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Post-Capitalism: A guide to our future....

Dr Rebecca Harding reviews this book by Paul Mason, 2015.  Penguin Random House, UK

“Post-Capitalism”, the “structure that evolves from the collapse of neo-liberalism” is built on one post-2008 reality, argues Paul Mason. “The next generation will be poorer than this one” and “the old economic model is broken and cannot revive growth without reviving financial fragility.” ... He goes on to argue, this post-capitalist world is catalysed by the rise of “info-tech” which has reduced the need for work and blurred distinctions between work and leisure time; which has undermined the capacity of the market to price information goods properly because they are abundant and free; and which has come from the rise of spontaneous collaboration of universally educated networked individuals through non-profit vehicles like Wikipedia.

The reality of Post-Capitalism, argues Mason, is that it offers a new model for the global economy. The old, neo-liberal model has broken down because of its reliance on “fiat money, financialisation, the doubling of the workforce, the global imbalances, including the deflationary effect of cheap labour, plus the cheapening of everything else as a result of IT. Each seemed like a ‘Get Out of Jail Free’ card allowing the ordinary Karma of economics to be suspended.”

Capitalism can no longer adapt to technological change, he argues, because technological change itself has created a value system that supersedes that of capitalism...

And if this weren’t enough to spark a reaction from the reader, the core challenge that the book is seeking to address is this: “For the developed world, the best of capitalism is behind us, and for the rest it will be over in our lifetime.” The solution “has to be based on micro-mechanisms, not diktats or policies, it has to work spontaneously” and it has to be “holistic.” Capitalism can no longer adapt to technological change, he argues, because technological change itself has created a value system that supersedes that of capitalism.  To paraphrase, the system rests on knowledge and intellectual capital rather than financial capital.  Information and knowledge are in abundance and thus the transition we are seeing both empowers individuals to find solutions and renders a value system based on supply and demand irrelevant since markets cannot price things that are not scarce.

This book will be seen as a political polemic.  Much like Rosa Luxemburg, he sees the collapse of global capitalism into spontaneous uprisings, localised conflicts and individual struggle. Mason’s Tour de Force through the history of capitalism and technological change is strongly influenced by Marxism and his solution is for the State to provide a structure in which the individual flourishes while handing the delivery of State services over to the individual.  Throughout, his anger at Capitalism and the failure of neo-liberalism is visceral and this will cloud the reader’s interpretation of what is, otherwise, a fascinating commentary on the political economy of globalisation and technological change.

The book is not just a polemic. His intellectual journey takes him through the literature on technology and innovation. His overview of Kondratieff Long Waves, through techno-economic paradigms to Romer’s endogenous growth theory is the best I have seen for a long while.  It is hard to disagree, whatever your politics with the observations that he makes about the way in which the capitalist system has adapted over time and the crisis that it faces now.  His point is well made – it was Marx who predicted that through technological change the capacity of Capitalism’s markets to price effectively would weaken as knowledge advanced and the capacity to extract surplus value from workers would diminish.

The book wanders off into observation frequently and these intellectual sidings are both its weakness and its strength.  Mason is a journalist and much of his proof is based on observation and self-reflection.  This makes it a political-economy stream of consciousness at times, but one that it well-written and engaging at all times.

The major issue with the book is the rather hubristic way in which it treats the current phase of technology and innovation.  It is the solution rather than the problem and the networked individual, sitting as they are in “a train carriage with white wires coming out of their ears,”…”understand that they are living through a third industrial revolution but they have come to realise why it has stalled.” He believes they will want to be empowered with the responsibility for transition to post-Capitalism, not least because in his view, Long Waves develop from technological and economic change but, more importantly, the class struggle as well.

At this stage I reach for my own books on technological Long Waves, coming as I do from a similar intellectual stable but with a less critical view of the economics profession than perhaps Mason has.  While many of Mason’s arguments are based on literature and observation, it is worth remembering that, in Chris Freeman’s words (arguably the founding father of the economics of technology), “Economics is meaningless outside the framework of history, since economies are historical by nature. Economics is a science of transition.”(1) So before we claim that this is a new era, that everything is about to change and that old orders are about to collapse, there are some fundamentals that apply: that technological change comes from dissatisfaction with the existing paradigm and that entrepreneurs rather than class warriors drive it.

And let’s remember too, that Marx also argued that workers needed to be liberated from the commodity fetishism that chained them to their Capitalist masters.  If we are to see a real revolution driven by those networked individuals under the age of 35 who will “pursue their self-interest through non-market action,” maybe we should pull out their headphones first.

(1): Chris Freeman and Francisco Louca (2001): “As Time Goes By: From the Industrial Revolution to the Information Revolution.” Oxford University Press,Oxford







Liveryman, Dr Rebecca Harding

Independent Economic, Trade and Market Analysis