Capitalism has “reached its limits” and is now “being replaced with something better”. That something, says Paul Mason, is “PostCapitalism”.
As economics editor of Channel 4 News, and previously BBC’s Newsnight, Mason has built his reputation filing arresting and thoughtful reports from economic hotspots like Greece and Gaza. As likely to talk to rioters as he is to quiz university professors, his television reportage brims with a natural sense of inquiry.
This book, too, contains much energetic and stylish writing, whether the narrative concerns the City of London or the politics of pre-revolutionary Russia. Yet for all his readable potted history, the book’s central thesis – that capitalism is “finished” and we can only “rescue ourselves from turmoil and inequality by moving beyond capitalism” – is deeply misguided.
Mason makes some justified attacks on Western economic policy – railing against banking’s role in the 2008 financial crisis, for instance, pointing to “evidence of criminality and corruption”. But he then advances policy prescriptions that are so vague and unrealistic that he detracts from his original critique.
At the heart of Mason’s vision is information technology (IT). The internet and mobile communication in general “has reduced the need for work”, Mason says, while “loosening the relationship between work and wages”. But is it true that “the coming wave of automation will hugely diminish the amount of work needed”? Does IT really mean fewer jobs?
UK employment has grown at the same pace as GDP over the same 20 years as such technology has expanded – faster in recent years. If we needed fewer workers, Western productivity would be growing – yet we see the reverse.
Mason also argues, more optimistically, that IT is driving the “spontaneous rise of collaborative production: goods, services and organizations are appearing that no longer respond to the dictates of the market and the managerial hierarchy”, he says. As such, hi-tech has “the potential to… destroy an economy based on private ownership”.
Claiming such destruction “is already happening”, Mason cites the “proliferation of parallel currencies, time banks, co-operatives and self-managed spaces”. He points to “new forms of lending” like crowdsourcing, carpooling and Wikipedia – “the biggest information product in the world, and made by 27,000 volunteers”.
The problem is that, while IT is clearly creating new markets, the so-called “sharing economy” – which includes eBay and the Airbnb room rental service – is almost entirely commercial. Far from outmoding capitalism, IT is making it more efficient. Barter trade happens, of course, and social media is helping it grow. But such transactions will only ever be marginal. Would “the sharing economy” turn invention into innovation? Would it manufacture the hand-held gizmos that harness technology, or generate the electricity to charge them?
Wikipedia is, indeed, written by volunteers – some inspired by its not-for-profit status. But they’re still clothed, fed and housed by their own (or their parents’) money, earned in the real world. And would Wikipedia still be not-for-profit had its founder Jimmy Wales not made a fortune as a futures dealer before creating it, while making money today as one of the world’s most sought-after speakers?
I agree with Mason that mainstream Western economists were “wrong to believe the system which emerged after 1989 was permanent… and the perfect expression of human rationality”. Capitalism, warts and all, is fast-developing. And for all its faults, it’s been variants of capitalism that have, since the fall of the Berlin Wall, lifted hundreds of millions out of poverty, not least across the emerging markets of the East.
PostCapitalism rightly argues for “a shift of political power away from the banks and the politicians who support them”. But the 2008 Lehman collapse doesn’t for one moment show that “capitalism has reached its limits”. Lehman happened because central banks pumped up equity prices by cheap money and bankers knew they would be shielded from the wreckage they caused courtesy of their political friends. Rather than too much capitalism, the financial crisis happened because there wasn’t enough.
I don’t agree with Mason that “the real austerity project”, masterminded by “the Neoliberal elite”, is to “drive down real wages and living standards in the West for decades until they meet those of the middle class in China and India on the way up”. The UK, on the contrary, is trying to finally control its public finances, so we don’t end up like Greece.
I also don’t agree that anyone with the luck and brains to study at “Harvard, Cambridge and MIT” is gaining “simply a badge of entry to this tawdry world”. And wondering whether the Soviet-era planned economy could have worked is, under no circumstances, “a good question”.
With the Left-wing MP Jeremy Corbyn bestriding the Labour party, Mason’s book is well-timed. It displays his characteristic energy and has some good insights. But its central message is utopian folly. “For decades, the opponents of capitalism have revelled in their own incoherence,” Mason writes. They still are.