Does capitalism have a future? It may, writes Paul Mattick [ht: mfa], but it’s not going to be particularly pretty. In fact, he argues, it looks like it’s going to be downright dismal.
First, depressions have a been a constant feature of the capitalist economy since the Industrial Revolution.
From the early 1800s to the late 1930s, in fact, capitalism spent between a third and a half of its history in depressions (depending on how they are dated by different authorities), which increased steadily in seriousness up to the Big One in 1929. It was only the relative shallowness of the recessions since World War II that gave rise to the idea that capitalism would no longer undergo the ups and downs characteristic of its first 150 years as the dominant social form.
Second, the current crisis was caused by the reappearance in 2007 of the depression avoided in the 1970s.
When the Golden Age came to a definitive end in the mid-1970s, the huge increase in government spending that avoided a return to depression conditions then was another step on the way to today’s increasingly problematic deficits. The very reason for the increase in government spending—insufficient profits—made it impossible to pay off the resulting state debt.
Meanwhile, government debt was joined by soaring amounts of corporate and private debt, making possible the apparent prosperity of the last two decades. Promises to pay sometime in the future took the place of the money the slowing capitalist economy failed to generate. Since governments, businesses, and, to an ever-increasing degree, individuals used borrowed funds to purchase goods and services, public, corporate, and household debt appeared on bank and other business balance sheets as profits. But the repayment of debt requires money made by the profitable production and sale of goods and services.
Third, the current crisis of capitalism is accompanied, and exacerbated, by two other looming problems:
Gloomy though such considerations are, they leave out two paradoxically related factors that promise further dire effects for the future of capitalism: the coming decline of oil—the basis of the whole industrial system at present—as a source of energy, and the global warming caused by the consumption of fossil fuels. Even if continuing stagnation should slow greenhouse gas-caused climate change, the damage already done is extremely serious.
Together, these problems foreshadow a dismal future:
What both of these continuing social stresses promise is that the decline of the economy, however cyclically inflected, will simply be the lead-in to a crisis of the social system that, because it is based on the laws of physics and chemistry, will transcend strictly economic issues. If the peaking of oil supplies and the catastrophes of climate change do not provoke a major transformation of social life, then it’s hard to imagine what could. This idea may seem unreal today to those of us who still live, for the most part, in what remains of the material prosperity wrought by postwar capitalism, much as the misery and terror of the inhabitants of war-torn Congo are hard to grasp for the inhabitants of New York or Buenos Aires. But this demonstrates only imagination’s weakness, not the unreality of the challenges in store for us, as local disasters like the flood of oil that poured out from BP’s drilling rig into the Gulf of Mexico in 2010 will perhaps make it easier to understand.
The question is, can anything be done?
The social relation between employers and wage earners, one that joins mutual dependence to inherent conflict, has become basic to all the world’s nations. It will decisively shape the ways the future is experienced and responded to. No doubt, as in the past, workers will demand that industry or governments provide them with jobs, but if the former could profitably employ more people, they would already be doing so, while the latter are even now coming up against the limits of sovereign debt. As unemployment continues to expand, perhaps it will occur to workers with and without jobs that factories, offices, farms, schools, and other workplaces will still exist, even if they cannot be run profitably, and can be set into motion to produce goods and services that people need. Even if there are not enough jobs—paid employment, working for business or the state—there is plenty of work to be done if people organize production and distribution for themselves, outside the constraints of the business economy. This would mean, of course, constructing a new form of society.
In Mattick’s view, capitalism has reached its limits, suggesting “the need finally to take seriously the idea, as the saying goes, that another world is possible.”