Tony Smith is a professor of philosophy at Iowa State University and the author of a number of books, most recently publishing Globalisation: A Systematic Marxian Account with Brill Press and Haymarket Books. He is also helping organize the 2016 conference of the International Social Theory Consortium, taking place at ISU June 9-10.
You had an article in Jacobin magazine a few months back. What was the main thrust of your argument there?
Well, a lot of people think that capitalism has an inherent technological dynamism, which then creates all these benefits for human flourishing. To some extent that is true, but the full story is much more complicated, because the closer you look at technological change in a society like the United States, the more you find out that the costs of that process are highly socialized.
If you look at research and development in general, you find that private corporations fund about two-thirds of all the R&D in the United States. But almost all of that is for short term, incremental projects that have commercializable results within three months to five years. On the whole — there are famous exceptions, but they are the exceptions — corporations just will not invest in basic research or long term R&D.
And they have good reasons to do that because there are all sorts of risks. Basic research is extremely costly, because it’s pushing the frontier and you don’t know if you’re ever going to get a commercializable product out of it. Even if you do, it would be thirty or forty years down the road, but thirty or forty years down the road, your company may not be here, so it might be some other company that benefits from the research you’re doing now.
So it would be irrational for corporations to put a lot of private money into this, but if basic research and long-term R&D isn’t funded, then society can’t be technologically dynamic. Our society is incredibly schizophrenic because we talk so much about the market, but ignore the reality that most of the basic research is funded with public money. Every year, R&D Magazine does a review of innovation from the past year, and from what I’ve seen, roughly 80 percent of the most important innovations are funded either in whole or in part with public money.
That’s part of the story. The other part of the story is our intellectual property system, which allows corporations to come in after the major risks have been taken with public funds, after decades and decades of working out bugs, and start slapping intellectual property rights all over the place.
The second it becomes cheaper to replace human beings with intelligent machines, capital will do it on a massive scale, and that is very, very close to being feasible.
To me, this is a big reason why inequality in the United States has grown so much. To a large extent the wealth of those at the top comes from intellectual property rights, and by the way, that group is pushing technological change in a way that is creating massive deflationary pressures on wages. They are pushing towards automation that can eliminate jobs. So the erosion of the middle class and the blue collar working class is happening through the use of technologies that the public funded.
So do you think there’s a better system than the one we currently have?
I do, of course. Once we realize the immense role of public funding in the great scientific, it’s not so hard to come up with alternatives. For instance, instead of having public subsidies and tax breaks go to pharmaceutical companies, what if we took that money and set up a half dozen research centers in biomedical technologies, and we tell the medical experts at these centers that we want them to allocate these funds to research drugs that can fix this or that ailment.
Then, if over time you do a good job of allocating that money, you’ll get bonuses and further funds. If you do a bad job, we’ll shut you down. In return for the funds, these researchers get good salaries and they get to work in this intellectually challenging environment, but the results will be in the public domain. Any company out there who wants to take advantage of this research and bring a drug to market can do so, but nobody would have a monopoly on it.
Compare that to the current system, where there is some innovation going on, but people are getting insanely, unimaginably wealthy off research that is funded by the public. Two thirds of biomedical research is funded with public money, and of the one third that is privately funded, two thirds of that goes to duplicative drugs (where we already have drug to deal with the problem, but it’s so lucrative that another pharma company wants to duplicate it). But we give patents to these companies who are only funding a small percentage of research, which allows them to raise prices by something like 400 percent. As they say, it’s the socialization of costs and the privatization of reward.
Capitalism is a central term in your work. What is your definition of capitalism?
Some people see the economy as a way to further human ends — the whole tradition of economics, from Adam Smith to Friedrich Hayek, starts from the assumption that markets are all about meeting human wants and needs. What Marx saw is that actually human beings are acting in a way that serves non-human ends. Sometimes we’re serving our ends simultaneously, but capital is the organizing principle of society. If our actions happen to fulfill the ends of capital then we get to fulfill our goals, but insofar as our goals lead us to act in a way that doesn’t help capital further its goal, then our goals tend to get pushed to margins.
It’s almost like a science fiction nightmare, where an alien power has gotten us to further its agenda and we don’t even know it. We think we’re going around fulfilling our agenda, and in a way we are, but we don’t realize that we’ve internalized this alien agenda. We don’t realize we’re in a system that will sacrifice any number of human beings if that will further capital accumulation. It’s all invisible to us; the principle that organizes our social life is invisible to us.
Capitalism is techno music at 160 beats per minute, 260 beats per minute, 1000 beats per minute.
Here in the United States, we’re fortunate because we’ve been able to displace the costs of this system to the poor regions of the globe, so the costs have been invisible to us. But now we’re at a point where those costs are coming home to roost. The second it becomes cheaper to replace human beings with intelligent machines, capital will do it on a massive scale, and that is very, very close to being feasible. Capitalism is itself undermining the world where selling your labor power for a wage gives you a chance to live a life of minimal dignity. The deflationary pressure on wages will be unimaginably intense very soon, so that the level of inequality that we’ve seen so far is just the beginning.
Capitalism has also always had immense environmental costs, because you have to make as much profit as you can as fast as you can, which you do by selling as many commodities as you can as fast as you can. But that means you are using resources and producing waste at a rapid rate. The ecosystem can replace resources and process waste, but at a different temporality. Capitalism is techno music at 160 beats per minute, 260 beats per minute, 1000 beats per minute. At the end of the day, you’re using resources and producing waste at a faster rate than the ecosystem can handle. This didn’t matter so much when capitalism was limited in scale, but it’s no longer the case that capitalism can go to another part of the planet — there are no “other parts of the planet” left.
Marx once said that the point is not to interpret the world, but to change it. Have you been involved in political activism at all? Did I hear you used to be involved in the Socialist Party?
[Laughs] Well, I’m not the activist I used to be, but when I first came to Iowa, there was a Socialist Party that traced its history back to Eugene Debs. They ran candidates for local office, not with much success, but they did elect some people to the city council in Iowa City. I was also a member of a party called Solidarity, but they never really built a presence in Iowa so I faded away from that as well.
It’s really been very exciting to me to see waves of student activism come and go. There was a very strong student activist movement here in the 1980s that was opposed to Reagan’s wars and did not buy any of the lies that were told about those wars. There were also people in Iowa who understood how many of Bush’s legitimations for the Iraq war were wrong. So at different moments there have been strong student movements in Iowa that I was peripherally a part of.
Then there was a long period of apoliticalness among the student body, but now that’s changing and it’s because we’re in a new period of financial capital. Even the most intelligent wing of the banking community has come to the realization that financial capital today is a parasite.
A vampire squid, one could say.
Exactly, the vampire squid thing. It’s one thing for fringe, radical writers to say it, but now the most intelligent commentators inside the capitalist system, people like Martin Wolf, the economics editor at the Financial Times, agree. They agree that the financial sector isn’t actually about allocating capital efficiently to the non-financial sector, but rather is about extracting wealth from the non-financial sector into the financial sector.
The banks did that with the housing market, and then that game ended with the recession in 2007, so they started looking for the next vulnerable source that they could extract wealth from. And of course they found that there was no regulatory oversight to protect students from these kind of parasitic activities.
We are now in this situation where students are graduating from public universities — doing what society wants them to do, developing themselves as knowledgeable, skilled citizens — by doing that they must take on levels of debt that we all know are unpayable. So at the very same time as capital is putting this immense deflationary pressure on wages, we’re telling students you have to take on these immense loans. It’s wrong, just obscenely wrong.
We’re at a “what the fuck” moment in the history of capitalism.
I think that has been a big part of the new wave of student activism, which is being expressed in ways that I almost can’t believe. I read these studies that the percentage of people under 30 who voted in the Democratic primary that are willing to identify as socialist is over 50 percent, 60 percent, 70 percent. These people are saying that there’s something fundamentally wrong with the way we’re doing things.
The way we’re talking about the environment, for example. It’s obvious that we as a society are committed to burning up all the gas we can. We just agreed to [the Bakken] pipeline, even though we know there will be spills. Anybody who thinks there aren’t going to be spills is living in la-la land. Or the factory farms that have basically destroyed Iowa as a place you can swim in the lakes. How many lakes are left in Iowa that a reasonable person would want to swim in? You could probably count them on one hand.
So student debt is just one part of a much bigger story. The same mechanism that is reducing good-paying jobs is producing student debt, is also producing the environmental crisis. There’s one explanation for all these things. The ultimate answer is that we are in a system based on the imperative “grow or die,” whatever the environmental costs might be. And these issues have led an astoundingly high percentage of students to start thinking in a way that hasn’t happened since I was a student in the very end of the 1960s into the 1970s.
There were a lot of us then thinking about these things, and we were right. But what happened is society went on a decades-long exercise in debt-fueled amnesia. Society pumped itself so full of debt that we thought we could forget about all these structural problems that people were talking about in the ’60s. You can keep that game going for a long time but at some point you’ve pumped it up so much that when it bursts it’s going to get really ugly. That’s the point we’re at.
That’s the secret behind quantitative easing. This is how bizarre our world is: central banks have to create trillions of dollars out of nothing because that’s what it takes to contain the depression that would otherwise have happened in 2007. We are at a — if I can say it — we’re at a “what the fuck” moment in the history of capitalism. Everybody knows quantitative easing can’t continue, but when it does stop, nobody has the slightest idea what happens then. The most intelligent people inside capitalism, like this Martin Wolf guy, are absolutely scared shitless.
So we are also at a very scary moment in history. It turns out the American Dream depended on the environmental crisis being localized, and there still being good-paying jobs, and on being able to displace the costs of capitalism onto the poorer regions of the world. All those things are now over for good, and the one thing that is absolutely forbidden is to extrapolate from the past period of how capitalism worked, to say this is how the future will be like. Just because capitalism was able to manage unemployment in the past, for instance, doesn’t mean it will be able to find some magic equilibrium in the future.
It sounds like you’re both optimistic and fearful about possibilities for the future.
I’ll tell you, the single thing I’m most fearful of — and I know this won’t make me any friends among the Bernie people — is the progressive energies that we’re talking about will be absorbed and dissipated by the Democratic Party. I’m old enough that I’ve seen that happen again and again. My view is that the Democratic Party is a capitalist party. Wall Street isn’t dumb: they fund the Democrats just as they fund the Republicans. That’s why, when we have a Democratic president, the secretary of the treasury will be from Goldman Sachs, and when we have a Republican president, the secretary of the treasury will be from Goldman Sachs.
The difference is the Republican Party tries to mobilize the regressive energies of the country to further their power, while the Democratic Party tries to mobilize the progressive energies to win elections. But after they get elected it wants to demobilize those energies because at the end of the day it wants to further capital accumulation. And then a couple of years later, we’re back at stage one and the fundamental structural issues still need to be dealt with. We have a couple more progressive people elected than we would have otherwise but in terms of what’s required, that’s not going to ever be enough.
My hope is that Trump implodes the Republican Party and turns it into two parties: a right-wing, explicitly racist, explicitly anti-immigrant party, and a right-wing business party. I would also love to see the Democratic Party implode into a Clinton wing and a truly progressive wing that was explicitly committed to a socialist agenda, a wing that would never appoint a secretary of the treasury from Goldman Sachs. I think that unless something like that happens, we won’t address the real problems we have, because the time scale of these things is so short. The latest study, out of Oxford, found that 47 percent of occupations could be eliminated because of automation within twenty years. It’s going to be a social catastrophe of the highest order, unless structural changes happen very fast. Same thing about the environment. The clock is really ticking.
I’m really optimistic about the rise of student activism, and the willingness to consider socialism, but you can’t be optimistic if you understand the time scale here. The Italian Marxist Antonio Gramsci has this phrase “pessimism of the intellect, optimism of the will,” meaning if you look at the situation intellectually you have to be pessimistic, but you can’t let that affect what you do. That’s how I think a rational person has to be these days.