It is in the news that millions of people around the world –inspired by a Swedish teenager so honest that looking at a picture of her will cure a headache—have taken to the streets demanding that something must be done. I will use this paper to offer an answer to the question what must be done: The basic cultural structures of the modern world must be transformed.
(This is a revised version of the TMS Editorial with same title published on 14 Oct 2019–to clarify and answer questions from readers.)
21 Oct 2019 – Today it is in the news that 906,000 hectares have burned in the Amazon forests so far in 2019. It is in the news that an even larger –although harder to determine- number of hectares have burned so far this year in African forests and savannahs. The media often mention that the fires of 2019 continue an ominous trend. There has been worldwide a steadily increasing loss of vegetation to flames that has been accelerating for several decades. The feedback loop is negative. Less vegetation means less rainfall means less vegetation.
It is in the news that millions of people around the world –inspired by a Swedish teenager so honest that looking at a picture of her will cure a headache—have taken to the streets demanding that something must be done. I will use this paper to offer an answer to the question what must be done: The basic cultural structures of the modern world must be transformed. I will not try to prove this thesis here. I will try to state clearly the thesis to be proven.
Walking back in time to 1990, when I wore a younger man’s clothes, I imagined I could contribute to saving the world by selling my car. The train of reasoning leading to my fantastic belief began more with nausea than with logic. Senator Richard Lugar of Indiana, where I was then living, was the Chair of the United States Senate Foreign Relations Committee. The first U.S. invasion of Iraq was about to begin. I read in a newspaper that Senator Lugar had threatened that if the French would not join in the invasion, then we would not share the petroleum with them. Gasping for air and trying not to vomit, I did a little research. I learned that the number of people in the world driving automobiles was then a little under one billion. The number of people living in extreme poverty was nearly equal. Now imagine that all the cars and all the poor people were lined up in pairs, with each car matched with one person whose goods and/or services had remained either unsold or sold for too little to live on.
Then in 1990 at the equilibrium point where supply equals demand leaving some people unemployed and some needs unmet (as Keynes might have put it), there was a certain number of extremely poor people, y, which was about a billion. That number was about equal to the number of people rich enough to own a car. Then if the pairs (x, y) where x is a car and y is a poor person were lined up, they would have formed a line stretching several times around the earth. The last x and the last y –as a close approximation– would have been located at the same place. If that place turned out to be over an ocean, then you would have to imagine that the car and the person were held above the waves by an angel or by a helicopter.
I reasoned that I could use the money I saved by selling my car and then walking, bicycling and using public transportation, to lift one person out of poverty. If I could explain the simple math to everyone else, then all other car owners would do the same. The outcome would be no private cars, no extreme poverty, less CO2 in the atmosphere, fewer wars, and (because people would walk more) fewer heart attacks.
Subsequently, when my mathematical model was tested using myself as a one-person empirical sample, the money saved by not driving a car proved to be enough to lift more than one person out of extreme poverty. But when the sample was enlarged it turned out that nobody else understood my math. Or if they did understand the math they preferred to continue driving while leaving in poverty the people they could have promoted to the lower middle class by walking and sharing.
Or –perhaps more likely—everyone else understood my math perfectly well. They would have given up their cars if they had believed that walking would save the world. But everyone else was smarter than I was. They always knew my reasoning was invalid. They always knew that the auto industry was indispensable to keep the economy going, and that long before advocates like me of the slogan ‘live simply, that others may simply live’ succeeded in shutting down most of its factories, dealerships, repair shops, service stations, insurance agencies, oil refineries, and so on, whatever it takes –a fascist coup if necessary—would be done to keep the automobile industry going. They knew from the beginning that the more people got out of poverty the more they would become drivers of cars. They also already knew more realistic solutions to the climate crisis. For example, all cars could be electric and non-polluting. All electricity generation could be non-polluting too. Electricity generation could be from renewable sources. The production of new green technologies could be made so labour-intensive and so profitable, that nobody would miss the demise of all the polluting industries.
Contrary to my 1990 fantasy of frugal peace, and contrary to other people’s perhaps more realistic plans for mass technological and economic conversion, the last forty years have brought little encouragement. While extreme poverty has declined, conventional automobile ownership has increased. The use of non-polluting technologies –here it must be mentioned that more are in the pipeline[i]— like electric cars and wind-generated electricity has increased; but as the human population has grown and economies have grown, worldwide pollution has increased even more. Bottomless violence and deceit and muddled thinking have gone baroque. The climate crisis has gotten worse. As we speak, many of the small gains of green policies are being erased by political movements led by figures like Trump and Bolsonaro. The Trumps and the Bolsonaros are supported by elites and by voting publics who view green policies as inimical to their economic interests.
Also, during those same forty years I and co-authors (hereafter ‘we’) have demonstrated in detail in numerous unread books, chapters in books, and papers that surviving the climate crisis (and other crises) requires the transformation of the basic cultural structure of the modern world.[ii] Not always in those exact words. Anything true can be said in more than one way—would you not agree?
Let me try to state in a few words why even assuming that the natural scientists and the inventors are succeeding in demonstrating that survival requires massive changes, and that massive changes are technically feasible, still nothing short of cultural transformation (also called social transformation) will save us. As I wrote above, stating is not proving. It is a start. It might motivate somebody to read some of our unread books.[iii]
God help me to be clear. So much depends on being able to communicate.
What is the basic cultural structure of the modern world?
In one word: Sales.
In two French words: séparation marchande.[iv]
The French phrase –literally ‘merchant separation’ or ‘commercial separation’—corresponds to what is sometimes called in English ‘the exchange relation’ which might also be called ‘the exchange non-relation,’ or ‘your problem is not my problem’ or ‘what’s in it for me?’ It corresponds to the point Adam Smith makes when he writes that to get our bread from our baker we appeal entirely to his interests and not at all to our needs or to any family or social or ethical ties that bind us; and to the similar point the Pie man makes when he says to Simple Simon, ‘Show me first your penny!’
Remember that twelve paragraphs above I identified the poor people with the people whose goods and/or services had remained either unsold or sold for too little to live on. I was relying on Keynes’ point that supply usually equals demand (so that everything supplied is sold and if more were supplied it would not be sold) not when all needs are met but when the needs of people with money and a desire to spend it have been met.[v]
Transposing to an ethical key, there can be a duty to work, or at least a duty to be willing to work, but there can be no duty to earn an income by working. Being employed requires finding someone able and willing to buy your work. There can be no duty to buy, hence no duty to employ, and hence no duty to be employed.
Given sales as the basic structure, history and logic tell us that over time, inevitably, investing in order to produce for sale for profit will become essential.[vi] It will become essential to ‘create employment.’ Without investment many (normally most) people’s physical needs will not be met. As happened in Chile in 1973, and as is happening in Venezuela now, ‘the economy comes to a standstill.’
As Michael Kalecki wrote: ‘Under a laisser-faire system the level of employment depends to a great extent on the so-called state of confidence. If this deteriorates, private investment declines, which results in a fall of output and employment (both directly and through the secondary effect of the fall in incomes upon consumption and investment). This gives to the capitalists a powerful indirect control over Government policy: everything which may shake the state of confidence must be carefully avoided because it would cause an economic crisis.’[vii]
The result is that whatever else happens, investors must be pleased. They can shut the system down for any reason or no reason. Jobs depend on them. Food depends on them. Normally (i.e. not in cases like those just mentioned where political motives are major factors) everything depends on sales being large enough at high enough prices to keep the motor that drives the system going. Some people call such a way of life a ‘regime of accumulation.’ This phrase has come to mean that everything about a culture, all its institutions and all its behaviour and beliefs and ideals, must be –whatever else they are—conducive to investors making profits.
This does not mean humans do not do other things that cause problems—like spending their free time having fun in ways that multiply the human population beyond the carrying capacity of the planet. Or like—as mentioned above—poor people when they stop being poor wanting to live like rich people, making ecological and other problems (like traffic) worse.
The (‘unbounded and realist’) perspective here proposed does not mean governments can always succeed in attracting all the investors they need to get the growth alleged to be necessary to create employment that they (misguidedly) want. No amount of sacrifice of social, financial and ecological objectives on the altar of the (false) God of growth guarantees that there will be growth, or that there will be employment, or that employment will bring with it dignity and security. Indeed, all governments are compelled (until thinking and institutions are transformed) to play a game only some governments can win. Even the winners only win some of the time. Each has 195 other governments competing with it.[viii] Usually all or most of the profitable business niches have already been found and occupied by someone else.
The greed of the rich, or some fraction of them, no doubt explains some of the persistence of untenable ideologies that (falsely) appear to serve their interests. Greed explains some of the concentration of wealth in their hands and some of the physical dependence of life on their decisions. But the main factor is not greed. It is structure. The necessities of life structurally depend on investing to produce for sale to customers who have money to buy. This is a fact about the rules of the game –namely the rules that govern sales. The cultural rules constitute the material positions that constitute the system.[ix] It is not a fact about psychology or about self-serving ideology or about original sin. Redistributing wealth, and other necessary changes, on the scale necessary to achieve governability to cope with today’s and tomorrow’s mass unemployment, global warming, and other existential crises, call for making the basic legal-cultural-social structure more susceptible to amendment in the light of physical facts.
In more detail: the reason why the main cause of inequality, exclusion, and paralysis in the face of climate change and other existential threats is structure, not greed, is this: The poor person gets a job (…the consumer finds a well-stocked supermarket, the government gets a tax base… etc.) only if the investor gets a profit. Therefore, people who already have money must end up with even more money, in order for the penniless to get anything.
Once the basic cultural (also called social) structure, the séparation marchande, is established, it is inevitable, as a matter of history and as a matter of logic, that life will come to depend on the confidence of investors. Inequality, exclusion and paralysis will set in. Of course, there have always been counter-currents existing alongside séparation marchande: mothers, neighbours, people marching to the beat of a different drummer, non-profit institutions, anarchist collectives, coops, governments of many kinds at many levels, and so on in endless variety. I am talking about markets –which Habermas called modernity’s primary institution,[x] about why they dominate us, why market phenomena (like capital flight) make it so hard to change property relations (which many have regarded as modernity’s primary institution and/or as identical with or inseparable from, markets) When push comes to shove (as in the Chilean and Venezuelan examples) when sales stop, for whatever proximate cause (including empty supermarket shelves with nothing on them), then society stops.
Greed is not the main issue. As Peter Drucker points out, even if the CEO of a company is an angel, who has no interest in personal gain, it is still the duty of the CEO to make sure that the company makes a profit.[xi] The CEO, like everyone else, operates inside what Max Weber called the ‘iron cage’ of capitalism. (Drucker thought her or his salary should never be more than 20 times that of the lowest paid employee.)
Now, some of the investors are peanuts. They own a one-bedroom apartment they rent out to students. Others are moguls. They have huge holdings parked in trust funds in tax havens that neither tax collectors nor academic researchers can trace. It is the moguls who gobble up the main juicy investment opportunities. As Thomas Piketty shows, confirming these theoretical reflections with facts, the largest fortunes, as far as can be discerned with the available evidence, are growing at around 7% per year. Smaller fortunes grow at slower rates. Meanwhile, most governments and most people sink into debt.[xii] This is the normal pattern, given the basic cultural structure. The times and places where tendencies toward greater equality have set in are exceptions due to exceptional causes, mainly wars.[xiii]
The necessity for transformation means that it must become possible to make rational and ethical decisions about climate change, mass unemployment, growing inequality, making social human rights realities instead of empty promises, and so on. Now, as things stand today, rational and ethical decisions –whether they are about meeting the needs of the poor or about switching to sustainable technologies or anything else– cannot be made and implemented without first doing whatever it takes to please investors. Therefore, they cannot be made at all. Until further notice there is no rational and ethical set of public policies that coincides with what must be done to try to persuade investors that investment in country A will be profitable, and indeed more profitable than investment elsewhere. Every country simultaneously winning the competition to achieve full employment by being a haven capital flees to from elsewhere (as Switzerland and Singapore have sometimes done) is a mathematical impossibility. What they had to do to win was what capital found most profitable. Capital finding it most profitable (compared to all its other opportunities) only rarely coincides with paying high wages to install green technologies that will continue to be labour intensive at high wages after they are installed. Every country always outbidding all the others to attract capital, and always doing it offering ways to make higher profits at less risk using labour intensive green technologies not just in the instalment phase but permanently, meanwhile leaving the carbon in the ground is a non-starter. It is a non-starter assuming the basic structure we now have, one where the starter for any mainstream economic activity is investment expecting future profits from sales.[xiv]
Therefore, surviving the climate crisis, or any life-threatening crisis, requires transforming the basic cultural structure of the modern world Transforming does not mean destroying. It does mean, as José Luis Coraggio says, ‘resignifying.’ [xv] Change meanings, and therefore change behaviours, to make institutions function to facilitate meeting all the needs on Maslow’s list in harmony with nature. This process can be called ‘ethical construction,’ remembering that in Aristotle’s ethics, arete (often translated as ‘virtue’ or ‘excellence’) means performing one’s functions well. It can also be called value-centred social and emotional education. The same philosopher said that a well-educated person finds pleasure in virtue (justice, for example) while a badly educated person finds pleasure in vice (greed for example). I would add that a well-educated person understands that greed is not the main problem. She or he understands cultural structure and why it must be changed. A badly educated person might believe mainstream economics.[xvi]
But is it really possible for humanity to escape from what Max Weber called the iron cage of modernity –thinking of modernity as a trap peoples with traditional values can enter but cannot exit? Is it possible for human beings to organize sustainable dignified livelihoods for all, escaping the constraints imposed by today’s excessive dependence on investment for production for sale for profit? Well, they did so; they organized the physical means of subsistence (to cite just two examples) by reciprocity and redistribution, for more than 95% of the time homo sapiens has been on the planet. Humans have survived and sometimes flourished in cultures with myriad basic cultural structures too numerous to count. Relying more on reciprocity and redistribution and less on séparation marchande is not leaping into the unknown. It is going back to the tried and true. It is going back to the tried and true with the modern benefit of incredibly productive new green technologies already in existence and/or already on the way.
Going back to the tried and true, acknowledging that new-fangled notions like doing everything for money do not work, also showcases the indispensable roles reciprocity and redistribution still play today; as the Republic of Ecuador showcased them in its new Constitution by listing reciprocity, redistribution, and customary practices alongside markets and planning as five guiding principles of a plural economy. Some business leaders today are going back to the tried and true today. They are resignifying themselves, as Gandhi suggested (updating dharma), as trustees; or as Robert Greenleaf suggested (in a book published by a press named after the Apostle Paul) as servant leaders. Their mission and purpose is to create social surplus that can be transferred to cover social deficits.[xvii] The list of growth points– of social innovations for the common good—is an endless list. As Elinor Ostrom says, what is possible in practice must be possible in theory.
Let me end with a question, an answer, two questions about the answer, and an invitation to participate in a culture-shift. The question: Assuming it is true that today’s basic cultural structure —the dependence of life on sales, which in turn makes life depend on investments expecting profits from sales– trap humanity in regimes of accumulation, where the necessity of pleasing investors constrains everything else, then how do we transform this basic cultural structure? The answer: By building communities of solidarity. Two questions about the answer: How do we build community? How do we build solidarity? An invitation: Consider practicing the answer Gavin Andersson proposes: By aligning across sectors to work together for the common good we build community and solidarity. By building community and solidarity, we escape from the trap we are in.
Greta Thunberg has said that to keep the carbon in the ground and to keep global warming from going past or beyond the 1.5 Celsius mark we need to change the rules and change the system.[xviii] But what new rules and what new system or systems would accomplish such goals? This is where the idea of unbounded organization comes in. Starting with the cultures that exist –which is the only place we can start— we work with cultural zones of proximal development (growth points) through mission-driven organizations. The bottom line is ethical: meeting needs because they are needs. That is what community means. That is what solidarity means. It is what a care ethic means. I cannot say more here. I have tried as hard as I can to communicate clearly what it means to say that the basic cultural structure leads to physical dependence on the confidence of investors. It is unreliable. It is ungovernable. It is on a collision course with nature.
[i] Peter H. Diamandis and Steven Kotler,. Abundance: The Future Is Better Than You Think. New York: Free Press, 2012.
[ii] For example, volume two, letters 26-50 of my Letters from Quebec. San Francisco and London: International Scholars Press, 1995 is titled ‘Methods for Transforming the Structures of the Modern World’.
[iii] . One could also give many examples of non-Marxists (like Paul Hawken) and Marxists (like Fred Bellamy) and feminists (like Charlene Spretnak) and theologians (like Tom Berry) and philosophers (like Arne Naess) who also claim that nothing less than cultural and social transformation will save life, but give different reasons why change is needed and arrive at different answers concerning how to achieve change.
[iv] André Orléan. L’Empire de la valeur : refonder l’économie. Paris: Seuil, 2011. The expression is introduced at Position 328 and then woven into an account that expresses better than I can how the relationships –and absence of relationships—it describes are fundamental for economic theory and for economic society.
[v] E.g. General Theory, p. 209. there agreeing with Hobson
[vi] This point is explained in more detail in Howard Richards. Moral (and Ethical) Realism. Journal of Critical Realism. Volume 18 (2019) pp. 285-302.
[vii] Michael Kalecki. Political Aspects of Full Employment. Political Quarterly. Volume 14. (1943) Pp.322-331. P.325. Paul Krugman makes a similar point in his The Return of Depression Economics. New York: W.W Norton, 2009. P.111-114.
[viii] Jeffrey Winters, Power in Motion: Capital Mobility and the Indonesian State. Ithaca: Cornell University Press, 1996.
[ix] Douglas Porpora, Cultural Rules and Material Relations. Social Theory Vol. 11 (1993) pp. 212-229.
[x] Jurgen Habermas, The Legitimation Crisis. Boston: Beacon Press, 1975. Karl Polanyi called modern society not capitalism but ‘market society’. Any number of mainstream scholars like Alex Inkeles have made up any number of lists of indicators defining the variable ‘modernity.’
[xi] Peter Drucker Business Objectives and Survival Needs. Journal of Business. Vol. 31 (1958) pp. 81-90.
[xii] Randall Wray has shown that the private sector as a whole can only make a profit if the public sector as a whole goes farther into debt, reasoning on the basis of accounting identities. Modern Money Theory. Basingstoke: Palgrave Macmillan, 2015. Check out Steve Keen’s debt watch and other debt watches and debt clocks on Google.
[xiii] Thomas Piketty, Capital in the Twenty-First Century. Cambridge MA: Harvard University Press, 2014.
[xiv] The mathematical contradictions involved in keeping the system running, without even thinking of meeting human needs without ecological damage, were clearly stated in 1913 by Rosa Luxemburg. Her Accumulation of Capital is easily found on Internet.
[xvi] Steve Keen, Debunking Economics. London: Zed Books, 2013. Keen’s findings are kept up to date on his website. https://www.ineteconomics.org
[xvii] I Corinthians 4:6; Luke 12:48; Howard Richards and Joanna Swanger, Gandhi and the Future of Economics. Lake Oswego OR. Dignity Press, 2013; http://www.consciouscapitalism.org
[xviii] In her TED talk of January 28, 2019 and repeatedly.