Het Neoliberale Geloof 390

ZCom Update:
Reimagining Socialism &
Economic Crisis

Dear,

There is an exchange/symposium on The Nation website about Reimagining Socialism, based on an essay by Barbara Ehrenreich and Bill Fletcher. Their essay and links to the various published comments are there too. We have also added the Ehrenreich Fletcher piece on ZCom.

Michael Albert, of ZCom, offered a couple of reactions to the essay, one long and one short, also both on ZCom. They are at - short comment: Reply to Ehrenreich/Fletcher and the longer essay: Taking Up The Task

When submitted to The Nation for the Symposium, the comment did not run which is why we include it below, to make up for that missed visibility. There has been another submission to The Nation exchange, of particular interest, two nights ago, which is on ZCom at Venezuelan Reply and will presumably soon be on The Nation site too. It is from Carol Delgado, the Consul General of the Bolivarian Venezuelan Consulate in New York City. We also include that piece, below.

The Nation comments are from about ten people many of whom urge the need not so much for reimagining a long-term economic and social vision, as for agreeing on a program for getting more active and aggressive in the present. Sadly, though, in short comments it was hard for those participating to include specifics. The third piece below, by Albert, does offer short term specifics for immediate program for the crisis.


First Inclusion...

Commentary on "Rising to the Occasion" by Ehrenreich and Fletcher in The Nation
By Carol Delgado Arria, Consul General of the Bolivarian Republic of Venezuela

To re-imagine and reinvent Socialism has been the Bolivarian Agenda and it is refreshing that progressives in the U.S. are daring to re-conceive this debate. In Venezuela, when we speak of 21st century socialism, we mean empowering people by retaining the grassroots aspirations of anti-capitalist movements but rejecting the institutions that have failed to meet peoples' needs.

As the authors point out, solidarity is extremely relevant. It can be a practice that allows new ways to think about ourselves as individuals, about society, as well as about North-South relations. This is why the Venezuelan government practices a number of non-market policies that are expressions social solidarity, such as the discounted heating oil program for poor communities in the U.S., the solidarity-based trade initiative known as ALBA, and the Petrocaribe agreement, which provides low interest financing for oil.

Although there is still much to be done and done better, in Venezuela we foster equity of distribution and give people control over their own lives and economic circumstances. Communal councils and communal banks are key institutions for creating Socialism of the 21st century in this context. Communal councils consist of communities organized to deliberate their most pressing problems and work with local government and national officials to turn community ideas into feasible projects. Through the communal banks, which are funded by the central government, thousands of local projects that emphasize collective property and participatory economics (Socialist Enterprises, cooperatives, etc) have been financed. This model is still developing but generally gets rid of bureaucracy and corruption, eliminates top down command, improves efficiency, and gives a sense of empowerment to the whole community. By reimagining socialism we are creating a more equitable, empathetic, and human society.

We believe we must go beyond hierarchies that divide and exploit. In our still new socialist enterprises we are discovering the need for a new definition of work and tasks, new procedures for decision-making, and new norms for income distribution. We aim to move towards an economic model that replaces the market, top-down planning, corporate decision-making, and alienating divisions of labor, in favor of participatory planning and substantive equality.

In our polity we need grassroots popular power, local assemblies, and informed active citizens, which is why we have created 27,000 communal councils, on the road to 50,000 to be the infrastructure of a new type of government.

I was pleased to see Barbara Ehrenreich and Bill Fletcher Jr. mention participatory budgets as something to learn from. Also, I was happy and hopeful to see the call to examine participatory economics, or Parecon, which to me addresses precisely the issues and offers highly relevant possibilities for truly 21st century economic production and allocation. Particularly interesting for us are the ideas of remuneration according to effort and sacrifice (instead of according to market criteria) and participatory planning (which provides a new popular power approach to allocation as a successful alternative to markets).

There are many "socialisms" and the U.S. has the people and the thinkers needed to facilitate the drafting of a great vision right here, right now. An anti-imperialist agenda is key to start the debate on the global financial crisis and the new America. Hopefully the discussion of a better economy and society undertaken in the U.S. will be informed by and perhaps even contribute to our efforts to build a better economy and society in Venezuela. Lets work together to make that happen.


Second Inclusion...

Replying to Ehrenreich and Fletcher
By Michael Albert

Ehrenreich and Fletcher ask: "do we have a [shared] plan?" and forthrightly answer that we don't, and we need a "deliberative process for figuring out what to do."

I agree. We need shared vision to inspire hope, incorporate the seeds of the future in the present, and illuminate a path to where we want to wind up. Here is a summary of a much longer essay "Taking Up The Task," available on the ZNet website.

Classlessness ought to inform our economic goal.

To have a classless economy requires that everyone by their economic position be equally able to participate, utilize capacities, and accrue income. Private ownership of productive assets must be gone, but so too must a division of labor that affords some producers far greater influence and income than other producers.

By their position in the economy, lawyers, doctors, engineers, managers, etc., accrue information, skills, confidence, energy, and access to means of influencing daily outcomes sufficient to largely control their own tasks and to define, design, determine, and control the tasks of workers below. These coordinator class members operate subordinate to capital, but above workers.

"Out with the old boss in with the new boss" does not end having bosses. To retain the distinction between the coordinator class and the working class would ensure coordinator class rule. This type change can end capitalism, but this type change will not attain classlessness. Thus, our movements and projects must eliminate the monopoly of capitalists on productive property, but also the monopoly of coordinators on empowering work. Indeed, this is what reimagining socialism is primarily about.

Beyond classlessness, we also ought to seek equity, solidarity, diversity, self-management, ecological balance, and economic efficiency.

Each person who is able to work, both for moral and economic reasons, should be remunerated for the duration, intensity, and onerousness of their socially valued effort.

Economic relations should produce a cooperative social partnership of mutual aid rather than people fleecing one another in an anti-social shoot out.

Economics should convey to each person self-managing say over decisions in proportion as those decisions affect us.

An economy should not compel us to destroy our natural habitat but should instead reveal the full and true social and ecological costs and benefits of contending choices, and convey to us control over the options.

Clearly, private ownership of productive property, corporate divisions of labor, top down decision-making, markets, and central planning violate all these aspirations.

For workers and consumers to influence decisions in proportion as they are affected by those decisions requires self-managing councils through which workers and consumers express and tally their preferences.

Equitable distribution requires workers be remunerated for their duration of effort, intensity of effort, and harshness of conditions, and that remunerated effort be socially useful so that workers have incentives consistent with eliciting fulfilling output.

Self-managed decisions require confident preparation, relevant capacity, and appropriate participation. There can't be some actors who monopolize empowering work while others are left disempowered and unable to manifest a will of their own. Balancing of jobs for empowerment eliminates the division between coordinators and workers by ensuring that all economic actors are enabled by their conditions to participate fully in self-management.

Allocation should be undertaken by cooperative and informed negotiation in which all people's freely expressed wills are proportionately actualized and in which operations, mindsets, and structures further the logic of self-managing councils, balanced job complexes, and equitable remuneration rather than violating each. To my thinking, this implies what has been called participatory planning.

If we were to agree on features like those noted above for economic vision, then requirements for current activist projects, organizations, and movements should patiently incorporate the seeds of the future in the present, including self-managed decision-making, balanced job complexes, equitable remuneration, and cooperative negotiated planning.

Strategically, just as movements should foreshadow a future that is feminist, poly-cultural, and politically participatory to avoid being compromised in their values, incapable of inspiring diverse constituencies, incapable of overcoming cynicism, and weak in their comprehension of current relations, so should movements for the same reasons foreshadow a future that is classless, including incorporating self-managing council organization, balanced job complexes, equitable remuneration, and participatory planning.

Seeking transformed economic institutions requires that we begin to create such institutions in the present but also that we fight for changes in capitalist institutions. Indeed, the path to a better future involves primarily a long march through existing institutions, battling for changes that improve people's lives today even as they auger and prepare for more changes tomorrow.

In battles around income, workplace conditions, decision-making, allocation, jobs, work-day length, and other facets of economic life, our rhetoric should advance comprehension of ultimate values. Our organizations should embody the norms we seek for the future. Our spirit should be full of optimism, but also clear about obstacles.


Third Inclusion...

Demand, Don't Succumb
By Michael Albert

The current economic crisis disrupts an already monumentally despicable system. The crisis makes what is horrible, horrific. But what can one do?

Is it useful to propose paths forward that lead back to the past? Should we celebrate attitudes that have no hope for anything more than recycling attenuated hardship? Should we proceed as if we have not even an inkling of an inclination to seriously change basic economic relations? Or should we get radical?

When elites look at a crisis that threatens the whole system, they too want to get out of it. But they want to minimize their own losses and ensure that the path out of temporary crisis doesn't reduce their advantages for the long haul. They want to escape current disaster, yes, but they also want to avoid what they consider permanent disaster - a system that works, but not solely, or even mostly, for them.

In other words, for those pulling the policy levers, the highest priority is not fixing things but avoiding long-term losses for owners and to a lesser degree for managers and other rich folk. True, the government's concern is not for each and every rich person. Some of the most transparently egregious money hoarders will be tossed under the proverbial bus, so to speak. The government's concern is for the money hoarders as a whole. The government's intent is to maintain the relative position of the owning class.

Thus, government proposals to escape the current debilitating disruptions and ward off impending disasters are constrained by what policy makers consider allowable. By dictate, corrective policies are not allowed to substantially raise the relative power of working people. That is the bottom line constraint that leads our government to enact half assed programs that pour social assets into rich people's institutions while not even considering for a second the possibility of stimulating the economy via charging the rich and benefitting the rest.

It is as if someone's heart stops and the defibrillator is parked right near the patient's bed. However, there is also a silent order from the Hospital's administration - a kind of unspoken bylaw of medical policy - doctors cannot use the defibrillator. Doctors, and in our case it is doctors for the economy, have to resurrect the dying patient, but they can't do it with the defibrillator. What is the "defibrillator" the economic doctors have to avoid? Redistribution of wealth and power.

The two most obvious elements of the economic mess the economy is currently spiraling ever deeper into are housing and jobs. Houses were overvalued - the famed housing bubble. As housing valuations came back to earth, foreclosures ensued and banks lost assets. The banks' financial problems are hard to track due to incredibly convoluted trading of mortgages wrapped up in "leveraged" securities that are sold again and again among the rich. But the basic situation - the collapsing investment values of the banks, and the declining house values and increasing mortgage payments of homeowners, together percolate into massive foreclosures, reduced bank loans, and reduced consumer spending. Declining revenues from the resulting curtailed sales then produce more cuts in lending and still less spending. It all reduces demand for final products which in turn causes cutbacks in their production. The production cuts lead to pink slips.

Next, those who lose their jobs, or who start to fear losing their jobs, defensively cut back their consumption, whether they have housing problems or not. Now we are in a real mess because this in turn leads to more firms reducing output, which means they fire more workers and have no jobs available for those who have been fired elsewhere. Housing begets slowdown begets firings begets more slowdown begets more firing.

Other dynamics contribute, and radical and even a few mainstream economists have been offering plenty of good analysis of the very detailed proximate causes that have been at work. What has been largely missing, however, is commentary that clarifies that it isn't greedy individuals but an institutional framework called capitalism that brings the disruption and that compels escalating exploitation of the poor. But the issue that is getting even shorter shrift is formulating plausible, desirable proposals for going forward.

Now I don't mean to say that finding such proposals is easy. I don't begin to understand macro economics - and I studied it in school, oh so long ago - though sometimes I wonder if the professional economists have all that much better understanding than me, or than the average person getting evicted or being handed a pink slip. Maybe the proposals I offer below would do the trick - or perhaps they would have effects I haven't foreseen that would need to be addressed by refinements. Maybe they would even have problems that would make them unwise or counter productive. That all has to be assessed. What I am sure about, however, is that the attitude behind the proposals offered below is very different than the most prevalent attitudes all around us. And we need new attitude.

Regarding housing, to start, how about we simply pass a law, no more foreclosures. Period. It is not allowed. No one should be denied their home because of a crisis which has enriched the rich at the expense of the poor. Oh wait, we need a caveat. If mansions are foreclosed, so be it. No house valued less than, say, $1 million can be foreclosed. More than that, no problem. So we start with the end of non rich people losing their homes due to the crisis. Up until when we win the no foreclosure act of 2009, of course, we should continue to organize to prevent foreclosures case by case and to forcibly forbid evictions, as part of making the more comprehensive demand.

But if the banks et al. can't foreclose, because we block their doing so, or we win a new law, what is to prevent people from simply ceasing to pay their mortgages? Answer: that's not allowed either, unless, that is, one can make a case that paying is beyond one's means due to the crisis affecting the value of one's home, the mortgage interest rate, or one's income. If any of that pertains, the mortgage is refinanced so it matches available means.

How do we determine people's available means? Life is messy, and no procedure will be perfect, but how about all those who say they must refinance due to crisis conditions, and who live together in a legislative district, must gather together, present their cases openly, and then collectively settle the rates for their rewrites. The district's legislators help and mediate. So do local high school civics teachers. They all facilitate.

Legislative districts are by the new law entitled to some total write down percentage on the sum of all their homes. The lower the average income if residents, the more overall write down is allowed. Yes, this means we are redistributing. Indeed, it is best to do that at every opportunity. Within a neighborhood, in light of its total write down options, and helped by legislators and high school teachers, neighbors who are seeking to reset their mortgages must cooperatively negotiate with one another the percentage of that total write down that each petitioner should have, given each person's plight as compared to the plight of others.

In other words, people in the legislative district have to act together in light of their relative real needs, taking account of one another, in order to move the process forward. It is all done in public, in participatory, assembly style meetings. Full cases are offered. Maybe local journalists can investigate the veracity of suspect claims.

Will some folks offer deceptive stories and get away with some lies and thereby gain when they shouldn't? Yes, it could happen in some cases. But so what? They have been ripped off of their dignity and material well being for ages. Anything that exceeds propriety after such public negotiations wouldn't begin to approach in scale or in impact the venality of what the rich do daily, much less what they do with taxpayer-financed bonuses.

This housing approach would, of course, cut into the profits of many institutions. But that is not a problem, it is another virtue. Can we get that straight? We leftists who are concerned with justice do not genuflect to profit. So why do even leftists often act as though profits declining is a bad thing? Oh, yes, I know, it's because if profits drop, owners want to stop operating their workplaces. It turns out, therefore, that we need to impose another law.

Any business with more than 20 employees or more than $5 million in assets cannot stop operations due to feeling that profits are going to be too low to warrant continuing. To retain their legal claim to own a profit making firm, owners must do their best to operate it to meet social needs. We are enduring a crisis. Owners should bear the brunt of the cost. Do owners want a supplement for lost income? No problem. They should try working.

What would give this law teeth? Any owner of any firm that wants to forego serving the public interest by ceasing to produce and distribute to meet needs is free to personally stop. That's their choice. However, having chosen to stop, the owners' firm is immediately turned over to the workforce and the surrounding community to keep it operating. The owners' deed to the firm is abrogated. And there is no selling to overseas buyers, either, or moving the firm's residence. Try any of that that, and the firm is turned over to the employees. That's society's choice.

What about employment? Demand has already dropped and is dropping further. To deal with needing to produce less output due to facing reduced demand, firms fire workers. We don't want that, so we need another law. There will be no firing until the crisis is passed. None. We don't want firing, so we outlaw firing. The owners won't like that. Tough. They are the masters of the old universe, not of the one we want to live in.

But how can owners keep just as many workers, yet produce less output? They can cut back hours for each worker. That way they keep all their workers employed but they can also have a total output at whatever level is needed. But wait - unless we make another rule, cutting back work hours would reduce overall incomes the same as just some people getting pink slips would. It would reduce overall demand and continue the spiraling problem of less demand inducing less production causing less demand, further reducing production, etc. Well, we can just adapt our new law.

Firms can and should cut hours in order to not overproduce when output must be reduced to avoid waste. That's fair enough. However firms cannot cut their total wage bill. Worker income cannot suffer due to the shortening of work time. If a workers' hours drop from 40 to 30, say, or more likely from 60 or 50 to 40, he or she still gets paid the total that he or she was earning at the greater number of hours. This means we are raising hourly wages. If you get the same income for 30 hours as you got for 40 hours and you were earning $10 an hour before, now you must be earning $13.33. With this approach, the total wage bill does not drop. Demand does not drop. Workers are working fewer hours, but with no cut in their total incomes. Additionally, we can impose that hourly wages cannot be cut during the crisis - at all. So be careful owners. If you unwisely cut back production, you will have to raise hourly wages. If you later increase production back up, increasing hours for everyone, you will have to maintain wages at their elevated level! It is probably better to drop your prices a bit and sell more, than to cut production when purchasing power declines.

Let's suppose those hearing this program are really relentless about pursuing justice. They say, hold on, what about the millions of currently unemployed? Why should they continue to suffer? So let's deal with that too. How about, right off, all firms must reduce the work week of all staff by 10%. Then, to keep producing at current levels, they must immediately hire new employees to make up the ensuing loss in output. At that point, if the firm wants/needs to reduce hours further for everyone, so be it - wages stay up - as described above. But then someone points out that all this extra wage burden will decimate profits. But our reply is: so what? You bet it will. That's the point. For at least the duration of the crisis - and we can hope this kind of thinking will catch on and persist forever - owners will have to operate pretty much without profits, and even taking losses, which means we are finally redistributing in the ethically and economically right direction.

So what have we got?

We have no more people losing their homes. We have no more exploitative mortgages ruining lives. We have no more pink slips being handed out. We have new jobs for the currently unemployed, and yes, enlarging green jobs and expanding education and other infrastructure are totally compatible with and would be enhanced by all this. We have increased wages per hour for everyone (or better, for everyone below some high target wage level) - and we have lots of new taxes on all that income for additional socially worthy programs.

We also have workers enjoying leisure. And we have that the only people hurt by it all are the rich, and quite properly so. It is not, however, a punishment for bringing on the crisis. They didn't bring it on, capitalism did. They are losing wealth because they have too much, and need to be pulled back into this universe.

Okay, is there some technical problem in all this? Probably there is. After all, the system is so ingrained to go berserk about even the most minuscule deprivation for the rich that there are bound to be many additional regulatory features needed to avoid a berserk system. Or maybe the whole proposal needs an overhaul. The point is, we need to conceive seriously radical options that can actually lead where we ought to be going. And then we need to fight for them.

In other words, leftists should have demands that represent our desires, rather than having demands that assume that our desires shouldn't be uttered in polite company.

If we aren't strong enough to win all the above, we work toward getting that strong. More, having demanded all the above, we will have so scared the rich and powerful about what kind of activism may be just over the horizon that they will agree to more than they would otherwise. We will have also opened the debate, begun the thinking that can lead forward, not back.

More, just because we have a comprehensive program giving a coherent logic to our desires doesn't mean we seek nothing less, but on the way to that program. In workplaces and neighborhoods workers and residents pursue tactics, strategies, and local demands that make sense where they are. The overarching program discussed here means to provide a context in which local activity can better take place. It means to indicate where local activity should aims and threaten to go.

You know the old joke about the economist who is trying to get a can of soup open on an island. Everyone else is trying to figure out how to get the top off the can by cleverly banging the can with sticks, or by carefully utilizing rocks to squeeze it, or maybe using a fire to make it explode. The economist, delusional and devoid of concern about being delusional, simply says, assume a can opener. Well the real version of this is that for any problem economists always tell us - implicitly - to assume the system must always aggressively benefit the rich and powerful, and then work within that constraint. I am sick of working within that constraint. We should all be sick of working within that constraint.

By the way, the idea of reducing work hours and retaining total wages paid - say, paying 30 hours work 40 hours pay for those below $100,000 salary per year, and perhaps 30 hours work 35 hours pay for those between $100,000 and $200,000 a year, say, and 30 hours pay for 30 hours work for those between $200,000 and $300,000 per year, and significant hourly and thus total pay cuts for everyone making more than that - would be a wonderful demand any time at all. In fact, it would be fine by me if it was way more stringent. Let the people decide! Not only would such a campaign, in a crisis or not, be dramatically redistributive, it would also give people time to lead lives, and, dare I say it, to pursue the monumentally important work of further redesigning society.