Published online 15 November 2008.
This diary is about the G20 summit and the economy, but really it’s about the larger implications of a society which cannot let go of its status quo assumptions in time to save itself. Here’s the false dilemma: either the current system must be saved, or the current system will fail. The idea that we could switch over to another system, through a set of radical changes, cannot even insinuate itself into the conversation, outside of (perhaps) a marginal section of the blogosphere. Yet this is what the world most needs. In light of this, I recommend that we (bloggers) attempt to overcome resistance to some basic premises of thinking about the current situation.
(crossposted at Docudharma)
OK, let’s start with Friday’s Time Magazine piece, “The G-20 Summit: A Vote of Confidence for Capitalism?” The fact that “capitalism” is being mentioned by name here should give us a glimmer of hope, even though the content is the most obsequious silliness:
The leaders of the U.K., France, Russia, China, India, Brazil, Saudi Arabia, South Africa, Turkey and 11 other developed and developing economies are meeting in Washington at the invitation of President George W. Bush. And the main thing these so-called G-20 members are likely to achieve is a declaration of continuing support for the international free-market system.
Go, team. Keep those eyelids shut, ignore that perfect storm. But at least get the pundits to discuss “capitalism.” Keep that word front and center.
Perhaps the new vogue (among its supporters) for discussing “capitalism” can be said to date back to mid-October, to an Economist piece titled “Capitalism At Bay.” I loved its diagnosis of the current predicament with the mortgage bubble:
The macro economic condition that set up the crisis stemmed in part from policy choices: the Federal Reserve ignored the housing bubble and kept short-term interest rates too low for too long.
Of course, too much of the economy was invested in the inflation of the housing bubble, and the Fed kept rates low to keep this bubble inflating. Check out Robert Brenner’s The Boom and The Bubble. Here’s a taste from the Verso Books blurb:
Only three years ago, the world economy seemed poised on the edge of catastrophe, as financial firestorms ripped through East Asia, Russia and Latin America. A sustained period of significant growth in the US, however, seemed to save the day against all the odds. So impressive was the surface appearance of this rescue mission that all manner of commentators proclaimed…once again…that a ‘new economy’ or ‘new paradigm’ of unlimited and harmonious growth had been forged.
So, you see: the same folks who were applauding the expanding housing bubble pre-’06 are now the ones claiming that the Fed made a mistake. Go team — defend capitalism, blame the Fed.
Meanwhile, General Motors is lobbying for a bailout:
General Motors Corp has been telling U.S. government officials that a bankruptcy filing by the automaker would set off a chain reaction hitting hundreds of its suppliers and dealers as well as its Detroit rivals,
However, The Telegraph (UK), out there in England, has dawningly recognized that there’s really no point in bailing out an industry which will produce stuff that people won’t buy:
But the purpose of propping up car makers – apart from saving jobs – is to allow them to keep producing cars. Why? There is now roughly one car on the road for every American old enough to drive. Car sales have fallen off a cliff. Pouring billions of dollars into the sector is pointless.
We are on the wings of a false dilemma here. Either the government lets the present-day capitalist (yeah, I like that word) economy collapse, or it attempt to save this economy through bailouts. No third option is proposed. The comment about “more fuel efficient cars” is a red herring. Ignore it. If nobody will buy them, it hardly matter how full of sweetness and light GM’s new cars are.
The collapse, remember, isn’t just about cars. Read Saul Landau’s summary of the store closings:
As holiday sales season approaches, consider the following: Mervyn’s, the giant department store chain, filed for bankruptcy. Linens ‘n Things and Ann Taylor are closing their stores; Eddie Bauer has already closed 27. Cache, the women’s clothing chain, discontinued 23 stores; Lane Bryant, Fashion Bug, and Catherine’s closed 150 “underperforming” stores nationwide. Gap will shut 85 stores plus some of its Old Navy and Banana Republic outlets. Foot Locker will abandon 140 outlets and Wickes Furniture is going out of business — after 37 years. Levitz (since 1910) will close all 76 of its stores in December.
Within two months, Home Depot will shut 15 outlets. Thirteen hundred employees will lose jobs. CompUSA closed all its stores. Macy’s will close 9 stores and Pacific Sunwear, 153. Movie Gallery filed for bankruptcy, and plans to close 400 of 3,500 video stores. Last fall, it shut 520. Sprint Nextel sealed 125 retail locations and will fire 4,000 employees after losing 639,000 customers. Last year, Sprint laid off 5,000. Wilson’s the Leather Experts plans to shut 158 stores. Bombay Company will close all 384 U.S.-based stores. Bankrupt KB Toys will close 356 stores.
Merry Xmas y’all! Enjoy the capitalist system!
Stranded Wind’s blog of today suggests that the the G-20’s bluster on capitalism (while its elites live high on the hog) is about Wall Street’s control of government, and that what we ought to do is create a lobby of our own to contest its power. Stranded Wind quotes this other blog, The Automatic Earth, which suggests:
Trying to hold on to what you got, trying to save the system as is, has been the sole US policy since the credit dams started bursting last year. In view of the fact that the policy has an exactly null and zero chance of succeeding, one might wonder why the country clings to it tooth and nail.
Sure, I agree. Let’s start a new lobby, to compete with Wall Street; maybe it could hire me in some capacity, so that during Great Depression II I won’t starve to death. But what would our lobby ask for? Ilargi, for his part, suggests that what we ought to do is ask for a return to the old Glass-Steagall situation. Steven Pearlstein of the Washington Post, for his part, comments upon this G-20 situation, and suggests “a new model of capitalism that everyone can live with.” But can everyone live with capitalism?
A piece in the Monthly Review by the sensational Minqi Li points to at least part of the problem I’m suggesting:
in the coming years we are likely to witness a major realignment of global political and economic forces. There will be an upsurge in the global class struggle over the direction of the global social transformation. If we are in one of the normal cycles of the capitalist world-system, then toward the end of the current period of instability and crisis, we probably will observe a return to the dominance of Keynesian or state capitalist policies and institutions throughout the world.
However, too much damage has been done. After centuries of global capitalist accumulation, the global environment is on the verge of collapse and there is no more ecological space for another major expansion of global capitalism. The choice is stark—either humanity will permit capitalism to destroy the environment and therefore the material basis of human civilization, or it will destroy capitalism first.
Minqi Li, whose book should be forthcoming this month, wrote this for the April issue of the Monthly Review. But let’s consider this paragraph in light of the various bailouts we can expect to be forthcoming, from the bailout of GM to possible bailouts for us ordinary folk.
Oh, sure, our government could prop up the car companies, so they could produce lots of cars and get everyone in the world to buy them. Let’s hope they prop up the car-buyers, too, while they’re at it; this would of course be a massive undertaking, bailing out personal debt on an unheard-of scale. I can only hope they touch a fraction of my own, personal ~$30,000.00 student loan debt. The well-heeled Americans could buy newer, greener cars; the old ones would be picked up by the poor folks, say that 40% section of humanity which subsists on less than $2/day. “Green growth,” in such a context, will only supplement the malignant capitalism which predominates today.
The statistics on global warming should already have presented a challenge to this sort of growth model. I’ve already presented this material before: in summary, let me just reiterate that we’re already in the scary zone, and that the only thing that keeps us from recognizing this is that the feedback effect from 385 ppm of global atmospheric carbon dioxide hasn’t kicked in yet.
The advocates of “green capitalism” are suggesting that what we need is “clean growth.” But nobody is recommending ONLY “clean growth,” and so we can expect that “clean growth” will merely supplement existing dirty growth. Something, after all, has to be offered to that bottom 40% of humanity which lives on less than $2/day.
But the discussion that should have been ignited by the primary source documents on abrupt climate change didn’t happen. I can only figure that we are not discussing radical solutions to the current dilemma because of some general, elite-driven, resistance to the thought of alternatives to the status quo. There are two resistances here which need to be overcome:
- “Bailouts” do not make sense in terms of preserving the existing economy because they do not address its structural dysfunction. (If “bailouts” are to be applied, then, they should focus upon immediate relief for those who have been cast into situations of basic need — this should have invalidated last month’s $700-billion bailout.)
- “Votes of confidence for capitalism” make no sense in light of the still-unresolved contradiction between an ever-expanding capitalist system and a finite planet.
We are the bloggers. We need to overcome resistance to status-quo thinking, and encourage the power to imagine a world that can cope with the challenges of the future without starting from the premise that the present, capitalist world must be endlessly recreated in whole cloth. How can we be most convincing in this regard?