The foundations of alternative economy Wael Gamal About the Writer: Researcher, translator, and trainer. Former editor of Mada Masr worked in press for 20 years, during which he moved between print, audio and visual media. He holds a BA in Economics and Political Science from Cairo University in 1993. He holds a postgraduate diploma in political science from the same university in 1994 and a postgraduate diploma in investment and finance from Middlesex University in London in 2002 with a grant from the British government. He co-authored with Salma Hussein the translation of Thomas Piketty‘s ―Capital in the Twenty-First Century‖ (published by Dar Al Tanwer in June) and editor of ―Egyptian Economy in 21st Century‖ Published by Al Maraya in December 2016 . This publication is an outcome of a seminar, non- periodical and sponsored by the Rosa Luxemburg Stiftung with funds of the Federal Ministry for Economic Cooperation and Development of the Federal Republic of Germany”. The content of this publication is the sole responsibility of the author and does not necessarily reflect a position of AFA or RLS. 1 Publishers: Arab Forum for Alternatives and Rosa Luxemburg Foundation Main Researcher of the project: Mohamed El Agati Translation: Sonia Farid Project Coordinator: Shimaa ElSharkawy To follow the papers of this series and other materials on Social justice, you can subscribe to the website: Social Justice Portal: /http://www.socialjusticeportal.org RegistrationNo: 18618 / 2102 Publishing & distribution: +2 01222235071 [email protected] www.rwafead.com 2 Introduction: The Arab region was, like the rest of was never a real effort to formulate a the world, swept by the global comprehensive vision of alternative neoliberal model that was economy, one upon which actual continuously promoted as the only projects can materialize. option even after its policies were Prevalent binary approaches: dealt a serious blow with the uprisings that took place in 2011. In August 2015, The Economist Those uprisings did, in fact, published an article called ―What‘s highlight the failure of such policies the alternative‖2 that contained a and demonstrated the urgent need review of John Plender‘s book for alternative ones, yet this was a Capitalism: Money, Morals and temporary phase that was followed Markets3. The article argues that by an aggressive comeback of capitalism is losing supporters and neoliberalism in the region. that its detractors are expanding to include figures like Pope Francis and Supporters of an alternative the inequality and injustice it triggers economy are usually criticized for are giving rise to several movements two main reasons that contradict such as Occupy Wall Street. The each other, each of which is cited article quotes Plender as saying that in a different context. On one capitalism might face another crises, hand, alternative economies are yet it will still survive since it, as the seen as general theories that title of the article suggests, ―better cannot be translated into projects than other systems,‖ which is on the ground and are deemed equivalent to the main argument upon populist. On the other hand, when which neoliberalism is based: that tangible demands and practical there is no alternative. projects are put forward by social movements and labor unions, The ―there is no alternative‖ their initiators are accused of discourse is founded on a number of lacking an overall vision that pivotal principles governed by a takes into consideration regional number of binary approaches: the and international contexts. technocratic versus the political and the ideological, the pragmatic versus Alternative economic policies the idealistic, and the state versus proposed across the Arab region corporates. before and after the uprisings ranged between cooperatives, self- management, tax reform, and anti- Tunisia, September 2016). Cairo, the corruption legislations as well as Arab Forum for Alternatives and initiatives by officials in several Rawafed, 2016. 2 public sectors such as healthcare, "What‘s the alternative? Capitalism education, and transport1. But there is not perfect. But it‘s better than other systems.‖ The Economist, 15 August 2015: https://goo.gl/BqJLRG 1 Mohamed al-Agati, ed. Alternative 3 John Plender. Capitalism: Money, Economy in the Arab Region: Morals and Markets. London: Concept and Issues. (Workshop in Biteback Publishing, 2015 3 American economist Joseph Stiglitz choices involved would indeed be describes the first approach: purely ‗technical‘‖6. ―Developing countries are often This approach not only reduces the advised (or instructed) to undertake efficiency of economic policies reforms recommended by ‗experts‘ through sidelining alternatives, but who are called ‗technocrats‘ and are also serves the interests of specific often backed by the IMF. Opposition groups at the expense of others. For to the reforms is usually dismissed as example, neoliberalism attributes ‗populist‘‖4. The term ―technocrat‖ poverty to lack of knowledge and was coined in the early 20th century expertise, therefore deals with to refer to the rule of experts. This poverty as a technical issue, which in perspective robs economic policies turn endows the state or the entity in of any social considerations and charge of these ―technicalities‖ with presents them as purely technical more legitimacy, as William while condemning alternatives as Easterly7 argues. Easterly links this biased and unscientific. discourse to what he calls ―Technocrats can, of course, make ―authoritarian development,‖ which an electricity plant work better - to means that ―what used to be the produce electricity at as low a price divine right of kings has in our time as possible. This is mostly a matter become the development right of of engineering, not politics. dictators. The implicit vision in Economic policies are usually not development today is of well- technocratic in this sense,‖ Stiglitz intentioned autocrats advised by adds5. According to Stiglitz, each technical experts‖8. economic policy has its advantages and its disadvantages, hence those This binary approach is always who benefit from it and those who accompanied by that of the are harmed by it: ―some may lead to pragmatic/realistic versus the higher inflation but lower idealistic/unrealistic. Neoliberalism unemployment; some help investors, poses itself as the only viable option others workers. Economists call that can actually be implemented on policies where no one can be made the ground because it is purely better off without making someone technical and devoid of any else worse off ‗Pareto efficient‘. If a ideological reference. ―Over the past single policy is better than all others thirty years, capitalist realism has for everyone, it is said to be Pareto successfully installed a 'business dominant. If choices among policies ontology' in which it is simply were purely Paretian - ie if no one obvious that everything in society, was made worse off by choosing one including healthcare and education, policy as against another - the should be run as a business,‖ says 4 Joseph Stiglitz. ―Don‘t trust 6 Ibid. technocrats.‖ The Guardian, 16 July 7 William Easterly. The Tyranny of 2003: Experts: Economists, Dictators, and https://www.theguardian.com/politics the Forgotten Rights of the Poor. /2003/jul/16/globalisation.economy New York: Basic Books, 2015. 5 Ibid. 8 Ibid. 4 Mark Fisher9. Capitalist realism in peasants, the European working its dominant neoliberal form has class, the poor everywhere? We expanded in an unprecedented live in a contradiction: a brutal manner that made attempts at state of affairs, profoundly finding alternatives an unrealistic inegalitarian—where all existence effort. In fact, the kind of is evaluated in terms of money atmosphere neoliberalism managed alone–is presented to us as ideal. to create makes finding alternatives To justify their conservatism, the quite hard: ―It is more like a partisans of the established order pervasive atmosphere, conditioning cannot really call it ideal or not only the production of culture wonderful. So instead, they have but also the regulation of work and decided to say that all the rest is education, and acting as a kind of horrible11. invisible barrier constraining thought American economist and Nobel and action‖10. It is noteworthy that Laureate Elinor Ostrom tackles the neoliberal realism itself seemed case of commons as an example of impossible decades ago. It was an economic alternative that would impossible, for example, in the be rejected by neoliberalism. 1960s to anticipate that global wave According to Ostrom, the fact that of privatization that has been taking commons had in many cases place in the few past decades. survived for thousands of years French philosopher Alain Badiou refutes claims by supporters of explains how the atmosphere created neoliberalism that it is a failing by neoliberalism keeps obstructing economic system. Ostrom also the emergence of any alternatives analyzes the reasons for the failure and eliminating any that get the of the system of commons in some chance of seeing the light and how cases and developed a set of micro- neoliberalism offers its own level theories that explain how explanation of different social commons can be efficient12. problems. The third binary approach limits the In truth, our leaders and choice between corporates and an propagandists know very well authoritarian state that controls the that liberal capitalism is an economy through a bureaucratic inegalitarian regime, unjust,