Here is Hillel Ticktin’s editorial for the forthcoming issue of Critique #46, due on December 1st, analysing the current crisis and its denouement:
http://www.critiquejournal.net
The most important ongoing event is the spectacular implosion of the financial system and the ongoing downturn. We will be having a number of articles on the subject in the next issue. These notes have conducted a running theoretical and empirical commentary but we will have more articles to supplement those in the April 2008 issue in the next issue-due to come out at the end of January.
The Implosion of Finance Capital-Depression and Deflation
It is almost impossible to open a newspaper without some reference to the historically important nature of our times. It is clear that we are living through a period comparable to that of the Great Depression in its political economic importance, even though it is unlikely to reproduce its length, depth and misery. These same establishment newspapers and journals find it necessary to defend and justify capitalism as a system, when there is no important movement challenging it. Marx is frequently quoted, both to support and criticise capitalism.12 Although, we may assume that the authors are not entirely serious, it is nonetheless a sign of the times. Nor is it only the media who are enamoured of Marx and gripped with self-doubt. Bankers and other establishment figures have excused themselves for not taking Marx seriously. Banks’ advice now includes the caution that Marx may be right about capitalism collapsing under the weight of its own contradictions.
Karl Marx appears then to have made a return from the grave to which he had been assigned in the nineties. Marxism has been declared wrong, irrelevant and worse for one and half centuries, only to return with renewed force. The suddenness of the conversion was unexpected. After all, far-left parties are marginal at best and detested at worst. The economics profession is, as ever, pro-market. Why then has there been this criticism of capitalism itself?
It was almost an orthodoxy that capitalism could always re-invent itself. That has been repeated by the historian Tristram Hunt 3 He points out that Engels had repeatedly expected a crisis to crack the system. He derives his material from Engels’ letters to Marx and concludes that capitalism gets through its crises. There is no doubt that capitalism is not at an end not least because there is no working class movement for socialism. However, Tristram Hunt has missed the point. We are now living in a period of instability, and the instability is that of the system itself. When someone argues that capitalism has survived, the question is always by what means. After all, the system has survived through repression, imperialism, and war as well as through the welfare state. We have never had a peaceful capitalism in the developed countries, without exploiting peoples beyond its borders. In the third world, the situation was and remains dire, with certain exceptions.
It is not accidental that Marx can be quoted and that the system itself be questioned by those at the heart of the system. This is in part because those personages know the weaknesses of the system in some detail but it is also in part because the Cold War is over and Marx is no longer tarnished with the taint of Stalinism. It is of particular note that these writers and commentators see capitalism as a system even if they argue that there is no replacement. Once capitalism is perceived as a system, its limitations can also be discussed and then it is a short step to perceiving capitalism itself as in evolution from its birth to its dotage.
Defence of Capitalism in the Downturn
The wave of questioning has led to three lines of defence. We are told that in the end we will be back where we were before the downturn or perhaps before the speculative rise in asset prices from 2004. Simon Jenkins, a liberal commentator, has argued that all the discussion of the limits of capitalism is just hot air.4 The failure lay in the regulators and the politicians who removed the regulation or who urged banks to extend their lending. Rationally considered, it can be argued that the financial crisis was an accident of history caused by the greed or incompetence of bankers or lack of regulation over a market which has to be regulated in order to function properly. In fact, there are three theses being put forward here.
Firstly, it is argued that capitalism is necessarily cyclical, but eternal, and hence the economy will recover and be better than ever, having learned its lesson. Secondly, it is maintained that the market requires regulation and regulation was systematically reduced over a period of more than twenty years, notably through the repeal of the Glass-Steagall Act in 1999 in the USA, allowing commercial banks to operate as investment entities as well as continue their everyday functions.5 Thirdly, it is held that things might not have gone awry had not a number of individuals been so greedy for ever higher rewards. A fourth thesis could also be put forward. The contradictions of capitalism are showing themselves but the system will continue as long as there is no political movement to replace it. The first view merges with the fourth. Much of the organised left effectively supports the last view, having given up on the idea of capitalism entering a systemic crisis. Tristram Hunt’s argument fits in here.
Clearly, none of these arguments says much for the capitalist system itself but then ‘the danger of meltdown’ has been a constant refrain in all the media. It would appear that both the capitalist class and those who manage their operations have been seriously frightened. Indeed, the two weeks that followed the nationalisation of the mortgage companies was described in graphic detail in the media, ‘Nightmare on Wall St’ being probably one of the best headline.
At the same time, although there is no organised left of any importance in the USA or Europe, the population is both worried and angry. It is one thing for a factory owner to receive a subsidy but another for bankers to be bailed out. Most people do not see bankers as anything but parasitic, receiving huge salaries for receiving other people’s money and lending that money out at exorbitant rates of interest. While financial capital is necessary for the capitalist system to function, the dominance of finance capital and the huge rewards it receives are a function of the present stage of capitalism itself and that view is widely held. Outside of the Anglo-Saxon countries, industrial capitalism plays a greater role and finance capital is often resented. As a result, Finance Capital and its functionaries see themselves as beleaguered, and in a fragile situation, both because of the threat to their ‘business’ and because of a possible systemic threat.
Tags: defence of capitalism, finance capital, Hillel Ticktin, implosion of the financial system, Karl Marx
No comments:
Post a Comment