Paul Mason’s Postcapitalism as a guide to new kinds of digital institutions

I’ve just finished Paul Mason’s Postcapitalism — A Guide To Our Future, I think one the few recent books about really radical institutional change that has won a wide audience. Mason’s first hand experience of political foment, from Taksim Square to UKIP’s northern heartlands, combined with his technological futurism, make for a good read.

At the core of the book is the claim that information technology is contradictory to capitalism, a view I also subscribe to. On the details, I’m less convinced.

Postcapitalism was published a good while ago (2015), so I’m a bit late to the game — on the other hand, reading the book as the Trump circus comes to town is as good a time as any other.

Mason’s prescience is compelling. His predications are not abstract, instead they evolve from today’s political context. He heralded ‘deglobalisation’ a year before Brexit made it fashionable. His view of Trump and Brexit as the inevitable backlash against stagnant living standards is now commonplace, a year ago most commentators assumed the status quo was unstoppable.

He was even more on point with the situation in Greece, which he has always positioned as the front line in the global battle between neoliberalism and whatever comes next. And lo, just recently the IMF now agrees with him (roughly).

Mason is, I think, taking some admirable risks. He quit his position as a journalist with Channel 4 to get away from the impartiality it imposed. Now he uses his status as a platform to disseminate his heterodox ideas. He’s firmly ensconced in the camp Corbin. Even if you don’t agree with everything he’s saying, it’s brave to do it. How many figures from mass media can you think of who have taken a similar path?

Postcapitalism helped me break the limiting assumption that the future will look like the recent past; to remember that, in the long sweep of history, radical change is the norm. It’s a suspension of disbelief that I can’t maintain for long, which is probably healthy, but it’s testament Mason’s writing that it’s possible at all. (I think if you are a good Marxist like Mason you call this historical specificity.) I’m going to criticise Mason’s tortuous journey through 19th century Russian economics, perhaps, though, it could be justified as a a way of dislocating the reader and creating a context for radical thought. Perhaps.

Two passages in the book he encapsulate the argument for me:

Capitalism is a complex adaptive system that has reached the limits of its ability to adapt…
New forms of ownership, new forms of lending, new legal contracts: a whole business subculture has emerged over the past ten years, which the media has dubbed the sharing economy. Buzz-terms such as the ‘commons’ and ‘peer-production’ are thrown around, but few have bothered to ask what this means for capitalism itself.

The first step in the book’s argument is to try and convince us that the economy follows a 50 year cycle, called a Kondratieff wave. We are, he thinks, currently at the end of such a wave, and hence facing a radical disruption; in this case increasing automation leads to growing unemployment and declining real wages.

Mason follows the Kondratieff wave idea with another Soviet era nugget and suggests we should adopt the Marxist ‘labour theory of value’. Automation will reduce the amount of labour required to produce goods and services to practically nothing. Only the labour theory of value will allow us to value goods in a post capitalistic society.

Combining these two points Mason calls for ‘project zero’, a semi-planned, zero carbon, zero marginal cost, zero employment economy that can only exist after global debts have been inflated away, where a basic income replaces employment as the means by which most people sustain themselves.

Exotic sounding Kondratieff waves are a sideshow. I am happy to believe we are at the edge of a great disruption. Despite the book containing many graphs, none attempts to show such a wave, probably because it doesn’t exist.

The discussion of long term context does give me a hook on which to hang a rather expansive aside: I’m very taken with Ian Morris’ Foragers, Farmers, Fossil Fuel sequence of human development. Not a cycle, instead a continuous upward arc. What comes after the fossil fuel stage? That’s the disruption we currently face, rather than the trough of a Kondratieff wave. Both Morris and Mason note that exponential long term GDP growth is the overriding determinant of how societies function.

If Kondratieff waves leave you feeling a little queasy, it’s still worth looking past them to the other valuable ideas in the book.

Moving on to the labour theory of value , I found that I was again lost in sea of highly contested Marxist theory which seemed in some ways tangentially relevant.

The issue here is what the fundamental units of economics are — no biggie! If you can call to mind a classic supply and demand diagram, we have price up the Y axis and quantity on the X. But what, philosophically, are we measuring with price? How do people value things? What are the units of price?

Marxists claim that the answer is the amount of labour required to make a product. Most modern economists think ‘marginal utility’ is a better idea. For a Marxist, an optimum outcome is one where labour is fairly distributed, most contemporary economists would think instead of utility being fairly distributed. (Whatever you think ‘fair’ means).

In day-to-day economics, both ideas work out roughly the same. Mason says that “mainstream price theory maps very well on to the surface end of the labour theory”. If you have money as a way of providing comparisons between goods the whole debate is moot.

The problem comes when you project the system into very different scenarios, where you try to imagine economies without money, or without labour. My feeling is that at this point we begin to see that question inevitably becomes value laden. Marx, writing in the era of serried workers in the factory, perceived the world through the lens of a ‘theft of labour’ and so used labour as the yardstick for everything else. Conversely, utility has the merit of being agnostic about what people value, but at the risk of being tautologous.

As with the Kondratief waves though, Mason doesn't need to solve this problem for his main point to stick. We can foresee a world where capitalism loses its dominance. We don’t need to work out which theory of value works best to entertain this idea. More likely, that future will foist one upon us.

Sometimes Mason deploys Marxist theory the way some quote the bible; a apotropaic to ward off uncertainty, a model that the world must conform to rather than vice versa. But beyond the encumbrance of k waves and theories of value the ideas are absolutely on point.

Almost unnoticed, in the niches and hollows of the market system, whole swathes of economic life are beginning to move to a different rhythm. Parallel currencies, time banks, cooperatives and self-managed spaces have proliferated, barely noticed by the economics profession.

In the book, information gets used in three different senses. If we are careful to distinguish them, we’ll see that each has very different implications.

Firstly, we have information as data about demand and supply. Who wants a particular good or service? Who can supply it? This kind of information is key to a well functioning economy. This is the subject of the classic ‘calculation debate’. The market mechanism is one of solving this extraordinarily complex informational problem. It used to be thought it was they only way, but as computers increase our ability to process information, perhaps there are others. This certainly could undermine capitalism.

The second type of information as intellectual property. Think of software, which is so important to the modern economy, but which is really just information. This is allegedly a threat to capitalism because the oft-noted fact that software can be copied at no cost (it is non-rivalrous). I can see the thinking, but it has to be said that many companies have made a perfectly successful business out producing software.

Finally, we have the example of information based products. A jet engine on a plane constantly transmits data about its performance back to the manufacturer. What looks like a classic industrial product is in fact an information based system. To me, this is simply irrelevant and changes nothing. Yep, there is information processing power built into some products, but that, in itself, doesn’t change the landscape at all.

Mason rolls all three into one, perhaps exactly because he’s so invested in Marxist economics from a largely pre-information theoretic economics. To me, this is the frontier. The way an information reconfigures the kinds of institution that function best is where all the exciting stuff is happening. Understanding how that works requires us to pull apart the different types and uses of information within society, not conflate them.

Marxism is the most Orthodox Heterodoxy. For a whole swathe of academia it’s a badge of honour, for everyone else it’s a propeller hat that marks out looney lefties and the most cosseted ivory tower academics. Perhaps Marxist thought could find a new articulation that bridges the gap, but I suspect a more effective approach is to find some new reference points, ones that aren’t so contentious.

It seems likely Postcapitalism would have been even more successful without such a heavy ideological burden. As Gillian Tett wrote of the book in the FT:

“Some readers may scoff at this. Others may stifle a yawn… Even if you love the current capitalist system, it would be a mistake to ignore the book. For Mason weaves together varied intellectual threads to produce a fascinating set of ideas”

Mason might be committed to Marxism, but I’m hopeful there could be a treatment of these topics that allows a debate to move forward without rehearsing old enmities. Here, I’m echoing Tett. Perhaps because she’s anthropologist rather than an economist, she sees the tribal nature of the debate:

So perhaps the key message from the book is this: in a world of rapid technological change, we need to rethink our old assumptions about “left” and “right”; cyberspace is ripping up many ideas about the government and class system. Politicians of all stripes should take note.