Fully Automated Luxury Communism A Manifesto

a heightened cycle of protest and riot in England after 2010 was followed by a failed but surprisingly close referendum on Scottish independence four years later. Even that paled into insignificance, however, when in 2016 Britain voted to leave the European Union, becoming the first member-state in its history to do so.

While ‘Brexit’ was the most important political moment in Europe for a generation, it was soon outdone by events across the Atlantic when, just a few months later, Donald Trump was elected the forty-fifth president of the United States. Less than a decade after the collapse of Lehman Brothers in 2008, it was now undeniable. An expansionist Russia, isolationist Britain and broken economic model had all been outdone by a reality TV star becoming the most powerful person on Earth. History was back.

Trump’s inauguration speech the following February stood in defiant contrast to the heady rhetoric of his predecessor, Barack Obama, when he assumed ofice eight years earlier. Claiming that the system was failing ordinary Americans, Trump’s explicit message of social decay and aggrieved nationalism became his immediate signature in ofice.

And yet in a strange way, despite their markedly diferent forms of presentation, Obama and Trump shared a similar faith in the unique ability of markets to find solutions. After all, anything else is tantamount to heresy in a world of capitalist realism – where the end of the world is more plausible than the end of capitalism.

This condition presents arguably the most pressing crisis of all: an absence of collective imagination. It is as if all humanity has been aflicted by a psychological complex, capitalist realism making us believe the present world is stronger than our capacity to remake it – as if it were not our ancestors who created what stands before us now. As if the very essence of humanity, if there is such a thing, is not to constantly build new worlds.

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In its defence, capitalism can point to an impressive record, at least so far. Having faced crises almost every decade for two centuries, amid the ferocious pace of constantly accelerating change, it has always found ways of extracting profit and, eventually, improving living standards. Capitalism has survived, evolved and prospered through the Industrial Revolution, the Great Depression, protectionism, two World Wars, the end of the gold standard and the demise of the Bretton Woods Agreement. Little more than a generation ago, much of the world was under the political influence of the former Soviet Union, with it and the United States seemingly destined to face of in nuclear confrontation. And yet that never came to pass and, as Fukuyama would later write, a divided world was replaced by one where markets prevailed and liberal democracy would reign supreme.

This explains why, in spite of manifest crises, those who champion the status quo are as confident as they are. Ours may well be a world of low growth, declining living standards and rising geopolitical tensions, but capitalism’s staunchest advocates draw strength from knowing similar problems have been dealt with before.

But besides those issues are challenges seemingly harder to overcome. In isolation each is historically significant, yet taken together they can be viewed as threats whose scale is civilisational, holding the potential to undermine the ability of capitalism to reproduce itself as a system based on infinite growth, production for profit and wage-labour.

There are five such crises, which at times overlap. They are climate change and the consequences of global warming; resource scarcity – particularly for energy, minerals and fresh water; societal ageing, as life expectancy increases and birth rates concurrently fall; a growing surplus of global poor who form an ever-larger ‘unnecessariat’; and, perhaps most critically, a new machine age which will herald ever-greater technological unemployment as progressively more physical and cognitive labour is performed by machines, rather than humans.

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Confronting such crises is the basis of FALC. Capitalism, at least as we know it, is about to end. What matters is what comes next.

The claim that capitalism will end, is, for capitalist realism, like saying a triangle doesn’t have three sides or that the law of gravity no longer applies while an apple falls from a tree. Rather than understanding the present as one historical period among many, like Victorian England or the Roman Republic, to be alive at the end of history means presuming our social systems to be as unchanging as the physical laws that govern the universe.

And yet the truth is capitalist realism is already coming apart. The fact you are reading these words at all is proof.

Despite the observations of Francis Fukuyama and his disciples, history returned on 15 September 2008 when the global financial system crashed. Within weeks the world’s leading economic powers, previous zealots for minimal state interference, were left with no alternative but to bail out their domestic banks, with some even being nationalised. That exposed their previous free market fervour for the lie it was: this was socialism for the rich and market capitalism for the rest. The critics had always said as much, now nobody could deny it.

But as well as revealing what had passed as common sense for the political project it was, that moment also ended a phase of global expansion that had powered financial services and real estate – most notably in Britain and the United States – to the forefront of economic life. Over the preceding two decades it was these areas which had underpinned growth, tax receipts and forms of asset ownership which were at least moderately distributed. After 2008 that decisively changed, meaning that in many countries poverty has increased, wages have stagnated and growth – in any significant sense – has vanished.

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In the US the Supplemental Nutrition Assistance Program, popularly known as ‘food stamps’, is a federal initiative that helps low-income Americans buy food. By virtue of its objective it is one of the most accurate indicators of poverty in the country. While in 2007, immediately before the crisis, 26 million Americans were in receipt of food stamps, by 2012 – at the tail end of what some now call ‘the Great Recession’ – that figure had almost doubled to 46 million. Over subsequent years, despite an alleged upturn in the country’s economic fortunes, that number barely moved, with Donald Trump frequently highlighting how 43 million Americans used food stamps while on the campaign trail in 2016. For all the talk of his victory being powered by ‘fake news’, that number was entirely accurate.

Analogous to food stamp use in the US is the meteoric rise in the number of people using food banks in Britain. The Trussell Trust, which operates the largest food bank network in the country, claims to have delivered around 41,000 food packs in 2010. By 2017 that had risen to 1.2 million after nine consecutive years of rising demand for their services. While the increased use of food banks in the UK is partially the result of disastrous welfare reforms, it also reflects something observable on both sides of the Atlantic: being in work no longer guarantees escaping poverty – quite the opposite.

The most detailed data available in the UK only serves to confirm a historic shift has taken place over the last decade, with those in relative poverty more likely to be in a working household than not. Most troubling of all is that this is accelerating: by the end of 2016, 55 per cent of people in poverty were in a household where someone was employed – an astonishing 7.4 million people. Just six months later that figure had risen to 60 per cent.

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Powering this downward spiral is falling wages: since 2008, real pay in Britain, which takes inflation into account, has dropped by more than 10 per cent. It should come as little surprise, then, that nearly 17 million Brits of working age have less than £100 in personal savings. In the United States it’s a similar story, with 63 per cent of Americans saying they have \$500 or less put aside.

The other pillar of consent for twentieth-century capitalism, of property-ownership as the complement to democracy, is in similar retreat. In Britain, where the Conservative Noel Skelton coined the term ‘property-owning democracy’ in 1923, home-ownership is at its lowest level since 1985 and continues to fall. It’s even worse in the US, though, where a combination of high prices, low wages and little credit means the average American is less likely to own their own home than at any time since 1965 – four years before the Moon landing.

Measuring Inertia

While ordinary people are struggling, measured through use of food banks and food stamps, wages which buy less or unmet expectations regarding home ownership, the abstract vision of the economy pedalled by elites, defined by growth and productivity, is in similar disarray. After all, on output per hour worked, perhaps the most useful measure of economic progress, Britain produced less in 2017 than it did a decade earlier. Such a development is without precedent in modern history.

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Similar issues are in evidence elsewhere around the world. ‘Lost decade ’, previously used to describe anomalous economic conditions in countries like Italy and Japan, is increasingly applied to an ever-growing cluster of nations. Since the crisis of 2008, Greece and Spain have seen unemployment go beyond 25 per cent, with youth unemployment touching double that. Elsewhere, economies such as Hungary, Austria, Portugal and Latvia’s are no bigger now than they were in 2008 when measured on an output-per-person basis.

Even in the rising nations of the Global South, the trend is clear. The 10 per cent growth which characterised the Chinese and Indian economies during the early years of the twentyfirst century are now a thing of the past. Elsewhere the likes of Brazil and Russia have been mired in recession almost as severe as parts of Europe, the only diference being their economic malaise has kicked in at far lower levels of relative development. Such a shift has only served to strengthen the forces of autocracy.

So our world is one increasingly defined by low growth, low productivity and low wages. Before the crisis, most policymakers would have thought such events impossible, let alone speculated about an appropriate response. Alan Greenspan’s 2008 remarks to the US House of Representatives are illustrative: the banking crisis having left this former chairman of the Federal Reserve in a state of ‘shocked disbelief ’ and ‘distressed’ by events he previously viewed as impossible.

While neoliberalism, which emerged with the Thatcher and Reagan governments, led to higher unemployment and lower wage growth, for more than a generation this was mitigated by access to cheaper goods and services – by relocating production to countries with lower wages – as well as inflated asset prices, particularly housing, and access to cheap mortgage and consumer debt. As well as forming the foundation for a widely felt material improvement in living standards, this was the economic base for a world where there was no alternative. How could you really be angry at anything with your credit cards and ever-cheaper consumer gadgets? And even if you were, what choice did you have once you’d earned your stake in the system with a home of your own? Now, with these previous fixtures in retreat, elites have yet to make a positive ofer about what comes next. What we know for certain is that the status quo can’t hold. There is no consent for a system which, on nearly every measure, is going backwards.

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This all explains the revival of radical politics, on both the left and right, in recent years. Because the events of 2008 came as such a shock – even for the system’s outsiders – nobody proved immediately able to take advantage of such a historic opportunity. Gradually that would change, however, with the previously unthinkable becoming increasingly commonplace. In the 2009 European Parliamentary elections, the far right made impressive gains across the continent with the likes of UKIP, France ’s Front National and even the British National Party attracting widespread support. The BNP’s results in particular came as a shock, with a party historically connected to the country’s neo-Nazi movement gaining almost 1 million votes and two MEPs. For a few years similar energies on the left were limited to the streets – such as the 2010 British student movement and the Spanish Indignados – but eventually these too translated to success at the ballot box. Spain ofered the most obvious initial expression of that with the emergence of a new party, Podemos, which gained five MEPs in 2014 just a few months after it had been formed, before finishing third in the following year’s Spanish general election.

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But before then, in January 2015, Greece ’s Syriza, a coalition of previously insignificant left-wing groups, would win the most seats in that country’s general election. After agreeing to be the senior partner in a wider coalition they formed a government, becoming the first party of the radical left to do so in a Western democracy since the Second World War. This fed hopes of a deal between Greece and the ‘Troika’ of the European Commission, European Central Bank and the International Monetary Fund on the terms of their coming bailout deal that summer. In due course Syriza campaigned for an ‘Oxi’ vote, defying the conditions proposed by the Troika. To widespread amazement, oxi – no in Greek – won by a landslide. While the Troika would refuse to change their stance in the negotiations that followed, and the Greek government capitulated to their terms, a new reality had emerged: the corridors of power were no longer insulated from mass protest in the streets.

In Britain, meanwhile, the Conservative Party won its first majority since 1992 as the right-wing UKIP attracted almost 4 million votes and the Scottish National Party took an astonishing forty seats from Labour in Scotland. A few months later, Jeremy Corbyn, who began his outsider bid at odds of 200–1, became Leader of the Labour Party – his supporters certain he could be powered by the same wave that had taken the likes of Syriza and Podemos so far in such a short space of time.

It was 2016 which proved to be the decisive year, however, as a crisis that started eight years earlier found its most potent political expressions. In June, Britain voted to leave the European Union with more people voting in the ‘Brexit’ referendum than any previous vote held in the country. That appeared to be a pivotal moment, with right-wing populism seeming to capture an increasingly clear hostility to governing elites. As Nigel Farage, a figurehead for the Brexit movement, triumphantly declared on the night, ‘This is a victory for ordinary people, for good people, for decent people … the people who’ve had enough of the merchant bankers.’

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Yet even the shock of Brexit paled in comparison to events just a few months later when Donald Trump, a well-known businessman and reality TV star, was elected president of the United States. Winning the Republican primary earlier that year had already caused a shock – and with Bernie Sanders pushing Hillary Clinton close for the Democratic nomination, the signs were there for an upset. Which was precisely what ensued as Trump took previously democrat-held ‘Rust Belt’ states on his way to the White House. The President-elect’s victory speech was reminiscent of Farage ’s, as he told ‘the forgotten men and women of our country’ that they would be ‘forgotten no longer’.

The following April, buoyed by the perception of a zeitgeist seemingly to her advantage, Britain’s new Prime Minister Theresa May called a general election to cement her party’s grip on power. An enhanced majority was widely viewed as inevitable, the question being how big a landslide the Conservatives could achieve. And yet, in a manner analogous to both Trump and Brexit, Labour defied the odds with a clear message of a break with the status quo. While they didn’t form a government, they did deprive the Tories of a majority, winning an additional 3.5 million votes in the process and enjoying the biggest increase in vote share – for any party – since 1945. The Tories, significantly to the right of their campaigns in recent years also did well, winning their highest share of the vote since 1987. Britain now displayed both key features of the new political landscape: massively increased polarisation, and uncertainty as to whether the politics of the left or right would ultimately prevail.

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While they might not share much politically, Trump and Corbyn, along with Brexit and the emergence of Podemos, Bernie Sanders and Syriza, indicate the era of capitalist realism is over.

And yet there is also a deeper story at play, one which remains largely unremarked upon. While the events of the last several years are both historic and unexpected, they are a response to an economic crisis, beginning in 2008, which itself only represents the first stage of a prolonged period of global disorder. Over coming decades we will not only endure the aftershocks of the failure of this economic model to deliver rising living standards, but also the era-defining efects of the aforementioned five crises. Individually, each poses an existential threat to our way of life. Together they could blow away the social and economic certainties of the last two and a half centuries.

But there is a deeper layer still, because we are at a crossroads as much as a clif edge. Alongside these challenges we also see the contours of something new, a society as distinct from our own as that of the twentieth century to feudalism, or urban civilisation from the life of the hunter-gatherer. It builds on technologies whose development has been accelerating for decades which, only now, are set to undermine the key features of everything we had previously presumed to be as unchanging as scarcity itself.

Its name? Fully automated luxury communism.

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