Two criticisms of Paul Mason’s Post-Capitalist Theses: underemphasizing finance and overemphasizing infotech

From an extensive and must-read review by Ann Pettifor:

* On the illusory naturalism of Kondratieff cycles

“My main beef with Mason’s book is that rather than define this period as one that was man-made – designed largely by the genius John Maynard Keynes and his Cambridge colleagues – Mason defines this period as a “Kondratieff upswing on steroids”.

Once again the implication is that this period of full employment, of science-led innovation, high productivity…high wages, consumption keeping pace with production, benign inflation and marginal speculative finance (p 86-7) is described as something beyond human agency – akin to the cycles of the moon.

Neoliberals too like to dismiss this age as beyond our present-day ken. Neoliberals too would like us to feel impotent in the face of day’s rapacious financial capitalism. But as the Golden Age proved, we are not impotent. And we are not the subjects of periodic, abstract cycles. The Golden Age was constructed, designed and implemented by a group of economists who congregated at Bretton Woods in 1944 and that were led by John Maynard Keynes and his American competitor, Harry Dexter White. (The striking thing about the conference was that only one banker was allowed to attend – and only because President Roosevelt regarded him as tame enough not to present a threat to the proceedings.)

Keynes and colleagues were confronted by a form of capitalism that had wrought massive destruction of lives, livelihoods and nations. They were surrounded by the wreckage of war, but were not intimidated by the scale of the challenge they faced in confronting, subordinating and managing global finance capitalism.
Nor should we be. We are not, as Mason suggests, the passive subjects of inexorable and inevitable cycles or Kondratieff waves of capitalism. We are masters of our own destiny – if only we (and professional economists) had the courage to identify, name, subordinate and manage the global finance sector – as Keynes and others have shown we can. ”

* Mason is over-emphasizing infotech and underestimating the role of finance

“While Mason does of course discuss the finance sector, he makes infotech the main driver of the changes we are witnessing today.

I beg to disagree. Far from ‘mutating’ in cycles of 50 to 500 years, the finance sector is today growing exponentially before our very eyes, with only the occasional financial crisis to arrest that growth. This is partly thanks to the rise of infotech, but infotech in the service of finance, not as its driver.
The last financial crisis (2007-9) turbo-blasted the sector into a new fantastic growth phase. Not only was Haute Finance bailed out, it also insidiously attached itself more fully to states – and wrested guarantees and protection from these governments, their taxpayers and their central banks.
And while this particular group of capitalists may worship at the shrine of Adam Smith and Ayn Rand, they nevertheless demand and expect taxpayer-funded guarantees and protection from the discipline and losses imposed by market forces.

Despite its detachment from the “real” economy of production, the global finance sector has succeeded in capturing, effectively looting and then subordinating governments and their taxpayers to the interests of financiers. Bankers and financiers now effectively control the public utility that is our monetary system. They can gamble and speculate on global markets without fear of losses or the fear of being disciplined by ‘the invisible hand’. They know their institutions are Too Systemic, or Too Big To Fail.

They are today’s Masters of the Universe – and they do not feature largely in this book.

Like so many others Mason takes the structure of the internet as a model for the evolution of capitalism and speculates that capitalism will evolve into a system in which hierarchies are flattened, machines are free and we’re all far more collaborative.

But Mason’s techno-utopianism is fundamentally about the production side of the economy. Yet, as he well knows, there is more to the economy than production. There is consumption – and Mason’s view of today’s sharing, networked and connected world may just as well be defined as collaborative consumption.

And then there’s the rentier sector of the economy – earning rent from assets (particularly financial assets like debt) effortlessly.

The last two sectors are not fully addressed in the wide sweep of this book.”

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