The Anti-Economy: How the Pursuit of Private Fortunes is Destroying Community Wealth

RogerK wants the The Anti-Economy: How the Pursuit of Private Fortunes is Destroying Community Wealth without being called a Communist.

... Personally I think that we need to develop a system of public or community investment, the purpose of which is to insure that economic outputs vital to the community continue to be produced as needed, rather than trying to increase the purchasing power of private investors. I see no reason why such a system of community investment must imply state factories in the Soviet sense or must imply the complete death of private enterprise.

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The highlighted phase is a very good definition of Communism. The community directs investment not individual capitalists.

RogerK's position is that...

... However, it is not my intention in this essay to try to prove that these optimistic assessments about the extendability of the economic status quo are false. I am simply going assume that a complete decoupling of economic growth from resource consumption is impossible, so that, sooner or later we must stop expanding our total economic output.

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In other words, RogerK is going to assume a constant economic efficiency. The quantity and quality of commodities produced is assumed to be directly related to the quantity of resources consumed. The labour component in commodity production is ignored.

Another problem with this assumption is that the current level of resource is probably unsubstainable. And, in order to reach a substainable economic system, the standard of living will have to drop.

RogerK then goes onto expound his economic theory:

Many people have claimed (I am one of them) that our current economic system requires constant growth for healthy functioning. This growth orientation of the economy is oftentimes blamed solely on our financial/monetary system. Granting unearned purchasing power to businesses and/or individuals in exchange for a larger amount of purchasing power in the future requires growth in the net production of use value. The excess purchasing power owed to the financier has to come from somewhere. Either purchasing power is taken away from someone else, or the net production of use value must increase. Since finance as means of robbery cannot be a politically stable institution, the desire for real growth in the production and sales of use value predominates.

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What RogerK is skirting around here is the issue of profit. I think he considers profit for the capitalist to be earned while profit for the financiers to be unearned. Whereas for Communists, all profit is unearned.

Here, the phrase, net production of use value, shows a confusion Use Value with Exchange Value. Profit is realised as the difference in exchange value of the inputs and outputs.

The second highlighted sentence comes close to the reason for the instability of the Capitalist system. All commodities must be purchased by a consumer for profit to be realised. In a fully developed Capitalist society, the only consumers are the proletariat. Thus, the total purchasing power of the local economy is the sum of the wages earned by the proletariat. But the wages of the proletariat are included in the cost of the commodities produced. Hence, the effect of profit is to reduce purchasing power unless the profit is invested (which is really the purchasing of machinery and raw materials).

This current economic crisis is a result of a higher rate of profit and a lower rate of investment. The economy will spiral down until purcahsing power is restored to the proletariat.

RogerK does not understand that credit increases the rate of turnover of capital by advancing to the producer a discounted exchange value for the commodities produced. Instead of the producer waiting for the commodities to be sold to the ultimate consumer because the profit is realised, the producer receives a lesser amount quicker and is, thus, able to begin the production cycle earlier thereby increasing the rate of economic activity. Unfortunately, the increasing rate of economic activity means that the crisis in consumption is reached sooner unless other avenues of consumption are opened up.

Later on, RogerK makes an interesting point:

By voluntary simplicity I do not mean that we all should live like 18'th century rural small holders. I mean that we need to reach a socially agreed upon conception of 'enough' in the realm of material wealth. Individuals need to reach economic maturity in the same way that their bodies reach physical maturity. If the individual desires increasing wealth without boundary then so will the larger economy. No matter how creative and productive an individual may be their income should not exceed the socially agreed up definition of sufficiency.

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RogerK comes to the point that humanity needs to survive as a society not as an accidental collection of individuals. This is a major departure from Capitalist philosophy in which the uncoordinated activities of selfish individuals somehow leads to a functioning society. This is really a major development in the consciousness of RogerK.

RogerK stresses the point further in:

Mutual support is the other foundation stone of an economy which is not rushing to destroy the commons in the name of private material security. I have already pointed out that real physical savings consist of the built up infrastructure of society, including the knowledge and skill of its constituent citizens. Since mutual support is an objective physical reality, why don't we stop seeking a delusory financial 'independence' and implement a system of universal social security? We need to create a social environment in which people who put their shoulder to the wheel and help to create and maintain the economic infrastructure of society, even in a humble capacity, can have confidence that that infrastructure will be used to support them in their years of declining productivity.

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So, RogerK accepts that common ownership and economic cooperation are needed for a substainable economy. He later on counters the argument about the extreme individualism prevents such a society coming into being. He rather would not get into that argument. He hopes that people would see sense.

RogerK presents his own version of Socialism or Barbarism forecast to force people to see sense:

I have absolutely no doubt that, in the face of a productivity decline, real understanding of the nature of our situation and realistic proposals for alleviating the associated suffering will be hard to come by. However, if the unique and unvarying response to this situation, for all time to come, is a vain attempt to restore the 'normality' of exponential economic growth, then it is hard to see how the decline of industrial civilization can stop anywhere short of neolithic villages. I prefer to assume that the case is not so desperate and talk to other human beings about our common dilemma as if I thought that intelligent cooperation were possible.

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In summary, RogerK's economic and political theories are nascent. He can see some points clearly, but the distinction between use value and exchange value is impeding development there. The role of credit follows from understanding of the capitalist production cycle. He hopes that a capitalist society can change somehow into a socialist one without evening seeing the political forces that maintain the current society.

A good start, but a lot more work is needed.