John Weeks – Post-Capitalism: Nationalisation of Monopolies

One need not break up monopolies if they provide basic services and letting predatory capitalism continue, but to nationalise them to serve the common good.

John Weeks is Professor Emeritus, School of Oriental & African Studies, University of London, and author of ‘Economics of the 1%: How mainstream economics serves the rich, obscures reality and distorts policy’, Anthem Press

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An article by Paul Mason on a transition to postcapitalism is part of an extremely important discussion for progressives. As the current version of neoliberal capitalism manifests its inherent social and economic effects, specifying how to reach a sustainable, equitable society is perhaps the central issue of our time.

Mason provides a four part foundation on which he believes the postcapitalist system might be constructed. To achieve a “different route beyond the market” governments or states should (I quote verbatim):

– enable the emergence of a non-market sector of the economy, consisting of mutuals, co-operatives and pools of relative abundance;

– expand the state sector to provide universal basic services and a basic income;

– enhance network effects, to create free utility not captured by private ownership and market exchange, and

– enact laws to break up tech monopolies and discourage rent-seeking business models, including more traditional rent-seekers such as property and financial speculators.

In addition to lack of clarity on the third point, an analytical and politically practical problem arises because these four items include proposals that may be contradictory. The last item calls for the “break up” of tech monopolies. I do not wish to attribute unintended meaning to Mason, but break up usually implies attempting to resolve the power of capitalist monopolies through market competition. That is, by dismantling them into smaller units that reduces their market power. Mason appears to argue that postcapitalism means moving beyond markets but one of the key policies to achieve that will be increasing competition in markets by breaking up monopolies.

This is an approach to corporate power embodied, for example in the now hardly functional US anti-monopoly laws. The first and most famous of these, the Sherman Anti-Trust Act of 1890, prohibited “any trust in restrain of trade or commerce”. In this policy approach the ills inherent in corporate power will end through market competition; ie. if Google or Microsoft were split into many competing units, their power would be weak and social impact less malevolent.

I have named this popular line of argument “the fallacy of competition“. Whether competition is part of the route to transforming capitalism has deep roots in European political economy, going back at least to the debate between two great 19th century socialists, M. Proudhon and K Marx. Despite their differences both played major roles in the progressive heritage of European social democracy, as explained by Issac Deutscher in Foreign Affairs.

In Proudhon’s analysis, the evils of capitalism arose from financial and producer monopolies. Under socialism these would be destroyed, allowing for competition to play a harmonious role. Mason’s article would seem in that intellectual tradition.

In contrast, Marx viewed competition as an unambiguously malign force, itself the source of the ills of capitalism. In his famous challenge to Proudhon, The Poverty of Philosophy Marx wrote (deep in his Hegelian period),

In practical life we find not only competition, monopoly and the antagonism between them, but also the synthesis of the two…Monopoly produces competition, competition produces monopoly. Monopolists are made from competition; competitors become monopolists.

More succinctly Marx asserted, [Competition] “is the negation of itself. Its most certain result is to ruin those whom it drags in its train.” I strongly recommend that progressives review that debate, in which two great thinkers lay out clearly different visions of postcapitalist society.

For purposes of this comment, the central issue is the policy implications of the two visions of competition. For Proudhon and Mason, the break up of monopolies represents a key plank in constructing the just postcapitalist society. For Marx the end of the maladies generated by monopoly requires eliminating capitalism itself through the end of wage labour.

Given the formidable task of overthrowing capitalism, and the uncertainty at best of the outcome after doing so, it should not surprise us that Proudhon not Marx has provided the underlying philosophical approach to reform capitalism by most social democrats. However, as I have elaborated in a recent book of mine, Marx’s view of competition as a destructive force carries clear and practical policy implications.

The most important of these policy measures are the following. First, governments must take finance out of capitalist control, either through direct nationalisation or some form of mutualisation (eg. building societies). Capitalist finance provides the essential vehicle for capitalist competition. Second, severely restrict competition between employees and employers through a basic income for all adults at a substantial level. Third, there must be broad-based delivery of basic services to remove education, housing, transport and health from private markets. And fourth, implement these competition-limiting measures within an environmentally sustainable reproduction of the social and economic needs of the population.

Underlying all my proposals is systematic government support for collective bargaining to fortify the role of employees and more generally citizens in economic governance.

Several of my proposals coincide with those of Paul Mason. The basic difference is that I oppose the break up of monopolies, which should be subsumed under public control in some form. My proposals are similar to those found in Franklin D Roosevelt’s famous Four Freedoms speech (1941) and several appear in the UK Labour Party’s 2017 election manifesto.

Capitalism with its competition fangs pulled offers a route to a society fit for human life.

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