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Monday, February 27, 2012

Book Review: Life Without Money

above: 'Life without Money'

The following book review explores the themes covered in the recently published book,               'Life Without Money'.  'Life Without Money' is edited by both Anitra Nelson and Frans Timmerman.  Anitra herself provides this glimpse at the themes explored in a book which seeks a way beyond market and money economies - towards a co-operative and sustainable future.  This review is reproduced with her permission.

By Anitra Nelson

When Time magazine announced “The Protester” as 2011 Person of the Year, we had to ask: Is this a signal of radical worldwide change? Did something special start to stir in 2011?

Certainly 1911 was such a momentous year: cities fell like dominoes across China so that, on New Year’s Day 1912, Sun Yat-sen became the provisional president of a liberal republic; civil strife was breaking out in Mexico, by May ending Porfirio Diaz’s dictatorial reign from 1877; and, in Russia, a brief restoration of conservative order was crumbling under the onslaught of Bolshevik and anarchistic activities. Lenin observed “increasing signs that the era of so-called peaceful bourgeois parliamentarianism is drawing to an end”.

Of course, it is only due to the dizzying events which followed through that decade and culminated in revolutions in all three countries – and more – that 1911 is now recognised by historians as such a momentous year. Still those alive at the time felt the winds of change. In some parts popular wisdom blamed Halley’s Comet, which had appeared in April 1910.

When New York’s Mayor Michael Bloomberg ordered police to clear Zuccotti Park of Occupy protestors on 15 November he called on the protesters “to occupy the space with the power of their arguments”. Starting out in the North as a movement against corporate greed, the Occupy movement quickly developed demands for grassroots democracy. The economic became political. But right at the moment it seems to have fizzled out. Or is this the quiet before the storm? What arguments might fill this space?

Whether or not 2011 becomes known as the turning point will mainly depend on whether or not the “99 per cent”, as we have nominated ourselves, take up Bloomberg’s gauntlet. It’s rather hard to imagine, with mainstream politics focusing on unremarkable presidential electioneering in North America; a pretence by the Australian media that Julia Gillard must fall and a real (read “male”) leader, such as Kevin Rudd or Tony Abbott, take her place; the UK and Europeans struggling with integration as a real, not simply nominal, Eurozone; and hard-fought-for “freedom” in the Middle East looking more and more like a mirage. Sorry, Lenin, world bourgeois parliamentarianism still seems alive and strong.

However, the 10 contributors to a new book, Life Without Money: Building Fair and Sustainable Economies, offer strong and radical responses to defenders of capitalism and the so-called “free world”. Most are activist scholars in universities in the UK, USA, Spain and Serbia. Both the book’s editors are Australian. They set out money-free models of community-based governance and collective sufficiency, arguing that production for trade contorts and destroys humane and natural values. They offer strategies for undercutting capitalism by refusing to deal in money, arguing that we need to replace monetary values and relationships by accounting directly in social and environmental values.

There are numbers of alternative communities, as well as movements such as squatting, freeganism and collaborative consumption, experimenting with non-market models. A decade ago they might have been considered marginal. However, their activities are gaining greater currency (pardon the pun) and coming into sharper focus as capitalists and workers alike fear more and worse instability in global financial markets. All this uncertainty, endemic to any market economy, threatens the viability of businesses, job security, house prices and home ownership, the worth of assets and superannuation savings. It makes people question the basis of our economy within which money is the operating principle, dominating value and determining so many relationships.

Even those of us who are not managers or workers are intimately integrated into the monetary system; everyone’s fortunes seem to rise and fall depending on satiating Mammon. The other failing of the economy is in not – or only very inadequately – accounting for environmental factors: increasing carbon emissions in the atmosphere leading to global warming, heightening the frequency and intensity of bushfires and floods; the erosion of natural ecosystems from deforestation; and the exploitation and pollution of the world’s oceans.

Environmental crises – runaway carbon emissions being but the tip of the iceberg – pose a massive threat to capitalism by laying bare the simplistic and inefficient rigidity of a system of production and exchange that focuses on price signals and that depends on growth. For the North, overconsumption is a very real sustainability-cum-economic challenge: if everyone decided to live modestly capitalism would disintegrate. Growth is capitalism’s Achilles’ heel. While overconsumption in the North demands that we develop less materialistic ways of living, it is simply impossible to imagine either individual entrepreneurs or national GDP “degrowing” without a planned economy, at which point we have only two options.

There is the option of state planned economies, which are out of favour among left and right alike. The problem with planned economies is working out how everyone gets a say in what is produced. If distribution is more on the basis of need, it would appear that money has little function. If we were to have less we would be very concerned to make sure we had enough and the kinds of things we feel we need, or badly want. Could we really leave such decisions to the kinds of politicians we have today?

No, we’d like a direct say in how we live.

Non-market forms have the distinct benefit of offering individuals and neighbourhoods economic democracy. It is precisely the importance of such democracy that lies at the heart of Occupy movements worldwide. Occupy politics focus on general assemblies (GAs), allowing everyone a say in decision-making. Clumsy, you say, impossible, not feasible. You’re right, under current economic conditions, under capitalism.

But the economic infrastructure of a world in which we could all have a say in how we live our lives is sketched out in the final chapter of Life Without Money, which builds on key arguments and examples in previous chapters to offer a model of a “compact society”. “Compact” because all the main relationships and structures would be based on legally enforceable voluntary agreements, rather than monetary contracts.

Instead of establishing tiny self-sufficient households, we’d work collectively, with a range of connected local households occupying a basic unit of a neighbourhood, the size of which would be flexible and dependent on the local ecology. Local collective sufficiency would be the key aim of every neighbourhood, sourcing materials for, and making, food, clothing and shelter as well as other basic needs, through appropriate technology. Of course, there would be likely to be needs or wants that people could not source or create locally. Ideally, these would be obtained from a neighbouring area or through the least environmentally and socially expensive option available at the time.

Establishing and maintaining collective sufficiency would require every individual to work out what they would need over a year, assessing local potential, planning how to meet the needs listed, working out how surpluses might be generated, and negotiating with other units to fulfil their needs. The internet facilitates this kind of collective research, planning and negotiation, which would involve numerous compacts.

In 1990 the Global Commons Institute established the idea of addressing the problem of global climate change by a contract-and-converge strategy – contracting emissions and converging by demanding big reductions from the largest polluters so everyone ends up with a similar carbon footprint. A contract-and-converge strategy can be applied to achieve fair and equitable production and distribution in a money-free world. We’d need to redistribute power over the means of production in a radically fair way.

A main focus of the Occupy movement has been working out how to develop and embed processes for direct decision-making. Only by expanding such experience can we decide what practices work, are efficient, effective and really democratic. At the same time, as developments that stimulated the Occupy movement show, the economic systems by which we live have to be reclaimed as our cultural inventions.

A massive decade of engaging with our current economic, environmental and political challenges might well have just started.


Anitra Nelson is an Associate Professor in the School of Global Studies Social Science and Planning, RMIT University, and co-editor of Life Without Money. She will be a Visiting Scholar in the Economics Department of the New School for Social Research in New York, March to May 2012.

This article is an expanded version of a guest post, “Occupy! and Radical Politics Part 2 – Beyond Money”, which appeared in a series at the Pluto Press Blog on 21 December, 2011.

10 comments:

  1. Seeming that I have asked this question in other areas without a satisfactory answer, I may as well try here as well.

    How do determine subjective values in both the provision of goods and labour? How can you allocate relative value between goods and services in a complex system - which is beyond the conscious capacity of individual or collective decision making - without a market-based feedback mechanism? How do you determine the demand (let alone the production) for goods and services that don't even exist yet?

    The examples of "Life Without Money" seem to suggest simple living and complacent impoverishment at best. The Twin Oaks community does not serve as an example of a success, but rather a demonstratable failure of the proposition. They have done the best the possibly can - and yet they still need to raise half a million dollars a year in income for a community of one hundred people.

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  2. Autarky is an issue for me on the matter of small communes as well; In the sense that our current living standards are only sustainable with economies of scale in the context of a large scale and extensive division of labour. That said small communes could survive in the midst of a broader society whose material needs were provided for through a large scale division of labour. I also personally believe in that context it would be difficult to 'do away' with the market when market relations provide a very flexible means for people to determine their own needs structures. But this does not mean that non-market relations cannot develop a growing space for themselves. There is a potentially growing place for reciprocity, barter, volunteering etc. But this will not 'replace' market relations - but rather can supplement them.

    I believe that strategically there is scope for different kinds of planning, reciprocity, voluntereing, self-suficien​cy... But such potential is likely to be realised experimentally, co-operatively - and on a small scale... Rather than replacing market relations such experiments could be supported in the context of broader market relations - and the large-scale social division of labour involved.

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  3. Hi Lev. As you admit, we can't agree on a vision or strategy for the future. I can neither understand what your model of so-called 'free market anti-capitalism' is, nor do I see it as 'a more valuable trajectory' (see comments on posts at http://lifewithoutmoneybook.blogspot.com/). Firstly, many economists agree that a pure free market not only has never existed but also is impossible. Secondly, how it can be anti-capitalist needs to be set out in detail.

    Fortunately, our ideas have a lot of traction elsewhere amongst socialists and anarchists, marxists and many politically active younger people who are environmentally and socially aware and concerned. Besides being a Visiting Scholar in the Economics Department of the New School for Social Research here in New York, March to May this year, we will be talking on two panels at the Left Forum in NYC mid-March (the event on our book featuring in early promotion for the conference) and at other universities and bookstores in the USA, UK and Europe, as well as having a good response to our events in Australia over the last couple of months.

    Most of the answers to the issues you raise in your comments above on substitutions for market mechanisms relate to democratic decision-making. For instance, if demand is only illustrated by market signals (prices) then it is a wasteful system; why not have people order what they need and then produce it rather than 'tell' producers by not buying their goods or finding goods they want highly expensive or not available at all because too many people want them?

    Equally, the impoverishment argument doesn't wash. The chapter on Twin Oaks does not outline what people get back from the system, rather what they put in. A clearer idea of its achievements can be found at the 'your passport to complaining is your willingness to do something about it' blog, is 're-post Island' (https://paxuswordpress.com/category/memetics) in the 'Older posts'(10 December 2011 post) in a report of living at Twin Oaks by Paxus Calta.

    Also we would not measure the success or failure of anything based on how much money was (or was not) spent creating it, as you seem to suggest with the Twin Oaks example. In fact our point is that monetary measurements are not a reliable measure of social or environmental values. If your point is that it is almost impossible to delink from monetary networks, we agree and it's one reason that we've written the book. At the same time we've explored ways of delinking and examined them critically in an effort to develop better strategies.

    You seem to be overcome by the kind of commodity fetishism that Marx described as characteristic of people living under a system where money becomes akin to a god. Do you really believe a system that leaves 1 to 3 billion people with insufficient or inappropriate food while enough food is produced to feed them is efficient? Do you really think that a free market can allocate efficiently and safely according to environmental values?

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  4. I am not suggesting that these problems exist for *all* goods, but certainly for the overwhelming majority of complex commodities. There are some things which can be produced relatively efficiently without heavily reliance market-feedback mechanisms and indeed, in times of war and other emergencies, the government (democratic or otherwise) takes over the consumer-centred direction of the market with an overall strategic orientation. There are even examples of even entire economies which, theoretically at least, could exist without money and markets; in their debate over the calculation problem Ludwig von Mises and Joan Robinson came to an agreement that in a fixed economy with an existing abundance of goods and services that no market would be necessary. This would be, of course, an economy where production and consumption reach the point of being entirely recurring. There would be no innovation, no change in in life, and all cats are grey.

    I do not imply that Twin Oaks (or other communes, such as East Wind and Acorn) are failures. Indeed, they are enormous successes, for those who want to live in such an environment - and not everybody does. I am simply illustrating how such communities are most certainly *not* examples of a "life without money". They are communities which which have significant domestic economies of scale, but significantly engage in simple commodity production (tofu, hammocks, seeds) for an affluent external market and which must purchase complex manufactured goods from external markets.

    It is a rather unfortunate and unscholarly application of the strawman fallacy to suggest that because I am utterly opposed to the primary thesis of "life without money", that means I concur with a system that leaves people below a standard of absolute poverty or am inattentive to environmental issues. Do not think that because I think because I consider the the thesis of "life without money" to be deeply flawed that I support the current system of political economy; I am very sensitive to its failures. The existence of mass impoverishment, for example, is not due to the technology of money, but rather due to a lack of receipt of money from the human share of nature resource values. The existence of environmental destruction again, is not due to the technology of money, but rather due to the lack of incorporation of external costs into internal prices. The matters of impoverishment and environmental degradation are problems which arise from a flawed political economy of which their lack of monetary values is a symptom.

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  5. Free-market anti-capitalism is a very well established field coming from a mutualist and worker-owned co-operative background. One can become more familiar with the model following the works on ownership and resource allocation from (for example) Thomas Hodgskin (and other Ricardian socialists), Pierre-Joseph Proudhon, Léon Walras, Benjamin Tucker, Jaroslav Vanek, to contemporaries such as Kevin Carson (you can download Studies in Mutualist Political Economy). But whether or not these ideas, or your ideas, have traction elsewhere is not particularly relevant. Fundamentalist religious beliefs have traction as well. The real question is whether various ideas work, in theory and practise.

    You raise the suggestion of democratic input instead of price mechanisms. I would proffer instead democratic ownership, management and planning, but with price mechanisms for resource allocation. For a system where people simply "order what they need and then produce it" is increasingly unfeasible as good and services become increasingly more complex to the point of impossibility.

    Firstly, one would either have to have some authoritarian committee (even a democratically elected one) defining what are 'needs' versus what are 'wants' and evaluating these on an individual level (a matter of "some" complexity), or, if it is entirely determined by the individual, it would be nothing more than a wishlist, whether act of production is made by an individual or collective.

    Secondly, in both cases non-market input (democratic or otherwise) has to deal with relative scarcity, an issue which is continiously avoided in this discussion. What feedback mechanism is a life without money going to use to determine value? How is a system which has no means of determining a universal cost of aquisition (relative demand to relative supply) between goods and services going to engage in opportunity cost? How do you compare heterogenous goods and services?

    Thirdly, the production of any complex good or service is not based on immediate use, but rather on the exchange of that good to others and usually for an *unknown* purpose; I can just imagine the application of "order what they need and then produce it" being applied to a computer system; "You may start by digging for ore!". This also applies to what appears to be basic (but complex) goods as well, as the famous essay "I, Pencil" illustrates.

    (This is the fourth time I've posted this - it has been deleted three times previously)

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    1. Money is central to capitalism, which is the only economic system where all social relations are determined by trading (at a profit). Other than the production of use values at a limited local or family level, nothing in capitalism is made unless it can be traded at a profit. Need or usefulness is never the determining consideration. If a commodity cannot be traded at a profit it will not be made. It is as simple as that. Without money there is no capitalism. It’s the only economic system that has relied wholly on the market. Without the market there is no capitalism. Capitalism is inherently expansionist, so at some stage it will meet the physical limitations of the planet. If you are against capitalism you are against the free market. I think Marx was not correct on a number of matters but I support his characterisation of Proudhon and his ilk as utopian socialists. Free-market anti-capitalism is an oxymoron. People who believe you can retain areas of capitalism under socialism in my view don’t understand socialism or capitalism.

      I heard a speech by US Marxist Gar Alperovitz, who supports worker-owner cooperatives. But he recognises that cooperatives are still capitalist and, in the final analysis, extract surplus value via profit at someone else’s expense when they trade (exchange) their products in the market place. Instead of having only one owner or a group of shareholders to collect the profit, the workers together collect the profit. But they are still capitalists. His solution is to give the profit away to the community attached to the cooperative.

      While I agree with the ‘mutualist’ Kevin Carson when he ‘emphasizes the importance of peaceful activity in building alternative social institutions within the existing society, and strengthening those institutions until they finally replace the existing statist system.’ That is what we are advocating in our book Life Without Money. Twin Oaks is an example. Clearly it will have to interact with capitalism while capitalism continues exist around it. That is how capitalism itself arose – in the gaps in feudal society. We also support Carson’s concept of ‘a society in which all relationships and transactions are non-coercive, and based on voluntary cooperation, free exchange, or mutual aid.’

      But I can see why Marxists and anarchists (such as the people who contributed to our book) attack such a self-confessed ‘populist’ with ‘petty bourgeois tendencies’ when he says: ‘We are not opposed to money… The "market," in the sense of exchanges of labor between producers, is a profoundly humanizing and liberating concept.’ Clearly Carson does not support a classless society, saying: ‘Our ultimate vision is of a society in which the economy is organized around free market exchange between producers, and production is carried out mainly by self-employed artisans and farmers, small producers' cooperatives, worker-controlled large enterprises, and consumers' cooperatives. To the extent that wage labor still exists (which is likely, if we do not coercively suppress it), the removal of statist privileges will result in the worker's natural wage… being his full product… it is our petty bourgeois tendencies that put us in the mainstream of the American populist/radical tradition, and make us relevant to the needs of average working Americans.’

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  6. Lev, the problem's probably just that your posts are being caught in the spam filter. The same thing happened with Anitra.

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  7. Hi Tristan. Our models focus on 'collective sufficiency' rather than individualistic self-sufficiency. The problem with 'current standards of living' is that yours and mine are above what is sustainable for all people on the planet to share, so our models address the environmental and social (equitable/fair) aspects of these challenges. Small communities do exist, so does volunteering etc. but we would argue that in many respects they can be seen to prop up capitalism and make up for its failings rather than compete with it per se. Your elaboration continually refers to the market as the superior system? But money isn't simply a tool but the operating principle of capitalist society, identifying and transferring power and leaving those without, powerless. Most importantly prices rarely incorporate social and environmental values. An example is house prices in Australia today. The market is not the only system characterised by division of labour. There are serious limitations and difficulties resulting from the division of labour in capitalism, such as between managers and the workers they supervise, and the behaviour of financial capitalists which contributed to the GFC.

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  8. Hi Anitra; I think there is great waste in capitalism - with unnecessary duplication of cost structures for a start. Take the instance of communications with the Telstra and Optus networks. And take the various energy retailers - and the profit margins that need to be catered for. Take the US housing market with thousands of properties unoccupied while thousands sleep on the streets. And look at staggered release of technology, built-in-obsolesence etc... On the other hand market mechanisms provide 'flexible self-determination of needs structures'. I think there should be a mixture of market mechanisms, with wide deployment of natural public monopolies to prevent waste. I think when it comes to global warming determined public sector action is necessary outside the private sector and the competitive market, though. I would like to see massive public sector investment in renewable energy. And public sector intervention is also preferred to acquire unoccupied properties, contruct public housing, wipe out homelessness. I also think non-market, communual production should be experimented with and extended as is practicable. But when it comes to mass production where is the alternative to the massive economies of scale provided with the TNCs? Where is the alternative to their R&D and innovation? It raises absolutely crucial questions re: economic and political POWER - but what is the alternative?

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  9. "Most importantly prices rarely incorporate social and environmental values."

    If that is the most important issue, then surely one should be advocating for the inclusion of these values into the price system (e.g., Pigovian taxes, emissions trading, Coase theorem) rather than creating a situation where environmental and social costs are not subject to marginal or relative evaluation.

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