The End of Capitalism?

Does the present financial crisis signal the end of capitalism, as we know it? The question was asked on Friday by our colleague Stephen Aguilar-Millan of the European Futures Observatory.

... Complete entry

Posted by director  on  09/16  at  09:16 AM

This is certainly one of capitalism's major, regular and predictable crises, produced in this case by inadequate capitalist self-regulation. As a capitalist party the US Republicans should have maintained independence from sectoral interests like the banks, and imposed regulations that would have prevented such a major crisis. But the GOP and Bush administration are riven by drug company reps appointed to regulate drugs, oil company reps setting energy policy, and so on. That leads to stupid, short-sighted public policy melt-down, and then the socializing of capitalism's losses, leaving the profits in the pockets of the lucky rich.

If the US corporate elites were smart they would back the Dems to come in and clean up the mess, and take the blame for Bush's economic crisis, ballooning deficits, and catastrophic foreign policy. But Sarah Palin, the religious right and the revanchist neo-cons look like they may perpetuate Republican/lobbyist control of the White House, accelerating the collapse of the US economy, its over-extended Pax Americana, and the model of democratic capitalism it represents, as you suggest Mike.

The most likely future political-economic alternatives, however, aren't the nation-state models of Chinese authoritarian capitalism or Euro-socialism, but the globalization of those models. Since WWII there has been growing transnational regulation of finance and capital, growing transnational investments in nation building and other social needs, growing transnational peacekeeping and policing, etc. All of these are already in place and they need to be ramped up.

The only question is whether they (a) fall apart completely, leading to depressions and wars, (b) remain opaque, unaccountable, and dominated by nuclear states and corporate lobbies, or (c) become more transparent and accountable. Making existing and future transnational governance transparent and democratically accountable is an ongoing struggle, and the profound global economic, ecological and security crises in the coming decades will undoubtedly give us many opportunities to press the case.

But even my most optimistic or pessimistic globalist scenarios don't amount to "the end of capitalism," just its regulation in various ways. I reserve the "end of capitalism" for something like Iain Banks' The Culture, where wages, work, money and markets have all become irrelevant.

Of course if Sarah Palin becomes the first true Holy Roller U.S. President in 2010 after McCain succumbs to cancer, and has her chance to bring on the Rapture by showing her PTA/hockey-mom toughness to Russia, well, that could also mean the end of capitalism.

Posted by  on  09/19  at  04:56 AM

Something which should be considered is the outside impact of those systems: Democratic socialism has been implemented with many wars and consequent destruction; differently, Communist capitalism has been, and is, implemented with less wars … Thus I should say that the best (for social reasons as well as for sustainability) should be Communist capitalism.

Posted by  on  09/21  at  02:00 PM

<b>Bullet Point One</b>

Hey Rui,

Please refer to history, communist capitalism has definitely NOT been implemented in the clean way you've suggested. The only reason these communist systems have even been able to even grow at the rate they have is because of globalism, and primarily because of American export policy for economic growth, especially in the pacific rim and surrounding areas. Without that policy there would have been even more wars than there have been.

In Summary: There should be a distinct warning of dehumanization, destruction of individualism, and elimination of stability. Those systems, have NOT been stable without vast amounts of external influx of capitol.

<b>Point Two</b>
It is also important to point out that capitalism NEVER disappears. No matter how oppressively it is treated. In the end...

Somebody owns the motives, the wealth, and the overall success. Even in the Soviet Union there were people who stood on top, and those millions that went to the gulag.

Either way, one best hope they/we, maintain some semblance of liberty in the shake up. So far it is looking like more and more control...

<b>Point 3</b>

It wasn't mentioned, but I'm tossing the point in anyway. It has been mentioned many times that this is an effect of a capitalist free-market, and in turn it is mentioned that "a once-in-a-century type of financial crisis." which logically dictates that we aren't in a capitalist free-market society. The US hasn't been for well over 60 years, verging on almost 100 years now of socialist market intervention. The closest free-market in the US was between 1840-1913. There were zero similar situations.

So one could argue well, that our forefathers knew and operated in a better way than we do today. I in no part find modern democratic capitalism, as it seems to be labeled, even remotely capitalist. It doesn't even accurately fit the definition anymore.

Maybe a new term should be defined; democratic socialist market, group market democracy? Who knows, it sure would be more accurate than continuing to label the modern system democratic capitalism.

Posted by  on  09/22  at  03:18 AM

I din't say that Comunism was implemented in a clean way, but that Capitalism was implemented in a much DIRTIER WAY. Do you have an accounting of the wars done by one and the other systems?

Posted by  on  10/01  at  01:48 AM

Over the next 10 years we could see corporate “subscription services” become the replacement for “ownership” in the new global economy. Content owners will have better control of their intellectual properties if they can prevent people from owning them to begin with. You can’t resell and redistribute something that you never actually owned and that's why subscription services will eventually replace ownership because content owners will demand it (for legal reasons). While this will certainly meet resistance in the ‘West’, but as the global economy shifts it’s focus to the ‘East’ it will certainly meet less resistance.

If you want to control the behavior of the masses, you must prevent them from owning anything and therefore preventing them from being able to resell it or redistribute it. Who would have thought that Karl Marx's vision would be brought into reality by a capitalist-driven corporate subscription service distributed via Internet 3.0 (cloud computing, IPv6, semantic web, The GRID, and etc)

"The theory of Communism may be summed up in one sentence: Abolish all private property." -Karl Marx

Posted by  on  10/01  at  06:56 PM

The basis of the problem is the control of the money supply. It could easily be argued that real Capitalism hasn't existed since the departure from the gold standard. And once you have a control or regulation of the money supply, you have an instrument that basis its operation on whoever controls it, which in this case was the Bush Administration and money happy Bernanky. They were engineering the supply in a way that was massively inflationary, to enrichen those who already had too much. The excess of these actions caused the backlash we have today. When real wealth and value are created, barring force or fraud, everyone has some part in it and everyone shares in it, much like the good times of the fifties, where the middle class grew to its strongest point. When monetary value is created without underlying real value and worth, the illusion of great riches lasts for a time and then everyone realizes the house[not really an analogy in this case!] doesn't have a foundation. Whatever system we have, it needs some serious changes at its most fundamental level, the creation and distribution of money or this will just happen over and over until, well, you know!

Posted by  on  10/06  at  09:17 AM

Adron said: "Without that policy there would have been even more wars than there have been.". An hypothesis of his own. My point is: indpendently of the reasons for the wars, how can a system be better than the other if it, factually, seems to have caused and to be causing more wars than the other?
That's why I asked you if you had an account of the wars done by one and the other systems.
Rui

Posted by  on  10/08  at  01:03 AM

That's a good point, which system causes more wars? A good question. I would add that Colonialism, by its very nature, would cause the most, as it is really just one big war, with the intent to heist anything of value from whoever you conquer. And since Colonialism is the forerunner, and it could be argued, a necessary prologue to Capitalism, Capitalism is very guilty also?

Posted by  on  10/15  at  12:48 AM

what if we all imagine a world informational system that manages tax collection within an auction system that connects suppliers of public services to the supply of money coming from tax collection? the demands would be inputted by societies by mobile devices attached to their SS number of whatever means of civil recognition and this telco could be managed by the state who would exchange telco services credit by civil-democratic actions of interaction... could you imagine?

Posted by  on  10/19  at  12:08 PM

Well, if it were the typical auction, highest bidder wins, then it wouldn't be much different, the wealthy would get all the services, and the state would either reinforce this or would act against this tendency which would cause the wealthy to withdraw and create their own little society, a bit like it is now!

Posted by  on  10/21  at  09:33 AM

I imagined often this type of solutions; I worked a time ago in a Ministry, and 1 reason for informatization was to fight corruption. I think computers would be better than humans from this point of view but they would need supervisors and the problem could be displaced to these, or not?.

Posted by Steven Earl Salmony  on  10/22  at  09:00 AM

No bail-out from global warming...........

http://www.oregonlive.com/commentary/oregonian/index.ssf?/base/editorial/1224199517206370.xml&coll=7

There's no bailout for the next crisis

Monday, October 20, 2008 The Oregonian

The recent haggling over how to solve the nation's economic crisis seems to have done little to ease the anxieties of either Wall Street or Main Street. And with good reason: Intuitively, we know we haven't seen the worst of it yet.

Watching a lifetime of stock options head south? Worried about where you'll find the money to pay for college or about the spiraling costs of health care? Certainly nothing could hurt worse than a foreclosure, could it? Well, maybe it could. If $700 billion sounds like a lot, try fathoming $9 trillion -- roughly 13 times the cost of today's hotly debated bailout. That's the projected cost of letting global climate change go unaddressed within this decade.

The thorough shakeup of today's economic climate foreshadows an even more disastrous global crisis heading our way. The same belief in unlimited, unchecked growth (some would say outright greed) that fattened our economy on a diet of junk bonds and hollow lending is also strip-mining our planet's environment of the currency that nature safely invested for us over millions of years, and upon which all life -- including our own -- depends.

The concept of peak oil is not just some naysayers' delusion. According to the U.S. Energy Department's own findings, commonly called the Hirsch report and issued in 2005, it's an unavoidable reality, one that is hurtling toward us faster than we know what to do about.

But like the blind eye that was turned on the proliferation of high-risk, foolhardy mortgages in the midst of a slowing economy, we've bolstered our bravado in the face of such warnings while enthusing about drilling offshore and in the arctic.

While we've been busy digging our fossil-fuel foundations out from under us with the same kind of naive bluster and faith in infinite growth that gutted the economy, we've also been busy ruining things at the top as our upper atmosphere becomes choked with carbon dioxide, leaving us in an environmental demise of our own doing.

When it comes to the economy, a few sleights of hand and a heavy toll on taxpayers, all partisan bickering aside, can be called upon to help us avert disaster and restore faith in the unlimited expansion model. But when it comes to nature's bank, cashing out is forever. No amount of midnight meetings, government-ordered buyouts or credit freezes can save a habitat laid fallow by years of unregulated dumping of chemical waste, nor can they lower our thermostats to an inhabitable temperature in the face of global warming.

Sound policy and the pursuit of new technologies might ameliorate some of our excesses, helping to slow down the rate of climate change and postponing the date of disaster. But like the banking and credit crisis that arrived to the surprise of so many experts -- despite the many warnings sounded years earlier -- environmental failure is going to rear its ugly head someday.

And when mother earth forecloses on us, there will be nowhere else to go.

Lisa Weasel is an associate professor of biology at Portland State University and a board member of The Greenhouse Network.


Steven Earl Salmony
AWAREness Campaign on The Human Population,
established 2001
http://sustainabilityscience.org/content.html?contentid=1176

Posted by  on  10/22  at  09:09 AM

Yeah, but the less human-to-human interaction the "system" have, the lower the chance of someone getting coorupted along the way... So, if you imagine some sort of self-managed set of systems that would run without supervision, there is the end of capitalism as we know it, because there is no way of getting little people's interests gaining advantages by corruption. something like the notion of the use of techonology proposed by the zeitgeist movement, or the future by design project.

Posted by  on  10/22  at  10:22 AM

I think you are right, the computer has to be programmed and also could be hacked and of course, would probably be put under "classified" form, so we displaced the problem. I definately dwell on money supply, but if the money supply is limited, not only is there less money for corruption, but more needs to go to the bottom and middle to keep basic needs met. if you don't do this, you have unrest and the miracle of America is that they have kept unrest down by feeding the masses a bigger carrot while still taking all the cream off the top for the priveledged. With less cream, the masses would demand more, which might cause more equity. But i also think, every nation needs to have its own plan for its own good, rather than being linked so strongly to the dollar. Whatever works, works, obviously this neo liberal economics only works for people who already have the wealth. You guys really have a good site here, a lot of great ideas and no name calling that is so common on many.

Posted by  on  10/28  at  10:26 AM

I am in total agreement with you Steve. In fact, this deficit stimulus spending is used to circumvent the "mother nature" aspect of the economy. When an economy is confined by a limited monetary system based on an actual value rather than "fiat", the link to the resource base is sustained. What comes out, has to add to the good of the society or economy, in order for the cycle to continue. Waste lessens the ability of people to produce more, because of its reflection on the balance sheet. There is no balance sheet when the Fed can issue or borrow whatever it wants from whoever its wants. That is an outlook that says there are "no limits" to anything and the earth is the first to lose out. Only in an economy like that, can an institution like the Forest Service, blessed with the richest collection of forests in the history of man, lose money in every year since its inception, while clearcutting its way through over ninety percent of the forests. They also depreciated their roads, mostly gravel, on a 1000 year basis, to look like they lost less money. The problem is basically, no economic principles really apply, this present system is on a mission, that lacks all logic, it's surprising it has lasted this long!

Posted by  on  10/28  at  10:30 AM

Well, If you could picture a system like the monetary tax collection, where all the money collected from taxes are declared to be equal to an amount of, say, X, and you have an electronic auction system for suppliers of services for the society to auction upon it to compete for the task to be done, and that task to be done is the result of the input of the society as in a democratic system, then you could have a different type of representativism where all the society is represented by their own ideals, something like this: 1) the society inputs a system with their requirements; 2) the system knows the collected money and triggers orders of service by the auction house; 3) the suppliers of service would compete to gain the auction of the job; 4) the system chooses the ideal service provider; 5) the society inputs the system with feedback on the task; 6) money is shifted to the supplier and the cycle begins again. Vantages: You get society to act democractly in a timely basis, rather that every 2 or 4 for years period. You get transparency of the money flow chain. You get competition of the suppliers. You take off human interaction that could corruptedly interfere with the suppliers-moneyholders chain. Well, I can imagine a whole sort of systems that IF connected, could bring this kind of correctness to a system that every time i stop to analyse it, it's (non-in)corruptible, because only of the human-being nature.

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