How much stuff gets thrown away not because it’s no longer functional, but because people no longer have a use or need for it, or they don’t know how to fix it, or how to get the replacement part for it? It’s otherwise perfectly good, or could readily be made so, but it’s thrown out anyway. How much gets discarded simply because its owner no longer likes it, or has no way to transport it to their next place? How much of the stuff that finds it’s way to landfill could, with a little love and attention, fulfill real needs for somebody else, if only they could be found? And when things are thrown away, where is “away”?
This is all wastefulness. Capitalists love wastefulness because they get to sell another one, without having to pay the costs of disposal of the previous one. But somebody pays. Someone’s life, health or environment is adversely affected by the waste. It’s just not the capitalist directly, or indeed the consumer that contributes to the waste. This is why there is planned obsolescence and why people don’t have the education, information or access to special parts, processes and tools to salvage stuff that is only slightly broken. Everybody thinks they’re getting away with it. Only, they really aren’t. Everybody is fooling themselves and each other. The waste is mounting. Waste is everywhere.
A vibrant Cooperative Movement emerged during the Great Depression, in response to unconscionable waste. Rather than see idle, unemployed men and women and their families starve, while factories remained at a standstill, unable to find anybody with the necessary cash to buy their products and while farmers were leaving fruit on the trees and crops in the ground to rot, or flushing thousands of gallons of milk a day down the sewers, because supply far exceeded demand, as measured by the money in people’s pockets, people self-organised. The real level of demand, as measured by hungry bellies and need, was the same as it ever was. The productive capacity was also still there, undiminished, but nobody was paying to mobilise it. Capitalism had failed them. All that had happened was the Wall Street casino was bust, taking money out of circulation. Untether the real economy from this made up money game and life could return to normal.
So people did, using the barter system, or trading their time and labour for the things they needed. Broken productive capacity was repaired and brought back into service, often by scavenging parts from other broken things. People, some 300,000 of them, found thriving livelihoods in mutual assistance schemes and cooperatives. Without investors, professional managers, government intervention and finance, they got back to work and restored their communitys’ standards of living.
My childhood experience of cooperatives is vivid. Our daily bread, our groceries, all our home wares, the fuel in our cars, books, school needs, the tools and building materials we required were bought from a cooperative, locally known as “The Store”. Just about everybody was a shareholder and it paid annual dividends, such was the prosperity generated. The cooperative extended a form of credit through a practice known as “lay by”, where you paid a small downpayment to secure the goods and they were held in your name until you could make the final payment to retrieve them. You didn’t buy bread, you bought tokens and exchanged them for bread on a daily basis. This prepayment scheme allowed the cooperative to buy the raw ingredients up front at better prices, because purchasing power was pooled. It worked.
When you needed to build a house or buy a car, you didn’t get a loan from a commercial bank. Instead, you sought a loan from the local credit union, whose funds were the savings of everybody you knew. There was no funny business and interest rates were favourable, because you knew this was a mutual support scheme, not a for-profit commercial enterprise. Overheads were kept scrupulously low and behaviour was exemplary, because nobody wanted to cheat anybody else. It wasn’t predatory. It was all of us helping all of us.
For decades, the city’s biggest employer, the local steelworks, had a less than acceptable safety record, with workers often killed and maimed, no longer able to work. The company washed its hands of these unfortunates and their dependents, not even paying for their medical care or funerals. At the front gates of the factory, the employees launched Newcastle Industrial Benefits, a fund paid into by the workers that acted as health insurance for the afflicted. My dad and my uncles were among the founders, outside the gates of the steelworks.
This fund brought decent standards of health care and poverty relief to workers and their families, if they were rendered sick or injured, or even killed. Everybody owned their health insurance fund. Profiteering was rare, because you were taking on everybody if you did. Healthcare providers had to look these working men in the eye, every day and everybody knew where they lived. Their children went to he same schools. You didn’t monkey around with healthcare charges like US hospitals and doctors seem to do these days. Everything was played with a straight bat.
These things are known as reciprocal economies and it appears to be a little studied and remembered aspect of economics, today. Reciprocal economies don’t obey the orthodox economic assumptions about people being self-serving, seeking only to maximise their personal gain. Mutual support systems that work tear the foundations of current neoliberal thinking apart, with concrete examples from empirical reality that comprehensively disprove and demolish neoliberal theory. Neoliberalism is bunk and we have the proof.
In the spring of 1932, in Compton, California, an unemployed World War I veteran walked out to the farms that still ringed Los Angeles. He offered his labor in return for a sack of vegetables, and that evening he returned with more than his family needed. The next day a neighbor went out with him to the fields. Within two months 500 families were members of the Unemployed Cooperative Relief Organization.
That group became one of 45 units in an organization that served the needs of some 150,000 people.
It operated a large warehouse, a distribution center, a gas and service station, a refrigeration facility, a sewing shop, a shoe shop, even medical services, all on cooperative principles. Members were expected to work two days a week, and benefits were allocated according to need. A member with a wife and two kids got four times as much food as someone living alone. The organization was run democratically, and social support was as important as material support. Members helped one another resist evictions; sometimes they moved a family back in after a landlord had put them out. Unemployed utility workers turned on gas and electricity for families that had been cut off.
The UCRO was just one organization in one city. Groups like it ultimately involved more than 1.3 million people, in more than 30 states. It happened spontaneously, without experts or blueprints. Most of the participants were blue-collar workers whose formal schooling had stopped at high school. Some groups evolved a kind of money to create more flexibility in exchange. An example was the Unemployed Exchange Association, or UXA, based in Oakland, California.
Noteworthy is Upton Sinclair’s campaign for California governor in 1934. Sinclair was a kind of Ralph Nader of his day. He based his campaign on a plan he called End Poverty in California, or EPIC, which was based in turn on the self-help cooperatives, UXA in particular. It would have taken the state’s idle farmland and factories and turned them into worker co-ops.
The idea of a genuine economy shorn of Wall Street contrivance touched a chord. Some 2,000 EPIC clubs sprang up. Sinclair won the Democratic primary, but California’s moneyed establishment mustered $10 million dollars to pummel him. EPIC died with his campaign, and the idea has been associated with quixotic politics ever since.
According to Wikipedia, EPIC “was a political campaign started in 1934 by socialist writer Upton Sinclair (best known as author of The Jungle). The movement formed the basis for Sinclair’s campaign for Governor of California in 1934. The plan called for a massive public works programme, sweeping tax reform, and guaranteed pensions. It gained major popular support, with thousands joining End Poverty Leagues across the state. EPIC never came to fruition due to Sinclair’s defeat in the 1934 election.”
Specifically, “the plan called for state seizure of idle factories and farm land where the owner had failed to pay property taxes.The government would then hire the unemployed to work on the farms and at the factories. The farms would then operate as self-sufficient, worker-run co-ops. EPIC also called for the implementation of California’s first state income tax. The tax was to be progressive, with the wealthiest being taxed at 30%. The plan would also have increased inheritance taxes and instituted a 4% tax on stock transfers. EPIC also included government provided pensions for the old, disabled, and widowed. To implement EPIC, Sinclair called for the creation of three new government agencies: the California Authority for Land (CAL), the California Authority for Production (CAP), and the California Authority for Money (CAM). CAL was to implement the plan for seizure and cultivation of unused farm lands. CAP was to do the same for idle factories. CAM meanwhile was to be used to finance CAL and CAP by issuing scrip to workers and issues bonds for the purchase of lands, factories, and machinery.”
“EPIC faced major opposition by the Republican Party and major media figures. Opponents of EPIC “organized the most lavish and creative dirty-tricks campaign ever seen—one that was to become a landmark in American politics” involving “turning over a major campaign to outside advertising, publicity, media and fundraising consultants for the first time.” Notable among these opponents were the heads of the major movie studios in Hollywood. This was largely due to Sinclair’s proposal to hand over idle movie studio lots to unemployed film workers to make movies of their own. In reaction, the studio heads threatened to move film operations to Florida, and deducted money from employee’s paychecks to give directly to the campaign of Sinclair’s Republican opponent for governor, Frank Merriam. In addition, two of the state’s most influential media moguls, William Randolph Hearst and Harry Chandler used their papers to solely cover Merriam’s campaign and to attack Sinclair.”
Money is a lubricant that enables work to be done and value to be created, through trade and economic activity. When an economy is starved of lubricant, because it is being hoarded, in off-shore bank accounts, then the real economy grinds to a halt, for want of those trading tokens. It turns out that any trusted, agreed upon token will do. Even scrip.
One of the best-known applications of the stamp scrip idea was applied in the small town of Wörgl in Austria in 1932 and 1933. When Michael Unterguggenberger (1884-1936) was elected mayor of Wörgl, the city had 500 jobless people and another 1,000 in the immediate vicinity. Furthermore, 200 families were absolutely penniless. The mayor-with-the-long-name (as Professor Irving Fisher from Yale would call him) was familiar with Silvio Gessell’s work on alternative currencies and decided to put it to the test.
He had a long list of projects he wanted to accomplish (re-paving the streets, making the water distribution system available for the entire town, planting trees along the streets and other needed repairs.) Many people were willing and able to do all of those things, but he had only 40,000 Austrian schillings in the bank, a pittance compared to what needed to be done. Instead of spending the 40,000 schillings on starting the first of his long list of projects, he decided to put the money on deposit with a local savings bank as a guarantee for issuing Wörgl’s own 40,000 schilling’s worth of stamp scrip. He then used the stamp scrip to pay for his first project. Because a stamp needed to be applied each month (at 1% of face value), everybody who was paid with the stamp scrip made sure he or she was spending it quickly, automatically providing work for others.
This was a way to prevent hoarding and increasing the velocity of money in the local economy. You can liken it to a game of pass the parcel, because nobody wants to get stuck with having to pay for the stamp, at the end of the month. If you spend it before the charge is due, it retains its face value. The lubrication that money serves as, in an economy, was recycled much more rapidly, in this experiment, facilitating much more economic activity. When people had run out of ideas of what to spend their stamp scrip on, they even decided to pay their taxes, early.
Wörgl was the first town in Austria which effectively managed to redress the extreme levels of unemployment. They not only re-paved the streets and rebuilt the water system and all of the other projects on Mayor Unterguggenberger’s long list, they even built new houses, a ski jump and a bridge with a plaque proudly reminding us that ‘This bridge was built with our own Free Money’ (see photographs). Six villages in the neighborhood copied the system, one of which built the municipal swimming pool with the proceeds. Even the French Prime Minister, Édouard Dalladier, made a special visit to see first hand the “miracle of Wörgl.”
It is essential to understand that the majority of this additional employment was not due directly to the mayor’s projects as would be the case, for example, in Roosevelt’s contract work programmes described below. The bulk of the work was provided by the circulation of the stamp scrip after the first people contracted by the mayor spent it. In fact, every one of the schillings in stamp scrip created between 12 and 14 times more employment than the normal schillings circulating in parallel. The anti-hoarding device proved extremely effective as a spontaneous work-generating device.
Wörgl’s demonstration was so successful that it was replicated, first in the neighboring city of Kirchbichl in January of 1933. In June of that year, Unterguggenberger addressed a meeting with representatives of 170 other towns and villages. Soon afterwards, 200 townships in Austria wanted to copy it. It was at that point that the central bank panicked and decided to assert its monopoly rights. The people sued the central bank, but lost the case in November 1933. The case went to the Austrian Supreme Court, but was lost again. After that it became a criminal offence in Austria to issue “emergency currency.”
Does this sound familiar? Only a central authority saviour can help people who are not allowed to help themselves locally. And as all economists will point out, when there is enough demand, supply always manifests in some way. Even if you have to import it. During the Anschluss of 1938, a large percentage of the population of Austria welcomed Adolf Hitler as their economic and political saviour. The rest is well known history.
The current global economy is dragging ordinary people into precarity and penury once again, as inequality, plutonomy and neoliberalism gather a galloping pace. Democracy itself is being deliberately dismantled to enable it. Strongman saviours, who seek to divide the world into the deserving and the undeserving, forcibly taking everything from the undeserving in order to enrich the deserving as their zero sum solution to people’s economic woes, are once again in the ascendant. I like cooperative solutions, like the ones discussed above, much better. They are less wasteful.
Activism of this sort, which actually is a benign species of applied anarchism, is something that most thinking people can, in good conscience, support. It even gives their lives meaning and purpose, because the cooperative nature of the work helps people directly and lifts them out of terrible circumstances. It’s fundamentally tied to generosity and gratitude – two very powerful human motivations.
The wealthiest capitalists always destroy and subvert these grass roots, self-help, mutual aid initiatives. They prefer to see their fellow man immiserated and destitute, rather than lose command and control over their economic profits and property. They’re remarkably cruel and callous, as human beings and have no place in any community of mutual benefit. They’re outcasts.
History shows the scale of the resources and sheer skullduggery that the wealthiest have employed to smash, weaken, subvert or absorb cooperatives and mutual societies, for their own personal profit. It happened to The Store, our cooperative local merchant, our credit union and our industrial benefits insurance in my home town. Even the cooperative bakery was closed. They were all privatised or run into the ground by commercial predators. Sometimes the names of the organisation remained, but their complexions changed as they began to favour the narrow interests of private shareholder profit over community well being. We no longer held a stake in these operations and they no longer cared what happened to us, as long as we kept paying. They uncoupled from their communities.
Only a change of heart and mind can affect a movement in our collective imaginations. We persist with the current foolish, failing economic games only because the narrative about a better, more fruitful, more prosperous, less wasteful future is insufficiently vivid and hence compelling. Despite the history of experiments that worked, the information has been suppressed and forgotten. Capitalists are necessarily dismissive of its unarguable successes for the prosaic reason that they want to maintain their unearned privilege at all costs – costs which they often don’t have to pay.
The only way to compel people to care is to exclude and ostracise those that don’t. We have to begin shunning, not serving obsequiously, those that act in ways that increase waste and immiseration. There have to be personal consequences for destroying the quality of life enjoyed by everyone else. It can’t remain an unpunished crime.
Above all, our current economic system represents a colossal waste of human potential. What a waste!
Some of the above was abstracted directly from these better-written articles: