February 18, 2009

Invest in every human and create real foundations for cooperation

With furious debate raging nationwide over the stimulus package crafted by the Obama administration, now might be a good time to address, once again, the dimensions of the philosophical and ideological divide in mainstream American politics and propose a rational alternative to the madness.

The conservative and libertarian camps are up in arms over the package, denouncing it as “socialism”. Obama’s supporters believe it is a necessary step in solving the economic crisis. Those further to the left, naturally, do not believe the plan goes far enough. For my part, I find the basic idea to be well justified, but I question how much good it can do since it does not address the foundational flaws in the American or the global economy.

History is posing a challenge to this generation. While I don’t reduce the nature of our economic problems to psychology, it is beyond doubt that the two wings of the American ideological and political establishment — welfare liberals and free market conservatives — are trapped in the paradigms of the 1960s and 1980s respectively, and are forcing the rest of us to suffer as they refuse to let go of their false idols. While I don’t think Obama is going to solve all or even most of our problems, I was relieved nonetheless to hear him say, and I paraphrase, “there will be no return to the failed ideologies of the past”. The question then remains: to which ideology will we go into the future with?

It must be said that the flaws in our economy run deeper than the chaotic financial markets and the haywire stock exchange. The first premise of modern capitalism as it really exists is not private production, finance or trade — these have existed throughout the history of civilization. The first premise is the total separation of the worker from the instruments of work on a mass scale, and thereby, the ability to directly appropriate the product of that work. Instead they depend upon a wage, set by the balance of supply and demand in the labor market. Hence the livelihood of the vast majority of individuals, not to mention the fate of entire towns and cities, is at the mercy of a wildly fluctuating, amoral market that has no conscience and no soul.

Neither the promotion of laissez-faire nor the building up of the liberal welfare state addresses this problem. Aside from what I consider to be deeply flawed ethical arguments for laissez-faire, the utilitarian argument most often invoked — at least to me — is a) free markets mean more competition, b) more competition drives down prices, therefore c) as consumers, we all benefit from free markets. There may be truth to this logic, but it tends to ignore what happens to us as workers, since a totally free market would have no minimum wages or labor unions. The trend for the last 30 years has been deregulation, tax cuts, and union busting, while real wages have declined, consumer debt has skyrocketed, and perhaps most seriously, the loss of secure jobs that pay well and their replacement with more “flexible” jobs thay pay less and offer fewer benefits. From where most people stand, the masses of ordinary citizens, they have lost more as workers than they have gained as consumers, rendering the only aspect of the utilitarian case for lassiez-faire that would mean anything to them quite meaningless.

On the other side, though no one should accept the crude caricatures of welfare policies and results made by the far right in its ideological crusades, there is truth beneath the muck; welfare does not solve problems and in many cases, it deepens them. It is a way of trying to solve a legitimate problem without really solving it. In the end the state and those who support it feel they have done their duty, while the poor and powerless remain exactly where they are (the same applies, by the way, to the modern notion of charity, which has little to do with its original meaning in Christianity).

There is a third and better way, and I doubt I am coining the term: the investment state. The concept has existed in many places in different forms, but the basic idea is that people should be viewed as worthy, in their inherent human dignity, of social investment that will enable them to become good citizens and productive, self-sufficient workers. The old saying goes, “give a man a fish and he will eat for a day; teach a man to fish and he will eat for a lifetime”.

It does no good, however, to teach a man to fish and then insist that he work for a wage so that he can buy his fish on the market, especially when the wages are low and the prices are high. But we want our man to eat for more than a day so we aren’t just going to give him a fish either. We’re going to give him a rod. That is what is always missing in the old saying.

How do we do so? In 1988 George Bush Sr. spoke of the “thousand points of light”, which was a quaint thought at the time, but today I think we need a thousand Mondragons. The Mondragon is a cluster of 150 workers cooperatives in Spain, complete with its own schools and university. The cooperatives are owned by the workers, and run by them democratically. The cooperatives compete on the open market, and hence they share the risks and the rewards, the losses and the gains. It is not a utopia where all is always well, but a community, where problems are faced and overcome in an atmosphere of cooperation as opposed to endless antagonism. The famous political philosopher John Locke wrote that “where there is no property, there is no injustice”; we might rephrase him slightly and say that in the case of the workers cooperative, where all have property, all have justice — even if they have nothing else.

A system of cooperatives may not be able to prevent economic crises — only a rational regulation of the financial system can do that. But what it can do for individual workers caught in the tempest is more than enough; it is the difference between clinging to a piece of driftwood for dear life, or being aboard a strong and sturdy ship whose problems can be addressed collectively. What person struggling to pay their bills and debts, or to find a new job or a home, wouldn’t benefit from that? It is all well and good to speak of communities, to speak of “coming together” and the like; but without solid links and real foundations it will only ever be talk.

There is a hidden hunger, a desire in the masses of isolated and worn-out working people of America for organizations and communities such as these. I believe, or hope, at any rate, that my generation will finally cast off the alienating Protestant work ethic, unrestrained individualism, and imperial ambition. At the same time they should not be expecting the federal government to solve every problem and look to the problems of every individual, though its ability to mobilize and distribute massive resources will be needed at first. If Obama truly wants to heal this country, he could focus those resources on establishing cooperatives of every kind (industrial, consumer, financial, housing, etc.) within the heart of our major cities and large towns, and they in turn could help the smaller towns. Once established, both the insecurity experienced by the isolated individual in the market, as well as the dependency experienced by the perpetual recipient of welfare, would fade away. Community would provide what chaotic markets and intrusive states cannot or should not provide.

Obama often spoke and wrote about “bottom up” politics before and during the campaign, and the key to that is knowing just what the bottom is. The bottom is the economic. It is the material body of society, without which its spirit cannot flourish.

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