Feral capitalism in crisis
By Tapani Lausti
David Harvey, The Enigma of Capital and the Crises of Capitalism. Profile Books 2011.
Paul Mattick, Business as Usual: The Economic Crisis and the Failure of Capitalism. Reaktion Books 2011.
There is no doubt that capitalist societies are sinking into deepening crises. The volatility of the system was revealed, for instance, in London riots. Much has been written about how these riots are not political but “mindless”. But as John Naughton writes: “So no matter how “mindless” their behaviour appears to be, it takes place in a context. And that context is shaped by economic and social conditions.” ("Recreational looting" in perspective, Memex 1.1., 9 August 2011)
One context is the huge gap in wealth in many developed countries, Britain being among the starkest examples. With the ongoing financial crisis, money classes are demanding austerity for everyone else but themselves. Even ordinary law-abiding citizens are outraged by claims that they have somehow participated in “living beyond our means”. To add insult to injury this accusation comes from people who even now seem to be able to profit from the mess they have themselves created. Spanish youth's answer is: “We won't pay for your crisis.” The Greeks are comparing these financial terrorists to the colonels who oppressed them four decades ago. Rebellion is travelling from Syntagma square in Athens and Madrid's Puerta del Sol to other places where people have stopped believing the capitalist propaganda. Paul Mattick and David Harvey have written travel guides to take along.
When my partner and I walked around Puerta del Sol protest camp last May in Madrid, we could sense the outlines of another kind of society in an embryonic form. People are good at organising everyday life when the necessity arises. They also understand democratic decision-making better than most politicians. They probably would invent ways to cope if the whole economy collapsed. Paul Mattick helps us to imagine what we would see around us: “if the whole financial system fell away, and money ceased to be the power source turning the wheels of production, the whole productive apparatus of society – machines, raw materials and above all working people – would still be there, along with the human needs it can be made to serve.” (p. 108)
The ruling elites seem to sense this danger to their power. Research shows that even after natural disasters they oppose grass-roots efforts to organize life by mutual help. Mattick writes: “As in totalitarian states, so also in democratic ones the formation of popular authorities poses an immediate threat to the powers that be, however limited the ambitions of the people concerned.” (p. 107)
In Spain the 15th of May movement has been formed spontaneously without any party political help. The traditional Left is nowhere to be seen. Mattick thinks that this is as well. The Left has lost its vision of an alternative kind of society and might be only a burden with its self-important revolutionary grand-standing. Mattick writes: “People will therefore have to develop new forms of organized activity, if they are to respond to the ongoing collapse of capitalism by constructing a new social system.” (p. 109)
David Harvey too has a lot to say about how to behave in the face of self-destructive capitalism. He writes about the need to reorganise ourselves and to begin “to build new collective organisational forms, knowledge banks and mental conceptions, new technologies and systems of production and consumption, all the while experimenting with new institutional arrangements, new forms of social and natural relations, and with the redesign of an increasingly urbanised daily life.” (p. 278)
Mattick and Harvey explain the background to the current crises of capitalism. Finding profitable investment opportunities has become more and more difficult. Mattick explains: “The slowdown in productive investment meant that money was increasingly available for other purposes.” A merger and acquisition boom followed in the 1980s. This boom then “shaded into a larger pattern of speculating in financial markets rather than investing in productive enterprises.” (p. 60)
Less and less surplus capital has been absorbed in production. One way of finding new investment opportunities was the big wave of privatisations but by 1990s profits started to fall again in spite of successful attacks on wages. Harvey writes: “Low wages and low profits are a peculiar combination. As a result, more and more money went into speculation on asset values because that was where the profits were to be had.” (p. 29) Harvey sees this as the moment when the financialisation of capitalism's crisis tendencies truly began.
One major way of absorbing excess capital has been the spectacular global urbanisation process. Harvey cites the astonishing and absurd debt-financed urbanisation projects in the Middle East, projects which are now in deep trouble. Harvey describes how this urbanisation is being sold as some kind of attractive boutique lifestyle. Again, London riots come to mind when one reads Harvey's analysis: “The impacts on political subjectivity have been huge. This is a world in which the neoliberal ethic of intense possessive individualism and financial opportunism has become the template for human personality socialisation. This is a world that has become increasingly characterised by a hedonistic culture of consumerist excess.” Harvey adds: “The impact is increasing individualistic isolation, anxiety, short-termism and neurosis in the midst of one of the greatest material urban achievements ever constructed in human history.” (pp. 175-176)
As this hedonistic-individualistic system spread throughout the developed capitalistic countries, counter-balancing parts of the economy came under attack. Public spending was now held to have detrimental effects on resource allocation, economic incentives, consumer choice, and individual freedom. Mattick comments: “More concretely, a period of reduced profitability required ‘economic adjustment and flexibility' – in other words, an ability to downgrade working conditions and wage levels.” (p. 72)
According to Mattick, governments hesitated “between the rock of ongoing depression, with its dangers of social upheaval, and the hard place of stimulus spending, with its limited effectiveness and disastrously mounting deficits.” In this situation, “governments seek a point of balance between their function of preserving ‘social cohesion' and their fundamental orientation to the needs and wishes of business.” (p. 78)
There are now clear signs that social cohesion is fragile in many countries and can easily erupt into riots or insurrections. People are beginning to see the reality behind elite propaganda and media confuscation. The ruling elites have begun to lose their legitimacy. As Harvey emphasises, there simply cannot be “an ethical, non-exploitative and socially just capitalism that redounds to the benefit of all.” (p. 239) Mattick, on his part, reminds us that “… capitalism is a system not for providing ‘employment' as an abstract goal but for employing people who produce profits; its goal is not the production of useful things but the increase of capital.” (p. 79)
From being slaves of capital, human societies must rise and take their destinies in their own hands. People are capable of this as many historical examples prove. Hopefully some day people's instinct of freedom will prevail.
In an article about London riots, Harvey had this to say: “But there are various glimmers of hope and light around the world. The indignados movements in Spain and Greece, the revolutionary impulses in Latin America, the peasant movements in Asia, are all beginning to see through the vast scam that a predatory and feral global capitalism has unleashed upon the world. What will it take for the rest of us to see and act upon it? How can we begin all over again? What direction should we take? The answers are not easy. But one thing we do know for certain: we can only get to the right answers by asking the right questions.” (Feral Capitalism Hits the Streets, ZNet, 13 August 2011)