Cooking the Books: Capitalist musings on money (2026)

The Cooking the Books column from the January 2026 issue of the Socialist Standard

Some capitalists have been philosophising recently on their favourite subject — money. One-time investment banker Matt Levine titled his ‘Money Stuff’ column in Bloomberg News (24 November) “Leave the Gold in the Ground”.

Gold is no longer used as the currency — what Marx called the ‘money commodity’ — as it was for millennia. It is, however, still a store of value. ‘Even now’, Levine pointed out, ‘gold is an important reserve asset, and people hold it in their financial portfolios in the form of gold futures, gold exchange-traded funds, etc’. What is being traded are titles to the ownership of gold. Those who buy and sell these are speculating on how the price of gold will move in the future. The gold itself is stored underground in a safe vault. When these titles are exchanged what happens is just that an entry of who it belongs to is changed in a database. The gold stays where it is.

Levine discusses the case of a group of capitalists who, noticing this, have come up with the idea of selling titles to gold that is still in the ground. They are either fools or knaves as they are assuming that unmined gold in the ground is as valuable as gold bars in a vault. But, of course, it is not. Unmined gold has no value precisely because it hasn’t been mined, though the land under which it lies will have a price based on what royalties might be received were it to be mined. Gold bars in an underground vault have value only because they have been mined, refined, made into bars and transported, their value reflecting the amount of labour that has had to go into doing all this.

What is perhaps surprising is that this is the explanation put forward in a news site for capitalists, surprising because it is an application of the labour theory of value that pro-capitalist economists teach is nonsense. After noting that ‘that modern finance creates layers of abstraction on top of real-world activity, and sometimes those abstractions become unmoored from the reality’, Levine applies this not just to titles to gold but to the shares in any business. As an example he takes Amazon:

‘A share of Apple Inc. stock encapsulates all of the labor and creativity that went into inventing the iPhone and manufacturing it and selling it and building app stores and everything else; all the factories and offices and decades of decisions are all reflected in the tradeable electronic token that is a share of stock’.

Another capitalist who has been philosophising on money is the richest person in the world himself, Elon Musk. Fox News reported him as telling a business forum on 17 November:

‘“If you go out long enough, assuming there’s a continued improvement in AI and robotics, which seems likely, the money will stop being relevant at some point in the future,” Musk said. He added there will still be constraints on power, such as electricity and mass. “The fundamental physics elements will still be constraints, but I think at some point currency becomes irrelevant,” Musk said’.

Musk seems to be embracing here the FALC — Fully Automated Luxury Communism — thesis. Improvements in AI and robotics will certainly make socialism easier but it is not that which will make money irrelevant. What will is only the conversion of the means of production from the private property of the few into common property of all. And that doesn’t have to wait for ‘full automation’, nor will it come about automatically through advances in technology.

More and Less (2025)

Book Review from the May 2025 issue of the Socialist Standard    

Slow Down: How Degrowth Communism Can Save the Earth. By Kohei Saito (translated by Brian Bergstrom). Weidenfeld & Nicolson £10.99.

It is well known that Karl Marx never completed his major work Capital. Just the first volume was published in his lifetime, and two further volumes, edited by Friedrich Engels, only appeared after his death. Kohei Saito argues here that Marx did not finish Capital because in his later years he became interested in scientific and what would now be called ecological issues. He did not publish much on these topics, but he left a lot of notes and excerpts from other writers, which are only now being put together as part of MEGA (Marx–Engels Complete Works). Saito’s book was discussed in the November 2024 Socialist Standard.

Saito further claims that Marx turned his back on productivism, the view that under capitalism productivity would continue to rise to bring about socialism (a well-known passage from the Communist Manifesto states that the capitalist class had massively expanded the productive forces). Marx argued, for instance, that capitalist agriculture led to depletion of the soil and disruption of the metabolic interaction between nature and humans, and he later praised communes in non-Western societies, such as Russia. This also involved a break with ‘Eurocentrism’, which supposedly involved projecting European history onto the rest of the world.

Saito criticises what he terms Accelerationism, the idea of completely sustainable economic growth. He associates this view with Aaron Bastani, author of Fully Automated Luxury Communism (on which see the June 2019 Socialist Standard). He claims that the improved productivity and replacement of fossil fuels envisaged in FALC would in fact lead to ‘increased plunder of the earth’. His solution is degrowth, which for one thing involves a greater spread of the commons and ‘collective management of productive activity’, thereby reducing the artificial scarcity of capitalism and increasing abundance, while at the same time cutting the hours of work needed. Degrowth is simply not possible under capitalism; rather, a steady-state economy based on sustainability is what is needed.

A chapter entitled ‘Degrowth Communism Will Save the World’ presents the author’s positive proposals, divided into five points. The first of these is the transition to an economy based on use value: fulfilling people’s basic needs would be given priority over increasing GDP. But here we meet the first real problem: it is just not clear whether Saito wishes to do away completely with exchange value and the whole idea of GDP. The second point, already mentioned above, is to reduce work hours, which need not imply increased use of automation. Thirdly, abolish the division of labour, as work will be more attractive if it involves a variety of tasks and activities. Further, the production process must be democratised, which includes the use of open technologies, those which ‘relate to communication and co-operative industry’. Lastly, priority must be given to essential work, labour-intensive activities that cannot be automated, such as care work, in contrast to the meaningless ‘bullshit jobs’ identified by David Graeber. A system built on these lines will be ‘equipped to satisfy people’s needs while also expanding the capacity for society to address environmental issues’.

The author summarises his position as follows: ‘the foundation of communism is the equal, communal management of the means of production as a form of commons – that is, as something distinct from private ownership or ownership by the state’. Socialists would agree with this, but unfortunately, he then goes on to accept the existence of the state as a means of getting things done, such as creating infrastructure. Perhaps he does not mean by this some kind of centralised organisation that enforces the rule and interests of a minority, but he could have been a lot clearer here. In fact, his description of future society is mostly fine as far as it goes, but he does not refer explicitly to three crucial aspects, the abolition of the wages system, the ending of production for sale and the abolition of class divisions. Without these, whatever exists will not be socialism/communism, whether it implements degrowth or not.

Paul Bennett

Will information goods undermine capitalism? (2024)

From the February 2024 issue of the Socialist Standard

Information goods are goods whose value derives not from physical characteristics but from the information they convey. In many cases they can simply be copied or downloaded without any cost to speak of (apart from the time spent doing this). Moreover, there is no obvious upper limit as far the volume or quantity of these goods is concerned. They are intrinsically non-scarce or non-rivalrous and, also, ‘non-destructible’ – unlike a physical good.

For instance, by accessing a piece of music on YouTube or an article via Google, you are not denying anyone else the possibility of doing the same. This may very well not be true of a physical good. If I take the last loaf of bread off the supermarket shelf you will, sadly, have to go without at least until the next delivery.

A further characteristic of information goods is that while they have very low or zero marginal costs, their fixed or amortised development costs tend to be particularly high. This cost structure is rather different from the traditional cost structure pertaining to physical goods and, thus, calls for a somewhat different pricing strategy.

Given the non-rivalrous nature of information goods, their zero marginal costs, and the technical ease of capturing or pirating such goods (perhaps in contravention of copyright law), an internet-based business might decide that the most pragmatic thing to do would be to simply abandon the idea of charging for the information goods or service it makes available to its customers. However, while it costs you nothing to have a Facebook page or use the Google search engine this does not mean these commercial entities don’t generate enormous revenues (and profits) for themselves in some other way. In fact, both these entities currently make billions of dollars in profits and even more in revenue. Primarily their revenues derive from advertising (and the copious use of algorithms to more effectively target individual users to benefit their advertisers) though there is also a growing secondary source of revenue in the form of various ‘virtual goods’ or Cloud-based services.

The point is that unless a business like Google was able to make a profit under capitalism it would simply not exist. You and I would not then be able to use its search machine. Being able to freely make use of this facility is contingent upon Google making a profit in the first instance.

As a matter of fact, making this facility free to its users is actually a rather clever way of generating a massive revenue flow through advertising and thus securing a handsome profit into the bargain. People using this facility are a captive audience as far as the advertisers are concerned with adverts being tailored via algorithms, as mentioned, to our own particular tastes and online viewing habits. How many of us would even consider using a Google search engine if we had to pay for it? One suspects only a miniscule fraction of its current users.

Dominated by Big Tech

It is not difficult to see why this kind of commercial activity based on the provision of information goods has come to be absolutely dominated by a tiny handful of very large corporations that have nearly all become household names in their own right. These corporations have the wherewithal to afford the very high development costs incurred. They have the economic clout and reach to shape the industry to suit themselves. For advertisers too, the large size of these corporations has distinct advantages; it provides a platform that enables them to cast their net much more widely – and efficiently – than would otherwise be the case.

Of course, not all information goods are free to the public. Far from it. Internet-based corporations, like Meta (Facebook) and Alphabet (Google), may be able to provide a free service to the public but only because they can cover the enormous, fixed costs all this involves, and make a profit, by making an even larger sum of money primarily in the form of advertising revenue.

However, in the case of other internet-based businesses we see a somewhat different model in place. The information goods and services they provide are not free but are commodified. This is apparent in the case of paywall sites for some online journals or newspapers or else, streaming services like Netflix or Disney. Still other internet-based businesses such as Amazon are engaged in the retailing and distribution of actual physical goods and thus depart even more from the conventional cost structure of businesses purely concerned with the distribution of information goods and services.

However, regardless of the kind of business we are talking about or the type of good it is peddling, the bottom line for any business in a capitalist economy is the need to make a profit. There is no such thing as a free lunch in capitalism. Somebody somewhere ends up having to pay the bill.

Developments like artificial intelligence, the internet of things, robotics and even 3D printing and desktop manufacturing are revolutionising the costs of doing business and shifting the emphasis from tangible to intangible assets. Physical goods are, so to speak, increasingly taking on or incorporating more and more of the qualities or aspects of information goods even though they obviously can never transcend their essential status as physical goods. Or to put it in a nutshell – you can´t have software without the hardware that goes with it

For this reason (and others) information goods are not, and can never be, free in some absolutist sense in a capitalist society as might be inferred from the fact that they – or some of them – can be downloaded effortlessly and without cost to your computer screen; they come with a price (even when the price is not necessarily paid by the consumer but the advertiser in this case).

Too easily beguiled

Some are too easily beguiled by the notion that we are moving, or already have moved, into something called an ‘information-based’ economy. It is the very nature of such an economy, they imagine, stemming from the intrinsic nature of information goods themselves, that has somehow supposedly changed the basic rules of the game, so to speak.

Tom Stonier, for instance, argued in The Wealth of Information: A Profile of the Post-Industrial Economy (1983) that:

‘Whereas material transactions can lead to competition, information transactions are much more likely to lead to cooperation. Information is a resource which can be truly shared’.

Superficially, this sounds all very plausible. One thinks of the crucial role of R&D in industry. A lot of the work of scientists involves collaborating with other scientists and sharing information through peer-reviewed journals and so on. This comes across as all very cooperative and civilised, indeed. Being a ‘non-rivalrous good’, information can be universally shared at virtually no cost. No nasty competition is required.

Its very abundance, goes the argument, means that an information good fundamentally breaks with the logic of the market itself. ‘Plenty’ undermines the rationale for attaching a price tag to a product and, thus, the idea of exclusively owning this product – in this case an information good. Insofar as a price tag is still attached to such a product this can only be explained, it is argued, by the fact that the provider is seeking to perversely, and quite unnecessarily, exclude others from freely using it. The motive of the provider is simply one of self-gain to be achieved by such means as patents and copyrights. In other words, they are asserting an unjustifiable monopolistic hold over the product in question in an age of potential plenty.

Indeed, this, it is sometimes suggested, is precisely why ‘late-stage capitalism’ is today dominated by the existence of virtual monopolies – or, more precisely, oligopolies. Prices are no longer explicable in the conventional terms of supply and demand. Rather they are imposed by diktat by the price makers – namely, those industrial giants striving to enlarge their share of the market in which they operate – to the detriment of price takers, the consuming public.

The basic idea that information technology is – allegedly – more and more bent on subverting the rationale for a market system is a recurring theme in books like Leigh Phillips and Michal Rozworski´s The People’s Republic of Walmart: How the World’s Biggest Corporations are Laying the Foundation for Socialism (2019). Capitalism, according to them, is being progressively hollowed out from within and what remains of it is but a brittle shell that seeks to needlessly confine and imprison the new life forms it has given birth to. These represent its arch nemesis: in particular, information technology.

Such technology, goes the argument, by enabling the application of so-called ‘centralised planning’ within the corporation and, by extension, the suspension of market principles – has the potential to transform society along ‘socialist’ lines or at least, provides us with a model of what such a future society would look like. This in itself is a questionable proposition in some ways, but it is also one that seems fundamentally at odds with the pre-eminent role of big corporations today in promoting market imperialism and commodity fetishism.

We should be more cautious in our assessment of the potential impact of information technology and not get too carried away with fanciful notions of the imminent arrival of what has been dubbed ‘fully automated luxury communism’ (FALC). There is no reason to think that information technology or the enhanced role of information as a factor of production, will somehow in and of itself pose some kind of existential threat to capitalism.

This should be obvious from the standpoint of capitalist businesses. The idea that they would somehow resign themselves to economic suicide seems inherently implausible. Under capitalism, generally speaking, technological innovations tend not to be taken up and developed by businesses if there is no prospect of making a profit by doing so.

Robin Cox

Blogger's Note:

Leigh Phillips and Michal Rozworski´s The People’s Republic of Walmart: How the World’s Biggest Corporations are Laying the Foundation for Socialism was reviewed in June 2019 issue of the Socialist Standard.

Cooking the Books: From Marx to Musk (2023)

The Cooking the Books column from the December 2023 issue of the Socialist Standard

In his interview with Rishi Sunak on 2 November Elon Musk speculated that the widespread application of AI would usher in an ‘age of abundance where any goods and services that you want, you can have’. People would only need work for ’personal satisfaction’.

Clearly, this wouldn’t be capitalism. It couldn’t be as it would mean the end of working for wages and producing goods and services to be sold. This was understood by, of all people, Jeremy Clarkson in a surprisingly perspicacious passage in his column in the Sun the following day:

‘The fact is, then, that if machines are doing all the jobs, there will be no economy. You won’t be able to buy anything because you won’t be earning anything. And there’s no point going to the government for help because that won’t have any money either. Because machines don’t pay taxes. They just spend all day making stuff. That no one can afford to buy. This means we will need a whole new economy. A whole new system where there’s no such thing as money. And that is the biggest worry of them all because no one has a clue what that might be’.

The last bit is not true. Socialists have long understood that the answer would be a society where productive resources including machines would be commonly owned and democratically controlled and used to produce wealth to directly satisfy people’s needs instead of, as now, to be sold on a market with a view to profit. In such a society there would indeed be no such thing as money.

Clarkson may not have known it but he was describing what has recently been called ‘fully automated luxury communism’. But we don’t have to wait for ‘full’ automation to bring about a society of common ownership, democratic control and production directly for use. The productive forces are already sufficiently developed for this. Making the change is now only a question of political will.

As a matter of fact years ago Marx had anticipated the points made by Musk. Writing in the late 1850s he speculated what would happen if the application of science and machinery to production led to such a high level of productivity that not only the value added by direct human labour to each unit produced was reduced to an insignificant proportion, but so was that transferred to these units from the fixed capital deployed:

‘As soon as labour in the direct form has ceased to be the great well-spring of wealth, labour time ceases and must cease to be its measure, and hence exchange value [must cease to be the measure] of use value. (…) With that, production based on exchange value breaks down, and the direct, material production process is stripped of the form of penury and antithesis (‘Contradiction between the foundation of bourgeois production (value as measure) and its development. Machines etc.’, Grundrisse, chapter 14).

In other words, goods and services would be so cheap — each unit would contain so little labour, both new and that transferred by machinery, etc — that the huge amount of them that could be produced could not be priced but might as well be given away or provided free.

Marx did not expect this point to be reached — he expected that the working class would have put an end to capitalism long before — but he realised that, if it were to be, it would mean the end of capitalism. Production for sale would no longer make any sense.

FALC (2022)

From the October 2022 issue of the Socialist Standard

The term ’Fully Automated Luxury Communism’ was invented by Aaron Bastani. In his book he says he is using the word to ‘denote a society in which work is eliminated, scarcity replaced by abundance and where labour and leisure blend into one another’ (p. 50). He calls this communism after Marx’s ’higher phase of communist society’ when ‘all the springs of co-operative wealth spring more abundantly’ and society can ‘inscribe on its banner: From each according to his ability, to each according to his needs! ’

Bastani sees such a society having become possible as a result of what he calls the ’Third Disruption’, the two previous ’disruptions’ being the Agricultural Revolution and the Industrial Revolution. His Third Disruption is basically the application of information technology to production; which ’means machines will be capable of replicating ever more of what was, until now, uniquely human work’ (p. 37).

A large part of his book is devoted to describing the possibilities that his Third Disruption opens up, such as full automation, gene editing, asteroid mining, synthetic meat, and endless energy from natural forces. He sees this last as eventually leading to a situation where it will be so cheap to produce individual items of wealth that there will be no point in putting a price on them; they could simply be given away. Similarly, work for a wage would become redundant as people would no longer have to sell their working energy to access what they need.

’What stands in the way isn’t the inevitable scarcity of nature, but the artificial scarcity of market rationing and ensuring that everything, at all cost, is produced for profit’ (p. 156).

How does he think society will get there? Disappointingly, but all too common amongst authors who present an often trenchant criticism of capitalism, he advocates various measures that he sees as steps in the right direction; he rejects UBI in favour of UBS (universal free basic services) as being more compatible with the ultimate aim.

He also states that ’any attempt at communism within the limits of the Second Disruption’ was ‘impossible’ (p. 241); this, because before the coming of IT it would not have been possible to eliminate work. But is eliminating human work an aim of communism? Hasn’t it been rather to eliminate working for wages, reduce working hours and make work enjoyable? And would it not have been possible to produce plenty for all on the basis of the common ownership of productive resources even before the digitalisation of information? Maybe it wouldn’t have been FALC, but certainly highly-automated, enough-for-all communism.

Blogger's Note:

See also:

• Seeing Visions (June 2019)
• The Strange World of FALC: Consumer Fantasy? (June 2019) 

Seeing Visions (2019)

From the June 2019 issue of the Socialist Standard

What comes to mind when you think of the word ‘revolution’? A spinning vinyl disc, a marketing cliché, heroic Bolsheviks clambering over iron railings, or queues of innocents being lined up for the firing squad?

The reason why more people don’t consider revolution as a serious political option is because their thoughts are instantly derailed by the mental pictures that this conjures up. Either revolution is meaningless because everything nowadays is a ‘revolution’ of some sort or other, or it is a blood-soaked Armageddon where nobody wants to go, no matter how desperate things get.

Arguably the lack of a mainstreamed, coherent vision of revolution, or of the society made possible by it, is what holds people back more than anything else. People already know that capitalism is a miserable system that’s rigged by and for the rich, and they don’t need to be told over and over again. But who’s offering a clear, understandable alternative, with a roadmap for how to get there?

The Socialist Party has, over the years, attempted to fill in this blank, however, we’ve always been reluctant to speculate too wildly, for several reasons. First, technology changes almost by the day, and what’s possible changes along with it. If we’d cared to describe our vision of a future socialist society, when we started out back in 1904, we would no doubt have been thrilling at talk of gas lamps in every street and a telephone in every town hall. Second, taste is a very time and culture-specific thing. What appeals to you might be off-putting to someone else, and there’s no point deterring people from building a free society simply because of idle speculation about what some of the furniture might look like. Third, and most importantly, it’s not up to us anyway, it’s up to the people who will establish socialism, which is you and people like you. If you want to live in bucolic forested idylls, as William Morris supposed back in the industrial 1890s, then doubtless you’ll make the arrangements. If you hanker for futuristic circular cities and gadgets galore, as Jacque Fresco and Zeitgeist imagined ten or so years back, then you’ll do what’s necessary to make it so. Or perhaps you’ll do both.

Not everyone shares our reservations about building castles in the air. In this issue, we consider two other images or ‘models’ of non-market socialism, which come at the subject from very different perspectives. First, there is the notion of fully automated luxury communism (FALC) devised by Aaron Bastani and James Butler of the alternative news outlet Novara Media. The idea of this is simple: machines are going to do all the work so we can just kick back and relax – once we’ve relieved the capitalist class of global control, that is.

Without rehearsing any of the criticisms that follow, or rehashing earlier ones (see Pathfinders, May 2015), it’s worth asking ‘is this the right strategic vision to put to workers’? FALC is a very clever approach in that it challenges head-on the idea of inevitable scarcity which is drilled into us today as part of capitalism’s manufactured artificial reality, and thus informs people’s too-ready assumptions about revolution as a time of misery, shortages, hard work and self-denial. Moreover, it imparts an appealing tongue-in-cheek humour to a subject more often plastered with a po-faced puritan frown. It feels young and fresh, and new, and now, in a way, no Marxist tract ever seems to. Trouble is, it might be going too far to the other extreme and risk looking like a Pollyanna paradise that’s got drunk on its own optimism. Workers might be seduced by a vision of luxury communism that makes it all sound easy and fun, but on the other hand, they may recall that if a thing sounds too good to be true, it probably is. Are they going to gamble everything on an idea of revolution that doesn’t seem to have considered all the externalities?

Externalities are also a problem in the second view, the model of ‘Walmart-socialism’. This is the idea that if a huge global company with hundreds of thousands of staff can operate perfectly well without its own internal market, then so could the entire planet, and that large global companies are in fact leading the way towards this new social reality. Leaving aside the whole question of central planning which we look at elsewhere, one or two obvious differences between a capitalist megacorp and socialist society present themselves. In the first place, capitalist companies are not democratic but autocratic, even if some limited decision-making is distributed through the system. ‘Citizens’ (ie workers) are not free not to do as they’re told, or free to do something else, or free to change their mind or walk off the job. No matter how managers like to pretend otherwise, a coercive element runs through capitalist companies like Brighton through a stick of rock. This is in stark contrast to socialist society which is predicated on the idea of nobody being anybody’s boss. Secondly, companies like Walmart are not obliged to factor in their wider impact on society, people, or the environment, when devising their future growth strategies. The only thing that really counts in a capitalist business is money, and how much they are going to make over their overheads. What this means is that people, society and the environment are inevitably pushed down the list of priorities, and they suffer accordingly. That’s why we have global warming, and the ‘bottom billion’, and famines and wars. In this sense using a capitalist enterprise as a model of a kind of proto-socialism seems more than bizarre, it’s a travesty.

All in all though, it’s good that people are discussing visions of the future, even if they can’t always agree on the details. Despite the risks inherent in such speculations, workers arguably have to see the goal before they can kick the ball in that direction. Hopefully, this discussion will help to focus minds, without moving the goalposts too often.

Paddy Shannon

The Strange World of FALC: Consumer Fantasy? (2019)

Book Review from the June 2019 issue of the Socialist Standard

The conquest of scarcity

Aaron Bastani, co-founder and senior editor at the alternative media organisation Novara Media, argues in his book Fully Automated Luxury Communism (published by Verso this month) that current technological advances are on the way toward overcoming scarcity and making ‘luxury communism’ – a society of abundance for all – possible for the first time. What Marx foresaw as the hypothetical result of further development of the productive forces is now rapidly turning into reality. On this basic point, the author is in full agreement with the World Socialist Movement, although there is scope for debate over exactly when a society of abundance became or will become possible.

In Section I of the book Bastani provides an overview of social development, with an emphasis on three great turning points or ‘disruptions’ – the first associated with the birth of agriculture, the second with the emergence of machine industry, and the third with the new information-based technologies whose inherent tendency (because ‘information wants to be free’) is to give rise to ‘fully automated luxury communism’, or FALC.

Section II is by far the best argued and most valuable part of the book. Its five chapters are devoted to each of the spheres of technology that are playing major roles in the ‘third disruption’:

• automation – not only of manual labour but also of many intellectual activities;
• renewable energy (mainly solar);
• ‘mining the sky’ – that is, extracting resources from heavenly bodies (initially, the moon and near-earth asteroids);
• genetic engineering to ‘edit’ disease-related segments out of the human genome;
• genetic engineering of organic tissues to brew ‘food without animals’ (substitutes for meat, fish, eggs, dairy products, etc).

Developments in these spheres are set to create ‘extreme supply’ and thereby banish scarcity in labour, energy, resources, healthcare and nutrition, respectively. At the same time, they point the way toward improving the environment, mitigating global warming, coping with demographic trends like an aging population and ending cruelty to animals.

More attention might have been given to the potential risks as well as benefits of the new technologies. One wonders about plans to pull a passing mineral-rich asteroid into earth orbit for ease of access, and whether a miscalculation might send it hurtling down and crashing into the Earth. One wonders about proposals to remove disease-related segments from the human genome, and whether the ‘editors’ might inadvertently remove genetic material that performs essential functions for the organism.

Bastani acknowledges that the emergence of the technological preconditions for communism will not be enough in itself to bring the new society into existence. The political preconditions are just as essential. In the absence of a vast popular movement for communism, some at least of the new technologies are indeed likely to widen social inequalities. For instance, automation could well generate mass unemployment on a scale hitherto unknown, while benefits to health and longevity from human genetic engineering will accrue mostly to the wealthy.

Thus Section III of the book focuses on how to build up a popular movement for FALC. Like most left-wing writers, the author aims to achieve revolutionary change by promoting reforms rather than by directly spreading revolutionary ideas, his unspoken expectation being that ordinary people will not be receptive to such ideas. However, some of his reform proposals do have the merit of prefiguring the new society. In particular, he is critical of the demand for a Universal Basic Income, preferring to campaign instead for the expansion of Universal Basic Services – that is, freely available public services like healthcare, transport, education and information.

Especially from the point of view of readers in other countries, the singular focus on British politics is unfortunate. It is unclear whether he fully appreciates the need to organise for communism at the global level – a need dictated by the global nature of capitalism itself.

Perhaps the author’s concept of communism is a little simplistic. The new society will not necessarily be fully automated. Even if near-complete automation is technically possible, people may well prefer not to implement it. They may choose to automate only work that is boring and unpleasant while preserving human activities that are – or can be made to be – interesting and satisfying. Partial automation (PALC not FALC) may be accompanied by a revival of handicrafts, assisted as convenient by high-tech gadgets.

There are also reasons to be less sanguine than Bastani concerning the  impact of climate chaos and the prospects for rapidly restoring the planet’s ecosphere. No doubt the falling price of solar energy facilitates the transition away from fossil fuels, but the oil, gas and coal bosses are still able to hold back this process by various means, such as using their political clout to block or eliminate state subsidies for renewables while maximising state subsidies for fossil fuel companies. And how much more damage will terrestrial mining do to our environment by the time mining is moved off-planet? Even when we do achieve communism the ‘paradise’ promised in the title of Section III may not be within reach any time soon.

Stefan

More FALC: The Walmart hypothesis (2019)

Book Review from the June 2019 issue of the Socialist Standard

Can Walmart Tell Us Anything About Socialism?

Internationally, there is a resurgence in discussing socialism, not just in the American sense of faintly looking at a welfare state, but credibly and seriously taking on the idea of a co-operative democratic abolition of market allocation of goods and resources. Books like Four futures: life after capitalism by Peter Frase have already lead the way, including among the options a world of abundance without money (although reading the text, it seems the author’s preferred or most likely future was some sort of regulated market in a post-ecological-collapse world). That book sprang from Jacobin magazine, and it seems that other contributors to that magazine are beginning to produce other useful examinations of the way towards a market-free world.

The latest example is Philips and Rozworski’s The People’s Republic of Walmart: how late-stage capitalism gives way to early-stage fully automated luxury communism. This book puts forward the simple case that firms like Walmart are in effect massive planned economies, close to the size and scale of the Soviet Union in terms of the number of products and processes they have to employ to run their enterprise. They also note how 3rd party firms that trade with them are effectively locked into their productive ecosystem.

Much of this is achieved algorithmically, with resources being poured into tracking stock through the system, knowing where it is at all times, and using vast storage capacity. The algorithms calculate what resources are available nearest to the point at which they are required, and how to get them there quickly. The authors give the counter example of Sears, which imploded after implementing an internal market and competition within its firm (under libertarian ideological commitment from its directors).

Of course, Walmart and Amazon are planning to exploit, and get the most out of, their workers and advantages over commercial rivals. It is not so much an example to be emulated, but a living demonstration that wide-scale economic allocation via planned structures works. Further evidence is found in a nuanced description of the history of the NHS, noting how it has gone from an ad hoc replication of existing structures, without conscious planning to serve community needs, to being carved up by an internal market. The authors note that it has always existed as a hybrid between the firms of GPs and the hospitals and the pharmaceutical industry, and that attempts to implement society-wide input and control were stymied at Westminster.

Democracy is seen as an inherent good and a necessity for wide-scale planning in an economy, if it is to serve people’s needs. Phillips and Rozworski note that a significant part of the failure of the Soviet Union’s planned economy was because of dictatorial intervention preventing the free flow of information between productive units, and removing their capacity to respond. The other living example they cite is Project Cybersyne in Chile.

British cyberneticist Stafford Beer was called in to help the Allende government implement a planned economy. Given the state of the country at the time, he had to improvise a system of telex and phone lines. His systems were credited with enabling the government to defeat a crippling lorry drivers’ strike, by routing key resources around disruptions and allocating available lorries. The principles behind Beer’s cybernetics were thus not all about enslaving people to the machine, but allowing distributed horizontal decision-making between relatively autonomous units with oversight and regulation to achieve common ends.

If all of this sounds remarkably familiar, it is because this is what we have been saying in our slightly less fashionably way since we were formed. Indeed, our pamphlet Socialism as a Practical Alternative, largely written by the late Pieter Lawrence, based a description of socialism on using the regulated stock control models already developed by the likes of Walmart, coupled with formation clearing houses to allow communities and groups to work to enable production for needs.

It’s clear, though, that while technology has advanced, along with the experience of wide-scale economic organisation, this is not a prerequisite for socialism. Pencil and paper-based systems could have handled the work (and probably still could), but the fact that machines and computers allow us to do it faster, and are increasingly presenting the possibility of co-ordinated democratic production in people’s minds, is making the topic more popular.

Philips and Rozworski cite the work of Scottish academic Paul Cockshott with his demonstration that an economy-wide plan is computable (especially if we exclude millions of null combinations of goods, arguably Walmart does not compute all the possible combinations of goods, but works with what it has and approximates efficient allocation-adjusting over time). Cockshott is not alone in academia, and he and collaborators have made impressive inroads into the possibilities of computational planning through vertical integration of sub-systems. It would be well to think what would be the result of the combined efforts of the best and brightest computational minds being directed towards co-operative economics and the satisfaction of needs, rather than algorithmic stock trading.

We have discussed in these pages before the types of innovations in thought and process that will enable us to make socialism work on a worldwide scale: Leonid Kantarovich’s linear programming; Gale and Shaply’s stable matching algorithm; Brams and Taylor’s envy-free cake-cutting algorithm, etc. The intellectual progress for the machinery of co-ordinating activity is improving, even if the political co-ordination to pick it up and use it is not yet as developed. It is good that these obscure and complex lines of enquiry are beginning to get serious popular attention.

Some commentators have begun to compare capitalism (and/or corporations) to a vast out-of-control Artificial Intelligence, programmed to maximise profit. This is potentially a powerful way of depicting capitalism: but the risk is, in coming up with algorithms and procedures to create a planned economy, that we would end up replacing capitalism with simply a rival AI, rather than returning to a human-centred system.

Demonstrating that we can plan and rationalise resources in the way that capitalism can and does is not a clincher for socialism: it could be argued that in an ends-based economy, using labour inefficiently could well become a goal (as William Morris pictured in his utopian novel News from Nowhere). The most powerful message we can send is that there is not one way to run an economy, and the only real limit is the power of our imaginations.

The tag-line of ‘fully automated luxury communism’ that is gaining some popularity may help raise the profile of consciously planning the economy co-operatively.

Pik Smeet

Cooking the Books: Not applying technology (2019)

The Cooking the Books column from the October 2019 issue of the Socialist Standard

In his book Fully Automated Luxury Communism Aaron Bastani quotes the US economist Paul Romer’s definition of technological change as ‘an improvement in the instructions for mixing together raw materials’ (he meant physical materials). He summarises Romer’s conclusion as that ‘over time, as technology develops, the value increasingly arises from the instructions for materials as opposed to the materials themselves’.

This is similar to what Marx, in ‘The Fragment on Machines’ in the Grundrisse, had said would eventually happen, with general scientific knowledge becoming a more important factor in production than direct labour. As this knowledge is a social product it’s an additional argument for socialism.

According to Bastani, Romer made the further point that ‘once the cost of creating a new set of instructions has been incurred the instructions can be used over and over again at no additional cost’. In other words, these instructions, once developed, could be available to be used for free in much the same way as digitised articles, books, films and music can be.

But there is a snag, as Bastani noted. This knowledge is privately owned and only made available by the developers to others at a cost – the royalty payments for the use of the patent. Some is even kept as a ‘trade secret’. Patents and other so-called ‘intellectual property’ rights are merely a legal fiction, applicable solely because they are entirely the product of a legal enactment, enforced by the courts and, ultimately, by the coercive power of the state.

Property rights over material goods are also a legal fiction, though not as blatant, as people can imagine more easily material goods being possessed in the absence of legal backing. On analysis, however, property in land, factories and other means for producing material things is not the same as physically possessing them. The owner of a landed estate does not physically possess the land in the same way that they possess their clothes or their car; nor does a capitalist shareholder. Their property rights have also been created and are enforced by the state.

The fact that scientific and technological knowledge has developed to the point where it could be applied to produce enough for everybody to be able to satisfy their material needs strengthens the case for socialism. It confirms that, whereas capitalism has developed the potential for this, it is incapable of activating it for the benefit of all. Capitalism has solved the problem of producing enough for all, but cannot distribute it. Only socialism can do this, on the basis of production directly for use, not profit, and distribution according to needs, not rationing through the wages system.

‘Fully Automated Luxury Communism’, as a description of socialism, is a deliberate exaggeration to dissociate the idea of communism from what happened in Russia with its shortages and queues. But it risks another misunderstanding – that socialism only becomes possible if there is ‘full’ automation. This would mean that it is still not really possible. This in fact is the justification that Bastani (and his fellow FALC advocate, Ash Sarkar) give for supporting the gradualism of the left-wing of the Labour Party. A better term, though admittedly not quite as snappy, might be ‘Highly Automated, Non-Austerity Communism’.

Editorial: A World of Abundance (2019)

Editorial from the June 2019 issue of the Socialist Standard

There is a lot of chatter about artificial intelligence and robots replacing workers in the workplace. Not everyone shares the anxiety about the potential threat of massive job losses. Some see this as an opportunity to bring about a different society where robots can perform all the menial jobs leaving humans free to pursue their hobbies and interests and lead a more fulfilling life. They are advocates of what is known as Fully Automated Luxury Communism (FALC).

Their argument is that developments in technology have created the possibility of a ‘post-scarcity’ society, where there will be abundance for all. They understand that present-day capitalist society cannot deliver this, as production is limited by what can be sold profitably, and that a fundamental change in society is required. One that provides for human needs rather than the profits for the few

However, we are not in agreement with everything they say. In a Guardian article (18 May 2015) Aaron Bastani, a prominent advocate of FALC, calls for ‘ a 10- or 12-hour working week’ and ‘a guaranteed social wage’, which implies that work will still be defined by employment and a monetary system would continue to exist. In socialism, however, work would be freed from the restrictions of wage labour and everyone would have free access to what they need and money would be redundant. It is only under capitalism where we are compelled to make profits for an employer that work becomes drudgery.

It is not just in the last few years that technological developments have made possible a society of abundance. This potential was achieved sometime in the early years of the twentieth- century when the world market was established.

The FALC advocates also seem to confuse abundance with luxury. Bastani calls for ‘Cartier for everyone, MontBlanc for the masses and Chloe for all’. (‘Britain Doesn’t Need More Austerity, It Needs Luxury Communism’, 12 June 2015, www.vice.com). For us, abundance is where everyone can live a fulfilling life free from poverty, not that they will necessarily own a Cartier watch. Under capitalism, people who can afford it acquire these luxury items so as to flaunt their superior status. In a society of genuine social equality, this will make no sense.

In the 1970s there were similar fears that the introduction of the microchip would create mass unemployment. In fact, this did not happen as the new computer technology brought forth new skills. Computer programmers were required to write the computer software and engineers were needed to maintain the hardware. Likewise, the new robots will need skilled workers to program and maintain them, though the extent of this is still debated along with the net effect on unemployment and part-time employment. Increases in unemployment so far have mainly been due to market conditions, rather than the application of new technology.

Bastani, who claims to be influenced by Marx, should know that capitalism cannot replace all human labour with machines. Robots and computers cannot create surplus value, from which profit is derived. Only human labour can.

It is encouraging that, after all the years when it has been accepted that there is no alternative to free market capitalism, groups and individuals are discussing possible alternatives, and in the process have rescued the terms communism and socialism from their toxic association with the state capitalist dictatorships.

Pathfinders: Immaculate conceptions (2015)

The Pathfinders Column from the May 2015 issue of the Socialist Standard

What’s been happening lately with the people from Occupy, UK Uncut and the rest of the rebellious ‘noughties’ crowd? Whatever activity there is has sunk below the media horizon and therefore dropped off the political agenda, while the restless radical pool continues to evolve into new forms and outgrowths, clustering, merging and diffusing in ways that seem more organic than organised. The big splashes in the morning papers have given way to a grey drizzly afternoon of self-doubt, boredom and endless questions.

What is one to do with a world ‘absolutely in thrall to capitalism’, where most radical groups ‘coalesce around a hollow capitalist meliorism’ or else focus on the bogus rhetoric of having no leaders at the expense of any real strategy, democratic oversight or ability to adapt to changing circumstances?

Thus speaks Novara Media, an ‘outgrowth’ of this very milieu and a sort of alternative online news service cum political analysis show aimed at the young radical, non-state anticapitalist sector. Its founders are a likeable and highly articulate pair of young postgrads/postdocs by the name of Aaron Bastani and James Butler, and five minutes of their quick-fire patter is enough to make your head spin.

What does Bastani say about non-state communist strategy in the 21st century? That the 20th century of mass one-way communication was the great outlier and that today’s pathways of communication through disparate and affinity-based back-channels is more akin to the 18th century. What does Butler say about the activist’s disavowal of theory? He explains that doers are always suspicious of thinkers: ‘there’s a history of people thinking that thinking means that one should be in charge of things and lead things, and movements led by thinkers and intellectuals is [sic] always a bad thing and tends to lead to paranoia and narcissism and overidentification’. They observe that protest should be offensive not defensive because defensive strategies become conservative and ‘fail to stake a claim on the future’, and they make clear that ‘people argue about political power needing to be purified, but it doesn’t, it needs to be overthrown’. Butler adds poignantly ‘we have been losing for so long that we’ve forgotten to ask how do we win, and what would winning look like?’

Well, what would winning look like for Novara Media? It would look like something called fully automated luxury communism (FALC). The argument is simple enough. Machines are taking all the jobs, so the future should be one of luxury and leisure. People have said this before but Messrs B&B don’t make the elementary mistake of thinking that this will happen without a revolution to overthrow the powerful elites. What’s appealing about their argument is that it emphasises what you can have tomorrow rather than what you have to put up with today. Communism for them is a glittering prize and an orgy of abundance, not an exercise in hair-shirt asceticism.

Do they mean non-state communism the same way we do? Oddly, Bastani mentions a ‘living wage’, which doesn’t fit the picture. Wages and money presuppose property relations and markets, which inevitably give rise to states. Leaving that to one side, are they anyway overegging the pudding? When talking about post-scarcity socialism we tend to talk about sufficiencies, not luxury. We do sometimes speculate about shortages in the short term as farmers switch from cash crops to subsistence, the ‘bottom billion’ are prioritised for food and healthcare, and the world productive system learns to readjust. Is it realistic and in fact responsible to promise luxury as standard?

As is common with future-gazers, Novara may have been seduced by their own vision. One only has to recall the utopian predictions of early advocates of nuclear power to remember that technology is always rosiest at dawn.

When considering anything to do with automation, indeed any machinery, one shouldn’t ignore that unwritten rule of the universe, Sod’s Law. If it can go wrong, it probably will, and just when you least expect it.

People who can only afford to drive old cars will have noticed that the more sophisticated the technology, the more unfixable and often disastrous it is when it ages and breaks down. It may be that the rate of development of complex systems always outstrips our ability to diagnose failures within those systems or, in the vernacular, we’re too clever for our own good. Why might this be so? Because as you add new features, sensors, cruise controllers, drop-down displays and so forth in arithmetical fashion into a closed network, the number of potential failures and multiple-node failures tends to increase in geometrical fashion.

In the immaculate world of the futuretopians, nothing ever goes wrong and everything always works at its optimum. If you ask what happens when the system breaks you get the response given out about the Titanic and Chernobyl: ‘Don’t worry, we’ve got a system to cover that’. There is just now a debate in airline circles about whether to develop fully-automated planes without pilots, controlled just by their on-board computers. This is how capitalism drives technology - the purpose is simply that the airlines would save a pilot’s wage. Would socialists be interested in this too? Opponents will point out that a driverless car which fails can just stop, whereas a driverless plane that fails has no good outcome.

How much complexity is too much? What is so endearing about clunky, old-fashioned, non-electronic cars is that there’s not so much to go wrong, and not much you couldn’t fix yourself given a shed, a few tools and a basic grounding in car maintenance. Socialism would have production plants and factories for the sake of economy of scale, but not to the exclusion of local, small-scale production and maintenance.

Socialist production, being non-market and not for profit, would work quite differently from the capitalist market process. If you’re giving up your time to build a bus, a power station or a piano, you don’t want to have to put in further work repairing it, nor create work for others by making it difficult to repair. You would use standardised and recyclable parts which could be swapped out easily. You would not bother adding features which looked impressive but didn’t do anything. You would only use quality components, not cheap ones intended to fail. And you’d keep it simple. But simple doesn’t have to mean plain, or plain ugly. Taking a cue from William Morris we could stipulate that beautiful things should be useful, and useful things should be beautiful.

Fully automated luxury communism is a vision based on two assumptions, that people want luxury and that they hate work. We suggest that neither of these is correct. Sufficiency is sufficient for security, and security is what people really want, not to live like Roman emperors, even if today capitalism makes people fantasise about getting stuff for the sake of having stuff. Second, there is the obvious fact that labour, even quite hard manual labour, can be a huge pleasure when freely and cooperatively engaged in. If that were not so there would be no art, no hobbies, and no sport. Full automation, where machines do everything, is probably more a fantasy of capitalism’s stressed-out wage-slaves than a healthy aspiration of free people. And let’s remember to ask, what if it breaks down?

Novara is keen to stress that their ideas are negotiable and do not come fully formed and fixed. It is a fact to gladden the hearts of socialists that people like Butler and Bastani are out there keeping revolutionary ideas alive and fresh, but when concocting revolutionary recipes we would always counsel a pinch of salt.

Paddy Shannon