The Capitalism Papers, chapter 12

(Continuing from this post.) Chapters 7 - 11 continue the saga of the fatal flaws and you can read them for yourself. Chapter 12 is about possible solutions. The question again comes up whether capitalism can be reformed or is it too far gone and beyond repair. Mander goes back to the local small business providing a community service or product, divorced from the ravenous hunger of global corps. It's a matter of scale and if capitalism could be limited in scale in might not be so bad, if only we can get our (US) government to move us in that direction as it has in some other democratic socialist countries. But the US government has been bought out by the capitalists and therefore this isn't going to happen; it's up to the rest of us. So what do we do? He notes four megashifts that must occur: nature comes first; local scale; changing corporate values/structures; hybrid economics.

Foremost is that we stop divorcing economics and ourselves from nature. The carrying capacity of the planet cannot handle the strictly abstract economic formulas that do not account for that. The steady-state economics movement is an expression of that. Economic measures like gross domestic product (GDP) must be replaced with something more like the genuine progress indicator (GPI), which accounts for external costs as well as beneficial unpaid services like within-family child care. And which most importantly recognized limits to growth (including population), with a shift from consumption to conservation. This will require some redistribution of wealth, since the poorest countries cannot reduce their already below-subsistance consumption. We need to establish this base requirement and get some people up to it by the more fortunate among us reducing our standards to it, siphoning the surplus to where it's needed. Also needed is restoring the commons to everyone instead of private interests. For example, the US constitution talks about human property rights but nothing about nature's rights.

One program of economic relocalization is the import substitution movement. When a community produces its own food and energy this reduces dramatically the generation and transportation costs of such goods. It also promotes a more direct democracy as people withing such communities must interact more closely to handle the logistics of maintaining such production for the common good. This exemplifies the principle of subsidiarity. Only when concerns cannot be handled locally do they encompass regional trade, and when that is insufficient does it move to national trade and governance. But in no case does it move to global trade/governance. Mander provides the example of the Iroquois confederation as a prototype for the US system. Unlike the top-down US federal system it adhered to the more bottom-up governance process of subsidiarity, where if regional or national consensus could not be reached than local policy ruled.

As for corporations, they aren't inherently greedy but have mutated due to global capitalism. Some local corps, as well as co-op and B corps, can be of great benefit to their communities. It's a matter of scale and corp structure. Hence the following corp reforms are in order. The corp legal purpose must include all stakeholders, including the environment. Healthy profits can still accrue but not to the degree it impinges on these other stakeholders. Corps are not people and should never have those rights, so Citizens United must go. Corps must take all costs into account on their balance sheets, including externalities like the natural and intellectual commons. At least 50% of corp boards must include workers and community stakeholders. There will be limits to size. Individuals within corps will be legally responsible for their actions. Goods and services are limited to a local community. The kind of local corps listed in the beginning of the section will be promoted and possibly subsidized. Top to bottom salary ratios can be no greater than 10 to 1. There are several other examples.

Hybrids is another option. Instead of eliminating capitalism outright how might it be included with other systems to limit its hegemony and destructiveness. Sarkar's ideas are one example, where we can have the kind of local, small business capitalism noted about, along with worker co-ops. But large national structures like finance and insurance requires State control or democratic socialism. One example of such a hybrid is China. He is not condoning their non-democratic governance or minimizing the environmental impacts of their system. But the hybrid economic combinations previously mentioned might be something to consider. Not mentioned is that China is taking up Rifkin's third industrial revolution. He also includes some other speculative hybrids on the drawing board.

Bottom line is that there is no ready-made answer to what is next; we are in the process of creating it and must each take personal responsibility for doing so. I'd argue though that when we do so by getting involved in the political process we not only can but have made significant changes to government policy. And it is government that is needed to legislate the kind of changes we want to see. Other governments are doing so and making progress and we in the US can as well. It's a matter of personal resolve and collective action. Let's join forces with Bernie Sanders, Elizabeth Warren, Alan Grayson and the Congressional progressive caucus and be that change.