To achieve radical economic change, we need to work differently

By Audrey Gaughran, Michelle Meagher and Meghna Abraham

(Editor’s note: this is a shortened version of an article first published by SOMO, the Centre for Research on Multinational Corporations.)

For those of us seeking radical transformation of the global economy, too many opportunities have slipped through our fingers. We know what we want, but often we have not worked out the details sufficiently to be convincing or mobilised sufficient, broad-based support.

Critically, we fail to confront the real and serious difficulties that must be overcome to achieve radical change, and to communicate effectively about how these challenges can be managed.

This is not to say civil society and academics working on economic change have not had a positive impact. But we must look at the hard reality: it is too little, too piecemeal, and the current system has been able to cope, even thrive, despite our best efforts.

The facts are stark: wealth inequality growing so egregiously that we will have individual trillionaires within a decade; the world overshooting 1.5 degrees of warming; the role of social media giants in fuelling racism, hate crimes and the rise of fascist ideologies; ongoing sale of arms to Israel, as genocide and enforced starvation are livestreamed … all of this must compel us to change what we have been doing.

But change what, exactly?

 

We’re talking about capitalism

When we say radical economic change, we mean change to the dominant global economic system which is capitalism. Challenging capitalism directly – as opposed to trying to contain its more egregious impacts – has, at least in the Global North, been dismissed by many as the naïve fantasy of fringe actors whose grasp of reality is questionable.

Meanwhile, capitalism itself has successfully been framed as meaning freedom and democracy, efficiency and logical use of resources. This is storytelling so powerful that all evidence to the contrary is simply ignored.

If we are to have any hope of achieving a new economic paradigm, one that serves society and nature in all their diversity, we need to be clear that we are working to end, or rather, transcend capitalism. We need to stop thinking it can be controlled or made consistent with the goals of justice and equality. The long-term course of capitalism is clear: growth, always. At all costs. And the costs are huge.

 

Learning from our past losses

There have been multiple opportunities to advance a progressive economic agenda over the past two decades. The 2008 financial crisis was one such opening. But too many economic justice advocates spent too much time explaining what went wrong and not enough on harnessing the moment to put forward well-developed proposals for major change. In the years since the crisis, the world’s richest people have gotten richer and wealth inequality has increased dramatically.

Too much of our time and energy remains focused on describing the problems of the economic system. Yes, we call for change, but often our calls are for incremental tweaks that can actually serve to reinforce the system (and make us, at times, part of the problem).

Much of the work on the regulation of companies, for example, has tended to accept the existence of massive multinationals and merely try to deal with their impacts on society. Too little work seeks to limit or remove their power. Or we make strong calls for meaningful change, but do not work out, in sufficient depth, how to get there. It is almost as if we accept that our ideas are not going to happen, so why spend time on the details? Again, there are important exceptions. Just not enough of them.

 

How do we deal with the fallout of radical change?

It is critical for us to acknowledge that meaningful change will hurt. Capitalism has wrapped its tentacles so completely around us all that any efforts to cut free will hurt millions, possibly billions, of people.

Substantial parts of whole countries' economies, from Ireland to Mauritius, have been built on attracting foreign investment. The livelihoods and pensions of people around the world are tied up in the ‘maximising shareholder value’ business model.

COVID-19 provided stark evidence of what happens when there is an unexpected reduction in global consumption: the multinational retail companies acted to protect themselves and their shareholders, while the poorest workers in global supply chains went unpaid and lost jobs. Unless there are strong safety nets and a clear plan, changing the pattern of consumption – a core goal of most economic change advocates – will harm a lot of people.

We will not succeed in birthing a new economic paradigm by debunking myths (of which there are many) whilst ignoring realities. If a country loses its big investors, that country will suffer. Not just through the loss of investment, but because it may see its credit rating reduced, struggle to borrow and have depleted foreign exchange funds to pay for vital imports or to service debt. Countries take these risks seriously, for good as well as erroneous reasons.

Consider Ireland: tech giant Apple is one of a handful of big foreign investors on which the country depends. When the European Commission told Apple it owed Ireland €13 billion in tax, Ireland tried, desperately, to stop Apple having to pay. Why would any country do this?

It is not simply a case of corporate capture of the state. Ireland fears the loss of investment because so many jobs would be lost, and there is nothing to replace them, at least not within the current system. How do we address this kind of dependency on Foreign Direct Investment which entraps many other countries like Ireland?

We do not need to reinvent the wheel. Good thinking on economic alternatives to the consumer-driven, growth-obsessed capitalist model exists. But a lot of it is not accessible to the broad constituency with whom we need to work to build political momentum for change. Ideas need to be available and socialised, discussed and shaped by those who will fight for them.

 

Whose perspectives count?

The work of building strong proposals for change should not be done by some elites in academia or civil society, disconnected from the grassroots social movements that have been at the forefront of the fight for economic justice and against capitalism for decades.

Developing deeply worked-out solutions with movements and activists is vital. Elite actors designing grand plans have a bad history for anyone who cares about justice. Either the plans fail because they lack support, or they are imposed via the brutal suppression of opposition.

Grassroots social movements at the frontline of dealing with the fallout of the capitalist model have a profound understanding of how it works in practice. For example, when Indigenous Peoples say ‘no’ to mining on their land, they face a David and Goliath fight – not just with powerful mining interests, but the whole value chain of actors who stand to benefit financially, and with the government and parts of the population of the country their land is in.

Advocates for a just transition who only focus on promoting safeguards and benefits for Indigenous communities affected by mineral extraction are unfortunately enabling resource extraction on Indigenous lands, within the existing capitalist model, while sidelining Indigenous perspectives on alternative economic approaches. Radical economic change thinking that is done in genuine partnership with Indigenous communities would likely lead to a very different approach.

 

Economic decolonisation and reparations

Another challenge we face is the tendency to work piecemeal. Overwhelmed by the complex and interconnected nature of the global economic system, we end up breaking it down into manageable work areas. However, capitalism is an interlocking system of oppression. It is not a set of separate policy arenas, and what one country does affects others. Nowhere is this clearer than in relation to economic decolonisation.

For many countries in the Global South, neo-colonialism – defined by economic conditions largely subject to external control and manipulation – is the dominant experience. The harmful impacts are wide-ranging and well-documented. Capitalism was and continues to be deeply racialised and maintains an unequal exchange and drain of resources and labour from the Global South to the Global North.

There is no version of a just economic system that does not include economic decolonisation. This means reparations should be central to how we work for a new economic paradigm. Reparations are not only about transfers of wealth to repay what was taken and compensate for atrocities, although this is part of what is required. Reparations mean ending the systems that enable the abuse, and most of these systems are related to capitalism.

This has long been recognised and advocated for by thinkers and activists from the Global South. Calls for reparations are, however, rarely given the level of political attention that is needed and are often sacrificed for more ‘pragmatic’ advocacy proposals, which Global North countries are willing to tolerate.

We can and must change this, but it requires both well-defined proposals for how these entrenched systems can be changed and a willingness to shift from insider advocacy to a wider and more sustained political mobilisation against powerful opponents who want to maintain the status quo.

 

Building sustained momentum for change

The system will not change itself. This sounds obvious, but we often work as if we did not see this. Currently, the policy advocacy of many NGOs targets mid- and senior-level policy makers who, in most countries, are in their jobs because they believe the system should be as it is. They will not make big changes, so why are they seen as critical interlocutors?

If we are clear that the system will not change itself, then we will see the importance of building political energy and momentum outside of the system. We will put more focus on working in deep alliances and less on policy advocacy strategies. This requires breaking silos and shifting from the narrow focus that models of funding have imposed on most civil society and academic organisations. It requires a commitment to solidarity across diverse agendas.

Putting forward clear proposals for deep systemic change does not mean restricting ourselves to proposals that are politically feasible now. What is important is that the proposed changes are worked out in a credible way. If we wait for big change to be politically feasible, we will repeat the failure of the 2008 crash.

We should aim to create proposals, in partnership with social movements, that are ready to be implemented when opportunities appear. Indeed, the very fact that we can set out detailed and defensible pathways to radical economic change can help create political opportunities.

How change happens is complex, messy, and defies theories of change. But it happens. It is seldom driven by those already in power, those holding privilege, those who are comfortable. Nor will it happen if we let people tell us to think small so we are taken seriously. Only when we take ourselves seriously enough to plan as if what we want can happen, and work broadly in solidarity with others, will we have any real chance.

 

Meghna Abraham and Michelle Meagher are co-founders of the Future Economy Incubator. Audrey Gaughran is the Executive Director at SOMO.