John Weeks – What is Post-Capitalism?

“The transition to post-capitalism requires a change in production and distribution based on wage labour, which will result in fundamental restriction of the role of markets.”

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

Recently progressives have responded to the obviously dysfunctional nature of the prevailing form of capitalism by proposing policies that would move to a “post-capitalist” economic system. An essential step towards moving beyond capitalism we need to be clear about what we leave behind. Therefore, a relevant start towards putting capitalism behind us is to identify its essential nature. That provides a guide to what must change and, by implication, what we seek to construct.

Two writers stand out above all others by their insights into the nature of capitalist society, Karl Marx and almost a century later Karl Polanyi. Their arguments are essentially the same, found in Capital Volume I, Part 2, Chapter 6, and The Great Transformation Chapter 6, respectively. Most critics of capitalism defined and continue to define capitalism as a system of markets with production and exchange driven by private profit. The two Karls went deeper, asking why capitalist markets exist and the source of profit. These are key questions because markets in various guises existed long before capitalism. In effect these authors ask not only what is capitalism, but also why capitalism exists.

Capital itself is money functioning as the vehicle to bring together workers and the means by which those workers can produce goods and services. Because the capitalists have laid out money for production, they must recapture that outlay through sales in markets, plus a profit. As such capitalism is a historically specific system of production based on wage labour rather than feudal tenure or slavery (explained in my 2010 book). Markets and competition among capitalist corporations are derivative from wage labour and the organizing role of capitalist finance. For the first time in history production and distribution must occur overwhelmingly through exchange, the production of commodities for sale.

This argument implies that transition to post-capitalism requires a change in production and distribution based on wage labour, which will result in fundamental restriction of the role of markets. Because wage labour is the basis of capitalism, and the overthrow of capitalism is not in the offing (to say the least), we are faced with a situation in which the task is clear but the means to achieve it appear intractable.

A possible approach to this apparently insurmountable obstacle is to be concrete. The UK Labour Party promises radical transformation of the national economy, with a programme found in its 2017 election manifesto. Perhaps there exist a combination of policies that while short of overthrowing UK capitalism might sufficiently transform production and distribution to change fundamentally the relation of capital to labour. The manifesto section titled A Fair Deal at Work provides a promising start.

Below I suggest the reforms that might facilitate the achievement of the apparently elusive post-capitalism. I start first from the perspective of employees, then focus on capital itself. A central characteristic of the exchange between capital and labour is that lacking themselves the means to produce, the vast majority of working people have no choice but to sell their capacity to work to capitalists who hold a near monopoly over those means. Unemployment is the mechanism to enforce the coercive nature of the exchange between capital and labour. The Proudhonist socialist tradition proposes to end this monopoly by achieving or returning to a society of mini-producers and cooperatives. The fundamental flaw in this strategy is that it too requires the overthrow of capitalism as its pre-condition.

An alternative strategy arises from the Marxist tradition, to maintain the formality of the capital-labour exchange but eliminate the coercive aspect. This would involve four polices, all of which appear to some extent in the Labour manifesto: 1) enforcement of compulsory industry wide collective bargaining for every sector of the private economy; 2) public provision of education, transport, health services, elderly care and housing; 3) a universal basic income pegged to per capita income; and 4) a macroeconomic policy that manages the economy close to full employment.

The first of these facilitates the power of trade unions to establish and maintain good working conditions, protection against harassment, and keep pay in line with productivity, while the second enhances pay with a “social wage” covering basic services. A universal basic income would replace unemployment payments, providing with the social wage a substantial income cushion to reduce the coercive role of unemployment (what Marx famously named the “reserve army” of capitalism). The purpose of basic income would not be to fund private consumption beyond the full basic needs of families. Finally, a macroeconomic policy aimed at maintaining full employment provides the wider context for protecting the power of employees. The macroeconomic policy would be supported by an industrial strategy generating productive jobs that involve skill acquisition, not the poverty level self-employment that characterizes the job growth in current UK labour market.

On the side of capital the focus of post-capitalist reform would be removal of finance from private profit and severe limitations on competition in markets, both of which I discussed in my previous article and I elaborate in my forthcoming book, Debt Delusion. To control the destructive effects of competition, all private enterprises over a specified size would have half their decision making boards made up of public officials and trade union members. Sectoral regulatory bodies would regulate and monitor smaller enterprises.

All of my proposals have been applied to some degree in the United States during the New Deal, United Kingdom, Scandinavia and Germany. As should be obvious, taken together they form a radical programme.

To summarise, post-capitalism would be a social system in which competition among employees would be severely restricted; the exchange between capita and labour transformed by eliminating the coercion of unemployment; finance would no longer be controlled by capital; and the public officials would aggressively restrict the role of market competition. It is a vision of society in which we make capitalism fit for human life not by “going local”, small and competitive, but by making the tendency in capitalism to generate monopolies as the vehicle to control society in the interest of the many.

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