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An economic system beyond reform

Some 170 economists have issued a statement in support of the occupation movement in the United States and put forward policies which they say will “liberate the economy from the short-term greed of the rich and powerful one percent”.

The predominantly American grouping calling itself Econ4 is opposed to the market fundamentalists whose theory has failed, they say. Instead, they want an economy that works for the people, for the planet and for the future. They are concerned about human health, the consequences of pollution and fairness.

It is stirring and attractive stuff and their support is welcome because it shows that the hostility to the present economic system demonstrated at Occupy Wall Street and throughout America is hitting home.

But with calls to end capitalist rule bubbling up from occupations around the world, in reality Econ4’s policies will only confuse those searching for a really new start because in practice they are a variant on the status quo.

The four principles of Econ4’s “profound departure from the orthodox economics of the past” hardly differ from the aims of the social democratic, welfare-supported parliamentary democracies which emerged in the wake of the Second World War: equality of opportunity, an economy able to withstand unexpected shocks, prices determined by full cost-benefit accounting, and “real” democracy.

These are aims which have long been buried under the rubble left by the capitalist credit-fuelled push for growth which took over the world in the process generally known as globalisation. For the capitalist system there was no alternative, and it was this growth imperative that forced the deregulation needed to allow credit to expand.

In a table in their mission statement, Econ4 set out their differences with “orthodox” economics, and it is there that you’ll find the only reference to capitalism in the whole document. They want to replace “managerial capitalism” with “shareholder democracy”.

That too is an old-fashioned look back to the even earlier days of capitalism when the issue of shares enabled the formation of joint-stock companies providing the additional capital needed to fund the investment needs of competing manufacturers. Shareholders had rights. The richer you were, the bigger the share you could buy, and the more rights you had. Something to aspire to? I think not.

Econ4 say they are not starting from scratch. They’re putting together a programme built around the funds of billionaire speculator George Soros who has committed $50 million to the Institute for New Economic Ideas, the Schumacher Society, and the UK-based New Economics Foundation. All accept the capitalist system of production – they just want it to operate more fairly. No doubt they would endorse Labour leader Ed Miliband’s call for a “responsible” capitalism.

But the crash of 2011 is ensuring that the orthodoxy of market fundamentalism is giving way to something much more brutal and a far more profound struggle is under way. The economic crisis has created and now coincides with a political crisis. In attempting to prevent economic collapse, bankers are replacing elected governments.

Agencies like the IMF and the European Central Bank act on behalf of the tight network of global corporations. They have their men in power in Athens and Italy and have put the new Spanish government under notice.

On the other side, the 99 per cent are rising up against capital and finding their voice in occupations throughout the world. The takeover of the long-empty UBS building in London and its transformation into an Ideas Bank is far more inspiring than half-baked plans for a more decent capitalism. And from the global spread of occupations can come a global network of People’s Assemblies as the democratic framework for a new economy.

Gerry Gold
Economics editor
23 November 2011

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