What do the Important People think of the (possible) end of capitalism?
A lot of what I’m getting over the Internet these days is an attitude that, because I’m asking questions, this means that I have some sort of attitude that they don’t like. Let me suggest an alternative option, one more suitable to Internet dialogue. Maybe I just don’t know the answer, and you can educate me with your opinions?
At any rate, this is one of those. I am asking “what do the Important People,” the leaders of opinion and the academic intellectuals who are consulted by government, “think of the possible end of the capitalist system”?
Okay, so who are the Important People? A society as complex as ours needs managers — the Important People are the intellectual strength behind the managers. They are what Kees van der Pijl calls the “cadre class,” the class which does the thinking necessary to maintain existing political and economic systems. You know, the folks who decide what’s important for the other, powerful folks on Wall Street and in Washington DC who make the big decisions.
NB: I am the founder of the postcapitalism group at DailyKos.com . In founding this group, I thought that we ought to go further than mere antcapitalism, to discuss what is going to happen after the capitalist system is dead and gone. I don’t think the end of the system is as far off as many people would like to believe — I’d give the existing system about thirty years at most, for reasons that should be apparent below.
I’m starting to read some things that make me doubt that my position is as marginal as it seems. Oh, sure, they’re not discussing this on the Six O’Clock News. But you wouldn’t expect anyone who is granted any responsibility for the status quo to publicize any other position than that capitalism is going to last forever.
Here is what I am reading, though.
The Pentagon is planning for a future in which mass uprisings will be triggered by global warming-amplified events.
in 2010, the Pentagon ran war games to explore the implications of “large scale economic breakdown” in the US impacting on food supplies and other essential services, as well as how to maintain “domestic order amid civil unrest.”
Meanwhile, economists are starting to issue forecasts for global economic growth that actually match the OECD record for the past forty years, that is to say that global economic growth is slowing from a high of 4.9%/year in the 1960s to an eventual rate of zero. From the same journalist:
While mainstream economists continue to predict an ongoing ‘recovery’, other leading experts point to the end of growth as we know it for the foreseeable future.
So we’re going to have a capitalist system without economic growth? How? Will anyone even bother with borrowing money at interest anymore, given how difficult it will be to pay the interest payments (never mind paying back the principal)?
It’s easy, moreover, to explain why the mainstream economists are so desperate to predict “recovery” despite the general atmosphere of austerity promoted by the elites. Some of the debate in academic circles is about the “confidence fairy,” the idea that economic confidence as expressed in the opinions of Important People will be a booster of real life economic growth. Here’s Paul Krugman on this topic from last year:
What the expansionary austerity types are claiming is that the indirect effect of austerity on confidence will outweigh the large direct depressing effect of cutting government spending now. That’s a very tall order.
So, if you are one of the Important People, say for instance Brad DeLong, you need to believe in the Confidence Fairy, because your disbelief would be bad for the real economy. We can’t have the Important People telling everyone the economy is doomed — it would result in panic in the markets or something like that. In that regard, we should find it noteworthy that there is real-life dissension from this appeal to groupthink in the ranks of the economists. In fact, it should tell us something important about the real economy — if the economy is unable to support its own Confidence Fairy, there’s something really wrong with it.
It’s important, here, to recognize that the idea of the “Confidence Fairy” is merely an adaptation of the role of confidence in the work of John Maynard Keynes, the famous economist. The idea of economic stimulus as expressed by Keynes was that more money in the economy will stimulate economic confidence, and thus business owners will choose to spend more, thus increasing overall economic circulation. Krugman, as a Keynesian, supports the “Confidence Fairy” as such — the problem, of course, is that at some point in the game (as Krugman also points out), belief in the “Confidence Fairy” is not supported by the facts on the ground, at which point promoting the “Confidence Fairy” becomes unrealistic and thus counterproductive. Right now we appear to be at the point at which the “Confidence Fairy” has become an object of mass conformity in belief — say you believe in the Confidence Fairy, or else things will be worse.
Now someone as marginal to the Important People as Chris Hedges is able to discuss, openly in the US alternative media, the matter of whether we can change trajectory and avert collapse. The video is worth watching:
“We are emulating all the mistakes that complex societies have made over the past 5,000 years.” Hedges, here, also cites a report by the World Bank on global warming that is “pretty apocalyptic.” Hedges himself is marginal — but the World Bank are definitely “Important People.” Can anyone here find the report Hedges is citing?
Now, considering its economic importance, all of the Important People are going to maintain the whole Confidence Fairy scheme until there’s some sort of tipping point and it’s obvious to everyone that the world-society is in economic and political free-fall. I’m hoping that at some point common sense will take over, and there will be some real public discussion about what science fiction writer Kim Stanley Robinson calls “ending the multigenerational Ponzi scheme.” Robinson:
Am I saying that capitalism is going to have to change or else we will have an environmental catastrophe? Yes, I am. It should not be shocking to suggest that capitalism has to change. Capitalism evolved out of feudalism. Although the basis of power has changed from land to money and the system has become more mobile, the distribution of power and wealth has not changed that much. It’s still a hierarchical power structure, it was not designed with ecological sustainability in mind, and it won’t achieve that as it is currently constituted.
The main reason I believe capitalism is not up to the challenge is that it improperly and systemically undervalues the future.
I see this undervaluing every day in discussion over the Internet. Our society has developed an obsession with the present moment at the expense of any serious consideration of the future. We can start to deal with this problem in our own writings — by discussing the future in them. More Robinson:
Second, the promise of capitalism was always that of class mobility—the idea that a working-class family could bootstrap their children into the middle class. With the right policies, over time, the whole world could do the same. There’s a problem with this, though. For everyone on Earth to live at Western levels of consumption, we would need two or three Earths.
It’s likely, however, that the promise of class mobility will itself disappear long before the bad ecological end due the capitalist system, with the biggest pay drop on record this June, and all of the income growth since 2009 going to the richest 7% of Americans in the first two years of the “recovery.” If capitalism does not offer any promise of social mobility, why should we offer our faith and trust in its workings?
Now, having said all that, I’m just itching to read your comments. “Crises have occurred before, so there’s no reason to believe that capitalism won’t survive them blah blah blah,” I can already hear you saying.
When dealing with discussions of what the future will bring, with an eye toward looking at the world-system, is Jason W. Moore. I’ve discussed Moore’s writings in previous diaries. To summarize briefly: Moore gives a number of good reasons for us to believe that the capitalist system is quickly approaching its terminal crisis, because it’s encountering problems of “peak accumulation” — the costs of accumulating are weighing down the system with increasing burdens, and there will be no forthcoming era of cheap resources to save us from these costs. Previous crises were not terminal crises because in the eras in which they occurred there was still a frontier for capital accumulation, the motor of the capitalist system. But this isn’t true today. Even emergent resources such as solar power will not save capitalism because they just simply aren’t vehicles for profit in the same way in which drilling for oil brings profits to oil corporations. You can see this in the German economy — despite Germany’s extensive investment in solar power, its economy is still tanking with the rest.
Look, even The Economist, a 1%er rag if there ever was one, ran a piece back in 2008 called “The World Economy: Capitalism At Bay.” They were no doubt scared enough at that time to consider the possibility of a vast economic collapse. Now I’m sure that, with corporate profits at record highs, the super-rich and their paid intelligentsia are not focusing too hard on the prospects of civilization-wide collapse. But the idea of collapse can’t be too far from their minds. So what are they thinking?
I cede the floor.