If you’re up for a little thick reading, here are a couple of articles related to what many are calling the “crisis of capitalism” that has gripped the world since the bank collapses of 2008.
The first one is an article from the September-October issue of New Left Review that got some attention when it first appeared. “The Crises of Democratic Capitalism” by political economist Wolfgang Streeck looks at the natural tendency of capitalism to run through cycles of boom and bust, taking societies through varying degrees of disruption and considers the friction between capitalism and democracy. For the “tl;dr” crowd, skip directly to the last portion, Section 7, “Political Disorder”, to get to the takeaways:
More than ever, economic power seems today to have become political power, while citizens appear to be almost entirely stripped of their democratic defences and their capacity to impress upon the political economy interests and demands that are incommensurable with those of capital owners. In fact, looking back at the democratic-capitalist crisis sequence since the 1970s, there seems a real possibility of a new, if temporary, settlement of social conflict in advanced capitalism, this time entirely in favour of the propertied classes now firmly entrenched in their politically unassailable stronghold, the international financial industry.
In short, in the process of taking itself down, capitalism has also taken down (or is in the process of taking down) democratic governments through the fiscal blackmail of bank bailouts, only to turn around and force the governments into usurious “austerity” programs to pay off the debts incurred to save them. They have had their cake and are getting to eat it, too.
Which makes this second article very distressing indeed. In an article at Project Syndicate.org entitled “Is Modern Capitalism Sustainable?”, Former IMF chief economist Kenneth Rogoff writes that it really doesn’t matter if the current form of capitalism is sustainable or not because whatever comes next is just another flavor of it and will most likely be even worse for everyone except the 1%. His article, which is a bit more of the “50,000-foot view” variety than Streeck’s (and thus a bit more readable for the average reader like myself), acknowledges that capitalism is essentially a juggernaut, but as such at any point in time it is really only a transitional beast that mutates to the conditions of the time, meaning it is next to impossible to talk about the “demise” of the system. Everything else around it, however, is fair game. Here’s a pull quote:
Perhaps the real point is that, in the broad sweep of history, all current forms of capitalism are ultimately transitional. Modern-day capitalism has had an extraordinary run since the start of the Industrial Revolution two centuries ago, lifting billions of ordinary people out of abject poverty. Marxism and heavy-handed socialism have disastrous records by comparison. But, as industrialization and technological progress spread to Asia (and now to Africa), someday the struggle for subsistence will no longer be a primary imperative, and contemporary capitalism’s numerous flaws may loom larger.
Don’t everybody cheer at once, now.
