Is US Capitalism Headed for a Sea Change?
In 1848 Karl Marx predicted capitalism’s demise. In 1989 Francis Fukuyama assured his readers that liberal democratic capitalism represented the end of history. In 2007 there may be reasons to suspect capitalism will evolve in ways we can at best only partially imagine. In 1960 most politically savvy Americans could hardly have foreseen G W Bush. Even many Republicans accepted a “mixed economy,” with a safety net and “fine tuning” deficits and monetary policy to assure equity and stable growth.
Liberals and conservatives have different takes on the fate of this dream. Conservatives argue that market manipulations undermine automatic and beneficent market balances and that safety nets encourage moral sloth and thereby exacerbate social problems. Ronald Reagan saved US capitalism by cutting taxes and deregulating the economy. Liberals reply that Reagan tax cuts and deregulation left growing economic inequality.
Both sides can make plausible arguments. Inequality did increase, but even working class Americans reaped modest gains in disposable incomes. Nonetheless, working and middle class wage gains in the last thirty years have lagged behind the gains made during the thirty years after WWII, when unions, an improving safety net, and government transportation and Cold War R and D spending triggered productivity gains and economic justice.
Nonetheless, the Post World War II consensus was not a golden age. The consensus tacitly accepted many traditional racial and gender boundaries. In addition, its version of worker rights stopped both at the water’s edge and outside the company boardroom. Viewing their corporation’s short- term profits as the route to increasing wages, union leaders often supported US government repression of social democratic unions abroad, Union leaders also viewed themselves as junior partners, entitled to a share in the growing pie but enjoying little role in planning the jobs and products that increase productivity. As workers in the sixties began to demand both wage gains and satisfying work, corporations sent jobs as well as product abroad. Productivity gains slowed and inflation escalated. A newly emerging OPEC demanded high oil prices. Racial tensions mounted as African American workers felt left out of post WWII prosperity. Whites whose jobs were becoming more insecure received from their unions and their political friends little help beyond the counsel for more concessionary bargaining with management.
Thus the Reagan Revolution represented the culmination and even intensification of several intersecting tensions. Blaming affirmative action and “welfare queens” for the troubles of working class whites, it both fed upon and intensified longstanding racial animosities and a sense of victimhood among working class citizens. Vietnam’s legacy and OPEC provided ammunition to view the US as victim, with the Iran hostage crisis becoming the most visually compelling encapsulation of this story. These intersecting narratives of victimhood fed on each other and were skillfully mobilized by the Great Communicator in support of military spending, self-reliant “manhood,” and the restoration of “morning in America.”
George W Bush has subtly but tellingly extended the Reagan revolution. Tax reductions for the wealthy continue, but government, rather than being hollowed out, has been outsourced to private corporations. Naomi Klein nicely summarizes this transformation in The Shock Doctrine: The Rise of Disaster Capitalism: ” the security failures of 9/11 reaffirmed in Bush [his] deepest ideological (and self-interested) beliefs - that only private firms possessed the…innovation to meet the new security challenge. Although…the White House was on the verge of spending huge amounts of taxpayer money to launch a new deal, it would be exclusively with corporate America… The deal would take the form of contracts, many offered secretively, with no competition and scarcely any oversight, to a sprawling network of industries.”
Klein overplays the impact of 9/11 deaths. Just as under Reagan, divergent underlying currents allowed Bush to turn this event into a surprisingly potent and motivating symbol. These currents included: 1) the growing role among some marginalized working class citizens of some fundamentalist theologies that divide the world neatly into good versus evil 2) increasing concerns about global cultural change, and 3) continuing anxieties about changing gender and economic roles for white working class males.
Nonetheless, 9/11, like the hostage crisis, was a visually powerful catalyst that speeded and intensified a sense of implacable, foreign-induced hostility to a virtuous core. The rhetoric surrounding the event and the visceral fears evoked by its constant replays have been used both to insulate government, to marginalize opponents of the system, to attract and flatter stressed middle and working class citizens who derive no economic benefit from the new capitalism. The only “facts” allowed into this closed universe are ones its leaders are willing to countenance.
In Bush’s capitalism, the presumed beauties of market competition are used as an argument against unions and social security. The most powerful business interests, however, receive secretive and generally noncompetitive access to and control of vital public functions, from logistics in Iraq to military and foreign intelligence.
Unlike even Reagan’s capitalism, however, as Paul Krugman recently points out, Bush’s agenda “has produced essentially no gains for ordinary American workers…. America has never before experienced a disconnect between overall economic performance and the fortunes of workers as complete as that of the last four years.” This capitalism is also sustained in part by a military adventure with cascading failures that dwarf Vietnam, by tenuous resource flows and environmental supports, and by religious currents that even among fundamentalists of various stripes are beginning to reveal surprising fissures.
US capitalism may head down some frighteningly authoritarian road, but I am skeptical of any predictions issued with an air of certainty. Capitalist transformation might well be viewed through oceanographers’ concept of “rogue waves.” Periodically mariners report that vast walls of water appearing seemingly from nowhere sink huge ships. Such reports, once taken as legend, are now regarded as quite credible. Oceanographers have identified conditions that can predispose to their occurrence. Usual ocean swells encounter complex fields of random eddies, currents following curved paths. The ocean swell’s energy can then be concentrated and focused, but the frequency and intensity of such effects can neither be explained nor predicted by normal additive linear models.
Bush II’s capitalism emerged as surprisingly intense and focused responses to complex, resonating undercurrents of racial, economic, gender, and global anxieties. Perhaps a dialogue between less dogmatic versions of social democracy and progressive and/or more skeptical capitalists might become a catalyst for a new capitalism that would respond constructively to gaps, risks, and tensions in the current order. A new capitalism might seek empowerment of workers in their workplaces as nongovernmental strategies to improve the long- term fortunes of both labor and capital. Manufacturers and workers might come to recognize that energy conservation and more efficient transit options could both create quality jobs here and improve US competitiveness. Both might come to acknowledge the importance of more free time as a reward for productivity gains in an era of resource challenge. Most importantly, they might also strive to become more attentive to emerging rights claims and injustices both domestic and international that even the best combination of markets and open democracies may leave or even generate in a world of flux and becoming. Achieving more democratic and less arrogant capitalisms may be tough and can hardly be assured, but the need for such transformations grows by the day.
John Buell (jbuell@acadia.net) is a columnist for the Bangor Daily News and co-author of Liars, Cheaters, Evil Doers: Demonization and the End of Civil Debate in American Politics.
Arguably, capitalism did not die so much as it was still-born from the get-go. America, at least, has always been more of a privateer economy, in which the private elite are state subsidized. Our way of life is also predicated on the existence of a slave class, whether domestic or foreign. It also has its own royalty caste, but we don’t call it that.
Capitalism is a non-sequitur, carrying the seeds of its own destruction. But it doesn’t yield to socialism, anarcho-syndicalism, Green-style community-based economics, etc. It yields to an age-old form of fascism, in which the owners of the means of production are synonymous with the owners/rulers of government. As old as civilization itself.
Here’s a better summary of Naomi Klein’s thoughts on disaster capitalism:
“These days, we are once again living in an era of corporatist massacres, with countries suffering tremendous military violence alongside organized attempts to remake them into model ‘free market” economies; disappearances and torture are back with a vengeance. And once again the goals of building free markets, and the need for such brutality, are treated as entirely unrelated.”
“Once you accept that profit and greed as practiced on a mass scale create the greatest possible benefits for any society, pretty much any act of personal enrichment can be justified as a contribution to the great creative cauldron of capitalism, generating wealth and spurring economic growth – even if it’s only for yourself and your colleagues.”
“Extreme violence has a way of preventing us from seeing the interests it serves.”
Comparing this type of capitalism to an occasional ocean swell is disingenuous. There is something more fundamentally wrong with capitalism that just a mere glitch.
http://theformofmoney.blogharbor.com/blog?nc=1
Yes and pigs might fly. Banana republic anyone.
I am a pessimist, time and time again since the depression, the majority of this country have followed the “leader”, done politically what they were told and cheered the thugs on. It is a nation founded on property rights and not on human rights. The Constitution does not reflect the declaration of independence. Thus capitalism reigns supreme and anyone suggesting it be curtailed in any way is a commie and a traitor at best, a democrat at worst.. I look at the actors in the political arena and I wouldn’t pay them in washers, no vision nothing on which to build a nation cowards when it comes to belling the corporate and well heeled.
Boobeoisie as Mencken called us. Rise up throw off your chains. I like the dudes in Vermont who are promoting a 2nd republic of Vermont, they have the right idea secede from an unworking republic.
John Edwards is noted for saying (about corporations), “I have been fighting these people all my life. They will not willingly give up any of their power.”
Capitalism is fine, but not without a government constantly vigilant and devoted to discovering and regulating each new excess and outrage against citizens. A century ago we learned the hard way about the need for anti-trust limits and steeply progressive income and capital gains taxes. In the last 25 years since Reagan, citizens have forgotten half of what was learned the hard way by earlier generations. It corresponds coincidentally and exactly to the admission by President Bush in a speech that “Income inequality is real. It has been growing for more than 25 years.”
Republican majorities do not pass legislation to keep citizens in control of corporations. Democratic majorities do. “Progressive” majorities would be fine for the task too, if we can get any into office. Until we do, we need a Congress and White House full of Democrats. In 2008, not some other decade.
Dream on, John. It’s not in the nature of capitalism to concern itself with the DISTRIBUTION of wealth. It’s concerned solely with the CREATION of wealth. Even classical liberals like John Stuart Mill recognized the need for government to regulate the balance between the two, constantly making course corrections to maintain that balance. Creating a corporate aristocracy is in the long term self-destructive because capitalism operates only with respect to short-term profits.
Central to this new capitalism is sharing the wealth. This is what J.K. Galbraith says about that:
“People of privilege will always risk their complete destruction rather than surrender any material part of their advantage.”
John Kenneth Galbraith
Capitalism will certainly continue, corporate style, across the globe, but Americans benefiting from the imminent descent of the dollar are those who’ve put their money in other countries or currencies.
What nonsense! Capitalism has shown no real ability to change and deal with the environmental problems it is causing. How can it, since capitalism is dependent on the totally anarchic and need-to-continually-expand ‘free market’ for its entire direction?
Capitalism–the employer’s appropriation of surplus labor from free laborers who own nothing but their labor power–isn’t something that we can wish away, or make go away by force without creating something worse. The trouble with “building socialism” is no one can agree on what socialism should really look like and how we get from here to there. The Soviet Union’s economy–if you want to call that socialist–was a disaster, largely because they couldn’t figure out how to get enough good-quality work out of their people. There doesn’t seem to be much choice but to wait and see what the beast becomes. It would be interesting to see what happens when the world’s population stops growing and all the large reserves of labor (today China and India, tomorrow Africa and the Middle East, are tapped out. Would capitalism morph into something else then or collapse back into a feudal order? The latter would be more likely if we exhaust the Earth’s resources without creating substitutes. Back to subsistence agriculture and high infant mortality for everyone!
Daniel David (12:50 pm), CD’s resident Dem Party loyalist, writes: “Capitalism is fine, but not without a government constantly vigilant and devoted to discovering and regulating each new excess and outrage against citizens…”
- If you knew something about Marx, you would understand that there is no such thing as a government “vigilant & devoted” in the way that you describe. Marx said that “The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.” What he meant is that the state itself, in a capitalist society, ALWAYS represents the most powerful private interests of that society. On the surface, it pretends to “represent the people” (ie, the general population) — but actually, it always represents a sort of consensus of the biggest business interests. There’s no such thing as what you imagine, except in fairy tales.
Your fairy tale conception of how societies work relates to your fairy tale notions about the Democratic Party, too. You write, “Republican majorities do not pass legislation to keep citizens in control of corporations. Democratic majorities do. ” Where do you get this idea, that Democrats pass legislation to keep citizens in control of corporations? There isn’t the slightest foundation for that. Open your eyes. (Go ahead, try to make a case for your claim here. I dare you.)
Charles Schumer (D-NY) is one of the biggest whores for Wall St in the whole US Congress. Clinton & Gore passed NAFTA, and then passed the Telecom Act of 1996, which gave away the airwaves to the telecoms, & loosened media ownership concentration rules. There has never been a single Dem presidential nominee who’s ever criticized the military industrial complex. There isn’t enough room on this page to list all the sellouts & giveaways of Democrats to corporate rule of America.
The correct characterization of BOTH parties, in regard to passing legislation “to keep citizens in control of corporations” is that both of them are absolute whores, who sell out to corporations on a daily basis. Neither party is “less evil” in this regard. Both of them are owned, lock stock & barrel, by corporate interests. The only difference is that Democrats nurture their unearned reputation for doing otherwise — largely a residue of the New Deal era — by using a slightly different rhetorical approach. In other words, Republicans don’t even pretend to be anything but corporate whores; while Dems pretend.
RichM,
Nice to see you here again. The reason I don’t worry too much about Marx, is that Marxism is failed, discredited and dead. I’m not a Marxist and couldn’t care less about anything he said. That you think Marx is quotable, and think all the politicians are whores, some of them just more admitting of it than others, is illuminating of your views.
I stand by my preference for Democratic legislation and presidential appointments over Republican legislation and presidential appointments. All American, no Marxism.
Daniel David
Oil just closed over $90 a barrel. It’s now well over the oft quoted “well it’s still cheaper than the oil crisis in the 70’s, adjusted for inflation”. Can’t say that now. An analylst on Bloomberg TV just predicted oil over $100 by the end of November, and we’ve yet to bomb Iran. Happy Thanksgiving.
militantliberal,
I agree to some extent, especially about the difficulty in getting leftists all on the same page in order to move forward to democratically and peacefully create a stable socialist society. And as the Russians found out, after a Jacobin revolution the utter chaos offers the most ruthless and unprincipled the best opportunities for taking control, and so the goals of such a revolution typically remain elusive and even illusory.
There is a certain inertia involved, but social/economic development is definitely a function of technological change, which itself is a function of scientific advancements (of course the details in the economy, the political system, and the power distribution are all factors as well). And scientific advancements are not predictable.
Having studied Artificial Intelligence in graduate school years ago, I still do believe in its promise, and I think that AI and robotics advancements, along with general computer and other high technology advancements, along with medical advancements, will likely have a significant impact on further economic/political/social evolution. We are not going back. We are moving ahead to something in large part unpredictable and, by all evidence accumulated with regard to political developments from the last few years, extremely frightening, likely to make Orwell’s dystopian future in 1984 a sweet dream by comparison.
I don’t think it’s “market manipulation” that the conservatives oppose; rather it’s market restrictions and government controls. The government constantly manipulates the market by subsidizing businesses. Ordinary people are taxed, and their tax dollars go toward funding business practices.
I’m not an economist or a political scientist, so I can only judge by what I read and hear, so if I’m wrong, I’d like to be corrected. But it’s my understanding that companies like Blackwater don’t get the money to pay for their activities from free market enterprise. Instead, they get government contracts paid for with tax dollars. I’m not saying that they don’t do any private business, but I believe when they receive a government contract, they get most of their profits from government dollars.
Large agribusinesses also receive money from the government, as do chains like McDonalds for activities such as advertizing overseas and pharmaceutical companies for research and development.
Is this not government manipulation? I wonder what would happen if businesses were actually left to their own devices to make a profit with no government assistance whatsoever. This is just speculation, of course, and I’m certainly not advocating removing controls and government oversight along with removing funding and subsidies.
However, it seems simplistic to state that conservatives want government out of business. It seems to me that the difference between communism and capitalism is that in communism, the government owns the businesses and controls them. In capitalism, the businesses own the government and control it. In addition, in capitalism, the government subsidizes the activities of the businesses.
Am I wrong here? If so, which of my assumptions are flawed?
Zoya, that should be the “accumulation” of wealth. The wealthy, a parasitic class, never “create” anything.
Everyone and even this article, says that “Raygun” cut taxes, I feel like the ass in Animal Farm, reminding that he and Bush I, raised taxes (Raygun 36 times!), and shifted them to the ever-decreasing middle class, the Christion notion that we are all in this together, seems to have failed the Republicannanites Twinkie attention span,,,,if we all do good then we all do good…seems like people band together to make everyone alittle better off not the few obsenely rich, this capitalistic notion is a throw back to feudalism, corporate feudalism..bundleing of sicks… facism, corpo-Rat welfare, and the words of JOhn the Baptist, for soldiers not to Extort, seem to reflect the massive control of our society and the inherent fear of our neighbors of the control the Military-petroleum con-plex has over this “capitalist economy?” government contracts is hardly capitalism
If you don’t care about Karl Marx, how about Lord Kelvin? His two laws of thermodynamics were promulgated two years later than the Communist Manifesto and 75 years after Adam Smith’s Wealth of Nations. If value is labor as Smith posited (and Marx accepted), then surplus value, profit, is impossible because surplus labor would violate the second law of thermodynamics. Smith’s vision of prosperity was necessarily founded upon the expropriation of resources from other nations. Capitalism would have sown political instability and economic collapse if confined to Europe. Confined to our globe, it can only do the same. That “science” known as ecomonics is no more reliable than alchemy with regard to production, and no more reliable than astrology with regard to “markets.” There are no meaningful references to facts outside ideology in any economic context.
merryoldsoul,
But I thought that if the corporate media repeats Republican talking points often enough, for example that shifting the tax burden from the rich to the middle class is “cutting taxes” while shifting the burden in the reverse direction is “raising taxes,” or that increasing welfare for the poor created “unhealthy dependencies” while increasing welfare for the rich was “investing in America,” then those talking points become true. That isn’t how it works?
Daniel David (3:04 pm) -
The question is not your personal opinion of Marx (a subject you’re unprepared to discuss) — it’s whether the cited observation of how capitalist society functions is basically correct. If you think it’s not correct (& if you had any intellectual integrity), you’d have to provide arguments supporting the view that a capitalist state can really represent the interests of “the people”, as opposed to simply the most powerful corporate interests.
But, like the Democrat-huckster you are, you don’t deal in ideas. You deal in cheap smears — your above reply is just old-fashioned red-baiting. Your reply also contains a note of US nationalism — “All American, no Marxism.”
Further, I asked you to back up your assertion that “Republican majorities do not pass legislation to keep citizens in control of corporations. Democratic majorities do.” Note that you are unable to offer the slightest proof of this particular lie. I would think that your fellow Dem Party apologists would be very disappointed with you, if you can’t do any better than that.
Capitalism is the greatest source for wealth..however just like managing any money supply there needs to be great attention payed to providing funds for social stability.
I’m tired of hearing from the right about “market forces,” and the left acquiescing. As soon as the left tries to get some sort of social safety net (for the poor and working class) the right cries “it goes against market forces.” This implies an invisible hand, like we all heard about in econ 101. The thing is, there are social safety nets for the rich, but nobody on the left screams about them. What about government bailouts (like what’s about to happen for the subprime borrowers), and lower tax rates on capital gains, and tax incentives to energy companies to do what they would do anyway, and loan guarantees that allow energy companies to even consider getting back into the nuclear industry, and on and on. What do those do to the “market economy?”
Even not considering how the right guides the “invisible hand” there are problems with the invisible hand: monopolies, price collusion, illegal dumping, not to mention slave wages. All of these have been found to be very problematic, and with good reason; they are what caused the guilded age. The right will say there’s nothing wrong with monopolies. If so, then why are we concerned about illegal dumping (selling for less than the cost of manufacture of a good)? Because huge corporations found that they could put small competitors out of business by doing it, (they could do for longer than the small business could stand losing the business) and then the big corporation would have a monopoly. Why would a big corporation be willing to sell below cost for such a long time? Because the payoff a monopoly brings is damn well worth the cost of getting it.
We need to fight back by fighting fire with fire: state loud and clear that tax breaks go against a free market economy. As do government loan guarantees, and all the other break given to big corporate. We might not actually want complete market economy, but this is how the right divides us.
Any of you people including the author ever heard of RIGGED capitalism?
I say a constitutional amendment that ensures the separation of state and commerce lets face it the cult of capitalism has effectively replaced religion.
Once that amendment is in place, we can then watch the fireworks and if we are left standing after the dust settles there will be a new age of democracy, American will once again be shinning light of freedom…if we loose, we are a bit worse then now.
RichM,
I responded to you on a previous thread that I am not obligated to answer each of your assertions and challenges, and there is nothing I could possibly say as a “smear” (as you allege) to top the jobs you do on your own credibility with a series of attack posts.
I mean, validating yourself via Marx. Good grief.
I have no interest in debating with you or anyone else the relative merit of quotations that can be excavated from history. I’m here to read the articles,
and express my own opinions. My opinion is that we need Democrats, a lot (lot) of them. The more you attack that thought, the more attention it gets.
As for being pro-American and pro-American Democracy,
yes, absolutely I am. My experience is that it works better, too, with the slightly more liberal Democrats in charge, most of the time.
As for my fellow Dem Party apologists being ashamed of me? Who knows? I’m actually not acquainted with any.
Daniel David
Under Reagan, Inequality did increase, but even working class Americans reaped modest gains in disposable incomes.
This is a typically over-simplified conclusion that ultimately corrupts public policy.
The modest gains that working class Americans reaped under Reagan were a side effect of developments that include the personal computer boom which would have occured under any adminsitration, Carter, Reagan, M.L. King, etc.
A huge factor is energy consumption. The 1970s economy was “crippled” by energy conservation. The 1980s economy was “aided” by energy gluttony.
Factoring in reality we see that Reagan’s policies did perhaps nothing at all beneficial.
In liberal capitalism the politicians bend over forward and offer their arses to the capitalists.
In fascist capitalism the capitalists bend forward and offer their arses to the politicians. However, Japan, China, Singapore, Taiwan, South Korea are a class of their own. The politicians in those places are in control of their own domestic capitalists’ arses while at the same time these politicians offer their own arses to foreign capitalists.
In those states which practise the so called “democratic socialism” or “Capitalism with a Human Face” the politicians’ relations with their domestic capitalists and their foreign capitalists are not so well defined as those practising facists capitalism or liberal capitalism. They are more flexible, more give and take between the parties and the control of arses keep shifting from one party to the other and back. It is a more harmonious relationship. This is the best the Democratic Party supporters in USA can look forward to.
In democratic socialism “Capitalism with a Human Face”:
America is NOT capitalist, it is fascist, and there is no hope of change as both political parties support this system.
If the American Socialist Party had the funding to run an advertising campaign telling the TRUTH of what they stand for (And not the negative programming of 1950’s Capitalism), I believe the time is ripe for their numbers to shoot up. The gap between the filthy rich and “average” wage earners (NOT minimum wage earners) is a selling tool in itself.
Here is how capitalism should work. Managed capitalism!
dafoe:
How about we just split the nation in quarters, along the lines of the Mississippi and the old Mason-Dixon? Then we could declare 4 new republics, united only for purposes of defense. Each could have its own Declaration and Constitution. (Maybe at least one of them could do it right and have BOTH documents agree that we are in this for the People, not the Property?)
Sounds like fun to me. Give folks a chance to choose the new nation in which they’d like to reside and to which they would like to swear allegiance. Maybe we could undo the Civil War and let the folks battle it out, the losers get to be plantation slaves, the winners the Massas, or Cowboys and Indians, whatever!
Maybe we have just gotten too big for the ideas of the Founding Brothers. After all, we are about a hundred times bigger with so many different perspectives and cultures. Maybe we can’t resolve problems any more. Smaller might well be better! (Oh, I forgot. Capitalism wouldn’t allow “smaller”, would it?)
Daniel-
Marxism is dead? Quoting him instantly discredits somebody?
But there cannot be a discussion on it of course, we are here merely to share opinions, and unsubstantiated ones apparantley.
To say the Democratic version is “better” without describing, in any way, what “better” means is not aiding any discussion. If it simply means they do more to hold corporations accountable, I would like to discredit that statement by looking at the WTO, and its complete lack of accountability to you or me. (And, like RichM was saying, it was strongly supported by Dems, and still is despite its disastrous consequences for the workers of the world)
Of course you do not have to accept every challenge, but if Marxism has been “discredited”(to the extent you discredit it), I think a lot of us would like to know when, because we did not get the memo, and could use your help.
Daniel David,
“I mean, validating yourself via Marx. Good grief.”
(sarcasm) Yeah! Who do Chavez, Marcos, Morales, Chomsky, Zinn, Albert, Parenti (Christian and Michael), Davis (Angela and Mike), Hardt, Negri, and millions of others…think they are, anyway? Frigging commies, they’re everywhere.
The sun does not revolve around the Democratic Party. The US is not the center of the universe. “Objects in the mirror are closer than they appear.” Etc.
I may be a social anarchist, but that hardly means that I think that Marx was full of beans about economics. At the end of the day, I’m 100% Anti-Empire. No gods, no masters, no borders.
managed capitalism like this in Europe: Please read
5 Myths About Sick Old Europe
1. The sclerotic European economy is incapable of leading the world.
Who’re you calling sclerotic? The European Union’s $16 trillion economy has been quietly surging for some time and has emerged as the largest trading bloc in the world, producing nearly a third of the global economy. That’s more than the U.S. economy (27 percent) or Japan’s (9 percent). Despite all the hype, China is still an economic dwarf, accounting for less than 6 percent of the world’s economy. India is smaller still.
The European economy was never as bad as the Europessimists made it out to be. From 2000 to 2005, when the much-heralded U.S. economic recovery was being fueled by easy credit and a speculative housing market, the 15 core nations of the European Union had per capita economic growth rates equal to that of the United States. In late 2006, they surpassed us. Europe added jobs at a faster rate, had a much lower budget deficit than the United States and is now posting higher productivity gains and a $3 billion trade surplus.
2. Nobody wants to invest in European companies and economies because lack of competitiveness makes them a poor bet.
Wrong again. Between 2000 and 2005, foreign direct investment in the E.U. 15 was almost half the global total, and investment returns in Europe outperformed those in the United States. “Old Europe is an investment magnet because it is the most lucrative market in the world in which to operate,” says Dan O’Brien of the Economist. In fact, corporate America is a huge investor in Europe; U.S. companies’ affiliates in the E.U. 15 showed profits of $85 billion in 2005, far more than in any other region of the world and 26 times more than the $3.3 billion they made in China.
And forget that old canard about economic competitiveness. According to the World Economic Forum’s measure of national competitiveness, European countries took the top four spots, seven of the top 10 spots and 12 of the top 20 spots in 2006-07. The United States ranked sixth. India ranked 43rd and mainland China 54th.
3. Europe is the land of double-digit unemployment.
Not anymore. Half of the E.U. 15 nations have experienced effective full employment during this decade, and unemployment rates have been the same as or lower than the rate in the United States. Unemployment for the entire European Union, including the still-emerging nations of Central and Eastern Europe, stands at a historic low of 6.7 percent. Even France, at 8 percent, is at its lowest rate in 25 years.
That’s still higher than U.S. unemployment, which is 4.6 percent, but let’s not forget that many of the jobs created here pay low wages and include no benefits. In Europe, the jobless still have access to health care, generous replacement wages, job-retraining programs, housing subsidies and other benefits. In the United States, by contrast, the unemployed can end up destitute and marginalized.
4. The European “welfare state” hamstrings businesses and hurts the economy.
Beware of stereotypes based on ideological assumptions. As Europe’s economy has surged, it has maintained fairness and equality. Unlike in the United States, with its rampant inequality and lack of universal access to affordable health care and higher education, Europeans have harnessed their economic engine to create wealth that is broadly distributed.
Europeans still enjoy universal cradle-to-grave social benefits in many areas. They get quality health care, paid parental leave, affordable childcare, paid sick leave, free or nearly free higher education, generous retirement pensions and quality mass transit. They have an average of five weeks of paid vacation (compared with two for Americans) and a shorter work week. In some European countries, workers put in one full day less per week than Americans do, yet enjoy the same standard of living.
Europe is more of a “workfare state” than a welfare state. As one British political analyst said to me recently: “Europe doesn’t so much have a welfare society as a comprehensive system of institutions geared toward keeping everyone healthy and working.” Properly understood, Europe’s economy and social system are two halves of a well-designed “social capitalism” — an ingenious framework in which the economy finances the social system to support families and employees in an age of globalized capitalism that threatens to turn us all into internationally disposable workers. Europeans’ social system contributes to their prosperity, rather than detracting from it, and even the continent’s conservative political leaders agree that it is the best way.
5. Europe is likely to be held hostage to its dependence on Russia and the Middle East for most of its energy needs.
Crystal-ball gazing on this front is risky. Europe may rely on energy from Russia and the Middle East for some time, but it is also leading the world in reducing its energy dependence and in taking action to counteract global climate change. In March, the heads of all 27 E.U. nations agreed to make renewable energy sources 20 percent of the union’s energy mix by 2020 and to cut carbon emissions by 20 percent.
In pursuit of these goals, the continent’s landscape is slowly being transformed by high-tech windmills, massive solar arrays, tidal power stations, hydrogen fuel cells and energy-saving “green” buildings. Europe has gone high- and low-tech: It’s developing not only mass public transit and fuel-efficient vehicles but also thousands of kilometers of bicycle and pedestrian paths to be used by people of all ages. Europe’s ecological “footprint,” the amount of the Earth’s capacity that a population consumes, is about half that of the United States.
So much for the sick old man.
Capitalism does not actually suggest a stable system in the first place. There are too many points of chaotic inflection: tendency for markets to be cornered, monopolization, politicians to be purchased, racketeering, an ill-informed or easily swindled marketplace, wars and other forms of coercion, the fact that we are not born tabula rosa, corporate personhood, hyper-specialization in labor, inability to really get a good fix on genuine land/resource claims historically (won by warfare, stolen, cheating treaty obligations, ethnic cleansing, etc.), baggage of slavery and state-sponsored industry, etc.
In a nutshell, capitalism is just “cover” for a system of hyper commodity fetishism. In which all things, including people, are prostitutes. Worth nothing than what they might fetch on the market. A sick and debased value set to be sure.
I’m not suggesting socialism as the only alternative.
I really don’t know what capitalism is, having never lived under it as an American.
Free markets sound like a good thing to me, but, again, represent an unknown.
The system we have now is neither. Note that the first thing Bush did after 9-11, was bail out the airlines with $11 billion in taxpayers’ money. That is not free market capitalism…it’s big corporations and government ruling over us together.
Capital and labor have nothing in common.
Universal Healthcare
It’s Free for Everyone
Grousefeather__ You are right about the fact that the wealthy do not create or produce wealth but mainly accumulate it. The people that build something out of nothing, or supply food and fiber where there was none before, or mine or pump something from the earth ate creating and producing. Also people that invent new ideas and methods are creating wealth. Many are only passing around what is already here or are investing what they have accumulated, which does help to keep the wheels turning.
As for the argument of socialism or capitalism, a mix of the two probably works best in the long run. We are seeing in our country now what too much capitalism can do, however socialism kills the desire to work hard and provide for one own needs, which is just as bad an idea.
Daniel David (4:47 pm) writes, “…I’m here to read the articles, and express my own opinions. My opinion is that we need Democrats, a lot of them. The more you attack that thought, the more attention it gets.”
- I think that what gets attention is that you keep making statements like the following (12:50 pm) — which, upon challenge, you are utterly unable to support:
“Republican majorities do not pass legislation to keep citizens in control of corporations. Democratic majorities do.”
Readers of these threads will notice that you make such broad assertions — but are unable to back them up. Many will draw the obvious conclusions from that — namely, that you don’t know what you’re talking about, & that you just fling around Dem Party propaganda without caring whether it’s true.
As for your dismissal of Marx — the quote I cited above (2:18 pm) is obviously a very accurate description of the US political system today: a government which serves only the powerful corporate interests, at the expense of the population. That was a very prescient observation about the role of government in capitalism, despite being written some 150 years ago.
Your manner of rejecting Marx’s statement (3:04 pm) (” The reason I don’t worry too much about Marx, is that Marxism is failed, discredited and dead. I’m not a Marxist and couldn’t care less about anything he said…”) is the manner of an ignoramus & Know-Nothing. It’s just the kind of thing a dolt like Bush might say. If I quoted you something from Spinoza, and you knew nothing about him, you would not be entitled to reject the quotation simply by saying you “couldn’t care less about anything he said.” // But you attempt that same tactic with Marx, because you’re a brainwashed American, who thinks he has the right to have loud opinions on things he knows nothing about.
Any system can work as long as its run direct democratically.
Marx was correct and Fukuyama was just writing a book for money. Capitalism is the system that has proven to be a failure and it definitely will not survive because it has no incentive to take care of a global society or the environment which sustains it. While the transnationals and the corporate governments can work in concert for certain purposes, they are inherent individualists who will always put their own interests first when that time comes when they have to choose between the “team” and survival. We have passed the apex of capitalism and it is all downhill from here. What sustained the greed of capitalism in the past was that the managers of corporate nations could keep their evil deeds secret from the general populaces for extended periods, and those evil deeds were necessary for the elimination of adversaries and the breaking up of or impoverishing of opponent countries so that the harvesting of resources could proceed virtually unrestricted.
The decline of capitalism will be relatively rapid, in historic terms, and a vivid manifestation of that can be seen now in our southern hemisphere. A real revolution is occurring in the countries of Venezuela, Bolivia, Ecuador and Nicaragua. The socialist governments emerging there are taking back their natural resources and putting them to the service of their populations. The new awareness is spreading all through South and Central America, especially among the indigenous peoples, and the type of leaders emerging are shining examples of the best that a people can produce.
The Revolution in Cuba produced an honorable society that is unparalleled in the history of the world. Their Latin American School of Medicine creates thousands of doctors from and for countries in the region and from Africa, at no cost to the students. They have an Operation Miracle program whereby they operate on and restore the sight to hundreds of thousands of people from the region, for free. They have an emergency medical brigade called Henry Reeve which sent 473 doctors and nurses and thirteen fully equipped field hospitals to Pakistan after their big earthquake and they stayed there for eight months, through a Himalayan winter. By comparison, the U.S. sent fourteen doctors for two weeks.
You could write a thick book on the fine qualities and meritorious accomplishments of the Cubans since the success of their Revolution in 1959. And they are socialist! If anyone speaks against socialism then they don’t know what they are talking about or have a base agenda. Cuba has shown what magnificent society can emerge from socialism and, even though they had to fight to get their’s, because of them the other regional countries don’t need to resort to war to get their socialism because Cuba has demonstrated what can be accomplished by that system even in the face of a fifty year blockade.
Capitalism is having it’s day now.
It will however in the end as Marx predicted some 150 years ago, fall at the feet of socialism.
If mankind is to survive and prosper, he will have to adopt socialism.
Capitalism is eating us and itself to death.
“George W Bush has subtly but tellingly extended the Reagan revolution”
Subtle my ass! There is nothing subtle about bush’s Norquistian economic policies.
I liked your comment qbaldsmoove. Adam Smith’s market “hand” might be invisible, but I am more than certain that it is giving me and the majority of people in this country the finger right now!I am too young to have experienced Keynsian policies, but perhaps they are worth dusting off at this point! My econ professor was a staunch Libertarian, so I am well aware of it’s negatives.Perhaps one of the older commentators can enlighten me on this point?
Rick,
You wrote that:
If mankind is to survive and prosper, he will have to adopt socialism.
I agree, but that is one monumental “If”.
RichM, Restive, off22,
Marxism is dead because Lenin and Stalin and other Soviet successors could not successfully implement it without killing LARGE numbers of their own citizens. This does not mean I believe Marx didn’t say anything that may be true. It does mean the whole of Marxism is no longer worth debating. Cuba is a basket case. Hugo Chavez will succeed only until his personal power is not propped up by oil money from elsewhere. Even China is embracing controlled capitalism at breakneck speed. So is Vietnam.
As for Democrats, I do not believe that the New Deal, public education, consumer protections of any kind, securities regulations, income taxes, civil service rules, Social Security, Medicare, Medicaid, union elections, utility regulation, truth in lending, ERISA, OSHA, Miranda rights, (stopping here, a non-exclusive list) were achieved without them.
Everything in government is a compromise, all the time, unless one party or other is in complete control, as has happened during part of the Bush administration.
I advocate for Democrats, because I want to see a governmental period from 2008 forward where the Democrats instead are in complete control. I believe it will better serve citizens than what we’ve seen, for instance on the issue of health care, as one example of an important issue. And reiterating again, I believe it’s to be an All-American event, with Marxism left completely out of the equation.
celebrity (Oct 25th, 8:08 pm) writes, “If the American Socialist Party had the funding to run an advertising campaign telling the TRUTH of what they stand for …, I believe the time is ripe for their numbers to shoot up…”
- There’s much truth to this. However, one must recognize that there are MANY “socialist parties,” both in the US, and elsewhere. These parties are not at all the same, and the presence of the word “socialist” in a given party’s name often doesn’t even mean that the party’s program has anything to do with socialism. (For instance, the governing party of Spain is called “The Socialist Party,” and the opposition French party has the same name. Neither really has anything to do with socialism — the names have historical roots, just as the “Labour Party” in Britain no longer has anything to do with labor.)
Anyone who wants to know what real socialism is about should read the World Socialist Website ( www.wsws.org ), a high-quality daily analysis of world events. The party publishing that site is called “The Socialist Equality Party,” or SEP.
Daniel David you’re a fscking idiot.
Cheers.
re RichM 11:16am
and let’s not forget that a little experiment begun some 70 years ago in germany was called “national socialism.” it worked—for a while—for the owners of krupp, i.g. farben etc. for the rest, not so much.
re endCapitalism 11:17am
ditto
Daniel David,
I’m sorry, but this all is highly specious on your part. Point by point:
“Cuba is a basket case. Hugo Chavez will succeed only until his personal power is not propped up by oil money from elsewhere.”
Cuba is far from perfect - but “basket case”? Come on. Look at their literacy rate, their national health care, and so on. As for Chavez, he was elected by a much larger majority than, well, any president in recent history, and probably ever.
“As for Democrats, I do not believe that the New Deal, public education, consumer protections of any kind, securities regulations, income taxes, civil service rules, Social Security, Medicare, Medicaid, union elections, utility regulation, truth in lending, ERISA, OSHA, Miranda rights, (stopping here, a non-exclusive list) were achieved without them.”
Howard Zinn: “When the New Deal was over, capitalism remained intact. The rich still controlled the nation’s wealth, as well as its laws, courts, police, newspapers, churches, colleges. Enough help bad been given to enough people to make Roosevelt a hero to millions, but the same system that had brought depression and crisis-the system of waste, of inequality, of concern for profit over human need- remained.” (http://historyisaweapon.com/defcon1/zinnselhel15.html)
“I advocate for Democrats, because I want to see a governmental period from 2008 forward where the Democrats instead are in complete control.”
Herein lies the heart of the matter. Your guys are poised to win from the looks of it, so you’re happy. Well, good for you! Meanwhile, the Democrats will do the same thing that the Republicans do, but slower. I don’t know if this is amnesia on your part, or just some kind of loyalist stubborness, but you seem to have a power fever. I suggest a walk in the woods.
“I believe it will better serve citizens than what we’ve seen, for instance on the issue of health care, as one example of an important issue.”
You chastize Cuba and put forth health care? Please. Hillary’s health care plan is not even close to a nationalized system.
“And reiterating again, I believe it’s to be an All-American event, with Marxism left completely out of the equation.”
You sound like anti-red big labor here, so I thought this may be appropriate in closing…from Howard Zinn again:
“In 1936 there were forty-eight sitdown strikes. In 1937 there were 477: electrical workers in St. Louis; shirt workers in Pulaski, Tennessee; broom workers in Pueblo, Colorado; trash collectors in Bridgeport, Connecticut; gravediggers in New Jersey; seventeen blind workers at the New York Guild for the Jewish Blind; prisoners in an Illinois penitentiary; and even thirty members of a National Guard Company who had served in the Fisher Body sit-down, and now sat down themselves because they had not been paid.
The sit-downs were especially dangerous to the system because they were not controlled by the regular union leadership. An AFL business agent for the Hotel and Restaurant Employees said:
You’d be sitting in the office any March day of 1937, and the phone would ring and the voice at the other end would say: “My name is Mary Jones; I’m a soda clerk at Liggett’s; we’ve thrown the manager out and we’ve got the keys. What do we do now?” And you’d hurry over to the company to negotiate and over there they’d say, “I think it’s the height of irresponsibility to call a strike before you’ve ever asked for a contract” and all you could answer was, “You’re so right.”"
I *refuse* to get behind whatever pro-Empire, pro-big business, boondoggle pseudo-liberal hogwash you seem to be peddling here. All you have done is convince me that I was right to begin with.
hazmat,
There are theoretically an infinite number of possible implementations of socialism just as there are an infinite number of possible implementations of a capitalist political economy.
I think most would agree that capitalist implementations are generally more likely to create rapid economic growth, and more able to feed a military apparatus so that it may attain supremacy. And most who believe in the superiority of the US system would claim that settles the issue.
However, many on the left (including me), would hold that superiority on the above measures is virtually irrelevant, as their ethical system, based on finding meaning and satisfaction in life as responsible members of the human family, leads them to value long-term sustainability and the long-term welfare and quality of life of members of the human society. And so they do not value rapid growth and an advantage in gaining military superiority or control over others.
But of course those who value what will bring them the ability to dominate will more likely have the opportunity to dominate, and under most capitalist-consistent value systems, they will take full advantage of that opportunity. But developing the ability to dominate and dominating are completely unrelated to maximizing sustainability and long-term societal welfare.
This provides another example of the verity of the simple old adage: “Good guys finish last.”
Daniel David (11:11 am) writes, “Marxism is dead because Lenin and Stalin and other Soviet successors could not successfully implement it without killing LARGE numbers of their own citizens…”
- Dan, your attempts to discuss this subject merely reflect standard US attitudes inculcated in our population by propaganda campaigns over the decades. You don’t know the first thing about it. For instance, many capitalist governments have also killed large numbers of their own populations. Most of those governments were supported by the US. Examples include Indonesia in 1965, the Congo under Mobutu, & almost every single country in Latin & South America, especially Chile in the 1970’s, & El Salvador in the ’80’s. // Furthermore, the US govt killed millions of people in SE Asia in the 60’s & 70’s. Does that discredit capitalism? Does that entitle one to say that “capitalism is dead?” // Germany under Hitler, Italy under Mussolini, and Spain under Franco were ALL capitalist countries. Does that entitle one to say that “capitalism is dead”?
To say that Marxism is dead because of the USSR is to demonstrate that the speaker knows nothing about the history of the USSR. Amusingly, your remark states that “other Soviet successors” killed large numbers of Soviet citizens. Please name one successor of Stalin who did anything of the sort. // Stalin was the only Soviet leader who did a lot of domestic killing, and his political line was not really Marxism. He was a counterrevolutionary — a career opportunist, & not really a Marxist at all.
You continue, “As for Democrats, I do not believe that the New Deal, public education, consumer protections of any kind, securities regulations, …were achieved without them.”
- Actually, many of the New Deal reforms were adaptations of ideas that had been promoted for years by militant labor movement activists, communists and socialists. // Furthermore, your trying to associate today’s Democrats with the New Deal is completely bogus. I myself have considerable respect for what was done in the New Deal, but the only thing today’s Democrats have in common with the New Dealers is the name. The political coalition is not remotely the same any more, and the party itself hasn’t introduced a single progressive reform since Medicare, which is over 40 years ago. Today’s Democrats are Republicans in sheep’s clothing. They are warmongering nationalists — as close to the military industrial complex as Repubs — & are fully complicit with Bush in every one of his crimes.
There is nothing wrong with capitalism, socialism, or most isms, it is the people who get into power who are to blame.
It is the need for power, the necessity of promoting greed, it becomes a game, instead of being seen as a blight on society.
If Marxism is dead as many say it is, then we will all be dead when capitalism dies. And it is dying, People.
It is killing off all life and not just us humans, too. And all many do is advocate voting for Democrats instead of Republicans?
re kivals 11:51 am
possibly you inferred a blanket condemnation of socialism from my post; nothing could be farther from the truth (if forced to pigeonhole myself, i’d accept the label “left libertarian” or maybe “anarcho-syndicalist”). i meant only to illustrate that calling something “socialist” doesn’t make it so, any more than calling our present system of corporate feudalism “capitalist” would make it palatable to adam smith.
restive and RichM,
I refer you above to the post by endCapitalism 10/26
11:17 am. You can simply ditto that post, perhaps again and again, and save yourselves a lot of typing time.
Daniel,
glad to hear you admit to your ignorance. it can be overcome - my suggestion for long walks to cure your power addiction still stands. oh, and have a nice day.
Daniel David (3:35 pm) - Well, I agree that endCapitalism’s 11:17 post was pretty good.
I think we’ve established a clear pattern here: you come to CD, do vacuous commercials every day for the Dem Party, then refuse to discuss substance when relevant questions are put to you. You make assertions — & then are unable to back them up. I’m sure we can look forward to much more of the same, from you.
“I think we’ve established a clear pattern here: you come to CD, do vacuous commercials every day for the Dem Party, then refuse to discuss substance when relevant questions are put to you. You make assertions — & then are unable to back them up.”
Wow, maybe it’s just me, but that sounds like a politician in the making. I’m sure he has a bright future ahead.
“I’m sure we can look forward to much more of the same, from you.”
Indeed.
“Seachange” , yes. Through the manufacturing of Global warming.
Thank you to all CAPITALISTS.
The Economists advisors are constantly experimenting, creating statistics to prop up the Share markets on the back of laborors ( both skilled and unskilled ).
There is no getting ahead in capitalism, as they always scheme ways to pay the house. Capitalist don’t even train you to become wealthy, they just train you to be their labor… too much work…
An empirical view of wealthy capitalist is:
The wealthy in Capitalist societies are “Collector Class” betting what they collect will be of value going forward. And they are dogged about saving their wealth at the back of anyone else. They are even starting to build walls to protect their wealth because of such practice.
The Seachange ( in terms of melting ice-caps, acid oceans) will come gradually when their collected wealth will be tested against present reality.
It will be a nice show!
In the end , we do not want wealthy masters, false gods or imaginary borders to rule over our free individual minds.
Interesting posts everybody.
By the way, I lived in Honduras and the Philippines. From what I’ve read and heard about Cuba, I think Honduras and Philippines are the basket cases.
Unfortunately, we have global corporations unleashed from their national moorings; this is especially true of the US.
However, these corporations still need the US’s global national security system to enforce the “rules” of the international hierarchy of production.
If corporations organize their own global system of military bases, client states and dependencies, than they won’t need the US national security system as much.
It is always instructive to study the emergence of world-capitalism starting circa 1500. Until recently, many corporate joint stock trading companies possessed their own navies, armies and marines. In some instances they owned whole swatches of the world: East Indian Company before 1857, the Hudson Bay Company, etc.
In fact, until the 19th c., many European kingdoms, city-states, and empires did not possess the needed infrastructure or funds to field huge armies. As a result, many of these governments hired large private mercenary contractors.
What we are experiencing is social and economic regression. Because we haven’t democratically progressed from formal political democracy to increasing economic democracy, our masters have to revert to earlier methods used to solve the continuing crises in capital accumulation.
At present, most large corporations are increasingly dependent on the governments to solve their accumulation problems: private no-bid contracts, military spending, grabbing important material resources: energy, water, minerals and land.
Of course, our masters are increasingly dependent on states to control the ever increasing restive populations who find no form of popular government that accepts their input. Instead, governments are increasingly focused on the accumulation problems of our corporate masters.
baladirev, yours is one among many good posts on this thread, thanks.
Going forward, I am afraid US will be much more likely to move closer to fascism than democracy, politically and economically. The American ruling class cannot get out of the obsession of thinking US should stay number ONE among nations.
The two fascist government, Russian and the Chinese, seem to come to the conclusion that to prosper and to be great they need fascism. The American ruling class is driven to the conclusion also that to beat these two potential challenger US must adopt fascism too.
For me fascism means capitalist and capitalism function hand in hand with a repressive government.
Let me reiterate the point that Paul from Texas makes above: the US does NOT have a free market capitalist economic system. It has an enconomic system of, by, and for the multinationals. It is better to apply Naomi Klein’s term “corporatacracy” or Greg Palast’s “corporatopia” to our present economic system.
Everyone should take a moment and read the Wikipedia entries on “Environmental Economics” and on “Ecological Economics.” Both argue–at least indirectly–that capitalism and environmental/social progress are perfectly compatible. In fact, when capitalist principles are appropriately applied (i.e. in the way Adam Smith laid them out) then environmental and social progress are actually stimulated.
Elijlyn, good point about the cult of capitalism replacing religion. Consumerism seems to be the new opiate of the masses.