January 31, 2008

The Future of Capitalism

Addressing Nicolas Sarkozy’s Gaullist rally recently, Tony Blair called time on the notions of left and right. In Blair’s view, politics, an art defined by division and argument, is to be replaced by a dash for the amorphous centre, represented by ‘the future or the past…strength or weakness’. That he had the gall to declare as much in France, the country that invented left and right in 1789, only compounded this original error. Nye Bevan, the great founder of the NHS currently celebrating its 60th birthday, surely had it right when he argued we know what happens to those who stand in the middle of the road. They get run down.

Yet Blair’s remarks were indicative of a profound shift in the scope of political argument. Where once socialists and social democrats heralded texts such as Lenin’s The State and Revolution, or Tony Crosland’s The Future of Socialism, which pointed towards the transcendence of capitalism, they are now drawn to those that dramatically detail the destructive power of the boundless free-market. Strikingly modern in their style and stark in their analysis, such works are also characterised by their penchant for neologism, ‘turbo-capitalism’, ‘hyper-capitalism’, ‘disaster-capitalism’, or in the case of Oliver James’s The Selfish Capitalist- Origins of Affluenza, wry pun. Far from tumbling into the early grave that Karl Marx claimed it was digging, capitalism has proven adept at officiating over the successive funerals of its ideological rivals.

The best of the bunch has been Naomi Klein’s The Shock Doctrine, the work that originated the aforementioned ‘disaster capitalism’. It centres on the phenomena of societies traumatised by disaster, both natural and man-made, being seized upon by governments and companies to further market ends unachievable under normal circumstances. Her case is most compelling in the cases of post-Katrina New Orleans (privatisation of the education system), post-tsunami Sri Lanka (business’s appropriation of the coastline), and Iraq (15 per cent flat tax and unrestricted free trade). With citizens preoccupied with day-to-day survival, the usual resistant forces are weakened for just long enough. As Klein sardonically remarks, “some people stockpile canned goods and water in preparation for major disasters; Friedmanites stockpile free-market ideas.”

Ambitious to a fault, The Shock Doctrine comes undone when it attempts to integrate post-Tiananmen China, where the market actually entered a prolonged period of hibernation, and post-Falklands Britain, where Thatcher’s appeal to a residual jingoism had little concrete effect on an economic revolution already unleashed. Amid this relentlessly melancholic landscape the final chapter ‘Shock Wears Off: The Rise of People’s Reconstruction’ can’t help but feel tacked on, and one has the sense of both people and author running to stand still. Implicitly, Klein calls for a return to the consensual Keynesianism of the Golden Age, but the route-map there is left to chance.

However, given the durability of the unhinged free market, is powerful critique twinned with improvised and sporadic resistance the best we can hope for? I don’t mean to sound unduly pessimistic; contrary to New York Times journalist Thomas Friedman’s latest, globalisation has not rendered the world flat and governments, as the relatively egalitarian Nordic states have demonstrated, retain extensive room for social-democratic manoeuvre. Persistent talk of a neoliberal ‘race to the bottom’ is designed to grant the right the same aura of inevitability that the left once traded on. Yet too often the centre-left portray any retention or even advance as only achieved in the teeth of all-consuming globalisation. A European social democratic revival could at least begin by acknowledging that globalisation imposes few genuine constraints, thus ending the irrational paranoia that leaves citizens bewildered and the prejudices of the right confirmed. Italy, where the crooked narcissist Silvio Berlusconi now seems likely to return to government, is a desperate example of this failure.

But what of the wider international level that Klein focuses on? With economists now more likely to differ on the severity than the probability of global economic decline, capitalism, warts and all, will be under the spotlight once more. With its inherent tendency to monopoly, to maldistribute wealth and to market failure all in tact, capitalism may have jettisoned its competitors but it has not, and cannot, cast aside these rogue characteristics.

These persistent faults at least provide openings but harnessing them proves a more weighty task. Some hail the so-called ‘pink tide’ of leftish Latin American governments as the bright spot in this regard. Governments in Bolivia, Venezuela and Ecuador have ensured that the poor majority can no longer be sidelined as passive spectators and have brought about a long overdue reckoning with bloated elites. But restricted by regional circumstance and over-dependent on charismatic individuals and resource populism, they fail to offer a globally transferable model.

Others alight upon China’s Market Leninism as a vital counterbalance to US hegemony. As Pinochet’s Chile demonstrated, democracy is neither a necessary precondition for, nor an inevitable consequence of, capitalist development but the defects that China is visibly tainted by are such that a political implosion cannot be ruled out. The informational difficulties and lack of accountability that flow from the absence of a free media and an independent judiciary are inherently defective and
can prove decisive.

It was vital, therefore, that after his shamefully sycophantic visit to the Chinese government, Gordon Brown renewed the UK pledge to campaign for a security council seat for India, the world’s largest liberal democracy and one equipped with an admirably secular system. In the form of the governing Congress party there remains a serviceable, if diminished, centre-left tradition and the outlines of a more sustainable and equitable rise.

In some ways it is symptomatic of the narrowing of economic horizons that the major capitalist power should find itself at war with a jihadist foe that, excepting opportunistic propaganda, has absolutely nothing to say on economics. First hubris and then fear have marked the left’s relationship with capitalism over the last fifty years, a cool dose of scepticism and an affirmation of human agency are the necessary preliminaries to engagement in this tattered arena.

Published in the Warwick Boar, 29/01/08

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