Capitalism Hits the Fan

One striking feature of a profound crises is that it is often the catalyst for the convergence of what would otherwise be contending lines of thought. In more tranquil times, the Georgist, the distributist, the mutualist, the “libertarian socialist” and so forth all have leisure to pick holes in each other's coats. But when things seem to be falling apart, the opponents of the system may find that they have more in common with each other than would otherwise be apparent.

Those trapped in the system remain clueless. The stock market, that bastion of cluelessness, rises three percent on a day that job losses of 600,000 are announced (really, more than 700,000, when “seasonal adjustments”—political manipulations of the numbers—are taken out.) The grounds for the market's optimism are unclear, but seem to be related, so the pundits assure us, to hopes for a general Bailout of Everything and Everybody by the state. Politicians debate endlessly the “stimulus” of the economy without ever asking whether there still exists an economy to stimulate. Indeed, the oft-heard statement that “70% of the economy is in consumption” doesn't strike our chattering classes as the absurdity it patently is. The only things that such a statement can mean is that we consume far more than we produce, and will soon end up producing and consuming very little. Why anybody would want to “stimulate” such an economy is beyond me. The major reason they think this way, I suppose, is that for the last 30 years they have been able to stimulate it, but only at the cost of unrepayable debts and an ever-weakening productive sector. Further, each round of “stimulus” has been both more expensive and less effective than the last; even small achievements cost more dollars. Eventually, we must come to a point—and we seem to have already come to that point—were we will spend everything to achieve nothing.

Clearly, the economy doesn't need stimulus, it needs to be restructured. The distributists and their allies already know how to do this: a great number of small owners of capital are better a few owners of large capitals; small scale better than the gargantuan; cooperatives better than anonymously-owned corporations (see Buy it Out! Break it Up! Fund it Right!)

However, there is one group that has been slow to join any real movement for reform. This is the group which many call “socialist,” but in fact are really “liberals” or “progressives,” or whatever name is now fashionable. This kind of liberalism has become, if anything, more wedded to the current system than even the hardened capitalist. After all, the capitalist wants socialist access to the public purse whenever he finds himself in need, which he usually does. The Liberal wants a “reform” of the system, which usually means no more than more regulation and higher taxes. This has to do with the history of English and American socialism, which become “Fabian” at the beginning of the 20^th century. The Fabians sought merely gradual changes without fundamental reform. As Belloc predicted, this would lead to a merging of the capitalist and socialist ideals into The Servile State: the corporate and state bureaucracies would become responsible to the welfare of the people, who would increasingly lose any real economic freedom.

The capitalist has always been comfortable with this arrangement. The regulations had the effect of keeping down competition, since they were a mere annoyance to a large corporation, but a crippling barrier to a small start-up. Hence, they get security of profit along with power and influence; their position becomes more entrenched, not less so. And if they get into trouble, as they frequently do, they can themselves become the objects of public charity and welfare, but at a much higher level than the average welfare mom.

Another group that has been AWOL in this struggle is the Marxists. The Marxists do want fundamental change. However, it is a change in the direction of even fewer owners, not greater. Indeed, there will be only one owner, the state; it is really just capitalism on steroids. Marx, for all his blather about the proletariat, never really trusted the working man to run his own affairs; he would always need a dictatorship to direct even the minutest of his actions. Further, Marx was a great admirer of capitalism; he loved its gargantuan scale and its terrifying power, and especially its power to replace religion as the focal point of men's lives. So we wouldn't expect much help from that quarter.

However, some Marxists take the theory in a different direction. These are the “Marxians,” which seems to refer to a Marxism stripped of its revolutionary and political ideology and its statist assumptions. The odd thing about this “Marxianism” is that it more resembles pre-Marxist socialism than Marxism, a “socialism” that was also anti-statist. The pre-Marxist socialists blamed the state for the vast accumulations of property that made the corporation the dominant economic and political institution; only the police power of the state could guarantee such an unnatural accumulation. Pre-Marxist socialists like Proudhon wanted to see an end to the state as a means to ensure a more equitable division of ownership, an ownership based on actual use of the land rather than legal convention. Indeed, Marx's “withering away of the state” is really just a sop to the non-Marxist socialists of his day.

An excellent example of the “Marxian analysis” comes from Richard Wolff, a professor of economics at the University of Massachusetts. Professor Wolff has an excellent lecture, Capitalism Hits the Fan, which offers an analysis of “the root causes of today's economic crisis, showing how it was decades in the making and in fact reflects seismic failures within the structures of American-style capitalism itself. Wolff traces the source of the economic crisis to the 1970s, when wages began to stagnate and American workers were forced into a dysfunctional spiral of borrowing and debt that ultimately exploded in the mortgage meltdown. By placing the crisis within this larger historical and systemic frame, Wolff argues convincingly that the proposed government “bailouts,” stimulus packages, and calls for increased market regulation will not be enough to address the real causes of the crisis - in the end suggesting that far more fundamental change will be necessary to avoid future catastrophes.”

What are these "fundamental changes" that Wolff calls for? It is nothing less than the belief that the worker rather than the capitalist ought to own the means of production, and own it directly, unmediated by the state. But at this point, the difference between the “Marxian” and the Distributist becomes a matter of the means rather than the ends.

.

Market Meltdown 101: Richard Wolff on Economic History from Amherst Wire on Vimeo.



Market Meltdown 101: Richard Wolff's Alternative Proposal from Amherst Wire on Vimeo.

We can note how Wolff's conculsions track with John Paul II's in Laborem Exercans:

But this socialization of property cannot be achieved by merely eliminating private property, which would simply take the means of production out of the hands of one group of people and put them in the hands of another group (68). We can say that property is properly socialized only “when on the basis of his work each person is fully entitled to consider himself part owner of the great workbench at which he is working with everyone else” (69).

We can also consider Pope Bendict's rather surprising praise for the Post-modernist and Marxist Frankfort School in Spe Salvi (See Post-Modernist Pope).

The days ahead will be difficult, no matter what happens. Almost anything is possible, and most of the possibilities are unpleasant. Those who wish to see a rational and peaceful restructuring of the economy must be constantly on the lookout for allies. The powers that be will not give up power easily, and in their unease there is no telling what they may do.

Incidentally, some of the more vociferous critics of the film are old-line socialists, who see in Wolff's work a mere call for syndacalism, which is also an ally of Distributism.