TOP 2013-05-02

Nothing Costs Money

“Is it possible to be progressive when the public coffers are empty?” said a certain Nick Clegg, UK deputy prime minister. Clegg deserves to be criticised because the public coffers were not, in fact, empty. But the criticism should also go deeper, because the presupposition behind this question is actually quite dangerous, even though most people are fully convinced of it. Namely, if the public coffers were empty, then it would be hard to be progressive. Social security has a cost. Public services are expensive to provide. Expanding social welfare schemes, contributing to climate change funds or aid for developing countries, are all expensive, and the burden falls on the taxpayer. Few people today would question these facts; the money has to come from somewhere, doesn’t it?

The debate about funding public services is traditionally a simple split between public and private viewpoints. Should students pay for their education, or should taxpayers pay? Should patients pay for their own healthcare, or should the state as a whole pay? Should public transport be entirely funded by customers, or should it be subsidised by the state? The questions are simple and the divide between the right-wing, advocating private funding such that the rich are always advantaged, and the left-wing, advocating state funding such that no-one is disadvantaged, is quite clear. Behind the debate lies the unspoken assumption that money is always a prerequisite for the provision of any service, and it’s just a question of who pays, and how much. I want to question this assumption. One good reason to question it is precisely because of its bias against the left, as Clegg’s fallacious idiocy aptly demonstrates: private funding is always an option, but public funding always faces the barrier that taxes must be raised or else public debt incurred. The socialist who demands free and universal public services is always asked, “where will all that money come from?” but the profiteers who demand that services be put in private hands face no comparable difficulty – the money will come from investors who expect a return, the customers will pay for what they need, and a profit will be made. So it is worth questioning such an assumption, because the playing field isn’t level. When socialists concede that “the money must come from somewhere”, they put themselves at a disadvantage. They are playing by the rules of capitalism, though their goal should be to free themselves of those rules.

Of course, the amount that we can build, provide or achieve will always be limited. It is limited by the material resources we have at our disposal, by our technical ingenuity and by the environmental conditions. These are natural constraints. To this end, I’d like to introduce the concept of technical viability into the discourse: something is technically viable if it falls within the natural constraints just mentioned. By contrast, something is economically viable if it makes a profit. I contend that the two types of feasibility rarely, if ever, intersect. It is technically viable to provide everyone with free healthcare, but not economically viable as it stands. It is technically, but not yet economically viable to switch wholesale to renewable energies and solve a whole host of ecological problems. It is technically viable to house, feed and clothe the world’s population, even at close to 7 billion people, but inequality and disfavourable economic conditions remain constant barriers. It is technically, but not economically viable to recycle all recyclable plastics and make plastic consumption sustainable. Conversely, it is economically viable for America to continue consuming more natural resources per head than anywhere else in the world, but it is not technically viable for this to continue indefinitely.

Remember that the profit mechanism is the ‘fundamental’ incentive for all economic activity in capitalist society. If it is not profitable then it’s difficult, and in many cases impossible to achieve. Social welfare exists in order to ‘plug the gaps’ that the profit mechanism doesn’t cover, but it is limited by the state’s financial resources. Thus, while all profitable enterprises are destined to flourish, only a subset of progressive schemes may do so. The capitalist mechanism makes it easy to do profitable business, but limits welfare to that which a government can afford and is prepared to implement.

Let us now consider what the ‘goals’ of civilised society might be. We might ask a conservative politician, why are profitability, competitiveness and economic growth good? They will probably answer that they are good because they increase the standard of living of society as a whole. This is true, although somewhat misleadingly, because there generally always remains a poor section of society which in many cases continues to get poorer despite economic growth; for the moment, however, let us accept the argument. Such an argument bases itself on some key assumptions about what society is supposed to ‘achieve’, as a whole. It assumes that we must aim to improve our quality of life, that we are all entitled to a decent standard of living; in short, the goal of society is ‘welfare’. Of course, the conservative politician who gives such an answer is lying: the goal of capitalist society has nothing to do with welfare and is only concerned with enriching the capitalists. Positive effects of this process for society as a whole are epiphenomena at best. Nevertheless, it is important that the arguments “growth empowers people”, “growth enriches society” are touted as somehow the real motivations behind the perpetuation and extension of the capitalist program. It suggests that we are all somehow in agreement about what society is supposed to achieve – in short, it is supposed to achieve wealth, defining wealth here in a broad way so as to include physical and mental well-being.

Now let us ask a hypothetical socialist what they consider to be the ‘goals’ of society. With teary-eyed passion and bright determination they will reel off certain standard responses: humanity should be fed, clothed and housed without exception, there shall be full employment, there shall be universal healthcare and education and none shall be discriminated against on the basis of their race, gender, religion, disability, sexuality or a host of other liberal keywords. We can summarise this with Kropotkin’s simple adage, “well-being for all!” I shall waste no time and simply assume that this should indeed be the ‘goal’ of society. The politicians’ rhetoric would suggest that most people are fundamentally in agreement that this is the correct answer, even if they only agree so as not to harm their popularity, hiding their true motives. Similarly, the fact that almost all nations have signed up to an international declaration of human rights, whose key messages include all of the socialist’s aspirations and could similarly be summed up as “well-being for all!”, is further testimony to the idea that most governments covertly accept this as a fundamental good.

We have seen that capitalist society, basing itself primarily on economic and not technical viability, is not fundamentally concerned with achieving this goal. It is also clear that this goal has not been achieved, with hundreds of millions of people continuing to live in conditions of extreme poverty, without access to healthcare or education, inequalities which in many cases follow race and gender divides. We are far from achieving the goal of “well-being for all!” and I fail to see how we shall achieve it when the basis of capitalist society is quite explicitly about making profit for capitalists, and not well-being for all. Well-being is, in a sense, only a by-product of capitalism, not its overt aim, and so it is hardly surprising that it does not reach every sector of society, but falls instead only on certain privileged ones. Full employment is impossible under capitalism without radical intervention from the state (such as in conditions of warfare); indeed, the capitalist will always seek to lay off workers where possible to save costs. Universal healthcare and education are, as we have seen, limited by the state’s funds. Since full employment is impossible, and since the capitalist will always try to push down wages, and since the West appears to depend on cheap labour in countries where the government does not guarantee agreeable working conditions or a decent minimum wage, it would seem there will always be an underclass of people who cannot make ends meet. From a more systemic perspective, it is well known that capitalism has a business cycle, in which there are periodic and inescapable crises, where growth slows or reverses, companies go out of business and people are laid off. Continued growth is then necessary to return to a healthy economy.

So there are at least three reasons to believe that capitalism has not only failed to achieve the ‘goal’ of society but is also antithetical to it: first, the profit motive is in conflict with the need for everyone to be employed and earn a decent wage; second, the business cycle is an inherent feature of capitalism that inevitably results in recurring periods of relative austerity; third, the economic growth imperative entails ever-increasing consumption of the Earth’s natural resources, making the entire system inherently destructive to the environment, which of course has a direct negative effect on well-being. There are many other reasons, but these seem to be the most serious. I submit that it is madness to support a system that depends on periodic crises just to be able to function; it is yet greater madness to support a system that depends on accelerating rates of consumption which threaten the sustainability of natural resources; but really, the greatest madness is to support a system which is so fundamentally at odds with that goal that we take to be crucially important and desirable – well-being for all.

Before I talk about a society that is based on “well-being for all!” and therefore inherently directed towards its attainment, I’d like to suggest that society has a secondary goal, which depends on the first but which is nonetheless important. Suppose that society has reached a state where nobody goes hungry, where all are clothed and housed, have an occupation with agreeable conditions and have access to healthcare and education. What would be the goal of this society? It is clearly not enough for most humans to have their basic needs met, so that they can simply survive in not uncomfortable conditions – on the contrary, people have ambitions, aspirations and hobbies that they wish to pursue, frequently of a creative or scientific nature. They may wish to associate with others, form friendships and associations directed towards common goals. The secondary goal of society, then, is the freedom to pursue creativity and science, in the company of others or not, and without conditions of force. For the sake of brevity I will refer to this goal as “[universal] freedom”, though it should be understood in precisely the sense just laid out; I could alternatively have called it “[universal] fun”, where fun would be construed in a fashion relative to the desires and foibles of the individual.

While capitalism appears to be incapable of achieving society’s primary goal, well-being for all, it is absolutely impotent with regard to the secondary goal, and not just because the second depends on the first. Of course, “universal freedom” has to be modulated by what is technically viable: if it is someone’s ambition to live on Venus, for example, this probably falls outside of the bounds of technical viability. This is a necessary limit to “universal freedom”. Under capitalism, however, the amount that we can achieve is always limited by the amount of money available and who has it, regardless of whether something is technically viable or not. Should we wish to build an exceptionally high-tech and environmentally friendly university, for example, even if it is a private university, the extent to which it can be high-tech and environmentally friendly is not only limited by the current ‘state of the art’ in these areas, but also by the amount of funding that we can secure, and it is unlikely that we will be able to attain the ‘state of the art’ in every single aspect. And should we want all sorts of facilities and even residences to attain the ‘state of the art’, and assuming that it is technically viable to do this, it is extremely improbable that there would be enough money or that the criterion of economic viability would be met. Science and technology advance much faster than our ability to implement them in all of the places where it is both desirable and technically viable to do so.

The prospects are also bleak for creativity under capitalism. Suppose we wish to publish a series of fantasy novels, or make a very creative and experimental computer game, or make a film set in the Himalayas – whether we can do these things successfully and with the level of polish that we would dearly love to see in them depends, under capitalism, on being able to make enough money to fund them, or to survive while pursuing them. In these industries, one must secure a deal with a publisher, and they will fund and market only those projects that will make them a profit. That all of these things are technically viable is irrelevant – if they do not make money, they are doomed.

Now I would like to suggest that the secondary goal, “universal freedom”, is in fact the most important one, and the primary goal of “well-being for all!” is just a prerequisite. The ultimate goal of society is to allow the fullest expression of the many and varied creative and intellectual talents of humanity to come to fruition and hence supply everyone with the most fulfilling life it is possible for them to live. Achieving such a goal might actually be impossible, but we can at least aim in that direction. Given that this goal is modulated by that which is technically viable, we already incorporate the comparatively mundane goal of not destroying the natural world in the process. Under this view, only a society blinded by greed, by slavish obedience to the demands of the market and the imperatives of growth and profit-making, really has a need to assert ‘sustainability’ as a desideratum in the first place.

For those who agree, at least in spirit, with what I have characterised as the goals of society, it is quite obvious that capitalism “isn’t working”, in the sense that it has not achieved even the primary goal, and shows no imminent sign of doing so, despite the fact that it remains quite feasible from technical and organisational points of view. In fact it should be quite clear that any system in which it is actually hard to “be progressive”, hard to provide universal well-being, hard to allow people to pursue the creative and scientific goals that they aspire to, in other words, a system in which it is hard to do things that are directed towards attaining the goals of society even in the face of their technical viability, is not a system worth having.

A full discussion of an alternative society that can attain the goals of well-being and freedom for all is beyond the scope of this article. Here I would like to address one relevant question – what could be the role of money in such a society, given that it cannot be of a capitalist nature? A society where all people are to receive the means both to live comfortably and to pursue their ambitions would need to ensure that there was enough money in existence and an adequate way of distributing it to precisely where it is needed: a hospital in need of beds would require immediate access to the funds, Joe Film-Maker in need of a camera would also have to have funds available to him. Everybody would have to earn enough to buy not just the things that they need to survive, but also what they need to fulfil their ambitions, and this latter amount could vary enormously between people. Some would be content to take care of children; some would only like to paint watercolours; others would like to send a probe to search for life under the surface of Europa. I cannot prove that no monetary system would be capable of meeting these demands, but I rather think that it would be easier without one.

Without a monetary system, implementing some project no longer comes down to questions of funding but rather questions of technical viability: do we have the expertise, do we have enough people on board, where shall we obtain the raw materials, what techniques shall be employed, how shall we divide up the work, how shall we ensure sustainability? A society without money would tackle these questions directly and would not need to make compromises or scale down the vision because of funding limitations. People would form associations and confederations at various levels to ensure that their needs were collectively met, and would enter into further associations to pursue the creative or scientific endeavours that appealed to them; agreements between these associations and with the larger confederations and communities they belong to would deal with questions of feasibility and process directly, without the mediation of a monetary or market system. There are standard objections about the feasibility of such a society, but they are dealt with elsewhere.

Such a society would have no concept of the monetary barriers that stand in the way of welfare projects and creative projects alike under capitalism. “Where will the money come from?” is a question nobody could ask. What I would like to stress is that money is not a natural law. It does not cost money in principle to build hospitals or houses, to make clothes, to educate people or to protect the environment – it costs only natural resources, energy, logistics, labour power and so on. If these resources are available – that is, if the criterion of technical viability is fulfilled – but if the economic resources are not, then money is acting as an arbitrary and unnecessary barrier. It becomes a barrier to achieving the principal ‘goals’ of society, well-being for all and freedom for all. So when the state tells you it is broke, and must implement “austerity”, do not believe them. They have been blinded by the dogma of the free market. The resources and the ingenuity are there, and if we free ourselves from the dogma, we will realise that no money is needed to harness them.