Wirtschaftswunder
While the total collapse of capitalism doesn't appear to have happened quite yet, I'm holding onto the possibility of at least a couple of heads on spikes at Broadgate and am pleased that Rentokil were hit extremely hard by the stock market turmoil, so the spectre of rats overrunning trading floors is a very real one. However, those who seem able to understand the increasingly abstract and baroque world of finance capital have been rather cautious. The most informative, while at the same time humouring those of us who find the start of Capital a bit tricky, has been this piece at Left Business Observer. It all begs the question though, that if the economy isn't going to do the work for us in Second International Stylee, then what exactly is it for? Less facetiously, if quality of life plummets and the paragon of the Anglo-Saxon model continues its public nervous breakdown but unemployment stays stable... a neoliberal 'success' can be measured by the amount of chaos and barbarity it creates, it would seem, begging the question asked (and not really answered) by George Monbiot in two fine recent columns: 'given that it damages the interests of nearly everyone, how has neoliberalism come to dominate public life?'
If the disaster, as Benjamin put it, is the status quo, then the eagerness for obvious catastrophe is linked to the political posturing of 'left-wing melancholy' and Kautskian quietism. Politically, it tends more to the security guards of the sinking ship. In the UK, the 1929 crash and the 'Winter of Discontent' left us with Chamberlain and Thatcher, respectively. But the impulse to welcome it is also a hope that at least something (save the obviously impending climatic disaster) can shake the inertia. However predictions of CHAOS and ANARCHY are tediously frequent, as English as crap infrastructure and resentment, and can after a while begin to resemble the hysterical peevery of an Evening Standard headline more than the looming millennium. It's almost a shock to see an actual tube strike, rather than occasional threats and Right-Wing headlines, and its appalling, if unsurprising, that from the Mayor on down the strike has so little sympathy, with two of the striking unions capitulating before its even started and three tube lines still running. The disruption has an almost comofortingly crap effect, adding to the weird stoicism of the affluent. The ideology of 'Angrael' Neoliberalism has become a stange combination of smug contentment and sulky apocalypticism. But how sustainable is an economy which, amongst other things, makes even its most privileged strata - those who don't slave in maquiladoras and special economic zones - so clearly unhappy.
posted by owen hatherley at 3:54 pm
4 Comments:
Owen,
It's useful to remember Schumpeter's notions of capitalism as "creative destruction" -- which of course calls to mind Bakunin, and implies an interesting fusion model of capitalism as an complex system emerging from negative economic liberty of the kind that, in the social sphere, Bakunin would advocate. Schumpeter understands that the basis models for orthodox economics - perfect competition, static S/D curves, etc - are very poor models of the real world. These models present the processes of economic change as smooth, and thus help stifle the tendency toward revolution/regulation. The truth is much more painful, and it's that pain that leads to Marx's Kapital idea that the boom-bust cycle will eventually blow up the system when the final, brutal bust occurs. Marx was wrong about that, though, in part because govenment has (in the post-Keynes era) discovered the tools by which it can adjust the macroeconomy. Interestingly, the adoption of Keynes' prescriptions is a [Hegelian?] synthesis of capitalism and socialism that forms the major underpinning for the mixed economies of today's West, and keeps 'capitalism' from the collapse it might be prone to on its own.
But there's another question to be asked here. Can a system that disproportionately benefits the 'elites' (in a relative as well as an absolute sense) also provide absolute benefits to the lowest classes? And if so, is this system to be lauded? I suspect that the major error of Marx's Kapital-ist diagnosis - i.e., that the boom-bust cycle is a burning fuse leading to total economic collapse (bust as ka-boom) - is precisely that which (nearly?) saves capitalism on a moral level: the fact that growth, despite its inconstancy, forms a general long-term upward trend that benefits all social classes.
Which is not to say that capitalism as such is the only way to achieve this. Market economies 'efficiently' allocate scarce goods via a natural price system (prices as spontaneous order). But this 'efficiency' is problematic - individual economic choices construct a system that distributes goods/rewards not based on 'need' or 'merit' but solely on merit within the market, and the superstructural effects of these markets in capitalism create problems of interventionism on the part of those with money and power, which in turn bend the market away from even its own limited form of 'efficiency.'
What matters, I think, is the way in which individuals interact with the necessary production mechanisms of the market as workers, and the abolition of stratified 'life chances' (Weber) in the interest of developing the ideas that underpin Bakunin's "free human society."
Put another way, by what mechanism can we allocate resources in a way that is more truly 'efficient,' and still provides the incentives that create (a universally beneficial) growth?
Cheers for the detailed response, some very good points. But there are a couple of bones I want to pick with it:
That Marx didn't anticipate Keynes (or more precisely, that he didn't anticipate the effects of Capital) on capitalism is a commonplace, really: and the 'mixed economy' is increasingly mixed in an extremely tendentious way - Keynesianism for the military and, as we've seen in the last weeks, stockbrokers, but a botched version of laissez-faire for new public services. The 'mixed' element that is 'public' is a post-45 remnant that clings on, as Monbiot rightly points out, because to dismantle it totally would be electorally disastrous.
Also, the point is precisely that under the Neoliberal boom, in contrast to the previous liberal then Social Democratic booms, wealth has simply not 'trickled down' (and what a grotesque expression that is) - all social classes have demonstrably not benefitted. In Britain, my original example, child poverty has risen in the last decade, those at the very bottom have been utterly pauperised, and those in the middle, those who do benefit, are overworked, insecure and in astounding quantities of debt.
The question, then, is that as long as Keynesianism (when used to bail out the market) can prevent capitalism's collapse, what are the ways in which it can be destroyed without it doing the work itself? As I tend to hold to the rather dated idea that there is a mechanism that can allocate resources in a more efficient manner - socialism.
(Finally, 'growth' seems a smokescreen: the very successful Swedish mixed economy has had miniscule growth, and this has done it no harm whatsoever...)
Owen,
Trickle-down economics - which calls to mind the American saying "Don't piss on my leg and tell me it's raining" - is quite explicitly class warfare, but it is also an economic tool to control the flow of capital up and down the economic ladder. Too much or too little inequality inhibits growth; the countries of Northern Europe are at one end of the 'efficient inequality range,' with the US and China at the other. In between growth is traded off for equality by degrees. Of course 'growth' is a crude measure, and under most circumstances predominantly benefits the ruling classes, but I don't consider it a smokescreen as it is a significant engine of (non-dialectical, non-revolutionary) progress. Compund growth is both an engine of long-term broad-based progress and explains the widening gulfs between First World and Third, between Haves and Have-Nots. Again, if we consider absolute material progress rather than relative, growth does (will? should?) benefit all classes in the long term. As some American paleoconservatives are fond of pointing out, huge percentages of America's poor own dishwashers, which provides a demonstrable material benefit via the reclamation of leisure. "Socialism" may be an efficient moral scheme for the allocation of resources in the short term, but depending on its particular structural conceits may place severe limitations on growth, and hence offer a limited capacity for societal progress (on economic and noneconomic levels). [one component of this limited-progress theory: With decreased individual economic incentives for technological progress, would the dishwasher have been invented?]
Note that this view is of the very long term, and should be weighed against the demands of the present. With the limitations of growth set by high levels of equality one is faced with a tradeoff - and arguably, a different kind of class war: one between the people alive today and the generations to come (an economist might ask: what is the appropriate discount rate?). To twist an American political commonplace, one might ask "are you better off today than you were four hundred years ago?"
I think the single most important question for a "socialist" program(me) to address, beyond "how do we put it in place?", is "what mechanisms can we use to incentivize behavior that leads to progress?"
In the present layout, it seems that Blogger has added a page break inside my linguistic joke (program/programme), which has put the onus on "me" to come up with an incentive mechanism responsible for progress in a socialist system. I'm sure there's some sort of lesson to be had from that.
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