Communal Capitalism

Communal Capitalism.



Dear friends,

Our chairman, Mr. Agustí Chalaux, has recently published a new document where he repeats once again, with his well-known provocative style, what he is always telling us: that if today there is material poverty (at a time when there is an actual build-up of material goods thanks to modern technology), we are all to blame, and mainly the governments which are unable to introduce a revolutionary monetary policy.

In short, it is a question, of understanding the importance of simple consumers -the people with an altruistic calling and those who cannot or will not get into the productive sphere- as essential market agents, especially in developed societies.

Agustí Chalaux recalls the historical instances proposed by Bismarck and Marx in the 19th century, and the new proposals made recently by the Nobel Prize of Economy, Maurice Allais: the hypothesis of a communal capitalism, complementary to the private capitalism and in a position to ensure the funding of a minimum revenue per inhabitant on behalf of all the simple consumers.

Even if Maurice Allais’ hypothesis remains limited to the monetary sphere, his point of view is very attractive to make us understand the economic dynamism represented in a developed society by all the simple consumers (agents of liberal professions, fringe groups, the sick people, the old people, children…) because they help the distribution of the production surpluses through the retail market.

In short, we should not think of the poor in terms of charity societies, but we should rather understand that they are an essential element in the smooth running of economy.

Best regards,

The team of the Centre Bardina.
Barcelona, 5th March 2000.

Communal Capitalism.

1. Bismarck, Marx and Lasalle.

For some years, well advanced the 19th century, Bismarck and Marx held a sporadic correspondence with the German trade unionist Ferdinand Lasalle (1825-1864) as a go-between.

Karl Marx Ferdinand_Lasalle Otto von Bismarck

As a result of this dialogue and of an undeniable communion of pacific ideals, Bismarck gave full liberty to the German trade unions, well in advance on the other European governments, even on the so-called progressive governments of England and France.

Shortly after that, in 1885 Bismarck created the first European Social Security, perfect to such an extent that it still subsists in Alsatia and in the department of La Moselle (in Lorraine) with quite remarkable results both in the strictly sanitary field and from a financial point of view (with levels never attained by the present day French Social Security, which is excessively bureaucratic).

Both Marx, with his economic analyses, and Bismarck, with a strictly political outlook, agreed on a project whose essential object was the need to give to every individual without a salary a free minimum revenue to grant him a reasonable life. In fact, what we call today the Basic per Capita Income.

2. Individuals without a salary.

In order to better understand the problem, we must in the first place define the word individual without a salary.

They are mainly persons who cannot find a means of making a living in the productive system, and who are therefore condemned to the role of unemployed.

But in a wider sense it defines all the individuals who are not in the productive system, either -as we have just pointed out- because they are forced unemployed looking for a job, or because they have chosen to remain outside the productive system.

In this second hypothesis we find a first case, very clear and easily admissible by society: that of altruistic vocations in the service of the community (physicians, teachers, volunteers for the developing countries…). But we must also include here individuals who choose freely to remain outside the production system and who, notwithstanding, have a right to a given subsidy for their sustenance.

3. Communal capitalism.

When they suggested a minimum grant for all the individuals without a salary, Marx and Bismarck discovered that this project was impossible to carry out in an economic system where only private capitalism controls the wealth of the nations (which is the situation which has been imposed on humanity for the last 4500 years).

As a consequence they suggested (each of them separately) the need for a communal capitalism complementary to the private capitalism, actually a revolution for the 19th century frame of mind. As far as Bismarck is concerned (a very popular politician who governed with almost absolute power), this revolution was not introduced because he did not want to cause the very weak Wilhelm II, who had also a complex, to abdicate, and he preferred to tender his own resignation.

4. Communal capitalism today.

Maurice_AllaisMaurice Allais, Nobel Prize for Economy, suggested lately a new reflection on communal capitalism, in the light of the present globalization of economy and the enormous development of telematics.

Mr. Allais in the first place points out the impossibility of a progress in the world economy just by making use of the private financial institutions (banks, savings banks and insurance companies).

The reason is very simple: at present private financial institutions control 95% of the money originated by the world production system, but only 25-30% of the workers are solvent and in a position to obtain traditional bank loans.

There is therefore an enormous amount of money which is not being used following traditional methods of financial loans, and the world economic system finds as the only opening the war industries, the multiplication of local wars and the different ways of political, economic and social corruption.

After this analysis, Mr. Allais suggests again -following Marx and Bismarck- the creation of a communal capitalism complementary of private capitalism. The most innovative aspect of his proposal is that of fixing the principles to supply the necessary resources for each of these two capitalisms.

Mr. Allais suggests that all those having bank accounts decide on a contractual basis the percentage that they freely leave for the banks to manage following the laws of private capitalism. The remaining bank account balances -always on deposit in the private banks- would be put at the disposal of the National Treasury by computerized means, in order to be used on behalf of simple consumers through a Communal Bank. For these balances the Communal Bank would pay the private banks a high interest which they should transfer to the account owners, which should also bring about a more intelligent notion of the traditional vocation of banks as borrowers from their clients).

After knowing the total availability of the Communal Bank, its managers should work out a programme for assigning the available money to the simple consumers and social institutions, without ever forgetting a sense of political wisdom in order to grant an equilibrium between the financial availability and the surpluses of the production sector.

However, the Communal Bank would not grant in any case the exact accountancy of the economic operations carried out with these funds, as they will be always used on the market, and this is always controlled by the exact and precise accountancy of the private sector.

5. Conclusion.

With these three examples -Bismarck, Marx and Allais- we wish to demonstrate that at present there are alternative solutions for the distribution of the production surpluses by integrating the simple consumers as market agents.

Unfortunately, this possibility has been systematically put aside by the political and economic powers and, too often, the economists paid by the system have preferred the security of their salary in the service of the official institutions rather than the risk of being removed from their job because of their revolutionary suggestions, (too far away from the «unique thought» imposed by the present world powers).

Agustí Chalaux de Subirà.
Chairman of CEJB.
Barcelona, 14th February, 2000.

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