at the risk of seeming ridiculous…

The End of Capitalism…?

Posted in written thoughts by Charles on December 9, 2008

Obviously… by virtue of the title… I’m referring to our current economic crisis.  Now, I admit: I have Marxist sentiments.  I even consider myself a Marxist (although I’m a bit wary of it because of the widely misunderstood notions of what that means).  The major reason why I would attribute that to myself is because frankly, I feel that his analysis of capitalism was right.  Contrary to common perceptions of the man, he was a scholar of capitalism.  By deeply understanding its processes, he eventually concluded that capitalism would rationally have to come to an end.  I do not have the time nor place (and I wouldn’t be able to do him justice) to discuss his theories in full.  But I would like to reflect on a lecture I attended.

Robert Brenner, UCLA professor and one of the world’s premiere Marxist historians, gave a lecture at Harvard today.  His research analyzes the current state of the market as a reflection of the exhaustion of capitalistic processes.  Contrary to the popular perceptions of technological advancement and growing “wealth” of the western economy, we have come to a dead end.  We have over-capacitated our manufacturing processes and sacrificed production in the name of profit.  Since the post-war epoch, we have consistently cut costs, which has gradually stifled the return of capital.  By crunching credit and inflating interest, our economy has stood helpless while watching brief economic “booms,” which essentially were momentary returns, undercut our own ability to break from sub-prime assets.

There are five insights a fellow lecturer gave:

First, this is no ordinary recession.  Its effects are saturating every sector of the economy.

Second, there is no exit from this crisis.  Why?  During the Clinton administration, there was a move known as “Global Market Integration”.  Or in other words, allowing neo-liberal economic practices to dictate the market.  Thus by fully integrating the market into a single ideological practice with no balancing alternative, we have undercut our own abilities to be rescued from the crisis.

Third, there is no evidence that there is any control of this crisis.  Newspapers gradually keep indicating that “this is a lot worse than we expected”.  This is obviously not a very academic way of stating a condition, but we must be mindful that it will only get worse.  Sub-prime assets, propelled by short-term lending practices in the housing market, essentially centralized the very health of our economy into the hands of estimated returns.  This helps explain why Wall Street tanked (or is tanking) because of the failure of the housing market.

Fourth, everything (globally speaking) resides on the U.S. nation-state.  We are the biggest borrower and spender of global capital.  This inherently places us at the very center of the global market.  This means… if we tank… so does everyone else.

And lastly, we have to ask ourselves: Can our environment endure what capitalism asks of us in order to move beyond our crisis?

Robert Brenner’s answer, and I agree with him, is no.  Not necessarily that it is impossible… but rather, the costs are not worth it.  “Worth it” relative to what?  Let me explain…

Our current crisis puts our economy, and by virtue us as well, in a mode of survival.  This can easily move us into an economic climate where moves are made at the cost of even more significant portions of the country… or the world for that matter.  By continuing down the road of over-capacity and underproduction, we jeopardize the global economy.  But there can be something else…

We can take this as an opportunity to rethink and critically question the practice of capitalism on the micro-level.  Examining things such as social relations, production as meaningful-rather-than-numbing, and competition as the fundamental motivator of innovation can help us rethink the way economics, business, and production is done.  In other words, we can see the “collapse” of capitalism as liberating.  The issues, then, aren’t necessarily technical… it is also cultural.

A professor from Detroit once told me that when he takes people on a tour of the deteriorating-yet beloved Motown, he says, “This is what the soul of a dying empire looks like.”  However, there is a lesson to be learned from this city if one studies what is happening on the ground.  There are grassroots activists that are modeling a community of new social relations… in the midst of economic depression.  They are practicing what is called: solidarity economics.  Work and production, as well as innovation, for the sake and empowerment of the community.

This leads me to a final thought… perhaps the least thoughtful of this rambling post.  Our current crisis, built upon credit, debt and competitive-but-over-capacitated production, begs me to ponder: What is it about competition that seems so necessary to fuel innovation and production?  This implies that people won’t work hard or innovate because profit is no longer the driving factor.  I realize that this is highly idealistic questioning.  But is competitive profit the sole motivator for innovation and production?  What about advancing the quality of life for all?  What if our economy was structured so that production would be in the name of communal advancement?  Setting aside examples of the Soviet Union and Eastern Europe (which are different subjects in themselves), I believe it has to be tried and tested.

I’m guessing I’ve lost most of you already.  But if you’ve read this far, thank you.  Hopefully, this financial crisis brings some fruitful critical thinking.


8 Responses

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  1. benson said, on December 9, 2008 at 06:22

    i agree with a lot of those thoughts bro. i think this current downturn will be the worst we’ve ever seen and it will shake the foundations of capitalism. our willingness to do things differently will definite our ability to get out and thrive from this crisis.

  2. Sam said, on December 9, 2008 at 06:34

    That was mind-blowing. Thanks for letting me know. I’ve been thinking the same thing for quite a while now. I read Shane Claiborne’s “Irresistible Revolution” over the summer, and his Simple Way community was utterly fascinating to me. I thought to myself, “If only every community were like this, poverty would be abolished.”

    I can’t help but think back on Acts 2:42-47; the fellowship of the believers. I believe Jesus came to sow the seeds that would undo the damage from the Fall. The Kingdom of God is the perfect form of society. If only our lawmakers studied the Bible in formulating policy instead of turning to themselves. I feel like we need to also re-read the Declaration of Independence. Government was made by the people, and for the people. Not for Big Business. (Second paragraph –

    I consider myself Marxist also, in the purest definition of that term. I believe that the means of production should be in the hands of the workers, not an outside entity. It makes no sense to have people reap the benefits of the labor of others. However, the question becomes, how to institute change in such a deeply embedded system? I think it really comes down to the grassroots movements. Jesus was a grassroots activist himself. Immortal Technique puts it well in his song “Caught in a Hustle,”

    “Trying to fight the system from inside, eventually corrupts you/But that’s what you get when you put a corporation above you”

    It’s easy to think that once we get to the top, we can institute real change, but I think in order to really climb to the top, you have to step on everyone else along the way. Jerzy Kosinski writes about this in his book “A Painted Bird,” a fascinating novel about the creation of the Other. I highly recommend it.

    “I saw clearly now: several feet below the opening there surged, billowing and receding, a black churning sea of rats. This surface twitched in an uneven rhythm, glittering with countless eyes. The light revealed wet backs and hairless tails. Time and again, like the spray of a wave, dozens of long scrawny rats assaulted with spasmodic leaps the smooth inner wall of the bunker, only to fall back onto the spines of others.

    I gazed at this rippling mass and saw how the rats were murdering and eating one another, pouncing on one another, furiously biting chunks of flesh and shreds of skin. The spurts of blood enticed more rats to fight. Each rat tried to scramble out of this living mass, competing for a place at the top, for yet another attempt to climb the wall, for yet another torn piece of rump.” – The Pained Bird, Jerzy Kosinsky, p. 61

  3. dan said, on December 9, 2008 at 08:25

    Leave it to me (as always) to throw the bone, and unfortunately it’s too late and I’m too tired to formulate a thorough response, but suffice to say are you convinced this is the end of capitalism (or the beginning of the end), or simply the end of our current system of it? What about how it relates to free market ideology?

    I think what we might see over the next couple years and into the next decade is a far more regulated market, especially with the need to keep a watchful eye on all the bailout funds we’ve allocated and given. Even injecting hundreds of billions of dollars into buying financial markets is hardly a capitalistic ideal. But somehow I doubt capitalist principles are going to disappear. I think even these concepts are so big and countries nowadays equally large and intertwined, it can be hard to really gauge the progression and correctly attribute to these concepts the effects we see around the country.

    To be honest, I view capitalism as the pessimistic outlook and method for solving the way society should be run, economically speaking. After all, it assumes that we need competition to bring out innovation because people–by nature–are jealous and are self seeking people. It’s socialism that’s the optimistic one, if anything. I would suppose that in a perfectly idealistic society, they would both work, since they would both be the same thing.

  4. Eunice Yuk said, on December 9, 2008 at 10:41

    i read all of that. hahaha 🙂
    maybe this will happen when obama is president (the solidarity economy ideal society stuff)

    he was accused of having socialist agendas after all


  5. Dan R said, on December 9, 2008 at 23:47

    What may happen will surprise you. The Ingenesist Project has specified 3 relatively simple web applications which if developed and deployed to social networks could make knowledge tangible outside the construct of the traditional corporation and inside social media.

    There is a tiny flaw in market capitalism that can be easily corrected. Technological change must always precede economic growth. We are going about the process of globalization as if economic growth can precede technological change. The Ingenesist project corrects this flaw. Again, this can be easily reversed with the system that we specify.

    If we are successful an innovation economy will be capitalism by the people for the people. I do not believe Marx or anyone would have predicted this. Please help out if you can

  6. Charles said, on December 10, 2008 at 02:09

    Dan, as always, thoughtful comment. Before anything, I just want to say that I’m not convinced that this is the end of capitalism. Granted that my title is called that… as well as me indicating that I’m a “marxist”… I know it seems like I’m saying that we are on the verge of a new economic epoch. This entry really is about reflecting on the lecture I went to. And that I felt the arguments were incredibly strong. Prof. Brenner himself never came out and said that this crisis is the end of capitalism… rather… it is more that we have to question whether our social, political, and economic environment can withstand the sorts of things capitalism asks of us to do.. in order to move beyond this crisis. He thinks it’s not worth it… and that we ought to re-examine social relations on the micro level. (By the way… I’m not doing the best of explaining his ideas… so forgive me for that.)

    In terms of regulated markets, that is another route (and probably what will happen). But one has to question whether the fundamental core of our economy is at stake. Injecting stimuli… massive amounts of bailout loans… will those actually work? Stimuli and bailouts seem to only work when there is a healthy credit foundation of a particular economy. But we have to wonder whether the neo-liberal consolidation has undercut any sort of exit strategy from this crisis. I suppose we’ll have to wait and see.

    But you’re right… we live in a world saturated by capitalist principles. They aren’t going to disappear overnight. But the economy will fundamentally change. It has to. The question is how and in what direction. I feel like the move to re-examine micro-level social relations of production will teach us some lessons about innovation and production rates. Incredibly idealist… I know.

    Dan #2…. that sounds really cool. But I’m too skeptical to believe in a silver bullet. It’s a bit of a jump to think that a capitalist system…. in development since the end of the middle ages… has one tiny flaw. That can essentially be fixed by a technological change. More power to you. But I don’t think that’s how it is. No hard feelings… just skeptical.

  7. sohndave said, on December 10, 2008 at 02:40

    my friends: just because it would not be worth it to continue the way things have been done, does not mean we will change the way things have been done.

  8. Eugene said, on January 27, 2009 at 01:20

    I didn’t read all the comments, but I did read most of your article. The last question you ask about whether wealth and cash is needed to incentivize work is interesting. Or maybe that’s the way I’ve interpreted your words. I think if we reframe capitalism and make other commodities more valuable then cash, then yes. I for one believe that the incentive should be the betterment of humanity, innovation, invention, creativity, etc.

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