Non-Capitalist Markets - Sylvio Gesell

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Introduction

This is an important aspect of research for P2P Theory. Following the relational typology of Alan Page Fiske, there are four intersubjective modes which have existed cross-culturally and historically: equality matching (gift economy), authority ranking (feudal-type structures), market pricing, and communal shareholding (according to us: P2P). Societies have always been a mix, but it can be argued that historically we have seen a succession of dominant forms: the gift economy in the tribal era, authority ranking in feudalism, market pricing in capitalism, and my hypothesis is that communal shareholding forms may dominate in a future 'P2P-oriented era'.

But if they have always co-existed, it may be illusory to aim for a stateless and marketless society, rather, we should expect states and markets informed and dominated by P2P principles. A current example is fair trade, a form of market that aims to become independent of pure power relations by negotiating with both producers and consumers.

The open questions is therefore: can we have markets without the unsustainability of the capitalist format and its attendent biospheric destruction and social and psychic dislocation?

To answer this question, we can also look to theoreticians of the past, such as Sylvio Gesell.

Michel Bauwens, February 9, 2006


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Markets without Capitalism?

Silvio Gesell is one of the main thinkers of this tradition. Gesell was briefly finance minister in Karl Liebknecht’s German-soviet republic and was greatly appreciated in his time by figures as Keynes and Martin Buber.

“In 1891 Silvio Gesell (1862-1930) a German-born entrepreneur living in Buenos Aires published a short booklet entitled Die Reformation im Münzwesen als Brücke zum sozialen Staat (Currency Reform as a Bridge to the Social State), the first of a series of pamphlets presenting a critical examination of the monetary system. It laid the foundation for an extensive body of writing inquiring into the causes of social problems and suggesting practical reform measures. His experiences during an economic crisis at that time in Argentina led Gesell to a viewpoint substantially at odds with the Marxist analysis of the social question: the exploitation of human labour does not have its origins in the private ownership of the means of production, but rather occurs primarily in the sphere of distribution due to structural defects in the monetary system. Like the ancient Greek philosopher Aristoteles, Gesell recognised money's contradictory dual role as a medium of exchange for facilitating economic activity on the one hand and as an instrument of power capable of dominating the market on the other hand. The starting point for Gesell's investigations was the following question: How could money's characteristics as a usurious instrument of power be overcome, without eliminating its positive qualities as a neutral medium of exchange ? He attributed this market-dominating power to two fundamental characteristics of conventional money: Firstly, money as a medium of demand is capable of being hoarded in contrast to human labor or goods and services on the supply side of the economic equation. It can be temporarily withheld from the market for speculative purposes without its holder being exposed to significant losses. Secondly, money enjoys the advantage of superior liquidity to goods and services. In other words, it can be put into use at almost any time or place and so enjoys a flexibility of deployment similar to that of a joker in a card game.

Gesell's theory of a Free Economy based on land and monetary reform may be understood a reaction both to the laissez-faire principle of classical liberalism as well as to Marxist visions of a centrally planned economy. It should not be thought of as a third way between capitalism or communism in the sense of subsequent "convergence theories" or so-called "mixed economy" models, i.e. capitalist market economies with global state supervision, but rather as an alternative beyond hitherto realized economic systems. In political terms it may be characterised as "a market economy without capitalism"…Gesell's alternative economic model is related to the liberal socialism of the cultural philosopher Gustav Landauer (1870-1919) who was also influenced by Proudhon and who for his part strongly influenced Martin Buber (1878-1965). There are intellectual parallels to the liberal socialism of the physician and sociologist Franz Oppenheimer (1861-1943) and to the social philosophy of Rudolf Steiner (1861-1925), the founder of the anthroposophic movement…An association called Christen für gerechte Wirtschaftsordnung (Christians for a Just Economic Order) promotes the study of land and monetary reform theories in the light of Jewish, Christian and Islamic religious doctrines critical of land speculation and the taking of interest. Margrit Kennedy, Helmut Creutz and other authors have examined the contemporary relevance of Gesell's economic model and tried to bring his ideas up to date." (http://userpage.fu-berlin.de/~roehrigw/onken/engl.htm)


Key Books to Read

Books to explore this tradition:


Silvio Gesell, The Natural Economic Order (translation by Philip Pye). London: Peter Owen Ltd., 1958. Dudley Dillard, Proudhon, Gesell and Keynes - An Investigation of some „Anti-Marxian-Socialist“ Antecedents of Keynes’ General Theory, University of California: Dr.-Thesis, 1949. Hackbarth Verlag St.Georgen/Germany 1997. ISBN 3-929741-14-8.

Leonard Wise, Great Money Reformers - Silvio Gesell, Arthur Kitson, Frederic Soddy. London: Holborn Publishing, 1949.

International Association for a Natural Economic Order, The Future of Economy – A Memoir for Economists. Lütjenburg: Fachverlag für Sozialökonomie, 1984/1989. (P.O. Box 1320, D-24319 Lütjenburg)

Margrit Kennedy, Interest and Inflation Free Money - Creating an Exchange Medium That Works for Everybody and Protects the Earth. Okemos/Michigan, 1995.


More Information

Eric Olin Wright's explorations in 'Market Socialism'

Erik Olin Wright has written a series of remarkable essays and book.

- On empowered deliberative democracy, five experiences, including the participative budget at Porto Alegre, are analysed, see http://www.ssc.wisc.edu/~wright/deliberative.html

- Book reviews of Charles Tilly's Durable Inequality and Alex Callinicos' Equality, at http://www.ssc.wisc.edu/~wright/Tilly.PDF and http://www.ssc.wisc.edu/~wright/Callin-rev.PDF Easy introductions, in the form of interviews, to his lifeling work on class and inequality

- http://www.ssc.wisc.edu/~wright/Polyc-int.PDF

- http://www.ssc.wisc.edu/~wright/kirby_wright.pdf

More on the basic income:

- Redesigning redistribution, at http://www.ssc.wisc.edu/~wright/Redesigning%20Distribution%20v1.pdf

- Basic income as a socialist project at http://www.ssc.wisc.edu/~wright/Basic%20Income%20as%20a%20Socialist%20Project.pdf Five books on 'Real Utopias'

Associations and Democracy, by Joshua Cohen and Joel Rogers, with contributions by Paul Q. Hirst, Ellen Immergut, Ira Katznelson, Heinz Klug, Andrew Levine, Jane Mansbridge, Claus Offe,, Philippe Schmitter, Wolfgang Streeck, Andrew Szasz and Iris Young. Edited and introduced by Erik Olin Wright (Volume I, Real Utopias Project Series, London: Verso, 1995)

Equal Shares: making market socialism work, by John Roemer, with contributions by Richard J. Arneson, Fred Block, Harry Brighouse, Michael Burawoy, Joshua Cohen, Nancy Folbre , Andrew Levine, Mieke Meurs, Louis Putterman, Joel Rogers, Debra Satz, Julius Sensat, William H. Simon, Frank Thompson, Thomas E. Weisskopf, Erik Olin Wright. Edited and introduced by Erik Olin Wright (Volume II, Real Utopias Project Series, London: Verso, 1996)

Recasting Egalitarianism: New Rules for Accountability and Equity in Markets, States and Communities, by Sam Bowles and Herbert Gintis with contributions by Daniel M. Hausman, John E. Roemer, Erik Olin Wright, Karl Ove Moene, Michael Wallerstein, Peter Skott David M. Gordon, Harry Brighouse, Elaine McCrate, Andrew Levine, Paula England, Steven N. Durlauf, Ugo Pagano, Michael R. Carter, and Karla Hoff. Edited and Introduced by Erik Olin Wright. (Volune III, Real Utopias Project Series, London: Verso, 1999)

Deepening Democracy: institutional innovations in empowered participatory governance, by Archon Fung and erik Olin Wright, with contributions by Rebecca Neaera Abers, Gianpaolo Baiocchi, Joshua Cohen, Patrick Heller, Bradley C. Karkkainen, Rebecca S. Krantz, Jane Mansbridge, Joel Rogers, Craig W. Thomas, and T.M. Thomas Isaac. (Volume IV of the Real Utopias Project Series, London, Verso, 2003)

Redesigning Distribution: basic income and stakeholder grants as cornerstones of a more egalitarian capitalism, by Bruce Ackerman, Ann Alstott and Philippe van Parijs, with contributions by Barbara Bergmann, Irv Garfinkle, Chien-Chung Huang , Wendy Naidich, Julian LeGrand, Carole Pateman, Guy Standing, Stuart White, and Erik Olin Wright (Volume V of the Real Utopias Project Series, London: Verso, in press 2005)