New Economy Journal

‘Values capitalism’ – Good luck with that, Jim

Volume 4, Issue May 2023

May 2, 2023

By - Ted Trainer

Article Theme : Does Capitalism Have a Future?

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Jim Chalmer’s essay in the February Monthly is an attempt to prepare us for a shift in the coming budget from the era of neoliberal domination to an approach where more attention is paid to non-economic factors. But we’ll need more than that to save us.

The move is commendable but it’s a few decades overdue and, and a sad testament to the state of things. For a start it is so vague and timid, carefully crafted not to irritate the business sector and to persuade them that ‘values capitalism’ will be good for them too.

Apart from that, the essay does not tell us much about what values capitalism means. Chalmers just seems to be proposing looking for policy initiatives which benefit society while also increasing opportunities for the business sector. Happily, this is going to be a cooperative win-win affair, avoiding any notion of redistribution or zero-sum impact on profitable investment opportunities.

The business sector is not opposed to intervention in the sacred market system, so long as it benefits them. The system is far from being a free market system: it is highly interventionist, regulated, and subsidised. What Jim is saying is that he now wants to do some intervening that addresses neglected social values while also creating opportunities for business. There is scope for that, but it is not going to make much difference to an economic system that is intrinsically and irredeemably unjust, incapable of being sustainable, and driving us to catastrophic global breakdown.

Exaggerated? Alarmist? Consider the global situation, which Jim seems to be totally unaware of. For fifty years, many scientists and a mountain of literature has been telling us that levels of production, consumption, ‘living standards’ and gross domestic product (GDP) in rich countries are far beyond sustainable. There is a strong case that they are around ten times the levels that all the world’s people could ever rise to. At last this is being widely recognised, evident in the emergence of the global Degrowth movement. The manic and mindless quest for endless increases in business turnover, affluence and GDP growth is now not just absurd, it is suicidal. The quest for economic growth is fuelling the depletion of resources and the destruction of the planet’s ecosystems, it is depriving poor countries of a fair share of resources because the rich countries are hogging them, and it generates resource wars. Further, it is eroding social cohesion, as neo-liberal doctrine produces increasing levels of inequality, and angry impoverished people are often inclined to see fascism as a better option.

But Jim is eager to reassure us that he is devoted to growth. Of course, if he didn’t, his promising prime-ministerial career path would promptly end.

Nor does Jim seem to understand the nature of the market system, or the fact that we cannot achieve a satisfactory society unless we prevent the marketit from determining our fate. In a market things go mostly to richer people, because they can pay more for them. Profit, rather than need, determines who gets the resources. As a result, around 600 million tonnes of grain are fed to animals in rich countries every year while around 800 million people are hungry all the time. It is much more profitable to feed grain to feedlot pigs than to malnourished children. Therefore, investment goes into ventures likely to yield most profit to those who own capital, not to meet the needs of hungry people.

No wonder there is such concern to preserve the “rules based global order”, when the main rule is to let the market determine what happens. Another one is that it is OK for capital to be invested in whatever will most enrich its owners, who don’t have to do any work although they consume goods produced by those who do. A morally satisfactory society would gear available resources to meeting need, and allow the market to make only unimportant decisions.

Growth, market forces, production for profit and the private ownership and investment of capital are fundamental, defining characteristics of capitalism. You cannot reform the capitalist system to not include these characteristics or their effects. Tinkering in order to find options which benefit both capital and society cannot make a significant difference to the present rapidly accelerating trajectory towards a catastrophic global breakdown that could see the end of Western “civilisation”. Increasing numbers are realising that capitalism is heading for self-destruction. Marx foresaw this is what its internal contradictions would lead to, but he got his timing wrong.

In a capitalist society, those with capital are able to invest it to accumulate more capital, while most people who have little or no capital can’t do this. By its very nature, capitalism allows the richest few to move towards possessing just about all wealth. Along with this comes the power to govern. Is this likely to end well? Hudson documents the way it has destroyed many societies and whole empires.

Jim might get the capitalist class to invest in some socially-beneficial things, although he’ll need to subsidise most of it and provide favourable regulation, (or else they would be doing it is now). However, you cannot make profits meeting the most urgent social needs, such as caring for the chronically ill or getting rid of homelessness, and unemployment (unemployment is only found in barbaric societies … it’s easily totally eliminated, but this economy treats labour like fish or bricks, to be traded in the market as commodities that can be left to rot when business doesn’t want them.)

The common narrative that more recycling and technical advances will allow us to achieve sustainability, without us having to undertake any economic degrowth, has now been demolished by extensive review studies. If GDP increases, so does resource demand and environmental impact.

There is a strong case that this society is incapable of solving its big problems, the main reason being that the cause of the problems is not even recognised or understood. A sustainable society with a good quality of life for all cannot be achieved without an enormously big and radical transition to far simpler lifestyles and systems. The core element must be most people living in highly self-sufficient and largely self-governing cooperative communities, drawing mostly on local resources, in control of their local economies and run by caring responsible citizens who are content to live frugally. These communities could have mostly privately owned small firms and farms, and there need be no reduction in high tech, research, modern medicine, and universities. (For further detail see The Alternative.)

Obviously at present, the chances of such a society emerging would seem to be negligible, but large numbers in lower income countries are turning to it, such as the Campesino, Zapatista, Rojavan Kurdiah, Satygraha, Ubuntu, Catalan and similar movements. The hope has to be that as rich societies deteriorate, many people will realise that they must develop and run local cooperative systems enabling sufficiency, security, supportive and inclusive community, and rich cultural provisions, with no interest in affluence, growth or GDP.

Given the dominance of capitalist ideology, Jim’s initiative is admirable and well judged. He is getting the intention to do something about the neo-liberal con trick on the agenda with as little risk as possible of provoking the establishment to deal with him. But we need far more than ‘values capitalism’ to save us, Jim.

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