Red Pepper reports back from a lively event held in London to launch John Hilary’s new book The Poverty of Capitalism. Joining him for a roundtable discussion were Doreen Massey and Francisco Dominguez
The Poverty of Capitalism starts from the gross injustice of contemporary capitalism and goes on to identify global multinational corporations as the real sources of power behind capitalism. John, can you tell us a bit about how and why you came to write the book?
John The book is designed to situate all of the things that War on Want works on, all the injustices around the world, very firmly within the struggle against capitalism and the globalised capitalist economy. The starting point is that we have just come through this massive crisis of capitalism, and yet in just a trice you have the whole system being remade in exactly the same form. It’s as if you have a terrible heart attack and surgery, you’ve just come out of intensive care and the doctor says there’s no need to change anything of your previous life, don’t exercise much and keep up your intake of fatty foods! It’s got that sense that we’ve learnt nothing at all, just going back to exactly where we were and hoping to avoid the same problems.
Doreen Exactly. We have to look at the structural causes of the poverty that John is talking about, a poverty that has been grotesquely exacerbated over the last four decades of neoliberalism. If we say we have to look at causes rather than symptoms, the underlying argument is that poverty isn’t a matter of distribution, so it can’t be solved by redistribution. What’s at issue is reorganising the structures that have produced the poverty in the first place.
John We have learnt as a result of the crisis that capitalism is at the heart of the problem – a system set up for the benefit of the few and based on the impoverishment of the many.
Doreen In a sense neoliberalism has forced the issues onto the agenda in a way that I don’t think was the case under social democracy. To me that means we must seize this moment and have a particularly aggressive attack on inequality.
Francisco And let’s not forget that neoliberalism didn’t start in the UK or US. It started in Chile in 1973 and was so brutal that democracy had to be destroyed and 10,000 people assassinated for them to implement what they wanted. The levels of exploitation, abuse, imposition, the way the sovereignty of the country was sold out, the wave of privatisation and the horrible consequences for the population . . . it makes you sick. Had they been able to privatise air, they would have done.
But even where formal liberal-democratic institutions aren’t assaulted so directly as in Chile under Allende, markets have effectively overridden any pretence of democratic representation.
Doreen Yes absolutely. We need to talk about democracy because the accumulation of power into capital under neoliberalism hasn’t only exacerbated inequality in terms of income and poverty but has absolutely eviscerated democracy. Inequality is not only economic but about voice, political voice and political interest.
John If we look at the history of trade talks from the 1980s onwards, including the most recent bilateral trade and investment treaties, we see capital being elevated to a status equivalent to that of the sovereign state. Basically capital now has the same power as sovereign countries in front of international arbitration tribunals.
And it’s not just in the global south. You see Germany, for example, which in the wake of the Fukushima disaster decided it was going to terminate its nuclear power programme by 2022, and Vattenfall, a Swedish firm, comes in and says, ‘Hang on, that means we face the prospect of losing out commercially, so we are now suing the German people for €3.7 billion.’
That’s extraordinary. You have one of the most powerful economies being held hostage by a company saying they don’t like the idea that they won’t be able to make as much profit as they have in the past. That challenge to democracy is one of the most pernicious elements of the spread of capitalist power.
What does this mean for how we talk about poorer nations and marginalised groups? Is it not any more a question of north versus south? Is it more that there is now a new, transnational elite class, perhaps more like the 99 versus 1 per cent?
John What was really interesting in the response to the crisis was that it wasn’t just the old colonial centres of empire, the G8, that signed up to austerity, to make people pay for a crisis they didn’t cause – it was the newly expanded G20. So you have countries like China, India and Brazil, who in the past have criticised the G8 as not doing the right things for the global economy, affirming the institutions of capitalist discipline, such as the IMF and the WTO, and that’s precisely because it’s their national champions, their biggest firms, that are now engaging in the global economy.
Doreen Class solidarity is certainly a reality amongst the rich and powerful. And given the lack of democracy, they have total impunity. Most people don’t even know it is happening. We think we are informed but most people aren’t aware at all that there is a mutually supportive network of elites and interests. It is very hard to address, partly because of the effects on democracy and the immunity they have from scrutiny given the way in which governments, including some in the global south, the media and so forth are recruited into the discourse.
John By 2000, the richest 1 per cent in the world already owned 40 percent of its assets, while the bottom half of the world’s population between them owned barely 1 per cent of global wealth. Globalisation has succeeded in enriching a new class of oligarchs at the expense of the majority of humankind.
Doreen The chapter on corporate power in practice shows how this power of capital has been so immensely developed over the last 40 years, and it is absolutely enraging.
John The global food regime represents the starkest way neoliberal globalisation has resulted in a concentration of power. The capitalist food regime basically dictates everything we eat, all the way from farm to fork – the production, distribution and consumption of food. It combines the worst aspects of networked capitalism with the most violent forms of dispossession from the extractive industries.
But what I found inspiring working on this book and with War on Want’s partners is that the food regime is where you see the greatest resistance. There is this worldwide movement fighting for food sovereignty against the capitalist system – and very explicitly against it, saying that we reject the idea of food as a commodity sold for mass profit, or that seeds should be controlled by a tiny minority of firms, Monsanto, Syngenta and the like, and that we want to rebuild an ecologically sound and socially progressive food system for the future.
Francisco One of the good things about the book is that it understands what people are trying to achieve as a movement – particularly through the examples of positive alternatives in Latin America. People are addressing extremely difficult issues that are the results of centuries of exploitation, distortion, expropriation and so on and therefore they have to operate with whatever they have at hand at the time.
In Latin America they’ve found ways to organise politically that are very creative and imaginative. If you think of Bolivia, there is a mass movement of movements. They have masses of movements all over the country and they come together in some form of event or coalition; they link up and understand, they negotiate and formulate a plan.
I was part of a trade union delegation to Bolivia that talked to the minister of energy, who told us the biggest problem had been that the energy companies stripped them of their gas and paid just 1 per cent in tax: ‘We increased it – to 85 per cent!’ I remember the delegation wanted confirmation that he’d actually said 85, and he said yes, 85. And then I said to him, playing devil’s advocate, ‘Don’t you think that’s a bit irresponsible? After all Bolivia is a very poor country, it needs all the foreign investment it can get and by these very harsh measures you are driving them away.’
His response was wonderful. He said, ‘Yeah, we thought they would go, but they haven’t. And therefore we are discussing whether to increase it to 95 per cent!’
John The experience of Latin America is not so much that you have positive states looking favourably on movements, but that you’ve had movements coming together and forming political structures which have then chosen to take state power. You also have ones that have chosen not to take state power.
Think of the Zapatistas, they have chosen not to go for the Mexican state but to have their own.
Doreen I’d like to ask some difficult questions, if we are internationalists, about why living in a particular area gives you the right to have the ownership of what is in that area. This is getting very idealistic but we can’t make claims that we can’t generalise. So, Saudi Arabia has the rights to all that oil? I think we need to be very careful in the way we make these kinds of statements.[Ecuador’s president] Rafael Correa claims greater sovereignty over the resources in Ecuador – absolutely right – but then, when it comes to indigenous communities, he says they have the right to protest but not veto developments and that we shouldn’t prioritise the local over the national. This is the kind of thing we might call nimbyism when it’s the rich but when it’s indigenous people in the Amazon we have completely different politics about it. I think we need to get tougher in our questioning about some of those things.
How can we encapsulate the experiences of Latin America as a movement here, and what are those lessons?
John I don’t believe they are automatically transferable, I don’t believe there are easy ways to say, ‘It worked in Cochabamba, let’s try it in Coventry.’ We are in a completely different, mature, industrialised, capitalist society – whatever terminology you want to use – and that has made it very problematic to get the same level of change.
Francisco Social movements in Latin America have over 30 years of resistance and experience, so they are showing us what is possible – but only if you have that relation of forces in your favour. This is an important issue, because the tasks that are posed politically are different, depending on the country. We don’t want to tell you ‘just nationalise things’. That’s not the way it works. In the three Latin American examples in the book, what is posed is state power, that’s what we fighting over, we are transforming the state, economy and society, because we advanced so much. I don’t think that’s the case in Europe.
Doreen We can’t go from Cochabamba to Coventry, but we can learn from Latin America. If you look at the debate about the press in Latin America, for example, instead of worrying about trivia like if Rupert Murdoch would just allow us to hedge him in a little they are going on the offensive in numerous countries and attacking the power of the press.
John We need to start thinking about how we can bring different people together. Where do people see their identities in forming movements and how can you break their alienation? I think opportunities like the People’s Assembly, which War on Want has been involved with from the start, are really important because it’s going back to a local grassroots positioning and saying there is a possibility of coming together across sectarian divides around an agenda which unites people. A lot of the existing struggles, but also some of the potential struggles, seem to coalesce into three areas; popular sovereignty, common ownership and social production, and these are three common principles that I draw out in the book.
Doreen Struggles in the 1960s were restricted to being distributional struggles, and that’s how the labour movement fought. It was about the share between capital and labour rather than the structure of the economy. So we can’t go back to social democracy; we can’t seek the solutions within those structures that basically retained the market system of production that produced inequality and then said, ‘Oops, now we need a state that goes in for redistribution.’ It’s a bonkers way of running an economy anyway: first you produce a problem, then you try to solve it.
John The ultimate idea of the book is that you don’t have to have an amazing state revolution. You can have smaller initiatives, co-operative, collective, the social economy, all of these different ideas that are being played out around the world, to challenge the idea that you have to base things on the profit of the few. That to me was the most optimistic element of the book, that there is already a plethora of alternatives being worked out in practice.
The title of the book is The Poverty of Capitalism. It’s not just because capitalism is the root cause of poverty, but because the poverty of capitalism is its lack of ambition. If all it is able to do is keep the wheels turning by the mass impoverishment of billions – 2.6 billion, over half the population of the global south, mired in poverty – then that is a bankrupt system and one that we must transcend.
John Hilary is executive director of War on Want. His book The Poverty of Capitalism: economic meltdown and the struggle for what comes next, is published by Pluto Press. Joining him for the roundtable were Hilary Wainwright, co-editor of Red Pepper, Doreen Massey, co-founder of Soundings journal, and Francisco Dominguez, secretary of the Venezuela Solidarity Campaign. Get the book for free with a Red Pepper gift subscription.