Economic democracy: the working-class alternative to capitalism 9781552663462, 1552663469, 9781552666173, 1552666174

Table of contents :
Introduction --
Capitalism --
Economic Democracy --
Opposing and Ending Capitalism.

Citation preview

Economic Democracy

Economic Democracy The Working-Class Alternative to Capitalism

Allan Engler

Fernwood Publishing • Halifax & Winnipeg

Copyright © 2010 Allan Engler All rights reserved. No part of this book may be reproduced or transmitted in any form by any means without permission in writing from the publisher, except by a reviewer, who may quote brief passages in a review. Editing: Mary Beth Tucker Cover design: John van der Woude Printed and bound in Canada

Published in Canada by Fernwood Publishing 32 Oceanvista Lane Black Point, Nova Scotia, B0J 1B0 and #8 - 222 Osborne Street, Winnipeg, Manitoba, R3L 1Z3 www.fernwoodpublishing.ca Fernwood Publishing Company Limited gratefully acknowledges the financial support of the Government of Canada through the Canada Book Fund, the Canada Council for the Arts, the Nova Scotia Department of Tourism and Culture and the Province of Manitoba, through the Book Publishing Tax Credit, for our publishing program.

Library and Archives Canada Cataloguing in Publication Engler, Allan, 1938Economic democracy: the working class alternative to capitalism / Allan Engler. Includes bibliographical references and index. ISBN 978-1-55266-346-2 1. Capitalism. 2. Democracy. 3. Working class. 4. Employee ownership. 5. Industrial management—Employee participation. I. Title. HB501.E568 2010   330.12’2   C2010-900018-8

Contents Introduction – 7 1. Capitalism: Socialized Labour – 9 Private Entitlement – 12 Capitalism against Democracy – 15 Malevolent Capitalist Markets – 18 Worsening Disparities – 19 Capitalist Crises – 22 Repression – 26 War and Minority Rule – 28 War as Capitalist Enterprise – 31 Externalized Environmental Costs – 36 Consumerism – 40 Population Growth – 42

2. Economic Democracy: Ending Minority Rule – 45 Equal Human Entitlement – 46 Numerous Owning Communities – 47 Workplace Democracy – 51 Democratic Media – 53 Education for Equality – 55 Wage and Salary Rates – 57 Individual Production and Direct Consumption – 59 A World without Capital, Repression or War – 61 Labour: The Source of Exchange Value – 64

Democratically Regulated Markets – 67 The Elitism of Central Planning – 69 Initiatives from the Bottom Up – 71 Sharing Advantages through Market Exchange – 73 Democratic Planning – 75 Living in Harmony with Nature – 78

3. Opposing and Ending Capitalism: Reforms to End Capitalism – 82 Karl Marx, Feudalism and Gradual Change – 84 Early Working-Class Gains and Losses – 87 Twentieth-Century Violence – 90 Party or Class – 94 Continuing Gradual Change – 98 The Limits of Pro-Capitalist Reform – 101 Tipping Points to Economic Democracy – 103

Acknowledgements – 106 References – 107 Index – 109

Introduction My aim in the pages that follow is to describe and analyze capitalism from a working-class perspective and to make the case that a working-class alternative, economic democracy, is practical. Humankind does not need a capitalist class. People who work for wages and salaries now do everything required for economic well being. Part I describes the nature, dynamics and consequences of capitalism. For much of the twentieth century capitalism was identified with the individual in the market, with democracy and with rising living standards. It is actually a system of socialized labour, privately owned capitalist collectives (corporations) and workplace dictatorships. Economic activity is directed not by the invisible hand of market forces but for the profit of wealth-holding minorities through fully visible master-servant relations. The competitive drive to maximize profits pushes capitalist enterprises to simultaneously increase production and cut employment and wages. It pushes enterprises to exploit resources at unsustainable rates and to externalize environmental costs, passing them on to communities, workers, other species and future generations. As disparities worsen and environments are degraded, wealth-holders turn to repression, militarism and war. Part II describes the working-class alternative to capitalism, economic democracy. All inhabitants will be entitled to a voice and equal vote in their communities’ economic and political decisions. Local, regional, national and international communities will own enterprises and direct public services. Workers in all occupations will democratically direct their labour time. Housing, health care, employment opportunities, education, skills training, leisure and a fair share of socially produced goods and services will be provided to everyone as human rights. Individual 7

Economic Democracy

enterprise will be encouraged. Discretionary goods and services will be exchanged through democratically regulated markets. Wage and salary differentials will be decided democratically. Science, technology and markets will be directed toward human well being, not profit for a minority. Part III discusses working-class change. Outside of Latin America, there is now virtually no organized opposition to capitalism. Trade unions and labour-supported electoral parties do promote changes that are intended to make life better for working people, but do not challenge the system. Social activists limit campaigns to single issues: poverty, environmental degradation, discrimination, repression or wars. It is not difficult to understand why few explicitly oppose capitalism. For nearly a hundred years, supporters and opponents have insisted that the alternative is armed revolution and authoritarian statism: disorder, death and destruction followed by dictatorship and top-down state control of economic and political life. When economic democracy — a world of human equality, democracy and cooperation — is the alternative, capitalism will no longer be seen as a lesser evil. When the working class, not a revolutionary party, is the agency of social transformation, change will be based on workplace organization, community mobilizations and democratic political action. The goal will be to transform capitalism into economic democracy through gains and reforms that improve living conditions while methodically replacing wealth-holders’ entitlement with human entitlement, capitalist ownership with community ownership and masterservant relations with workplace democracy.

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1 Capitalism Socialized Labour Capitalism has pushed independent producers to the fringes of economic activity. Before capitalism, most households were largely self-sufficient. Small holders, tenants and sharecroppers produced food and materials. Self-employed artisans and small masters employing one or two journeymen, produced handcrafted goods. Majorities were poor, sometimes in dire want. They had to pay rent and some were compelled to provide labour services, but most were otherwise free to direct their own labour time and to consume, barter or sell the goods they produced. By the end of the twentieth century, most people in most occupations and industries were engaged in wage and salary work, working with and for others. The class of people who depend on wage and salary work includes architects, bookkeepers, computer programmers, construction workers, daycare workers, engineers, farm labourers, factory workers, graphic artists, hospital workers, interpreters, journalists, kinesiologists, loans officers, loggers, mathematicians and managers. It includes nurses, oil rig workers, pilots, police, professors, quality control supervisors, railway workers, receptionists, sales clerks, secretaries, soldiers, teachers, truck drivers, ushers, veterinarians, warehouse workers, X-ray technicians, yard workers and zoologists. Self-employed professionals and other service providers — owner-operators of trucks and machinery, artists, artisans, shopkeepers and farmers — combined accounted for less than 15 percent of the paid workforce in western Europe and North America. Although nominally self-employed, many are dependent on corporate capital for supplies and markets, and on landlords 9

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and banks. Insofar as they earn their living through their labour, they are in the working class. The transformation of majorities into wage and salary workers was made possible by rising agricultural productivity. Turning soil with steel plows pulled by oxen and horses and fertilizing with animal manure steadily advanced in northern Europe in the Middle Ages, making fallow years unnecessary and allowing two or three crops to be rotated annually. In the fifteenth century, the adaptation of Chinese steel smelting techniques in Italy and then elsewhere improved the quality and reduced the price of European steel for guns, industrial machines and plows (Menzies 2008: 214–24). In England improvements in the productivity of agricultural labour were accompanied by privatizations. Dispossessed and unemployed villagers, left with nowhere to grow their own food or allow animals to graze, migrated to rapidly growing towns and cities where the availability of plentiful cheap labour encouraged capitalist investment in manufacturing. By the end of the nineteenth century, machine industry and steam power had made individual production obsolete in most industries. In the twentieth century, steadily falling transportation costs, motorized farm machinery, synthetic fertilizers, chemical weed and insect control, selective breeding of plants and animals and regional specialization within global markets increased the productivity of land by ten times and the area a family could farm by another ten times. This hundred-fold increase in agricultural productivity — largely due to cheap petroleum — led to massive flights of people from rural to large urban centres. A majority of farmers continue to be self-employed, but agriculture in more prosperous countries now directly employs 5 percent or less of the population. Two to three times that number are wage and salary workers employed producing machinery, fuels, patented seeds and chemicals, or processing foods and distributing agricultural products (Mazoyer 2007: 313–95). Scientific innovation, central to the twentieth-century rise in labour productivity in agriculture and industry, has also been socialized. In the nineteenth century, corporations began to employ scientists to work in research laboratories. Scientific

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advances came to rely less on individual inspiration than on the coordinated work of numerous professionals in different specialties. In 1885 individuals took out 90 percent of patents. By 1950 corporations took out 75 percent. In the late twentieth century, products and processes in information technology were devised, developed and refined by salaried researchers. Stock options made a few fabulously wealthy. Most remained salaried workers, often working sixty or seventy hours a week with no overtime pay. Their innovations became the “intellectual property” of the corporations that employed them (Noble 1977: 87). In poor countries, the socialization of labour is masked by unemployment and the continuing reliance of majorities on subsistence agriculture. In much of Africa and in parts of Asia and Latin America 60 to 80 percent of populations earn meagre livings off the land. Some of the desperately poor become undocumented immigrants in Europe or the U.S. Many crowd the tenements, shanty towns and streets of megacities like Cairo or Lagos. Although wage and salary work is unavailable for many, self-employment is precarious. Few opportunities exist for independent urban subsistence. The only hope for the urban and rural poor, for the present and the future, is regular secure wage or salary work (Davis 2006). In older centres of capitalist industrialization, the growing dependence of people on wage and salary work is obscured by the decline in manufacturing employment. Where that decline is relative, it is a measure of the more rapid growth of other forms of social labour, especially public and private services. Where the decline is absolute, the explanation is capital flight and the continuing introduction of labour-saving technologies. Capital flight eliminates wage and salary work in some places and speeds the socialization of labour elsewhere. As labour-saving technologies increase the productivity of social labour, individual production becomes less viable. The more human well being comes to depend on social employment, the more aggressively supporters of the system defend competitive individualism. The wealthier the rich get, the more they complain that taxes for public services are too high. The less access common people have to independent subsistence,

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the more aggressively wealth-holders demand that individuals and families look after themselves. When a North American worker loses his job to capital flight, what can he as an individual do about that? How successfully can a new graduate support herself when she is loaded down with student loan debt and the only work available pays little more than the minimum wage? How independent are individuals in poor countries when half or more are unemployed and revenues that should be applied to education, health care, housing, transportation and communications flow abroad as profits, dividends, management fees and debt service charges? Rhetoric aside, capitalist entitlement and the socialization of labour have made individual independence impractical for nearly everyone. Private Entitlement Under capitalism, means of livelihood that require cooperative social labour are owned by wealth-holding minorities who are entitled to direct these for private profit. Supporters of the system get comfort by claiming that capitalism is better, certainly no worse, than minority entitlement based on heredity, religious sanction, education, ideology or naked armed force. In its mythology, capitalism freed common people from feudal oppression. In reality, private capitalist entitlement freed wealth-holding minorities to enrich themselves at the expense of the subsistence, employment and lives of majorities. Modern capitalist property relations in England began with enclosures or privatizations. Lands that had been held in common for generations were fenced and claimed as private property that could then be bought and sold. Dispossessed villagers were driven off the land. Those who could not find work were compelled to labour in workhouses or transported as indentured servants to colonial plantations. The nominally free — men, women and children — were worked for twelve and sixteen hours a day in factories, mills, mines, and ships for wages that sometimes did not cover the cost of food. Private capitalist entitlement was brought to North America by British colonists. Guns and germs gave them the means to

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privatize lands that had been held in common by indigenous tribes and villages. Corporations like the Virginia Company were given title to vast tracts of land, plantations to be worked by indentured servants. Meanwhile, the catastrophic drop in indigenous populations made land free for the taking. Indentured servants from England, Scotland and Ireland who escaped their masters and fled to other communities could readily blend in as property-owning settlers. Faced with vanishing labour, plantation owners pushed for laws restricting the rights and liberties of African Americans. Slavery was racialized, making it easier to identify and forcibly return escaped plantation workers. In the U.K. real wages began to increase in the first half of the nineteenth century after the rise of trade unionism. In the second half of the century most working men had gained formal equality in the law and the right to vote in the U.K., the U.S. and other capitalist countries. Slavery was legally abolished. Trade unions gained the right to engage in collective bargaining. However, to this day, wealth-holders retain the private right — the legal obligation — to squeeze profits out of every minute of others’ labour time. Capitalist title allows, encourages and compels wealthholders, regardless of their individual sentiments, to profit at the expense of others. Enterprises with higher profits gain control of additional supplies, technologies and markets. Those with lower profits lose capital value, are bought out, absorbed by others or bankrupted. In the competitive capitalist fight to determine winners and losers, common people, workers and communities are collateral damage. Today, in Africa, Latin America and Asia, people continue to lose access to lands they use for subsistence. Agricultural lands, forests and waterways continue to be privatized, turned into capitalist ranches and plantations or flooded for electricity. Handicrafts and industrial production for local markets are undermined by cheap imports. In Canada, indigenous people continue to be victimized by capitalist dispossession. Lands they use for hunting and gathering are still being lost to private timber leases, mining operations, ski resorts and hydroelectric projects. In the tsunami of December 26, 2004, 250,000 people lost

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their lives and 2.5 million were left homeless. For capitalists this disaster was an opportunity for profitable private investment. In Sri Lanka, Indonesia and other affected areas, seaside lands that had supported fishing and agricultural communities were sold or given to private companies for the construction of tourist resorts. The survivors who had inhabited these coastal areas were given little or no compensation. They were driven away by police and armed forces and moved to relocation camps miles from the sea and their previous livelihood (Klein 2007: 463–87). In more prosperous countries, publicly owned railways, electrical utilities and waterworks, as well as schools, medical care, regulatory agencies and prisons are privatized. Public service is then motivated by private profit. Proprietary secrecy replaces the public’s right to know. Corporate privateers like to portray themselves as visionary free market entrepreneurs; they have more in common with the tax farmers of late feudalism who purchased the right to collect taxes and then squeezed peasants, artisans and shopkeepers for all they could get. The claim that private companies provide better value for the tax-payer dollar does not stand up to scrutiny: for-profit companies have higher administrative costs, shareholders expect the prevailing rate of return, corporate executive and managerial salaries are higher than in the public service, and private companies pay higher interest rates. Where privatized companies do reduce costs, this is done at the expense of the public and workers by cutting services, maintenance, employment and wages. In the U.S., where health insurance is in the hands of private companies, half the population has no health insurance, but the country spends nearly twice as much of its national income on health care as any other prosperous country. Focused on maximizing profits, private insurance corporations reduce their medical loss ratios by looking for pretexts to deny claims and terminating coverage for the chronically ill. In recent years, top corporate executives have been charged and convicted of fraud. At Enron, Hollinger, ImClone, Nortel, Parmalat, Tyco and WorldCom, corporate insiders and top executives were charged with personally appropriating millions in corporate revenues. Bernard Madoff was charged with pocket-

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ing billions legally belonging to investors. If those convicted had given themselves similar amounts in bonuses and stock options as rewards for transferring work to non-union contractors, shifting employment to low-wage countries or moving head offices to off-shore tax havens, they would still be lauded as titans of capitalism. Taking money that legally belongs to other wealthholders is a crime; appropriating income and employment from working people and communities is a capitalist prerogative. Proudhon, a nineteenth-century French radical, said “property is theft.” He exaggerated. Karl Marx, following Thomas Aquinas and John Locke, held that property began as the right of people to the products of their own labour. Then under capitalism: The right of property is inverted, to become, on the one side the right to appropriate others’ labour, and on the other, the duty of respecting the product of one’s own labour, and one’s own labour itself, as value belonging to others. (Marx 1973: 458) In pre-capitalist times property right was based on customary use: possession was nine-tenths of the law. As capitalism evolved, written records of entitlement came to take precedence over customary use and human need. Title deeds, shares, bonds and credit instruments that can be bought and sold gave wealthholders the right to do as they please with others’ means of livelihood. If property is the right of people to the products of their own labour, capital is legalized theft. Capitalism against Democracy For the working class, democracy is fundamental. It is a means and a goal. Democratic rights — freedom of assembly, association and speech, as well as the right to vote, protest, withhold labour and picket — allow workers to protect and advance their class interests. Real democracy, actual rule by the people for the people, and human equality are the historic aspirations of working-class movements. Although capitalism in the twentieth century came to be identified with democracy, at least with elections, it is based

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on workplace dictatorship. Corporations deemed in law to be individuals are actually the primary institutions of capitalist social power. Corporations are wealth-holders’ collectives that combine shares of numerous investors in the interests of private profit-maximization. They have the command structures of autocratic governments. Corporate chief executive officers, aided by top-down bureaucratic hierarchies, decide whether communities prosper or decline. Each of the largest transnational corporations now employs more labour and generates more revenue than most governments. They have the power to impose their will on wage and salary workers and on communities nearly everywhere. Neither employees nor residents have a voice or vote in their decisions. The basic principle of corporate governance is not one person, one vote but one share, one vote. Corporate capitalism is rule by the wealthiest (Engler 1995: 60–84). Capital-owning minorities can support and do benefit from limited democratic rights. Formal rights help stabilize social relations. Elected governments can legitimize capitalist entitlement in the eyes of working people. Public support at home helps transnational corporations impose their private interests on other countries. Identifying with some democratic rights is good public relations, but for most of capitalism’s history, the rich viewed democracy as mob rule. The limited democratic rights we now have are a consequence of working-class struggles. In England, capitalist property rights were definitively secured after the Glorious Revolution of 1688, but the new regime of William and Mary was certainly not democratic. Voting was a property right, not a human right. Less than one quarter of adult males and no women could vote for parliament. State power was openly and methodically used to transform customary rights into private property, to turn the common rights of villagers into private capital. In the 1830s, after decades of growing mass mobilizations for freedom of assembly, association and speech as well as the right to vote, Whig majorities in parliament — supported by manufacturing and banking capitalists as well as some large landowners — passed the Reform Acts, which gave cities more representation in parliament and reduced property qualifications, increasing eligible voters to one-sixth from one-tenth of the adult

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male population. From 1838 to 1850, hundreds of thousands rallied behind the campaign for a People’s Charter, demanding voting rights without property qualifications for all adult males. In the next decades, trade unions and radical workers’ clubs continued to rally, protest, boycott and picket to expand democratic rights. By the late nineteenth century, men in the U.K. had gained the right to vote, but women did not gain the vote until after World War I. In most countries wage workers did not achieve what are now considered middle-class living standards until after the rise of industrial unions in the 1930s and 1940s. The ideology and laws of capitalist countries were openly sexist, racist and even genocidal towards ethnic minorities and groups deemed less fit until the 1960s. Capitalists continue to disregard the most basic democratic and human rights of people abroad. Until the middle of the twentieth century, European imperialism openly denied the indigenous people of the Americas, Asia, Africa and the Middle East the right to run their own affairs. Direct imperial rule has largely ended, but transnational capital continues to pursue its interests at the expense of human and democratic rights. Cuba provides an example. After Castro’s government nationalized industry, the U.S. organized the Bay of Pigs invasion. It continues to impose economic and political sanctions on the country. There are many other examples as well. In Chile in 1973, transnational corporate interests and local capitalists with the support of the U.S. government organized a military coup to overthrow the democratically elected socialist government of Salvador Allende. In Venezuela in 2002, the U.S. embassy supported the failed coup against Hugo Chavez, the democratically elected president. In Haiti in 2004, the U.S., Canada and France participated in overthrowing the elected government of Jean Bertrand Aristide. In Palestine, the democratically elected Hamas government continues to be boycotted. In the Middle East and Central Asia transnational corporate rights to petroleum resources rest on agreements with hereditary dictatorships. In China, capitalism flourishes under authoritarian party rule. The list goes on.

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Malevolent Capitalist Markets Supporters of capitalism insist that human well being should be left to the market. In the market, they claim, a benevolent invisible hand directs self-centred individuals to meet the wants and needs of others. This theory has an enduring appeal. However, its logic assumes that people are self-employed and able to shift to any work that is more remunerative, that no buyers or sellers dominate markets and that everyone is fully aware of market conditions. If all that were the case, perhaps market forces would direct individuals to labour in ways that are beneficial to all, but capitalism would not exist. Capitalism is a system of unequal entitlements. Wealthholding minorities have exclusive title to lands, resources, buildings, machinery, equipment and technologies and control access to credits. Letting the market decide is a euphemism for letting capitalists decide. Transnational corporations dominate the most profitable markets. The huge sums they spend on advertising and marketing networks make it impractical for individual artisans or national firms to compete. The malevolent consequences of capitalist markets are most obvious in places where profits depend on dispossession and cheap labour. The Great Hunger in Ireland in the 1840s is a classic example. A million people died of starvation and malnutrition and another million fled their homeland. Throughout the famine, Anglo-Irish planters who had appropriated the most productive lands continued to export grain, chickens, pigs, milk products and cattle. Dispossessed Irish villagers, who got occasional work on plantations and subsisted on potatoes grown on the small plots left to them, did not have the money to buy food. When blight destroyed potato crops, they were left to die. In India and China capitalist markets were even more malignant. Before the European conquest most production in both countries was for subsistence and local markets. People suffered from recurring droughts and floods, but indigenous ruling classes had located grain stores throughout their domains. Roads and canals were constructed and maintained to move food from areas of plenty to places of need. To protect producers from

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falling prices and consumers from rising prices, government stores were replenished when supplies were plentiful and sold off when supplies were low. After the British consolidated their conquest of India in the late eighteenth century, public grain stores were looted and sold. Irrigation works were left to decay. Lands became the private property of British and Indian capitalists. Villagers who lost customary rights to land were reduced to working as sharecroppers or day-labourers for minimal wages. Railways — financed by taxes collected in India itself — were built to move troops throughout the subcontinent and to move produce to international markets. Supporters of imperialism claimed that this showed that British rule was modernizing India. For the people of India, the immediate consequences were catastrophic. Railways gave landowners and merchants the means to move grain from areas of poverty and starvation to places where prices were higher. During the famines of 1876-1879 at least six million people perished. In 1877, with famine at its worst, India exported nearly 400,000 tons of wheat — twice what it had the previous year and three times the exports of two years earlier. During the next major El Nino weather cycle, in the mid-1890s, millions again perished as food was exported. In the same decades, China suffered even greater loss of life. Britain and its imperial allies had seized control of China’s trade in the opium wars of the 1840s. As in India, grain stores were pillaged for private profit. When crops failed, food was transported from places where the penniless were starving to places where it could be sold for a profit (Davis 2001: 7, 27). Worsening Disparities In the two hundred years that capitalism has dominated global markets, income disparities within and among countries have widened in nearly every decade (Milanovic 2005: 139–44). This is more than a coincidence. In the nineteenth and early twentieth centuries, direct imperial rule was intended to provide European wealth-holders with opportunities to enrich themselves. Today, when transnational corporations invest in low-wage countries,

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they expect to take more money out than they put in. Anything less would be contrary to the interests of their shareholders. Transnational corporate investment in poor countries is limited to export industries, resource exploitation, plantation agriculture for global markets and assembly plants that can easily be moved elsewhere if workers organize for higher wages. As a condition of investment, transnational corporations typically insist on tax concessions and the right to repatriate profits. To pay for the power generation, rail lines, roads, docks and communications facilities required, governments borrow from transnational financial institutions. Credits will be withheld until domestic markets are opened to imports. When approved, most of the credits will go to pay contractors and engineering firms from abroad. The export revenues the country earns will then flow out of the country as debt service charges, profits, dividends and management fees. Cheap imported consumer goods will undermine domestic employment in handicrafts, manufacturing and agriculture. Some of the consequences of global capitalist entitlement are surprising. A 2008 study of International Monetary Fund (imf) loans to Eastern Europe and the former Soviet Union found that countries receiving the most imf loans had the highest rates of tuberculosis. After imf loan programs ended, tuberculosis rates declined. The connection may seem implausible, but tuberculosis rates do relate inversely to expenditures on public health and social housing. The imf, controlled by U.S. financial interests, demands that countries unable to meet debt service charges cut spending on social programs like health care and housing (Kahn 2008). Domestic capital in poor countries usually aligns with transnational capital. The richest and most influential local capitalists are typically owners of large landed estates whose profits from coffee, palm oil, rubber or sugar depend on plentiful supplies of cheap seasonal labour. It is in their interests to ban unions and suppress social movements. They may profit by supplying goods and services to transnational enterprises and their employees, but faced with undeveloped and shrinking local markets, they are more likely to invest in Swiss or Caribbean banks, in transnational stocks, bonds and commercial paper, or real estate in Florida or France. Corruption is a problem. For a transnational corporation, it

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is far cheaper to buy off government officials than to pay decent wages or pay taxes for education, housing and infrastructure. Corruption is hardly limited to poor countries. In rich and poor countries alike, policies that benefit capitalist interests, like deregulation, privatizations and cutting taxes on capitalist income, are justified by laissez faire rhetoric and greased by political campaign contributions and future favours. Free trade has aggravated the tendency of capitalism to worsen disparities. In 1961, when tariffs were higher and currency values, interest rates and capital movements were regulated, people in the richest countries had average incomes twelve times higher than those in the poorest. By the end of the century, people in the richest countries had incomes thirty times higher, but, income in many countries was shrinking, their economies having peaked in the years listed: Algeria, 1985 Cameroon, 1986 Colombia, 1997 Djibouti, 1971 El Salvador, 1978 Fiji, 1996 Gambia, 1984 Guatemala, 1980 Honduras, 1979 Indonesia, 1997 Jordan, 1986 Mali, 1979 Malawi, 1979 Nicaragua, 1977 Niger, 1963 Peru, 1981 Rwanda, 1983 Sierra Leone, 1980 Tanzania, 1976 Trinidad & Tob., 1982 Venezuela, 1977 Zambia, 1955

Bolivia, 1978 Central African Republic, 1977 Cote d’Ivoire, 1978 Ecuador, 1997 Ethiopia, 1980 Gabon, 1976 Ghana, 1971 Guyana, 1976 Haiti, 1960 Jamaica, 1972 Kenya, 1990 Madagascar, 1971 Mauritania, 1970 Nigeria, 1977 Paraguay, 1981 Philippines, 1982 Senegal, 1961 South Africa, 1981 Thailand, 1996 Uganda, 1969 Yemen, 1990 Zimbabwe, 1991

(Milanovic 2005: 139–44)

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Statistics on income are of limited value in countries where most goods and services are produced for direct consumption. Still, they do reflect the success or failure of capitalism to meet human needs. Now that the prices of most foods are set globally, an income of less than $2 a day is unquestionably an indication of severe want. Desperate poverty in the midst of excess consumption is not an anomaly; it is a consequence of capitalist entitlement (Galleano 1973). The cost of providing people everywhere with food, housing, health care and education would not be prohibitive, requiring less than 1 percent of the annual national income of the most prosperous countries. More is spent on frivolous consumer luxuries and weapons of war. Far more has been spent in little more than a year bailing out global financial institutions. Under capitalism, what is called foreign aid is too often a cover for subsidies and grants to donor-country aid agencies, military contractors, financial institutions and resource corporations. What poor countries need is domestic employment for domestic markets. Domestic production provides the revenues and justifies expenditures for transportation and communications systems, education, skills training, health care and housing. It is also the main source of income for global markets. Capitalists have lost enthusiasm for domestic production for domestic markets because it undermines the control transnational corporations have over markets and resources. By increasing labour income, domestic employment reduces foreign and domestic profits based on low wages. Capitalist Crises The neoconservatives who dominate corporate boardrooms, orthodox economics and the political agendas of most countries insist that markets if left unregulated will reach equilibrium at full employment. In the real capitalist world, periods of growth are followed by stagnation, falling employment and declining markets. Booms and busts are predictable consequences of competitive minority entitlement. In the quest to maximize profits capitalist enterprises expand production and cut labour costs.

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They introduce labour-saving machinery, speed the pace of work, cut wages and move operations to places where labour is cheaper. So long as employment and income are generally expanding, enterprises that increase production and cut labour costs get higher profits. When growth in total production exceeds aggregate growth in income from wages and salaries, markets stagnate and profits are squeezed. The system faces crises of overproduction and underconsumption. (Underconsumption here may or may not mean that people are suffering physical privation. It simply means that workers are not receiving enough income from their labour to purchase all the consumer goods and services they produce.) Capital markets worsen these crises. During periods of economic growth, speculative buying and selling drives up the prices of corporate shares and real estate, compelling enterprises to generate more revenues to meet increased capitalist claims. To do this, they more aggressively seek ways to cut employment and wages. Labour’s share of total income falls further. Consumer purchasing power stagnates and declines. Seeking other ways to increase profits, wealth-holders turn to financial manipulations until paper pyramids collapse. The 2008 financial collapse began when deposit and investment banks, hedge funds and insurance companies could no longer cover losses in real estate, mortgages and consumer credit. Although outrageously extravagant executive salaries and bonuses, pyramid scams and outright fraud aggravated the crisis, its roots can be traced back to the 1970s, when the Nixon administration deregulated exchange and interest rates. Capital was freed to move nearly anywhere in search of cheaper labour. After the election of Margaret Thatcher in the U.K. in 1979 and Ronald Reagan in the U.S. in 1980, governments openly adopted policies intended to make the rich richer. Keynesian full employment and welfare state policies were repudiated. Taxes paid by the highest income brackets were lowered and eliminated. Government regulations were watered down and ended. Labour laws were changed to make it more difficult for unions to organize and to engage in collective bargaining. Global wealth-holders responded by investing billions in the

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city of London and larger sums in U.S. treasury bills, government and corporate bonds, shares, money market instruments and real estate, making the U.S. the largest importer of foreign capital. Meanwhile U.S. corporations were moving employment to countries where labour is cheaper. Instead of financing additional U.S. production capacity, foreign credits were used to pay for imported goods and to cover government deficits. Cheap and plentiful credit allowed private investment funds, brokers and major banks to make billions in fees and trading gains from mergers and acquisitions, leveraged buy-outs, derivatives and credit default swaps, as well as from personal debt packaged as asset-backed securities. As government, business, mortgage and credit-card debt ballooned, consuming beyond one’s income came to be viewed as a civic virtue. The great minds in high finance saw no problem. The prevailing wisdom was that even if foreclosures were necessary, investors would still profit from rising real estate prices. In 2006 real estate prices began to fall. In 2008 companies investing in sub-prime mortgages failed. The stock market lost 50 percent of its value. The loss in capital value was estimated at between $15 and $30 trillion. Millions of families lost their homes. Millions were laid off. The price of oil fell by two-thirds. The market for automobiles crashed. Access to credit dried up throughout the capitalist world. The U.S. and British governments responded with massive bailouts of financial institutions. Although portrayed as forms of Keynesian economic stimulation, the bailouts were a continuation of neoconservative supply-side policies (euphemism for putting more money in the pockets of the rich). An immediate panic flight of capital from the U.S. and U.K. was averted, but the required government borrowing also diverted credits from trade and investment elsewhere. In early 2009, the World Bank estimated that private credit available to poorer countries had fallen by more than 80 percent since 2007. For the first time in half a century the global market shrank. Capitalism faced a quandary. Supply-side policies could maintain and increase capital’s share of total income but at the expense of working-class income, employment and market

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demand. Keynesian policies, by increasing working-class purchasing power, would revive market demand but at the expense of the share of total income appropriated by capital. In many countries, spending on physical infrastructure has been boosted, but the employment generated has been more than offset by corporate layoffs. Meanwhile, governments acting in the interests of capital, citing growing deficits, are cutting social programs and public employment. Governments committed to stimulating markets would treat bailout funds as public equity in the banking, mortgage and insurance companies responsible for the bubble and its collapse. To broaden and democratize access to credit, public ownership would be transferred to states, provinces, metropolitan regions, cities and counties. The debts of poor countries would be written off so that more domestic funds would be available for domestic production in local markets. Money would be provided to protect public and private pension funds. Homeowners would be allowed to renegotiate mortgages to reflect lower current interest rates and real estate prices. Spending would be substantially increased on schools, child care, health care, public transportation, social housing, reforestation, environmental reclamation and research into technologies that reduce and eliminate greenhouse gas emissions. Social security payments would be increased. Everyone would be provided with a minimum annual income. Labour laws would make it easier for unions to organize and engage in collective bargaining. Eligibility for unemployment insurance would be expanded. The claim that Keynesian policies would burden future generations with intolerable debt holds only if it is presumed that current income disparities must be maintained. Steeply graduated income taxes on the highest incomes would not damage markets for most goods and services, would reduce wasteful conspicuous consumption and would substantially increase government revenues. In the U.S., the vortex of the financial crash, much of the cost of government stimulation could be covered with deep cuts to military spending. Raising tariffs on imports to 15–25 percent from the current

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average of 5–10 percent would directly generate additional government revenues and would indirectly generate more by encouraging more domestic employment. Tariffs have been demonized by transnational corporate interests, but despite the business consensus, the 1930 Smoot-Hawley tariff cannot reasonably be held responsible for the severity of the Great Depression. Average U.S. tariffs were already at 40 percent, when SmootHawley raised them to 60 percent (Bernstein 2008: 348–59). The resulting retaliatory tariffs did further reduce world trade, but that was a symptom of an underlying problem: the division of the capitalist world into imperial zones — British, French, Dutch, Japanese, German, Italian and American. Each empire openly limited others’ access to markets they controlled. Capitalist markets are now global. Tariffs could be raised by international agreement to levels high enough to encourage domestic production everywhere, but not so high as to be barriers to international trade. However, so long as transnational corporate interests control most governments as well as the World Trade Organization, public action to protect domestic production, employment and income will be resisted. State power will continue to be used to protect and advance transnational corporate interests. Repression Ruling classes throughout history have relied on armed force to mobilize labour, to plunder and to appropriate surpluses as tribute, rent or taxes. When capitalist property relations are secure, capitalists purchase labour time, sell the goods and services produced and pocket the difference as profits. These transactions appear voluntary, but capitalism, like all other forms of minority entitlement, rests on armed force and repression. In Britain, capitalism began with the enclosures of what had been common lands. Villagers who had worked lands for subsistence were forcibly evicted. The dispossessed were arrested as vagrants, hanged for stealing food, forced into workhouses or shipped as indentured servants to colonies, where many died of exhaustion, malnutrition and beatings. By the end of the eigh-

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teenth century most people were left with nothing but their labour power. Workers who formed unions to protect their common interests were jailed, transported to penal colonies abroad and sometimes hanged. By the early twentieth century, capitalist property relations prevailed nearly everywhere. In many countries, men and women had won the right to vote and working people had gained freedom of association and assembly, but wealth-holding minorities continued to use courts, police, prisons and armed forces to protect and advance their narrow class interests. The rise and defeat of fascism in World War II showed that minority entitlement had to be based on more than armed force. To win the Cold War, capitalists looked to mass support. Labour laws were changed to make it easier for workers to join unions and engage in collective bargaining. Labour-supported parties joined governments. Full employment and welfare state policies were adopted. Steeply graduated income taxes dampened the capitalist drive to widen disparities. By the 1970s, it had become clear that the Soviet Union and China were not catching up but falling behind capitalist countries in economic development and military technology. Common people in many countries had come to identify capitalism with the individual in the market, with democracy and with steadily rising living standards. As organized working-class opposition to capitalism disappeared and the proportion of workers represented by unions declined, wealth-holding minorities withdrew their support for welfare state policies. They returned to nineteenth century laissez faire policies insisting that governments should limit themselves to national security, law and order and promoting the interests of capital. The neoconservative reaction worsened social polarization and fuelled a revival of authoritarianism and repression. The fear and loathing that winners in the game of competitive entitlement had for losers — for the poor, the unemployed, the homeless, immigrants and racialized minorities — was magnified. De facto racial profiling in the U.S. did not begin with the targeting of immigrant and U.S.-born Muslims. Most of the prisoners on the war on drugs were African-American and Hispanic men. The

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war on drugs was a pre-emptive strike against the chronically unemployed and disaffected that escalated in the 1980s as betterpaid manufacturing jobs were lost to lower-wage countries. Men without higher education who had earned enough from wagelabour to modestly support families were reduced to dependence on low-paid precarious employment, public welfare or private charity. A few turned to crime. The corporate media and pro-capitalist politicians demanded more power for the police, longer prison sentences for petty crimes and fewer rights for the accused. At the turn of the millennium, the U.S. had 5 percent of the globe’s population and accounted for 25 percent of the prison population. After September 11, 2001, repression escalated. The war on terrorism resulted in security authorities being granted the power to arrest and hold persons indefinitely without charge, to bypass access to U.S. courts and to transport suspects abroad to be tortured. Repressive state power is not unique to the U.S. — it accompanies minority entitlement. In Canada young indigenous men are jailed at rates comparable to those for young AfricanAmerican men in the U.S. In France, the descendants of people who came as guest workers from Turkey, North Africa and the Middle East grow up in suburban ghettos with few opportunities to earn decent income. Young men are locked in recurring cycles of low-paid marginalized work and unemployment. Frustration and despair boil into occasional confrontations with police. Pro-capitalist politicians, horrified by what they call anarchy, demand more police power and more imprisonment. They demand that repressive state power be used to keep the disentitled in their place. War and Minority Rule The reliance of capital on armed force is barely masked in international relations. In much of Africa, Asia, the Middle East and South and Central America majorities are poor and many are unemployed or underemployed. Elementary needs are left unmet. When capital provides work, it is at jobs that are heavy, gruelling, dangerous, dirty, monotonous and low-paid with little

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prospect for advancement. The surpluses their labour generates flow abroad. When internal repression is not enough to keep the dispossessed and impoverished in their place, capitalism turns to war, foreign military occupation and the terrorism of high-tech weaponry (Galeano 1988). War preceded capitalism; it is a consequence and a cause of minority rule. During the many millennia before class divisions — when family groups, bands and villages were largely self-sufficient, living off the plants and animals they gathered, fished and hunted — human solidarity may not have gone beyond groups that lived together. People may have been pleased to meet and mingle with strangers. If they were fearful, they may have chosen to flee rather than fight. As the lands most suited to human habitation came to be occupied, flight became less practical. People fought to keep or gain access to means of subsistence. How frequent were violent clashes in primeval times? Nobody knows. The domestication of animals and plants allowed people to regularly produce surpluses over and above their basic subsistence. Ruling classes emerged. Early ruling classes may have evolved within communities from families that had honed their military skills, or who claimed knowledge of the timing of seasonal change, of hydraulic engineering, plant and animal breeding, trade with other communities, medicines, rituals or the mysteries of the spirit world. Historically, ruling classes were often the descendants of herders and hunters who used their cooperative mobility and skill with horses and weapons to impose their rule over agricultural communities. Whatever their origins, ruling classes came to see war as a source of power, riches and expanding domains. They relied on the threat and use of armed force to appropriate surpluses as tribute, rent or taxes and to mobilize labour. For peasants, artisans, labourers and shopkeepers, war was usually tragic. Some young men may have looked forward to the adventure, but for most people war meant hardship, suffering and loss. Food stores, animals and buildings were requisitioned. Sons, brothers, husbands and fathers were conscripted, often never seen again. Trade relations were disrupted; markets and access to supplies were lost. Defeat meant that communities would be pillaged, crops and animals destroyed, cities razed,

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men slaughtered, women raped and children enslaved. Victory increased the arrogance and power of ruling classes. Capitalism emerged out of pre-existing class relations in Europe. Advances in navigation, shipbuilding and guns gave kings, princes and merchant-adventurers the means to seize control of trade in spices and other luxuries and to loot gold and silver from the Americas. The progress of capitalism is widely celebrated; its horrors are downplayed. In the Americas, the quest for private wealth led to the European conquest of a hemisphere. Gold and silver mines were worked largely by forced indigenous labour. War, diseases and enslavement reduced populations by 90 percent. Entire cultures and languages disappeared. Private profits from tobacco, coffee, sugar, cotton and cocoa came to depend on the labour of indentured servants from Europe and then on enslaved Africans. Millions of Africans were captured and transported abroad. Communities with productive agriculture, refined handicrafts and wide trading networks disintegrated. In the eighteenth century, a private British army seized control of India, the world’s second largest economy. It looted, privatized and impoverished a sub-continent renowned for its irrigation works, handicrafts, textiles, architecture, mathematics, art and wealth. In the nineteenth century, British opium cartels seized control of China’s trade. China, which had led the world in industrial technologies and was the world’s largest economy, sank into a hundred years of social disorder, civil war, famines and worsening poverty. The global expansion of capitalist entitlements made a few fabulously wealthy. Majorities, even in the imperial heartland, did not benefit. During the two generations after the British conquest of India in 1759, plunder and imperial profits doubled British ruling-class wealth. Great mansions were built throughout the U.K. The funds available for investment in machine industry increased exponentially. Meanwhile, independent artisans in industry after industry lost their livelihood. Women, children, and men had little choice but to seek work in dark and dangerous mills. Working-class housing, nutrition and living standards deteriorated. Chronic unemployment rose. Life expectancy fell to less than forty years.

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After laws banning unions as criminal conspiracies were repealed in the 1820s, trade unions grew in strength. Collective bargaining and political action began to improve wages and living conditions. Capitalists turned to steam power. Factories were relocated to towns where wages were lower. As working-class income lagged behind growth in production, capitalism looked to imperial expansion. Colonies provided industry with captive markets, lower cost resources and cheaper labour. By the beginning of the twentieth century most of the globe had been divided among imperial powers. Markets expanded for a time, but as colonies were progressively impoverished, global production capacity outstripped consumer income. With nowhere else to expand, ruling classes redirected industry to the production of mechanized weaponry and hurled their young men against others in two horrendous wars. The world wars disrupted international relations and existing capitalist entitlements. Faced with the all-or-nothing logic of war, ruling classes jettisoned capitalist principles. Market forces were replaced with state regulation, planning and rationing. Labour, resources and revenues were conscripted to meet war needs. Private properties were expropriated. Some well-placed war profiteers became fabulously wealthy. Millions of common people were killed in battle, millions more in bombings, sieges, and methodical massacres. The horrors of World War I led directly to the Bolshevik revolution in Russia and then to fascism in western Europe. After World War II, Soviet troops occupied eastern Europe. The Italian, German and Japanese empires were defeated. The French, British and Dutch empires were dismantled. Mao Zedung’s People’s Liberation Army took control of China. War as Capitalist Enterprise Capitalism survived. The U.S., whose cities and civilians had escaped the horrors of mechanized war, became the dominant capitalist power. Conscription and military spending ended the chronic unemployment of the 1930s and substantially increased corporate profits. After the war, Marshall Plan grants, loans and material assistance helped speed the reconstruction of capital-

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ist Europe, generating huge U.S. trade surpluses and corporate profits. By the year 2000, the U.S. was spending nearly as much on preparation for war as the rest of the world combined. It had six thousand military bases on its own soil and seven hundred abroad. The global reach of its military allowed U.S. corporations to exploit the globe’s cheapest resources. It gave U.S. financial interests the clout to compel poor countries to put the payment of debt service charges ahead of their people’s desperate need. It gave U.S. capitalists the security to transfer employment abroad. For U.S. capital, militarism is profitable. For ordinary U.S. citizens the costs are onerous. In 2006 the Defense Department absorbed 21 percent of the U.S. federal budget. Spending on the wars in Iraq and Afghanistan — accounted for separately — increased that to 31 percent. Adding the debt service charges, research, housing, construction, welfare, pension and benefit payments incurred by the military brings that to half of current U.S. federal spending. Military spending provides some jobs in nearly every congressional district, but nowhere near the number of jobs moved to countries with cheaper labour. Revenues spent on the military are not available for public services. Unlike most other prosperous capitalist countries, the U.S. does not provide its people with universal health care coverage. Urban infrastructure has been left to decay. The U.S. is falling behind in education and in nonmilitary research and development. The massive profits made from military spending have produced a powerful U.S. military-industrial-congressionalmedia complex with vested interests in promoting and advancing military industries, weapons of mass destruction and wars. Even tiny fractions of the hundreds of billions of tax dollars transferred to military contractors, when recycled as political campaign contributions, can and do tilt the balance in elections and legislation. By glorifying violence, militarism perverts culture. Movies, television and video games portray armed combat as the source of honour, glory, altruism and riches. Where is the honour and glory in bombing waterworks, bridges, schools and hospitals? Where is the altruism in the destruction of homes and the killing

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of women and children? Where is the wealth creation? In earlier times major wars were man-made disasters as destructive as floods, earthquakes or volcanic eruptions. Still, in some places imperial conquest did make transportation safer and cheaper, increasing access to markets and supplies. After imperial boundaries had been secured, Sumerian, Egyptian, Persian, Greek, Ch’in, Roman, Gupta, Arab, Mayan, Mongol, Inca, Ming, Ottoman, Spanish, French and British peasants, artisans, shopkeepers and merchants did for periods benefit from widened access to markets and materials. Now that trade is already global, victory brings no general advantage. Advancing technology has made war progressively more destructive. Lives are lost and means of production and infrastructure are destroyed. A few profit, but the imposition of property rights and exchange relations by force of arms provokes resistance. Trade declines. The overall capacity of humankind to meet wants and needs is reduced. Israel is a warfare state whose agriculture rests on the forced seizure of land and water supplies. Its economy depends on private profits from arms sales, security services and real estate development. Sixty years of expansion by force of arms has transformed Palestine and its neighbouring countries into lands of smouldering and explosive disaffection, poverty, unemployment and terror. In Somalia, nearly two decades after U.S. military intervention, the country remains locked in civil war, disorder and worsening poverty. By 2008 it had become the most dangerous centre of maritime piracy. A decade after nato bombarded Serbia into submission, Kosovo remained a centre of weapons smuggling and of drug and human sexual trafficking. In Afghanistan, seven years after U.S. bombing drove the Taliban out of major cities, millions remained in external and internal refugee camps. Millions more were unemployed with no means to support their families. Parents who did have money for clothes, books and fees were afraid to send girls and boys to school. Foreign occupation continued to provoke armed resistance. Air attacks and insurgency made reconstruction and investment impractical. Warlords dominated the countryside. Illicit opium poppies were the country’s main export. The insur-

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gency, U.S. bombing, destruction and disorder are spreading to Pakistan, a country of more than 100 million people. The promoters of military intervention claim that democracy and development are the goals. In the first four years of intervention in Afghanistan, Canada spent $6 billion on its military and $741 million on aid. The U.S. and nato spent $80 billion on military action and less than a tenth of that on reconstruction and development. The financial aid reaching Afghans is even less. Eighty percent of aid money is paid to businesses, agencies and aid workers from nato countries. Foreigners employed by aid agencies are paid salaries comparable to what they would be paid in their countries. They are provided with the best available housing and often with new suvs. Local people employed by occupying authorities and foreign agencies are paid far less, as little as $2 a day. Contrary to the rhetoric of humanitarian intervention, the governments that sent troops to Afghanistan are committed to capitalist entitlement, to expanding corporate control of resources and markets and to providing capital with cheaper labour (Pilger 2006: 351–414). The war in Iraq increased the profits of military contractors. Corporations, including Lockheed Martin, Haliburton, the Carlyle Group, Bechtel, Fluor and Blackwater received billions of dollars in no-bid cost-plus contracts to provide missiles, airplanes, armoured vehicles and private mercenaries, to transport and feed troops, to repair recurring damage to oil fields and pipelines and to construct airfields and walled U.S. compounds. They have provided security services, trained Iraqi police and soldiers, organized elections and advised provisional authorities. Their profits are military secrets, subject to little or no public scrutiny. What is certain is that U.S. taxpayers foot the bill. The costs for the people of Iraq are beyond measure — Saddam Hussein did not have weapons of mass destruction; the U.S. military does. In the first six weeks of the war, more than thirty thousand bombs and twenty thousand guided missiles, 67 percent of the total ever made, were dropped on Iraq. Once the country was occupied, infrastructure not destroyed was left to decay. Public services all but disappeared. Hundreds of thousands of lives were lost. Millions fled occupying forces and insurgent

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attacks. Disorder and chaos prevented millions more from meeting elementary human needs (Klein 2007: 389–448). What justified these war crimes? For the supporters of U.S. imperialism, it was oil. Iraq has large undeveloped low-cost oil reserves. If U.S. petroleum companies could seize Iraq’s oil, their profits would be immense, in the trillions of dollars. That is far from what happened. Instead of opening additional sources of supply, foreign occupation and resistance reduced Iraq’s oil exports and made the development of reserves impractical. Other governments in the region, fearing the wrath of their own people, are less willing to deal with U.S. oil companies. Even if the occupation had given U.S. transnationals control of Iraq’s oil fields, U.S. consumers and industry would gain little advantage. Global capital recognizes no protected markets. The capitalist drive to maximize profits means that transnational corporations sell wherever prices are highest. Aside from the wealth-holders who profit from war, everyone loses. As a system, capitalism continues to look to militarism because armed force remains the source of minority entitlement and the ultimate means to cheapen labour. Honduras, the second poorest country in the Americas, provides a recent example. The profits of capital in Honduras are based on cheap labour in coffee and banana plantations, mining and export processing. In 2009 a military coup removed democratically elected President Manuel Zaleya from office and the country. President Zaleya was organizing referendums to change a constitution that gives control of state institutions to wealthy oligarchs. He supported Venezuelan President Hugo Chavez’s plans for regional economic development, and he had raised the minimum wage. The coup was condemned by Barack Obama and every government in the Americas, but the U.S. military — which has significant bases in the country — cooperated with the usurpers. U.S. and Canadian export processing, plantation and mining corporations openly supported the military seizure of power. The willingness of capital to cheapen labour by using armed force was blatant in Haiti, the poorest country in the western hemisphere. In 2004, former members of the disbanded Haitian army had crossed the border from the Dominican Republic and

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seized several Haitian cities. On February 29 armed forces from the U.S., France and Canada kidnapped and forcibly exiled Jean Bertrand Aristide, who had twice been elected president by wide margins. Haiti’s predatory elite and transnational corporate interests hated his government for abolishing Haiti’s brutal army, raising minimum wages, opposing privatization and dramatically increasing spending on schools teaching in Kreyol, the language of the majority. After President Aristide was forcibly removed from the country, the permanent members of the U.N. Security Council, acting as accessories after the fact, endorsed the coup. Occupying troops were brought in from Brazil, Chile, Jordan and Sri Lanka. Thousands of elected officials, the existing police force and most public employees were dismissed. Hundreds were arrested. Schools closed. Public transportation was abandoned. Non-government organizations directed by foreigners took control of what remained of education, health care and other public services. Minimum wage laws were repealed. The country that was already the poorest in the western hemisphere became poorer. In conservative market theory, investors lured by cheaper labour and higher profits should have rushed to Haiti. Instead, wealth-holders fearing for their lives shuttered their businesses. The country descended into a hell of worsening poverty, blatant corruption, kidnapping and robbery. In the following years, a country forcibly prevented from governing itself was left defenceless against the most damaging hurricanes, floods and earthquakes in its history. The mandate of occupying U.N. armed forces was rigidly limited to security. International intervention initiated by capitalist interests left the Haitian people with no effective national government, no stuctures of community organization, and no means to protect or rescue themselves from the forces of nature (Engler 2005; Halward 2007). Externalized Environmental Costs Capitalism gives wealth-holders’ interests precedence over human and environmental well being. Private capitalist entitlement allows factory ships to catch fish at rates that exceed natural

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reproduction. In the last fifty years, half of the planet’s old-growth temperate forest was clear-cut or burned. Mining, manufacturing, power generation and agriculture are allowed to contaminate soils, lakes, water tables and oceans. In the drive to increase profits, petroleum development, beef production, air travel and automobile usage have continued to expand despite the accumulation of atmospheric carbon dioxide and the acidification of oceans. Scientific evidence now indicates that climate change will become irreversible and sea life as we know it may disappear within a century unless fossil fuel usage is reduced — by 80 percent or more in the most prosperous countries. So long as economic activity is motivated by private profit, a reduction on that scale would cause widespread unemployment, impoverishment and disorder. Failure to act is likely to be more catastrophic. Yet governments committed to capitalism propose little more than tweaking markets, trading pollution credits or raising carbon taxes. The capitalist market is the problem, not the solution. The competitive drive to maximize profits makes capitalist enterprises dependent on low-cost, readily available energy supplies. Cheap petroleum has made it practical to replace human labour with machines. It has made it practical to move employment to places where labour is cheapest and to ship goods by sea and air nearly anywhere. The profits that can potentially be made from green investments are minuscule compared to the profits capital makes by exploiting resources at unsustainable rates and externalizing environmental costs. The capitalist response to the rising cost of conventional oil reserves is not to cut back but to turn to coal, tar sands and shale. Burning coal generates more pollution. To extract oil from tar sands, vast areas of forest and grasslands are strip-mined. Soil cover and vegetation are removed. Greenhouse gas emissions are triple those produced in the production of conventional oil. For every barrel of oil, three barrels of water and two tons of sand are used and polluted (Nikoforuk 2009). Extracting methane from coal beds and natural gas from shale requires similar amounts of energy and also contaminates water tables, surface water, soils and the atmosphere.

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Rising oil prices have made fuel from ethanol more profitable, but ethanol, whether from corn, cane, soy or palm oil, requires synthetic fertilizers (petroleum by-products) as well as substantial volumes of energy in planting, harvesting, refining and transporting. Like gasoline, it emits carbon dioxide into the atmosphere when burned as fuel. Meanwhile fuel for machines becomes more profitable than producing food. With government subsidies nuclear power can be a significant source of profit for engineering companies and utilities. Its ties to weapons and national security shroud its real environmental and economic costs in secrecy. We do know that uranium mining brings toxic radioactive tailings to the surface. Refining uranium into nuclear fuel requires large amounts of energy, much of it from coal, and leaves more toxic radioactive waste behind. The production of cement and steel and the energy required in the construction of nuclear power plants releases tons of carbon dioxide into the atmosphere. The cost of storing radioactive tailings and spent fuel for tens of thousands of years may require more energy than was produced (Harding 2007). Capitalist industrial agriculture also rests on externalized environmental costs. Synthetic fertilizers, chemical pesticides and genetically modified seeds can produce high yields, but microorganisms that naturally replenish soil nutrients are destroyed. Birds and insects that controlled pests are poisoned. The health of farmers, workers, their families, their neighbours and consumers is compromised. To maximize profits from meat production, chickens, turkeys, ducks and pigs spend their brief unnatural lives confined to cages. Cattle are crowded in pens where they feed not on grass, their natural diet, but on mash and pellets manufactured from corn, soy and animal by-products. To reduce the spread of disease and speed weight gain, animals are routinely treated with antibiotics, promoting the evolution of antibiotic-resistant organisms. So much waste is produced that run-off has become a significant health concern, polluting streams, rivers, lakes and water tables and expanding dead zones in coastal estuaries. Capitalist salmon farms are based on unnatural crowding and antibiotics. Accumulated waste contaminates surrounding waters. Sea lice, spread by escaped farm fish, threaten the survival

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of immature wild salmon. Unlike the fresh-water, plant-eating fish that have been farmed in Asia and Europe for millennia, salmon are carnivores. Two to five pounds of fish converted to meal must be provided for each pound of farmed salmon. To make it profitable to transform more fish into less, drift nets snare all species in their path. Bottom trawlers do the same as they churn up the seabed. Entire species are fished to extinction, marine habitat is destroyed, and coastal people in South America, Africa and South Asia lose needed food. Farmed tiger prawns also consume two to five pounds of fish for each pound of product. Prawn farms are located on Asian coasts and islands, on land that had provided food, such as rice for local consumption. The land flooded with seawater is fit for prawn farming for ten or fifteen years. It then becomes too contaminated for prawns and too saline for the agriculture that had sustained people in the past. The private companies that owned the prawn farms may have recovered their investment with a good return, but local people will have lost productive lands. Mining is another major source of capitalist profit and of severe local pollution. A ton of copper produces four hundred tons of waste. An ounce of gold leaves five million ounces of waste. When costs can be externalized, the cheapest way to extract precious metals is heap-leach processing. Cyanide solutions are poured or sprayed over heaps of ore. The metalcyanide compound is removed and processed. Toxic tailings are left in nearby ravines, usually behind earthen dams, or pumped into rivers, lakes or oceans. As the metal is extracted and sold, shareholders and top executives draw their dividends, salaries and bonuses. Once ore can no longer be profitably processed, the mine — incorporated as a separate company — will be allowed to fall into bankruptcy. Prudent shareholders and executives will have invested earnings elsewhere. Clean-up costs, which can exceed the costs of extracting the metal, are left to local communities or to regional or national governments. Clear-cutting — removing all trees, the mature, the immature, the prized and those of little or no exchange value — maximizes return on investment and minimizes labour costs. After a forest is clear-cut, timber companies can take their profits and equipment

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and move elsewhere. In some places, a clear-cut forest opens new opportunities for capitalist profits in cattle ranching and plantation crops. Meanwhile, diverse and distinctive species of plants and animals disappear, opportunities for gathering, hunting, tourism and recreation are lost. Watersheds are damaged; agricultural lowlands are flooded; exposed soil dries and blows away; streams are silted; myriad known and unknown organisms, plants and animals lose their habitat (Engler 1995: 55–59). Capitalists are not the first ruling minorities to disregard environmental consequences. Sumerian, Persian, Greek, Mayan, Pueblo and Easter Island ruling elites continued to divert waterways, expand irrigation works and level forests until the material foundation of their class power and privileges had been destroyed. What distinguishes capitalism is the escalating pace and global scope of environmental damage (Wright 2004). Consumerism Capitalism has made consumerism the opiate of the masses. The competitive drive to maximize profits pushes capitalist enterprises to expand production while cutting employment and wages, compelling workers to produce and consume more just to maintain existing employment and living standards. For wage and salary workers, buying and consuming are consolations for enduring workplace dictatorship, for spending most of our waking hours doing what others command. Are the masses to blame? Capitalist entitlement denies most people a vote in economic decisions. Consumer goods are manufactured by capitalist industry, consumer wants by corporate advertisers and the media. Billions are spent to encourage conspicuous consumption. Obsolescence is deliberately designed into products. The private automobile is an archetype of manufactured wants and needs, of conspicuous consumption and of planned obsolescence. For nearly a hundred years, it has sustained expanding production and profits in assembly and parts manufacturing, as well as in steel, plastic, rubber, glass, upholstery, advertising and insurance companies, credit providers, suburban development and of course the petroleum industry — from exploration

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to refining, distribution and service stations. Transportation based on private automobiles encourages urban sprawl, the profligate paving of lands and the pollution of the air, soils and waters. It bears a large responsibility for the reckless exploitation of mineral and petroleum resources. If per capita automobile use in all continents reached North American levels, petroleum consumption and atmospheric pollution would increase ten times or more. Supporters of capitalism make much of the unintended consequences of government decisions. The personal automobile is responsible for more unintended and damaging consequences than all government decisions combined. It is a major source of greenhouse gas emissions and the leading cause of premature death and crippling injuries, killing some forty thousand people a year in the U.S. alone. The financial cost of traffic accidents exceeds the combined costs of all criminal activities. Automobiles have become increasingly luxurious, air conditioned with state-of-the-art sound systems, global position indicators and fingertip access to electronic communication, but driving is not a walk in the park. It is an inherently stressful acquired taste. While at the wheel, drivers are a fraction of a second away from loss of control and disaster. Attention must be focused on other vehicles, pedestrians, traffic lights and lines painted on pavement. The time spent nearly motionless while driving leaves muscles unused, turns nutrients into body fat and clogs arteries with cholesterol. Is that a price worth paying for what appears to be the freedom to go where you want when you want? Divide the total yearly distance travelled by the working time it takes to pay for a car, to maintain it, to pay for parts and repairs, to buy fuel and insurance, plus the time spent at the wheel, moving, creeping, waiting in traffic gridlock. When all that time is added up, the average urban car owner will have gone no more than four miles for each hour spent — the speed of a healthy walk. Of course, most car owners have little choice. Public transportation in most places is frustratingly inadequate. For many there is no other practical way to get to work or to meet daily family needs.

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Population Growth In the thousand years from 500 to 1500, before the rise of capitalism, Europe’s population had not even doubled, increasing from 27 million to 50 million. In the next three hundred years, from 1500 to 1800 — during the rise of mercantile capitalism and the beginnings of steam-powered industry — Europe’s population nearly tripled, reaching 144 million. Then, in the 120 years to 1920 — as industrial capitalism destroyed most subsistence production and individual enterprise — Europe’s population tripled again, to 486 million (Cipolla 1972: 36–41 and 1973: 699). Rapid population growth in early capitalist Europe would not have been possible without the increasing productivity of land and agricultural labour. The use of animal fertilizers and the turning of soils with steel ploughs pulled by oxen or horses had been gradually spreading in Europe since the Middle Ages. After 1500, new crops from the Americas, especially corn and potatoes, dramatically increased the supply of food that could be harvested per acre. Rising agricultural productivity could have meant improved living standards for existing populations. Instead, advancing capitalist property relations meant enclosures, dispossession, impoverishment and rising populations. People were being driven off the land into towns and cities in search of work, where wages often did not cover bare subsistence. Entire families were crowded into single rooms in filthy tenements, breeding grounds for mindnumbing vices and epidemics of infectious diseases. Preventive public health measures were non-existent. The medical care of the time, based on bleeding, leeches and mercury, did more harm than good. Gin, the readily available cure-all, was cheap. Living conditions continued to worsen until the 1830s, but populations grew rapidly (Lis 1979). By the beginning of the twentieth century, as life expectancy was approaching present levels, European populations stabilized. Laws limited hours of work for women and children. Factories were inspected for safety. The growth of trade unions led to rising wages. Public health measures slowed the spread of contagious maladies. The paleoconservative Thomas Malthus (1766–1834)

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had it backwards: population does not rise rapidly when workingclass living standards improve, it declines. The imposition of capitalist property relations on other continents had similar consequences. Before the nineteenth century, populations in India and China were more or less stable, growing slowly for millennia. In the initial periods of disorder after European conquest, populations fell. As private capitalist entitlement replaced customary rights, villagers were dispossessed and impoverished. Populations grew rapidly. Then, in the late twentieth century, after a generation of political independence, birth rates fell below replacement levels in China and were not much higher in India. Now, the most rapidly growing populations are in Africa, the Middle East, central Asia and Latin America. In Africa rural people are still losing customary rights to subsistence to capitalist entitlement. The continent’s surpluses are being exported as profits and debt service charges. The Middle East and western Asia, rich in petroleum resources, remain theatres of Euro-American imperial and colonial adventures, their populations and markets separated by boundaries imposed by the victors of World War I. Surpluses flow abroad. Until the late twentieth century little was invested in domestic industry. In the poorest countries of Latin America lands that had provided subsistence continue to be expropriated in the interests of exporters. Before capitalism, when people depended on customary rights to subsistence, available arable lands, waterways, forests and resources naturally limited population growth. Gender divisions of labour were practical. Men did much of the seasonal heavy work of ploughing and maintaining irrigation ditches, fences and buildings. They travelled with herds, apprenticed in crafts and fought wars. Women were responsible for most routine daily labour. They planted and harvested garden crops, looked after farmyard animals, gathered firewood and water, prepared meals, made and mended clothing, attended to the health needs of their families, produced handicrafts and exchanged their family’s produce in local markets. Because the work done by women was essential for daily family survival, and since childbirth and infant care limit the time women spend on other tasks, family size was

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in one way or another restricted. Capitalist property relations have ended nearly all customary rights to subsistence. People driven from fertile lands are left to survive as best they can. Some, struggling with starvation, try to eke out a living for a few years by grazing animals on fragile soils, logging hillsides or burning brush to plant crops. (The damage to ecosystems caused by the desperately poor can cover wide areas, but it is small, on a global scale, compared to the damage done by capitalism.) Many of the dispossessed migrate to unfamiliar urban centres. Women housed in tenements or crowded shantytowns have little access to productive subsistence activities. Young women may find paid employment in assembly plants working twelve- to sixteen-hour days, six and seven days a week, a pace that few can continue for more than a few years. Otherwise women and men are faced with high rates of chronic unemployment. Many seek solace in religions that condemn the licentiousness, competitive greed and conspicuous consumption of capitalism. While claiming to spiritually uphold traditional ways, conservative religions that defend patriarchal authority and oppose workers’ rights reinforce wealth-holders’ entitlement. Women are treated as the chattels of fathers, husbands, brothers and sons. Marriage is made an institution for the production of children. Numerous children are more mouths to feed, but for the disentitled, they can be hope. For religious elites, numerous children mean larger flocks. For capitalists, numerous children mean more cheap expendable labour. Capitalist dispossession and privatizations have alienated people from the natural world, but returning to past systems of minority entitlement is neither practical nor a solution. Hereditary aristocracies, theocracies, meritocracies and hegemonic parties as well as capitalists act in their narrow interests. Now in a time of global interdependence and socialized labour, human well being will be explicitly served only when everyone is equally entitled to participate in economic and political life. All forms of minority entitlement including capitalism are divisive and destructive anachronisms.

2 Economic Democracy Ending Minority Rule By socializing most labour, capitalism has created a class of people with the capacity to democratically end wealth-holders’ entitlement and all forms of minority rule. Wage and salary workers now include men and women who fashion and assemble things with machines, people employed in public and private services, retail and wholesale trade, administration, transportation, finance and agriculture. It includes all who support themselves through their own labour: day labourers, professionals and the self-employed — shopkeepers, owner-operators of machinery, artisans and artists, working farmers and sharecroppers. The working class includes indigenous people and others who provide for themselves outside the money economy as well as everyone who depends on wage and salary work, full-time parents, the marginally employed, the unemployed and students. People who depend on income from their labour, the overwhelming majority, will not overcome minority rule until everyone is entitled to participate as equals in social labour and in the direction of economic life. Perhaps minority entitlement did advance human well being when most people laboured most of their waking hours to provide their families’ rudimentary needs. The right of minorities to appropriate surpluses produced by others did free some from the necessity of daily toil. It gave them the means and time to organize and command the labour required to construct monuments and irrigation works, to plot movements of the stars and to develop systems of record-keeping, computation and writing. It allowed them to organize, define and proscribe human aspirations, beliefs and fears. Most of all, freedom from 45

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daily toil allowed ruling classes to refine their military skills, to impose their will on communities, to control trade routes, to build empires, to plunder and to appropriate tribute. Leisure is no longer the exclusive privilege of minorities. The steadily rising productivity of social labour coupled with minority entitlement has made involuntary leisure a more serious problem. In many countries, a third or a half or more of the population are unemployed or underemployed. If every man and woman on all continents had access to employment, current global production levels could easily be maintained with a regular work week of twenty-four hours or less. Everyone everywhere could have the time and income to participate in community life, to pursue studies and to acquire whatever technical, professional or artistic skills they choose. Economic democracy, the working-class alternative, would end capitalism and minority entitlement; it would not turn the world upside down. We cannot know how people will reorganize social life once minority rule is a distant memory, but workers as a class have no interest in abolishing wage labour, money, industry, technology, markets or global exchange. The working-class goal is to replace competitive minority entitlement with equal human entitlement, capitalist ownership with social ownership, and master-servant relations with workplace democracy. The working-class alternative could be called communism or socialism, but both are now identified with state ownership and top-down central command. It could be called real democracy or social democracy but the former is vague, while the latter has come to mean support for moderate reforms within capitalism. Economic democracy is preferable because that is what is meant. “Economic” from ancient Greece refers to the beneficial management of resources and labour in households, estates or cities. Democracy, the opposite of oligarchy — rule by the rich — is supposed to mean rule by the people. Equal Human Entitlement Economic democracy begins with equal human entitlement. Capitalist title is exclusive and negative. It is the right of wealth-

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holders to profit from the labour of others without interference from communities, workers or the state. Equal human entitlement is inclusive and positive. It is the right of everyone to a fair share of social products, to education, skills training and employment opportunities. It is the right of all inhabitants to a voice and equal vote in their communities’ economic decisions. Equal human entitlement does not mean that workers will own enterprises. Workers’ ownership under capitalism can protect jobs and provide workers with experience in the democratic direction of social labour, but it remains a form of private competitive ownership that pushes worker-owners to focus on narrow immediate interests. By tying workers’ income to the rise and fall of enterprise net revenues, worker ownership pushes workers to continue the non-sustainable exploitation of resources and the externalizing of environmental costs. It gives majorities in an enterprise an interest in moving some employment to places where labour is cheaper (Schweickart 1996). In a world of global interdependence where most goods and services require the cooperative coordinated labour of numerous occupations in many places, no particular occupation or group of workers can reasonably claim exclusive entitlement to means of livelihood or to net revenues. People who manufacture final goods, extract resources, transport and distribute products, construct and design means of livelihood or record and allocate income have an equally legitimate claim on socially produced values. So do people employed in education, art, entertainment, protecting communities, medical care and full-time parents. Everyone who engages in providing goods or services for others, or who would if they could, has a legitimate claim to a voice and equal vote in the direction of their communities’ means of livelihood. Numerous Owning Communities Supporters of capitalism have succeeded in identifying state ownership with power that stands above the people. State ownership in countries with democratic rights is more transparent, more accountable to the public than private capitalist ownership.

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Still, state ownership gives government officials, party leaders or designated experts the right to decide how to direct economic activity. With social ownership, the inhabitants of villages, towns, urban neighbourhoods, cities, metropolitan regions, provinces, states, nations, continental unions and perhaps the globe will democratically direct means of livelihood. Local communities could own smaller manufacturers, service, construction, retail and transportation enterprises, as well as lands, buildings and most rental housing. In small countries, most industry may be nationally owned. In larger countries metropolitan regions — major cities including the surrounding countryside, perhaps provinces or states — will likely own most manufacturing, resource-processing, warehousing, wholesaling, communications, finance and transportation enterprises. Federal or national governments may be responsible for railways, airlines, banks, insurance and communications systems, as well as some resource and manufacturing enterprises. Continental and global communities may own communications and transportation systems. Alternatively, transnational enterprises could be federations of autonomous national, regional or continental enterprises. Community ownership is not difficult to imagine or to organize. Under capitalism, shareholder ownership is a legal fact, yet shareholders can live anywhere and can own millions of shares or only one. With community ownership, all inhabitants will be equally entitled to participate in setting the priorities and policies of the community’s enterprises. In small communities, decisions could be made in meetings of all inhabitants. Larger communities like cities, regions and nations could appoint or elect directors. Meetings would be open to all. Where there is general agreement, decisions would be left to the people doing the work. Where there is disagreement, issues would be debated in open community meetings. Decisions could be made by elected delegates or by referendum ballot with one vote for each inhabitant. If democracy is defined as the right of people to directly participate in making decisions, an ideal owning community would be small enough, fifty thousand people at most, so that everyone could meet in one place. Local communities will provide housing, seasonal foods, personal and public services, transporta-

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tion and entertainment. However, small communities do not have the markets or all the supplies required to sustain most social labour; if democracy is defined as the right of people to make the decisions that most affect their well being, a community must be substantially larger. Metropolitan regions are small enough so that all inhabitants have an immediate and direct interest in internal economic activity. They are large enough so that industries and skills are sufficiently diverse to allow inhabitants to effectively respond to changes in internal and external market conditions. Although not everyone in a metropolitan region can come together in one place, meetings could be held in neighbourhoods, wards, towns and smaller cities. Issues can be discussed, positions formulated and votes taken. Deliberations can be broadcast on cable television and made available to all on the internet. Delegates could be elected to regional assemblies. Where there is little controversy, delegates could make decisions by majority vote. Where people demand it, decisions would be made by referendum ballot. Under capitalism, politicians are dependent on funds from wealth-holders. When communities own means of livelihood and surpluses are democratically and transparently allocated, representatives will in fact and theory be dependent on the communities that elect them. Communities may experiment with different forms of representation. Some could decide to mandate their representatives to take the majority position. Some could choose proportional representation. Some could revive the ancient Greek practice of choosing representatives by lot or rotation. Whatever procedures are adopted, the deliberations of representatives will be fully transparent. Economic democracy will be based on the voluntary interdependence of communities, on global cooperation and on human equality. Everyone will be entitled to participate in making decisions in concentric circles of smaller to larger communities. Some of the decision-making authority now held by nation-states will shift to metropolitan regions, cities, towns and neighbourhoods. Some will pass to continental unions and the entire human community. Two or more communities would be free to formulate common policies or make mutually beneficial agreements. No

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level of government will have absolute authority. Local communities will be responsible for day-to-day well being. They will have a voice and veto power over public services, economic development and resource exploitation within their boundaries. Metropolitan regions, states and provinces will likely administer education, health care and other public services, as well as civil and criminal law. Federal or national governments will provide most of the funding for public services and for the elimination of disparities within their boundaries. They will likely continue to be the primary law-making institutions, and along with continental and global institutions, will establish and enforce social and environmental standards. Perhaps 30 percent of social revenues will be assigned to local communities, 30 percent to metropolitan regions, 30 percent to national governments and 10 percent to continental unions and the global community. Although nation-states are now viewed as the obvious centres of social power, these arose as institutions of capitalism. Nation-states provided wealth-holders with the authority and armed force needed to privatize commons and evict villagers, to end the power of guilds and to replace feudal privilege with the rights of wealth pure and simple. Money minted and printed by nation-states provided reliable and expanding means of exchange. The naval fleets and armies of nation-states gave European wealthholders the means to engage in imperial plunder, the slave trade, plantation agriculture and colonial settlement, and the power to dominate international markets. By the late twentieth century, wealth-holders everywhere had come to depend on transnational corporate profits. The legal powers of smaller nation-states came to be seen as barriers to globalization and impediments to profit-maximization. Having no interest in international democratic rights, wealth-holders turned to institutions that directly serve transnational corporate interests such as the U.S. military, nato, the European Union, the International Monetary Fund, the World Trade Organization, and the U.N. Security Council. With economic democracy, nations will continue to be centres of linguistic, cultural, political and economic activity. In some regions, people speaking the same language but living in

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different countries may develop common economic and cultural institutions. Nations and communities within nations will be free to protect and modify their cultures. Aboriginal rights to territories, waterways and resources will be respected and indigenous people, like everyone else, will be fully entitled to participate in the political and economic affairs of broader communities. Regional unions in Africa, Latin America, the Arab world, central Asia and Europe may organize common markets. A democratized United Nations, or an entirely new institution of global human solidarity no longer controlled by a handful of privileged powers, may be given the authority and provided with the revenues required to deal with global problems. Individuals will be free to move where they choose with the right to participate as equals in communities wherever they reside. Mass migrations and the resulting disruption of families and communities will end, since these are desperate reactions to the agglomeration of capital and employment in some places and impoverishment and unemployment in others. As inequalities are ended, immigration and emigration are likely to move toward balance everywhere. Gated neighbourhoods and walled nations will pass into history. Workplace Democracy When men and women must submit to dictatorship at work, democracy is superficial, little more than ceremonial. The workplace is where we spend most of our waking hours. In economic democracies, people in all occupations will have a voice and equal vote in democratically directing their labour time. Communities will own enterprises, establish policies, audit revenues and expenditures and determine whether enterprise goals are being met. They will appoint financial officers and auditors and appoint or elect chairs of enterprise boards. They will provide inhabitants with the information needed for the transparent democratic direction of social assets. Workers will elect their supervisors and managers up to and including chief operating officers and will be responsible for deciding how best to meet community goals. Divisions of labour will continue, but master-servant relations

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will end. These are a feature of capitalism intended to make workers constantly aware that their working time and the products of their labour are the property of wealth-holding minorities. Master-servant relations discourage more than encourage productive social labour. Enthusiasm for work is undermined when people must submit to workplace dictatorship, suffocating surveillance, petty power trips and bullying. People who are compelled to put their employers’interests ahead of their families, co-workers and communities become alienated from work. They seek fulfilment elsewhere, most commonly in consumption, which of course profits capital. When labour time is directed democratically by people doing the work, procedures, processes, machinery and equipment will be redesigned to eliminate needless stress, noise and dangers to health and safety. As the travail now associated with labour ends, people will be motivated to work smarter and more productively. Even now, despite the alienation of capitalist entitlement and master-servant relations, doing work well, gaining and holding the respect of peers and contributing to the well being of communities are enduring sources of personal satisfaction. Workers employed in the provision of public services will also democratically direct their labour time. Under capitalism, authority in public employment is rigidly hierarchical, treated as if it were proprietorial. Governments jealously guard cabinet and executive secrecy. Public employees — aside from a few top advisers — are rarely consulted. In economic democracies every man and woman will have the right to participate in setting public policies and priorities. Communities will elect or appoint officials responsible for protecting social assets and for carrying out community policies. Workplace democracy in public employment will bring issues and contending interests into the open, into the forum of public debate and democratic decision-making. Public employees are a cross-section of communities: building cleaners, clerical workers, professionals, trades people and truck drivers. The diversity of occupations and interests will make workplace democracy a powerful check and balance against the misuse of public assets. Individuals and self-serving groups will no longer be able to hide

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behind state secrets to direct public resources in their own narrow interests. Wage and salary workers in all industries and occupations will be entitled to bargain collectively and freely associate in unions of their choice. Sectoral, industrial and occupational unions will negotiate wage rates and join with other unions in setting wage differentials within and among occupations. Unions will represent individual workers with grievances, will take part in setting workplace health, safety and training standards and may engage in political lobbying on behalf of the workers they represent. All occupations will in effect become democratic and self-regulating. Unions may not always agree with the policies of communities. When they disagree, they would have the right to withhold their labour, to strike and picket. Communities that disagree with the way workers are organizing their labour could refuse credits or close enterprises. Most conflicts between communities and groups of workers will be resolved before that point. Since most people in owning communities will be wage and salary workers and all workers will have voice and vote in their communities’ decisions, relations between workers as inhabitants of owning communities and workers as workers will not be inherently antagonistic. Most disagreements will be resolved amicably through democratic debate and compromise. Democratic Media Under capitalism, majorities are passive recipients of messages, bombarded with interminable appeals to choose among similar products sold by similar corporations. Commercials are interspersed with celebrity voyeurism, crime and violence. Professional sports are passion plays that reinforce the ruling-class need to distinguish winners from losers: minuscule differences in strength, endurance, hand-eye coordination, determination and luck separate glorious victors from abject losers. Nature programming aims to persuade viewers that wild animals, like corporate executives, aggressively compete to assert place and position. History is war after war. News, information, discussion, entertainment, drama, art and music that annoy advertisers, that

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question capitalist entitlement or that draw attention away from the next commercial are avoided. In economic democracies, the media will be socially owned and democratically regulated. Television and radio networks may be owned nationally. Towns and cities could own newspapers and movie houses as well as television and radio stations. Villages, neighbourhoods, unions, professions and ethnic groups, as well as athletic, artistic and political cooperatives, could have their own cable channels, tv or radio programs, websites, magazines, book publishers, film clubs and pages in local newspapers. Boards of directors of community-owned media will be elected. Regular public hearings could be held to ensure that majority and minority opinions and interests have fair access to the media. Under capitalism, freedom of the press means the right of corporate owners to maximize profits for their shareholders, executives and advertisers. In economic democracies, freedom of the press will mean the right of everyone to participate in formulating their communities’ messages as well as the right of everyone to all information required for the democratic direction of political and economic life. Where there is advertising — paid messages — these will be regulated by communities. The profits of corporations producing cars, alcoholic drinks, pop, video games or junk food will no longer take precedence over the health of people or the environment. Perhaps communities will redirect the skills of advertisers to the promotion of human equality and solidarity, healthy living, public transportation and sustainable consumption. With numerous owning communities and the diversity of occupational and community interests, the media in economic democracies will be a source of tolerance, pluralism and individuality. News, educational programs and most entertainment will be provided as public services. Programming aimed at narrower audiences could be pay-per-view or covered by cable fees or subscriber pledges. With numerous owning communities, independent producers, artists, journalists and documentary filmmakers will have more opportunities than at present. Readers, listeners and viewers will have more choice in news and entertainment; art, creativity, culture and diversity will flourish.

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Workplace democracy will encourage professional ethics, investigative reporting and artistic integrity. The diversity of support occupations will provide counterweights towards any tendency to narrow, elitist professional self-interest by reporters, editors, anchors or managers, helping to make the media open to transparent public scrutiny. Education for Equality Education will be a human right. Education standards will be set by broader communities, while teachers and parents in local communities will cooperate to develop approaches that best meet their needs and circumstances. Children will have the right to learn at their own pace for their own sake. Under capitalism, higher grades are used to justify minority privilege. Lower grades are used as proof that majorities deserve less. With economic democracy, the speed at which children learn relative to others will not be used to separate elites from the masses. Pupils who excel at particular subjects — mathematics, languages, music, science, trades or athletics — will have opportunities to focus on these from an early age. Everyone, during the course of their lives, will be provided with opportunities to develop and refine their personal interests and skills in ways that promote human equality, individual well being and democracy. From the earliest age, children will be encouraged to understand and respect the value of all forms of labour. Mental labour will no longer be treated as superior to manual labour or qualitatively different. Nearly all labour is both mental and manual. Without thinking, a person can no more dig a ditch than design a front-end loader. Younger students may be paid to work two or three hours a week at simple tasks like planting or watering flowers or shrubs, weeding or cleaning school yards or public boulevards. Teenagers could be paid the prevailing wage for six or eight hours a week working in local enterprises or in social or environmental services. Young men and women could work in more physical occupations. As they grew older, they would be encouraged to learn specialized skills, trades and professions. The transparency of economic democracy will make the

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knowledge and techniques of all skills and disciplines matters of public record. All occupations, sciences and arts will be open to anyone who has the aptitude and takes the time to learn and develop skills. Medical training, for example, could be based on a combination of working apprenticeships and formal education. A young man or woman could start as a hospital helper. Then, alternating six months’ work with six months’ formal schooling, he or she could move on to become a practical nurse, a cook, a medical technologist, a registered nurse, a pharmacist, a nurse practitioner, a midwife, an occupational health expert, a doctor or a medical specialist. The same approach could be taken in industry. A young person could begin as a helper, move on to become a machine operator, take classes to become a skilled tradesperson and then take further classes to become a professional engineer or systems analyst. Adults will be encouraged to continue their formal education, perhaps with paid leaves. Some people will prefer to do the same work throughout their lives. More will likely advance their skills and responsibilities within an occupation or industry. Others will shift from occupation to occupation, seeking a variety of work experiences. Some will prefer to work shorter hours and pursue education unrelated to their work. Retirement would likely not be so abrupt. A person who wishes to retire with full pension, perhaps after thirty years of work, would have that right. People could also continue working at their job, full- or part-time; or if they choose, they could retrain for entirely different work. Regardless of age, everyone will have the right to advance their skills and education. Aside from providing specific skills and knowledge, education will focus on providing everyone with capacity to investigate, research, write reports and speak their views on social issues. In practice, most people most of the time will be preoccupied with their personal lives. Probably only a minority will take social initiatives, but those who do could come from any occupation. No minorities, no meritocracy will have a monopoly on information, communication or decision-making.

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Wage and Salary Rates When men and women in all occupations are equally entitled to participate in their communities’ political and economic life, the value of every person’s labour time will become equal. This does not necessarily mean that everyone will be paid the same. It does mean that entry-level wages and salary differentials based on education, training and practical experience are likely to be much the same in all industries. It is possible that after economic democracy has been long established, when all are accustomed to being equally entitled to participate in economic decisions, when human needs and wants can be met with a substantially shorter work week, after social labour has become as pleasurable as play, wage and salary differentials will come to be viewed as divisive and unnecessary. Majorities in manufacturing, for example, could be pleased to operate machinery. Others would choose, for their personal satisfaction, to become electricians, machinists, engineers, systems analysts or managers. In the health care industry, most people could be glad to work as support staff, orderlies, porters, cleaners or food service workers. Job satisfaction and the rewards inherent in education itself would encourage enough people to take the training required to become doctors or nurses. People would see no point in being paid more or less than others. This is a vision of communism — a society of equality and abundance — that inspired nineteenth-century opponents of capitalism. Alternatively, people may decide that individuals who continue their education, take further training or otherwise increase the social value of their labour should be rewarded with higher pay. Income differentials may be seen as practical, impersonal and fair ways to direct social labour time to the environmentally sustainable production of goods and services that people need and want. Perhaps some communities and workplaces may opt for equal pay while others choose income differentials. What is certain is that income differentials, where they exist, will be based on the work people do, not on the wealth they own or control. Once all are entitled to participate as equals in economic decisions,

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communities may decide that the highest paid should make no more than two or three times as much as the lowest paid. It is unlikely that people would agree to a spread of five to one. If the lowest annual income in $30,000, majorities are not likely to be persuaded that someone paid $150,000 actually contributes five times more to the well being of communities. In the nineteenth century, John Stuart Mill wryly noted that people who work the hardest are paid the least. Income is apportioned almost in an inverse ratio to the labour — the largest portion to those who have never worked at all, the next largest to those whose work is almost nominal, and so in a descending scale, the remuneration dwindling as the work grows harder and more disagreeable, until the most fatiguing and exhausting bodily labour cannot count with certainty on being able to earn even the necessities of life. (Mill 1871: 128) Capitalism continues to mock the work ethic by giving the largest rewards to those who work the least. In economic democracies people who do heavy, dangerous, unhealthy or isolated work may be paid more than those doing easier and more pleasant work. This does not mean that work done by men will be paid more than work done by women. Much of what was traditionally considered women’s work — caring for children and the infirm, working in fields, cleaning hotel or hospital rooms, or stacking goods on shelves — can be as heavy, as exhausting, as likely to injure or permanently cripple as most work done by men. In economic democracies women, like men, will have the right to engage in any labour they are capable of doing. Neither women nor men will be expected to push themselves beyond a healthy pace of work. The capitalist focus on squeezing additional profits from every moment of labour time will end. Work processes will be humanized. If some work is unavoidably dangerous, noxious or mind-numbing, it will be shared so that no one is stuck doing it for most of his or her working life. People doing the most unappealing labour could work shorter hours or be paid higher rates, or both.

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Instead of spending their entire day doing repetitive or exhausting tasks, workers could alternate heavy labour with lighter labour, and monotonous work with mentally stimulating work. Individual Production and Direct Consumption At present, from 5 to 15 percent of people in more prosperous countries are self-employed. Once capitalist control of access to means of livelihood, finances, patents, technologies, processes, supplies and markets has come to an end, more people may be self-employed. After peasant landholdings were forcibly collectivized in the U.S.S.R. in the 1930s, individual enterprise came to be viewed as incompatible with socialism. However, for common people, the right to work on one’s own and exchange the products of one’s labour has historically been no less important than freedom of association, speech, assembly or the right to vote. Aristotle (a supporter of minority entitlement) stated the obvious when he said that democracy has two fundamental attributes: everyone participates as equals in governing their communities, and people are free to live as they choose, since “not to live as one likes is a mark of a slave” (Aristotle 1943: 260). When capitalist entitlement has ended, individual craftspeople and independent shopkeepers will have more access to supplies and markets. Doctors and dentists could work on salary for community clinics or set up in private practice. Engineers, technical and management specialists, accountants and lawyers could work on salary for their communities or on their own as consultants on contracts for enterprises and communities. Some of the self-employed will make more than average income; as at present, most make less, but they will keep more of the revenues their labour produces. The self-employed may own their tools, equipment and machinery. They could lease land and buildings and claim title to improvements; community ownership of land and commercial buildings will keep rents low. Where an individual has claims on real property these would be based on value added through labour. Land rights would include obligations. A farmer’s entitlement

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to land, for example, may be conditional on the growing of food crops. Where agricultural land is left idle, a community could expropriate it with fair compensation. Individual enterprise means that some labour will be privately employed; a farmer could employ seasonal labourers; a lawyer could employ a paralegal or a secretary; a doctor could employ a nurse or a medical secretary; a retailer could employ a clerk and a bookkeeper; a self-employed towboat master could employ crew. However, no one will be entitled to exploit the labour of others. Privately employed workers will be paid the same wages and salaries as the socially employed. They will have the same rights to a voice and vote in directing their labour time, as well as the right to occupational representation. Hiring will be transparent. It may be organized by unions and professional associations or by community-run employment agencies. Individual enterprises and partnerships that come to regularly employ more than a few will be socially owned. Communities would compensate the persons involved for past unpaid labour time and monies they have invested in the enterprise. Perhaps producer co-ops equally owned by all workers could be intermediate alternatives in enterprises employing a dozen or fewer. Once everyone is entitled to prevailing wages, salaries and benefits, it is unlikely that nannies, cooks or housekeepers will be privately employed. Where there is a demand, communities could organize user-pay home cleaning and gardening services. Communities will provide care for children, the infirm and the aged as a human right. People will have more time to provide for themselves. Before capitalism, most people grew their own food, built their own shelter, made their own clothes and shoes and provided for their own transportation. Today in more prosperous countries production for direct consumption has been reduced to the care of children, washing and mending clothes, house cleaning, simple home repairs and what remains of home cooking and gardening. Capitalism as a system has no interest in production for direct consumption because it produces no exchange value. When everyone is equally entitled, human well being, not private profit, will motivate social labour. Wherever practical, people will be

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encouraged to provide for themselves. The regular work week may be reduced to twenty-four hours or less. Additional time off could be organized seasonally so that more people could participate in the production of food and materials for direct consumption. The more individuals, families and neighbourhoods provide for themselves, the easier it will be for communities to meet social needs and wants. A World without Capital, Repression or War Capital will have little role in economic life. Now, when capital is equated with physical means of livelihood, with savings and investments, it does appear to be critically important. But capital is no thing at all. It is a social relation, the right of wealth-holding minorities to claim private title to means of livelihood and socially produced surpluses. In economic democracies, communities will own social means of livelihood, land, resources, buildings, plant, machinery and equipment. People will continue to design and improve technologies. Wage and salary workers and the self-employed will defer spending, providing savings for investments. Communityowned enterprises will retain funds to maintain and renew means of livelihood. (Despite gross disparities under capitalism, wage and salary workers are the source of most personal savings. Most investment in plant and equipment comes from the retained earnings of enterprises.) When capitalism has been brought to an end, socially owned financial institutions will employ tellers, clerical workers, loans officers, computer programmers and operators, administrators, accountants and actuaries, as well as experts on industries and markets. Revenues, surpluses, savings, credits and investments will become matters of transparent public record. Interest rates will be kept low, no more than the minimum required to encourage saving and to cover the experience-rated risk of loss. Established enterprises and farmers producing food for local markets may pay a real interest rate of 2 percent or less. An enterprise initiating a new product may pay 4 percent. A more questionable market venture where the risk of default is greater

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may pay 6 percent. When everyone is entitled to a voice and vote in economic decisions, communities will invest most of their surpluses and savings in local production for local markets. Communities that have surpluses over and above their immediate needs may invest some of these in other communities. They may earn interest, but with social ownership, they could no longer seize others’ means of livelihood if debts are not paid. The rights of creditors will no longer trump those of debtors. Where there is default, the communities involved will openly decide how to best to accommodate the interests of debtors and creditors. People committed to human equality will not tolerate a net flow of money from the poor to the rich. Where debt service charges saddle poorer communities with negative balances of payments, the international community will compensate them with equivalent funds. Now, when people everywhere are infected with the self-serving competitiveness of capitalism, that may seem utopian. Once the scaffoldings of capitalist property relations have been removed, people will understand that well being everywhere depends on human equality. Some individuals may continue to be obsessed with accumulating wealth, with conspicuous consumption and with competing for place and position, but they will no longer dominate economic or political life. Basic social relations will be cooperative, democratic and egalitarian. The insecurities and prejudices that now plague global and local communities will end. Once capitalist entitlement has been replaced with the right of people everywhere to democratically direct their means of livelihood, coveting others’ resources, surpluses or markets will be pointless. The pretexts for foreign occupations, war, militarism and repression will evaporate. No powerful interests will profit from militarism. Governments will have no need to whip up xenophobic hatreds and fear to justify spending for public employment or research and development. Communities will cooperate in the search for peaceful sustainable ways to meet human needs and wants. Security and prosperity will rest on the voluntary exchange of equivalents, on mutually beneficial trade agreements and on planning for human well being.

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The right of all inhabitants to participate in economic decisions will push national, continental and global communities to eliminate disparities within their boundaries. More advantaged communities may allocate a portion of their total income — perhaps 2 percent — for aid, grants and loans to poorer communities to help speed the elimination of disparities. Under capitalism, what is called foreign aid is an opaque mix of private charity, laissez faire ideology and transnational corporate interests. In economic democracies, the objective will be to provide people with the means to help themselves. Communities receiving assistance would decide how it will be allocated. They will do the planning and the work themselves. The results will be transparent. Loans could be repaid to development agencies for continuing reinvestment in poorer communities instead of being repaid to donor communities. States as institutions of repression will wither away. The police, the courts and penal authorities will be directly and openly accountable to the communities they protect. Crime against persons and property may not entirely disappear. Where property has been stolen or damaged, justice will be sought through compensation in labour time where practical. Imprisonment will likely be a last resort, perhaps limited to crimes of violence. Communities will protect the public from people afflicted with criminal dementia, but in ways that are transparent and respect persons. Murder may be punished by permanent incarceration, but people committed to social equality and individual rights would give no institution the power to take the life of any person. Where there are no victims there will be no crimes. Consensual non-violent adult activities will be of no interest to the criminal law. Dangerous substances will be regulated, but addictions will be treated as health problems. Nations, regions and the international community will maintain armed forces sufficient to protect their inhabitants from violent internal and external gangs. Beyond that, military spending will be seen for what it is, a destructive waste of social revenues, labour time and resources. Soldiers, like everyone else, will have the right to organize unions and to participate as equals in their communities’ affairs. Committed to upholding

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the principles of equal human entitlement, social ownership and workplace democracy, members of the armed forces will not engage in anti-democratic adventurism. Labour: The Source of Exchange Value The prices of goods and services produced for exchange will be openly and deliberately set to cover labour costs at democratically agreed wages and salaries. These will include the labour time required to conceive, develop, process, produce, transport, distribute and exchange commodities, the labour time required to prevent and repair environmental damage and the commodity’s share of the labour time embodied in machinery, equipment, buildings and infrastructure. Communities may also decide to include all or part of the costs of social infrastructure, health care, education and other public services in production prices or exchange values. The exchange values of widely traded commodities like petroleum, steel, copper and some grains will be set globally. The production prices of most goods, such as housing and seasonal foods, public transportation and equipment, as well as personal services, will be determined within national, regional and local markets. Social ownership of wholesale and retail trade, transportation, importing and exporting, as well as of resources and manufacturing, will give communities the means to protect and advance domestic employment, wages and social benefits. Exchange value is a measure of labour time, but human needs and wants cannot be met without nature. Without air, water, lands and materials, human life would not be possible. Still, it is labour that transforms the gifts of nature into food, shelter, drink, clothing and transportation. Labour can be as primordial as picking fruit or as technologically refined as designing computers. Whatever its form, it is labour time of average skill and intensity, using current technologies at prevailing wages, that determines the exchange value of goods that can be readily produced. The labour theory of value is identified with Karl Marx (1818–83), but earlier economic thinkers, including William Petty (1623–87), John Locke (1632–1704), David Ricardo (1772–1823),

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and John Stuart Mill (1806–73) each held that labour is the source of exchange value. Adam Smith (1723–90) wrote: Equal quantities of labour, at all times and places, may be said to be of equal value to the labourer. In his ordinary state of health, strength and spirits; in the ordinary degree of his skill and dexterity, he must always lay down the same portion of his ease, his liberty and his happiness…. Labour… is alone the ultimate and real standard by which the value of all commodities can at all times and places be estimated and compared. It is their real price, money is their nominal price only. (Smith 1937: 33) Smith knew that actual prices rise above and fall below exchange values in response to changing supply or demand. He understood that capital demands the average rate of profit or better in addition to the labour costs of production. He saw that monopolies have the power to sell goods for more than their exchange value. Still, he viewed labour time as the unvarying standard of value because an hour of labour time is an hour of labour time for every person who performs it. Smith’s view was amplified a few decades later by David Ricardo. Noting that some workers in a given time can produce more goods of a higher quality, Ricardo concluded that exchange value or natural price is not a measure of the actual time it takes to produce a commodity; it is a measure of the average time required. Karl Marx refined this theory. He saw exchange values or production prices as measures of “socially necessary labour time” but rejected the classical assumption that customary or prevailing wages are natural or fair. He held that wage rates are determined by the productivity of labour and class struggles — by combinations of capitalists and state repression, by the success or failure of workers’ attempts to bargain collectively. In the second half of the nineteenth century, the labour theory of value helped inspire trade unions and working-class political clubs to campaign for higher wages, better working conditions and political equality. In 1871 common people in Paris, reacting to the failure of the imperial government of

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Napoleon III to defend the country against Prussian troops, took command of the city. The Paris Commune lasted barely two months before it was crushed with the loss of thousands of lives. Still, the city’s common people had declared their intention to organize labour democratically and to provide workers with the full value of their labour time. The rich and the educated classes (more or less interchangeable at the time) responded by abandoning the concept of exchange values or natural prices. They insisted that prices are nothing more or less than what people are willing to pay, measures of the marginal propensity of individuals to consume. At a time when machine industry had already made most individual production obsolete, when corporations and cartels dominated technologies, supplies and markets, capitalist public relations proclaimed homo economicus — a hypothetical all-knowing hyper-rational self-centred individual consumer — sovereign in the marketplace. Although labour was removed from polite price theory, capitalists remained obsessed with widening the spread between prevailing production prices and labour costs. Steam-powered and then electrical machinery made it possible to replace higher-paid skilled labour with cheaper repetitive labour. That obsession continues. In the late twentieth century, robots replaced assembly-line labour. Computerized information storage and retrieval systems replaced formally educated labour. Factories and services were relocated from North America and western Europe to Mexico, Indonesia, China, India, Poland and Ukraine, dramatically reducing the price paid for labour time. Still, the labour theory of value is dismissed as outdated if not seditious. Equations have been devised to prove that exchange value could just as logically be attributed to capital, machinery or natural resources. Of course, as a function of all those variables, production prices can be related to any. For a merchant, the value of goods and services appears to be determined in exchange. For an industrial capitalist, revenues and profits appear to be functions of investment decisions and command over labour. If steel, fuel or machines could express their perspective, these could claim to be the source of exchange value. From a human perspective,

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exchange value is a measure of the human labour time embodied in commodities. Democratically Regulated Markets Households and neighbourhoods are likely to produce more goods and services for direct consumption under economic democracy. The exchange of discretionary goods will continue to be regulated by market forces. Markets are now identified with capitalism, but people were exchanging goods and services long before capitalism. In the earliest human cultures families and kin groups gathered, caught and killed most of what they consumed. The principles of production and exchange probably were “from each according to their abilities, to each according to their needs” and “he who can but does not work, neither shall he eat.” Millennia ago, individuals, villages and tribes began to specialize, spending some or most of their working time producing goods for exchange. Some planted and harvested crops, others herded animals. Some hunted or fished, wove blankets, preserved food, tanned leather, made footwear, prepared medicines, fashioned objects of worship or recited community stories. Within families or villages, individuals were provided with what they needed and expected to do what they could. In exchange with people outside circles of customary obligations, the aim was to get equivalent values or better in return. Production for exchange allowed people to meet their own needs while meeting the needs and wants of others. It has encouraged people to look beyond family, village, tribe and nation. It has spurred advances in the productivity of human labour and deepened the interdependence of communities. None of that makes markets inherently benevolent. Forces of supply and demand reflect, reproduce and aggravate existing entitlements and disparities. Where disparities are wide, market forces give the rich more and the poor progressively less. “Demand” in the jargon of capitalist economics does not refer to needs or even wants. It means purchasing power. When access to food is left to supply and demand, people without money starve.

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When housing is left to market forces, the poor live in hovels, alleys or doorways. When education is left to market forces, many cannot pay to send their children to school. Market-based medical care focuses on expensive treatments for the wealthier, leaving the poor to charity or to suffer and die without medical attention. When the provision of water, electricity, transportation and communications are left to markets, capitalist profits take precedence over basic human need. The problem is neither market exchange nor money; it is wealth-holders’ entitlement. With economic democracy, access to food, housing, health care, education, occupational training and child care will be provided as human rights. Money will continue to measure exchange value and be a claim on future goods and services, but will no longer give some the right to control others’ means of livelihood. If market forces reduce employment opportunities, undermine public services or damage environments, communities will deliberately and openly act to protect the interests of their residents. When human well being, not private profit, is the objective of trade, tariffs and import restrictions will be openly used as tools of social planning. Tariffs are taxes on imports. Taxes are needed to pay for public services and infrastructure. Taxes that help boost domestic employment are doubly beneficial. Of course, communities also benefit from the widest practical access to supplies and markets. In a world of cooperation, democracy and equality, tariff rates will be negotiated and decided by mutual agreements. These will be high enough to encourage domestic production but not so high as to discourage international trade. In capitalist ideology, trade is shrouded in mystery and danger. It is said to depend on the risk-taking acumen and courage of profit-seeking merchants. Most trade is and has long been in the hands of state and private monopolies that control the markets of people engaged in producing and distributing commodities. At the beginning of the twenty-first century, trade was dominated by giant corporations like Walmart, Mitsubishi and Samsung. Each employed tens of thousands of wage and salary workers. While relying on coordinated, cooperative social labour, the interests of these transnationals were narrowly private: to maximize profits

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by buying low and selling high. In economic democracies, communities will democratically control trade. Communities and socially owned enterprises may employ workers to search for supplies from outside their boundaries and for markets in other communities. Self-employed trade facilitators may be paid a share of the revenues their initiatives generate. Trade will no longer be a mystery. Much of it will be routinely done through electronic searches and communication. The Elitism of Central Planning The alternative to voluntary exchange among communities and individuals is a centralized international authority with the power to decide what goods will be produced and consumed and where. In theory such decisions could be made democratically by majority vote after fully transparent discussions (Albert 1991). Even if that were practical, some people would insist on making their own consumption decisions. Doing so would involve them in illicit exchange. Substantial numbers would then be subject to criminal sanctions and repression. What purpose would be served? Religious and secular utopian socialists have long condemned money exchange. By the twentieth century, the horrors of imperial market relations, the recurrence of crises of simultaneous overproduction and underconsumption and the continuing insecurity of employment in the most industrialized countries had convinced working-class parties to oppose both capitalist entitlement and market exchange. In the 1930s, after the Soviet Union forcibly collectivized agriculture, opposition to market forces became a dogma of the anti-capitalist left. The early Soviet economy had been based on nationalized industry and private peasant landholdings. Lenin saw “Fordism” — assembly line manufacturing in massive coal-powered factories — as the road to rapid industrial development. However, by the late 1920s Soviet industrial production had barely returned to 1913 levels. Industry, plant, equipment and a generation of workers’ skills had been lost in the devastation of World War I and the prolonged civil war. A trade embargo by the U.S., Britain and France blocked Soviet access to markets, supplies, technologies

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and machinery. More than 80 percent of the population continued to live off the land, largely working for their own subsistence. Because domestic industry was not producing the goods that peasants may have purchased in exchange for their surpluses, they consumed and stored most of what they produced. Without access to more food, Soviet industry could not employ more workers or expand industrial production. In 1929 the central government under Joseph Stalin ordered the nationalization of land and agricultural produce. The immediate effect was a dramatic fall in agricultural production. Peasants slaughtered their animals and consumed their stores. More than a million were forcibly evicted from their homes and deported to work in new industrial centres in the north and east. Millions died of starvation. In the following years, after state control of agriculture was secured, more food was shipped to cities. Industry grew rapidly, for a time providing other impoverished countries with an alternate model of industrial development. With state ownership and top-down central planning, enterprises were no longer driven by the competitive capitalist drive to maximize profits. Instead, the system maximized overall surplus by limiting the growth in income and consumption of workers. Bolshevik rule became more authoritarian and repressive. The Stalinist leadership cult gave top officials control of nearly all political and economic decisions, discouraging and prohibiting the regional, local and individual initiatives that could have allowed communities to find new or better uses for available labour and resources. The system favoured megaprojects, some of which, like nuclear power and the draining of the Aral Sea to irrigate cotton fields, had catastrophic environmental consequences. By the 1980s top-down central planning had come to be seen as dictatorial, inefficient, arbitrary and environmentally destructive. Computers have exponentially increased the data that a central authority could store, sort and analyze. Still, it is unlikely that any central planners could accurately predict all upcoming changes in technologies, resource utilization, consumption patterns, occupational choices and environmental sensitivities everywhere. Even if central planners were so far-sighted, impar-

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tial, altruistic and wise that they could thoroughly and meticulously predict and meet everyone’s wants and needs, a minority of experts, political leaders and state officials would control the daily lives of majorities. Initiatives from the Bottom Up Human entitlement, numerous owning communities and workplace democracy will encourage innovation from the bottom up. Where there is little social or environmental controversy, decisions on new forms of employment will be made by those initiating the proposals and left to community financial institutions. Under capitalism, only wealth-holding individuals and those who can gain access to capital have the means to innovate. Capitalist innovation is often destructive. Employment is lost to machines, new processes or new products; jobs are moved to places where labour is cheaper. In economic democracies, the objective of innovations will be to improve the quality of life, to make labour more productive or agreeable and to create new employment. Many more people will be inspired to take initiatives. Most innovations will likely come from within existing enterprises. Workers employed in the manufacturing, distribution, installation and servicing of imported goods, components, materials or software will look for ways to produce these locally. Individuals or groups taking the initiative will approach community representatives or a socially owned financial institution. If a proposal seems practical and environmentally sustainable, if skills, infrastructure and markets are available, financing would be provided. The community could hire the people who initiated the proposal as managers or technical specialists, or turn to others with more relevant expertise. The practicality of democratic community innovation can be illustrated with a brief discussion of language schools in Vancouver. In the 1990s scores of private language and vocational schools opened in the Vancouver metropolitan region. By 2000, tens of thousands of foreign students were in that city studying English. The initiative came from people employed in education who saw the expanding market. No government, no corporation

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planned this growth. Capitalism was not responsible. Englishlanguage students from Korea, Mexico, China, Japan and northern Europe were attracted to metropolitan Vancouver because of its racial diversity, tolerance, night life, restaurants, skiing, sailing and mild climate, its numerous public post-secondary schools, its public transit and the availability of accommodation in family homes. Capitalism is responsible for the thousands of unemployed university graduates who were available to teach in these schools. Cutbacks in public services, privatization and the loss of head offices to mergers and acquisitions dramatically reduced available professional employment. Capitalism is also responsible for the shady operators who have damaged the reputation of language and vocational schools since the neoconservative B.C. Liberal government deregulated private post-secondary education in 2001. In economic democracies, language schools would be viewed as a kind of value-added tourism. The initiative in expanding these could be taken by teachers, administrators, recent graduates or immigrants. Where there is a market, communities would provide facilities, the required training and the regulations needed to maintain and improve teaching standards and students’ living conditions. To encourage innovations, communities may provide material incentives. Individuals and groups could patent new products or processes and be rewarded with a portion of the community’s additional net revenues or savings as a commission or royalty. However, a patent would not give any person or enterprise exclusive right of usage. With equal human entitlement people everywhere would be entitled to use any innovations, perhaps on the payment of royalties. Ending exclusive capitalist title would make it unlikely that innovators will become fabulously wealthy. The pathologically greedy may find that deplorable, but innovations will be more rapidly adopted. With numerous owning communities, innovators will have more opportunities. If one community or one socially owned financial institution rejects a proposal, others could be approached. When business secrecy has ended, the potential

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benefits and the pitfalls of innovations will be more apparent. Narrow self-interest and personal delusions are less likely to lead to costly mistakes. Sharing Advantages through Market Exchange The objective will be to meet needs and wants by exchanging equivalents in labour time, but inequalities may never entirely disappear. Some communities will have natural and social advantages. Some will have more fertile land, more refined skills, cheaper sources of energy or materials and easier access to markets. Production for exchange will encourage communities to share these comparative advantages with others. Under capitalism comparative advantage is a measure of what is most profitable for wealth-holders. It is largely based on cheaper labour. In economic democracies, labour time will have the same value everywhere. Comparative advantage will become a measure of more productive social labour. To illustrate, let us imagine three communities. A has a steady supply of air-dried old-growth wood and highly skilled piano makers. B produces specialty metals; it has many engineers experienced in making computerized machines. C has highly regarded fashion designers and many clothing enterprises. With ten thousand hours of direct and indirect labour time, A can produce pianos with a production price of $l million; B can produce computerized robots with the same exchange value; C can produce the same value of clothing. Each community could produce their neighbours’ specialties, but doing so would require twelve thousand hours of labour time. If each community instead exchanged $l million worth of their own specialties for their neighbours’, they would be sharing their advantages and freeing up two thousand hours of labour time for other market production, for additional public services or to reduce regular hours of work. Comparative advantage is perhaps more obvious in natural resources. Let us assume that Alberta and its municipalities share ownership of natural gas fields, natural gas sells for $10 per thousand cubic feet (tcf) and Alberta’s average costs of

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production are $2. Local communities could distribute natural gas internally at its actual cost, saving their inhabitants $8 for every tcf consumed. The benefits of exporting gas at $10 would be equally obvious. The province and municipalities would gain $8 for every tcf exported. The additional revenues could go to education, health care, housing, transportation or environmental services, or to the expansion of other market-based means of livelihood — a compelling incentive to share natural gas with others. If the forests of British Columbia were socially owned, local communities would weigh the benefits and environmental costs of logging, wood processing, secondary manufacturing, fishing, mushroom-picking and tourism. Communities may limit logging to what they can use for secondary manufacturing. However, if the price of raw logs — an increasingly scarce resource — rises faster than the price of wood products, communities could gain more revenues by exporting logs harvested in a sustainable way. Under capitalism, local communities often oppose log exports because the revenues — and much of the work — go to outside corporations. With social ownership, revenues from log exports would belong to the communities with the forests; local people would get most or all of the work. If the net revenues from log sales could provide more employment than wood processing or manufacturing, it could be in the interests of communities to export logs, to share their natural advantage with others. Unlike capitalist enterprises that are driven to maximize profits, socially owned enterprises would not be preoccupied with comparative advantage. Democratic communities of working people would be just as concerned with additional employment opportunities, more free time and the sustainability of environments. Looking again at the example above, communities whose inhabitants are satisfied with existing employment opportunities may choose to purchase industrial robots from community B. By doing so they would free labour for other needed goods or services or for increased leisure. Communities with underemployment could choose not to introduce robots until their labour is more fully utilized or until they have developed the capacity to produce these themselves. In economic democracies, no class would have

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an interest in elevating comparative advantage to a principle more important than the well being of workers or communities. Democratic Planning Communities will deliberately and openly plan to meet their inhabitants’ wants and needs. Proponents of capitalist entitlement argue that social planning has unanticipated, often damaging consequences and that well being should be left to market forces. Theory aside, however, capitalism has always relied on social planning. Enclosures in England would not have generated profits without the planned organization of agricultural labour. Plantations could not have been established abroad without the arming and provisioning of naval expeditions, without the deliberate dispossession of indigenous populations and without the planned transportation of indentured labour and forcibly enslaved Africans. Internal capitalist markets would not have expanded without the construction of canals and railways and the employment of tens of thousands of navvies and engineers. Without the planned organization of armies, navies, merchant shipping, shipyards and armouries, western capital would not have come to dominate world markets. In the twenty-first century, when most labour is social and markets are global, economic activity is not practical without planning. Transnational corporations routinely engage in social planning on a scale far beyond anything done by past imperial bureaucracies. They have levelled mountains, damned great rivers, flooded populated valleys, spanned the globe with transportation, communications and energy networks and moved industries from continent to continent. Capitalist planners may not have anticipated the consequences, but when the objective is to maximize profits at the expense of workers and communities, dispossession, unemployment, worsening disparities, social disorder, violent repression and wars should not be surprises. In economic democracies, market forces will not stand above the well being of people. Equal human entitlement, social ownership and workplace democracy will push communities to meet

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basic needs as human rights. The myriad voluntary transactions of individuals, enterprises and communities will provide the ongoing information communities require to direct social labour to the production of discretionary goods and services that people want. Planning will not be viewed as an arcane art or science. Experts will have a voice and vote, but planning will be transparent. Communities will focus on obvious balances: on balancing employment opportunities with available labour; balancing the money costs of public services with surpluses generated in exchange; balancing imports with exports; and balancing industrial activity with the carrying capacity of environments. Employment will be a human right, but labour will continue to be viewed as a cost in time and effort. Democratic communities will provide employment and allocate labour in ways intended to maximize the well being of inhabitants. More people are likely to be employed in education, skills training and making communities more liveable, beautiful and distinctive. Instead of 5 percent or less, agriculture may employ a quarter of populations, for parts of the year at least. Farmers may be paid the prevailing social wage for the time they spend protecting and advancing the natural fertility of soils in addition to the revenues earned from their crops. Fewer people are likely to be employed in policing, prisons and the military. Once wealth-holders are no longer entitled to enrich themselves by externalizing environmental costs or promoting the consumption of alcohol, tobacco, junk food, the private automobile and pharmaceuticals of dubious benefits, fewer people may be employed in curative medicine. More people will be employed in child and elder care, in preventive public health and in environmental protection. If some are still left without employment opportunities, regular hours of weekly labour could be reduced or paid vacation time could be increased. If the public services cost communities half of their income, labour producing for exchange will have to generate a financial surplus of 100 percent. Under capitalism surpluses are often higher. In Canada, surpluses in manufacturing are commonly double what is paid in wages and salaries. In industries with higher machinery and equipment costs, the exchange value added in the

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production of commodities can be five times higher. In industries like petroleum refining, surpluses generated can be ten times payroll (Statistics Canada 1997). When everyone has a voice and equal vote in deciding what will be provided as a human right and what will be produced for exchange, it will be obvious that communities must cover the costs of public services, just as individuals have to pay for discretionary goods and services. Some or all of the costs of public services could be covered by value-added or sales taxes. Some could be collected as excise taxes on particular commodities like tobacco, alcohol or hydrocarbons. Some or all could be collected as taxes on personal income. Some could be collected as tariffs on imports. Capitalists view taxes as deductions from profits. In fact, publicly funded roads, bridges, ports and communications facilities make enterprises more profitable. Public schools educate workers for private industry. Publicly funded health care makes more labour time available and reduces costs that enterprises may otherwise be compelled to bear. Transfer payments — pensions and other forms of social assistance — generate markets for goods and services. Communities will plan to balance the exchange value of imports and exports. A community that imported more than it exported over an extended period would face a loss of savings and eventually a loss of purchasing power. Exporting more than was imported would provide communities with little advantage. Social ownership would not allow some to use net export revenues to gain control of others’ resources or markets. To help eliminate disparities, more prosperous communities may deliberately export more. Otherwise communities with an export surplus would redirect labour to domestic needs and wants. Communities will balance industrial activities with the carrying capacity of environments. With social ownership, externalizing environmental costs will no longer be practical. The inhabitants of communities will themselves be victims of local resource depletion. Workplace democracy will encourage workers — the first victims of toxic processes — to take the lead in drawing attention to environmentally damaging industrial practices. Losing work for environmental reasons may still be

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personally distressing, but people will no longer have to choose between the environment or employment. Human entitlement will give everyone a right to useful employment at democratically determined wages and salaries. Communities will make mistakes. The consequences of the best-laid plans will never be entirely predictable. Technologies and tastes change. Markets for some goods and services will unexpectedly stagnate and decline. Sources of supply may be lost. However, change will be easier to anticipate. Social ownership and workplace democracy will make plans transparent. People who lose jobs will not suffer enduring hardship. Communities will respond by organizing new kinds of employment. If additional production for exchange is viewed as unnecessary, trivial or unsustainable, labour would be redirected to public or environmental services. General overproduction would be no problem at all. If communities find themselves producing more of everything than people need or want, the required hours of social labour could be reduced with no loss in income. Living in Harmony with Nature Social ownership will free people from the capitalist drive to maximize profits. Marginally higher revenues and cheaper commodities will be less important than human well being and the environment. Equal human entitlement and the diversity of human interests will push communities to focus on general and future well being. Workplace democracy will encourage people in all occupations to draw attention to unsafe, unhealthy or environmentally damaging economic activity and to develop environmentally sustainable alternatives. Economic activity will be guided by the precautionary principle that holds that enterprises must prove that their products and processes do no harm. It reverses the capitalist principle that private title gives wealth-holders the freedom to do as they choose unless it has been legally proven that harm has come to others. Social ownership will make it impractical to externalize environmental costs; owning communities would themselves suffer the consequences.

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Democratic communities of working people will have no interest in replacing healthy physical activity with fuel-driven machines or chemical processes simply because higher profits are generated. Machinery and industrial processes will be refined to increase the effectiveness of labour time and to reduce and eliminate unsafe and obnoxious labour, but agreeable social labour will be seen as the most benign source of untapped energy. The labour time required to protect the environment and repair ecological damage will be viewed as necessary and included in the social costs of production. Action to sustain environments will not be limited to market incentives. Communities working in their own interests will have good reason to focus on using less, on recycling and on developing technologies that allow human needs and wants to be met in ways that are compatible with environmental integrity. With ownership by communities, industry will be restricted to sites where toxins can be contained within zero-emission facilities and processed into useable or at least harmless substances. Democratic communities of working people will choose multi-use forestry. Instead of clear-cutting old-growth forests, communities will choose selection logging that does the least harm to soils and waterways and allows forests to regenerate naturally. Broader communities will prohibit logging that undermines ecosystems. Coastal communities will not permit draggers to pillage their continental shelves for cheap fishmeal. They will have no interest in salmon farms that consume more fish protein than they produce or prawn farms that destroy the fertility of lands. The oceans outside existing national boundaries will no longer be a no-man’s-land, a privateers’ free-for-all; communities will cooperate globally to regulate fisheries and protect species and habitat in all waterways. Agriculture will change dramatically. Communities will not agree to agrochemical practices that destroy ecological balances and the natural fertility of soils. Domesticated animals will be allowed to live more natural lives. Wild mammals, birds, insects, plants and ecosystems will be protected. Communities may look for opportunities to export food and materials to regional and

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global markets. They will expand agriculture for local consumption. Community gardens are likely to become significant sources of food in urban areas. The quality of human life will no longer be separated from environmental well being. In North America, average private living spaces will decrease; public space will likely increase. Social ownership and community initiatives will lead to the more rapid development of wind and solar energy, smaller scale hydroelectric power, geothermal pumps and the utilization of waste industrial heat. Cities and neighbourhoods will be reconfigured so that residential areas are closer to work, commerce, recreation and entertainment. In urban areas, fast, reliable, comfortable and pollution-free public transit will replace most automobile use. In areas where population is too small and too dispersed to sustain convenient public transportation, people may continue to depend on private automobiles. These are likely to be far smaller — perhaps less than a thousand pounds. (Moving 3,000 pounds or more of metals, plastic and electronics wherever one goes is profitable for capital but an egregiously irresponsible waste of resources.) Air travel will be drastically reduced; most travel between metropolitan centres will likely be by high-speed electric railways. Planned obsolescence and conspicuous consumption will serve no social purpose. People whose physical and social needs are met as a human right will expect to live in harmony with nature. Most people will understand that consuming less can improve social and personal well being. Individuals will continue to find pleasure in consumption and personal possessions, but seeking happiness in ever-increasing consumption will be viewed as pathetically banal, a waste of human labour time, socially divisive, personally unhealthy and environmentally unsustainable. Some may insist on consuming more than others, but they will not be exclusively entitled to make economic decisions. No longer alienated from their means of livelihood, most men and women will seek and find happiness in their work. People will also look to additional leisure, their family and friends, education, refining their skills, to cultural, artistic, and recreational activities and to voluntary contributions to their communities.

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When capitalist entitlement has been replaced with equal human entitlement, when economic activity is democratically directed by communities and women everywhere are free to participate as equals in their communities’ social life, free to pursue the careers of their choice and free to control their own bodies, most women will have one or two children; some will have three or more; some will be childless. Populations will remain stable or gradually decline.

3 Opposing and Ending Capitalism Reforms to End Capitalism Capitalism is a formidable system. Wealth-holding minorities are entitled to decide where employment is provided and who will get it. Wage and salary workers must do the bidding of capital as a condition of employment. In the competitive drive to maximize profits, many get employment and expanded access to goods and services; many others lose employment, are dispossessed and impoverished. Private ownership of social communication — television, radio stations, newspapers, movies and magazines — allows corporate oligarchs to define wants and aspirations and to direct news and entertainment in their narrow interests. Capitalist title to socially produced surpluses gives wealth-holding minorities the means to control governments and, when it is in their interest, to pit communities or ethnic groups against one another. As formidable as capitalism is, the working class has the capacity to end it. Labour, not capital, produces the surpluses that are transformed into capitalist profits. Capital needs labour; labour does not need capital. What the working class does need is the collective conviction that capitalism is not compatible with human well being and that economic democracy is practical and attainable. When a world of human equality, democracy and cooperation is the working-class goal, no armed uprisings or revolutionary dictatorships will be required or desired. The working class will rely on workplace organization, community mobilizations and democratic political action. The objective will be to transform capitalism into economic democracy through gains and reforms 82

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that improve immediate living conditions while replacing capitalist entitlement with human entitlement, capitalist ownership with social ownership and master-servant relations with workplace democracy. As more people succeed in gaining access to food, housing, education, health care, employment and fair wages as human rights, capital will lose its capacity to use desperation to impose its interests on workers and communities. As the right of communities to democratically regulate economic activity expands, capitalist entitlement will weaken and end. As more wage and salary workers in more occupations organize in unions and replace master-servant relations with workplace democracy, the control wealth-holding minorities have over social labour will wither away. The power that wealth-holding minorities have over political agendas can be reduced through reforms that make lobbying and financial contributions to political parties immediately transparent. Public funding can make political parties less dependent on private wealth. Public regulation of military procurement and transparent community oversight of the criminal justice system can reduce the capacity of wealth-holding minorities to use state power against the interests of majorities. Cutting military spending will release public funds for human needs and reduce the capacity of ruling classes to manipulate religious or regional sentiment in their narrow interests. The power of wealth-holders to manipulate trade can be reduced by taxing international financial transactions and the speculative buying and selling of capitalist claims. Raising tariffs to levels that encourage domestic production without blocking access to broader markets and supplies would protect domestic employment and reduce the capacity of transnational capital to force workers and communities to compete to drive down the price of labour. An 80 percent tax on personal income over $150,000 a year would limit the control wealth-holding minorities now have over socially produced surpluses. Steeply graduated income taxes would reduce conspicuous consumption and provide communities with funds for social programs, public health care and education, as well as for investments in

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environmentally sustainable production for local markets. Expanding social ownership of means of livelihood directly weakens the power of capital, limits the externalizing of environmental costs and ends the foreign ownership that is now the major source of international instability and war. Community ownership of residential lands would make it practical to provide everyone with decent housing. Community-owned clinics, hospitals and pharmaceutical enterprises would end the diversion of billions of health care dollars to corporate executives and shareholders and give everyone a right to directly participate in determining their communities’ priorities for public health care spending. Community ownership of the media with workplace democracy will void the license that corporations now have to manipulate public opinion. Karl Marx, Feudalism and Gradual Change In 1848 Karl Marx held that capitalism was transforming the working class into the universal class, a class fully capable of replacing capitalist entitlement with the democratic organization of social labour. Sooner or later, the working class, compelled by circumstances, would make itself the ruling class. In doing do, it will sweep away the conditions for the existence of class antagonisms, and of classes generally.… In place of the old bourgeois society, with its classes and class antagonisms, we shall have an association, in which the free development of each is the condition for the free development of all. (Marx 1964: 41) In the twentieth century Marx came to be identified with the Russian Revolution and the violent seizure of state power. The official ideology of the Communist International was called Marxism-Leninism, but Marx, who had died thirty years before the Russian Revolution, had spent his life explaining that fundamental change grows out of gradual changes in material conditions, relations of production and class struggle. Material conditions include methods of agricultural and

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industrial production, technologies and science and access to resources and markets. Relations of production are the entitlements classes have (or do not have) to lands, resources, employment opportunities, goods and services, surpluses and decision-making. These depend on material conditions and on class struggles — on action taken by dominant classes to protect and advance their privileges and on movements of subordinate classes to assert their rights. In The Communist Manifesto, published in 1848, Karl Marx and Friedrich Engels wrote that capitalist industrial progress was creating the material conditions for universal abundance. By transforming majorities into wage workers, capitalism was creating a class accustomed to cooperative social labour that would have the capacity to end capitalism and all systems of minority rule. “To win the battle of democracy” the working class will “wrest, by degrees, all capital from the bourgeoisie” through measures including progressive income taxes, free education and state ownership of land, industry, railways and banking (Marx 1964: 39–41). During the 1848 uprisings in Europe, Marx had participated in mass opposition to feudalism as a pro-democracy journalist supporting working-class demands. After the authoritarian old order was re-established, Marx, fleeing political persecution, settled in England, where working-class organizations had for some time been challenging capitalism. Marx lived in a time of gradual but fundamental change. While the working class was beginning to challenge capitalist entitlement, feudalism was still being transformed into capitalism. Feudalism was a system of subsistence agriculture, handicrafts, local markets and patron-client relations. Most goods and services were produced for direct consumption. Entitlements, privileges, access to means of livelihood, social authority and divisions of labour were largely hereditary and hierarchical. Lesser lords were clients of greater lords. Patrons were supposed to protect the interests of their clients. Clients, down the chain of command, were expected to do the bidding of their patrons. Under capitalism most goods and services are produced by wage labour for ever-widening markets. Means of livelihood are

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bought and sold. Entitlements and social power are based solely on wealth. Divisions of labour are learned and earned (at least in theory). Authority is based on master-servant relations. Masters (capitalists or their representatives) purchase labour time and have title to the goods produced. Workers are employed only so long as their labour is profitable for capital. The transformation of feudalism into capitalism cannot reasonably be ascribed to any uprising, event, year or century. In England modern capitalism goes back to the privatization of common lands in the fourteenth century and to the acquisition of gold and silver from the Americas (often through piracy) from the sixteenth century. International trade in wool added to capitalist wealth. So did trade in spices, tobacco, sugar, opium, tea, cocoa and coffee based on plantation agriculture abroad, on indentured labour and on the traffic in slaves from Africa. As more money circulated, capitalist agriculture became more profitable. More lands were enclosed. As increasing numbers of villagers were dispossessed, labour became cheaper; manufacturing became more profitable. Over time, income from capital came to exceed income from hereditary entitlements. Capitalists came to share and then dominate state power. In England, inherited feudal rights and privileges would continue long after the mercantilist coup of 1688, well into the nineteenth century. Nearly a hundred years later, the French Revolution did “abolish feudal property in favour of bourgeois property” but capitalism had long been advancing in France (Marx 1964: 26). Hereditary patron-client relations continued to play a powerful role in France’s political and economic life well into the twentieth century. In Germany, Bismarck, a Junker — a hereditary landlord — used feudal political power to construct a national capitalist market and to finance German industrialization. In Japan, the Meiji Restoration of 1867 replaced the samurais’ feudal entitlements with cash payments, but the high aristocracy continued to dominate the state and the country’s economy at least until 1945.

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Early Working-Class Gains and Losses In Marx’s lifetime, the working class had far less capacity to oppose capitalism than it has today. People who made their living by selling their labour time were still a minority. Voting was a property right. Working-class meetings and anti-capitalist speech and writings were prosecuted as sedition. Nonetheless, working people defied laws and rallied against minority privilege. Thousands of workers protested unfair wages and brutally long hours by withholding their labour, posting demands on factory doors, picketing and boycotting employers. By the 1820s many employers in England were avoiding strikes by negotiating with unions. In 1824 laws prohibiting membership in unions were repealed. Striking and picketing were still prohibited, but workers could legally bargain with their employers and mobilize for political reforms. In the 1830s the first Reform Acts were passed. Property qualifications were lowered to give some working men the vote. From 1838 to 1850, the Chartist Movement organized petitions, strikes and mass rallies for political and economic rights. In his first years in England Marx was preoccupied with his writings. In the next decade, he played a central role in the International Workingmen’s Association. During its brief existence, 1864–76, the London-based International provided strike support and assisted in the formation of unions in many countries, including the United States, where the oldest unions continue to call themselves internationals. Unions inspired by the International campaigned for freedom of association and assembly, the right to strike and picket, and for the right to vote without property qualifications. In 1867 most regularly employed men in England gained the vote. Marx, who is sometimes maligned as the godfather of twentieth-century totalitarianism, could with more evidence be called a godfather of twentieth-century democracy (Cole 1962; Padover 1973). Nineteenth-century class struggles were far from one-sided. Capitalists took advantage of changing material conditions to increase their wealth and social power. Coal-powered machines reduced the need for manual labour in industry and agriculture,

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rendering most handicrafts obsolete and expanding the supply of cheap labour. Meanwhile, the U.K., France, Holland, Germany, Belgium, Russia and the U.S. were invading, occupying and dividing the planet, spreading capitalist property relations, privatization, dispossession and impoverishment. Cheaper colonial products replaced domestic agricultural materials and textiles. In Europe, peasants, artisans and factory workers lost their employment. Millions emigrated to the U.S., the British dominions and South America. By the 1860s, the U.S. was an industrial power with plentiful land and resources, cheap immigrant labour and highly skilled tradespeople. Trade unionism had gained the latter middleclass incomes, shorter working hours and effective control over their work. Taylorism ended that. Fredrick Taylor, an American engineer, designed assembly lines. Each worker was assigned one or a few repetitive tasks that could be easily taught and minutely controlled by managers. Taylorism allowed employers to fire highly skilled trade union members and replace them with lower-paid immigrants and men and women fleeing poverty on farms (Braverman 1974). In the early twentieth century, establishment opinion held that unions had outlived their usefulness, but workers continued to organize. In the U.S. and Canada, striking coal and hard-rock miners were attacked by private security forces, police and militias. In the textile mills of New York and Massachusetts, immigrant workers — often women — went on strike to protest poverty wages and slave-like working conditions. The Industrial Workers of the World (iww) organized migrant agricultural, mine and mill workers. The iww openly campaigned against wealth-holders’ control of means of livelihood. In the U.K. the Industrial Syndicalist League was gathering support from railway workers, seafarers, engineers and miners. In Italy, Spain and France, anarcho-syndicalists committed to direct mass action were leading strikes and factory occupations. In Germany, shop stewards’ movements organized local strikes and sit-ins as an alternative to top-down negotiations. In 1889 a Second International had been formed. It aimed to unite workers in all countries against the looming threat of inter-

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imperialist war (Joll 1966). When World War I began, patriotism and war fever overwhelmed international working-class solidarity. Trade unions and socialist parties in Austria, England, the British dominions, France, Germany, Italy, Russia and the United States either openly supported their country’s war effort or remained silent as workers fought and died to advance their ruling class’s imperial designs. As predicted by anti-war socialist leaders, such as Jean Jaures in France, Sylvia Pankhurst and Keir Hardie in the U.K., Karl Liebknecht and Rosa Luxembourg in Germany, James Connolly in Ireland, Eugene Debs in the U.S., and Lenin and Trotsky from Russia, the war was a catastrophe. More than ten million soldiers were killed. Twenty million were wounded. The Russian people suffered the most. On International Women’s Day in 1917, women munitions workers in St. Petersburg walked out on a general strike for peace and bread. Soldiers defied orders to fire on demonstrators and organized councils (soviets) to vet and veto officers’ orders. Workers in factories and railways elected councils to take charge of their workplaces. The Czar abdicated. A self-proclaimed provisional government led by Alexander Kerensky gained the approval of the countries bankrolling the Czar’s armed forces. With continuing credits from the U.K., France and the U.S., the carnage continued. Meanwhile, increasing numbers of peasant soldiers were returning home with their weapons, setting up village committees and redistributing land. In October, the Bolshevik Party, led by Lenin and Trotsky, took state power in the name of soldiers’, workers’ and peasants’ councils. The new soviet government repudiated czarist debts and called for an end to the war. It decreed that factories would be managed by workers’ committees and proclaimed its support for rapidly spreading peasant land redistribution. German troops advanced against Russian forces until a peace treaty was signed in early 1918. Later that year, after German sailors’ and workers’ councils took control of ships and factories, the Kaiser abdicated. The German government sued for peace. The war ended. Factory occupations spread through much of Europe. For a time, workers’ councils did successfully manage production.

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In some factories, production increased and useful innovations were adopted. But goods could not be sold; supplies could not be obtained; routine financing was out of the question. Worker-controlled factories faced an intractable problem. Most distribution and banking were in the hands of firms where salaried employees remained in patron-client relations. Believing that their employers were obligated to return their loyalty, they did not join with production workers. Unable to finance daily operations or find buyers for their products, workers’ councils in some places voted to return factories to capitalists. In other places workplace occupations ended in demoralization and repression (Haffner 1973; Spriano 1964). Twentieth-Century Violence The first decades of the twentieth century were a time of mass working-class mobilizations against capitalism and imperialism, of militarism and war , followed by factory occupations and capitalist reaction. After the surrender of Germany in 1918, France, the U.K. and Canada sent troops to fight the Bolsheviks, but soldiers had had enough of war and demanded to be sent home. Meanwhile, the czarist aristocrats in command of the white armies openly proclaimed their intention to restore landowners’ rights and privileges. Peasants, the overwhelming majority of the population, were equally determined to defend their newly gained rights to land. With their support, the Bolsheviks won the civil war and consolidated their power in most of what had been the czarist empire (Maddox 1977). In many places, the challenge to capitalism soon passed. In Germany and Austria monarchies were abolished. Social democrats won elections and participated in coalition governments. Social services and labour laws were improved, but capitalists regained private title to most means of livelihood. In Hungary, an armed counter-revolution overthrew a left-wing government that had based itself on workers’ councils. In the U.S., the Industrial Workers of the World and socialist parties were declared criminal conspiracies. More than a thousand working-class activists were arrested. Many employers refused to negotiate with traditional

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craft unions. In Canada in 1919 an armed rcmp attack ended the Winnipeg General Strike. City police supported the strike. In Italy, Mussolini’s paramilitary forces helped capitalists regain control of factories. They terrorized socialists and syndicalists, workers and peasants. In the U.K. in 1926, the Trade Union Congress called a general strike to protest rising unemployment and declining real wages. The strike was called off two weeks later. Unions, weakened and demoralized, made further concessions. The Russian Revolution had divided working-class organizations. Trade unions and political parties on both sides continued to organize for collective bargaining and campaign for political change that benefited working people, but those aligned with the Communist International identified fundamental social change with armed struggle and revolutionary dictatorship. Those who remained in the Socialist International rejected both, in effect muting and then dropping opposition to capitalism. The twentieth century had already been and would continue to be a time of horrific wars. Despite the identification of violent revolution with fundamental change, few armed seizures of state power led to fundamental changes in social entitlements. Some reinforced existing property rights. Most did little more than change the individuals in command of state power. When the century began, China was in the midst of the Boxer Rebellion, a widely supported uprising against foreign interference. Imperial Chinese forces, with foreign military aid, defeated the uprising. Foreign control of China’s economy and politics tightened. In 1910 civil war broke out in Mexico and continued with interruptions until the 1930s. Mexico then settled into a form of state-directed Keynesian capitalism. Petroleum resources were nationalized. Trade union rights and ejidos (village lands held in common) were given constitutional protection. The state encouraged domestic industry, which for the most part remained privately owned. The commanding heights of state power were in the hands of generals who had led revolutionary armies and taken personal possession of great latifundias. This institutionalized revolution remained largely intact until 1994, when Mexico opened its domestic markets to U.S. and Canadian capital in the North American Free Trade Agreement.

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From World War I through the early 1920s, Republican forces in Ireland fought British and Loyalist armies, but capitalism was not challenged. In Italy in 1922, Mussolini’s fascist army marched on Rome and seized state power in the name of order, authority and nationalism. In Portugal in 1926, a right-wing coup ended a brief period of democratic rights. In Germany, Hitler’s Nazi Party won a plurality in the 1933 elections. It then used paramilitary gangs and the regular army and police to suppress opposition parties and independent trade unions, as well as to persecute, imprison and kill communists, socialists, anarchists, Roma (gypsies), Jews and other ethnic minorities, people with disabilities and homosexuals. In Spain, General Franco’s fascist armies, with the support of landowners, the Catholic Church, Hitler’s airforce and Mussolini’s troops, launched attacks on the democratically elected Republican government. A civil war raged from 1936 to 1939. Democratic rights in Spain were lost and were not restored until the 1970s. The Bolshevik Party’s success in holding on to state power in the Soviet Union, initiating industrialization and defeating invading German armies in the 1941–45 war inspired Communist Party insurrections in Yugoslavia, Albania, Korea, China and Vietnam. Armed national liberation struggles succeeded in Burma and Indonesia. In the 1950s, nationalist military coups and uprisings overthrew foreign-imposed regimes in Syria, Egypt, Libya and Iraq. In the early 1950s, U.S.-backed coups overthrew elected governments in Iran and Guatemala. In 1959, Fidel Castro took power in Cuba with the July 26 Movement and reacted to the U.S. embargo by nationalizing industry. In the 1960s and 70s, anti-imperialist armed uprisings led to independence in Algeria, Zimbabwe, Angola and Mozambique. Right-wing, pro-capitalist military coups seized power in Argentina, Bolivia, Brazil, Chile, the Dominican Republic, Ghana, Haiti, Indonesia, Liberia, Sierra Leone, Pakistan, the Philippines and Uruguay. In 1979, the Sandinista coalition overthrew Samosa’s corrupt dictatorship in Nicaragua and then faced a decade of terrorist bombings, crop burnings and assassinations sponsored and financed by the Reagan administration. At the end of a century of armed revolutions, minority rule

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was barely challenged. That is not a surprise. Violent change turns fellow humans into enemies that must be destroyed. It separates winners from losers, recreating divisions between the entitled and the disentitled. Wealth-holding minorities have the advantage. Their entitlements allow them to call on the law to act in their interests. Their control of industry, transportation, communication and social surpluses gives them the means to train, provision, transport and pay private armies. Armed upheaval is inherently incompatible with workingclass interests. Working people are preoccupied with supporting themselves, their families and their communities. Workers as individuals may participate in armed combat, but violent disorder diverts public expenditures from social services to armed forces. Means of livelihood are destroyed and abandoned. Trade relations are disrupted. Social and political rights are lost. As might becomes right, the power of ruling minorities expands. Where anti-capitalist forces have succeeded in taking state power, victory in armed combat has not encouraged tolerance, pluralism, personal rights or democracy. In Russia, the long civil war accustomed Bolshevik officials to top-down central command. On taking power, Lenin’s government had proclaimed its support for the management of factories by workers’ committees. Within months, industry was nationalized. Managers appointed by the government were given unilateral authority to direct production and hire and fire workers. Trade unions and factory committees were ordered to organize armed militias to requisition food and supplies from peasants for Soviet troops and industry. As the civil war ended, discontent grew. Bolshevik leaders abandoned what they had called War Communism and instituted the New Economic Policy. Peasants were allowed to sell their surpluses. Restrictions on private small-scale enterprises were lifted. In the late 1920s, Stalin’s government, faced with chronic food shortages in cities, used armed force to collectivize agriculture and to direct labour to heavy industry. Party rule continued to be called the dictatorship of the proletariat, but political power in practice was in the hands of top party and state officials, generals and industrial managers. They relied on repression to limit dissent. When Communist Party rule imploded in the early

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1990s, well-placed officials took the lead in privatizing public assets. Some became billionaires who claimed private ownership of Russian industry. As it turned out, the party dictatorship was a transition not from capitalism to communism but from feudal capitalism to unrestrained market capitalism. Party or Class Marx held that the working class would develop the capacity to end capitalism. Lenin argued that workers’ organizations could not get beyond trade unionism, beyond what he called economism. In czarist Russia, trade unions were under close police surveillance. Any workers’ protests or demands that went beyond grovelling supplication were brutally repressed. The agency of social change, Lenin concluded, would have to be a party of professional revolutionaries steeled in legal and extra-legal political resistance. However, unlike most opponents of czarism who believed that peasants would provide the main support for social revolution, Lenin held that industrial workers would be the revolutionary party’s base. The Russian Revolution made Lenin’s views seem prescient. In October 1917, the Bolshevik Party seized command of the czarist state in the name of soldiers’, workers’ and peasants’ councils, and to the surprise of nearly everyone held onto power. In the first years, Bolshevik rule did largely rest on the support of the industrial proletariat. Although industrial workers were 10 percent of the population, most were employed in railways, shipping, coal mines, the steel industry and the production of munitions — all critical to victory in the civil war. By the early 1920s the occupation of factories by workers’ councils in Germany, Italy, Hungary and Austria had collapsed, but the Bolsheviks had consolidated power in the old czarist empire. Lenin appeared right: workers as a class were not capable of ending capitalist property relations. For the rest of the century most opponents of capitalism viewed revolutionary armed forces and political cadres as the agencies of social change. Armed forces would take control of the state and defend it against counterrevolution; professional cadres would provide the skills and

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networks required to take command of the state and industries. The role of the working class was to provide mass support for the party. Communist parties in power claimed to be guided by Marxism-Leninism. Marx, who viewed the working class, the immense majority, as the agency of anti-capitalist change, came to be associated with top-down party dictatorship, a form of minority rule that had little working-class support outside of the most oppressed and impoverished countries. Left-wing academics who accepted Leninism as the alternative to capitalism attributed the absence of international working-class support for actually existing socialism to Marx’s economic determinism. Marx was wrong, they claimed, to hold that workers would spontaneously oppose capitalism. Perhaps some people who called themselves Marxists were economic determinists. Marx was not. He saw social change as a product of material conditions, property relations and class struggles. As a life-long proponent of the humanity of the labouring masses, Marx did not and could not have viewed workers as unthinking automatons who would overthrow capitalism spontaneously, without thought, planning or collectively articulated goals. Marx may have underestimated the resilience of capitalism. Living in a time when working-class opposition to capitalism remained largely illegal, he may not have expected that capitalists could accept freedom of assembly, association and speech and the right to vote for working people and maintain control of means of livelihood and political power. Marx did not predict that the increasing productivity of social labour and growing trade unionism would lead to expanding working-class income and mass consumerism. He had inklings but could not fully see the destructive environmental consequences of unrestrained industrial expansion. He could not have known that supporters and opponents of capitalism would for nearly a century insist that the alternative was violent upheaval, authoritarian statism and the privation of exclusion from world markets. Marx knew that educated opinion viewed working-class change as preposterous. In the philosophical, religious and

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political traditions of Europe, Asia and the Middle East, majorities who labour for a living have long been viewed as little more than pawns of the ruling class, expected to do what they are told, not to change the world. Capitalist ideology continues to view workers as objects not subjects of history. The theory of the individual in the market implicitly excludes wage and salary workers from economic and political decisions. In business, the media and the mainstream academic world, workers are routinely portrayed as ignorant and narrow-minded, incapable of making intelligent decisions. Lenin’s view that anti-capitalist consciousness had to be brought to the working class from outside was neither original nor unreasonable in his time and place. In czarist Russia, organized working-class action was severely repressed. The industrial proletariat and the intelligentsia were socially distinct classes. Majorities were illiterate and impoverished, eking out a living on the land as small holders, sharecroppers and landless peasants. Russia was a prototypical neo-colony, a nominally sovereign country with an economy directed in the interests of domestic and transnational capitalists. Russia provided cheap agricultural products to Europe and got credits and manufactured goods in return. Because landowners and capitalists maximized their profits at the expense of the income of majorities, they had little practical interest in developing domestic markets. Campaigns for industrial development came from the intelligentsia, from revolutionary students, many of whom became peasant and trade union leaders and would later become cadres of the Bolshevik revolution and state. Czarist Russia was not unique. In the future, people in countries impoverished by capitalism or occupied by foreign armies may continue to look to charismatic leaders, armed revolution, state ownership and central planning as the route to industrial development and independence. The idea of heroic young men and women taking up arms against oppressors has a powerful and primordial cultural appeal. Nonetheless, when the objective is a world of human equality, democracy and cooperation, the only realistic agency of anti-capitalist change is the working class. The failure of factory occupations after World War I did not

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prove that workers as a class are incapable of ending capitalism. It did show that factory workers alone cannot accomplish this. The relative homogeneity of the industrial proletariat and the employment of hundreds and thousands in industrial enterprises did encourage the occupational solidarity that led to factory occupations and then to the growth of industrial unions. However, so long as the working class was narrowly defined as the industrial proletariat, a working-class alternative to capitalism was not realistic. It is the heterogeneity, the universality of the working class, that makes economic democracy practical. There is now no necessary economic activity that is not done by wage and salary workers. Anti-capitalist consciousness does not have to come from outside workers’ struggles. In most countries, wage and salary workers have the legal right to organize unions, to write, speak, associate and engage in political action. Nearly all wage and salary workers are now literate. Every occupation includes people with post-secondary education. Most professional intellectuals are wage and salary workers. Higher-paid salary workers, technicians, professionals and managers may still be inclined to identify with the prevailing system, but in today’s world of unrestrained capitalism they too face the loss of employment due to downsizing, outsourcing, computer technology and financial meltdown. Outside of wealthholding families and the top tiers of corporate management, patron-client relations are now illusory. For much of the twentieth century, history appeared to be on the side of the Leninist view of social change. In 1950, communist parties had abolished capitalism in countries that accounted for a third of humankind. In the early twenty-first century a communist party opposed to capitalist property relations and committed to top-down state control remains in power in only one small country, North Korea. The Communist Party retains state power China, but it openly and aggressively fosters capitalism. The governing party in Cuba continues to oppose capitalism, but it relies more on the organized support of people in communities and workplaces than on top-down authority. Where movements against capitalism are growing, these are

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based on mass mobilizations and electoral action. In Venezuela Hugo Chavez has won transparent, democratically contested elections. In Bolivia and Ecuador, opposition to the system has been mobilized from the bottom up. Mass movements in these small poor countries face serious obstacles, but they do demonstrate that working-class opposition to capitalism is motivated by visions of human equality, democracy and cooperation and rests on workplace organization, community mobilizations and democratic electoral action. Continuing Gradual Change Violence got all the attention in the twentieth century, but it was a time of gradual yet momentous social change. As direct imperial rule was brought to an end, communications and trade in daily necessities became global. The steady expansion of mass consumerism provided substantial numbers of wage and salary workers with middle-class living standards. In many countries, discrimination in employment, education and housing based on race, gender and sexual orientation became illegal. Changes were largely incremental, made practical by the steadily increasing productivity of social labour and achieved through collective bargaining gains and reforms won through mass political mobilizations. In the 1930s, strikes, picket lines and sit-ins swept industry in the U.S., Canada and other countries. During and after World War II, unions grew rapidly in many industries. Expanding union membership led to rising wages, improved working conditions and increased benefits. Political parties and governments supported by trade unions adopted Keynesian full-employment policies. Progressive income taxes dampened the tendency of capitalist entitlement to widen disparities and provided funding for broadened post-secondary education, pensions, unemployment insurance, welfare payments, social housing and public health care. In 1900, women did not have the right to vote. Fathers and husbands legally controlled their finances. Women in agriculture and other family enterprises sometimes got no money of their

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own. They were excluded from most professions. Women working in clothing and textile industries, domestic service or retail trade laboured for wages half or less what men were paid. During World War I, however, women’s employment grew dramatically. As men joined or were conscripted into armed forces, women were recruited to work in rapidly expanding war industries. Tens of thousands joined unions, transforming suffrage campaigns into mass movements. By 1920, women in New Zealand, Finland, Canada, the U.K., Australia and the U.S. had won the vote. During World War II women returned to industry in large numbers. After the war, laws were passed restricting the employment of married women. Then, within a decade, employment of women in offices, services and manufacturing began to steadily rise. Labour-saving machinery made muscle power less important. Assembly lines and standardized procedures reduced requirements for long years of apprenticeship. More goods and services that had been produced at home for direct consumption were provided by corporate business, making families less dependent on the labour of women in the home and more dependent on income. More reliable birth control made it practical for women to spend most of their lives employed in wage and salary work. As changing material conditions and social relations undermined traditional justifications for discrimination based on sex, women more confidently demanded equal rights in education, workplaces and unions. By the 1970s, women in many countries had secured legal control of their personal finances. Laws were passed prohibiting sex-based discrimination in employment and education. By the 1990s, a third and more of union members were women. In public service occupations and in hotels, restaurants, clothing, food processing and trade, women were often a majority. Health care has become a human right. In Canada, Saskatchewan led the way. In 1944, the Cooperative Commonwealth Federation (ccf) won the provincial election. In 1946, the ccf government passed legislation for a publicly funded hospital insurance program, but medical services outside hospitals still had to be paid out of pocket or through private insurance. In 1957, the government of Canada agreed to share the costs of hospital and laboratory services. In 1961, the Saskatchewan government,

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taking advantage of federal funding, introduced legislation for comprehensive public health care coverage for everyone. Saskatchewan doctors’ associations, supported by the Canadian and American medical associations, local chambers of commerce and insurance companies, denounced the plan as socialist medicine. On the other side, the Saskatchewan Federation of Labour, farmers’ groups and many rural municipalities rallied to support the legislation. A province-wide movement began organizing for community clinics to be managed by elected local boards. These were to be staffed by salaried doctors from different specialties working in teams with nurses and other health care professionals focused on prevention as well as cures. On July 1, 1962, the Medical Care Insurance Act was enacted. Most of the province’s 725 doctors withdrew their services. The strike lasted until July 23 when doctors agreed to a single-payer, comprehensive public health care system with universal coverage. The government agreed to pay doctors fees for service — not salaries — effectively ending the movement for community clinics. The agreement would provide the framework for the 1966 Canada Medical Care Act, allowing for single-payer, universally accessible public health care (Rands 1994; Badgley 1967). In the U.S., civil rights movements succeeded in overturning laws that explicitly discriminated against African-Americans in housing, employment, education and other public services. In Canada, the courts and the law reversed, in principle, a century of blatant disregard of treaties signed with indigenous people. Movements against direct imperial rule had already ended global justifications for theories of racial superiority. By the end of the century, racialized minorities, immigrants, the disabled, homosexuals and the transgendered in many countries had achieved protection against discrimination. Meanwhile, corporate oligarchs were organizing the neoconservative reaction against unions, the welfare state and public spending. As blatant discrimination in education and employment subsided, college-educated women and people from visible minorities gained employment opportunities, but majorities without professional or technical qualifications (including most men and women of visible minorities) who depended on collec-

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tive bargaining, social services, and public employment faced declining income and fewer job opportunities. Looking back, movements against capitalist entitlement had peaked in the 1940s. In the 1960s, opposition to the Vietnam War and to authoritarian lifestyles appeared to have empowered youth. Young people became a focus of corporate advertisers. By the 1970s, wealth-holders’ entitlement was barely challenged. Unions represented a declining portion of wage and salary workers even though the number of women in unions was steadily increasing. Transnational corporations were consolidating control of the resources and markets of former colonies. The Soviet economy was clearly falling behind in the volume, variety and quality of consumer goods. Forced labour camps, purges and executions and military intervention in Hungary and Czechoslovakia had ended most working-class support for the Soviet Union. In China the Great Leap Forward had disrupted agriculture and industry; the Cultural Revolution provoked social disorder and divided the ruling party. For working-class majorities in most countries, socialism as it existed came to be identified with dictatorship, repression and lower living standards. Capitalism was identified with the individual in the market and democracy, a system that provided many people with expanding access to consumer goods. Trade union officials and electoral parties supported by labour continued to advocate Keynesian policies, but did so claiming that reforms would strengthen the system. The Limits of Pro-Capitalist Reform When most working people are convinced that capitalism is the best possible system, trade union leaders focus on gains for their members within the system. Unionism becomes a kind of competitive minority entitlement: the most successful unions are viewed as those that win the best wages and benefits for their members; solidarity rarely goes beyond occupations or industries. For a time, union officials who supported capitalism did gain daily rapport with employers. In the long run, the withering away of organized working-class opposition to capitalism encouraged

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the capitalist reaction. Wealth-holders became more aggressive in the pursuit of their narrow class interests, demanding an end to what they called confiscatory taxes, profligate spending on social services and the culture of entitlement. Neoconservative governments reduced and eliminated taxes paid by the rich, froze and cut social programs and privatized utilities, schools, hospitals, health care services and penitentiaries. More jobs were moved to places where labour was cheaper. Unionized employment steadily declined. In the 1950s, a third of U.S. wage and salary workers and nearly half of all blue-collar workers were represented by unions. By the end of the century, less than one in ten workers in private U.S. industry were union members. Trade union representatives who hold a kind of public office cannot be expected to take up arms or to advocate violent opposition. They do have a responsibility to expose the capitalist drive to maximize profits at the expense of labour, the marginalized and the unemployed and at the expense of the environment. They should look for opportunities to make the case that majorities who depend on wage and salary work are capable of democratically directing economic life in the common human interest. Trade unions are not alone in the failure to oppose capitalism. Social activists rarely explicitly oppose capitalism. Campaigns around single issues may get broader support, but the capitalist drive to maximize profits is behind the racialization of minorities, gender discrimination in workplaces, widening disparities, wage discrimination, repression, wars, campaigns against public services and the externalizing of environmental costs. When capitalism is unchallenged, the disaffected, within and outside the trade union movement, look for scapegoats to explain declining living standards, unemployment and crime. Some blame drugs, ignorance, schools, the media, feminists, the banking system, globalization, homosexuals, immigrants, visible minorities or the poor. Others blame Americans, Christians, Jews, China, Islam, democracy, liberals, older white men, Communists, socialists or trade unions — anything but capitalism. Working-class opposition to capitalism will not arise spontaneously. It could begin in public sector union campaigns against privatization or in trade or industrial union campaigns against

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outsourcing and downsizing. It could begin among anti-poverty or environmental activists, the radical left, scholars, historians, educators, journalists, lawyers or bloggers. Mass opposition to the system could begin in community campaigns against transnational corporate control of resources and markets. What is certain is that until the organized working class explicitly opposes capitalism, the system will not be effectively challenged. Tipping Points to Economic Democracy When a world of human equality, democracy and cooperation is seen to be a practical and attainable alternative, people will oppose capitalism with hope instead of fear. People will more confidently demand that basic needs be met as human rights. More workers will organize against unilateral capitalist control of workplaces. More communities will mobilize for democratic control of resources, social employment and markets. More will join in political action against the externalizing of environmental costs, against disparities, unemployment, poverty, repression, militarism and war. Instead of looking for scapegoats, the disaffected, the marginalized, the dispossessed and the unemployed will look to working-class solidarity. Unions will identify with their communities and humanity as well as their occupations. New unions that focus less on narrow sectional interests and more on fair wages and reasonable differentials within and among occupations may be organized. Existing unions may adapt. In either case, unions will become organizations of human solidarity. Local labour councils, regional federations and national congresses will aim to unite wage and salary workers in all occupations with the unorganized, the marginalized and the unemployed everywhere. Unions will stand for equal human entitlement. The power of capital is global. Movements for economic democracy must be international, but people do not have to wait for everyone everywhere before opposing the system. Steps taken by smaller communities to strengthen human entitlement and weaken capitalist entitlement can inspire movements for similar gains and reforms elsewhere.

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Communities can take initiatives to provide housing and to protect local employment, food production and wage and salary rates. Local ordinances and bylaws can provide environmental protection. When capital moves employment to places where labour is cheaper, communities can respond by taking public ownership of enterprises, providing all inhabitants with a voice and vote in decisions and workers with the right to democratically direct their labour time. As gains and reforms strengthen human entitlement, social ownership and workplace democracy in more places, tipping points will be reached after which capital will lose the means to control markets and supplies. Attempts by wealth-holding minorities to impose their narrow interests through capital flight, repression or war will deepen opposition to capitalism. Political parties will pass legislation to weaken capitalist power for pragmatic electoral reasons. Many wealth-holders as individuals will come to identify more with their humanity than with their capital. As a class, capitalists will do what they can to retain their privileges. Working people can respond to capitalist violence with protests, rallies, strikes, international boycotts, general strikes and the occupation of workplaces. By taking democratic control of means of livelihood, wage and salary workers can deny capital access to industry, transportation, communications, finance and socially produced surpluses. When police and soldiers — who are wage and salary workers — have to choose between wealthholding minorities on one side and the working class on the other, many will identify with the overwhelming majority. Taking up arms against violent repression and foreign occupation is a human right — arguably an obligation — but violence, no matter how justified, makes life worse for common people. It plays into the hands of people who believe might is right, the most bellicose supporters of minority rule. Where violence in the name of the people has succeeded, political power has ended up in the hands of the commanders of armed forces. Working-class change in the future as in the past will be based on workplace organization, community mobilizations and democratic political action. Ideally, economic democracy will be established through

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referendums or votes in legislatures to convert remaining private capitalist equity into public bonds. Is a majority vote too prosaic an end to class struggle? When capitalism has finally been replaced with economic democracy, humankind will have overcome millennia of minority privilege and class rule. Everyone will be entitled to participate as equals in social means of livelihood and in making their communities’ political and economic decisions. Communities from the local to the global will be freed to direct resources and social labour toward immediate and future well being. Everyone everywhere will be entitled to find happiness, respect, employment, meaning and beauty in daily life.

Acknowledgements Local 400 of the International Longshore and Warehouse UnionCanada gave me the opportunity to participate in social relations as a working-class activist and a trade union official. The ilwu has a history of commitment to membership democracy and to working-class and human solidarity, demonstrating that successful collective bargaining under capitalism need not corrupt or buy off workers. The Vancouver and District Labour Council gave me firsthand experience of the heterogeneity of the working class. Unions represented in the council include men and women employed in resource industries, construction, transportation, communications, manufacturing, services, administration, trade, health care and education, people who have learned on the job as well as the technically trained and professionals, like computer programmers, researchers, teachers, nurses and professors. The vdlc does not limit itself to exclusively trade union issues. It takes stands in support of the poor, the homeless, the marginalized and immigrants and has consistently opposed militarism, war and foreign occupations. Gary Engler and Yves Engler read drafts and made useful comments. Criticisms by Errol Sharpe from Fernwood Publishing pushed me to remove unnecessary arguments. Mary Beth Tucker edited the final draft. I of course accept responsibility for mistakes or omissions. Jean Rands read numerous drafts and made many suggestions. Her experience organizing and bargaining on behalf of clerical, service and financial workers helped shape my understanding of working-class heterogeneity. The conceptions of economic democracy and social change presented here are hers as well as mine. 106

References Albert, Michael, and Robin Hahnel. 1991. Looking Forward, Participatory Economics for the Twenty-first Century. Boston: South End Press. Aristotle. 1943. The Politics. New York: Penguin. Badgley, Robin F., and Samuel Wolfe. 1967. Doctors’ Strike, Medical Care and Conflict in Saskatchewan. Toronto: MacMillan. Bernstein, William J. 2008. A Splendid Exchange: How Trade Shaped the World. New York: Atlantic Monthly. Braverman, Harry. 1974. Labor and Monopoly Capital. New York: Monthly Review. Cipolla, Carlo. 1972. The Fontana Economic History of Europe. Volume 1: The Middle Ages. London: Collins/Fontana. _____. 1973. The Fontana Economic History of Europe. Volume 4: The Emergence of Industrial Societies [2]. London: Collins/Fontana. Cole, G.D.H., and Raymond Postgate. 1962. The British Common People. London: Methuen. Davis, Mike. 2001. Late Victorian Holocausts — El Nino Famines and the Making of the Third World. London: Verso. _____. 2006. Planet of Slums. London: Verso. Engler, Allan. 1995. Apostles of Greed, Capitalism and the Myth of the Individual in the Market. London, Halifax: Pluto, Fernwood Publishing. Engler, Yves, and Anthony Fenton. 2005. Canada in Haiti: Waging War on the Poor Majority. Vancouver and Halifax: Red and Fernwood Publishing. Galleano, Eduardo. 1973. Open Veins of Latin America: Five Centuries of the Pillage of a Continent. New York: Monthly Review. _____. 1988, Century of the Wind. Volume 3: Memory of Fire. New York, London: W.W. Norton. Haffner, Sebastian. 1973. Failure of a Revolution: Germany 1918/19. London: Andre Deutsch. Halward, Peter. 2007. Damming the Flood: Haiti, Aristide, and the Politics of Containment. London: Verso. Harding, Jim. 2007. Canada’s Deadly Secret: Saskatchewan Uranium and the Global Nuclear System. Halifax: Fernwood Publishing. Joll, James. 1966. The Second International 1889–1914. New York: Harper Colophon. Kahn, Michael. 2008. “British Study Links imf Loans to Tuberculosis.” 107

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London: Reuters, July 21. Klein, Naomi. 2007. The Shock Doctrine, the Rise of Disaster Capitalism. Toronto: Alfred A. Knopf. Lis, C., and H. Soly. 1979. Poverty and Capitalism in Pre-industrial Europe. Brighton: Harvester Press. Maddox, Robert J. 1977. The Unknown War with Russia: Wilson’s Siberian Intervention. San Rafael, CA: Presidio Press Marx, Karl. 1973. Grundrisse, Introduction to the Critique of Political Economy. London: Pelican. Marx, Karl, and Friedrich Engels. 1964. The Communist Manifesto. New York: Monthly Review. Mazoyer, Marcel, and Laurance Roudart. 2007. A History of World Agriculture from the Neolithic Age. New York: Monthly Review. Menzies, Gavin. 2008. 1434: The Year a Magnificent Fleet Sailed to Italy and Ignited the Renaissance. New York: Harper Perennial. Milanovic, Branko. 2005. Worlds Apart: Measuring International and Global Inequality. Princton, NJ: Princeton University Press. Mill, John Stuart. 1871. Principles of Political Economy. London: Longman’s. Nikoforuk, Andrew. 2009. Tar Sands, Dirty Oil and the Future of a Continent. Vancouver: GreyStone Books. Noble, David. 1977. America by Design. New York: Knopf. Padover, Saul K. 1973. Karl Marx on the First International. New York: McGraw Hill. Pilger, John. 2006. Freedom Next Time. London: Black Swan. Rands, Stan. 1994. Privilege and Policy: A History of Community Clinics in Saskatchewan. Saskatoon: Community Health Cooperative Federation. Schweickart, David. 1996. Against Capitalism. Boulder, CO: Westview Press. Smith, Adam. 1937. The Wealth of Nations. New York: Modern Library. Spriano, Paulo. 1964. The Occupation of Factories, Italy 1920. London: Pluto Press. Statistics Canada. 1997. Manufacturing Industries in Canada. Catalogue No. 31 203 XPB. Wright, Ronald. 2004. A Short History of Progress. Toronto: Anansi.

Index A Afghanistan 32, 33 Africa 11, 13, 21, 28, 39, 43, 51, 86 agriculture 20, 38, 39, 50, 69, 70, 80, 85, 86, 87, 93, 98 Albania 92 Aquinas, Thomas 15 Aristide, Jean Bertrand 17, 36 armed force 14, 26, 27, 29, 36, 50, 63, 70, 89, 93, 94, 99 armies 50, 75, 91, 92, 93 Asia 11, 13, 17, 28, 39, 43, 51 automobiles 41, 80

D Debs, Eugene 89 disparities 19, 21, 50, 63, 67, 75, 77, 98 drive to maximize profits 82 drugs, war on 102 E Egypt 92 enclosures 12, 26, 42, 75 F famine 18, 19 feudalism 14, 86 fishing 14, 74 forests 13, 40, 43, 74, 79 France 17, 20, 28, 36, 69, 86, 88, 89, 90 G Germany 86, 88, 89, 90, 92 Guatemala 21, 92

B birth control 99 Burma 92 C Canada 13, 17, 28, 34, 36, 76, 88, 90, 91, 98, 99, 100 Castro, Fidel 92 ccf 99 Chavez, Hugo 17, 35, 98 China 17, 18, 19, 27, 30, 31, 43, 66, 72, 91, 92, 101, 102 Communist International 91 computers 64 Connolly, James 89 Cuba 92

H Haiti 17, 21, 35, 92 Hardie, Keir 89 health care 14, 100 homo economicus 66 Hungary 90, 101

109

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I imperialism 19, 30, 31, 33, 35, 43, 50, 69, 75, 89 impoverishment 37, 42, 51 indentured labour 75, 86 India 18, 19, 30, 43, 66 indigenous people 13, 28, 51, 75, 100 Indonesia 14, 21, 66, 92 industrial proletariat 94, 97 International Monetary Fund 20, 50 Iran 92 Iraq 32, 34, 35, 92 Ireland 18, 89, 92 Italy 88, 89, 91, 92 iww 88, 90 J Jaures, Jean 89 K Kerensky, Alexander 89 Keynesian policies 23, 98, 101 Korea 72, 92 Kosovo 33 L laissez faire 21, 27 Latin America 11, 13, 43, 51 Lenin 69, 89, 93, 94 Libya 92 Liebknecht, Karl 89 Locke, John 15, 64 M Marx 15, 64, 65, 84 material incentives 72 Middle East 17, 28, 43

militarism 32, 62 Mill, John Stuart 58, 65 money 18, 20, 33, 62, 65, 67, 69, 86, 98 N nafta 91 nation-states 49, 50 nato 33, 34, 50 Nicaragua 21, 92 Nixon, Richard 23 nuclear power 38 P Palestine 17, 33 Pankhurst, Sylvia 89 Paris Commune 66 patron-client relations 85, 86, 90 prawn farms 39 privatization 21, 36, 44, 72, 86, 102 production for direct consumption 13, 60 Proudhon 15 R Reagan, Ronald 23, 92 Ricardo, David 64, 65 Russia 31, 88, 89, 93, 94 Russian Revolution 84, 91, 94 S Security Council 36, 50 Serbia 33 Smith, Adam 65 Somalia 33 Soviet Union 20, 59, 69, 92 Sri Lanka 14, 36 Stalin, Joseph 70, 93

Index – 111

subsistence 11, 12, 13, 18, 29, 42, 44, 70, 85 Syndicalists 88 Syria 92

V Vancouver 72 Venezuela 17, 21 Vietnam 92

T Thatcher, Margaret 23 Trade Union Congress 91 trade unions 17, 20, 31, 42, 54, 60, 65, 87, 88, 89, 91, 92, 93, 94, 98, 99, 100, 101, 102 Trotsky 89

W welfare state 100 Winnipeg General Strike 91 women 12, 16, 17, 30, 33, 42, 43, 44, 51, 55, 57, 58, 81, 88, 89, 98, 99, 104 workers’ councils 89, 90 World Trade Organization 50 World War I 17, 31, 43, 69, 99 World War II 31, 99

U U.S. 11, 17, 20, 28, 31, 32, 33, 34, 35, 41, 69, 88, 89, 90, 91, 92, 98, 99, 100 Ukraine 66

Y Yugoslavia 92