Marc Humbert, Emeritus Professor, Political Economy, Rennes University, France.[1]

1. Introduction: Why Call Into Question the Liberal Paradigm?

To choose such a target – the liberal paradigm- became obvious to me after several years spent to try to build a Political and Ethical Knowledge in Economic Activities (PEKEA). This PEKEA attempt[2] was triggered by dissatisfaction with standard economic theory, two shortcomings of which had been pointed out.

First of all, standard economic theory does not take into consideration any power phenomenon, i.e. it both prohibits any Government intervention and denies that private entities exercise power over the free functioning of markets. Secondly, it claims to be a neutral, strictly technical analysis and refuses any moral or ethical consideration. However, it is clear that, on the contrary, economic life is strongly marked by phenomena of power, which is the domain of politics, and by the consideration of values, which are questions of ethics. Hence, this attempt to build an approach worded PEKEA, a Political and Ethical Knowledge in Economic Activities …

This attempt has been a challenge to the standard economic theory which not only nurtures a pervasive thought in the whole of human activities, but which is also imposed by oligarchies as a normative behaviour for all.

This dominant thinking proclaims, in the name of neutrality, to follow a technical perspective. This means a machine’s point of view, considering people and everything as separate things, as commodities. That is to reduce each human being to be an individual homo economicus, that is a machine searching to buy more for less or/and to sell less for more. And to impose such a vision to guide everyone’s behaviour.

On the contrary, PEKEA has considered that to deal with economic activities, it is necessary to adopt a political and ethical point of view.Thus, Pekea has tried to build an analysis of relationships between people, individuals, groups and collectives, each steeped in their own cultural, social and territorial history, confronting their values and their powers. This should refer to a relational anthropology.

The constitution of each self “I,” relies on a relation with someone else “you” mediated by an institutionalised third, almost at first a “language,” which in the meantime unites and separates “us,” I and You. These shared elements nurture our relations between us, they are fundamental “commons” and create in the meantime for each of us, our existence, our life, and our links, our bonds, our values. This weaving of links is at the foundation, and is essential to the pursuit, of our human life.

Taking this into consideration, the target of PEKEA had to be extended to build a Political and Ethical Knowledge addressing not only the sole economic activities but all Human activities. That seemed to take us far away from concrete economic consideration, especially away from the development issue. This development issue was the point of departure of my research in political economy, my endeavour has been to find effective policies for development.

Consequently, I will try to convey to the audience the idea that the reference to the liberal paradigm is responsible for, or say the liberal paradigm is “behind the failure to deal with the word development issue” (II). It is not easy to make the demonstration because some elements that are put forward by the liberal paradigm are quite respectable[3]. But even these elements are not put into practice by those who proclaim their observance and their reverence to the liberal paradigm, showing a “persistent huge gap between liberal ideal and the political realities” (III). We have also to acknowledge that the adoption of the liberal paradigm may be considered as the engine of a scientific, technical and industrial revolution, although this “unlimited unleashing of science and the forces of production” (IV), is finally responsible for increasing mass suffering and looming ecological catastrophe. However, this does not appear like that to the general opinion, above all because Oligarchies and their allies use “magic words hiding the responsibility of the proclaimed liberal paradigm” (V). To overcome this trap, it is necessary to fully understand the role given by the implementation of the liberal paradigm to “capitalism” (VI) and to “money” (VII) which are the two main antagonists to the common and to solidarity.

Before to enter into this relatively long analysis to document the necessity to shift from the liberal paradigm, I would like to present briefly what may be an alternative. That is to take fully into account what is wiped out by the dominant thinking supported by the liberal paradigm. I mean the relationships between people in all sectors of human life. These relations of life, building our common world, I named them, after Ivan Illich’s seminal work[4]: “conviviality” what creates a convivial world.

With hundreds of academics, in order to escape from the reductionism imposed by the dominant thought, we have decided to make explicit the principles of a political philosophy that could be able to guide the building of convivial societies and their relations. And we named it “convivialism.”

Those who want to escape from relations which lead to links and constraints and prefer total individual liberty, adopt liberalism which flourishes under the liberal paradigm.

Those who want conviviality between all, need to define and to adopt convivialism which relies on the solidarity paradigm which means to accept links and constraints.

Convivialism[5] is based on the observance of 4 basic and interdependent principles, their interdependence compels self-limitation of each, that is responsible moderation, and makes hubris control as an imperative. The four principles are:

  1.  common natural humanityEcological mind and no discrimination between human beings. We are sisters and brothers of equal dignity, taking care of nature, of which, we are a part.
  2.  common sociality – relations between us are our prime value, our interdependence is expressed in solidarity and leads to cooperation.
  3.  Autonomous individuation to allow to each one the power to be and to act, taking care of each other. This is freedom in solidarity.
  4.  Diversity that means the necessity to deal with conflicting interests and to reconcile opposing views to build a path towards the common good. This is the democratic ideal.

Now, lets turn to a deeper analysis of the direct and indirect negative effects produced by the proclaimed reference to the liberal paradigm.

2. Behind the Failure to Deal With the World Development Issue

My endeavor as a researcher in political economy has been to bring a contribution to the effort made by so many countries to build their self-sustaining national capacity to answer the needs, and first the material needs, of their population, that is to do research in a domain currently worded “development.”

Standard theory says: let them participate through their firms to the international division of labour in free competitive international markets, according to their comparative advantages as Ricardo explained, using their natural endowments and they will be rewarded by an increase in their wealth. To-day, this is still the theory on which UN institutions, WTO and all free trade agreements are based. Despite this hegemonic way of thinking, observations of the real world, of the historical economic development and growth of the main industrial countries today, as England, Germany, USA, Japan or China, show that this theory is light years away from what has been the actual functioning of the international economy. This theory makes us blind to the real functioning of this world.

The main results of twenty years (1980–2000) of research reveal the actual functioning of the world. There is, in the international markets, a global systemic competition between firms and nations, that means competition between firms’ strategies combined to a competition between States’ strategies rivalling to win. Firms are private organizations aiming at accumulating capital and one outcome of the global systemic competition is the world concentration of capital. This means that each essential industrial sector is dominated by an oligopoly of giant firms which organized their territorial network of subsidiaries and subcontractors, suppliers, and customers to maximize their profit. States try to boost their own firms and to attract foreign investments to make their GDP growing as rapidly as possible to stay at the top or to climb in the international hierarchy of nations measured by the level of GDP/capita. The global systemic competition is based on a technological race for advances to be turned into new marketable products boosting an everlasting industrial change and world growth, which, as a collateral, is exhausting our planet sustainability.

In conclusion, a country lagging behind has no chance to successfully increase its capacity to meet the material needs of its population unless it finds a positive way to enter this race, this systemic competition. This requires to make its firms capable of winning a share in the markets thanks to relevant promotion and protection, industrial, technology, scientific and educational policies. But this has become more and more difficult to make it. Almost impossible for countries which are still unable to get sufficient food for their population. Very difficult for the others, because of the higher and higher level of the technological capacities necessary to produce industrial and service goods according to the norms that prevailed in the international markets. All historical national attempts to disconnect in order to find an independent path have failed.

This systemic international competition gained momentum in the 19th century at a time when all peoples, living in organized countries of the world, were still enjoying a roughly equivalent level of material well-being and an average high autonomy with few international exchanges. From then on, world development became more and more uneven. This principally stemmed from the effect of political implementation in Western Countries, of some principles of the liberal paradigm. It boosted a scientific, technical, and industrial revolution. And only these Western countries, which politically dominated the Rest of the world, have experienced an acceleration and broadening of material and immaterial growth. It was a new era in Human history, marked by this race, this global systemic competition, for material growth and wealth. However, the dominant theory of the functioning of the world, which still serves as a reference for the Oligarchies and the UN institutions, remains the one that Adam Smith initiated – free competition in a free world – under the umbrella of a hegemonic intellectual thought that instrumentalized the reference to the liberal paradigm.

This is clearly a fraud and its outcome is the present situation of our world whose evolution is supposed to have been guided by the liberal paradigm.

I consider that the present state of our economic, social, and natural world, and its past and present evolutions, are leading to a catastrophe. If we do not change our ways, within a century, there will be great and increasing suffering that will gradually reach almost all living beings on earth and cause the death of several billion of them. We must therefore change our path and question this liberal paradigm to which the oligarchies and UN institutions, that lead us, refer to and which they use to blind us to the realities of how our world works.

Despite this clear evidence of the responsibility of the reference to the liberal paradigm regarding the failure to deal with the development issue and the looming catastrophe, the general opinion seems stuck to this paradigm. Principally because everyone dreams that by referring to it, Oligarchies will grant sovereignty to people, giving freedom and equal power to all. But, to tell the truth, there has been a persistent huge gap between this liberal ideal and the political realities.

3. Persistent Huge Gap Between the Liberal Ideal and the Political Realities

The Western countries have shaken the whole planet at the end of the European Middle Ages around 1500. They opened a first cosmopolitanization of the world, introduced a new capitalism and started an intellectual and ethical reform called Renaissance or Humanism. This movement led, two centuries later, to the Enlightenment. With it, came the supposed “Age of Reason” – following Descartes and Bacon – and “Age of Liberty” for all individuals, with the Bill of Rights in England (1689) and later, with the French Revolution (1789) and the declaration of rights of Man.

They were proclaimed to be universal truth for the whole Humanity. And, from then on, Modernity was established under the reference to the liberal paradigm and under the leadership of a revamped Oligarchy.  It has not only been a philosophical and political revolution but it also boosted an industrial revolution. We will come to this, but first we must underline that from the beginning, the reference to the liberal paradigm was a fraud as it is shown by two series of facts.

First, the proclaimed sovereignty of people was reserved to Westerners: Europe amplified its colonial imperialism, again in the end of 19th century, for example in Africa, and organized mass exploitation within the colonized nations. Slave were traded from Africa, and slavery in the Americas by European colonies did not stop, neither after the Bill of Rights nor after the French Revolution[6]. Slaves were still imported to Brazil until 1866, and slavery was constitutional in the independent Unites States from 1776 to the end of the secession war in 1865. Franklin Delano Roosevelt, when he proclaimed in 1941 the four freedoms[7] for the world and when his widow promoted the United Nations’ Declaration of Human Rights in 1948, were bearing within their country, strong discrimination against black people and an apartheid that lasted until 1965.

The second factual evidence that there was a fallacy in the reference to a paradigm of freedom for all and subsequent sovereignty of the people, is that it took a very long time before the right to vote and to be elected, be granted to all men and women. So that they could choose their government and participate to the collective decisions. In the United States various restrictions beyond that to black people were stopped only in the 1920s when women were granted the right to vote. In France, men got this right to vote in 1848 and women in 1946. In England it was only in 1918 that all men got this right, and women in 1928. Political realities have long been far away the ideal referring to the liberal paradigm claimed by the West since the 18th century.

There still persist a gap between proclaimed ideal and realities. Indeed, in all these Western countries those who are not white males do not enjoy quite the same freedoms as these white males. As a matter of fact, there is still an unclaimed but persistent patriarchy and racism. This does not mean that similar phenomena are not experienced by minorities and women in other countries. Quite the contrary, today around half the world population is enduring such lack of freedom.

Anyway, it is clear that the liberal paradigm as a guide to political philosophy is very far from being fully applied by those who claim it and it is therefore a fraudulent reference. However, under the Western influence, reference to the liberal paradigm was disseminated around the world, political independence was given to a host of people that have formed new States. Thus, spread a political regime worded as “liberal democracy” with universal suffrage to all, with a periodic ballot to choose their government by the people. In these countries people is considered as sovereign and supposed to enjoy civil and political rights according to the 1948 Universal Declaration mentioned above. A liberal society. Nevertheless, still today, many doubts are cast on the reality of democracy, even in Western countries.

This liberal paradigm has served not only to the political revolution but to the industrial and economic revolution and almost every human being gets a sense of pride from technical achievements that no other species has been able to do. High speed transportation on the ground, on sea, in the air up to the moon, long distance instant telecommunications, artificial intelligence, transplantation of organs…to name just a few. But in the meantime, this unlimited unleashing of science and the forces of production is finally responsible for increasing mass suffering and looming ecological catastrophe.

4. Unlimited Liberal Unleashing of Science and the Forces of Production

During thousands of years, everywhere in the world, in organized countries, oligarchies have been able to integrate – step by step – a growing proportion of their population into the processes they ruled, either by force and coercion, or by incentives and propaganda, by political or religious institutions, also by spreading misleading grand narratives and false hopes, in order to gain their trust and to fully exploit them.

European people were under the same holistic rule. Everything was under control, especially what was considered as knowledge or truth that had to be approved by the Oligarchies. Galileo in 1633 was forced by the Church to recant his claims that the Earth moves around the Sun. From now on, this type of constraint will disappear, and the forces of scientific thought and its technical applications will be freed to accomplish Bacon and Descartes’ program. Francis Bacon asked for conquering nature for the sake of relieving man’s estate, and René Descartes urged to become “like masters and possessors of nature”. The Age of Reason opened to free intellectuals and scientists the possibility to explore nature without any doctrinal or social prevention.

Freedom to think and to search scientific truth without doctrinal barriers, but with the only limit of complying with Reason, with rationality, was combined with individual rights granted to give to all freedom to act. First the right to private property as advocated by John Locke (1690), duly confirmed by the further Declaration of Rights. And freedom of contract allowing independent decisions by separate individuals pursuing their own interests without any obligation of taking care of others. Adam Smith (1776) advocated that the best thing to do was “laissez faire laissez passer” popularizing the motto of the French economist Vincent de Gournay. If everyone minds himself alone, the market will do the best for all.[8]

Freedom to try to master nature and freedom to act without taking care of nothing and to enjoy private property without any constraints allowed western merchant and technical venturers to boost capacities of production and to further exploitation of the Rest of the world. The combination of these changes has resulted in extraordinary scientific progress and material achievements. What was named industrial revolution. This phenomenon was boosted by a new Oligarchy, the one that replaced the old one, that of the traditional world of closely linked individuals, subordinated to nature.

However, this industrial and economic revolution brought about a succession of crises – some fifteen in the course of the 19th century, in almost all industrial countries, until the major crisis of 1929 – that seemed to threaten the very existence of their societies. Despite its dynamism to bring long term expansion of production and population, these benefits went to the sole winners of a free competition, winners who exploited the masses. Moreover, the evolution did not show a smooth trend: to periods of euphoria when even a significant percentage of the poorer get employment and salaries, followed periods of depression, during which the masses were unemployed and returned to misery.

Despite this threat of explosion, the new international Oligarchy expected automatic recovery and took only small policy measures until the strong and radical reaction decided in 1933 by the Federal Government in the United States. That was the American New Deal, which was followed by economic Keynesianism, a model that was generalized in the industrial nations exclusively. These nations will continue to dominate the Rest of the World where countries were “underdeveloped” and at best, integrated as peripheral countries. But within rich countries there was a kind of brake on the exploitation of the masses with step by step a new acceleration in the growth of production and populations until the 1970s.

Then, after the Thatchero-Reaganian reversal (1979–82) against Keynesianism and the rallying of attempted communist dissent (1989–91), the growth pace declined, principally in old industrialized countries. They faced challenges above all from a few Asian Countries, with China among them. The Western oligarchy has tried to maintain its dominance through ever more advanced technology and by deepening globalization and financialization exacerbating cut-throat competition. They went back to more exploitation of masses through new forms of organizations and to extract more resources from the poor countries. And new emerging countries added their dynamism to this extraction and to the process of exhaustion of the habitability of Earth. Thus, everywhere social suffering is increasing, people’s confidence is waning, and they are tempted to revolt, to turn inwards, or to the dictatorships they hope will protect them.[9]

To be sure the proportion of population who are presently escaping the dominant process, either outside it or by constructing a niche and resisting to outside pressure had become very low. It is said that indigenous people are less than 300 million and almost all people duly governed by States forming the UN are under the rule of the Oligarchy. There are countless – certainly tens of millions – of local arrangements to relax, to transgress the dominant rules, especially since the Thatcher-Reaganian reversal. But these arrangements gather far less than 10 % of the world population and they have not been able to reverse the global trend, perhaps not even to slow it down, although they are a source of hope and inspiration to achieve a decisive shift.

But for the time being, the whole world, led by the world oligarchy, is hitting the ecological wall and is heading for a catastrophe. However, the frightened general opinion does not blame loudly and clearly, liberalism and capitalism, because Oligarchies and their allies use magic words hiding the responsibility of the proclaimed liberal paradigm.

5. Magic Words Hiding the Responsibility of the Proclaimed Liberal Paradigm

The fraudulent liberal paradigm has unleashed (inter alia) private forces which were until the 19th century, by and large, embedded in the social organization of countries, of people. After the short-lived New Deal-Keynesianism in the industrial countries, the general return towards an unrestricted use of the proclaimed liberal paradigm led to what has generally been called neoliberalism and financial capitalism.

These two words function as if there was no problem with liberalism and with capitalism. A host of people who disagree with the state and evolution of our world as it is imposed on us by this Oligarchy, are reluctant to denounce the liberal paradigm, to denounce capitalism, as the culprits of our disastrous situation. They prefer to use, some kind of magic words. In doing so, they suggest that the enemy to be fought is only a certain form of liberalism, a certain form of capitalism, and that these can find or recover acceptable forms. Thus, this is, at least, either a tacit acceptation of liberalism and capitalism or/and the illusory belief that they are not systems that can give birth to monsters, as communism has engendered Stalinism.

On the side of the Oligarchy, and among the beneficiaries of the system[10] the music is rather different. They are very few to say that they are in favor of neoliberalism and financial or speculative capitalism. They refer only to the liberal paradigm. This confirms the illusion of their soft opponents. Thus, with the use of magic words, there are no longer two clearly opposed camps.

More, or worse, the dominant discourse has managed to convince the masses that we live in a market economy. A system that would have been in operation at all times for the good of all. A system that Standard economic science claims – wrongly – to have demonstrated efficient, offering the optimal situation for societies and the best welfare for people. This denomination has created a kind of myth erected as a deity, the market statured as a golden calf, the “divine market,”[11] to be adored.[12]

The reference to the market economy has become the unsurpassable and optimal characteristic for the organization of any society. European Union is based on this belief as Gaël Giraud stated recently:[13] “We live together because we produce and consume in the same market” – this has become[14] the watchword on which the construction of the euro zone and most of the European treaties are based. To be sure, almost everywhere in the world, socialists and communists have embraced the market economy. In France, however, Prime Minister Jospin insisted on introducing an illusory nuance by indicating that he would say “yes to the market economy, no to the market society.”[15]

The use of these words is a magical attempt to hide the responsibility of the liberal paradigm, the responsibility of capitalism. This is a fraud. Let read its exposure by John Kenneth Galbraith: “capitalism” is no longer “the accepted designation of the economic system […and] the identification of those who exercised economic and therewith political authority […/] the renaming of the system [started after] the Great Depression.

Capitalism all too obviously did not work. So denoted it was inacceptable. There followed a search for a benign alternative name. “Free Enterprise” had a trial in the United States […] in Europe there was “Social Democracy” […finally] came “the market system” [; ….] with the controlling power of the consumer […] sovereignty [, …] the market […] was the final authority to which the producing firm, the capitalist, was amply subordinate […] No individual firm, no individual capitalist, is now thought to have power. There is nothing here from Marx or Engels. There is only the impersonal market [ideologically and politically neutral], a not wholly innocent fraud. [Because, here, as in other cases, there is total] divergence between approved belief […] and reality.”[16]

To tell the truth, our world is governed by private capitalist powers and their allies. Of course, markets exist when the economy is not planned and administered. But they are not places for the peaceful exchange of goods like village squares. They are battlefields where powerful capitalists, firms and states violently confront each other and do everything to win over the other fighters.

Thus, any attempt to escape the impending catastrophe that threatens our world and to remedy the immense and increasing suffering of all living beings on earth – and the destruction of their natural environment – can only succeed by overcoming this deadly sham. This does not mean returning to a true liberal paradigm – which has proven to be unsustainable –, but implementing radical changes in respect of a solidarity paradigm.

It is necessary in order to succeed that be identified the processes that have been the engine driving the dangerous world evolution, accelerated under the liberal paradigm. Thus, we must give some light on the role played by what was hidden by the magic words: capitalism and money acting under the patronage of the liberal paradigm.

6. Capitalism under the Liberal Paradigm

Capitalism, and Money as well, have been realities in the working of human groupings for a very long time. Long before the introduction of the liberal paradigm. Let’s start to examine the case of capitalism.

Capitalism is a word which points out a process of accumulation by an individual or an entity (a group of people or an institution). This accumulation relies on the appropriation, by all means, of a resource – what means power on this, as a thing- with the aim of its exploitation. This exploitation consists of a process that turns it into a thing which can be exchanged, sold for a higher amount than the costs –the investment – engaged; the size of the difference relies on the efficiency of the exploitation. It is the profit, or return on investment, that allows accumulation, and its total or partial reinvestment leads to further accumulation for the sole operating individual or entity. As far as this entity is not a whole community of people, it is a private process.

In the era of hunters-gatherers the life in common, the sharing of resources did not let place for capitalism. However, from the Neolithic and the birth of urban life, some institutions or some individuals have behaved according to what is capitalism. Often with a limited efficiency, since a part of their profit could have been invested, for example, in pyramids what did not contribute to the pursuit of accumulation. Nevertheless, capitalist behavior, avoiding wasting profit in consumption, has been adopted by individuals and entities, a long time before the birth of Protestantism. Although Max Weber[17] linked the birth of rational (and peaceful) capitalism with the Protestant ethic, Fernand Braudel,[18] for example, has revealed a very different history.

Braudel documents the emergence of social structures which are monitored by capitalist behaviors in Europe in the 12th century, especially in cities, and later nation-states, Venice (13th), Antwerp (16th), Amsterdam (17th) and then London (18th). This spirit organized conventions, as well as infrastructures where capitalists were monopolists and not entrepreneurs operating in competitive markets as they will be deified by Joseph Schumpeter.[19] At that time, capitalists did not use free markets, and operated with the support of governments which did not search to organize free competition. They were already a kind of oligarchy exerting their power on the economic world, sometimes influent in the political scene. However, until the liberal watershed, capitalism was under the social control exerted by religion – and up to a certain extent the argument of Weber is right:  in catholic countries to make profit was not a sign of God approbation- and by the feudal system and the sovereign. King Louis XIV of France, found that Nicolas Fouquet was becoming too rich and decided to have him imprisoned from 1661 until his death. The motto of Fouquet’s family was “Quo non ascendet?” “What heights will he not scale?”. To get this unlimited space for private accumulation it will be necessary to wait for the reign of the liberal paradigm.

Not only, free, and unlimited appropriation – by market means- was allowed and warranted, but absolute freedom for any individuals, allowed them to behave without social or personal constraints. The age of liberty severed the traditional links between people and almost no behavior could be repressed in the name of vanishing religious values, and led to the end of old feudal traditional relationships. Let’s quote Marx and Engels who comment the spirit of what they call “the bourgeoisie” which took on the aristocracy as the dominant class: “no other nexus between man and man than naked self-interest no more place for sentiment, just “the icy water of egotistical calculation” and that single, unconscionable freedom – Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.”[20]

This description by Marx and Engels expressed what Polanyi[21] later worded “disembedding the market” (p. XXV) from the society, and Polanyi explained “labour and land are no other than the human beings themselves of which every society consists and the natural surroundings in which it exists. To include them in the market mechanism means to subordinate the substance of society itself to the laws of the market” (p. 75). As a matter of fact that was not the law of the market who dominated concretely, but the powers of capitalists who became authorized to hire people freely, that is to say to exploit the labour force as any other resource, efficiently, to make a profit maximum, as Marx showed the mechanisms in his books.

What is driving the behavior is the will to be rich and powerful what supposes accumulation. As Marx put it in his masterpiece Das Kapital, published in 1867: “Accumulate, accumulate! That is Moses and the prophets! “Industry furnishes the material which saving accumulates.” Therefore, save, save, i.e., reconvert the greatest possible portion of surplus-value, or surplus-product into capital! Accumulation for accumulation’s sake, production for production’s sake.”[22]

When liberal paradigm unleashed capitalism which could flourished thanks to the commodification of land and labour, markets, that is potential buyers of products were still “small” and capitalists acted to extend markets, within their countries et step by step throughout the world. Anyway, it will take time to include in their mode of production and consumption so many people as it is the case today.

Not only capitalists have spread their powers everywhere, but in the meantime, through accumulation and cut-throat competition against one another, they have pushed concentration and the outcome we face today is extraordinary. In all sectors of industry, a handful of giant companies organized the production with global chains decomposing the process of production across territories and deciding what to produce, as they are able to act on consumers to dictate to them what to buy. They lead the high technology sector, with the so called GAFAM, or the agroindustry sector for our need of food, the transportation – cars, airplanes, rockets to name a few.

Capitalism is rational utilitarianism. It is supposed to contribute to the global growth and the ones who are lagging behind may wait for the benefits that they will get from the growth and wealth of the leaders, through the trickle-down mechanism.

Capitalist minded people do not act because there is a good reason to do so, e.g. to help someone, to take care of nature, to enjoy life, to satisfy real needs…Even if sometimes they used manipulation to make believe people that they act because, it is trap to hide that their sole target is to make more profit, with more efficiency. Capitalism spirit is antagonistic to common spirit and to solidarity spirit.

And money has become the best ally of capitalism.

7. Money under the Liberal Paradigm

As it is the liberal paradigm which unleashed capitalism, to get rid of the invasion of the spirit of capitalism, we need to shift to another paradigm, for example to the solidarity paradigm. And in doing this, we should reconsider what is money for us.

Karl Polanyi proclaimed that “labor, land and money are obviously not commodities” (p. 75) Thus they should not be traded but treated as commons. Let’s take the case of money.

The fraudulent history of money is that it would have appeared to foster the development of markets, when a kind of commodity (finally silver or gold) was used as “universal” intermediary to settle exchanges instead of using a system of barter. This would have been a condition to make markets flourishing.

It is now attested that in fact money has existed a very long time ago, perhaps among groups of hunters-gatherers, 60,000 years ago. This is the thesis of paleoanthropologists that are followed by Jean Michel Servet. Money was not used principally for exchanges, but as one common good, to nurture interdependency in social occasions, as marriages, funerals, hunting success and other events with or without concrete sharing to organize. Thus, the conception of money was that of a link, a bond, an obligation that united a community where anyone trust each other. For Jean Michel Servet such a money is a link.

On the contrary, when money is used to settle a transaction, it is said that it cuts the link between partners, it cuts the obligation to pay, it cuts the debt, and both get their freedom back. But where does the money come from? How is it produced?

After the end of money as a quantity of gold (or any other thing) it has appeared to educated people that money is created when a bank says to a debtor, I gave you a credit of 1000, and that the debtor may use this amount to pay purchases up to this amount. But this relies on a very important condition. Anyone in the “community of payments” must accept this money against concrete goods or services. This supposed a strong link of trust between all members of this community. Where is the independent individual freedom regarding this strong link? You may also remember, for example that on the paper-money of the king dollar, there is a written inscription “in God we trust.” Where is the independence vis-à-vis religious values?

Anyway, in the today world, Money is a debt, mainly created by private banks. As a matter of fact, this is not news. David Graeber[23] drawing upon the work of Michael Hudson, has written the story of the first 5000 years of debt. Firstly, they were temples that created money in Assyrian times. But what is still the same is that, according to Michael Hudson, the economic history was that of a fight between creditor and debtor, and above all, an history of powers exerted by creditors on debtors. Trying to impose the re-payment of the debt.

As a matter of fact, a lot of debts, even or perhaps even more to-day, are not re-payable. In the past in many “civilizations” they used to organize Jubilees, a tool to periodically erase debts of the past. This has come to an end a long time ago, but today, the amount of debts has risen to a multiple of all the value of goods and services produced each year in the world. Debts, as such, are not re-payable. Never.

Jean Michel Servet stands for an organization of liquidity and credit, that is access to money, in the same way as we should organize the commons. Everyone should have access to money. Since 2008, and until today, in the USA or in EU or Japan, private banks have got huge amounts of money from their central bank (said quantitative easing) and they even pay for that, but they do not lend this money to the economic actors of the real economy. Banks lend money when they can make profit in doing so. And it is more interesting for them to act on financial markets, for example to lend to Governments or to act in fiscal paradises, to help giant companies to purchase their own assets.

However, there are thousands of experiments which organize local currency to reappropriate money as a common on a local territory by a community of people.

One ancient example is “WIR.” WIR is both an abbreviation of Wirtschaftsring – economic circle- and the word for “we” in German, meaning that there is a community, us. According to its statutes, “Its purpose is to encourage participating members to put their buying power at each other’s disposal and keep it circulating within their ranks, thereby providing members with additional sales volume.” Although WIR started in 1934, with only 16 members, they are today 62,000. Total assets are approximately 3.0 billion Swiss francs, annual sales in the range of 6.5 billion.

Clearly, the liberal paradigm, in severing social links and allowing industrial and economic revolution, has extended the field of actions of banks far beyond what was possible for the Italian bankers during the Renaissance. The extension of this field has exploded during the last four decades by re- liberalizing the financial system on which the New Deal Keynesian episode had imposed strict regulations. They have opened the door to a generalized debt economy and to a financial capitalism which works almost independently of the real economy, even if it continues to extract from it, its substance. Its folly could lead to a systemic crisis with destructive consequences far beyond what was the outcome of the 2008 crisis.

Oasis of local currencies could help to preserve life within local communities and with local arrangements of production and innovation.

8. Conclusion

As a conclusion, I would express just a short wish.

We must get rid of the spirit of capitalism and of all its implementations that have been allowed under the liberal paradigm.

On the contrary, we must disseminate the spirit of convivialism, to act always because of good reasons of life, with efficacy – this is not efficiency- to enhance our collective solidarity rather than our individual, private, profit.

To achieve that we must shift from the liberal paradigm to the solidarity paradigm.


[1] Paper presented at the XXVIII WEBINAR REDESIST, Federal University of Rio de Janeiro–23 September 2021.

[2] About PEKEA, see for example: Humbert, Marc (2005) “Political and Ethical Knowledge on Economic Activities: “PEKEA”: stone of hope?”. In: Semináro Internacional REG GEN: Alternativas Globalização (8 al 13 de Octubre de 2005, Hotel Gloria, Rio de
Janeiro, Brasil). Rio de Janeiro, Brasil : UNESCO, Organización de las Naciones Unidas para la Educación, la
Ciencia y la Cultura, 2005. Available at

[3] “Don’t throw the baby out with the bathwater” is a usual excuse to keep the baby dying in this lethal water. (This idiomatic English expression is also in use in French and in many other languages; it is a German proverb: Das Kind mit dem Bade ausschütten. Thomas Murner is said to be the earliest person to have used it in 1512, in Narrenbeschwörung (Appeal to Fools). The best way out, is to take the baby out and put it in a safe bath.

[4] Ivan Illich (1973) Tools for Conviviality, New York, Harper &Row.

[5] Convivialist International (2020) “THE SECOND CONVIVIALIST MANIFESTO: Towards a Post-Neoliberal World,” Civic Sociology, June, p. 1-24, (

[6] In France and its colonies, slavery was abolished in 1794 but restored by Napoléon in 1802.

[7] In his famous 1941 State of the Union address, Franklin D. Roosevelt proposed four fundamental freedoms that people “everywhere in the world” ought to enjoy: freedom of speech, freedom of worship, freedom from want, and freedom from fear

[8] “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love.” Book 1, Chap II p. 17. “every individual […], generally, indeed, neither intends to promote the public interest, […] he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention” Book IV, Chap II p. 421. Adam Smith (1776) An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith, edited with an Introduction, Notes, Marginal Summary and an Enlarged Index by Edwin Cannan (London: Methuen, 1904). Vol. 1. 07/11/2018. <>

[9] Yet very few groups form and gather to protest orally or more, to demonstrate in the streets, to revolt, to riot. Most are simply trying to survive, acting as if they accept their fate. Many are waiting for a saviour. The world, however, is not experiencing a significant rise in dictatorships, although many observers seem to fear it, referring to the European atmosphere of the 1930s. What seems to be able to mobilise crowds is not social suffering and the lack of political and economic democracy, but life-threatening either ecological threat or war risks. The recent largest global demonstration was the one that simultaneously brought people from almost every country on the planet, 0.1% of the world’s population, into the streets on the 20 and 27 September 2019 to demand effective measures to slow global warming. Without result and without any repetition of these demonstrations, perhaps prevented by the COVID 19 pandemic that has been raging since the beginning of 2020. In the past, it was only surpassed by several demonstrations between January and April 2003 against the war in Iraq which culminated with a world coordinated demonstration on the 11th February that gathered around 0.2 % of the world population. Mobilisation clearly requires a high degree of life-threatening feeling within the masses.

[10]By “beneficiaries” I mean two categories. Those who are actively involved in this regime in a subordinate position (less than 5% of the world’s population) and those who have not suffered too much so far and can maintain a comfortable life. They form less than 10% of the population and live mainly in the old industrial nations or in the new economies that have emerged.

[11] I borrow this wording from the title of a book by Dany-Robert Dufour (2007) Le divin marché – La révolution culturelle libérale, Paris, Denoël.

[12]Doing this, the official narrative returned to the Smithian “invisible hand” leading to harmony and prosperity.

[13] Gaël Giraud (2012) Illusion financière, Paris, Les éditions de l’Atelier, p. 231. Giraud goes on wrting that this motto could be translated as: “We live together because we sacrifice to the same anonymous deity, the faceless hypostasis that some call financial markets and whose demands are simply dictated by sun spots”. This « sun spots » theory is a joke, evoking Jevons’s argument about the fluctuation of crops, and means that the financial markets are not linked with the real economy and its fundamentals, but perhaps with the sun’s activity.

[14] Its anti-democratic character became more explicit when the draft European ‘constitution’ was rejected at several ballots in 2005, but was nevertheless taken up again in a new form, and without a vote of the citizens, in the Lisbon Treaty of 2007. The measures then taken confirmed that we had gradually moved well beyond the first extension of financial liberalisation in 1985, which had already led in a direction opened up by the 1957 Treaty of Rome.

[15] “oui à l’économie de marché, non à la société de marché” said Lionel Jospin (French socialist Premier ministre, during the Socialist Summer University, La Rochelle, Août 1998) contributing to a process aimed at the “modernization” of the French socialism.

[16] Extracts from p. ix and p.6-8 in John Kenneth Galbraith (2004) The Economics of Innocent Fraud – Truth for Our Time, New York, Houghton Mifflin Company. J.K. Galbraith (1908-2006) worded “approved belief” as “conventional wisdom” in one of his seminal works: John Kenneth Galbraith (1958) The Affluent Society, New York, Houghton Mifflin Company. In between [] I added a few words to help understanding as it could have turned difficult since I cut sentences; to be sure I kept the meaning of the message delivered by Galbraith.

[17] Max Weber (1904) “Die protestantische Ethik und der Geistdes Kapitalismus”, Archiv für Sozialwissenschaften und Sozialpolitik, Bd. XX (1904) und XXI (1905). It was translated into English by Talcott Parsons in 1930 Max Weber (1930) The Protestant Ethic and the spirit of capitalism, New York, Charles Scribners’s Sons. The translation into French came only in 1964: Max Weber (1964) L’Éthique protestante et l’esprit du capitalisme, Paris, Plon. Luc Boltanski et Eve Chiapello (1999), Le nouvel esprit du capitalisme, Paris, Gallimard.

[18] Fernand Braudel (1979) Civilization and Capitalism, 15th–18th Century, translated from French by Siân Reynolds, 3 vols, Cambridge, Belknap press.

[19] Joseph Alois Schumpeter (1942) Capitalism, Socialism and Democracy, New York, Harper & Brothers. However, Schumpeter wrote in this book that he thought that capitalism will not survive, wiped out by its excessive success, and he seemed to stand for the perspective of the advent of a kind of social democracy.

[20] Marx and Engels (1848) The Manifesto of the Communist Party. This text is the exact description of the world as it has become until now.

[21] Karl Polanyi (1944) The Great Transformation- The Political and Economic Origins of our Time, Boston, Beacon Press

[22] Karl Marx (1867) Capital, Volume One, Chapter Twenty-Four: Conversion of Surplus-Value into Capital, Section 3, Separation of surplus-value into capital and revenue. The abstinence theory

[23] David Graeber (2011) Debt : the first 5000 years, Brooklynn, Melville House.