The Do Re Mi

I’m occupied at present preparing a review of Thomas Piketty’s ‘Capital and Ideology’, which turns out to be one of the most important books I’ve read in many decades. Piketty makes perfectly plain that none of our current problems are soluble until we get to grips with a drastic economic restructuring. Call it reform, call it revolution, call it whatever, none of the other issues that keep presenting themselves as a way forward - gender, race, identity, even climate - are tractable until the power of big money is vanquished. Piketty acknowledges that both social democracy and state socialism have now failed, and offers suggestions for economic structures that could lead further.

He also analyses aspects of our current situation that made my blood run cold:

“Let me be clear about the meaning of negative public capital such as we find today in the official national accounts of the United States, United Kingdom, and Italy. Negative capital means that even if all marketable public assets were sold—including all public buildings (such as schools, hospitals, and so on) and all public companies and financial assets (if they exist)—not enough money would be raised to repay all the debt owed to the state’s creditors (whether direct or indirect). Concretely, negative public wealth means that private individuals own, through their financial assets, not only all public assets and buildings, on which they collect interest, but also a right to draw on future tax receipts.  

[...]

In strictly theoretical terms, there is no limit on how negative public wealth can go. Strictly speaking, one could reach a point where private individuals through their financial assets owned the totality of all future tax revenues or even the totality of everyone else’s income, so that everyone would de facto be working for the bond­holders. This happened frequently in ancient times (when slavery was a conse­quence of heavy debt or military tribute; see Chap. 6)"

[Thomas Piketty 'Capital and Ideology', p614]

In the end it’s still ‘The economy, stupid’, or as Woody Guthrie put it rather more nicely, the ‘Do Re Mi’:

Social Democracy Uber Alles

The outcry over the revoking of Uber's London licence shows that the service it provides is popular, and it's unquestionably a significant, innovative use of new technology to improve transport. On the other hand the outcry from drivers about lack of benefits and job security show that the application of technology is being used (not uncommonly) both to increase exploitation of the labour force and to flout legal regulation designed to protect labour and customers. The outcry of Black Cab drivers against Uber ignores the fact that people flocked to Uber not merely for convenience (though that is considerable) but because Black Cabs had priced themselves out of the market with the last big price hike.

Put all this together and it's clear that all the parties need to get together and find a workable solution, which is highly unlikely to happen because of the vastly different political atmospheres between UK and USA, and a general lack of adult leadership on both sides. I can imagine a system where Uber's technology is used, within a revised legal framework that brings in Black Cab drivers too. Uber would have to give up predatory pricing and recognise its employership, while Black Cab drivers would have to slacken their monopoly. And pigs would have to mount flying unicorns.

Amazon, Google, Facebook, Uber and the rest have built a worldwide, highly effective infrastructure of the sort that socialists (especially Stafford Beer) used to dream about - but unsurprisingly, as private enterprises, they use it to generate mega-profits for their owners and to erode working conditions and pay for their workers. The challenge for social democrats - which few are thinking straight (or even talking) about - is to devise new reforms that will make this infrastructure work better for the public interest, without destroying it or crushing its ability to keep innovating.

Tax avoidance by the big tech companies is certainly a major issue, and getting them to pay anything at all would be a step forward, but punitive taxation is not a solution either. Similarly with ownership, old-style nationalisation is unimaginable, unaffordable and might in any case stifle innovation. As for regulation, we need to grasp in precisely what ways the new connectivity renders many older forms of regulation ineffective, and modify them to the new reality. In fact we need to rethink a whole complex of now-inseparable issues - benefits, universal basic income, employment rights, taxation, public v private provision.

Not convinced? Then remember for a moment all those billions of pounds from the public purse that have been wasted over the last 50 years on failed NHS and other public IT projects. Now try to imagine how technology like Amazon/Google/Facebook's would help the NHS with appointments, record keeping and sharing, even diagnosis...

No parties that I'm aware of on either side of the Atlantic are thinking seriously about these matters in sufficient depth and urgency. In the USA the sheer incompetence of the Democratic Party has put the Republicans in a position not only to erase what remains of New Deal social democracy, but also to salt the earth against any possibility of its regrowth. In the UK social democracy has fallen down the crack that runs down the middle of the Labour Party, between a Right that remains wedded to neoliberalism, and a Left often hobbled by nostalgia (not always conscious) for state socialism. Not until Jeremy Corbyn starts calling himself a social democrat rather than a socialist, can you be sure that the party has remembered the difference.