How to avoid the next monetarist consensus IV

Celestial Monetarism

It has long been a dream of leftists that the market might one day be eradicated. Not because state control of production is itself desirable, rather that with the right state planning we might reach a point in history where self-interest evaporates from productive relations and renders both state and market unnecessary. Rather than struggling to outdo each other materially we would employ our skills to sustain and nurture each other. Selfless supply would service legitimate demand: From each according to their ability, to each according to their need.

For the monetarist however this is nothing but a seductive fantasy, a hollow but dangerous sound-bite: The chaos and uncertainty of unfettered supply and demand is not an impediment to social freedom but its core. While harsh and painful, the market is the bedrock of wealth, innovation and liberty.

Of course the left don’t hold the monopoly on idealism. We could similarly distil pure monetarism down to something like:

From each according to their desires, to each according to their desires.

As with the previous adage this has an appealing purity. Demand becomes nothing more than the desire to own something; supply becomes nothing more than the desire to meet those demands. Nothing unwanted gets made (well, not for long anyway) and given a large enough demand (to make it worthwhile for the producer) everything feasible is available for purchase, state of the art, and at the best possible price.

As with collectivist nirvana, the belief is that given the right relations of production the state would eventually disappear, or at least shrink out of all recognition. Get production right and we won’t need unemployment benefit or income tax or the NHS, or so many policemen to bash people over the head for not wanting to join in. Society would be more attuned to individual human needs and wouldn’t require the constant tinkering and bullying of a central overseer.

Feasibility is another matter. Clearly this does not describe the current order. Like collectivist nirvana, monetarist nirvana would have to be actively engineered over a period of time. It would require a wholesale transformation of human nature (or the release of the true human nature currently trapped in the social-democratic lie, if you prefer.)

Interestingly, while collective idealism suggests that economic equality would require minimal policing, monetarist idealism makes the same claim for economic inequality. The supposition is that the benefits provided by the unfettered market would be enough to secure the compliance of those who fare less well: No income tax would mean more pay for the lowest earners. No sales tax would mean cheaper living costs. No welfare would mean everyone would have to work, so less devilry from idle hands. Instead, a fully productive society consisting of a multitude of social strata – with all necessary incentives and human fulfilment provided by the possibility of social mobility.

Terrestrial Monetarism

For all its purity this vision does not have evidence on its side. There is nothing to suggest that the unfettered free market can produce a free, just, or stable society. While it has long been is a mantra of the right that “socialism is all very nice on paper but it doesn't work in practice”, we now have three decades of accumulated proof that while Monetarism is all very horrible on paper, it doesn’t work in practice either.

The monetarist promise of social and industrial peace is a fiction. As long as some people live by wages the same tensions will remain – pay, conditions, workloads, hours, leave. Working people will always have good reason to combine and campaign for a decent living. It’s class-struggle as usual, and we can expect the usual response from the state.

The monetarist response of course is to ‘limit’ the scope of the idealism. Withering the state is reinterpreted as the more modest withering the welfare state. Meanwhile coercive state apparatus mushrooms. The invisible hand is reliably accompanied by the iron fist. Rather than becoming an anachronism, ministries of surveillance, incarceration, torture and murder are the hallmark of the 'free'-market economy.

This violence is usually excused as a temporary phase, a necessary evil during the transition to the peaceful stateless society – a Dictatorship of the Bourgeoisie to lead us to free-market nirvana. Interestingly, as with the Dictatorship of the Proletariat, it seems that the only way to secure an end to state coercion is through increased state coercion: the only way to rid ourselves of the police and army is through more police and army.

In truth these means are the end. For many free-market advocates violence is a regrettable but necessary means of maintaining the natural human hierarchy. Rather than a crime, many see the juxtaposition of opulence and grinding poverty as the natural order of things, a reflection of differing human skills and capabilities. Consequently those whose poor aptitude leads them to be materially poor are likely to thieve and connive and form unions and labour movements, and so skew this natural hierarchy. Consequently, a powerful coercive state apparatus is a justifiable evil, a regrettable waste of resources, but necessary to keep the dogs at bay and maintain human freedom in other spheres.

If profound inequality is the natural state of being, so be it. For many free-market advocates the natural order of humanity seems to be a super-rich elite, a modest-sized middle class, and a mass of dirt-poor. And, of course, a formidable ministry of violence to keep everything from boiling over. It sounds harsh, and indeed it is harsh, but it’s nothing new. Throughout human history the wealthy have been dreaming-up justifications for inequality, and justifications for using violence to maintain their status. It’s just the latest excuse for business as usual.

What is to be done?

The most important weapon in the fight against the next monetarist consensus will be honesty. The honest truth is that unfettered capitalism does not lead to wealth and freedom. It only further entrenches inequality and powerlessness. Equally however, the left need to be honest about the problems that arise from collective organisation of economics.

The first truth is not something you would deduce from the corporate friendly media. The economic ‘miracles’ reported in Time and Newsweek were just miraculous accumulations of profit for global corporations, and came at terrible cost to domestic populations. From Chile to Russia to Poland to South Africa the story was the same. A monetarist controlled World Bank and IMF blackmailed desperate countries into privatising their economic and social infrastructure; the booty was divided up between multinationals, Mafiosi, and the stooge governments of the host countries. (For the awful details see Naomi Klein’s Shock Doctrine.)

It’s been a funny game when you pan out a little. Monetarists campaigned to convince every country in the world that it would face ruin if it didn’t embrace the free-market. Thatcher insisted that if we didn’t slash state spending at home we would be out-priced in the global market. And indeed, as long as we were funding good health and welfare how could we possibly complete with the unit cost of production in Taiwan, Malaysia, Mexico and the new China?

The darkly amusing thing is, the reason those other countries had such high rates of productivity was because they had been bombed and bullied out of their own hopes of decent welfare by the very same ideological clique imposing their plans at home. Reagan and Thatcher at one and the same time set out to smash welfare domestically and in the developing world.

Clearly for monetarists the fear is not that any one country that allows welfare will make itself uncompetitive, but that if the whole world adopts minimal welfare standards the general level of exploitation will fall, that is, corporations will make less money out of us as a species. Clearly the national interest of neither first nor third world country is being served by monetarism; it is a third entity, the global corporation that benefits.

Monetarists have contrived to keep the whole world desperate, every nation, business and worker in a state of perpetual fear of the other, for the sake of corporate profit. But we can find hope in this policy of despair. If destroying welfare in one county helps to destroy it elsewhere, we must conclude the opposite is also true: Any country that refuses to treat its population as corporate fodder is cutting slack for others to do the same. The greatest threat to monetarism is the threat of a good example.

Free-market thinkers are certainly aware of this fact, hence the desperate measures taken against any country that falls out of line. Only by insuring that most workers get paid peanuts can they ensure that most workers get paid peanuts.

It’s a counter intuitive after decades of being set at each other’s throats, but it is nonetheless the case. Refusing to participate in the monetarist game is the best way to help other countries to refuse. Every victory for a particular labour movement is a general victory for the entire labour movement. The best way to fight for a better deal globally is by fighting for lower productivity globally, and higher public spending globally.

The second point about honesty relates to the credibility of this fight. One of the most powerful weapons in the monetarist arsenal is the perceived idealism of the left. Just as the ideal total market economy has been discredited, the same must be admitted for collectivist idealism. Wilfully naive monetarism is unlikely to be defeated by an equally naive belief in the collective.

If the left have nothing to offer in place of monetarism but equally dogmatic demands for wholesale common ownership then the prospects for change seem bleak. While it is easy to condemn the capitalism of Haliburton and Walmart, there is little to be gained by lumping all forms of private enterprise in the same bin. A credible political alternative will require careful consideration rather than blanket condemnation. It will involve picking between good and bad examples of market forces.

Consequently we can also forget about setting anything in stone. There will be no end of history, left or right. Progressives will, as ever, push for greater collective action and collective ownership. But we can forget about finding a permanent solution to economics.

It shouldn't really come as a surprise. Economics is such a complex network of interests and desires. There are managers, owners, workers, unions, competitors, products, resources and the environment to consider, and that's before you even get to the desires and ambitions of politician and party. You can see the temptations of idealism – the idea that if you could only lop-off one or more of these heads you might create something stable. But like the hydra, they just keep growing back.

The end of The End of History

Both monetarist and collectivist idealists strived for a pure application of their beliefs. Each dreamed of a world washed clean of the ideology of the other. Accordingly any concession was seen as deadly contamination, the thin end of the wedge, the first steps on the road to defeat. Nothing less than the pure market economy, or the pure market-less economy would do.

Reality, however, flatly refused to conform to the ideal. However harshly market forces were imposed people still combined to get a better deal. They still struggled and protested and campaigned for social justice. Similarly, as fast as the state tried to smother the free-market, the black market thrived. People persisted in selling their goods and services to each other at the going rate, regardless whether the state approved the deal. The market can never really be eradicated, it just moves underground.

The oppressive nature of Chilean-style capitalism and Soviet-style communism can be seen as a response to this refusal. For all the efforts of the state, Soviets still conceived of themselves as individuals, with individual motives and desires. Likewise, Chileans still conceived of themselves as comrades, compassionate social beings with a stake in each others lives. The only means of maintaining the pretence of purity was fear and violence.

Both monetarist and collectivist absolutisms are doomed to failure because both deny the rational basis of the other. The inconvenient truth is that human allegiance is a complex and unpredictable thing. There are legitimate social desires and legitimate individual desires. There are times when we want to co-operate and times when we want to act as individuals. Some of us may veer more in one direction than the other, but we each posses both impulses. The fact that certain people find one or other of these impulses abhorrent has no bearing on the matter.

Without massive oppression, it seems the mixed economy is the only game in town. The only set-up that stands a chance of sustaining democracy is one that tolerates the desires of both the individual and the collective. This is not to say that massive oppression cannot also occur in a mixed economy, only that it is bound to occur in a society that aims to stamp out either collective or individual will.

Of course we will argue forever about the composition of the mix – perhaps that’s what politics is – deciding what we do and don't want to co-operate over? But we can forget about dispensing with the mix.