Thursday, April 28, 2016

Three-Body Problem Dark Forest

Earlier in this month I read "The Three Body Problem" and "The Dark Forest", by Cixin Liu. Liu is China's leading sci-fi author. The 3rd (final?) book "Death's End" will be out in September. I have it on pre-order.

The best part of these books is the physics - very creative and interesting. The chaotic orbit of a planet in a trinary stellar system (the title of the 1st book) is very well explained. The speculative post-standard model physics is very good stuff.

The books also adopt, as per the title of the 2nd book, the view of interstellar civilization that I first remember from Greg Bear in "The Forge of God". They are sweeping in scope, both in space and time.

The plotting was also pretty good. After at times lulling you to a point of approaching boredom, wham, action! Kind of like "Breaking Bad".

The odd part was some of the characterization. You are reminded that China is still a Communist country. Who else has "political officers" on their vessels as main characters? The 1st book opens in the 1960s with the Cultural Revolution, and, in some ways, it seems the books keep that "revolutionary zeal" feel. And that feel is the opposite of "noirish cool". Even the chain-smoking cynical detective character still has the approval of the powers-that-be, i.e., the party officials.

Here's some samples of uncoolness and other weirdness from the 2nd book:

"Mr. Shi, we haven't been working together long, but I really respect you."

A humble respect so rarely seen among modern people seemed to be in his blood, able to manifest at any time.

there was the principle of fairness in battle opportunity. ... a fair number of ships could not have been considered to have taken part, leaving them nothing in the history books but eternal regret.

They looked so noble and perfect, from the captain to the lieutenants, and their eyes shone with a godlike wisdom.

Earth now had the calm confidence to face any sort of enemy.

Yet Zhang Beihai's calm eyes were a strong force field that upheld the stability of the formation and helped them maintain their military poise. Children cast aside into the endless night needed a father most of all ...

his eyes full of a fatherly concern that gave her an undreamed-of sense of comfort ...

So, exposure to a different culture is a good thing I guess. Even if some of the attitudes seem, what, phony or insincere? Or juvenile? Quaint? Or just definitely Not Cool. Or maybe it's a translation problem, but I don't think so.

Still, the books are well worth the read, and I'm looking forward to the 3rd one.

Wednesday, April 27, 2016

Time For Music Again

How the time does fly. New music for the 1st 3 months of this year.
  • David Bowie, "Blackstar". Amazing that Bowie made this 7 track album knowing he was dying. It is a fitting memorial. The 2 videos from the album are both disturbing and haunting. 4 stars.


  • Bloc Party, "Hymns". A very nice album from this British group. Catchy tunes, good dancers. Here's "Into The Earth". 4 stars.


  • Ra Ra Riot, "Need Your Light". Not as good as their prior album, but some good tunes. I will give it 4 stars out of respect for their earlier effort and because I suspect it will grow on me.
  • Lake Street Dive, "Side Pony". Their 2nd album. Kind of like the Ra Ra Riot. No songs jumped out at me. Plus, the engineering I thought was a little suspect. It seemed like it needed more, something closer to the Phil Spector wall of sound. 4 stars.
  • Bonnie Raitt, "Dig In Deep". I read somewhere how this was her 1st album of new material in several years. It does not seem like that long. Again, how the time does fly. This is a great album, man can that woman play slide guitar. I am working up "Shakin' Shakin' Shakes" for the jams. 4 stars.


  • Lucius, "Good Grief Deluxe". Their 2nd album. About the same quality as their 1st, I think. 4 stars. Here's "My Heart Got Caught On Your Sleeve".


  • Vandaveer, "The Wild Mercury". I read a review of a recent local concert by this group, out of Louisville. The guy who writes the material and sings lead is from Lexington. He has a female harmony singer. Genre-wise, iTunes made it "Folk" - it's kind of in that folk-country-alternative blend like, say, Lonesome Bellow. Very listenable. 3 stars - mostly because everything else has been 4! I have to pretend I still have some powers of discrimination!
I am hopefully back to playing at jams for a while. I played at the Groove Jam in Richmond, and the Sunday jam at Shamrock's. Despite not practicing much, I think I acquitted myself fairly well. I'm also working up a couple o new songs.

Monday night I went to open mic at Willie's Locally Known. This has relocated from the north side to Southland Dr, in the (cursed) site by the railroad tracks that used to be Trump's (and then the execrable ShowMe's). They have done a great job with it. Rustic wood look. The end by the stage has raised seating along the walls for an amphitheater effect. I loved their bourbon bar as well. Q: Which bourbons do you carry? A: All of them.

The open mic is run by Coralee of popular local band Coralee and the Townies, who I have never seen. So she did 1 song on vocals and acoustic guitar, then started calling people up to do 2 songs. It was not so good for a while. Late-in-life guitarists without much touch, out-of-tune guitars, etc. Amateur night.

Then this 20 YO kid got up and played originals on ukulele and vocals. Totally odd chords, very distinctive voice, completely fresh and original. I talked to him afterwards, need to get his name. I was hesitant to do it, so as not to taint his originality, but I suggested he listen to Tune-Yards - another alternative ukulele player. I'd buy his album right now, but what tremendous potential.

Next up a 15 YO kid playing Preston Reed / Kaki King open-tuned acoustic guitar type stuff. Very good.

Then a 16 YO kid playing a mandolin. First a very jazzy instrumental, very nice, then singing a country song with a great, expressive voice.

So it wound up being a worthwhile evening of live music.

Monday, April 11, 2016

Twelve Tomorrows

I read the 4th edition of "Twelve Tomorrows", published by MIT's Technology Review magazine. As in past years, it is a very good collection.

The Stross story, "Life's a Game", explores the end(game) of gamification as drolly as you would expect. "All the Childhood You Can Afford" by Daniel Suarez paints a picture of a very different and unique type of future dystopia. The John Kessel story "Consolation" features a global warming dystopia that is quite possible - and, while there is some degree of schadenfreude in southerners and particularly Texans as illegal aliens in a north that is now part of Canada, one hopes nonetheless that we don't go there. "The Design Doyenne Defeats the Dullness" by Paula Antonelli finally gives us a post-scarcity future, with art of course reigning, and presiding over a ritual suicide.

I was disappointed but not particularly surprised that there were quite a few more dystopias than utopias. The only story not mainly dystopian was the Antonelli.

But the last story kind of threw me. It was titled "The Ancient Engineer", by Bruce Sterling, who is a great author and futurist, and who edited this collection. The story is about a 2nd century Roman engineer??? So, I'm not sure what he was thinking in giving us "11 Tomorrows & 1 Yesterday".

Wednesday, March 30, 2016

My Grandson, Age 14-20 Months

My 1st grandson, Sam, was born July 2014 in Zagreb Croatia. He and his parents came back to Louisville in July 2015. His parents went back to teaching elementary school in JCPS. For 6 weeks starting in September, I babysat Sam 1 day/week. It was fun, but a long day, what with driving to Louisville and back.

During that period, he seemed to be really into pushing buttons to make things happen. He was particularly fascinated by the water fountain at the library. It had large buttons on 3 sides, push any 1, out comes the water! What fun! I couldn't help thinking, well, I guess we know that the main survival skill for his generation is!

He wasn't much into building, but, anytime I made a tower of russian doll blocks, he would pause with a gleam in his eye before going all-out Godzilla on it. His mother says he's now starting to get into building things.

The 3rd week of March I got to spend 5 days with him and his mom in Florida. His playing skills were greatly improved. He totally got that you put the Fisher Price people into the cars, chairs, merry-go-rounds, etc.

One day we went to the beach. The Gulf was calm as usual, 6-12 inch waves. He loved it. There was a girl maybe 4 YO and her brother maybe 6 YO who were playing near him. The boy would kick at the waves coming in, and Sam decided that that was the ticket. He got full on belligerent with the waves. He would bend over swish his hands back and forth in the water - clearly saying, "take that, ocean". Another wave would come in and hit him and he would squeal with excitement.

It was really interesting, there was no fear, just total excitement. I figured he maybe got a double dose of adrenaline junkie genes, from his maternal grandmother and his dad both. But my daughter-in-law, the mother of my 5 YO granddaughter Lucy, said that Lucy was similarly fearless up until about 2-1/2 YO.

Last week one of my daughter's oldest friends was in from Philadelphia to help her mom move, and she brought her 16 month old son with her. We had them over for salmon on the grill. It was great seeing him and Sam play together, and it was notable how he seemed to mimic Sam's behavior heavily.

Sam shows the same behavior: if he sees a bigger boy doing something, he's going to try it. It made me wonder: is this all that defines alpha males? The algorithm, "copy the behavior of the biggest boy around", makes a lot of sense. The biggest boy is likely the oldest and most experienced. Copying his behavior seems like one of those "good enough" adaptions that evolution comes up with.

I had thought that a lot more went into defining what makes an alpha male. But, maybe it is just that they are the biggest?

Friday, March 04, 2016

Postcapitalism

"Postcapitalism", subtitled "A Guide to Our Future", is the latest book by Paul Mason (@paulmasonnews). Mason is an English journalist, broadcaster, author, and visiting professor.

I must have preordered it because it just showed up on my iPad a few weeks ago. It is 378 print pages. It has an introduction and 3 parts containing 4, 3, and 3 chapters. It was a quick and compelling read, and I strongly recommend it. It seems in some ways to be the companion piece to "This Changes Everything" blogged here, approaching the same problem but from the economic rather than the environmental side.

First, a summary in very broad strokes. Human civilization has gone through 3 modes of production:

  1. Feudalism, lasting up until the start of the Enlightenment;
  2. Merchant Capitalism, from the start of the Enlightenment until the start of the Industrial Revolution;
  3. Industrial Capitalism, from the start of the Industrial Revolution until now.
Capitalism has followed 50 year Kondratiev waves, in which a new family of technologies achieves widespread deployment, leading to capital generation. The cycle winds down when the market is saturated for the new technology, at which time financial looting becomes prevalent to suck out all the nice excess capital generated, until the next technology wave comes along.

But, the 5th wave of the Industrial Capitalism era, led by "network technology, mobile communications, a truly global marketplace and information goods", has stalled. I think the reason can be described as: digital technology has broken economics. As Cory Doctorow recently put it, there are no copy-proof bits. As Mason puts it

Once you can copy/paste a paragraph, you can do it with a music track, a movie, the design of a turbofan engine and the digital mockup of the factory that will make it.

Once you can copy and paste something, it can be reproduced for free. It has, in economics-speak, a 'zero marginal cost'.

Marginal costs are what modern economic models are based on. So, no marginal costs => economics is broken. I've commented on this in the past: that "economy" implies scarcity, so how does "economics" deal with abundance?

So it is now time for a new mode of production: postcapitalism. Mason explores many aspects of what he thinks this could look like.


The Introduction begins comparing free-market Moldova and Putin's Russia - what, an oligarchy / kleptocracy? The basic message is that both countries pretty much suck. In general, the world economy's recovery from the 2008 financial recovery has been anemic at best. and has become "a social crisis" as well.

There are, on the face of it, only two ways it can end. In the first scenario, the global elite clings on, imposing the cost of crisis on to workers, pensioners and the poor over the next ten or twenty years.

...

In the second scenario, the consensus breaks. Parties of the hard right and left come to power as ordinary people refuse to pay the price of austerity. ... This is a variant of what happened in the 1930s and there is no guarantee it cannot happen again.

The current form of Capitalism in the world is Neoliberalism. This term is used more in Europe than in the US and has nothing to do with "liberalism" - it is much more like what in the US is called Libertarianism.
Neoliberalism is the doctrine of uncontrolled markets: it says that the best route to prosperity is individuals pursuing their own self-interest, and the market is the only way to express that self-interest.

...

Its prestige rests on tangible achievements: in the past twenty-five years, neoliberalism has triggered the biggest surge in development the world has ever seen, and it unleashed an exponential improvement in core information technologies. But in the process, it has revived inequality to a state close to that of 100 years ago and has now triggered a survival-level event.

...

Among the 1 per cent, neoliberalism has the power of a religion: the more you practise it, the better you feel – and the richer you become.

But information technology is eroding neoliberalism and opening the door for postcapitalism through 3 mechanisms:
First, information technology has reduced the need for work, blurred the edges between work and free time and loosened the relationship between work and wages.

Second, information goods are corroding the market’s ability to form prices correctly. That is because markets are based on scarcity while information is abundant. ...

Third, we’re seeing the spontaneous rise of collaborative production: goods, services and organizations are appearing that no longer respond to the dictates of the market and the managerial hierarchy.

Wikipedia is the textbook case for the 3rd mechanism.

So the stage for the showdown is set:

The elite and their supporters are lined up to defend the same core principles: high finance, low wages, secrecy, militarism, intellectual property and energy based on carbon. The bad news is that they control nearly every government in the world. The good news is that in most countries they enjoy very little consent or popularity among ordinary people.


Chapter 1 is titled "Neoliberalism Is Broken". Mason describes the 2008 financial meltdown in detail, as well as the recovery and the anti-recovery - the austerity programs many countries embarked on despite the best advice of most economists. Mason has an even harsher view of the austerity programs.

This is the real austerity project: to drive down wages and living standards in the West for decades, until they meet those of the middle class in China and India on the way up.
The 4 pillars that "first allowed neoliberalism to flourish but which have begun to destroy it" are:
  1. ‘Fiat money’, which allowed every slowdown to be met with credit loosening, and the whole developed world to live on debt.
  2. Financialization, which replaced the stagnant incomes of the developed world workforce with credit.
  3. The global imbalances, and the risks remaining in the vast debts and currency reserves of major countries.
  4. Information technology, which allowed everything else to happen, but whose future contribution to growth is in doubt.
Particularly bleak for the average person is financialization.
A single mum on benefits, forced into the world of payday loans and buying household goods on credit, can be generating a much higher profit rate for capital than an auto industry worker with a steady job.
The impact of information technology seems to be the biggest problem for Neoliberalism.
All the money created, all the velocity and momentum of finance built up during the last twenty-five years have to be set against the possibility that capitalism – a system based on markets, property ownership and exchange – cannot capture the ‘value’ generated by the new technology. In other words, it is increasingly evident that information goods conflict fundamentally with market mechanisms.
He paints a very bleak picture of the world of 2060, after 4 decades of secular stagnation. Countries may de-globalize, imposing huge tariffs on imports to stimulate local industries (as the US did in the 19th century), and go back to their own currencies to inflate away debts.


Chapter 2 is titled "Long Waves, Short Memories". We meet Nikolai Kondratieff and learn more about his waves.

The start of a long cycle sees:
  • the rollout of new technologies
  • the rise of new business models
  • new countries dragged into the global market
  • a rise in the quantity and availability of money.
His theory has gone in and out of popularity since he first proposed it in 1925. Joseph Schumpeter's theory of Business Cycles builds on it. Shumpeter's "most prominent modern follower" is Carlota Perez.

But the theory was fatal to Kondratieff. Marxist dogma required that Capitalism come to an end, not that it keep reincarnating itself in 50 year cycles. After 8 years in prison, Kondratieff was executed by firing squad in 1938.

Here are Mason's descriptions of the 5 waves of Industrial Capitalism:

  1. 1790–1848: The first long cycle is discernible in the English, French and US data. The factory system, steam-powered machinery and canals are the basis of the new paradigm. ...
  2. 1848–mid-1890s: The second long cycle is tangible across the developed world and, by the end of it, the global economy. Railways, the telegraph, ocean-going steamers, stable currencies and machine-produced machinery set the paradigm. ...
  3. 1890s–1945: In the third cycle heavy industry, electrical engineering, the telephone, scientific management and mass production are the key technologies. ...
  4. Late-1940s–2008: In the fourth long cycle transistors, synthetic materials, mass consumer goods, factory automation, nuclear power and automatic calculation create the paradigm – producing the longest economic boom in history. ...
  5. In the late–1990s, overlapping with the end of the previous wave, the basic elements of the fifth long cycle appear. It is driven by network technology, mobile communications, a truly global marketplace and information goods. ...


Chapter 3 is titled "Was Marx Right?". I guess I am going to have to read Marx. The 2008 crisis caused lots of people to revisit Marx.

Marxism is both a theory of history and a theory of crisis. As a theory of history it is superb: armed with an understanding of class, power and technology, we can predict the actions of powerful men before they know what they’re going to do themselves. But as a theory of crisis, Marxism is flawed.

...

Marx understood that capitalism is an unstable, fragile and complex system. He recognized that class gives different agents in the market unequal power. But Marxism underestimated capitalism’s capacity to adapt.

...

A crisis happens only when ... you run out of cheap labour, or new markets fail to appear, or the finance system can no longer safely hold all the capital that risk-averse investors are trying to store there.

Man, Marx really nails this one:
The main function of credit, he wrote, is to develop exploitation ‘to the purest and most colossal form of gambling and swindling, and to reduce more and more the number of the few who exploit the social wealth’.
I had no idea that Marxism predicted that the end of a Capitalist cycle becomes dominated by the financial sector and looting behavior. When you see vulture capitalists harvesting the infrastructure and pension funds of profitable companies and derivative of derivative financial instruments being used by the financial industry to rape and pillage, you can understand how Marxists could see this as the Capitalistic beast finally devouring itself. But they underestimate Capitalism. Other end-of-cycle behavior we've seen recently that was also widespread 100 years or 2 cycles ago:
Competition, argued the business magnates, brought chaos to production and depressed prices to the point where new technology could not be rolled out at a profit. The solutions were to be found at three levels: monopoly, price fixing and protected markets.

...

during the time we call the belle époque or the Progressive Era – a time of rapid growth, liberalization and cultural uplift – the world prospered not through the market but by the controlled suppression of it. Back then, this caused scant confusion for conservatives. The people it confused were the Marxists.

Sci-fi author David Brin, whose blog I follow, belabors this point, re conservatives and libertarians should reclaim Adam Smith and foster competition rather than monopolies. It looks like we're in the wrong part of the cycle for that.

Marx's theory was updated in the 20th century by:

  • Rudolf Hilferding was influential in the 20th century up to World War 2. He thought the evolutionary process of Capitalism would be "free markets -> monopoly -> socialism".
  • Rosa Luxemburg was also active during this period. She thought that "once the entire globe had been colonized, and capitalism introduced across the colonial world, the system must collapse." Hah, the race to the bottom will be over when the last low wage workers in the world are gone, I guess. But "Luxemburg had ignored the fact that new markets are formed in a complex way, interactively, and that they can be created not only in colonies but within national economies, local sectors, people’s homes and indeed inside their brains." Surprisingly, "by the mid-1920s, her theory had become the state doctrine of the Soviet Union."
  • Vladimir Lenin drew "the conclusion that finance-dominated capitalism was proof of the system's imminent doom. Lenin called this new declining model 'imperialism', and defined it as 'capitalism in transition'."
  • Nikolai Bukharin "asserted that, because nation states had become aligned with the interests of their dominant industrial companies, the only form of competition left was war."
  • Jeno Varga was a Hungarian Marxist economist who "predicted the constant decline of workers' real incomes." Hmmm, that sounds like the last 30 years, in the developed countries anyway.
It seems odd that these Communist political figures were on some level economists. But I guess Marxism is indeed at least as much an economic system as a political. No wonder economics remains so politicized.

Mason states his own 6 step "restatement of long-cycle theory, merged with what is rational about the Marxist understanding of crisis." Using this framework, he tells us why the 4th long cycle of the Industrial Age is different.

The fourth long cycle was prolonged, distorted and ultimately broken by factors that have not occurred before in the history of capitalism: the defeat and moral surrender of organized labour, the rise of information technology and the discovery that once an unchallenged superpower exists, it can create money out of nothing for a long time.


Chapter 4 is titled "The Long, Disrupted Wave". Mason tells us the tale of "Les Trente Glorieuses" - the 30 years of incredible growth and prosperity that followed World War 2. The Marshall Plan rebuilt Europe, and the Bretton Woods accords established the Keynesian framework that everyone worked under. The US dollar became the world currency, its price pegged to gold, and all other currencies pegged to the dollar. The US, with its infrastructure undamaged by the war, became for 25 years the world's first true hegemonic power.

The Marshall Plan, combined with domestic rebuilding efforts, allowed most European economies to grow at well above 10 per cent per year until they reached their pre-war highpoint, which for most was achieved by 1951.
But, of course, such growth could not be sustained indefinitely, and in the early 70s, 2 shocks brought an end to this period of growth:
  1. In August, 1971, Richard Nixon took the US off of the gold standard, "thereby destroying Bretton Woods". This was in response to other nations devaluing their currencies against the dollar.
  2. In October, 1973, the Arab Oil Embargo began. The price of oil quadrupled. "The resulting shock pushed key economies into recession."
Meanwhile, workers had been doing very well during the post-war boom. But when things started to slow down, they wanted to continue with their gains. Sometimes governments helped mollify them by increasing social programs.

The stage is set for the creation of Neoliberalism.

Neoliberalism was designed and implemented by visionary politicians: Pinochet in Chile; Thatcher and her ultra-conservative circle in Britain; Reagan and the Cold Warriors who brought him to power. They’d faced massive resistance from organized labour and they’d had enough. In response, these pioneers of neoliberalism drew a conclusion that has shaped our age: that a modern economy cannot coexist with an organized working class. Consequently, they resolved to smash labour’s collective bargaining power, traditions and social cohesion completely.
We know how this turned out. Neoliberalism mostly won. In the US and UK, the power of unions was smashed.
The 1980s saw the first ‘adaptation phase’ in the history of long waves where worker resistance collapsed. ... After 1979, the workers’ failure to resist allows key capitalist countries to find a solution to the crisis through lower wages and low-value models of production.
Mason reviews economic data for the last 40-100 years a la Piketty. One interesting number is that, with the introduction of 250 million Chinese into the manufacturing workforce, from 1980 to 2000 the number of workers in the world doubled. [US workers certainly aren't happy about this, but it did enable the UN Millennial Goal for extreme poverty reduction to be met.] Chinese wages have risen to where their jobs are being being offshored to Vietnam and Bangladesh. I have lately been thinking that Africa will not be the next offshoring target because its infrastructure is so bad: limited rivers and no integrated railroads. Mason believes the data says that the "race to the bottom" is about over:
the days of easy wins for firms offshoring their production are drawing to a close.
We still finished the 4th wave with the Neoliberals firmly in control, but with Capitalism really struggling.


Chapter 5 is titled "The Prophets of Postcapitalism" and begins Part II. The primary driver of postcapitalism is information technology, but free markets don't know how to deal with all its features.

The [2013] report showed that while ‘intangible assets’ were growing on US and UK company balance sheets at nearly three times the rate of tangible assets, the actual size of the digital sector in the GDP figures had remained static. So something is broken in the logic we use to value the most important thing in the modern economy.

...

In the 1990s, as the impact of info-tech began to be understood, people from several disciplines had the same thought at once: capitalism is becoming qualitatively different.

Buzz phrases appeared: the knowledge economy, the information society, cognitive capitalism.

Mason also uses the term "info-capitalism".

The first prophet we meet is Peter Drucker. He is considered the father of modern business management, particularly in Japan. He was all about optimizing people rather than data.

In 1993, the management guru Peter Drucker wrote: ‘That knowledge has become the resource, rather than a resource, is what makes our society “post-capitalist”. It changes, and fundamentally, the structure of society. It creates new social dynamics. It creates new economic dynamics. It creates new politics.’

...

Drucker’s case rests on the assertion that the old factors of production – land, labour and capital – have become secondary to information. In his book Post-Capitalist Society, Drucker argued that certain norms essential to capitalism were being replaced. Writing before anybody had seen an internet browser, Drucker observed the information-rich capitalism of the 1980s.

Drucker posed and answered a question crucial to understanding postcapitalism. The question: "who is the social archetype of postcapitalism?" The answer: "'the universal educated person'". And who is this "universal educated person"? Mason describes someone that sounds like millennials in general - [and The Brooklyn Hipster in particular. Know the Brooklyn Hipster by his narrow-legged black jeans, whom I have gotten to study at length when visiting my oldest daughter graphic designer who lives in ... Brooklyn!]

Mason puts his finger on my main worry re the millennials:

The problem is, they show no interest at all in overthrowing the old capitalism, and scant interest in politics at all.
The next prophet we meet is Paul Romer.
In 1990 the American economist Paul Romer blew apart one of the key assumptions of modern economics and in the process thrust the question of info-capitalism into the mainstream.

In their search for a model that could predict a country’s rate of growth, economists had listed various factors: savings, productivity, population growth. They knew that technological change influenced all these factors but they assumed, for the purposes of the model, that it was ‘exogenous’ – external to their model and therefore irrelevant to the equation they were trying to write. Then, in a paper titled Endogenous Technological Change, Romer reset the whole argument. He demonstrated that, since innovation is driven by market forces, it cannot be treated as accidental or external to economic growth but must be an intrinsic (‘endogenous’) part of it. Innovation itself has to be situated within growth theory: its impact is predictable, not random.

The impact of Romer's theory, as summarized by journalist David Warsh:
The fundamental categories of economic analysis ceased to be, as they had been for two hundred years, land, labour and capital. This most elementary classification was supplanted by people, ideas and things … the familiar principle of scarcity had been augmented by the important principle of abundance.
And the final result:
Romer’s research had shown that, once you move to an information economy, the market mechanism for setting prices will drive the marginal cost of certain goods, over time, towards zero – eroding profits in the process.

In short, information technology is corroding the normal operation of the price mechanism.

Our next prophet is one I am familiar with: Richard Stallman. He is the founder and spiritual leader of the Free & Open-Source Software (FOSS) movement. Here he is in The GNU Manifesto in 1985:
If anything deserves a reward, it is social contribution. Creativity can be a social contribution, but only in so far as society is free to use the results. Extracting money from users of a program by restricting their use of it is destructive because the restrictions reduce the amount and the ways that the program can be used. This reduces the amount of wealth that humanity derives from the program.
Contrast that to Bill Gates, who was angrily railing at people not to "steal software".

The contributions of the FOSS movement - the Linux stack, Firefox, Android, Ruby On Rails - the list goes on and on - are the 2nd textbook case for postcapitalistic production.

According to standard economics a person like Richard Stallman should not exist: he is not following his self-interest but suppressing it in favour of a collective interest that is not just economic but moral.
But information technology is not the whole story. Our next prophet is US journalist Kevin Kelly, who wrote in Wired in 1997
The grand irony of our times is that the era of computers is over. All the major consequences of stand-alone computers have already taken place. Computers have speeded up our lives a bit, and that’s it. In contrast, all the most promising technologies making their debut now are chiefly due to communication between computers that is, to connections rather than to computations.
So we now have the network economy. But, so many services are supplied on the net for free. How is a capitalist to make any money? That problem led to the dotcom crash of 2000. I love this characterization of that crash by John Perry Barlow:
‘The whole dot-com thing was an effort to use 19th and 20th century concepts of economy in an environment where they didn’t exist, and the internet essentially shrugged them off. This was an assault by an alien force that was repelled by the natural forces of the internet.’ And he pointed out where the debate might go next. ‘In the long term it’s going to be very good for the dot-communists.’
Our next prophet is Yochai Benkler, who apparently was involved in the creation of the Creative Commons License - the extension of FOSS principles to all forms of intellectual property. In his 2006 book "The Wealth of Networks" [great title, I love whenever someone invokes Adam Smith's classic]
[he] concluded that the network economy was 'a new mode of production emerging in the middle of the most advanced economies in the world’.

...

‘The result is that a good deal more that human beings value can now be done by individuals who interact with each other socially, as human beings and as social beings, rather than as market actors through the price system.’

Discussing Wikipedia and what motivates people to contribute their time to it, Mason makes what I think is an important statement:
it is not money the participants are exchanging. They are in effect exchanging gifts.
The gift economy is a known economic system mostly studied by anthropologists rather than economists. Mason doesn't use the term, I think this system might play an important part in postcapitalism.

More exploration of the information economy, and how it breaks free market capitalism.

In 1962, Kenneth Arrow, the guru of mainstream economics, said that in a free-market economy, the purpose of inventing things is to create intellectual property rights.

...

if a free-market economy with intellectual property leads to the underutilization of information, then an economy based on the full utilization of information cannot have a free market or absolute intellectual property rights. And this is just another way of saying what Benkler and Drucker understood: that info-tech undermines something fundamental about the way capitalism works.

Our next prophet really surprised me. It is none other than our old friend Karl Marx, whose better known ideas were the topic of Chapter 3. In 1858, Marx wrote a piece called "Fragment on Machines". It reminds me of Keynes "Economic Possibilities for Our Grandchildren", which I blogged on here - but it was written 80 years earlier, and it is quite a bit more far-thinking. In fact, it is bizarrely prescient.
Marx drops a bombshell. In an economy where machines do most of the work, where human labour is really about supervising, mending and designing the machines, the nature of the knowledge locked inside the machines must, he writes, be ‘social’

...

these two ideas – that the driving force of production is knowledge, and that knowledge stored in machines is social – led Marx to the following conclusions.

First, in a heavily mechanized capitalism, boosting productivity through better knowledge is a much more attractive source of profit than extending the working day, or speeding up labour: longer days consume more energy, speed-ups hit the limits of human dexterity and stamina. But a knowledge solution is cheap and limitless.

Second, Marx argued, knowledge-driven capitalism cannot support a price mechanism whereby the value of something is dictated by the value of the inputs needed to produce it. It is impossible to properly value inputs when they come in the form of social knowledge. Knowledge-driven production tends towards the unlimited creation of wealth, independent of the labour expended. But the normal capitalist system is based on prices determined by input costs, and assumes all inputs come in limited supply.

...

When we measure the development of technology, he writes, we are measuring the extent to which ‘general social knowledge has become a force of production … under the control of the general intellect’.

...

Furthermore, he had imagined what the main objective of the working class would be if this world ever existed: freedom from work.

But, the Capitalism of the time recovered, and Marx never went back to this idea. It lay fallow until the 1960s. The idea was first developed further by the disciples of the scholar who rediscovered 'Fragment on Machines', Antonio Negri. They called it 'cognitive capitalism'.
Cognitive capitalism, say its proponents, is a coherent new form of capitalism: a ‘third capitalism’, following the merchant capitalism of the seventeenth and eighteenth centuries and the industrial capitalism of the last 200 years. It is based on global markets, financialized consumption, immaterial labour and immaterial capital.

...

Yann Moulier-Boutang, a French economist, believes that the key for cognitive capitalism is the capture of the externalities.

...

‘Capturing positive externalities,’ writes Moulier-Boutang, ‘becomes the number one problem of value.’

Externalities are side-effects, for good or for bad, possibly unintentional, of economic activity. Economics in general does not place a price on them. But, now, in cognitive capitalism, they are the thing it is crucial to measure. Traditional economics is indeed broken.

Mason disagrees with proponents of cognitive capitalism, who feel that the theory explains where we are now.

In fact, the system we live in is not a new, coherent and functioning form of capitalism. It is incoherent. Its tense, febrile and unstable character comes from the fact that we’re living in an age of the network alongside the hierarchy, the slum alongside the web café – and to understand the situation we have to see it as an incomplete transition, not a finished model.
Mason favors the description of "current reality" described by Jeremy Rifkin, in his 2014 book The Zero Marginal Cost Society.
Rifkin argues that peer-production and capitalism are two different systems; currently they coexist and even gain energy from each other, but ultimately peer-production will reduce the capitalist sector of the economy to a few niches.
Rifkin identifies the Internet of Things as having exponential growth potential.
It could rapidly reduce the marginal cost of energy and physical goods in the same way as the internet does for digital products.
So this sets the stage for the final struggle between Neoliberalism and Capitalism, and postcapitalism, succinctly described by Mason:
Technologically, we are headed for zero-price goods, unmeasurable work, an exponential takeoff in productivity and the extensive automation of physical processes. Socially, we are trapped in a world of monopolies, inefficiency, the ruins of a finance-dominated free market and a proliferation of ‘bullshit jobs’.

Today, the main contradiction in modern capitalism is between the possibility of free, abundant socially produced goods, and a system of monopolies, banks and governments struggling to maintain control over power and information. That is, everything is pervaded by a fight between network and hierarchy.


Chapter 6 is titled "Towards the Free Machine". It begins with a description of protests in 2013 in Istanbul, where a pile of free stuff, mostly consumables, magically grew to support the protesters. It is an example of the transition from scarcity to plenty.

But it’s a major challenge for economic theory. Capitalism made us see the price mechanism as the most organic, spontaneous, granular thing in economic life. Now we need a theory of its disappearance.
The theory that Mason proposes is the labor theory of value. Although it is not popular, it dates back to Adam Smith.
‘It was not by gold or by silver but by labour that all the wealth of the world was originally purchased,’ Smith wrote; ‘and its value, to those who possess it, and who want to exchange it for some new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command.’
Standard economics teach that value has other components as well: capital and land. But Mason maintains that Smith felt that labor was the key component.
Profits and rents are deductions from the value produced by labour.
David Ricardo "created a more developed model". Factory owners and workers deserved to prosper, as opposed to the landed aristocracy who lived off of rents. But, as you would expect, it didn't take long for the owners and workers to disagree on how much each of their labors should be valued.
Just as a rent-seeking aristocracy can be shown to be parasites on the productive economy, so too can capitalists be seen as parasites on the work of others.
So as the labor theory of value became the bible of early trade unionists, it was increasingly rejected by the capitalists. Labor to capitalists is something to be exploited, coercively if necessary.
Even in advanced countries the labour market is built overtly on coercion. Just listen to any politician make a speech about welfare: cutting unemployment and disability benefits is designed to force people to take jobs at wages they can’t live on.

...

Work for a salary is the bedrock of the system. We accept it because, as our ancestors learned the hard way, if you don’t obey, you don’t eat.

The orthodox alternative to the labor theory of value is Marginalism, or the 'usefulness theory' of value.
Léon Walras, one of the founders of marginalism, insisted: ‘The selling prices of products are determined in the market … by reason of their utility and their quantity. There are no other conditions to consider for these are the necessary and sufficient conditions.’
Mason spends a lot of this chapter explaining why the labor theory makes more sense than Marginalism, particularly in modern times.
It treats profit as if it were made somewhere central within capitalism: the workplace, not the marketplace.

...

the labour-theory is the greatest theory of the market ever written. It ascribes to the market, and only the market, the mechanism of making concrete the reality beneath.

...

mainstream economics evolved into a pseudo-science that can only allow for statements obtained through crunching the data. The result is a neat set of textbooks, which are internally coherent but which continually fail to predict and describe reality.

...

Marginalism emerged because managers and policymakers alike needed a form of economics that was bigger than accountancy but smaller than a theory of history; it had to describe in detail the way the price system worked – and in a way that took no interest in class dynamics or social justice.

...

But there is a crucial piece of ideology built into marginalism: the assertion that the market is ‘rational’.

Hah, our old friend, 'the rational market'. As in the last economics book I reviewed, Behavioral Economics has shown 'the rational market' to be an imaginary beast.

But its inability to deal with info-capitalism in today's world is its fatal flaw.

Because marginalism was a theory of prices and prices only, it cannot comprehend a world of zero-priced goods, shared economic space, non-market organizations and non-ownable products.

But labour-theory can. The labour-theory actually predicts and calibrates its own demise.

That 2nd paragraph really threw me. "Predicts and calibrates its own demise"??? Indeed the rest of the chapter uses labor theory to develop a description of info-capitalism - to then conclude that it cannot work. I think the point is, that at least labor theory gives us a tool to evaluate info-capitalism, whereas Marginalism does not. OK, the penultimate paragraph of this chapter, quoted below, explains this.

We go back to Marx to develop this description of info-capitalism - a capitalism where, asymptotically at least, everything is free.

But the amounts of labour value embodied in information products can be negligible. And once knowledge becomes truly social – as Marx imagined with the concept of the ‘general intellect’ – some of the value is contributed for free, as follows:
  • Information goods naturally leverage general scientific knowledge
  • Their users feed back, in realtime, data that allows them to be improved, for free
  • Any improvement in knowledge somewhere can be implemented in every machine deployed everywhere, immediately.
Mason models info-capitalism, where all labor and capital costs head for zero, except for "energy and physical raw materials". So down goes marginal utility, and down goes prices. "Mainstream economics would be puzzled."
And even though we are far away from the pure information economy modeled crudely here, we can already feel these effects in reality: monopolies are arising to prevent software or information goods becoming free; accounting standards are becoming garbled as companies resort to valuation guesswork.
Even the OECD is admitting that there is trouble.
In its first major macro-economic study of the internet, in 2013, the OECD admitted: ‘While the internet’s impact on market transactions and value added has been undoubtedly far-reaching, its effect on non-market interactions … is even more profound. Non-market interactions on the internet are broadly characterised by the absence of a price and market-clearing mechanism.’
One point Mason makes is one that I have thought about, and maybe noted: that if the millennials decide to opt out of the modern economy, it will still leave the old lizards in control of raw materials.
economics in a zero production cost society quickly comes to centre on energy and raw materials: they become the sector where scarcity still rules.
I note that Mason includes energy and I do not. The decentralized nature of solar power tells me that we can get plenty of energy without involving the old lizards.

So now we come to the part where info-capitalism doesn't work.

It would have to stop the price of information goods falling, by using monopoly pricing: think Apple, Microsoft and Nikon/Canon on steroids. It would have to maximize the capture of externalities by corporations. Every interaction – between producer and consumer, consumer and consumer, friend and friend – would need to be mined for value. (In labour-theory terms, our non-work activity has to be turned into work contributed to the corporation for free.) A thriving info-capitalism might seek to maintain artificially high prices for energy and physical raw materials, through hoarding and other monopolistic behaviour, so their cost fed through into higher average necessary labour time to reproduce labour. Crucially, it would have to create new markets beyond production, in the field of services.

...

And finally, for info-capitalism to succeed it would have to find work for the millions of people whose jobs are automated.

...

But there are clear structural obstacles to making this work.

Mason lists 3 - no 4 - obstacles [Spanish Inquisition joke]. Hah, I like the shoutout to Dune and mentats. I'll include it as a tribute to Frank Herbert, the great sci-fi author and bard of evolution.

First, the normal escape route – innovation creates expensive new technologies that replace info-tech – is blocked. ... The only way you could remove the information effect from these coming technologies would be, as in Frank Herbert’s sci-fi novel Dune, to ban computers and replace them with expensive human experts in calculation.

The second obstacle is the scale of workforce redesign.

...

Alongside sex work we might have ‘affection work’: you can see the beginnings of it now in the hired girlfriend, the commercial dog-walker, the house cleaner, the gardener, the caterer and the personal concierge.

...

And here’s where you hit the third obstacle – what philosopher André Gorz called the ‘limits of economic rationality’. At a certain level, human life and interaction resist commercialization.

...

And there's yet another obstacle: property rights.

So here's the big finish:
So what we have in reality is an info-capitalism struggling to exist.

We should be going through a third industrial revolution but it has stalled.

...

An economy based on information, with its tendency to zero-cost products and weak property rights, cannot be a capitalist economy.

The usefulness of the labour-theory is that it accounts for this: it allows us to use the same metric for market and non-market production in a way that the OECD’s economists could not. Crucially it enables us to design the transition process so that we know what we are trying to achieve: a world of free machines, zero-priced basic goods and minimum necessary labour time.


Chapter 7 is titled "Beautiful Troublemakers". It is an depth history of labor and the labor movement - although Wikipedia says that the labor movement, as opposed to socialism, was committed to working with capitalism. Particular attention is paid to the defeat of labor in the 4th wave, and the current status of labor.

Following the collapse of labor in most of the developed world, many of those manufacturing jobs have move to the 3rd world, or the "global south". Will they organize as earlier labor forces did? Mason doesn't think so.

On the subsoil of precarious work, extreme poverty, migrant labour and slum conditions it has been impossible for anything that matches the collectivity and consciousness of the Western labour movement at its height to grow in the global south.
Meanwhile, in the West, per André Gorz
Work - the defining activity of capitalism - is losing its centrality both to exploitation and resistance.
Mason is very knowledgeable on Marxist/Leninist/Communist principles - he is the most leftist writer I have encountered in my economics readings - he describes himself as having been a "Leftie activist" back in the day. I am ashamed to admit, discussion of these topics makes me cringe a little. I grew up in the US Midwest in the 1950s - maybe I'm afraid the ghost of Joe McCarthy is going to haunt my dreams or something. Looking up a lot of the youngest of the "prophets" of the prior chapter reminded me of something that I, like most Americans, think about very seldom if at all: that most if not all European countries have real live communist and socialist parties, often in several different flavors.

But as much as he respects Marxism, he is not at all shy about calling out its shortcomings. In particular, that the Wikipedia definition of "labor movement" is correct. Workers did not want to overthrow capitalism and institute socialism.

They wanted a more survivable form of capitalism.
More Marx wrongness:
Marx was wrong about the working class. He was wrong to think automation would destroy skill; wrong to say the proletariat could not produce an enduring culture within capitalism.
Mason provides great detail as the labor movement seems to progress steadily ahead from the start of the Industrial Revolution, up to World War 2. In Germany, the Nazis outlawed unions and destroyed socialist parties. Mason takes a unique view of events surrounding World War 2: the viewpoint of the labor movement.
The scale of death during the Second World War makes it difficult to comprehend. So its impact on the politics and the sociology of the working class has been the subject of a horrified silence. But let us puncture it. The majority of the Jews killed in East Europe were from politicized working-class communities. Many were adherents either of pro-Soviet, left Zionist parties or the anti-Zionist Bund. The Holocaust wiped out an entire political tradition in the global labour movement in the space of three years.

In Spain, the unions, co-ops and militias of the left were destroyed by mass murder – and their traditions suppressed until the 1970s. Meanwhile, in Russia the working-class political underground was exterminated by the gulag and mass executions.

...

As the Second World War approached, the extreme left – the Trotskyists and anarchists – tried to maintain the old, internationalist line: no support for wars between imperialist powers, keep the class struggle going at home. But by May 1940 the war was a bigger fact than the class struggle.

...

Working-class politics would become dependent on an Allied military victory. After the war, those who survived the slaughter, conscious of how close organized labour had come to total obliteration, now sought a strategic accommodation.

After the war, in "Les Trente Glorieuses", labor was relatively well treated. Piketty pointed out that during the war there were rigid wage controls imposed on managers and executives - maybe that and the "one-for-all" attitude of the war made capitalism a little less rapacious for a while.

Hah, this is something I had never heard, but it makes sense:

Additionally, the Allies actually imposed welfare states, trade union rights and democratic constitutions on Italy, Germany and Japan, as a punishment for their elites and as an obstacle to their re-emergence as fascist powers.
It seems really sad that you can look at "Les Trente Glorieuses" as Capitalism playing rope-a-dope with labor and lulling it into complacency - and then reorganizing as Neoliberalism for the knockout punch.
The trade-off? Workers abandoned the ideologies of resistance that had sustained them in the third long wave.
Increasing automation post-war foreshadowed where we are now.
If work seemed ‘absurd, ridiculous and boring’ to the Fiat workers Alquati interviewed in the early 1960s, there was a deeper reason. ... There would come a time when manual work was no longer necessary.
Moving into the 1970s, the contraceptive pill greatly changed the labor force.
Women surged into higher education: for example, 10 per cent of US law students in 1970 were female – this rose to 30 per cent ten years later. And with control over the timing of childbirth, the stage was set for a decisive increase in female participation in the workforce.

In sum, what emerged was a new kind of worker. The generation that would wage class war in the 1970s began with higher incomes, higher levels of personal freedom, fragmenting social ties and much better access to information.

Again, we come to 1980, when the Neoliberal onslaught began. Led by stagflation and the recessions and increased public spending it caused, together with increasing worker frustration and activism,
a new breed of conservative politicians decided the entire system would have to be dismantled. The second oil shock, after the Iranian revolution in 1979, gave them the opportunity. It triggered a new, deep recession and this time the workers faced corporations and politicians determined to try something new: mass unemployment, industrial closures, wage cuts and cuts in public spending.

They also faced the emergence of something they’d insufficiently prepared for in the years of radicalism: a part of the workforce prepared to side with conservative politicians. White southern workers put Reagan into power; many skilled British workers, tired of the chaos, swung to the Conservatives in 1979 to give Thatcher ten years in office. Outright working-class conservatism had never gone away: what it always wants is order and prosperity, and by 1979 it could no longer see these things being delivered by the Keynesian model.

By the mid-1980s, the working class of the developed world had moved in the space of fifteen years from passivity to strikes and semi-revolutionary struggles to strategic defeat.

That brings us to our modern, international, service-oriented workforce. I had not realized that financialization was as bad as it is. It seems like such a sad thing. And indeed it has effects.
Costas Lapavitsas, a professor of economics at London University’s SOAS (School of Oriental and African Studies), calls this ‘financial expropriation’, and its impact on the self-image of the working class has been profound.
Most modern information workers are playing against a stacked deck as well. When I went on vacation, my coworkers knew I expected them to handle my work, and I was actually never disturbed on vacation. How many modern information workers get away with that now?
In highly information-centred work, especially with smart mobile devices, work and leisure time are substantially blurred. This has over a relatively short period loosened the bond between wages and working time.

...

The worker of the Keynesian era had a single character: at work, in the local bar, in the social club, on the football terraces, they were the same essential person. The networked individual creates a more complex reality: s/he lives parallel lives at work, in numerous fragmentary subcultures and online.

...

All the qualities the sociologists of the 1990s observed in the tech workforce – mercuriality, spontaneous networking, multiple selves, weak ties, detachment, apparent subservience concealing violent resentment – have become the defining qualities of being a young, economically active human being.

But the same network that ties modern workers to their jobs 24x7 also ties them together - so, bosses beware!
China’s workers – who for now look like digital rebels but analog slaves – are at the heart of the phenomenon of networked rebellion. These networked movements are evidence that a new historical subject exists. It is not just the working class in a different guise; it is networked humanity.

...

They [networked individuals] are the working class ‘sublated’ – improved upon and replaced. They may be as clueless as to strategy as the workers of the early nineteenth century were, but they are no longer in thrall to the system. They are enormously dissatisfied with it.


Chapter 8 is titled "On Transitions" and begins Part III. Great starting quote:

An all-round increase in wealth threatened the destruction – indeed in some sense was the destruction – of a hierarchical society.
Emmanuel Goldstein, in George Orwell, Nineteen Eighty-Four
Hmmm, looking forward, I don't know if Mason gives enough credit to the power of the lizard brain - the source of hierarchical behavior in everything with a backbone. The old lizards are tough.

Humanity has seen so far 1 major transition in mode of production: from feudalism to capitalism, beginning at around the time of The Enlightenment. So studying that transition might help us understand what the transition from capitalism to whatever-comes-next might look like.

[BTW, 'postcapitalism' is a horrible name for 'whatever-comes-next' - clearly no marketing people have been involved in the naming. Seriously, I really think this bears some thought. Names are important. Look at when Dennett and some of them came up with the name "Brights" for atheists. Ugh. Commonwealthism? Plentyism? Abundancy?]

Mason gives us another science fiction reference: Red Star (1909) by Alexander Bogdanov. Bogdanov, a medical doctor, was one of the twenty-two founder members of Bolshevism. Mars is used as a stand-in for a future where automation has eliminated all work.

Bogdanov was using the novel to outline a complete alternative to the ideas that would dominate the far left in the twentieth century. He advocates technological maturity as the precondition for revolution, the peaceful overthrow of the capitalists by means of compromise and compensation, a focus on technology as a means to reduce labour to a minimum and a relentless insistence that it is humanity itself that has to be transformed, not just the economy. Furthermore, a major theme of Red Star is that postcapitalist society has to be sustainable for the planet.
This is quite a different vision for Russia.
There is a whole literature of 'what if?' focused on Bogdanov - and rightly so.
So rather than putting Russia on a road to postcapitalism, Lenin and even worse Stalin created a Russia that just didn't work. We are going to look at their failed transition to see if we can gain any insight into our stalled transition to postcapitalism. The worst of their ideas was a planned economy.

The 1920s and 1930s featured "The Calculation Debate" - can you calculate well enough to plan an economy? In 1920, Ludwig von Mises published "Economic Calculation in the Socialist Commonwealth". He posited that, divorced from reality, a planning system will never calculate what is needed as well as a market.

In the 1930s, one of Mises's pupils, Friedrich Hayek, another Libertarian favorite, retreated from this, and said, with "the right information", calculation could be done - but too slowly.

Polish economist Oskar Lange kind of went with a hybrid plan: consumer markets with central planning.

Instead of being signalled through price movements, the unmet needs of the economy are signalled through shortages and surplus goods.
It took me a while to understand why we care about "the calculation debate". The reason is, if the price of everything goes to zero and markets are broken, how is supply matched to demand? This brings us back to needing the labor theory of value.
Mises’s work on calculation contains a second valuable insight: it is not trading between enterprises that is the true mediator of supply and demand in a market economy, it is the finance system – which puts a price on capital. ... if we want a postcapitalist economy, not only do we need something better than the market for distributing goods, we also need something better than the finance system for allocating capital.
Something else learned from the failure of the planned Russian economy:
In economic terms, the most important thing the Russian Trotskyists left us was probably the idea that a transition phase generates its own dynamics; it is never just the fading of one system and the rise of another.
Some more from Trotsky:
In a memorable passage, whose relevance to the twenty-first century will be clear, Trotsky wrote:
If a universal mind existed … that could register simultaneously all the processes of nature and society, that could measure the dynamics of their motion, that could forecast the results of their inter-reactions – such a mind, of course, could a priori draw up a faultless and exhaustive economic plan, beginning with the number of acres of wheat down to the last button for a vest.
The absence of such a ‘universal mind’, he said, requires instead the promotion of workers’ democracy – which had been abolished. Only if human beings, with freedom of speech, became the sensors and feedback mechanisms for the planning system could this crude calculating machine work.
We now move forward 60 years or so. We have powerful computers now! Let's revisit the "the calculation debate"! But, spoiler alert, it still doesn't work.
Over the past twenty years, Paul Cockshott and Allin Cottrell – a computer scientist and an economics professor – have worked tirelessly on a problem we thought we didn’t have: how to plan an economy. Though not well known, their work is rigorous and performs an invaluable service; it is a textbook outline of what we should not do.

...

Though the researchers decry the dogmatic idiocy of Soviet planning, their world view remains that of a hierarchical society, of physical products, of a simple system where the pace of change is slow. The model they’ve produced is the best demonstration yet of why any attempt to use state planning and market suppression as a route to postcapitalism is closed.

On to the transition from feudalism to capitalism at the time of The Enlightment.
The mode of production is one of the most powerful ideas to come out of Marxist economics.
Mason does something I thought was really interesting. He looks to the plays of Shakespeare. In particular, the history plays represent the old mode of production, the tragedies and comedies the new.
Feudalism was a system based on obligation: ... peasants ... to the landowner ... to ... the king

...

In the comedies and tragedies we are suddenly in a world of bankers, merchants, companies, mercenary soldiers and republics. ... The typical hero is a person whose greatness is essentially bourgeois and self-made

From Shakespeare back to Marx.
For Marx, a mode of production describes a set of economic relationships, laws and social traditions that form the underlying ‘normal’ of a society. ... To understand a mode of production, another revealing question is: ‘what reproduces itself spontaneously?’ In feudalism, it is the concept of fealty and obligation; in capitalism, it is the market.
So Marx believed that communism would occur after capitalism, to share the abundance capitalism has created? We get a quote from the 1930 Keynes that I mentioned earlier.
'there must come a time when there is relative abundance, compared to the scarcity that has driven all previous economic models', then Marx was only saying the same thing as Keynes said in the early 1930s: one day there will be enough goods to go around and the economic problem will be solved. 'For the first time since his creation,' Keynes wrote, 'man will be faced with his real, his permanent problem - how to use his freedom from pressing economic cares ... to live wisely and agreeably and well.'
If you doubt a future of abundance, this chart should make a believer of you. It's actually kind of scary. More pretty charts in addition to this one here.

as the graph above shows, GDP per person rates are rising all across the world. The stage where all the lines go close to vertical is the one Keynes and Marx allowed themselves to imagine – and so should we.
We have reached the "four probable causes for the end of feudalism."
  1. The Black Death. 1/4 of Europe's people gone.
    Suddenly farm workers, who had been the lowest of the low, could command higher wages.

    ...

    'Agricultural rents collapsed after the Black Death and wages in the towns soared to two and even three times the levels they had held'

    ...


  2. The second driver of change was the growth of banking.

    ...


  3. The third big driver of capitalism's takeoff was the conquest and pillage of the Americas

    ...


  4. Finally, there was the printing press.
...

If we accept the four-factor account given above, the dissolution of feudalism is not primarily a technology story. It is a complex interplay between failing economics and outside shocks.

So now let's see how this compares to where we are at now, the end of capitalism.
feudalism was an economic system structured by customs and laws about obligation. Capitalism was structured by something purely economic: the market. We can predict from this that postcapitalism – whose precondition is abundance – will not simply be a modified form of a complex market society.

...

The modern equivalent of the long stagnation of late feudalism is the stalled fifth Kondratieff cycle, where instead of rapidly automating work out of existence, we are reduced to creating bullshit jobs on low pay, and many economies are stagnating.

Are there now shocks to capitalism similar to the 4 described shocks to feudalism described above? Yes.
The modern-day external shocks are clear: energy depletion, climate change, ageing populations and migration. They are altering the dynamics of capitalism and making it unworkable in the long term.
What will the transition out of capitalism look like?
a gradual, iterative and modular project. Its aim should be to expand those technologies, business models and behaviours that dissolve market forces, eradicate the need for work and progress the world economy towards abundance.


Chapter 9 is titled "The Rational Case for Panic". This chapter is where we sync up with "This Changes Everything".

Wherever I go, I ask questions about economics - and get answers about climate.

...

In this book, I’ve avoided ‘building in’ the climate crisis until now. I wanted to show how the clash between info-tech and market structures is, on its own, driving us towards an important turning point. Even if the ecosphere was in a steady state, our technology would still be pushing us beyond capitalism.

In case you were wondering: CLIMATE CHANGE IS REAL! THE CLIMATE CRISIS IS REAL!
in the edge-places of the world the catastrophe is happening already. If we listened to those whose lives are being destroyed by floods, deforestation and encroaching deserts, we would better understand what is coming: the total disruption of the world.
Mason states the thing that absolutely blew me away as I started reading "This Changes Everything": how is possible for climate deniers to deny, in the face of overwhelming evidence opposing their case?
It has become common to laugh at the absurdities of the climate-change deniers, but there is a rationality to their response. They know that climate science destroys their authority, their power and their economic world. In a way, they have grasped that if climate change is real, capitalism is finished.
Mason reviews the severity of the climate crisis, and additionally the (aging) population bomb. Japan is the canary-in-the-coal-mine for the effects of an aging population. Pension funds across the world are having trouble. The summary:
The psychological byproduct in the minds of the policy elite was the idea that there are no impossible situations; there are always choices, even if some of them turn out to be tough ones. There is always a solution, and it is usually the market.

But these external shocks should be the alarm call. Climate change does not present us with a choice of market or non-market routes to meeting carbon targets. It mandates either the orderly replacement of market economics or its disorderly collapse in abrupt phases. Ageing populations run the risk of tanking the world’s financial markets, and some countries will have to wage a social war on their own citizens just to stay solvent. If that happens it will make what happened in Greece after 2010 look like just a few bad summers.

...

If you used the method engineers use – root cause analysis – to ask why three systemic disruptions are happening at once (financial, climatic and demographic), you would quickly trace them to their cause: an economic system in disequilibrium with its environment and insufficient to satisfy the needs of a rapidly changing humanity.

The chapter concludes with a call to action, with a bit of an attempt to inject some pragmatism into the often feckless left:
So we need to inject into the environment and social justice movements things that have for twenty-five years seemed the sole property of the right: willpower, confidence and design.


Chapter 10 is titled "Project Zero". This is the final chapter, it is time for The Plan [Dune movie reference].

a new route beyond capitalism has opened up, based on promoting and nurturing non-market production and exchange, and driven by information technology.

...

I call it Project Zero – because its aims are a zero-carbon energy system; the production of machines, products and services with zero marginal costs; and the reduction of necessary labour time as close as possible to zero.

Mason now spells out "FIVE PRINCIPLES OF TRANSITION":
The first principle is to understand the limitations of human willpower in the face of a complex and fragile system.

...

The second principle for designing the transition is ecological sustainability.

...

The third principle I want to insist on is: the transition is not just about economics.

...

A fourth principle should be: attack the problem from all angles.

...

The fifth principle for a successful transition is that we should maximize the power of information.

...

we should use the new breed of simulation tools to model every proposal virtually before we enact it for real.

So those are the principles. Now let's get the goals.
  1. Rapidly reduce carbon emissions so that the world has warmed by only two degrees Celsius by 2050, prevent an energy crisis and mitigate the chaos caused by climate events.
  2. Stabilize the finance system between now and 2050 by socializing it, so that ageing populations, climate change and the debt overhang do not combine to detonate a new boom-bust cycle and destroy the world economy.
  3. Deliver high levels of material prosperity and wellbeing to the majority of people, primarily by prioritizing information-rich technologies towards solving major social challenges, such as ill health, welfare dependency, sexual exploitation and poor education.
  4. Gear technology towards the reduction of necessary work to promote the rapid transition towards an automated economy. Eventually, work becomes voluntary, basic commodities and public services are free, and economic management becomes primarily an issue of energy and resources, not capital and labour.
For the rest of this chapter, Mason talks about us digging in, getting our hands dirty, and making it happen. Some of these are "yeah, right", but Mason often has a snappy comeback which leaves you saying, "yeah, well, OK, maybe".
First, we need an open, accurate and comprehensive computer simulation of current economic reality.

...

So one of the most radical – and necessary – measures we could take is to create a global institute or network for simulating the long-term transition beyond capitalism.

Mason astutely points out that the E in DSGE, which are the models popular in economics now, stands for "Equilibrium" - and there's not likely to be much of that around when we are transitioning between modes of production.

Another no-brainer for starting down the right path:

switch off the neoliberal privatization machine. ... the neoliberal system cannot exist without constant, active intervention by the state to promote marketization, privatization and the interests of finance. It typically deregulates finance, forces government to outsource services and allows public healthcare, education and transport to become shoddy, driving people to private services.
As I have said before, "privatization" always means figuring out how to line some fat cat's pockets.

More help for the fat cat's in today's world:

even the most progressive infrastructure designs are molded around the interests of the rich ... infrastructure planning remains one of the disciplines least transformed by networked thinking.
My reaction to this next part is definitely, "good luck with that":
It would be more sensible to combine controlled debt write-offs with a ten- to fifteen-year global policy of ‘financial repression’: that is, to stimulate inflation, hold interest rates lower than the inflation rate, remove people’s ability to move money into non-financial investments or offshore, and thus inflate away the debts, writing off the part that remained.

To be brutally clear, this would reduce the value of assets in pension funds, and thus the material wealth of the middle classes and the old; and by imposing capital controls you would be partially deglobalizing finance. But this is only a controlled way of doing what the market will do via chaos if, as S&P predicts, 60 per cent of all countries see their debt reduced to junk by 2050.

I don't know. This also made me think about a word that gives me a feeling of happiness and hope whenever I see it: jubilee!

In the section "EXPAND COLLABORATIVE WORK", Mason discusses coops, which have always seemed like a good way forward to me. Their problem is that, unless they team up with a bank, they usually have limited capital. It reminds me of the hardship that successful slave rebellions on Caribbean islands - say Haiti and northern Barbados - encountered. The slaves got their freedom, the capitalists withdrew all capital, and these are still the poorest areas in the region. Coops represent successful wage slave revolts.

The classic workers’ co-ops always failed because they had no access to capital and when crisis hit they couldn’t persuade their members to take lower wages or work fewer hours. Successful modern co-ops, such as Mondragon in Spain, work because they have the support of local savings banks and because they’re complex structures

...

In a network-based transition, collaborative business models are the most important thing we an foster.

...

Likewise we should not fetishize the non-profit aspect of things.

[The Mondragon coop features prominently as a role model in Kim Stanley Robinson's "2312", blogged here, which is I think is a post-scarcity sci-fi novel worthy of comparison to the gold standard, the Iain M. Banks Culture novels.]

This next thing is a great idea. I think I will create a petition at whitehouse.gov for this. It sounds like something Obama might enjoy setting up during this, the "no-fucks-to-give", segment of his presidency.

At the government level, there could be an Office of the Non-Market Economy.
Are the corporations going to help? For the most part, probably only if forced to via "law and regulation". So political power will still be required.
The low-wage, low-skill and low-quality corporations that have flourished since the 1990s exist only because the space for them was ruthlessly carved out by the state. All we need to do is throw that process into reverse gear.

It may sound radical to outlaw certain business models, but that’s what happened with slavery and with child labour.

That last statement is a great and insightful point.

What form will the resistance of Capitalism to its demise take?

The creation of monopolies to resist prices falling towards zero is capitalism’s most important defence reflex against postcapitalism.
Infrastructure companies are some of the biggest monopolies Capitalism currently has going for it. These should definitely be brought back under public control.
In summary: under a government that embraced postcapitalism, the state, the corporate sector and public corporations could be made to pursue radically different ends with relatively low-cost changes to regulation, underpinned by a radical programme to shrink debt.
We've seen that this transition is being brought about by the fact that economics is broken and markets are failing. What do we do about markets?
There is no reason to abolish markets by diktat, as long as you abolish the basic power imbalances that the term ‘free market’ disguises.

Once firms are forbidden to set monopoly prices, and a universal basic income is available (see below), the market is actually the transmitter of the ‘zero marginal cost’ effect, which manifests as falling labour time across society.

But in order to control the transition, we would need to send clear signals to the private sector, one of the most important of which is this: profit derives from entrepreneurship, not rent.

Not real sure about this next. Are we rewarding entrepreneurship or not? But, if we really want more people to use Creative Commons licenses, we could do this, and figure that most creators do it from the love of creation, not money. I guess the 2nd paragraph explains it as well.
But patents and intellectual property would be designed to taper away quickly.

...

as befits a society where the rate of innovation is becoming exponential, the reward period is going to be shorter.

This next one is going to go over really well with 'small government' proponents. But, I have seen where 1/3 of fossil fuel corporations are facing bankruptcy. What would that number be if their tax and other incentives were removed? So maybe government picks these companies up for a song.
To meet climate change with urgent action, the state should take ownership and control of the energy distribution grid, plus all big carbon-based suppliers of energy. These corporations are already toast, as the majority of their reserves cannot be burned without destroying the planet. To incentivize capital investment in renewables, this technology would be subsidized and the companies providing it remain outside state ownership where possible.
And if that weren't enough, let's "SOCIALIZE THE FINANCE SYSTEM" as well. Really, really, good luck with this?

But, we almost did some of this in 2008; we almost did buyouts instead of bailouts. And the plan to put banks in Post Offices seems doable - I believe Canada is moving ahead with this - and a great 1st step. Here is a very reasonable justification for socialization, in view of the 2008 bailouts:

Morally, if the risks are socialized, then the rewards should be socialized too.
Here are the steps towards this socialization:
  1. Nationalize the central bank, setting it an explicit target for sustainable growth and an inflation target on the high side of the recent average.

    ...

    In addition to its classic functions – monetary policy and financial stability – a central bank should have a sustainability target

    The US is already there, yes? The Fed is nationalized. In contrast, I believe that the Bank of England is the de facto but NOT the official national bank.

  2. Restructure the banking system into a mixture of utilities earning capped profit rates; non-profit local and regional banks; credit unions and peer-to-peer lenders; and a comprehensive state-owned provider of financial services.
  3. Leave a well-regulated space for complex financial activities. ... The guiding principles would be to reward innovation and to penalize and discourage rent-seeking behaviour.

    ...

    In countries such as the UK, Singapore, Switzerland and the USA with globally oriented finance sectors, governments could offer a deal whereby, in return for coming clearly and transparently onshore, some limited lender of last resort facilities were made available to the remaining high-risk, profit-oriented finance firms. Those which did not come onshore and become transparent would be treated as the financial equivalent of Al-Qaeda.

The proposal to socialize/nationalize the finance system really kind of gobsmacked me. But once you think about it, it makes so much sense. I have concluded that there are some business activities that should always be not-for-profit: healthcare, prisons, war. Putting a profit motive into any of these immediately creates immense moral peril.

Meanwhile, the finance system is charged with administering the most pervasive piece of software in our current system: money. When you see day traders, high-frequency traders, creators of advanced derivative financial instruments acting as parasites on our financial system and extracting mass quantities of $$$ while adding absolutely no value, you know there is a problem. These guys are basically financial hackers exploiting bugs in the system.

I think at one point I proposed, tax these guys profits 50% - if they are going go be parasites on the rest of our financial dealings, they should at least split the loot 50-50. So maybe, socializing the market is a more direct approach to the problem?

Here is a beautiful idea of a forward-looking financial system:

In future we might see all kinds of socially benign instruments traded – health outcomes, for example. If the state can create a market in carbon, it can create a market in anything else. It can use market forces for behaviour change, but ultimately there must come a time when it imbues these instruments – which effectively form a parallel currency – with greater purchasing power than actual money.
I like this next too, it is a balanced approach: wherever there is not moral or environmental peril, allow a competitive marketplace.
With energy and banking socialized, the aim in the medium term would be to retain as extensive as possible a private sector in the non-financial world, and to keep it open to a diverse and innovative range of firms.

Neoliberalism, with its high tolerance for monopolies, has actually stifled innovation and complexity.

And finally, we come to one of my latest causes. It is very sad, that Universal Basic Income (UBI) should be the #1 target for progressives, except that, in the US, we don't even have Universal Health Care! I have been backing UBI advocate Scott Santens (@2noname) on Patreon for several months now.
the biggest structural change required to make postcapitalism happen: a universal basic income guaranteed by the state.

...

A basic income paid for out of taxes on the market economy gives people the chance to build positions in the non-market economy.

...

The universal basic income, then, is an antidote to what the anthropologist David Graeber calls ‘bullshit jobs’: the low-paid service jobs capitalism has managed to create over the past twenty-five years that pay little, demean the worker and probably don’t need to exist.

We're whipping and driving down the stretch now! Almost there!
the global corporations get their market power from knowing more – more than their customers, suppliers and small competitors. The simple principle behind postcapitalism should be that the pursuit of information asymmetry is wrong – except when it comes to privacy, anonymity and security issues.

...

cooperative, self-managed, non-hierarchical teams are the most technologically advanced form of work. Yet large parts of the workforce are trapped in a world of fines, discipline, violence and power hierarchies – simply because the existence of a cheap labour culture allows it to survive.

YES! YES! YES! Embrace Utopia!
We need to be unashamed utopians. The most effective entrepreneurs of early capitalism were exactly that, and so were all the pioneers of human liberation.
Thinking about how hard making this transition could be, this is a very astute and hopeful observation:
It is absurd that we are capable of witnessing a 40,000-year-old system of gender oppression begin to dissolve before our eyes and yet still seeing the abolition of a 200-year-old economic system as an unrealistic utopia.
The penultimate point: "LIBERATE THE 1 PER CENT". I think I've blogged about how closely CEO psych profiles match those of psychopaths. And several recent research studies show the ultra-rich do indeed tend to be entitled dickheads. Ha ha, nice that Mason shows sympathy for the assholes:
Beneath it all lies lingering doubt. Their self-belief tells them that capitalism is good because it is dynamic – but its dynamism is only really felt where there are plentiful supplies of cheap labour, repressed democracy – and where inequality is rising. To live in a world so separate, dominated by the myth of uniqueness but in reality so uniform, constantly worried you’re going to lose it all, is – I am not kidding – tough.

And to cap it all, they know how close it came to collapsing; how much of every single thing they still own was actually paid for by the state, which bailed them out.

A quick look at the dark/down side:
The danger is that as the crisis drags on the elite's commitment to liberalism evaporates.

...

'China shows capitalism works better without democracy'

Phew, we did it! We're there. And thank you, Paul Mason, for your final uplifting message:
But there is good news.

The 99 per cent are coming to the rescue.

Postcapitalism will set you free.


As I said at the beginning, a compelling read, a strong narrative. My ignorance of leftist economics is made apparent, but informed somewhat as well. This was the book I totally needed to read next. I like The Plan - lots of ideas, lots of entry points.

But as I noted, parts of The Plan clearly require political muscle, which brings us back to the question of our times: are the Millennials ever going to start voting?

I've mentioned before my fear that they will rather just opt-out on existing political institutions, like in the eye-opening story by Karl Schroeder in the "Hieroglyph" collection which I blogged about here. It seems like that has so much chance of failure - but, my oldest daughter was active in Occupy Sandy, where hastily-organized volunteers with hastily-constructed web apps were able to seriously outperform the Red Cross, particularly in low-income areas - so maybe it does have a chance of success.

One nitpick: Mason at times talks about the 4th cycle being prolonged, and other times about the 5th cycle being stalled. I think the "5th cycle is stalled" fits the 50 year cycle model better. Ha ha, one thing about doing these in-depth reviews, you notice that type of thing.

One thing I don't quite get: Mason seems to dislike 'fiat money' and "creating money out of nothing". I'm not sure why, except for the fact that it is part of what makes Neoliberalism work. Seems to me like we need to do more of it. Money is just software after all. A tool that has been misused should not be thrown away, but rather used properly.

I also felt that Mason tended to let the narrative of the labor movement overwhelm other viewpoints. That seems to be his area of greatest expertise, so that is understandable. It was very interesting at times - say in the discussion in Chapter 7 about World War 2. But in that same chapter, in discussing the betrayal of workers in voting for Reagan and Thatcher, he totally ignores other factors that I would say were also of great importance: racism, religious fundamentalism, and patriarchalism rejecting the civil rights movement, the 60s-70s counterculture, and the new freedom contraception brought to women, for example.

Similarly Mason seemed incredibly informed on the history of Marxism/Leninism, the Bolsheviks, and Russian communism. I learned lots of stuff on these topics, on which I had heretofore been pretty ignorant, but at times I really didn't feel that they added much to the main narrative. I guess the reason for including them was seeing some of why capitalism's only recent competitor failed, and why it could not serve as a postcapitalist solution. But my lack of interest here probably derives in a large part from the US/Neocon narrative that "Communism lost, so it is bullshit."

Still, I was quite surprised at the number and depth of Marx's insights. So, despite Krugman's recently recommending against it, it looks like "Capital" is going on the reading list.


One thing that tickled me as I was writing this review/summary. Mason talked about copy/pasting from sources into his book. Normally I am working on a PC, to which I download the ePub of the book from Kobo. I then use Adobe Digital Editions to copy excerpts into blogspot in my browser. But I didn't have access to my PC, only to my MacBook. No Adobe Digital Editions on the MacBook - I guess Apple and Adobe are still feuding. At the advice of Kobo support, I installed Kobo Desktop on the MacBook, so I can now pull the eBook up. Oops, you can select, but there is no copy function. So here is my fabulous kludge: you select the text; click Translate from the dropdown menu; when it balks, click LOOK UP ON Wikipedia; when Wikipedia pops up in the Browser, command-A, command-C from its input box, and the text is now in the cut/paste buffer, ready for blogspot. Tada! Information does indeed want to be free!


One final note, "SEARCH THIS BLOG" had never seemed to work well on this blog. I view this blog as my exocortex, so limited search capability is definitely a time-wasting bummer. It seems to be working much better now! Thank you, Oh Google!