Conclusion
Paul's book raises some interesting questions, but actually fails to raise the most important question – the property question. By failing to do so, he prevents himself from providing the necessary answers to all those questions. By failing to locate his analysis in the realm of production, Paul ends up looking for the problems in the wrong place, and so also looks for answers in the wrong place too.
Paul equates Neo-liberalism with capitalism, and equates Neo-liberalism's crisis with a crisis of capitalism. On that basis, Paul also equates the 2008 financial crisis with an economic crisis of capitalism. But, as I have described, none of these things are true. Neo-liberalism/conservative social-democracy represents the ideology of the 0.01%, the interests of the owners of fictitious capital. Objectively, the interests of this class fraction, of money-lenders and rentiers is hostile to that of real capital. Whether it is their attempt to maximise their revenues, in the form of interest/dividends, or rent, which is a deduction from profit, or their attempt to keep astronomically high asset prices inflated, they act as an obstacle to capital accumulation, and economic and social stability.
Yet, for reasons I have described, this class fraction was able to hold political sway from the 1980's onwards. 2008 represented not an economic crisis of capitalism, but the explosion of the contradiction between the short-term interests of this class fraction with the objective interests of real capital, and, in particular, of the dominant form of capital – socialised capital. As the underlying economic laws of capital led to the start of a new long wave economic expansion, after 1999, so it caused interest rates to rise, and, as interest rates rise the capitalised value of financial assets and property is reduced. With interest rates at such low absolute levels, and asset prices at such astronomically high levels, even minimal absolute rises in interest rates represent large percentage increases, with a correspondingly large effect on reducing asset prices.
Instead of seeing 2008 as an effect of the immense economic strength of capitalism, in the current period, Paul sees it in terms of economic weakness and crisis, and yet that in itself stands in stark contradiction to his central idea that capitalism, on the basis of info-tech, is on the verge of creating abundance. That contradiction is also reflected in his prediction, not just of a long-term stagnation, but also of the emergence of energy scarcity, and a growing problem of providing for an ageing population. He never seems to realise that a contradiction between abundance and scarcity arises in this argument.
Paul says that his analysis and solution is based upon the Labour Theory of Value, but he does not seem to understand that theory correctly. Like Adam Smith, he confuses labour and labour-power, thereby confusing the value created by labour with the value of labour-power. Similarly, he thereby confuses socially necessary labour-time with necessary labour. So, like Smith, he ends up with a cost of production theory of value. Smith begins with a Labour Theory of Value whereby the value of commodities is determined by the quantity of labour-time required for their production. They exchange according to these values. But, Marx says, Smith argues this ceases when capital and landed property arises. At that point, because labour is abundant and capital is scarce, labour is sold below its value, and capital above its value, i.e. capital obtains a profit. The prices are then a function of competition, fluctuating around a “natural price”, which is the price the owner of the factor of production requires to bring it to market. The prices of all commodities are then determined by such a natural price, which must suffice to cover that natural price of the labour and capital required for its production.
Its effectively this theory, based on the value of labour-power, i.e. wages, that Paul adopts rather than Marx’s Labour Theory of Value. As a consequence, he equates reducing production costs down to reducing wages, and reducing socially necessary labour-time to reducing necessary labour. He fails to see, therefore, that reducing necessary labour simply results in an increase in surplus labour, and that reducing necessary labour to zero can simply result in a massive rise in surplus value! Only by addressing the property question, i.e. who controls the means of production, and so who controls the surplus product, can this be resolved in workers interest.
Even if the value of commodities were reduced to near zero, by this process, all of these commodities remain the property of the capitalists, and constitute a huge surplus product. There is no reason, under these conditions, for the capitalists not to use this huge surplus product to employ their own private armies – we already have large private security forces, gated communities etc. - for their protection, to fill their homes and estates with retainers, domestic servants and courtesans.
In the 19th century, when the introduction of new machines raised productivity, it resulted in labour being thrown out of production, a rise in surplus value, and fall in the value of labour-power. It meant that with lower wages, and more available profits, capitalists massively expanded their employment of domestic servants. In other words, they were enabled to exchange revenue for revenue, rather than converting the profit into capital for the employment of wage labour.
By focussing on the question of distribution, and the question of market v non-market transactions, Paul misses these central questions, and by not even raising the question he cannot provide any of the necessary answers.
Although Paul rightly notes the damaging effect of catastrophist theories, on the Left, he ends up providing just another such catastrophist theory. First we have the confusion of the 2008 financial crisis with an economic crisis of capitalism. To fit this theory, Paul is led into the clumsy mechanism by which the Fourth Long Wave runs from 1945-2008, whilst the Fifth Wave begins in the late 1990's. Then, on the basis of this, Paul accepts all of the various catastrophist arguments, and concludes that 2008 represents the start of a 50 year period of stagnation. But, all of these catastrophist theories have been proved wrong. Despite all of the austerity, and attempts to constrain growth, growth continued in most parts of the globe after 2008. In the last two years, the pace of that growth has increased. The US, even near full employment, continues to increase payrolls at a rate about double what is required to absorb additional workers. In 90% of the world's economies, growth is rising above trend, with many now experiencing growth at the same rates as in the early 2000's.
Similarly, Paul adopts many of the old Malthusian arguments about catastrophe due to resource depletion or population growth and migration, etc. These theories, going back to Malthus himself, have never proved even remotely accurate, and generally have reactionary undertones. As I have described, that looks already likely once more. The very technological development that Paul puts at the centre of his argument, is producing, here and now, energy surpluses, and energy technologies that will rapidly replace fossil fuels. That same technology both creates the potential surplus product to provide for an ageing population, and also provides the health and social care solutions that will massively reduce that cost in the next decade and beyond, as these health and social care solution become commoditised.
Paul requires these catastrophes as catalysts because he has no logical basis for the transition from capitalism to postcapitalism. That is not to say that many of the ideas he raises about the development of cooperatives, open source, mutual, peer to peer production, and so on are not interesting and relevant, but they appear almost as afterthoughts. A series of organisational forms with no coherent strategy for their development, or bringing them together. They do not flow out of his analysis, and as production based solutions, nor could they, given his focus on the realm of distribution rather than production.
But, that again is not surprising, because Paul has failed to deal with the central question – the property question. The central thesis of Paul's argument is correct, we have gone through a tremendous revolution in technology. It has revolutionised production, and it is beginning to revolutionise consumption. In the next decade, vast new ranges of commodities related to health and social care will be developed. It was recently announced that the police are going to be randomly stopping drivers to check that their eyesight is adequate, and will be taking away licences where it isn't. In the next few years, once we have driverless vehicles, that potential limitation on mobility for tens of thousands will be removed.
As asset price bubbles burst and money-capital returns to fund real capital accumulation, meeting the demand for all of this vast range of consumption goods, a period of rapid economic growth is at hand. The prospect of relative abundance does begin to open up in the transitional period of a progressive social democracy, provided the property question is asked and correctly answered.
It requires a struggle for industrial democracy, on the same kind of scale as was waged for political democracy at the beginning of the 19th century, or was waged for male workers' suffrage at the end of the 19th century, or for Women's Suffrage at the start of the 20th century. That struggle must remove the right of shareholders to exercise control over property they do not own, and to enable the associated producers to exercise control over the socialised capital of the firms in which they work. The only rational control over socialised capital can be one exercised via industrial democracy, by the control over that capital by the workers and managers in each enterprise; it requires this industrial democracy and control of this socialised capital to increasingly coordinate and regulate the production of these separate businesses, at least on an EU wide scale, into a loose operational social plan, utilising all of the real-time data that these businesses already have, along with all of the longer-term data and projections collated by the state.
On this basis, the transitional stage we are now in, can be rapidly accelerated, and the basis for the creation of Socialism established.
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