The British publication The Spectator in 2014 sponsored a debate in the British Museum whose topic was, “Stop whining young people, you’ve never had it so good!” So that should give you a very good idea of their bias.
At least since the 19th century, whole libraries have grown up making the claim that capitalism has had its day. Most of these works have been written in a spirit of hopefulness that has come to nothing. And not just because they are so grudging about the fact that capitalism has raised more people out of poverty than any other financial system in history. Nor just because they remain deaf to the beautiful irony that capitalism remains the only financial system in history so benevolent that it makes even its most feverish critics rich.Paul Mason's Postcapitalism is proof that the left is out of ideas (Spectator)
The unspoken source of the problems — and the cause of the prolific book production — is that if capitalism is such a dreadful system, why has it kept trumping all their alternatives?
I have a friend who lets her spare room on Airbnb. Every week she checks the price of hotels in her area and offers her spare room for a few pounds less. There is nothing wrong with this, but it is not ‘sharing’: it is simply undercutting existing service providers. Entities that are successful at this will eventually float on the stock market and make their inventors rich. In the meantime, some of us will get cheaper accommodation as hotels and Airbnb compete, while some of us will remain loyal to places we just like. But all this is not a demonstration that capitalism has lost its capacity to adapt, rather that it is still adapting — as it always has done — in new and innovative ways.
To say that people have been predicting the end of capitalism for two hundred years and have always been wrong is to say that the capitalism of two hundred years ago is the same as capitalism today. That no matter how much it mutates or transmogrifies, no matter how much government intervention is required, it is still capitalism. Interesting tactic. Just define “capitalism’ as whatever the economic system happens to be at the moment,” and yes, capitalism will never go away, and all the critics are always wrong. A lot of things we take for granted as part of capitalism today were vigorously opposed less than one hundred years ago.
Of course, it also assumes that the only alternative to capitalism is Soviet-style communism, a system Marx himself never advocated (and didn’t even live to see). It also assumes capitalism is monolithic. Is Nordic Capitalism the same as Anglo-American capitalism? Is Swiss capitalism the same as Greek Austerity capitalism? Is Chinese Communism capitalism, because it seems like the most successful version in the world right now.
To some extent we are already are living in postcapitalism. A common refrain on the libertarian right is “Capitalism is a great system, we should try it sometime.” Well, we did try it, and it failed miserably. To some extent we are now replaying that experiment with the same disastrous results – economic stagnation, lowered living standards, widespread unemployment, social dysfunction, tent cities, extreme inequality, decaying infrastructure, political corruption, plutocracy, lawless financialization, out-of-touch elites, private affluence amid public squalor, etc.
Was it truly capitalism that “lifted people out of poverty?” “Leave-alone” style Capitalism produced the “The Condition of the Working Class in England” and “How the Other Half Lives.” It produced the cholera epidemics near the Broad Street Pump, the Great Stink, the Triangle Shirtwaist Fire, the Haymarket riots, the Long Depression, and garbage piling up in the streets of New York City. It produced the Luddite Revolts, Chartism, the Canut revolts, the Paris Commune and the Petroleum Revolution. As late as the 1870s, it had barely budged living standards for the vast majority of people even in the industrial nations of the North Atlantic, to say nothing of the rest of the world.
What changed between then and now? According to the right, capitalism just “naturally” raises people out of poverty as long as it is left alone. Trickle-down and all that. History shows otherwise.
No, what happened next were the Liberal Reforms, Prussian State Socialism, the Russian revolution, the Progressive Movement, the New Deal, the Beveridge Report, the Great Society, and other government “interference” in the “natural” workings of the Market. What happened were unions willing to fight and to die for things like workplace safety and an eight-hour day. If we’re being generous, we could say that the productive forces unleashed by capitalism, coupled with the power of the state to regulate and tax businesses and undertake efforts to bring about general social welfare (spurred by the fear of Communism) have raised more people out of poverty than any other system, including the leave-alone capitalism the preceded it. Let’s not forget that the greatest number of people raised out of poverty in the last twenty years have been in a *Communist* country (China). In Western countries practicing neoliberalism, poverty has actually been increasing relative to the recent past, especially in places like Latvia and Greece.
By the same token, since poverty is a relative condition, we could also say that capitalism has increased poverty more than any other system. Critics like to say that, “Communism makes everyone equal – equally poor.” We might just as well say that it makes everyone equally rich. We measure our wealth against our immediate surroundings, not by some arbitrary standard. Under the Iron Rice Bowl, most people were relatively equal. Yes, they were poorer when compared with Western overconsumption. But if poverty is a difference between rich and poor, there was less poverty before capitalist “reforms.” Happiness is judged by relative poverty, which as why as countries get richer and more unequal, after a certain level happiness and societal well-being does not increase, and even declines.
And of course the thing underlying all of it was the scientific revolution coupled with the power of fossil fuels. Capitalism did not unleash growth that had long been dormant. No, it was the extraordinary harnessing of the power of fossil fuels that enabled the growth rates that capitalism requires as its bread-and-butter, and the resulting economic system is what we take for granted today. That is, Capitalism was a product of growth, not its cause, any more than the rooster’s crowing permits the sun to rise. As we’ve seen, the growth of money is a central feature of capitalism as opposed to the economic systems prior. After all, fossil fuels raised millions out of poverty in former Communist countries as well.
And making its critics rich is a strange claim- it’s a heck of a lot easier to get rich by defending the system instead of criticizing it, just ask Bill O’Reilly or Rush Limbaugh or pretty much any mainstream economist. In fact, people like Russell Brand can criticize it only because they made a pile of money in some other way (like comedy entertainment). Most capitalist critics are not getting rich, even when they’re not facing down water cannons and police batons. Maybe the reason it seems that way is that you have to be rich to be paid any attention to, and the poor are too strapped to write books about their plight:
I realized that there was something wrong with an arrangement whereby a relatively affluent person such as I had become could afford to write about minimum wage jobs, squirrels as an urban food source or the penalties for sleeping in parks, while the people who were actually experiencing these sorts of things, or were in danger of experiencing them, could not. In the last few years, I’ve gotten to know a number of people who are at least as qualified writers as I am, especially when it comes to the subject of poverty, but who’ve been held back by their own poverty. There’s Darryl Wellington, for example, a local columnist (and poet) in Santa Fe who has, at times, had to supplement his tiny income by selling his plasma – a fallback than can have serious health consequences. Or Joe Williams, who, after losing an editorial job, was reduced to writing for $50 a piece for online political sites while mowing lawns and working in a sporting goods store for $10 an hour to pay for a room in a friend’s house. Linda Tirado was blogging about her job as a cook at Ihop when she managed to snag a contract for a powerful book entitled Hand to Mouth (for which I wrote the preface). Now she is working on a “multi-media mentoring project” to help other working-class journalists get published.In America, only the rich can afford to write about poverty (Guardian)
There are many thousands of people like these – gifted journalists who want to address serious social issues but cannot afford to do so in a media environment that thrives by refusing to pay, or anywhere near adequately pay, its “content providers.” Some were born into poverty and have stories to tell about coping with low-wage jobs, evictions or life as a foster child. Others inhabit the once-proud urban “creative class,” which now finds itself priced out of its traditional neighborhoods, like Park Slope or LA’s Echo Park, scrambling for health insurance and childcare, sleeping on other people’s couches. They want to write – or do photography or documentaries. They have a lot to say, but it’s beginning to make more sense to apply for work as a cashier or a fry-cook.
So critics of capitalism are getting rich, eh?
Then there is Greece. Mason’s reputation has deservedly grown in recent months through his interesting and animated reports from the epicentre. But his diagnosis is all wrong. He blames the Greek crisis on neoliberalism and capitalism as a whole, while seeming oddly unbothered by Greek corruption or the faulty construction of the EU and eurozone as causal factors. This is much like reporting a drink-driving accident but blaming the crash on the invention of automobiles.But what if the automobile were designed to crash? This is rich, trying to divorce what is happening in Greece from the Neoliberal project. Talk about revisionism! The Euro was expressly designed by the architects of Neoliberalism, specifically a fellow named Robert Mundell, to deprive democratically-elected governments of decision-making power. This article by Greg Palast has all the gory details:
The euro would really do its work when crises hit, [Robert] Mundell explained. Removing a government's control over currency would prevent nasty little elected officials from using Keynesian monetary and fiscal juice to pull a nation out of recession. "It puts monetary policy out of the reach of politicians," he said. "[And] without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business."Robert Mundell, evil genius of the euro (Guardian)
He cited labor laws, environmental regulations and, of course, taxes. All would be flushed away by the euro. Democracy would not be allowed to interfere with the marketplace…. The supply-side economics pioneered by Mundell became the theoretical template for Reaganomics – or as George Bush the Elder called it, "voodoo economics": the magical belief in free-market nostrums that also inspired the policies of Mrs Thatcher.
Mundell explained to me that, in fact, the euro is of a piece with Reaganomics: "Monetary discipline forces fiscal discipline on the politicians as well."
However, this comment to the article is quite intelligent:
EnosBurrows • 4 hours agoBut how much does capitalism have to “adapt” before we stop calling it capitalism? Before it is something else? I think Mason and others are making the point that capitalism is being prevented from adapting, because the next adaptations would be something too akin to socialism for some people’s taste. Neoliberalism can be seen as an express design to prevent this happening; to drive us away from postcapitalism to Neofeudalism instead (which I will deal with later).
I am reading Paul Mason's book at the moment. He is correct, I think, in pointing to rapid technological innovation and adaptation as the core of the success of "capitalism." Douglas Murray here seems to agree although with more optimistic conclusions about what it all means.
I suggest that a problem here is that at some point if enough "adaptations" have occurred one is faced with the evolution of a new entity. It might still be called "capitalism" but it is only genealogically connected to "capitalism" as understood by Adam Smith, or Karl Marx or even Ayn Rand, or as practised in the real economies around those figures. Only by extreme reification or naive terminological essentialism can continue that some stable entity called "capitalism" has existed over the past 200+ years and will continue to exist.
Mason suggests, without resorting to any claims of certainty about what will in fact occur, that the capitalism has reached the limits of adaptability. He discusses specific problems: national and international debt levels that have no connection with the real economy; already reached limits to growth in the West and rapidly approaching limits in China, India, etc; the suppression of popular democracy where populations object to corporate and central bank policies designed to preserve the current structure. He suggests that the international financial system now does not the resources to deal with another shock on the scale of 2008. And he argues that the current system will be unable to deal with future foreseeable problems such as a rapidly ageing worldwide population (including China, India, Mexico, etc), climate change, and the problems of pollution.
I don't that he is wrong in all this. His error, if it is there, will be if capitalism does indeed prove to be more adaptable than he thinks.
This article makes a good point – defenders of the current system will not tolerate any suggestion that the system we have right now is ideal and eternal. They must take whatever the status quo is and put an optimistic sheen on it. I think this is partly because as Neoliberalism presides over corruption and looting, it needs to be spun as a rip-roaring success because it funnels money to wealthy elites. Hence the boosterism that I referred to above. Ever-more extreme and draconian measures need to be taken to ensure that the system stays the way it is and does not evolve naturally into one more in accord with the changing realities we are experiencing, from digital technology to automation to aging populations to climate change, and I think that is a main insight of the idea of Postcapitalism.
The hostile response to Paul Mason's Postcapitalism raises a question: why are rightists economic optimists?
I ask because that reaction seems to me to be part of a pattern. It tends to be free market types who are most critical of Malthusian-type pessimism, and I get the impression that it is left-liberal economists who are more worried by secular stagnation whilst rightists are more sanguine about it.
There is, though, no necessary logical connection between optimism and pro-capitalism. Joseph Schumpeter was an admirer of capitalism but feared it could not last. David Ricardo advocated free markets but feared that diminishing returns would choke off growth. And there was for a long time a melancholy tendency within conservatism - expressed most eloquently (pdf) perhaps by Michael Oakeshott.The sad death of free market pessimism (Stumbling and Mumbling)
It would be perfectly coherent to be believe that freeish market capitalism is a good thing but that it is imperiled not just by bad policy but by intrinsic developments such as diminishing returns or a loss of entrepreneurship. And yet free market pessimism is a view that seems to have faded.
As Schumpeter said, “Capitalism Survive?—I have tried to show that a socialist form of society will inevitably emerge from an equally inevitable decomposition of capitalist society.”