The Future of Capitalism

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This is what capitalism is supposed to be about: the bright, lighter-than-air, technological wonder that leads us into a future where we know no bounds, no ties to terrestrial roots, just sheer productivity taking us into a weightless economy, instant connection, free associations. The boundless human spirit and all that jazz.

The reality is, unfortunately, that a lot of people are wading through excrement and refuse and that the gizmos, even when you can afford them, are just excrement and refuse packaged in a nice way (what Adam Smith would call "trinkets and baubles", the desire for which is the "deception" that keeps the "industry of mankind" moving forward).

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What we need to think about is capitalism as a historical process (that academic economists do not even countenance the use of the word is itself quite revealing). And so, if we look at the last 40 years and think about the secular stagnation of growth, rising inequality (the 1%) and rising debt we might wonder if capitalism is facing not just temporary structural difficulties but a more profound crisis, a slow, gradual but inevitable decline. Is financialization a symptom of this decline?

I think one could go further. When one thinks about the decline of the public sector and its ethos (David Marquand, Tony Judt)-something that goes beyond privatisation but includes it; if one thinks about the inability of democratic politics to rein in an unfettered capitalism (since the left has sold itself down the river thanks to Clinton and Blair, the trade unions have been decimated and the universities are firmly in the camp of the neo-liberals); and if one couples that with the vast extension of 'commodification' and a consumer culture into all walks of life, something that is almost ubiquitous in our very thinking, then you've got a recipe for a perfect storm.

So, it's not just structural fault lines one needs to look at; it's the very culture of capitalism that is leading us down to a world of very few alternatives (this was the radical point of Illich back in the seventies: reliance on the state and the market for 'goods' actually led to a diminishing of our autonomy).

It's not the 'external' constraints on capitalism that we should be thinking about ('external' being the word Calhoun uses). What does it mean to say the looming ecological crisis is external to the history of capitalistic development?

What is more interesting is the view that there is an internal contradiction in capitalism, that it will undermine itself? How so?

Well, this goes back to Polanyi and the idea of fictitious commodities. Land and labour, for example, can never fully be made into commodities but there is a tendency in capitalistic development to try and set up equivalences everywhere (bring down everything into the nexus of the market and a system of equivalences or commensurability where the final arbiter of value is money or commoditized time). But here's the rub, the contradiction" the system has always needed and relied upon an 'other' (non-capitalist sector-Nancy Fraser) in order to extract value. This can take the shape of colonial enterprise where you can get cheap labour (think slavery or modern-day outsourcing to countries where regulation is weak) or it can take the shape of reliance on 'affective labour', trust, goodwill and a whole range of 'social capital' that is not produced by the system.

So, the real question for sustainability arises when capitalism itself undermines the very base on which it relies. What happens when the state is not there to tame its wilder instincts? What happens when people lose their motivation to work hard or save because they are living just for the moment (this what Daniel Bell saw a long time ago in his Cultural Contradictions of Capitalism). And what happens when one of the chief contributors to innovation and the creation of social value is throttled by the market (i.e the public realm)? When land, like everything else, is privatized does it fall into ruin (Wendell Berry). If not, how else would you explain the incredible amount of environmental damage inflicted by this mode of production, this way of life?  

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What is the relation of academic economics to all of this? (Of course, academics like to pretend that they're value-neutral or that their subject approximates to a science). they just lay out the facts and policy people make the judgements.

The reality is, however, that there is an intimate link between economic theory and market societies. Neo-liberalism and neo-classical economics are not one and the same thing but one needs to examine the relation between the two.

"That it [economic orthodoxy] afforded a measure of justification to the free activities of the individual capitalist, attracted to it the support of the dominant social force behind authority."

--Keynes.