A plan for life without capitalism --Yanis Varoufakis

Why we need a Progressive International that must plan for today and for beyond capitalism

Keynote at the PI 2020 Summit, 18 SEP 2020

by Yanis Varoufakis


Our era will be remembered for the triumphant march of a Twin Authoritarianism in whose wake the vast majority of humanity experience unnecessary hardship and the planet’s ecosystem suffers avoidable climate destruction.

For a brief period, that Eric Hobsbawm described as the short 20th Century, Establishment forces were united in dealing with challenges to their authority. It was a rare period, in the grander scheme of human history, in that the Establishment had to face varieties of progressives aiming at changing the world ranging from the original social democrats, who sought to redistribute power between capital and labour within capitalism, to the Soviet-linked regimes that experimented with non-capitalist but centralised modes of production; to Yugoslavia, trying its hand on self-management; to the national liberation movements in Africa and Asia; even he original radical Green movement in places like W. Germany.

Back then, the Establishment was united against all those progressive challengers. I grew up in a right-wing fascist dictatorship that was instigated by the United States during the Lyndon Johnson administration – one of the most progressive administrations when it came to domestic politics which, nonetheless, did not hesitate to prop up fascists in Greece or to carpet-bomb Vietnam. I mention the LBJ administration in the 1960s as a reminder of the historic fact that what we now call the Liberal Establishment used fascists and local despots liberally to prop up the so-called Western Way of Life. The fear and loathing of right-wing populism that can be found today plastered on every page of the New York Times was simply absent back then. Back then, the New York Times and other organs of the Liberal Establishment portrayed the progressives as enemies of freedom and democracy – never the Papadopoulos or the Pinochet monsters.

Things changed after 2008, the year the western financial system imploded. Following twenty-five years of financialisation, under the ideological cloak of neoliberalism, global capitalism had a 1929-like spasm that nearly brought it to its knees. The immediate reaction was to use the central banks’ printing presses, but also to transfer bank losses to the working and middle classes (via bailout loans), so as to re-float financial institutions and markets. This combination of socialism for the financialised few and stringent austerity for the masses did two things.

First, it depressed real investment globally (as firms could see that the masses had little to spend on new goods and services), thus creating a gigantic gap between (a) real investment and (b) available cash and savings (boosted massively by government money printing). The result was discontent amongst the many and stupendous riches for the very few.

Secondly, it gave rise initially to progressive uprisings (from the Indignados in Spain and the Aganaktismeni in Greece to the Occupy Wall Street movement and various left-wing forces in Latin America) who were, however, efficiently dealt with either by the Establishment directly (e.g. the crushing of the Greek Spring in 2015) or indirectly by the stagnation of global capitalism (e.g. the fading of leftist Latin American governments as Chinese demand for their exports collapsed due to the imbalance between global savings and global investment).

As progressive causes were snuffed out one by one, the discontent of the masses had to find a political expression. It was then that phenomena not seen since the mid-war period were observed. Mimicking the rise of Mussolini, who promised to look after the weakest and to make them feel proud to be Italian again, we witnessed the Rise of the Nationalist International. The rightist expression of Brexit (“We want our country back, plus more money for the National Health Service”), Donald Trump (“I shall look after the ones the Wall Street and the Liberal Establishment left behind”), Bolsonaro, Modi, Le Pen, Salvini, Orban etc. etc.

It is thus that, for the first time since the Second World War, the great political clash was not between the Establishment and assorted Progressives but between different parts of the Establishment: One part appearing as the stalwarts of Liberal Democracy, the other as the representatives of Illiberal Democracy.

Of course, this clash between the Liberal Establishment and the Nationalist International was utterly illusory. Mr Macron needed Le Pen, without whom he would never be President. And Ms Le Pen needed Macron and the Liberal Establishment’s austerity policies that generated the discontent that fed her campaigns.

Nevertheless, the fact that the Liberal Establishment and the Nationalist International were, in reality, accomplices does not mean that the cultural and personal clash between them is not authentic. The authenticity of their clash, despite the lack of any real policy difference between them (e.g. the Trump administration used the same Wall Street personnel to deliver the type of tax cuts George W. Bush and even Hillary Clinton supported), made it next to impossible for Progressives to be heard over the cacophony caused by the clashing variants of Authoritarianism (the Liberal Establishment and the Nationalist International).

This is why we need a Progressive International: Because the fake opposition between the two variants of the Twin Authoritarianism – the Liberal Establishment and the Nationalist International – threaten humanity by trapping us in a business-as-usual agenda that destroys life prospects and wastes opportunities to end climate change.

How can we break the stranglehold of the Twin Authoritarianism darkening our souls and mortgaging our youth’s future? Look at our defeats in Greece in July 2015, when a promising progressive rebellion against austerity-for-the-people and bailouts-for-the-oligarchy took place. Or the successful undermining of Jeremy Corbyn and of Bernie Sanders within their own parties. Look at the way in which popular progressive leaders in Brazil, Bolivia and Ecuador were driven out of the political contest. Look at the way a veil of silence is drawn over the courageous struggles for self-determination by countless communities in Africa or India. 

Look carefully at this multitude of defeats and I think you will agree that only one thing could prevent them: A Progressive International to counter the Davos International (of the Liberal Establishment) and the Nationalist International (of the recalcitrant xenophobic Right).

Has the time not come, friends, for Progressives to emulate the bankers and the fascists who have proven time and again their remarkable capacity for internationalism? Is it not time to follow their example to unite across borders behind a common agenda, to create a common narrative, to press our capacities into the service of the same agenda in favour of the many deploying a joint investment plan into saving the planet?

I think that this time has come. Now is the moment when we either form an effective, successful Progressive International, or we share the burden of blame for humanity’s failure to serve people and planet.

Common Program, Uncommon Collective Action Plan

“But, what does a PI entail?”, I hear many of you ask. “What does it mean in practice?” While such a grand project cannot be based on anyone’s blueprint, and must be constructed organically and via crowdsourcing of ideas, one thing is clear – at least to me: The PI cannot succeed if it simply emulates efforts like the World Social Forum or the brilliantly open discussion format in the squares where we used to gather a decade ago in Spain, in Athens, in London, in NYC. We need something that these earlier attempts at bringing progressives together lacked: A Common Program and a Collective Action Plan.

I have already spoken in favour of confronting the internationalism of the bankers and the fascists with a progressive internationalism. The fascists and the bankers, lest we forget, have a common program. Whether you speak to a banker in Chile or to a banker in Switzerland, you will hear the same story: How financial engineering provides the capital necessary to invest in everything we need, why privatisation is a must that only fools dispute, the need to offer investors certainty against local legislatures and courts etc. Similarly, every time you speak to a member of the Nationalist International, you will hear the same story: Why electrified border fences are essential for sovereign democracies, the threat to our culture and to our social welfare system from migrant labour as well as from international Jewry/Islamists, the importance of looking after the natives while making the life of those deemed less-than-loyal or worthy citizens harder etc. My point is: Progressives also need a common program. 

We must also speak with one humanist voice across the world.

Talk, of course, is cheap if not backed by action. The Liberal Establishment do not have this problem. They are in government almost everywhere and, even if not in actual government, they are certainly in power. Their politicians, bureaucrats and bankers act upon the world every minute of the day, always and consistently in a manner that promotes their Common Program. The Nationalist International also act upon the world. Whether through violence on the streets of Portland or Piraeus, or through the policies of Trump, Bolsonaro and Modi, they are never short of a series of acts in total harmony with their misanthropic, xenophobic, reactionary Common Agenda. We need to emulate them in this regard too: we need to plan and carry our Collective Actions in defence of local communities as part of a global, well-planned, mobilisation.

In summary, the PI needs two things that we never developed in the past: A Common Program and an Uncommon Collective Action Plan allowing for local interventions that are part and parcel of a global campaign.

Toward an Effective Global Solidarity

What Collective Action Plan should we envisage? Do you remember Chris Smalls, the Amazon employee who dared organise a walkout from the company’s Staten Island facility in protest at working conditions during the pandemic? He shot momentarily to fame when it was revealed that, having fired him, Amazon’s ultra-rich and uber-powerful directors spent a long teleconference planning his character assassination to undermine his cause. Even though a considerable number of public figures spoke out in Chris’s defence, the furore had no effect. Amazon emerged from the 2020 lockdown richer, stronger and more influential than ever. As for Chris, once his five minutes of fame faded, he remained fired and vilified.

What would it take for the PI to make a difference and to defend Chris in a way that angry letters to the NYT did not? Suppose the PI were active then and we could call upon people far and wide to participate in a Day of Inaction – a particular day when we just do not even visit Amazon’s website in support of Chris Smalls. Not visiting a website for a day costs people – even heavy Amazon users – next to nothing but can translate into large costs for corporations like Amazon.

This could be a start: Identifying multinational companies that abuse workers locally and targeting them globally, utilising the great disparity between the cost to participants and the costs of the targeted firms. Then, in a second phase, we could combine these consumer Days of Inaction with trades union Days of Action at the local level, aimed at the company and its affiliates.

The prospect of such Global Action in Support of Local Workers or Communities has, I trust, immense scope. With some clever communication and planning, they can become a popular way people around the world can embrace to get a feeling they are helping make the world a freer, fairer place.

What should our Common Plan look like?

Toward a Common Program – an International Green New Deal

The good news is that we have many different Green New Deal proposals to draw upon. However, while each contains useful ideas, they need to be synthesised into an overarching coherent, internationally coordinated plan that can be supported locally and implemented everywhere. To gain such traction, the plan must answer three questions: What must be done? How will we pay for it? Who will do it?

We know what we must do. Power generation must shift massively from fossil fuels to renewables, wind and solar primarily. Land transport must be electrified while air transport and shipping must turn to new zero-carbon fuels (e.g. hydrogen). Meat production needs to diminish substantially, with greater emphasis on organic plant crops. Strict limits on physical growth (from toxins to cement) are of the essence.

We also know that all this will cost at least $8 trillion annually. 

Additionally, we need to create from scratch institutions that will coordinate the various works and distribute the costs and the benefits between the global North and the global South. The task seems enormous. In a world where even the modest Paris Agreement lies in tatters, it is terribly easy to surrender to despair.

This is precisely why we need a New Deal narrative at a planetary scale. Franklin D. Roosevelt’s original New Deal succeeded because it came at a time when the grapes of wrath were filling and “growing heavy for the vintage”. Its singular achievement was to address people who had given up and to inspire in them the hope that, astonishingly, there is an alternative. That there are ways of pressing idle resources into public service. The New Deal’s success was to present a plan that made sense to the disheartened and offered opportunity to the entrepreneurial; a plan that changed the frame from which a majority of people assessed their circumstances.

The key questions of funding and distribution can also be answered through this new frame. The $8 trillion we need annually will have to be financed both from public and private sources. Public finance, just like in the original New Deal, must involve transnational bond instruments and revenue-neutral carbon taxes – so that the money raised from taxing diesel can be returned to the poorest of citizens relying on diesel cars, in order to strengthen them generally and also allow them to buy an electric car.

Meanwhile, tax evasion will only be dealt a major blow if we introduce a global minimum effective corporate-tax rate on multinational corporations of, say, 25%, that is then redistributed on the basis of a simple formula taking into account the geographical distribution of sales.

To plough these resources into green investments, we could propose a new Organisation for Emergency Environmental Cooperation, or OEEC - the namesake of the original OEEC which, seventy-five years ago, administered the works funded by the Marshall Plan in Europe. One main difference from the 1950s is that today’s task is not simply to re-build but to develop new zero-emissions technologies. No country alone can fund the requisite research and development. The OEEC would, thus, pool the brainpower of the international scientific community into something like a Green Manhattan Project – only one that aims, instead of mass murder, at ending extinction.

Even more ambitiously, the PI can propose an International Monetary Clearing Union, of the type John Maynard Keynes suggested during the Bretton Woods conference in 1944, including well-designed restrictions on capital movements. By rebalancing wages, trade and finance at a planetary scale, both involuntary migration and involuntary unemployment will recede, thus ending the moral panic over the human right to move freely about the planet.

Organisation

The need for a Common Agenda and a Common Collective Action Plan means that the PI needs to feature an international organisation. The great question for us all is: How can we create this essential organisation without falling prey to the usual organisational pitfalls; e.g. bureaucracy, exclusion, power games?

This is a difficult question that members of the PI Council must address - one that I have no answer for. However, not having an answer at this point is a good thing, since this is an answer we must discover together.

The one point I want to make at this juncture is that the difficulty in answering this question, and setting up an effective organisation, is no excuse for not proceeding. The bankers and the fascists have found answers. Granted that it is harder to find answers to this question as progressives who reject hierarchies, bureaucracies and the encroachments of paternalism, we have a duty to find them nevertheless.

An International Green New Deal is necessary but not sufficient: the PI must look beyond capitalism

Friends, Some say that the time for a Green New Deal has come and gone. That it is now too late. That capitalism cannot be civilised, tamed or rendered compatible with humanity’s survival. I have to admit that I tend to agree with them, in part at least. An International Green New Deal is necessary, on this I have no doubt. But I don’t believe it is sufficient.

Consider what happed on 12th August 2020, the day the news broke that the British economy had suffered its greatest slump ever. The London Stock Exchange jumped by more than 2%! 

Nothing comparable had ever occurred. Similar developments unfolded in Wall Street, in the United States. My interpretation is that, when Covid-19 met the gargantuan bubble with which governments and central banks have been zombifying corporations and financial institutions since 2008, financial markets finally decoupled from the underlying capitalist economy causing capitalism to evolve surreptitiously into a horrid postcapitalism – not, of course, the postcapitalism that convinced socialists once envisioned.

Our PI needs seriously to take into account the possibility that capitalism is not only worth terminating but, more pressingly, that capitalism has already undermined itself. If I am right on this, even members of the PI who entertain hopes of reforming, or civilising, capitalism, must consider the possibility that the PI has a duty to look beyond capitalism – indeed, to plan for a postcapitalist civilisation.

Glimpses of postcapitalism

While this is neither the moment nor the place to plan for postcapitalism, it is useful to imagine what a postcapitalist world might be like. Without a capacity for such contemplation, mixed in with our realistic International Green New Deal, our PI will fail to inspire either us oldies in need of a boost of hope or the generation of youngsters seeking a vision worth fighting for.

In a book that came out just this week, called ANOTHER NOW, I try to imagine that my generation had not missed every pivotal moment history presented us with. What if we had seized the 2008 moment to stage a peaceful high-tech revolution that led to a postcapitalist economic democracy? What would it be like?

To be desirable, it would feature markets for goods and services since the alternative – a Soviet-type rationing system that vests arbitrary power in the ugliest of bureaucrats – is too dreary for words. But to be crisis-proof, there is one market that market socialism cannot afford to feature: The labour market. Why? Because, once labour time has a rental price, the market mechanism inexorably pushes it down while commodifying every aspect of work (and, in the Age of Facebook, of our leisure even). The greater the system’s success in doing this, the less the exchange value of each unit of output it generates, the lower the average profit rate and, ultimately, the nearer the next systemic crisis.

Can an advanced economy function without labour markets? Of course it can. Consider the principle of one-employee-one-share-one-vote. Amending corporate law so as to turn every employee into an equal (though not equally remunerated) partner, via granting them a non-tradeable one-person-one-share-one-vote, is as unimaginably radical today as universal suffrage used to be in the 19th Century.

By granting employee-partners the right to vote in the corporation’s general assemblies, an idea proposed by the early anarcho-syndicalists, the distinction between wages and profits is terminated and democracy, at last, enters the workplace – with the new digital collaborative tools standing by to remove all inefficiencies that would otherwise hamper the prospects of a democratically-run corpo-syndicalist firm. 

Besides the democratisation of firms, it would bring the demise of share markets and terminate the need for gargantuan debt to fund mergers and acquisitions.

Already, some Central Banks are thinking of providing every adult with a free bank account. If this goes ahead in a society without share markets, why would you want an account with a private bank? Once debt leverage linked to share markets and personal banking disappear, so does commercial banking. Goldman Sachs and the like become extinct – without even the need to ban them.

What if we were to take this idea further, proposing that the Central Bank also credits each such account with a fixed monthly stipend (a universal basic dividend). As everyone would use their central bank account to make domestic payments, most of the money minted by the central bank will be transferred within its ledger. Additionally, the central bank can grant all new-borns a trust fund, to be used when they grow up.

Thus, persons would receive two types of income: The dividends credited into their central bank account. And earnings from working in a corpo-syndicalist company. Neither need be taxed - the end of income and sales taxes (VAT). Instead, three types of taxes fund this type of government: a 5% tax on the raw revenues of the corpo-syndicalist firms, a carbon tax, and proceeds from leasing land (which belongs in its entirety to the community) for private, time-limited, use.

Once this principle is embraced, a market-socialist blueprint almost writes itself. Freed from corporate power, unshackled from the indignity imposed upon the needy by the welfare state, and liberated from the tyranny of the profits-wages tug-of-war, persons and communities can begin to imagine new ways of deploying their talents and creativity.

Conclusion

Friends, I tried to outline the reasons a Progressive International is essential at our present moment in history.
Faced with the onerous task of fighting against the Twin Authoritarianisms wrecking the future, we need: a common plan of what needs to be done worldwide, a common campaigning framework for energising progressives around the world to implement our common plan, a common international organisation to coordinate our campaigns, and last, but not least, a common will to envision postcapitalism – together. 

Our Progressive International is a unique opportunity to meet this challenge. Across the world. Together!