrous effects of mountain top coal removal than they are to provide tax benefits to solar energy, most industries have figured out how to play the game. They hire lobbyists, donate to politicians–and they find the benefits exponentially greater than the cost. Journalist Nicholas Kristof noted that the chemical and pharmaceutical industries alone spent $121,000 per member of Congress on lobbying last year. Research from Harvard’s Safra Center for Ethics shows that corporations in general get up to $220 return for every dollar they “invest” in lobbying Congress.

The governing classes and elected officials have always created the rules of the economic game. These legal frameworks and the systems they support affect our nation’s economy and daily life more than the most visible government programs, including social security, food stamps, or health care. 

Reich goes on to say:

The rules are the economy. … As the economic historian Karl Polanyi recognized [in his 1944 book, The Great Transformation, those who argue for “less government” are really arguing for different government—often one that favors them or their patrons. “Deregulation” of the financial sector in the 1980s and 1990s, for example, could more appropriately be described as “reregulation.” It did not mean less government. It meant a different set of rules.

In the book 23 Things They Don’t Tell You About Capitalism, the University of Cambridge economist Ha-Joon Chang writes:

The free market doesn’t exist. Every market has some rules and boundaries that restrict freedom of choice. A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them. How “free” a market is cannot be objectively defined. It is a political definition. The usual claim by free-market economists that they are trying to defend the market from politically motivated interference by the government is false. Government is always involved and those free-marketeers are as politically motivated as anyone. Overcoming the myth that there is such a thing as an objectively defined “free market” is the first step towards understanding capitalism.

OUR “UNFREE MARKET”

Many opposed environmental regulations, which first appeared a few decades ago on things like cars and factory emissions, as serious infringements on our freedom to choose. Opponents asked: If people want to drive in more-polluting cars, or if factories find that more-polluting production methods are more profitable, why should government stop them? Today, most people accept these regulations, but they’re a sign of an unfree market. So some limitations on freedom (i.e., protective legislation) can be helpful. But most “unfreedoms” can be devastating. In essence, we have to choose which unfreedoms we want to live with.

Most would consider monopolies a sign of an unfree, and even an immoral market. Monsanto, through the licensing of technology with its GMO seeds, controls 90% of the soybeans and 80% of the cornplanted and grown in America. According to the Center for Food Safety, this drove up the average cost of planting a single acre of soybeans 325%. For corn, the cost has risen 2,659% between 1994 and 2011. So through its monopolized control of seeds, it is driving the price of food through the roof, ensuring the starvation of millions of people around the world.

Powdered cocaine is a drug generally preferred by rich, white Americans, while the poor tend to use crack cocaine. While both are illegal, crack carries a legal penalty 100 times longer than the same substance in powdered form. It seems that there’s also no free market when it comes to jail terms. Not surprisingly, with wealth, power, and influence come lighter criminal penalties.

Higher education has also never been part of the free market. Admissions spots at universities are “sold” more often that we we’d like to believe, whether through the influence of legal donations, or powerful friends or family.

The free market is an illusion. If some markets look free, it is only because we so totally accept the regulations that are propping them up that they become invisible.

SOCIAL INEQUITY BY DESIGN

“We can have a democracy or we can have great wealth in the hands of a few, but we cannot have both.”—Louis Brandeis

An undeniable result of this unfree market is the continued consolidation of wealth and influence. On average, CEO pay has increased 937% between 1978 and 2013. The average worker’s pay increased just 10.2% over the same period. This increase has little to do with the increasing value of these CEOs, and everything to do with the power and influence they have over the rules of the system that allow them to enrich themselves. 

The real earnings of the median male have declined 19% since 1970, and the median male with only a high school diploma saw his real earnings fall 41% from 1970 to 2010. Among those classified as poor, 20.4 million people live in what is considered “deep poverty,” meaning their incomes are 50% below the official poverty line. One quarter of the nation’s Hispanics and 27% of African Americans live in poverty.

Reich writes: “There is no longer any significant countervailing force (like powerful labor unions), no force to constrain or balance the growing political strength of large corporations, Wall Street, and the very wealthy.” He also describes research conducted by Princeton professors Martin Gilens and Benjamin Page, which analyzed 1,799 policy issues to determine the influence of economic elites and business groups on public policy issues compared to average citizens. It found that, “The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact on public policy.” 

The notion that we live in a democracy turns out to be just another illusion. The deteriorated state of our democracy more easily enables the wealthy and powerful to write the rules and give themselves the greatest benefits. Activists Martin Kirk and Alnoor Ladha argue that the current set of rules that articulate the values of our economic operating system can be best characterized as extractive, exploitative, greedy, selfish, elitist, hierarchical, patriarchal, life-denying, and indeed, psychotic. They invoke the Cree Indian term, wetiko, which is a cannibalistic spirit with an insatiable desire for consumption, that eventually even subsumes its host. They are essentially saying that the animating force of late-stage capitalism is the mind-virus of wetiko.

In sum, we have a system that has already chosen winners and losers. A system that elaborately ensures who gets into Ivy League colleges, gets the best jobs, makes the most money, and enjoys the most privileged lives. This is the same system that decides which businesses receive the most corporate welfare, benefit most from regulations, receive the best protection from foreign competitors, and are most likely to get the best returns on their lobbying dollars. We have, at the end of the day, the freest marketplace that money can buy. A system created by wetikos to perpetuate wetiko.

THIRTEEN WAYS TO START FIXING THE PROBLEM

The solution lies not in a freer marketplace with less government intervention, but in a marketplace that expresses the wishes and best interests of the majority, in one that fairly protects the rights of minorities with what we might call a “democratic marketplace,” driven by a commitment to justice, equity, interdependence, ecological regeneration, and the well-being of all life. 

How do we move toward this goal? Here are 13 ways to start fixing the deep psychosis of our system.

1.  Get money out of politics. We must overturn Citizens United v. FEC, support organizations like Free Speech For People (which has led an attack on the ruling), and ultimately transition to 100% publicly financed elections.

2.  Require disclosure on the source of funding for any and all documents published academically or in the public domain.

3.  Create new anti-trust laws that prevent and eliminate monopolies.

4.  End all corporate financial subsidies.

5.  End insider trading.

6. Initiate an immediate living wage and transition to a basic minimum income for all citizens.

7.  Expand the definition of unionized labor to increase the number of workers that unions represent.

8.  Set a corporate minimum tax rate of 25%.

9.  Eliminate the second home mortgage deduction.

10.  Increase funding available to fund Employee Stock Ownership Plansand build greater tax incentives for co-operatives and other forms of employee ownership.

11.  Stop transferring the cost of product externalities from business to society. The American Sustainable Business Council (which I cofounded) has a working group developing policy recommendations that would begin to move us toward full-cost accounting.

12.  Permanently eliminate payroll taxes.

13.  Mandate that women make up 50% of the directors of all public and private companies over the next three years.

This is not an exhaustive list, but rather an example of what is possible that highlights how many existing solutions already exist. We have been taught that politics and economics are separate fields. But that is an artificial distinction that serves the power elites and their agents of exploitation. We must rein in the corporate take-over of society so that we can reimagine commerce, community, and government itself, and usher in a just transition to a post-capitalist, post-wetiko world. You can .

Jeffrey Hollender (@JeffHollender) is cofounder and former CEO of Seventh Generation, and now the CEO of Sustain Natural. He is the author of six books, including How to Make the World a Better Place: A Guide to Doing Good.

Part of the Seeing Wetiko series. See all articles here. This article was originally published in Fast Company.

An earlier version of this article appeared in the Stanford Social Innovation Review on March 30, 2016.

[Photos: Flickr users Quinn Dombrowski, John Murphy, Tobin, Adam Swank, brownpau. vitaliy_73 via Shutterstock]

The post 13 Ways We Can Fix The “Free Market” So It Works For Regular People, Not Just The Rich appeared first on P2P Foundation.

Overview

The country of one’s dreams must be a country one can imagine being constructed, over the course of time, by human hands.”
-Richard Rorty

Among capitalism’s many critics, it is standard procedure to state that neoliberalism has failed and that unless our societies construct a new paradigm for how economies work, human societies will collapse under the weight of an unsustainable and environmentally catastrophic capitalist system.

The International Monetary Fund (IMF), the most powerful purveyor of neoliberal ideas over the last forty years, has now admitted that perhaps its signature ideology has been oversold, and that the costs of free market ideology may have outweighed the touted benefits. When this happens, we may be sure something has reached a breaking point. Whether this signals a fundamental shift in thinking, or a tactical maneuver to preserve the status quo, is a matter of political perspective. (My money is on the latter.)

In fact, neoliberalism has not failed. From the vantage point of its ultimate purpose—maximizing wealth to the owners of capital—it is succeeding admirably.  As a doctrine, it is true to its principles. The problem is that these principles are not just unsustainable—they are pathological. The deification and normalization of greed and the hoarding of wealth by an ever-shrinking and increasingly predatory minority has brought us to the brink of economic and social collapse.¹ What is more, the dominance of neoliberal ideas in our culture has literally deprived people of the capacity to imagine any alternative. This is the ultimate triumph of ideology. If ever there was a time when alternative visions of how economies might work were urgently needed, it is now. The absence of alternatives from public debate is one clear symptom of the crisis we are in.

If ever there was a time when alternative visions of how economies might work were urgently needed, it is now.

The election of Donald Trump in the US, the success of Brexit in the UK, and the rise of neo-fascist parties across the face of Europe only highlight the continuing failure of leftist movements to present such a vision and to address the massive discontent that is now driving political developments. But it is also true that the direction this discontent can take is still up for grabs. Despite recent disheartening events, the election of Syriza in Greece, the popularity of the Sanders campaign in the US, the rise of Podemos and Barcelona en Comú in Spain, and the success of the Pirate Party in Iceland show that the triumph of right wing reaction is not guaranteed. But the failure of Syriza to challenge the status quo in Europe and the rise of Trump in the US also indicate that a change of political direction is not tenable within the parameters of our present institutions. We have entered an age where it is entirely likely that change—in whatever form—will come not as a result of conscious political effort on the part of social movements, but rather from the collapse of the current system.

What is entirely unknown is what form this change will take. Already, the absence of an alternative to capitalism has given rise to forms of reaction not witnessed since the fascist era of the 1930s. Even more frightening is that the pathology of fascist ideas has taken hold in what were once the strongholds of liberal democracy. In the US, the first weeks of a Trump administration has revealed the face of an Orwellian dystopia in the making. It seems clear that the urgency of our present moment is now primarily political. The consequences of global warming, growing inequality, disappearing civil liberties, and the consolidation of the surveillance state all point to the necessity of political mobilization on a scale not seen since the uprisings of the mid 1800s. It is also clear that any such mobilization must be propelled by a vision and a plan that concretely and radically challenge and transform the underpinnings of our current system.

It means the recovery of economic and political sovereignty by nations, the radical curtailment and redistribution of wealth, the social control of capital, the democratization of technology, the protection of social, cultural, and environmental values, and the use of state and civil institutions to promote economic democracy in all its forms. Above all, it means the evolution of new forms of governance that deliver decision-making power to citizens in an era of global power dynamics. A tall order. But if the grievances that are polarizing societies across the globe are not channeled in ways that offer people constructive pathways to reform, positive visions of society that they can believe in, ways of life that have meaning beyond self-aggrandizement and the worship of money, what comes next will be a nightmare, fueled by rage and resentment. In the US, we are seeing this unfolding before our eyes.

Thankfully, the elements of a new imaginary are all around us.

Thankfully, the elements of a new imaginary are all around us. The outlines of a new political economy that is both humane and in which the fulfillment of the person is conjoined to the well-being of one’s community are already visible in the innumerable examples of cooperative and social enterprises that are showing daily that social values can be the basis for a form of economics in which the common good prevails. Ethics can be a basis for a new economic order. In this essay, I will not dwell on what has gone wrong with late stage capitalism. The seemingly permanent state of economic, social, and environmental crisis that it has engendered is evidence that our economic system is both unjust and unsustainable. Nor can I address all aspects of what a Next System entails. What I will do is describe elements of political economy that I think are indispensable for paradigm change; including, the forms by which such an economy might function; the roles of citizens and the state; the role of technology; and, examples of how these ideas may be realized in strategic areas. These include the provision of social care, the creation of money and social investment, the creation of social markets, and the containment of corporate power. It is true that the rapid regressions that we are now witnessing daily clearly require urgent and immediate action to resist very specific threats that affect real lives and cannot wait for what may come next. These range from the erasure of civil liberties, to the rollback of environmental protections, to the racist discrimination against minorities that is now public policy. But if these regressions are in fact symptomatic of a political order in crisis, as I argue in this paper, thinking about what comes next can ensure that the urgency of our actions in the here and now reflect a vision for the long term that gives meaning and coherence to what we do today.

George Monbiot, “Neoliberalism – The Ideology at the Root of all Our Problems,” The Guardian,
April 15, 2016, https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot.

This paper by John Restakis, published alongside three others, is one of many proposals for a systemic alternative we have published or will be publishing here at the Next System Project. We have commissioned these papers in order to facilitate an informed and comprehensive discussion of “new systems,” and as part of this effort, we have also created a comparative framework which provides a basis for evaluating system proposals according to a common set of criteria.

Continue reading, download the PDF here.

The post Cooperative Commonwealth & the Partner State appeared first on P2P Foundation.

Few ideas have more profoundly poisoned the minds of more people than the notion of a “free market” existing somewhere in the universe, into which the government “intrudes.” In this view, whatever inequality or insecurity the market generates is assumed to be natural and the inevitable consequences of impersonal “market forces.” … If you aren’t paid enough to live on, so be it. If others rake in billions, they must be worth it. If millions of people are unemployed or their paychecks are shrinking or they’ll have to work two or three jobs and have no idea what they’ll be earning next month or even next week, that’s unfortunate but it’s the outcome of “market forces.”

Reich’s point is that market forces aren’t the result of a free market, which doesn’t exist, never has existed, and probably never will exist. What we do have is a highly engineered marketplace with hundreds of thousands of rules — rules most often created behind closed doors by people who will benefit from every word and comma they put into place. These rules take endless form — the tax code, appropriations bills, new laws, court rulings, executive orders, and administrative guidance to name just a few.

Democrats and Republicans alike — at all levels of government and in all three branches—design these market forces. They grant favors to local businesses, friends, and favored industries, as well as emerging and dying technologies. While these rules are more likely to limit the liability from the disastrous effects of mountain top coal removal than they are to provide tax benefits to solar energy, most industries have figured out how to play the game. They hire lobbyists, donate to politicians — and they find the benefits exponentially greater than the cost. Journalist Nicholas Kristof noted that the chemical and pharmaceutical industries alone spent $121,000 per member of Congress on lobbying last year. Research from Harvard’s Safra Center for Ethics shows that corporations in general get up to $220 return for every dollar they “invest” in lobbying Congress.

The governing classes and elected officials have always created the rules of the economic game. These legal frameworks and the systems they support affect our nation’s economy and daily life more than the most visible government programs, including social security, food stamps, or health care.

Reich goes on to say:

The rules are the economy. … As the economic historian Karl Polanyi recognized [in his 1944 book, The Great Transformation], those who argue for “less government” are really arguing for different government — often one that favors them or their patrons. “Deregulation” of the financial sector in the 1980s and 1990s, for example, could more appropriately be described as “reregulation.” It did not mean less government. It meant a different set of rules.

In the book 23 Things They Don’t Tell You About Capitalism, the University of Cambridge economist Ha-Joon Chang writes:

The free market doesn’t exist. Every market has some rules and boundaries that restrict freedom of choice. A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them. How “free” a market is cannot be objectively defined. It is a political definition. The usual claim by free-market economists that they are trying to defend the market from politically motivated interference by the government is false. Government is always involved and those free-marketeers are as politically motivated as anyone. Overcoming the myth that there is such a thing as an objectively defined “free market” is the first step towards understanding capitalism.

Our “Unfree Market”

Many opposed environmental regulations, which first appeared a few decades ago on things like cars and factory emissions, as serious infringements on our freedom to choose. Opponents asked: If people want to drive in more-polluting cars, or if factories find that more-polluting production methods are more profitable, why should government stop them? Today, most people accept these regulations, but they’re a sign of an unfree market. So some limitations on freedom (i.e. protective legislation) can be helpful. But most ‘unfreedoms’ can be devastating. In essence, we have to choose which unfreedoms we want to live with.

Most would consider monopolies a sign of an unfree, and even an immoral market. Monsanto, through the licensing of technology with its GMO seeds, controls 90 percent of the soybeans and 80 percent of the corn planted and grown in America. According to the Center for Food Safety, this drove up the average cost of planting a single acre of soybeans 325 percent and for corn it has been 2,659 percent between 1994 and 2011. So through their monopolized control of seeds, they are driving the price of food through the roof, ensuring the starvation of millions of people around the world.

Powdered cocaine is a drug generally preferred by rich, white Americans, while the poor tend to use crack cocaine. While both are illegal, crack carries a legal penalty 100 times longer than the same substance in powdered form. It seems that there’s also no free market when it comes to jail terms. Not surprisingly, with wealth, power, and influence come lighter criminal penalties.

Higher education has also never been part of the free market — admissions spots at universities are “sold” more often that we we’d like to believe, whether through the influence of legal donations, or powerful friends or family.

The free market is an illusion. If some markets look free, it is only because we so totally accept the regulations that are propping them up that they become invisible.

Social Inequity by Design

“We can have a democracy or we can have great wealth in the hands of a few, but we cannot have both.”—Louis Brandeis

An undeniable result of this unfree market is the continued consolidation of wealth and influence. On average, CEO pay has increased 937 percent between 1978 and 2013. The average worker’s pay increased just 10.2 percent over the same period. This increase has little to do with the increasing value of these CEOs, and everything to do with the power and influence they have over the rules of the system that allow them to enrich themselves.

The real earnings of the median male have declined 19 percent since 1970, and the median male with only a high school diploma saw his real earnings fall 41 percent from 1970 to 2010. Among those classified as poor, 20.4 million people live in what is considered “deep poverty,” meaning their incomes are 50 percent below the official poverty line. One quarter of the nation’s Hispanics and 27 percent of African Americans live in poverty.

Reich writes, “There is no longer any significant countervailing force (like powerful labor unions), no force to constrain or balance the growing political strength of large corporations, Wall Street, and the very wealthy.” He also describes research conducted by Princeton professors Martin Gilens and Benjamin Page, which analyzed 1,799 policy issues to determine the influence of economic elites and business groups on public policy issues compared to average citizens. It found that, “The preferences of the average American appear to have only a miniscule, near-zero, statistically non-significant impact on public policy.”

The notion that we live in a democracy turns out to be just another illusion. The deteriorated state of our democracy more easily enables the wealthy and powerful to write the rules and give themselves the greatest benefits. Activists Martin Kirk and Alnoor Ladha argue that the current set of rules that articulate the values of our economic operating system can be best characterized as extractive, exploitative, greedy, selfish, elitist, hierarchical, patriarchal, life-denying, and indeed, psychotic. They invoke the Cree Indian term, wetiko, which is a cannibalistic spirit with an insatiable desire for consumption, that eventually even subsumes its host. They are essentially saying that the animating force of late-stage capitalism is the mind-virus of Wetiko.

In sum, we have a system that has already chosen winners and losers. A system that elaborately ensures who gets into Ivy League colleges, gets the best jobs, makes the most money, and enjoys the most privileged lives. This is the same system that decides which businesses receive the most corporate welfare, benefit most from regulations, receive the best protection from foreign competitors, and are most likely to get the best returns on their lobbying dollars. We have, at the end of the day, the freest marketplace that money can buy. A system created by Wetikos to perpetuate Wetiko.

Thirteen Ways to Start Fixing the Problem

The solution lies not in a freer marketplace with less government intervention, but in a marketplace that expresses the wishes and best interests of the majority — in one that fairly protects the rights of minorities with what we might call a “democratic marketplace,” driven by a commitment to justice, equity, interdependence, ecological regeneration, and the well-being of all life.

How do we move toward this goal? Here are thirteen ways to start fixing the deep psychosis of our system.

1.  Get money out of politics. We must overturn Citizens United v. FEC, support organizations like Free Speech For People (which has led an attack on the ruling), and ultimately transition to 100 percent publicly financed elections.

2.  Require disclosure on the source of funding for any and all documents published academically or in the public domain.

3.  Create new anti-trust laws that prevent and eliminate monopolies.

4.  End all corporate financial subsidies.

5.  End insider trading.

6. Initiate an immediate living wage and transition to a basic minimum income for all citizens.

7.  Expand the definition of unionized labor to increase the number of workers that unions represent.

8.  Set a corporate minimum tax rate of 25 percent.

9.  Eliminate the second home mortgage deduction.

10.  Increase funding available to fund Employee Stock Ownership Plans and build greater tax incentives for co-operatives and other forms of employee ownership.

11.  Stop transferring the cost of product externalities from business to society. The American Sustainable Business Council has a working group developing policy recommendations that would begin to move us toward full-cost accounting.

12.  Permanently eliminate payroll taxes.

13.  Mandate that women make up 50 percent of the directors of all public and private companies over the next three years.

This is not an exhaustive list, but rather an example of what is possible that highlights how many existing solutions already exist. We have been taught that politics and economics are separate fields. But that is an artificial distinction that serves the power elites and their agents of exploitation. We must reign in the corporate take-over of society so that we can reimagine commerce, community and government itself, and usher in a just transition to a post-capitalist, post-wetiko world.

*An earlier version of this article appeared in the Stanford Social Innovation Review on March 30, 2016.

Originally published at FastCompany. 

Part of the Seeing Wetiko series. See all articles here.

Photo by angermann

The post Seeing Wetiko: The Freest Marketplace Money Can Buy appeared first on P2P Foundation.

Max Ehrenfreund, throughout the Washington Post article that reported on the poll (“A majority of millennials now reject capitalism, poll shows,” April 26), uses “free market” interchangeably with both “capitalism” and “the status quo.” Applying the basic principles of deductive logic, this means that the status quo is a free market — a conclusion so absurd as to suggest Ehrenfreund’s own confusion more than anybody else’s. He quotes an older 2011 Pew survey that similarly used “capitalism” as a synonym for “America’s free market system.”

John Della Volpe, the Harvard polling director responsible for the most recent findings, argued that “They’re not rejecting the concept. The way in which capitalism is practiced today, in the minds of young people — that’s what they’re rejecting.”

The problem is that people like Ehrenfreund, the Pew researchers and virtually all TV talking heads and mainstream politicians of both major parties explicitly use the term “free market system” to refer to what we have right now.

The other problem is that there’s never been a form of capitalism in practice that wasn’t at least as coercive and statist as what we have right now. Historical capitalism began five or six centuries ago, not with free markets, but with the conquest of the free towns by the absolute states and the mass expropriation of peasants from their traditional rights to the land by the landed oligarchy, and continued with the colonial conquest of most of the world outside Europe. Since then capital has continued to rely heavily on the state to socialize its operating costs, erect barriers to competition, and enforce illegitimate title to all the land and natural resources engrossed in previous centuries. This history of conquest, robbery and enslavement is in the basic genetic code of contemporary corporate capitalism.

At Reason (“Millennials Hate Capitalism Almost as Much as They Hate Socialism,” April 27), Elizabeth Nolan Brown recognized that what Millennials mean by “capitalism” isn’t some hypothetical “free market”:

Capitalism is Big Banks, Wall Street, “income inequality,” greed. It’s wealthy sociopaths screwing over the little guy, Bernie Madoff, and horrifying sweatshops in China. It’s Walmart putting mom-and-pop stores out of business, McDonald’s making people fat, BP oil spills, banks pushing sub-prime mortgages, and Pfizer driving up drug prices while cancer patients die. However incomplete or caricatured, these are the narratives of capitalism that millennials have grown up with.

But then, when you subtract all these aspects of contemporary capitalism, you’re left with something a lot like the Cheshire Cat when both the cat and the grin have disappeared.

In any case Brown does a lot better than Emily Ekins, who reported on the Reason-Rupe poll a year ago. Ekins simply reasserted the conventional dictionary definitions of “socialism” and “capitalism” as a matter of dogma, suggesting that the fact Millennials like socialism but don’t want a “government-managed economy” simply meant “young people don’t know what these words mean” (“Poll: Americans Like Free Markets More than Capitalism and Socialism More Than a Govt Managed Economy,” Feb. 12, 2015). And in another article (“64 Percent of Millennials Favor a Free Market Over a Government-Managed Economy,” Reason, July 10, 2014), she cited Millennial inability to “define socialism as government ownership” as a sign of ignorance of “what socialism means.”

But “capitalism” and “socialism” are terms with long, nuanced histories, and the conventional dictionary definitions are — at best — extremely time- and perspective-bound. And treating the dictionary definition of “socialism” as though it trumped the actual history of the socialist movement is — if you’ll excuse me — the very definition of “dumb.”

There have always been non-statist strands within the socialist movement, since its very beginning — one of them is known as “anarchism.” At times the non-statist forms of socialism were dominant. And there have always been self-identified socialists within the free market libertarian movement.

Even state socialists like Marx and Engels, who saw socialist control of the state as an essential step towards building socialism, didn’t equate “socialism” to state ownership and control of the economy as such. “Socialism” was a system in which all political and economic power was in the hands of the working class. Nationalization and state control of the economy might be part of the transition process to socialism — if the state came under working class control. On the other hand, increasing state control of the economy when the state was controlled by capitalists would simply be a new stage in the evolution of capitalism in which the capitalists managed the system through the state in their own interest.

Today the most interesting subcurrents in the socialist movement are those like the autonomism of Antonio Negri and Michael Hardt, which sees the path to post-capitalism as “Exodus” — the creation of a new society around counter-institutions like commons-based peer production.

Erik Olin Wright, for example (“How to Think About (And Win) Socialism,” Jacobin, April 2016), sees “socialism” as a system in which democratically organized social forces — as opposed to either states or corporations — are the dominant means of organizing activity. Societies throughout history have been a mixture of such institutional forms — but under capitalism the for-profit business firm became the hegemonic institution, or kernel of the entire society, with other institutions defined by their relations to capital. As capitalism evolves into socialism, new democratic social institutions will become the hegemonic form, and the state and business will be reduced to niches in a system characterized by the dominance of the new democratic institutions.

Things like local currencies, land trusts, cooperatives and commons-based peer production exist under capitalism today. But as capitalism reaches the limits of growth and confronts its terminal crises, these new socialist institutions will expand and knit together into a coherent whole that will form the basis of the successor system, and the remains of corporate and state institutions will be integrated into a system defined by its post-capitalist core.

…the possibility of socialism depends on the potential to enlarge and deepen the socialist component within the overall economic ecosystem and weaken the capitalist and statist components.

This would mean that in a socialist economy, the exercise of both economic power and [state] power would be effectively subordinated to social power; that is, both the state and economy would be democratized. This is why socialism is equivalent to the radical democratization of society.

And something like this, by the way — a vision of transformation based on prefigurative politics and counter-institution building — has been at the heart of many versions of socialism and anarchism since their first appearance as organized movements two hundred years ago.

So maybe when Millennials say they hate capitalism and like socialism, but oppose state control of the economy, it’s not they who are confused. Maybe they have a better idea of what “capitalism” and “socialism” mean than people like Frauenfelder and Ekins.

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As an example of the latter, Akerlof and Shiller argue that “our free market system” by its very nature “tends to spawn manipulation and deception.” And what they describe — “[i]f business people behave in the purely selfish and self-serving way that economic theory assumes” — is an economy in which economic actors are abstract “economic men” and most productive and distributive functions are mediated by the cash nexus. But there have been markets throughout most of human history. And many of the societies in which market exchange has existed have arguably been a lot freer than the one we live in now. But societies in which everything is mediated by the cash nexus, and most economic functions are performed by for-profit business firms, are a relatively recent phenomenon of the capitalist era and — according to anthropologist David Graeber — totally a creation of the modern state. So what Akerlof and Shiller describe is actually a system created by massive state brutality, and maintained by ongoing state intervention, that grossly distorts spontaneous human social relations. What does their use of “free market”add to this?

And what, in practical terms, does a “free market system” even mean? Is a political-economic-social system in which the overwhelming majority of landed property can be traced back to state engrossment and land grants to privileged classes, and the enclosure of vacant and unimproved land by absentee landlords, and the rightful owners (i.e. the actual occupants, users and cultivators) pay tribute to them, a “free market”? Is a system where title to most of the world’s mineral and energy reserves dates to colonial robbery a “free market”? Is a system where the majority of profit depends on patents and copyrights — i.e., a state restriction on the right to copy information or designs — a “free market”? Is a system where the state limits competition, and most industries are dominated by a handful of corporations with administered pricing and collusive suppression of innovation a “free market”? Is a system where the majority of corporations would be running in red ink if the state weren’t socializing a major share of their operating costs and risks a “free market”?

If it is, the term “free market” doesn’t mean much. On the other hand if “free market” means anything, the present system is not a free market. It’s a system where capitalists and landlords control the state, and the main function of the state is to guarantee profits and rents to the propertied classes.

The only conclusion I can draw is that “free market,” as the overwhelming majority of people in mainstream discourse use it, simply means “the system we have now,” as opposed to (maybe?) Social Democracy or an idealized New Deal economy. But what we have now is arguably as statist  as the New Deal or Western European Social Democracy ever was — it’s just that less of the state intervention is on the side of labor unions and the poor.

Some folks on the Left like Naomi Klein and Dean Baker recognize a distinction between “corporatism,” or the “corporate welfare,” and the “free market.” And some on the right are fond of responding to left-wing critics by saying “Oh, that’s corporatism (or crony capitalism), not capitalism.” But the latter, at least, do it as just a hand-waving gesture to acknowledge a few outlying phenomena like the Export-Import Bank or somesuch, while defending the core of the existing system as legitimate.

That’s nonsense. There is no “free market system.” There never has been. Despite the efforts of some on the Right to pretend that some period in the past has at least approximated laissez-faire, capitalism — the system that replaced feudalism 500 years or so ago — was founded on massive robbery, aggression and enslavement, and has been statist to its core ever since.

If politicians and talking heads, or academic intellectuals, want to talk about corporate capitalism, by all means let them do so. But stop talking as if the system we live under has anything to do with freedom.

Citations to this article:

• Kevin Carson, Does ‘free market’ even mean anything?, Augusta Free Press, 2016-03-31
• Kevin Carson, Does “Free Market” Even Mean Anything?, Strike the Root, 2016-03-31

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