Postcapitalism | Paul Mason

Summary of: Postcapitalism: A Guide to Our Future
By: Paul Mason

Introduction

Delve into the fascinating world of ‘Postcapitalism: A Guide to Our Future’ by Paul Mason and explore the reasons behind the imminent downfall of neoliberal capitalism. This book summary unravels the effects of fiat money, financialization, global trade imbalances, and the information-technology revolution on our current economic system. As you plunge into this insightful analysis, prepare yourself to learn how new modes of production, alongside historical economic cycles, challenge the fundamental principles of capitalism, ultimately leading us toward a postcapitalist society.

Neoliberalism’s Grim Realities

The failures of neoliberalism – the modern form of capitalism where societies pursue individual self-interest in a free market – are becoming increasingly evident. According to OECD, economic growth will slow down while inequality will rise by 40% in the Western world. The two main factors behind these disturbing trends are financialization and the use of fiat money to combat financial crises. Financialization, the process by which bank credits compensate for stagnant income, can lead to an imaginary economy based on the interest on loans and credits. When it comes to crises, the use of fiat money allows governments to take on more debt, which will eventually cause follow-up crises. This practice has already led to some severe emergencies, such as the 2015 Eurozone crisis, where the European Central Bank printed €1.6tn. The result is that more and more of society’s money is imaginary, based purely on interest owed on loans and credits, which is a significant cause of why neoliberalism is failing.

Neoliberalism’s Four Main Failures

Neoliberalism’s collapse has been attributed to four main factors. The first is global imbalances, whereby major deficit countries import more than they export; the second is the information-technology revolution, which undermines the role of property ownership in neoliberalism. Additionally, fiat money and financialization have also contributed to the downfall of neoliberalism by causing economic instability. The 2008 financial crisis once served as a wake-up call to the non-sustainability of neoliberalism. In essence, neoliberalism has failed due to the inadequacies of these four interrelated factors.

The Kondratieff Cycles

The Kondratieff theory argues that capitalism cycles through historical waves of upswings and downswings, rather than collapsing in crises. Joseph Schumpeter developed this theory into the Kondratiev cycles, which have had four cycles in the history of capitalism. However, the disruption in this pattern appears to have stalled the fifth wave due to the failure of neoliberalism.

The End of Capitalism?

The Impact of Information Technology on Traditional Economics

In the 1990s, the rapid growth of personal computers and increased information sharing fundamentally altered the economy. People began coining terms like “knowledge economy” and “cognitive capitalism,” which didn’t fit into traditional capitalist frameworks.

The rise of “information technology” challenged the basic principles of supply and demand in a capitalist system. In an economy increasingly based on information products like software, ebooks, and online news articles, the rules of the game have changed. Information goods can be copied and shared at little cost, unlike physical products that are limited in supply and therefore more valuable.

Information technology has enabled new forms of non-capitalist production. For example, Wikipedia is a free platform with over 24 million registered users who contribute to it without any expectation of profit or ownership.

The emergence of free goods and lack of property rights inherent in the network economy mean that a postcapitalist society is possible. Information technology is leading us to a future beyond the current capitalist framework.

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