Money Talks: Harry Shutt

Visionary economist Harry Shutt, author of ‘Beyond the Profits System: Possibilities for a post-capitalist era’, tells it how he sees it to The Occupied Times.

Occupied Times: Tell us about the situation in Greece – are we seeing a corporate takeover?

Harry Shutt: In Greece, the global financial ‘syndicate’ (including Goldman Sachs and the IMF) is effectively dictating government policy. I’d argue this is nothing very new; it’s just become more blatant in the present crisis. It’s a delusion that Greece, or any other Western country, is a democracy, in that our governments have long been in the pockets of the syndicate – or big business in some other guise. This structure has no democratic legitimacy, and has demonstrated its willingness to subvert any lingering democratic tendencies – as when it moved quickly to quash the Papandreou government’s attempt to put the bail-out package to a referendum in December, by replacing it with an unelected government led by an ex-Goldman Sachs technocrat.

OT: Whose interests is the EU representing here?

HS: As for the EU, its democratic credentials have long been discredited. Following the massive rejection of the proposed ‘constitution’ by the voters of France and the Netherlands in 2005, the European Council simply reframed it in the form of the Lisbon Treaty – a document designed by or on behalf of corporate interests – and implemented without referenda in most member states.

OT: You said once that we are living in a totalitarian state – the only difference between us and North Korea being that we can say what we like as long as we don’t mind being ignored…

HS: What I mean is that we are subject to a single dominant ideology (neo-liberalism) from which no mainstream political party is allowed to deviate in any meaningful sense; a position which is reinforced by an equally monolithic stance on the part of both the mass media and academia. 30 years ago, much greater pluralism was allowed, particularly in universities. Dissenting voices may from time to time be heard, but they are never given enough time or space to make significant impact on public consciousness. Consider the performance of more ‘liberal’ media such as the Guardian or the BBC during the current crisis: despite the manifest disintegration of the system, their much-hyped efforts to make a critical reappraisal of ‘capitalism’ invariably reach the conclusion that there is no viable alternative to the status quo. There are, however, signs the internet may be breaking down these barriers, particularly as it saps the financial viability of the mainstream corporate media.

OT: Mussolini once defined fascism as the merging of corporate interests with the state – isn’t that what we’ve got now?

HS: It very precisely describes what we’ve got now. However, I personally wouldn’t consider this constitutes, by itself, an adequate definition of Fascism (with due respect to Mussolini) as I think Fascism also encompasses the promotion of bigotry and sectarianism (whether ethnic or religious). However, there are signs our leaders are resorting to this too.

OT: What solutions do you think will lead to permanent and lasting change? Presumably nothing will happen until we root out corruption in politics…

HS: The point about ending (or severely curtailing) political corruption is crucial. I think the no.1 priority for Occupy in the British context should be to demand the full implementation of the latest proposals of the Committee on Standards in Public Life (November 2011) on party political funding, which goes a long way to substituting state funds (but at negligible cost to the taxpayer) for private contributions. This is not because I think the proposals are ideal (the upper limit of £10,000 on personal contributions still seems too high and would leave scope for abuse) but it would establish the principle of the primacy of state funding and thus be a huge step in the right direction.

OT: What other reforms would you ?like to see?

HS: Company law amended so as to make the enterprise sector more responsive to the public interest. ‘People before profit’ is a popular slogan from the Left; but those who chant it seem to have little idea how to bring about this change of priorities except by public takeover of existing enterprises, which is arguably a discredited model. A far more effective way of achieving the goal of a responsible corporate sector would be a) to make a company’s right to limited liability conditional on its accepting public representation on the board – whether at national or local community level – and even give the public a right of veto over certain decisions (e.g. executive pay, redundancies, capital investment); and b) to make any other public subsidy or privilege to companies – whether private or public – subject to specific conditions designed to ensure that the incentive does achieve the specific end(s) intended in the public interest.

OT: Basically ensuring that corporations fulfil their obligations to the public as well as shareholders?

HS: Yes, but equally it would remove the presumption – currently implicit in company law – that maximising private profit is a public good, which results from requiring company boards to put the interests of shareholders above all others. It would still allow private ownership to operate where no public subsidies or privileges are sought (which should suit small businesses). And besides enabling more rational allocation of resources in the public interest, such a change would help to remedy another defect of the capitalist model: the compulsive need of companies to accumulate more and more profits as shareholders’ funds, on which they are obliged to try to achieve a market rate of return. As Marxist analysis has shown, this not only tends to concentrate wealth and income in fewer hands over time but makes inevitable the catastrophic business cycle (boom and bust), of which the current crisis is an extreme example.

OT: You are also a big supporter of a citizen’s income. How might this work?

HS: A citizen’s income is a flat-rate benefit paid to all adult citizens or qualifying residents designed to be sufficient for one person to live on – i.e. in principle equivalent to the poverty line in the country concerned. It is payable out of general taxation unconditionally (regardless of other sources of income) and does not affect entitlement to health-care or education. It will replace benefits and guarantee that everyone’s basic needs are covered by a non-means-tested weekly payment, as of right – raising everyone’s levels of dignity and freedom and allowing people to engage in socially useful and creative activities or take entrepreneurial risks they might otherwise avoid.

This is an idea that has been around for centuries and has been espoused by eminent economists and thinkers from John Stuart Mill onwards. The main reason why it’s time has now come is that technological change has rendered labour increasingly redundant and banished the 20th century dream of ‘full employment’ – always a fantasy, particularly in the developing world – for ever. there’s a more detailed discussion on my website, Harryshutt.com.

OT: Has a citizen’s income ever been put into practice successfully before, and if so, where?

HS: To date, no country has implemented a comprehensive, unconditional citizen’s income, although a number have conditional programmes such as a negative income tax. However, the pressures for more equitable and cost-effective income distribution are building – to the point where some countries have enacted the necessary legislation for a citizen’s income – notably Brazil (2004) and Iran (2010) – and are in process of trying to mobilise the necessary funds to fully implement it. This should suggest that, if such relatively poor countries can contemplate affording it, for developed (OECD) countries it should be much easier given the political will to distribute income more rationally.

OT: You said recently: “Athens is burning today, Rome will be burning next week and London next month”. Do you see the protests increasing and is this just the beginning?

HS: Yes, there is a possibility that the crisis could intensify – either because of renewed financial collapse or social explosion, or both. Hence, while as a group we do need to inform ourselves of how the financial system works – something which, as I’ve written, is made more fiendishly difficult by the deliberate obfuscation of the banksters and economists – we also need to be prepared for events spinning further out of control and consider how Occupy might react. I cannot predict the timing of any particular new outbreak of trouble (such as another Lehmans-type collapse) – but what is certain is that the crisis is nowhere near resolution, and our rulers remain as deeply in denial as ever.

www.harryshutt.com.