May 10, 2017    8 minute read

Why Taking Back Control Is Impossible If States Continue Facilitating Globalisation

The Real Issue    May 10, 2017    8 minute read

Why Taking Back Control Is Impossible If States Continue Facilitating Globalisation

The mantra of Brexit has been ‘take back control’. As seen with Nick Clegg’s piece on Brexit voters in Ebbw Vale, Wales a few months ago, such a slogan still holds significant importance.

In this ‘dying town’, as it was described, the real effects of deindustrialisation and the limitation of employment opportunities that have come from this are apparent; residents feel that their woes are due to the spectre of EU bureaucracy, which is faceless and unaccountable.

Taking a wider perspective, it seems many of these voters see the move from deindustrialisation to a “wage-subsidy” economy (that is fixated on flexible work, the decoupling of wages from productivity and the use of the welfare state to subsidise low-wages) as blameable upon the developments of globalisation, of which the EU happens to be the most representative case to many of these people.

The New Speenhamland

The new Speenhamland system that has been developed removes control from both the worker and the self-employed person, favouring a cartelised economy where employers are subsidised either through tax credits and a multiplicitous welfare system, or through the minimum wage which acts as a technocratic barrier to entry (favouring larger employers who can afford this overhead cost).

Thus the idea of taking back control has a significant prescience to it, representing the faceless elements of globalisation which no-one can seemingly control. However, such a view misses the significant involvement of states in constructing the infrastructure of globalisation and creating the means through which it became realised.

Western states (particularly the UK and the US) chose to move away from policies which coupled wage growth with productivity gains, instead favouring a de-unionised economy where all workers are treated as individual contractors who cannot make collective claims on the growth in technology and productivity.

State Decisions

They chose to develop transport infrastructure (national road systems, waterways and airports, alongside R&D, paid for by the state, that was the backbone of aviation and technological developments in transportation) that was costed in such a way as to place the costs on general consumers and users, while socialising the costs of multinational corporations who primarily use this infrastructure for their internal production and distribution systems.

States chose to create the new Speenhamland, where stratified forms of welfare provision acted as a subsidy system for inadequate pay and work conditions.

They chose to create stringent intellectual property rights through international TRIPS agreements and the Americanisation of patent systems, which favoured a hands-off form of corporate control. Consequently, companies like Nike, Apple and Microsoft own property claims to proprietary technology and concepts, while contracting out the production processes that create their products.

States opted to push forth an international financial system that allowed for a financialised means of accumulation (as it favoured domestic government deficits and subsidised state debts).

The creation of credit is done by banks, and tacitly guaranteed by states and state-like institutions (central banks, the Basel Accords and independent financial regulators), allowing for the creation of debt-credit relations which push forth a mode of inflation that favours asset-price growth and the subsidisation of corporate debt, as well as encouraging consumer debt accumulation and minimising wage growth as an element of inflation.

Captalist Apathy

The capitalist state has gone along with such developments, either aiding in their development or making them viable from the beginning. The methods of globalisation would not be possible without the state acting as market-maker, subsiding overproduction in mass production systems and allowing the move to an arms-length corporate control, reliant on financialisation and the quelling of worker’s claims on wealth and productivity.

Fundamentally, the state has produced these mass economies of scale, removing control and limiting the capability of an exodus from this system. In this regard, deindustrialisation is not a natural phenomenon, something that had to happen but a constructed element borne from direct state policy and the growing importance of developing a globalised economy.

While it can be seen that “shifts in demand and technology, more than globalisation, have led to de-industrialisation”, this ignores the plethora of actions that shifted that demand. These include the increase in international demand facilitated by states encouraging international trade through nominal forms of deregulation (which developed through GATTS that internationalised US-based regulatory systems) and the development of technology which removed control from workers by producing unemployment while limiting the means to either re-skill or move into another area of employment.

In this sense, meaningfully taking back control would involve questioning these developments and recognising their politicised origins, producing new potentials that shift control downwards in a subsidiarised manner.

Cooperative Accumulation

It is about changing the means of accumulation that are accorded importance by both states and the forces of capital, in favour of cooperative accumulation: the collective accumulation of resources for mutual benefit.

In terms of technology, it means appropriating new methods of production that decentralise production systems. 3D printing, CNC cutting tables and copyable proprietary software and hardware allow individual and small-group collectivities to produce a number of consumer products, from white-goods to complex phones and laptops, for local and regional networks.

New forms of sourcing, as with recycling, allow for new forms of accumulation amongst decentralised producers, ending a reliance on the centralised distribution networks of resource companies and their capabilities for mass extraction of diamonds, gold and copper, which are all major components in modern technology.

New forms of energy production, as in solar and wind, support such decentralised platforms as they move away from the mass energy production of coal and nuclear plants, supporting independent energy producers on a smart network where electricity is a shared resource of abundance, provided within scaled systems of houses and businesses.

As a result, new forms of labour are created that favour independent contractors in voluntary networks, either wholly owning their individual means of production or actively participating in P2P networks where proprietary ideas and products are shared and produced. Labour markets can become optional realms of the economy, based on the desire to enter into voluntary relations with an employer rather than as a necessity of a wage labour system.

This then changes the role of economies of scale, favouring forms of re-industrialisation that grow from the ground-up in networks of quasi-industrial production for the local and regional economies and a cooperative accumulation that directly links producer and consumer, thus removing the middlemen within international distribution networks. This allows for subcontracted, arms-length corporate control.

Evident Potential

Such can already be seen in the developments of Shanzhai production and hackerspaces in China, where proprietary concepts and goods are shared in networks of netizens and sold to local consumers in clustered economies of cooperative producers. In a similar manner, the methods of cooperative production in the Mondragon cooperatives present another example of regional economies of scale that produce a multitude of goods and services primarily for the Basque region.

It also means questioning the relations of the capitalist state, and in its place creating an infrastructural partner state that goes alongside these multitudes of local and regional networks of production and consumption. Such a state would be subsidiary in character, keeping political relations at the lowest possible level of engagement and building from the ground-up.

In such a system of horizontal and vertical relations, things like the tax system and the provision of welfare become similar to Fred Foldvary’s idea of decentralised taxation (based on land value taxation) and the mutual aid systems that existed before the modern welfare state respectively. The state becomes a fluid structure that aids in economic development through distributed forms of political decision-making.

Taking Back Control

Thus the mantra of taking back control is a false one when wrapped in the narratives of globalisation, that see the move toward deindustrialisation as a natural outcome of economic dynamics. The reality is that such narratives have been developed by purposeful political action, through interest groups, politicians and ideologues.

Taking back control in this regard is a nonsense, that achieves nothing more than shuffling pieces on a board. The reality is that industry, in the sense of large factories producing steel, cars, white goods, etc. is an impossible future, that required a huge managerial state to maintain them during the height of Keynesian economic management.

However, this does not mean that globalisation is the only alternative to the national Keynesianism that preceded it. Instead, looking at the economies of scale that characterise globalisation, we see constructed variables that are open to significant criticism and change. One such mode of change involves growing and cultivating a decentralised paradigm of cooperative accumulation and counter-institutions that involve the distribution of political and economic power to subsidiarised platforms.

This would truly mean taking back control.

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