The Multidimensional Crisis and Inclusive Democracy, Takis Fotopoulos (2005)

Chapter 10:

Is there a way out of the crisis?


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The liberal answer: more marketisation


Several, if not all, of the above dimensions of the present crisis are acknowledged by both the Right and the Left. Not surprisingly, in terms of the above analysis, the proposals made by both ends of the political spectrum, despite appearances, do not in effect  differ significantly between them, as both the Right and the Left take for granted the existing institutional framework of the market economy and liberal democracy.


On the part of the Right, the New Right’s[1] solution to overcoming the present multi-dimensional crisis is further marketisation. But, if we consider the possible effects of further marketising the economy, it becomes obvious that none of the aspects of the multidimensional crisis that we considered is amenable to market solutions. Therefore, the Right’s proposals for freeing completely the market forces, further privatisations and a minimal state amount to nothing less than the rational organisation of inequality. The New Right’s claim that the liberalisation of markets brings about a decentralisation of economic power is obviously false. In fact, as I tried to show in this book, the opposite is true: the more liberalised the markets are, the greater the concentration of economic power in terms of income and wealth. The fact that the US has always been the model of a market economy is not irrelevant to it also being "the most unequal industrialised country in terms of income and wealth".[2] Furthermore, not only the market economy has no inherent mechanism to avert ecological damage but, in fact, any effective social controls to protect the environment are incompatible with its logic and dynamic.


The socialsit answer: enhancing the “civil society”


On the part of the Left, the way out of the crisis is expressed in terms of the proposal to enhance “civil society”, i.e. the various networks which are autonomous from state control (unions, churches, civic movements, cooperatives, neighbourhoods, schools of thought etc.). This tendency, thanks to the theoretical work of modern social democrats of the Habermas School,[3] today exerts considerable influence among social democrats, eco-socialists, even social-liberals, as well as supporters of the “radical democracy” project.


The civil societarians’ way out of the multidimensional crisis seems to be radically different from the one proposed by the Right. Instead of further marketisation, they argue for limits (i.e. social controls) to be imposed on markets and the state by the civil society networks. Furthermore, instead of privatisations they propose a kind of “market pluralism” which can encompass a variety of market agents: family businesses, publicly owned or municipal companies, worker communes, consumer cooperatives, non-profit organisations etc.[4] Finally, acknowledging the fact that “civil society left to itself, generates unequal power relationships which only state power can challenge” they conclude that “only a democratic state can create a democratic civil society.”[5]


It is therefore obvious that the civil societarian approach involves a high degree of statism, exercised either at the national or transnational level. It is also clear that the civil societarians, who castigate radical socialists and supporters of the democratic project as utopians, are in fact much less realistic than them when they suggest that the clock could be moved back to the period of statism, i.e. to a period when the market economy was characterised by a significantly smaller degree of internationalisation than at present. Clearly, the civil societarian approach is both utopian, in the negative sense of the word, and a-historical.


It is utopian, because, in effect, it is in tension with both the state and the internationalised market economy. It is in tension with the state because, as neoliberalism has shown, it is fairly easy for the state to undermine effectively the institutions of the civil society (see, for instance, the effective demolition of trade union power in Britain). And it is in tension with the internationalised market economy, because it is well known that there is an inverse relationship between the degree of competitiveness and the level of development of the civil society’s institutions: the more developed these institutions are (e.g., trade unions) the lower the degree of international competitiveness, as the case of Sweden has shown. So, given that neither social democrats nor their fellow travellers in the Green movement see the outcome of the inevitable tension between the civil society, on the one hand, and the state and the market economy, on the other, in terms of the replacement of the latter by the former, it is not difficult to predict that any enhancement of the civil society will have to be compatible with the process of further internationalisation of the market economy and the implied role of the state.


Also, the civil societarian approach is fundamentally a-historical, since it ignores the structural changes which have led to the present neoliberal consensus and the internationalised market economy. In other words, it ignores the fact that the tendency to minimise social controls on the market, which today is dominant everywhere, is not simply a matter of policy but it reflects fundamental changes in the form of the market economy. This implies that every attempt towards an effective social control of the market necessarily comes into conflict with the requirements, in terms of competitiveness, for the reproduction of today’s growth economy.


The civil societarians’ problem is not, of course, that they do not base their strategy on an effort to seize state power (the traditional statist tactics) but rather on a strategy of social transformation “from below.[6] The problem lies in the fact that their approach takes for granted the entire institutional framework of the market economy, representative democracy and the nation-state and therefore is as ineffective as that of the Right in dealing with the multi-dimensional crisis. Thus, the adoption, first, of the market economy means that every attempt by autonomous institutions (for example, labour unions, ecological movements, etcetera) for an effective control of the market —in order to achieve social, ecological and other aims— is in dire contradiction with the logic and dynamics of the internationalised economy. Inevitably, any attempt to introduce similar controls will lead to the adoption of insignificant half-measures, which will be compatible with the institutional framework (see e.g. the fiasco of the world conferences to control the greenhouse effect).


The adoption, second, of representative democracy means that the direct democracy “injections” proposed by the advocates of this tendency, will, in fact, function as inoculations against direct democracy. The fundamental pre-condition for the creation of an active citizen’s consciousness is that the citizens themselves (and not others “on their behalf”) should manage the political process. Hence, the supposed “democratic” proposals merely reinforce citizens’ passivity, misleading them to believe that they exercise political power, when, in fact, the latter remains firmly the privilege of the few, and the many are relegated to the role of “pressure groups”—now baptised as “counter-powers”!


In conclusion, enhancing the civil society institutions has no chance whatsoever of either putting an end to the concentration of power, or of transcending the present multidimensional crisis. This conclusion may be derived from the fact that the implicit, although not always explicit, aim of civil societarians is to improve the functioning of existing institutions (state, parties, market), in order to make them more responsive to pressures from below when, in fact, the crisis is founded on the institutions themselves and not on their malfunctioning! But, in the present internationalised market economy, the need to minimise the socio-economic role of the state is no longer a matter of choice for those controlling production. It is a necessary condition for survival. This is particularly so for European capital that has to compete with capital blocks, which operate from bases where the social-democratic tradition was never strong (the United States, the Far East).


But, even at the planetary level, one could seriously doubt whether it is still possible to enhance the institutions of civil society within the context of the market economy. Granted that the fundamental aims of production in a market economy are individual gain, economic efficiency and growth, any attempt to reconcile these aims with an effective “social control” by the civil society is bound to fail since, as historic experience with the statist phase has shown, social control and market efficiency are irreconcilable objectives.[7] By the same token, one could reasonably argue that the central contradiction of the market economy today is the one arising from the fact that any effective control of the ecological implications of growth is incompatible with the requirements of competitiveness, which neoliberal globalisation process imposes.


The need for a new liberatory project


Still, despite the huge “objective” crisis we considered in the previous pages that has led to a situation in which the economic system cannot meet even the basic needs of at least a quarter, and possibly a third, of the world population,[8] the internationalised market economy is not widely questioned. It is obvious that the recent collapse of the “socialist” growth economy and the consequent integration of the “left” into social-liberalism has functioned as a decisive pacifying factor at the subjective level. This makes the need for a new liberatory project, which will transcend both the market economy and “socialist” statism, even more important.


Therefore, there is an urgent need today to develop a new liberatory approach which sees the causes of the present multi-dimensional crisis in terms of the concentration of power that is implied by any non-democratic institutional framework, either of the market economy or of the socialist statism variety.  This will open the way for the development of a similar mass consciousness about the failure of “actually existing capitalism” to the one that led to the collapse of “actually existing socialism”, and for new forms of social organisation.


Today, we have to transcend both the neoliberal internationalised market economy and socialist statism in order to put an end to economic misery, which oppresses the majority of the world’s population, and to arrest the ecological destruction, which threatens us all. Failure to create alternative democratic forms of social organisation means that, as the present multidimensional crisis intensifies, the ways out of it that will be enforced by the transnational elite in the future will, inevitably, be increasingly authoritarian in character. The “war against terrorism” that was initiated by the events of September 2001, and the general shrinking of individual liberties that has accompanied it, are clear indications of the direction that present society takes.


Thus, roughly 100 years after the adherents to socialist statism attempted to create a new kind of institutional framework in place of the market economy and representative “democracy”, it is becoming increasingly clear today that the autonomy of the social individual can only be achieved in the context of democracy. In other words, in the framework of a structure and a process that, through direct citizen participation in the decision-making and implementing process, ensures the equal distribution of political, economic and social power among them ―the topic of the next part.



[1] See, e.g., Henri Lepage, Tomorrow, Capitalism, The Economics of Economic Freedom (London: Open Court, 1982); Nick Bousanquet, After the New Right (London: Heinemann, 1983), Mark Hayes, The New Right in Britain (London: Pluto Press, 1994).

[2] Edward Wolff, “How the Pie Is Sliced: America’s Growing Concentration of Wealth”, The American Prospect (summer 1995).

[3] See John Ely, “Libertarian Ecology and Civil Society” and Konstantinos Kavoulakos, “The Relationship of Realism and Utopianism: The Theories of Democracy of Habermas and Castoriadis”, Society and Nature, Vol. 2, No. 3 (1994).

[4] Michael Walzer, “The Civil Society Argument”, in Dimensions of Radical Democracy, ed by Chantal Mouffe (London: Verso, 1992), p. 100.

[5] Ibid., p. 104.

[6] See for instance, Hilary Wainwright, Arguments for a New Left, Answering the Free Market Right (Oxford: Blackwell, 1994), Ch. 3.

[7] TID, Ch 2; see also, M. Olson, The Rise and Decline of Nations (New Haven, Connecticut: Yale University Press, 1988).

[8] According to the latest World Bank data, 24 percent of the world population live in absolute poverty or, alternatively, 32 percent live in relative poverty (World Bank, World Development Report 2000/2001, Tables 1.1. & 1.2).