Post-Communism extreme capitalism has failed in Latin America, in Russia, in parts of Asia, in Africa, and it will probably continue to claim victims. What to do? Marxism failed completely in the Soviet and East European experiment. But in one sense Marx was right when he predicted that the accumulation of capital would mean that the rich get richer and the poor poorer and the large enterprises will gradually absorb the smaller ones until only a few giants are left – and that was before the multinationals. In those industrialized countries of North America, Europe and Asia where capitalism seems to work, it may very well be at the cost of the rest, especially the so-called Third World. In fact, capitalism needs a third world in order to dispose of its detritus. Rudolf Steiner said a long time ago: “When people do not see the world in a spiritual way, necessarily those institutions that advance material well being will also cause an increase in egotism and therewith gradually cause need, suffering and poverty.”  Without such a spiritual world view, he went on, it wouldn’t help at all to give everyone enough to eat, for sooner or later, many will again have nothing to eat. As a profound analysis, this may well be true, and it should be given considerable thought. As far as a truly “third way” out of the social-political-economic morass is concerned, beyond capitalism and communism, well, perhaps more about that next time….


That was the last paragraph of the editor’s musings in the last issue. It wasn’t a promise (notice the catch-all “perhaps”), but today, May 1 – Labor Day in all the world except the United States and if anyone knows why I’d appreciate the information – with the new issue of Southern Cross Review already due on your cyber doorstep, I’ve decided to give it a try.

            Beyond capitalism and communism” was a slogan in certain European circles back in the sixties and seventies, and at that time signals seemed to exist that the slogan could become a reality. But slogans seldom if ever have any relation to reality, and this one was no exception. When the Berlin Wall crumbled it signaled the reality of the end of communism, and the slogan became meaningless, although it is doubtful that it ever had any practical meaning. In Czechoslovakia the talk was of “Socialism with a human face”, before the Soviet tanks rolled into Prague and crushed the movement. But even had it succeeded at first, carried forward by popular enthusiasm and hatred for the Soviets, it was condemned to failure in the long run, for it was based on the same Marxist fallacy that the State could efficiently manage the economy. The State, however,  democratic or not, is an inherently inefficient social body, condemned to fail when it attempts to act beyond the limits of its legitimate mandate, which is, or should be, exclusively political.

            The fall of the Wall in Berlin symbolized for many not only the end of communism but also the victory of capitalism, and they contended that capitalism equals freedom. But freedom for whom? If we look at this a bit more carefully, we see that capitalist freedom is for the producers of goods and services; in other words industry, national, multinational, super-national. Ironically, with the fever to consolidate and the absorption of smaller enterprises by larger ones, Karl Marx’s prophecy that capitalism would end up with very few huge corporations controlling the world seems to be coming true. The capitalist optimists were wrong; the problem still exists and the showdown has only been postponed.

            I live in a country, Argentina, which embraced neo-capitalism with fervor unmatched even in the industrialized “First World”. Today, May Day 2002, as the country struggles to rise up from the ashes and the honored workers’ children are picking through garbage dumps for food, the stunned look on the faces of the experts would be comical if the situation were not so tragic. There is no guerrilla movement here, as there was in the seventies and eighties, because, I think, there is no competing ideology (Marxism) to embrace, and no dictatorship to hate. Whoever can, including the idealists, has already emigrated – even to Israel, where the uncertainty of war seems preferable to participation in the lack of hope of a nation. Is Argentina an exception? Unfortunately not, although the fall from relative prosperity has been extreme here. 

      If socialism is unworkable and leads to totalitarianism, and capitalism as we know it gives birth to corporate domination and corruption, if neither one constitutes a social alternative, is there hope at all for social renewal? Don't expect me to condemn globalization. That's not an option. Globalization is the essence of economic activity, which recognizes no frontiers. It is a fact and opposing it and chanting slogans against it is an excercise in futility. The problem is not globalization as such, but the way it is being implemented. You cannot expect national economies which are in the dark ages compared to the industrialized behemoths to convert to free market capitalism from on day to the next, opening their markets to imported products which are of superior quality and lower priced than the local equivalents, and expect the local national economy to survive. Nevertheless, this is exactly what is happening, and the ones who suffer most are the masses of unemployed.

      The essential problems with capitalism are a) ownership of the means of production, i.e., capital, by stockholders, and b) the lack of a control mechanism which can harness capitalist greed. The Marxist solution to the former was turning the means of production over to the political State, which history has shown to be unworkable.

      Buying stock is like going to the races or the casino. You bet on a certain company or companies and you win or you lose. You have no other interest in that company than to collect dividends or sell at a profit. The accumulation of large amounts of stock can result in a controlling interest by means of which you can sell the company, along with its employees, to the highest bidder. This is a form of diluted slavery in that the worker can quit and thus avoid the block, if he is willing and able to lose his employment. In order to reform this situation it would be necessary to eliminate the stock market. Stocks could remain, but they could only be owned by people who are actively engaged in the company’s activities; and they could only be sold upon the person leaving the company and only back to the company itself. In this way, each enterprise would remain independent and huge controlling amounts of capital would be avoided.

The obvious objection to this is that the companies would no longer be able to raise capital on the stock market. True – but what are banks for? Loans could still be obtained from banks, and bonds, which do not give ownership or control of the company, would still be issued. The banking industry is another thorn in society’s side. They should be private, non-profit making enterprises in the form of cooperatives or whatever other legal format is available or could be made available.      

The control mechanism in economic endeavor should not be the State, as we have seen. And the “free market” is a euphemism for control by corporations. The element in the economic cycle which is just as important, or even more important than production, is consumption. Between these two poles of production and consumption, the distribution (wholesale and retail) of produced goods provides an element of neutrality. Market control, then, should be exercised by representatives of these three forces: Production, Distribution and Consumption. They would be organized in Economic Associations with the responsibility of deciding on all aspects, including prices, of economic activity.

Is this complicated? Yes, it is. There would be many details to iron out. But such associations would involve all the actors directly involved in the economic process – national and international. They could be financed by something like the “Tobin Tax” on currency operations.

We have only touched on the economic elements of society here. There are other equally important ones. Where does the political state fit in this scheme of things? And what about education and other cultural activities? More about them in the next issue.

Frank Thomas Smith, editor


May I make my fond excuses
for the lateness of the hour
But we accept your invitation,
and we bring you Beltane's Flower
For the May Day is the Great Day,
strung along the Old Straight Track
And those who ancient Lines did Ley
will heed this song that calls them back!

Pass the Word, and pass the Lady
Pass the Plate to all who hunger!
Pass the Wit of Ancient Wisdom
Pass the Cup of Crimson Wonder!

Ask the Green Man where he comes from,
ask the Cup that fills with Red
Ask the old grey Standing Stones
who show the Sun His way to bed
Question all as to their Ways,
and learn the Secrets that they hold
Walk the lines of Nature's Palm,
crossed with Silver and with Gold.

Join in Black December's Madness!
Lie in August's welcome Corn!
Stir the Cup that's ever filling
with the Blood of all that's born!
For the May Day is the Great Day,
strung along the Old Straight Track
And those who ancient Lines did Ley
will heed this Song that calls them back!

 From "Songs from the Wood" (Jethro Tull)