Preview Chapter 1 of After Capitalism, by Michael Spence

“One of the greatest difficulties to be overcome
is this firmly 
rooted picture, coming down from earlier times,
of society as a single body with one central authority at the top
having authority over and responsibility for all the affairs of that society.
Before this can be overcome a different picture must be built up… “

Chapter 1

The Need for Change


A look back at the course of human evolution will show that just in the last few centuries there have been enormous developments in technology and in the possibilities of industrial production, developments far exceeding in scope and pace anything that has taken place before. Today for the first time humanity has at its disposal the know-how and the ability to produce sufficient for every human being on this earth; enough for them to enjoy a reasonable standard of living in so far as this can be achieved through the supply of the physical necessities of life. That this is now possible can be confirmed by anyone who, putting aside all preconceived ideas and feelings and viewing the situation quite objectively, looks at the actual possibilities given by the development of modern science and technology and by our modern methods of economic production and distribution. This possibility could be realized without anyone having to labor all their working life in the dehumanizing conditions of many of our present factories and mines. It could be done in a way that would still leave individuals time and energy to partake in the activities of cultural life and so to nourish their inner life of soul. Furthermore, this could be achieved without the present high degree of waste and damage to the environment. That there is still so much poverty, homelessness, hunger, and hardship in the world is not a problem of our inability to produce and distribute what is needed. This is not an economic problem, nor is it a financial problem – it is a social problem.

It is not acceptable to attribute our present social failures to a lack of money. To say there is not enough money is like saying that something cannot be done because there is no way to enter it in the accounts. It is not that we do not have the means to produce what is needed – it is, more than anything else, that we do not have the right way of thinking, together with the right social structure, to bring to realization the full potential of what is now possible.

But what is a reasonable standard of living? The Earth could not sustain the world population if all lived at the level of consumption that we in the developed economies do, or expect to do. We enjoy this level of consumption just because there is a much larger part of the world population who are obliged to survive on very much less. We can see this clearly if we look at the many products we use that are produced by cheap labor, by people who are often unable to enjoy what they produce for others. We can see it when we look at the level of consumption of the Earth’s oil, gas, and other resources by a population that is a small fraction of the whole. This extravagant use of resources in the developed countries does not necessarily bring greater happiness.

A reasonable standard of living for all can only be achieved if those in the economically developed countries reduce their expectations and their demands, thus making it possible for those in the less developed countries to increase theirs. But in the current situation this would be unacceptable to the people of the developed countries. In addition to this, an economy is judged healthy and sustainable only when the gross domestic product (GDP) not only increases year by year, but is experienced as doing so. More seriously, the present financial and legal structures are such that the financial system goes into crisis when there is any sustained downward movement of GDP.

What is true for the world as a whole is true for each individual country. Those who create or make money through the financial markets consume a disproportionate share of the total product while those who earn their wages through their actual work in production and services must be satisfied with much less.

Is the standard of living of any particular people to be judged solely by their economic consumption? There must be a reasonable basic level; but beyond that, does more, as a rule, lead to greater happiness? There is a widespread assumption that this is so, that more money, or more of what money can buy, brings greater happiness in life; that material possessions, a large expensive house and car, the possibility to travel, to spend holidays abroad, and perhaps above all to be able to have all this without having to work, are what give greatest fulfillment to life. But a close and objective observation of life, supported by an increasing amount of psychological research, shows that having more does not necessarily contribute to greater happiness. At a certain point, the inner sense of the quality of life can actually begin to diminish as many factors such as stress, fear, lack of purpose, and feelings of isolation reduce any feeling of happiness, sense of fulfillment, and peace of mind.

But human beings are not merely consumers of products, there are soul needs to consider as well: for example, the need to create, to develop latent skills and interests, to seek for a deeper understanding of life. This aspect of human life can really only be served by a healthy and vibrant cultural life of the community in which we live. Should not our perception of the standard of living also include the cultural and moral qualities of the community and the richness of the life of soul of its members, not just the factors included in the GDP?

Through all of history, different cultures, institutions, and social structures have come into being, served a particular people and time, and then been overcome and replaced by others; or grown decadent and faded out.

If, particularly in Europe, we go back just a few centuries, we will see social structures built on very different foundations from those existing today. Society was built on a class structure with an aristocracy as the masters over a middle class and a proletariat who, certainly in earlier times, recognized their place in society as appointed by divine order. The aristocracy held their place as leaders, lawmakers, and landowners by right of birth, that is, through heredity. But though this social order at the time seemed to be divinely ordained and unchangeable, as the nature of the human being evolved it became more and more decadent and finally, particularly around the time of the First World War, was swept away.

Then there emerged two polar opposite social orders: commun- ism, and western capitalism based on a market economy. Each can be seen as arising out of real social evolutionary needs. But communism lost its original impulse and became destructive and decadent, and it too has to a large extent passed away, though remnants in distorted forms continue. Today capitalism and the market economy are showing clear signs of having grown far beyond their original beneficial purposes and have come to a point where they primarily serve the egoism and greed of those in a position to “play the market.” If we look not just at the economic and financial spheres of human activity in isolation but at society as a whole, then it becomes apparent that, as they function within social life today, they cannot last. Capitalism and the market economy have reached a point where they are increasingly destructive of society as a whole. This is clear when one looks closely at the causes of the recurring financial crises around the globe, the widening gap between the rich and the poor, the massive environmental degradation in certain parts of the world, and the looming environmental catastrophes brought on by climate change, among other things.

What then must come after capitalism? This is a question that must be taken hold of. Or is it not possible to know this and to prepare the way for it? Must it come, as has happened too often in the past, through upheaval, revolution, and widespread suffering brought on by a final collapse of the present system?

There was a time when the church, cathedral, or temple stood at the center of the town or city, as the focus of the community. As an architectural achievement of great beauty, it stood as a House of God, a place from which moral guidance and inspiration rayed out to the people who lived and worked in its environment. This is no longer so. The great churches and cathedrals are today often little more than tourist attractions, remnants of a past age. Now it is more likely to be the tall buildings of the banks, financial offices, and trading centers that reach upwards to the heavens and stand as the great architectural achievements in our cities. It is these buildings, temples of a different sort, that stand as symbols of what people can strive for, of what can give direction and purpose to their lives.

In religion, people looked up with reverence to that which they felt to be infinitely greater than themselves, that which as the source of their being gave meaning and purpose to their lives. In the Divine they found their purpose and direction; in God’s law they sought guidance through life, security, and hope for reward in the future. In the fruits and products of nature they saw the gifts of God. In following their leader, their king, pharaoh, or priest, they were following the representative of their God, through whom God spoke.

But now the great majority of people, at least in the developed world, act as though there is no god, no outer divine authority, and no moral law that speaks to a person from without. In so far as religion does still play a part, it is a weak affair generally limited to a person’s inner private life, not determining his outer daily life and actions. Religions, including those of people in the poorer, undeveloped world, where they do still have a strong hold, teach of a god, but one that spoke to human beings in times long past. Christianity, Judaism, Islam, Buddhism as they are generally practiced today all attempt to proclaim teachings as they were given in former ages – the voices that first declared those truths are no longer heard today.

In all those areas of the world where social life is based on the particular form of capitalistic thinking that has spread from the west, from the United States of America and Europe, money has seemingly taken over from belief in God as that which actually motivates people and gives direction and purpose to their lives. Money is now an ever- present influence, it wields dominion over the way we think and live, over our sense of values and what we do. It establishes the order of human beings within society. Those who have no money must serve those who do. It has replaced the divine ordering that in former times guided a person through life, gave purpose, security, and hope of a better future in this life on earth and of reward or otherwise after death.


The food we eat is often not produced out of a desire or need in the producer to provide good healthy nourishment; instead the primary motive is to make money. So too with the clothes we wear, the medicines we need, the houses in which we live, and the entertainment we enjoy. There are, of course, many who do produce out of quite different motives, out of a real impulse to serve people, to provide what people need for a healthy life, but within the whole today they are a minority. Those producers who are driven by the urge to make money are often able to drive those who do wish to serve out of the market.

Must it inevitably be as it is? Is it really impossible to change the direction of the trend of our time? Are the huge financial institutions, the banks, the financial futures exchanges and the stock markets really fulfilling a socially necessary role? What is this money that has come to so dominate our lives? In itself it is useless, it has no substance. Is it real, or is it an abstraction, an illusion, or just a means of accounting of values? If so, what are the values it accounts for?

Money has been created neither by nature nor by God – it has been created by human beings. But now it has grown far beyond the control of the humanity that brought it into being. Like “The Sorcerer’s Apprentice,” it seems that its creator is unable to control that which he has let loose.

Money and our particular capitalistic monetary system have come into being as part of the structure of human social life as it has evolved through the ages. If we are to take control of money, to make it serve humanity rather than make humanity serve it, we must look to changing not the money itself but that which, within the evolving social structure, brought it forth in the way it has.

Though over the centuries many social forms and structures have come and gone, there is still at the foundation of most of our various structures something which has its origins in the old theocracies in which there was no thought of democracy, equality, or individual freedom. They were formed when human life was very different and much simpler than it is today. Then it was very much the group or the tribe that was the dominant societal force or unit. Today, and increasingly so, the individual person stands alone, unbeholden to the rigid inheritance of ancient custom.

Behind all present social thinking and activity is the basic perception that society is a unitary whole with a government or other leader at the head providing leadership, guidance, management, and control over the whole. Society is conceived of in the form of a pyramid, itself built up of smaller pyramids. This is the form that can be seen in virtually all social groupings, whether governmental, business, or educational, and whether democratic, religious, communist, paternalistic, or dictatorial. At the head, usually supported by a group of ministers or other such departmental heads, is the prime minister, president, chief executive officer, headmaster, or captain. Guidance, wisdom, law, and decisions affecting the whole are handed down from the single authority at the head. This is a form that comes down from the theocracies of earlier times; it is one that was proper for a time when people accepted that their leader, king, pharaoh, or priest received wisdom directly from God. But is it right for today?


Thorough and objective observation of society will show that it is in fact formed of three quite distinct sectors or streams, each with its own function and purpose, and each working according to its own laws. Once this threefold nature is recognized and understood, it will be possible to begin to transform society according to its own inherent nature into one more appropriate to people of today.

In the following chapters I shall attempt, first, to throw light on these three spheres or sectors and to show how, on the basis of the working together in harmony of these three independently constituted sectors, our social life can be renewed in a way that will serve the present and the immediate future needs of humanity. The perception of this threefold structure will then provide the concepts with which to examine money in a new light, particularly those aspects of our social structure which provide the foundation of our present capitalistic system. This I shall attempt in the second part of this book.

One of the greatest difficulties to be overcome is this firmly rooted picture, coming down from earlier times, of society as a single body with one central authority at the top having authority over and responsibility for all the affairs of that society. Before this can be overcome a different picture must be built up, that of one body formed of three quite separate and autonomous sectors working closely together – each sector having its own differently formed guiding or authoritative body, but the three together forming a complete whole. Most people immediately feel uncomfortable with this, they sense disorder and conflict arising out of three such bodies having no central coordinating authority. This problem will arise so long as we continue to think in terms of three similar but independent sectors, each a replica of the presently existing unitary state. But each sector is not a replica of the others, each is organically different, and in its difference complements the others.

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After Capitalism

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