Capitalism at its Historical Limits

From The Chronicle Review:

Apart from the patently nonreality-based dissent of its Republican members, the Financial Crisis Inquiry Commission could hardly have expected the report it issued in January to arouse much excitement. After a year and a half of research and the testimony of academics and other economic experts, it came up with no more than the already conventional wisdom that the economic downturn that burst into public view in 2007 might have been avoided, having been caused by a combination of lax governmental regulation and excessive risk-taking by lenders and borrowers, particularly in the housing market. The same conventional wisdom assures us that swift government action prevented the Great Recession from turning into a full-blown depression, and that the downturn has given way to recovery, albeit a “fragile” one. No matter how often it is repeated, however, this wisdom remains unconvincing.

Why is the recovery so fragile? Why is unemployment stubbornly high? Why are the banks, newly stocked with cash by that swift government action, so uninterested in advancing it for business expansion? Why is the series of sovereign debt crises in Europe echoed in the United States by collapsing state budgets? Why do politicians call relentlessly for austerity even while the economy remains unable to satisfy the need of millions for housing, health care, education, and even food? The bankruptcy of the putative science of economics already demonstrated by the failure of experts to predict the catastrophe is underlined by their apparent inability either to explain what is happening at present or to reach consensus on measures to be taken in response.

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While at present they are still awaiting the promised return of prosperity, at some point the newly homeless millions, like many of their predecessors in the 1930s, may well look at newly foreclosed, empty houses, unsaleable consumer goods, and stockpiled government foodstuffs and see the materials they need to sustain life. The simple taking and using of housing, food, and other goods, however, by breaking the rules of an economic system based on the exchange of goods for money, in itself implies a radically new mode of social existence.

The social relation between employers and wage earners, one that joins mutual dependence to inherent conflict, has become basic to all the world’s nations. It will decisively shape the ways the future is experienced and responded to. No doubt, as in the past, workers will demand that industry or governments provide them with jobs, but if the former could profitably employ more people, they would already be doing so, while the latter are even now coming up against the limits of sovereign debt. As unemployment continues to expand, perhaps it will occur to workers with and without jobs that factories, offices, farms, schools, and other workplaces will still exist, even if they cannot be run profitably, and can be set into motion to produce goods and services that people need. Even if there are not enough jobs—paid employment, working for business or the state—there is plenty of work to be done if people organize production and distribution for themselves, outside the constraints of the business economy. This would mean, of course, constructing a new form of society.

Capitalism has been around for so many generations now, proving its vitality by displacing or absorbing all other social systems around the globe, that it seems a part of nature, irreplaceable. But its historical limits are visible in its inability to meet the ecological challenges it has produced; to generate enough growth to profitably employ the billions of people accumulating in slums in Africa, South America, and Asia, along with growing numbers in Europe, Japan, and the United States; and to escape the dilemma of dependence on a degree of state participation in economic life that drains money from the private enterprise system. Just as the Great Recession has demonstrated the limits of the means set in place during the last 40 years to contain capitalism’s tendency to periodic disaster, it suggests the need finally to take seriously the idea, as the saying goes, that another world is possible.

“Capitalism’s Dismal Future”, Paul Mattick, The Chronicle Review