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Paul Bickley


Paul Mason

Allen Lane, 368pp

Paul Mason, Economics Editor for Channel 4 News, argues that we're witnessing the death of one kind of economy and the emergence of another. The economy is being transformed by the free exchange of data and information, which is both abundant and free, and will force the costs of production down. Since Mason subscribes to the labour theory of value - the idea that the profit from any business comes from the surplus value of the work put into it by staff - he argues that in information's capacity to reduce the amount of labour required, in some cases to zero, lay the seeds of capitalism's destruction. The transition from capitalism to postcapitalism will be (and already is) pretty bumpy, but can be eased by state actions like the guarantee of minimum incomes, the nationalisation of monopolies - particularly businesses that monopolise information - and the encouragement of the firms and practices which recognise the new reality. Postcapitalism does not require political revolution, but can be constructed inside the husk of capitalism, though external shocks like energy crises will drive the transition, and specific government actions could oil the gears. Mason's boldest claim, yet the one on which he is most elusive, is that postcapitalism will require a 'new kind of human' - just as the transition from feudalism to early capitalism required fundamental changes of human consciousness, and contemporary workers are often obliged to become 'entrepreneurs of the self' in ways that industrial waged labour never was. This new humanity will be networked, suspicious of hierarchies, and will have internalised the liberation and creativity that postcapitalism itself will eventually exhibit. Much of this book reads like a reprise of other versions of technological utopianism, but in his description and critique of capitalism and neo-liberalism Mason's is persuasive. He is, without a shred of doubt, an anti-capitalist, but a nuanced and thoughtful one who appreciates that capitalism is highly adaptive, and has thus far been able to flourish through finding and creating new markets (China, Russia and other former communist countries) or indeed by 'marketising' aspects of human life itself (I couldn't help noticing that one of the 'reforms' imposed on the Greek government was a liberalisation of Sunday trading). Neo-liberalism, he notes, has delivered an unprecedented growth in global GDP over the past 25 year period, which has benefited developing economies and 'the 1%', but not low income and average income workers in the developed world. So why and how will capitalism end? Mason roots (at length) his analysis in the work of Nikolai Kondratiev, a Russian economist who was eventually executed by firing squads during Stalin's Great Purge. Kondratiev theorised that capitalism moved in long cycles of fifty years or more, with an upswing where both production and consumption would expand, driven by technological innovation and highly skilled labour, and then long periods of collapses when profitability drops beneath interest rates. In this stage, wages would stagnate and less skilled jobs will take up more of the labour market, before organised labour resisted, forcing the capital to look for new routes to higher productivity and profitability through technological innovation - the upswing of the next cycle. That this wasn't a theory of capitalism's final crisis was the reason why Kondratiev ended up in the Gulag. Here's the rub, then, and the premise of all that follows: neo-liberalism - the dominant economic doctrine of the last 20 years - has stalled the transition to the next cycle. In the 1970s and 1980s it broke the power of organised labour, creating an atomised workforce that had to like or lump a low-skill, low-wage economy and borrow to maintain consumption. After the collapse of the Bretton Woods system, which pegged most currencies, via the US dollar, to the value of gold, any downturn could be resolved by pumping cheap money into the economy (that, of course, is broadly the intent of 'quantitative easing' - though much of that money has ended up sitting idle in bank reserves). Some one-off factors - like the economic liberalisation of China - have offset some of the trauma, but capitalism's problems are now existential, at least as an economic system that enables the expression of a measure of humanity. No matter what you think of it, so far it has tended to be fused with democracy, but in the increasing global inequality and in the case of the European Union, where national sovereignty has been blatantly short-circuited, the author perceives that it is going badly wrong and may try to secure itself through authoritarian means. Mason's journalism often adopts an apocalyptic vibe, and this is occasionally the case here. It's obvious why Mason finds this an appealing tool with which to describe and interpret what has happened to Western economies in the last decade - laden with cheap money and debt, stagnating wages, and a recovery that is marked, in the UK at least, by low productivity and low-wage, poor-quality jobs. The crucial new ingredient that Mason adds is information technology, which in itself has dramatically transformed the economy, the workplace, and a range of human behaviours. More than that, he thinks, it has fundamentally changed the game. Once information exists, it can be used over and over again at no extra cost. Musicians, and the industry which assists in the production, distribution and promotion of music, are trying desperately to come to terms with a product that can be reproduced on millions of devices, at no cost. Only by enforcing intellectual property rights could the game be changed, and even if you do that successfully, then transactions will be un-market-like - nothing to do with supply and demand. Alongside that, open source technology begins to play a greater part in the economy, though because it has no cash price it is often invisible, more and more information is collected and distributed in the 'Internet of Things', and commonsbased peer production grows, eclipsing capitalist production (what did Wikipedia do to Encyclopaedia Britannica?). I'm fairly sure that Mason's thesis overall is at least partly right. Technology and information flows have changed our economy beyond recognition within my own memory, and there is no reason to suggest that this process is exhausted. But though he emphasises capitalism's adaptability, I think he does not emphasise it enough. Pope Benedict argued that the principles of gratuitousness and the logic of gift as an expression of gratuitousness 'can and must find their place within normal economic activity' - but Mason never allows for the possibility that the economics of free stuff might help begin to redeem, rather than replace, capitalism.