Monday 17th August 2009

It is becoming increasingly common in mainstream political and economic discourse to encounter the phrase "late capitalism". Whereas some years ago we were more likely to be offered "the end of history" (Fukuyama), several factors have combined to undermine confidence in that vision of an everlasting continuum of capital accumulation. Chief amongst these factors are:

  • the visible limits of expansion within our physical environment, and the prospect of catastrophic climate change
  • the bursting of the latest speculative bubble and the evident dominance of the productive economy by (inherently unstable) finance that has been exposed as a result

Like the iceberg appearing through the mist at the bows of the Titanic, these factors engender dramatic reversals of expectations, even amongst the captains and their lieutenants:

Suddenly, we're facing a collapse in activity on a truly Marxist scale. It's difficult to imagine the world's love affair with free markets being sustained under this onslaught. The extreme nature of this downswing will change our lives for decades to come.
Stephen King, HSBC Chief Economist, The Independent, London, 2nd March 2009.

If we are now forced to contemplate the possibility of an endgame, what might come next? Bellamy Foster writes in The Great Financial Crisis (Monthly Review Press, 2009):

The only things that could conceivably be done within the system to stabilize the economy, Sweezy stated at Harvard in 1994, would be greatly to expand civilian state spending in ways that genuinely benefited the population; and to carry out a truly radical redistribution of income and wealth of the kind “that Joseph Kennedy, the founder of the Kennedy dynasty” referred to “in the middle of the Great Depression, when things looked bleakest”—indicating “that he would gladly give up half his fortune if he could be sure the other half would be safe.” Neither of these radical proposals of course is on the agenda at present, and the nature of capitalism is such that if a crisis ever led to their adoption, every attempt would be made by the vested interests to repeal such measures the moment the crisis had passed. [p. 108]

Whatever position you take on the twin crises refered to above (environment; finance) there is a strong case that the democratic regulation of our economic lives is lacking and must be bolstered in one way or another. Decisions are made in boardrooms and stock markets that no one in their right mind would vote for, given free and equal access to information. As Joel Bakan showed in The Corporation (Robinson Publishing, 2005) our strongest civil organisations are mandated by law to act selfishly in pursuit of shareholder value, and to externalise all costs of environmental or social destabilisation as irrelevant to that pursuit. In this way seeming madness is in fact only a cumulative effect of rational decisions made in a structure from which democratic considerations (the greatest good for the greatest number) are explicitly excluded.


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