Sunday, January 22, 2012

Democracy and Capitalism

The title of this post is also the title of a recent On Point episode.  It begins by questioning:  "Is Democracy up to the challenges of this century? Is Capitalism? We’ll look at two great pillars, and the questions now around them."

As the episode began, I was excited to hear a mainstream news outlet actually addressing these questions.  However, as things progressed, particularly when Gideon Rose began to speak, it was clear that no one was willing to really question the taken-for-granted ideas about our political economic system.  It became the same old line about "our system is really great, or at least the best we can hope for, but we just need to make some tweaks to make it work better."  Yawn.

Gideon Rose asserted that, if we could just somehow get things to work the way the did in the Good Old Days (1950s and 60s) then more wealth would be generated and it could be spread around to level inequality and alleviate poverty in the U.S.  This line of reasoning very well demonstrates the myopia and Americentrism that pervades the thought of most economists.  Things may have been going well in the U.S. (and the other industrialized powers) in the post-WW2 period, but that does not mean that capitalism was creating and spreading wealth on a global scale!  In fact, the rest of the world (even if one excludes the communist world) was mired in poverty as a direct result of the global relationships that enabled expansion in the industrialized centers.  Income inequality was much more polarized on a global scale.  So yes, the 1950s-60s were great times... if you ignore the rest of the world.

In this vein, Rose and Kupchan both seem to think that globalization is a recent phenomenon.  It may be more visibly now in the first world, as corporations have moved their manufacturing operations to other parts of the world in order to exploit cheap labor and resources.  People in the U.S. and Western Europe are suddenly angry that "their" jobs are being sent elsewhere.  But, capitalism has always been a global system.  In the post-WW2 era and earlier, manufacturing in the U.S. and Western Europe depended on the cheap raw material inputs from other parts of the world, which were obtained under conditions of colonial/neo-colonial exploitation.  The citizens of the first world, furthermore, depended for their high standard of living on the unequal global exchange relationships that allowed them to purchase, with money representing a small fraction of their own labor hours, commodities whose actual production required a far greater number of someone else's labor hours.

Furthermore, Rose and Kupchan never seem to consider why the Great Capitalism of the post-WW2 era didn't last for more than a couple decades.  Was it just that people got bored and wanted to try something new, as if an economy were a pair of shoes?  If this form of capitalism was so great, why was it not preserved?  In truth, the conditions of the post-WW2 era could not be sustained because of the inherent contradictions of capitalism, that transformed a period of great economic expansion, through the the workings of its fundamental logic, into a period of great economic stagnation.  Specifically, the revolutions in production (assembly line technology, mechanization, transnational organization), which are responsible for the economic boom enjoyed by a fraction of the world's population, also laid the groundwork for its own demise.  Production was proceeding at a scale that far outstripped actual human needs, and profitability plummeted. Everyone became Keynesians and tried to manufacture demand to keep up with the unnecessarily ballooning supply.  Result:  increased consumerism, accelerated cycles of production (i.e. things become obsolete much more quickly so that people are constantly having to buy new stuff), private and public indebtedness, bombardment by advertisements and corporate sponsorships...  As it turned out, trying to artificially manufacture demand never solved the problem of overproduction; profitability was never restored and now everyone is saddled with massive debts.

Precisely for this reason I would say, contrary to Rose and Kupchan, that capitalism does not come in different forms.  It comes in one form (whose basis is wage labor and generalized commodity production), with varying levels of state involvement and approaches to social welfare depending on ever-fluctuating circumstances determined by capitalism's underlying and unchanging logic.  The state is an instrument of the capitalist class, and so it is used strategically to respond to changing environments and maintain the general conditions that are necessary for capitalism to function.

Rose says that, among the members of the Occupy Wall Street movement, it is the smart ones who want to return to the capitalism of the 1950s-60s.  I can only find that statement arrogant and offensive.  Wouldn't the smart ones be those who are able to think outside the bounds of dominant ideology?

No comments:

Post a Comment