Paul Mason: The Latest Pied Piper of "the Death of Capitalism" Gary North - July 24, 2015 from Specific Answers

Paul Mason: The Latest Pied Piper of "the Death of Capitalism"

Gary North - July 24, 2015

Remnant Review

If social change came through combining old shibboleths with the latest fads, there would be a future for the Left. But that is not how social change takes place.
The latest old Leftist to write a book on the end of capitalism is somebody I had never heard of: Paul Mason. His book is titled, Postcapitalism.
To launch it, The Guardian, that aging warhorse of British Leftism, published his article: "The end of capitalism has begun." This has been announced repeated by The Guardian for 80 years.

[Note: the book I regard as the best autobiography I have ever read, Malcolm Muggridge's Chronicles of Wasted Time: The Green Stick, provides a series of delightful vignettes on his years as a correspondent in Moscow for The Guardian.]

It never ceases to amaze me how people who cannot think straight can come up with new justifications for whatever worldview they decided at 20 was correct, and which did not pan out. They keep changing the reasons for their grand scenario, but the scenario never changes. It is always this: "Capitalism is just about to die. But this time, we will not have to go to the barricades. It will all be easy-peasy. We don't have to risk anything. It's all built into the mode of production."

This is Marxism without courage. This is Marxism without revolution. The argument from the mode of production is as empty analytically as Marxism was from the beginning, but at least Mason's screed is written in English, not English as a second language, which Marx wrote in. (If you ever read anything lively or even insightful written by Marx, you can be sure that it was one of Engels' ghost-written essays.)
Here, I dissect Mr. Mason's article, not because he is worth refuting for his own sake, but so you can see the pathetic quality of his arguments. Yet he is regarded as hot stuff in the English Left community. The Guardian has baptized him. He is the latest and the greatest. He is the last man standing. Of course, when his new book sinks without a trace, there will always be another last man standing.
It's not easy being a Leftist under 80.
THE DEATH OF SOCIALISM
He begins where every Leftist should always begin his analysis: the betrayal of socialism by socialists. This is where Marx usually began, most famously in the Manifesto of the Communist Party (1848). (By the way, this also is where all conservative analysis should begin: the betrayal of conservatism by conservatives.)

The red flags and marching songs of Syriza during the Greek crisis, plus the expectation that the banks would be nationalised, revived briefly a 20th-century dream: the forced destruction of the market from above. For much of the 20th century this was how the left conceived the first stage of an economy beyond capitalism. The force would be applied by the working class, either at the ballot box or on the barricades. The lever would be the state. The opportunity would come through frequent episodes of economic collapse.Instead over the past 25 years it has been the left's project that has collapsed. The market destroyed the plan; individualism replaced collectivism and solidarity; the hugely expanded workforce of the world looks like a "proletariat", but no longer thinks or behaves as it once did.

Actually, the proletarians never behaved the way Marx said they would. They were rarely Marxists. The few who were had little influence. The workers went in the direction of trade unionism, which just wanted a larger slice of the pie. That was the position of the revisionist Marxists under Eduard Bernstein in the 1880's. They dropped the idea of revolution, which was the central idea of Karl Marx. The refusal of the workers to adopt Marxism was why Antonio Gramsci, in the 1930's, abandoned Marxism in the name Marxism, and instead promoted the view that the revolution would never come until the workers of the West abandoned the morality of Christianity. He scrapped Marx's idea that the mode of production is fundamental.
Mason refuses to go that far. He still clings to Marx's mode of production theory of the stages of historical development. He thinks Moore's law will do the trick.
Mason at least admits that socialism is now a spent force. The capitalist mode of production did not cause a communist revolution, contrary to Marx. Democratic socialism has also failed to displace the capitalist elite. Socialists never did come up with a blueprint for how their system could deal with the problem of scarcity. None of them ever described in detail a socialist incentive system that will rationally allocate wealth, and will also maintain economic incentives for high productivity -- incentives that will match, let alone exceed, capitalism's incentives.
This was openly admitted in 1990 by Robert Heilbroner, the multi-millionaire socialist economics professor, author of the best-selling history of economic thought, The Worldly Philosophers. He wrote an obituary: "After Communism." It was published in The New Yorker (Sept 10, 1990). In it, he wrote these words: "Mises was right." Right about what? About the impossibility of rational economic calculation in a world without private property and capital markets. He then called for the next phase of socialism, one which will be based on environmentalism, not economic theory. He said that only by mobilizing the masses behind the idea that the government should intervene in order to save the environment, could socialism once again gain a hearing. Otherwise, the movement was dead.
A little over a year later, the Soviet Union ceased to exist. That was the last hurrah for Marxism, unless we count North Korea.
POST-CAPITALISM
Something is soon going to replace socialism. It is not capitalism.

If you lived through all this, and disliked capitalism, it was traumatic. But in the process technology has created a new route out, which the remnants of the old left -- and all other forces influenced by it -- have either to embrace or die. Capitalism, it turns out, will not be abolished by forced-march techniques. It will be abolished by creating something more dynamic that exists, at first, almost unseen within the old system, but which will break through, reshaping the economy around new values and behaviours. I call this postcapitalism.

I see. Post-capitalism. When you're dealing with Leftist intellectuals, it's always post-this or post-that. This has to do with book marketing. David Brooks, who is a clever author, once wrote that if you want write a best-selling book for the intelligentsia, it should be titled either The End of . . . or The Death of. . . .

As with the end of feudalism 500 years ago, capitalism's replacement by postcapitalism will be accelerated by external shocks and shaped by the emergence of a new kind of human being. And it has started.

Ah, yes: the new mankind. The utopian Left always has the new man waiting in the wings, ready to take front and center. The historically inevitable demise of capitalism will bring him to the stage.
What will bring him into the real world, at long last? What change in the mode of production -- which has failed to do this so far -- will at last evolve?
MOORE'S UNNAMED LAW
Moore's law will bring the new man. This is technological innovation relating to computer information processing. Mason invokes Moore's law, but never mentions it by name.

Postcapitalism is possible because of three major changes information technology has brought about in the past 25 years. First, it has reduced the need for work, blurred the edges between work and free time and loosened the relationship between work and wages. The coming wave of automation, currently stalled because our social infrastructure cannot bear the consequences, will hugely diminish the amount of work needed -- not just to subsist but to provide a decent life for all.

He says that capitalism is reducing the need for work. This is nonsense. Unemployment in the United States is as low as it has been for decades. People have jobs. All over the world, people are looking for jobs, and they are getting jobs wherever trade unions are not keeping them out of the job market, as they do in Greece and Spain.
There surely will be recessions. Central banking guarantees this: the boom-bust cycle. But this has nothing to do with technological innovation, robotics, or Moore's law.
As long as there is scarcity, there is a need for work. As long as we cannot get everything we want at zero price, we are going to have to work to get whatever it is we want. The idea that the socialist nirvana is going to come in on the back of Moore's law is simply one more example of the same old socialist story, namely, that industrial capitalism will lead to mass unemployment. It was not true 200 years ago, and it is not true today. We see nothing like what he is described. Yet he says it is right in front of us. He says it is even behind us. Well, it isn't.
INFORMATION COSTS AND THE FREE MARKET
He continues.

Second, information is corroding the market's ability to form prices correctly. That is because markets are based on scarcity while information is abundant. The system's defence mechanism is to form monopolies -- the giant tech companies -- on a scale not seen in the past 200 years, yet they cannot last. By building business models and share valuations based on the capture and privatisation of all socially produced information, such firms are constructing a fragile corporate edifice at odds with the most basic need of humanity, which is to use ideas freely.

Then he says that cheaper information is corroding the market's ability to price things. This may be the dumbest statement by any socialist I have ever read. The whole point of Hayek's famous article in 1945, "The Use of Knowledge in Society," and also the whole point of Mises's revolutionary article in 1920, "Economic Calculation in the Socialist Commonwealth," was this: the price system is the most important source of accurate information about the economy in the history of man. The essence of decentralized information is this: the free market's system of incentives persuades people who possess accurate information to share with others, usually by selling it to the highest bidder, and then implement this information in order to make a profit.
Raymond Kurzweil is right: the decline in the cost of information has been gigantic ever since the census of 1890, and it is accelerating. Yet this era was a period of extraordinary economic growth, and a period in which capitalism became dominant throughout the world. The essence of the free market is this: there is a constant reduction in the cost of everything through increased productivity, but above all, there is a reduction in the cost of accurate information.
So, Mason has things exactly backwards.
THE STRUCTURE OF CAPITALISM
His third erroneous conclusion has to do with the structure of capitalism. He thinks we are headed for decentralization. So do I. He thinks this is anti-capitalist. I do not. On the contrary, it is the essence of advanced capitalism.

Third, we're seeing the spontaneous rise of collaborative production: goods, services and organisations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world -- Wikipedia -- is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.

In the initial stages of capitalism, there is centralization of production. Why? To take advantage of the economies of scale. But this process ends rapidly. The capitalist system provides a growing number of alternatives in order to sell goods and services to people with all kinds of tastes. I wrote about this in 1974. It was not a new idea then.

Almost unnoticed, in the niches and hollows of the market system, whole swaths of economic life are beginning to move to a different rhythm. Parallel currencies, time banks, cooperatives and self-managed spaces have proliferated, barely noticed by the economics profession, and often as a direct result of the shattering of the old structures in the post-2008 crisis.

This is "commune babble." Marx always thought that communal socialists were utopian airheads, and this is one of those few areas in which I have always agreed with Marx.
BACK TO THE COMMUNAL FARM
Then he writes: "You only find this new economy if you look hard for it." This means that it doesn't exist as a significant market factor.

In Greece, when a grassroots NGO mapped the country's food co-ops, alternative producers, parallel currencies and local exchange systems they found more than 70 substantive projects and hundreds of smaller initiatives ranging from squats to carpools to free kindergartens. To mainstream economics such things seem barely to qualify as economic activity -- but that's the point. They exist because they trade, however haltingly and inefficiently, in the currency of postcapitalism: free time, networked activity and free stuff. It seems a meagre and unofficial and even dangerous thing from which to craft an entire alternative to a global system, but so did money and credit in the age of Edward III.

These Greeks have been wiped out economically by the socilist policies of the state. They participate on the fringes of the money economy. They are working in a low division of labor sector. In short, they are basically living in the manorial world before capitalism. Yet this Leftist thinks communal living is the wave of the future.
Leftists are convinced that we are about to have a world of free goods. This has been the whole push of socialism from day one. So, there is no curse on the earth. There really isn't any scarcity. It is only because of evil institutions, which were created by capitalism, that mankind is kept from the nearly unlimited productivity of nature. Private property is keeping nature from overwhelming us in the bountiful cornucopia of free stuff.
They never learn. They never figure out that nature is niggardly. They never figure out that there is scarcity, and that only through capital formation can this scarcity be overcome. Only through the extension of the division of labor through capital formation and greater specialization can we overcome the limits of scarcity. This was Adam Smith's position in chapter 1 of The Wealth of Nations (1776), but socialists refuse to respond to it.

New forms of ownership, new forms of lending, new legal contracts: a whole business subculture has emerged over the past 10 years, which the media has dubbed the "sharing economy". Buzzwords such as the "commons" and "peer-production" are thrown around, but few have bothered to ask what this development means for capitalism itself.

So, what else is new? What is capitalist society, if not experiments in new forms of ownership, meaning ownership outside of the state's control, new forms of lending, and new contracts? Experimentation in these things has gone on in the West since at least 1300.
THE MIXED ECONOMY AS THE HOLY GRAIL
If production is not governed by the coercive power of the state, then it has to be governed by the price system. There is no third position for a mass economy. You can have family businesses. You can have little family farms where people live in near starvation. We have this in some parts of Africa. But these little plots of ground are not productive, and neither are the people who farm them. That's why the sons move off the family farms and into the city. They want to make money. They want to become productive. They want to participate in the division of labor economy. "How you gonna keep 'em down on the farm, after they've seen TV?" Or the Internet.
Like a dog returning to its vomit, he calls in the state to make all this happen.

I believe it offers an escape route -- but only if these micro-level projects are nurtured, promoted and protected by a fundamental change in what governments do. And this must be driven by a change in our thinking -- about technology, ownership and work. So that, when we create the elements of the new system, we can say to ourselves, and to others: "This is no longer simply my survival mechanism, my bolt hole from the neoliberal world; this is a new way of living in the process of formation."

I ask: What change in our thinking?
How are we -- whoever "we" are -- going to create all this? How are we going to cooperate? If we do not cooperate through central planning, then we have to do it through the free market. There is no third choice. It is either the coercion of the state or the voluntarism of the free market that lets us do anything jointly on a large-scale basis. Society is not a small family farm. We face an either-or situation.
We can have Keynesianism in the middle, but he is saying that the Keynesian middle doesn't work anymore. On this, he and I agree. So, which way are we headed? Are we headed back to state centralized planning, which he admits is dead, or are we headed towards a free market system, in which voluntarism, exchange, and the division of labor are the foundations? Neither, he says.
Then where?
THE CASE OF THE MISSING BLUEPRINTS
He wants socialists give up the idea that central planning works. They should, indeed. They flounder around, desperately seeking for a third way in between socialism, which has failed, and the free market, which is capturing the minds of hundreds of millions of people around the world. Leftists do not want to go in that direction, either. Problem: they have never produced an outline, analytically speaking, of what the alternative to central planning is, other than free market pricing.
These guys never offer any blueprints. It's all airy-fairy, touchy-feely, commune babble.
The problem is this: the Keynesian welfare state is going bankrupt. Red revolution is not looming; red ink is. He sees this.

The solutions have been austerity plus monetary excess. But they are not working. In the worst-hit countries, the pension system has been destroyed, the retirement age is being hiked to 70, and education is being privatised so that graduates now face a lifetime of high debt. Services are being dismantled and infrastructure projects put on hold.

He is correct. He is describing Keynesianism, and it isn't working. So, he needs to give us something that is not the dead socialism with which he began the essay, and is also not the fiscal sinkhole Keynesianism that he insists is not working. But he can't beat something with nothing. Where is his blueprint?
Leftists do not have an analytical blueprint. They also do not have a practical blueprint.

Meanwhile in the absence of any alternative model, the conditions for another crisis are being assembled. Real wages have fallen or remained stagnant in Japan, the southern Eurozone, the US and UK. The shadow banking system has been reassembled, and is now bigger than it was in 2008. New rules demanding banks hold more reserves have been watered down or delayed. Meanwhile, flushed with free money, the 1% has got richer.Neoliberalism, then, has morphed into a system programmed to inflict recurrent catastrophic failures. Worse than that, it has broken the 200-year pattern of industrial capitalism wherein an economic crisis spurs new forms of technological innovation that benefit everybody.

Yes, neoliberalism is a spent force. But, analytically speaking, it was always a spent force. There was never any analytical foundation to it.
The fact that Keynesianism is staggering from crisis to crisis does not bring tears of frustration to the eyes of defenders of Austrian School economics. We have been saying that it is a walking corpse from day one. It has been incoherent economics from the beginning, beginning with Keynes' General Theory.
Austrians have an alternative model: the free market. Mason doesn't understand it. I suspect that he has never read a book written by an Austrian School economist. He is completely oblivious to it. He is doing exactly what Heilbroner wrote in 1990: the entire economics profession had for 70 years ignored Mises's 1920 essay, "Economic Calculation in the Socialist Commonwealth." Heilbroner said it was high time that economists finally faced up to the fact that Mises was right. But Mason has never heard of Mises's article, has never heard of Heilbroner's essay, and doesn't know come here from sic-'em about economic theory.

That is because neoliberalism was the first economic model in 200 years the upswing of which was premised on the suppression of wages and smashing the social power and resilience of the working class. If we review the take-off periods studied by long-cycle theorists -- the 1850s in Europe, the 1900s and 1950s across the globe -- it was the strength of organised labour that forced entrepreneurs and corporations to stop trying to revive outdated business models through wage cuts, and to innovate their way to a new form of capitalism.

Here is a middle-aged socialist who is still spouting the rhetoric that he learned in college 30 years ago, and which was obsolete then.
Here is a middle-aged man who is trying very hard to sound like a youthful activist. He writes: "Occupy was right: capitalism has failed the world." The Occupy movement was a media circus for a year, and now it is barely a memory. It was a movement of the sons and daughters of Leftists. They were university students who had taken too many sociology courses, and who were therefore unemployable above minimum wage.

As a result, large parts of the business class have become neo-luddites. Faced with the possibility of creating gene-sequencing labs, they instead start coffee shops, nail bars and contract cleaning firms: the banking system, the planning system and late neoliberal culture reward above all the creator of low-value, long-hours jobs.

Hardly anybody in the business class is a neo-Luddite. Everybody owns a smartphone (except for me). Everybody is trying to figure out how to sell to people who own smartphones. Everybody is enchanted with Apple. Neo-Luddites? What has this guy been smoking? He really ought to stop. It is affecting his judgment.

Innovation is happening but it has not, so far, triggered the fifth long upswing for capitalism that long-cycle theory would expect. The reasons lie in the specific nature of information technology.

At this point, he abandons commune babble. He substitutes 1980's trend babble. It is like listening to some old codger reading his favorite passages out of Megatrends.
He invokes the shibboleth of 19th-century socialists: the distinction between "production for use" and "production for exchange."

The great technological advance of the early 21st century consists not only of new objects and processes, but of old ones made intelligent. The knowledge content of products is becoming more valuable than the physical things that are used to produce them. But it is a value measured as usefulness, not exchange or asset value.

Production for use was production on the medieval farm. It was a small farm. An early manorial estate had a division of labor. It was organized on the basis of private property. There was no market exchange system, because the division of labor was still too low. But the movement of Western civilization after the year 1000 was in the direction of the market economy based on monetary exchange. In other words, the history of the West since the year 1000 has been based on the substitution of "production for a market" in place of "production for use." The socialists of the 19th century never understood enough about economic theory or the history of economic institutions to recognize that their slogan was basically a defense of the pre-market medieval manorial economy. We have waited for 200 years for one of these guys to sit down and put on paper exactly what legal and economic framework he is talking about to make this system work. Marx never discussed anything that would take place beyond the first stage of the proletarian revolution. Neither did Lenin. Neither did Stalin. The non-Communist Left has yet to offer a systematic analytical presentation of the economic incentive system that will make operational the long-heralded but never described middle path between central planning, which has visibly failed, and free market decentralized planning, which the Left despises. Is it too much to expect that one of them will finally publish such a blueprint? Apparently, it is way too much to expect.

In the 1990s economists and technologists began to have the same thought at once: that this new role for information was creating a new, "third" kind of capitalism -- as different from industrial capitalism as industrial capitalism was to the merchant and slave capitalism of the 17th and 18th centuries. But they have struggled to describe the dynamics of the new "cognitive" capitalism. And for a reason. Its dynamics are profoundly non-capitalist.

Hayek presented the case for the free market in terms of cognitive capitalism in "The Use of Knowledge in Society," but this poor soul seems never to have heard of the essay, and surely has not read it.

During and right after the second world war, economists viewed information simply as a "public good". The US government even decreed that no profit should be made out of patents, only from the production process itself. Then we began to understand intellectual property. 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. He noted: "precisely to the extent that it is successful there is an underutilisation of information."You can observe the truth of this in every e-business model ever constructed: monopolise and protect data, capture the free social data generated by user interaction, push commercial forces into areas of data production that were non-commercial before, mine the existing data for predictive value -- always and everywhere ensuring nobody but the corporation can utilise the results.

These people hate this word: "Mine." They have tried for 200 years to persuade a world that believes deeply in "mine" to surrender ownership to everyone else. But who will enforce such a rule? What kind of concentrated government power is necessary? Who will get to the top of this pyramid of power internationally? Chapter 10 of Hayek's The Road to Serfdom (1944) got to the point: "Why the Worst Get on Top." If Mason is saying that, somehow, we will all agree voluntarily to surrender our ownership over privately controlled information, then he is a utopian's utopian. Marx would have had a field day with him and his views.
Old socialists sing the old songs, desperately trying to connect with younger people, yet they cannot see what is under their noses.

If we restate Arrow's principle in reverse, its revolutionary implications are obvious: if a free market economy plus intellectual property leads to the "underutilisation of information", then an economy based on the full utilisation of information cannot tolerate the free market or absolute intellectual property rights. The business models of all our modern digital giants are designed to prevent the abundance of information.

Arrow was a mainstream economist who wrote in the language of modern economics: a world of perfect knowledge and equations. Any suggestion that what he had to say related to anything in the real world, let alone anything regarding entrepreneurship in a world of uncertainty, is absurd. This is one more example of a Leftist who doesn't understand what he is reading. Quoting Kenneth Arrow to anybody, for any reason, has always been a waste of time. Arrow worked hard to be incoherent, and he achieved his goal beyond his wildest expectations.

Yet information is abundant. Information goods are freely replicable. Once a thing is made, it can be copied/pasted infinitely. A music track or the giant database you use to build an airliner has a production cost; but its cost of reproduction falls towards zero. Therefore, if the normal price mechanism of capitalism prevails over time, its price will fall towards zero, too.

This sounds good to me. It sounds like a world without government intervention to set up 15-year patents and generational copyrights. In short, it sounds like the free market. But he is pushing it as if this wave of the future is somehow consistent with stronger government, stronger planning, higher taxes, and coercive wealth redistribution by the state. It is none of these things.

For the past 25 years economics has been wrestling with this problem: all mainstream economics proceeds from a condition of scarcity, yet the most dynamic force in our modern world is abundant and, as hippy genius Stewart Brand once put it, "wants to be free".

As I said, this is commune babble. He cites the king of commune utopianism, the founder of The Whole Earth Catalog. The socialists' mythology and impulse have always been driven by one claim above all other claims: the absence of scarcity in nature. They always come back to the same theme: if we just get rid of free-market institutions, universal abundance will cascade over all of us. This claim ignores all of human history. Scarcity is built into the cosmos. They have never figured out that there is inescapable scarcity: at zero price, there is greater demand than supply.
MARX LIVES!
The Left cannot escape Marx.

There is, alongside the world of monopolised information and surveillance created by corporations and governments, a different dynamic growing up around information: information as a social good, free at the point of use, incapable of being owned or exploited or priced. I've surveyed the attempts by economists and business gurus to build a framework to understand the dynamics of an economy based on abundant, socially-held information. But it was actually imagined by one 19th-century economist in the era of the telegraph and the steam engine. His name? Karl Marx.

The ghost of Karl Marx still haunts the thinking of these people. All roads lead to Marx -- a civilized Marx, a neutered Marx, a Marx without the doctrine of social salvation through proletarian revolution. They want Marx, but they don't want his religion of revolution. But, as I wrote in 1968, Marxism was only about the religion of revolution. The rest of his convoluted speculative system was, as he aptly put it, superstructure.

The scene is Kentish Town, London, February 1858, sometime around 4am. Marx is a wanted man in Germany and is hard at work scribbling thought-experiments and notes-to-self. When they finally get to see what Marx is writing on this night, the left intellectuals of the 1960s will admit that it "challenges every serious interpretation of Marx yet conceived". It is called "The Fragment on Machines".In the "Fragment" Marx imagines an economy in which the main role of machines is to produce, and the main role of people is to supervise them. He was clear that, in such an economy, the main productive force would be information. The productive power of such machines as the automated cotton-spinning machine, the telegraph and the steam locomotive did not depend on the amount of labour it took to produce them but on the state of social knowledge. Organisation and knowledge, in other words, made a bigger contribution to productive power than the work of making and running the machines.

Is worth observing that it was a fragment. It was part of his Grundrisse, an incoherent jumble of notes that he never tried to publish. It was not published until 1939. Marx knew this idea was not worth pursuing, and he never pursued it. He had plenty of time to pursue it. Das Kapital was published in 1867. If this section was so important, why did he not try to get it into print somewhere? Why didn't he mention it again? He never did. It was an offhand afterthought, and so it should remain.
Here is an desperate Leftist, vainly trying to resurrect something that Marx left buried, where it belonged. He thinks this is some kind great insight. Marx never did. So, why should we?

Given what Marxism was to become -- a theory of exploitation based on the theft of labour time -- this is a revolutionary statement. It suggests that, once knowledge becomes a productive force in its own right, outweighing the actual labour spent creating a machine, the big question becomes not one of "wages versus profits" but who controls what Marx called the "power of knowledge".

Here is a polemicist who trying to dig up some forgotten remnant of The Great Man's Vision, desperate to make his reputation by reviving this long-ignored item. But in the case of this document, it wasn't merely long ignored; it was deliberately buried by the author. Marx never took the idea anywhere. He didn't it was worth taking the idea anywhere. But this poor guy, in the early 21st century, is trying to make something out of this long-ignored fragment, as if it had any relevance today, despite the fact that it had no relevance in 1858. He is trying to get some smidgen of truth out of an economic system that never was coherent, and which was universally abandoned when the Soviet Union committed suicide in 1991. As my father used to say, he is looking down a dead horse's throat, except my father never said "down," and he never said "throat."

In an economy where machines do most of the work, the nature of the knowledge locked inside the machines must, he writes, be "social". In a final late-night thought experiment Marx imagined the end point of this trajectory: the creation of an "ideal machine", which lasts forever and costs nothing. A machine that could be built for nothing would, he said, add no value at all to the production process and rapidly, over several accounting periods, reduce the price, profit and labour costs of everything else it touched.

Marx wrote "social" because he never had any economic analysis regarding the post-revolution world. He never wrote about the world beyond the proletarian revolution. He never spelled out what he was talking about. That was because he never knew what he was talking about. He never had an analytical system by which he could describe how the division of labor would be guided, when this was in a world in which the state had withered away, and the free market price system no longer existed.

Once you understand that information is physical, and that software is a machine, and that storage, bandwidth and processing power are collapsing in price at exponential rates, the value of Marx's thinking becomes clear. We are surrounded by machines that cost nothing and could, if we wanted them to, last forever.

The value of Marx's thinking was always close to zero, and now it is less than zero. It is time to stop looking down a dead horse's throat.

In these musings, not published until the mid-20th century, Marx imagined information coming to be stored and shared in something called a "general intellect" -- which was the mind of everybody on Earth connected by social knowledge, in which every upgrade benefits everybody. In short, he had imagined something close to the information economy in which we live. And, he wrote, its existence would "blow capitalism sky high".

This poor guy doesn't understand that musings are not theory. Unpublished musings are not to be taken seriously. He wants us to believe that the musings of an unemployed German Ph.D. in 1858 can provide some kind of substantial foundation for economic analysis in the world of Moore's law.

With the terrain changed, the old path beyond capitalism imagined by the left of the 20th century is lost.

And who is the path-finder who will lead the Left by means of a fragment in Marx's notes? I think I know who he has in mind.

But a different path has opened up. Collaborative production, using network technology to produce goods and services that only work when they are free, or shared, defines the route beyond the market system. It will need the state to create the framework -- just as it created the framework for factory labour, sound currencies and free trade in the early 19th century. The postcapitalist sector is likely to coexist with the market sector for decades, but major change is happening.

BACK TO MISES
The socialist always want to get back to Marx, and the Austrian School economist always wants to get back to Mises's 1920 essay. The Austrian asks: How can there be collaborative production if there is no system of free market-generated prices?
This is also worth asking: Why is there any need to allocate assets in a world of free resources? If resources are free, they don't have to be allocated. No one allocates air. I breathe in and breathe out, and I don't ask anybody permission. That is because air is free.
He talks about free resources and also about the problems of resource allocation, when the very foundation of all economic analysis, from Adam Smith to the present, or third chapter of Genesis to the present, is this: at zero price there is greater demand than supply.

Networks restore "granularity" to the postcapitalist project. That is, they can be the basis of a non-market system that replicates itself, which does not need to be created afresh every morning on the computer screen of a commissar.

Once again, I ask: If there is no central planning, how can production be organized? If there is no price system based on the private ownership of capital, how can there be any form of rational allocation of scarce economic resources? We are back to Mises in 1920. But this guy has never read Mises's essay.

The transition will involve the state, the market and collaborative production beyond the market. But to make it happen, the entire project of the left, from protest groups to the mainstream social democratic and liberal parties, will have to be reconfigured. In fact, once people understand the logic of the postcapitalist transition, such ideas will no longer be the property of the left -- but of a much wider movement, for which we will need new labels.

So, once again, there will be collaboration with the state. This is Keynesianism's system. It is the middle path. It is the government directing production, but somehow it isn't the government directing production. It is a price system directing production, but somehow it isn't a price system directing production. Then what is it? Leftists offer no blueprint. They never have.
HISTORICAL ASSERTIONS INSTEAD OF BLUEPRINTS
Now we get a romp through Western history.

Who can make this happen? In the old left project it was the industrial working class. More than 200 years ago, the radical journalist John Thelwall warned the men who built the English factories that they had created a new and dangerous form of democracy: "Every large workshop and manufactory is a sort of political society, which no act of parliament can silence, and no magistrate disperse."Today the whole of society is a factory. We all participate in the creation and recreation of the brands, norms and institutions that surround us. At the same time the communication grids vital for everyday work and profit are buzzing with shared knowledge and discontent. Today it is the network -- like the workshop 200 years ago -- that they "cannot silence or disperse".

The whole society is not like a factory. It is like an auction. It is governed by a fundamental principle: high bid wins. It is a system of competitive pricing. It is a system of allocation by means of competitive bidding. It is not like a factory; it has never been like a factory. That line of reasoning was Frederick Engels' line of reasoning, and it wasn't correct then. He never made it work in terms of economic analysis, and neither can Mason.

True, states can shut down Facebook, Twitter, even the entire internet and mobile network in times of crisis, paralysing the economy in the process. And they can store and monitor every kilobyte of information we produce. But they cannot reimpose the hierarchical, propaganda-driven and ignorant society of 50 years ago, except -- as in China, North Korea or Iran -- by opting out of key parts of modern life. It would be, as sociologist Manuel Castells put it, like trying to de-electrify a country.

Mason is correct. But this is one more argument in favor of Austrian economic theory. It is not an argument in favor of central planning, cooperative planning, or any other middle path between total state centralization and private ownership of the means of production.

By creating millions of networked people, financially exploited but with the whole of human intelligence one thumb-swipe away, info-capitalism has created a new agent of change in history: the educated and connected human being.

Here it is again: exploitation. We are always back to Marxian exploitation theory. But then why does Mason fail to present straight Marxian economics? Marx couldn't describe an institutional solution to capitalist exploitation. His whole system was wrong. Böhm-Bawerk refuted it in 1884, and again in 1896, on just this point: the exploitation theory. Mason imports the rhetoric of Marx, but he ignores the fact that Marxian socialism, and all other forms of central planning, never came to grips with this issue: private ownership is required to price resources rationally. It can be done on a family-owned farm in a primitive society. But in an advanced division of labor society, there must be capital markets: auctions. That was Mises's point in 1920, and Leftists never respond to it. They are intellectually incapable of responding to it. Mises was right.

This will be more than just an economic transition. There are, of course, the parallel and urgent tasks of decarbonising the world and dealing with demographic and fiscal timebombs. But I'm concentrating on the economic transition triggered by information because, up to now, it has been sidelined. Peer-to-peer has become pigeonholed as a niche obsession for visionaries, while the "big boys" of leftwing economics get on with critiquing austerity.

So, now we need "de-carbonization." We get greening. We get touchy-feely. We are back to communal farm, but with solar panels that are produced by mass production techniques. He returns to Greek communal farms.

In fact, on the ground in places such as Greece, resistance to austerity and the creation of "networks you can't default on" -- as one activist put it to me -- go hand in hand. Above all, postcapitalism as a concept is about new forms of human behaviour that conventional economics would hardly recognise as relevant.

So how do we visualise the transition ahead? The only coherent parallel we have is the replacement of feudalism by capitalism -- and thanks to the work of epidemiologists, geneticists and data analysts, we know a lot more about that transition than we did 50 years ago when it was "owned" by social science.

First, he is mistaking feudalism, which was a judicial system of oath-bound civil control, with manorialsm, a system of joint but private ownership. Second, he is espousing a return to manorialism. Manorialism did not have a price system inside the domain. It was like Engels' factory. (I mean this literally. Engels owned a factory. He was rich.) There were no prices. But if you do not have prices, you cannot have a high division of labor economy. You have to have prices, and prices have to be based on the private ownership of the means of production. That was Mises's point in 1920, and Leftists will not respond to it.

The first thing we have to recognise is: different modes of production are structured around different things. 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. But we can only begin to grasp at a positive vision of what it will be like.I don't mean this as a way to avoid the question: the general economic parameters of a postcapitalist society by, for example, the year 2075, can be outlined. But if such a society is structured around human liberation, not economics, unpredictable things will begin to shape it.

Leftists do not have an economic blueprint. They have never had a blueprint. They do not tell us what post-capitalist legal structures are going to be. They do not tell us how production and distribution can be organized apart from a price system. They just spout dreams and slogans. They want to make us feel good about something or other, but they never tell us what the something or other is going to be.
LITERARY EXCURSIONS
Now he turns to Shakespeare.

For example, the most obvious thing to Shakespeare, writing in 1600, was that the market had called forth new kinds of behaviour and morality. By analogy, the most obvious "economic" thing to the Shakespeare of 2075 will be the total upheaval in gender relationships, or sexuality, or health. Perhaps there will not even be any playwrights: perhaps the very nature of the media we use to tell stories will change -- just as it changed in Elizabethan London when the first public theatres were built.

Is there any Leftist fad that this guy is not going to invoke to describe the world of the post-capitalist future? If he had been writing in 1967, he would be talking about setting up a hippie commune. Without a price system or central planning, there is no alternative to a commune. Problem: a commune is going to be run by communists.
He branches out into some kind of undergraduate English literature course that he took 30 years ago. This chatter is supposed to be a substitute for his lack of a blueprint. This is supposed to cover for the fact that he offers no economic analysis.

Think of the difference between, say, Horatio in Hamlet and a character such as Daniel Doyce in Dickens's Little Dorrit. Both carry around with them a characteristic obsession of their age -- Horatio is obsessed with humanist philosophy; Doyce is obsessed with patenting his invention. There can be no character like Doyce in Shakespeare; he would, at best, get a bit part as a working-class comic figure. Yet, by the time Dickens described Doyce, most of his readers knew somebody like him. Just as Shakespeare could not have imagined Doyce, so we too cannot imagine the kind of human beings society will produce once economics is no longer central to life. But we can see their prefigurative forms in the lives of young people all over the world breaking down 20th-century barriers around sexuality, work, creativity and the self.

Leftists are not a threat, intellectually speaking. They do not sustain an argument. They do not have a blueprint, and they have never had a blueprint. They cannot tell us how the system is going to work. They cannot tell us what the cooperative arrangements among civil government, producers, and consumers are going to be.AN HISTORICAL ROMP
Next, we get a romp through the history of the transition from manorialism -- not feudalism -- into early modern capitalism.

The feudal model of agriculture collided, first, with environmental limits and then with a massive external shock -- the Black Death. After that, there was a demographic shock: too few workers for the land, which raised their wages and made the old feudal obligation system impossible to enforce. The labour shortage also forced technological innovation. The new technologies that underpinned the rise of merchant capitalism were the ones that stimulated commerce (printing and accountancy), the creation of tradeable wealth (mining, the compass and fast ships) and productivity (mathematics and the scientific method).Present throughout the whole process was something that looks incidental to the old system -- money and credit -- but which was actually destined to become the basis of the new system. In feudalism, many laws and customs were actually shaped around ignoring money; credit was, in high feudalism, seen as sinful. So when money and credit burst through the boundaries to create a market system, it felt like a revolution. Then, what gave the new system its energy was the discovery of a virtually unlimited source of free wealth in the Americas.
A combination of all these factors took a set of people who had been marginalised under feudalism -- humanists, scientists, craftsmen, lawyers, radical preachers and bohemian playwrights such as Shakespeare -- and put them at the head of a social transformation. At key moments, though tentatively at first, the state switched from hindering the change to promoting it.

To which I say: "So what? What has this got to do with the price of smartphones in North Korea?"
CORRODING CAPITALISM
He now returns to Moore's law (unnamed).

Today, the thing that is corroding capitalism, barely rationalised by mainstream economics, is information. Most laws concerning information define the right of corporations to hoard it and the right of states to access it, irrespective of the human rights of citizens. The equivalent of the printing press and the scientific method is information technology and its spillover into all other technologies, from genetics to healthcare to agriculture to the movies, where it is quickly reducing costs.

So, how would he change these laws? He does not say.
Keynesianism is not working.

The modern equivalent of the long stagnation of late feudalism is the stalled take-off of the third industrial revolution, where instead of rapidly automating work out of existence, we are reduced to creating what David Graeber calls "bullshit jobs" on low pay. And many economies are stagnating.

So, what is his solution? To explain his solution, he resorts to bafflegab.

The equivalent of the new source of free wealth? It's not exactly wealth: it's the "externalities" -- the free stuff and wellbeing generated by networked interaction. It is the rise of non-market production, of unownable information, of peer networks and unmanaged enterprises. The internet, French economist Yann Moulier-Boutang says, is "both the ship and the ocean" when it comes to the modern equivalent of the discovery of the new world. In fact, it is the ship, the compass, the ocean and the gold.

He steadfastly ignores the following fact: these new technologies are based on production for the market. The main thrust of the technological and digital revolutions is in the direction of decentralization and private ownership. Always, there is private ownership. Without private ownership, there are no prices. Without prices, there is nothing but economic blindness. That was Mises's point in 1920, and Leftists never respond to it.

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. They have not yet had the same impact as the Black Death -- but as we saw in New Orleans in 2005, it does not take the bubonic plague to destroy social order and functional infrastructure in a financially complex and impoverished society.Once you understand the transition in this way, the need is not for a supercomputed Five Year Plan -- but a project, the aim of which should be to expand those technologies, business models and behaviours that dissolve market forces, socialise knowledge, eradicate the need for work and push the economy towards abundance. 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 work time as close as possible to zero.

LET THEM EAT SLOGANS!
Socialists specialize in stringing together slogans. They never offer any economic blueprints, but they are long on slogans. They never tell us how their dreams can be implemented. They never describe the system of sanctions -- judicial and economic -- by which people will get what they want through cooperation. They never discuss economic cause-and-effect, but they are really good at listing slogans.

Most 20th-century leftists believed that they did not have the luxury of a managed transition: it was an article of faith for them that nothing of the coming system could exist within the old one -- though the working class always attempted to create an alternative life within and "despite" capitalism. As a result, once the possibility of a Soviet-style transition disappeared, the modern left became preoccupied simply with opposing things: the privatisation of healthcare, anti-union laws, fracking -- the list goes on.If I am right, the logical focus for supporters of postcapitalism is to build alternatives within the system; to use governmental power in a radical and disruptive way; and to direct all actions towards the transition -- not the defence of random elements of the old system. We have to learn what's urgent, and what's important, and that sometimes they do not coincide.

This is utopianism. This has been going on for millennia, of course, but it was only after 1660 that the millennialism of religious utopian reform faded, to be replaced by the millennialism of government-mobilized utopian social reform. This vision is utopian to the core, and rests on a fundamental premise: the state can transform the nature of man.

The power of imagination will become critical. In an information society, no thought, debate or dream is wasted -- whether conceived in a tent camp, prison cell or the table football space of a startup company.

A world without waste! How wonderful! No dream is wasted! No child is left behind! The greatest good for the greatest number! From each according to his abilities, to each according to his needs! The slogans roll on.

As with virtual manufacturing, in the transition to postcapitalism the work done at the design stage can reduce mistakes in the implementation stage. And the design of the postcapitalist world, as with software, can be modular. Different people can work on it in different places, at different speeds, with relative autonomy from each other. If I could summon one thing into existence for free it would be a global institution that modelled capitalism correctly: an open source model of the whole economy; official, grey and black. Every experiment run through it would enrich it; it would be open source and with as many datapoints as the most complex climate models.

There will be modular designs in this redesign of the post-capitalist world. But who will design the pieces? Who will supervise their on-site assembly?
With respect to software, specific people write programs. Specific people either own the code they write, or else they participate in open source coding. But someone is responsible for beta-testing each program. And when it fails, which it will, someone has to offer customer support. But in Mason's vision, modules will all fit together. Somehow, the beta testing will eliminate the bugs. This wonderfully designed modular society, which nobody has designed, and for which nobody is legally responsible, will first transform our world, and then mankind.
It all rests on one assumption: there is no scarcity. It all rests on the assumption that, at zero price, supply equals demand. There will be no waste.

The main contradiction today is between the possibility of free, abundant goods and information; and a system of monopolies, banks and governments trying to keep things private, scarce and commercial. Everything comes down to the struggle between the network and the hierarchy: between old forms of society moulded around capitalism and new forms of society that prefigure what comes next.

This is utopianism, pure and simple.

Is it utopian to believe we're on the verge of an evolution beyond capitalism? We live in a world in which gay men and women can marry, and in which contraception has, within the space of 50 years, made the average working-class woman freer than the craziest libertine of the Bloomsbury era. Why do we, then, find it so hard to imagine economic freedom? It is the elites -- cut off in their dark-limo world -- whose project looks as forlorn as that of the millennial sects of the 19th century. The democracy of riot squads, corrupt politicians, magnate-controlled newspapers and the surveillance state looks as phoney and fragile as East Germany did 30 years ago.

I agree. Decentralization and the accelerating decline in the cost of information will undermine the present elites. But this undermining process will move in the direction of greater decentralization, more private ownership, fewer patents, and more innovation. It will not have anything to with socialism. The government will not be involved.

All readings of human history have to allow for the possibility of a negative outcome. It haunts us in the zombie movie, the disaster movie, in the post-apocalytic wasteland of films such as The Road or Elysium. But why should we not form a picture of the ideal life, built out of abundant information, non-hierarchical work and the dissociation of work from wages?Millions of people are beginning to realise they have been sold a dream at odds with what reality can deliver. Their response is anger -- and retreat towards national forms of capitalism that can only tear the world apart. Watching these emerge, from the pro-Grexit left factions in Syriza to the Front National and the isolationism of the American right has been like watching the nightmares we had during the Lehman Brothers crisis come true.
We need more than just a bunch of utopian dreams and small-scale horizontal projects. We need a project based on reason, evidence and testable designs, that cuts with the grain of history and is sustainable by the planet. And we need to get on with it.

A specter is haunting the world. It is the specter of sloganeering.
CONCLUSION
Paul Mason is the latest example of Leftism's desire to bury free market capitalism. The end of capitalism is always just around the bend.
May he retire on a Greek communal farm. Maybe it will have a free Internet connection.