The Dow Jones averages of the New York Stock Exchange dipped well below 12 000 yesterday. This means they have fallen nearly 2 000 points since their last high, which is a fall of about 16%. This is a fairly significant fall, and it is being accompanied by (actually, driven by) a crisis of credit; namely, that many Americans can no longer afford to pay the interest on their debts, and many lending agencies are having difficulty finding the capital to meet their own obligations, so are making debt terms stringent, which ratchets up the problems for debtors. Since Americans are more in debt now than ever in history, and since the whole country is gigantically in debt via its enormous trade deficit, this looks like being quite a serious recession.
This is also very much a crisis of capitalism. In a planned economy (or even in a regulated economy, such as the United States had from the 1940s to the early 1970s) it would be possible to prevent people from getting into excessive debt in the first place — both individuals and lending agencies. It would also be possible to transfer money between sectors of the economy to resolve problems, instead of using crude and inefficient methods like interest rates (which in America are now lower than the inflation rate; banks are basically paying people to borrow money, an interesting light on the kind of profits they are making since if they were simply dependent on their usury charges they would all go broke). So this is happening because of capitalism, and it is not being sorted out because of capitalism (in both cases, because of that capitalism of a special type known as neoliberalism).
But should supporters of socialism really be dancing in the streets over this?
The trouble is that supporters of socialism have grown used to welcoming crises of capitalism. Indeed, we have grown used to anticipating such crises even when they do not exist, a practice which makes left-wing economists seem like very bad prophets. It’s worthwhile asking why we do this, and whether we ought to.
Crises of capitalism certainly serve to show that capitalism is not a perfect utopian system. In this sense their existence provides a valuable counterweight to capitalist propaganda. However, it is not actually necessary to wait until the stock exchange crashes before noticing that there is something wrong with capitalism. One has only to go to the slums and the depressed areas in any Western country and compare and contrast with the affluent areas, to recognise a problem. The vital statistics tell the same story of the harm caused by economic inequality. What is more, if one goes to the poor world, to which the Western countries have outsourced most of their greatest poverty, one can easily see that capitalism is a catastrophe; one need only drive down the N2 in Cape Town, past the airport, to recognise the problems of capitalism. We don’t actually need crises to know this.
What happens in a crisis is that the ruling class becomes vaguely worried and looks about for answers. Sometimes they look to leftists for answers (or, at least, for the appearance of doing something useful which can be disavowed later if it doesn’t work, or becomes unpopular with the elite). The notion that capitalism has problems becomes part of public debate, because the ruling class permits it, in order to let off some steam building up in the working class and middle class. But supporters of socialism should not be under the illusion that this means that a crisis of capitalism is bringing them power. All that this change in the discourse means, is that leftists are being invited to take part in the shadow-play that is capitalist political discussion; in short, leftists are being asked to help cover up the crisis of capitalism until such time as normalcy is established and the leftists can be thrown overboard. The gratitude which many leftists feel for this invitation helps show how desperate and how opportunistic many leftists really are.
Of course, Marx hinted that capitalism’s recurrent crises would grow in scope and stature until eventually the system became unmanageable. What he did not foresee, understandably, was that capitalists would establish a system of state capitalism, regulating the system wherever it was absolutely necessary and freeing it wherever it was possible to do so. This does not mean that Marx was altogether wrong — the crises do recur, and sometimes they are humdingers, but the system has become a great deal more resilient than Marx would have anticipated (and Marx had nothing but respect for the power of capitalism). Lenin and Trotsky thought that the First World War was the sign of a final crisis of capitalism which would bring world revolution, but they were wrong — although their ideas stuck around until 1929. Even many capitalists thought that the Great Depression proved Lenin and Trotsky right, but these capitalists were as wrong as Lenin and Trotsky had been. The system survived.
The notion has somehow got into the memestream that capitalist crises are good for the left. This is distinctly questionable. In 1929-39, admittedly, a liberal party with Keynesian inclinations took power in the United States, and since the Americans practically dictate the debate on all topics, this creates the illusion that capitalist crises are good for the left. The same period, however, saw the collapse of the Labour Party in Britain and the installation of the Conservatives for — eventually — fourteen years; in France a Leftist party came in in 1936 only to be chucked out two years later. We all know what wonders the Great Depression did for the Left in Germany and Austria, not to mention Japan (where the rise of quasi-fascist militarism was closely tied to the economic depression.
More recently, the great revolution of the 1973 economic crisis was the overthrow of Salvador Allende in Chile; the great revolution of the 1978 economic crisis was the overthrow of the Shah of Iran and his replacement by a theocracy. (Admittedly the latter crisis also saw the Sandinistas installed in Nicaragua, but that was a trivial event outside its political impact in the United States.) That economic crisis also saw conservative governments in power virtually everywhere in the West. The 1991-2 economic crisis returned the Tories to power in Britain; the 2000 economic crisis saw George W Bush installed in America. No, capitalist crises do not seem particularly good for the left.
Indeed, insofar as we can see any orthodox political parties as left-wing, the reverse often seems to be true. The last two major waves of British Labour victories have happened during times of economic success, for instance. However, it is probably true to say that there is no genuinely left-wing political party functioning in Western societies, and few enough outside Western societies. In South Africa, for instance, if you wish to repudiate the ANC and turn radically leftward, you can choose the Democratic Alliance (neoliberal corporate front with a strong lick of white racism), the Independent Democrats (ditto), the Inkatha Freedom Party (ditto, plus Zulu nationalism as well), the Freedom Front Plus (white racism with a strong lick of neoliberal corporatism) — and, er, that’s about it. The representation of genuinely left-wing parties amounts to a handful of municipal councillors. (Much the same is true in Britain, come to think of it.) In short, if another 1929 arrives, there is no socialist political party in a position to take what advantage they can of it.
Why is this so? Well, surely, one reason is that the capitalists do not appreciate the existence of an alternative to their system and have done their best to crush it. The state capitalism of the USSR, which at least called itself socialism, was gradually squeezed out of existence (with a good deal of help from the corruption and incompetence of the state capitalists themselves, who ironically eventually came up with a 1929-style crisis of state capitalism). The state capitalism of the PRC still exists, but almost nobody talks about it (least of all leftists, who often seem to treat China rather the way that pre-1972 American capitalists used to treat it). [A peripheral note on typographical errors; the Creator spelled “treat” as “trweat”, which if consistently applied would make this weblog seem as if dwafted by Lord Peter Wimsey. But that would be wather to weveal the Cweator’s owwigins, would it not? Haw-haw.]
Anyway, back to the predicament. Propaganda, right-wing entryism, corporate bribery and good old-fashioned repression have thrown socialism onto the rubbish-heap of history as of now. The fact that socialism is alive and could surely get off the rubbish-heap if it wanted to, is obviously the case, but strangely enough many socialists seem quite happy to lie there like inverted beetles, waving their limbs and making feeble squeaking noises. This, again, is because of a misinterpretation of the nature of capitalist crises:
What was said by Marx, boys, what did he porpend?
Waiting for the end, boys, waiting for the end.
This parody of Auden is not really a parody at all when applied to some contemporary leftists who are simply waiting, patiently, for the end of capitalism so that they can get on with building the socialist New Jerusalem. It provides a perfect excuse for sitting around and doing nothing. We must wait for the imperatives of History. It is rather like assuming that the ways of God are mysterious and therefore we can’t blame the Big Guy Up There if the infidels happen to slaughter a few hundred thousand/million/billion of Our Side. In the end it will all turn out right — because someone we never met wrote about it in a Holy Book we never read.
Now, this is flabby balderdash. No crisis of capitalism is ever going to be great enough to bring down the state which is geared towards serving the interests of capitalism. On the contrary, the crisis of capitalism merely makes the propaganda of the ideological apparatus more intense and makes the repressive apparatus more attractive to the guardians of the system. Nor is it possible to get rid of the bad guys by simply pointing to a few million unemployed and saying “See! Your system doesn’t work!”. The system works just fine for the bad guys and they are perfectly happy with it.
If the system is to be overthrown, it might be easier to overthrow it during a capitalist crisis. But that would only be true if, during the period when capitalism is at its most rampant (which is often when it is at its most self-confident and most tolerant of dissent) the socialists had built a structure strong enough to take advantage of it. This doesn’t happen by itself. It only happens if socialists know what they are doing and are able to say, even at the apparently best times of capitalism, that they have a way which is still better — which is, of course, true. But few socialists seem to waste time trying to demonstrate this, or to show exactly how true it is. Which is one reason why our New Jerusalem continues to recede before us like a mirage in the desert of reason.