Capitalism, Keynes, Socialism
Nathan Coombs (April 25th, 2009)
In reaction to the global economic crisis, in his cover story for the current issue of Prospect magazine Geoff Mulgan tantalisingly holds out the promise of what life would looks like ‘After Capitalism’[i]. The only problem is that his hodgepodge of possible routes beyond capitalism – foremost the vague vision of “servant capitalism” – not only do not transcend capitalism, are not only being articulated by those with the greatest stake in promulgating capitalism (he even cites David Cameron as playing a part), but are even aspects of capitalism with us today: the same aspects to have played their part in inducing the global crisis that supposedly marks the beginning of a new epoch.
Amongst his suggestions of routes beyond capitalism he includes Keynesian investment in green industries, the pluralisation of company governance and the introduction of “personal welfare counts” (previously called the welfare state?) It does not take a whole lot of nous to work out that this is hardly a portrait of a world ‘after capitalism,’ but simply an extrapolation of contemporary trends within capitalism: precisely those trends that have historically prevented the possibility of any ‘after’.
Keynesian economics - the answer to the global economic crisis?
In other words, is it really so difficult to imagine that green entrepreneurs will become the new tycoons of the 21st century; backed by government decrees enforcing the adoption of their technologies and authorisation of their patents? Has the welfare state historically achieved more than rounding off the sharp edges of capitalism and exculpating the middle class’s guilt about the presence of massive underclasses in phenomenally wealthy countries? Will these purported servile tendencies do anything to end the unstoppable global progression towards soaring inequalities and the collapse of social mobility?
Mulgan is not the only one, however, to see in a revived Keynesian spirit a route beyond capitalism; that despite the fact Keynes’ theory from the start was intended to halt the spread of communism throughout Europe. Darling of the liberal-left, Joseph Stiglitz, has called for “a new kind of public-private partnership” and “a new balance between market and government.”[ii] Those on the left of the Labour party have also apparently been pressing for a Keynesian fiscal stimulus package; and we are told that finally we now have a clear demarcation between the Conservatives and Labour over the issue of national debt and counter-cyclical spending.
Yet if this is Keynesianism, it is an odd one. With U.K. national debt reaching unprecedented levels and most of that having been squandered on propping up the crumbling edifice of the banking system and tax cuts to boost consumption, there is little left to adopt even minimal investment programs. Rumour has it that the international bond markets are likewise getting uneasy with the UK and United States’ prolificacy with their national debts and might, at some point, no longer wish to keep buying.
It is thus a bizarre spectacle to see the liberal-left flock to resuscitate Keynes at this particular global political-economic conjuncture. The lack of objective analysis of whether Keynesian economics has any relevance to the current situation – nevermind its desirability or not – signals a true lack of ideas and head in the sand mentality. That the ultimate source of credit and the sustainment of artificially high standards of living vis-à-vis value creation in the West, comes from high savings in the East; on this point no debate within the realm of mainstream politics or economics has anything to say. It is, quite simply, political economy; and politicians don’t do political economy nowadays.
That is also not to say though that the Left is doing much better in the ideas department. At the start of his article Mulgan cites Marx and quite correctly observes: “much contemporary anti-capitalist literature (from David Korten, Wendell Berry, Alain Lipietz or Michael Albert) is that they offer little account of how their visions might be realised and how powerfully entrenched interests would be overcome.” At the same time, however, he ignores the key lesson of Marx; the source of problems within capitalism does not come from its form (polluting vs. non-polluting, regulated vs. unregulated etc.) but from the logic of capital itself. Where the mechanisms of capital are at work, it can never be the ‘servant’ of any, except for those who stand to benefit and profit from its workings. Keynesian economics was supposed to take the edge off the hardship of workers, but only so that they would not rise up and topple the system itself.
Still, let us leave aside the poignant subject of agency Mulgan raises, because it is undoubtedly true that all mooted anti-capitalist cries of ‘there is an alternative’ do not contain with them the necessary forces to achieve their, albeit limited, goals. No – the question is rather whether in fact the opposite of Mulgan’s supposed plethora of alternatives to capitalism currently defines our contemporary predicament?
Recently in Comment is Free Eric Hobsbawm argued “socialism has failed”[iii] – cue the cries of those who believe that 20th century socialism was never really tested, that communism wasn’t given a chance once it was driven off the rails by Stalin. The Trotskyite thesis that true workers power was suppressed by bureaucracy falls a little flat though when we consider that across the world all socialist and communist states ended by falling into the same pattern: centralized state-run economies that ultimately lagged behind their capitalist rivals. The answer by some, reiterated again in Mulgan’s piece, is the only answer lies in reducing consumption and the pace of modern life within capitalism. This all seems a bit rich when we still are afflicted with a housing crisis, inadequate medical science and the shackles of wage labour; all set within a global context in which the impoverished of the world are crying out for development and their slice of an enlarged pie.
For many on the Left, developments in Latin America have signaled a source of inspiration and hope: foremost the governments of Evo Morales in Bolivia and Hugo Chavez in Venezuela. The problem is that even in these supposedly ‘radical’ regimes, thumbing their nose to global capitalism and U.S. imperialism, there are persistent doubts as to the novelty and efficacy of the new socialism. As Jon Beasley-Murray surmises the findings of a new book on the Latin American Leftist governments:
“It turns out that the two most salient characteristics of the ‘new Latin American left’ are that it is neither new, nor particularly left, and that we are a long way from seeing ‘utopia reborn’. Hence in Venezuela, it is not until 2007 that chavismo defines its goal as ‘twenty-first century socialism,’ and even ‘Chavez did not explain … in what respect [it] should differ from the Soviet experience of the twentieth century.’”[iv]
The same sentiments are expressed in a pamphlet of the Commune on ‘the revolution delayed’ in Venezuela, which for all the rhetoric of a new form of socialism being pioneered, the reality on the ground is state corporatism and the co-option and stagnation of all autonomous political activity outside the Party-state[v].
The problem then to any conception of moving beyond capitalism, or moving beyond Keynes, must lie in the lack of ideas of what and how such a society should work. Marx himself was almost certainly deserves his fair share of guilt for this; maneuvering the 19th century communist movement away from one of considering actual alternative social organizations to warning against writing the ‘cookbooks of the future’. There is a certain logic to his argument; in that societies are organic creations that arise from the forces within them, not utopias to just be decided upon and grafted onto reality. Nevertheless, the deliberate shying away from such issues are no longer tenable in the context of the risk aversion with which people now look upon any attempts at radical change.
This means that we have to fundamentally revisit the question of how else society could be run that would not suffer the irrational developments within capitalism? Although it is tempting at this point to start invoking all sort of management speak, like the need ‘to think outside the box,’ we have to face a number of stark facts. First, any alternative to capitalism must, as a matter of course, be based on economics and power relations. Second, there are only really two historical models that present themselves as alternatives to capitalism: anarcho-syndicalism and the state-run economy.
Is it therefore the case that at present the only viable route is the theoretical renovation of the anarcho-syndicalist route? I think both historically and theoretically the answer has to be no. Despite communism’s failures, it did at least have a model that was historically tested and could count some achievements, whereas anarchism has never succeeded in become a reality at all. In Hegel’s words “What is rational is actual; and what is actual is rational”[vi] – unless the Left is to slip into impotent utopianism, it would do well to keep these words in mind. It has never been clear how anarcho-syndicalism would remove capitalism or deal with the state and international state power. Unlike communism – ‘nice idea, but doesn’t work in practice’ – anarchism must count as not a great idea and one that has never worked in practice.
Does all this take us back to the state-run economy as the only viable alternative? Depressingly, maybe it does. But perhaps a new route of thought beyond capitalism should not involve a simple resuscitation of discredited Stalinist models, but the re-questioning of the state in the state-run economy. Or, to put it another way, as the state plays an ever-increasing role in the economies of all major countries, perhaps moving beyond capitalism lies in challenging the particular state form we have at present. Perhaps it means pushing for widespread nationalisation, but only on the terms of a massive rethink of how state power operates and governs. As the gathering movement for civil liberties shows us, more are now willing to question the state than ever. What if that questioning could be made truly radical?
In any case, these are the sorts of economic and political questions which need to be addressed. The Left has so far failed to raise any substantial challenge in response to the economic crisis. Unless we do so, we will not be entering the new epoch Mulgan forebodes, nor basking in the warm glow of a Keynesian economic politics, but welcoming more of the same, or worse.
Nathan Coombs is a PhD student in political philosophy at Royal Holloway, University of London and also co-editor of the Journal of Critical Globalisation Studies.
[i] Geoff Mulgan, “After Capitalism,” Prospect 157 (April, 2009) http://www.prospect-magazine.co.uk/article_details.php?id=10680
[ii] Jospeh Stiglitz cited in Yutaka Nagahura, “The politics of the long run,” Radical Philosophy 155 (May/June 2009), 11.
[iii] Eric Hobsbawm, “Socialism has failed: now capitalism in bankrupt,” Guardian Online (10th April, 2009) http://www.guardian.co.uk/commentisfree/2009/apr/10/financial-crisis-capitalism-socialism-alternatives
[iv] Jon Beasley-Murray, “Laboratory Latin America,” Radical Philosophy 155 (May/June 2009), 48.
[v] The Commune, “The revolution delayed: a decade of Hugo Chavez,” The Commune (16th February, 2009) http://thecommune.wordpress.com/2009/02/16/new-pamphlet-on-chavezs-venezuela/
[vi] G.W.F. Hegel, Elements of the Philosophy of Right (Cambridge: Cambridge University Press, 1991), 20.