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Since neither we nor our legislators plan to do anything about it, and since our adherence to progressive ideology apparently outweighs our willingness to exercise our power, it is time to state with determination where this is all going to hit bottom. The ecological dilemma of a society dependent upon not-so-cheap and not-so-clean oil provides a starting-point for my argument that the capitalist system has reached a cul-de-sac. In this respect, predominant policy initiatives anticipate a post-capitalist world in which an elite of special interests uses government as a gatekeeper for public access to limited slots in a relatively tiny consumer society.
Crossposted at Orange)
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As reported in Firedoglake last week, the progressive cave-in on "health insurance reform" anticipates a whole series of further legislative "victories" in which the corporate stranglehold upon government is tightened. The first, as Jane Hamsher admirably points out, will be "climate change legislation," or "clean coal legislation" or whatever it will be called when the majority in Congress is finished triangulating it "so as to receive 60 votes in the Senate" or whatever the excuse du jour is at legislative crunch time.
Meanwhile, as also reported in Firedoglake, the Republican Party, the object of all that triangulation (see: "bipartisanship"), has declared its new cause: a revival of the Confederacy. So what will they imagine next, as they attempt to pull away that 5% of Republican voters with a propensity to vote Democrat now and then? Forget that war of position we’ve lost — we have demographics to think about!
Sure, practically everyone on this site wants prosperity of some sort — a revival of the old populist Keynesianism — but it’s not going to happen without some widespread, popular "pushback" against the existing momentum of the system. Firstly, you have the financial elite’s reluctance to disturb a system in which it is claiming an increasing share of the total economic pie. As John Bellamy Foster points out:
The ruling class and its state — not just in the United States but also in the entire advanced capitalist world — have no answer to economic stagnation but renewed financialization. So fast is finance growing at present while the "real economy" (i.e. production) is in shambles that fears are expressed in the financial press every day of the development of a gargantuan bubble that will burst sooner rather than later.
Moreover, a return to a populist Keynesian growth economy would run into another roadblock: the price of oil. Ian Welsh adds:
It is not, and will not be possible for the US to have an actual good economy for any length of time, or even at all (as opposed to a mediocre economy) until the oil bottleneck is broken.
Of course, the established financial interests are going to claim their "due," as Saudi Arabia did before Copenhagen. It’s hard to see, moreover, how developing "alternative energy" (but leaving the capitalist system in place) is really going to change the equation. As Foster and Magdoff point out, all of the "proposals for the ecological reformation of capitalism" (look halfway down the page) are corporate scams, which will lead us back again and again to a reconsideration of the central dynamic at work in the crisis: the contradiction between a growing capitalist system and the finite resource capacities of planet Earth.
"Alternative energy" under the conditions of the current system will postpone the day of reckoning, while the intelligentsia (acting as keepers of the flame of progressive ideology) cede the field. To quote Foster and Magdoff again:
There are some people who fully understand the ecological and social problems that capitalism brings, but think that capitalism can and should be reformed. According to Benjamin Barber: “The struggle for the soul of capitalism is…a struggle between the nation’s economic body and its civic soul: a struggle to put capitalism in its proper place, where it serves our nature and needs rather than manipulating and fabricating whims and wants. Saving capitalism means bringing it into harmony with spirit—with prudence, pluralism and those ‘things of the public’…that define our civic souls. A revolution of the spirit.” William Greider has written a book titled "The Soul of Capitalism: Opening Paths to a Moral Economy." And there are books that tout the potential of “green capitalism” and the “natural capitalism” of Paul Hawken, Amory Lovins, and L. Hunter Lovins. Here, we are told that we can get rich, continue growing the economy, and increase consumption without end—and save the planet, all at the same time! How good can it get? There is a slight problem—a system that has only one goal, the maximization of profits, has no soul, can never have a soul, can never be green, and, by its very nature, it must manipulate and fabricate whims and wants.
There are a number of important “out of the box” ecological and environmental thinkers and doers. They are genuinely good and well-meaning people who are concerned with the health of the planet, and most are also concerned with issues of social justice. However, there is one box from which they cannot escape—the capitalist economic system. Even the increasing numbers of individuals who criticize the system and its “market failures” frequently end up with “solutions” aimed at a tightly controlled “humane” and non-corporate capitalism, instead of actually getting outside the box of capitalism.
It is important to look at this larger quote in context. The belief that capitalism somehow has a "soul" which has been corrupted by neoliberal hegemony over the past thirty years is probably motivated by a nostalgia for the old era of Keynesian capitalism, the ’50s and ’60s, when the capitalist system may have appeared to have gained a "soul" because of its support for government programs to alleviate poverty. Meanwhile capitalism has moved on — as I’ve said above, the attempt to resurrect Keynesian capitalism will confront elite indifference and resource limitations, while as Simon Johnson tells us:
And so, despite what the FBI has rightly called an “epidemic” of mortgage fraud, with 80% of the losses arising when industry insiders are involved in the losses, not a single senior officer of a major nonprime lender has been arrested (much less convicted) of mortgage fraud or securities fraud.
And as gjohnsit tells us:
JP Morgan and HSBC control between 85% and 100% of the futures market for gold and silver. That’s a monopoly by any definition, and it can smash down the price whenever it wants to as long as a large percentage of the traders don’t take physical delivery.
Thus at this point the capitalist system exists increasingly to facilitate Ponzi schemes, all of which will end with the domination of the perpetrators who have bought off government. Would you like to guess where it will all end up?
Whence capitalism?
The mainstream intelligentsia, as I’ve pointed out above, have not envisioned post-capitalism. Instead, they long for the good old days of the 1950s and 1960s, when capitalism appeared to have a soul. At that time, the profit motive (acting in concert with the competition for "development" between nation-states) appeared to require an economy with a "middle class" of consumers. Today neither the national nor the global economy really needs to produce enough to do more than preserve the positions of national elites, for said elites profit through Ponzi schemes and by using government as a "client." So why does capitalism today need a "soul," i.e. consumers? Answer, it doesn’t.
Instead, it appears that the capitalist system will at some point, perhaps a couple of decades from now, replace itself, leaving the eco-capitalist intelligentsia behind. What will be the form to come? Well, neither the financial elites nor their political handmaidens will need any real economic competition, so one can expect that aspect of the economy to dwindle to nothing. What they do need, however, is privilege — and so we can expect a vast expansion in the market for Ponzi schemes, fraud, legal bullying, and other means by which a privileged class can extend its privileges to all of its "buddies" at the expense of the vast majority of the population.
They won’t need "economic growth" — the lessons of the Great Recession, with Goldman Sachs profits at record highs in a year in which the global economy contracted by 2%, will not be lost upon the financial elites in the second crash. "Economic growth," moreover, would expose the oil bottleneck which Ian Welsh pointed out, as well as exacerbating abrupt climate change, the implosion of oceanic and rainforest ecosystems, and other ills of the capitalist system. No "economic growth," moreover, will allow the elites to claim that "capitalism" is congruent with "decreases in fossil-fuel emissions," which should please the eco-capitalist intelligentsia to no end.
They also don’t need education — education served the ’50s and the ’60s, the heyday of capitalism, as both a buttress to the economy and as the primary advertised means of social class advancement (besides ascending the corporate ladder) in the United States. Once upon a time, moreover, America’s vast educational systems, both in terms of public school and of college and university systems, were imagined to be the bulwark of the military-industrial complex, which continues to maintain bases around the world at great cost to the taxpayers. Today, however, in light of Federal inaction in the face of bankrupt state governments (California being the most prominent example), and in light of further Republican pushes to reduce the tax "burden" on the richest of America’s citizens, one can see for oneself the truth to which Richard D. Vogel points: "Public education is now in decline in much of the world." At some point the capitalist system will be replaced at some point by a money-based caste system, a sort of state-capitalism-in-reverse if you will, and nobody will know — the intelligentsia having been bought off, and everyone else having lost access to education systems.
What do you want to do about it?
I suppose that what you want to do about it depends upon how much of this scenario you wish to believe. Do you really think that you can just elect "more and better Democrats" to the point where they will all suddenly renounce the "Washington Consensus" and bring back the growth economy of the 1960s? You’ve already dismissed the arguments I’ve made (see above) against the likelihood of such an occurrence?
A public readership which thought as I did would look to a multifaceted approach: candidates where they can recognize the situation for what it is, educational campaigns where they would be effective, direct action where useful. The end of such activity would be a livable post-capitalism — a world-society after capitalism in which the people-as-a-whole would have some say in the direction of the economy.
But I’m not going to put words into anyone’s mouth.
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The progressives’ new anthem:
http://www.youtube.com/watch?v=ISVfDiWiTxw&feature=player_embedded
“In other words, Congress is so immobilized we have to rely on the Fed — which operates mostly in secret, whose chair is appointed every four years but whose other governors have fourteen-year terms, and which doesn’t even depend on a congressional appropriation for its own funding but draws interest on the portfolio of Treasury securities it controls.
Singapore , Brazil ,The Bolivarian Revolution.
Imagine.
We may be seeing the end of Capitalism. But capitalism isn’t ending. It can’t.
Why? Real capitalism is simply a formulation of a fundamental truth of nature, like evolution or gravity. Like evolution in particular, it is never popular with politicians, least of all those who tout the virtues of the Capitalist brand most loudly. But liking it or not changes nothing. We may live in an age of economic creationism, of Smith and Ricardo deniers. But economic realities remain the same.
Like Darwin’s theory, lower-case capitalism teaches conclusively that the forces that affect our lives are irreducibly random. No inherited wisdom, traditional authority, or established reputation for past success can give any person or class any more insight into the right way to do things than is granted to all others. There is no God-given Elect entrusted with power and judgment. We are all equal before the forces that shape nature and history and should thus have an equal say in how we respond. The more of us take part in economic competition, the more likely it is that some of us will get it right and let all of us survive. All should thus be no less equal before the human laws that govern civil society and economic relations.
This real capitalism underpins Liberalism and revolution, political as well as Industrial. Whatever else it may do or have done, it has irretrievably shattered the aristocratic, even monarchic worldview that grounds Conservatism to this day. The rich are not better, neither bred to power nor chosen by Heven. They are mostly just lucky. Rarely clever or perceptive or industrious. Never entitled or deserving.
I think that you are right to say that something is being abandoned. The ever wealthier and ever less competent and productive neo-aristocrats of our time are clearly abandoning their liberal, capitalistic pretences. Their grandfathers may have once been capitalists. But the grandchildren are degenerate, would-be princelings and autocrats who prioduce nothing and spend everything, secure in the God-given wisdom of which great wealth is the one necessary proof. Their Capitalism is a throwback to real capitalism’s opposite, so abandoning the name is easy if not inevitable.
Nonetheless, capitalism per se continues as before. It will consume the Baron Goldman and the Comtes de Sachs just as it consumed Louis the XVI and his bankster friends. We are already seeing the beginnings. Our wealthy class has burned through a legacy of 200 years of hard work and real productivity, all in less than a generation. We no longer build, invent, or discover. The vast multitude of Americans who used to do so have been monopolied, leveraged, mergered, outsourced, and off-shored into a position where they can have little or no effect on economic policy–they don’t have the capital. A few, leisured aristocrats run things now. They have all the capital and no inclination to use it. They confound luck with wisdom and risk with investment. So now, as in Louis’ day, all we produce are wagers, which is to say, nothing at all. Such a course is not economically viable. It can’t last.
Unfortunately, the process by which our neo-aristocrats mount the tumbrils and head off to whatever National Haircut awaits them is not going to be pleasant for any of us. It never is.
We’ve been to the brink before and managed to pull back. So I wouldn’t write us off just yet. We have no shortage of capable people, we just need to convince the “powers that be” to put such men center stage.
As for Capitalism&capitalism, the current wave of neoliberal Financial Capitalism is most certainly a proven fraud. As for capitalism with a small “c”, if you define it as being simply a reflection of the truths of nature, fine. But I’d reply that our perception and understanding of those “truths” are far from perfect. Smith made some valuable insights but Ricardo was a fraud, Ricardo’s big idea’s never worked in practice. Basically, nature told Ricardo to piss off.
Ah, the 50s where the pigs of society had to fork over 91% in the top income bracket. That’s the soul of the country that was gutted.
LOL! The current social order is always, in the eyes of its defenders, an eternal truth, just as the defenders of feudalism regarded the Great Chain of Being as a “formulation of a fundamental truth of nature,” and just as “evolution” was used to defend imperialism and thus, also, racial inequality. Oh but capitalism is ACTUALLY SACRED you know…
No, we’re not. We’re not “equal.” We might have “equal rights” in a just social order, but this is also a mere reflexive defense against the attempt, mostly successful, to divide us into a society of immutable social classes.
No, what’s being abandoned is the pretense that any economic competition is necessary to put them where they are. Instead, they merely point to their control of the politicians, the courts, and the cops.
Have faith, friends, for surely their time of reckoning will come! Hallelujah!
Good post; good comments. Nothing much to add.
I do not begrudge an individual that recognizes a need for a product, designs, markets, produces and sells the product for a profit. Far from it. Without those entities, well, I don’t see how anything else would work. Well, maybe the government could simply print it’s fiat currency and provide every member of society the same amount, every week.
What I do object to, are those involved in investment banking that simply game the system. Identify new methods, devices or securities that allow them to loot and plunder. I do not see them as anything other than criminals.
You know what I think?
The world is going crazy and it can’t stop itself. Financial criminals rule and they can’t stop themselves. They don’t “earn” anything, they just bubble and churn fabulous unreal money that sooner or later pops. It’s money that has no reality check, that’s not tied to anything real except real greed. Someone has a sense of humor someplace, when you look at the new dollars and coins with the inflated heads on them–they’ve been telling us all along. But there’s no way to tell a fake dollar of greed from a real dollar of work, so the more greed dollars they make, the more infected and worthless any dollar becomes. Meanwhile Plunger’s writing diaries saying that all the gold has been stolen from the vaults and even that reality check is gone. It’s all going to go kablooie.
I’ve seen this movie, it’s a moment in Yellow Submarine, and we are now in the Sea of Monsters. The dreaded vacuum monster (http://www.youtube.com/watch?v=_vqEQAo8bec at 2:32) (reminiscent of Taibbi’s Goldman Sachs giant vampire squid?) sucks up everything he sees. This monster, that monster, that bush, the Yellow Submarine, finally the whole landscape, and then he’s wandering in the blank nothingness of Nowhere, where he looks around, spies his own switching tail and sucks himself up. And that’s the end of him. But the movie goes on, singing.
I can get lost thinking where-did-it-come-from-where-does-it-go… but in the end for the moment I think it’s something that will be a relief when it happens, the end of monster money pegged to monstrous greed. It ate itself up, it failed. Ding dong! Maybe when that moment comes we will wake up from this sick nightmare and look around at reality again, the real world of declining natural resources that WE really are pegged to, and reassess, try to live in some sustainable, caring, healthy, rational way, sing. So many real people out of work, and so much real work that needs to be done, all that’s been missing has been money. The moment of Duh! The world comes to its senses, comes to life again. Someone posted about “time banks” recently, where you bank hours of work and exchange for other hours of work. What a concept, work/real exchanges where corporate fakepersons and Wall Street CEOs and their monster paper are worthless :-)
I can’t remember if it was Robin Williams or Bill Cosby or someone in my high school class who said that time was the biggest in joke of all, something we were all in on, all agreed on, how to count the divisions of a day and what time it was — I think of money like that, and its value, as an in joke among the fewer and fewer… I don’t know who the first/last financial kingpin standing will be, Blankfein, Greenspan, Paulson, Rubin, this Rothschild or that Rockefeller — but can’t you just hear his quavering lament?
(total awesome h/t to Robin Gibbs and the BeeGees :-)