Global Capitalism's Terrifying New Math
McKinsey, one of the world’s preeminent business consultants, released a sobering new report this week detailing that, worldwide, total debt has risen by 40.1 percent — or $57 trillion — since the financial crisis of 2008. “Debt,” here, can mean many things: debt to other countries and international institutions, as in Greece and Italy, which were bailed out by the troika; it also means debt to financial institutions, or household and personal debt of the kind those of us paying off mortgages, medical debt or student loans here in the states know all too well. It all means bad news for the economy.
As “Renegade Economist” Ross Ashcroft explains for the Guardian, Kingston University economist Steve Keen, who predicted the financial crisis back before the bubble burst in 2008, has created a metric to understand when a global financial system needs some, for lack of a better word, updating. He’s written that when private debt reaches 150 percent of a country’s GDP, that that country should take some serious measures to get its financial house in order. Replicated on a global scale, a critical mass of countries all clocking in above the 150 number spells a highly fragile economic landscape. In the UK, private debt currently stands at 350 percent of GDP. In Japan? 400 percent. China? 217 percent. In the United States, that figure stands at a reasonable if-still-ominous 233 percent of GDP. Overall, private debt now stands at the greatest levels in human history.
Between debt and our slowly roasting planet, we’ll be lucky to walk away from the next 25 years with just one crisis. There is a common denominator behind our debt and what else is ailing us: capitalism. The point here isn’t to fear monger about the next financial crisis or speculate on how bad it’s going to be. The zombies are here, and it’s clear that they’re not doing the vast majority of people much good. Great zombie movies don’t focus on the lead-up to the apocalypse. They’re also not about analyzing the diverse array of structural and political factors that put them there. The question everyone wants to know is, “How do you beat the zombies?”
While the economic challenge posed by capitalism’s own zombie apocalypse is obvious, it’s also, maybe even primarily, a political challenge. In the absence of significant popular pressure, global elites (politicians, bankers, etc.) are likely to respond to the coming financial crisis like they did the last one: the wrong way. Rather than putting money into the “real economy,” where we live, spend, love and work, politicians in 2008 chose to prop up the bankers and speculators who got us into the mess in the first place. Consequently, the only industry that’s grown significantly since 2008 is the financial sector. In other words, they bailed out the wrong people and are likely to do so again and again. Given our current political landscape, they’re also more likely to ground us further into a vicious cycle of austerity and “backdoor privatization,” as Ashcroft calls it. That is, cutting spending and public services to save money, starving out vital public services and paving the way for private industry to buy up our now husk-like social safety net, post offices, public transit systems, schools, etc. As the private market drives down wages and busts unions, people’s ability to buy the houses, cars and expensive educations they’re being marketed decreases, leading those same people to take on even more personal debt and landing us all back at square one: more debt, more crisis.
While some economists might have you believe that their choices are based on cold hard calculations, the choices of where to allocate money — especially in the wake of a financial crisis — are ideological. It’s not an ideology of evil bloodsuckers, but of a heartfelt, pragmatic belief that more resources should be controlled by fewer people. Similarly, zombies are driven by their physical need for brains. Are zombies evil? Certainly not, but their primary interest in the acquisition of brains is directly opposed to our own as people with brains.
Left unchecked, the zombies will inherit the earth; in some ways they already have. Confronting the zombie takeover of earth isn’t about convincing them they’re wrong: it’s about strategy and numbers. In the wake of the Great Depression, virtual armies of the newly unemployed cropped up around the country to demand jobs, food and basic human dignity. Mounting enough pressure, they forced FDR’s administration into enacting massive public works and relief programs with the New Deal, in the process laying the groundwork for the modern labor movement. Occupy Wall Street tapped into the public outrage at banks and corporations, creating one of the biggest movements of the last 30 years. With one of any number of crises just around the corner, it’s time to choose between the night of the living dead and a livable planet and economy.