Posts Tagged ‘capitalism’


There is no doubt that, eight years after the crash of 2008, the world economy continues to stagnate. The problem of slow growth is confirmed by Joseph Stiglitz [ht: ja], who bases his argument on the latest report from the United Nations, World Economic Situation and Prospects 2016 (pdf). Thus, for example, the growth rate of developed economies, which averaged only 0.8 percent over the 2007-2014 period, was projected for 2015 to be 24 percent less than before the crash (and forecast to still be less than in 2007 for at least the next two years). For other groups of countries, the decline is even worse: 54 percent for developing countries and 132 percent for economies in transition.

A few days ago, I argued that slow growth was a fundamental problem for capitalism. The question is, why?

To be clear, there’s a reasonable argument to be made that we would all be better off with less or no growth. That’s certainly true for our natural environment, in terms of issues such as global warming, pollution, and so on. Fewer resources would be extracted; less energy would be needed, thus lowering the level of greenhouse gasses; and, in general, less environmental damage might be caused by our economic activities.

My argument, however, is about the predominant economic system in the world today. It is capitalism that has a slow-growth problem. And that’s because growth is both a premise and promise of a particularly capitalisy way of organizing our economic activities.

It is a premise in the sense that capitalists—the capitalist class as a whole, not necessarily individual capitalists—can collect and utilize for their own purposes more surplus-value when capitalism is growing—when productivity is high, when more commodities are being produced, when the economy as a whole is growing. There’s more surplus available, even if workers’ wages are rising, and individual capitalists can all get their aliquot share of that growing surplus.

Of course, capitalists can get more surplus even when the economy is not growing, or growing only slowly. But that requires additional measures, such as keeping wages low. If, for whatever reason, they’re able to keep workers’ wages from growing, then the difference between the value those workers produce and what they receive in income can still grow.

employment gap

And, as it turns out, capitalism has a way of keeping workers’ wages from rising: unemployment. According to the United Nations, just in the OECD countries, 44 million workers were unemployed in 2015, about 12 million more than in 2007. And one third of unemployed individuals were out of work for 12 months or more in the last quarter of 2014—a 77.2 percent increase in the number of long-term unemployed since the financial crisis hit.

One of the key premises of capitalism is that it provide sufficient jobs to employ everyone who wants to (and, of course, needs to) work. Clearly it hasn’t been able to do that in the years since the crash—and slow growth in the foreseeable future will maintain or even increase the existing “employment gap.”



But, of course, the existence of a large number of unemployed workers has had the desired effect: real wages declined from 2008 onward and, even as they began to increase in 2015, they’re still far below what they were before the crash.

And while the decline in real wages certainly serve to increase profitability in the short run, it has also undermined the ability of workers to buy back the commodities they produce. That undercut the consumption contribution to growth. In turn, capitalists ahve been hesitant to continue to invest, which is lowering the investment component of growth.

That means we can expect little economic growth now and in the years to come. And, as I have shown, slow growth undermines both the premise and promise of capitalism.


Contemporary capitalism has a big problem. And no one seems to be able to refute it.

The problem, as Robert J. Gordon sees it, is that economic growth is slowing down, it has been for decades, and there’s no prospect for a resumption of fast economic growth in the foreseeable future. After fifty (from 1920 to 1970) years of relatively fast growth, and a single decade (the 1950s) of spectacular growth, the prospects for continued growth seem to have dimmed after 1970.

In the century after the end of the Civil War, life in the United States changed beyond recognition. There was a revolution—an economic, rather than a political one—which freed people from an unremitting daily grind of manual labour and household drudgery and a life of darkness, isolation and early death. By the 1970s, many manual, outdoor jobs had been replaced by work in air-conditioned environments, housework was increasingly performed by machines, darkness was replaced by electric light, and isolation was replaced not only by travel, but also by colour television, which brought the world into the living room. Most importantly, a newborn infant could expect to live not to the age of 45, but to 72. This economic revolution was unique—and unrepeatable, because so many of its achievements could happen only once. . .

Since 1970, economic growth has been dazzling and disappointing. This apparent paradox is resolved when we recognise that recent advances have mostly occurred in a narrow sphere of activity having to do with entertainment, communications and the collection and processing of information. For the rest of what humans care about—food, clothing, shelter, transportation, health and working conditions both inside and outside the home—progress has slowed since 1970, both qualitatively and quantitatively.

From what I have read, Gordon appears to privilege technical innovation over other factors (such as dispossessing noncapitalist producers and creating a large class of wage-laborers, concentrating them in factories and cities, and so on). He also seems to argue that the fruits of past economic growth were evenly distributed and that the drudgery of work itself has been eliminated.

Still, the idea that rapid economic growth took place during a relatively short period of time dispels one of the central myths of capitalism, much as the discovery that relative equality in the distribution of wealth and constant factor shares characterized an exceptional phase of capitalism.

And that’s a problem: the presume and promise of capitalism are that it “delivers the goods.” It did, for a while, and now it seems it can’t—which has mainstream commentators worried.

They’re worried that capitalism can no longer guarantee fast economic growth. And they’re worried, try as they might, that they can’t refute Gordon’s analysis. Not Paul Krugman or Larry Summers or, for that matter, Tyler Cowen.

All three applaud Gordon’s historical analysis. And all three desperately want to argue he’s wrong looking forward. But they can’t.

The best they can come up with is the idea that the future is uncertain. Thus, as Cowen writes, “many past advances came as complete surprises.”

Although the advents of automobiles, spaceships, and robots were widely anticipated, few foretold the arrival of x-rays, radio, lasers, superconductors, nuclear energy, quantum mechanics, or transistors. No one knows what the transistor of the future will be, but we should be careful not to infer too much from our own limited imaginations.

Indeed. We certainly don’t know what lies ahead. But, since the 1970s, we’ve witnessed growing inequality in the distribution of income and wealth, which resulted in and in turn was exacerbated by the most severe economic crisis since the 1930s. Capitalism’s legitimacy, based on “just deserts” and economic stability, was already being called into question. Decades of slow economic growth and the real possibility that that trend might continue for the foreseeable future mean that capitalism (not to mention those who spend their time celebrating capitalism’s successes and failing to imagine alternatives) has an even bigger problem.


In the summer of 2014, Ta-Nehisi Coates made headlines by announcing that he had changed sides and was now in favor of reparations to African-Americans (accompanied by an explanation of why, in contrast to four years earlier, he had changed his mind). Two weeks ago, Coates made headlines again by criticizing Bernie Sanders for opposing “reparations for slavery” (accompanied, a week later, by a defense of his critique of Sanders).

Needless to say, this is a sensitive debate, one that over time might contribute to the development of a progressive movement in the United States but also one that, at the present moment, threatens to undermine the fragile foundations of that movement. So, I want to step lightly and, instead of taking a firm position, merely raise a few issues for further discussion.


The first point I want to make is that, notwithstanding the title of his original article in The Atlantic, Coates did not make a cases for reparations. He did make a case that the history of American democracy and capitalism is a profoundly racialized history, which stretches back to slavery, continues through the Jim Crow era, and persists to the present. It’s a history this nation persists in overlooking or forgetting—and its effects are profoundly present both in memory and in daily life today. No matter how many times we imagine a post-racial society, we are reminded of the racial disparities and injustices that have accompanied the emergence and development of all of our major economic, political, and social institutions. Coates’s essay provides eloquent testimony to at least some of that history—including, of course, the stark racial segregation of my own city.

But we also have to recognize the fact Coates did not make a case for reparations per se. Nowhere in his essay does he explain how a payment, no matter how large or small, from the United States government to the descendants of African and African-American slaves will actually undo the enduring legacy of racism in the United States.


True, there’s an enormous racial wealth gap in the United States—between, for example, median white households and African-American (by a factor of 12) and Hispanic (by a factor of 10) households. Much of that wealth is in the form of housing. But that’s not where the bulk of the wealth in the United States has been accumulated. Rather, we’ll find it in the hands of a small group of wealthy individuals and large corporations—and reparations to the descendants of slaves will do little to close the gap between those at the top and the bulk of individual (whether African-American, Hispanic, or white) households.

Now, to give Coates his due, perhaps he is more interested in the investigation of the consequences of that racist legacy, a public airing and discussion that would be provoked by a full-scale debate about reparations (which would come from passing Congressman John Conyers Jr.’s HR 40, the Commission to Study Reparation Proposals for African Americans Act), and that’s fine. Let us, as a nation, finally come to grips with both the history of American racism and of the racial disparities and injustices that are so much a part of our recent history—from discriminatory subprime mortgages through unequal rates of unemployment and incarceration to racially biased police violence.

Or, alternatively, Coates might reframe the debate about reparations and begin to write about who actually gained from racist policies and practices over the course of U.S. history. If he did, he’d end up with a very small group of slaveowners, landowners, and capitalists (along with a larger, but still relatively small, group of overseers, merchants, and managers) who benefited from the labor performed by a much larger group of slaves, sharecroppers, and wage-workers. He might also add the institutions—including many colleges and universities—that grew from the proceeds of slavery and the slave trade, sharecropping, and capitalist enterprises. Those are the groups and institutions he might want to look at for reparations.

But, if he did, Coates would also discover that the wealth accumulated by a tiny minority of those at the top stemmed from activities that have also employed white (and Hispanic and other) tenants and workers. They’ve all been plundered—whether at work and in attempting to secure adequate housing, by private employers and bankers and through government policy—and, in that sense, are all due reparations.

No, it certainly hasn’t been the same—the same treatment, the same outcomes—for different racial and ethnic groups. Not by a long shot.

The problem is, reparations might not solve that problem of social theft for any of those groups, as it took place over the course of U.S. history and as it still exists today. In fact, we have to recognize, those gaps are getting larger—for whites, blacks, Hispanics, and everyone else.

As I see it, nothing short of a radical change in the way our economy is organized will overcome those gaps. That’s what conservatives and liberals have no interest in but is exactly what Coates and Sanders should be talking about—with one another and with everyone else in the country as this political campaign moves forward.


500 years after Thomas More’s powerful critique, the interest in utopia seems not to have wained.

In fact, you can make the case, as Tobia Jones [ht: ja] does, that the end-of-history realism of the 1990s has finally given way to a new search for utopia:

Everything looks different now. George Bush Sr’s new world order is frightening and deeply disordered. Religion, which sociologists predicted would slowly slide out of view, is the dominant political issue of the early 21st century, a form of utopianism that just won’t go away. Meanwhile capitalism, which was the motif of triumphalist freedom, seems less noble after Enron, Madoff, Libor and RBS. If anything, people are even more fed-up with the laziness, injustices and profligacy of consumerism than they were back in the 1990s.

It is precisely the combination of ongoing economic instability and grotesque levels of inequality that has undermined capitalist triumphalism and created the space for new kinds of radical dreams.

That’s why I am curious to see what will emerge from Julia O’Connell Davidson and Neil Howard new series on utopia thinking and “Utopia 2016: A Year of Imagination and Possibility” current being staged by Somerset House, King’s College London, and the Courtauld Institute.

The question, as always, is where the new utopian inspiration will come from. More, while replete with criticisms of the existing order, never attempts to offer an answer. But Ursula Le Guin does, repeatedly throughout The Dispossessed (pdf):

“It is our suffering that brings us together. It is not love. Love does not obey the mind, and turns to hate when forced. The bond that binds us is beyond choice. We are brothers. We are brothers in what we share. In pain, which each of us must suffer alone, in hunger, in poverty, in hope, we know our brotherhood. We know it, because we have had to learn it. We know that there is no help for us but from one another, that no hand will save us if we do not reach out our hand. And the hand that you reach out is empty, as mine is. You have nothing. You possess nothing. You own nothing. You are free. All you have is what you are, and what you give.”

That “shared pain” is the precisely the ground for utopian critique.



It just so happens a new London exhibition, Things Fall Apart, is based on a series of posters from the 1930s designed to criticism racism and colonialism and to attract Africans and African-Americans to the racial harmony promised by the communist utopia.


The folks at BlaqSwans [ht: sm] set out to map what they consider to be the emerging post-capitalist paradigm associated with peer-to-peer movements and some of the key thinkers, both precursors and current influences, of those movements.

Here are the three things they confirmed when they assembled the map:

  • There is much more to this transition that the greenwashing offered by Uber and Airbnb, which are actually not peer-to-peer. This is precisely why we deliberately reused the shape of a honeycomb popularised by the “Collaborative Economy Honeycomb” infographic. It lists startup companies claiming to be part of that ‘sharing economy’, when many really are unbridled capitalism trying to further optimise the existing ‘selling economy’ – nothing wrong with selling but let’s not call it ‘sharing’ with the ethical claims usually attached to it.
  • The intellectual work of theorising this new economy has now reached a critical mass that is too often overlooked by ‘mainstream’ economists, observers, and policy makers who treat it as fringe.
  • Put together, the practical initiatives run at the grassroots level offer a credible sustainable alternative contradicting the eventual perception that the post-capitalist paradigm is a utopia dreamt up by isolated hippies. On the contrary, it is now possible to shop food regularly outside of mass retailers’ distribution networks, it is possible for a major French city like Grenoble, or Barcelona in Spain to be run by grassroots movements, and it is possible for farmers to produce in a biodynamic and commercially viable way to escape the vicious cycle of pesticides and high yields.

While the Community Economies Collective is not cited as an influence, there is a great deal of overlap between their work and the post-capitalist paradigm mapped above.

BlaqSwans also mapped what they consider to be the current capitalist paradigm in the following way:


The two maps are a very good start. However, I’d like to see more attention to issues of class, especially the way the surplus is appropriated, distributed, and utilized within the current capitalist paradigm and how the problem of the surplus is being managed differently within the emerging postcapitalist paradigm.

Capitalism new yorker

Special mention

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Sidney W. Mintz, a renowned cultural anthropologist who focused on the Caribbean rural proletariat and linked Britain’s insatiable sweet tooth with slavery, capitalism, and imperialism, died on Sunday at the age of 93.

The son of a restaurateur and an amateur chef himself, Professor Mintz was best known beyond the academy and his own kitchen for his Marxian perspective on the growing demand for sugar in Britain, beginning in the 17th century.

In his view, that hunger shaped empires, spawned industrial-like plantations in the Caribbean and South America that presaged capitalism and globalization, enslaved and decimated indigenous populations, and engendered navies to protect trade while providing a sweetener to the wealthy and a cheap source of energy to industrial workers.

“There was no conspiracy at work to wreck the nutrition of the British working class, to turn them into addicts or ruin their teeth,” Professor Mintz wrote in “Sweetness and Power.” “But the ever-rising consumption of sugar was an artifact of interclass struggles for profit — struggles that eventuated in a world market solution for drug food, as industrial capitalism cut its protectionist losses and expanded a mass market to satisfy proletarian consumers once regarded as sinful or indolent.”

He added, “No wonder the rich and powerful liked it so much, and no wonder the poor learned to love it.”

For me, Mintz’s work was important for many different reasons: the importance of history in making sense of food, economic and social relations, and commodity exchange; a conception of capitalism as a global system; and a focus on capitalist and noncapitalist class structures and class struggles in both the North and the South. Perhaps most important, he turned traditional economic determinism on its head by arguing that the consumption of sugar, tea, and other commodities and their social importance in eighteenth-century Great Britain shaped British colonial policy and the production of those commodities throughout the empire.

Mintz’s work was also an important inspiration for one of my recent courses, Commodities: The Making of Market Society.