Subtitled “A Guide To Our Future”, Postcapitalism is a welcome, albeit flawed, addition to the debate on the future of capitalism, what a socialist society might look like and how to achieve it. Steve Dobbs reviews Paul Mason’s latest book.

At a Glance

The basic theme of the book is that capitalism in its current form, neoliberalism, has exhausted itself. Mason defines neoliberalism as a highly financialised capitalism, where fiat money and credit/debt purvey most aspects of everyday life (such as mortgages, payday loans etc). Capitalists chase the cheapest labour and raw materials around the world to exploit, leading to globalised supply chains and the unequal relationships between the advanced and the developing countries. All this, he says, has been enabled by the development of computers and Information Technology (IT).

The 2008 economic crash was a turning point for neoliberalism and showed its instability and temporary character. Since then, economic growth has been at a snail’s pace alongside ever increasing inequality. Civil unrest and wars are becoming increasingly frequent. Another economic crash could send the world over the brink.

Yet the beginnings of a new collaborative mode of production, based on freedom of information/data and automation, have been growing within the womb of neoliberalism. This new system needs to be nurtured through a variety of policies as a way out of this blind alley. In turn, this will gradually give way to a new society where work is increasingly automated and capitalist relations are phased out, giving people the time and resources to pursue whatever they choose in this new post-capitalist society.

Information Economy

One of the key tenants of Mason’s theory is “that an information economy may not be compatible with a market economy” (p25).  This point is elaborated in Part II of the book:

“Since the mid-1990s, a revolution in the way we process, store and communicate information has created the beginnings of a network economy. This has started to corrode the traditional property relations of capitalism [.] It corrodes the price mechanism for digital goods … by pushing the cost of reproducing information goods towards zero.”  (p142)

Mason cites the example of Wikipedia, where modern IT has allowed tens of thousands of volunteer collaborators to create the free online encyclopaedia. This has disrupted, and in many ways decimated, the traditional encyclopaedia industry, taking the realm of encyclopaedic knowledge out of the capital domain and placing it into the commons.

But this is not a process that is either new or unique to IT. For example, the publicly owned British National Health Service, which provides a service free at the point of use, is so pervasive that it prevents, or at least severely limits, the expansion of a market in private healthcare in the UK (exluding the internal privatisation of the NHS).

However, in the same way that the NHS is funded through general taxation, the maintenance of Wikipedia (staff, infrastructure etc) also has to be funded from somewhere. It does this through raising private donations, the majority of which are small donations from workers. Indirectly, then, Wikipedia, like the NHS, is still reliant on the production of capital value. Furthermore, the computers they use are manufactured in capitalist factories. The offices they sit in are built by capitalist property developers. The staff that maintain Wikipedia sell a commodity, their labour-power, to the Wikimedia Foundation. It therefore seems strange to declare the ‘network economy’ as a new mode of production, given its reliance on capitalist commodity production.

Declining Value, Rising Profits?

Mason correctly recognises that capital is self-expanding value. For example, industrial capitalists seek to expand their capital by expanding the production and sale of their commodities. The profit they gain can then be invested in additional or new technology (constant capital), increasing the productivity of the workforce. This allows more commodities to be produced in the same period of time, but it also reduces the value of the commodities produced because they embody less labour-time. There is a tendency for the value of commodities to decline over time as productivity increases, along with diminishing returns on investment (profit rates) since only human labour-power is the source of new value (profit) . “There is, as Marx suggested, a process whereby labour is expelled [from production] by machinery; the result is a tendency for the profit-rate to fall.”

Unfortunately, Mason has a completely contradictory approach to these phenomena. He approvingly quotes the French economist Michel Husson who “argues, correctly, that neoliberalism ‘solves’ the problem of profitability – for both individual firms (by suppressing labour costs) and for the system as a whole (by massively expanding financial profits).” (p71)

With regards to the first point, it is true that reducing wages can work as a counter-tendency to the falling rate of profit, although not indefinitely. However, UK real wages did not fall during the bulk of the “neoliberal” period, but only after the 2008 crisis. What happened prior to 2008 is that growth in wages slowed down, giving the relative impression of falling wages (source: An Examination of Falling Real Wages, ONS).

It is odd that Paul Mason cites Husson because he later approves of the Temporal Single Systems Interpretation (TSSI) of Marx’s Capital (see p56), even though the main proponents of TSSI such as Andrew Kliman and Alan Freeman reject Husson’s method for measuring the rate of profit and show how “neoliberalism” did not restore profit rates in the US or the UK! (See, for example, Andrew Kliman’s The Failure of Capitalist Production and Alan Freeman’s The Profit Rate In the Presence of Financial Markets: A Necessary Correction)


If, as Mason claims, profit rates are high, why is capital investment so low? Didn’t Marx say that the rate of profit was the “motive force of capitalist production”? (source: Marx, Capital volume 3 Chapter 15).

To which Mason retorts “[T]here is a fairly clear explanation: in the neoliberal system, firms use profits to pay dividends rather than to reinvest. And in conditions of financial stress – obvious after the Asian crisis of 1997 – they use profits to build up cash reserves as a buffer against a credit crunch. They also relentlessly pay down debt, and in the good times buy back shares as a kind of windfall profit distribution to their financial owners.” (p71)

Mason’s explanation is superficial and baseless. During the “neoliberal” period, productive investment did not decline because profits were diverted to pay dividends. In actual fact, “U.S. corporations’ net investment in fixed productive assets constituted a slightly larger percentage of their profit during the 1981-2001 period than it did between 1947 and 1980” (source: Andrew Kliman, The Failure of Capitalist Production, p91)

The rate of investment did not fall because profits were diverted away from investment, but because the rate of profit fell: “[T]he rate of accumulation of U.S. corporations has indeed tracked the rate of profit quite closely during the last four decades, in the sense that both rates fell and in the sense that movements in the rate of profit almost always preceded movements in the rate of accumulation by one or more years… variations in the rate of profit account for 83 percent of the variations in the rate of accumulation of the following year.” (source: Andrew Kliman, The Failure of Capitalist Production, p90)

Neither is it quite possible to square the notion that corporations are “relentlessly” paying down debt, given that corporate debt has continuously risen during the “neoliberal” period (source: M Roberts, Debt Matters)

The main problem with Mason’s “analysis” is that, for all his citations of Marx, he does not understand the fundamental concept of value and how this relates to credit in the financial system. In the UK, 97% of money is not created to represent the value of commodities sold, but as credit/debt by the banks. Mason recognises this “financialisation” of aspects of modern life but he fails to apply a Marxist analysis.

In the topsy-turvy world of banking, customer savings and deposits are treated as liabilities. A bank’s assets are the loans and various financial instruments they hold that supply them with a regular stream of income. When a bank loans to a client, it creates credit-money for the client which must eventually be paid back with interest. Whether the client is a capitalist or a worker, the bank appropriates part of the value that was due to be received by their client as either wages or profit. For the bank, this debt is a claim on future value production. The bank assumes that this debt will be paid off, and so treats the accumulation of these debt claims as the same as accumulation of capital. However, there is one crucial difference. The debt claims have no value in themselves as no commodity was produced– they are promises of future value.

If future value production looks rosy (as with a rising rate of profit), then these debts can eventually be paid off and the banks make a profit. If, however, the rate of value production (the rate of profit) is declining, then these debts become harder to pay off. More debt has to be accumulated in order to pay off the old debt, and so the debt exponentially increases. This is exactly what has been happening during the “neoliberal” period.

Divergence In Value and Price

“For a thing to be sold, it simply has to be capable of being monopolized and alienated.” (Marx, Capital volume 3, p772)

It is the Marxist analysis of credit-money and financial assets that shows how in fact commodities can simultaneously have zero value and command trillions of dollars on financial markets without the mechanics of capitalism breaking down. This is what really blows the foundations of Mason’s postcapitalism sky high: the fact that price can diverge from value. Commodities with zero or near-zero value can have substantial prices because of the private monopoly of the means of production, distribution and exchange. Intellectual property rights are used to monopolise and hence capitalise (price) information. Rent can then be extracted from users of said information via licence fees and legal contracts enforced by the state. This is why Mason’s idea of a “revolutionary reformis[t]” transition to postcapitalism is so utopian. The capitalist state is not a neutral body that can simply be controlled by a left wing parliament, but a well-oiled machine that safeguards the interests of the ruling class through its various appendages. As Marx noted, one of the lessons from the short-lived Paris Commune of 1871 was that “the working class cannot simply lay hold of the ready-made state machinery and wield it for its own purposes” (source: Marx, Civil War In France).

To overcome the private monopoly on capitalised information, the capitalist state must be “smashed” and replaced with a workers’ state (see Lenin, State and Revolution) and the major corporations brought into state ownership under workers’ control.

Socialist Economic Planning

But throughout Postcapitalism, Mason rejects the notion of a workers’ socialist revolution:  “In the old socialist project, the state takes over the market, runs it in favour of the poor instead of the rich, then moves key areas of production out of the market and into a planned economy. The one time it was tried, in Russia after 1917, it didn’t work.” (p xvi).

So there we go. Socialism was tried once in a semi-feudal country nearly a century ago, it didn’t work, and now it’s a “dead question” (p xvi) for Mason.  In reality, the aim of the Russian Revolution led by Lenin, Trotsky and the Bolsheviks was to detonate the world socialist revolution. They knew that Russia was too under-developed and needed international solidarity from the workers in the advanced countries. The best they could hope for in Russia was a state-managed capitalism whilst they held out for successful revolutions in countries like Germany, France and Britain. Unfortunately, for various reasons these revolutions failed and Russia was left isolated, which paved the way for Stalin and his conservative ideology and totalitarian practice of “socialism in one country”. As an ex-member of a Trotskyist organisation, Mason should really know this.

Mason rejects any notion of socialist economic planning, and derides academics Cockshott and Cottrell as “cyber-stalinists” for proposing the feasibility of a socialist economic plan calculated by super-computers. Mason’s criticisms becomes increasingly bizarre: “[Cockshott and Cottrell] show that to plan an early 21st century developed economy, it would have to be stripped of its complexity, see finance removed completely, and have radical behavioural change enforced at the level of consumption, workplace and democracy and investment.”(p233)

But what Mason criticises is exactly how a socialist economy would operate. Rather than having hundreds of near-identical competing products (such as dishwasher powders or flat-screen televisions), a socialist society would rationalise the vast array of goods so that a smaller selection of scientifically proven and superior products are offered, removing poor quality goods and reducing “complexity” at the same time. Rival companies spending huge budgets on wasteful marketing would be eliminated, freeing up people and resources for more socially useful and fulfilling work (and indeed leisure time). As Marx outlined, a socialist society would move to replace money with a system of labour-tokens (or ‘certificates’ as Marx called them in Critique of the Gotha Programme), which would not be exchangeable between people, hence preventing the sale of labour-power as a commodity and the restoration of capitalist exploitation. Naturally, this would involve having the financial system “removed completely” in the monetary sense, although bank accounts would still exist to track the credits and debits of labour-tokens.

Mason’s flimsy response to this is that Trotsky and Preobrezhensky perceived the need for money and markets to exist. Yes – in the Soviet Union in the 1920s and 1930s! Russia was a semi-feudal country were the vast majority of the population were peasants. The level of economic, scientific and cultural development was completely insufficient to immediately move towards a moneyless planned economy envisaged by Marx. But times have moved on since Trotsky wrote “The Soviet Economy in Danger” 83 years ago. Marx was certainly clear on the issue of ‘socialist finance’: “[I]llusions about the miraculous power of the credit and banking system, in the socialist sense, arise from a complete ignorance about the capitalist mode of production and about the credit system as one of its forms. As soon as the means of production cease to be transformed into capital (which also means the abolition of private property in land), credit as such no longer has any meaning, something incidentally that even the Saint-Simonians have realised.” (Marx, Capital volume 3, p743)

Modern capitalism is largely based on planning, with supermarkets, stores and online retailers tracking the physical quantity of their stock and the rate at which it is sold at the product level (for example, via barcodes). Many of them have systems that automatically place orders when stocks fall below a certain threshold. Modern computing technology allows for virtually real-time monitoring of stock and sales, as well as predicting future sales based on past history. If we know what goods are sold on a daily, or even hourly basis, then surely it is feasible to calculate the inputs required to produce these goods and the relevant supply chains? Is this not already the networks and decentralised plans that Mason describes as his alternative?

In this sense, money (exchange-value) plays little role in the capitalist planning process, and instead goods (use-values) are tracked directly, even for retailers that sell tens of millions of different products. There is thus a strong case for eliminating money. Mason seems to think that in a socialist economy you would not be able to peruse shops and choose what you want to “buy”, but rather you would have to make your intentions to purchase certain goods known a week advance to the central planners. This is because Mason sees the “market” simply as a neutral, “giant calculating machine” (p151) for distributing goods that can be transposed into any mode of production. In fact, the existence of a “market” presupposes the generalised production of commodities – goods produced in order to profit from exchange – which can only mean one system: the capitalist mode of production. The point of socialism is to abolish commodities and the production of commodities so that people’s needs can be met directly. However, this does not mean that there is no consumer choice under socialism! The acquisition of goods, alongside workers direct participation in the economy, would act as the feedback mechanism for the plan and shape the next one. For consumer goods, plans could be drawn up automatically on a daily basis to satisfy consumer needs. Hence we can only answer in the affirmative when Mason sulks that, under socialism, “[t]here can be no credit cards in this world; no payday loans; probably a much-reduced e-commerce sector.” (p233). We can only add that workers would have ‘debit cards’ linked to their ‘bank accounts’ that would deduct labour-tokens when goods are acquired.

By stripping out the “bullshit” jobs under capitalism (via automation or making certain work redundant e.g. marketing, finance) and seeking to maximise employment, the remaining socially useful work can be shared out amongst the population so that most people would only have to work 2 or 3 days per week, greatly increasing free-time amongst the population. Workers would be able to engage in art, culture and science on a far greater level, and some of this would take place outside of the plan in people’s free-time. Mason does not appreciate this at all, and complains that “[a] computerised plan… could not tell Beyonce to produce a surprise album marketed only via social media… Such a plan would see time spent curating a Wikipedia page, or updating Linux [as] … wasteful and incalculable.” (p234) But a plan would not have to calculate these things, any more than an economic plan would have to calculate whether you go down the pub with your mates or produce a dubstep track on your computer. Mason states that “the plan [would not] be concerned with the most interesting thing in our modern economy: free stuff” (p234), to which we say: exactly! As the abundance of consumer goods increases and the necessary labour-time to produce everything needed for society decreases, free-time, and hence the production of “free stuff”, would become the norm rather than the exception. This would represent what Marx called the transition from the “first phase” of communism to the “higher phase” (see Marx, Critique of the Gotha Programme). Mason seems to think that capitalism can be nurtured to give way to this “higher phase” of communism, without the need for workers’ revolution.

Capital and the Working Class

Mason boldly states that “Marxism got it wrong about the working class” (p180). He derides the mighty movements of the working class throughout history: “The workers were forced into revolutionary action by social and political crises, often provoked by war and intolerable repression. On the rare occasions when they achieved power, they couldn’t stop it from being usurped by elites operating under a false flag. The Paris Commune of 1871, Barcelona in 1937, the Russian, Chinese and Cuban revolutions all demonstrate this.” (p180) Mason argues that workers were too wedded to “the persistence of skill, autonomy and status in working-class life” (p181) to really want to overthrow capitalism, hence they inevitably ended up passing the baton to subversive agents. This is simply another rehash of his previous argument that socialism was tried but failed, and so will never ever work again.

As Mason notes himself, the argument that the working class is no longer a revolutionary class is not new. For decades, the revisionists of Marxism have decried that the working class is “dead”, or has been “bought off” with the lure of cheap consumer goods and readily available entertainment like television, computer games and mass sporting events. But Marxism does not assign the working class the role of “collective historical subject” for reasons of nostalgia or subjective sentiment.

The maintenance and reproduction of capital(ism) requires the maintenance and reproduction of a property-less class whose only means to existence is through the sale of their labour-power. This is because capital is a social relation between capitalist, who owns the means of production, and worker, who owns little but her labour-power. Capitalism will continue to churn through the world’s population and bring them into the ranks of the working class as long capital exists. In fact, the working class globally has grown massively over the past few decades, not shrunk (source: Juliet Schor, Guardian article “Economic fallacies: is it time to work more, or less?”). Mason does not dispute this fact, but argues that “[f]or many workers, their primary physical and ideological relationship to capital is through consumption and borrowing rather than work.” (p209). This is yet another indicator of how Mason makes a fetish out of finance. Because he believes that financialised capitalism has “solved” the problem of declining profit rates, his projection for the economy is “stagnant growth and state-level bankruptcy: austerity until death, but with an upgraded version of the iPhone every few years.” (p212)

Yet as has been previously pointed out above, “financialisation” does not create new value, but can only appropriate what is produced elsewhere. This is why the recent slowdown in growth in China, the manufacturing hub of the world, is so important for the health of capitalism. The path ahead for capitalism is not “secular stagnation” and rising profit rates, but sharp and severe economic crises. Such crises will necessarily propel the ranks of the working class and unemployed into open conflict with the state and capitalist class. The task of socialists is to organise the most advanced layers of workers and prepare for these inevitable events and the qualitative changes in workers’ consciousness that they will bring. Mason completely rules such a perspective out.

Mason’s Manifesto

The top aims of Mason’s postcapitalism (p269) in brief are:

  1. Rapidly reduce carbon emissions
  2. Stabilise and socialise the financial system to prevent boom and bust
  3. Deliver high-levels of material prosperity for the majority
  4. Apply new technology to automate work as much as possible

Every socialist would naturally support these aims – the issue is how to achieve them. For example, it is not the financial system that causes economic crises, but capital itself. Crises manifest themselves as financial crashes due to the intertwined nature of production and finance. Socialising (ie nationalising) the financial system will therefore not prevent crises of overproduction; crises will simply manifest in other sectors of the economy.

Mason thinks that a “revolutionary reformist” government (presumably elected through parliament) can convince the capitalist class that enacting policies against their interests is, in fact, in their interests. That is why we need a Marxist programme to change society, one that is not based on the fantasy of taming capital like Mason advances, but by destroying it and replacing it with a planned socialist economy.


1 Comment

    • Name

      you at least need to read some literature about FREE market capitalism before you spout this lunacy.

      Try starting with for a light hearted description of capital markets.


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