Posts Tagged ‘zombies’

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Capitalism’s crises are clearly becoming deeper and more severe. After the crash of 2007-08, the United States (and much of the rest of the world) was subjected to the Second Great Depression, the worst economic downturn since the depression of the 1930s. Now, in the midst of the novel coronavirus pandemic, business activity has ground to a halt and unemployment has soared to levels reminiscent of the first Great Depression.

Not surprisingly, both Main Street and Wall Street firms have once again turned to the U.S. government to be bailed out through a series of programs that dwarf anything the world has seen before. The Federal Reserve and the Treasury Department have stepped in with a broad array of actions to keep capitalist enterprises afloat, including up to $2.3 trillion in direct lending to support employers and financial markets (including loans to 24 large financial institutions known as primary dealers), lower interest-rates (along with a promise to keep them low for the foreseeable future), a resumption of the purchasing of massive amounts of securities, relaxing regulatory requirements on financial institutions, direct lending to banks (to encourage them to lend to their corporate clients), and the list goes on. They’ve also supported direct payments to workers, through so-called stimulus checks to households and extra payments to unemployed workers, so they’ll be available to employers when business activity resumes.

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The result has been an explosion of the debt (securities plus loans) owed by nonfinancial corporations, which is now close to 80 percent of Gross Domestic Product. That debt (which has been subsidized and encouraged by the federal bailout) has become the mainstay of economic activity in the United States. It’s what’s keeping American businesses—including Apple, Walmart, AT&T, Disney, Nike, and Berkshire Hathaway—afloat.

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And, as businesses take on increasing amounts of debt, the percentage of “zombie firms“—corporations whose debt servicing costs are higher than their profits but are kept alive by relentless borrowing—is now close to 20 percent.

This growth of zombie capitalism is not new. Capitalism’s most ruthless critic saw the trend emerging already in the middle of the nineteenth century:

The last illusion of the capitalist system, that capital is the fruit of one’s own labour and savings, is thereby destroyed. Not only does profit consist in the appropriation of other people’s labour, but the capital, with which this labour of others is set in motion and exploited, consists of other people’s property, which the money-capitalist places at the disposal of the industrial capitalists, and for which he in turn exploits the latter.

As it turns out, the Wall Street Journal is well aware that the combination of massive government bailouts and widespread corporate indebtedness has cast doubt on contemporary capitalism, since

easy money has juiced up the value of stocks, bonds and other financial assets, which benefits mainly the rich, inflaming social resentment over growing inequalities in income and wealth. It should not be surprising that millennials and Gen Z are growing disillusioned with this distorted form of capitalism and say that they prefer socialism. The irony is that the rising culture of government dependence is, in fact, a form of socialism—for the rich and powerful.

It should come as no surprise that the Journal sees this as a “distorted” form of capitalism, which has the effect of “creating more zombies and monopolies, widening inequality, undermining productivity and slowing growth”—thereby undermining the premise and promise of “just deserts” and an expanding economic pie. To which their only response is, if only U.S. capitalism could return to the natural law of “economic risk and loss”. . .

But zombie capitalism is real capitalism. Corporations and banks, supported by their political and media representatives, presume that in both good times and bad they are entitled to turn to assistance from a shifting combination of public and private entities, which will allow them to continue and expand their operations, even as the legitimacy of their enterprise as a whole is called into question. They’re only worried about their own profits (or at least their own less-then-profitable survival), confident that the risks and losses will be successfully passed on to others.

A time when capitalism did not involve the shifting of costs from capital onto others is a pure illusion, a fairytale that is trotted out when corporations and banks appear to violate the natural laws of economics and to increasingly call for and rely on cheap money and government bailouts.

The problem is, capital is the one that has kept the zombie story alive, since it has long treated its workers as will-less and speechless bodies, interested only in shirking effort and relying on handouts. That’s why now employers want to cut back on unemployment efforts, to force them back to work.

But capital itself has become the real zombie, a set of corpses that are only reanimated by the supernatural efforts of governments and banks. So, as befitting the genre (according to Simon Pegg), they have become increasingly “slow and steady in their approach, weak, clumsy, often absurd” in their activities.

The Journal clearly wants to eliminate the association of contemporary capitalism with death, preferring a world populated by entities that obey the laws of economic risk and loss. But, as we all know, that world is animated by another undead creature, the vampire, which “lives only by sucking living labor, and lives the more, the more labor it sucks.”

Contemporary zombies or a return to vampires—that’s the only choice offered by those who defend capitalism in the midst of the current pandemic. Better, it seems to me, to protect our brains and life-blood from all the undead creatures that haunt the capitalist imaginary and devise a radically different way of organizing economic and social life.

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Special mention

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In the United States, we’ve witnessed a return of the Roaring Twenties—for the past three and a half decades.

As Emmanuel Saez and Gabriel Zucman show, the share of wealth (defined as total assets, including real estate and funded pension wealth, net of all debts) held by the top 0.1 percent of families is now almost as high as it was in the late 1920s.

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The opposite side of the wealth coin has been an erosion of wealth, beginning in the mid-1980s, among the middle class and the poor. By 2012, the bottom 90 percent of Americans collectively owned only 23 percent of total U.S. wealth, about as much as they owned in 1940.

According to Saez and Zucman,

The growing indebtedness of most Americans is the main reason behind the erosion of the wealth share of the bottom 90% of families. Many middle-class families own homes and have pensions, but too many of these families also have much higher mortgages to repay and much higher consumer credit and student loans to service than before. . .For a time, rising indebtedness was compensated by the increase in the market value of the assets of middle-class families. The average wealth of bottom 90% of families jumped during the stock-market bubble of the late 1990s and the housing bubble of the early 2000s. But it then collapsed during and after the Great Recession of 2007–2009. . .

Since the housing and financial crises of the late 2000s there has been no recovery in the wealth of the middle class and the poor. The average wealth of the bottom 90% of families is equal to $80,000 in 2012 – the same level as in 1986. In contrast, the average wealth for the top 1% more than tripled between 1980 and 2012. In 2012, the wealth of the top 1% increased almost back to its peak level of 2007. The Great Recession looks only like a small bump along an upward trajectory.

How can we explain the growing disparity in American wealth? The answer is that the combination of higher income inequality alongside a growing disparity in the ability to save for most Americans is fuelling the explosion in wealth inequality. For the bottom 90% of families, real wage gains (after factoring in inflation) were very limited over the past three decades, but for their counterparts in the top 1% real wages grew fast. In addition, the saving rate of middle-class and lower-class families collapsed over the same period while it remained substantial at the top. Today, the top 1% families save about 35% of their income, while the bottom 90% families save about zero.

And looking forward?

If income inequality stays high and if the saving rate of the bottom 90% of families remains low then wealth disparity will keep increasing. Ten or 20 years from now, all the gains in wealth democratisation achieved during the New Deal and the post-war decades could be lost. While the rich would be extremely rich, ordinary families would own next to nothing, with debts almost as high as their assets.

To put it differently—and in honor of the season—what we can expect in the future is a tiny group of extremely wealthy vampires continuing to share in a larger and larger share of the blood of living labor, accumulating more and more wealth, while the vast majority wander the economic and social landscape like zombies, being paid the same amount for the work they do and owning next to nothing.

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‘Tis the season, and therefore our thoughts are haunted once again by zombies and vampires.

David Castillo and William Egginton see them as being metaphors for different forms or stages of capitalism:

If the modern vampire may have functioned as an apt metaphor for the predatory practices of capital in colonial and post-colonial societies, today’s zombie hordes may best express our anxieties about capitalism’s apparently inevitable byproducts: the legions of mindless, soulless consumers who sustain its endless production, and the masses of “human debris” who are left to survive the ravages of its poisoned waste.

But zombies and vampires haunt us in other ways as well.

Let’s start with blood-sucking vampires. Today, in the United States, as productivity increases but workers’ wages remain stagnant, we continue to be haunted by the image of capital sucking the blood of living labor. What are corporate profits and the incomes of the top 1 percent but the flows of that blood—out of the mass of people who work for a living and into the pockets of those who happen to have sharp teeth and an insatiable appetite for more?

As for zombies, John Powers sees their meaning as having changed in recent years:

Sometime in the years leading up to September 17, 2011, zombies had gone from being associated with a terror of mob rule to the promise of release from an inescapably all-encompassing system. To be clear: Zombies were not being equated with corporate capitalism – they had become the revolution itself. Zombies had become the alternative to the system with no alternative.

We should remember, in Max Brooks’s World War Z novel, when cities were made to be as efficient as possible in order to fight the zombies, the plumber held a higher status than the former CEOs; when the ultra-rich hid in their homes, which had been turned into fortified compounds, they were overwhelmed by others trying to get in, leading to mass slaughter.

 

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Special mention

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Next year, I have to give a major address on rethinking Marx and utopia at a conference on “Capitalism and Socialism” sponsored by the Center for Communal Studies at the University of Southern Indiana (I’ll post the link when the conference web site becomes active).

I still haven’t figured out what I’m going to say yet (although I have some ideas, connected to the theme of critique). And, like John Powers, I’ve never been a “zombie guy” (in fact, I’ve mostly stayed away from the growing list of films and literature featuring zombies). However, based on his article on the post-capitalist dimensions of the zombie apocalypse, I just might have to spend a bit of time studying what zombies have come to represent in the current crises of capitalism.

The first time I was cognizant that zombies might no longer mean what I had grown up being told they meant was during the unexpected sight of Occupy Wall Street protesters dressed as zombies taunting the 1%. I was familiar with the phenomenon of zombie walks – absurdist flash mob street theater – so I wrote the association off to protesters making a pun on “zombie capitalism.” But looking back, I no longer think so.

Sometime in the years leading up to September 17, 2011, zombies had gone from being associated with a terror of mob rule to the promise of release from an inescapably all-encompassing system. To be clear: Zombies were not being equated with corporate capitalism – they had become the revolution itself. Zombies had become the alternative to the system with no alternative.