Investing in Civilization

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Investing in Civilization

• Alan Freeman
• radicaldemon.org

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What is economic recovery?

• 1929, 1893
• Crash after 20 years slow growth
• Long (10 years) period of high unemployment
• Political, social upheaval and suffering (war,
  etc)
• Long (20 year) period of growth
• Working definition of recovery

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Recovery starts with war

• Unemployment high
• Investment low
• Government replaces investor
• Fordism
• Welfare state
• New growth
• New use values
• New era

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What made the profit rate rise?
Source US Bureau of Economic Analysis
www.bea.gov. NIPA tablesCFixed Assets table
1.01 (Current-cost net capital stock of private
enterprises)LOutput, table 1.9.5, line 2
(output of private enterprises)Accumulation
Ratio L/C
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Value

• State restored the profit rate
• It used up accumulated private capital
• It substituted for the normal function of slump
• The numerator in the profit rate was slashed
• When the economy was handed back to private
  capital, they obtained a high return
• It secured the productivity of the economy
• USA entered postwar with unit costs 1/3 nearest
  rival
• Without increasing capital stock
• Profit rate was highest ever because capital
  stock was lowest ever (relative to output)

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The Dark Side

• War needed for recovery
• War leaders were social reformers
• Universal rights confined to victors
• Small advance, enormous suffering
• Is there an alternative?

Universalist-civilisational -
Reactionary-Parasitic Coexist in same
historical processes
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The Heart of Darkness

• England needs new lands from which we can
  easily obtain raw materials and at the same time
  exploit the cheap slave labour that is available
  from the natives of the colonies in order to save
  the 40 million inhabitants of the United Kingdom
  from a bloody civil war

- Cecil Rhodes, founder of Rhodesia (Zimbabwe)
and de Beers
1870 Radical Programme (Liberal
Unionists) Universal education Social
Housing three acres and a cow -to be financed
by colonial revenue
Sources Bigelow, B.and B. Peterson, Rethinking
globalization. P44The Radical Programme Joseph
Chamberlain
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The Bright Side

• Also new social consumption

Health, education, jobs, minimum wage, pension
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What the state actually invested in
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Services a silent transition
Share of services in employment
Advanced Countries
China
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The Cost Illusion

• Human Rights are productive
• State invested in the labour force
• Raised productivity (skills, health, reduced
  costs, etc) of the workforce
• Reduced the value of labour power the cost of
  the wage bill
• Neoclassical economics resents as a cost
  actually, it was an asset
• Typical Canadian auto wage 1500 lower than US
  employer does not pay health insurance
• This is investing in civilization

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The Physicalist Illusion

• Assumes productivity only by machinery

• Decisive advances in history raised human
  capacity
• Hindu-Arabic numbers
• The Book
• Mass Education, numeracy, literacy

• Germany recovered twice within 5 years after
  enormous physical destruction

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Implications of the service economy

• Enough material resources to feed the world
• 6,000 average 2008 Western average 1950
• Most production not material
• 86 per cent work in services
• Access to advanced services confined to few
• Art
• Care (children, education, elderly care,
  disability)
• Green investment is a middle-class indulgence
• We have to make these things universal
• This requires a new declaration of rights

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Investing in Civilization

• What is needed?
• Investing in primal productive force of society
  humans
• New universal rights right to care, create, and
  sustain
• Reduced material basis, expanded spiritual basis
• Achieve on a world basis
• Who? How?
• All previous solutions the nation
• Universalism for the rich nations
• at the cost of destitution for most of the world
  poor
• Marx world working class oppressed and poor
• Socialism versus barbarism

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Economic Ideology Today

• Equilibriummarket is perfect

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Inequality an unsustainable truth
Inequality between Global North and South
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Leading or crushing?
Sources World Bank WDI indicators, IMF World
Economic Outlook, United Nations TED database