Report: Capitalism after the Coronavirus by Paul Mason (Keynote)
In his keynote lecture, Paul Mason, British journalist and writer of the book Post Capitalism (2015) explains us his view on the fundamentals of information technology and its disruptive effects on capitalism as we know it. Building an argument that walks us through historical and ongoing events and theories, that shines light on “a war of utopians” that will (as he believes) lead us into a better world, including a more sustainable form of capitalism.
Introduction: the fetishisation of autonomous systems. “We treat the economy as something that’s outside of us. And as if we have to decide to save it or to save us.”
Paul Mason frames his talk in today’s context three crises: economic, democratic, and technological. He explains the rise of fatalism as the common root behind them and the influence of COVID-19. All of this as an introduction to his talk, which will focus on what could be a way out of this, focusing primarily on the economy.
On the level of imagination during previous and ingoing crises and the fundamental issue of capitalism
“This time, governments have certainly acted. […] We’ve seen whole industry sectors been bailed out. […] I am afraid it’s not imagination enough.”
Paul Mason puts capitalism and the debt vs GDP ratio forward as the main fundamental driver between the current crises. A.o. making reference to J.M. Keynes. “The way we behave now with money signals that we believe that in the future there is going to be a highly vibrant economy which is going to be capable to pay back all the debts. […] And that’s not going to happen.”
IT versus economy
On the role of information technology on the economy. “Information technology is not creating a hidden value. It does something that’s quite the opposite.”
An explanation of the specific nature of information technology and how it is different from any other market we have known: they are not scarce and infinitely copiable. Which makes their prices drop exponentially. And also affecting derivative products and services, e.g. the cost of sequencing a Human genome etc.
Also, Mason explains secular stagnation (i.e. a period with little or no economic growth) as a phenomenon that is now coinciding with the price drops explained in the previous part. And how mainstream explanations for this phenomenon fail to touch upon the fall of interest rates as likely the true driver behind it. Referring to Paul Schmelzing’s predictions towards negative interest rates by the mid 21st Century.
And how nobody seems really prepared to discuss what these phenomena mean for capitalism. After which he does so himself. “The ability of information technology to produce huge amounts of utility for almost nothing is disrupting capitalism.”
On the production of network effects by information technology and the democratisation of technology. Mason explains the immense value there is in network effects and how it is (or should be) sort of an intermediate element that is not owned by anyone (cfr. COVID data that is being collected for the social good versus the struggles we have with the big tech companies who are claiming value on these network effects that we as users create).
After this, Mason touches upon the fact that it’s easier than ever before to replace a broken product or service by another one. (Cfr. Have entire user communities switch from one app to another).
From the endogenous crisis to an exogenous crisis and the influence of our attitude towards time. In the previous sections, Mason focused on the endogenous crisis of the economy: the one that is inherent to how capitalism is functioning. Now, he moves into an exogenous crises: climate change and the COVID-19 pandemic. And how these are linked to the nature of capitalism as we’ve created it.
Followed by insights on our attitudes towards time: with ambassadors for gradual progress versus revolutionaries. And the fact that the current climate crises forces us to act within a short timeframe that’s beyond our comprehension.
Towards a way out
The way out: focus our minds on building an alternative economic model. “Since 2008, the most important task has been to build a more sustainable form of capitalism. And I am not talking about post-capitalism or anti-capitalism.”
In this final section, Mason elaborates on how he sees a transition towards a new and more sustainable form of capitalism and how the COVID pandemic acts as a potential catalyst. For example by pushing state-capitalist strategies to become more visionary, introducing universal free basic services (and not a universal basic income, as attractive as it is), fight monopolies and rent-seeking businesses and enshrine the right of information democracy.
To wrap-up, Mason inspires us with his view on the war of utopians and how this struggle could take us into a better society by the end of this century.
“I am asking governments to think as they take anti-crisis measures to use them as a long-term play into a new economy.”