Transition to an equivalence economy

1
Transition to an equivalence economy

• Paul Cockshott

2
Background

• Our book 'Towards a new socialism' was written in
  the late 1980s during the crisis of Peristroika.
• We were attempting to put forward a different
  route for the countries of Eastern Europe than
  that proposed by the market socialist theorists
  supported by Gorbachov.
• Addressed to already existing socialist economies

3
Now need to discuss transitional steps

• 2 Reasons
• 1. World economic crisis
• 2. The rise in Latin America of socialist
  governments willing to try new policies

4
Long term goals

• Political
• Radical Democracy

• Economic
• Radical socialism

• Radical getting to the root (radix) of a
• problem or issue
• Historical root of an issue
• Causal root of a problem

5
Radical Democracy

• Return to the roots of the idea of Democracy in
  Ancient Greece - Return to the study of Aristotle
• But update it with modern technology
• Direct legislation by the people we update this
  with mobile phone technology, we have developed
  practical techniques for secure and anonymous
  mobile phone plebiscites on key issues like
  levels of taxation, new laws etc.
• Selection of representative bodies by random
  selection not election only scientifically
  representative mechanism.

6
Radical Socialism

• Go back to historical roots
• ideas of Owen and Marx

• Address the causal roots beneath the evils of
  exploitation, inequality and poverty.

Like Owen and Marx we proposed the abolition of
money and its replacement by a system of labour
tokens
Christ Love of money is the root of all evil
7
The forgotten economics of Mar's socialism

• Welfare state paid for by Income Tax
• Money wages and money prices abolished, instead
  workers are paid in labour vouchers
• No property income
• Goods priced in terms of labour to make them
• Economy as a whole subject to planing
• Why Planning?
• Without planning can not eliminate unemployment
• Without deliberate planning can not address the
  environmental problems like CO2 buildup

8
Shattered Illusions

• Today it is revealed that bank money is nothing
  but a system of computer records, whose value is
  sustained by mutual illusion. At a critical point
  the illusion is shattered and trillions of
  vanish before our eyes
• The classical economists in contrast revealed the
  objective basis of economic value

9
Objective basis of value

• Labor was the first price, the original
  purchase-money that was paid for all things. (
  Adam Smith)?
• The cost of any article may be reduced in its
  ultimate analysis to the quantity of labour by
  which it was produced.(Charles Babbage1)?
• 1 He was the economist and mathematical genius
  who invented the computer in the 1830s.

10
Objective

• A planned economy in which such illusory money is
  replaced by labour accounts.
• If you work one hour you are paid 1 hour of such
  tokens and can purchase goods that took 1 hour to
  produce.
• Benefits
• eliminates exploitation.
• provides an incentive and rewards hard work
• provides a stable unit of calculation unlike
  money

11
For more details ...

• This is very schematic, but our book goes into
  considerable detail about how such a system could
  be made to work, and I can answer further
  questions at the end.

12
Practical policies

• Can visionary economic ideas be turned into
  practical economic policies which can be applied
  here and now?
• Yes. I will explain how.
• Monetary Policy
• Employment legislation

13
Counter inflation Policy

• Monetary target, fix the value of the Bolivar in
  terms of labour hours in Venezuela
• Publish each month the Bolivar/labour exchange
  rate
• Inflation stems from inadequate internal tax
  revenues, and exchange controls which prevent
  central bank from using dollar oil revenues to
  absorb excess Bolivars in circulation. Both these
  would need to be addressed. Implications for tax
  revenue and exchange controls spelt out in longer
  article.
• Once value of the currency is fully stabilized it
  could be renamed the (Labour) Hour.

14
Counter exploitation policy

• The three great pillars of exploitation are
  Profit, Interest and Rent.
• Recognise in law that labour is the source of
  value
• Give workers the right to for full value of their
  work, this right to be enforcable in labour
  courts
• The above measures, once enforced, eliminate
  profit of capital
• Taxes on landlords to be set to capture the
  greater part of rent revenue

15
Implications

• Right to full value of labour eliminates
  capitalist exploitation
• But it does not explicitly expropriate the
  owneers of businesses
• Thus the government can not be accused of
  removing peoples property
• Former owners can still operate their businesses
  as salaried managers.
• Backup legislation allowing majority employee
  representation on company boards would also be
  required to prevent capital flight. This is also
  supported by the next measures

16
Counter Usury policy

• Cancellation of debts this is being done one
  sidedly to the advantage of Wall St in the USA. A
  general cancellation of debts should be
  international policy of socialism.
• Aim, over a longer period to phase out Usury (
  interest on loans)

17
Implications of the cancellation of debts

• Existing money is in two forms
• State issued Paper Money and coin
• Bank accounts. These are debts owed to
  depositors, or credit lines extended to borrowers
  ( overdrafts ).
• Ability to create money gives banks enormous
  social power, but bank money is ultimately an
  illusion backed only by a fractional reserve of
  state money.
• Once the ratio of bank money to real money gets
  too high, the illusion breaks down and the
  banking system collapses as is happening now.

18
Implicati0ons continued

• There are now two options
• The state assumes the liabilities of the banks in
  order to preserve the money holdings of the
  propertied classes, this would place an
  intolerable burden on the taxpayer
• The state declares that
• Nobody owes the banks anything
• The liabilities of the banks are limited to their
  holdings of real money.
• Thus if Banco Comercial has 1 billion Bolivar in
  cash and 250,000 customers, its liability to each
  customer is limited to 4000 Bolivar per customer

19
Restoration of liquidity

• This measure effectively wipes out most of the
  money holdings of the patrician classes, reducing
  their cash holdings to a more plebian level.
• It may be necessary for the state to inject
  additional paper money into the banks and take a
  controlling interest in return.
• It restores liquidity to the banking system by
  improving its debt to reserve ratio allowing the
  banks to extend credit to employee controled
  enterprises.
• It lays the financial foundation for the policy
  of eliminating direct exploitation of labour.

20
Public revenue

• There is a danger that private exploitation is
  seen as being replaced by state exploitation. To
  prevent this taxes in a socialist country should
  be voted on by the people themselves. This could
  be done using mobile phones. At the University of
  Glasgow we have developed a simple secure system
  of holding plebiscites using mobile phones.
  Similarly the main budgetary headings could be
  approved by electronic plebiscites

21
Pensions

• If property income is cut off, then many old age
  pensioners will loose much of their income if it
  comes from pension funds.
• Need for upgrade of state pension system to the
  sort of levels ( relative to average national
  income ) that is currently achieved in Sweden.
• This would have to be funded out of income tax.
• Necessary on grounds both of justice and
  political expediency to do this.
• Crisis is anyway rendering most private pension
  schemes much less viable.

22
Hacia un NUEVO SOCIALISMO
Nuestro libro era escrito en el crepúsculo de 20
socialismo del siglo, durante la crisis de
Perestroika, Apuntó proporcionar una
respuesta alternativa a la crisis que afecta la
URSS entonces, una respuesta que era diferente a
eso de los reformadores de Mercado de profesional,
23
Hoy

• se revela que el dinero especulativo del sistema
  financiero (acciones, bonos, etc.) es nada más
  que un sistema de archivos de computación cuyo
  valor de mercado se sostiene por la ilusión
  mutua. En un punto crítico la ilusión se derrumba
  y billones de desaparecen delante de nuestros
  ojos.

24
Adam Smith

• El trabajo fue el primer precio, el original
  medio de adquisición que se pagó, para todas las
  cosas. (Adám Smith)
• El costo de cualquier artículo puede reducirse
  (expresarse) en último término a (en) la cantidad
  de trabajo que requirió para producirse.
  (Charles Babbage1)
• 1 Él era el genio matemático que inventó la
  computadora en los 1830s

25
El objetivo

• Una economía planeada democráticamente en que
  dicho dinero ilusorio es reemplazado por vales de
  trabajo que son seguros y objetivos,
  correspondientes al tiempo de trabajo realizado
  por alguien.
• Si usted trabaja una hora usted recibe una hora
  de vales de trabajo y puede comprar cualquier
  bien que requirió una hora para producirse.

26
Los beneficios

• Elimina la explotación del obrero.
• Proporciona un incentivo y premia el trabajo duro
  
• Proporciona una unidad estable de cálculo a
  diferencia del dinero

27
Lo opuesto la Política de inflación

• El blanco monetario, arregle el valor del Bolivar
  por lo que se refiere a horas del labour en
  Venezuela
• Publique cada mes el tipo de cambio de
  Bolivar/labour
• La inflación proviene de de los réditos del
  impuesto interiores inadecuados, y reglamentación
  de los cambios que impiden al banco central usar
  el dólar los réditos de aceite para absorber los
  Bolívares del exceso en la circulación.
• Ambos que éstos necesitarían ser dirigidosse.
  Las implicaciones para el ingresos tributarios y
  espelta de las reglamentación de los cambios
  fuera en el artículo más largo.
• Una vez el valor del dinero se estabiliza
  totalmente podría renombrarse el (el Labour)
  Hora.

28
Lo opuesto la Política de Explotación

• Los tres grandes pilares de explotación son
  Ganancia, Interés y Renta.
• Reconozca en la ley que el labour es la fuente de
  valor
• Déles el derecho a obreros a para el valor lleno
  de su trabajo, este derecho para ser el
  enforcable en las cortes del labour,
• Las medidas anteriores, una vez dio fuerza a,
  elimine ganancia de capital
• Los impuestos en los propietarios para ser puesto
  para capturar la parte mayor de rédito de la
  renta

29
Usura

• La cancelación de deudas-esto está haciéndose un
  sidedly a la ventaja de Wall St en el EE.UU.. Una
  cancelación general de deudas debe ser política
  internacional de socialismo.
• Apunte, encima de un período más largo para
  escalonar fuera la Usura (el interés en los
  préstamos)

30
El rédito público

• Hay un peligro que la explotación privada se ve
  como reemplazarse por la explotación estatal.
  Prevenir esto impone contribuciones en un país
  socialista debe votarse adelante por las personas
  ellos. Esto que usa los teléfonos móviles podría
  hacerse.
• En la Universidad de Glasgow nosotros hemos
  desarrollado un sistema seguro simple de sostener
  plebiscitos que usan los teléfonos móviles.
  Semejantemente los títulos presupuestarios
  principales podrían aprobarse por los plebiscitos
  electrónicos.

31
Hacia el socialismo del siglo XXI

• Podrían discutirse muchos otros problemas, éstos
  se cubren en el papel más largo y en el libro
  Hacia el socialismo del siglo XXI '