Is capitalism the problem?

Posted in Around The Nation, The Economy at 12:25 pm by wcnews

Richard Wolff was on Bill Moyers & Company this week and the discussion was about our economic system. And the discussion turned to the lack of criticism of capitalism in our country, Taming Capitalism Run Wild.

Here’s an excerpt:

BILL MOYERS: But so few have done that. As you know, as you’ve written, as you have said, we’ve not had much of a debate in this country for, I don’t know, since the Great Depression over the nature of the system, the endemic crisis of capitalism that is built into the system. We have simply not had that kind of debate. Why do you think that is?

RICHARD WOLFF: Well, I think we have had it from time to time. We have had some of the greatest economists in the tradition, for example, Thorstein Veblen, at the beginning of the 20th century, a great American economist, very critical of the system. Someone who taught me, Paul Sweezy, another Harvard graduate. These are people who have been around and at various times in our history, the beginning of the 20th century, during the 1930’s, again in the 1960’s, there was intense debate.

There has been that kind of thing in our history. I mean, we as Americans, after all, we take a certain pride, which I think is justified, we criticize our school system. We just spent two years criticizing our health delivery system in this country. We criticize our energy system, our transportation system.

And we want to believe, and I think it’s true, that to criticize this system, to have an honest debate, exposes flaws, makes it possible to repair or improve them, and then our society benefits. But then how do you explain, and that’s your question, that we don’t do that for our economic system?

For 50 years, when capitalism is raised, you have two allowable responses: celebration, cheerleading. Okay, that’s very nice. But that means you have freed that system from all criticism, from all real debate. It can indulge its worst tendencies without fear of exposure and attack. Because when you begin to criticize capitalism, you’re either told that you’re ignorant and don’t understand things, or with more dark implications, you’re somehow disloyal. You’re somehow a person who doesn’t like America or something.

BILL MOYERS: That emerged, as you know, in the Cold War. That emerged when to criticize the American system was to play into the hands of the enemies of America, the Communists. And so it became disreputable and treasonous to do what you’re doing today.

RICHARD WOLFF: And for my colleagues, it became dangerous to your career. If you went in that direction, you would cut off your chances of getting a university position or being promoted and getting your works published in journals and books, the things that academics need to do for their jobs. So yes, it was shut down and shut off. And I think we’re living the results. You know, if I were–

BILL MOYERS: Of the silence? Of–

RICHARD WOLFF: Yes. Of the lack of debate. We’re living in an economic system that isn’t working. So I guess I’m a little bit like one of those folks in the 12-step programs. Before you can solve a problem, you have to admit you got one. And before we’re going to fix an economic system that’s working this way, and producing such tensions and inequalities and strains on our community, we have to face the real scope of the problem we have. And that’s with the system as a whole and at the very least, we have to open up a national debate about it. And at the most, I think we have to think long and hard about alternative systems that might work better for us.

BILL MOYERS: I was intrigued to hear you say elsewhere that this is not just about evil and greed. And yet you went on to say capitalists and the rich are determined not to bear the costs of the recent bailouts or the crisis itself. You even go so far as to suggest, as to question their patriotism, and that they may not have the country’s interest at heart. If that’s not greed, what is it?

RICHARD WOLFF: Oh, I think it isn’t greed. It’s– and let me explain why. Yes, I’m critical of corporations and the rich because they do call the shots in our society, and so that brings on them a certain amount of criticism, even though they don’t like it. So I will do that. But beyond that, let me absolve them in the following way. Bankers do what this system goads them to do.

If you talk to a banker, he or she will explain to you, “These are the things that will advance the interests of my bank. These are the problems I have to overcome. And that’s what I try to do.” And my understanding, and I’ve looked at this in great de– is that– that’s correct. They’re not telling a story. They’re doing. They’re following the rules. They do the things that advance their interests and they avoid the things that would damage their interests.

That’s what they’re hired to do as executives or as leaders of their institutions. And that’s what they do to the best of their ability. So for example, I’m not enthused about arresting these people or punishing them in this or that way. And the reason is simple, if we get, I won’t mention any names, but we get some banker and we haul him up in front of a court, and we find out he’s done some things that are not good.

And we substitute the next one. He gets arrested though, he gets fined, he gets removed. The next one is subject to the same rewards and punishments. The same inducements. The same conditions. If we don’t change the system, we’re not going to change the behavior of the people in it. So in a sense, I do absolve them even when they are greedy, because they’re doing what this system tells them to do. And if we don’t change the system, substituting a new crop will not solve our problem.

I recommend watching the whole thing.  If your belief in the current system is solid then you shouldn’t have a problem.  Hearing the other side shouldn’t scare anyone.  There’s also some good history in the discussion.  Until we have an honest discussion of what’s wrong with out economic system, we’re unlikely to fix our current economic problems.

More from Richard Wolff and Joe Stiglitz in the extended post.

Capitalism Becomes Questionable.

The depth and length of the global crisis are now clear to millions.  In the sixth year since it started in late 2007, no end is in sight.  Unemployment rates are now less than halfway back from their recession peak to where they were in 2007.  Over 20 million are without work, millions more limited to part-time work, millions have been foreclosed out of their homes.  Those who retain jobs suffer declining real wages, fewer benefits, reduced job security, and more work.  This year of “austerity” began with an increase in the payroll tax rate for over 150 million wage-and-salary earners from 4.2 to 6.2 per cent (a 48% increase from 2012) — a far more significant tax event than the trivial — but wildly hyped — increase of taxes on those earning over $450,000 annually from 35 to 39.6 per cent (a 13% increase from 2012).  Austerity deepens as Republicans and Democrats negotiate merely details of their agreements to cut government spending on social programs helping working people.

Between the crisis and today’s austerity policies lie the bailouts — a bought government’s program to aid mega-finance and other large corporations with unlimited funds unmatched by anything comparable for the mass of working people and smaller businesses.  The bailouts worked for them, for the large corporations who secured them for themselves.  For that reason, “recovery” blessed them while it bypassed everyone else.  Now austerity policies shift onto the general population major portions of the costs of the crisis and the bailouts.  The situation is so bad and US government complicity with capitalists at the people’s expense so exposed that the capitalist system is becoming questionable.  Criticism challenges the last half-century’s treatment of capitalism as the absolutely best possible economic system, beyond any need for discussion or debate, justifiably implanted around the world by military force, etc.

First of all, this deep and long crisis undermines decades of confident assurances and predictions that another deep capitalist depression was no longer likely or even possible.  Capitalism’s inherent instability overwhelmed and thus proved the futility of efforts to prevent its crises.  Moreover, both conventional and extraordinary monetary and fiscal policies failed repeatedly to bring Europe, Japan, and the US out of the crisis.  Central banks, international agencies, and national executives charged with economic responsibilities have, since 2007, spoken with assurance and met often, posed for media photos, puffed and threatened, made a few last-minute, stop-gap agreements, resolved to meet again and do more at the next meeting.  However, the crisis continued for most people.  In many places it has gotten much worse.  All this challenges glib notions that capitalism’s highest authorities have the system “under control.”

Implicitly, at first, millions of people began to question whether capitalism does still “deliver the goods” as its defenders so long insisted.  In the US, declining economic conditions for parents coupled with rising school debts and declining job prospects for their children suggest rather that capitalism “delivers the bads.”  The widening inequalities of wealth and income that contributed to the crisis have in turn been further aggravated by it.

The old ideological mechanisms that for decades had persuaded most US citizens — that economic hardship was the result of individual decisions and personal failures — left growing numbers dissatisfied.  The old scapegoats (immigrants, the poor, minorities, foreign powers, etc.) raised to deflect systemic criticism have been working less well than in the past.  In their place, the notion is rising that today’s economic problems are systemic, that capitalism itself is the problem.  Systemic criticism is returning into the public consciousness and into public debate in ways not seen in the US since the 1930s.

On the right, in the US and beyond, the questioning of capitalism has not yet found many strong voices.  Instead, right-wing resentments about wealth and income inequality, crisis, bailouts for banks, etc. have so far been largely deflected and subordinated to increasingly implacable and violent oppositions to government, immigration, the poor, etc.  These classic moves of right-wing ideology mobilize a broad coalition of traditional conservatives, nationalists, racists, religious fundamentalists, gun enthusiasts, and so on.  In the US, they ally with funding sources among major capitalist interests in demonizing the government as the evil to be overcome.  That alliance provides mass support for the austerity policies that private capitalists prefer.  Attacking the demon government, especially when led by a black, Democratic President, is the basic Tea Party mantra.

In stark contrast, questioning capitalism is how portions of the left are finding access back into mainstream conversation in the US.  They are developing new ways of asking questions and focusing criticism.  They largely avoid the language, concepts, and imagery associated with earlier forms of anti-capitalism: traditional socialism, the USSR, China, and the marginalized, often sectarian groups who remain identified with those forms.  Various sorts of anarchism and unorthodox Marxisms have surfaced and found followings on the left.  Many of these diverse movements have formulated critiques of the crisis focused on its roots in capitalism.  Capitalism, they stress, is a system that one could and should question.

The transition from implicit to explicit and widely disseminated left systemic criticisms of capitalism is an important achievement of the Occupy Wall Street (OWS) movement since the autumn of 2011.  Slogans about the 99% confronting the 1% have condensed a cacophony of very diverse critical attitudes toward the crisis, public policy, and the direction of US economics and politics.  A powerful unifying theme has arisen.  The cause of crisis, unjust bailouts, economic decline, and matching political dysfunction is also the central problem of our time.  Extremely unequal distributions of wealth, income, and power are capitalism’s systemic products and likewise explain its problems, crises, and repeated failures to solve them.  To get beyond capitalism’s instability, inequality, and injustice, system change is necessary.

In Europe, the same global capitalist crisis evolved differently.  Inside the US, overt, mass opposition to the crisis or to government policy or to capitalism qua system has been rare.  When it occurred, it flared up in short-lived explosions such as the Wisconsin public employee union actions against the governor and in OWS-related activities.  By contrast, in Europe mass opposition became nearly continuous after mid-2010 as austerity policies were imposed and various combinations of labor unions, left political parties, and new and often independent social movements went into the streets.  Europe has since experienced protests, strikes, mass demonstrations and general strikes coordinated nationally and sometimes continentally.  These mass citizens’ actions have been larger, lasted longer, and been better organized than anything seen for at least half a century.  As in the US, especially since OWS, the theme of anti-capitalism has been a notable and growing dimension of these actions.

Moreover, the explanation of the difference between European and US anti-capitalism and anti-austerity movements teaches some important lessons.  In Europe after 1945, business and conservative efforts to destroy the labor unions and anti-capitalist parties and movements were far less successful than their counterparts in the US.  Thus, as the current crisis led to austerity, Europeans opposed to austerity and to capitalism were far less disorganized and far less isolated from one another — and likewise less ideologically disarmed.  They could and did mobilize millions for classic, visible street actions to advance their criticisms and demands.  They could and did plausibly threaten effective electoral action as well.

And inequality is getting worse and the American Dream is becoming less and less a reality. As Joe Stiglitz points out, Equal Opportunity, Our National Myth.

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