I’ve seen quite a lot of debate recently about how the currently deepening crisis of capitalism will be overcome, and what sort of society will be the result. In looking at this debate, it is useful to think about the political debates of the 1930s and how they compare to today’s situation.
Just as in the 1930s, liberal democratic governments across the globe are proving themselves corrupt, incompetent, and utterly bewildered by the crisis confronting them. Just as in the 1930s, many are stating that liberal democracy has had its day, but that addressing the crisis requires more drastic measures and so the future will be either one of fascism or socialism. As Zizek has stated: “The marriage between capitalism and democracy is over.” If we look at what resulted from the 1930s crisis and the ensuing world war we can see that both liberal democracy and capitalism rebounded, surprising most everyone (For instance Orwell expected Britain to transition to socialism following the war). Therefore many today argue that concerns of an end to liberal democracy are overblown and that the ship of society will soon right itself.
On the other hand, if we look at what actually resulted from the crisis, we can see that “liberal democracy” as it was understood up until that point did not really “survive” at all. This was a point that was made by James Burnham on the right, and by Herbert Marcuse on the left (among others). What emerged from the ashes of the pre-war capitalist world was a strange hybrid of liberal democracy, fascism, and socialism. While elections and parliaments carried on with their business of governing, the ideas of laissez-faire were widely discredited, and “management” became the order of the day. In the case of most Western countries this implied a new corporatism (as in Fascism), with inflections of social democracy won by united front politics on the left and induced by the fear of communist revolution. Keynesian economic management by the state in collaboration with monopoly capital and establishment-approved labour unions was imposed in order to overcome the “anarchic” character of pre-war capitalism. In concrete terms this meant the rise of big science, the military-industrial complex, and the new consumer culture of the suburbs. While there was considerable variation from state to state (For example the Americans considered the Keynesian system to be a perfection of “free enterprise” while the Swedes considered it to be a kind of socialism without all the fuss of revolution) the hybrid pattern was broadly evident across the western world. For all these reasons, post-war liberal democracy is often characterized as a kind of “embedded liberalism.”
So why not just return to this hybrid model? After all, it was the world’s answer to the 1930s crisis. This is the sort of position advocated by Keynesians like Paul Krugman, yet even Krugman appears to have come to accept the futility of this argument in the face of entrenched establishment opposition. Indeed, this is where we begin to see the limits to trying to learn from the example of the 1930s. In searching for what is similar to today in the 1930s crisis (A worldwide liquidity trap, the bumbling failures of liberal democracies, a new authoritarianism, an increasingly immiserated working class, high unemployment, and an enormously wealthy bourgeoisie) we fail to see what is different about today, which is pretty much everything else! It is of no real analytical value to state that the US top tax rate in the 1950s was 91% and a similar tax rate could fund a similar welfare state if we fail to understand why the tax rate is so low today and shows no real signs of significantly increasing. While many resort to arguments that amount to calling the ruling class “greedy,” “obstinate,” “short-sighted,” or “stupid” these are not very useful critiques, as it is not at all clear that our current ruling class possesses these negative qualities in any greater amount than those of previous eras. Ideology too is not a sufficient explanation. While ideas certainly do constitute a “material force,” they do not do so in isolation, but rather wax, wane, and evolve relative to material circumstances (There are good reasons why the divine right of kings is not a hot topic of debate these days). I have described the rise of neoliberalism in previous posts, so I will not bother retreading that territory here. However I would like to emphasize one result of neoliberal development, which is the transnationalization of the capitalist system, a point that is usefully raised in Robinson and Harris’ article “Towards a Global Ruling Class? Globalization and the Transnational Capitalist Class” but is also addressed by such pro-capitalist writers as Thomas Friedman in his The World is Flat, which I reviewed here.
While authors such as Niall Ferguson in his The Ascent of Money like to point out that we are now in the second great age of globalization, which was preceded by that which developed during the second half of the 19th century, and ended with the outbreak of the First World War, describing quite ominously how the last one ended and how foolish liberal dreams of perpetual peace founded on international capitalist enterprise were, in this description they miss a fundamental point about today’s globalization. This is the transnationalization of production, and the accompanying rise of a transnational capitalist class (TCC). As Robinson and Harris point out, in the first age of globalization production primarily took place in imperial cores, which dumped their excess production on colonies while they simultaneously extracted the resources used in production from those same colonies. In contrast, today’s production is transnationalized across countries. Various component parts are designed and produced in separate countries out of resources produced in yet other countries, then making use of supply chain management software are assembled in yet another location before being shipped all over the world for consumption. As Manuel Castells has often stated, capitalism acquires a “networked” character. The various forms of collaboration and inter-dependent ownership between the bourgeoisie of various nations created the basis for the development of the TCC and an accompanying Transnational State Apparatus. It is in terms of the development of the TCC that we should understand for example, the Clinton administration’s deliberate strategy of national deindustrialization through the promotion of free trade agreements, a strategy which would have been unthinkable to the national bourgeoisie of the pre-WW1 era, and certainly to those of the 1930s.
It is in this context that the struggle for socialism, and indeed even for social democracy, seems so daunting. Social democrats have not won a significant victory in decades, their electoral victories proving largely illusory, and producing little more than a slightly decelerated neoliberalism. They can talk about 91% tax rates until they are blue in the face, but it seems like all they can really implement is the agenda of the TCC. While some significant residues of national autonomy remain, such as those of the USA, the PRC, and that of Germany (which is currently throwing quite a wrench into the capitalist system) the recent historical record does not suggest that they hold any real progressive potential. One reason that the Occupy movement hasn’t put all their energy into putting forward a concrete set of demands (despite their clear capacity to list desiderata when asked) is that most realize that there is little to no prospect of them being addressed, let alone implemented.
The challenge for the left is therefore enormous. Unlike the 1930s, there is no existing socialist bloc to point to for ideas (No matter how problematic the USSR was it did at least prove that a socialist revolution was possible) and while the left has faced similar circumstances before (in the 19th century) the struggle for socialism could then conceivably be conducted on a national level, which is much more manageable than a global one. Building socialism on an isolated local scale is quite conceivable (See the Mondragon cooperatives) and the same can be said for the national level, but a truly transnational socialist project is almost inconceivable. However the idea of a socialist project that encompasses the whole human family has always been a part of the socialist vision (Arguably it was the total failure of the German Revolution that gave rise to the current anti-internationalist mindset). It might be easier to focus on localism these days, but in the face of the vast mobility of the TCC and the global scope of the crisis this basically amounts to an admission of defeat. The second era of globalization has produced a TCC full of “global citizens” whose outlook is consciously international and cosmopolitan in its orientation (although there are nationalist reactions to this position), the question is whether the transnational working class can achieve a similar level of consciousness.
The recent encampments movement has demonstrated a certain level of transnational working class conscious, one of its most encouraging aspects, but the question of how to turn this nascent consciousness into a strategy remains unanswered. Shows of solidarity are not meaningless, but neither are they an effective answer to the “international of the bourgeoisie.” The greatest enemy facing the left is the strange fascist tendency of our day, which attempts to subvert transnational consciousness and instead mobilize the population around national symbols which have already been largely rendered irrelevant at a political economic level by globalization. Perhaps most telling in this regard was the recent replacement of the hitherto apparently unassailable Silvio Berlusconi by the TCC as though he were little more than an unruly employee. When Berlusconi was replaced with the “technocratic” Monti, it became apparent that 21st century fascism is little more than the flip side of the neoliberal coin, the pair representing different “management styles” that can be deployed in varying circumstances. Mussolini certainly never would have been subject to this kind of interference from the League of Nations. The return of a fascism identical to that of the 1930s seems highly unlikely given this international environment.
The crisis has given the left an opportunity to “think big” and it is one that is currently being taken advantage of with alternatives to capitalism being debated with a newfound vitality. The question is can we “think globally and act globally” today?