The final crisis of capitalism.....

Who would have though ten years ago that the developed capitalist nations of the world would be in the process of nationalizing their major banks? That Russia would be bailing out a bankrupt Iceland? That the United States would be on the verge of the biggest financial crisis since the Great Depression?

Not everyone is entirely displeased about the financial crisis. A wide spectrum of people- from Hugo Chavez to James Kunstler- are rejoicing, because it looks like they are going to be proven right about the fundamental irrationality of the American system.

This looks more and more like something even bigger than the Great Depression. There is a decent chance that we may be entering into the death throes of capitalism. The final crisis of the capitalist system. I don't know what will come out of this- but I suspect that it won't be the liberal-capitalist world order as we know it today.

In a way it's poetic justice that the financial sector should turn out to be the Achilles' heel of capitalism. Ever since the Middle Ages, thoughtful and sensitive people have seen there was something seriously wrong, and morally unhealthy, about the idea of high finance. That some people should make money, not through producing physical or intellectual goods (bread, vegetables, iron implements, houses, medical care, scientific ideas) but by manipulating money, was widely seen as wrong, a form of usury. It continues to be wrong today. Tolstoy said that there were two kinds of work, mental and manual, and that both were equally honorable- but that the 'work' of the financier was neither. He was right. The financial profession got us to buy the idea that labor was separable from reward, and from the final product, and that there was no morally necessary tie between the two. From these it was a simple step to reifying money, giving it a value in itself, separating it from actual physical goods. And from there just another step to people making money out of more money, through deft paper shuffling that contributed nothing of real value to the world, but that made them more and more money.

And now comes the time to pay the piper. You can't get something for nothing, and labor can never be separated from reward, any more than eating can be separated from digestion. We are going to pay a long and cruel price, as a society and as a world, for buying into the myth of free money, for consuming rather than saving, for allowing the resources of the world to be monopolized by decadent oligarchies. It will be a terrible price- and we are all guilty, so we will all have to pay it. But we can make sure that the oligarchies that took responsibility for getting us into this mess, pay the biggest price of all, by being of their unearned power and wealth, once and for all.


Of course it isn't just the financial crisis that we are embroiled in today. We are running out of fossil fuels (oil, natural gas and coal) that have been the lifeblood of the world economy since the Industrial Revolution. The climate is rapidly changing for the worse- African deserts are getting drier, Arctic ice is melting, floods and hurricanes are becoming more common, tropical diseases are spreading north. There are warnings that we may be entering a vicious spiral in which the Amazon gradually receives less and less rainfall until it turns into a desert. World fisheries are rapidly being depleted. Forests are being cleared, our topsoil is being eroded. All these problems reinforce each other, and they all add up to a perfect storm. Any one of them alone could pose a big threat to a society- in concert, two or three of them have brought down societies before. Look at Easter Island.

But now we have all these multifarious threats to the ecological and biological support system on which human civilization, and so many of the other life forms that inhabit our world, depend. And on top of it, we have the financial crisis. We have new diseases that are coming out of the woodwork- nasty hemorrhagic fevers, drug-resistant TB, HIV. Islamic Jihadism is making its bid to conqer the world by force and reestablish the Caliphate. Russia is flexing its muscles once again, and one country after another- most recently in South America- is standing up to say No to the Washington Consensus.

Not all of these are bad things- I tend to think that the new assertiveness of leaders like Putin, Chavez and Correa are very good things. Eurasia needs a strong Russia with a strong leader, and Latin America needs socialism. But it all adds up to a crisis, and my own belief is that world capitalism won't be able to solve this crisis.

We are entering a new age, an age of hardship, sacrifice, and suffering. This will be an age in which we all need to pull together and ration our scarce natural and social resources in a just and humane way. We tolerated having most of society's wealth monopolized by a tiny oligarchy, because in the past most people in the powerful countries were at least well off enough that they had a decent share of the pie. But that won't be the case in future. We are entering an era in which society's resources will be too scarce and precious for people to tolerate them being concentrated in the hands of the rich, and used to make luxury goods. Hardship and rationing will be the words of the future. It will be, at least for a very long time, a permanent war economy, and it will call for a greatly expanded and authoritarian state to resist those elites who would take advantage of crises to make a profit.

It will be, in short, the death of capitalism. And like the phoenix, a new and better society will rise out of the ashes of the old. What that new society will look like, we can't yet say. But we can know for sure that it will be like nothing we ever dreamed of.