Economic Theory

Paul Mason’s Postcapitalism: The left’s unwitting conversion to neoliberal economics

Unlike many other advocates of free markets, I quite like Channel 4 News economics editor Paul Mason. His journalistic approach, informative yet editorialised towards his own opinions, is compulsive viewing. So when he penned a book on his new idea – “Postcapitalism” – I knew it would be controversial yet worthy of review.

Mason does not like the “free market” very much, and he likes its supporters even less. “Postcapitalism” makes that very clear. The main thesis is that a combination of the automation of a wide range of jobs, the proliferation of freely available information online, and the growth of the sharing and collaborative economies offers a route to a “postcapitalist” world. By this, he seems to mean a world in which less economic activity is undertaken by corporates and for monetary exchange.

Bizarrely, however, he seems to believe this trend is a repudiation of his personal bogey man – “neoliberalism”, an ideology pushed by those who, Mason thinks, want people to be poorer and more insecure in an atomised, individualist society, and who desire big corporates making big profits. Mason’s karaoke leftie assumption that those who believe in smaller government have ignoble ulterior motives means the book has received a hostile reception from defenders of capitalism.

But in many ways, Mason identifies important trends. The substitution of capital for labour is leading to a more polarised jobs market, often with rapid change, and this will necessitate policy adaptation. Education will need to become more life-long, and taxes and welfare must adjust to the rising prevalence of “portfolio careers”. Technology and information proliferation are bringing more services to people for low or no cost, empowering individuals.

The sharing or “gig” economy is allowing people to utilise their human and physical capital outside of corporate structures. Far from representing the end of capitalism, however, the gig economy is a new stage. Rather than overthrowing the market, technology and easy access to information is extending it by bringing in more personal assets. Think of Airbnb, Uber and peer-to-peer lending platforms: this is not post-capitalism, this is capitalism proper.

Of course, such technologies are also allowing collaborative activities like Wikipedia, which, as Mason rightly says, does not operate commercially. But what makes Mason think that this is something which “free marketeers” or “neoliberals” would oppose?

Most liberal economists do not believe in government control of economic activity. They desire the economy to be more “free”, not necessarily more commercial. The “neoliberal” revolution was a recognition that almost everything that happens is “economic activity” in the sense that it entails opportunity costs. The view of economists like Milton Friedman was that, as far as possible, well-being would be enhanced when economic activity was overwhelmingly based upon the voluntary activities of individuals and networks. Whether this happens through the corporate sector or via non-commercial cooperation is irrelevant. Indeed, while Mason extols Wikipedia as an example of a post-capitalist world, its founder Jimmy Wales is a self-defined libertarian.

There is therefore a paradox in Mason’s position. He loathes the “neoliberal revolution” and its proponents. He impugns their motives, and sees the period as having undermined trade unions and social solidarity. But now he wants the left to embrace the “gig” economy, which facilitates the voluntary empowerment that neoliberals have always wanted. Has Mason unknowingly become a convert to the cause of a free economy based overwhelmingly on voluntary exchange?

Whether the framing of his thesis as an anti-neoliberal agenda was an attempt to sell his book or purely based on misconceptions about his opponents remains unclear. But as the British left hurtles towards reviving the ideas of the collectivist, big government 1970s, Mason’s alternative could prove a good antidote, and one much more in line with the cause of economic freedom.

Ryan Bourne is the IEA’s Head of Public Policy. This article first appeared in City AM.

Head of Public Policy and Director, Paragon Initiative

Ryan Bourne is Head of Public Policy at the IEA and Director of The Paragon Initiative. Ryan was educated at Magdalene College, Cambridge where he achieved a double-first in Economics at undergraduate level and later an MPhil qualification. Prior to joining the IEA, Ryan worked for a year at the economic consultancy firm Frontier Economics on competition and public policy issues. After leaving Frontier in 2010, Ryan joined the Centre for Policy Studies think tank in Westminster, first as an Economics Researcher and subsequently as Head of Economic Research. There, he was responsible for writing, editing and commissioning economic reports across a broad range of areas, as well as organisation of economic-themed events and roundtables. Ryan appears regularly in the national media, including writing for The Times, the Daily Telegraph, ConservativeHome and Spectator Coffee House, and appearing on broadcast, including BBC News, Newsnight, Sky News, Jeff Randall Live, Reuters and LBC radio. He is currently a weekly columnist for CityAM.