No such thing as a final collapse of capitalism

12 03 2009

Marx may have been semi-resurrected a while back, at least in a bastardised version. It has taken a global slump to bring Lenin back into the limelight. He is quoted in the Financial Times as saying in 1919 that,

To believe that there is no way out of the present crisis for capitalism is an error.

In the run up to the G20 meeting in April it is important to keep in mind what Lenin said. You would be forgiven for thinking that some supporters of capitalism have forgotten this crucial truth. The news media are full of  articles from erstwhile advocates of the free market, such as Anatole Kaletsky, arguing that only state activity can get the world economy going again. Others, like Noreena Hertz, dream of a new form of capitalism which is free from conflict and based on cooperation.

We are moving into a global slump the consequences of which could be terrible for the developed west and disastrous for the developing world. But capitalism is not going to collapse. In the continued absence of any alternative the market will revive at some point. Nor is it going to somehow transform itself into something which is not capitalism, mainly because there is no agency to affect that kind of change. The main problem is not the potential for capitalism to collapse or to be transformed, but whether the world’s leaders can prevent a full blown catastrophic slump.

Leadership is the key issue at the moment, not the mode of production. We can agree that the market economy is failing. It would certainly be a good thing if we could think about practical alternatives to the market and how to promote them. But the priority has to be to encourage ways of involving more people in finding solutions to the current crisis. Looking to the state or relying on utopian dreamers is not going to help create a long term solution.

The current quiescence of the population in most countries in the face of recession is the biggest barrier to recovery. Most people are still in a state of shock and disbelief and that extends to the political elites. For example, as Daniel Finkelstein points out, our leaders here in the UK are in denial about the consequences of the slump for the future funding of the public sector.

In the absence of proper democratic politics, with parties that stand for something and which have ideas for change, the scope for activity to get out of the slump has fallen entirely back within the realm of the state. The rest of us are reduced to passive observers or suffering victims. Yet the economy is not a technical process,it is the product of all of our activity. We need to find ways of involving more people in the debate on what is wrong and what we can do to fix it.



2 responses

12 03 2009
Arshad Ali

If by capitalism, you mean the “accumulation of capital,” then this will only survive in attenuated form, with ever more state intervention. If you mean “free-enterprise society,” that hasn’t existed in modern times: state power has been crucial for capital formation.

15 03 2009

Couldn’t agree more. After the credit crunch comes the public sector crunch and the pensions crunch. Every last penny and more of our Community Charge goes to pay the Council’s pension fund, as more people are now drawing from it than contributing.

Arts organisations and charities are already feeling the chilly wind of disappearing sponsorship. We should be acting now, but no doubt we’ll leave it until another crisis hits. I’d like to see us slashing the cost of the Olympics in half, reducing public expenditure by 10% across the board. It may do us all some good to live a little smaller with less buying, less consumerism and more authentic business activities.

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