Another Now

by Yanis Varoufakis

  This extreme incident reinforced Costa’s opinion that waged labour was a form of submission. Just as the ownership of one person by another is intolerable, irrespective of how well the master treats the slave, so too is an illiberal and unjust wage contract, whatever the wage or the working conditions. Unable to imagine how the masses could be liberated from the wage system, Costa focused his efforts on freeing himself – on becoming his own boss. The price he paid for this liberation – which he achieved by shorting shares and derivatives in the 2001 and 2008 stock exchange routs – was the partial sullying of his soul and, feeling like a fraud, he kept quiet about what he had done. But on the frequent occasions he found himself humming his own version of the song – ‘If one of us is waged, none of us are free’ – a pang from his guilty conscience made itself known.

  And yet, what could he say to someone like Eva who would lose no time pointing out the impossibility of running an advanced industrial society without a system of waged labour? Supporting its elimination as a way to abolish unfair wages would make her laugh. The only thing Eva recognized as unfair was telling consenting adults they were not allowed to transact with one another on whatever terms they chose. Constraining that freedom was both unjust and stupid, as it would destroy the entrepreneurial drive that liberates us all from poverty and need.

  Despite not having all the arguments sorted out in his head, Kosti’s description of corporate life in the Other Now changed everything for Costa. He was now able to imagine a modern, high-tech corporation where everyone shared the firm’s net revenues, albeit in proportion to the average opinion of their contribution, with no distinction between those who collected the profits and those who were paid a wage.

  The elimination of bosses and hierarchies was no less significant. As a teenager in the mid-1970s, Costa had a school friend, Gregory, who was an anarchist. While most other teenagers, especially in Crete, were drawn to the Left and its anti-capitalist rhetoric, Gregory rejected it. Gregory was obsessed instead with the anarcho-syndicalist movement of the early twentieth century, especially the variety that arose around 1910 in Catalonia. Its central tenet was that power is civilization’s worst enemy, especially when channelled through hierarchies, which only bring out the worst in us. Like left-wing radicals, anarcho-syndicalists opposed private rights over property and the noxious division of earnings between wages for minions and profits for the masters. But anarcho-syndicalists went a step further and opposed the state itself, which they saw as the main defender of those property rights and corporate hierarchies.

  To avoid the tyranny of power, the anarcho-syndicalists that had shaped Gregory’s thinking were committed to replacing corporate hierarchies with decentralized systems relying on equal rights and the principle of one person one vote. Their movement was, of course, thwarted by the antipathy of both the establishment and the communist left, as well as by the primitive technologies of the time, which impeded their ideas’ implementation. But the ideas Gregory shared with Costa left a profound impression on him.

  ‘Besides capital,’ Gregory warned Costa, ‘we must beware power.’ It was a thought whose influence on Costa grew with time.

  In the mid-80s, as part of his quest for alternatives to capitalism, Costa had taken a close look at the Soviet model of corporate management and economic planning. It left him distinctly cold. In theory Soviet companies were commonly owned and all their employees ostensibly shared the net revenues. And yet they were managed by hierarchies every bit as ruthless in their imposition of power relations as anything Henry Ford or Jeff Bezos ever concocted.

  If Costa had learned anything from his experience of corporate life, it was that power perverts and hierarchies are effective only at reproducing themselves, begetting even more corrupting power. In fact, the formal ownership of a company is of less importance, he decided, than the way in which power is structured and reproduced within it. Even though the absence of private property rights limited the capacity of Soviet bosses to profit, it did not limit their hierarchies’ dictatorial power over the workers, and often over consumers and local communities as well. So when in 1991 the communist system collapsed, Costa was saddened that the only alternative to capitalism that actually existed had disappeared, but he was not at all surprised. Gregory’s warnings had prepared him to expect the Soviet Union’s hierarchies to turn it from despotic collectivism into a system of industrial feudalism.

  In one of his dispatches, Kosti asked Costa if he was still in touch with Gregory. ‘He deserves to know that somewhere out there a new corporate reality is brimming with his ideas,’ Kosti said.

  How Costa would have loved to convey to Gregory the excellent news from the Other Now, but neither of them could track him down. In imagining Gregory’s response, however, Costa realized he lacked answers to many of the harder questions he would have asked him. What kind of ownership structure supported the one-person-one-vote system of corporate decision-making? Who if anyone actually owned the company’s capital, not just its financial reserves but also its good name, the capacity of its brand to stir something in people’s hearts or minds? What happened when people fell out or wanted to leave?

  Kosti’s brief but arresting answers continued to arrive. No one could own shares in the company unless they worked in it, following a successful interview and an all-member vote admitting them. Those admitted were granted precisely one share. The fact that some members were regarded with greater esteem than others and were paid more, via higher bonuses, did not translate into more votes. They may have had more influence in the debates preceding any vote, just as a skilled orator in a parliament does, but the one-person-one-share-one-vote rule was paramount.

  Gradually it dawned upon Costa that, as this company structure spread through the economy, outcompeting and replacing others, stock exchanges would have disappeared. Kosti confirmed that, by the early 2020s, stock exchanges had indeed shrunk into economic insignificance, resembling our markets for stamps or cryptocurrencies: present but inconsequential. Instead of the liquid, instantly tradable shares of Our Now, which grant their owners a claim over future profits produced by others, in the Other Now shares were similar to franchises: an automatic, non-transferable, personal right to participate on equal terms in the decision-making of the company one worked for.

  The implication of this was momentous: for the first time since the inception of capitalism, the political and economic spheres had been reintegrated. Before capitalism, political and economic power had been indistinguishable. Princes were rich and only the rich were princes. Political power translated automatically into the power to extract wealth from others, through coercion or conquest. And the power to coerce translated into titles, castles, sceptres and tiaras. It was capitalism that had changed all this. With the establishment of international trading routes came the rise of merchants as a new class: economically powerful, despite their lack of political clout and lowly social standing. For the first time, economic power was distinct from political authority. The divorce was finalized when the merchants evolved into the major share-owners of industry and, eventually, global finance and technology. Iris had instilled these notions in Costa over the course of many long discussions.

  In this context, one person one share one vote was truly revolutionary – a major step towards reintegrating the political and economic spheres. In our reality, we are accustomed to wielding power in political elections on the basis of one person one vote, but in shareholders’ meetings one has as many votes as one has shares. The richer you are the more shares you can afford to buy and the more votes you can cast in favour of your own interests. This leads generally speaking to corporate strategies that maximize the dividends of the people or institutions hoarding the most shares, usually resulting in short-term gains for them at the expense of society’s – and sometimes even the company’s – long-term interests. And so the few with the many shares are able to accumulate even more shares, giving them more power to acc
umulate more shares, and so on indefinitely.

  In contrast, Kosti and his colleagues can only ever own a single share each, which grants them a single vote and no more, to be cast in the all-member ballots that decide every corporate matter of strategic importance – from management and planning issues to the distribution of net revenues. Not only does this guarantee drastically lower income inequality, equal power encourages decision-making that favours collective, long-term interests rather than individual, short-term gain. And since spending in the marketplace is also a form of voting – when we choose to buy one brand of yoghurt over another, we lend some of our economic power to that yoghurt maker over its competitor – the lower income inequality of the Other Now promises a more equal say on what products society devotes its limited resources to producing.

  To Costa, the benefits of such a system were immediately apparent, but what wasn’t clear was how one could ever amass the means required to start a company in the first place. Costa was used to a world in which the stock market could fund a start-up – indeed, could make its owners stinking rich – years before the company made a single dollar of profit. ‘Without a stock market,’ Costa asked Kosti, ‘how is capital formed and accumulated?’

  Accumulation: democratized inequality

  Kosti’s answer was as follows. Every resident is provided with a bank account by the central bank. It is called Personal Capital or PerCap for short. Every person’s PerCap comprises three funds that are kept separate by Chinese walls: Accumulation, Legacy and Dividend.

  Kosti’s income from business activity – basic pay and bonuses alike – is credited into his Accumulation fund within his PerCap. So, people working in companies that are doing better have higher Accumulation deposits, as do those who receive higher bonuses. In this sense, Accumulation is the least novel of the three PerCap funds and the realm in which inequality manifests itself freely. ‘But do note that we are talking about a fully democratic inequality,’ Kosti was keen to point out, ‘in the sense that those receiving high bonuses do so not because of accumulated power, but because their colleagues used their one share one vote to grant them these payments on perceived merit.’

  Legacy: a trust fund for every baby

  All babies are born naked. Soon afterwards, however, some are dressed in expensive clothes and put on a path to a privileged life while the majority wear rags and must perform miracles to escape from a life of exhaustion, exploitation, servitude and fear. This is the kind of inequality that defines Our Now, from cradle to grave.

  Not so in the Other Now. There, the moment a baby is born the state creates for it at the central bank a dedicated PerCap Legacy fund and credits that fund with a considerable sum of money, the same for all babies. Babies are still born naked but every one of them comes into the world with a bundle of capital provided by society.

  This means that when they come of age and are ready to enter an existing business, or start one alone or with others, every youngster has some capital to deploy. To protect them from eating into it injudiciously, Legacy is the most illiquid of the three PerCap funds, with various hoops to be jumped through before anyone younger than sixty-five can tap into it.

  Sure enough, some babies are born into privileged families, just as in Our Now. However, in the Other Now none are born into the hideous freedom Costa first read about as a child on the tombstone of his favourite author, Nikos Kazantzakis: I HOPE FOR NOTHING. I FEAR NOTHING. I AM FREE.

  ‘But what happens to poor kids until they are old enough to tap into their Legacy?’ asked Costa.

  Dividend: a universal right to the proceeds of society’s capital

  Kosti explained that this is where the third fund within PerCap comes into play – Dividend. Into this the central bank deposits a monthly sum, the size of which is determined by one’s age. Dividend is largely funded by corporate revenues received by the state. In effect, the state taxes all corporations, usually at 5 per cent of gross revenues, to provide a social payment to all its citizens. Together with Legacy, the trust fund a baby receives at birth, Dividend guarantees freedom from need as the baby grows into a child, a young adult and a citizen.

  The monthly payment’s purpose is to liberate everyone from the fear of destitution but also from the demeaning and cruel means testing of the welfare state. It provides people who do not care to engage in business activity with sufficient income to provide priceless contributions to society that no market can properly value – for example in the caring sector, environmental conservation or non-commercial art. ‘To exercise their right to laziness even,’ Kosti added provocatively.

  Of all of Dividend’s benefits, Kosti made a point of extolling one in particular: it liberates the poor from the so-called safety net that in fact entangles them in permanent poverty. Instead of a net that traps them, Dividend acts as a solid platform on which the poorer and the unluckier can stand, allowing them to reach for something better. It gives young people the freedom to experiment with different careers and to study non-lucrative topics, from Sumerian pottery to astrophysics. It single-handedly makes impossible the type of exploitation that, in Our Now, we take for granted in the so-called gig economy with its archipelago of zero-hours contracts.

  Costa was aware of various proposals for different versions of universal basic income, many of which had been floating around since the 1970s. He had not liked them much. Like many left-wingers, he considered the right to laziness an essentially bourgeois concept. But his greatest qualm, as he explained to Kosti, was that using the taxes of a hard-working proletarian to pay for some bum to lounge around all day watching telly would only lead to division. ‘It is antithetical to working-class solidarity,’ he said.

  ‘But you are forgetting that no one pays income or consumption taxes here,’ replied Kosti. ‘Dividend is a return to every citizen for their partial ownership of society’s capital.’

  Costa admitted he had not thought of that. Indeed, his appreciation of Dividend dramatically increased when Kosti pointed out that only two taxes were levied in the Other Now: corporate tax and land tax. No income tax. No sales tax or VAT. No one paid a penny to the state on their income or whenever they purchased something, a good or a service. Costa found it as difficult to get his head round this as Eva would later have accepting a society without a stock market. But once he had, he saw that Dividend made sense in a way that universal basic income had not in the 1970s and 1980s. The key was that Dividend was not financed by taxation; it was, rather, a real dividend that people received as co-owners of the capital stock they were collectively producing – even if they did not do what we readily recognize as work.

  Wealth is like a language

  One of Ludwig Wittgenstein’s stunning observations was that no private language is possible. By definition, language is something that can only be produced collectively. Iris enjoyed pointing out that the same is true of wealth. In direct contradiction of the myth promoted by capitalists and rentiers that wealth is produced by individuals, only to be collectivized by the state through taxation, the reality, Iris argued, is that wealth, like language, can only be produced collectively. Only then is it privatized by those with the power to do so.

  To illustrate her argument, she would point out that pre-modern forms of capital such as farmland and seeds were collectively developed through generations of peasant endeavour before being appropriated by landlords. Today, every Apple, Samsung, Google or Microsoft device relies on infrastructure and components that were originally developed thanks to a government grant or made possible by drawing on the commons of ideas that grew in the same way folk tales and songs do: communally. While big tech has eagerly appropriated all this socially produced capital – and made a mint in the process – it has never paid any dividends to society. And it does not stop there. Every time we search for something on Google, navigate using an app or post a photo on Facebook or Instagram, we add to those corporations’ capital stock with our data. Guess
who is collecting all the dividends?

  Costa had long believed that the solution to this problem was higher taxation of big tech’s profits or, in his more radical moments, the nationalization of Google and its ilk. Now he came to think that this Dividend that Kosti was describing was a far better scheme than either taxation or nationalization: that everyone is granted a right to share in the returns to capital stock merely reflects the collective investment on which corporations’ capital relies. And because it is impossible to calculate the precise amount of social capital that any firm owes society in this way, the only way to decide what percentage of their revenues should be returned to society is by means of a democratic decision – namely, the legal stipulation that a slice of all corporate revenues (5 per cent in the case of Kosti’s firm) should flow automatically into the central bank, from where it continues to flow so as to fund, in part, every baby’s Legacy and every adult’s Dividend. Just as Kosti and his colleagues share equally a slice of the corporation’s revenues in the form of basic pay, so society shares equally a slice of the corporation’s returns on capital in the form of basic income.

  What a marvellous idea! Costa thought, his instinctive scepticism by now almost wholly swept away. And yet questions remained. In the absence of the investment and start-up capital provided by stocks and shares, how were corporations such as Kosti’s ever formed? And what if Kosti were to fall out with his colleagues or wished to move on? Would he leave empty-handed?