crisis of neo-liberalism or crisis of capitalism

8/14/2019 Crisis of Neo-Liberalism or Crisis of Capitalism

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INSURGENT ANTHROPOLOGIES: A

CRISIS OF NEO-LIBERALISM OR A

CRISIS OF CAPITALISM?

By Christopher Carrico

all the forces which promote full employment can only remain

operative if they do not themselves undermine the rate of profit,or if they are not accompanied by other trends which do so.

Likewise, all the forces which increase profits cannot achieve

accelerated long-term growth if they do not at the same time lead

to an expansion of the market for the final consumers, i.e. if they

do not lead towards full employment.

Ernest Mandel, Keynes and Marx in Dictionary of Marxist

Thought, edited by Tom Bottomore

As I noted in my last post on As It Ought to Be:

The U.S. experienced increasing income and wealth equality from

the time of the Great Depression until the late 1960s. (Then) (t)he

U.S. capitalist class began, in the 1970s and even more markedly
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after the election of Ronald Reagan in 1980, to engage in

conscious class warfare for the restoration of capitalist class

power.

The economic crisis that began in 2007 and has continued to thepresent is the end result of these three decades of class warfare...

The economic order which has dominated for the last 30 years has been one

that I have been describing as neo-liberal. I argued before that at the level of

policy it has been characterized by a state that is focused on:

instituting strict welfare reform policies at home, disciplining the

labor market through economic policies which exponentially

increased the wealth of Wall Street, while keeping Main Street

relatively secure by offsetting stagnating or declining hourlywages with an increase in working hours, and an expansion of the

availability of consumer credit.

Neo-liberalism asserts that the state ought not to interfere in the economic

realm, but this rule is unevenly and unequally applied. Under neo-liberalism,

states have used their coercive powers not to bring the excesses of capitalism

into check, but rather to act on behalf of capitalto discipline labor and agents

of dissent.

The question that this neo-liberal characterization of the present crisis begs,

is Is it possible for the current crisis to be resolved by a return to more

moderatecapitalist policies such as those of Keynesianism or of the welfare

state policies pursued by so many advanced industrial countries from WWII

until the 1970s?

If we believe that current crisis of the economic system is a crisis of neo-

liberalism, one possible way to resolve the crisis would seem to be a return to

economic policies that would address the problem of under-consumptionthrough jobs stimulus or through the expansion of the social safety net. Taxes

could be raised on corporations; government could be directly involved in the

business of jobs creation, for instance through investments on building

infrastructure; and social welfare benefits could be expanded, rather than

contracted as is currently proposed by the Republicans.


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Capital set about the class warfare that I have been referring to as neo-

liberalism as a solution to the long term decline in the average rate of profits.

When the assault on labor, wages, and the social safety net was significantly

under way, this assault acted as a countervailing tendency to the tendency of

the rate of profit to decline. As a result especially of the Reagan Revolution,growth rates picked up again from 1982 until 1997 (3.6%), but have been

very slow since the late 1990s (2.2%).

The only demands that the 99% could articulate under existing socio-

economic power relations, are a return to the conditions that Capital sought to

remove through the Capital Strike of the 1970s and through the subsequent

neo-liberal assault on the working class. Such a return would not solve the

current crisis of the capitalist system. It may bring temporary relief, but at the

cost of exacerbating the underlying causes of the crisis in the first place.

There is one solution that history has shown to temporarily solve the crisis of

over-accumulation brought on by the falling rate of profit: a major world war.

While providing temporary economic stimulus, the New Deal did not solve the

underlying crisis that caused the Great Depression. It was the Second World

War, which was responsible for the mass destruction of a major portion of the

productive capacity of the worlds major industrial nations that ultimately

created renewed conditions for capital accumulation after the war.

Hoping that there is better way out of a Global Depression, in a 2009 piece inthe Brooklyn Rail, Paul Mattick, Jr. called What Is to Be Done? had the

following to suggest as a possible alternative:

Will people instead turn their attention to bettering their own

conditions of life in the concrete, immediate ways an unraveling

economy will require? Will newly homeless millions look at newly

foreclosed, empty houses, unsaleable consumer goods, and

stockpiled government foodstuffs and see a way to sustain life? No

doubt, as in the past, Americans will demand that industry orgovernment provide them with jobs, but as such demands come

up against economic limits, perhaps it will also occur to people

that the factories, offices, farms, and other workplaces will still

exist, even if they cannot be run profitably, and can be set into

motion to produce goods that people need. Even if there are not

enoughjobspaid employment, working for business or the


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statethere is work aplenty to be done if people organize

production and distributionfor themselves, outside the

constraints of the business economy.

Or, as Ernest Mandel puts it in his entry on Keynes and Marx in theDictionary of Marxist Thought, the inherent tendency of capitalism

towards crisis implies:

the need to create another economic system, with a different

economic logic and relations of production; a transition towards

socialism, the expropriation of the bourgeoisie, and the

elimination of bourgeois state power.

These are the real tasks ahead.As I have argued here before,the choice

before us is between Socialism or Barbarism.
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