Published: 23rd August 2021
Draft Topic for our ‘Transformation, a Manifesto for Democratic Socialism’
For Democratic Public Investment
Investment is the main motor of economic growth and the basic generator of employment. But investment under capitalism has been falling for nearly 50 years. The only way out of this crisis is through a programme of public investment linked to a democratic public banking service
All other things being equal, those nations that invest a larger amount of their incomes will tend to have much faster growth than those which don’t. The graph below clearly confirms this tendency.
For developing countries, investment provides the building blocks on which an economy is built. For developed countries it is the lifeblood of economic advance. For both, investment determines much of the economic destiny of a nation. As it does for humanity as a whole.
The Importance of Infrastructure Investment
The central economic problem today in the capitalist world is the lack of investment. Reflecting this, in many capitalist countries we see major shortfalls in infrastructure. Thus, there are a lack of convenient and fast transportation systems; of modern communication networks; of clean water and modern sewage facilities; of sufficient electric supply; of effective public services and so on. The infrastructure that does exist is often ageing and in serious need of repair and renovation.
The latest example of inadequate infrastructure has been exposed in the ongoing Coronavirus crisis. In a few countries, government capacity, community support and health facilities were sufficient. These included the most advanced nations such as Germany. Or geographically isolated countries such as New Zealand, Australia and South Korea. Or the more socialistically-oriented countries such as China, Vetnam, Laos, Cambodia, Cuba and Venezuela. In these countries, the hospitalisation and death rates were very low.
But in most capitalist countries in the world their health infrastructure was woefully inadequate. And their governments proved less concerned with protecting the health of their citizens. And more focused on helping their companies to keep making profits. Even when they did decide to switch priorities they usually proved unable to mount effective health campaigns to test, trace and isolate people who had the virus.
The lack of up-to-date infrastructure seriously undermines a country’s economy. On the other hand, good and expanding infrastructure greatly helps an economy build and grow. Take the example of improving transportation through the construction of roads and shipping ports; bridges and tunnels; railways and airports. Such links open up whole regions and rural areas and connect them to the cities. This enormously increases trade and economic activity within a country. By reducing the time it takes to move people and goods around it improves peoples’ productivity and efficiency. And it produces new opportunities for socio-economic advancement for the population as a whole.
The same is true for other elements of infrastructure such as water delivery, land management, power, communications and so on. Without these elements in place a country will not be able to develop effectively. It is precisely the lack of such facilities that has been holding Africa back and other areas of the developing world. For instance, only 30% of Africa’s roads are paved. As a result in most of the continent transportation of people and commodities becomes extremely difficult. Especially when it rains and the roads become clogged with mud. Similarly, large areas of Africa have little or no electricity with all the limitations this means for economic activity and even basic homelife. But this latter problem is not restricted to Africa. Large parts of South Asia have problems of repeated power cuts which disrupt their potential for growth and modernisation.
The problem is that to build up the infrastructure of a nation requires long-term major investments. Plus a wider perspective which recognises that the advantages of such investments are not just limited to a particular sector but apply across the board. It is on both of these grounds that such investments are not attractive to capitalist sources of finance. After all, capitalists are not charitable institutions. They only invest and produce for a handsome profit in a foreseeable timeframe. Thus, they usually favour short-term profits on limited investments in specific sectors. Of course, they are happy to bid for infrastructure projects as long as someone else is footing the bill. It is for this reason that long experience has demonstrated that countries trying to escape the trap of underdevelopment cannot do so by relying on capitalist investment.
Even the advanced countries face the same dilemma. If they want to renew and expand their infrastructure the state has to take the lead. In some cases, governments have tried to combine public and private investment in so-called Public-Private Partnerships. But these have usually turned out to cost far more than if the state had done it alone. With the private sector tying up the state in contracts that milk it of funds over a long period.
Need for Major Investment in the Economy
In the richer nations most infrastructure was funded by the state. But this was not enough. In most cases, the state has also had to take the basic industries into public ownership. Thus key sectors had to be nationalised such as power, rail, communications, water, steel production and so on. The efficient operation of such basic industries, and their provision of relatively inexpensive goods and services, form the underpinning of a modern economy. Once again private capitalists proved unwilling to make the large-scale investments needed to maintain and develop such industries. And this was the reason they were brought into state ownership earlier in the 20th Century. This case for public ownership has been re-proven in recent times after the privatisation of some of these sectors – the reintroduction of the profit motive and hungry shareholders has only resulted in higher prices and reduced investment.
Even for the facilities that are owned by private companies, major investments are becoming more and more expensive, requiring a longer time for returns. But capitalist investors and shareholders are not prepared to dig so deep or wait for so long. That is why there is a lack of investment in so many sectors today. As we outlined in our earlier Manifesto section on Modern Capitalism, many companies are sitting on great piles of cash and often prefer to speculate on stock markets. Or buy back their own shares. Rather than to invest in new development.
Even where companies do invest, they do so not for the benefit of their workers, customers, or society as a whole. But for profit for themselves. Clearly, whenever investment is needed to advance the long-term interests of a country as a whole it has to be done through public investment.
Advantages of Public Investment
Jonathan Clyne, one of the founders of our Socialist Network, has written on the historical relationship of public ownership to public investment. There can be no doubting the truth of his statement that “Public ownership has a proven record of mobilising and directing large investments into chosen areas.” 1 This was true in both the capitalist countries and the state socialist republics. As we have shown in some detail in our sections of the Manifesto on ‘Socialism and the Soviet Union’ and ‘China’s New Economic Policy’. It was public investment in infrastructure and basic industry in these backward countries that helped lay the basis for their rapid development. And in the case of China continues to take it forward today.
This public investment combined with planning also helped the state socialist countries avoid the boom-bust economic cycle of the capitalist nations (for details on this cycle see our earlier Manifesto section on Democratic Dynamic Planning). In the case of the Soviet Bloc the regular cyclical downturns in private investment that plague capitalism did not apply given the small size of its private sector. In China where the private sector plays a much bigger and increasing role in the economy, the state’s public planning and investment tools have so far been able to bridge any cyclical problems in private investment. Thus we saw in recent years how China was able to mobilise a massive programme of public investment to successfully power through the international Great Economic Recession of 2008-9.
Again, in order to avoid the much smaller international economic slowdown of 2016-17, the Chinese government speeded up public investment in order to stimulate the economy. State investment increased by 23.7%. Significantly, as marxist economist in China, John Ross highlights: “this growth began to stimulate private investment, which started to accelerate from a low level in November 2016. This demonstrated that instead of state investment ‘crowding out’ private investment, which is the claim of neo-liberalism, arguing that state sector and private sector interests are counterposed, in China state investment by aiding economic growth stimulated private investment…” 2
Ironically, as John Ross points out, it is only in societies where the public sector is dominant that keynesian stimulation measures like this really work. In contrast, in capitalist societies where private investment rules, it is precisely because the state cannot control or direct the investment decisions of individuals and private companies that render the policies advocated by Keynes, the most famous capitalist economist of the 20th Century, ultimately ineffective. As Ross summarises the problem, in systems based on private enterprise, the state lacks the ability “to regulate the level of investment.” 3 This was a major contradiction in Keynes’ theory that Keynes himself acknowledged when he wrote that “I conclude that the duty of ordering the current volume of investment cannot safely be left in private hands. It was necessary, therefore, to aim at a socially controlled rate of investment.” 4 And more clearly with “I expect to see the State… taking an ever greater responsibility for directly organising investment.” 5
Falling Investment in Capitalist Countries
Another major contradiction, not just in Keynes’ theory but in capitalism itself, is the built-in tendency of the rate of profit in the main productive sectors to fall. And as a result for investment in those sectors to fall over the long term and flow into less productive but more profitable areas. This process and the reasons for it are explained in our Manifesto section on Modern Capitalism. The result of this major decline in productive investment is a relentless fall in the rate of economic growth. This central flaw in capitalism was of course identified by Karl Marx in the 19th century and outlined in his books on Capital.
A big exception to this tendency which Marx anticipated, can occur with the major destruction of capital equipment such as can happen in a major depression. Or a war. Or both. This is what happened through the period after the 1929 Great Depression and during the Second World War (the most equipment destructive war to date). Destruction on this scale, in effect, creates a reset in the economic system and lays the basis for another era of investment and growth. As we saw in the two decades after the Second World War.
However, once again, the tendency for the rate of profit to fall reasserted itself so that by the end of the 1960s, there was a profits crisis in the advanced capitalist economies. This ushered in a long period of declining private investment in the productive areas of the economy in the period from 1970 to 2015. As we can clearly see from the chart below.
The inevitable result of this continuing fall in investment in the productive sectors of the capitalist countries is a similar fall in economic growth, as the chart below dramatically reveals.
These two charts confirm our opening point in this Manifesto section on Democratic Public Investment. Namely, that the level of investment in an economy is the key driver of economic growth. And a fall in investment will lead to a fall in growth. It also explains how in a publicly-driven system like China, state control of investment has been able to avoid the regular crises and slumps that typically afflict the capitalist economies. That is why China has had no capitalist business cycle since the coming to power of the Communists in 1949.
Chinese Investment in Infrastructure
Nowhere has the benefits of public investment been more clearly demonstrated than in China. Its gigantic expenditure in recent decades on new infrastructure has brought spectacular benefits. This was especially the case from 2008 onwards. The Chinese government launched a massive public building programme in order to counteract the threat of the 2008 Great Economic Recession that broke out in the Western capitalist countries. Although this huge expansion in infrastructure increased national and local government debt it has had a long-term beneficial effect on the economy. And on the lives of the Chinese people. Something that the capitalist approach to investment misses. They can’t see that investment in infrastructure comes first and prosperity follows.
Take China’s new 40,000 kilometre-long high speed rail network. This represents two thirds of high speed rail globally. And compares to the next biggest operator, Spain, which only has a high speed network of 3402 kilometres. Indeed, China’s high speed network now equals the whole of Germany’s normal train network. China’s incredible achievement in building this network in record time can be seen from the following graph.
However, from 2011 onwards many Western commentators scoffed at the wisdom of building this network across China. They mocked the small number of high speed passengers in the early years. And the low fares they were being charged. They claimed that the whole project was in big trouble and headed for failure. However, such scepticism is rarely heard today. China’s high speed rail network is now turning an annual profit. But far more important, it is rapidly and smoothly carrying 2.3 billion passengers per year, travelling a combined 680 billion passenger-kilometers. Indeed, half of all train journeys in China are now on the high speed network.
Among many advantages, this has delivered a massive reduction in travel times which has allowed all kinds of business, family and tourist travel to become possible. This has meant that China, a country the same size as the United States, is being able to unite the countryside with the cities. And for the first time to knit its far flung regions into one nation. Journeys that could take up to 48 hours now can be completed in ten. Typically, the earlier Western capitalist criticisms of China’s high speed railway projects were based on narrow and short-term profitability projections rather than weighing up these longer term benefits.
Nor is the building of the high speed network slowing down. It is planned to rise to 70,000 kilometres by 2035 forming part of a massive 200,000 kilometre-long rail network that links up the whole country. Not only has this huge project dramatically improved life for the population and delivered big improvements for the economy, but the high speed rail network in China is electric. This means that it is playing an important role in cutting pollution and reducing the use of cars, especially for long journeys. In this way it is an important contribution to China’s plan for reducing global warming.
China has also created a whole new industry for itself. It is now the world’s most advanced train and track manufacturer and is exporting its trains and supporting systems all over the globe. A good example of China’s new high-speed train technology is its automatic track-width adjusting facility. The difference in track widths between many countries is a major barrier to international train travel. This is a particular problem for China’s Belt and Road Initiative which is building train lines across the world. Until now trains had to stop when it came to a country with a different track width, while freight and passengers were transferred to a different locomotive. This caused considerable delay and extra cost for international travel. However, China’s new technology allows the train to automatically adjust its wheels to the different tracks without stopping.
Likewise, new technologies are being rolled out in China for local transportation in cities. China’s planners can see that already there are too many overcrowded roads in cities. They are mindful that only a fraction of Chinese people have cars. And that living standards will soon be high enough for everyone to own them. But there never can be enough roads, bridges and tunnels to accommodate such an increased number of vehicles. Therefore a big expansion of cheap, comfortable, rapid, zero-emission public transport is not only desirable but essential.
To begin to cope with this, China is now the largest producer of electric buses which together with electric taxis are being made mandatory in one city after another. This is a key part of reducing pollution in the urban areas. Also, in twenty five of China’s largest cities, extensive underground metro systems are now in place. This includes the four largest in the world. Undoubtedly, this is one of the most efficient ways for moving
people around cities. And if there are sufficient underground trains and carriages it is very convenient and comfortable for passengers.
However, underground systems cannot cover every location in a big city. Nor are they really practical for smaller cities where passenger numbers are much lower – they are far too expensive to excavate and take decades to build. Normally, buses fill in these gaps but they are very slow moving in city traffic and less comfortable. To overcome these limitations, China is starting to roll out a new form of city-wide public transport. Combining bus and train technology, electric shuttles are now being introduced into third and fourth tier cities. These travel over a new form of raised monorails that are easily located above existing roads and open areas. And cheaply and quickly constructed. The new shuttles are very quick, safe, quiet and comfortable. Having rubber wheels and flexible junctions they can travel easily over hilly terrain and turn in short distances that are impossible for normal trains and metros. In comparison to train manufacture, the shuttles are made cheaply using mass electric bus vehicle production lines. All of this allows tickets to be as low as five cents and to attract a mass ridership.
How successful such new transport technologies will be remains to be seen. However, it is only through public investment that environmentally friendly solutions like this will be developed and widely introduced.
Investment that a Democratic Economy Could Deliver
There are so many examples of public investment that are urgently needed across the world. “For example, where there is a problem of homelessness and substandard housing, one of the immediate priorities of any socialist government would be to employ construction workers to build houses.” 6
Another common problem concerns the supply of water. In too many countries there are serious problems of recurring drought. This is only likely to get worse with the rise in world temperatures. Yet most countries receive enough water through rainfall and river flows. Their water problems usually arise because they are not sufficiently utilising their rivers or efficiently collecting their rainfall through dams and reservoirs. And do not have a national water grid for efficiently distributing their water resources around the country. Even in many of the driest regions of the world major steps can be taken to transform the land and local climates through better conservation and land management. Looking ahead, there is the prospect of renewable energy being used to green desert areas with treated seawater.
Meanwhile, in many countries massive investment is needed to install or renew urban sewage systems. And in plants to treat polluted water and wastewater so that it can be used again. Either for agriculture (with a lower level of filtration) or for drinking water.
The other side of climate change is the increasing incidence of storms and the floods they are causing. Of course, some floods cannot be avoided. But the majority of flooding can be predicted and prepared for. And the damage minimised.
All this demands major public investment. Investment in national water collection and distribution; in water conservation and desalination; in sewage and water treatment; in flood prevention.
It is the same story with power. In large parts of the world there is a constant problem of power cuts. In some places such as areas in Africa, there is no electricity at all. Even in those more advanced countries with a constant power supply, electricity prices are continually rising.
Whatever the power situation, there is a common need for a switch over to the generation and storage of renewable energy if we are to stop and reverse climate change. A significant contribution to this can be made by individuals through the installation of private solar panels, the purchase of electric cars and energy conservation. But the massive scale and urgency of the problem will only be overcome by collective action through public investment and society-wide mobilisation. For example, the money wasted by America in the Iraq War nearly twenty years ago would have been enough to install solar plants across the deserts of the South West US and to supply the energy needs of the whole nation.
The Key Role of the Banks
No public investment strategy is feasible that does not incorporate a country’s financial system. In the modern capitalist economy the banks, insurance and pension funds play an absolutely central role in the operation of the economy. And in the provision or otherwise of finance for growth and expansion. But, as we have seen from the 2008-9 banking crisis and the gigantic fraud that caused it, these financial institutions are not operating in the interests of society as a whole. Even when they were bailed out with public finance they failed to assist the smaller businesses who desperately needed their assistance.
In the run up to the Great Economic Recession there was a continuous process of bank mergers and takeovers across the world. Nowhere was this more obvious than in the United States as the dramatic graphic below clearly demonstrates:
So huge had the banks and financial firms become and so crucial to the economy, that by the time of the international banking crisis they were deemed ‘too big to fail’. And so powerful were the bosses who commanded these banks that in most Western countries they became ‘too big to jail’. This despite the fact that it was they who had consciously and deliberately encouraged the fraudulent mortgage lending. And overseen their wrapping up into sham financial instruments. All with the aim of securing massive personal commissions of hundreds of millions of dollars for themselves. Gains that they walked away with.
The 2008-9 international banking crisis only made the concentration of ownership worse. The big banks used the crisis to further consolidate the financial sector into yet bigger players, offering even more colossal systemic risk to the whole international structure of capitalism. And in a situation, as the graph below shows, where debts have reached yet greater heights.
Obviously, we cannot allow a situation to continue where individual economic organisations owned and controlled by a small minority, and run in their interest to the detriment of the rest of us, hold the whole future of society in their hands. If we are serious about moving towards a democratic economy capable of addressing and overcoming our economic and social problems, our first step must be to take the financial sector into public ownership. And bring it under democratic control. Without this step we will not be able to effectively plan for our future. Or to execute our democratically decided plans.
One of the great ironies of the capitalist finance sector and the malignant power it wields over us, is that much of the capital used by the finance industry is our own money. Our wages, our savings, our pensions, our insurance policies, our mortgages. By bringing this sector under public ownership and control, all we are really doing is taking back control of our own money. No wonder that public ownership of the banks scores highly in opinion polls.
A Historic Demand
The demand for the banks and other financial institutions to be taken into public ownership is not new. Karl Marx identified the failure to nationalise the banks as one of the main reasons for the failure of the Paris Commune back in 1871. Likewise, Lenin on the eve of the October Revolution of 1917 explained the central role played by banks under capitalism. And identified the need for them to be nationalised as a central task for the revolution. His analysis is worth quoting at length:
“The banks, as we know, are centres of modern economic life, the principal nerve centres of the whole capitalist economic system. To talk about “regulating economic life” and yet evade the question of the nationalisation of the banks means either betraying the most profound ignorance or deceiving the “common people” by florid words and grandiloquent promises with the deliberate intention of not fulfilling these promises.
It is absurd to control and regulate deliveries of grain, or the production and distribution of goods generally, without controlling and regulating bank operations. It is like trying to snatch at odd kopeks and closing one’s eyes to millions of rubles. Banks nowadays are so closely and intimately bound up with trade (in grain and everything else) and with industry that without “laying hands” on the banks nothing of any value, nothing “revolutionary-democratic”, can be accomplished.
What, then, is the significance of nationalisation of the banks? It is that no effective control of any kind over the individual banks and their operations is possible (even if commercial secrecy, etc., were abolished) because it is impossible to keep track of the extremely complex, involved and wily tricks that are used in drawing up balance sheets. founding fictitious enterprises and subsidiaries, enlisting the services of figureheads, and so on, and so forth. Only by nationalising the banks can the state put itself in a position to know where and how, whence and when, millions and billions of rubles flow. And only control over the banks, over the centre, over the pivot and chief mechanism of capitalist circulation, would make it possible to organise real and not fictitious control over all economic life, over the production and distribution of staple goods, and organise that “regulation of economic life” which otherwise is inevitably doomed to remain a ministerial phrase designed to fool the common people. Only control over banking operations, provided they were concentrated in a single state bank, would make it possible, if certain other easily-practicable measures were adopted, to organise the effective collection of income tax in such a way as to prevent the concealment of property and incomes; for at present the income tax is very largely a fiction.
The advantages accruing to the whole people from nationalisation of the banks would be enormous. The availability of credit on easy terms for the small owners, for the peasants, would increase immensely. As to the state, it would for the first time be in a position first to review all the chief monetary operations, which would be unconcealed, then to control them, then to regulate economic life, and finally to obtain millions and billions for major state transactions, without paying the capitalist gentlemen sky-high “commissions” for their “services”. 7
Even capitalist politicians have accepted the need for public ownership of banks. The central banks in most countries are publicly owned and used for the issue of currency and as an instrument for government financial management of various aspects of the economy. This central bank role has been a target of the neoliberals who have successfully pushed in a string of countries for the central banks to become ‘independent’ of day-to-day government control.
Public ownership has also been implemented in the commercial banking sector in many countries. Even in the United States there have been examples of publicly-owned banks and a highly successful and stable one continues today in North Dakota. With a new one planned for California.
In China, the government’s ownership of the main banks in the country including the central bank, the People’s Bank of China, are a vital element in its direction of the economy. And a key part of the effectiveness of its planning process.
Not Just a Change of Ownership
But taking the banks into public ownership is not enough. First, we need to introduce democracy and transparency into the whole central bank and regulatory framework, thus giving a positive answer to the age old question: ‘who regulates the regulators?’
Even more important is the question of who runs the banks and who its activities benefit. An extreme example of this was seen during the 2008-9 international banking crisis as it played out in the UK. A number of the banks were nationalised in order to save them from going under. Large amounts of public money was ploughed into these banks to pay off their debts. But instead of the government bringing in a more progressive management they largely left them in the hands of the old dishonest and irresponsible managers who had ruined them in the first place. Not surprisingly, these managers carried on with their old practices as was revealed in the following years. These practices included failing to help small businesses who desperately needed support during the crisis and its aftermath. Even worse, the banks continued to advise their clients how best to avoid paying taxes to the very government that now owned them.
As it happens, the 2008-9 banking crisis gave the ruling Labour Government a golden opportunity to bring most of the British financial sector into the public sector for next to no cost. With all of the gains that would have flowed from this for the benefit of the people as a whole rather than the small minority of moneygrubbers at the top. Instead, the Labour politicians used the public purse to bail out the City of London. The nationalisation that was carried out was seen only as a temporary measure. To be followed as soon as possible by a return to the private sector. This was state capitalism at its worst.
Instead, the financial sector needs to be brought under democratic public ownership and control, transforming the private banks and the rest of the financial institutions into a democratic public banking service in order to serve the interests of the 99% of the population who it currently exploits and neglects. To make a public banking service democratic and transparent it would need to come under the direction of parliament and planners in partnership with its direct stakeholders: the banking staff; insurance and pension policyholders; and account holders, both individual and small/medium enterprises alike.
Such a democratic public banking service could provide economic stability and growth, along with effective economy-wide planning and investment. Plus, it would stamp out the money laundering, corruption and tax evasion that is undermining our public finances and political life. Along with the mis-selling of financial products, and the insider fixing of financial, currency and commodity markets which is cheating so many bank customers and society as a whole.
A unified democratic public banking service would deliver a wide range of benefits to society. It would do away with the lavish profit-taking. And the huge sums currently lost to bonuses and commissions that have incentivised much of this sector’s fraudulent culture. Moreover, it would abolish the sector’s ridiculous waste, duplication and unnecessary operations. Imagine what could be done with the expensive property tied up in thousands of lookalike high street branches. Or the huge marketing budgets wasted on promoting virtually identical services.
Investing in People and Enterprises
A democratic public banking service would certainly deliver great benefits on a macroeconomic level, providing as marxist economist Michael Roberts puts it: “financial support to any national plan for investment in infrastructure, the environment and jobs.” But such a service could also greatly increase investment in our small and medium size businesses and cooperatives. Supplying them with expertise and cheaper loans and credit. Helping them to manage their finances and expand their activities. And to innovate.
We can also use a democratic public banking service to invest in individuals and families. A whole range of benefits could be delivered to individual account holders, savers, borrowers, the insured and pensioners. With the savings made by abolishing the outrageous profit-taking, we could start by abolishing bank charges and offering lower interest rates for borrowers and higher rates for savers. We could bring to an end the exorbitant interest charges on credit card holders with the introduction of cheap public credit cards. And drastically reduce transaction costs for card-handlers.
At the moment, banks are institutions where we have to have our wages, pensions and welfare payments paid into. And where we place our meagre savings. Institutions which we get virtually nothing from but which use our money to make profits for the directors and the wealthy. For the poor the banks offer nothing, not even individual accounts. This further increases their marginalisation in society
But imagine a financial sector turned into a public service which genuinely seeks to assist people. A service that utilises the tens of thousands of existing financial industry staff to provide advice and financial support for individuals and families. Virtually everyone gets into difficulty at some time or another. Or needs financial advice and assistance for key decisions in their life. A democratic public banking service could provide the guidance and financial help to help us through these times.
Investment is the main motor of economic growth. And the only reliable source of investment is public investment applied as part of a planned economy. For developing countries public investment in basic infrastructure is the prerequisite for the emergence of a successful economy. To be followed by encouragement and support for the labour intensive sectors such as agriculture, mining, textiles etc. that are the natural strength of most developing nations. This can then lay the economic basis for the emergence of light industry and consumer manufacture. And in due course, heavy industry and new technologies.
For the more advanced economies, as we have shown, private investment is in serious decline which is the main factor behind the capitalist world’s economic stagnation and crises. This compares dramatically with the incredible success being experienced by the Chinese economy. China has used planning and public investment to create a modern and efficient infrastructure, several examples of which we detail here. Also to invest heavily in education, and research and development. All this is paying off with China likely to become the most powerful economy in the world over the next decade, if not earlier.
We have also outlined a number of areas that urgently need public investment across the world. Such as action to stop the destruction of habitat and species, and to rapidly cut back on carbon emissions if we are to reverse the disastrous trend towards higher temperatures.
A key aspect of public investment is the privately-owned financial sector which controls much of the investment in the capitalist world. We have outlined the overwhelming case for public ownership of the banks which is the only way that governments will be able to seriously mobilise public investment on the scale needed to overcome their national and international problems. But we argue that the bringing of the financial sector into public hands cannot just be a case of exchanging the private owners for ministers and civil servants. Instead, it must be a new democratic model of public ownership in which the bank workforce, bank customers, small business customers and so on should have a key role in its governance. Alongside representatives of the wider community through parliament. Our aim should be to transform the banking, pension and insurance sector from an industry that uses and abuses our money into a genuine public banking service that assists people and businesses with financial advice and financial assistance.
For Democratic Public Innovation
Innovation is essential for the advance of any system. Here we look at the increasing problems posed by innovation under capitalism.
And how innovation could be greatly increased with input from the wider public in the transition to a
democratic socialist society.
Innovation is usually taken to mean the introduction of new technologies in society. But it is much more than that. Innovation applies to changes made to any aspect of human endeavour. Thus, we are also talking about the introduction of new ways of doing things, improvements to existing processes and so on.
As such, innovation is the key to the success or otherwise of any social and economic system. For example, it was the lack of effective innovation in many areas of the Soviet economy that was an underlying cause of its failure to compete with the capitalist world market. This spelled doom for its survival. Yet the question of innovation in a democratic socialist society – how it can be accelerated and positively directed to improving humanity, and how it can be democratised to involve ordinary people – is rarely if ever discussed on the Left. Any democratic socialist manifesto must deal with this question if it is to offer a credible way forward for society.
Innovation Past and Present
In the feudal societies of Europe some members of the ruling aristocracy were excited by science. But this was usually only in its pure form as the search for pure knowledge. In general, they weren’t interested in the application of science to day-to-day problems which they tended to regard as beneath them. This is where the capitalists slowly emerging within feudal society came into play. In innovation they saw the opportunity for stealing a march on their rivals and increasing their profits. “Where the aristocrat looked up through a telescope at remote galaxies, the capitalist wanted to look downwards into the world beneath his feet and find out what needed to be done to turn material reality into a saleable commodity. This changed forever the role of thinker and doer. Thinking, henceforth, was measured by its ability to make profit, or to comprehend the world so that profit would become more likely.” 8
Once capitalism had succeeded in defeating feudalism politically it began to remove the many religious and other restrictions that had previously existed as barriers to investigation and the application of science and technology. As a system in which innovation lies at the heart of its existence, capitalism was without doubt the most innovative system yet known to mankind. Karl Marx and Friedrich Engels were among the first to recognise that innovation was the motor of capitalist development. It is worth quoting here some of what they wrote about this in their Communist Manifesto published as early as 1848:
“The bourgeoisie cannot exist without constantly revolutionising the instruments of production… All old-established national industries … are dislodged by new industries, whose introduction becomes a life and death question for all civilised nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe…The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of its commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate…The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature’s forces to man, machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation of rivers, whole populations conjured out of the ground – what earlier century had even a presentiment that such productive forces slumbered in the lap of social labour?”
Capitalist societies were not the first to experience key innovations. For example, ancient China had discovered many important new technologies. Discoveries such as iron and bronze; paper and much later printing; silk and porcelain; alcohol and tea; gunpowder and the compass; clocks and seed drills; umbrellas and paper money. To name some of the most famous.
However, capitalism was unique in the centrality and speed of its technological development. As an essential part of capitalism’s competitive drive for maintaining or increasing profits, innovation is built into its very nature. It was for this reason that it was able to so quickly overcome the mighty ancient civilisations of China and India.
Indeed, one of the biggest arguments for capitalism made by its defenders is its ability to innovate. Significant sections of society are inspired by the ability of capitalism to innovate and compare this ability as a decisive advantage over other systems such as the bureaucratic planned economies of the Soviet Bloc and China. Of course, the Soviet experience was only one model of state-dominated socialist development. The modern Chinese example seems to be achieving a far better rate of innovation. One that looks set to be surpassing its capitalist rivals. If China’s rate of innovation does leave its capitalist competitors behind this will deal a major psychological blow to the capitalist system and deeply undermine its morale.
Turning Science into Technology
Although they are often mentioned together, science and technology are not the same. Science is the study of nature and the increasing of knowledge about the universe. Meanwhile, technology is the application of this scientific knowledge to practical outcomes. The difference between these two concepts was vividly demonstrated in the Soviet Union. At one time 50% of the world’s scientists lived in the USSR. This reflected the massive percentage of people going to university in the Soviet Union and its encouragement of science and industry. As a result, great basic science was carried out with a large number of patents awarded. But, with the main exception of the Soviet military and space sectors, too many of these scientific developments were not turned into effective technological applications. This was especially the situation in light industry and consumer goods. For this reason, many Soviet products were not attractive on the world market.
Contrast this to the experience of Japan. In the 1970s, Japan was spending only 2.5 percent of its GDP on research and development, while the Soviet Union was spending more than 4 per cent. Yet Japan’s products were increasingly popular across the world. And its economy was growing much faster than the Soviet Union. A major factor was that in Japan its research and development funding was spread across a wider variety of economic sectors.
Moreover, in Japan, there was a strong integration between research and production at the enterprise level. Whereas in the Soviet Union there was often a wide separation between the two activities. Crucially, the Soviet Union did not have organisations through which to commercialise the technologies developed by the State. In contrast, Japan had strong user–producer linkages, which were non-existent in the Soviet system. Japan also encouraged devolved innovation with incentives provided to management and the workforce of companies, rather than focusing mainly on its centralised ministries and academies of science.
The same criticism could be made against the state-owned industries in the capitalist countries. Too often, leading edge technologies seem to be found mainly in the private sector. For this reason business has come to be widely accepted as the innovative force. While the State-owned industries are cast as a drag on innovation, necessary for the ‘basics’, but too large and heavy to be the dynamic engine of the economy. Although there is an element of truth in this description, in practice things are more complex.
State Funding Behind Many Technical Advances
Apple, currently the most valuable company in the world, is held up as a model of American capitalist innovation. But the reality is that it is more a model of design and marketing than technical innovation. In fact, Apple has one of the most miserly research and development budgets in the technology sector. The key technologies found in the iPAD, the iPhone etc. were actually developed in universities with government funding. While the underlying processes that Apple took advantage of, including the internet, were originally developed as US military programmes. But this is just one well known example. In truth, most of the radical innovations that have fuelled the growth of American capitalism – from railroads to the Internet; from modern-day nanotechnology to pharmaceuticals – trace themselves back to state investment and government coordination.
For instance, the algorithm that led to Google’s success was funded by a public sector National Science Foundation grant. Even the much-praised Elon Musk of Tesla electric cars fame, was only able to move into mass production through a government loan of $100 million. This enabled him to buy and refurbish the General Motors/Toyota joint automobile factory in California. Then there was the big tax incentive from the Federal government for each new Tesla car sale in the first years. Without this it is quite likely he would have gone out of business. He himself admits that he was close to bankruptcy in the years from 2017-2019.
It was a similar story for Elon Musk’s SpaceX company held up as a great example of new private initiatives in the space business. However, without the purchase of Musk’s first three rockets by the Defense Department, SpaceX would never have left the ground. And without the subsequent massive contract from the National Aeronautics and Space Administration, Musk’s company would have not survived,
Likewise across the advanced capitalist economies. In the development of aviation, nuclear energy, computers, the Internet, biotechnology, and today’s developments in green technology, it has been the state – not the private sector – that has kick-started development. It was the state that demonstrated a willingness to take risks while the private sector was too fainthearted. Even after these new technologies were developed with government assistance, the private sector was still too scared to invest. Seeing profits as too uncertain or too distant. So governments had to fund commercialisation of these technologies, until “venture capital arrived 15–20 years after the most important investments were made by public sector funds.” 9
In so many cases under capitalism, major companies act as parasites on the public purse, feeding off the benefits of research done at public expense. Too often industrial grants and tax incentives for company research and development have become business giveaways, making individuals and their companies richer but providing little return to the economy or to the State.
Myth of The Heroic Inventor
The history of innovation is often portrayed as a series of brilliant and determined individuals who were able to produce ingenious solutions and turn them into popular products. Yet, the advance of technology was always a much more complicated and collective process in which all kinds of developments built upon each other. Only then to lay the basis for other major advances. Certainly, in the past, individuals played a key role in this process. But this is less and less the case today.
Nowadays, the finance required and the scale of production, marketing and distribution needed to commercialise new ideas, is on a level incomparable to the earlier days of capitalism. There are still the occasional examples of the individual inventor which are repeatedly celebrated in the media. But these are very much exceptions to the rule. Innovations overwhelmingly are based on the work of government funded bodies. Or come out of large companies. “Over the last century, the heroic entrepreneur has increasingly become a rarity and the process of innovation in products, processes and marketing has become increasingly ‘collectivist’ in its nature.” 10
Today, the vast majority of patents are awarded to and held by companies and publicly-funded organisations. This is not surprising given that the process of applying for patents is complicated and costly. And too often leaves individuals and small companies at a great disadvantage. Among other problems, they leave them open to having their ideas stolen or copied by the big companies who constantly monitor the patent applications. Even where patents are successfully awarded this is only the first step. Trying to legally enforce patents against the big sharks in the market is a very difficult, slow and expensive process which many an inventor has had to give up in frustration. Or for lack of resources.
Then comes the task of turning good ideas into successful products. The difficult task of securing the capital needed to move into mass production or convincing an existing producer to take the invention on board. In many cases inventors are not able to overcome these hurdles. Here enters the venture capitalist who, taking advantage of the vulnerable individual inventor or small company, seeks to secure the maximum profit from and/or control over the company that will produce the new product or service.
Lack of Planning
Where companies do carry out their own research and development there is very little coordination between them. Naturally, they have an interest in keeping the results of their research secret from their competitors and from the rest of us, no matter the negative effect this has on mankind’s level of knowledge. This contrasts with the public sharing of research outcomes in universities and other publicly funded academic institutions. Indeed, public peer review is an important aspect of the academic research world.
As a result, in the capitalist world there is little opportunity to coordinate or plan private commercial research and development. This leads to too much investment going into some sectors and too little in others. The ludicrous internet dotcom boom of the 1995-2000 period was a classic example of this. This lack of planning also means that a lot of potential advantages for combined and hybrid development is lost. And resources that might be needed to build on the new technology are not made available.
A significant exception to this lack of innovation planning was found during the postwar period in the developmental states of Japan, South Korea, Taiwan etc. There, governments instructed companies on what technologies and product lines to focus on, coordinated industrial applications and gave assistance where possible. The result was a major technical and economic leap forward for these countries. In less than two generations they were able to emerge into the advanced nation league. This example radically undermines the neo-liberal, anti-state planning, coordination and investment arguments put forward by the capitalist economists today.
Of course, these Asian states received considerable US military support which saved them having to waste valuable resources on defence. They were also given ‘most favoured nation treatment’ so they could export into the massive US market without tariffs. All as part of an attempt to counter the influence of the Soviet Union and prevent the very real threat of revolution in the immediate post war situation. But the development model in East Asia has long gone. These countries have since evolved along more classical capitalist lines through the penetration of neoliberal ideas and practices. And the tendency of investment in capitalist economies to fall over time has befallen them. Accordingly, their rate of technological advance and economic growth has greatly suffered.
The Speed of Innovation
Innovation today is growing very rapidly. It is generally estimated to be increasing at an average of 5% per year. If this was an example of linear growth it would take 20 years of 5% growth to double the size of human knowledge. But it is occurring in an exponential fashion, with growth compounding on itself each year. The result is that the doubling of knowledge is taking place in 14 years rather than 20. In some sectors, this rate of change is happening even faster.
As such, we are living in an age of incredible technical acceleration. In the first stage of human-organised technology, it took half a million years to move from stone tools and the regular use of fire, to the beginning of farming. But it only took a few thousand years more to move into the Neolithic age. An age in which people produced pottery and the wheel, built houses and began to produce food surpluses. From then on, each technological stage came more quickly. As we can see from the chart below, each dialectical technological leap forward took less time than the one before. Coming up to date, a paradigm shift like the Internet took only a few years to take hold.
The lack of innovation planning under capitalism was bad enough in the past. But with this ever-increasing pace of change it makes innovation increasingly chaotic and disruptive. And causes a growing level of anxiety and discontent. Clearly, under capitalism we are on a train that is getting faster with no driver and no brakes. As such, our current economic system is fundamentally incapable of dealing with the rising technological whirlwind. And the longer we fail to control the increasingly rapid pace of technological development, the sooner it will control us.
In our transition to a democratic socialist society, we should heed the words of Frederick Engels expressed as far back as 1847, that innovation must “create new needs and, at the same time, the means of satisfying them. It will become the condition of, and the stimulus to, new progress, which will no longer throw the whole social order into confusion, as progress has always done in the past.” 11
Waste and Disruption
The increasingly rapid waves of innovation in capitalism generate an incredible level of waste. This wastage can become destructive and ruinous even for capital itself. The devaluation of prior investments in machinery, plant and equipment; as well as in the built environment and communications links, even before their value has been recovered, is becoming a serious problem. In terms of human capital, unplanned technological change continually renders skills obsolete, destroys jobs and displaces workers. Workers are expected to go where the work is rather than for work to go where the workers are. All of this imposes great hardship on people and their families. Especially for older workers who are routinely discarded.
Elitist Science and Technology Research
Large government budgets exist in the advanced countries for scientific research. Typically public funding at around 2% of GDP is allocated for this purpose. In the USA the state became a major patron of science after the Second World War when it realized that “the successful technical effort of the war years had drawn heavily on the bank of basic knowledge and research skills”. Since then, successive American administrations have channelled funds to basic science, as well as to technologies drawn from that science, to ensure that the state continues to have access to war-winning technology. Accordingly, the federal government provides most of the funding for basic science research in American universities.
However, the population as a whole has almost no say in the priorities of this spending. Even though taxpayers are collectively the patrons of state-funded science research, there is little or no open debate about what the research is for. This is ridiculous given that so much of the economy and other aspects of society is determined by this research.
For example, the lion’s share of public investment goes into military research with the US Department of Defense directly controlling around half of all state funding for scientific research and development. This amounts to over $100 billion a year. Yet, military research and development does nothing to solve human problems of disease, hunger and under-development. It leads only to more fearsome means of death and destruction. If the public was genuinely consulted, research priorities would be very different.
People would naturally want their taxes spent on research into health prevention issues such as vaccines, birth defects, obesity etc. Or into improving housing construction, insulation and so on. Or more research into overcoming the environmental crises through large scale desalination; generation and storage of energy; and the capture of carbon from the atmosphere.
But the priority of the US government is to help its big companies. As well as providing the military with a bank of basic knowledge and thence access to advanced technology, government spending in the defence sector delivers huge profits to private industry. Through defence contracting a handful of corporations secure vast sums from the taxpayer.
The same pattern operates in all the advanced capitalist economies. In Britain, for example, around 30 per cent of the state’s total budget for research and development is spent on military-related projects. The emphasis on research and development of new weapons ensures that Britain’s companies remain a major player in the international arms trade. While the taxpayers of both the producing and the purchasing countries bear the costs of this trade, the high margins and fat profits it yields find their way into private pockets. Moreover, the secrecy involved in military research and development means that even when it uncovers useful advances that could be applied in other fields, often these applications can be forgotten or delayed for decades.
Democratic institutions do have some oversight of the science and research budgets but in practice, the heads of the military-industrial-political bureaucracy are left to decide these things. Meanwhile, the public has no direct access to the debate about what constitutes national science goals and priorities.
Research on Health
Another dramatic example of how life and death is affected by the wrong priorities of the research and development establishment is in the field of health. For instance, the World Health Organisation estimates that 18 million people die globally every year of preventable and curable medical conditions because of the high cost of drugs. The AIDS disease was a classic example of this. Ten million people died of AIDS between 1996 and 2003 because they couldn’t afford the exorbitantly expensive drug therapies. The drug companies were unwilling to reduce their charges for the poorer countries and the patients died unnecessarily without treatment. This not only destroyed the individuals but the families and communities which relied on them. And severely set back these countries economically.
Contrary to the popular conception encouraged by massive television advertising, the pharmaceutical industry is not the source of most medical advances. In fact, a big majority of significant new drugs are produced with public, not private, funds. Take vaccines for example. The main drug companies have long stopped doing vaccine research. There is little profit in producing a drug that is only taken once in order to prevent disease in people. Indeed, the drug companies are not really interested in curing diseases, never mind preventing them. Where is the ongoing profit from that? No, they are looking for drugs that treat medical conditions over a long period. They want long-term, repeat customers.
The ongoing coronavirus pandemic is a good example. The real research into the Western vaccines that we hear all about was usually led by university science departments or small research companies, with the drug companies acting only as testing, manufacturing and distribution partners.
In practice, the private pharmaceutical companies mainly focus on producing ‘me too’ drugs which are slight variations of their existing big money earning medicines which are about to lose patent protection. Or on treatments that are virtual copies of the big profit earners made by their competitors. In recent years, the CEOs of large pharma companies have admitted that their decision to downsize – or in some cases eliminate – their R & D labs is due to their recognition that in the ‘open’ model of innovation most of their new products are based on research carried out by small biotech firms or public labs.
The Internet – a Double-edged Sword
Another major example is the Internet. The ability to amplify communication is profoundly important for the expression of mass dissent. For example, the emergence of European printing technology in the 14th and 15th centuries had a huge impact on the religious, economic and political life of the continent. By allowing the mass of people for the first time to read the original religious texts of Christianity in their own language, enabled them to compare the actual ideas expressed there to the very different teachings of the Catholic Church. And thereby to compare the original directions to the corrupt behaviour of the Church’s functionaries. Thus, the wide circulation of Martin Luther’s religious pamphlets helped develop the Protestant Reformation movement and greatly undermined the ideology of the Catholic-dominated feudal system. Less well known is the fact that the printing press also allowed radical critics and dissenters to distribute their ideas. The socialistic Leveller movement that formed the popular backbone of the English Revolution in the 1640s, had its own weekly newspaper with a mass readership.
Of course, the internet will have a far far larger impact on struggle than the printing press. Allowing people all over the world to instantly communicate with each other at a fraction of the previous cost is an absolute requirement for the development of internationalism. Until now, how could the workers of the world unite when they couldn’t even communicate with each other? In the past, only government institutions, companies, political and trade union bureaucracies were the ones able to establish and maintain regular international communication. Comparing that to the situation today, this is a communication revolution indeed.
Now the internet is offering the potential for people everywhere to instantly see and talk to each other, critique events and compare ideas. This is a mind-blowing development the consequences of which none of us can conceive. Take our Manifesto as an example. The coherent and practical ideas we are developing here for replacing capitalism can easily spread across the world. And be taken up by hundreds of millions. The internet and its associated communication technologies are a fundamental challenge to the monopoly of ideas that the capitalist media had established over the last two centuries. A monopoly that has allowed them to successfully manipulate the limited form of democracy we have.
But like everything else in the universe, innovation can be of positive or negative benefit. A glass can be used to drink out of or to smash over someone’s head. All technological developments have their positive and negative potential. So too with the internet and its child, social media. Certainly, the online world offers the potential for all humans to communicate with each other. To express their wishes and feelings and bring real democracy into being. However, as we are now seeing, social media can also be used to atomise, to divide, to trivialise, to divert and to deceive. How many people are being confused by the spread of all kinds of crazy ideas and conspiracy theories? Or having their prejudices deliberately stoked and inflamed?
The social media monopolies and the corporate world who take advantage of their facilities, are rapidly learning how to manipulate our emotions and desires with Public Relations tricks and deep learning techniques. This knowledge is not just being used to sell us products and services. It is now being used to influence how we vote in elections as we saw with Cambridge Analytica’s use of facebook data to influence the 2016 election in favour of Trump. Or the use of social media used against Jeremy Corbyn and Labour in the British General Election of 2019.
At the same time, the internet is being used as a powerful device by the state to monitor and track dissent and dissenters. If we allow big business and government agencies to continue controlling the online world in this way we can only expect ever more sophisticated methods of mass manipulation and invasion of privacy. The further development of what is now called ‘Surveillance Capitalism’.
The internet monopolies, Facebook and Instagram, Google and Twitter have become just too important to the health of society to be left as private companies serving the needs of their billionaires founders. They urgently need to be brought into democratic public ownership and run as accountable public utilities.
Other Negative Features of Capitalist Innovation
The innovation priorities of investors in the capitalist world are all wrong. For example, far too much research and development is devoted to developing luxury goods that are way out of reach of the majority of society. Still more innovation goes into making products look better or more fashionable. Or better packaged irrespective of their use value. In the food sector huge sums are devoted to improving the look or taste of processed foods regardless of the nutritional benefit or the damage it often does to the consumer.
At the other extreme, the majority of humanity is ignored by the research community. After all, business is only interested in people who have enough money to buy their products. That means that less than 3 billion people out of the world’s 7.5 billion are regarded as potential customers. The rest are just too poor.
Suppression, Copyrights & Patents
Although capitalism has been built on innovation, there are a whole series of measures taken by business in order to stifle innovation when it suits them. For instance, many companies consciously suppress research and development when it threatens their existing profits. This may be achieved by simply shelving inconvenient in-house discoveries. Or by buying inventions from other sources and killing them. A famous example of technological suppression was the EV1 electric car from General Motors. This was mysteriously scrapped in the 1990s despite proving very popular. This was done in order to protect the internal combustion engine and the oil industry which depends so much on it. But its suppression set back the development of electric transport by two decades with disastrous consequences for the environment. More recently, this effort at suppressing electric vehicles has reappeared. This time against Tesla’s roll out of electric cars. With the oil companies suspected of secretly funding a big hostile public relations operation and big short positions on Tesla stock in an effort to bring down the company and its founder Elon Musk. Fortunately, the effort this time around has failed spectacularly.
A much more widely practised method of suppression of innovation is through the use of patents and copyright laws. The impression given is that this is designed to protect individual inventors, writers and artists. To guarantee them a fair return on their ingenuity and effort. But 97% of patents are worthless and with the increasingly rapid change of technology, products become so quickly out of date. Besides, both patents and copyright infringements are very difficult and expensive to prosecute. In truth, these protections are mainly used to protect the wealthy and big corporations. Particularly, as these are the only groups with enough finance and patience to legally enforce them. In fact, patents don’t stop technology from being stolen by a rival. They only help provide the basis for legal action. That is as long as you have millions of dollars to pay the legal costs.
To this end, there is now a layer of parasitic companies with deep pockets who specialise in buying up patents and enforcing the collection of fees on them. In respect of this, most multinationals are regularly involved in extensive court battles against each other for control over patents and the rent-seeking income that depends on them. These patent wars benefit the lawyers not the consumers, raising prices and holding back new development.
“The unspoken reality is that the U.S. patent system faces … a market so constricted by high transaction costs and legal risks that it excludes the vast majority of small and mid-sized businesses and prevents literally 95 percent of all patented discoveries from ever being put to use to create new products and services, new jobs, and new economic growth.” 12
The big downside to patents and copyright is that they greatly inhibit the rapid spread of knowledge and discovery. This benefits a few but is to the detriment of society as a whole. The most dramatic example of this is taking place with the US vaccines for Covid-19. Despite the fact that the research for the vaccines has been largely publicly funded, the groups that have developed them and the drug companies which have manufactured them, are insisting on high prices for the doses. And on the upholding of their patents. The result is that on the one hand eight new vaccine billionaires have been created. While on the other, the poorer countries cannot afford the vaccines which is causing the incredibly slow rollout of vaccinations and the death of hundreds of thousands.
The priorities of this protectionist approach to innovation under capitalism are wrong. “… while intellectual property rights may provide incentives, they also impede the diffusion of information and use of new ideas to generate further advances… the defenders of intellectual property rights assume that the only reliable incentive for creativity and invention is monetary reward, but this is simply not the case. A great deal of research and development is done in publicly financed projects in universities and other research settings. Scientists are driven by a range of motives other than monetary rewards: prestige, curiosity, solving problems for humanity. Most artists and writers, even dedicated artists and writers, do not receive large financial rewards from their work and yet they persist because of their commitments to aesthetic values and a need to express themselves.” 13
In fact, the problem of information property protection has grown in recent years. For example, there has been a successful effort to greatly extend the life of copyright. International copyright now lasts 70 years after the death of the originator, including how the work is used. Given the average lifespan of most people, this can often mean that income and usage remains in copyright for more than a century. And these rights can be sold on to third party companies. This has made creative works so much more attractive for purchase. The result is an increasingly restrictive regime in the world of information: “Information is power. But like all power, there are those who want to keep it for themselves. The world’s entire scientific and cultural heritage, published over centuries in books and journals, is increasingly being digitized and locked up by a handful of private corporations.” 14
In practice, the locking up of information in universities in the First World is both elitist and racist. And increases inequality yet further. However, there are countercurrents against this process emerging. The whole Open Source movement through which creators and programmers make their work freely available has become a major force. But even this will be unable to overcome the power of the deep-pocketed information devourers as long as capitalism reigns supreme.
The Threat to our Jobs & Skills
According to technologists, we are now entering what is called the Fourth Industrial Revolution. An era where artificial intelligence and robots have the potential to automate more and more areas of work. This should offer the welcome prospect of greatly increased wealth for humanity. Along with drastically shorter working hours and increased leisure for all. But under capitalism automation is not being introduced to benefit society as a whole. But only to save on labour costs and deliver incredible riches for the few. With the rise of the tech billionaires we have witnessed where the benefits of technology are going. Even in the pandemic we have observed these tech billionaires getting richer by the day.
At the same time, we are already seeing a growing tendency in many parts of the world for the majority of new jobs to be lower paid and more insecure. This is no accident. New technology under capitalism is specifically aimed at saving costs through eliminating well paid, permanent jobs. As the great nineteenth century socialist, William Morris, pointed out: “If machines were meant to be labour-saving why did they so often save on the labourer rather than the labour of the producer?” 15
In the near future we are facing the possibility of massive job losses and rising unemployment. Just take the example of the auto industry. We have already seen the replacement of the majority of automobile production workers with industrial robots. Next will come self-driving vehicles, a technology that is now being prepared by the automobile industry. In the United States there are 5.7 million licensed truck drivers plus millions of taxi drivers. The idea is to replace many of them with self-driving vehicles. But it’s not just the jobs of factory workers and truck drivers that are threatened by automation. Artificial intelligence-based systems are sweeping away millions of clerical jobs in banking and other areas of administration. Even highly professional positions are in line to be impacted such as lawyers and surgeons.
It is not as if there is a lack of potential alternative jobs to be done in society. For instance, there is a huge number of caring jobs and other such services needed in society. But capitalism doesn’t value such work. Indeed, it is increasingly cutting such jobs and pushing the burden of caring onto unpaid family members.
Capitalism’s Dystopian Future
We are witnessing the merciless behaviour of the multi-billionaire gainers from this new world of technology such as Jeff Bezos from Amazon; Elon Musk from Tesla and SpaceX; and Mark Zuckerberg from Facebook and Instagram. Should we be surprised that at the same time as they enjoy undreamed of riches, they ban trade unions from their companies. That Amazon works its employees to the bone. That Facebook abuses our privacy and amplifies online prejudice. That Tesla treats its customers with disdain.
Under capitalism, instead of a bright future where automation releases us from toil and offers us a future of abundance, we see the dystopian prospect of hardship, unemployment and surveillance for the masses. It is small wonder that most science fiction movies now portray a depressing and brutal fate for mankind. A corporate planet in which the ultra rich live in a separate, artificial and luxurious world. With their children being made super intelligent and super healthy through the use of enhanced DNA. While the rest of us live in slums and poverty.
But the future of innovation doesn’t have to be like this…
Democratic Public Innovation
We have seen that capitalism has been a highly innovative system compared to previous epochs of history. But also how it has distorted scientific research and development in favour of the interests of the rich and powerful. Even more, that the future of innovation under capitalism potentially offers the depressing prospect of inequality and slavery. Inequality with all the wealth created going to a few at the top. Slavery as artificial intelligence, surveillance and robots threaten to become our masters rather than our servants.
If we hope to avoid this nightmare scenario we have to develop a far better and more democratic form of innovation. One that fully involves the citizenry in the innovative process. In other words, ways of greatly expanding and enhancing the process of innovation in the transition to a Democratic Socialist society. With the enormous benefits this would bring to humanity.
New Resources and New Priorities
The first step in a new policy of Democratic Public Innovation has to be to significantly increase spending on basic scientific research and technological development. Instead of the 2% of GDP or less that is currently spent in the advanced capitalist countries, we should be aiming to double this to 4 or 5% as part of democratic national plan. A significant portion of this extra funding can come from the existing huge defence budgets, which in the US (if their secret funding is included) is now a trillion dollars a year. The aim being to transition, without loss of pay or conditions, much of the armed forces, military research and the arms industry into more productive basic scientific exploration, civilian research and production. And of course to save large sums by the cessation of capitalism’s repeated wars and military operations.
From the outset we should leave behind the elitist and opaque manner in which national research budgets have been arrived at in the past. Instead, these programmes should be subject to widespread public debate and decision especially on the underlying assumptions and priorities involved. In democratising these budget decisions, naturally we should expect to move away from the pro-corporate direction of current research programmes. And towards the key needs of the public such as in health, housing, the environment, transport and so on. Greatly helping in this direction would be the formation of new democratic public enterprises in the fields of construction, drug manufacture, green energy production and so forth. These would be natural recipients of public funding for research and applications.
The next key step in building a more powerful innovative system is to launch a major expansion in places in the stem subjects which now produces nearly five million graduates a year. As much as almost the rest of the world combined. Certainly we can learn from their successes and mistakes in this field.
But there are other ways that innovation can be greatly increased. And with relatively minor funding. The most important of these is for us to tap into the knowledge and innovative creativity of the wider population.
Tapping into the Knowledge and Creativity of Workers
In the formative years of capitalism in the 18th century, many of the most important inventions were developed by workers and craftsmen. For example, Thomas Newcomen and John Calley invented the steam engine in 1712. Newcomen was an ironmonger and Calley a metalworker. Their machine pumped water out of coal mines making the power of coal accessible for production. John Harrison, who invented the longitude clock in 1713, was a carpenter by trade. James Hargreave who invented the spinning jenny for textile production in 1764 was an uneducated, illiterate weaver. James Watt who greatly improved the steam engine in 1765, was an instrument maker. His machine went on to power the Industrial Revolution. Richard Arkwright, who in 1768 invented the spinning frame which revolutionised cotton making, was a barber. Robert Fulton who invented the steamship in the 1790s was a jewellry maker.
Moving into the 19th Century production moved on from handicrafts and small one-manned firms. Factories and larger companies started to develop. And with them larger workforces along with disputes over wages and conditions. In response, collective organisation among the workers began to appear. Along with calls for workers’ control and workers’ input into production. By 1844 Karl Marx and Friedrich Engels were beginning to identify and highlight the alienation that the newly developing proletariat were facing in their labour for the rising capitalist class. They saw that workers were being drawn into a new kind of slavery – wage slavery – in which they had no say over their work or the products they were making.
This lack of power not only led to the exploitation of the workers but also suppressed much of their creativity in the productive process. Yes, suggestions are encouraged from the workforce with token rewards. But, what is the point of suggesting improvements when the real benefits only go into the boss’s pocket?
This contradiction between the workers’ lack of power over outcomes, and their deep potential for improving the productive process, continues today. That said, in some sectors there have been successful efforts aimed at accessing this knowledge and creativity. One of the most famous was in the Japanese car factories in the 1970s which introduced regular worker-management team meetings in order to improve car production and safety. The outcome was a massive improvement in productivity and product quality which allowed it to outcompete with the American and European auto industry. And to become a global force in vehicle manufacture. But this is the exception that proves the rule. The overwhelming majority of capitalists zealously insist on their right to take all the decisions. A right that in capitalism is strongly reinforced by law and by the forces of the state.
In contrast, in a future of democratic public enterprises the workforce could become fully involved in decisions on what they produce. And in the direction of the enterprise as a whole. In such an environment workers would be encouraged to develop new ideas on product and service design, functionality, quality and production. With the benefits of new processes, product improvements and rising productivity being shared between the workers and the other real stakeholders, rather than going to the top management and private shareholders as it does in capitalist companies. The incorporation of workers control into the fabric of democratic public enterprises would tap into the wealth of knowledge held by the producers. And unlock the talent and ingenuity they have always held. This would open up a big and ongoing potential for innovation in industry and the services sector.
Involving Customers in the Design of Products
In a future of democratic public enterprise the customers would no longer be seen as passive purchasers of products and services. They are vital stakeholders in the life and future of an enterprise and must be brought in as key partners in its governance. How to do this effectively will be dealt with in the next section of our Manifesto. Suffice it to say, customers and their representatives need to play a central role in enterprise decision-making, having a direct say not just on pricing but also in improving product design, function and quality. As well as in product life, ease of repair and so on.
This has the potential to greatly open up product innovation on a huge scale. Instead of customers facing a simple ‘take it or leave it’ choice when they are looking for a product or service, they can begin to actually influence the features of a product. Instead of customers being treated as objects to be exploited and ripped off, they can become genuine partners in the productive process.
The end result of this will not just be an economy in which products are more fairly priced, and greatly improved. But in which we can access the rich talent that exists among the purchasing public for designing new products and services. Already, in the fashion industry young customers are now beginning to utilise the power of the internet to successfully design their own clothes and have them rapidly produced at cheaper prices by Chinese textile makers. New designs that are proving highly popular with their peers.
Reuniting Workers and Consumers together
Another great advantage in empowering the workers and the customers in a democratic public enterprise is that they can begin to communicate their problems to each other. Thus opening the way to the creation of new solutions and even new products. In fact, in earlier ages individual craft workers and customers had direct contact with each other which allowed them to negotiate directly over their handiwork and ensure an agreed tailor-made outcome. Unfortunately, this interaction was completely lost with the introduction of capitalist mass production. While this greatly reduced the prices of products and standardised products, it removed customer feedback and often produced lower quality and satisfaction.
Now we are in a position through future democratic public enterprises to re-establish the old relationship between workers and the customers. But on a much higher level. Imagine the improvements that could result when customers can see how their products are being made and can directly communicate to the workers the difficulties they are having with them. Or when workers are able to discuss with the customers possible improvements to the quality of existing products. Or for either side to suggest entirely new products and test them together.
Attempts are made by capitalist firms to overcome the gulf between them and the customers through various market research techniques. However, these are severely limited by the desire of capitalist companies to maintain or increase their profits. Yes, customers can indicate the colour of a product they prefer and other marginal changes. But any more significant improvements will only be implemented if they fall within the short-term plans of the company and don’t undermine its profits. Certainly, it is no substitute for real democratic input.
Mass Involvement in Innovation
Ordinary people can also be inventors. But under capitalism very few are actually involved in the development of innovation. Consider the millions of ideas that are out there that never see the light of day for lack of encouragement and support. How much better would it be if we could involve the whole population in the innovation of products, processes and services? This might not be in the form of complex new technologies but in basic products for everyday use. Or include the significant improvement of existing ways of doing things. Often, improvements can have a bigger and more lasting impact than new inventions.
Even the capitalists can see the limitations of the current innovation process. The latest models in capitalist business thinking urge employers to find ways to reach out beyond their employees to the wider public. Using prizes and other incentives to inspire new ideas from customers and the wider population.
There are even distasteful yet popular reality television shows around the world in which inventors present their ideas to venture capitalists. These include programmes such as Dragon’s Den, Shark Tank, The Vault and so on. Such shows usually consist of a panel of potential investors listening to inventors pleading their case for financial support. If the venture capitalists like a project they then compete with each other over how much money they are willing to invest versus the level of ownership they are demanding for their support. The relationship between the investors and the inventors is of course one-sided, with the inventors having to give up a major element of control in exchange for desperately needed cash. In this way, this TV programme format quite accurately replicates the discouraging reality that faces inventors as they try to turn their ideas into saleable commodities. Except that in reality the venture capitalists are not interested in projects requiring less than a million dollar investment as it is not worth their time and effort to consider them.
The key to breaking through these frustrating barriers to innovation in capitalism, is to create a system that provides places where people can come with their ideas. Have them evaluated and developed. And financially supported when they are ready for implementation. A few such start-up centres already exist in some major cities but they are almost exclusively focused on new technology and are usually at the mercy of exploitative companies such as Google who use them to hoover up fresh ideas that they can exploit.
A dramatically better alternative would be to create public innovation centres in every town and city area. Places where people could go with their ideas and have them worked up into viable projects with the assistance of genuinely independent professional experts. Centres that could then allocate finance to bring them to reality. Inventors could then be free to choose between credit to develop the idea themselves. Or where they were not interested in its economic application they could license it for public use.
Such innovation centres could utilise some of the staffing and property that would be released by the democratic public ownership of the banks that we talked about in our earlier Manifesto section on Democratic Public Investment. We could use the key resources that would be unshackled by merging together all the different bank and financial company branches that currently duplicate the same services.
In support of such a popular Public Innovation Service we would need a continuous drive using the media and education to encourage people not just to complain about things but to start thinking about how they could be improved. At the moment society fails to encourage people to become inventors or pioneers. To think outside the box. Instead, the system tends to reinforce conformist and apathetic attitudes. Such as the typical follower-the-leader mentality which produces followers who just accept the way that things are done. Or the attitudes that breed obedience and curb creativity. Instead, we need a society based on participatory democracy in which we train people in how to better analyse things and express themselves. Both as individuals and together with others. A community where people are helped to develop their problem-solving skills. This would be such a great investment in society’s ability to innovate.
Shorter Working Hours
A key step in creating an innovative and participatory society is to greatly reduce the hours we currently work for our livelihoods. Without this it will be very difficult to break from the passive patterns of the past.
This is not a new idea. Already in the early years of capitalism, in Britain in the 1830s and 40s, the appeal arose for shorter working hours. The mighty Chartist movement, that campaigned for the vote for working people, also called for a shorter work day. This was not only to provide rest and recuperation for workers, and time for family life. But also because it would additionally “free the worker to participate capably in public and civic affairs”.16
As the nineteenth century progressed, the demand for shorter working hours coalesced into a massive labour movement campaign for the ‘eight hour day’. It was the campaign for this demand that laid the basis for the emergence of May Day as international workers day. Significantly, the “campaign for an eight-hour day was actually much more than it seemed, for it centred not on shorter hours, but on a changing lifestyle and pattern of life: eight hours work, eight hours rest and eight hours for leisure and the pursuit of knowledge… The remaining two thirds would belong to the worker for rest, for his enlightenment, and to build family and community.” 17
Nearly a hundred and fifty years later we still face the same problem of long working hours. In fact, there is growing pressure on us to spend even more time working for other people. Too often we are now expected to work overtime, often unpaid. The British Trades Union Congress produced a report in 2020 that estimated that workers in Britain were now putting in £35 billion of unpaid overtime a year. The same story could be told everywhere. In many countries, we are being pressurised into doing more than one job a day. And in too many occupations families are being neglected as we are forced to become workaholics for the boss.
Today, “the formal economy plays far too large a part in people’s lives, with adverse consequences for their relationship with other people and with the environment. The economic basis for a vastly shorter working week now exists but its realisation depends upon the radical redistribution of working time...” 18
This problem is widely recognised, even by many governments. For example, in China there is a campaign against the incredibly long hours that are expected of employees in its tech sector. Similarly, there has been a crackdown on online educational companies with new strict limits on the hours that students can access their portals.
Even more positive has been the shorter working hours trial in Iceland’s public sector. In the trial 1% of Iceland’s workforce moved from a five day, 40-hour week, to a four day 35-36 hour week, without loss of pay. The trial was judged an “overwhelming success”. “Productivity remained the same or improved in the majority of workplaces, researchers said. Workers reported feeling less stressed and at risk of burnout, and said their health and work-life balance had improved. They also reported having more time to spend with their families, do hobbies and complete household chores.” 19
The trial which ran from 2015 to 2019 was organised by Reykjavík City Council and the national government. It covered workers in preschools, offices, social service providers, and hospitals. The success of the trial has led to unions renegotiating shorter hours and working patterns for 86% of Iceland’s workforce.
A number of other trials are now being run across the world including in Spain and New Zealand. Researcher Gudmundur Haraldsson concluded that “The Icelandic shorter working week journey tells us that not only is it possible to work less in modern times, but that progressive change is possible too.” 20
The above example shows what can happen even before the potential benefits of new technology begin to really kick in. The future of humanity lies in using technology to free us from the domination of tedious work. A future in which we can move away from the old capitalist concept that ‘time is money’. Where time is instead seen as a crucial natural resource that must be more valued and better used.
Intermediate Technology / Development
As we explained earlier, half of the world’s population are too poor to be catered for by many of the capitalist world’s products. Certainly not its new technology devices. Large numbers don’t even have access to electricity so can hardly use the stream of new electronic gadgets that pour out of global factories. For too many poor people progress passes them by. There is a recognition of this problem and a movement for Intermediate Technology has grown up to address it. This is aimed at producing a cut down version of products that are specifically designed for people with small budgets and limited infrastructure. But beyond the occasional charitable project the big multinationals don’t devote any serious resources to this area.
The same problem afflicts much of the development aid that is delivered by individual countries and international institutions like the World Bank. Too often their projects end up as white elephants, supplying equipment and techniques that are far too costly. Or way above the ability of local populations to maintain after the project teams have packed their bags. The underlying reason for this problem is the elitist manner in which these projects are conceived of, approved and carried out.
In the transition to a democratic socialist society we need to create technology and provide development projects that are not only more appropriate for poorer countries. But that are designed and implemented in a genuine partnership with the people whom they are intended to help.
Inequality & Finite Resources
A common argument usually voiced by some sections of the middle class in the better parts of the world, is that the problem of inequality between nations can only be solved by the richer countries cutting back their consumption as they transfer resources to the developing countries. Certainly the super rich must accept measures to redistribute a major part of their wealth to the many who desperately need help. But the idea that the solution to the planet’s problems is for the more advanced nations to sacrifice their living standards and share their wealth with the poorer nations, is all wrong.
For one thing, while there are many people who could afford to make sacrifices in the advanced countries, there is also growing mass poverty there. It would be political suicide for democratic socialists in the advanced countries to ignore this fact and to argue for cutting living standards of the majority of the population. Inevitably, we would alienate huge sections of the voting public and play into the hands of the Right who would win any election against the Left pushing for such a self-destructive plan. Certainly the Right would not introduce such policies. Quite the opposite. So it would be a self-defeating policy.
More fundamentally, this is basically a hopeless programme for the sharing out of poverty. For levelling down. In contrast, we should be arguing for levelling up. Raising the poorer countries to the level of the richest countries and then all moving forward together.
The argument that is often made against this more positive approach is that we cannot raise the developing countries to the same level as the advanced ones because of the planet’s lack of resources. That we are rapidly running out of raw materials for food, energy and production. With no possibility of meeting the growing needs of a rapidly rising global population. But this is based on a whole set of false assumptions.
The most basic of these wrong assumptions is that we can continue to operate under a destructive, wasteful, chaotic and short-sighted capitalist system. Rather, in the place of capitalism we must offer the vision of a democratic socialist society based on abundance for everyone. Not as a distant utopian dream but a realisable future for humanity.
Let’s start with the issue of the world’s population. Contrary to the gloomy predictions of Thomas Malthus in 1798 that rising population would lead to mass starvation, agricultural production rose to meet the challenge. The same happened to Paul Erlich’s ‘The Population Bomb’ which predicted in 1968 that worldwide famine would break out in the 1970s and 1980s. Once again this didn’t happen. On the contrary, recent decades have seen a big fall in birth rates as women everywhere are having far less children for powerful socio-economic reasons. The result is that the latest statistics show the global population is likely to reach a peak of 9 billion by 2050. And then start to rapidly decline.
Energy & Climate
In the transition to a global democratic socialist society we need to immediately tackle the climate crisis. And we can. A top priority for democratic socialist governments would be to co-operate in the urgent transition from fossil fuels like coal, oil and gas to renewable energy. Unlike capitalist governments who are tied to the big energy companies, we have everything to gain by rapidly switching over to the natural sources of energy – sun, wind, water from rivers and oceans, and thermal. We would invest big resources in installing solar panels, wind farms and water technology. And in research and development on ever more efficient equipment for converting the natural forces into usable and storable energy. Indeed, we can see a bright horizon of virtually unlimited, low cost energy. But it will take public investment and innovation to get us there.
In most parts of the planet food production is still incredibly primitive. Huge amounts of production are lost to drought, flood, frost and pests. Then there is the 40% of food that is wasted before it reaches the distribution system. In fact, according to agricultural experts there is a potential to increase food production tenfold. Eric Drexler’s outline of how such abundance in agriculture could be achieved is worth quoting at length:
“Enclosed agriculture (greenhouses, for example) can greatly increase and stabilize yields, largely freeing agriculture from constraints of temperature, soil, and water. Compared to unprotected environments, where the vagaries of location and climate determine growing conditions, using controlled environments can commonly raise the productivity of land by a factor of ten or more. Optimizing growth conditions requires enclosures that control temperature (usually warm, never too hot), humidity (usually high, but not saturated), and sunlight (typically bright, but diffused, not direct), and that provide soil with ample nitrogen, phosphorous, and potassium. A well-controlled enclosure can also exclude pests without using pesticides, and can recycle nitrogen and phosphorous, retaining them to fertilize crops without contaminating streams. To accomplish this on a large scale requires an abundance of physical capital: the structural components for building the enclosures, the equipment they must contain—pumps, pipes, and filters for water reprocessing, heat pumps and thermal storage to regulate temperatures, and finally, sources of power to make them all work. The rewards of expanding the use of enclosed agriculture would include higher yield per hectare, but also better food quality, freedom from pesticides, extended growing seasons (in many regions, year-round production), freedom from constraints of soil quality and available water, and protection from drought. From a biospheric perspective, benefits would include reduced water demand and contamination, and a way of supplying human needs for food while reducing the overall footprint of agriculture and relieving pressures that drive the deforestation of Amazonia. Cleanly increasing agricultural yields by a factor of ten would change human life and the face of the Earth.” 21
Limited Raw Materials
This brings us onto the question of the shortage of raw materials on the planet. Once again there have been many past predictions that we would run out of various minerals. But the reality is that large areas of the planet have yet to be properly surveyed. More important, materials science is a fast growing area of scientific investigation with research into inexpensive, alternative substances advancing at an accelerating pace. Equally important is the expanding recycling industry and its associated technology. Unlike the wasteful practices of the past, in a democratic socialist economy we would need to give much greater value to conservation and the recovery of materials for fresh use.
Last but not least there is the promise of futuristic innovation such as nanotechnology which offers the possibility of drastically cheaper manufacture at microscopic level using commonly found materials.
Ultimately, none of us can forecast what future innovation will deliver. Although past experience has shown that if we can imagine something, it will probably be possible. In truth, It is not the technological possibilities that are holding us back. Instead, it is whether the human race can establish control of the technology and direct it to positive ends.
Capitalism claims to be the most innovative system in the history of humanity. This was certainly true in comparison with the slave and feudal systems that preceded it. And also true when compared to the bureaucratic planned economies of the USSR and the wider Soviet Bloc – the Soviet’s lack of innovation in light industry and consumer products meant it could not effectively compete with the capitalist countries on the world market. And was one of the main reasons for its collapse. However, this is definitely not the case with state socialist China which promises to become the global technological leader in the coming decade.
As it happens, much of the innovation in capitalism actually results from public spending by the military, in universities, in space research, in government research and other funded programmes. As a result most innovation generated today is not by individual inventors. Rather it is large companies and university departments that register the vast majority of discoveries. And then capitalist legal systems reinforce this virtual monopoly through their use of draconian patent and copyright laws.
Looking at the way that innovation has evolved historically, it is clear that it is developing at an ever increasing pace which is subjecting society to great disruption. This is particularly the case in the capitalist world given its lack of planning and its drive for profit over human need. Such profit-seeking innovation is causing just too many negative outcomes. Instances of this include research on health which is not primarily geared to saving lives but in piling up massive financial gains for the drug companies. The latest example of this is in the Covid-19 pandemic where half of the world has not yet been able to get vaccinated just to protect the benefits of the Western vaccine developers. Another example is in the field of online communications where the rise of the internet monopolies is invading our privacy, manipulating our ideas, and even threatening our sanity.
Nowhere more dangerous is this lack of social control in innovation than in the coming era of automation. Instead of the bright promise of growing wealth and leisure for all, automation under a capitalist elite threatens most of humanity with a dark future of unemployment, subordination and poverty.
The answer to this dystopian outlook is to bring innovation under democratic public control. Firstly, by democratising the way that basic national science, research and development budgets are arrived at and distributed. Expanding and reorienting our national research priorities away from military purposes and corporate profit-orientated goals. And towards human-centric development in fields such as food, health, energy, transport, housing and the environment.
A key part of this democratisation would be tapping into the knowledge and creativity of workers, customers and other groups in society by bringing them into the design of products and services. More widely, by building a network of public innovation centres that would evaluate, develop and invest in ideas for new and improved products and services. Backed up by a society-wide campaign encouraging and equipping people not just to complain but also to problem-solve. Just imagine the explosion of positive and constructive innovation that could be possible under such a democratic public innovation system?
1. ‘Transition to Socialism 4.0′ by Jonathan Clyne, p.51
2, ‘China’s Great Road’ by John Ross, pub. 2021, p.140
3. ‘China’s Great Road’ by John Ross, pub. 2021, p.154
4. ‘China’s Great Road’ by John Ross, pub. 2021, p.138
5. ‘China’s Great Road’ by John Ross, pub. 2021, p.138
6. ‘Imagine, A Socialist Vision for the 21st Century’ by Alan McCombes, pp.79-80
7.‘Nationalisation of the Banks, The Impending Catastrophe and How to Combat It’, by V I Lenin, 1917, Lenin Collected Works, Progress Publishers, 1977, Moscow, Volume 25, pages 323-369
8. ‘Thinking Hands – the power of labour in William Morris’ by Philip Katz, pp.71-2
9. ‘The Entrepreneurial State: Debunking Public vs. Private Sector Myths’ by Mariana Mazzucato
10. ‘23 Things They Don’t Tell You about Capitalism’ by Ha-Joon Chang’, pp.165-7
11. ‘Principles of Communism’ 1847 by Frederick Engels, Online Source https://www.marxists.org/archive/marx/works/1847/11/prin-com.htm
12. ‘Our System Is So Broken, Almost No Patented Discoveries Ever Get Used’ by Jay Walker, Wired Magazine, 1/5/2015, https://www.wired.com/2015/01/fixing -broken-patent-system/
13. ‘Envisioning Real Utopias’ by Erik Olin Wright, Verso 2010, Highlight Loc. 1233-51 Monday, January 07, 09:34
14. ‘Guerilla Open Access Manifesto’ by Aaron Swartz July 2008
15. ‘Thinking Hands – the power of labour in William Morris’ by Philip Katz, p.164
16. Weaver 1988: 88
17.‘Thinking Hands – the power of labour in William Morris’ by Philip Katz, p.255
18.’What on earth is to be done? A red-green dialogue’ by the Red-Green Study Group, p.43
19.’Four-day week ‘an overwhelming success’ in Iceland’ BBC News, 6 July 2021, https://www.bbc.com/news/business-57724779
20.’Four-day week ‘an overwhelming success’ in Iceland’ BBC News, 6 July 2021, https://www.bbc.com/news/business-57724779
21.‘Radical Abundance’ by K Eric Drexler – Highlight Loc. 4138-52 Monday, September 30, 07:40)