Paul Mason, Postcapitalism: A Guide to our Future

Paul Mason, Postcapitalism: A Guide to our Future, Allen Lane/Penguin, 2015, 1 846 14738 8, hbk, xxi + 242 pp, £16.99

The thesis of Paul Mason’s book is simple and important: that for two hundred and fifty years capitalism has been maintained by a series of Kondratieff waves, but that this historical process has now broken down. We therefore face a complex transition to postcapitalism, so we need to prepare for it.

The argument of the book is complex, and the short summary that the length of this review permits will to some extent caricature it: but this summary will show why the book’s thesis is particularly relevant to the Citizen’s Income debate. At the heart of the thesis is the Russian economist Kondratieff’s theory of cycles, or waves, and Mason’s emphasis of the role of labour in those cycles. At the beginning of each new wave, new technology ( – usually invented as the previous wave was coming to an end), and new capital investment, fuel an economic upswing. As savings rise and banks hoard capital, the upswing slows down; consumption slows, capital flows into an unproductive finance sector, ample credit reduces interest rates, wages and prices collapse, and recession sets in. When further new technologies emerge, new business models evolve that can employ them, new markets appear, and the finance sector releases capital for investment in new production that employs the new technologies, then a new upswing can begin. Mason’s important emphasis is on the role of labour in this process. To somewhat simplify his argument: it is people who consume the new production, people need resources to do that, those resources are mainly generated by wages, new technologies tend to reduce the requirement for labour, so a new wave can only take off if labour is sufficiently skilled and organised to enable it to extract sufficient of the proceeds of production to enable it to purchase the new production. Somewhat counterintuitively, it is strong labour movements that have enabled capitalism to survive.

Mason surveys the five Kondratieff long waves that the global economy has experienced: from 1790 to 1848, the factory system, steam power and canals generated the upswing, and the end of the cycle came with the depression of the 1820s and political crises in Europe. Railways, the telegraph, and machines making machines, generated the second cycle, which lasted from 1848 to the 1890s, when a long depression occurred. Scientific management was the business model that enabled heavy industry, electrical engineering and mass production to drive the third long wave from the 1890s to 1945, which was ended by the Second World War’s destruction of capital. In the fourth cycle, from 1945 to 2008, transistors, automation, and computers, created a long economic upswing. The oil price shock of 1973 started the decline, which culminated in the financial crisis of 2008. A fifth long cycle then started, driven by information and communication technology, a global marketplace, and information goods: but, as Mason shows, it has stalled. The first four cycles were accompanied by large workforces which were increasingly organised and therefore able to extract sufficient proceeds of production to fuel the cycle. Foolishly, neoliberalism has broken the power of labour, and has therefore prevented the fifth cycle from taking off. A second factor that has contributed to the fifth cycle not taking off – and this is one of Mason’s major themes – is the rise of information goods that are essentially free: many of them are designed to be free, and even if they are not, then in practice they become free or almost free. Recorded music is the classic example. With information goods being increasingly important – and with increasingly sophisticated 3D printing, we shall soon see products that we never thought could be free or almost free becoming so – and in many contexts markets will become increasingly irrelevant. We shall be in an era of postcapitalism. The fifth Kondratieff wave will fizzle out, and there will be no more of them.

Paul Mason’s description of what postcapitalism will look like is inevitably somewhat speculative – what else could it be: but perhaps the least speculative element is his section on the necessity of a Basic or Citizen’s Income ( – strangely missing from the index: it’s on pages 284 to 286). Why pay a Citizen’s Income?

A basic income paid for out of taxes on the market economy gives people the chance to build positions in the non-market economy. It allows them to volunteer, set up co-ops, edit Wikipedia, learn how to use 3D design software, or just exist. It allows them to space out periods of work …

– and he adds a variety of other advantages that will be familiar to readers of this Newsletter. Mason suggests that production and goods would become increasingly socialised, that less money would therefore be needed, and that the Citizen’s Income could then disappear. Perhaps. Perhaps not.

Where we might wish to dissent from Mason is in relation to his suggestion that a Citizen’s Income could only be established in the context of an overall postcapitalist transition project. As our research has shown, it is perfectly possible to establish a genuine Citizen’s Income from within the current tax and benefits system without additional financial resources being available. The importance of this finding is that it suggests that we could already have in place one of the building blocks of a postcapitalist economy, and that that could ease the transition into some of the other changes that will be required, such as a reduction in working hours for everyone so that the work that does need to be done can be better shared.

Not everyone will agree with Paul Mason’s thesis and prescription: but anyone who does not surely has an obligation to present an alternative theory that coheres with the evidence. It will be interesting to see if such alternative theories result in a requirement for a Citizen’s Income. In the meantime, Mason’s book is a useful guide, and is an encouragement to put in place the social policy that we shall need as the transition to a postcapitalist society and economy takes place. A Citizen’s Income would be a good place to start.