{"id":25717,"date":"2013-02-18T12:00:36","date_gmt":"2013-02-18T12:00:36","guid":{"rendered":"http:\/\/www.transcend.org\/tms\/?p=25717"},"modified":"2013-03-02T01:15:50","modified_gmt":"2013-03-02T01:15:50","slug":"a-key-question-how-do-we-make-the-economy-work-for-the-poor","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2013\/02\/a-key-question-how-do-we-make-the-economy-work-for-the-poor\/","title":{"rendered":"A Key Question: How Do We Make the Economy Work for the Poor?"},"content":{"rendered":"

This book is about a concept and a fact.\u00a0\u00a0\u00a0\u00a0 The concept is \u201cunbounded organization.\u201d[i]<\/a>\u00a0 The fact is the Community Works Programme of the Republic of South Africa.[ii]<\/a>\u00a0 The intended audience of the book is the educated public.\u00a0 This first chapter is an essay in persuasion.\u00a0 It is an attempt to persuade potential readers that learning what this book has to say will be worth the time and the effort they will need to invest to read it.<\/em><\/p>\n

We want to make a case for the claim that \u201cunbounded organization\u201d is a useful concept, indeed a key concept.\u00a0 A key opens doors.\u00a0\u00a0 We use the word \u201ckey\u201d to suggest that the concept of unbounded organization can be said to \u201copen doors.\u201d It helps to answer questions and to resolve problems regarding not just one but several theoretical problems in the social sciences.\u00a0\u00a0 Similarly the practical question posed in the title of this chapter, \u201cHow do we make the economy work for the poor?\u201d can be regarded as a question whose satisfactory answer would \u201copen\u201d answers to other crucial practical questions such as, \u201cHow can violent conflicts be transformed into peaceful cooperation?\u201d [iii]<\/a>\u00a0 \u201cHow can social problems associated with poverty and inequality be alleviated?\u201d[iv]<\/a>\u00a0 and \u201cHow can the world become sufficiently governable to make it possible to enforce the environmental laws needed to make human life sustainable.\u201d[v]<\/a>\u00a0\u00a0 We think it is almost self-evident that a satisfactory answer to the question, \u201cHow do we make the economy work for the poor?\u201d would be a key that would open closed doors that block solutions to other crucial practical problems.\u00a0 Nevertheless, redundant though they may be in our own minds and perhaps in the minds of others, we will in later chapters make explicit arguments linking poverty alleviation to solutions to other major problems.<\/p>\n

After reading this first chapter the reader should possess an inkling of what we mean by \u201cunbounded organization\u201d and \u201can unbounded approach.\u201d\u00a0 She or he should have a rough notion of where we stand on some issues in the philosophy of the social sciences.\u00a0 She or he should have an inkling of why somebody might think, and why we do think, that the problem of making the economy work for the poor will be forever intractable as long as the approaches to solving it are \u201cbounded\u201d \u2013in a sense of \u201cbounded\u201d to be sketched in this chapter and later shaded and augmented.\u00a0 This theoretical claim will be illustrated and supported later in the book by empirical evidence from a large programme designed to serve a million participants by 2014.[vi]<\/a>\u00a0\u00a0 We shall interpret South Africa\u2019s Community Works Programme (CWP) as an unbounded approach that does<\/i> make the economy work for the poor.\u00a0\u00a0 After completing a reading of this first chapter the reader should be in a position to judge whether her or his time and effort would be well spent attempting to master the more detailed arguments of the rest of the book.<\/p>\n

We now proceed to offer a way to talk about \u201cthe economy.\u00a0 Then we will make a brief comment on who and what we are talking about when we refer to \u201cthe poor,\u201d and begin to say why we believe it is useful to speak of unbounded organization to contribute to making the former \u201cwork\u201d for the latter.<\/p>\n

The Economy<\/span><\/p>\n

Taking a leaf from the book of Max Weber we will start with an ideal-type of pure capitalism.[vii]<\/a>\u00a0\u00a0 When he was studying modern western societies Weber employed as a tool for analysis a simple concept of rational economic man (dubbed by some people homo economicus<\/i>).\u00a0\u00a0 He knew perfectly well that the ideal type was not a mirror reflecting the feelings, thoughts, and actions of flesh and blood people.\u00a0 His procedure was to start with a simplified ideal type that provided important insights into human action at a given time and place.[viii]<\/a>\u00a0\u00a0 Then he could study human action that did not<\/i> conform to the ideal type by comparison<\/i> with the ideal type.[ix]<\/a>\u00a0\u00a0 We will use a stripped-down bare-bones model of pure capitalism.\u00a0 It will be an ideal type not of an individual actor but of a social system.<\/p>\n

We introduce our stripped-down bare-bones model of the economy with a simplified version of a diagram drawn by Karl Marx.[x]<\/a><\/p>\n

Gogo Karlina Mvhendana is 91 years old and lives in Belfast, South Africa.\u00a0 She has been blind since 2004 and has no one to take care of her.\u00a0 CWP participants built her a one-room home with donations from people in the area.\u00a0 They helped her get groceries and also linked her to an eye specialist in nearby Hazyview.\u00a0 After a cataract operation she has regained sight in one eye.\u00a0 \u201cGod has sent the CWP to assist me. I am so happy.\u00a0 I sometimes feel that I can walk to the river and go for a swim,\u201d she says.<\/i><\/p>\n

M\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 >\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 C \u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0>\u00a0\u00a0 \u2026\u2026..P \u2026\u2026\u2026\u2026\u00a0\u00a0\u00a0 >\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 C\u00b4\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 >\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 M\u00b4<\/p>\n

The diagram represents that the capitalist begins with M, Money.<\/p>\n

With the money M the capitalist purchases the commodities C necessary for production, most notably the peculiar commodity that is the labour power of the workers.<\/p>\n

(Marx\u2019s German word translated as C \u201ccommodities\u201d is Waren,<\/i> a cognate of the English \u201cwares\u201d i.e. things made to be bought and sold.\u00a0 The word \u201cwares\u201d was famously employed by the innocent Simple Simon who said to the pieman \u201cLet me taste your wares,\u201d unaware that in a mercantile economy the possession of money is a prerequisite to eating\u2014a point later developed in greater detail by Amartya Sen in his study of famines.[xi]<\/a>)<\/p>\n

Next in the diagram the owner of the commodities purchased sets in motion the process of production:\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u2026\u2026P\u2026\u2026.<\/p>\n

At the end of Production the same owner has become the owner of other wares. Now they have become commodities with a greater value, designated as C\u00b4<\/p>\n

Finally comes the sale of C\u00b4 resulting in M\u00b4.\u00a0\u00a0 The quantity of Money M\u00b4 earned by the sale of the commodities produced is greater than M, the quantity of Money initially invested.<\/p>\n

In theory this ideal-typic representation[xii]<\/a> of a capitalist economy implies[xiii]<\/a> staggering consequences.[xiv]<\/a>\u00a0\u00a0 In practice staggering consequences follow to the extent that this simplified diagram accurately reflects how the economy works.\u00a0\u00a0 We do not expect the reader to grasp the consequences all at once.\u00a0 We expect them to sink in gradually.\u00a0\u00a0 Now we will briefly mention some.[xv]<\/a><\/p>\n

\u00a0Phumi Bombo is a teacher at the Gobelha primary school in Umthwalume in the South African province of KwaZulu-Natal.\u00a0 \u201cEvery year we bury up to ten learners, all from accidents.\u00a0 Since we\u2019ve had teacher assistants from CWP there is yet to be a fatal accident that involves a child from our school.\u00a0 The change is visible and the learners are taken care of.\u00a0 When I am late or cannot come to school for whatever reason, I do so with the knowledge and confidence that I have left my learners with somebody who is capable of holding the reigns until I can take over<\/i>.<\/p>\n

In this stripped-down bare-bones model of the economy, money is advanced for the purpose of making something to sell at a profit.[xvi]<\/a>\u00a0 If money-seeking-profit is not advanced, nothing happens.[xvii]<\/a>\u00a0 The aim of the game is to make the difference M\u2019 minus M as large as possible.\u00a0 For that to happen the difference C\u2019\u00a0 minus C must be as large as possible; in other words the aim is to maximize the difference between the selling price of the goods and the cost of making them.\u00a0\u00a0 Costs must be kept down.\u00a0\u00a0 Wages are a cost; therefore (in this model) the wage bill must be kept down, both by limiting hires and by limiting salaries.\u00a0\u00a0 If costs rise to the point where the spread C\u2019\u00a0 minus C shrinks toward zero,\u00a0 causing\u00a0 the spread M\u2019 minus M to shrink toward zero, then no money-seeking-profit will be advanced.\u00a0\u00a0 In that case there will be no employment and no production, and consequently (since nothing will be produced) no consumption.<\/p>\n

Marx\u2019s Presuppositions<\/span><\/p>\n

Let us take temporary leave of the consequences<\/i> of seeing the economy as a process of capital accumulation in order to look at what is presupposed<\/i> when it is seen that way.\u00a0\u00a0 Looking again at Marx\u2019s diagram, notice that both the left-hand side (the beginning) and the right-hand side (the end) consist of sales.\u00a0 In the beginning the capitalist buys<\/i> the labour-power and other inputs needed to set in motion the production process.\u00a0\u00a0 In the end the capitalist sells <\/i>the products.\u00a0\u00a0 The legal and ethical rules that constitute exchange in markets are presupposed.[xviii]<\/a>\u00a0 Marx had earlier outlined those legal and ethical rules in a famous paragraph in Volume One of Capital:<\/span><\/p>\n

\u201cThe sphere of circulation, or of exchange of commodities, within which labour power is bought and sold, is in fact a true Eden of the natural rights of man.\u00a0 There reign only freedom, equality, property, and Bentham.\u00a0\u00a0 Freedom!\u00a0 Because the buyer and seller of a commodity, say labour power for example, are not moved by anything but their own wills.\u00a0 They make a contract, as free persons, equal in rights.\u00a0 The contract is the form in which they give to a joint legal expression to their common will\u00a0\u00a0 Equality! Because they relate to each other as owners of commodities, and they exchange equivalent for equivalent.\u00a0 Property!\u00a0 Because each disposes only of his own.\u00a0\u00a0 Bentham! Because each is concerned only with his own self-interest.[xix]<\/a>\u00a0\u00a0 The only force that brings them together and defines their relationship is their selfishness, their own advantage, their private interests.\u00a0\u00a0 And just because each is concerned only with himself, and neither has concern for the other, due to the pre-established harmony of things, or under the guidance of a most cunning providence, all work for the sake of each other\u2019s advantage, for the common good, for the general interest.\u201d[xx]<\/a><\/p>\n

Adam Smith<\/span><\/p>\n

What has Marx done here?\u00a0 He has repeated some principal doctrines of Adam Smith, transposing them into irony.\u00a0 Freedom, equality, contract, property, and self-interest constitute what Smith calls \u201cnatural liberty\u201d in The Wealth of Nations.<\/span>[xxi]<\/a>\u00a0 For Marx the same norms acknowledged by Smith and by classical economics generally are the rules that constitute and govern the exchange of commodities.\u00a0 They frame the process of capital accumulation both at its beginning (acquiring the inputs of production) and at its end (selling the outputs of production).\u00a0\u00a0 If we ask then, \u201cWhat is this thing called \u2018the economy\u2019 (which we want to transform to make it work for the poor)?\u201d we will find that Marx and Smith (and following Smith today\u2019s liberals and neo-liberals) define the economy by the same<\/i> constitutive norms (freedom, equality, contract, property, and self-interest) –provided that we restrict our analysis to the exchange of commodities in what Marx calls \u201cthe sphere of circulation.\u201d<\/p>\n

Marx has also in the passage quoted (no doubt deliberately and consciously) repeated in an ironic mode a central doctrine of Adam Smith\u2019s Theory of the Moral Sentiments<\/span>.\u00a0 It is the doctrine that divine providence has decreed that it shall be the nature of human beings each to pursue his or her self-interest.[xxii]<\/a><\/p>\n

Marx agrees with Smith, in the sense that when the two look at commodity exchange in a market economy they see the same practices governed by the same norms; Smith also agrees with Marx, in the sense that Smith also finds that a consequence of market exchange is, by and large, the misery of the wage-earner.[xxiii]<\/a>\u00a0\u00a0 That wages will be low follows from a central and pervasive feature of Smith\u2019s conceptual apparatus.\u00a0\u00a0 Prices in general, including wages (i.e. the price of labour) fluctuate around and tend to converge to what Smith calls the natural price.[xxiv]<\/a>\u00a0 The natural price is the cost of production.\u00a0\u00a0 Competition in free markets tends to lower the prices sellers can charge buyers down toward the cost of production of the item sold.\u00a0\u00a0 In the case of skilled and highly educated workers, the cost of production of a worker includes the cost of acquiring skills and education.\u00a0 In the case of 18th<\/sup> and early 19th<\/sup> century European ordinary workers (the kind of worker most observed and most discussed by the classical economists Smith, Ricardo, and Marx) the principal component of the cost of production of a worker was the cost of food.\u00a0 Smith wrote, \u201c\u2026the demand for men, like that for any commodity, necessarily regulates the production of men; quickens it when it advances too slowly and stops it when it advances too fast.\u00a0 It is this demand which regulates and determines the state of propagation in all the different countries of the world….\u201d[xxv]<\/a>\u00a0\u00a0 Lack of market demand for labour \u201cstops\u201d its production because children die, or are never born, and sometimes adults die, because wages do not suffice to buy sufficient food.\u00a0 David Ricardo makes the same point with more explicit language:\u00a0 \u201cLabour, like all other things which are purchased and sold, and which may be increased or diminished in quantity, has its natural and its market price. The natural price of labour is that price which is necessary to enable the labourers, one with another, to subsist and to perpetuate their race, without either increase or diminution.\u201d[xxvi]<\/a><\/p>\n

\n

Phindile Ntshangase is the Njoko community garden supervisor in Nongoma.\u00a0 She is an orphan looking after four siblings. \u201cWhen my mom died in 2008 I thought it was finished for my family.\u00a0 I felt helpless.\u00a0 I am really happy now that I am able to care for my siblings and myself.\u00a0 This has brought hope into my life.\u00a0 Every month I am saving R200 because I want to continue my nursing studies.\u00a0 As long as I am employed I will not be helpless.\u201d<\/i><\/p>\n

The Poor<\/span><\/p>\n<\/div>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 In addressing the question how to make the economy work for the poor we have been discussing what is meant by the words \u201cthe economy.\u201d\u00a0 Now we will turn our attention briefly to what is meant by \u201cthe poor\u201d but only long enough to do a short thought -exercise, and only with a single limited aim.\u00a0\u00a0 The aim is to underline the desirability of holistic approaches to poverty alleviation that deal with its social dimensions as well as its economic dimensions.<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Here is the thought-exercise:<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Imagine.\u00a0 Imagine we are having a beer in a tuck shop[xxvii]<\/a> in Alex.[xxviii]<\/a>\u00a0 Now imagine that we are at exactly the same location on the surface of the earth four hundred years earlier.\u00a0\u00a0 We notice that now (in our new now, the one four hundred years prior to the time we conventionally call now) the human population is quite small; it seems lost and insignificant in the vast immensity of the natural landscape.\u00a0 Money plays a small role in our lives if we use it at all.\u00a0 Although food consumption in terms of calories per day is comparable to what it will be for the poor people four hundred years later, the future-people (not just any future-people but specifically the poor ones in the tuck shop in Alex) will have lost many food-producing and food-gathering skills; they will spend more hours a day on the whole trying to eke out a living by hook or by crook and will enjoy less leisure.[xxix]<\/a>\u00a0 The future-people will have lost their traditional culture and identity.[xxx]<\/a>\u00a0 They will no longer live securely in extended families and clans where \u201cchildren of the same homestead will share even the head of a locust.\u201d [xxxi]<\/a>\u00a0\u00a0 They will see wealth but will not touch it.\u00a0\u00a0\u00a0 Humiliation will be the daily diet of their souls.[xxxii]<\/a>\u00a0\u00a0 Drinking, fighting, and promiscuity will be their desserts.\u00a0 The future people will live far from the lands of their ancestors, for they will have left their ancestral lands to move to the city to look for work, and many of them will not have found it.\u00a0 That is a strange concept, \u201clooking for work and not finding it.\u201d\u00a0 We cannot understand it.\u00a0\u00a0 How can one not find work when all of nature invites us to do something useful for ourselves and our kin?\u00a0\u00a0 We cannot grasp the concept, but no doubt the future-people who will have personal experience of it in daily life will know what it means.<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Of course all of this is mere imagination.\u00a0 It is no substitute for the practitioner\u2019s careful study of the particular actually existing culture of the milieu<\/i> where she or he works.\u00a0\u00a0 It is no substitute for discerning a culture\u2019s zone of proximal development, for discerning it can go next, starting from where it is now.[xxxiii]<\/a>\u00a0\u00a0 This imaginary thought exercise is meant to orient real-life efforts to end poverty [xxxiv]<\/a> toward what we believe to be a special strength of the CWP approach, moving beyond an already broad focus on employment, acquiring assets, and access to goods and services toward an even broader focus on social integration.[xxxv]<\/a><\/p>\n

How We Can Make the Economy Work for the Poor<\/span><\/p>\n

\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 We have been insinuating, without yet coming right out and saying it, that the phrase \u201cthe economy\u201d is best glossed as human practice governed by the constitutive rules[xxxvi]<\/a> of commodity exchange, namely[xxxvii]<\/a> freedom, equality, property, contract, and self-interest, or, alternatively, following Smith, the principles of natural liberty. [xxxviii]<\/a>\u00a0\u00a0 These rules of the game make it inevitable, or nearly so, that the logic guiding the system and the dynamic driving the system will be capital accumulation.[xxxix]<\/a>\u00a0\u00a0 Assuming with Adam Smith that natural liberty is inseparable from free competitive markets, these rules of the game make it inevitable, or nearly so, that wages will be low.\u00a0\u00a0\u00a0 The economy so structured is not likely to work for the poor; working for the poor is not its purpose (its purpose is to turn money into more money); the objective of working for the poor or any social or ecological objective, —indeed any objective whatever –is likely to clash with its overriding imperative.\u00a0 Its overriding imperative is to keep profits flowing, since the expectation of profits is what drives it (its overriding imperative was named \u201cconfidence\u201d by John Maynard Keynes.[xl]<\/a>)<\/p>\n<\/div>\n

Nongenisolo Madlokazi lives in the rural village of Upper Mnyameni in Keiskammahoek in Eastern Cape.\u00a0 She is the elected CWP supervisor for her village.\u00a0 Of seven people in her household, only one is working.\u00a0 \u201cThe CWP has helped to chase away the hunger.\u00a0 In my house there was no furniture and now I have furniture and there is food in the house. It has also warmed my heart because I have got respect in the village because of this project.\u201d<\/i><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0 It would follow that when in history there have been economies that have reliably worked for the poor (and that if there are to be in the future economies that reliably work for the poor) there must have been (and in a happy future there must be) intervening generative causes<\/i> that are not comprehended in our stripped-down bare-bones model of capitalism.<\/i>\u00a0\u00a0 We propose to call them \u201cunbounded.\u201d\u00a0 We can make the economy work for the poor with unbounded organization.<\/p>\n

\u00a0\u00a0 Putting the same matter slightly differently, it is our view that the reasoning of the classical economists was valid.[xli]<\/a>\u00a0 It is as valid today as it ever was.\u00a0\u00a0 Whenever history turns out differently from what is to be expected within the bounds of the natural liberty that framed their analysis, it is because the facts[xlii]<\/a> they observed, and therefore the premises from which they reasoned, do not obtain.<\/p>\n

\u00a0\u00a0\u00a0 Thus our initial answer to the question how to make the economy work for the poor is a negative one.\u00a0 \u201cThe economy\u201d in what can be regarded as the ideal-typic primary sense of the term is not<\/i> going to work for the poor.\u00a0 As Amartya Sen has wisely written capitalism can generate mean streets and stunted lives unless it is restrained and complemented by other institutions– in many cases by nonmarket institutions.[xliii]<\/a><\/p>\n

\u00a0\u00a0 We think the best way to proceed to explain our proposal to employ unbounded organization to make the economy work for the poor will be to begin by giving a good example of what we mean.\u00a0\u00a0 We beg the reader to tolerate the suspense of waiting for general conceptual clarification of the bounded\/unbounded distinction; and to tolerate the suspense of waiting to learn more in general terms about why we think that in general unbounded organization is a useful concept in making the economy work for the poor; while we develop one particular example of an idea that breaks the bounds of the constitutive rules of commodity exchange \u2013the idea of separating the right to live from the necessity to sell.<\/p>\n

The Right to Live<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 We have been talking about how to talk about the economy.\u00a0 We have been using and putting in perspective the language of business.\u00a0 Now we shall shift to the somewhat different language of human rights.[xliv]<\/a>\u00a0\u00a0 We will soon bring together these two rather different realms of discourse with a proposition about the kind of economy needed to honour commitments to human rights:\u00a0 It must be an economy where it is not necessary to sell something (labour-power or something else) in order to enjoy the right to live.<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 There is an international consensus solemnly expressed in a series of multilateral treaties signed by the authorized representatives of almost all nations [xlv]<\/a>affirming that every human being has civil, political, economic, social and cultural rights.[xlvi]<\/a>\u00a0 Underlying all these rights is the right to live.<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 In order to live every human being must satisfy certain basic necessities, such as food, water, housing, and health care services.<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Since the earliest beginnings of the human species its diverse cultures have prescribed that human beings in one form or another have duties to contribute to sustaining the lives of others.[xlvii]<\/a>\u00a0\u00a0 Commonly social norms provide that humans have a duty to work.\u00a0\u00a0 Those excused from working have generally been an upper class, not a lower class.\u00a0\u00a0\u00a0 But it cannot be a duty to sell.\u00a0 A sale always requires the voluntary agreement of a buyer.\u00a0 Because there cannot be a social norm obliging buyers to buy, there cannot be a social norm obliging sellers to sell.<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 In mercantile societies like our own people usually satisfy their basic necessities by buying what they need with money.\u00a0 They get the money by selling.\u00a0 Often what they sell is their labour-power.<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 In the individualistic vocabulary typical of our kind of society, it is said that \u201cpeople should stand on their own two feet.\u201d\u00a0 They should not rely on \u201csomeone else\u201d to meet their basic needs.\u00a0 A moment\u2019s reflection shows that a culture where such sayings are common is out of touch with reality.\u00a0 \u201cStanding on your own feet\u201d means \u201cgetting your own money.\u201d\u00a0 \u201cGetting your own money\u201d means selling something.\u00a0\u00a0 But a sale can never be performed alone.\u00a0\u00a0\u00a0 It always requires the participation of at least one other person or organization, namely the buyer.<\/p>\n

Concerning the Philosophy of the Social Sciences<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Notice what we are doing.\u00a0 We are relativizing commodity exchange.\u00a0 We are relativizing the institutional frame[xlviii]<\/a> of economics.\u00a0 We are, so to speak, stepping out of our culture, moving backward, and seeing it from a distance as one culture among several or among many;\u00a0 as we might in our imagination move to a position in outer space where we could see the planet earth as one among several[xlix]<\/a> planets,\u00a0 or move still farther out to see our own galaxy as one of many galaxies.[l]<\/a><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 We see this book as part of a transition from bounded social sciences whose categories are derived from liberal institutions,[li]<\/a> to an unbounded social science whose categories are unlimited.\u00a0\u00a0\u00a0 We draw inspiration from the cultural\/historical approach to psychology pioneered by Lev Vygotsky.[lii]<\/a>\u00a0 We find ourselves sympathetic with the views of the anthropologist James Boggs. [liii]<\/a>\u00a0 Boggs notes that the highly controversial concept of \u201cculture\u201d has for many years been a flagship of anthropology as a discipline.\u00a0 It plays a role similar to the theory of evolution in the biological sciences,\u00a0 since culture can be thought of as the ability to transmit innovations better adapted to the\u00a0 environment from one generation to another through upbringing, thus giving the human species an evolutionary advantage over species that can only innovate by mutation and natural selection.\u00a0\u00a0\u00a0\u00a0 In the twenty first century \u201cculture\u201d can be regarded as an overarching theoretical framework for the social sciences replacing the previously hegemonic liberal doctrine of human order inherited from the Enlightenment.\u00a0\u00a0 In our terminology, bounded psychology, bounded economics, bounded politics, and so on, are no longer tenable.\u00a0\u00a0 The cat is out of the bag.\u00a0 The constitutive rules of commodity exchange are neither necessary nor sufficient nor universal nor always desirable.[liv]<\/a><\/p>\n

\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Boggs suggests that the scientific success and political significance of the concept of \u201cculture\u201d help to explain why it is now under attack.\u00a0\u00a0 It has challenged the established categories of liberal social science.\u00a0 It has challenged the ideologies legitimating the institutions of the global economy.\u00a0\u00a0 He summarizes and responds to a series of contemporary attacks \u201cfrom the left\u201d e.g. those that fault the concept for inevitably implying hierarchy, and a series of contemporary attacks \u201cfrom the right\u201d e.g. those that see the concept of culture as undermining the very possibility of rational science and the very possibility of ethics.<\/p>\n

Agnes Moswale is a coordinator of the Bokfontein CWP.\u00a0\u00a0 \u201cWhen I started CWP I was a participant and couldn\u2019t read or write.\u00a0 I used to sign with an X and I hated it.\u00a0 At our site participants attend ABET[lv]<\/b><\/a> classes.\u00a0\u00a0 I attended the classes and worked hard and was promoted.\u00a0 As a coordinator I must write a weekly report on the work that is done by my participants.\u00a0 I find that I can do this as well as manage my registers.\u00a0 If it wasn\u2019t for CWP I would not be where I am now.\u201d<\/i><\/p>\n<\/div>\n

Keynes\u2019 Concept of Liquidity Preference<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Returning to why full economic and social rights can only be honoured in a society where the right to live is separated from the necessity to sell something, we find another reason why selling cannot possibly be a duty in our way of viewing John Maynard Keynes\u2019 concept of liquidity preference.\u00a0\u00a0 It is one thing to say everyone should do useful work; it is quite another thing to say everyone must find a buyer who will pay them money for doing it.<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The liquidity preference is a preference for holding cash (or assets similar to cash) instead of spending the cash to buy something.\u00a0\u00a0 Keynes gives a list of eight \u201cpsychological\u201d reasons why people often prefer having money to spending it.\u00a0\u00a0 They are:<\/p>\n

    \n
  1. To build up a reserve against unforeseen contingencies.<\/li>\n
  2. To build up a reserve for foreseen future needs, such as old age, paying for the education of children.<\/li>\n
  3. To build up funds to enjoy consumption at a later date.<\/li>\n
  4. To enjoy a gradually increasing expenditure, i.e. instead of taking all one\u2019s enjoyment now as soon as one has the money.<\/li>\n
  5. To enjoy a sense of independence.<\/li>\n
  6. To secure a flexible sum of money for carrying out business projects.<\/li>\n
  7. To bequeath a fortune.<\/li>\n
  8. To satisfy pure miserliness. [lvi]<\/a><\/li>\n<\/ol>\n

    Keynes drew up another list of motives for not spending money that applies not to individuals but to central and local government and to business corporations.[lvii]<\/a><\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The fact that people have what Keynes calls liquidity preferences implies that some goods and services remain unsold (the ones that would have been sold if people had had no liquidity preferences and therefore had spent their money buying them). [lviii]<\/a><\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Consider a way to look at three time periods.<\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 At Time One the population as a whole has a certain income X.\u00a0\u00a0 It is the proceeds from everything they have sold.<\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 At Time Two the population as a whole does not spend all of X.\u00a0 Because of liquidity preferences it spends some smaller amount X \u2013 Y.<\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Therefore, at Time Two the income of the population cannot possibly by X again.\u00a0 Once again their income is the proceeds from everything they have sold.\u00a0\u00a0 But since the total spent is X \u2013 Y, the total income derived from sales cannot be more than X \u2013 Y.<\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Therefore purchasing power at Time Three derived from sales at Time Two must be less than X.<\/p>\n

    \n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 So here we introduce another dimension of the problem:\u00a0\u00a0 it is not just that sales lag because people prefer to keep money.\u00a0\u00a0 They also often lag because even when people want something and would prefer to buy it, they cannot afford it because their income is too small.\u00a0 (And the reasons why their purchasing power is constrained cannot be traced entirely to living in a poor nation that lacks physical and technical development.)<\/p>\n<\/div>\n

    Sizwe Nojkile is a participant at the Kagiso CWP.\u00a0 \u201cAs for me if I was not a participant in this project I would be in jail for stealing, in particular cell phones.\u00a0 CWP has helped me a lot because come month end, I know I have some money in my bank account that I have worked for, not a handout,\u201d he says.<\/i><\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 To see this and many other things still more clearly it is useful to stand in the light of an accounting identity we consider central to Keynes\u2019 thought:<\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Total Sales = Total Purchases<\/p>\n

    An individual may have more sales than purchases (and accumulate cash) or more purchases than sales (accumulating debt) but if one sums up over a whole society (Keynes often writes \u201ccommunity\u201d instead of \u201csociety\u201d) first all of the sales and then all of the purchases, the two totals must be equal.[lix]<\/a>\u00a0 This is true because what is a sale from the seller\u2019s point of view is a purchase from the buyer\u2019s point of view.\u00a0\u00a0 It is the same transaction.<\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 As soon as we notice this accounting identity we smell a rat.\u00a0\u00a0 If the rat could talk it would tell us that a community that relies too much on the logic of commodity exchange to meet the needs of its people is headed for trouble.\u00a0\u00a0 Switching the terminology slightly (saying \u201creceivables\u201d instead of \u201csales\u201d and \u201cpayables\u201d instead of \u201cpurchases\u201d)\u00a0 we suddenly see a gaping pit where before we saw only normality:\u00a0\u00a0\u00a0 Every business aims to have — indeed to survive long it must have– receivables greater than payables.\u00a0\u00a0 But<\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Total Receivables = Total Payables<\/p>\n

    because what is a receivable from the seller\u2019s viewpoint is a payable from the buyer\u2019s viewpoint.\u00a0\u00a0 It is the same outstanding obligation.\u00a0 A community composed entirely of successful businesses, where every business regularly takes in more than it pays out, is an impossibility.<\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 At this point the reader may well already have a sense of where we are going.\u00a0\u00a0 We are going to a plural economy with diverse logics where what is not accomplished by one logic can be accomplished by another.<\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 But again we do not expect the reader to grasp the significance of these points all at once.\u00a0\u00a0 They will take time to sink in.\u00a0\u00a0 They imply that no amount of education, no amount of skills-training, no amount of encouraging the poor to go entrepreneurial and set up their own enterprises, no amount of advice on how to tap into new markets, in short nothing that makes the poor more capable of producing and marketing goods and services will suffice to end poverty.\u00a0\u00a0 Let Keynes speak:\u00a0 \u201cThe celebrated optimism<\/i> of traditional economic theory, which has led to economists being looked upon as Candides, who, having left this world for the cultivation of their gardens, teach that all is for the best in this best of all possible worlds, provided of course we let well alone, is also to be traced, I think, to their having neglected to take account of the drag on prosperity that can be exercised by an insufficiency of effective demand.\u201d[lx]<\/a><\/p>\n

    An Abundance of Sellers, a Scarcity of Buyers<\/span><\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 For us Keynes provides a valuable theoretical lens for interpreting what we see every day on the streets.\u00a0 Actually we see in Keynes\u2019 contributions only a glimpse of the fundamental problem, as the tip of an iceberg is a glimpse of a much larger mass of ice under the water.\u00a0\u00a0 The fundamental fact (the mass of ice under the water) limiting what can be accomplished within the bounds of the logic of commodity exchange is that the constitutive rules of our type of society (unlike those of a society organized by kinship or by some other form of reciprocal obligation) leave each individual free to buy or not buy, sell or not sell.\u00a0\u00a0 We see no reason to believe that in a society like ours every seller who needs to sell something in order to live will find a buyer.[lxi]<\/a>\u00a0 We need to separate the right to live from the duty to sell because even with all the good will in the world not all those who need to sell something to make a living are finding buyers.\u00a0 On the streets we see those who are doing their best to survive legally and legitimately in a world where money is needed to survive and getting money requires finding someone to buy what one has to sell; and we also see those who have given up on legitimacy in a mercantile world, who resort to begging, confidence games, and thievery; or who evade reality with drugs, drink and\/or insane fantasies.\u00a0\u00a0 Those who strive to be legitimate often find few customers who have money and need or want what they are trying to sell.\u00a0 This applies as much to high-end shops trying to sell luxuries to the rich as to the craftspeople and hawkers covering sidewalks frequented by the poor with homemade trinkets or cheap goods from China.<\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Science and common sense both lead us to believe that although the logic of buying and selling may work for the majority, it does not work for everybody.\u00a0 We believe that to honour in practice the human rights solemnly declared on paper we need other dynamics (other motivating forces) and other logics (other criteria for making decisions.)\u00a0\u00a0\u00a0 Of course we have not yet considered the views of those who disagree with us and see these matters quite differently, for example those who deduce from Keynes that every year\u00a0 there must be enough investment spending and\/or government spending to compensate for that year\u2019s shortfall of consumer spending.[lxii]<\/a>\u00a0 For that reason and others we cannot claim to have proven anything.\u00a0\u00a0 Hopefully we are communicating to the reader a point of view sufficiently interesting and sufficiently connected to vital questions humanity needs to answer to merit the reader\u2019s further attention.<\/p>\n

    Working Without Selling <\/span><\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 But how can you work without selling?\u00a0\u00a0 Or without selling your labour to an employer who in turn sells the product?\u00a0\u00a0 Who will pay you?\u00a0 Where will the money to pay you come from?\u00a0\u00a0 Who determines whether your work is truly useful?\u00a0\u00a0\u00a0 How can the value of your work be measured?\u00a0 Who supervises your work?\u00a0 Is there not a danger that without the discipline of competitive pressure governing private sector employment, the so-called work without selling will become a charade, a disguised handout?\u00a0\u00a0 A slush fund politicians use to build a vote bank?\u00a0 What is to prevent the programme that employs you from crowding out opportunities for the private sector by spending public funds to do things private enterprise would otherwise do\u00a0 — in the end creating no net increase in employment but only a number of public jobs no higher than the number of private jobs crowded out?\u00a0\u00a0 Will the wage paid by the programme not become a floor so that employers will be unable to find anyone willing to work for less?\u00a0 Will not wages in general rise?\u00a0\u00a0 And if wages rise will not some businesses fail because they are unable to pay them?\u00a0\u00a0 And will not the competitiveness of South Africa in the global marketplace be undermined if wages here rise higher than wages elsewhere?<\/p>\n

    \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Whatever the answers to these questions might be, it is clear that separating the right to live from the necessity of selling is possible.\u00a0 \u00a0South Africa\u2019s Community Work Programme is a fact.[lxiii]<\/a> \u00a0Its participants are not only not required<\/i> to sell;\u00a0 they are not allowed<\/i> to sell anything they produce on CWP time or with CWP assets.\u00a0\u00a0 Their work is entirely community service.\u00a0 CWP is well on its way to reaching its goal of providing useful regular paid work for a million participants in 2014. \u00a0It is a fact too big to ignore.\u00a0 It exists.\u00a0\u00a0 If it exists it must be possible.<\/p>\n

    ENDNOTES:<\/b><\/p>\n

    [i]<\/a> The concept of unbounded organization has previously been developed in Gavin Andersson, Unbounded Organization: Embracing the Societal Enterprise<\/span>.\u00a0 Pretoria: University of South Africa Press, 2013; Gavin Andersson, \u201cLooking Back to the Future: Conversations on Unbounded Organisation,\u201d Dark Roast Occasional Papers Series 12.\u00a0 Cape Town: Islandla Institute, 2003 (available at www.islandla.org.za<\/a>, accessed 29 January 2013), revised and reprinted as a chapter in E. Pieterse and F. Meintjes (eds.) Voices of the Transition:\u00a0 the Politics, Poetics and Practice of Development<\/span>.\u00a0 Johannesburg: Heinemann, 2004:\u00a0 Gavin Andersson and Howard Richards, \u201cBounded and Unbounded Organisation,\u201d Africanus<\/span> Volume 42 (2012) pp. 98-119; Howard Richards and Gavin Andersson, \u201cNeville Alexander, Unbounded Organisation and the Future of Socialism,\u201d Education as Change<\/span> Vol.?? (2013), pp.??; Howard Richards, \u201cUnbounded Organization and the Unbounded University Curriculum,\u201d in P.Inman and D. Robinson (eds.) University Engagement and Environmental Sustainability<\/span> Manchester UK: Manchester University Press, 2013.\u00a0\u00a0 Videotaped discussions of the concept of unbounded organization are available on You Tube and on the websites www.humiliationstudies.org<\/a>\u00a0 and www.seriti.org.za<\/a><\/p>\n
    \n

    [ii]<\/a> An introduction to the Community Works Programme can be found on the website of the International Labour Organization, ILO, www.ilo.org<\/a>\u00a0 accessed 29 January 2013.\u00a0 In the subsection \u201cFeatures\u201d of the section \u201cILO Newsroom\u201d an article dated 27 July 2011 is titled, \u201cSouth Africa and the ILO team up to promote public employment and community work programmes.\u201d\u00a0 It begins, \u201cWith an official unemployment rate of 25 per cent, the South African government knows that employment creation cannot be left to the private sector alone. There is a huge gap between the jobs that are needed and the jobs that the market can generate. The State has the responsibility to fill that gap.\u201d<\/p>\n<\/div>\n

    \n

    [iii]<\/a> The doctrine that there is a close link between socioeconomic development and conflict prevention has been called \u201cthe Brazilian doctrine\u201d and identified with that nation\u2019s positions on international issues.\u00a0 Giorgio Romano Schutte, \u201cNeo-developmentalism and the Search for a New International Insertion,\u201d Austral:\u00a0 Brazilian Journal of Strategy and International Relations<\/span>. Volume 1 (2012) pp. 59-98. p. 72.<\/p>\n<\/div>\n

    \n

    [iv]<\/a> In their book\u00a0 The Spirit Level: Why More Equal Societies Almost Always Do Better\u00a0 <\/span>London Allan Lane 2009 authors Richard Wilkinson and Kate Pickett provide evidence that more equal societies tend to do better on measures of physical health, mental health, drug abuse, education, imprisonment, obesity, social mobility, trust and community life, violence, teenage pregnancies, and child well-being.<\/p>\n<\/div>\n

    \n

    [v]<\/a> That the world economy, and consequently the world, are not now governable and that for this reason the biosphere cannot be protected is argued by Joel Novek and Karen Kampen. \u201cSustainable or Unsustainable Development: an Analysis of an Environmental Controversy.\u201d Canadian Journal of Sociology.<\/span>\u00a0 Vol. 17 (1992).\u00a0 pp. 249-273.\u00a0 The authors write at p. 250. \u201c…the relationship between economic expansion and environmental protection remains fundamentally contradictory.\u201d\u00a0 This argument is further elaborated by many authors including Michael Redclift, Sustainable Development: Exploring the Contradictions<\/span>.\u00a0 London:\u00a0 Methuen, 1987.<\/p>\n<\/div>\n

    \n

    [vi]<\/a> Similarly a theoretical argument is combined with an empirical study of a large socioeconomic development programme in Howard Richards, The Evaluation of Cultural Action<\/span>.\u00a0 London: Macmillan, 1985.<\/p>\n<\/div>\n

    \n

    [vii]<\/a> Max Weber, Economy and Society<\/span>.\u00a0 New York: Bedminster Press, 1968 pp. 3-26.\u00a0 (The original German edition of 1922 published posthumously by his widow Marianne Weber drew on material on ideal types Weber had published in 1913 in the journal Logos<\/span> volume 4, pp. 253-294.)<\/p>\n<\/div>\n

    \n

    [viii]<\/a> A very important insight Weber associated with the rational economic actor was that once certain institutions were in place it became an objective (not merely subjective) need to get an income because people needed an income to purchase the necessities of life.<\/p>\n<\/div>\n

    \n

    [ix]<\/a> Somewhat similarly, physicists calculate the ideal trajectory of a falling object using Galileo\u2019s law of falling bodies that describes how they would fall in a perfect vacuum, and then adjust their figures to take into account friction from air and any other factors that produce deviations from the theoretical ideal.<\/p>\n<\/div>\n

    \n

    [x]<\/a> Marx uses diagrams like this several times in the second volume of Capital<\/span>, which was edited by Friedrich Engels after his death and first published in German in 1885.\u00a0 It is available in English in a translation by Ben Fowkes published by Penguin classics in London in 1990.<\/p>\n<\/div>\n

    \n

    [xi]<\/a> Amartya Sen, Poverty and Famines: an Essay on Entitlement and Deprivation.<\/span>\u00a0 Oxford: Clarendon Press, 1983.\u00a0\u00a0 Sen shows in detailed studies that there has been food available in the great famines of recent centuries, but that the poor lacked purchasing power to acquire it.<\/p>\n<\/div>\n

    \n

    [xii]<\/a> Max Weber regarded Marx\u2019s account of capitalism as an analysis of ideal types.\u00a0 Max Weber, The Methodology of the Social Sciences.<\/span>\u00a0 New York: Free Press, 1949.\u00a0 p. 103.\u00a0\u00a0 Louis Althusser and Etienne Balibar in their commentary on Capital<\/span> emphasize that Marx makes many simplifying assumptions.\u00a0 See their Reading<\/span> Capital<\/span>.\u00a0 (abridged English edition) London: New Left Books, 1970.\u00a0 (Complete French edition Lire le Capital.<\/span> Paris: Francois\u00a0 Maspero, 1968)<\/p>\n<\/div>\n

    \n

    [xiii]<\/a> \u201cImplies\u201d in the sense of \u201csuggests\u201d or \u201cpoints to a further meaning,\u201d not strict logical implication.<\/p>\n<\/div>\n

    \n

    [xiv]<\/a>\u00a0 The diagram shows the essence of the logic and dynamic of accumulation.\u00a0 Once M has become the larger quantity M\u2019, the process can be repeated.\u00a0 M\u2019 can become the even larger quantity of money M\u2019\u2019.\u00a0 M\u2019\u2019 can be reinvested to produce M\u2019\u2019\u2019, and so the accumulation of money can go on indefinitely.<\/p>\n<\/div>\n

    \n

    [xv]<\/a> What we have to say will be only a tiny addition to the huge existing literature on capital accumulation.\u00a0 Marx himself wrote in the first volume of Capital<\/span>:\u00a0 \u201c\u201cWith the accumulation of capital there develops the specifically capitalist mode of production, and with the specifically capitalist form of production there develops the accumulation of capital.\u00a0 \u2026 Each accumulation becomes a means for making a new accumulation.\u201d Das Kapital<\/span> Erstes Buch, Kapitel 23, part II, paragraphs 7-8 (our translation).\u00a0\u00a0 Four basic sources are Rosa Luxemburg, The Accumulation of Capital<\/span>; London: Routledge and Kegan Paul, 1951 (original German 1913); Patrick Bond, Horman Chitonge and Arndt Hopfmann (editors), The Accumulation of Capital in Southern Africa.\u00a0 <\/span>Durban: University of KwaZulu-Natal, 2006; Samir Amin, Accumulation on a World Scale<\/span>.\u00a0 New York: Monthly Review Press, 1974; Maria Mies, Patriarchy and Accumulation on a World Scale<\/span>.\u00a0 London: Zed Books, 1986.<\/p>\n<\/div>\n

    \n

    [xvi]<\/a>\u00a0 Today in practice the amount of money changing hands every day speculating in what John Maynard Keynes called the \u201ccasino economy\u201d dwarfs the sums invested in the real economy producing goods and services. \u00a0See Susan Strange, Mad Money<\/span>.\u00a0 Manchester UK: Manchester University Press, 1998.\u00a0\u00a0 From Marx\u2019s perspective this shortcut turning M into M\u2019 without P cannot possibly be sustainable because the only way to earn sustainable profits is to hire workers whose cost to the employer is less than the value of what they produce.<\/p>\n<\/div>\n

    \n

    [xvii]<\/a> In Marx\u2019s vocabulary there is no Bewegung<\/i>, no movement.\u00a0 Money advanced is the impetus that sets everything else in motion; without it everything else stands still.<\/p>\n<\/div>\n

    \n

    [xviii]<\/a> Max Weber is famous for the implausible claim that capitalism began with the protestant ethic of inner-worldly asceticism, but more often he made the more plausible claim that capitalism could only begin after or concurrently with the establishment of a rational legal order of the western Roman type.\u00a0\u00a0 Without law, he pointed out, economic decisions could not be made because their consequences would not be kalkulierbar<\/i>; in other words without law the future enforcement of property rights and contract compliance would be so uncertain that no investments could be made.\u00a0 See the section of Weber\u2019s Economy and Society <\/span>on \u201cMeaning and Limits of Legal Authority for the Economy.\u201d<\/p>\n<\/div>\n

    \n

    [xix]<\/a> Here Marx does not refer to Bentham\u2019s famous felicific calculus, or to his famous views on the greatest good of the greatest number.\u00a0\u00a0 He appears to refer to passages where Bentham holds that since people are experts on their own pleasures they should be left free to pursue happiness as they see fit and\/or to those where he regards the pursuit of self-interest as natural and inevitable.\u00a0\u00a0 Although it is clear enough why Marx invokes Bentham\u2019 s name here,\u00a0 it could not be said that\u00a0 Bentham was in fact on the whole in favour of\u00a0 each looking out only for himself.\u00a0 His collectivism balanced his individualism.\u00a0 See L.J. Hume, \u201cJeremy Bentham and the Nineteenth Century Revolution in Government,\u201d The Historical Journal.<\/span>\u00a0 Volume 10 (1967) pp. 361-375.<\/p>\n<\/div>\n

    \n

    [xx]<\/a> Karl Marx, Das Kapital<\/span>.\u00a0 Erstes Buch, 4 Kapitel, section III in the next-to-last paragraph. (our translation)<\/p>\n<\/div>\n

    \n

    [xxi]<\/a>\u00a0\u00a0 Smith remarks that the only encouragement that industry requires is some \u201ctolerable security\u201d that it will enjoy the fruits of its own labour.\u00a0 (p. 269)\u00a0\u00a0 He identifies basic property rights and liberty with elemental justice.\u00a0 (p. 137 and passim<\/i>).\u00a0\u00a0 A \u201ccivilized\u201d society (p. 289) is one where property rights are established and therefore there are three \u201corders\u201d (social classes).\u00a0 The three orders are those who live by rent, those who live by wages, and those who live by profit.\u00a0 Wherever things follow their natural course and people are at liberty to choose their occupations, they seek the most advantageous employments. (p. 111) The page numbers refer to volume one of the two volume edition of The Wealth of Nations<\/span> edited by Edwin Cannan and published by Arlington House with no date at New Rochelle, New York. (first edition 1776, although the standard edition revised by Smith himself is that of 1789)<\/p>\n<\/div>\n

    \n

    [xxii]<\/a> Adam Smith, Theory of the Moral Sentiments.<\/span>\u00a0\u00a0\u00a0 Cambridge UK: Cambridge University Press, 2002 (first edition 1759)\u00a0\u00a0 The famous \u201cinvisible hand\u201d metaphor to which Marx alludes when he says mockingly that a cunning providence has provided that selfishness serves the common good is found in part IV chapter 1.<\/p>\n<\/div>\n

    \n

    [xxiii]<\/a> Although little-noticed by Smith\u2019s admirers, this point was not lost on Marx, who observed that Smith himself explained why in a free market in negotiations between employer and employee the employer commonly has the stronger bargaining position.\u00a0 Das Kapital <\/span>Erstes Buch, Kapitel 23, paragraph 6.\u00a0 Smith\u2019s general discussion showing why workers are usually the losers is in Chapter VIII of Book One of The Wealth of Nations.<\/span><\/p>\n<\/div>\n

    \n

    [xxiv]<\/a> We omit the complications derived from the fact that the classical economists worked with a labour theory of value, while most contemporary economists tend to define the value of a thing as whatever a buyer is willing to pay for it.<\/p>\n<\/div>\n

    \n

    [xxv]<\/a> Wealth of Nations<\/span> book 1, chapter 8, at page 88 of the edition cited above.<\/p>\n<\/div>\n

    \n

    [xxvi]<\/a> David Ricardo, On the Principles of Political Economy and Taxation<\/span>.\u00a0 London: Macmillan, 1951.\u00a0\u00a0 The lines quoted are the opening paragraph of Chapter Five \u201cOn Wages.\u201d<\/p>\n<\/div>\n

    \n

    [xxvii]<\/a> A small shop where liquor is sold and served, similar to what would be known in other parts of the English-speaking world as a pub, a bar, a lounge, or a saloon.<\/p>\n<\/div>\n

    \n

    [xxviii]<\/a>\u00a0\u00a0 Alexandria, a poor district of Johannesburg.<\/p>\n<\/div>\n

    \n

    [xxix]<\/a> This thought is suggested by Marshall Sahlins, Stone Age Economics<\/span>.\u00a0 Chicago: Aldine, 1967, although he wrote of times still longer ago.<\/p>\n<\/div>\n

    \n

    [xxx]<\/a> In the language of Emile Durkheim they will suffer anomie<\/i>, normlessness.\u00a0 Durkheim found that anomie <\/i>was a typical consequence of the transition from archaic to modern society.\u00a0 Emile Durkheim, \u00a0The Division of Labor in Society<\/span>.\u00a0 New York: Free Press, 1947 (French original 1893);\u00a0 Suicide<\/span>.\u00a0 New York: Free Press, 1951 (French original 1897).\u00a0\u00a0 Similarly,\u00a0 Karl Polanyi describes the growth of the modern economy as a \u201cdisembedding\u201d of economic relations from social relations; while Louis Dumont construes the rise of modernity as the rise of the isolated individual.\u00a0 Karl Polanyi, The Great Transformation.<\/span>\u00a0 Boston: Beacon Press, 1944;\u00a0 Louis Dumont, Essays on Individualism<\/span>.\u00a0 Chicago: University of Chicago Press, 1992.<\/p>\n<\/div>\n

    \n

    [xxxi]<\/a> \u201cBana ba motho ba kgaogana tlhogwana ya tsie<\/i>.\u201d\u00a0 A proverb in the Tswana language.<\/p>\n<\/div>\n

    \n

    [xxxii]<\/a> See Evelin Lindner, The Psychology of Humiliation<\/span> (Ph.D. dissertation, University of Oslo) and other works by the same author.<\/p>\n<\/div>\n

    \n

    [xxxiii]<\/a> See the discussions of Lev Vygotsky\u2019s concept of zone of proximal development as applied to development work in Gavin Andersson, Unbounded Organization<\/span> cited above.<\/p>\n<\/div>\n

    \n

    [xxxiv]<\/a> \u00a0See the case studies on particular CWP sites showing the programme\u2019s impact on breaking the cycle of criminality and on other social dimensions of poverty on the website of TIPS,\u00a0 the South African presidency\u2019s Trade and Industrial Policy Strategies think-tank where CWP was in large part designed.\u00a0 http:\/\/www.tips.org.za\/community-work-programme<\/a>, accessed 12 February 2013.<\/p>\n<\/div>\n

    \n

    [xxxv]<\/a>\u00a0 Social integration is a concept derived from Durkheim who used int\u00e9gration sociale <\/i>as a synonym for solidarit\u00e9 <\/i>and treated both as desiderata concerning which modernity is structurally deficient. Therefore they must be deliberately constructed.\u00a0 Durkheim treated economic integration through employment or otherwise as part of the larger project of overcoming anomie<\/i> by social integration into a normative order.\u00a0 See further Jonathan Turner, \u201cDurkheim\u2019s Theory of Integration in Differentiated Social Systems,\u201d Pacific Sociological Review<\/span>.\u00a0 Volume 24 (1981) pp. 379-391;\u00a0 Werner Landecker, \u201cTypes of Integration and their Measurement,\u201d American Journal of\u00a0 Sociology<\/span> Volume 56 (1951) pp. 332-340;\u00a0 Geoffrey Nelson et al, Shifting the Paradigm in Community Mental Health: Towards Empowerment and Community<\/span>.\u00a0 Toronto: University of Toronto Press, 2001.<\/p>\n<\/div>\n

    \n

    [xxxvi]<\/a> The phrase \u201cconstitutive rules\u201d is explained and applied in a way similar to the way we apply it here in Charles Taylor, \u201cInterpretation and the Sciences of Man,\u201d Review of Metaphysics<\/span>\u00a0 Vol. 25 (1971) pp. 3-51.\u00a0\u00a0 This seminal essay has been frequently anthologized and is available on line.<\/p>\n<\/div>\n

    \n

    [xxxvii]<\/a> By saying \u201cnamely\u201d we do not mean to insist that there is anything irreplaceable about the words we have chosen (following Marx and Smith).\u00a0 There are other legitimate and useful ways to describe how the same set of norms constitutes the same basic social structure; Taylor for example in the essay just cited writes of a \u201cbargaining society.\u201d<\/p>\n<\/div>\n

    \n

    [xxxviii]<\/a> Earlier we took the precaution of saying Smith and Marx saw the same rules \u201c–provided that we restrict our analysis to the exchange of commodities in what Marx calls the sphere of circulation.\u201d\u00a0 The reason for this precaution was that Marx thought profit could not be explained at the level of circulation but only at the level of Produktionsverhaltnisse<\/i> (the production relations found in the \u2026..P\u2026.. part of the diagram where C becomes C\u2019).\u00a0\u00a0 Although we believe \u201cthe economy\u201d is best glossed as we have stated, we do not mean to ignore Marx\u2019s views on this point and we will come back to them in a later chapter where we will discuss the explanation and the social functions of profit.<\/p>\n

    [xxxix]<\/a> See on this point Chapter Four \u201cLaw\u2014The Constitution of Modernity\u201d and Chapter Five \u201cEconomics\u2014the Operation of Modernity\u201d in Catherine Hoppers and Howard Richards, Rethinking Thinking: Modernity\u2019s Other and the Transformation of the University<\/span>.\u00a0 Pretoria: University of South Africa, 2011.<\/p>\n<\/div>\n

    \n

    [xl]<\/a>\u00a0 John Maynard Keynes, A General Theory of Employment, Money, and Interest.<\/span> London: Macmillan, 1936. Chapter 12. \u00a0Keynes adds a twist.\u00a0\u00a0 People invest not only because they expect a firm to be profitable, but also because they think the value of their shares will increase because other people will regard them as a profitable investment.<\/p>\n<\/div>\n

    \n

    [xli]<\/a> We mean \u201cvalid\u201d regarding the topics we have discussed.\u00a0\u00a0 We do not mean that none of them ever made a logical error regarding any topic.<\/p>\n<\/div>\n

    \n

    [xlii]<\/a> i.e. the human practices, the institutions.<\/p>\n<\/div>\n

    \n

    [xliii]<\/a> Amartya Sen, \u201cSraffa, Wittgenstein, and Gramsci,\u201d Journal of Economic Literature.<\/span>\u00a0 Vol. 41 (2003) pp. 1240-1255. p 1247.<\/p>\n<\/div>\n

    \n

    [xliv]<\/a>\u00a0 The general notion that in any given society there may be operating different and perhaps incommensurable \u201clanguages\u201d comes from the methodology of the sociologist Robert Bellah and his co-authors of Habits of the Heart: Individualism and Commitment in American Life<\/span>. Berkeley: University of California Press, 1986.\u00a0\u00a0 They found four pervasive \u201clanguages\u201d in mainstream United States culture: the language of business, that of therapy, that of religion, and that of civic life.<\/p>\n<\/div>\n

    \n

    [xlv]<\/a> As of October 2012 the economic, social, and cultural rights covenant had been signed by 162 nations and ratified by 160.<\/p>\n<\/div>\n

    \n

    [xlvi]<\/a> The International Convention on Civil and Political Rights was adopted by General Assembly resolution\u00a0 on December 16, 1966.\u00a0 It entered into force on March 23, 1976.\u00a0 The International Covenant on Economic, Social, and Cultural Rights was adopted by General Assembly resolution on the same date and entered into force on January 3, 1976.\u00a0 It includes the right to an adequate standard of living.\u00a0 The Constitution of the Republic of South Africa was approved by the Constitutional Court on 4 December, 1996 and entered into force on 4 February, 1997.\u00a0 Its Chapter Two is a Bill of Rights that includes among others rights to the basic necessities mentioned in the text above, food, water,\u00a0 housing, and health care services.<\/p>\n<\/div>\n

    \n

    [xlvii]<\/a>\u00a0 It has been argued that the most general form of the duty to contribute to the welfare of (at least some) others found in all human cultures is the norm of reciprocity.\u00a0\u00a0 Alvin Gouldner, \u201cThe Norm of Reciprocity: a Preliminary Statement.\u201d\u00a0 American Sociological Review<\/span> Vol. 25 (1960) pp. 161-178.\u00a0 Nancy Tanner has shown that the physical evolution of the human species has been that of an animal evolving to live in groups and to secure its livelihood by cooperation in her On Becoming Human.\u00a0 <\/span>Cambridge: Cambridge University Press, 1981.<\/p>\n<\/div>\n

    \n

    [xlviii]<\/a>\u00a0 The institutional frame of economics is discussed by Joseph Schumpeter in his History of Economic Analysis <\/span>New York: Oxford University Press, 1956 at pp. 544-550.\u00a0\u00a0\u00a0\u00a0\u00a0 It is the same as the Smithian \u201cnatural liberty\u201d and\u00a0 Marxian \u201cparadise\u201d we have been discussing.<\/p>\n<\/div>\n

    \n

    [xlix]<\/a>\u00a0 Thus for the historian Karl Polanyi there are not very many types of human economy, as there are not many planets in the solar system.\u00a0 For Polanyi a future that corrects the exaggerations of the present is likely to feature the tried and true principles that worked for many centuries before the rise of capitalism, notably the principle of reciprocal obligation and the principle of redistribution of the surplus. See Karl Polanyi et al.\u00a0 Trade and Markets in the Early Empires<\/span>:Economies in History and Theory.<\/span>\u00a0 New York: Free Press, 1957 and other works by the same author.<\/p>\n<\/div>\n

    \n

    [l]<\/a>\u00a0 Our own view is the human capacity to invent institutions is unlimited.\u00a0 One reason for this view is the anthropologist Victor Turner\u2019s opinion that the physiology of the human brain lends itself to creative processes including ritual play that function in the social construction of reality somewhat as mutation and variation function in organic evolution.\u00a0 Victor Turner, \u201cBody, Brain, and Culture,\u201d Zygon: Journal of Religion and Science<\/span>.\u00a0 Vol. 18 (1983) pp. 221-245.<\/p>\n<\/div>\n

    \n

    [li]<\/a> Immanuel Wallerstein periodizes the disciplinary consolidation of economics, political science, anthropology, and sociology in the early 19th<\/sup> century and sees them as part and parcel of the global liberal hegemony established after the defeat of Napoleon.\u00a0 See his Unthinking Social Science.<\/span>\u00a0 Stanford: Stanford University Press,\u00a0 1995.\u00a0 Michel Foucault similarly saw the founding of the social sciences as an aspect of the constitution of notre modernit\u00e9 <\/i>dating their rise a bit earlier at the time of the French Revolution.\u00a0 See the latter part of his The Order of Things<\/span> New York: Random House, 1994 (French original 1966), his books on the origins of psychiatry, medicine, and criminology, and his lectures at the Coll\u00e8ge de France where he deals with the origins of political science and economics.<\/p>\n<\/div>\n

    \n

    [lii]<\/a> See the extended discussion of Vygotsky and activity theory in Gavin Andersson, Unbounded Organization: Embracing the Societal Enterprise<\/span>.\u00a0\u00a0 Pretoria: University of South Africa Press, 2013.<\/p>\n<\/div>\n

    \n

    [liii]<\/a> James Boggs, \u201cThe Culture Concept as Theory, in Context,\u201d Current Anthropology. <\/span>Volume 45 (2004) pp. 187-209.<\/p>\n<\/div>\n

    \n

    [liv]<\/a> In a later chapter we will discuss the views of Friedrich Von Hayek and others who agree that the constitutive rules of commodity exchange are social constructions neither universal nor eternal, but nevertheless argue that they should not be altered.\u00a0 See his The Fatal Conceit: the Errors of Socialism.\u00a0 <\/span>Chicago: University of Chicago Press, 1988.<\/p>\n<\/div>\n

    \n

    [lv]<\/a> Adult Basic Education and Training<\/p>\n<\/div>\n

    \n

    [lvi]<\/a>\u00a0\u00a0 John Maynard Keynes, The General Theory of Employment, Interest, and Money<\/span>.\u00a0 London: Macmillan, 1936.\u00a0 pp.\u00a0 107-8.<\/p>\n<\/div>\n

    \n

    [lvii]<\/a> Keynes, op. cit. pp. 108-9.<\/p>\n<\/div>\n

    \n

    [lviii]<\/a> We see sellers refraining from buying as a massive fact whose consequences require in the end an unbounded approach like that of CWP.\u00a0\u00a0 Those who see the economy differently might be divided roughly into three classes:\u00a0 (1) Those who see no problem, reasoning for example that money not spent will be deposited in banks, who will then lend it out again to people who will spend it; (2) those who positively celebrate not spending as saving which will make possible investment and therefore growth; (3) those who see a problem, but who believe that suitable monetary and fiscal macroeconomic policies can cope with it in a more or less acceptable way.\u00a0\u00a0 Concerning the latter two: \u201cThe development of new products for which demand is disproportionate to normal demand will not stop, even if it \u2026breaches ecological norms.\u00a0 Nor will it cease to be necessary to balance society\u2019s books.\u00a0 The new products process \u2026and consumers who like to shop with their credit cards will still be necessary to keep employment at acceptable levels.\u00a0 They display the treadmill that ensnares humanity; it is necessary to go forward faster just to stay in place\u2026. Thus it is that caring and aware humans everywhere are asking the questions, How did we get on this treadmill?\u00a0 And how can we get off it?\u201d\u00a0 Howard Richards, Understanding the Global Economy<\/span>.\u00a0 Santa Barbara CA: Peace Education Books, 2004.\u00a0 p. 68.<\/p>\n<\/div>\n

    \n

    [lix]<\/a> This is true in an ideal-typic stripped down bare-bones capitalism.\u00a0 In the real world there are taxes.\u00a0 The buyer pays more than the seller receives.<\/p>\n<\/div>\n

    \n

    [lx]<\/a> John Maynard Keynes, General Theory<\/span> op. cit. p. 33.\u00a0\u00a0 There is an unending stream of academic literature attacking, defending, and revising Keynes\u2019 ideas.\u00a0\u00a0 Much of it is summarized in J.E. King, A History of Post-Keynesian Economics since 1936.\u00a0\u00a0 <\/span>Cheltenham UK: Edward Elgar, 2002; J.E. King, Post-Keynesian Economics: An Annotated Bibliography<\/span>. Aldershot UK and Brookfield VT: Edward Elgar, 1995.\u00a0 Some of it will be discussed in later chapters of this book.<\/p>\n<\/div>\n

    \n

    [lxi]<\/a> The contrary view that for every seller there must be a buyer is approximately Say\u2019s Law attributed to Jean Baptiste Say (1767-1832).\u00a0\u00a0 We will discuss it and contemporary views of it in a later chapter.\u00a0 It makes a huge difference for CWP and for any employment guarantee scheme whether the real world is more as Say sees it or more as Keynes sees it.<\/p>\n<\/div>\n

    \n

    [lxii]<\/a> \u00a0\u00a0Concerning investment spending as a solution see the trenchant arguments of Rosa Luxemburg in her The Accumulation of Capital<\/span> London: Routledge, 2003.\u00a0 (German original 1913)\u00a0 She argues that while investment spending may well get more purchasing power into the hands of buyers thus making it possible to sell this year\u2019s glut of otherwise unsellable goods, in the long run it will only make the problem worse by creating even greater productive capacity and even more goods that cannot be sold.\u00a0 Concerning government spending as a solution see James O\u2019Connor The Fiscal Crisis of the State.\u00a0 <\/span>New Brunswick NJ: Transaction Publishers, 2001.<\/p>\n<\/div>\n

    \n

    [lxiii]<\/a> Also alive and well is the Mahatma Gandhi National Rural Employment Guarantee Scheme started in India in 2005, and by 2010 enrolling participants from over 55 million households.\u00a0 Its experience has been a major source of ideas for CWP.\u00a0 It in turn has drawn on the experience of the employment guarantee schemes that have functioned in the Indian state of Maharashtra since 1972-73.\u00a0 Later chapters of this book will review historical experience and theoretical rationales for employment guarantees in Sweden, Argentina, and Ethiopia.\u00a0 It should be noted that although CWP is laying the groundwork for a possible future employment guarantee in South Africa it is not yet an employment guarantee.<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    We want to make a case for the claim that \u201cunbounded organization\u201d is a useful concept, indeed a key concept. A key opens doors. We use the word \u201ckey\u201d to suggest that the concept of unbounded organization can be said to \u201copen doors.\u201d It helps to answer questions and to resolve problems regarding not just one but several theoretical problems in the social sciences. Similarly the practical question posed in the title of this chapter, \u201cHow do we make the economy work for the poor?\u201d can be regarded as a question whose satisfactory answer would \u201copen\u201d answers to other crucial practical questions such as, \u201cHow can violent conflicts be transformed into peaceful cooperation?\u201d<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[40,127,146],"tags":[],"class_list":["post-25717","post","type-post","status-publish","format-standard","hentry","category-transcend-members","category-africa","category-economics"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/25717","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=25717"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/25717\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=25717"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=25717"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=25717"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}