WHEN ANTI COLONIAL ANTI IMPERIALIST MOVEMENTS BECOME THE STATE

Cry, Our Beloved Namibia

Opinions - Editorials | 2020-07-31

by Editorial Team 

WHAT HAPPENED to prime minister Hage Geingob who, in 1998, led a national conference on ethics and corruption that generated great plans for good governance in Namibia? It surely cannot be that Geingob's promotion to president has translated into backward steps.

Hage Geingob, the president of the Republic of Namibia, appears to be a far cry from prime minister Hage Geingob of the 1990s.

At the beginning of this year, president Geingob announced during his official new year's message that 2020 would be 'the year of introspection'.

His declaration followed revelations of grand government-led corruption that the fishing industry was financing Swapo's factional battles and lining the pockets of cronies.

With five months left in 2020, the first signs of introspection came last week when Geingob led a Swapo 'post-mortem'. That was hardly encouraging. The meeting was actually a clear sign that Geingob and his government are only concerned that Swapo could lose government power. They see no need to fix the broken ethical and moral fibre of Namibia.

The introspection announced by the head of state should have been, by definition, a national process. And to be clear, it should be a process as opposed to an event.

President Geingob can consult prime minister Geingob for the 1998 blueprint of a nationwide consultative process aimed at building systems and institutions to nurture societal ethics and integrity.

At the beginning of 1998, prime minister Geingob tasked secretary to Cabinet Isaac Kaulinge to set up technical teams comprising the ombudsman, auditor general, prosecutor general, and non-governmental role players (including trade unions, business sector and civic organisations) to plan for a national conference later that year.

The technical teams crisscrossed Namibia, talking to members of the public as well as gathering information through research and surveys.

The 1998 national conference on the promotion of ethics and combating of corruption made far-reaching recommendations for good governance: A code of ethical conduct for all political appointees and government employees; public disclosure of assets and any conflicting interests; ethical studies to be included in the school curriculum; institutions for the public role of civil society in the fight against corruption; and strengthening the auditor general, ombudsman and prosecutor general.

The establishment of what became the Anti-Corruption Commission (ACC) was also decided there, but bolstered with guarantees for independence from the governing executives.

The ACC was to recruit its own staff, for example. So, it is baffling to hear current ACC director Paulus Noa not only welcome a career spy as chief executive but saying there was nothing wrong with the government of the day appointing top ACC employees like him and his managers. Only a stooge or an ignorant person can welcome such blatant government installations in an organisation set up to eliminate corruption out of the same government.

Anyway, Geingob's 1998 conference argued for an anti-corruption agency that would be accountable only to parliament.

It is thus concerning to see Geingob presiding over much-weakened watchdog institutions despite claiming he was building accountability and good governance for Namibia.

A month ago, defence minister Hafeni Vilho demonstrated the disdain politicians and bureaucrats have for accountability when he blasted the auditor general for publishing the abuse of taxpayer resources in the military. For instance, the auditor general highlighted how the ministry was paying a salary and subsistence allowances to a ghost (non-existent) military attaché in the Democratic Republic of Congo.

Expect no one at the defence ministry to pay back the stolen public funds or even go through any transparent disciplinary process.

Such are the depths Namibia has sunken to since the 1990s when prime minister Geingob was in denial arguing that corruption was “not a serious problem”, but at least took steps to start cleaning house.

Now, Namibia seems to have gone to the dogs with a government that is not even willing to go through a concerted nationwide process of introspection –– like an alcoholic yet to admit addiction.

Such is the despair at the government's attitude that one can only borrow from Alan Paton's novel and say: Cry, the beloved country.

Instilling Fear to Silence the Outspoken

Opinions - Editorials | 2020-08-07

by Editorial Team

Journalist Edward Muumbu

GAGGING a journalist employed at a taxpayer-funded news organisation has demonstrated growing intolerance by the governing elite towards critical voices.

Worryingly, the censure of Edward Muumbu over the past week by state news agency Nampa, because he apparently made president Hage Geingob nervous at a press conference, is the latest in a trend to silence government employees deemed outspoken or those who act against rampant corruption and the theft of public resources.

Even if presidential spokesperson Alfredo Tjiurimo Hengari ramps up the decibels when denying that the Presidency has anything to do with the gagging of journalists, there's enough evidence to suggest that those in high office are complicit in muzzling the outspoken. Most examples relate to the Fishrot scandal although not exclusively.

Geingob set the tone in December 2019 when he took aim at three of his Cabinet ministers (Calle Schlettwein, Tom Alweendo and Leon Jooste), telling them in a Cabinet meeting to resign.

“You are behaving like you are cleaner than others. You are criticising how the [Fishrot] case has been handled,” said Geingob, adding: “If you are not happy with how the case is being handled, then why don't you just resign?”

In fact, none of the ministers had criticised how the case was being handled. They merely expressed moral outrage on social media and called for tough action against the looters.

After a lull, there has been a flurry of action against the outspoken over the past two months: Lead Fishrot investigator Nelius Becker was transferred to a position of impotence – to head the police forensic unit, a key institution that requires hardcore science skills, which Becker does not remotely possess.

That was followed by the removal of Hannu Shipena as executive director of the Anti-Corruption Commission (ACC). Shipena regularly said the fight against corruption must be strengthened. A week or two before Shipena's removal, finance minister Iipumbu Shiimi was on social media castigating the ACC administrator for complaining that the lack of funding could hamper investigations.

And this week, Hengari issued a press release unabashedly saying that firing former health minister Bernard Haufiku was in no small part due to him “speaking out of turn” and without authorisation.

Geingob recently tore into Swapo MPs for not defending the government despite being in the majority. This was clearly aimed at leaving no room for contrarian views and to make lawmakers meek in their legislative role.

Geingob may have achieved his goal – Cabinet members this year have been less publicly vocal on corruption.

These latest incidents are a reminder that we are too close for comfort to autocratic states like China, where medical doctors, journalists and researchers who tried to warn the public about Covid-19 were gagged and jailed.

Silencing critical voices comes a long way in Swapo. At the state-funded broadcaster, NBC, critical programmes such as 'Open File' have been taken off air in 2014.

While we should not tolerate corruption, Swapo and other parties should be able to tolerate divergent views within their ranks. Ultimately, allowing competing views is a sign of strength. More than that, we need to respect and strengthen our hard-won independence.

We do not want – nor can we afford – our democracy to fall silent. The president and the ruling party need to shake off the outdated Cold War culture of weaponising fear.

Intolerance breeds intolerance. The consequences are manifold. While silence and powerlessness go hand in hand, they are dangerous bedmates. Look no further than Zimbabwe.

Namibians who cherish freedom of speech and value access to information (thus knowledge) as a prerequisite to individual or group development would be well advised to express moral outrage at this systematic erosion.

Good Governance Gone to the Dogs

Opinions - Editorials | 2020-07-24

by Editorial Team

A SPY has just been appointed chief administrator of Namibia's Anti-Corruption Commission (ACC). What a sick joke if not downright scary.

It is not so much that the government chose a career spy, but the manner in which it was done suggests intentions that go against good governance.

The battle between transparency and cover-up has now reached a crescendo amid the Fishrot scandal.

The intelligence world and anti-corruption work are like day and night: One operates in shadows, the other shines the spotlight into dark and hidden corners for maximum transparency.

Moving Tylvas Shilongo from his position as chief administrator of the Namibia Central Intelligence Service to the ACC should send chills down the spine of anti-corruption campaigners.

With this move, president Hage Geingob, prime minister Saara Kuugongelwa-Amadhila and the Cabinet have just trashed the president's mantra that “transparency plus accountability equals trust”.

For most of its existence, the ACC suffered from a lack of public trust as it got known for heavy-handed investigations of lowly ranked civil servants who abuse government resources while ignoring big-fish corruption.

With the conviction of a minister and the arrest of two more at the end of 2019, the ACC was just about starting to regain trust.

But a reversal is clearly on the cards: The minister of finance announced a budget showing the ACC as woefully underfunded, especially when expected to unravel one of the most sophisticated corruption sagas (Fishrot) Namibia has ever seen. Fishrot lead investigator Nelius Becker has been shifted to a position outside his field of experience and expertise and distanced from the ongoing Fishrot investigation.

And now a spy manager replaces arguably the most critical anti-corruption administrator the ACC has had in Hannu Shipena.

The latest move was as calculated as you can get. Shipena has been sent to one of the government's equivalents of a re-education camp, albeit not exactly with the brutality of the Chinese Xinjiang programmes or Soviet gulags – but the National Council for Higher Education is just as effective in silencing a strict administrator.

When Geingob addressed a Swapo press conference two weeks ago to deny that his party received Fishrot money, he said he did not want them to be viewed as acting as judge, jury and executioner. If these latest moves are not exactly that, then we can't imagine how it could be worse.

It is about time parliament and civil society take steps to maximum effect.

For starters, the ACC should be detached from political leaders and the civil service. It is preposterous that the ACC director general and chief administrator are appointed by the same government leaders they are supposed to investigate. At the very least the only business the Public Service Commission should have in the ACC is to advise on personnel matters, not recommend to the president who should be in charge.

The ACC must be autonomous similar to the judiciary, the Electoral Commission of Namibia (ECN), the ombudsman or any institution whose role is about the checks that are the responsibility of a public protector.

Like ECN commissioners, the recruitment of top ACC officials should be public and transparently done. What a shame even the University of Namibia beats the anti-corruption body's hiring in the very basics of good governance and accountability systems.

Parliament must immediately step up and ensure the ACC is strengthened with arm's-length protection from the government of the day.

As for civil society, protest must go as far as public interest litigation to keep the governing executives from weakening the fundamentals of our democracy.

SWAPO

Party

Description

Description

The South West Africa People’s Organisation, officially known as SWAPO Party of Namibia, is a political party and former independence movement in Namibia. It has been the governing party in Namibia since the country achieved independence in 1990. Wikipedia

Founded: April 19, 1960, Windhoek, Namibia

Founders: Sam Nujoma, Andimba Toivo ya Toivo, Jacob Kuhangua

Leadership: Hage Geingob, Hage Geingob (President)

South West Africa People’s Organisation (SWAPO)
https://www.sahistory.org.za/article/south-west-africa-peoples-organisation-swapo

SWAPO flag

The South West African People's Organisation (SWAPO) was founded in Windhoek, South West Africa (presently Namibia) on 19 April 1960 by Herman Toivo ja Toivo. The party was originally formed to advocated immediate Namibian independence from South Africa and became the country’s leading party following independence in 1990.

The SWA territory was entrusted by the League of Nations to South Africa under an administrative mandate after the First World War. After the Second World War, South Africa extended its apartheid policies to this territory and became a military occupier. After South Africa refused a United Nations order to withdraw from the trust territory in 1966, SWAPO turned to armed struggle.

SWAPO emerged as the sole liberation movement in the early 1960s because it had the support of the Ovambo, the largest ethnic group in Namibia. More a military organisation than a political one, SWAPO launched military operations against the South African government’s military positions. On 26 August 1966 the first major clash of the conflict took place, when a unit of the South African Police, supported by South African Air Force, exchanged fire with SWAPO forces. This date is generally regarded as the start of what became known in South Africa as the Border War.

Initially SWAPO suffered heavy losses against the South African Army but later SWAPO was backed by the Angolan ruling party, Popular Movement for the Liberation of Angola, the Soviet Union, the Norwegian government and the African National Congress. SWAPO used Angola as a base for guerrilla warfare on Namibian soil; operations were carried out by SWAPO’s guerrilla force, the People’s Liberation Army of Namibia (PLAN). Beginning in 1978 South Africa made periodic retaliatory land and air strikes into Angola. Herman Toivo ja Toivo, the founder of SWAPO, was imprisoned in South Africa for a 20-year term in 1968 but was released in 1984. Nujoma returned to Namibia in September 1989.

In 1978 the UN recognized SWAPO as the sole representative of the people of Namibia. Both SWAPO and South Africa agreed to a UN plan for a cease-fire, withdrawal of South African troops, and free elections to be guaranteed by UN security forces. After years of diplomatic maneuvering, South Africa finally accepted a UN resolution to that effect in December 1988. Sporadic fighting continued. In 1989 Nujoma was elected president and SWAPO won a majority of the delegates selected by the country’s voters to write a constitution for an independent Namibia. The following year a new constitution was adopted and Nujoma took office and in the same year South Africa completely withdrew unconditionally from Namibia.

SWAPO continued to dominate the political scene into the 21st century, transforming itself from a liberation movement into a governing party. SWAPO won the first and second election five years later. During its second term in office, the SWAPO dominated parliament and amended the constitution to allow their long term leader and now president of Namibia, Sam Nujoma, a third term in office. The constitutional amendment raised fears that this compromised Namibia’s democracy. The party won 75.1% of popular votes and 55 out of 78 seats in the parliamentary election held on 15 November 2004.

Controversy within the movement

Various groups have claimed that SWAPO committed serious human rights abuses against suspected spies during the Independence struggle (esp during the period of exile). The most serious of these was the detainee issue, which remains a divisive issue. Another issue was the Breaking the Wall of Silence (BWS), which was founded by those detainees to press the SWAPO-government on the issue of human rights abuses. SWAPO denies serious infractions and claims anything that did happen was in the name of liberation. The stories of the detainees begin with a series of successful South African raids that made the SWAPO leadership believe that they were spies in the movement. Hundreds of SWAPO cadres were imprisoned, tortured and interrogated.
References


Wallis, F. (2000). Nuusdagboek: feite en fratse oor 1000 jaar, Kaapstad: Human & Rousseau.|Encyclopedia Britannica Online (2009), ‘South West Africa People’s Organization’, available at: britannica.com [accessed 14 April 2009] |SWAPO [online], available at: wikipedia.org [accessed 14 April 2009]|Angola and South West Africa: A Forgotten War (1975-89) ”“ article published by geocities.com
Sources in Our Archive

The South West Commentator, Vol 2 No 3, February 1962
The South West Commentator,Vol 2 No 4, 28 March 1962
The South West Commentator, Vol 2 No 5, 16 May 1962
Namibia is showing wear and tear after 30 years under SWAPO rule
Interview with Oliver Tambo by Mayibuye,1 September 1981
Official Organ of the National Liberation Front,Vol 1.No 2, April 1963
Official Organ of the National Liberation Front, Vol 1.No 3, May 1963
Yu Chi Chan Club Pamphlet No. IV - Secret Communication by Allison Drew
National Liberation Front - Revolution in Latin America
South West Africa People’s Organisation (SWAPO) Report

Collections in the Archives
South West Africa People’s Organisation (SWAPO)
Nelson Rolihlahla Mandela

Jakob van Zyl, Key NASA Jet Propulsion Laboratory Engineer, Dies at 63

Van Zyl’s roles included director for astronomy and physics and director for solar system exploration.

By Associated Press | Updated: 28 August 2020 

Photo Credit: NASA

Van Zyl was involved in several missions including the one that sent the Juno spacecraft to Jupiter

HIGHLIGHTS

Van Zyl was involved in several missions like Juno spacecraft to Jupiter
He was a part of Perseverance rover mission currently en-route Mars
van Zyl encouraged youngsters in Nambia & South Africa to pursue science


Jakob van Zyl, an engineer who held crucial positions at NASA's Jet Propulsion Laboratory and was involved in numerous space exploration missions over decades, has died. He was 63.

Van Zyl, who retired in 2019 after a 33-year career, suffered a heart attack on Monday and died Wednesday at a hospital in Pasadena, California, said Veronica McGregor, a spokeswoman for JPL.

Van Zyl's roles included director for astronomy and physics, director for solar system exploration and associate director on a project to formulate a vision for JPL's future.

NASA’s Soon-to-Launch Mars Rover Is Brawniest and Brainiest One Yet

“JPL and NASA are richer for his many technical and managerial contributions, and for his unwavering dedication and engaging personality,” JPL Director Michael Watkins said in a statement.

Van Zyl was involved in missions that sent the Juno spacecraft to Jupiter, Dawn to the asteroid belt, Cassini to Saturn, and the InSight Mars and its tying accompanying CubeSat spacecraft. He was also involved in the Mars 2020 Perseverance rover mission currently en route to the red planet, as well as development of future missions.

His early work in Earth sciences led to roles designing and developing missions using synthetic aperture radar.

A native of Namibia, van Zyl received a degree in electronics engineering from Stellenbosch University in South Africa and earned his master's and doctorate in electrical engineering from the California Institute of Technology, which manages JPL.

JPL said van Zyl was passionate about encouraging young people in Namibia and South Africa to pursue science.

“His legacy will inspire many generations to come,” Lisa Johnson, US ambassador to Namibia, said in a video tribute posted to the embassy Facebook page.

Van Zyl is survived by his wife, Kalfie, and two siblings.

Leading Namibian scientist mourned

News - National | 2020-08-no: 3

by Taati Niilenge

Dr. Japie van Zyl. Photo: National Telegraph

TRIBUTES are pouring in for one of Namibia's best exports in the science field, Japie van Zyl.

The former director of Solar System Exploration at Nasa's Jet Propulsion Laboratory died on Wednesday in a hospital in Pasadena, California, after suffering a heart attack earlier this week.

In a message to Van Zyl's wife, Kalfie, president Hage Geingob on Heroes's Day said the Namibian-born scientist's passing was untimely.

“The passing of Dr Japie van Zyl has robbed our nation of an outstanding scientist whose contributions in space research advanced our understanding of the universe. My exchanges with the highly affable Dr Van Zyl during his visits to the country of his birth were always pleasant and illuminating,” Geingob said in a statement issued on Wednesday.

Van Zyl was born at Outjo and raised at Opuwo. He was employed at Nasa's Propulsion Laboratory from 1986 until his retirement a few years ago.

Stellenbosch University in South Africa has also expressed condolences over the death of Van Zyl, who obtained an honours degree cum laude in electrical engineering from the university.

“We are deeply saddened by the news of the passing of the Namibian Stellenbosch alumnus, Dr Japie van Zyl, one of the world's leading space scientists. The fact that Van Zyl passed away on Heroes' Day ishould not go unnoticed. Despite his many successes overseas, the soil of Africa and the potential of the continent remained close to his heart. As extraordinary professor in SU's Electrical and Electronic Engineering Department, he ploughed back into the next generation of engineers and scientists at his alma mater,” Martin Viljoen, the university's spokesperson, says.

In 2015 Stellenbosch University honoured Van Zyl with an honorary doctorate for being the driving force behind many successful space projects, representing Africa and Stellenbosch University in the most advanced technological environment globally, and inspiring young scientists on his home continent.

Van Zyl often visited the youth at Walvis Bay and in Windhoek to host presentations on the wonders of the universe and Robotic Solar Systems Exploration.

He also hosted various Skype presentations with Namibian pupils, often saying he wanted to give back as much as possible to the youth of the continent he came from.

“I really liked him. It was always amazing to learn about the planets and what it looked like in space. I always went to his presentations when he came to Walvis Bay,” Grade 11 pupil Johny Shamina says.

Martella Diedericks, a member of science group Eye Namibia, says Van Zyl leaves a gap in science exploration for young people.

“We will remember him as a man who made sure children in Namibia gained an interest in science. He made a huge difference in the lives of parents and their children. He made you feel important when he spoke to you. We used to Skype him late at night. He was always humble,” she says.

At the time of his death the scienitst was leading a team developing a revolutionary rapid Covid-19 testing system. The president said Van Zyl died at a time when he still had much to contribute to humanity, adding that Namibians will remember him.

How deforestation can lead to more infectious diseases

The world's forests act as shields, keeping humans safe from coronaviruses and other diseases. Their destruction can unleash devastating consequences for global public health.


Scientists have been repeating the warning for at least two decades: As humans encroach upon forests, their risk of contracting viruses circulating among wild animals increases.

That's why Ana Lucia Tourinho wasn't surprised when she heard about the novel coronavirus, which was first detected in China in December and has since spread around the world. An ecologist at the Federal University of Mato Grosso in Brazil, Tourinho studies how an environmental imbalance can cause forests and societies to become sick.

"When a virus that wasn't part of our evolutionary history leaves its natural host and enters our bodies, it's chaos. The new coronavirus is rubbing that in our faces," she said.

Deforestation destroys the equilibrium

Before it infected the first humans and spread through the world by living in travelers' bodies, the novel coronavirus, officially named SARS-CoV-2, inhabited other hosts in a wild environment — most likely bats.

When such viruses are isolated and in equilibrium in their habitat, for example a closed forest, they are not a threat to humans. The problem arises when this natural reservoir is cut down, destroyed and occupied.

Scientific studies published before the current pandemic had already showed a connection between deforestation, the proliferation of bats in the damaged areas and the family of coronaviruses, which includes the current lethal strain.


In Asia, deforestation often occurs to clear land for intensive agriculture, such as palm oil plantations

Aneta Afelt, a researcher at the University of Warsaw in Poland, conducted studies indicating that the next severe infectious disease would come from Asia due to the region's high levels of deforestation over the past 40 years.

To reach this conclusion, Afelt tracked previous pandemics caused by other coronaviruses. These include SARS, which spread in 2002 and 2003 and had a 10% fatality rate, and MERS, which spread in 2012 and had a 38% fatality rate.

"By being one of the regions of the world where population growth is the strongest, where sanitary conditions remain poor and where the deforestation rate is the highest, SEA [Southeast Asia] meets every condition to become the place of emergence or reemergence of infectious diseases," Afelt wrote in a 2018 article.

Read more: Living in the shadows of violence and development in Brazil's Amazon
Watch video 03:02

Slash and burn - When farmers destroy their ecosystem

Amazon rainforest important for public health

The scenario is similar in the Amazon. In 2019, deforestation reached a record-breaking 9,762 square kilometers (3,769 square miles). Reports of deforestation increased by 51.4% between January and March 2020 in comparison to the same period the previous year.

An analysis by Columbia University in New York showed that the region, which houses the biggest tropical forest in the world, is also considered a likely center for epidemics. It also found that bats in Brazil carried at least 3,204 types of coronaviruses.

Tourinho doesn't even want to think about the public health impact that will occur if the Amazon rainforest continues being destroyed at this rate.

"If the Amazon turns into a great savannah, we can't even imagine what kind of diseases [could] come out of there. It's unpredictable," she said. "Besides being important to us because of the climate, the fauna, it is important for our health."

Studies in Brazil have already tracked the direct relation between deforestation in the Amazon and an increase in diseases. In 2015 the government-led Institute of Applied Economic Research (IPEA) found that for every 1% of forest that was cut down per year, malaria cases increased by 23%.

The study used data from 773 cities that a project monitoring deforestation in the Amazon had gathered from 2004 to 2012. Besides malaria, the incidence of leishmaniasis, a disease transmitted by a sandfly-borne parasite, also seemed to relate directly to levels of deforestation.

Read more: Brazil's Amazon rainforest has become the Wild West for illegal gold miners


Wildfires, due in part to deforestation practices, raged in the Amazon in 2019

Forests as shields

"The closed forest is like a shield against external communities coming into contact with animals that are hosts for microorganisms that cause diseases. And when we fragment the forest, that opens new ways of entry to its heart. It's a ticking time bomb," Tourinho said, while pointing out the danger of large projects like hydroelectric stations in the Amazon.

Entering and exiting the closed forest to cut down trees, raise cattle or mine can pose a health danger.

"People who enter these areas can have contact with these viruses and within them take the problem to urban centers," said Tourinho.

In this scenario, indigenous people are more resistant because they have lived with untouched forests for centuries, Tourinho said.

However, when they do come into contact with a new virus, isolated communities can be particularly vulnerable, because members' immune systems haven't been exposed to as many infectious diseases.

Read more: Indigenous people in the Amazon brace for coronavirus

Yet it is in urban centers that viruses can spread more rapidly. "When these viruses reach cities, they disseminate very quickly exactly because it is so easy to travel in these centers, to travel internationally," Tourinho said. "Cities repeat the same confinement style that we impose on animals, and trigger the proliferation of contagious diseases."

One of these paths could explain the origin of the current coronavirus, which has infected more than 3 million people and killed more than 211,000 worldwide, according to Johns Hopkins University.



BATS: SECRETS OF THE FLYING MAMMAL
Not just rare cave-dwellers

From Australia's bush to Mexico's Pacific coast — hanging in trees, perched high up on mountains, hidden in caves, rock crevices, and rooftops—bats are the most widely distributed mammal on Earth, inhabiting every continent except Antarctica. Making up about 20% of all mammals, these nocturnal creatures are the second most common mammal after rodents, and the only one capable of sustained flight.

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Date 29.04.2020
Author Nadia Pontes
Related Subjects Deforestation, Amazon, Asia, Coronavirus
Keywords coronavirus, deforestation, epidemic, Amazon, Asia, infectious diseases

Permalink https://p.dw.com/p/3bZ

The Red and the Black
BY SETH ACKERMAN

Profit is the motor of capitalism. What would it be under socialism?


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Radicals have a habit of speaking in the conditional. Underlying all their talk about the changes they’d like to see in the world is the uneasy knowledge that our social system places rigid limits on how much change can be accomplished now. “After the revolution . . .” is the wistful, ironic preface to many a fondly expressed wish on the Left.

Why, then, are radicals so hesitant to talk about what a different system might look like? One of the oldest and most influential objections to such talk comes from Marx, with his oft-quoted scorn toward utopian “recipes” for the “cookshops of the future.” The moral of the quote, supposedly, is that a future society must emerge from the spontaneous dynamics of history, not from the isolated imaginings of some scribbler. This isn’t without some irony, since two years later Marx the scribbler wrote his own little cookshop recipe in his Critique of the Gotha Program — it involved labor tokens, storehouses of goods, and an accounting system to determine how much workers would get paid.

As it happens, Marx’s comment was a riposte to a negative review he’d received in a Paris newspaper run by devotees of the philosopher Auguste Comte, criticizing Marx for offering no concrete alternative to the social system he condemned. (That’s why, in the original quote, he asks wryly if the recipes the reviewers had hoped to see happened to be “Comtist” ones.) To grasp the context, you have to understand that like many utopian writers of the era, Comte proffered scenarios for a future society that were marked by an almost deranged grandiosity, featuring precise and fantastically detailed instructions on practically every facet of daily life. It was this obsessive kind of future-painting that Marx was really taking aim at.


A related cause for reticence is the feeling that to spell out ideas for future social institutions amounts to a sort of technocratic elitism that stifles the utopian élan of the people-in-motion. Great social change never happens without multitudes becoming inspired to heroic acts of enthusiasm, and patient attempts to grapple realistically with the material problems of a functioning society are rarely so inspiring. This is by no means a trivial objection; one of the oldest fallacies on the Left is the illusion that change happens when someone comes along with a brilliant ten-point plan and manages to convince everyone of its genius.

Still, a successful radical project has to appeal to every emotional register: not just those ecstatic moments when history opens up and everything seems possible, but also those pensive and critical moods when even inveterate optimists-of-the-will find doubt and reflection taking over. Even a struggle as epic and impassioned as the movement for the eight-hour day — which “seemed one of the most striking utopias of revolutionary socialism” at the time, as Elie Halévy remembered — was, in the end, about a bureaucratic measure, enforced by legal directives and factory inspectors.

Maybe the most fundamental reason the Left has been suspicious of such visions is that they have so often been presented as historical endpoints — and endpoints will always be disappointing. The notion that history will reach some final destination where social conflict will disappear and politics come to a close has been a misguided fantasy on the Left since its genesis. Scenarios for the future must never be thought of as final, or even irreversible; rather than regard them as blueprints for some future destination, it would be better to see them simply as maps sketching possible routes out of a maze. Once we exit the labyrinth, it’s up to us to decide what to do next.

In this essay, I start from the common socialist assumption that capitalism’s central defects arise from the conflict between the pursuit of private profit and the satisfaction of human needs. Then I sketch some of the considerations that would have to be taken into account in any attempt to remedy those defects.

What I’m not concerned with here is achieving some final and total harmony between the interests of each and the interests of all, or with cleansing humanity of conflict or egotism. I seek the shortest possible step from the society we have now to a society where most productive property is owned in common — not in order to rule out more radical change, but precisely in order to rule it in.

There is nothing wrong with thinking concretely and practically about how we can free ourselves from social institutions that place such confining limits on the kind of society we are able to have. Because of one thing we can be certain: the present system will either be replaced or it will go on forever.

Radicals responded to the end of “really existing socialism” mainly in two ways. Most stopped talking about a world after capitalism at all, retreating to a modest politics of piecemeal reform, or localism, or personal growth.

The other response was exactly the opposite — an escape forward into the purest and most uncompromising visions of social reconstruction. In certain radical circles, this impulse has lately heightened the appeal of a leap toward a world with no states or markets, and thus no money, wages, or prices: a system in which goods would be freely produced and freely taken, where the economy would be governed entirely by the maxim “from each according to his abilities, to each according to his needs.”

Whenever such ideas are considered, debate seems to focus immediately on big philosophical questions about human nature. Skeptics scoff that people are too selfish for such a system to work. Optimists argue that humans are a naturally cooperative species. Evidence is adduced for both sides of the argument. But it’s best to leave that debate to the side. It’s safe to assume that humans display a mixture of cooperation and selfishness, in proportions that change according to circumstances.

The lofty vision of a stateless, marketless world faces obstacles that are not moral but technical, and it’s important to grasp exactly what they are.

We have to assume that we would not want to regress to some sharply lower stage of economic development in the future; we would want to experience at least the same material comforts that we have under capitalism. On a qualitative level, of course, all sorts of things ought to change so that production better satisfies real human and ecological needs. But we would not want to see an overall decline in our productive powers.

But the kind of production of which we are now capable requires a vast and complex division of labor. This presents a tricky problem. To get a concrete sense of what it means, think of the way Americans lived at the time of the American Revolution, when the typical citizen worked on a small, relatively isolated family farm. Such households largely produced what they consumed and consumed what they produced. If they found themselves with a modest surplus of farm produce, they might sell it to others nearby, and with the money they earned they could buy a few luxuries. For the most part, though, they did not rely on other people to provide them with the things they needed to live.

Compare that situation with our own. Not only do we rely on others for our goods, but the sheer number of people we rely on has increased to staggering proportions.

Look around the room you’re sitting in and think of your possessions. Now try to think of how many people were directly involved in their production. The laptop I’m typing on, for example, has a monitor, a case, a DVD player, and a microprocessor. Each was likely made in a separate factory, possibly in different countries, by various companies employing hundreds or thousands of workers. Then think of the raw plastic, metal, and rubber that went into those component parts, and all the people involved in producing them. Add the makers of the fuel that fired the factories and the ship crews and trucking fleets that got the computer to its destination. It’s not hard to imagine millions of people participating in the production of just those items now sitting on my desk. And out of the millions of tasks involved, each individual performed only a tiny set of discrete steps.

How did they each know what to do? Of course, most of these people were employees, and their bosses told them what to do. But how did their bosses know how much plastic to produce? And how did they know to send the weaker, softer kind of plastic to the computer company, even though it would have been happy to take the sturdier, high-quality plastic reserved for the hospital equipment makers? And how did these manufacturers judge whether it was worth the extra resources to make laptops with nice LCD monitors, rather than being frugal and making old, simpler cathode ray models?

The total number of such dilemmas is practically infinite for a modern economy with millions of different products and billions of workers and consumers. And they must all be resolved in a way that is globally consistent, because at any given moment there are only so many workers and machines to go around, so making more of one thing means making less of another. Resources can be combined in an almost infinite number of possible permutations; some might satisfy society’s material needs and desires fairly well, while others would be disastrous, involving huge quantities of unwanted production and lots of desirable things going unmade. In theory, any degree of success is possible.

This is the problem of economic calculation. In a market economy, prices perform this function. And the reason prices can work is that they convey systematic information concerning how much of one thing people are willing to give up to get another thing, under a given set of circumstances. Only by requiring people to give up one thing to get another, in some ratio, can quantitative information be generated about how much, in relative terms, people value those things. And only by knowing how much relative value people place on millions of different things can producers embedded in this vast network make rational decisions about what their minute contribution to the overall system ought to be.

None of this means that calculation can be accomplished through prices alone, or that the prices generated in a market are somehow ideal or optimal. But there is no way a decentralized system could continually generate and broadcast so much quantitative information without the use of prices in some form. Of course, we don’t have to have a decentralized system. We could have a centrally planned economy, in which all or most of society’s production decisions are delegated to professional planners with computers. Their task would be extremely complex and their performance uncertain. But at least such a system would provide some method for economic calculation: the planners would try to gather all the necessary information into their central department and then figure out what everyone needs to do.

So something needs to perform the economic calculation function that prices do for a market system and planners do for a centrally planned system. As it happens, an attempt has been made to spell out exactly what would be required for economic calculation in a world with no states or markets. The anarchist activist Michael Albert and the economist Robin Hahnel have devised a system they call Participatory Economics in which every individual’s freely made decisions about production and consumption would be coordinated by means of a vast society-wide plan formulated through a “participatory” process with no central bureaucracy.

Parecon, as it’s called, is an interesting exercise for our purposes, because it rigorously works out exactly what would be needed to run such an “anarchist” economy. And the answer is roughly as follows: At the beginning of each year, everyone must write out a list of every item he or she plans to consume over the course of the year, along with the quantity of each item. In writing these lists, everyone consults a tentative list of prices for every product in the economy (keep in mind there are more than two million products in Amazon.com’s “kitchen and dining” category alone), and the total value of a person’s requests may not exceed his or her personal “budget,” which is determined by how much he or she promises to work that year.

Since the initial prices are only tentative estimates, a network of direct-democratic councils must feed everyone’s consumption lists and work pledges into computers, in order to generate an improved set of prices that will bring planned levels of production and consumption (supply and demand) closer to balance. This improved price list is then published, which kicks off a second “iteration” of the process: now everyone has to rewrite their consumption requests and work pledges all over again, according to the new prices. The whole procedure is repeated several times until supply and demand are finally balanced. Eventually, everyone votes to choose between several possible plans.

In their speaking and writing, Albert and Hahnel narrate this remarkable process to show how attractive and feasible their system would be. But for many people — I would include myself in this group — the effect is exactly the opposite. It comes off instead as a precise demonstration of why economic calculation in the absence of markets or state planning would be, if perhaps not impossible in theory, at least impossible to imagine working in a way that most people could live with in practice. And Parecon is itself a compromise from the purist’s point of view, since it violates the principle “from each according to ability, to each according to need” — individuals’ consumption requests are not allowed to exceed their work pledges. But of course without that stipulation, the plans wouldn’t add up at all.

The point is not that a large-scale stateless, marketless economy “wouldn’t work.” It’s that, in the absence of some coordinating mechanism like Albert and Hahnel’s, it simply wouldn’t exist in the first place. The problem of economic calculation, therefore, is something we have to take seriously if we want to contemplate something better than the status quo.

But what about the other alternative? Why not a centrally planned economy where the job of economic calculation is handed over to information-gathering experts — democratically accountable ones, hopefully. We actually have historical examples of this kind of system, though of course they were far from democratic. Centrally planned economies registered some accomplishments: when Communism came to poor, rural countries like Bulgaria or Romania they were able to industrialize quickly, wipe out illiteracy, raise education levels, modernize gender roles, and eventually ensure that most people had basic housing and health care. The system could also raise per capita production pretty quickly from, say, the level of today’s Laos to that of today’s Bosnia; or from the level of Yemen to that of Egypt.


But beyond that, the system ran into trouble. Here a prefatory note is in order: Because the neoliberal Right has habit of measuring a society’s success by the abundance of its consumer goods, the radical left is prone to slip into a posture of denying this sort of thing is politically relevant at all. This is a mistake. The problem with full supermarket shelves is that they’re not enough — not that they’re unwelcome or trivial. The citizens of Communist countries experienced the paucity, shoddiness and uniformity of their goods not merely as inconveniences; they experienced them as violations of their basic rights. As an anthropologist of Communist Hungary writes, “goods of state-socialist production . . . came to be seen as evidence of the failure of a state-socialist-generated modernity, but more importantly, of the regime’s negligent and even ‘inhumane’ treatment of its subjects.”

In fact, the shabbiness of consumer supply was popularly felt as a betrayal of the humanistic mission of socialism itself. A historian of East Germany quotes the petitions that ordinary consumers addressed to the state: “It really is not in the spirit of the human being as the center of socialist society when I have to save up for years for a Trabant and then cannot use my car for more than a year because of a shortage of spare parts!” said one. Another wrote: “When you read in the socialist press ‘maximal satisfaction of the needs of the people and so on’ and … ‘everything for the benefit of the people,’ it makes me feel sick.” In different countries and languages across Eastern Europe, citizens used almost identical expressions to evoke the image of substandard goods being “thrown at” them.

Items that became unavailable in Hungary at various times due to planning failures included “the kitchen tool used to make Hungarian noodles,” “bath plugs that fit tubs in stock; cosmetics shelves; and the metal box necessary for electrical wiring in new apartment buildings.” As a local newspaper editorial complained in the 1960s, these things “don’t seem important until the moment one needs them, and suddenly they are very important!”

And at an aggregate level, the best estimates show the Communist countries steadily falling behind Western Europe: East German per capita income, which had been slightly higher than that of West German regions before World War II, never recovered in relative terms from the postwar occupation years and continually lost ground from 1960 onwards. By the late 1980s it stood at less than 40% of the West German level.

Unlike an imaginary economy with no states or markets, the Communist economies did have an economic calculation mechanism. It just didn’t work as advertised. What was the problem?

According to many Western economists, the answer was simple: the mechanism was too clumsy. In this telling, the problem had to do with the “invisible hand,” the phrase Adam Smith had used only in passing, but which later writers commandeered to reinterpret his insights about the role of prices, supply, and demand in allocating goods. Smith had originally invoked the price system to explain why market economies display a semblance of order at all, rather than chaos — why, for example, any desired commodity can usually be found conveniently for sale, even though there is no central authority seeing to it that it be produced.

But in the late nineteenth century, Smith’s ideas were formalized by the founders of neoclassical economics, a tradition whose explanatory ambitions were far grander. They wrote equations representing buyers and sellers as vectors of supply and demand: when supply exceeded demand in a particular market, the price dropped; when demand exceeded supply, it rose. And when supply and demand were equal, the market in question was said to be in “equilibrium” and the price was said to be the “equilibrium price.”

As for the economy as a whole, with its numberless, interlocking markets, it was not until 1954 that the future Nobel laureates Kenneth Arrow and Gérard Debreu made what was hailed as a momentous discovery in the theory of “general equilibrium” — a finding that, in the words of James Tobin, “lies at the very core of the scientific basis of economic theory.” They proved mathematically that under specified assumptions, free markets were guaranteed to generate a set of potential equilibrium prices that could balance supply and demand in all markets simultaneously — and the resulting allocation of goods would be, in one important sense, “optimal”: no one could be made better off without making someone else worse off.

The moral that could be extracted from this finding was that prices were not just a tool market economies used to create a degree of order and rationality. Rather, the prices that markets generated — if those markets were free and untrammeled — were optimal, and resulted in a maximally efficient allocation of resources. If the Communist system wasn’t working, then, it was because the clumsy and fallible mechanism of planning couldn’t arrive at this optimal solution.

This narrative resonated with the deepest instincts of the economics profession. The little just-so stories of economics textbooks explaining why minimum wages or rent controls ultimately make everyone worse off are meant to show that supply and demand dictate prices by a higher logic that mortals defy at their peril. These stories are “partial equilibrium” analyses — they only show what happens in an individual market artificially cut off from all the markets surrounding it. What Arrow and Debreu had supplied, the profession believed, was proof that this logic extends to the economy as a whole, with all its interlocking markets: a general equilibrium theory. In other words, it was proof that in the end, free-market prices will guide the economy as a whole to its optimum.

Thus, when Western economists descended on the former Soviet bloc after 1989 to help direct the transition out of socialism, their central mantra, endlessly repeated, was “Get Prices Right.”

But a great deal of contrary evidence had accumulated in the meantime. Around the time of the Soviet collapse, the economist Peter Murrell published an article in the Journal of Economic Perspectives reviewing empirical studies of efficiency in the socialist planned economies. These studies consistently failed to support the neoclassical analysis: virtually all of them found that by standard neoclassical measures of efficiency, the planned economies performed as well or better than market economies.

Murrell pleaded with readers to suspend their prejudices:


The consistency and tenor of the results will surprise many readers. I was, and am, surprised at the nature of these results. And given their inconsistency with received doctrines, there is a tendency to dismiss them on methodological grounds. However, such dismissal becomes increasingly hard when faced with a cumulation of consistent results from a variety of sources.

First he reviewed eighteen studies of technical efficiency: the degree to which a firm produces at its own maximum technological level. Matching studies of centrally planned firms with studies that examined capitalist firms using the same methodologies, he compared the results. One paper, for example, found a 90% level of technical efficiency in capitalist firms; another using the same method found a 93% level in Soviet firms. The results continued in the same way: 84% versus 86%, 87% versus 95%, and so on.

Then Murrell examined studies of allocative efficiency: the degree to which inputs are allocated among firms in a way that maximizes total output. One paper found that a fully optimal reallocation of inputs would increase total Soviet output by only 3%-4%. Another found that raising Soviet efficiency to US standards would increase its GNP by all of 2%. A third produced a range of estimates as low as 1.5%. The highest number found in any of the Soviet studies was 10%. As Murrell notes, these were hardly amounts “likely to encourage the overthrow of a whole socio-economic system.” (Murell wasn’t the only economist to notice this anomaly: an article titled “Why Is the Soviet Economy Allocatively Efficient?” appeared in Soviet Studies around the same time.)

Two German microeconomists tested the “widely accepted” hypothesis that “prices in a planned economy are arbitrarily set exchange ratios without any relation to relative scarcities or economic valuations [whereas] capitalist market prices are close to equilibrium levels.” They employed a technique that analyzes the distribution of an economy’s inputs among industries to measure how far the pattern diverges from that which would be expected to prevail under perfectly optimal neoclassical prices. Examining East German and West German data from 1987, they arrived at an “astonishing result”: the divergence was 16.1% in the West and 16.5% in the East, a trivial difference. The gap in the West’s favor, they wrote, was greatest in the manufacturing sectors, where something like competitive conditions may have existed. But in the bulk of the West German economy — which was then being hailed globally as Modell Deutschland — monopolies, taxes, subsidies, and so on actually left its price structure further from the “efficient” optimum than in the moribund Communist system behind the Berlin Wall.

The neoclassical model also seemed belied by the largely failed experiments with more marketized versions of socialism in Eastern Europe. Beginning in the mid-1950s, reformist economists and intellectuals in the region had been pushing for the introduction of market mechanisms to rationalize production. Reforms were attempted in a number of countries with varying degrees of seriousness, including in the abortive Prague Spring. But the country that went furthest in this direction was Hungary, which inaugurated its “new economic mechanism” in 1968. Firms were still owned by the state, but now they were expected to buy and sell on the open market and maximize profits. The results were a disappointment. Although in the 1970s Hungary’s looser consumer economy earned it the foreign correspondent’s cliché “the happiest barracks in the Soviet bloc,” its dismal productivity growth did not improve and shortages were still common.

If all these facts and findings represented one reason to doubt the neoclassical narrative, there was a more fundamental reason: economists had discovered gaping holes in the theory itself. In the years since Arrow and Debreu had drafted their famous proof that free markets under the right conditions could generate optimal prices, theorists (including Debreu himself) had uncovered some disturbing features of the model. It turned out that such hypothetical economies generated multiple sets of possible equilibrium prices, and there was no mechanism to ensure that the economy would settle on any one of them without long or possibly endless cycles of chaotic trial-and-error. Even worse, the model’s results couldn’t withstand much relaxation of its patently unrealistic initial assumptions; for example, without perfectly competitive markets — which are virtually nonexistent in the real world — there was no reason to expect any equilibrium at all.

Even the liberal trope that government interventions are justified by “market failures” — specific anomalies that depart from the Arrow-Debreu model’s perfect-market assumptions — was undermined by another finding of the 1950s: the “general theory of the second best.” Introduced by Richard Lipsey and Kelvin Lancaster, the theorem proves that even if the idealized assumptions of the standard model are accepted, attempts to correct “market failures” and “distortions” (like tariffs, price controls, monopolies or externalities) are as likely to make things worse as to make them better, as long as any other market failures remain uncorrected — which will always be the case in a world of endemic imperfect competition and limited information.

In a wide-ranging review of “the failure of general equilibrium theory,” the economist Frank Ackerman1 concluded:


A story about Adam Smith, the invisible hand, and the merits of markets pervades introductory textbooks, classroom teaching, and contemporary political discourse. The intellectual foundation of this story rests on general equilibrium. . . . If the foundation of everyone’s favorite economics story is now known to be unsound . . . then the profession owes the world a bit of an explanation.

The point is this: If a deterministic story about free markets generating optimal prices, leading to maximum output was no longer viable, then the failure of planned economies could hardly be attributed to the absence of those features. As Communist systems were collapsing in Eastern Europe, economists who had lost faith in the neoclassical narrative began to argue that an alternative explanation was needed. The most prominent theorist in this group was Joseph Stiglitz, who had become famous for his work on the economics of information. His arguments dovetailed with those of other dissenters from the neoclassical approach, like the eminent Hungarian scholar of planned economies, János Kornai, and evolutionary economists like Peter Murrell.

They all pointed to a number of characteristics, largely ignored by the neoclassical school, that better accounted for the ability of market economies to avoid the problems plaguing centrally planned systems. The aspects they emphasized were disparate, but they all tended to arise from a single, rather simple fact:in market systems firms are autonomous.


That means that within the limits of the law, a firm may enter a market; choose its products and production methods; interact with other firms and individuals; and must close down if it cannot get by on its own resources. As a textbook on central planning put it, in market systems the presumption is “that an activity may be undertaken unless it is expressly prohibited,” whereas in planned systems “the prevailing presumption in most areas of economic life is that an activity may not be undertaken unless permission has been obtained from the appropriate authority.” The neoclassical fixation with ensuring that firms exercised this autonomy in a laissez-faire environment — that restrictions on voluntary exchange be minimized or eliminated — was essentially beside the point.

Thus, free entry and multiple autonomous sources of capital mean that anyone with novel production ideas can seek resources to implement their ideas and don’t face a single veto point within a planning apparatus. As a result, they stand a much greater chance of obtaining the resources to test out their ideas. This probably leads to more of the waste inherent in failed experiments — but also far greater scope for improved products and processes, and a constantly higher rate of technological improvement and productivity growth.

Firms’ autonomy to choose their products and production methods means they can communicate directly with customers and tailor their output to their needs — and with free entry customers can choose between the output of different producers: no agency needs to spell out what needs to be produced. To illustrate the relative informational efficiency of this kind of system, Stiglitz cited a Defense Department contract for the production of plain white t-shirts: in the tender for bidding, the physical description of the t-shirt desired ran to thirty small-print pages. In other words, a centralized agency could never learn and then specify every desired characteristic of every product.

Meanwhile, East European economists realized that an essential precondition for firms to be truly autonomous was the existence of a capital market — and this helped explain the failure of Hungary’s market-oriented reforms. In seeking an explanation for the persistence of shortages under the new market system, the Hungarian economist János Kornai had identified a phenomenon that he called the “soft budget constraint” — a situation where the state continually transfers resources to loss-making firms to prevent them from failing. This phenomenon, he argued, was what lay behind the shortage problem in Hungary: expecting that they would always be prevented from going bankrupt, firms operated in practice without a budget constraint, and thus exerted limitless demand for materials and capital goods, causing chronic production bottlenecks.

But why did the state keep bailing out the troubled firms? It’s not as if the Hungarian authorities were opposed to firm failures on principle. In fact, when bankruptcies did happen, the Communist leadership treated them as public relations events, to demonstrate their commitment to a rational economic system.

The ultimate answer was the absence of a capital market. In a market economy, a troubled firm can sell part or all of its operations to another firm. Or it can seek capital from lenders or investors, if it can convince them it has the potential to improve its performance. But in the absence of a capital market, the only practical options are bankruptcy or bailouts. Constant bailouts were the price the Hungarian leadership was forced to pay to avoid extremely high and wasteful rates of firm failures. In other words, capital markets provide a rational way to deal with the turbulence caused by the hard budget constraints of market systems: when a firm needs to spend more than its income, it can turn to lenders and investors. Without a capital market, that option is foreclosed.

As resistance against Communism rose, those in Eastern Europe who wished to avoid a turn to capitalism drew the appropriate lessons. In 1989, the dissident Polish reform economists Włodzimierz Brus and Kazimierz Łaski — both convinced socialists and disciples of the distinguished Marxist-Keynesian Michał Kalecki — published a book examining the prospects for East European reform. Both had been influential proponents of democratic reforms and socialist market mechanisms since the 1950s.

Their conclusion now was that in order to have a rational market socialism, publicly-owned firms would have to be made autonomous — and this would require a socialized capital market. The authors made it clear that this would entail a fundamental reordering of the political economy of East European systems — and indeed of traditional notions of socialism. Writing on the eve of the upheavals that would bring down Communism, they set out their vision: “the role of the owner-state should be separated from the state as an authority in charge of administration. . . .[E]nterprises . . . have to become separated not only from the state in its wider role but also from each other.”

The vision Brus and Łaski sketched was novel: a constellation of autonomous firms, financed by a multiplicity of autonomous banks or investment funds, all competing and interacting in a market — yet all nevertheless socially owned.

All of this lays the groundwork for raising the critical question of profit. There are two ways to think about the function of profits under capitalism. In the Marxist conception, capitalists’ restless search for profit drives the pace and shape of economic growth, making it the ultimate “motor of the system”— but it’s judged to be an erratic and arbitrary motor that ought to be replaced by something more rational and humane. In mainstream economics, on the other hand, profits are understood simply as a benign coordinating signal, broadcasting information to firms and entrepreneurs about how to satisfy society’s needs most efficiently.

Each of these versions contains some truth. Look at the mainstream account. Its logic is straightforward: a firm’s profit is the market value of the output it sells minus the market value of the inputs it buys. So the pursuit of profit leads firms to maximize their production of socially desired outputs while economizing on their use of scarce inputs. On this logic, profits are an ideal coordinating device.

But the logic only holds to the extent that that an item’s market value is actually a good measure of its social value. Does that assumption hold? Leftists know enough to scoff at that idea. The history of capitalism is a compendium of mis-valued goods. Not only do capitalists draw from a treasury of tricks and maneuvers to inflate the market value of the outputs they sell (e.g., through advertising) and drive down the value of the inputs they have to buy (e.g., by deskilling labor). But capitalism itself systematically produces prices for crucial goods that bear little rational relation to their marginal social value: just think of health insurance, natural resources, interest rates, wages.

So if profit is a signal, it invariably comes mixed with a lot of noise. Still, there’s an important signal there. Most of the millions of goods in the economy aren’t like health insurance or natural resources; they’re more banal — like rubber bands, sheet metal, or flat-screen TVs. The relative prices of these goods do seem to function as decent guides to their relative marginal social values. When it comes to this portion of firms’ inputs and outputs — say, a steel company that buys iron and sells it manufactured as steel — profit-seeking really does make capitalists want to produce things people desire in the most efficient way possible. It’s those crucial mis-valued goods — labor, nature, information, finance, risk, and so on — that produce the irrationality of profit.

In other words, under capitalism firms can increase their profits by efficiently producing things people want. But they can also increase them by immiserating their workers, despoiling the environment, defrauding consumers, or indebting the populace. How do you obtain one without getting the other?

The standard answer to this dilemma is what you might call the social democratic solution: let firms pursue their private profits, but have the state intervene case by case to forbid them from doing so in socially harmful ways. Ban pollution, give rights to workers, forbid consumer fraud, repress speculation. This agenda is nothing to sneeze at. The social theorist Karl Polanyi saw it as part of what he called the long “double movement” that had been underway ever since the industrial revolution. Polanyi argued that liberal capitalism had always been pushed forward by a drive to turn everything into a commodity. Because it required that production be “organized through a self-regulating mechanism of barter and exchange,” it demanded that “man and nature must be brought into its orbit; they must be subject to supply and demand, that is, be dealt with as commodities, as goods produced for sale.”

But that commodifying drive had always produced its dialectical opposite, a countermovement from society below, seeking decommodification. Thus, Polanyi’s double movement was “the action of two organizing principles in society, each of them setting itself specific institutional aims, having the support of definite social forces and using its own distinctive methods”:


The one was the principle of economic liberalism, aiming at the establishment of a self-regulating market, relying on the support of the trading classes, and using largely laissez-faire and free trade as its methods; the other was the principle of social protection aiming at the conservation of man and nature as well as productive organization, relying on the varying support of those most immediately affected by the deleterious action of the market — primarily, but not exclusively, the working and the landed classes — and using protective legislation, restrictive associations, and other instruments of intervention as its methods.

After the Second World War, the pressure of the countermovement made decommodification the unacknowledged motor of domestic politics throughout the industrialized world. Parties of the working class, acutely vulnerable to pressure from below, were in government more than 40% of the time in the postwar decades — compared to about 10% in the interwar years, and almost never before that — and “contagion from the Left” forced parties of the right into defensive acquiescence. Schooling, medical treatment, housing, retirement, leisure, child care, subsistence itself, but most importantly, wage-labor: these were to be gradually removed from the sphere of market pressure, transformed from goods requiring money, or articles bought and sold on the basis of supply and demand, into social rights and objects of democratic decision.

This, at least, was the maximal social-democratic program — and in certain times and places in the postwar era its achievements were dramatic.

But the social democratic solution is unstable — and this is where the Marxist conception comes in, with its stress on pursuit of profit as the motor of the capitalist system. There’s a fundamental contradiction between accepting that capitalists’ pursuit of profit will be the motor of the system, and believing you can systematically tame and repress it through policies and regulations. In the classical Marxist account, the contradiction is straightforwardly economic: policies that reduce profit rates too much will lead to underinvestment and economic crisis. But the contradiction can also be political: profit-hungry capitalists will use their social power to obstruct the necessary policies. How can you have a system driven by individuals maximizing their profit cash-flows and still expect to maintain the profit-repressing norms, rules, laws, and regulations necessary to uphold the common welfare?

What is needed is a structure that allows autonomous firms to produce and trade goods for the market, aiming to generate a surplus of output over input — while keeping those firms public and preventing their surplus from being appropriated by a narrow class of capitalists. Under this type of system, workers can assume any degree of control they like over the management of their firms, and any “profits” can be socialized— that is, they can truly function as a signal, rather than as a motive force. But the precondition of such a system is the socialization of the means of production — structured in a way that preserves the existence of a capital market. How can all this be done?

Start with the basics. Private control over society’s productive infrastructure is ultimately a financial phenomenon. It is by financing the means of production that capitalists exercise control, as a class or as individuals. What’s needed, then, is a socialization of finance — that is, a system of common, collective financing of the means of production and credit. But what does that mean in practice?


It might be said that people own two kinds of assets. “Personal” assets include houses, cars, or computers. But financial assets — claims on money flows, like stocks, bonds, and mutual funds — are what finance the productive infrastructure. Suppose a public common fund were established, to undertake what might be euphemistically called the “compulsory purchase” of all privately-owned financial assets. It would, for example, “buy” a person’s mutual fund shares at their market price, depositing payment in the person’s bank account. By the end of this process, the common fund would own all formerly privately-owned financial assets, while all the financial wealth of individuals would be converted into bank deposits (but with the banks in question now owned in common, since the common fund now owns all the shares).

No one has lost any wealth; they’ve simply cashed out their stocks and bonds. But there are far-reaching consequences. Society’s means of production and credit now constitute the assets of a public fund, while individuals’ financial wealth balances are now its liabilities. In other words, the job of intermediating between individuals’ money savings and society’s productive physical assets that used to be performed by capitalist banks, mutual funds, and so on, has been socialized. The common fund can now reestablish a “tamed” capital market on a socialized basis, with a multiplicity of socialized banks and investment funds owning and allocating capital among the means of production.

The lesson here is that the transformation to a different system does not have to be catastrophic. Of course, the situation I’m describing would be a revolutionary one — but it wouldn’t have to involve the total collapse of the old society and the Promethean conjuring of something entirely unrecognizable in its place.

At the end of the process, firms no longer have individual owners who seek to maximize profits. Instead, they are owned by society as a whole, along with any surplus (“profits”) they might generate. Since firms still buy and sell in the market, they can still generate a surplus (or deficit) that can be used to judge their efficacy. But no individual owner actually pockets these surpluses, meaning that no one has any particular interest in perpetuating or exploiting the profit-driven mis-valuation of goods that is endemic under capitalism. The “social democratic solution” that was once a contradiction — selectively frustrating the profit motive to uphold the common good, while systematically relying on it as the engine of the system — can now be reconciled.

To the same end, the accrual of interest to individuals’ bank deposits can be capped at a certain threshold of wealth, and beyond that level it could be limited to simply compensate for inflation. (Or the social surplus could be divided up equally among everyone and just paid out as a social dividend.) This would yield not exactly the euthanasia of the rentier, but of the rentier “interest” in society. And while individuals could still be free to start businesses, once their firms reached a certain size, age and importance, they would have to “go public”: to be sold by their owners into the socialized capital market.

What I’m describing is, in one sense, the culmination of a trend that has been proceeding under capitalism for centuries: the growing separation of ownership from control. Already in the mid-nineteenth century, Marx marveled at the proliferation of what we now call corporations: “Stock companies in general — developed with the credit system — have an increasing tendency to separate this work of management as a function from the ownership of capital, be it self-owned or borrowed. Just as the development of bourgeois society witnessed a separation of the functions of judges and administrators from land-ownership, whose attributes they were in feudal times.” Marx thought this development highly significant: “It is the abolition of capital as private property within the framework of capitalist production itself.”

By the 1930s this “socialized private property” had become the dominant productive form in American capitalism, as Adolf Berle and Gardiner Means signaled in The Modern Corporation and Private Property. The managerial-corporate model seemed to face a challenge in the 1980s when capitalist owners, dissatisfied with languishing profit rates, launched an offensive against what they saw as lax and complacent corporate managers. This set off a titanic intra-class brawl for control of the corporation that lasted more than a decade. But by the late 1990s, the result was a self-serving compromise on both sides: CEOs retained their autonomy from the capital markets, but embraced the ideology of “shareholder value”; their stock packages were made more sensitive to the firm’s profit and stock-market performance, but also massively inflated. In reality, none of this technically resolved the problem of the separation of ownership and control, since the new pay schemes never came close to really aligning the pecuniary interests of the managers with the owners’. A comprehensive study of executive pay from 1936 to 2005 by MIT and Federal Reserve economists found that the correlation between firms’ performance and their executives’ total pay was negligible — not only in the era of mid-century managerialism, but throughout the whole period.

In other words, the laboratory of capitalism has been pursuing a centuries-long experiment to test whether an economic system can function when it severs the one-to-one link between the profits of an enterprise and the rewards that accrue to its controllers. The experiment has been a success. Contemporary capitalism, with its quite radical separation of ownership and control, has no shortage of defects and pathologies, but an inattention to profit has not been one of them.

How should these socialized firms actually be governed? A complete answer to that question lies far beyond the scope of an essay like this; minutely describing the charters and bylaws of imaginary enterprises is exactly the kind of Comtist cookshop recipe that Marx rightly ridiculed. But the basic point is clear enough: since these firms buy and sell in the market, their performance can be rationally judged. A firm could be controlled entirely by its workers, in which case they could simply collect its entire net income, after paying for the use of the capital.2 Or it could be “owned” by an entity in the socialized capital market, with a management selected by that entity and a strong system of worker co-determination to counterbalance it within the firm. Those managers and “owners” could be evaluated on the relative returns the firm generates, but they would have no private property rights over the absolute mass of profits.3If expectations of future performance needed to be “objectively” judged in some way, that is something the socialized capital markets could do.

Such a program does not amount a utopia; it does not proclaim Year Zero or treat society as a blank slate. What it tries to do is sketch a rational economic mechanism that denies the pursuit of profit priority over the fulfillment of human needs. Nor does it rule out further, more basic changes in the way humans interact with each other and their environment — on the contrary, it lowers the barriers to further change.

In a tribute to Isaac Deutscher, the historian Ellen Meiksins-Wood praised his “measured vision of socialism, which recognized its promise for human emancipation without harboring romantic illusions that it would cure all human ills, miraculously making people ‘free’, in Shelley’s words, ‘from guilt or pain.’” Socialism, Deutscher had written, was not “evolution’s last and perfect product or the end of history, but in a sense only the beginning of history.” As long as the Left can retain this elemental basis of hope, it will keep a horizon beyond capitalism in its sights.
No relation.
The economics of labor-managed firms is a huge topic that raises a host of complex institutional questions lying beyond the scope of this article. (See Gregory Dow’s Governing the Firm for a comprehensive treatment.) But as a matter of politics, the important thing to note is that with such firms there is no longer a systemic conflict between an autonomous capitalist or managerial class and the mass of the population. Of course, there are still clashing sectoral interests. But those exist no matter what property form is in place. Moreover, I think there is good reason to believe that the sway of parochial sectoral interests on politics is greater when there is an autonomous capitalist class than when there is none, because that class has an intrinsic interest in maintaining the porousness of the state to self-seeking minority interests in general.
There’s no need to assume that managers must necessarily collect pecuniary rewards for better performance. But using that assumption makes possible a simple mathematical illustration of how managers can be evaluated on relative but not absolute profits. Suppose that at the start of each year the authorities decided on a certain fraction of national income that would be devoted to paying managerial bonuses at the end of the year. The number could change each year, but let’s say this year it’s 3%. When the year is out, national income is added up, along with total profit. If total profit comes to 30% of national income, that means total bonuses will be one-tenth of total profits (3%/30%) — which means the bonus pool for each firm’s managers will be equal to one-tenth of that firm’s profits. Under a system like this, each manager would have an interest in improving her own firm’s profit performance; but she would have no rational reason to subvert or object to any general profit-suppressing laws, norms, customs or regulations enacted in the public interest, assuming they applied to all firms equally. Again, what’s important here is the concept: whether it’s money or praise that is awarded for good performance, the principle is the same.

ABOUT THE AUTHOR
Seth Ackerman is Jacobin's executive editor.

Unions Can Fight for and Win COVID-19 Protections
BYZUKHRA KASIMOVA DAWN TEFFT

A year before the coronavirus pandemic, graduate workers at the University of Illinois-Chicago went on strike for three weeks and won. Last month, they built off of the infrastructure built during that strike to demand and win COVID-19 protections.

University of Illinois at Chicago graduate workers and supporters during a strike in 2019. (Dawn Tefft)



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Workers at the University of Illinois at Chicago (UIC) have bargained what we believe are the first set of wins for a graduate union negotiating the effects of COVID-19. It was our winning strike last year that made our employer realize it should come to the table and give us what we demanded.

When the crisis hit in March, graduate workers at UIC quickly realized that having health insurance would not prevent them from accruing huge medical bills.

Nor did teaching assistants and graduate assistants, who perform much of the teaching and administrative duties at the university, have sufficient sick leave, as is typical for graduate workers in the United States on short-term contracts.

To make matters worse, international student workers who traditionally receive only nine months a year of financial support from the university found themselves stranded in the United States after the worldwide suspension of travel. They were left to their own devices by the university’s office of international services.

This office charges an international student fee each semester, but failed to provide immigration updates and guidance to international workers, who were left to interpret contradictory advisories issued by federal immigration authorities.

Unable to work off campus because their visas prohibit them from doing so, most international student workers had no job for the summer and no family members in the United States to stay with in case of eviction.
The Plan

Illinois declared a state of emergency on March 9. Within twenty-four hours, members of Graduate Employees Organization (GEO) Local 6297 had used a stewards meeting to draft bargaining demands and create an organizing plan. The list included two weeks’ paid sick leave, full coverage of COVID-19–related medical care, free housing, and a $400/month stipend over the summer for international students stuck in the United States without income.

The administration agreed to meet but then rejected each of the union’s demands.

In response, a steward wrote an article for Jacobin explaining how at the start of the pandemic, UIC’s trustees had voted to allocate $300 million to erect buildings and also voted to increase health care premiums for students.

On March 21 GEO emailed the membership that article and instructions on how to email the administration. Later that day, management told union leaders they would be changing their position on some of the demands and the union could stop flooding their inboxes.


Two days later the administration sent a revised proposal for a memorandum of understanding (MOU), agreeing to many of GEO’s demands. But we continued to negotiate to try to win the remaining ones.

GEO’s contract specified 3.25 sick days per semester for the average twenty-hour per week job. The union fought for and won two weeks of paid sick leave, on top of regular sick leave, for anyone who contracted COVID-19 or was taking care of a family member with it. (These crucial wins were eventually replaced by more comprehensive COVID-19 sick leave policies in the federal government CARES Act.)

Many members had written the union requesting teletherapy services for mental health. Knowing that studies show graduate workers have some of the highest stress levels in the nation, GEO fought for and won mental health counseling by telephone.

The union also won coverage for members who use CampusCare, the university’s in-house health care provider. And though the university didn’t formally agree to this in an MOU, it did institute a policy covering all COVID-19–related out-of-network ER expenses at 100 percent and urgent care at 70 percent.

The policy also met our demand of mass preauthorization of all COVID-19–related tests and treatments at ER and urgent care facilities. Previous policy required that doctors individually preauthorize all out-of-network treatment.

These emergency care wins were critical, according to GEO secretary Jared O’Connor, because “the system establishes too many barriers to access treatment easily and equitably. I have been stymied by CampusCare during a medical emergency, and it only made the situation worse.”

Though the administration never formally agreed to our demand to create long-term repayment plans for student debt owed to UIC, it did institute that for those who owe less than $1,500. And in response to demands from both graduates and undergraduates, it partially refunded fees, dorm costs, parking passes, and meal service plans.
International Workers’ Relief

The union had effectively reversed management’s position on all but one of our initial demands. But the university still refused economic relief for international graduate workers, who could neither return to their home countries for the summer nor work outside the university.

So the union’s international caucus crafted a larger set of demands, including the initial one around financial relief, and emailed them on April 3 to administrators and the office of international services.

The caucus asked for a response within a week, or they would email the bargaining unit with the expanded demands. The caucus felt the administration wouldn’t want them to agitate the international students who make up 40 percent of the bargaining unit and are often more exploited than domestic workers — and they were correct.

A week and a day later, the administration announced a task force on summer funding issues.

It also announced a virtual town hall, where international caucus members agitated. Afterward, a caucus member and a union officer were invited to be on the task force.

The task force has so far created eighty new internships and assistantships over the summer, both for international workers and for US workers who have lost assistantships due to the shift to online classes. At least forty more are needed, for international students alone.

“The amount of organizing that was done since last year’s strike paid off during the current crisis,” said international caucus member Siamack Hajimohammad. “The active presence of various committees and subgroups in GEO made the communication very effective across the board.”
Strike’s Lasting Impact

Ayear before the pandemic, GEO went on an offensive strike for three weeks, ultimately winning the largest raises in the union’s history: fee reductions and fee freezes, lower health care costs, and a requirement that all departments create grievable policies regarding appointments and reappointments.

In February, a month before Illinois declared a state of emergency, union members staged a march on the boss. They swarmed the provost’s office to demand the university stop violating labor law, which the university’s labor relations staff had felt emboldened to do with greater frequency since the Janus decision that eliminated fair-share dues in the public sector.

GEO’s actions to protect workers’ health and economic rights during the pandemic were all the more successful because of the union’s history of taking strong action. The administration knew GEO wasn’t going to let up, and decided it made more sense to work with the union than to remain in conflict.

GEO and other locals in the coalition of campus unions are pushing to reallocate the funds away from new buildings and toward addressing workers’ needs during the pandemic.

“I think the UI System has failed and continues to fail to budget properly,” said GEO copresident Sagen Cocklin. “We have seen time and time again that the university is much more keen to fund buildings than the people that work inside of them.”Republished from Labor Notes.SHARE THIS ARTICLEFacebookTwitterEmail
ABOUT THE AUTHOR

Zukhra Kasimova is a member of UIC-GEO Local 6297’s International Caucus.

Dawn Tefft is executive director of GEO.