“I think it’s possible that you can make a better capitalism than that which currently exists. But not by much.
The fundamental problems are actually so deep right now that there is no way that we are going to go anywhere without a very strong anticapitalist movement. So I would want to put things in anticapitalist terms rather than putting them in anti-neoliberal terms.
And I think the danger is, when I listen to people talking about anti-neoliberalism, that there is no sense that capitalism is itself, in whatever form, a problem.
Most anti-neoliberalism fails to deal with the macro-problems of endless compound growth — ecological, political, and economic problems. So I would rather be talking about anticapitalism than anti-neoliberalism.” ―Prof. David Harvey, in an interview with Jacobin Magazine
The country is falling apart. Progressives know “the system” is to blame. But is this problematic “system” neoliberalism? Or is it, more fundamentally, capitalism?
That is precisely what Cenk Uygur of The Young Turks asked Naomi Klein in a recent interview: Is it the “excesses of capitalism” that are the issue? Is it the “neoliberal” strategies that all of us (progressives) agree are wrong?
Or, is it actually the “core” of capitalism that is the problem?
Cenk Uygur reiterated his belief that it is “neoliberalism,” not necessarily “capitalism,” that is the problem. After all, as he has noted before, he is the “CEO” of a large business, and his business arguably does good in the world.
Naomi Klein’s response to the question was not a single word, either “neoliberalism” or “capitalism.” Klein did imply, however, that one of those words is more of the correct answer.
“It depends on how we understand capitalism, and why this economic system we have evolved into neoliberalism about 40 years ago,” Klein responded. “Sometimes there’s this sense that you can just turn back the clock to the pre-neoliberal period.”
This is Naomi Klein referring back to “Keynesian” economics and “New Deal” capitalism―the more “ideal, kinder and gentler” capitalism―which would include generous social programs, greater economic prosperity (at least for some), and higher social mobility.
“I think that structurally, actually, that’s just not true,” Klein went on… “Neoliberalism was an attempt to resolve a crisis within capitalism―which was a crisis of stagnation.”
“This comes down to the problem which is really at the heart,” says Klein. “We have an economic system that needs constant growth and expansion in order to survive. When it reaches a plateau of either stagnation or contraction (a recession or depression), then it has to very hungrily find ways to achieve new growth.”
As her answer winded down, Naomi Klein would conclude again that “Neoliberalism was an attempt to resolve a crisis within capitalism.”
What Klein seemed to be saying is that wherever capitalism exists, it will always trend toward this more “advanced” form of modern capitalism―which we call “neoliberalism.”
Noam Chomsky, a prominent intellectual and critic, has summarily explained this very same problem. “A primary goal of the neoliberal reaction was to reverse the falling rate of profit that resulted, in part, from growing labor militancy.”
The “tendency of the rate of profit to fall” is a major part of the Marxist critique of capitalism. What this principle describes is a problem where, eventually, profit and growth “level off,” and solutions must be implemented by the “capitalists” to maintain their growth and profits (and ultimately, the capitalist system).
Among these reforms that capitalists implement in order to preserve the system (thus allowing them to continue their own profit and growth) include cutting costs, undermining labor power, transferring wealth from public to private coffers, and manipulating the political system (which enables all this).
More concretely, there becomes a greater structural incentive to lower wages and fire workers, offshore jobs, raise prices to preserve profit margins, deregulate finance, cut worker benefits, attack and destroy unions, hide wealth in tax havens, raise worker expectations and demands (harming worker’s rights and quality of life on the job)―and finally, just plain fraud and deception.
Capitalism, in other words, is not so much “different” from neoliberalism, but something that eventually becomes neoliberalism whenever it is allowed. The eternal battle of capital vs labor always places labor on the defense against the progression of capitalism. In a capitalist system, it seems this will always be the case, because the capitalists, by definition, control the resources.
This process is not merely a matter of “greed” of the business owner, or even the super-wealthy CEO. The cycle is a matter of survival in a competitive capitalist system. In order for capitalists to preserve capitalism―in order to maintain growth, expansion, and profit―the capitalists, and thus the capitalist system, must always find a way to maintain and even increase its rate of exploitation.
A problem of power
At the core of capitalism is a certain structure of ownership that keeps the balance of wealth and power in the hands of a minority. As “soft capitalist” economists like Robert Reich have noted, this concentration of wealth power can be countered in a number of ways: strong unions, banking regulations, worker cooperatives, and others.
And yet, even at a time when the power of capital is countered by forces of labor, the very source of power remains untouched: the nature of capital. It is always an uphill battle for the countervailing forces, against the capitalists, who legally maintain their source of power through a specific system of property law and rules of ownership.
The 20th century showed that unions can, and will, be destroyed. Regulations will be made―and undone. Politicians, elections, and governments will be bought. Taxes on the wealthy will be cut; valued social programs will come under attack, be weakened, and often destroyed.
Even in the popular “social democratic” nations, which Bernie Sanders points to―like Norway, Finland, Sweden, and others―labor has been under attack, and social programs have been weakened and cut. Just one major example is the current situation with the National Health Service, in the United Kingdom, which is being eroded by a conservative government.
The NHS is a beloved program, with one poll showing that, more than anything else, it makes citizens “proud to be British.” Yet the public, short of revolt, or even just a political revolution, do not hold the power. The capitalists and their pocketed politicians do.
Nowhere is safe from this extreme global capitalism, or, neoliberalism.
It will require an eternal vigilance of the majority to keep the capitalist typhoon at bay. Must labor always be required to maintain a political vigilance and militancy? Or can we please just change the system? Just so that we can live our lives…?
You tell me
Maybe capitalism can be made soft, humane, “conscious”―or even “for the many,” like Robert Reich claims. Or, maybe it can’t.
It’s technically possible. It just seems unlikely, to me. And obviously, not just to me.
But even if capitalism could truly be made “good,” and “for the many,” rather than the “few,” it seems that most likely, this “better” form of capitalism will never last too long.
When the majority slips―when the countervailing forces become weak or inactive―when the masses, once again, become complacent, apathetic, unconcerned, and uninvolved―right there, in that very moment, capitalism’s shadow will make its move. Capitalism will evolve, and it will become “neoliberalism.”
The capitalists are always watching, waiting, and hoping for this moment. It is an opportunity to advance their own interests.
Maybe there’s a better way to do things. Maybe there’s a fundamentally different system that incentivizes our better nature. There must be. As a Democratic Socialist, I certainly believe so.
In any case, it’s a debate that we should continue to have, especially on the left. “Progressives” and “social democrats” are my allies, and in many ways, we agree on many things. But I believe we cannot just talk about the fruits of neoliberalism, while ignoring capitalism, its roots. If I am wrong for being a socialist, and not just a progressive, then prove it.
With climate change on the horizon, especially―the stakes have never been higher.