Fully Automated Fantastical Luxury Communism

If we had ham, we could have ham and eggs, if we had eggs . . .

That is nearly the title of a book by Aaron Bastani to which I was referred by Ezra Klein and Derek Thompson in their “Abundance” book, the subject of my three-part jeremiad. His exact title lacks my derisive ‘fantastical’ word, though the book is really worth attention. “Abundance” owes a lot to it, though we could see Abundance as a reformist version of FALC. Even so, neither provides a plausible politics to support their visions of a post-scarcity world. The impending climate crisis inspires utopianism, and these authors are not alone in that pastime. The anticipated decline of production costs prompts breathless schemes that imagine the reallocation of resources and output, willy-nilly.

Klein & Thompson hook their tract on a foolish indictment of “the broad Left.” Bastani urges a new party. I agree with both that any Green agenda will have to be rooted in a broader program of social welfare. There will have to be some meat and potatoes along with the spinach.

The most resonant point in FALC goes back to Marx. The powerful advance of productive forces and productive relations, thanks to technological innovation, threatens to blow up pre-existing social and economic relations. Bastani’s surveys in the fields of energy, health, and agriculture are persuasive that great progress remains possible. I’m more skeptical about Mars colonization and asteroid mining, though those are in there too. The undeniable advance of solar energy, that has wide-ranging implications, is striking.

The problem for all of these writers is two-fold. Most immediate is that, thanks to the leadership of Trump, Modi’s India, and Russia, the world is reeling away from green transformation, especially in the realm of renewable energy. A depressing point I like to make with regard to the U.S. is that if a plague fails to concentrate the public mind in support of social cooperation, particularly in the case of public health, it’s hard to see a way out of the first dilemma.

The second is that even if Trump and MAGA expired tomorrow, the status quo bias of the electorate and politics in general would still render marginal FALC or its reformist brother, Klein’s Fully Automated Luxury Social Democracy.

On top of the political difficulties is the reality that presently the world, with the important exception of the Peoples Republic of China, is moving in the opposite direction from Bastani’s FALC. There is the hint that some kind of austerity would be required for a global course correction, an austerity that might include reducing meat in the diets of the First World. If so, we might as well wait for the asteroid to hit. Hence ‘fantastical.’

Putting on my fuddy-duddy economics hat, Bastani offers some wiggy economic reasoning. He asserts that Gross Domestic Product is an outmoded measure of welfare. To start with, he offers an incorrect definition. It is not the measure of all transactions, it only counts “final goods and services.” It does not count production costs, which would be double-counting. A newly-produced machine counts in GDP as investment.

As for GDP not being a measure of welfare or well-being, this is actually the first thing that is taught in every Principles of Economics course everywhere. Bastani acknowledges that GDP’s invenror Simon Kuznets said as much. Even so Bastani neglects a few crucial distinctions of GDP compared to well-being. More to the point, he claims that revolutionary advances in supply, entailing a fall in production costs, mean much that is produced, such as when you listen to a song for free on Pandora, is not measured. This is just wrong.

In the case of Pandora, your listening is purchased by Pandora’s advertisers, which does count for industry profits and GDP. We could say the same for whatever jollies you get out of social media or websearch. That aside, if you spend less on music because of Pandora (I never got into Spotify), it will either show up as less GDP or show up in whatever you did buy instead. GDP remains perfectly serviceable as a measure of what it measures. Interpretations of general welfare will have to be grounded somewhere else.

At one point Bastani asserts that goods will not be produced if their marginal cost is zero, “and conventional economics cannot explain it.” Wrong wrong wrong. First off, goods with zero marginal cost are produced all the damn time. The reason is not mysterious. There is money to be made. See Pandora above.

Second, the zero marginal cost issue, and the associated difficulty of charging prices to customers, is dealt with in the theory of public goods. Not a new theory as these things go. One of my favorite papers as a grad student was “The Anatomy of Market Failure” by Francis M. Bator (R.I.P.) from 1958.

Back to the dodgy politics suggested by Bastani, he reduces them to 1) “a break with neoliberalism,” 2) worker cooperatives, and 3) radically increased public funding of renewable energy and other public services.

How (1) would work is not obvious. I am all for 2 and 3, though the politics there range from difficult to extraordinary. At some point I hope to revisit labor-managed firms, the subject of my Masters thesis. Watch this space.

In summary, I fully endorse FALC as a worthwhile read. Its demonstration of the socially transformative power of technology is important, as is the relevance of such powers to the survival of the human race. As a congenital wet-blanket, however, I have to say the proposed politics of transformation are not convincing.

My new glimmer of insight is that for the U.S., the future lies in the development of “municipal socialism,” the subject of a decent literature. It is in cities where the most ferment is being generated, particularly by the Democratic Socialists of America. Hopefully electoral success in cities will isolate and render obsolete DSA’s ultra-left bimbos. I would like to hope there is potential in rural areas, but so far little awakening has been observed, beyond wanting to get past Trump.

One of my own two-cent suggestions is that activists in the urban field should look back at land value taxation. The other is that the impending decimation of Medicaid and SNAP eligibility (Supplemental Nutrition Assistance Program, formerly ‘food stamps’) presents local governments and activists with a golden organizing opportunity, founded on providing assistance to beneficiaries in applying for and remaining eligible for benefits. It would do to recall that in the late 60s and early 1970s, the same activity gave birth to the welfare rights movement. Its leader and my idol Frances Piven is still around.