Book review:
Market Schmarket – Building the Post-Capitalist Economy
Molly Scott Cato, 2006
Market Schmarket covers a huge range of facts and issues, relating to the past, pre-Capitalist, and the present, to show that TINA – ‘There Is No Alternative’ – is a manipulative lie. Molly demonstrates that not only were there successful economies before Capitalism, but that we urgently need to end this system, to save society and give us a chance to avoid a catastrophic level of global warming/climate change. We need to return to ‘Localisation’ and self-reliance, not as a matter of insularity and xenophobia, but for survival and genuine international mutual support.
Writing in plain English for a popular readership, she shows that the assertions of neo-liberal economists are consistently false, special pleading in defence of an indefensible system. ‘Free markets’ are far from ‘free’; they are designed to extract wealth from poor people and countries to benefit the wealthy at the expense of society, of natural resources and of the ability of the environment to absorb the resulting pollution. They depend on political support and manipulation. ‘Globalisation’ is the ultimate, ultimately disastrous phase of the drive for these ‘free markets’.
The main theme of the book is the need, as individuals, to recognise the exploitative, destructive and unstable nature of Capitalism, as does the Global Justice movement, and to start to insulate ourselves from it by opting out of the consumerist rat-race; getting out of debt, aiming for self-reliance and rebuilding the local community, working with the various manifestations of the resurgence of the ‘gift economy’ which used to be an important part of social life, especially for the poor.
Contrasting the Capitalist wage-slavery with the former moral/ethical basis of transactions as demanded by religions and applied by the early craft guilds, she notes the importance of creative work to human wellbeing, and its removal from Capitalist work-relations. She gives brief mention of Citizens’ Income as a needed counter to wage-slavery.
She recognises that the usurious nature of our money system underpinning Capitalism, which originates almost entirely as interest-bearing loans from banks, is the prime cause of both inflation, ‘business cycles’ of boom and bust, and the ‘need for growth’, which is required to avoid collapse under the debt-mountain it has created. Cuba, Venezuela and Argentina are cited as examples of communal and national survival strategies against the collapse of this system.
She outlines the former widespread debate about alternatives, notably during the depression era following the 1929 ‘crash’, and the alternative money systems developed, such as LETS and the Swedish JAK bank (which is based on the original Swiss WIR system, both of which use the ‘demurrage’ ideas of Silvio Gessell).
Also noted with approval are the recent EDMs (Early Day Motions) to our Parliament which advocate government-created money to pay for its capital-spending on infrastructure without need to borrow or tax, to be accompanied by corresponding restrictions on bank-lending to avoid any inflationary effect. She does not, however, mention or comment on the more radical proposal, now again rapidly gaining support, to change to a system of all national money being brought into circulation by government creation and spending, and ending entirely the banks’ right to create money, and with it, all the resulting debts.
Internationally, she outlines the history of trading monies, through the ‘gold standard’, the Bretton Woods Agreement of 1944 which rejected Keynes’ proposal for an international currency, the Bancor. Instead, under pressure by the US, it adopted its proposal for a ‘gold backed’ Dollar. This had its gold-backing unilaterally removed by the US in 1971, since when the US has been able to go massively into debt by printing dollars to buy its imports, at the expense of the rest of the world. As an urgently needed reform of this situation, she recommends the EBCU, or Energy/Environmentally Backed Currency Unit, proposed by Richard Douthwaite. This is based on the Contraction and Convergence proposal of the Global Commons Institute, to progressively reduce the burning of fossil fuels while reducing global inequality, by issuing tradable entitlements on an equal per capita basis, and reducing these over time to a pre-agreed sustainable level of emissions.
Sparingly illustrated with relevant tables and graphs, the book contains a wealth of quotations to support her thesis. It covers so much ground that none of it can be covered in depth, as she notes, but it should prove to be a good introduction to encourage study of the nature of the current global economy, and the ways needed to change it, individually or collectively. While she does not include a recommended reading list, the extensive Notes at the end of the book, identifying the sources of the many quotations, can be used as a guide to sources for further study.
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