http://axisoflogic.com/artman/publish/article_29798.shtml
The End of Capitalism? Cracks in the Foundation
By Ann Robertson
Mar 8, 2009, 06:39
The collective consciousness of the U.S. working class is on the brink of a
profound transformation. We grew up being told that capitalism was the best of
all possible systems, with apparent confirmation being supplied by the fall of
the Soviet Union. But we are now entering a new reality that has the potential
to overturn all the old, established assumptions perhaps, in the final
analysis, even to overturn capitalism itself.
The U.S. government, which has been lecturing other countries for decades about
the virtues of privatizing state-owned enterprises, has recently embarked on a
campaign of reversing its own dictates by partially nationalizing many of the
financial institutions that were teetering on the brink of disaster. In other
words, the U.S. government became a stockholder in these companies, thereby
ironically taking a step in the direction of socialism socializing their
losses, that is, not their profits. Meanwhile, for decades, the U.S. working
class has watched helplessly as public education has been defunded, the
environment has been progressively destroyed, and social services in general
have shriveled, all supposedly because no money was available to launch a
rescue operation. Yet the breathtaking speed with which the government threw a
staggering trillion-dollar bailout to the financial institutions with no
strings attached has not been lost on the working class. And more is on the
way: the government has thus far pledged a total of $8.5 billion to help rescue
the financial institutions. Workers, too, through their unions, are now
demanding bailouts.
Policies that only yesterday appeared as irrevocable as acts of nature suddenly
appear as they truly are: political decisions made by the federal government
where Democrats and Republicans are united in their commitment to rescue their
friends - the rich.
And fuel has been thrown on the fire. Recently, when asked for an account of
how they spent the bailout funds, the financial institutions refused to oblige.
After all, they calculated, why should they start becoming accountable to the
U.S. public after all these centuries? This, too, has not been lost on the
working class.
The working class also took notice of the modest but resounding victory scored
by the United Electrical workers at the small windows and doors factory in
Chicago. These workers did not have the advantage of working in a key industry
so that if it were shut down, the reverberations would echo far and wide,
thereby providing them with bargaining leverage. But they were emboldened by
the outpouring of public support from across the country, and Bank of America,
one of the most powerful banks in the world, backed down.
Finally, the working class was assured that the Great Depression would never
see a second coming. Lessons had been learned and mechanisms were inserted to
guarantee everlasting stability, we were told. All these assurances now look
like more toxic assets, and working people will begin to draw the obvious
conclusion: not only are recessions endemic to capitalism, but depressions are
as well. And this realization will inevitably provoke questions about the
desirability of capitalism itself.
The Defense
Harboring a rather grim view of human nature, capitalism's apologists have
argued for centuries that we are incorrigibly greedy to the core, meaning that
we focus exclusively on our individual self-interest, not the interests of our
neighbors or the community at-large or those who are most needy, and we define
our well-being principally in terms of the accumulation of material wealth.
Accordingly, Milton Friedman, leading member of the notorious Chicago School of
Economics, reasoned: "The problem of social organization is how to set up an
arrangement under which greed will do the least harm; capitalism is that
system."
Hence, capitalism is a system that embraces greed; its defenders insist that to
do otherwise would be hopelessly naive and utopian. But, they continue, by
placing certain restrictions on greed, such as rules of ownership and
regulations governing production, distribution and exchange of property,
capitalism succeeds in harnessing greed in order to maximize its effectiveness.
In other words, greed is the fuel that energizes the system. Ayn Rand, the most
virulent defender of capitalism, simply put it this way: greed is good.
Adam Smith, one of capitalism's earliest and most eloquent defenders, argued
that when individuals are allowed to compete against one another and pursue
their private self-interest, everyone's interests are advanced by means of an
"invisible hand." For example, if two businesses are in competition, then the
business that manufactures the best product for the lowest price will prevail.
In this way, everyone is motivated to excel, and progress in the production of
wealth seems almost guaranteed.
The Veil Slips
But with economic turmoil engulfing the world where millions of people are
being thrown out of work through no wrongdoing on their own part and where
homelessness and hunger are on the rise, the arguments in support of capitalism
begin to lose their compelling force. As the crisis deepens, faith in
capitalism will be dragged down faster than the value of a worker's 401k. And
what was considered virtuous in the past will become the vice of the future.
For example, let us consider the role of individual self-interest and greed in
the current crisis. The subprime loan debacle offers an instructive example.
Financial institutions engaged in a frenzied flurry of brokering loans to
people who wanted to buy a house but had bad or no credit. The loans were
manipulated to entice the unsuspecting house buyer by originally pegging
interest rates low, but, disguised by the fine print, jumping to much higher
rates a few years later. Many homebuyers were consequently duped after all, we
are not taught how to buy a house in school and put down their money only to
discover not long afterwards that they could not afford the payments.
One might assume it was not in the financial institutions' interests to
negotiate loans that would certainly fail, but the opposite was in fact the
case. Lenders were often rewarded with handsome bonuses in relation to the
quantity of loans they brokered, not their quality. Moreover, these loans were
routinely bundled together and sold to unsuspecting investors who had no idea
what they were buying. The original lenders scored a quick profit and left the
investors holding toxic bundles. It was all about greed and self-interest.
But the pursuit of naked self-interest, regardless of the misery inflicted on
others in the process, surely does not represent an anomaly in capitalist
society. Capitalist enterprises that are connected with fossil fuels are
choosing to destroy the planet rather than curb their pollution. Clean
operations cost money, and these companies would rather protect their profit
margins than protect the environment. Automobile industries have vigorously
lobbied against higher fuel standards, coal companies have invested millions in
advertising in an attempt to convince the U.S. public to believe in the fantasy
of "clean coal," and oil companies, in a similar campaign, have tried to
convince us that they are on the cutting edge of clean energy, while all of
them are accelerating the destruction of the planet through the intensification
of global warming. They have all carefully crafted policies in the
self-interest of their particular company, and they have been willing to
sacrifice everyone else's interests in the process. This is business as usual
for capitalism.
In a recent New York Times op-ed article (December 16, 2008), Thomas Friedman,
in a fit of exasperation, vilified the toxic lenders, and concluded:
The Madoff affair is the cherry on top of a national breakdown in financial
propriety, regulations and common sense. Which is why we don't just need a
financial bailout; we need an ethical bailout. We need to re-establish the core
balance between our markets, ethics and regulations. I don't want to kill the
animal spirits that necessarily drive capitalism - but I don't want to be eaten
by them either.
But isn't this rather like asking wolves to become sheep? Capitalism is driven
by a basic set of rules, and if you do not adopt the rules, you do not survive.
Accordingly, ruthless competition in the business world is a virtue. Selling
products to people without warning them of their potential flaws, even fatal
flaws, is simply good business sense. On the other hand, hiring people who are
nice and desperately in need of work, regardless of their abilities, is a vice
because, if such policies become the norm, the company will collapse under the
weight of incompetence.
Morality isn't something that is suspended in midair - always waiting for us if
we tire of acting selfishly. Morality is nurtured by, and is inseparable from,
the social structures we operate in, as Philip Zimbardo's famous Stanford
prison experiment illustrated. It showed that when people are placed in
relations of vastly unequal power - some were assigned the role of prison
guards while others the role of prisoners - individuals who are otherwise good,
decent people will turn sadistic. Our morality is molded by the structures that
surround us, and today these structures are defined overwhelming by market
relations with their own agenda: profits are the highest good.
These market relations are not just a side-show in our society; they radiate
from the economy and penetrate almost every sphere, particularly the political.
Corporate America routinely gives huge sums of money to politicians. Does
anyone really believe corporations would engage in this practice if they did
not get a return on their investment? That is why, when Friedman states, "We
need to re-establish the core balance between our markets, ethics and
regulations," one can only wonder, whom is he addressing? If he is directing
this plea to the working class, we should point out that our concerns have
never constituted a political priority. If he is addressing corporate America,
Friedman should be informed they do not care about ethics except in rare cases
when ethics and profits coincide. And if he has the politicians in mind, then
the question should be redirected back to the corporations, their handlers.
Ben Stein, economic writer for The New York Times, paused after losing
considerable wealth in the current economic meltdown and offered these musings
in his December 28, 2008 column: "We are more than our investments. We are what
we do for charity. We are how we treat our family and friends. We are how we
treat our dogs and cats. We are what we do for our community and nation. If you
had $100 million or $100,000 a year ago and now you have a lot less, you are
still the same person." In other words, he rightly concluded that family and
community have real value, as opposed to the acquisition of meaningless things.
Unfortunately, this insight only rises to consciousness when capitalism breaks
down, and a lull interrupts the frenetic race for profits. As soon as
capitalism revs up again, this insight is submerged and we are back to the
routine of equating morality with money, offering our greatest respect to those
with the greatest wealth and the most expensive cars.
The Problem
People are a social species. We need each other, not only to satisfy our basic
physical needs, but also to satisfy our deep-seated psychological needs. We
need to be appreciated, loved, and enjoy the pleasures of friendship.
Capitalism, however, directs people to look to the accumulation of wealth as
the highest good so that each of us competes against the others for "success."
While some material wealth is obviously necessary for survival and for a
comfortable life, when wealth is promoted to the supreme good - when people are
valued on the basis of their income and not on the content of their character -
then human needs become subordinated to the accumulation of material things.
Genuine needs are forsaken for artificial substitutes. Once people accept this
premise, then they embark on a lonely, futile road. When the accumulation of
wealth proves unfulfilling, then these unwitting victims pursue even more
wealth, but fulfillment and satisfaction always seem to recede to a more
distant horizon. In short, they become more like drug addicts, always
identifying happiness with a bigger fix, but becoming progressively more
miserable in the process.
Capitalism has placed us at a crossroads in history. Our planet can no longer
sustain the hyper consumption that this economic system encourages. 70 percent
of the U.S. economy has been dependent on consumption; without it, we slip into
a recession. When there is a national disaster, we are encouraged to go
shopping. Meanwhile, the environment is breaking down. If these tendencies are
not checked, it will suffer irreversible damage.
We are not greedy to the core; greed is not the origin of capitalism but to a
large part its effect. People are placed in structures in which greed and
selfishness are rewarded. Hedge fund operators have walked away with tens of
millions, sometimes hundreds of millions of dollars, and then successfully used
their wealth to lobby Washington for low taxes. Meanwhile, teachers who are
dedicated to helping everyone achieve their full potential must struggle to get
by. Artists who want to make our world more beautiful, and us happier in the
process, must struggle to get by. Hard-working maids and janitors must struggle
to get by. People who do not like to compete but just want to do a good job
must struggle to get by. But those who are only dedicated to money and
themselves can indulge in every imaginable luxury.
If the environment were healthy and the rest of us had plenty, who would care?
These money-obsessed fanatics could be dismissed as immature, self-absorbed and
self-indulgent degenerates. But the irrationality and injustice becomes
intolerable when this rapacious greed implies that millions of others will not
have their basic needs met and the environment will be destroyed.
The Solution
Socialism is predicated on the premise that in order for society to operate in
the interests of the majority, everyone must have both a voice and vote in
democratically determining its direction. Instead of the economy being owned by
a wealthy elite who run it entirely in their own interests while impoverishing
billions of people around the world and destroying the environment, it would be
placed in public hands. And its basic operating framework would then be
determined by a public discussion, with all the relevant information available,
followed by a debate and vote. In this way, the economy could be steered onto
an entirely rational foundation so that its ability to serve the interests of
ALL members of society would be maximized coupled with the recognition that our
collective interests can only be served when the environment, which nurtures
and sustains us, is healthy and vibrant.
Such a revolutionary transformation would represent a tremendous moral advance
for humanity: the impulses of individual self-interest and greed would be
replaced by a conscious commitment to defend the interests of everyone. Instead
of the weak and frail being cast by the wayside to fend for themselves, society
would redouble its efforts to ensure that their needs, too, were properly
addressed. Instead of living by the uninspiring dictum, "Everyone for him or
herself," we would embrace the principle, "An injury to one is an injury to
all" because, in the final analysis, the well-being of each individual is bound
by millions of invisible threads to the well-being of all others.
Conclusion
The stakes are high. The U.S. working class will be reevaluating everything in
these next years, and in particular the nature of the capitalist economy which
runs most efficiently when wages and benefits are at rock bottom, or when
workers can be replaced by machines and when unemployment is high. Although
workers might not succeed in overthrowing capitalism during this profound
economic crisis, their consciousness will emerge transformed. Capitalism will
never again enjoy their unquestioning loyalty. If this crisis does not prove to
be the end of capitalism, it will be the beginning of the end.
Ann Robertson is a writer for Workers Action (www.workerscompass.org), and can
be reached at [email protected]
http://dandelionsalad.wordpress.com/2009/01/06/the-end-of-capitalism-cracks-in-the-foundation/
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