Transformative Change: The System
Updated: May 25, 2020
Transformative change is forming systems and societies that are different to the status quo. Here, we present a series of four blogs regarding this topic: i) The system, ii) The system and nature, iii) The alternatives, iv) Creating change. We recognise that this series is influenced by our own lived experiences. For full disclosure, these lived experiences have taken place in the Global North, by two white women. We fully acknowledge others have had, and continue to have, different experiences and we would love to open up a discussion around how we can make transformative changes that are just and sustainable for the planet and society.
Key Points:
‘The enclosures’ of the 16th century played a constitutive role in transforming the feudal system into a capitalist one through the creation of labour and land markets.
A capitalist system is understood as an economic system based on private ownership of the means of production and their operation for profit.
The establishment of neoliberalisation was largely a response to moderate the burgeoning democratic movements of the 1960s.
The 1970s economic crisis provided an opportunity for neoliberal policies to be adopted and practiced. Policies that include privatisation, corporate tax reduction, deregulation of labour markets, restriction of state intervention, and increased market competition.
Neoliberalism has contributed to widening economic inequality, catastrophic market failures, and the consolidation of power and wealth by the few.
Neoliberal ideology remains the dominant narrative largely as a result of the media-politics-corporate echo chamber and the decades-long suppression of dissenting voices.
Capitalism, the economy, commodities, neoliberalism. These loaded terms are enough to give anyone a migraine before they’ve read past the first paragraph. So, let’s not begin with a discussion of economy but one of history. We will begin in the 16th Century, exploring what capitalism is and how 'the enclosures' in Britain transformed the feudal system into a capitalist one. We will then take a leap to the mid-20th century to understand what today's neoliberal capitalism entails, how it came to be, why it isn't working for the many yet remains the dominant narrative to this day.
Towards the beginning of the 16th century, advancements in European science and shipbuilding had opened up the possibility for travel, trade, and discovery on a global scale. Merchants and sailors trading in wool, spices, silk, and steel became enormously wealthy as these goods took on international value but their financial success came at a heavy price. Landowners across England and Scotland, horrified seeing their ‘social inferiors’ acquire wealth that could surpass their own, led one of the most violent transformations in human history: the enclosures. In the place of perishable crops (which offered no access to the global markets), landowners brought sheep onto the land for their highly valuable wool. However, this required the landowners to dispose of something else: people. Over 70% of peasants were removed from their ancestral lands. Now, beyond the ethical and moral implications, this is important for two reasons: one, labour became a commodity; two, land became a commodity.
Unlike goods, commodities are produced in order to be sold. Previously, under the feudal system serfs and peasants toiled the land to produce enough food for themselves and their master, who would take his cut. The thought of renting yourself, your labour, to a master, in order to survive was unthinkable. But when they were violently evicted from ‘the commons’ (land), the majority of the population, who no longer had access to the land or tools to survive, could only live by auctioning off and commodifying their labour. They had to work for a wage. And so was the birth of the labour market. As for the land, the landowners seized the opportunity to rent it out to someone who could oversee the production of wool themselves. The denser the pasture, the more sheep could graze on it, the more wool it could produce, the higher the rent they could charge.
Here is where it gets really interesting. I’m going to talk about something very familiar; the profit motive. What may be less familiar is the relationship between the profit motive and debt. Let’s go back to the serfs and peasants, who have been evicted with no means of subsistence. Many were forced to rent themselves and enter the labour market. However, a few among them took a different route. They rented the land from the landowners. They organised the production of the wool and crops like small-scale entrepreneurs, renting plots from landowners and hiring other landless serfs and peasants. As they were too poor to pay rent or wages before they had produced any goods, they had to borrow. And who did they borrow from? The landowners themselves or local loan sharks, who charged interest. Regardless of the source, we see here that debt came first. The emerging entrepreneurs became cast against others in a life-dependent competition for resources, clients, and survival so that they could pay off their debts. Profit became central to survival. As debts and profits grew, so did competition. A competition that required entrepreneurs to pay their workers less, and less, and less, in order to remain in the race. Alongside enormous wealth for the few came increasing debt and poverty for the many. Through the industrial revolution and beyond, the rich became richer, the bankrupt were resigned to labour in the workhouses, and the workers suffered ever worsening working conditions.
And so, the enclosures played a constitutive role in transforming the feudal system into a capitalist system: an economic system based on private ownership of the means of production and their operation for profit. But what does this mean for our capitalist system of today?
Let’s take a leap forward to the mid-20th Century. From the 1950s to 1970s, there was a period of egalitarian economic growth. Economists like to call this time ‘the golden age’ of modern capitalism.This period could be more accurately described as ‘state capitalism’ because government spending was the major driver of growth and development. Alongside economic growth, this period in time was marked by advances in social justice and formidable democratising movements: the women’s rights movement, the civil rights movements, the environmental movement, and the Vietnam War protests to name some. Large groups of the public, who were usually passive and apathetic, were entering the political arena and engaging in public affairs to press their demands. The capitalist class were losing power, influence, wealth, and they knew it. Two important documents of the time, from both sides of the US political spectrum, encapsulate this thinking: The Powell Memorandum (1971) and the The Crisis of Democracy (1975). The former described free enterprise as being ‘under broad attack’ and called on business to counter the threat. The latter described the ‘crisis’ as an ‘excess of democracy’ and called for its ‘moderation’. Though different in rhetoric, the message across the political spectrum was the same: democracy is a threat so the population must be restored to passivity and obedience. They had to regain control, and the 1970s provided the right opportunity to do that.
In 1971, reeling from the costs of the Vietnam War, the US dismantled the Bretton Woods system (a system which defined all currencies in relation to the US dollar, itself defined in relation to gold) so money was no longer backed by anything tangible (i.e. gold). A couple of years later, oil-producing countries issued embargos, causing oil-price shocks. Inflation had gripped the Western world while economies had stagnated. As Milton Friedman, one of the central thinkers of neoliberal ideology, said, ‘Only a crisis - actual or perceived - produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.’ (pg. 7). The stage was set, the time was now, and the idea ‘lying around’ was neoliberalism.
Neoliberal ideology is practiced and maintained through privatisation, reduction of taxes on corporations, reduction of public expenditure, restriction of state intervention, valuing the individual over society, and greater market competition. Many view these features as desirable, as offering more freedom, autonomy, and allowing creativity to flourish but as we see below, this is not always the case. Neoliberalism centres on the idea of ‘free markets’: a system in which the prices for goods and services are self-regulated by the open market and by consumers (supply and demand determines the price) with little or no government intervention. Of course, the ‘free market’ in practice does not exist. We see this every time the state intervenes to offer subsidies to big business, lower corporate taxes, deregulate the labour market, and use taxpayer’s money to bail out financial institutions (banks, investment firms etc.) that have plunged the world into economic crisis (think 2008). Under the capitalist model and ‘free market’ system, inefficient private commercial enterprises would simply cease to exist but what we have today is ‘socialism for the rich, capitalism for the poor’.
Today, in the context of Covid-19, we are experiencing a colossal failure of neoliberal capitalism. Experts have warned of the threat of pandemics for decades. There were ample opportunities to prepare, to avoid the devastation that is Covid-19. So, why were we so unprepared? There are two overriding reasons. Firstly, although coronaviruses are highly diverse and rapidly mutate, it is possible to perform research and development on antiviral therapies for coronavirus strains. This would give a good head start when new coronaviruses, like Covid-19, emerge. In fact, this type of preparation was advocated in a 2013 review paper which synthesised 10-years of important lessons regarding highly pathogenic coronaviruses. However, after interest waned in public and private sectors (for various reasons), so did the potential for profit. Pharmaceutical companies follow neoliberal and free market ideology. They observe market signals and if the signals tell them that there is no profit, no market, then they are not interested. Despite continued calls from the scientific community for further development of anti-coronavirus drugs, without free market incentives or government intervention, it is unlikely to happen. Secondly, neoliberalism has depleted, weakened, and rolled back the State under the premise that government interference is the problem, not the solution. This has left developed countries with the most neoliberal economies lacking the basic health infrastructure to treat those who are ill, test the population on a large scale, and provide the necessary personal protection equipment to those who are facing the pandemic on a daily basis. The virus has not only revealed the failure of the market to respond to this crisis, it has also highlighted the deep inequalities of our system. Social distancing is a luxury that the poorest in our communities can’t afford and so, out of obligation, must regularly expose themselves to Covid-19. If we do not learn from this failure, the next may be worse, and there will be a next time.
The growth that has proceeded under the neoliberal model has been highly inegalitarian. In the 1950s, a CEO made 20 times the salary of their average worker, today they make 361 times more. Between the 1950s-1970s, the top 1% of households captured one fifth of total income, the top 0.1% captured one tenth. Today that has almost doubled for the former and tripled for the latter. Meanwhile, real wages (purchasing power) for the majority of the population have stagnated since the 1970s. As a result, living standards for many in the Western world continue to deteriorate, devastatingly so. Unprecedented until now, ‘deaths of despair’ are rising among middle-aged, middle-class citizens; these include deaths from suicide, and drug and alcohol overdoses that are linked to deteriorating job prospects, social isolation, and relationship breakdowns.
Neoliberal ideology is sustained in three important ways. Firstly, by what some term, a ‘revolving door culture’, whereby powerful individuals from the political, corporate, and media worlds all move within the same circles, floating from public to private jobs and vice versa, creating an echo chamber. Secondly, through our education institutions. As economist Ha Joon-Chang of the University of Cambridge explains, if economists want to be respected they have ‘little option but to embrace neoliberal ideas’. As a consequence, supporters of neoliberalism have a wealth of intellectual material to draw on, with little opposition, reinforcing the pervasive mantra of ‘there is no alternative’ in the next generation of economists. Lastly, there has been a concerted effort to undermine any opposition to the status quo. After WWII, trade unions were formidable forces, playing active roles in the making of government policy and administration of major social services. Yet, under the neoliberal regime, the institutions that allow people to participate in decision making have been systematically weakened. In 1984, having granted the police enormous power and a huge pay increase, the British Government, under Margaret Thatcher, inflicted a devastating defeat on trade unionism during the Miner’s strike of 1984-85. In more recent history, Trade Unions became the target of a campaign against ‘facility time’ which allowed trade union representatives to take time off of work to be present for union duties. With dissenting voices marginalised for so long in politics, the media, education, and trade unionism, today even the smallest move away from neoliberal ideology is met with disbelief and panic.
Politics was once fuelled by debate, challenges, and clashes over radically different policies. Today, mainstream politicians rarely offer any real alternative to neoliberal policies. What is deemed politically possible at any given time, otherwise known as ‘Overton’s window’, has shifted so dramatically to the right that when the Labour government proposed to restore the top rate of tax to 50%, the neoliberal proponents cried out in horror, even though the top rate of tax was 60% in Thatcher’s time in office, and even higher than that before her. That is how far Overton’s window has shifted. Time to shift it back. Time to imagine, test, and practice the alternatives that are built, not on the profit motive, but on values of justice, dignity, and equality.
Now, panic ye not; we know this is a conservation blog. So, next week we will feed your obsession for nature related content. We will be exploring how this system interrelates with the natural environment, how oppression and inequality have extended to the exploitation of nature, and why solutions based on our current system are unlikely to work in the long-term.
Kathleen Drake and Alice Lawrence
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