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Published: Monday, July 16, 2007
Bylined to: Hector Dauphin-Gloire
A dress rehearsal for the final collapse of liberal capitalist ideology
VHeadline guest commentarist Hector Dauphin-Gloire writes: Within the last several years, the spirits and hearts of the men and women all over the world who dream of an end to the greed and moral corruption that characterize late-capitalist civilization, most of all in North America and parts of Western Europe, have been lifted up to the heavens by the successful revolution being carried out in the Bolivarian Republic of Venezuela under the auspices of Commander Chavez.
But many people have wondered to what extent the model of 21st Century Socialism can be introduced into other countries.
The right-wing apologists of capitalism, for their part, have assured us that socialism cannot ever work; when the evidence of Venezuela suggests otherwise, they say that it depends on the unsustainable mining of Venezuela’s oil resources, and that socialism in Venezuela will collapse when oil prices fall.
Many of us on the left have worried for a different reason: how much does Venezuela’s transition to a post-capitalist society depend on the charismatic and larger-than-life figure of Commander Chavez?
If it were not for his inestimable courage, perseverance, intelligence, and his great heart and soul, could Venezuela have come this far?
Are Venezuelans both to be thankful to God that they have such a leader, and to sorrow that other countries cannot enjoy the same blessings?
I would say no. The socialist revolution in Venezuela is not dependent on their oil resources, as helpful as they have been, and only in part dependent on the stellar leadership of Commander Chavez.
Furthermore, while the exact form that post-capitalist social order takes may differ from country to country, I believe that late capitalist society must inevitably fade away, probably within the next 50-100 years. I have been coming to this conclusion gradually for years, but especially recently since I read two thought-provoking works: “The Long Emergency” by the scholar of peak oil, James Kunstler, and ‘Monopoly Capital," published in the late 1960s by the Harvard economist Paul Sweezy (and dedicated to Che Guevara). This has strengthened my belief that liberal capitalism, as strong as it appears today, is a doomed system.
Why should we be surprised?
The British Empire reached its territorial peak in about 1920, a mere 40 years before it was to come to its end. The Roman Empire reached its greatest extent only a couple of centuries before its collapse.
- It is not uncommon in studies of population biology to see an animal reach its maximum population, and wiping out the food that it lives on, just before its population crashes precipitately to a small fraction of its previous size.
That liberal capitalism was stronger in 1990 than it had ever been, and seemed to hold unchallenged sway over the globe, is no guarantee that the clock is not even now ticking towards its doom. Not only would the fall of liberalism, capitalism, secularism and all their works be a desirable thing, but I believe that it is a necessary thing as well.
Sometime in the next 50 years, the contradictions between oligarchic capitalism (also called ‘monopoly capitalism’ or ‘late capitalism’) and the increasing scarcities of global natural resources will lead to upheavals that bring liberal society to its end, and probably with it monopoly capitalism to its end.
- I do not know what may replace liberal capitalism, whether it may be better or worse, but I do believe it will be replaced.
The efforts of Venezuela and Cuba to find a way of life ‘after capitalism’ are going to become relevant, at least as showing the possibilities that exist, for one country after another.
To understand why liberal capitalism is inherently unsustainable, we must look closely at the analysis of Paul Sweezy’s seminal work. Sweezy argues that late capitalism is characterized by a specific form of ownership: oligopoly.
Most industries are controlled by a few large producers, and to some extent these producers exert their power across industries as well: a single firm may control auto companies, food producers, tool companies, etc.
One example might be General Electric, which is involved in the aircraft, engine, medical equipment, finance, lighting, power generation, and entertainment industries among others, and last years had revenues of over $160 billion, larger than the GDP of quite a few nations. With the rise of multinational companies since the 1960s, a single company may now have an influential position in markets across the world.
Whether this is the case or not, I am not going to try and show here. It is a widely held position, and has been argued and defended by many, that the trend ever since the 1960s has been to ever greater concentration of wealth and property ownership: within industries, between industries, across national boundaries. I share this view, and am really arguing to those who believe it on the basis of the evidence (which is abundant) what the eventual result of this concentration is to be.
Sweezy makes the point that oligopoly shares some of the features both of monopoly and of competitive capitalism. Like a pure, competitive ‘free market,’ companies are always trying to improve their position and market share, as it is never secure. Thus there is always a drive to cut costs: this may take the form of throwing men and women out of work, skimping on environmental and health safety measures, using cheaper materials or more efficient technologies, etc.
(It is worth noting that as E.F. Schumacher would have pointed out, most of these improved technologies boil down, in the end, to getting machines to do the work that people would have done, and thus throwing people out of work- whether for better or for worse.)
Yet one form of competition that oligopolies shy away from is price competition: companies prefer not to lower prices in order not to get into a price war. Without formal collusion, the inherent structural requirements of the system force oligarchic capitalist firms to strive towards lower and lower costs, and at the same time higher and higher prices. This produces the problem of underconsumption.
Oligarchic firms have a greater and greater surplus, yet how can they invest it?
It can initially be invested in producer goods, but if those goods are not producing goods for consumption then they cannot be used, and will not be demanded. The oligarchy consumes a certain proportion of the surplus itself, through decadent and lavish lifestyles, but it cannot use up the entire surplus; there is a limit to how much even the rich can consume. By allowing a greater portion of the product to end up in the hands of the working class and the poor (through higher wages, worker ownership, transfer payments, public services, etc.) the surplus could be used up, but this is the one thing that capitalism is terminally allergic to.
Strengthening and enriching the poor would necessarily threaten the privileged position and class interest of the rich.
A certain amount of the surplus can be used up through unproductive expenditures: through war, through hiring vast armies of servants and idle hangers-on, through building churches and temples, making art and music: but ultimately each of these pursuits reaches a dead end.
War threatens the interest of the ruling classes themselves, while these other pursuits, however noble in and of themselves, are ultimately incompatible with the coldly rational and utilitarian pursuit of profit that drives capitalism.
While each of these methods of consuming the surplus has its value, another aspect of the inherent crisis of under-consumption is to induce every class of society to buy and consume as much as they possibly can. In a saturated and under-consuming market, every firm is trying to snatch the tiniest possible advantage in selling their product. Thus the massive and completely irrational expenditure of late capitalist societies on advertising, marketing, distribution, and other aspects of the sales effort.
What was in the 19th century an afterthought to the production process has by today become a massive and vital sector of late-capitalist economies. People are relentlessly exhorted to buy things they don’t need, to throw away perfectly good tools and appliances, to strive for an even bigger house, an even faster car, an even better television.
What in a rational society would be seen as temptations towards greed and gluttony are today seen as perfectly reasonable economic activities. How many of us have ever tried to ask ourselves what advertisers, marketers, etc. really contribute to society?
And how many of us who have considered that question were able to think of a good answer?
The answer is that there is no good answer ... they perform a vital role to our economy, but Paul Sweezy’s answer in 1966 is as true as ever: that it is clear that an economy in which such jobs are necessary has ceased to be driven by the true needs of humanity. Beneath the glitz and immorality of capitalist advertising and its necessary corollary, capitalist wastefulness, is the desperate need of a late capitalist society to consume the surplus that it inevitably produces.
I don’t mean to pick on advertisers, of course. A great many jobs that are necessary for today’s society would have no need and no place in a well-ordered socialist state. A socialist society would have no moneylenders, no private bankers, no health insurers, no stockbrokers, no investment bankers, no prostitutes, no marketers, no drug dealers, no public relations specialists, and only a minimal number of soldiers, bankers, salesmen and lawyers.
It is thus the inevitable tendency of late capitalist society to produce more and more and to encourage, exhort, and tempt people to consume more and more.
A late capitalist society in which people lived thrifty and humble lives would fall apart immediately: thrift and modesty are of course incompatible with the very nature of capitalism.
The people who decide to live modest lives on small farms, to buy thrift shop clothing, to make their own toys for their children, are laughed and jeered at, for good reason.
Capitalism cannot tolerate more than a few of these subversive souls, for they call into question the very greed and gluttony on which late capitalist society depends. The junior high school boys who jeer at a girl for wearing a home-stitched dress, are in their way the foot soldiers of capitalism, doing their bit for capitalism in the same way that the politicians who tried to stamp out socialism from Viet Nam to Venezuela were doing theirs.
But why should this form of society not be able to survive indefinitely?
Perhaps we agree that capitalism is an immoral system, but why is it necessarily unsustainable?
Evil regimes and ways of life have lasted before, for very long periods of time. Slave and caste societies lasted for thousands of years.
What is inherently not just evil but also self-destructive about capitalism?
The answer is that the tendency of late capitalist economies to exacerbate their own contradictions -- between increased concentration of wealth in the hands of a few and increased immiseration of the poor, and between an increasingly unusable and indigestible surplus, necessitating an obsessive and frenetic sales effort with corresponding waste and profligacy -- were only possible in the twentieth century due to the intensive and completely unsustainable mining of the world’s natural resources.
Much of the world’s concentration of wealth and power is due to the expansion of multinational companies which were able to develop supply chains spanning the world; the flood of consumer goods with which firms flooded the market and which they induced people to buy were largely produced from materials that depended on petrochemical and cheap energy production; the need of capitalist firms to keep ahead of their competitors by producing newer goods in ever bigger quantities, at ever cheaper prices, necessitates the increase, year after year, of our demands on world energy and resource supplies.
But in the twenty-first century, no longer will the profligate consumption of energy, metals, agricultural products and other goods be possible.
Global shortages of energy, fibers, grains, fish, meat, fresh water, power, metals, and petrochemicals will all lead to generalized suffering that, as usual, will hit the poor hardest, and will radicalize them. For the promise of capitalism -- a Devil’s bargain if there ever was one -- was that the working classes in the developed countries gave up striving for a better society, for more control over their working lives, for a society based on motivations of love and self-sacrifice rather than pride and greed, in exchange for a higher standard of living- the ‘goods’ promised by capitalism.
People in the socialist countries lost faith in their systems not because those systems failed to provide them with food, housing, useful work or other basic necessities but because they had fallen behind the West in their ability to provide consumer goods -- luxury goods.
(To what extent they really lost faith in those systems is another question; while naturally people in the Central European nations despised the socialist regimes that had been forced on them by Soviet tanks, people in the Soviet Union and Yugoslavia tended to see much good as well as some evil in the systems they had.)
The strength of capitalist society was always its ability to manage and produce wealth- perhaps this was not inherently good, and perhaps the cost was much too high, but in any case, this was the task that capitalism promised to accomplish, and did. Socialism’s strength lay in its ability to manage poverty and scarcity. But if scarcity becomes the generalized state of the world, won’t capitalism have lost its greatest selling point?
- The tendency of capitalist firms to overproduce and to waste natural resources in the search of private profit will become odious to an increasing number of people as energy prices, grain prices, meat prices, and the prices of other basic necessities increase.
There will arise calls to reform the system to make it more rational and less wasteful. At first modest calls: Third World peasants will want fish to be directed to human consumption rather than to animal feed, First Worlders will demand that plastics be devoted to basic necessities before they are used to make luxuries, and that energy is used to produce fertilizer and heat houses of the poor before it is allowed to wealthy people for extra cars and heating large mansions.
People of all classes, but especially the poor and middle classes, will by necessity cut their consumption of luxury goods and everything except basic necessities: they will produce more things for themselves, reuse old appliances instead of replacing them, adjust to a lower standard of living. But this will create a serious problem for the capitalist firms that depend on encouraging as much profligacy and spending on luxury goods as possible. Capitalism is notoriously bad at rational management of non-renewable and commonly owned resources. But most natural resources like metals, oil, fish stocks, timber, etc. are by their nature commonly owned, and renewable only if allowed to regenerate themselves (i.e. harvested below a certain rate). For the most part capitalism was left to its own devices, in half the world, during the twentieth century, and the result is that all over the world natural resources are under threat.
- Oil supplies are perhaps 50% exhausted; stocks of the preferred food-fish are perhaps 80% exhausted; many countries have seen their stocks of natural timber reduced to only 10 or 20% or their original extent.
India and China, the world’s most populous countries, face major water shortages. Almost nowhere in the world are soil nutrients and quality being maintained. A major crash in the world’s ability to support consumption is due within the next half century, and the essentially wasteful and over-productive qualities of monopoly capitalism are going to be more evident than ever. That late capitalism wastes petrochemicals by manufacturing and convincing people to buy preposterous plastic toys that they don’t need, that late capitalism manufactures new models of cars every few years and convinces people to send their old one to the dump (and to spend their hard-earned cash buying a ‘better’ one) was perhaps tolerable when petrochemicals, metals, and energy were abundant.
In an era when they are scarce, the working people of the world and their governments will no longer tolerate this kind of waste. They will call for the rationing of at least the most basic goods, and for stripped-down levels of consumption and shared sacrifice on the part of all members of society, but especially from the rich; this will seem not only morally right, but necessary.
The oligarchy, seeing that its wealth and position depend on maintaining high levels of production, inequality and consumption, will resist with every tool it has at its disposal. And the broad multi-class alliance that, in the developed countries, has at least passively lent its support to capitalism, will be broken.
- Whether through peaceful reform, socialist revolution, civil war, or the ascendancy of a new right-wing aristocratic tyranny, a new society of serfs and aristocrats, is anybody’s guess.
Let me make it clear that my beliefs about the future owe little to any dogmatically Marxist conception. The fact that capitalism tends towards under-consumption was noted not just by socialists and communists but by many liberal economists including Keynes and Sismondi.
The fact that natural resource overuse -- the fact that we have been living off natural capital, not natural interest -- is a commonplace among anyone who seriously studies human history from an ecological perspective. To link the two is an easy task, and I have no doubt that many people all over the world are coming to the same conclusion as me, right now.
As to what the post-capitalist society might look like, I don’t know. I oppose Capitalism, Fascism, and Stalinist Communism in much the same way and for much the same reasons; my ideal vision of the future involves autonomous workers’ cooperatives, peasant farmers, and a few small private producers living together in a harmonious society, each motivated both by the desire to support himself and those he cares for and more importantly to contribute to society and to seek fulfillment through honest work.
I envision the State as the agent that owns and controls the production and provision of some basic goods like energy, mined metals, health care, etc., which ensures that everyone has the basic necessities of life, and that no one can rise too far above his fellow men, and which does its best to promote the values of social solidarity, equality, hard work, and Christian love.
This is one vision of what the future might look like -- having some things in common with Tito’s Yugoslavia, some with social democratic Sweden, some with socialist Cuba and Nicaragua, some with the Christian peasant societies of medieval Europe, some with the peasant communes that existed in historical time all over the world, for example in the Inca ayllu.
This is one way that capitalism might, in the next 50 years, collapse.
Liberalism will fall with it, not least because liberalism is the political embodiment of the values -- of illusory ‘freedom,’ of individuals pursuing their own self-interest and somehow achieving invisibly the good of society, of each individual’s idea of good and evil being equally valid -- that find their economic expression in capitalism.
In any case, generalized rationing of basic goods is incompatible with a strictly liberal society. Rationing will at least be necessary in the middle term, as alternate energy sources, recycling of metals and plastics, and natural regeneration of fisheries, soils and forests allow our natural capital to replenish itself.
A fully free market might reassert itself sooner or later, but I believe that by that time society will already have grown use to the idea that at least some basic economic functions should be planned and at least some goods be rationed. Because this isn’t to the interest of everyone, especially not to the interest of powerful interest groups in society, there will be major social conflict, combined with generalized hardship and scarcity, and these are similar circumstances to the last time liberal society collapsed, in the 1930s.
It is my fervent hope, of course, that the results will turn out better in the future than they did back then.
The Great Depression will turn out to have been a dress rehearsal for the final collapse of liberal capitalist ideology. While many of the factions that sought to replace liberal capitalism were inspiring and wonderful, the Nazis and Stalinists also took advantage of the chaos to advance their power over Europe.
We can only ensure that that does not happen again by accepting that liberal capitalist society is finished, and then by trying to ensure that the leaders of the future look more like Chavez and Morales (or for that matter, like Vladimir Putin and the generals who rule Thailand today), and less like Stalin and Hitler.
But to try to fight against history, to try and ensure that any threat to capitalist society is eliminated in advance, will only ensure that when the collapse does come, the only ones left to pick up the pieces are the truly vicious opportunists of the left and the right.
To build dikes against the river’s flow, ultimately, is to court disaster when the river finally breaks through.
Hector Dauphin-Gloire
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