We have been here before, most notably during the Great Depression, and for similar reasons, with an unregulated financial sector inflating itself to near-insane levels before the bubble burst. Helpless politicians, apparently unable to comprehend the nature or scale of this global stupidity, are no better at conceiving a political response now than they were then, and political dysfunction exacerbates economic dysfunction. Richard Wolff brilliantly identifies the reasons for our paralysis, and in an age permeated by a fear of decisive proposals he has the courage to say that ordinary people must be trusted to organise their own work.
Wolff starts with the fact that the state is in the corporate grip. In 2007-08, banks which owed hundreds of billions as a result of their own frenzied borrowing from other banks which had themselves borrowed colossally were fed trillions in taxpayers’ money; they were neither allowed to collapse, nor nationalized wholesale, nor prosecuted for almost certain criminality. They are confident that new regulations will not be introduced and that old ones will not be revived, and they remain the biggest welfare scroungers in history. The CEOs who have long supplanted even the tiny cabals of institutional shareholders nominally in charge led the post-crash rush for Washington handouts, and the neoliberal politicians whose campaigns they funded were furious that President Barack Obama’s stimulus package was too small. If the corporate banks now lend at all, they lend to bodies like the United States and German governments, not to the small and medium-sized businesses which account for the great bulk of economic activity; their alleged ideological hatred of all things public conveniently vanishes, as it does in India, where gigantic and multiple corporate failures are concealed by endless refinancing at public expense.
Meanwhile, the U.S. corporate sector contributes under a fifth of the country’s total tax revenues. Ordinary people pay the rest. They have increased their productivity sharply in the last three decades, but with real wages held flat the only way they can consume enough to keep the system from collapsing is to live on their credit cards, and to do this more and more, as the state directs its — their — resources increasingly towards the corporates and away from public services and public infrastructure.
Keynesian remedies Our political bankruptcy is worsened by the apparent untenability of responses which have rescued us in previous crises. A predictable revival of Keynesian formulae, whereby states would disregard budget deficits and spend to keep money circulating by getting people back into work, seems to have lost its earlier appeal. According to Wolff, the public — who pay the price for decades of an economic crisis they did not cause — fear that the initially increased budget deficits would mean even worse austerity for them. Secondly, Keynesian dispensations are inherently unstable. They are systematically evaded and destroyed by private corporations, often with the aid of an increasingly conglomerate-owned press, and in any case Keynes himself saw his remedies as temporary, not as structural defences against the inherent self-destructiveness of capitalism.
There is also good evidence for the impact of the corporate press; between 1960 and 1967, three flourishing British social-democratic papers, the Daily Herald , the News Chronicle , and the Sunday Citizen , were all destroyed by advertiser boycotts; their readerships totalled 9.3 million out of a total population of about 55 million, and they were highly respected by their readers. The Herald , which was funded by trade unions, had a readership of 4.7 million in the last year of its existence — more than twice the combined readership of the broadsheets the Times , the Financial Times , and the Guardian , but its 8.1 per cent of national daily newspaper circulation got it only 3.5 per cent of net advertising revenue per thousand copies. In face of access to such a huge readership, the advertiser boycotts amounted to gross economic irrationality. They were nothing other than ideologically-driven class warfare; today, even public-service broadcasters increasingly resemble the corporate press in tone and content.
Highly significant truths are therefore obliterated from public discourse. The absence of systemic critique means that sticking-plaster measures are messianically proclaimed as promises of imminent deliverance, and the corporate-driven destruction of mass labour organisations has all but ended any serious political pressure to regulate corporations or to hold major industries and services in public hands. In addition, it is almost never said that the total losses caused by the crash and by what even Larry Summers calls permanent depression far exceed the sums that would have been needed to keep the system going. In the United States alone, 20 per cent of productive capacity has lain idle since 2007, while millions and perhaps tens of millions are out of work and dependent on state benefits.
On Soviet Union As for other alternatives, one of Wolff’s strengths is his honesty about the Soviet Union. The condition of Russian society itself and international hostility effectively combined to reduce global conceptions of socialism to state socialism, which is just another way of subjugating hundreds of millions to state institutions and the few who control those, whether for the sake of power or profit. Wolff unhesitatingly calls this state capitalism, in which a remote and oppressive apparatus appropriates the surplus value the workers’ own labour power generates.
Throughout the argument, Wolff complements his command of political economy with sharp sociological insight, not least in respect of the ways women’s expanded participation in the formal workforce has exposed capitalism’s destructive effect on the family, and his sense of the value of everyday association informs his own radical proposals for workers’ self-directed enterprises. These would go far beyond worker-managed ones, because the workers would themselves be the owners, the directors, and the workers; nobody outside the organisation could be a director, and posts would be rotated so as to prevent the excessive division of labour and to limit gross inequalities of income. The workers themselves would decide what to produce and how to produce it, and would do so in consultation with local bodies and communities – which could at the very least control the obscenities currently dismissed as externalities whether inflicted by private or so-called public bodies. Wolff has no general problem with profits, but the surplus which workers generate would be used for innovation and development under the same rubrics of reasoning and consultation, not under the present system whereby innovation is accepted only if it enables corporations to sack staff and increase profits.
Wolff, whose ideas are far less outlandish than they might seem to our deadened sensibilities, gives the example of the Mondragón Corporation; this federation of cooperatives based in Spain’s Basque region has been in existence for nearly 60 years and now has a staff of over 80,000. The organisation is explicitly committed to internal democracy, to creating jobs, and to the human and professional development of staff, as well as to the wider environment.
Wolff himself may or may not be something of an economic Aristotelian, but the idea that the informing principle of work must be reasoned, wide-ranging, and authoritative judgment in freedom from coercion and fear embodies a sense of what it is to be human which far transcends the imprisonment to which a collapsed capitalism and contemporary economic theory have consigned us.
DEMOCRACY AT WORK — A Cure for Capitalism: Richard Wolff; Haymarket Books, P.O. Box 180165, Chicago IL 60618. $ 15.
