Decidimos publicar esta entrevista com as respostas em inglês para traduzir com a maior fidelidade possível as respostas do Professor Stuart Holland. Iremos em breve lançar uma edição em português para que todos a possam ler.
1. Porque falhou o setor público empresarial?
To some degree in the UK and the US because of the unfounded claim of Friedman that private enterprise always was more efficient than public, and his false crowding-out case. As well as predation on public sector assets through privatisation to enlarge the sphere of profit in an economy such as the UK since the 1980s onset of de-industrialisation, echoed since in the US.
But public intervention – and innovation – in the US has been highly successful. Mazzucato (The Entrepreneurial State: debunking public vs. private sector myths (Anthem 2013 plus several web references) has shown that from the later 1950s there also was a shift in US military spending away from giant projects directly concerning defence to the sponsorship of civilian high tech start- ups by small innovating firms. For example, a result of the shock to the American establishment from the launch of Sputnik in 1957 was the creation of the Defense Advanced Research Projects Agency – DARPA – in 1958.
Before the formation of DARPA the military was the sole controller of all military spending and had kept it ‘in house’. Through DARPA much of this was publicly contracted to private research on ideas that might not produce results for ten or twenty years and in the civil as well as defence sectors. This included semiconductors, human computer interface, touchscreen technology vital for Apple, and the early stages of the internet, Google-s algorithm, biotechnology and, later, nanotechnology. An outcome was that between 1971 and 2006, 77 out of the most important 88 innovations rated by R&D Magazine’s annual awards had been fully dependent on federal support, and not only, if especially, in their early phases
Also, in France public entrepreneurship has flourished rather than failed. EDF – Electricité de France – has fulfilled the French planners postwar aim of 80% self-sufficiency in energy through nuclear power, has done so without a Three Mile Island meltdown and has taken over what remains of the less well managed UK nuclear industry. TGV is in its third generation when privatised rail in Britain is among the most expensive and slowest in Europe. The EU Ariane satellite launcher is the outcome of France’s Diament ICBM. Airbus would not have happened without France having developed its aircraft jet aircraft capacity both for defence and also with the publicly owned and managed Concorde at Toulouse, and has overtaken Boeing.
In Italy there no longer are any major private corporations. Olivetti (formerly in computers) has failed. FIAT has become part of Chrysler, now is based in Detroit, and produces mainly in Brazil, with employment in Italy down from 100.000 to 5.000. Edison Italy is a shadow of its former self with only 5.000 employees and has been taken over by France’s EDF. Whereas the IRI subsidiary Finmeccanica, recently rebranded Leonardo, has grown from 30.000 to over 45.000 employees plus several thousand more in the UK by taking over Westland helicopters which was failing under private ownership. The state owned and managed national hydro corporation ENI still is a force not only in Italy but in joint ventures in developing countries.
China, if allowing also major inequalities in wealth, has managed to lift some 600 million people out of poverty and with central roles for the State. It is state enterprise independently and through joint ventures with foreign firms, that has enabled it to achieve world class advanced technology while its state banks now are the three biggest in the world. In also then ended joint ventures with foreign companies such as IBM, Siemens, Boeing and Airbus since gaining relevant technology transfer in sectors such as computers, civilian aircraft and high speed rail and is going it alone. While in State promoted and managed satellite technology, again, it is world class.
2. A função redistributiva é possível em cenário de globalização e respetiva mobilidade de capitais?
Yes, if there were a Tobin Tax, and more effective corporate taxation. One of the scandals in the US is that most of the corporations which owe the success of their innovations to DARPA, such as Google and Apple, pay next to no tax even if there now are moves in the EU for them to do so.
But there is a parallel need is to conceptualise redistribution not only in fiscal terms but also by creating value through social and public investments and doing so on a redistributive basis. Combined with raising minimum wages, this was the basis of the Roosevelt New Deal and the derivations from this in the case for Eurobond finance of a Green New Deal for Europe which now has gained endorsement from the European Commission and 24 EU member states, including Portugal thanks to strong support from Antonio Costa, on the initiative of Commission President Ursula von der Leyen.
The preconditions for this were by Antonio Guterres in 1998, following my proposal to Delors in 1993 (The European Imperative, Spokesman) to get the European Investment Bank to widen its operational criteria to include investment in health, education, urban regeneration, green technology and other environmental protection with an explicit cohesion and convergence remit. Thereafter the feasibility of this was set out in several versions of A Modest Proposal for Resolving the Eurozone Crisis with Yanis Varoufakis and James Galbraith, to which there are multiple web references
Crucially, while the EIB normally funds only half of an investment, this does not count on Portuguese national debt and can be at an interest rate of only a fraction of one per cent (0.2) for up to 30 years. With indirect implications for gains in fiscal policy. Investment in health, education and urban regeneration are major items in any government’s borrowing and expenditure. We live in urban societies and urban regeneration alone can include any new – or replacement – investment in an urban area.
Which means that EIB and Eurobond funding can release a major share of current taxation either from directly financing investment or borrowing for investment at higher interest rates from the private sector to finance social expenditure. Such as raising unemployment benefits and gaining more labour intensive employment in health and education – more health workers and shorter waiting lists , more teachers and smaller class sizes – which actually had been a recommendation of the Essen European Council of 1994 – with the right to work-life balance – as a means of reinforcing a European Social Model
3. Que papel para as empresas públicas ou fortemente participadas pelo Estado? O socialismo de mercado de Oskar Lange pode ainda dar contributos?
Lange was brilliant and he used both marginal cost pricing and equilibrium economics as the basis for planning a socialist economy. Walras also had done so much earlier, from the 1860s, rather than the general assumption that he was advocating them for market economies – though also arguing that banks should be publicly or mutually owned since otherwise they would speculate with deposits and risk destroying them, and that public utilities, services and transport in a market economy should be run on a non-profit basis.
It is Walras in this sense, rather than Lange, who is relevant to the case for a mixed and socially just economy now. See Walras, L. (1865). Les associations populaires de consommation, de production et de crédit. Paris: Economica, 1990, which you should be able to access on the web. And further the paper by Andrew Black and myself Cherchez la Firme: Redressing the Missing – Meso – Middle in Mainstream Economics. Economic Thought, 2018, vol. 7, issue 2, 15 – 53 http://et.worldeconomicsassociation.org/papers/cherchez-la-firme-redressing-the-m
4. Qual o papel para novas formas de planeamento inter-empresarial, como o consubstanciado no projeto Porter e em utensílios como a prospetiva? Este planeamento deve conformar o investimento público em infra-estruturas?
The Michael Porter project for industrial districts has not succeeded in Portugal and failed entirely in the Third Italy of Tuscan from which Becattini and Piore and Sabel drew the case of a ‘new industrial divide’. Nearly all the small textile and leather firms in the once iconic town of Prato are owned and run by Chinese firms. The problem has been that Italian entrepreneurs were brilliant at process innovation – thereby reducing jobs – but hopeless at product innovation. The answer is for such SMEs to gain some of the features of larger multinational companies by European and other joint ventures without first needing to achieve economies of scale.
Como conciliar com as lógicas de curto prazo dos ciclos políticos?
Not all politicians have only short term perspectives. Roosevelt did not. Sanders has not. Attlee did not. Delors did not, nor did Guterres either in the European Council or when chairing the Socialist International. Macron does not, as in supporting Eurobonds for a European New Deal even if his labour market reforms are misguided.
5. Ultrapassada, desde Bernstein, a “teoria do valor” marxista, qual é a do socialismo democrático? Isto é, como determinar o rendimento justo para cada atividade económica?
Marx was right on the alienation of surplus value but wrong in seeking in the ‘transformation problem’ to translate labour values into prices. Firms with market power and brand attachment can make prices and profits rather than need to sell at the cost of their labour inputs.
I.e. an iPAD sells for €320 in Portugal when its production cost in China, plus distribution costs, is less than €30 and when the development costs including touch screen displays and up to a dozen components have been federally funded in the US (Mazzucato)
Obviamente tal questão impacta profundamente no modelo de contribuições e impostos e levanta todas as questões levantadas, pelo menos, desde Mirrlees.
Mirrleess and others presume a transactional basis for human behaviour, i.e. working for money, which is real for those on lower incomes – they need it – but less so for those on higher incomes. Above a basic Maslow survival hierarchy of needs people can work for self-fulfilment and/or for vocational values, e.g. teachers, health workers, researchers. Schumpeter stressed that innovative entrepreneurs rarely are driven by money but to realise their ideas, even if some then make fortunes.
A useful gain in terms of equity would be to tax bonuses both at higher rates and related to performance in banks and hedge funds, and which in functional terms could reduce speculation. Another would be a Tobin tax on financial transactions, which also could reduce it. But another main gain would be to achieve effective corporation tax. Also that the EU should use its competition powers – i.e. not allowing abuse of a dominant market position – to insist that global corporations selling in the internal market pay corporation tax there.
The argument is simple and could be well grasped by members of the public, i.e. if no taxation – no sales. It should be advocated by PES members of the European Parliament and gain support from Greens and Die Linke. As well as by individuals on radio, TV or social media.
6. Qual o modelo de gestão empresarial a valorizar de futuro – empresas cooperativas? empresa democráticas? empresas de capital participado pelos trabalhadores? empresas públicas, empresas em bolsa com a participação popular (idêntico ao modelo J. Roemer), etc.?
Cooperatives in agriculture, as already in production in Portugal, but also going right through to cooperatively owned and controlled distribution outlets, as in France and, to a lesser degree, in Italy. Mutual societies in the social domain such as care for the elderly, as with Montepio, and in some finance. Capital sharing in some enterprise although in SMEs owner-entrepreneurs will not want to lose control. Otherwise, for major enterprise and banks public ownership or controlling shareholdings which (Holland The State as Entrepreneur 1972) often can be minority.
The Bardhan and Roemer model maintains that the profits from enterprises should be distributed equally among the public Maybe, but this needs to avoid the risk of Friedman’s voucher capitalism which in the former USSR meant that people short on cash sold their vouchers to oligarchs.
7. É possível desenvolvimento económico, sustentado, sem novas fontes promotoras da ética, dado o esvaimento progressivo das fontes religiosas e ideológicas e as dificuldades de controlo de novas formas de egoísmo, desresponsabilização, imediatismo e de crime, algum bastante sofisticado?
Egoism – and Hobbesian self-interest as human motivation has been exaggerated. Both Hume and Adam Smith directly contested Hobbes’ claim that people were motivated only by self-interest. Yet they also observed that it was not only due to the rule of law, or fear of it, that British society, trade and industry was flourishing by the mid-18th century in a manner that was unprecedented. Markets were working well because it paid not only to compete, but to cooperate on the basis of trust. As in an auction, where a gesture implied a contract.
Trusting professionals also was the basis of success in national health systems and education until the 1980s when market ideologies and performance criteria were demanded of health workers and educators. Which now has been lost through Foucauldian levels of surveillance and performance which in the British NHS has trebled administrative costs and in both the English NHS and the Portuguese SNS led to high levels of alienation, burnout, early retirement and industrial action.
8. As novas formas de energia ecológica serão necessárias ou o crescimento está absolutamente necessitado de novas formas (como a fusão nuclear a altas temperaturas, ainda experimental)?
We cannot wait for nuclear fusion but can act both with solar power, windmills, etc. But also with LEZ low emission zones in cities and towns. In the spring of 1998, on my initiative, the Deputy Prime Minister of the incoming Labour Government, John Prescott, launched an Alternative Traffic in Towns – Alter – project which managed within months to gain commitment from over 120 European cities including London, Paris, Berlin, Rome, Lisbon and Athens to introduce low emission zones. On the rationale that if they did so this would give a message to the major – meso – vehicle producers that there would be a macro demand shift to ‘green’.
Initially the project stalled. In part because the EU Commission, in a classic case of inertial institutional logic, claimed that it could not fund more than three cities in an environmental safeguard project. While the EIB had not yet got its act together to bond finance environmental protection on its new 1998 remit. But by now there are more than 200 active or planned low emission zones in Europe, even if their impact varies depending on the design and size of the zone and as well as its enforcement
Face à alteração climática devemos defender crescimento zero ou que tipo de objetivos reformulados para o crescimento mundial?
Go for zero GDP growth but with greater employment in the social domains of education, health and social services. The Green New Deal agenda of von der Leyen and others addresses this. But also tackle the 100 global corporations that account for over 70% of total carbon emissions.
9. A robotização e automatação do trabalho, bem como a desconfiguração da pirâmide etária, permitem um mundo em que os meios de produção são basicamente privados, constituindo uma pequena elite, com todo o poder, juntamente com os trabalhadores altamente especializados? Como obstar a este cenário de concentração extrema de poder?”
The risks for employment from AI in a capitalist system are massive. Yet while AI can replicate neural networks such as in the brain, the brain is the matter of the human mind, and not the mind itself.
Computers can programme but do not have values such as kinship, empathy or care for others which are distinctively human characteristics. Nor for other meanings that range beyond what can be explicit. Which relates to their inability to understand rather than only cite some of the most important dimensions of human experience. Such as is typical of philosophy, of the feasibility and evolution of drama, music, and poetry, imaginative narrative, lateral thinking or conceptualising alternative societies.
The answer to the impending unemployment from AI is human and social – a society in which people work for less time as a social right. Intellectuals, artists, politicians may be ‘working’ independently for 60 or even 90 hours a week. But dependent employees should not be obliged to work for more than 24 or 32, for three or four days. They did so in the British 3- day week of the early 70s, when output only fell by 3 per cent.
Which should be combined with more labour intensive employment in the social domains, i.e. more teachers and smaller classes at all levels of education, more health professionals and shorter waiting time for diagnosis and treatment, more social workers and thus more personalised care for those of the elderly who otherwise may lack family support. More labour intensive employment actually was recommended by the Essen European Council of 1994 following my recommendation of this to Delors, in the last European Council he attended as President of the European Commission, but needs higher public profile and following through https://www.europarl.europa.eu/summits/ess1_en.htm
Computers can be used to model alternative democratic societies, as I and others did with econometric models in designing an agenda for full employment for Delors in 1993. But cannot realise them, which depends on democracy as a process at multiple levels. Which was integral to Rousseau’s social contract. As he said, the English thought themselves free because they could vote one every seven years (then the parliamentary term) for the better of two bad alternatives but in between elections remain as unfree as before, not last since only a miniscule elite minority had the right to vote. Whereas his ideal Social Contract was for very small local societies with the right both to assent and dissent.
While relying on computers and AI, as in the run up to the financial crisis of 2008 can be catastrophic. Theorists of alleged ‘rational expectations’ programmed them to sell if stock market prices fell below certain parameters, in order to ‘remove human error’. Which they duly did with an ensuing and ongoing crisis from which neither the States nor Europe as yet have fully recovered.
For those who may be interested I have developed much of the above in Beyond Austerity: Democratic Alternatives for Europe. Nottingham: Spokesman Press. And in Contra la Hegemonia de la Austeridade – Alternativas para l’Europa. Barcelona Arpa Editores. Both published in 2016.
Economista Britânico e Ex-Membro do Parlamento Britãnico
Assessorou figuras como De Gaulle, Jacques Delors ou António Guterres
Autor de vários livros, entre eles “The Socialist Challenge”, “Modest Proposal” e “Uncommon Markets”