Posted 2 years ago on Feb. 21, 2012, 5:05 p.m. EST by LeoYo
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Economic Alternatives to Capitalism
Tuesday 21 February 2012
by: Richard D. Wolff and Gar Alperovitz, Truthout, Economic Update | News Analysis
Occupy Wall Street protesters stage a demonstration at Foley Square, in New York, November 17, 2011. (Photo: Richard Perry / The New York Times)
In partnership with Truthout, Professor Richard D. Wolff hosts a weekly radio show on WBAI 99.5 in New York called "Economic Update." In December, historian and political economist Gar Alperovitz met with Wolff to discuss an issue they both work on heavily: worker-managed and worker-owned companies. Wolff and Alperovitz are at the forefront of advocacy and education for worker-ownership as a solution to the many problems we are facing today. Wolff and Alperovitz, along with philosopher David Schweickart, will host a panel entitled “The Next System: Exploring Economic Alternatives to Capitalism” at the Left Forum in New York City, a conference from March 16 through the 18th. You can learn more about the conference and register by visiting the Left's Forum's website.
Richard Wolff: My guest for today, Gar Alperovitz, is the Lionel Bauman Professor of Political Economy at the University of Maryland. He is a co-founder of the Democracy Collaborative. I have read a whole bunch of his articles and books over the years. The one I am holding in my hand right now, and perhaps the one he’s best known for these days, is called America Beyond Capitalism and is currently in its second edition. The people who have commented on it as wonderful include Noam Chomsky and Howard Zinn. Now I will read what both gentlemen had to say. Noam Chomsky called this “a marvelous book, I recommend it all the time” and Howard Zinn “A set of eminently practical ideas…”
Gar, it’s a pleasure to welcome you to the program and thank you for taking the time to spend with us today.
Gar Alperovitz: Thank you, Rick. I really appreciate it.
Wolff: Well, let’s get right into discussing both your general work and this book. A basic premise of the book has been the notion of a long-term decline in or of U.S. capitalism. You stated that in the first edition of your book, America Beyond Capitalism, some years ago and again in the new second edition this year. Between those two editions, U.S. capitalism did indeed crash quite badly and we’re in the soup of an economic crisis now. So I want to begin by asking you to tell us whether you still believe there’s a long-term decline and whether the current crisis makes you feel that more or less strongly, or just how the current crisis has shaped your thinking.
Listen to the radio show:
Alperovitz: Well, broadly the notion that--and the premise of the book, and we can go to a longer discussion--is that in fact we are entering an era of deepening stagnation and political stalemate. I think you can make a case, and Rick you’ve made the case in terms of the loss of demand that can’t hold up the Keynesian solution to the problem, many, many times. If you don’t have buying power, you can’t do that, but I think it’s a deeper problem and an ongoing problem.
A short form of the argument would be: in the first quarter of the century, up to World War I, there was decay, decline, and indeed almost major recession and almost depression. We don’t know what would’ve happened, but World War I certainly bailed out the economy. In the second quarter of the century in the 1920s, you find the same pattern and then the Great Depression and World War II bailed out the economy. In the third quarter of the century, the post-war economic boom partly from savings built up during the war, partly from the Korean War, the Vietnam War, the big military budgets of the Cold War and because the competitors, Germany, Japan, many others have been significantly destroyed, we were boosted in the third quarter. I think you can see that now, even though the military budgets are high absolutely, they are declining as a share of the GDP.
So I think that we are facing that, plus global competition, and I think those forces could be resolved even in a corporate capitalist system if you have sufficient power to mount a traditional Keynesian solution. But what is significant--and this is the heart of the matter--why that solution is not available is that the American progressive or liberal politics has decayed also above all because the labor movement. The labor movement is no longer what it once was. It was 34-35% at its peak just after the war, it’s now down in the 11% range and down in the 6% range. And the muscle behind a traditional way to balance a corporate capitalist system in Keynesian solutions and social programs--that muscle power of labor (in Sweden it was 85% of the labor force unionized)--is declining. So that’s a picture of decay, and there doesn’t seem to be an easy way out of that. And on the other hand, and here’s an oddity: nuclear weapons now prevent, I think, a kind of industrial scale war like World War I or World War II. We can have small horrible wars, but they don’t function economically in a way that they did previously.
Wolff: So that even the technology of warfare undermines its economic effects.
Alperovitz: Exactly. Which means ongoing stagnation, decay, pain, and with that, growing awareness. And here, we have to thank the Occupy groups. People now sense something new. Something fundamental is wrong, not just if we elect the next guy. That’s a big deal in history when that begins to happen and I think that’s one of the things coming out of this pattern of decay and stagnation.
Wolff: Yes, it’s absolutely remarkable and I try to suggest it wherever I go, too. That a movement like this can grow so rapidly across the country and draw such a popular support and yet at the same time has the unprecedented--at least over the last century--courage to talk about a basic inequality and a basic economic dysfunction, that’s an amazing thing to see, and in the United States all the more.
Let me pick up on a point you made. It would be reasonable, given what you said, to see anger in the streets as we’re seeing, to see resignation on the part of people who don’t know what to do, despair, turning away from politics, the kind of disengagement from civic involvement that that Harvard sociologist that you and I both admire, Robert Putnam, talks so poetically and so statistically well about. And yet your work is infused with a certain optimism, and I noticed that it was present again in this month’s op-ed in the New York Times that you wrote. Mainly, that Americans in huge numbers are turning to collective, co-operative kinds of economic institutions that are not your typical capitalist top-down hierarchical enterprise. Talk to us a little bit about whether that’s happening, how it’s happening, and whether we have the grounds to see in that a positive response to the kind of decay that you identify.
Alperovitz: Well, let me just set the stage of that. I’m a historian and I think about it in historical terms. The book is called America Beyond Capitalism which means, what is the next stage? And I think there’s a stage beyond the current stage, a much more interesting stage. What I see happening just under the horizon is that all of the traditional solutions--at the local level, the state level, the national level--simply don’t work. And the pain level is driving people to begin to build on things that they’ve done in the past. So for instance, most people don’t realize it: there are 130 million people involved in co-ops and credit unions in the United States, democratizing the ownership of those instructions. That’s at least 40% of the society.
There are something like 13 million Americans in one or another form of worker ownership. Some good, some bad, some that could be organized much better if the organizers begin taking them on. There are 4,000 or 5,000 neighborhood corporations. Again, changing and democratizing instead of privatizing the ownership of capital, a central principle that’s got to build and develop. I’ll give you a long statistic; America Beyond Capitalism is filled with these practical things that Howie Zinn was commenting on. But I’ll give you one more: 25% of American electricity today is produced by socialist institutions. Co-ops and municipal enterprises--25%. A quarter. Most people aren’t aware of the actual very American, very decentralized, very ordinary ways of changing the ownership of capital in a society which 1% owns half the investment capital just about. Let me say that again, the top 1% owns just about, a little bit under, half of the investment capital. That’s a medieval number, and I don’t mean that rhetorically.
Wolff: No, the inequality is stunning.