A Hill of beans?

BARRY WINTER reviews Anti-Capitalism: The social economy alternative, by Chris Hill, and considers the role of the social economy in creating change, as well as sustaining socialism.

This is an intriguing book. Written and, indeed, published by a former, long-standing member of Militant and, at the time of writing, a member of one of its offspring, the Socialist Party, its ambition is to tackle many of the hard questions confronting the left today. What particularly attracted me was the promise in the subtitle, ‘The Social Economy Alternative’.

Of necessity, the history of socialism is littered with attempts to transcend periods of decline in its fortunes, to find creative ways forward in hard times. This account follows that well-trodden path. As before, the challenge is how to retain those understandings and experiences that remain relevant while responding imaginatively to what’s new. This raises the tricky question of what ideas to jettison in the process, something that is fraught with dangers. Accusations of heresy and betrayal regularly follow such efforts (and, in some cases, they may be appropriate).

That is what makes Chris Hill’s single-handed attempt a brave and worthy one. Not content simply to wait for better days, for an up-turn in the ‘class struggle’ of the ‘it-must-come-soon-comrade’ school of unthinking, Hill recognises that socialists today face many formidable challenges. He makes a serious and strenuous attempt to look at some of them. I don’t think that he succeeds, however, partly because it is not easy for anyone to tackle these issues but also because he is too weighed down with his old political baggage to travel very far. The distance that he has moved, however, could mean he has already gone too far for the far left.

Hill is seeking to incorporate into his model of a new society forms of alternative economics based upon co-operatives and collective self-help. Unlike others from his political tradition, he does not airily dismiss these ideas. Instead, he looks at them in some detail, combining this with an honest attempt to pinpoint the failings of Soviet-style central planning.

For this reason, I think that it is useful to examine his main arguments, and to identify its more positive elements, rather than simply focus on its shortcomings. In certain respects his work parallels ideas that the ILP has been developing in recent years, although there remain major underlying differences too.

Standard fare

Hill’s starting point is the standard fare of the far left which, having written off the Labour Party as having no progressive role, sees hope coming from elsewhere. While identifying the decline in the left’s fortunes, Hill sees great promise in the emergence of the anti-capitalist movement. However, like others on the left, he also recognises that this movement is unimpressed with socialism. So, for him, the question becomes how to win these social forces to socialism. The faith once placed in transforming the Labour Party into a vehicle for socialism is transferred to a new generation of anti-capitalist activists. He says they must be won both to the notion of “what socialism means in a modern context” and to a new political party that can further these aims.

His approach has much in common with many contemporary radicals, including George Monbiot, who say that, because the Labour Party is fundamentally tied to global capitalism, a space has opened up for an alliance of anti-capitalist activists and groups. This is not the place to review these arguments but they do merit further consideration, not least because many socialists are pinning their hopes on them.

Hill’s particular account consists of five linked arguments. He provides:

• a critical review of global capitalism, corporate power and finance, and the massive social costs involved
• a broad assessment of the “failure of central planning” and why “the allocation economy is unworkable”
• a largely sympathetic consideration of the contribution of green economics to socialist ideas
• an outline of a future socialist economy, including the role of state ownership, currency and trade controls, co-operatives, private enterprise and the role of the market
• a consideration of the prospects of the left.

As an economist, Hill seems most at home when discussing the economic aspects of his analysis. He acknowledges that capitalism is a “tremendously innovative system that destroys to create”, that it “has become a form of ordered chaos … manipulated by huge sophisticated organisations”. Yet today’s capitalists are “as helpless as their forebears in determining what the outcomes of the system are”. He also argues that the world financial markets are little more than casinos. Like others, Hill accuses the big corporations and financial institutions of controlling much of our lives, arguing that they exercise that control without reference to the people affected by their decisions.

An indication of Hill’s open thinking is the welcome he gives to the idea of the Tobin tax, the proposals to place a levy on short-term, international currency deals. He says that while this does nothing to change the capitalist logic of currency exchange it “would reduce speculation and raise considerable revenues”.

When looking at the socialist alternative to capitalism, the centrally planned economy, Hill pulls no punches: “I hope to show that the task of modern day socialists it to socialise the market not create a democratic system of allocation.” His argument is that there is a stark choice about producing goods: either a factory operates by being told what quantity and type of product to make and where to send the finished items, or it works within some kind of market. With markets, the enterprise makes decisions about what to produce, what materials to buy, and what to sell in response to people’s wants.

With central planning, he argues, decisions are made independent of the enterprises. Taking the Soviet system as an example, he notes that an estimated 3,000 million planning indicators existed at any one time. The result was massive inefficiency with no incentive to produce goods of quality or to maintain standards. Instead there was colossal underemployment of workers and enormous waste.

While he is ready to accept that introducing workers’ control and freedom to criticise would have removed the system’s worst excesses, “the central failure would remain that central planning removes the whip of the market and takes decision making powers away from those directly involved in production”. In short, there is no incentive to “do a good job”. These characteristics, he argues, can also be found closer to home – in the hierarchically organised public and private monopolies. The result is management empire building, bureaucratic arrogance and inefficiency.

To those who argue that greater consumer control could be introduced into a non-market economy, he says that while this too might help, it does not avoid the central dilemma. “Either a product or service is sold to those who want to buy it in competition with others, thereby ensuring sensitivity to customers’ demands, or there is no market and sales are guaranteed with all the arrogance that monopoly entails.”

Hill’s argument is that an economy can be socially owned and directed and no longer ruled by the profit system, but it remains a market system. “[I]f money exists, goods are priced, and there is freedom to establish a business, then a market economy exists.” He acknowledges that tensions will exist in any synthesis between the disciplines of market and social interests of a planning system. They can best be dealt with, he says, by ensuring that the interests of the state, the workforce and consumers are properly represented in the process.

Green ideas

Hill is at pains to understand the ideas emerging from the green movement, which he says, perhaps rather optimistically, are becoming the common sense of the age. For him, the recurring contradiction of green politics is that it side-steps the dilemmas of the free market, with the result that its alternatives become either utopian or simply about lifestyles.

While the greens see a loss of individual or community control to big business and central government, he feels that they avoid issues of power. Instead of facing entrenched power structures, which they often see as unchangeable, they prefer to work from the bottom up, Hill argues. Their pessimism about large-scale social change leads them towards wanting “to build an economy within an economy”.

As he puts it: “Of course, something can be done this side of the revolution.” He recognises that there are many ways of organising that can make a difference. What is less clear, however, is the extent to which he thinks that this ’difference’ really amounts to little more than a ‘hill of beans’.

That does not stop him from carefully examining the social economy alternatives in some detail: in particular the value of local currencies, LETS, local savings for local development, credit unions as providers of cheap credit, and various forms of co-operatives.

One example of local currency that he examines was in the inter-war years in the small Austrian town of Wogl, which had a population of 50,000. The use of stamp money by the local authority over a 12-month period reduced unemployment from 35 per cent to almost nothing. Before the state banned local currencies, all the housing in the town had been repainted, the streets had been extensively re-paved, local forests replanted and a bridge built.

Hill also examines member-controlled local savings banks, noting that one in four people in the US belong to a credit union. In Ireland half the population are involved and these banks provide services “as efficient as high street banks while charging low interest on loans, lending to people who are turned away by banks and using the savings for the benefit of the community”.

Hill cites the interesting example of the radical South Shore Bank which operates in an area of serious economic decline in Chicago. Actively promoting business loans linked to financial advice, the bank targeted owners who wanted to refurbish their flats. As a result, 9,000 flats have been improved in 20 years and the bank has pumped over US$40 million loans into the area. He notes that the directors recognise the limits of their efforts, that when it comes to creating jobs they acknowledge the need for external financial support.

Hill also considers Short Circuit, a study of a small town north of Brisbane, Australia, written by Richard Braithwaite. A once declining farming community now has a large credit union which has helped to fund 30 new businesses. Aided by the state government, an old creamery was converted into a base for small businesses. This houses 18 co-operatives, including a radio station, food producers and retail outlets, as well as a well-supported LETS scheme.

While Hill is clearly impressed by these kinds of developments, he refuses to be starry-eyed. As he argues: “Any form of self help and activism should be supported, but that does not mean turning self-help into a strategy for political transformation.“ He says that it would be “perversely optimistic” to consider that local currencies and LETS could counter powerful capitalist forces. Instead, he says (echoing his particular brand of Marxism) that in a period of depression, he would want them “to be part of much more radical measures”.

Woolly thinking

Clearly, Hill wants to counter any woolly thinking in the green movement about the role of alternative economics in the process of social change, particularly its preference for shying away from some of the big issues. He thinks co-operatives can only be part of a transforming strategy, which I think is reasonable. But then he argues: “Like so much green economics they would form part of the solution once the ‘big economics’ is sorted out.” (My emphasis)

In other words, he seems to saying first take command of the economy, then you can effectively engage in local economic strategies. Of course, a socialist society of the type he envisages could provide a far more supportive framework for local economic initiatives than capitalism. What Hill misses, however, is a golden opportunity to develop the argument politically as well as economically.

He does not envisage the political difference that networks of self-help initiatives could make in laying the basis for radical social change. He doesn’t see that it is from the energies, activities and networks of people at local levels that a movement for change can be constructed; that these activities could provide much-needed self-confidence, training, knowledge and experience which large numbers of people need to re-engage in politics.

In other words, a democratic, do-it-yourself culture, based on lived experience, could provide the foundation for constructing a new society. People will find out what works and what does not. And, hopefully, they will accumulate the understanding necessary to learn from experience, by debating their successes and failures.

Hill is on solid ground when he argues that we need to see the bigger picture in relation to capitalism and the economy. His argument that major aspects of industry and finance need to be democratically socialised is, I think, basically sound. Recognising that “total state control is to be avoided”, he nonetheless argues that the “socialisation of major companies should be the cornerstone of any new movement”.

But the ability to take greater economic control becomes far more powerful and persuasive when people can see from experience the ways that capitalism acts as a fetter on their endeavours. Otherwise calling for socialisation of the major companies tends to become an empty political slogan, completely dependent upon Hill’s anticipated economic depression for any real progress to be made.

Hill takes comfort from “the thousands of green activists who have a more fundamental view of capitalism”. He imagines a continuous process of realignment on the left/green axis. But quite how he intends to woo the greens is unclear. Putting it rather crudely, is this realignment going to be based on the left giving the greens the ‘right message’ – on propaganda alone – or is it going to be based on speaking to people’s experiences as they seek to implement locally-based strategies?

If the latter, then the role of the left might be to suggest what policies could help and to generalise the experiences, to argue that a process of expanding democratisation is crucial to maintaining progress. It is about making the links, but cannot be about luring people away from such activities, urging them to concentrate instead on the broader political project. Equally important, these initiatives can encourage people in wider society to participate, or at least to see that there is something of value in what is being done, that there are alternatives to the ‘free market’, that such efforts deserve support.

Here and now

Once you accept that local alternatives can be valuable in the here and now, rather than ‘after the revolution’, then the important question is what can we start asking of local government, the state and other institutions to develop and strengthen these processes? In particular, what is it reasonable to ask of Labour governments? How can they provide a framework for – and support, materially – local renewal?

The Australian example shows that there is a crucial role for ‘outside’ bodies in providing help. There are policies which can facilitate these processes, and forms of funding that can make a major difference to their chances of success. Naturally, working with the state and its agencies entails risks. The key is to insist on democratic accountability in whatever arrangements are made.

Yet on this Hill is silent. Indeed, this is the point where our paths most clearly diverge. He does go into detail, much of it interesting and useful, when considering the outlines of a socialist economy. He challenges traditional left thinking about planning and markets. The wealth of ideas that he offers here are, however, in stark contrast with the absence of a clear-cut strategy to achieve them. He examines co-operatives in Spain and in Japan which demonstrate their creative potential. He states that worker- and user-controlled co-operatives will form an essential part of a democratic socialist economy. Yet, until the class war has been ‘won’, until his ‘revolution’, they are effectively placed on the back burner.

Sadly, it is the political hack who comes to the fore. There will be a ‘day one’ of the revolution, he says, when the grip of the free market will be broken. Forgetting what he wrote earlier about the Tobin tax, he dismisses piecemeal reforms before the big day as being only an irritant to the capitalist system. His revolution is more an event than a complex process.

Unable to integrate his ideas about alternative economics into his political perspectives, Hill ends up subordinating the former to the latter. In so doing, he leaves a huge hole to be filled between the present and his future society. His answer is to plug it with a new socialist party.

Interestingly, he indicates that he is very weary of sectarianism on the left and hopes for a more open and honest way of proceeding in order to build this party. Here he has my sympathies but not my company.

He argues: “A new workers’ party with a left wing programme is needed to engage people – not those touched by direct action, but the population at large.” Such a party will support direct action but also be engaged in electoral politics to register its growing support. It cannot resemble “the small, centralised and sectarian caricatures of the past”. This must be a new mass party in which people with his outlook provide its revolutionary rather than its reformist wing.

Thus, he not only reinvents the Labour Party but he also sees his fellow thinkers as providing its left wing. He wants to build a new party in which the left has a better chance of winning this time round, a somewhat circuitous route to socialism!

This means that the many insights to be found in his account in relation to alternative economics become trapped by a convoluted political strategy. It seems that he wants to repeat history, to fight old battles in a new party. Being on the left is never easy, but being on the left with this kind of perspective seems to be particularly burdensome.

My hope is that he can find a way out of this political maze, that he can jettison yet more of his ideological baggage. It would be mutually beneficial to be able to share the journey with him.

Anti-Capitalism: The social economy alternative, by Chris Hill, is published by Spokesman (2002), priced £15.