Saturday, February 7, 2009

Is A Capitalist Meltdown Upon Us?

By Manifesto Joe

I'll only be 53 on my next birthday in late July, yet it already seems like I've lived a tiring amount of history. Only 20 years ago, the world saw the meltdown of Soviet-style communism -- and many observers, largely neo-conservatives, interpreted that as an ideological culmination, "the end of history." There was even an influential book written with that title. (Does anyone remember that author now? And, does he want to remember that book? Yeah, I know -- Francis Fukuyama.)

It appears that reversals of fortune can happen quickly. Now it looks like the allegedly venerable ideology of "free-market" capitalism is on the ropes, and in serious danger of going down. Who would have thought it?

Die-hard Marxists did. I've never been one of them, even as a long-ago radical all of 23 years old. I still know three people who have continued to call themselves Marxists in total defiance of dismissal or ridicule, and they are probably gloating a lot now. The economic train wreck they kept dogmatically predicting finally seems to be in front of us.

But even as America sleepwalked through our Second Gilded Age (circa 1981-2005), I grew skeptical of the Marxist vision. "Historical inevitability" always sounded like a religious tenet, without the pure superstition; and Marxism itself, a sort of quasi-religion for embittered atheists.

We should be as cautious about awarding hard-line socialists a victory here, as much as "we" (in the editorial sense) should have checked for our wallets the minute Reagan started talking about trickle-down and Phil Gramm started talking about deregulation. The past century should have taught us that the answer lies in between.

Starting with the excesses of laissez-faire: America has, for the past 30-ish years, seen the roller-coaster ride that happens with that sort of economic policy. An elite grows very rich, a minority near the bottom slips much further down, and most people tend to stagnate in the middle.

There are cycles of boom and bust. The booms are good for most people, but especially good for a few. The latter group inevitably forms a "Why Should I Have To Pay Taxes?" lobby and gets bonanzas from lawmakers eager to please. And since these are the people of ostentation and material success, their influence is great among fashionable "thinkers" of the day.

Now the big bust is upon us. It's a bit like 1933 all over again -- not as grim or total in devastation, but it's likely to get worse. President Barack Obama has warned us that this is so.

But history, with its entire lesson, should be heeded, and it seems like Obama is one who will do so.

There were very good reasons for the meltdown of the Soviet empire 20 years ago. Contrary to right-wing mythology, Reagan and his military buildup had little to do with it. Post-Soviet Russian economists recall the problems as internal, and any intellectually honest person knew what they were. There's no need for me to recite the litany here -- Americans heard it all for decades.

But let's face it, die-hard socialists out there -- state-run enterprises have a poor track record. The employees seem to lack incentives to produce. Cooperatives tend to degenerate into personal conflict, power struggles and chaos. And as for the concentration of power in the hands of "vanguard revolutionaries" -- the horrors and enormities of that have been abundant just in the past century.

I don't think it's hard to argue for a sense of balance and measure. In America, it seems like the compromising wheeler-dealers -- the FDRs, the Trumans, the LBJs, the Ted Kennedys -- got more done for working Americans than any of our homegrown radicals ever did.

But there is little doubt that there's been a sea change, and it's been back toward socialist thinking. The Nobel Prize committees have not been known for their sympathy toward socialist-leaning economists, yet Nobel Laureate economist Joseph Stiglitz has more or less come out in favor of the nationalization of U.S. banks. That would be a major step toward socialism of some fashion. Why not? We've just given the bastards $700 billion in taxpayer money to keep them in business. Here's a link to the interview with Stiglitz.

And, it appears that such state power would be the only thing to force the shameless swine who run these enterprises to behave themselves. Sen. Claire McCaskill, D-Mo., made a speech on the Senate floor about the Wall Street oinkers who had themselves awarded $18.4 billion in bonuses while their enterprises got in on the aforementioned $700 billion, because of reckless and disastrous mismanagement. Here's another link to reports on this issue, and to a video of McCaskill's speech. Be patient, the video seems very rough.

So, what should be the ultimate American destination, in an era of "capitalist" meltdown? The Swedes, with a hybrid socialist-capitalist system, don't seem to do badly, with avowed Socialists predominantly in power since 1929. Their booms are smaller, but so are their busts. Their people don't live in fear of homelessness or inability to afford basic health care. Right-wing humorist P.J. O'Rourke, when asked about the Swedes' seeming happiness with their stable system, said that they are all insane -- but that their insanity is distributed equally among the people.

It's a funny line. But there's nothing funny about facing a mortgage foreclosure, or about the welfare rolls shrinking even as joblessness is rapidly expanding. With a growing U.S. underclass, it may be time to take a second look at the socialist mind-set -- despite the old Marxist baggage. Nobody requires us to go to extremes.

Manifesto Joe Is An Underground Writer Living In Texas.


Jack Jodell said...

Great having you back, Manifesto Joe---you were sorely missed! As usual, you have come up with another gem here. There are so many truisms in what you have presented, I don't even know where to start. Guess I'll just go free-form. Yes, the population at large has done far better as a result of movers and shakers from the inside like FDR, LBJ, et al, than from radicals outside the system throwing rocks at it. Yes, we are blessedly and deservedly entering a new era. I never thought we'd see a new gilded age in this country, but Reagan, the ultra-conservative GOP and Bush 2 managed to pull it off, much to the detriment of most of the country and world. And yes, Reagan most certainly did NOT "defeat communism" as all the hardcore right-wingers love to claim (they lie about so many other things, why not that too, I guess?). Obviously, industrial strength Marxism is not the answer, as it stifled creativity and motivation. There will always be a place for individual initiative and profit. Unfortunately, THAT went to an extreme since 1981. Sweden has indeed pulled off a very sensible and pragmatic form of capitalist-socialism which I believe we would do well to, and probably will, emulate. The similarities between Obama and FDR are amazing. Both took office in economic turmoil; both took the reins from an ineffectual predecessor; both were labeled as socialistic destroyers of capitalism, and I believe Obama will, just as FDR did, MODIFY capitalism and SAVE it in a new and more humane and democratic form. The only differences between today and the mid 1930s is that today the GOP has comparatively higher numbers than back then, and the country is not yet suffering as badly as it did in that era. Sure, the Old Guard neocon boys like McConnell, Boehner, Pence, Kyl, Shelby, Vitter, and Corwyn are going to scream bloody murder and fight modern-day reform all the way. And Limbaugh is today's Fr. Coughlin, only much more deluded and vicious, but every bit as irrelevant and ineffectual. But in the end, I believe all of those GOP dinosaurs will become extinct and Obama will prevail. He HAS to, or we will undoubtedly see the rise of a world war far worse than WW II!

Marc McDonald said...

>>The economic train wreck they
>>kept dogmatically predicting
>>finally seems to be in front of

I've long read Marx and I believe that he was a genius and a prophet and one of history's greatest philosophers. If that makes me a "Marxist," then so be it. But I'd like to point out that Marx never prescribed any sort of specific socialist society. He simply explained why capitalism would eventually fail.

By contrast, most "capitalists" and "free market" economists are vastly more dogmatic than any Marxists I know. These people worship what they call the "free market" with the same fervor that you'd find in any extremist cult.

Compared to these Kool-Aid drinkers, I'd have to say I'm a lot more open-minded. I really don't give a shit about the specifics of what sort of new society we build, as long as it is more egalitarian (and therefore more just and fair) than the corrupt and rigged system that we have now. I don't give a shit how we get there, be it via the "free market" or via "socialism" or whatever, as long as we get there.

>>>they are probably gloating a
>>>lot now

I can't speak for all "Marxists." But I have to admit, I do see a silver lining to the current economic crisis. For a start, if the U.S. goes broke, it will be forced to end our Iraq adventure---which, with 1.3 million dead, has to rank as one of our era's great War Crimes.

U.S. economic collapse would also mean no more future Iraqs. For that reason alone, I'd welcome a collapse of the U.S. economy. I'm goddamn sick and tired of my tax dollars going to slaughter men, women and children civilians overseas so the likes of Halliburton can rake in billions of dollars in no-bid contracts.

By the way, I believe the current government's purpose is to simply serve the interests of the rich and powerful (and to steal from the poor and working-class to pad the pockets of the rich). The Wall Street "bailout" was only the latest example of this.

If the current economic crisis causes social unrest which forces major, sweeping changes in the structure of our current government, I simply can't fathom how this could not be welcomed by any clear-thinking, rational, informed adult who is not of the Silver Spoon class.

I've said it before and I'll say it again: the problem in Washington is much bigger than the politicians. The problem is the system itself, which is corrupt and broken. When you have a broken system, no politician on earth---no matter how competent---can ever hope to fix things.

Jack Jodell said...

Mr. McDonald, you raise some very valid points. I, too, am not hung up on how we improve things, just so long as they are improved and ARE more egalitarian. We have indeed been guilty of war crimes not only in Iraq, but in Grenada and Vietnam as well. We have bullied and meddled in the affairs of far too many countries for far too long, and it's high time that shit came to an end. And you're right---our entire system and culture is permeated with corruption and self-interest. Being human, we will undoubtedly never perfect it, but we can and should at least keep working to make it better!

Marc McDonald said...

Hi Jack, thanks for your kind words. I think continental Europe provides a good template for how to run a more fair and just society than the U.S. offers. I've also long been intrigued by the Japanese model (which is even more egalitarian than Sweden).

I don't believe Japan is a utopia. But the more I've looked at Japan over the years, the more I've come to admire their society. Perhaps a mix of the best of Europe and Japan could produce a blueprint for the world to follow in the future.

What's certain, however, is that the Anglo-American "to hell with all regulations" model has been seriously discredited in the current crisis. Good riddance to Gordon Gekko and his ilk.

Manifesto Joe said...

One thing that I found sad to read is that even in Japan, which has prided itself on fulfilling the promise of lifetime employment for its workers, there is serious labor unrest. At some point, employers there, including automakers, started a system of hiring "temporary" workers by contract. Now, with a global downturn, many are being canned, and they aren't happy. They are protesting in the streets, saying that being a "temporary" worker in Japan is a new kind of underclass.

I guess some of the Japanese execs have been studying the American model a bit too closely.

Jack Jodell said...

Guys, what both of you present are excellent proofs of why complacent, ignorant backwoods Americans who constantly and stubbornly insist we're always right and are the best country in the world are dead wrong! We hold no monopoly on wisdom or virtue. For supposedly being "the land of the free" we are notoriously intolerant and closed-minded socially, and our economic system is anything but egaltarian. We have many great attributes to this country, but we also have a long way to go. So, America-firsters: If you want some useful info, always tune into Manifesto Joe, Marc McDonald, and others who see the world in fact and truth, with a dose of much-needed benevolence thrown in for good measure!

dr sardonicus said...

Excellent points as always, Joe. We can never have pure socialism any more than we can have pure capitalism. There are simply some things the public sector does better than the private sector, and others the private sector does better than the public sector. One of the most important jobs government does is to find the right mix. Every country's mix is going to be different based upon economic and cultural considerations, and should be flexible as conditions change. One of the big problems with our government is that it ignores this responsibility - too many of our politicians, especially on the right, would rather sing hymns of praise to some unrealistic capitalist utopia than participate in the hard work of finding an economic mix that will work for all Americans.