Alternatives to capitalism

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By ELEUTÉRIO FS PRADO*

The thesis that capitalism is an insurmountable mode of production is a myth contradicted by the currently existing technological possibilities to organize the complex social life of contemporary societies.

Before presenting and criticizing the best argument against socialism it is necessary to talk a little, very little, about a very, very bad argument. And it is found in the book capitalism without rivals (However) by Branko Milanovic. In this leaflet, its author offers two ideal types to establish an understanding of contemporary capitalism: one of them, which he calls “meritocratic and liberal capitalism”; the other, which he calls “political capitalism”. These two “models” – as he himself explains – represent in broad strokes, of course, the really existing capitalisms in the United States and China, respectively.

In the last chapter, called Future of global capitalism, after presenting contemporary capitalism as amoral because it imposes the commodity form on almost everything, Milanovic wonders if there is an alternative system that could replace it in the future. He poses this question rhetorically and then gives a very “Thatcherite” answer: “the problem with such a sensible assessment is that there is no viable alternative to hyper-commodified capitalism”. He justifies, then, this peremptory conclusion in two ways: (a) “the alternatives created in the world turned out to be worse – some of them much worse”; (b) “one cannot hope to maintain all this” – i.e. the “goods and services that have become an integral part of our lives” – “destroying the acquisitive spirit or eliminating the accumulation of wealth as the only way to success".

Thus, in the first argument, Milanovic takes the historical experiences of “real socialisms” as definitive when he himself considered them in that same book as unfaithful to the thought of Karl Marx. In fact, he reasoned that they were not socialisms in fact, but only paths or even stages through which certain backward societies got on the path of capitalist development. Through this contour, they avoided the obstacles that the already established capitalist powers imposed on their potential competitors. In any case, an economist who had been research leader at the World Bank should know that the future is not contained in the past and that, logically, events that took place yesterday do not rule out possible events tomorrow.

In the second, he resumes the perverse thesis of Francis Fukuyama, now through a utilitarian and pragmatic argument, typically bourgeois: there is no alternative, liberal capitalism is the end of history. Behold, for him, man is (albeit not all) economic man, without realizing that the subject a-subjected to the logic of limitless accumulation is brought into existence by capitalism itself. And this transhistorical anthropological assumption, which goes back to Bernard Mandeville, is even affirmed by him: “one of the characteristic features of the human condition is that it is not possible to improve our material life without giving free course to one of the most unpleasant traits of our nature. ” He thus hails, by cynical apology, selfishness as a desirable trait in human nature.

Now, even if communal and democratic socialism is currently presented as a difficult path, it is still a real possibility, which requires, in order to come into being, the optimistic commitment of the true critics of the really existing capitalism. But who, after all, formulated the best argument against socialism was not Mister Milanovic. He was an unrepentant opponent of any form of socialism or even any form of social democracy: Herr Friedrich Hayek.

The thesis of this author from the Austrian school of political economy says that the market is not just a place where goods are exchanged, as it consists above all in a decentralized information system that is unsurpassed as such in the function of promoting the meeting of suppliers and demanders of goods. goods. Moved by the competition of commodity producers on the one hand and consumers on the other, the market is also a mode of discovery. Based on it, the former develop new production techniques, as well as new products, the latter open up to new tastes and new ways of satisfying their needs.

Millions or even billions of different consumers not only discover there the useful things that satisfy their needs, but they obtain, through prices, information about the relative scarcity of goods and about whether or not their desired purchases fit into their budget. their budgets. The millions of capitalist suppliers, on the other hand, are faced there with the needs of people, families and other producers, also obtaining public information about the prices they can charge for their goods and, thus, about the profits they can obtain by selling what they have produced to others. consumers.

To better understand this way of apprehending the economic sphere of society, it is important to realize that Hayek abandoned, to a certain extent, the tradition of political economy that sought to think of the economy based on a perspective that takes people as independent beings. Differently, he thinks of the economy as a complex adaptive system, as a decentralized communication system whose messages cannot be apprehended in a unified way and, therefore, replaced.

As such, this system consists of a competitive process whose evolution allows the use of knowledge about available human and non-human resources, which would otherwise remain underutilized. This knowledge, therefore, according to him, cannot be used by a planning body that intended to manage the economic system better than it is capable of doing by itself. About this process – he says – it is not even possible to arrive at a knowledge that synthesizes its functional links in formulas, since it is only possible to apprehend its general patterns of behavior.

In his fight against socialist interventionism, this author came to think of the economic system as a cybernetic system that has the property of self-organization, which is capable of reproducing its own structure indefinitely. But unlike constructed cybernetic systems – servomechanisms –, that formed by markets remains an enormous processor of information that is beyond the capacity of the human mind to reproduce or even understand. Thus, the formation of prices is understood as an intrinsically decentralized process of negative feedback that allows the functioning of the economic system, on which, moreover, people depend for their own survival. This system, moreover, consists of a spontaneous realization of man's decentered action in the course of secular history - not of his conscious and deliberative purposes.

This author, therefore, thinks of the economic system based on the commodity ratio, on the money ratio and on the capital ratio as the spontaneous creation of a long-term evolutionary process through which they were selected little by little, through countless trials, errors and corrections, more efficient rules for the survival of the human species. Even if they are absolutely necessary for the effectiveness and efficiency of actions, people use these rules in everyday life unconsciously; behold, these rules operate in man's action without his knowing them: “man does not know most of these rules which he follows when he acts; and even what he calls intelligence largely consists of a normative system which operates in him, but which he has no knowledge of”.[I]

Quinn Slobodian, author of a fundamental work for a necessary critical understanding of Hayek's neoliberalism, summarized well the practical, moral and political consequences of this way of thinking about the economic system:

Hayek argued that the world economy – a large catallaxy – is sublime. As it operates beyond reason, the abuse of reason – as you say – can ruin it. Desiring to realize a preconceived idea of ​​economic equality in pursuit of “the mirage of social justice” implies containing the creative capacity of competition, mixing the price signals of markets and, finally, “destroying a civilization that no mind planned, because it grew out of the free efforts of millions of individuals”. The sanctity of the world economy – beyond statistics, mathematics or even sensory perception – must be defended against the “synoptic illusion” of constructivist demands.[ii]

This understanding of the world allows Hayek to rethink the nature of liberalism itself as a special modality of individualism, a perspective – as is known – characteristic of modern times. For him, the true individualism that this tradition of thought sustains consists of a profound humility in relation to the processes of historical development: he cannot rebuild them as he pleases, according to his ideals of a good or just society; on the contrary, he has to accept them even if he doesn't like their harsh consequences. “Humanity” – he says – “has achieved certain results which have not been projected or understood by any individuals and, indeed, they have always surpassed individual minds”.[iii]

As a result of this way of reasoning about the advent of civilization, he attributes to individuals an extremely modest role in shaping society; they are little more than ants in relation to anthills, ants certainly a little more intelligent than true ants, but still living beings very poor in the ability to recreate the world in which they live in front of their possible purposes.[iv] Still as a consequence of this argument, which evidently diminishes man in order to raise the economic system to the highest possible height, Hayek adopts – and for this reason he has already been severely criticized – an instrumental perspective of freedom. For this hero of neoliberalism, it was said by scholars of his work, “freedom (freedom) consists essentially in the use of habitual or tacit, dispersed and fragmented knowledge” that markets, but also other spheres of social life, produce.[v]This freedom is therefore an imprisonment.

And it couldn't be different. Hayek, as liberalism has been doing since the XNUMXth century, apprehends capitalism from its appearance, that is, from the circulation of goods. Thus, it hides the production relation that constitutes it as such and that denotes its essence: the relation between capital and salaried work which is, as such, a relation of exploitation, but which is also the basis for a relation of political domination – which remain because they do not appear as such, since what merely appears are the “social relations of things”.

But here it is necessary to emphasize above all that this is not a social link that develops peacefully in a bucolic landscape. On the contrary, it seems to be a logic that constantly tends to excess, not only through periodic crises, but because it is a principle of infinite development that tends to an inexorable disaster as it reaches certain limits of man and nature: money, constantly and on a larger scale, it is always transformed into means of production and labor power to generate more goods and thus more money. Therefore, if assent to this logic was in the past acceptance of progress, now, in the sunset of capitalism, it becomes an acquiescence to a regression or even a possible suicide of humanity itself.

If so, why is it suggested right away in the title of this article that there is a better argument, then shown to have been provided by Hayek, a staunch opponent of socialism? Simply because this argument has a core of truth that cannot be overlooked. Indeed, if socialism is to succeed in developing an economic system alternative to capitalism, it must also be a complex adaptive system – now, not governed by an accumulative “automatic subject”, but by a telos that makes it possible to meet human needs, culturally enriching man himself and, moreover, without depleting the natural resources on which he depends to survive. Why such a telos can be achieved, it is necessary that the alternative system contains its own negative feedback structure that guarantees the property of self-organization.

But why is Hayek's argument still bad? Well, to show this it is necessary to present some good arguments. The last one is that the author of The Path of Serfdom constructed an apology for capitalist markets, implicitly ignoring the rich complexity of human experience and the human being. He thinks from an extreme dichotomy: collective action involving a large number of people can only be developed by the market of liberal economies or by centralized planning, on which the centralized system of accumulation that existed in the Soviet Union was based.

It should be seen at the outset that a socialist system, contrary to what it may seem, cannot come into existence as an arbitrary construction of a rationalist mind that considers itself capable of reconstructing social processes according to its determination and will. Indeed, it has to take advantage of and take advantage of recent developments in the field of information systems aimed at solving complex problems of social coordination. It should be noted that network platforms based on feedback structures already exist and are in operation, effectively and efficiently solving problems of pairing or bringing together people interested in a certain artistic, professional topic, etc., of people who want to develop certain activities. practices, demanders and suppliers of goods and services.

Although created in a neoliberal perspective that emphasizes competition, platforms of the latter type contain possibilities that may challenge the canons of neoliberalism itself. Recently, Evgeny Morozov suggested three possibilities for the development of information systems that are consistent with the perspective of democratic socialism: solidarity as a motive for discovery, the “decommodification” of social activities and automatic planning.[vi]

Behold, according to him, it is possible to contradict Hayek's thesis according to which competition is the only social motive compatible with an evolutionary evolver that virtuously reproduces itself in time: (a) altruism, as certain social experiences even within the capitalism itself, can motivate groups of people who wish to coordinate their actions aiming at the good of their fellow men; (b) the purpose of acting as good citizens can bring together large contingents of people who aim to provide and improve legislation in any of the fields that may be necessary. There are certainly other relevant examples, but it should be clear that platforms for bringing people together can make new forms of participatory democracy viable. In these activities, the feeling of social solidarity prevails – and not competition.

To examine the second possibility, that is, that of “decommodification” of certain social activities, it is necessary to see, first, that the market, through prices, solves a problem of complexity reduction. And it appears to be quite necessary when you have a very large number of people interacting and when these people have very heterogeneous preferences. But this is not always true. The company, for example, consists of a way of coordinating activities that involve thousands of people. Now, how do they differ? The company and the market differ with regard to the degree of spontaneity in the development of these activities: it is small and accessory in the first case; great and fundamental in the second case. In the latter, even if centralized planning is feasible, it cannot be recommended because it empowers an inevitable bureaucracy.

The market form in Hayek's conception – and he is correct in this regard – has essentially the nature of a spontaneous order. According to Morozov, the legacy of cybernetics can bring other solutions to this second type of coordination problem, that is, when preferences are diffuse, resources are varied, the environment is very changeable and the number of people involved is very large. For example, it is possible to create an informational platform to seamlessly match donors and recipients of used goods in a city as large as São Paulo. Behold, sites of this type already exist to pair buyers and sellers of used goods, thus forming an electronic market. And the reason for this market is not so much competition, but the feeling of sharing what is no longer useful for some and what can be useful for others.

The third possibility consists of thinking about coordination modes that solve the problem of complexity that the market solves without adopting the bureaucratic command of production and without using central planning. In this case, what is sought is, on the one hand, to suppress the alienation that capitalist commercialization engenders and, on the other hand, to give emulation and competition a role in obtaining efficiency and effectiveness. To achieve the first objective, it is necessary to replace the price system based on capitalist money and, therefore, on abstract quantity of work, which remains implicit, with a valuation system in which the transaction value of each good or service is obtained by means of a quantum of work, now explicit, measured according to a certain democratically established convention. The function of this convention is to mitigate the variety of jobs that are needed to produce goods and services in a complex economy like the modern economy. The small, medium and large production units established as common, autonomously self-managed by the workers themselves, are therefore responsible for the generation of all goods and services.

Families and individuals, to acquire goods and services, receive passwords that represent such value in general. Such passwords are obtained in exchange for work dedicated to production in general or even without compensation, but due to an imperative need. Individual and social needs are thus met. Meetings between consumers and producers – between demands and offers – are promoted through informational sites. These, by the way, already exist today; for example, what is currently called the “free market”. These platforms allow not only a circumstantial matching of suppliers and demanders, but also a decentralized planning of production and consumption. Behold, they accumulate a large amount of information about the habits, the needs of consumers, as well as the qualities of the goods and services offered by the producers. Therefore, they also allow for inverting the market order, that is, producing on demand.

As these passwords do not actually function like money, the system as a whole does not operate according to the imperatives of hoarding and the automatic subject of capital, but is exclusively addressed to the production of use values ​​in general. Faced with social, family and individual needs, with ecological imperatives and a balanced energy consumption, it will be necessary to centrally plan only the major variables that condition the volume and quality of production that must be carried out in the economic system. The thesis that capitalism is an insurmountable mode of production and that liberal democracy is the end of history are widespread myths and politically believed by all those who do not want to change or who are ignorant of the technological possibilities currently existing to organize social life. complex nature of contemporary societies.

*Eleutério FS Prado is ptitular and senior professor at the Department of Economics at FEA/USP. Author, among other books, of Value excess: critique of post-big industry (Shaman).

Notes

[I]See Slobodian, Quinn – Globalists – The end of empire and the birth of neoliberalism. Harvard University Press, 2018, p. 232.

[ii] Op.cit., p. 225.

[iii] Op.cit., p. 233.

[iv] This metaphor is not unreasonable. Hayek uses mechanical rather than biological metaphors; he compares, for example, the relationship between man and the market with the relationship between filings and a magnet.

[v] Op.cit., p. 232.

[vi] Morozov, Evgeny – Digital socialism? The calculation debate in the age of Big Data. New Left Review, 116/117, 2019, p. 33-67.

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