The New millennium, the New Economy and the New Socialism

ÁÎ×Ó¹â HenryC.K.Liu ¹ù¤l¥ú hliu at
Fri Dec 31 10:47:45 MST 1999

The new millennium is an artificial point in time, but the new economy
is real.  The US, with the most technologically advanced culture, is the
birth place of the new economy, which is driven by erratic bursts of
technological innovation accompanied by little understood but fast
changing socio-political and legal rules.

The old economy is in decline where low paying jobs are dwindling
through export, and unskilled workers are sacrificed by Schumpetrian
creative destruction.  The new economy has forestalled the old business
cycles and forged new relationship between capital and labor, as well as
producers and consumers.

Differing from industrial capitalism, the new economy of finance
capitalism is based not on production but on innovation.  Wealth is
created not by current surplus value of on-going processes but by
anticipated surplus value in the coming economic order.  Suddenly,
wealth is created by current deficits that last not months but years.
Revenue is generated not from the consumers directly, but from third
party sources which thirst after consumer attention.

Value in the new economy is based not on uniqueness but on connectivity,
a socialist principle.  The productivity and value of the means of
production under one's control is enhanced only by the availability and
compatibility of those of others.  Competition becomes
counter-productive and interdependence, a concept which had disappeared
in recent decade, suddenly becomes obvious.  The natural drive for this
productivity growth demands and results in the general acceptance of
industry standards.  Capitalistic legalism goes against this trend by
sanctifying the earliest registered patent and giving it undue power.
Still, the universal standardization permits the mass production of
individualized items at negligible additional cost.  It is the real
basis for a new socialism.

This new economic order is by nature socialistic because it is knowledge
based and comparatively not capital intensive before the cooperate
imperialistic stage.  Yet the capitalistic right wing has been
relentless in gaining control of this new socialist economic order.  The
new economy is shaping up to be a new age of robber barons with new
billionaires created by the month, mostly through a regime of
intellectual property rights which protects not so much inventors but
manipulators of applications, distorting the socialist nature of

The new economics is based on the free distribution of products, such as
internet browsers and content portal services, the tangible component of
the new means of production, while the ownership of the system of
production is increasing concentrated in fewer hands under traditional
capitalistic rules.  While there is a trend to socialize the created
wealth among first generation participants in a new company, the real
growth is built on exploitation of low paid software programmers in
India and China.

Economists are the slowest to accept this paradigm shift in the
knowledge revolution because of sunk intellectual investment in past and
obsolete theories.  Leftist economists, largely marginalized in the
capitalist culture, tend to trail at the tail of this herd's reluctant
march toward reality.

The socialist nature of the new economic order, the invisibility of
structure in cyberspace, the decentralizing devolution of decision
power, the drastic fall of cost per additional item, is being
capitalized by the artificial rules of law and corporate structure of
capitalism. The greatest cooperative in the history of mankind, the
Internet, is rapidly and unfairly being privatized by the undemocratic
application of obsolete laws of property, particularly intellectual
property and political licenses within a regime of corporate structure.
The corporation is the modern monarchy.  There is no divine right for
corporations any more than there was for kings.

Providing more with less is the basis of growth and the accounting of
growth is registered wealth.  When growth is not shared, it is
maldistribution by political means, which will lead to self-destruction
through social conflict.  This truth makes socialism inevitable.

Reward for innovation is natural and is not anti socialist.  But the
unnatural hoarding of wealth by the likes of Bill Gates is not based on
innovation, but rather on anti innovation predatory business practices,
as the Justice Department has proved. The is no reason why AOL and
Amazon should not be mutual organizations, since their worth is based
entirely on their access to customers.

Knowledge accumulates exponentially and creates chain reactions of new
knowledge.  Capitalism permits, nay, demands, patented knowledge to
vertically control the natural chain reactions of related innovation for
the purpose of concentrating wealth, as Microsoft has done.

Creativity is replacing capital as the elixir of growth.  Yet the value
generated by creativity is captured by a new generation of capitalists
who use their new wealth in turn to capture traditional leftist
political institutions, such as the Democrat Party in the US and the
Social Democrat in the EU and the Labor Party in the UK, to hasten the
demise of the old economy while making the new economy safe for
It is therefore clear that Marxists should focus on resistance to the
global push for turning the concept of intellectual property rights into
monopolistic rights and for turning social assets in private
corporatized property.  The order of battle if to gain control of the
new economy from these new robber barons and return it to the people.

To start with, lets consider the rationale for a program of maximum
income to balance minimum wages.  A maximum income of US$5 million per
year per individual will not dampen personal incentive, but will
certainly arrest the undemocratic concentration of economic power.  When
a single individual like Bill Gates can own assets exceeding the
national worth of several LDCs, it is maldistribution of wealth by any
standard, and in a money economy, it translates directly into an
undemocratic distribution of political power.

Henry C.K. Liu

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