Today, alternatives to capitalism continue to survive and thrive in a number of living forms and social movements. The emphasis shifts with the context. Now there is a new language underpinning new ideas – as when the prefix ‘eco’ is added to that old warhorse ‘socialism’. Ecosocialism contains a suspicion of technology and the gospel of progress that was unfamiliar back in the days of state-socialist Five Year Plans or various social-democratic schemes of modernization. There are new movements that advocate doing things slowly – slow food, slow cities, even slow money. Some speak of radical autonomy, in response to a state increasingly divorced from its democratic pretensions. Others aim to rethink the entire enterprise of economic growth and speak of a future based on degrowth. There is also now an attempt to fuse the struggles against poverty and wealth into a common notion of a democratic sufficiency in which all might share. Today’s advocates of an alternative to wasteful capitalism have their roots in past human experiences. They can all find voices of past dissent that still speak to them and offer possibilities of roads not yet taken.
1 Cees Nooteboom, All Soul’s Day, Harcourt Books, New York, 1997.
2 Thomas Hobbes, Leviathan, Penguin Classic, 1981.
3 Marshall Sahlins, Stone Age Economics, Routledge, New York, 1989.
4 Pierre Clastres, Society against the State, Zone Books, Cambridge, 1990.
5 Karl Polanyi, The Great Transformation, Beacon Press, Boston, 1944.
6 Samuel Bowles and Herb Gintis, Democracy and Capitalism, Basic Books, New York, 1986.
7 EP Thompson, The Making of the English Working Class, Vintage, New York, 1966.
8 Walter Mignolo, ‘The Communal and the Decolonial’ Turbulence (Ideas for Movement), nin.tl/1a9hwZY
9 Kenneth Rexroth, Communalism: from its origins to the 20th century, Seabury Press, New York, 1974.
Capitalism: a system of reckless resilience
How capitalism developed – and why it depends upon ‘creative destruction’. The rise of neoliberalism as a political philosophy and the transformation of old enemies such as Russia and China into authoritarian free marketeers. And why capitalism is beyond the control even of the captains of finance.
‘The most convincing and enduring foe of the global financial economy ultimately is the global financial economy itself.’
Ulrich Beck1
What is the problem with capitalism anyway? Hasn’t it delivered modernity and prosperity over the centuries? Has a better economic system ever emerged, offering a more efficient way for allocating resources? Isn’t the invisible hand of the market the only way for billions of people to interact economically without falling under stultifying bureaucratic control?
Those who make the case for capitalism vary from its most sophisticated economic thinkers (such as Adam Smith, Friedrich Hayek and Milton Friedman) to the thousands of graduates of business schools who all sing from the same songbook of market perfection. Even the best-known liberal critics of capitalism such as John Maynard Keynes and John Kenneth Galbraith saw no real alternative to it as the most efficient form of economic organization, although they were committed to finding ways to iron out its instabilities and disequilibria through the intervention of the public power of the state. But such reforms have fallen out of fashion given the ascendancy of neoliberal orthodoxy since the 1980s. Today, government after government still suffers from frozen policy imaginations in the face of the speculative bubbles that destabilize everything from public finance to the plans and dreams of ordinary people. The panicked ad hoc bail-out of banks and corporations ‘too big to fail’ and the imposition of austerity packages on the masses to pay for it now appear to be the only recipes in the public policy cookbook. By and large, government policies, despite bold words about re-establishing a coherent regime of regulation, have failed to gain much more leverage over these corporate actors than did the previous regime of speculative ‘market freedom’. It was this neoliberal dispensation, obsessed with removing the regulatory shackles on the ‘free’ movement of capital, that allowed the creation and sale of an avalanche of unstable paper assets – secondary mortgage markets, derivatives, credit default swaps, and so on. According to the economic historian Jeff Madrick, most of these difficulties remain to be addressed:
‘These included the lack of transparency in the derivatives markets, where prices were set in obscurity on trillions of dollars of transactions. Market theory calls for clear and open pricing information. It includes the conflicts of interest of the credit ratings agencies, which were paid by the issuers seeking high ratings. This is bound to lead to market failure. There are also the absurd compensation practices of Wall Street, which largely protected the traders and other decision-makers from the longer-term risks the stockholders were taking.’ 2
Even in the face of the obvious failures of the current phase of finance-dominated capitalism, the political class seems to have no ability (or even willingness) to regulate the destructive behavior of those wielding economic power – let alone the imagination to conceive of an alternative to capitalism. Reform of regulatory agencies such as the US Federal Reserve or the Bank of Settlements in Switzerland has largely left them toothless or subject to bad conflicts of interest. The market conditions that allowed the collapse of 2008 to occur remain a Sword of Damocles hanging over the global economy.
Historical roots
There was a time when capitalism was seen as simply one of a number of competing philosophies of political economy. It grew up in opposition to the traditionalist conservatism of big feudal landowners. It was associated from its inception with a politics that embraced the negative freedoms of non-interference with individual enterprise and conscience. Its proponents were quite skeptical of the more positive freedoms associated with a wider democracy. They feared (not without reason) that a broader majoritarian self-rule would endanger the rights to the enjoyment of property of those who by ‘dint of their own efforts’ had been successful in obtaining it. For theorists such as John Locke, who influenced the English Revolution, or many of the Founding Fathers who shaped the limits of the American Revolution, there was a profound distrust of mob rule. By this they meant that those without property (and perhaps even slaves) might come together to assert their interests and rights. The vision of the most radical of these theorists of the revolutions that cleared the way for capitalism to flourish was that of ‘a republic of smallholders’. Men like Thomas Jefferson of Virginia or Jean-Jacques Rousseau in France might well have been horrified by the way in which today’s one-per-cent corporate super-rich and their acolytes dominate economic and political decision-making. Their vision was a distinctly rural one of a sturdy and independent yeomanry and craftspeople that would form the backbone of a healthy society. Nonetheless, their emphasis on market freedom and