Build Alternatives I

Section
9. Support New, Environmentally-Aware, Economic Systems
Page
9.6

Heinberg points out in his book ‘Power’1 (see Section 8.8) that critics of the current system are good at pointing out faults, but weak at mapping transitions, let alone constructing alternatives; this is certainly so for alternative economic systems. Defenders of this situation say that we already have alternative systems available, e.g. Marxist, Socialist, Communist systems, etc., but as I have discussed in Section 1.1.4, these perform little better for the environment than does capitalism, primarily because of their human/material reductionism, and their equal obsession with growth. So, if we are to do better, far better, for the world and for a sustainable future, we must build something new.

(Panorama. 2015. Yanis Varoufakis).

Thankfully, some have stepped forward to meet the challenge, and one excellent example is Yanis Varoufakis’ ‘Another Now – Dispatches from an Alternative Present’2. Varoufakis is an economist, academic and politician who was once Greece’s Finance Minister – post the Global Financial Crisis – which very much sharpened his resolve to deal with the injustices of the current economic order and to construct a better, fairer, system.

‘Another Now’ sets up a debate about the current system, its strengths and weaknesses, and possible future economic systems, between two fiery protagonists and one ‘mediator’. The two protagonists are Eva, a dry-as-dust economic rationalist, economist and failed investment banker, and Iris, an older anarchist and revolutionary of the left. The mediator is Costa, an engineer and IT expert, and the narrator is Yango, a mathematician and friend of Iris. The action is set in 2025.

It sounds as if it could be a bit clunky and overly dialectical, but it is better than this and is constructed as a novel, and contains genuine human warmth.

The book presents two parallel universes: our world and ‘Another Now’ which split off from our reality after the GFC in 2008. In this Other Now capitalism has been toppled and a new economic system established. Capitalism is brought down by:

 

  • Short-term payment strikes, starving the system of funds and profit;
  • Blocked payments to pension funds that supported socially and environmentally irresponsible companies;
  • Days of Inaction: boycott days of no purchase of goods and services of certain irresponsible companies; and
  • Complete IT transparency that exposes the transactions of governments and corporations.

In its place a new system is established, its basic features being:

  • A type of anarcho-syndicalism Varoufakis calls ‘corpo-syndicalism’ which he applies to corporations and imbues with spontaneous order and personal responsibility working in a flat structure to run companies;
  • 5% of a company’s income goes to the government (there is no other taxation); other portions go for bills, such as utilities, and to basic pay, and bonuses;
  • Basic pay is equal between all employees;
  • Bonuses can be accrued by garnering votes from fellow employees; reciprocity is stamped out by a public, transparent, hologram/avatar of votes; each employee has one vote;
  • Each worker gets one company share; this is non-transferrable;
  • Capital can be accumulated, but in a modest way: each resident has a Personal Capital Account run by a central bank comprising three sub-accounts: (i) Accumulation: for basic pay and bonuses; (ii) Legacy: the state puts an equal amount into the account at birth for later use as an adult; (iii) Dividend: the central bank deposits a monthly sum from the 5% state tax on gross revenue, mentioned previously, as a ‘social payment’;
  • People can lend money from their Personal Capital Account, with interest, to their business or to others; therefore, capital can be accumulated;
  • Most companies and organisations are relatively small;
  • Randomly selected Citizens’ Juries rank companies by a ‘Socialworthiness Index’ so as to reflect their usefulness beyond their workers and shareholders; this index is public;
  • Because tradable shares are banned, retail commercial and investment banks disappear; the “whirlpool of financial speculation is dammed”;
  • There are types of community credit unions as well as the central bank;
  • There are markets, but they are not capitalist markets; they are “truly free markets”;
  • There are local, digital, currencies;
  • The IMF is replaced by the IMP (International Monetary Project) whose job is to balance out trade and money flows, e.g. via a Trade Imbalance Levy;
  • There is no private land; it is controlled by regional authorities and rent is paid;
  • Once capitalism disappears and markets are freed from private ownership, GDP is demoted to just another economic measure and value is no longer determined by exchange value, but by experiential value.

 

(Spennemann, D. 2009. Herrnhut ruins, Western District, Victoria, Australia. Herrnhut has been called Australia’s first ‘utopian commune’. Based on a form of proto-Protestantism, it began in the 1850s and lasted more than 40 years. <https://www.abc.net.au/radionational/programs/archived/ark/herrnhut/3525198 >).

 

This other world is debated, argued, attacked, examined, in detail by Iris, Eva and to an extent, Costa, and I won’t tell you the outcome, other than that there is fundamental disagreement as to whether this ‘Other Now’ really will lead to a better world, and to how ‘improvable’ is the human condition.

Varoufakis is to be heartily applauded for his cleverness and courage in presenting just what ‘Another Now’ might look like and how it might work, but there are some criticisms I have. The problem of growth, the desire for it and its sheer, immense and shiny allure, is largely ignored, replaced by ‘power’. Granted, it is extremely hard to unpick the tightly intertwined strands of power/money/growth, but I am not sure they are synonymous. Probably, power is the main driver for the super-rich oligarchs of this world, but I suspect growth, and ‘more’ is the dominant desire in this equation for the global majority, and its religious hold on modern humanity is unlikely to be toppled by Days of Inaction and technical problems (even if they represent fundamental problems) with capitalism. For example, look at what happened after the GFC in 2008; capitalism is more than adept at displacing blame and exhorting the masses to ever more sacrifice, and the masses are prepared to do same.

‘Another Now’ is not about the environment, but about global inequality and the social rapacity of capitalism. The environment is mentioned in passing, usually in its synonymous modern form of climate change. It appears to assume that the Other Now will automatically be better for the environment, without spelling out how or why. This is a reasonable assumption, to a point, as the great ravening beast of capitalism is tamed and something more modest and controlled installed in its place, but it is by no means a given, and if the desire for growth is not properly addressed, as mentioned, then it will live on to undermine the environment, no matter what the system. As witness to this, ‘Another Now’ does not address population growth at all.

At the heart of all attempts to construct a better world is the conflict between our understandings and beliefs as to the human condition: how good, or bad, are we, and how ‘perfectable’ are we? Capitalism sets the bar very low and says that private self-interest is the only thing robust enough to survive and to protect the individual from communal tyranny; other systems, such as communism, set the bar higher, but seem forever trapped in an excusatory transitional phase whereby the masses must be ‘encouraged’ (all-too-often, ‘co-erced’) into co-operating for a larger good. ‘Another Now’ is definitely in the more optimistic camp about human nature, requiring very high levels of co-operation, co-ordination and commitment to work; are we up to it? Varoufakis introduces several clever algorithms to somewhat reduce the consensual burden of decision-making in ‘Another Now’, and leaves elements of personal agency, investment and accumulation in the system, perhaps to not ‘stretch’ the human too far. Whatever the answers to these questions, his contribution is that capitalism is broken, that we can build new economic systems, that they can work, and that they will be – necessarily – far better for society and environment.

 

1 Varoufakis, Y. 2020. Another Now: Dispatches from an Alternative Present. The Bodley Head, London, U.K.

 

Note: I have not had a chance to read it in full as yet, but another interesting attempt to ‘build alternatives’ has been made by Kate Raworth, in her book, ‘Doughnut Economics’2. It is summarised here by Goodreads:

Economics is broken. It has failed to predict, let alone prevent, financial crises that have shaken the foundations of our societies. Its outdated theories have permitted a world in which extreme poverty persists while the wealth of the super-rich grows year on year. And its blind spots have led to policies that are degrading the living world on a scale that threatens all of our futures.

Can it be fixed? In Doughnut Economics, Oxford academic Kate Raworth identifies seven critical ways in which mainstream economics has led us astray, and sets out a roadmap for bringing humanity into a sweet spot that meets the needs of all within the means of the planet. Enroute, she deconstructs the character of ‘rational economic man’ and explains what really makes us tick. She reveals how an obsession with equilibrium has left economists helpless when facing the boom and bust of the real-world economy. She highlights the dangers of ignoring the role of energy and nature’s resources – and the far-reaching implications for economic growth when we take them into account. And in the process, she creates a new, cutting-edge economic model that is fit for the 21st century – one in which a doughnut-shaped compass points the way to human progress. 

Ambitious, radical and rigorously argued, Doughnut Economics promises to reframe and redraw the future of economics for a new generation.” In addition, and perhaps most excitingly, we have a practical example to follow of Doughnut Economics being trialled. The City of Amsterdam has adopted its principles (in 2020) and we will watch with interest their successes and failures and the extent to which they can operate independently of the overarching capitalist system.

2 Raworth, K. 2017. Doughnut Economics. Random House, New York, USA.

Explore Other Economic System

9.1 Introduction

Just as with the previous section – ‘Energy’ – which is, inescapably, all about fossil fuels so pre-eminent and extraordinary has been their dominance and transformation of the world in the last 200 years, so too is this section – ‘Economy’ – real...

9.2 Capitalism: Benefits and Beneficiaries

“Capitalism can be defined as the deliberate and systematic societal encouragement of the accumulation of growth capital through the use of money and debt, the enforcement of private ownership rights (especially of land and natural resources), and...

9.3 Capitalism: Problems for the Environment

In 9.2 we looked at some of the key planks of capitalism and the benefits they have brought, at least to part of, humanity. Now we turn to the problems they pose, particularly environmental problems, and because of their scale and ubiquity, this i...

9.4 Responses: 1. Re-design the Capitalist System

Just as with the previous section, ‘Energy’, there are basically two responses to the problems identified: 1. Re-design/improve the existing system to account for these problems, or 2. Build a whole new system; here we look at the first approach. ...

9.5 Fatal Flaws

Despite the almost heroic efforts of Pearce and others to improve the capitalist system, to make it properly account for the environment, and to separate its destructive ways from its standard operation, there remains an irredeemable futility at t...

9.6 Build Alternatives I

Heinberg points out in his book ‘Power’1 (see Section 8.8) that critics of the current system are good at pointing out faults, but weak at mapping transitions, let alone constructing alternatives; this is certainly so for alternative ec...

9.7 Build Alternatives II

As well as Varoufakis, there are others – individuals and organisations – who refuse to be crushed and bullied by capitalism and are prepared, nay impelled, to think beyond the current straight-jacket. As so often in T10, Higgs1 serv...

9.8 Directing Money to the Environment I

We have already aired arguments as to whether the environment can be, or should be, better accounted for within the modern capitalist economy, but one thing not up for debate is that it is currently almost entirely outside this economy. As such, i...

9.9 Directing Money to the Environment II

While webpage 9.8 addressed indirect funding to the environment via pension funds or similar, 9.9 will examine direct application of whatever discretionary funds one may have available. At first glance this seems relatively straightforward, but...

Explore Other Sections

1. Build the Nature-Human Relationship
1. Build the Nature-Human Relationship 1.1 Articles 1.2 Art Installations 1.3 Books 1.4 Buildings 1.5 Film, Documentaries, Podcasts 1.6 Music 1.7 Paintings 1.8 Photographs 1.9 Poems 1.10 Spiritual Responses
1/11

1. Build the Nature-Human Relationship

This section is designed to foster appreciation and insight that will – hopefully – lead to novel ways to build a better relationship between human beings and Nature. This section is also atypical ...
2. Reduce Consumption
2. Reduce Consumption

2. Reduce Consumption

I hope Reneé Descartes would forgive us for saying that, at least for the modern world, he was wrong.  When, in 1637, he said: “I think, therefore I am”, he could not have anticipated that the majo...
3. Replace God of Growth with God of Quality
3. Replace God of Growth with God of Quality

3. Replace God of Growth with God of Quality

In a supposedly secular age there has arisen a global religion and god like never before, a religion whose reach and power makes every other belief system before it seem pitiful and insignificant: ...
4. Work, Volunteer, Act for the Environment
4. Work, Volunteer, Act for the Environment

4. Work, Volunteer, Act for the Environment

What we do in our day-to-day lives can have great impact. Section Four divides up these actions into three groups – Work (4.2 & 4.3), Volunteering (4.4), and Action, e.g. voting, protesting, et...
5. Reduce Population
5. Reduce Population

5. Reduce Population

Even on top of Mt. Everest, in one of the remotest, most difficult places on earth, there is a great traffic-jam of people jostling for position. And yet, ever more vociferously, we deny that overp...
6. Ensure Media Acknowledgement of Environmental Context
6. Ensure Media Acknowledgement of Environmental Context

6. Ensure Media Acknowledgement of Environmental Context

The media is one of the three, great ‘poles’ of power in the world (alongside political and corporate power) and how they frame and present ‘the environment’ has a profound effect on how we respond...
7. Stop Further Loss of Natural Habitat and Species
7. Stop Further Loss of Natural Habitat and Species

7. Stop Further Loss of Natural Habitat and Species

New York is an exciting, mesmerising place. Human culture is extraordinary and often wonderful. Our powers of transformation of the natural world seem limitless. The trouble is, we don’t seem to be...
8. Assist Energy Descent and Transition
8. Assist Energy Descent and Transition

8. Assist Energy Descent and Transition

Our current energy largesse is an extraordinary ‘gift’, an unprecedented gift of the ages; millions of years to produce and from millions of years ago. Coal, oil and gas, forming...
9. Support New, Environmentally-Aware, Economic Systems
9. Support New, Environmentally-Aware, Economic Systems

9. Support New, Environmentally-Aware, Economic Systems

Just as with the previous section – ‘Energy’ – which is, inescapably, all about fossil fuels so pre-eminent and extraordinary has been their dominance and transformation of the world in the last 20...
10. Reduce Wastes to the Rate of Natural Assimilation
10. Reduce Wastes to the Rate of Natural Assimilation

10. Reduce Wastes to the Rate of Natural Assimilation

Section 10 will attempt to organise this enormous topic by addressing the context and status of pollution in 10.2, before focussing in on air pollution; particularly greenhouse gas pollution and cl...