In Mason’s view, the 2008 crisis made clear the folly of neoliberalism and the limits of capitalism itself.
He provides these lessons:
- The rich will get richer.
Today’s neoliberal regime serves the needs of the richest 1%. Powerful corporations drive this system, and the austerity policies of the International Monetary Fund, the World Bank and the World Trade Organization prop it up. Neoliberalism rests on the idea that self-interest is good, regulation is bad and inequality is an inevitable by-product of humanity’s inherent ruthlessness. Anyone who questions neoliberalism must confront the old saw that the only alternative is Soviet-style socialism.
- Technology threatens the building blocks of capitalism.
Like neoliberalism, capitalism is on shaky ground, Mason argues. For all of capitalism’s accomplishments – and it has many, like plentiful food and widely available health care – it is getting old. While global capitalism brings iPhones and fashionable, bargain-priced clothes, it also spawns rogue traders on Wall Street and factory deaths in Bangladesh. People see capitalism as the apex predator – the top of the food chain – of economic systems, but even capitalism has a lifecycle, one that eventually must end. As a flexible, ever-changing organism, capitalism learns from and conforms to the world around it. Information technology presents capitalism with a foe that defies its ability to adapt. Tech threatens capitalism’s foundations – the concepts of markets, ownership, and strongly linked work and wages.
- Work should be collaborative.
A main thrust of Mason’s argument is that employees need a better deal. Over the past two decades, the corporate model of employment relied on unskilled workers in low-paying positions. Reversing this trend requires a new era of collaborative workplace arrangements that drive the greater social good and not, argues Mason, profits and ruthless competition. Worker co-ops could create high-wage positions. Such co-ops have a utopian ring and typically fail due to a lack of capital and a limited ability to cut wages or reduce payroll. But some do work: The Spanish co-op Mondragon succeeded by establishing banking relationships with local institutions and following an adaptable business model that allows it to move workers from one industry to another as demand shifts.
Ideally, large companies would shift from a focus on “financial exploitation” to a more worker-friendly model. However, the collaborative model cannot realistically thrive without government regulation and incentives. Regulators would need to make it difficult for employers to launch low-wage businesses and easier to establish companies that pay a living wage. Ultimately, the public sector must outlaw certain private-sector business models. That seems like a confiscatory policy, Mason admits, but he counters that governments once took criticism for such contentious moves as ending slavery and banning child labor.
- Government must crack down on monopolies.
Mason believes that, under neoliberalism, governments have become too tolerant of monopolies, capitalism’s default response to competition and falling prices. In some cases, like a water utility, a monopoly might make sense. But, Mason warns, if monopolies exist, they must operate as publicly owned, nonprofit entities. Over 30 years of neoliberalism, states have given public monopolies to the private sector, shifting wealth from consumers to investors. In a postcapitalist world, the public sector would take back these private monopolies and force them to provide services at cost. As part of the reversal of the privatization of public wealth, drug companies could no longer hold patents on drugs created via state-funded research. Such steps would end monopolies’ ability to gouge consumers. Such sweeping wealth redistribution would be “vastly more effective than raising real wages,” Mason writes.
- A postcapitalist economy would embrace green energy.
Establishing a postcapitalist economy and creating a low-carbon energy system are inextricably linked. “The attempt to create a nonmarket economy and a low-carbon system are clearly interdependent,” Mason asserts. Due to carbon emissions, the world teeters on the brink of a climate catastrophe. Only immediate action can mitigate the damage, but the market stands in the way. Corporations don’t want to give up their profits, and consumers don’t want to relinquish cheap energy. But when the private sector can’t or won’t do the job, the public sector must act – despite howls of protest from Congress. Mason’s cure: The public sector should take over the wholesale energy market. His rationale? While the private sector has a profit incentive to burn carbon, the public sector could protect the Earth from harm. In every phase of the economy, governments should reward energy-efficient strategies and punish inefficient ones. A widespread green effort would also shape the future design of buildings and transportation networks.
- The financial system should serve the public interest.
Mason repeatedly – and accurately – claims that financial markets have grown increasingly complex as the velocity of money becomes dizzyingly swift. But the rest of his argument is more open to debate. While complex financial instruments can continue to exist in a postcapitalist world, they should face heavy regulation. He maintains that the private sector should share in the risks of these instruments and not only in their rewards. “Morally, if the risks are socialized, then the rewards should be socialized, too,” he writes. Countries should start banking reform by nationalizing central banks and setting clear targets for growth and inflation. Next, banking regulators should remake banking systems so that financial institutions organize as nonprofit utilities with capped profits. Small to medium-sized banks, credit unions and peer-to-peer lenders would meet basic lending and liquidity needs. The state would act as a more comprehensive provider of financial services and as the lender of last resort. Investment banking and other complicated financial activities could continue, but only in a separate and tightly regulated space.
- Government should enact a universal basic income.
A basic income would pay a subsistence wage to everyone simply because they’re alive. “Why pay people just to exist?” Mason asks. “Because we need to radically accelerate technological progress.”
The basic income would replace unemployment insurance but would achieve the same result. With automation threatening nearly half of all jobs in the advanced economies, the basic income would act as an insurance policy against massive unemployment. Under the Mason plan, the basic income would go to everyone, with no conditions. Other types of welfare, such as family payments and disability benefits, could continue under this scheme. Without a basic income, many people in modern labor markets would become part of “an enormously expanded precariat.” With a basic income, workers would no longer have to take stressful or demeaning jobs. They could volunteer, learn new technical skills or do nothing.
A basic income would be costly: If the UK’s basic income were £6,000 [$8,060] each for 51 million adults, the annual budget of £306 billion would be twice its current welfare budget. If the minimum wage were £18,000, individuals would achieve an obvious advantage by going to work. But if they were unable to or chose not to work, the basic income would allow them to avoid stigma and starvation.