This is the ninth diary of a series on excuses for "why we can't have socialism." The argument that goes that socialism is impossible because capitalism will last indefinitely, and prevent any and all alternative societies from arising. Societies that have held on to the old socialism, well, mostly Cuba, are completely ineffective at socialism, and survive only by virtue of a black market capitalism. See, e.g. Patrick Symmes' Thirty Days as a Cuban.
The idea with this excuse is that there is no real force in the world today opposing the capitalist system — maybe there are a few protesters here or there but nothing is really going on to "take out" the capitalist system, and since it's defended by the US military, the global corporate elite's all-powerful proxy force (responsible for 46% of global military spending), we can expect capitalism to last indefinitely.
Within this ideological spell, "progressivism" appears as a taken-for-granted notion that things are, or can be, getting better, while at the same time the predatory economics of neoliberal capitalism (and the "inverted totalitarianism" described by Sheldon Wolin) is regarded as the ultimate goal-state of Western civilization.
It seems like I've heard this excuse from the time I was first exposed to radical ideas in the 1980s. Look at how strong the capitalists are! Who is going to defeat them? Usually this narrative is voiced by disillusioned radicals who see no option anymore beyond cowering in terror at the apparatus operated by the elites while "blending in with the crowd" and maintaining an image of outward conformity. Protests will be ignored, votes can be "arranged," and politicians can be bought, so don't even bother to challenge the system from the outside. If you voiced radical ideas in your twentysomething youth, as I did, you were told that it's best to "work within the system" if you wanted to promote social change.
The problem, of course, with such reasoning is that capitalism's ultimate defeat is not about what we do, though we can still have an effect upon the world. The most effective critique of the capitalist system today voices the objection that it is headed, on its own momentum, toward some sort of terminal crisis. This momentum used to be called "the contradiction of infinite growth on a finite planet" — now, h/t to Jason W. Moore, it's called "peak appropriation":
Capital's problem today is not depletion in the abstract but the contracting opportunities to appropriate nature cheaply (i.e. with less and less labor). (p. 33)
Now, the capitalists (and their client governments) do indeed present a facade of invincibility. Capitalist, corporate rule (rule by governments beholden to corporate capitalists) is advertised as the pleasurable alternative to being shot by the cops — or at least this is what the protesters at the 1999 WTO conference saw. And indeed the corporations may rule indefinitely, if they can get the mass public to believe in the corporate ideology of life into the indefinite future. The problem, of course, is that capitalist business depends, for the indefinite sustainability which its propagandists loudly proclaim, upon "profit," which itself is "capital accumulation" — corporations getting richer and richer. This is not entirely a polite business, nor always a win-win situation for all involved, but is rather increasingly (in this era) a matter of their being able to manipulate the system so that they get a profit. Corporate profit today often means leaning upon government for appropriation opportunities (what David Harvey called "accumulation through dispossession" and what Paul Krugman recently called "profits without production") and the exploitation of cheap labor, as Moore points out in the abovecited article:
In contrast to the golden ages of American and British world power in the mid-20th and mid-19th centuries, the era 1983-2008 was not built atop an industrial revolution in labor productivity. Quite the opposite! The robot factories of the future, widely anticipated in the 1970s, never materialized. The future became a world of sweatshops, surplus humanity, and shock doctrines, not automated factories. (p. 35)
As the rediscovery of cheap labor in areas of the First World which in more prosperous times saw significant gains in worker rights requires a renewal of government repression of labor, we can expect austerity planning to be the trend in ideological justification of government policy today, even though (as one recent Alternet piece suggests) it hurts now and will hurt even worse later. And this is in fact what is happening.
In fact, one can imagine that such planning has been achieving its intended goals. The US suffering its biggest pay drop on record of recent is evidence of this. As Joe Firestone pointed out in a recent piece in Naked Capitalism, practically all of the budgets coming out of Washington DC are austerity budgets, and this is likely so for an important reason:
One explanation is that everyone in the political mainstream is on board with the gradual destruction of the American middle class and the creation of a plutocracy where wealth is concentrated in the hands of a few; and that everyone also knows very well that tight budgets lead to gradual private sector financial losses falling much more heavily on the middle class and the poor, and that these, in turn, will increase the wealth gap between the rich and everyone else. In this view, the effects of these budgets are not some overlooked side effects of implementing austerity; but are a great feature of medium and long-term austerity.
I don’t know how many people fit the bill provided by this explanation, but I think that far too many of our elected officials, and, many more than we like to think, embody this explanation. The truth is that the elites are after the American people, and that in the areas that really matter we’ve become a kleptocracy, a lawless oligarchy that continuously extracts more and more financial assets from most Americans by illegal means largely with impunity because authorities will not prosecute them.
This reasoning, unlike the others Firestone offers, cuts to the heart of elite motivation — greater profit — which (by the way) we also see in Volume 1 of Karl Marx's book Capital. There, in Chapter 25, Marx argued that the persistence of a large "surplus labor army," a mass of desperately poor, unemployed people (as promoted by austerity planning), will decrease wages, thus making labor-power cheaper. Cheaper labor-power means that businesses have to budget less for wages. Profit!
This is, as the Marx examples shows, neither a new trend nor a new elite motivation. The elite desire to force down wages may have been occluded, for a few years in the 20th century, by what in the academic business is called "Fordism" — pay them more (as Henry Ford did) but control their behaviors through what Frederick Winslow Taylor called "scientific management" — but this was later supplemented beginning with the neoliberal age (1973-present) with an emphasis on "flexible (i.e. disposable) labor." What's new, then, is that the drive to force down wages occurs in an era of declining overall growth, with a capitalist world-system that will have maxed out its potential on Earth through resource depletion and environmental despoliation, and is soon to experience "peak appropriation." And it is this combination of trends which has the potential to weaken capitalism to the point where it will either 1) morph into some other, oppressive system, or 2) be replaced by something else.
(Certainly we can say that the environmental catastrophe of global warming has reached the attention of our nation's "security" agencies, which are preparing now for the uprisings that such phenomena are expected to bring. Of course, the silliness of all this is that the US government, as the guardian and protector of global capitalism, expects the main challenge to capitalism to be not global warming itself but rather the uprisings it will provoke.)
Now, admittedly this is a form of speculation. I am merely saying here that "if this goes on" the ultimate end, the destruction of capitalism and its replacement by a regime of something more brutal (or possibly something better, if the resistance wins) is quite possible. I could, then, be wrong. I must point out in my defense, however, that the defenders of the capitalist system, the elites, are indefinitely committed to the continuation of most of the trends I cite.
During its golden age, corporate capitalist rule was justified to the masses upon the provision of goods to "the consumer" — we can read in Ludwig von Mises' (1956) "The Anti-Capitalistic Mentality" (a propaganda piece of old) that capitalism exists for consumers. And, of course, we are still told that everyone can be a consumer — in the system's adolescence this message was the fundamental notion behind Horatio Alger novels. But in this era the positive reinforcement of capitalism is taken for granted — of course you want all of the good things money can buy, Sallie Mae no doubt assumes of its clients, because how else are you to enjoy life while paying off your student loan debts. At some point in the development of the future dystopia I'm suggesting here, the system will be largely characterized by the brute force with which demonstrators are cleared from the streets in Istanbul or disciplined in Sao Paulo or with which "security" is provided for the upcoming G-8 conference. What replaces the consumer utopia for us now is the simple slogan "I owe, I owe, so off to work I go." It's easy to imagine that at some late point the elites will create facades and name them "capitalism" without the actual conditions for what we call capitalism being there, the carrot and stick approach having been replaced by a series of ineffective appeals to debt servitude, electoral "democracy," and other ways in which the elites congratulate themselves.
Every once in awhile the system spits out some sort of propaganda around its ostensibly benevolent plans to "help the economy" — microlending, for instance, or Japan's economic experiment known as Abenomics, here debunked by Mike Whitney. My local college library now has more than half-a-dozen books praising the virtues of microlending for peasants in poor countries — which eventually I won't be able to see at all when the college libraries digitize their holdings and make them exclusively available to "students, staff, and faculty." When that happens, I suppose, we will be confronted with the reality of "peak propaganda" — that point at which the propagandists are so desperate for money that they are no longer offering their services for free, and so one must pay if one wants to be propagandized.
But really what we are talking about is the early onset of what John McMurtry called the Cancer Stage of Capitalism. It is, in short, a time in which we are seeing what McMurtry calls the "pathologization of the market model," the use of "economic principles" to destroy both economy and ecology in eventually vain hopes of propping up the profit rate against a shrinking actual growth rate.
I don't see this process, the endless tightening up of the economy for the sake of the attachment of profit guarantees to normal behavior, as sustainable, which brings up the question of ultimate ends. What happens when an economy no longer has to have consumers (or for that matter the whole productive apparatus that is supposed to be the basis for profit) for the continuation of corporate profit, and the corporations maintain their rule through theft aided by brute force while the vast majority of human beings become as useful as trash and the actual, living economy shrinks each year instead of growing? Does that reality still count as capitalism? As Wallerstein argued, we will eventually reach a point at which:
We can have a system better than capitalism or we can have a system that is worse than capitalism. The only thing we can’t have is a capitalist system.
As I've suggested above, what's new about today is not the repression of wage labor which was a mainstay of 19th-century life in the core nations and their overseas possessions. No. What's new about today are the economic and ecological conditions under which the current repression of wage labor is occurring: the capitalist system has suffered from a declining rate of growth (from decade to decade) since 1973 — this was spelled out in a piece by William K. Tabb some time ago in the Journal of World-Systems Research — as a world of resources becomes a world of environmental concerns. So the overall trend is headed in the direction of zero growth, and perhaps toward economic shrinkage, as the era of intensive global warming dawns upon us.
One of the ways in which we can say that the real-life trend shines through the propaganda of profit and growth is by taking a look at the "cheapness" of resources according to what Jason W. Moore (in another piece) calls the "Four Cheaps." The four cheaps are food, labor-power, energy, and natural resources — they're what businesses need to keep growing. The economy of food, which maintains labor-power as a good resource for businesses, is an especially succinct example of what is going on economically today. We can say with certainty that the promoters of the status quo in India are interested in showing how life is better for all under their regime of capitalist progress, yet the cost of food has increased (leading at some points to food riots throughout the world) and Indians are living on less food than they had forty years ago. The sales pitches intensify as the products increase in price and the money we have to buy them decreases.
Today's economic austerity, which is what the technocrats call "fiscal prudence" or a "balanced budget," appears under these conditions as a sort of reversion to the Victorian model of capitalism, conditions of long hours, low wages, and misery, the model which received Charles Dickens' loudest complaints in novels such as Oliver Twist, which complained of a form of child labor which has yet to make its reappearance in the First World. (Of course, when Poland decides to scrap the eight-hour day to attract foreign capital investment, maybe it's just a matter of time before we see life as depicted in "Oliver Twist" again.) The primary cultural difference between the era of Dickens and now, though, is that the zeitgeist of the era of Dickens, as miserable as it may have been, also experienced the full flowering of the "Whiggish view of history," in which life was expected to improve indefinitely with historical progress. The spirit of this era, however, is one in which (to quote something the philosopher Jurgen Habermas said back in 1984) "the utopian horizon has contracted" and the zeitgeist is predicted in advance by Nouriel Roubini.
Add to the repression of wage labor the anticipation that we will not be able to "grow our way out" of the next economic crash, as it will be caused by the collapse of a market in which balance sheets are supposedly balanced by the claimed possession of $1.2 quadrillion in derivatives. A mere Keynesian stimulus is not going to do anything about the tidal wave of debt that will be rolling through the economy when this ultra-vast "derivatives market" house of cards is finally unraveled.
The most immediate cause of possible collapse for the capitalist system of today was spelled out by Harry Shutt in a series of books: The Trouble With Capitalism (1998), The Decline Of Capitalism (2005), and Beyond The Profits System (2010) are the ones I've read. The essence of Shutt's argument is this: capitalism today suffers from a surplus of capital that is getting ever worse. As more and more capital accumulates, the capitalists continue to demand more and more profit from the system, with the end-result that they leech the life out of the system as a whole. Eventually there should come some sort of great crash, similar to what happened in the Great Depression, which will purge the system of its excess capital. Unfortunately, government in this era exists largely to prevent such a crash, to keep capital alive through subsidy and by allowing capital to "cook the books." But the longer the eventual crash is forestalled, the more capital accumulates and the more precarious the real-life situation (unlike the one cooked on the books) becomes. Eventually the crash takes out the system as a whole, or at least that's Shutt's hypothesis.
Government's commitment to the maintenance of corporate profits in the neoliberal era is not merely limited to subsidy, although there are plenty of subsidies — most notably the fossil fuel subsidies the US provides to companies whose activities are self-destructively the most obvious cause of global warming. Joe Shikspack's most recent diary contains a short discussion of a "divine right to profit" inscribed in the Trans-Pacific Partnership. Here's the fun part of the text Joe Shikspack quotes from the advocacy group Public Citizen's treatment of the TPP:
The U.S. has made one of the major planks of the TPP the expansion of the notorious “investor-state” enforcement system. It allows foreign corporations to challenge national laws and regulations outside of national courts. These pacts elevate individual corporations and investors to equal standing with agreements’ signatory governments, empowering corporations to directly enforce public treaties by suing governments in foreign tribunals for taxpayer compensation for domestic regulatory policies that investors believe diminish their “expected future profits.” These regulatory policies can be anything from environmental protection to financial regulation.
From here we can predict that the existing order will become a sort of fantasyland in which the parties all mutually agree to pretend to the eternal life of the principles of "profit," "solvency," and "economic growth," when the reality on the ground is one of the exhaustion of these same principles in ecosystems disasters. One recalls an old Native American quote to the effect that "When the last tree is cut, the last fish is caught, and the last river is polluted; when to breathe the air is sickening, you will realize, too late, that wealth is not in bank accounts and that you can’t eat money." The people at the top of the for-profit corporations really do believe that they can eat money — so the prescription they make for themselves is to eat more money at a faster rate to make up for the nutrition they're not really getting.
At some point the commonly-held faith in money will fall apart, not as a sort of economic inflation but as a common recognition that whatever money one holds will eventually be sucked up by corporations or by government and that real material wealth will be in the possession of power, the power to tell the vampires "no."
Now, I realize that none of this will establish the actual possibility of some future socialism. After all, none of the protesting publics from Tunisia to Egypt to Greece and Spain to the US to Turkey to Brazil are ready to build socialism anew, and the experiment in "21st-century socialism" in Venezuela is at this early point the popular end of what used to be called Keynesianism. Socialism is not going to be granted to the people on a silver platter — it will have to be achieved as the outcome of a class struggle which has not shown up just yet. But what I've tried to establish here is that the idea that capitalism will last indefinitely is more far-fetched than it sounds.