Capitalism In Crisis or Without End: “What’s Left?” September 2017, MRR #412

This is the conclusion to my overlong analysis last column of the crisis of the Left and the crisis on the Right (Party like it’s the 1960s: “What’s Left?” July 2017, MRR #410).

Our story so far:

Interregnums are instances of revolutionary class conflict, either regional and diffuse (Great Peasants’ War, 1524-25; English Glorious Revolution, 1688) or more consolidated and national (French 1789 Revolution, Russian 1917 Revolution, Spanish 1936-39 civil war). Related regional interregnums were strung together into a broad, territorial interregnum (religious conflicts/wars across continental Europe, 1517-1648), while associated national interregnums were linked into a global interregnum (WWI through WWII, 1914-1945).

The French 1789 Revolution gave rise to our modern Left-Right political landscape and modernity itself. The Right is both a revolt against the modern world and a reaction to the Left. In Europe, the moderate Right and reactionary Right were joined by a Fascist Right, while in the United States various radical and new Rights emerged. But in the face of international socialism and communism after WW2, an effort was made by Buckley and the National Review to define, unify, and defend an official conservative movement.

When the Left in the 1980s experienced a crisis due to the defeat of organized labor, the collapse of real existing socialist regimes, and the decline of Marxism, the Right underwent a corresponding crisis. More fractious than the Left due to its non-programmatic, non-rational nature, the Right exploded, particularly in patriot and populist terms. The secular, religious, and xenophobic Right can barely contain the proliferation of groups and ideologies, unlike the Left which neatly divides into antiauthoritarian, parliamentary, and Leninist types.

Because the Right is invariably a reaction to the Left, when things fell apart and the center on the Left could not hold, mere anarchy was loosed both on the Right and the Left. The crisis of the Left was matched by a crisis on the Right—with mindless proliferation, sectarian infighting, and growing Red/Brown crossover on the Right—which in turn marked the beginning of another global interregnum. But what is the cause of this crisis on Left and Right, and of the global interregnum? Is it the fabled Marxist final crisis of capitalism?

First, I need to backtrack.

I called myself paleo, more or less orthodox, and old school in my Marxism when it comes to class struggle, modes of production, and the origins of modernity. Yet I’m also hep, au currant, and with it when it comes to updating my Marxist political economy with a little world systems theory (Braudel, Wallerstein, Arrighi). Capitalism started to develop in embryonic form as a world system of exploitation and appropriation as early as 1450, and went through two cycles of capital accumulation (the Genoese and Dutch cycles) prior to the British cycle which acted as a context for the French 1789 Revolution and Europe’s industrial takeoff. So not only is it correct to call the English civil war (1642-51) a prequel to the bourgeois revolutions that ushered in the modern world, it’s clear that the Renaissance prefigured the Enlightenment, and that the modernity of Machiavelli and Hobbes presaged the modernity of Locke and Rousseau. The extensive trading networks, market relations, and commercial expansion of capitalism prior to 1750 did not possess capital’s “relentless and systematic development of the productive forces” that the industrialization of the British cycle initiated, as Robert Brenner and Ellen Meiksins Woods noted. Whether we call the period from 1450 to 1750 pre-capitalism or proto-capitalism or market capitalism, we need to distinguish it from modern capitalism proper after 1750. Hence the use of the French 1789 Revolution as a convenient benchmark for the advent of modern industrial capitalism, modernity, and modern Left-Right politics.

The Marxist-influenced world systems school argues that each cycle of capital accumulation responsible for the rise of the current world economy is comprised of commercial, production, and financial phases. The commercial phase is characterized by making profit from trade and commerce—simple circulation and exchange. The production phase is distinguished by making profit from the whole process of industrialization—building factories to produce commodities, hiring workers, paying them less than what the commodities are sold for, and then valorizing the resultant surplus value into capital. The final financial phase is typified by making profit from investing in everything else that makes money—trade, commerce, manufacturing, factory production, services—which is just one step removed from simple exchange and circulation once again. What is most profitable in this three-phase cycle schema is the production phase because that’s where infrastructure is produced, the working class is reproduced, and capital is fully valorized. The commercial and financial phases are merely making money off of circulating money, and the financial phase in particular is seen as capitalism in decline.

This tripartite model is problematic and weakest when it comes to the pre-industrial Genoese and Dutch cycles, and only comes into its own with the British and American cycles. What’s more, its best to take this theory as descriptive rather than prescriptive. The center for world capitalist market power shifted from Genoa, through the Netherlands and Britain, to the United States, where it is predicted to shift again, probably to Asia, since American-centered capitalism is financializing and thus in decline. But will that shift occur? Or are we in the End Time, the final crisis of capitalism?

This model works admirably well in describing what happened when American-based capitalism changed from production to finance, which can be pinned down roughly to 1973. The Keynesianism of the Kennedy/Johnson era transitioned to the neoliberalism of the Thatcher/Reagan era when the political and cultural unrest, growth in social programs and expansion of the welfare state, and strong organized labor and strong middle class of the 1960s gave way to the rollback of government regulations, the welfare state, the public realm, and unions of the 1980s. The neoliberal trend began when the rank-and-file labor rebellions and wildcat strikes of the 1970s were routed, then was formalized with the defeat of organized labor by Reagan’s breaking the PATCO unions and Thatcher’s trouncing the striking miners, and was finally enshrined with the collapse of the Soviet bloc. Marxism appears to be bankrupt. This is, of course, the beginning of my crisis of the Left and on the Right, and my global interregnum. But why did it happen?

The short, Marxist answer is that the change from Keynesianism to neoliberalism, from affluence to austerity, from production to finance, is due to a tendency for the rate of profit to fall. If I had to choose between the lively polemics and exhortations of the 1848 Manuscripts, Communist Manifesto, and Critique of the Gotha Program versus the dry scientific analysis of Capital’s three volumes, I would choose the former every time. That’s because my mathematical chops are seriously lacking, even though I think there are insights to be had in Marxist economic statistics, formulas, and models. One such outstanding Marxist economist was Henryk Grossman whose work The Law of Accumulation and Breakdown of the Capitalist System attempted to formulate mathematical laws of capital accumulation, how it operates and why it falls short. The tendency for the rate of profit to fall (mainly due to the changing organic composition of capital) can be offset by capitalism’s creative destruction (state austerity, economic depression, war).

In the grand scheme of things then, when capitalist production became less and less profitable the economy transitioned to finance capitalism. Neoliberalism as the ideology of finance capitalism is all about deregulating and financializing the economy, rolling back the welfare state, crushing organized labor, and privatizing the public realm to reverse the falling rate of profit, and as such it’s a rightwing ideology of capitalist decline and crisis. Will this be capitalism’s final crisis as originally predicted by Marx himself, or simply the shift of capitalist power in a world economy to Asia as currently predicted by world systems theory? I can’t say, since I’m being descriptive and not prescriptive. But is capitalism-without-end really possible, or are we quickly reaching the planet’s carrying capacity for cancerous economic growth? That’s a question that will have to wait for a future column.

NOTE: Financial capitalism is a whole system, to include the state and most corporations, not merely the international banking system. This must be made clear in a time of Left/Right Red/Brown crossover politics. I’m particularly leery of talk about “international bankers” or that not-so-clever portmanteau “banksters” because it so easily slips into teleological conspiracy theory and “international jewish” idiocy.


“Democracy is so overrated:” “What’s Left?” September 2016, MRR #400

Democracy is the worst form of government, except for all the others.

― Winston S. Churchill

If a majority voted for you to jump off a bridge—would you?

— CrimethInc., “From Democracy to Freedom”

I set the table by covering it with a dark cloth and placing a lit candelabra on it. I position my Ouija board and planchette on the table in front of the chair before I sit down. I’m ready to prognosticate.

As I write this column, it’s the first week of July and both the Democratic and Republican National Conventions are happening later in the month. I predict Hillary will win the DNC and Trump the RNC. Neither party or electoral base is exactly keen on their respective nominees, but the “Bernie or Bust” or “Never Trump” crowds won’t prevail. Further, I predict that Hillary will win against Trump, but it will be a close election, uncomfortably so. My final and last prediction is that the surprising surge in votes for the Libertarian Party candidate Gary Johnson will be to the Trump campaign what Ralph Nader was to Al Gore. Oh yeah, and there will be rioting in Cleveland in 2016 to rival Chicago 1968.

That’s four predictions, four pretty obvious political forecasts on which you as the reader can score me, starting with the August issue and running through the November elections. Also, there’s four months to fill commenting on the elections, tap dancing on air if you will. Because by the time my comments on what’s happening right now, at this moment, reach your eyes they’re already past their prime. Outdated. And as I’ve hinted at above, I’m not a soothsayer by any means.

One of my major annoyances with American politics is its unrelenting pettiness. Hardcore Republicans for instance purposefully call their opponents the Democrat Party, not the Democratic Party. Their rationale is that the Democratic Party is far from democratic in operation and intent, but it’s clear when Republicans use Democrat Party in partisan debates they’re really intending to needle and provoke their opponents. It’s such elementary schoolyard antics; the wannabe tough kid insisting on calling another kid surnamed Wankel “Wanker” all the time. Far from entertaining the rest of us with clever puns, this mean-spirited sparring is debasing our language and degrading our political discourse.

The deepening clusterfuck that is Brexit follows closely behind in terms of politically humbling experiences. Who would have thought that Britain’s two main political parties—the Tories and Labor—as well as the political geography encompassed by the names Great Britain and United Kingdom would be destroyed by a simple non-binding referendum of whether or not Britain should leave the European Union? As David Van Reybrouck commented in The Guardian: “Never before has such a drastic decision been taken through so primitive a procedure – a one-round referendum based on a simple majority. Never before has the fate of a country – of an entire continent, in fact – been changed by the single swing of such a blunt axe, wielded by disenchanted and poorly informed citizens.” (“Why Elections are Bad for Democracy,” 6-29-16) As the political edifice of the United Kingdom continues to crumble, threatening the EU in the process, the efficacy of elections and liberal democracy are in serious doubt.

Let’s start with the word democracy. The term comes from the ancient Athenian practice of the adult males of the city-state (the demos) gathering in assembly to directly vote on all civic matters and leadership. Right away we understand the qualified nature of the word because the right to vote did not apply to women, children or slaves, a limitation shared by that other classical political system from which the West draws its inspiration: the practice of the Roman republic. The complex property-based system in ancient Rome (collective voting for magistrates and tribunes) provided for an indirect, representative form of government where the franchise continued to expand as Rome itself grew, encompassing allies and conquered peoples, until the original republic mutated into an empire ruled by Caesars. The more geographically prescribed scope of Athenian democracy did not prevent that city-state from acquiring an empire however, nor from devolving into oligarchy under decades of war.

For America’s founding political elite steeped in Enlightenment liberalism, there was a sharp distinction between a democracy and a republic. Pure democracy always ran the risk of despotism and imperialism, of mob rule where “51% of the people could vote to take away the tooth brushes of the other 49%” as a John Bircher once told me. By contrast, republicanism intended to contain such problems with territorially small, constitutionally-limited, mixed representative government, which was a central principle of Locke, Montesquieu, and Rousseau. Hamilton, Jay, and Madison further argued in the Federalist Papers that the necessary limitations of a small constitutional republic could be transcended by the judicious application of legal checks-and-balances within a physically expanding domain of ever-multiplying, contending factions. Thanks to this political reformulation, the spread of the American republic across the continent and beyond was never in contradiction to or in conflict with oligarchy or empire.

But these political distinctions have been muddled and mongrelized to the point where we now think that democracy and republicanism are just the names of two different political parties, not two distinct political systems. We are told constantly “we live in a democracy,” we pledge allegiance “to the Republic for which it stands,” and we believe like Candide’s Professor Pangloss that we live in the best of all possible worlds. Rather than remain befuddled however, let’s simplify matters by saying that the West’s ideal is for representative democracy in the context of a national state.

“[I]n an election, you may cast your vote, but you are also casting it away for the next few years.” David Van Reybrouck of The Guardian writes. “This system of delegation to an elected representative may have been necessary in the past – when communication was slow and information was limited – but it is completely out of touch with the way citizens interact with each other today.” We tend to fetishize elections, according to Reybrouck, while demonizing the subject of that voting, resulting in an almost universal distrust of governments, political parties, and politicians while increasing calls for a strong leader “who does not have to bother with parliament and elections.” He concludes that “Democracy is not the problem. Voting is the problem.”

Oh, really?

Representative democracy, from Roman republicanism to Western liberalism, doesn’t seem to be the solution for nationalist extremism, capitalist exploitation, oligarchic despotism, colonial conquest, or imperialist appropriation. If we switch out the word nationalist for patriotic and capitalist for commercial this is true for direct democracy, from ancient Greece to the cantons of Switzerland. Ah, but what we need is more democracy; real democracy, radical democracy, participatory democracy. We need decentralized, participatory decision-making with easily recallable elected representatives, rights for minorities, rotating offices, ad hoc organizing, impermanent institutions, even consensus process.

“And how do you insure democratic control of industry?” Marvin Garson once asked rhetorically, spelling out a kind of radical democratic ultra-leftism called Council Communism. “Why, by setting up workers’ councils in each industry which operate with full respect for all the normal democratic procedures—especially the right to establish caucuses and factions, and the right to strike. The economy, in short, will be run the way a government is SUPPOSED to be run; it will be like a gigantic New Left convention—impeccably democratic and a stone drag.” (“Going Beyond Democracy,” 1968)

Such a tedious scenario is in no way enlivened by the absurdity of consensus process, which is nothing more than tyranny by the minority if not the individual, as CrimethInc well grasps as the myth of unanimous rule in its provocative essay “From Democracy to Freedom.” The group also understands that democracy is institutionalizing governance and state-production by its very nature. But CrimethInc’s attempt to substitute autonomy for democracy and to insist on the permanence of the revolutionary moment is pure sophistry. “Thousands of us flood into the streets, finding each other in new formations that offer an unfamiliar and exhilarating sense of agency. Suddenly everything intersects: words and deeds, ideas and sensations, personal stories and world events. Certainty—finally, we feel at home—and uncertainty: finally, an open horizon. Together, we discover ourselves capable of things we never imagined.” This is Trotsky’s Permanent Revolution on MDMA, and much like some fantasy of permanent orgasm this raises the question: what do we do after the revolution when we once again have to make mundane decisions. Do we make decisions by lottery or drawing straws, by rotating onerous tasks or making each individual boss-for-a-day, even by adapting Reybrouck’s concept of sortition in which a representative sampling of the population makes decisions for the whole? Let me return to Marvin Garson again.

“Every industry has its own inchoate underground of people who take pride in doing good work, who aren’t in it just for the money, who get angry when their employers make them sacrifice quality for the sake of profit. Let that underground get together and suddenly a real alternative to corporate capitalism will exist. […] Perhaps it’s impossible to run a steel mill or an electric power plant in a free and creative way. In that case, run it automatically.”

I’ve made the argument that, even at its best, democracy is a stone drag by quoting Garson before. By next column, I should have plenty to say about the dueling circuses of the RNC and DNC.