In his new book, the economist imagines a future transformed by Covid-19 and sketches a daring vision of democratic socialism
‘On 12 August, the day the news broke that the British economy had suffered its greatest slump ever, the London Stock Exchange jumped by more than 2%’. Photograph: NurPhoto/Getty Images
When Margaret Thatcher coined “Tina” – her 1980s dictum that “There is no alternative” – I was incensed because, deep down, I felt she had a point: the left had neither a credible nor a desirable alternative to capitalism.
Leftists excel at pinpointing what is wrong with capitalism. We wax lyrical about the possibility of some “other” world in which one contributes according to one’s capacities and obtains according to one’s needs. But, when pushed to describe a fully fledged alternative to contemporary capitalism, for many decades we have oscillated between the ugly (a Soviet-like barracks socialism) and the tired (a social democracy that financialised globalisation has rendered infeasible).
During the 1980s, I participated in many debates in pubs, universities and town halls whose stated purpose was to organise resistance to Thatcherism. I remember my guilty thought every time I heard Maggie speak: “If only we had a leader like her!” I was, of course, under no illusion: Thatcher’s programme was despotic, antisocial and an economic cul-de-sac. But, unlike our side, she understood that we lived in a revolutionary moment. The postwar class war armistice was over. If we wanted to defend the weak, we could not afford to be defensive. We needed to advocate as she did: out with the old system, in with a brand new one. Not Maggie’s dystopian one, but a brand new one nevertheless.
My critique of capitalism meant nothing unless I could answer a pressing question: 'What’s the alternative?'
Alas, our lot had no vision of a new system. Instead, we were in the business of bandaging corpses while Thatcher was digging graves to clear the way for her spanking new spiv capitalism. Even when we were putting up a splendid fight in defence of communities that deserved defending, our causes screamed “anachronism” – fighting to preserve dirty coal-fired power stations or the right of male rightwing trade unionists to reach sordid deals behind closed doors with the likes of Robert Maxwell and Rupert Murdoch.
Just as when the Soviet Union collapsed in 1991, we on the left – social democrats, Keynesians and Marxists alike – had the sense we would live the rest of our days as history’s losers, so in 2008, with Lehman’s collapse, those living the ideology of neoliberalism saw history erupt with similar soul-destroying force. Some years later, surveillance capitalism forced tech-evangelists, who thought they had seen in the internet an irresistible global democratic force, also to shed their illusions.
Two years ago I decided we need a blueprint, a sense of how democratic socialism could work today, with our current technologies and despite our human failings. My reluctance to attempt such an undertaking was immense. Two people helped me overcome it. One is Danae Stratou, my partner. From the week we first met, she has been telling me that my critique of capitalism meant nothing unless I could answer her pressing question: “What’s the alternative? And precisely how would things – like money, companies and housing – work?”
The second, and most unlikely, influence was Paschal Donohoe, Ireland’s finance minister and president of the Eurogroup. A political opponent who thought little of me as a finance minister (a mutual assessment), he was kind enough to write a generous review of an earlier book of mine. While Donohoe liked my account of capitalism he thought the book’s ending, in which I tried to sketch some features of a postcapitalist society, was “most disappointing”. He was right, I thought. So I decided to write Another Now.
In a bid to incorporate into my socialist blueprint different, often clashing, perspectives I decided to conjure up three complex characters whose dialogues would narrate the story – each representing different parts of my thinking: a Marxist-feminist, a libertarian ex-banker and a maverick technologist. Their disagreements regarding “our” capitalism provide the background against which my socialist blueprint is projected – and assessed.
Capitalism took off in earnest when electromagnetism met share markets at the end of the 19th century. Their coupling gave rise to networked megafirms, such as Edison, that produced everything from power stations to lightbulbs. To finance the huge undertaking, and the massive trade in their shares, the need arose for megabanks. By the early 1920s financialised capitalism roared, before the whole juggernaut crashed in 1929.
Our current decade began with another coupling that seems to be propelling history at dizzying velocity: the one between the enormous bubble with which states have been refloating the financial sector since 2008, and Covid-19. Evidence is not hard to spot. On 12 August, the day the news broke that the British economy had suffered its greatest slump ever, the London Stock Exchange jumped by more than 2%. Nothing comparable has ever occurred. Financial capitalism seems finally to have decoupled from the underlying economy.
Another Now begins in the late 1970s, straddles the crises of 2008 and 2020 but also sketches out an imaginary future, and concludes in 2036. There is a moment in the story, on a Sunday evening in November 2025 to be precise, when my characters try to make sense of their circumstances by looking back to the events of 2020. The first thing they note is how drastically the lockdown changed people’s perception of politics.
Nationalist leaders offered demoralised citizens a trade: authoritarian powers in return for protection from a lethal virus
Before 2020, politics seemed almost like a game, but with Covid came the realisation that governments everywhere possessed immense powers. The virus brought the 24-hour curfew, the closure of pubs, the ban on walking through parks, the suspension of sport, the emptying of theatres, the silencing of music venues. All notions of a minimal state mindful of its limits and eager to cede power to individuals went out of the window.
Many salivated at this show of raw state power. Even free-marketeers, who had spent their lives shouting down any suggestion of even the most modest boost in public spending, demanded the sort of state control of the economy not seen since Leonid Brezhnev was running the Kremlin. Across the world, the state funded private firms’ wage bills, renationalised utilities and took shares in airlines, car makers, even banks. From the first week of lockdown, the pandemic stripped away the veneer of politics to reveal the boorish reality underneath: that some people have the power to tell the rest what to do.
The massive government interventions misled naive leftists into the daydream that revived state power would prove a force for good. They forgot what Lenin had once said: politics is about who does what to whom. They allowed themselves to hope that something good might transpire if the same elites that had hitherto condemned so many to untold indignities were handed immeasurable power.
It was the poorer and the browner people who suffered most from the virus. Why? Their poverty had been caused by their disempowerment. It aged them faster. And it made them more vulnerable to disease. Meanwhile, big business, always reliant on the state to impose and enforce the monopolies on which it thrives, boosted its privileged position.
The Amazons of this world flourished, naturally. The lethal emissions that had temporarily subsided returned to choke the atmosphere. Instead of international cooperation, borders went up and the shutters came down. Nationalist leaders offered demoralised citizens a simple trade: authoritarian powers in return for protection from a lethal virus – and scheming dissidents.
If cathedrals were the middle ages’ architectural legacy, the 2020s will be remembered for electrified fences and flocks of buzzing drones. Finance and nationalism, already on the rise before 2020, were the clear winners. The great strength of the new fascists was that, unlike their forerunners a century ago, they don’t need to wear brown shirts or even enter government to gain power. The panicking establishment parties – the neoliberals and social democrats – have been falling over themselves to do their job for them through the power of big tech.
To stop new outbreaks governments tracked our every move with fancy apps and fashionable bracelets. Systems designed to monitor coughs now also monitored laughs. They made earlier organisations specialising in surveillance and “behaviour modification”, like the infamous KGB and Cambridge Analytica, seem positively neolithic.
What was the moment when humanity lost the plot? Was it 1991? 2008? Or did we still have a chance in 2020? Like epiphanies, the fork-in-the-road theory of history is a convenient lie. The truth is we face a fork-in-the-road every day of our lives.
Suppose we had seized the 2008 moment to stage a peaceful hi-tech revolution that led to a postcapitalist economic democracy. What would it be like? To be desirable, it would feature markets for goods and services since the alternative – a Soviet-type rationing system that vests arbitrary power in the ugliest of bureaucrats – is too dreary for words. But to be crisis-proof, there is one market that market socialism cannot afford to feature: the labour market. Why? Because, once labour time has a rental price, the market mechanism inexorably pushes it down while commodifying every aspect of work (and, in the age of Facebook, our leisure too).
Can an advanced economy function without labour markets? Of course it can. Consider the principle of one-employee-one-share-one-vote underpinning a system that, in Another Now, I call corpo-syndicalism. Amending corporate law so as to turn every employee into an equal (though not equally remunerated) partner is as unimaginably radical today as universal suffrage was in the 19th century. In my blueprint, central banks provide every adult with a free bank account into which a fixed stipend (called universal basic dividend) is credited monthly. As everyone uses their central bank account to make domestic payments, most of the money minted by the central bank is transferred within its ledger. Additionally, the central bank grants all newborns a trust fund, to be used when they grow up.
People receive two types of income: the dividends credited into their central bank account and earnings from working in a corpo-syndicalist company. Neither are taxed, as there are no income or sales taxes. Instead, two types of taxes fund the government: a 5% tax on the raw revenues of the corpo-syndicalist firms; and proceeds from leasing land (which belongs in its entirety to the community) for private, time-limited, use.
Once share markets have disappeared, the need for gargantuan debt to fund mergers and acquisitions evaporates – along with commercial finance
When it comes to international trade and payments, Another Now features an innovative global financial system that continually transfers wealth to the global south, while also preventing imbalances from causing strife and crises. All trade and all money movements between different monetary jurisdictions (eg the UK and the eurozone or the US) are denominated in a new digital accounting unit, called the Kosmos. If the Kosmos value of a country’s imports exceeds its exports, it is charged a levy in proportion to the trade deficit. But, equally, if a country’s exports exceed its imports, it is also charged the levy. Another levy is charged to a country’s Kosmos account whenever too much money moves too quickly out of, or into, the country – a surge levy of sorts that taxes the speculative money movements that do such damage to developing countries. All these levies end up as direct green investments in the global south.
But it is the granting of a single non-tradeable share to each employee-partner that holds the key to this economy. By granting employee-partners the right to vote in the corporation’s general assemblies, an idea proposed by the early anarcho-syndicalists, the distinction between wages and profits is terminated and democracy, at last, enters the workplace.
From a firm’s senior engineers and key strategic thinkers to its secretaries and janitors, everyone receives a basic wage plus a bonus that is decided collectively. Since the one-employee-one-vote rule favours smaller decision-making units, corpo-syndicalism causes conglomerates voluntarily to break up into smaller companies, thus reviving market competition. Even more strikingly, share markets vanish completely since shares, like IDs and library cards, are now non-tradeable. Once share markets have disappeared, the need for gargantuan debt to fund mergers and acquisitions evaporates – along with commercial finance. And given that the Central Bank provides everyone with a free bank account, private banking shrinks into utter insignificance.
Some of the thornier issues I had to address in writing Another Now, to ensure its consistency with a fully democratised society, included: the fear that powerful people will manipulate elections even under market socialism; the stubborn refusal of patriarchy to die; gender and sexual politics; the funding of the green transition; borders and migration; a bill of digital rights and so on.
Writing this as a manual would have been unbearable. It would have forced me to pretend that I have taken sides in arguments that remain unresolved in my head – often in my heart. I, therefore, owe an immense debt of gratitude to my spirited characters Iris, Eva and Costa. Above all else, they allowed me seriously to ponder the hardest of questions: once we have conceived of a feasible socialism that blasts Thatcher’s Tina out of the water, what must we do, and how far are we willing to go, to bring it about?
Another Now by Yanis Varoufakis is published by Bodley Head. To order a copy go to guardianbookshop.com. Delivery charges may apply.