A Crisis of American Capitalism

Published on Friday, September 19, 2008 by CommonDreams.org

by Lawrence R. Velvel

You don’t have to be a socialist (and I certainly am not) to understand that this capitalistic country is confronting a crisis of capitalism.  This is not merely a matter of the huge losses and meltdowns that have taken place and have threatened to bring down the whole system with them.  It is also a matter of the failure of a culture, a culture that has grown and grown since the sainted Reagan introduced the twin pillars of his morning in America:  unchecked greed and militarism.

Militarism today holds high carnival:  in Iraq, on somewhere between 700 and 1,100 American bases around the world (the exact number being a secret, even if known to the Pentagon), on huge carriers patrolling seas all over the world, in Bush/Cheney ideas that we should intervene all over the world, in a Pentagon budget of what — something in the neighborhood of 500 billion dollars or more, I suppose?

Unchecked greed also held high carnival, as it drove the housing market ever higher by means visibly pregnant with failure because they defied history, economics, human comprehension and sense:  Adjustable rate mortgages, with initially low rates that one knew — I certainly knew, often said, acted accordingly, and wholly fail to grasp why everyone didn’t know — were pregnant with disaster because they would be unsustainable for the buyers when the interest rates increased, as inevitably they would because rates always rise and fall; securitization that gave rise to so-called tranches so complicated that nobody could understand what the risks and rights were; derivatives which may be even more complicated and which nobody has a real handle on apparently.  It was all nuts (as this writer often said to people), and now it has come crashing down, as was inevitable.  The acclaimed geniuses — like Alan Greenspan (who led the way) — who lived in and loved celebrification, who profited from it, have been shown the fools that they are.  In Greenspan’s case, this is at least the second burst bubble he promoted, the other being the high tech stock market which melted down at the beginning of the 2000s.  (Of course, in America, where nothing succeeds like failure, as is oft typified by celebrified coaches, baseball managers and university presidents, Greenspan remains a great man.)

The heads of major firms have likewise fallen, as their houses of cards collapsed.  The fall of titans represents a horrid, economy-threatening failure of the culture of greed, dishonesty (which often was a major part of pushing the insane instruments on uncomprehending buyers), and unchecked capitalism, the culture which has been pushed on us by conservative intellectuals, politicians and the uncomprehending mainstream media since Reagan took office in 1981.  This vile culture (and the militarism which is in some important ways associated with it (e.g., a war for oil, huge profits for contractors)), came to dominate much of the American nation.  Now the culture of unchecked greed and celebrification of its richest practitioners has come acropper (as did the war in Iraq).  That it would come acropper was inevitable, based as it was on stupidity.  Leaders have been exposed as fools — yet again.

Continued . . .

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The current importance of Marx, 150 years after the Grundrisse

Conversation with Eric Hobsbawm

ZNet, September 16, 2008

By Eric Hobsbawm
and Marcello Musto

Eric Hobsbawm is considered one of the greatest living historians. He is President of Birkbeck College (London University) and Professor Emeritus at the New School for Social Research (New York). Among his many writings are the trilogy about the “the long 19^th century”: The Age of Revolution: Europe 1789-1848 (1962); The Age of Capital: 1848-1874 (1975); The Age of Empire: 1875-1914 (1987), and the book The Age of Extremes: The Short Twentieth Century, 1914-1991 (1994).

Marcello Musto is editor of Karl Marx’s Grundrisse: Foundations of the Critique of Political Economy, London-New York: Routledge 2008.

1) M. M. Professor Hobsbawm, two decades after 1989, when he was too hastily consigned to oblivion, Karl Marx has returned to the limelight. Freed from the role of instrumentum regni to which he was assigned in the Soviet Union, and from the shackles of “Marxism-Leninism”, he has in the last few years not only received intellectual attention through new publication of his work, but also been the focus of more widespread interest. Indeed in 2003, the French magazine Nouvel Observateur dedicated a special issue to Karl Marx – le penseur du troisième millénaire? (Karl Marx – the thinker of the third millennium?). A year later, in Germany, in an opinion poll sponsored by the television company ZDF to establish who were the most important Germans of all time, more than 500,000 viewers voted for Marx; he came third in the general classification and first in the “current relevance” category. Then, in 2005, the weekly Der Spiegel portrayed him on the cover under the title Ein Gespenst kehrt zurück (A spectre is back), while listeners to the BBC Radio 4 programme In Our Time voted for Marx as their Greatest Philosopher.

In a recent public conversation with Jacques Attalì, you said that paradoxically “it is the capitalists more than others who have been rediscovering Marx”, and you talked of your astonishment when the businessman and liberal politician George Soros said to you “I’ve just been reading Marx and there is an awful lot in what he says”. Although weak and rather vague, what are the reasons for this revival? Is his work likely to be of interest only to specialists and intellectuals, being presented in university courses as a great classic of modern thought that should never be forgotten? Or could a new “demand for Marx” come in the future from the political side as well?

E. H. There is an undoubted revival of public interest in Marx in the capitalist world, though probably not as yet in the new East European members of the European Union. It was probably accelerated by the fact that the 150th anniversary of the publication of the Manifesto of the Communist Party coincided with a particularly dramatic international economic crisis in the midst of a period of ultra-rapid free market globalization.

Marx had predicted  the nature of  the early 21st century world economy a hundred and fifty years earlier, on the basis of his analysis of “bourgeois society”. It is not surprising that intelligent capitalists, especially in the globalized financial sector, were impressed by Marx, since they were necessarily more aware than others of the nature and instabilities of the capitalist economy in which they operated. Most of the intellectual Left no longer knew what to do with Marx. It had been  demoralised by the collapse of the social-democratic project in most North Atlantic states in the 1980s and the mass conversion of national governments to free market ideology, as well as by the collapse of the political and economic systems that claimed to be inspired by Marx and Lenin. The so-called “new social movements” like feminism either had no logical connection with anti-capitalism (though as individuals their members might be aligned with it) or they challenged the belief in   endless progress in human control over nature, which both capitalism and traditional socialism had shared. At the same time the “proletariat”, divided and diminished, ceased to be  credible as Marx’s  historical agent of social transformation. It is also the case that since 1968 the most prominent radical movements have preferred direct action not necessarily based on much reading and theoretical analysis.

Of course this does not mean that Marx will cease to be regarded as a great and classical thinker, although for political reasons, especially in countries like France and Italy with once powerful   Communist parties, there has been a passionate intellectual offensive  against Marx and Marxist analyses, which was probably  at its height in the 1980s and 1990s. There are signs that it has now run its course.

Continued . . .

Reflections on Twenty-First Century Socialism

by Prof. James Petras

Global Research, August 18, 2008

In order to explore the perspectives for socialism in the 21^st century, it is essential to recover some of the basic postulates, which inform the socialist project. In addition, it is important to recover some of the basic advances achieved by 20^th century socialist regimes as well as to critically reflect on their distorted structures and failed policies.

In the most basic sense it is important to remember that ‘socialism’ is a means to a better material life than under capitalism: Higher living standards, greater political freedom, social equality of conditions, and internal and external security. ‘Respect’, ‘dignity’ and ‘solidarity’ can only be understood as accompaniments of these basic material goals, not as substitutes. ‘Respect” and ‘dignity’ cannot be pursued in the face of long-term, large-scale deprivation, sacrifice and delayed fulfillment of material improvement. Governments claiming to be ‘socialist’ which idealize ‘sacrifice’ of material living standards in the name of abstract principles of justice, are more akin to ‘spiritual socialism’ of a religious order rather than a modern dynamic socialist government.

Social transformations and the replacement of capitalist owners by the socialist state can only be justified if the new order can improve the efficiency, working conditions and responsiveness to consumers of the socialist enterprise. For example, in some socialist regimes, under the guise of a ‘revolutionary offensive’, the state intervened and eliminated thousands of small and medium size retail urban enterprises in the name of ‘eliminating capitalists’. The result was a disaster: The stores remained closed; the state was incapable of organizing the multitude of small businesses and the great majority of workers were deprived of vital services.

Twentieth century socialist states built effective and successful medical, educational and security systems to serve the majority of the workers. The majority of socialist states eliminated foreign control and exploitation of natural resources and in some cases developed diversified industrial economies. On the whole living standards rose, crime declined, employment, pensions and welfare were secured. However 20^th century socialism was divided by deep contradictions leading to profound systemic crises. Bureaucratic centralism denied freedom at the workplace and restricted public debate and popular governance. Public authority’s over-emphasis on ‘security’ blocked innovation, entrepreneurship, scientific and popular initiatives leading to technological stagnation and mass passivity. Elite material privileges based on political office led to profound inequalities, which undermined popular belief in socialist principles and led to the spread of capitalist values.

Capitalism thrives on social inequalities; socialism deepens through greater equality. Both capitalism and socialism depend on efficient, productive and innovative workers: The former in order to maximize profits, the latter to sustain an expanding welfare state.

20^th Century lessons for 21^st Century socialists

21^st century socialist can learn from the achievements and failures of 20^th century socialism.

First: Policies must be directed toward improving the living as well as working conditions of the people. That means massive investment in quality housing, household appliances, public transport, environmental concerns and infrastructure. Overseas solidarity and missions should not take priority over large-scale, long-term investments in expanding and deepening material improvements for the principal internal class base of the socialist regime. Solidarity begins at home.

Second: Development policies should focus on diversifying the economy with a special focus on industrializing the raw material, making major investment in industries producing quality goods of mass consumption (clothing, shoes, and so on) and in agriculture, especially becoming self-sufficient in basic essential foods. Under no conditions should socialist economies rely on single products for income (sugar, tourism, petroleum, nickel), which are subject to great volatility.

A Socialist government should finance education, income and infrastructure policies, which are compatible with its high economic social and cultural priorities; this means educating agronomists and skill agricultural workers, skilled construction workers (plumbers, electricians, painters) and civil engineers, transport workers and urban and rural planners of public housing to decentralize mega-cities and substitute public for private transport. They should set up popularly elected environment and consumer councils to oversee the quality of air, water and noise levels and the availability, prices and quality of food.

Twentieth century socialist governments frequently alienated their workers by diverting large of amount of aid to overseas regimes (many of whom were not even progressive!). As a result, local needs were neglected in the name of ‘international solidarity’. The first priority of 21^st century socialism is solidarity at home. Twentieth century socialists emphasized ‘welfare’ from above – government as ‘giver’ and the masses as ‘receivers’ – discouraging local action and encouraging passivity. Twenty-first century socialism must encourage autonomous class action to counter privileged ‘socialist’ bourgeois ministers and functionaries who use their office to accumulate and protect private wealth through public power. Autonomous popular organizations can expose the hypocrisy of rich ministers who attack well-paid industrial workers as ‘privileged’ while riding in chauffeured Mercedes and enjoying luxurious apartments, second and third ‘vacation homes’ and who send there children to expensive and exclusive private schools at home and abroad.

Above all socialism is about social equality: Equality in income, schools and hospitals; equality between classes and within classes. Without social equality, all talk of ‘diversity’, ‘dignity’ and ‘respect’ is meaningless. Capitalists also support ‘diversity’, as long as it does not affect their profits and wealth. Socialists support income and property equality which effectively re-distributes wealth and property to all workers, white and black, Indian farmer and urban worker, men and women, and young and old. There is no ‘dignity’ in being poor and exploited; dignity comes with struggle and the achievement of socialist goals of social equality and rising living standards.