Lenin graces the cover of a recent issue of The Economist. The Financial Times is running an entire series on the “crisis in capitalism.” Francis Fukuyama, a recovering neoconservative, makes a plea in Foreign Affairs for the left to get its intellectual act together. And that noted class warrior Newt Gingrich has been assailing Republican presidential candidate Mitt Romney for being a ruthless moneybags.
Excuse me? Does the left hand know what the right hand is doing? What parallel universe did we all just stumble into?
It’s not the first time, of course, that the political spectrum has become all jumbled. Ten years ago, the 9/11 attacks sent some liberals scurrying rightward in support of the Bush administration’s extended response. The disastrous aftermath of the Iraq War then pushed even some leading neoconservative lights, like Fukuyama, in the other direction. The aftershocks of this upheaval can still be felt in the debate around the Libya intervention and the “right to protect” doctrine.
Now, the financial crisis and the Occupy movement have convulsed the political spectrum along a different dimension. The political categories of Right and Left -- which derives from where opposing representatives, royalists versus radicals, sat in the French national assembly around the time of the 1789 revolution -- have been woefully inadequate for some time. But if the house organs of the financial sector and the house intellectuals of the Right are all talking like a Marxist study group, then perhaps we are on the verge of a major transformation -- not only in terminology but, more importantly, in the facts on the ground.
The message from the traditional Right is by no means unified. Let’s start with Gingrich, who is what passes for a conservative deep thinker these days (which makes me almost nostalgic for the days of William F. Buckley). Gingrich knows that his reputed “smarts” will go only so far in attracting votes in the Republican presidential primary. He has orchestrated a late surge, toppling Mitt Romney in South Carolina and threatening him in Florida, by combining two qualities: meanness and class resentment. Although Gingrich’s national unpopularity has become the stuff of legend -- it’s at a nearly toxic 56 percent -- a core group of Republican voters thinks he has the best chance of scoring a below-the-belt knockout blow against President Barack Obama in the November election.
But Gingrich the pugnacious pugilist has not been satisfied to rest on his unpleasantness. The man who pulls in several million dollars a year, enough to rack up several hundred thousand in charges at Tiffany’s, figures that, compared to Romney, he’s practically a member of the proletariat. Gingrich has criticized Romney for hitting the jackpot on financial investments, for having Swiss bank accounts, for firing workers. “Is capitalism really about the ability of a handful of rich people to manipulate the lives of thousands of other people and walk off with the money, or is that somehow a little bit of a flawed system?” he told reporters in New Hampshire. Way to go, Newt!
Gingrich’s indulgence in the rhetoric of class warfare -- which goes well beyond anything that President Obama has dared -- reflects the political insurgency that is taking place within both major parties. The populists are lining up against the plutocrats, with the Tea Party and the Occupy movement providing the shock troops. Such rebellions against the elite take place on an almost cyclical basis -- progressives against the Gilded Age wealthy, New Dealers against the financiers, Reaganauts against the Republican blue bloods. If the U.S. economy improves and the threat of another major global downturn recedes, then perhaps both the Tea Party and Occupy will melt away. Obama will go back to his Wall Street-friendly rhetoric and the Republicans will deem Gingrich’s neo-Marxist tactics a failed experiment.
But with the U.S. economy still stagnant and the House of Euro collapsing in on itself, capitalism is indeed facing a crisis of confidence. For the Financial Times, which is running a series on the current challenges facing capitalism, the problem boils down to how much business executives get paid. Capitalism needs adult supervision because a few bad eggs have bent the rules to their own benefit, and this supervision best comes from, drum roll please, the state.
“Capitalism needs the state,” the FT editorializes, “not to run the economy but to regulate how individuals run it and have them face the consequences of their actions.” The state, in other words, has to step in to save capitalism from itself, but only in the limited fashion of a schoolmarm disciplining the disruptive elements. The FT provides space for Occupy London’s somewhat more radical critique, but the overall message of the series is one of irritated reproach: The super-wealthy have been making it increasingly difficult for the conventionally wealthy to go about their business of racking up profits according to the traditionally skewed rules of the game.
The Economist has a somewhat different take on the matter. Capitalism in general isn’t in crisis, just the Western, laissez-faire variety. Asian-style capitalism has recovered rather quickly from the financial crisis. “State capitalism is on the march, overflowing with cash and emboldened by the crisis in the West. State companies make up 80% of the value of the stock market in China, 62% in Russia and 38% in Brazil,” the magazine points out. “They accounted for one-third of the emerging world’s foreign direct investment between 2003 and 2010 and an even higher proportion of its most spectacular acquisitions, as well as a growing proportion of the very largest firms.”
But where the Financial Times practically begs the state to pay more attention to the economy, The Economist is leery of the state capitalism that has guided the economic success in China, South Korea, Singapore, and elsewhere. The magazine raises doubts about “the system’s ability to capitalise on its successes when it wants to innovate rather than just catch up, and to correct itself if it takes a wrong turn. Managing the system’s contradictions when the economy is growing rapidly is one thing; doing so when it hits a rough patch quite another. And state capitalism is plagued by cronyism and corruption.”
The Economist and the Financial Times have squared off on the issue of where to strike a balance between the guiding hand of the state and the invisible hand of the market, an age-old debate. They both recognize that the go-go days are over. Reasonable capitalists can disagree about the proper mix, but their goal is the same. They’ll tweak the original recipe but won’t fundamentally alter the ingredients or the final product.
Which brings us to Francis Fukuyama. In its special anniversary issue devoted to the last 90 years of thinking on global issues, Foreign Affairs invited the big-picture guy behind the “end of history” thesis to reflect on “the future of history.” More than 20 years ago, Fukuyama predicted that the triumph of liberal democracy would spell the end of serious ideological debate and thus the end of history. He has since revised his argument considerably, since many ideological challenges to liberal democracy have persisted -- nationalism, religion, militarism -- and history, red in tooth and claw, soldiers on. The two key challenges he identifies in his Foreign Affairs essay are China’s state capitalism and widening inequality. To Fukuyama’s dismay, the Left has not fashioned a plausible alternative to the unregulated market that has so palpably failed.
“For the past generation, the ideological high ground on economic issues has been held by a libertarian right,” Fukuyama writes. “The left has not been able to make a plausible case for an agenda other than a return to an unaffordable form of old-fashioned social democracy. This absence of a plausible progressive counternarrative is unhealthy, because competition is good for intellectual debate just as it is for economic activity. And serious intellectual debate is urgently needed, since the current form of globalized capitalism is eroding the middle-class social base on which liberal democracy rests.”
Fukuyama and the Right are taking the challenge of Occupy in some ways more seriously than traditional liberals. They understand that widening inequality challenges the very underpinnings of capitalism (much as the Right understands that climate change, as Naomi Klein points out in a Nation article last year, challenges the essential logic of capitalism). What Fukuyama really wants is for the “responsible” Left to come up with a middle-class-friendly alternative to what he considers a more dangerous populism. He fails to recognize that the standard of living of the U.S. middle class depends in large part on the global inequality sustained by our current economic system.
Despite his misunderstanding of the sustainability of the middle class -- and his naïve commitment to a marketplace of ideas already tilted in favor of the wealthy -- Fukuyama does raise an important point about the lack of compelling synthesis coming from the Left. We await a modern Marx who can shake up the Left just as surely as the Right with a trenchant critique of the current economic orthodoxy and a game plan for transformation. The Left, after all, has long been committed to a similarly unrestrained growth paradigm, from the industrial model of communism to the stimulus packages of progressive economists.
This Marx will produce not a manifesto for the middle class. Rather, the new synthesis will fuse economics and environmentalism in a way that fundamentally reorients both disciplines. Marx pioneered political economy; Marx 2.0 will pioneer planetary economy. It’s not just about greening capitalism, as if enough solar cells and Prii will save the world. Our current economic system has reached its planetary limit.
The confusions of our political classification system suggest that we stand at the verge of a new era. The task is not, as The Economist, the Financial Times, Francis Fukuyama, and Newt Gingrich all believe, to save capitalism or the middle class. The stakes are much higher than that. The rising waters will overwhelm Left and Right both. The future might be “storm socialism,” as Christian Parenti argues in TomDispatch, with big government expanding to deal with big weather. Or, if the next Marx is out there somewhere scribbling away, the future might be an entirely different economic system altogether.
We’ve just published a new collection of World Beat columns. All Over the Map: The Best of World Beat is available as an e-book. It contains more than 125 columns, so you can have all your favorites in one place and catch up on the issues that you might have missed. Remember the column about the Qosbi Show? The one about the politics of overseas adoption? Obama’s Nobel Prize? The Yes Men? Wild and crazy Albanian politics? The first electoral win of the Occupy movement? The foreign policy of the Republican presidential candidates in verse? The geopolitics of Facebook? The art of torture?
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Rev. Chuck Currie: Mitt Romney Not Concerned About People Living In Poverty -- But He Should Be
Anthony Flaccavento: The General Welfare
If the workplace was democrat, this problem is solved.
If you are a skilled worker, and not easily replaceable, I'm going to pay you more to make sure you don't leave...
While workers should have some input, in the end of the day, it is the owner who makes the decision.
Really? that is an artificial price control, which is not good for economies.
Your labor is a good to, and companies demand it. Labor responds to supply and demand just like any other product.
So. Do you study economics at all? Or do you just study Keynesian stuff? I'm more of a free market Adam Smith type...
The scribblers and big thinkers may or may not succeed in bending the ear of the monied elites. But that shouldn't be the hinge from which the fate of the world hangs. We need a representative democracy that's more immediate and more responsive than the 18th-century two-parties-once-every-four-years variety we have now. Then let the big-idea guys persuade and point the way forward for all of us, not just the overseers.
think of this country 100 years from now, when it's very possible we have 1 billion people here, there is no why the Republic will survive as currently constituted.
That 'fine' version of capitalism from 1945-1980 ran out of steam and stagfIated in 1980... This is why we had a Reagan-Thatcher Revolution.
It's important to understand that the postwar period was unique... America's economic b00m was primarily due to the fact that we had an intact and highly productive manufacturing base and a huge surplus of labor.... as the rest of the industrialized world was recovering from being flattened by global war. Once Germany's and Japan's manufacturing base got back on its feet... we had more difficulty competing in the global economy as time moved on.
During the earlier part of that period, America essentially had a monopoly on exports... we were essentially what China is today... the manufacturing base of the planet. We could afford to have a big government, high taxes, generous wage rates & benefits and all the wonderful things from that period.
As much as we would all like to go back and relive the glory days... we can't.
We're in a very different world where there are a billion or two people on the other side of the globe that are working and studying a lot harder than we are so they can have the lifestyle we have enjoyed for decades.
In short: Our beloved big arthritic government and its vast array of tentacles that have a strangIehold grip on public education, health care and mortgage lending (to name only three) are not compatible with the 21st century. This antiquated system is not going to last very long at the rate we're going. We need to liberalize the economy and critical industries like education and health care from the corroded iron chains of the State. It's the only way our system can compete in this new world.
But you are right... it is a mess worth saving.
In many ways, civilization kinda depends on it.
It seems to me that they understand that financial markets are a kind of sport, not a way of providing necessary things. As Taleb would say, financial markets "do not harbor the certainties that normal citizens can require." As a result, critical industries--like education, housing, health care, utilities, and the like--are definancialized in these regimes. They are too important to commoditize through markets.
You also ignore the fact that the Japanese, German, and now Chinese rises prosperity have been largely the product of government design, and that the gains in the U.S. economy in the decades since 1980 have been based on either illusory bubbles of capital or developments like microprocessors and the internet that were innovated with government money.
Taxation only solves the problem short term, those at the top will eventually see the opportunity and get those rates overturned, as happened in the past. You want to change America?
Democratize the workplace. Simple, how would you treat your peer, and community? And once you are practicing democracy every day at work(or maybe every Friday?) how would that change your opinion on large scale democracy? Probably profoundly.
What is needed is intelligent, socialist regulation of an otherwise robust free enterprise system, driven by a true democracy, not just the illusion of one.
Your prescription is the ideal, but in the modern world it's not enough to know what to do. We have to invent how to do it.
I am fully for the discussion of new approaches, though.
http://en.wikipedia.org/wiki/Social_Credit
Social Credit philosophy is best summed by Douglas when he said, "Systems were made for men, and not men for systems, and the interest of man which is self-development, is above all systems, whether theological, political or economic."
"The progress of human society is best measured by the extent of its creative ability. Imbued with a number of natural gifts, notably reason, memory, understanding and free will, man has learned gradually to master the secrets of nature, and to build for himself a world wherein lie the potentialities of peace, security, liberty and abundance."
Douglas said that Social Crediters want to build a new civilization based upon absolute economic security for the individual—where “...they shall sit every man under his vine and under his fig tree; and none shall make them afraid.” In keeping with this goal, Douglas was opposed to all forms of taxation on real property.
Social Credit elevates the importance of the individual and holds that all institutions exist to serve the individual – that the State exists to serve its citizens, not that individuals exist to serve the State.
Social Credit has been called the Third Alternative to the futile Left-Right Duality.
No he didn't. Marx was a second or third rate historian, who wrote impenetrable garbage, which "intellectuals" pretend to understand. Most of his ideas were in no way pioneering. His ideas about economics were borrowed from his contemporaries or from his predecessors and turned out to be wrong later on.
It seems to me that our decision makers,are not in Washington(their reps.are though) but in Dallas,Charlotte,New York,and all the other citadels of commerce of the world.
To me,economical ethics boils down to a simple question or two...Where do we draw the lines between fair trade...and theft,or deception in practice,and how do we regulate the system?
Can the construction of business practice be built in a manner that is not harmfull to future generations? How do we repair the damage that we have done?
Or if right wing economics is your thing, how about this system,
http://en.wikipedia.org/wiki/Anarcho-capitalism
Both would be way better than anything that is currently practiced because they understood that any entity which forcibly expects compliance (Whether unions, corporations or governments) will eventually become tyrannical. Bakunin disagreed with Marx on state power as anarcho-capitalists disagree with people like Romney for using government to protect or enhance their businesses. It is time to get government out of economics because CENTRAL PLANNING HAS NEVER WORKED (Show me an example of this in history with a country that was an empire and I will apologize but you will not find one. Central economic planning can only work with small countries.)
For instance, is the Chinese or Japanese model of industrialization - in which the government purposefully sets up and manipulates conditions to allow free markets to function optimally - central planning. If so then they worked fabulously, if not then I don't think anyone is arguing for Soviet or Maoist style centralized directives.
The first example of "central planning" I can think of involves the Roman Empire's grain tax system, which essentially ceded the most basic aspect of any economy - grain production - to the state and a centralized, powerful landowning class for the benefit of the military and the populace of Rome, which was given free grain handouts to artificially inflate the population and keep the city sufficiently "imperial." This system was so successful that the Empire only collapsed once the system was broken by the Vandal invasion of Africa. Medieval peasant and feudal society (certainly completely lacking any central planning) would never approach the productivity of Roman run estates, and the Mediterranean trade, which was based around state owned ships moving state property back and forth, wouldn't be nearly as busy until the rise of the strong monarchies much later.
I get that Stalinist central planning has never and will never worked, but throughout history prosperity has been most notable when it coincided with and been the purposeful aim of strong states. I can't think of an exception.
1) It always starts affecting everyone's financial freedom.
2) Larger government and central planning always lead to two problems (Corruption of the economy-Even your Roman example had this problem & war mongering).
So if the strength of the state is your primary concern, I can understand the idea behind central planning. But if you are more concerned with making a life for your family & government planning has done nothing but put up roadblocks that prevent you from acheiving higher status than we need to start embracing the REAL CONCEPTS OF ECONOMIC FREEDOM (There are various systems out there). This is what the argument boils down to!
CroationCritter: I am Fanning you for your thoughtful postings! I don't always agree with you but I have always maintained that we as thinking people don't always need to be in agreement, we should always however be able to talk and communicate at that civilized level that we so claim to be a part of.....
I've learned a lot from the YouTube postings of Judge Nepolitano at a time when the rubbish behind the "Patriot Act" (absolutely nothing patriotic about it!) and the increasing encroachment on abrogations of Civil liberties of all kinds - hold our country hostage to suspicion, fear and paranoia! We may as well re-name ourselves after the former Soviet Union or North Korea or some such ridiculously totalitarian system...
Founding Fathers like Thomas Jefferson, Tom Paine and so many others must be turning cartwheels in their graves to see the jingoism, propaganda, religious meddling and other nonsense becoming a part of our national fabric and all in the name of National Security.... Disgraceful, disgusting and terribly dangerous to our remaining the Nation we were once supposed to be!
Our economy is a human creation with flaws. The biggest flaw it the concentration of wealth in too few hands, crashing the economy and impoverishing the 99%.
The Cure is high progressive income taxes, like we did under Ike when the USA became the greatest economy in history, and how Sweden, Germany and Holland take care of all the citizens, using automation and tech.
50% over a million, 90% over a billion. Pay your dues, you really would hate Somalia.
"When economic power became concentrated in a few hands, then political power flowed to those possessors and away from the citizens, ultimately resulting in an oligarchy or tyranny." John Adams
"As riches increase and accumulate in few hands . . . the tendency of things will be to depart from the republican standard." Alexander Hamilton
Thomas Jefferson, "I hope we shall crush ... in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country".
Corporations make no sense in a democratic society.
His direct challenge of the entire Washington establishment, including the establishment of his own party, is not about political opportunism... it's something he's Iaid out in a set of books going back to his early political career.
Yes it is about a paradigm shift... The "Old Order" in Washington have made a mess of things. Western civilization is in decline as a direct result of decades of a metastasized dysfunctional establishment that is br0ken, entrenched and in an advanced state of decay. This is the problem all across the western world... where we've moved too far away from the principles of the Enlightenment and classical liberalism, which is what made western civilization so successful in the first place.
Basically, the idea is that the "Enlightenment Baton" was passed through the generations... but somewhere along the way, it was dropped... Newt wants to pick it back up and run with it.
Gingrich is a politician first and foremost, and an intellectual somewhere way down the line.