Towards An Economy Based On Provision Of Human Needs

Tuesday, 13 August 2024, 11:58 am
Opinion: Ian Powell

A critical feature in Karl Marx’s theoretical construct of political economy provides a valuable insight on how economies in countries such as Aotearoa New Zealand, function and how they might function better in order to achieve the well-being of their peoples.

This construct begins with the statement that any product begins first with both a labour-value and a use-value.

The former is what produces the product. How it is materially used to satisfy a human requirement or usefulness is the latter (Capital, Volume 1, pp. 35-41).

Under capitalism, which is more than simply commerce, when that product is traded as a commodity in a market, it acquires an additional exchange value.

That is, the proportion by which the commodity can be exchanged for something else, which is usually money.

This shifts the use-value of an economy away from human-needs towards wealth accumulation driven. Human needs are relegated to by-products.

It is this that differentiates capitalism from earlier forms of commerce including markets and trade.

Pandemic lessons

The Covid-19 pandemic has been arguably or potentially at least the greatest threat to the survival of capitalism.

The other main threats have been the fear of international socialist revolution arising out of the 1917 Russian Revolution and the 1930-40s with the economic collapse under the Depression and subsequent world war.

The pandemic’s arrival did not mean that New Zealand and other capitalist economies could somehow pause during a lockdown and then simply resume when it was over.  

Capitalism’s addiction to profit means that its main purpose of wealth accumulation continues throughout; before, during and after.

The satisfaction of people’s needs is only a by-product in this endless process of accumulation. Consequently, insecurity of future profits instantly pushed capitalism into crisis.

On the one hand, the pandemic challenged the very foundations of capitalism. On the other hand, lockdowns provided nature for a much-needed break.

This break included cessations of industrial production  and transportation restrictions. Carbon dioxide emissions and other pollution significantly reduced.

From production for profit to provision for need

The above ‘pandemic conclusions’ are those of Dr Christoph Hermann in his ‘Life under the pandemic: from production for profit to provision for need’ published in Socialist Register 2021 (pp.274-290). 

Hermann, a history lecturer at the University of California (Berkeley), discusses the experience of the residents of smog-plagued cities such as New Delhi who could suddenly see the sky.

The pandemic lockdowns demonstrated that a focus on essential needs can provide breathing space for the global ecosystem.

But it also led him to conclude that the pandemic crisis “sounded the death knell to all attempts to solve the ecological crisis through profit-based incentives.”

The dramatic fall in oil prices caused by the decline in economic activities caused by the pandemic will undermine the shift to less damaging energy sources because this shift is contrary to capitalism’s prime driver, wealth accumulation.

Carbon cowboys

Hermann’s article was published in 2021 and so much has been learnt since then. However, his basic point remains valid.

This is evidenced by the increasing direct influence of the fossils industry at the United Nation COP28 Climate Change Conference in Dubai in December 2023.

Further, Hermann is right to criticise the dependence of commercial markets to reduce carbon emissions.

This is not just because these wealth accumulation driven markets have the greatest responsibility for increasing emissions in the first place.

It does not, however, mean reliance on market forces and technology to reduce emissions as presently advocated by New Zealand’s new government.

This is just political camouflage for a mix of  lack of commitment to address climate change and largely covert climate change denial.

This point was well made in a critique from Pat Baskett published by Newsroom (11 August): The free market won’t solve our emissions problem.                

Instead Hermann’s critique recognises that carbon emissions markets can create carbon emission beneficiaries in the form of profiteers.

This was discussed by Patrick Greenfield and Nyasha Chingono in The Guardian (15 March): Textbook example of profiteering carbon cowboys.

Levering off what is described as a “textbook example” at Zimbabwe’s Lake Kariba, which has the planet’s largest human-made dam, the writers describe the role of what are called ‘carbon cowboys’.

They quote a forest scientist revealingly that:

Nature-based carbon markets have largely been co-opted by groups affectionately known in the industry as ‘carbon cowboys’. These groups spent much of the last 15 years snapping up and enrolling large tracts of land in the developing world, with little care for Indigenous rights governing these areas, or ensuring that local inhabitants get paid for their conservation work.

Towards a needs based use-value economy

Hermann’s advocacy of a needs-based economy involves ensuring there is sufficient supply in order to remove the existential threat of wealth accumulation.

The more supply is addressed the more debt (an inevitable consequence of this threat) diminishes.

While achieving socialism may well require revolution of some form, transitioning  towards a use-value society can be done incrementally in small steps.

Small examples already exist, including in New Zealand. Cooperatives, not-for-profit organisations and such as cooperatives (including food) and small family-owned farms already run on use-values.

A use-value society involves shifting to a more communal and cooperative based economy. But it does not require excluding markets, commerce or trade.

These elements preceded capitalism and would continue either in the absence of, or with diminished  wealth accumulation influence.

Democratising democracy

But it does require democratising economic and social life well beyond formal political democracy. Democratising democracy means much more than spending a few moments in an election booth or completing a voting form.

Hermann concludes with the following:

This means genuine opportunities for active participation and administration – not just by taking surveys or forming committees that can voice concerns but have no power in decision-making processes.

Further:

Positive experience with growing islands of use-value orientation in the sea of profit-maximization can, hopefully, pave the way for a systemic change, ending capitalism and tackling the ecological crisis.

Currently in New Zealand due to the power of the vested interests of the beneficiaries of wealth accumulation (sometimes reinforced by cronyism) there is little appetite among the parliamentary parties for this form of transition.

Seeds of interest can be found within the policies of the Greens and Te Pati Māori. Hermann may be overly optimistic in his analysis. But without hope you can't have progress; you also can’t have waves without first having little ripples.

Just saying!

© Scoop Media

Ian Powell

Otaihanga Second Opinion is a regular health systems blog in New Zealand.

Ian Powell is the editor of the health systems blog 'Otaihanga Second Opinion.' He is also a columnist for New Zealand Doctor, occasional columnist for the Sunday Star Times, and contributor to the Victoria University hosted Democracy Project. For over 30 years , until December 2019, he was the Executive Director of Association of Salaried Medical Specialists, the union representing senior doctors and dentists in New Zealand.

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