Is capitalism stuffed, or is it just me?
Because I get a little steamed up now and then, I do try to check my hyperbole meter from time to time. In my last post, I claimed that capitalism was experiencing ‘some kind of catharsis’. This is, in fact, the optimistic version. I don’t need much more hyperbole to suggest that capitalism is murdering its own children, driven insane by short-term greed.
But hold on a minute. In the privacy of my own head I ask myself, how true is this? I have to remember always that I like to entertain – too many of my missives have a rather doomy aspect to them – so the least I can do is try to raise a faint hyperbolic smile here and there between the anger and the irony. It is, however, a dangerous path to tread frequently, because it’s easy to end up all froth and no coffee.
I have a series of tests against which my more drastic remarks must stand (somewhat irregularly, I admit). The first is this: do I sound like my dad?
Bugger. Off to a bad start then. Let’s forget that one and move on: Am I implying that capitalism was in better shape back in some previous, nostalgic past?
Crap. Who wrote these stupid tests? What’s the next one?: Am I moaning about something that, in fact, hasn’t changed since the bloody Romans went home?
Phew. I’m saved. You see, it’s not just another ‘end of the world’ bitchfest from a grumpy old man. There really is something different going on right now, something that capitalism has never experienced before. It has made it vulnerable in a way I don’t think anyone saw coming, and it’s why I think it may well fail, pretty much entirely, as an economic system. Either that, or a truly unspeakable alternative…
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The nation-state is a mandatory component of democracy. Putting it baldly, it is the nation that grants us rights because the nation-state is the source of all legislation – bar the thorny development of legal instruments with wider scope. While governments can control fiscal policy and set tax rates, perhaps that gives some impression of national destiny, but history seems to suggest nations have always been susceptible to the fortunes of their neighbours. Borders define conflict, sometimes limit it, but often measure it against incursion or deprivation – think North and South Korea. But what happens when the borders melt?
The implication of the nation-state is that each is like a car, with its own driver. What happens the nations coalesce, like we’re all in one big car, nobody can agree who should be driving, but we are already moving at considerable speed? This is what has happened to our economies, and it is a result of the desire to globalise trade.
Computers have made possible a convergence of interests and mechanisms that now operate at extraordinary speeds. The homogenisation of fiscal mechanisms, stock exchange and currency transactions, trade and capitalisation, banking and finance, all increase the inter-dependency even as these efficiencies yield greater profits and opportunities.
I can’t help but see this as a monumental machine built on very shaky foundations. Returning to my metaphor, the global economy used to stand on many pillars, each a nation with its modest independence. Now the entire world’s prosperity rests on the shoulders of a tired hero whose time has come, and an energetic giant whose domestic ambitions are as clear and precise as its newfound responsibility towards everyone else is confused and faltering. All the rest of us are subscribers to one or other of the economic and developmental paradigms the US and China represent.
Who is driving? Nobody really. The markets move independent of the world around them, inflating and speculating, depreciating and selling short. Governments watch, more or less helpless because the money reacts badly to interventionist policies; consequently, you don’t see too much of that going on except when bail-outs are required. Governments play with their armies because that’s one thing they can command – sort of.
What they can’t control is money, and the employment it moves around the globe at a whim, ever in search of cheaper labour. Employment markets are destabilised. National economic fortunes become so volatile entire countries are written off as bad risk.
Ripples in a pond. Never before has a trader in Hong Kong been able at a push of a button to put an engineering firm in Bolton out of business. It is the butterfly effect, the small input of fractal mathematics whose eventual influence and the extent of it may be impossible to determine. Capitalism wished for this with all its heart – the unconstrained opportunities of global trade. They have joined up all the countries in the world, made every nation another regional sales opportunity, and every capital is just another branch office of Earth plc, all networked together so tightly there isn’t any real boundary at all, no nationality: since when did money speak any language except its own?
Who is running this giant corporation? Nobody. Look at our leaders squabbling among themselves. Is this the best we can expect of our leaders – a profound failure to actually do any leading? When I say capitalism is heading for a monumental train crash, perhaps you can see what leads me to this conclusion. Chuck in climate change, peak oil and exponential population growth, and it’s time to…Christ! Time to what? Leave the planet?
OK, at least now we know what the question is.
(…and that unspeakable alternative? Well, thinking about Murdoch and Koch and BP and Mittal and Gates and big pharma and Wal-Mart…and you know how climate change deniers go on about unelected world governments…)