Who’s up for some post-capitalism?

 Posted by on 10 April 2009  Modern Life
Apr 102009
 

Socialism has failed. Now capitalism is bankrupt. So what comes next? That’s the provocative question being asked by Eric Hobsbawm in The Guardian:

The basic idea that dominated economics and politics in the last century has patently disappeared down the plughole of history. This was the way of thinking about modern industrial economies, or for that matter any economies, in terms of two mutually exclusive opposites: capitalism or socialism.

…

Both are bankrupt. The future, like the present and the past, belongs to mixed economies in which public and private are braided together in one way or another. But how?

This isn’t the first time in history that whole economic systems have been tossed out. Feudalism anyone? But for generations, we’ve been told that capitalism was all set to dominate the future. Having conquered communism, it was unfettered profit for anyone who was ready to grasp it by the horns.

It doesn’t look quite so bulletproof now, though. Now, I don’t know if capitalism is really going the way of the dodo, but I expect some market reforms in the near future.

The most interesting part of Hobsbawm’s essay, though, were almost throwaway points like this:

Nobody seriously thinks of returning to the socialist systems of the Soviet type – not only because of their political faults, but also because of the increasing sluggishness and inefficiency of their economies – though this should not lead us to underestimate their impressive social and educational achievements.

“Impressive social and educational achievements.” Indeed! I mean, Cuba is famed for its cigars, but I’ll bet its most important exports are its educated doctors (that it trades for oil with Venezuela, for example).

So why are government so focused on economic growth, to the exclusion of all else? Because I think they’ve bought into the capitalist assumption that “a rising tide floats all boats” — so that the GDP and the stock market was believed to be a shorthand measurement of how healthy society was.

As Hobsbawm (and others) have argued, though, rising wealth in society hasn’t been shared equally. With a growing income gap between rich and poor, the average wealth may go up, but the bulk of people don’t get any richer.

More on this as I think about it, but I wanted to point out Hobsbawm’s column for more people to read. My initial thoughts are that: a) governments should use something like the “Happiness Index” and not just economic indicators to set policy; and b) free “trade” should mean opening borders to people — ie. to labour — and not just to goods.

Comments?

Grant Hamilton

  • Determinator

    Well, technically, capitalism didn’t really fail. It was a failure of the US and world financial markets and the idiots who run them, to imagine that the American sub-prime mortgage fiasco wouldn’t come back and bite them on the arse. And that fiasco would likely not have occurred if the US government (started by Clinton and made worse by Bush) had not so deregulated banking and other financial institutions.

    While Canada is and will continue to suffer economically because of our close trade relations with the southern behemoth, our financial system still had much of those regulation safeguards in place (at least in comparison), ones that the current US president has praised and reportedly plans to emulate.

    Capitalism can work, but not without some good old socialism and regulation thrown in to keep it honest. Capitalism without restraint (and resulting deregulation) is a neo-Conservative ideal, and a bad one at that.

    Look what deregulation did for public safety in Canada:

    http://www.cbc.ca/consumer/story/2008/10/05/listeria-inspections.html?ref=rss

    • http://www.absurdintellectual.com/ Grant Hamilton

      The story at that link reminds me of the story behind Walkerton — oh, we’ll just trust the industry!

      Deregulation so often saves money in the short-term, only to lead to massive systemic failures in the long-term. I don’t know why it’s still beloved by policy-makers (oh, because of the “saves money in the short-term” part, gotcha).

      I don’t think the column was meant to imply that capitalism had utterly failed. I mean, our paper money still has value, there are still marketplaces and jobs, etc. But I think the idea that “markets know best” that started in the 80s is going to be rolled back — a lot.

      I mean, it was just a couple of years ago that we had things like the DoD setting up virtual “futures markets” for terrorist attacks — betting that the wisdom of the crowd would allow them to predict attacks.

      Doubt now that “the crowd” looks so smart (how long would it have been until we had people gaming that market, shorting the terrorists, selling sub-prime terror derivatives, etc).

      If we’re looking for some sort of socialism/regulation/capitalism mix, I wonder if we shouldn’t coin a new name for it. This might be a chance for a paradigm shift — a shift away from the capitalist/communist dichotomy where one is good and the other bad. That’s too Cold War for me. Time to be as post-capitalist as we want to be post-racial, maybe.

  • Determinator

    We kinda already live in that country Grant, that mix of socialism/regulation/capitalism. And while the mix is still being worked out, it appears to be working better than the model currently falling apart in the US, though that too has so called “socialist” elements.

    While I say capitalism didn’t really fail (and I am directing the comment more at the article by Eric Hobsbawm who wrote “We don’t yet know how grave and lasting the consequences of the present world crisis will be, but they certainly mark the end of the sort of free-market capitalism that captured the world and its governments in the years since Margaret Thatcher and President Reagan…) neither has socialism completely collapsed, and again I use Canada, and several countries in Europe, as examples.

    Free markets are good, but they need watchdogs to temper greed and stupidity. Oh, and a really strong media doesn’t hurt either. Actually, a mix of capitalism and communism/socialism is not a new idea. A phrase was coined for it after the Second World War, a “mixed economy” : http://en.wikipedia.org/wiki/Mixed_economy.

    How the United States still deserves to be called “mixed” I am not sure. The same twits who deregulated in the US think Canada is a socialist abomination. But if you read this guy:

    http://network.nationalpost.com/np/blogs/fpcomment/archive/2009/03/12/peter-foster-let-the-auto-companies-fail.aspx

    … You would assume he isn’t a big fan of a Mixed Economy either.

    • http://www.absurdintellectual.com/ Grant Hamilton

      No, I know there are elements of a mixed economy in, well, every economy. After all, even in Soviet Russia they had stores, they had rubles, and “consumers” had some “choices.” And obviously some goverment oversight/regulation is necessary and desirable*

      I think the point that Hobsbawm is trying to make is that the trend in the last 25 years or so has been towards more capitalism, less socialism — turning to markets instead of government more and more, especially since the end of the Cold War.

      I just went out for a run, and spent some time thinking about all this. I wonder if the “problems” with both capitalism and communism are related. I was thinking, communism relies too much on the collective good, and doesn’t really satisfy individual needs or motivations. Capitalism, on the other had, excels at motivating and rewarding the individual, but doesn’t pay any attention to the common good. Maybe both of these disconnects are related to industrialization.

      Perhaps what’s needed is a mix of capitalism with small-scale collectivization. (Idealism alert!) They say that small-town banks didn’t buy into this sub-prime mess because they tended to know their mortgage holders, and they didn’t sell of the debts to offshore investors. Small-scale farmers are less likely to dump industrial waste into the river, if only because it’s their kids’ friends who fish downstream. And small hardware stores are more likely to sponsor a local baseball team than MegaloMart.

      You can already see this trend in things like Fair Trade food, or “know your farmer” initiatives, or CSAs.

      But (cynicism alert!) maybe all this is just a trend, just a backlash, just a short-lived fad for “authenticity” that will dry up as quickly as cheap credit.

      (Update: I originally posted this whole post while Amy was logged in, and just noticed it. But I’ll bet, since it doesn’t sound like her at all, everyone just assumed it was me. Anyway, fixed.)

      ___
      * I read a story about post-war Sarajevo once, detailing what was essentially unrestrained capitalism. There were three competing phone companies. None of them could connect to the other networks. So if you were a pizza place, say, you needed three phone numbers — with three phone lines connecting you to three different networks. Bizarre. But some people were arguing that in a purely capitalist marketplace, a company could spring up to solve that problem. Calling Company X, they would, for a fee, connect you to any number on any phone network. But it seems so much simpler and easier to just dictate that they have to work together. I mean, imagine if Fords had red taillights and white headlights, but Chevys had white taillights and red headlights? (better for nightvision, I dunno)