The Meidner Plan

A Swedish labor economist called Rudolf Meidner, who played a major role in the construction of the highly successful Swedish welfare state in the 1960s and early 1970s, came up with what became known as the Meidner Plan.

Confronting inflation, the powerful trade unions were urged to exercise collective wage restraint. In return, the extra profits (surplus-value) that would accrue to capital because of that restraint would be taxed away and placed in a worker-controlled social-investment fund that would purchase shares in capitalist corporations. The shares purchased were deemed untradeable, and over time … control over the corporation would pass over to the social-investment fund. In other words, the capitalist class would quite literally be bought out (peacefully) over time and replaced by total worker control over investment decisions.

The plan was greeted with horror by the capitalist class … The social-democratic government of the time got cold feet and never attempted to implement the plan. But when you think about it, the idea (much more complicated in its details, of course) is broadly consistent with Marx’s argument, at the same time as it offers a peaceful way to buy out capitalist class power. So why not think more about it?

David Harvey, Companion to Marx’s Capital: the Complete Edition, Chapter 9

Winners Take All

This is a link to a talk by Anand Giridharadas, stemming from his recent book. It focuses on wealthy people who are genuinely trying to make a difference in the world, but end up just upholding the system that is creating the problems.

He attacks the concept of looking for “win-win” solutions to tackle the problems that face modern society. A win-win solution means that everyone has to benefit, the people at the top of the system must benefit along with the people at the bottom. This means that people who are the worst off in society can’t benefit or become better off unless there is also a benefit flowing to those on the top of the system.

To tackle truly big problems we need to start looking at solutions that are not win-win. We need to change our approach, and start looking at options that are outside the current flawed system. To fix a big problem in society, maybe someone at the top of the current system may have to come out at the end a little worse off.

… We make a difference in ways that protect the continued ability to make a killing. We seek to change the world in ways carefully chosen to not change our world. When you look at the ways in which the winners of our age give back, help out, or make a difference, they are often designed to protect the system, above all, that the winners stand on top of. …

On any number of the most fundamental questions of what ails us in society, there is a real change option out there if we think hard and study hard. But often that real change option is expensive for the winners of our age one way or another. And then, miraculously, a fake change, a facsimile of a change materializes that is very inexpensive for the winners. And often what happens in our culture now, in a culture over run by win-win thinking point of view, we go for the fake change, we go for the facsimile of change, because that kind of change is free. …

Explore the places and situations, and there may be more of them than what you think, where what is good for you and what is good for the world is different.

And what will you do when you come to those places? Those are the very important questions. And what will society do when we come to those places? …

A lot of the winners of the world ask the following questions: “What can I do? Where can I start? What can I create?” …

What a lot of the winners of this age refuse to ask is: “What am I already doing? How am I already involved in these problems? How can I be complacent in an economy and society that is so unkind to so many people even as it builds and creates amazing things?” …

Anand GiridharadasWinners Take All 

To Destroy Neoliberalism

There is an article by Nick Hanauer, published on Evonomics, arguing that capitalism itself is not an evil, and remains the most effective system to solve the world’s problems.

Nick Hanauer argues that capitalism has been corrupted by the neoliberal view that the goal of “the corporation must be to maximize shareholder value, humanity be damned”, a goal that totally discards mankind’s pro-social nature and the desire to cooperate.

Despite stating that it is mankind’s “humanity, not the absence of it, that is the source of our prosperity”, he goes on to suggest that it is not the capitalist system that needs to change, only that way that people act under the system.

To rescue capitalism from neoliberal thinking Nick Hanauer offers four heuristics.

Irrespective of your views on capitalism, Nick Hanauer’s heuristics does a good job in pointing out some of the biggest flaws in the system.

Heuristic number one: Capitalism is self-organizing, but not self-regulating.

The notion of market capitalism as a Pareto-optimal closed, equilibrium system is—to use the technical term—bullshit. Throughout the world, the most broadly prosperous capitalist economies are also the most highly regulated and highly taxed. To be clear: Government investment and intervention is not a necessary evil. It is just plain necessary.

Which leads us to heuristic number two: True capitalism is not shareholder capitalism.

The neoliberal claim that the sole purpose of the corporation is to enrich shareholders is the most egregious grift in contemporary life. Corporations are granted limited liability in exchange for improving the common good. Thus, the true purpose of the corporation is to build great products for customers, provide good jobs for employees, provide a fair return to shareholders and to make their communities stronger—in coequal measure.

Heuristic Three: Capitalism is effective, but not efficient.

Schumpeter’s “perennial gale of creative destruction” has proven extraordinarily effective at raising our aggregate standard of living, but it can also be extraordinarily wasteful, cruel, and unequal—unequal to the point that it threatens to destroy capitalism itself. If our economy and our democracy are to survive the ever-quickening pace of technological change, we must use every tool available to close “the innovation gap” between our economic institutions and our civic institutions.

And finally, heuristic number four: True capitalists are moral capitalists.

Being rapacious doesn’t make you a capitalist. It makes you an asshole and a sociopath. In an economy dependent on complex trust networks to facilitate the cooperative tasks from which prosperity emerges, and when prosperity itself is understood—not as money but as solutions to human problems—true capitalists understand that every economic act is an explicitly moral choice—and they act accordingly.

Nick HanauerHow to Destroy Neoliberalism: Kill ‘Homo Economicus’

Remembering Stephen Hawking

You will be missed.

If machines produce everything we need, the outcome will depend on how things are distributed. Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution. So far, the trend seems to be toward the second option, with technology driving ever-increasing inequality.

Professor Stephen Hawking, in response to a Reddit AMA