Capitalism Is Collapsing -- and Nothing Is Rising to Replace It

[Independent voter]

This is from Alternet, a website from the extreme American left but I thought it was a change from Trump 24/7.

Capitalism is a phenomena, it's not a policy. In the Soviet Union and Communist China and even North Korea today you find thriving "black markets". What is a "black market"? Pure capitalism. As a phenomena capitalism will always be there, if you have a lump of gold someone will trade you something for it.






http://www.alternet.org/economy/end-...-end-our-world

Some anonymous wise person once observed that it is easier to imagine the end of the world than the end of capitalism. But Wolfgang Streeck, a 70-year-old German sociologist and director emeritus of the Max Planck Institute for the Study of Societies, thinks capitalism’s end is inevitable and fast approaching. He has no idea what, if anything, will replace it.

This is the premise of his latest book, How Will Capitalism End?, which goes well beyond Thomas Piketty’s Capital in the 21st Century. Piketty thinks capitalism is getting back into the saddle after being ruined in two world wars. Streeck thinks capitalism is its own worst enemy and has effectively cut itself off from all hope of rescue by destroying all its potential rescuers.

“The end of capitalism,” he writes in the introduction, “can then be imagined as a death from a thousand cuts... No effective opposition being left, and no practicable successor model waiting in the wings of history, capitalism’s accumulation of defects, alongside its accumulation of capital, may be seen... as an entirely endogenous dynamic of self-destruction.”

According to Streeck, salvation doesn’t lie in going back to Marx, or social democracy, or any other system, because there is no salvation at all. “What comes after capitalism in its final crisis, now under way, is, I suggest, not socialism or some other defined social order, but a lasting interregnum — no new world system equilibrium... but a prolonged period of social entropy or disorder.”

Five developments, three crises

If we need a historical parallel, the interregnum between the fall of Rome and the rise of feudalism might serve. The slave economy of Rome ended in a chaos of warlords, walled towns and fortress-estates, and enclaves ruled by migrant barbarians. That went on for centuries, with warlords calling themselves “Caesar” and pretending the Empire hadn’t fallen. Streeck sees the interregnum emerging from five developments, each aggravating the others: “stagnation, oligarchic redistribution, the plundering of the public domain, corruption, and global anarchy.”

All these problems and more have grown through “three crises: the global inflation of the 1970s, the explosion of public debt in the 1980s, and rapidly rising private indebtedness in the subsequent decade, resulting in the collapse of financial markets in 2008.” Anyone of a certain age in British Columbia has vivid personal recollections of these crises and the hurt they caused. The strikes and inflation of the 1970s preceded the Socreds’ “restraint” era, and now we mortgage our lives for a foothold in the housing market. Streeck reminds us that it was nothing personal, just business. We weren’t just coping with one damn thing after another; given his perspective, we can see how it all fit together with an awful inevitability.

When the bubble pops

And it continues to fit together. Temporary foreign workers and other immigrants make unions’ jobs harder. “Recovery” amounts to replacing unemployment with underemployment. Education is an expensive holding tank to keep young people off the labour market. Women are encouraged to work so they can be taxed. But middle-class families need two incomes anyway to maintain their status, so they import underpaid immigrant women as nannies. At some point soon these nannies will be sent back to their home countries when Vancouver’s housing bubble pops.

Perhaps the middle-class families will then make their payments by taking in boarders. Streeck’s essays were written over the past few years, and are sometimes a bit dated. For example, he writes that “American oligarchs, unlike their counterparts in other societies like Ukraine or Russia, are of a ‘non-ruling’ type, since they are content to live alongside a public bureaucracy, a state of law, and an elected government run by professional politicians.”

That changed on Nov. 8, when the American oligarchs ousted noncompliant professional politicians and assumed direct power through Donald Trump and his cabinet. (We may yet see an analysis of Trump on Streeck’s blog.) In one essay, Streeck shows how the economic crisis of the 1970s led to the political crisis of today. Postwar Europe and America rebuilt the world by “Fordism” — mass production of durable goods at an affordable price, with few or no options. But Fordism eventually glutted the market with all-too-durable goods. In the 1960s, I wore the hand-me-down nylon socks my father had bought in the 1940s.

In 1972 my wife and I bought a washer and dryer that still run reliably in 2016, without repairs. That couldn’t last, especially as the baby boom tapered off. Capitalism’s solution was to offer customized, short-lived products that didn’t just meet your needs, but met your wants as well. That meant avocado-coloured refrigerators in the 1970s and granite kitchen countertops today, but nothing that really made life easier. It just let consumers express their changing personal tastes and status. And it wasn’t just consumer goods — it was information as well. Streeck notes that public broadcasting systems and a few private networks dominated the media for decades. Now we have hundreds of private channels competing for our attention (and our money).

Public media like the CBC have tried to compete with private radio and TV, with generally awful results: instead of classical music, CBC Radio 2 gives us Mozart’s greatest hits plus Mozart gossip. Radio 1 promotes the careers of inarticulate hip-hop artists and reports commuter woes caused by housing prices and the lack of decent public transit.

Politics as personal fashion statement

What Streeck calls the “individualization of the individual” has afflicted whole nations, including Canada. We no longer vote for a party because our family always has, or because we support most of its policies. We want avocado-coloured day care programs, and granite-counter “world-class” pipeline safety, and if we don’t get both in one party, we stay home and sulk. In effect, we prefer to be consumers of politics as personal fashion statement rather than actually take part in running the country. Marx thought communism would see the withering-away of the state. Instead, capitalism has reduced the state until its chief functions are protecting the rich and policing the poor.

But in the process, capitalism has killed off its rescuers. Who’s going to save the banks in the next collapse? Who’s going to bail out the masters of the financial universe when artificial intelligence takes their jobs? And who’s going to police the poor when taxpayers can’t pay for the cops and the rich are hiring cops for their own gated communities? Wolfgang Streeck sees neither a single cause of capitalism’s collapse nor any obvious successor regime.

The European Union may break up. Climate change may drown south Florida, including Donald Trump’s Mar-a-Lago. Refugees will keep coming north; they will eventually overwhelm the fences and guards and create new enclaves in Europe and the U.S.A. and Canada.

New pandemics will sweep unchallenged around the world. No coherent political communities will be there to respond to such disasters. Such communities may arise centuries from now, but if Streeck is right, capitalism has ensured that we and our children will never live in them.

[falagar112]

While I rejoice different political views - and the discussion should never disappear, this article is a little bit to much gloom and doom

Aside from the question if capitalism is actually dying (human greed and capitalism go hand in hand, I don't see it completely disappearing) - there *are* plenty of alternatives. They are vilified alternatives because that is what politics does to alternatives - but that doesn't mean that it cannot work, or hasn't worked before.

I could mention Agorism here (Samuel Edward Konkin) - which is already taken off, but in ways that were not technologically available before. Uber and AirBNB come to mind?

There comes a point where unemployment due to robotic automation get past a certain point that an economic change will be needed. There also comes a point where (natural) resources get so low that a change in society is in order. When Earth runs out, space will suddenly become priority number one - which requires a different education system to raise our kids to scientists rather then factory workers.

Like the article mentioned, the transition phases are the worst, and we're in one right now. So while it might look bad (and in many cases/countries, it is!) it won't end in the end society. Unlike earlier civilizations, we are "in touch" with most that happens around the world (short of some fake news, haha) that when a change happens somewhere and turns out to actually work, more will follow.

It also needs a change in mind set when it comes to politics. We should elect leaders because.. they have the skillset to be a good leader. Not because "lesser of many evils". Power and money should play no role, skill should. And that is something you can all blame yourself for, to put it bluntly

What I mean with that (in the case of the USA) - on one hand you happily vote for Trump because "lesser of two evils and will sort all our problems", but at the same time you don't vote on an independant candidate (Gary Johnson comes to mind) because "that vote makes no difference, he will never win". Thing is, without you voting for him, he will indeed never win!

If you want to see what an actual protest vote can do - look at Iceland, and their last elections, and the results afterwards. While we have this political system, as flawed as it is in many ways - your vote (or entering politics yourself) is the one thing that can actually make a difference. Use it wisely and vote for who *you* think is the best candidate for the job, regardless of what others tell you to vote, or if you think that person has an actual chance. Politicians are a direct reflection of us, the people.

[Endus]

This is from Alternet, a website from the extreme American left but I thought it was a change from Trump 24/7.

Capitalism is a phenomena, it's not a policy. In the Soviet Union and Communist China and even North Korea today you find thriving "black markets". What is a "black market"? Pure capitalism. As a phenomena capitalism will always be there, if you have a lump of gold someone will trade you something for it.

I see that kind of comment made all the time, and it's wildly incorrect, and demonstrates a complete failure to understand what "capitalism" actually is.

Black markets are markets, and that seems to be their entire argument to them being "capitalist". The issue with this, of course, is that capitalism didn't originate the concept of a market. Mercantilism was the standard economic system in the Middle Ages and into the Renaissance, prior to the shift towards capitalism, and mercantilism absolutely relies on market systems. Market socialism is purely socialist, with no capitalist elements whatsoever, and also uses market action as part of its system.

And the supposed "purity" they mention is the lack of government intervention. Which isn't just useless as a measure, it's obviously false when it comes to black markets, which are formed entirely in response to strong government market control.

Capitalism as an economic system revolves around the ownership of the means of production. A black market in stolen electronics, for instance, isn't "capitalist", because nobody in that market is producing anything. They're stealing them from the producers, and re-selling. The drug markets are often heavily manipulated internally by a host of factors, and don't respond purely to supply and demand as people claim, either; https://insight.kellogg.northwestern...al-drug-market


Private ownership isn't going away. The large structures of capitalist nations may collapse, but that doesn't mean the end of capitalism itself. Perhaps the end of the capitalist era, in terms of how nations define their economic policies, but not the concept itself. If anything, we're seeing a democratization of capitalism, an emerging world where we don't need to concentrate wealth to own means of production in the first place; individuals can produce goods for themselves to an increasing extent.

[falagar112]

I see that kind of comment made all the time, and it's wildly incorrect, and demonstrates a complete failure to understand what "capitalism" actually is.

Black markets are markets, and that seems to be their entire argument to them being "capitalist". The issue with this, of course, is that capitalism didn't originate the concept of a market. Mercantilism was the standard economic system in the Middle Ages and into the Renaissance, prior to the shift towards capitalism, and mercantilism absolutely relies on market systems. Market socialism is purely socialist, with no capitalist elements whatsoever, and also uses market action as part of its system.

And the supposed "purity" they mention is the lack of government intervention. Which isn't just useless as a measure, it's obviously false when it comes to black markets, which are formed entirely in response to strong government market control.

Capitalism as an economic system revolves around the ownership of the means of production. A black market in stolen electronics, for instance, isn't "capitalist", because nobody in that market is producing anything. They're stealing them from the producers, and re-selling. The drug markets are often heavily manipulated internally by a host of factors, and don't respond purely to supply and demand as people claim, either; https://insight.kellogg.northwestern...al-drug-market


Private ownership isn't going away. The large structures of capitalist nations may collapse, but that doesn't mean the end of capitalism itself. Perhaps the end of the capitalist era, in terms of how nations define their economic policies, but not the concept itself. If anything, we're seeing a democratization of capitalism, an emerging world where we don't need to concentrate wealth to own means of production in the first place; individuals can produce goods for themselves to an increasing extent.

Bolded the important part here, it is something many still don't realize, and if you want to discuss capitalism, you need to know what it actually entails.

An actual market system, I would like to think it is in our genes, and more importantly, it is not linked to politics in any way. Both can exist in a vacuum.

And while I agree that private ownership won't go away, the privatization of means of production? That might actually die. And I would be glad to see it go - it would cut our resource wasting by quite a lot.

Also I would like to mention, since you mentioned black markets - there's such a thing as grey market, too. And that is something many of you participate in unconsciously. You paying a kid to mow your lane, a babysitter in cash - they are all grey market economy. You are taking money away from the state and spend it in a way that you see fit, rather then someone else dictating you (taxes). Like I mentioned in my previous post, there are even businesses build inside the grey market, Uber isn't exactly "legal" but since it became so big before they shot it down, everyone tasted the many advantages and freedoms that it gives people, so they tolerate it in most countries. Airbnb is another example. You don't have to run drugs or be a prostitute or sell stolen goods to be part of breaking away from the system - all you need is a tradeskill and people willing to trade with you.

Technology makes it even easier - bitcoins say hi.

[Celista]

Ugh, Alternet. It's nearly as bad as Brietbart in some ways.

Capitalism is not collapsing. It is clearly thriving enough for global poverty to be at all time lows, in no small part due to technological advances that have improved supply chain practices, especially via logicstics management (transportation of goods and services). We have international open markets and trade deals that help to facilitate trade and increase quality of life for most of the globe.

Capitalism is not perfect, unchecked capitalism is like a bull in a china shop. Wealth that accumulates in the hands of the few while most others struggle (through low/stagnant wages, unemployment, lack of worker protections, etc) is a recipe for class warfare. It needs to be balanced with policies and programs that maintain a reasonable quality of life instead of constantly pushing wages and quality of life down (whether through outsourcing or other means). This can be achieved while ensuring economic growth and corporate prosperity.

TL,DR: stop reading Alternet.

[twiddler]

Don't you worry, the American Dream will save capitalism.

[Concequence]

Don't you worry, the American Dream will save capitalism.

Lol no. Capitalism is not going away, it doesn't need to be saved. However the logistics of Capitalism is going to change drastically soon. The Economy will need to change more fully to a "service" and "development" industry. Traditional Labor is going to be entirely replaced by automation. So you wont Mine, but you might be the repair guy who fixes mining machines. We will eventually outlive the need to have operators who run machines, as AI gets better. QA will become automated. Creative positions will become the gold mines of the future. Develop new recipes for the food machines to make, or maybe actually cook food for insane prices, as a novelty. ... Basically everyone will build new things or designs, or they will repair things, or designs. And everyone who cant do that, will have basic income. Needs will all be part of the package. Basics will all be covered, and the only things with pricetags will be "above and beyond" items. ... This is the only way our society will advance, so unless we destroy everything first... this is the future.

[Deleted]

National Socialism will rise

[Independent voter]

I see that kind of comment made all the time, and it's wildly incorrect, and demonstrates a complete failure to understand what "capitalism" actually is.

Black markets are markets, and that seems to be their entire argument to them being "capitalist". The issue with this, of course, is that capitalism didn't originate the concept of a market. Mercantilism was the standard economic system in the Middle Ages and into the Renaissance, prior to the shift towards capitalism, and mercantilism absolutely relies on market systems. Market socialism is purely socialist, with no capitalist elements whatsoever, and also uses market action as part of its system.

And the supposed "purity" they mention is the lack of government intervention. Which isn't just useless as a measure, it's obviously false when it comes to black markets, which are formed entirely in response to strong government market control.

Capitalism as an economic system revolves around the ownership of the means of production. A black market in stolen electronics, for instance, isn't "capitalist", because nobody in that market is producing anything. They're stealing them from the producers, and re-selling. The drug markets are often heavily manipulated internally by a host of factors, and don't respond purely to supply and demand as people claim, either; https://insight.kellogg.northwestern...al-drug-market


Private ownership isn't going away. The large structures of capitalist nations may collapse, but that doesn't mean the end of capitalism itself. Perhaps the end of the capitalist era, in terms of how nations define their economic policies, but not the concept itself. If anything, we're seeing a democratization of capitalism, an emerging world where we don't need to concentrate wealth to own means of production in the first place; individuals can produce goods for themselves to an increasing extent.

Capitalism is "production for exchange" driven by the desire for personal accumulation of money receipts in such exchanges, mediated by free markets. The markets themselves are driven by the needs and wants of consumers and those of society as a whole. If these wants and needs were (in the socialist or communist society envisioned by Marx, Engels and others) the driving force, it would be "production for use". Contemporary mainstream economics, particularly that associated with the right, holds that an "invisible hand",[67] through little more than the freedom of the market, is able to match social production to these needs and desires.[68]


If you have a lump of gold, that is your capital. You exchange it for a back of rice, "capitalism" occurred. If you can sell the rice for more than the lump of gold you made a profit.

Markets wouldn't form if it wasn't for greed. Greed drives capitalism.

[Endus]

Capitalism is "production for exchange" driven by the desire for personal accumulation of money receipts in such exchanges, mediated by free markets. The markets themselves are driven by the needs and wants of consumers and those of society as a whole. If these wants and needs were (in the socialist or communist society envisioned by Marx, Engels and others) the driving force, it would be "production for use". Contemporary mainstream economics, particularly that associated with the right, holds that an "invisible hand",[67] through little more than the freedom of the market, is able to match social production to these needs and desires.[68]


If you have a lump of gold, that is your capital. You exchange it for a back of rice, "capitalism" occurred. If you can sell the rice for more than the lump of gold you made a profit.

Markets wouldn't form if it wasn't for greed. Greed drives capitalism.

First, you're citing this from a wikipedia page about Marxist theory, not capitalist theory, describing what Marx referred to as the "capitalist mode of production"; https://en.wikipedia.org/wiki/Capita...arxist_theory)

And you're quoting that passage somewhat out of context as a result.

If your argument here were true, then literally all economic activity would be "capitalism". Which is obviously nonsense.

[Independent voter]

First, you're citing this from a wikipedia page about Marxist theory, not capitalist theory, describing what Marx referred to as the "capitalist mode of production"; https://en.wikipedia.org/wiki/Capita...arxist_theory)

And you're quoting that passage somewhat out of context as a result.

If your argument here were true, then literally all economic activity would be "capitalism". Which is obviously nonsense.

The state paying welfare to a recipient seems like it wouldn't fall under capitalism. The state isn't making a profit, there is no greed.

What other examples do you have?

[Endus]

The state paying welfare to a recipient seems like it wouldn't fall under capitalism. The state isn't making a profit, there is no greed.

What other examples do you have?

By your argument, the state providing that welfare was "capitalism"; welfare was their "lump of gold" that was exchanged.

Capitalism is defined by and distinguished from socialism primarily by the ownership of the means of production. Not the presence of exchanges of goods and services. You're literally trying to argue that the existence of trade is what defines capitalism, and that's just flat-out false. And not even supported by your own source.

[Independent voter]

By your argument, the state providing that welfare was "capitalism"; welfare was their "lump of gold" that was exchanged.

Capitalism is defined by and distinguished from socialism primarily by the ownership of the means of production. Not the presence of exchanges of goods and services. You're literally trying to argue that the existence of trade is what defines capitalism, and that's just flat-out false. And not even supported by your own source.

No, the state giving money to a welfare recipient lacks greed as a motivation, the state isn't making a profit.

[Endus]

No, the state giving money to a welfare recipient lacks greed as a motivation, the state isn't making a profit.

You're repeating things that aren't relevant. Also, the state's self-interest in the welfare of its citizenry is "greed", anyway.

[Deleted]

National Socialism will rise

We will very likely see the rise of nationalism (as it allready started). But not National socialism. This time it is national bolshevism, thanks to Putin.

Nationalism will not help to fight the consequences of neo liberalism but accelerate it.

At the end Marx will be right.. the masses will rise against the capitalists. As they are a few who have everything, with a majority living in poverty.

Nationalism will just lead to the complete opposite at the end.

[Nadiru]

Capitalism is about the private ownership of capital goods, what Endus calls "the means of production." This distinguishes it from socialism with its public ownership of capital goods, and previous systems of despotism with what's tantamount to the state ownership of capital goods. "Big" (or more precisely, Liberal Market) Capitalism isn't going away, and in fact is likely to be more ingrained in the global economy for the simple fact that research and innovation are increasingly potent drivers of global growth, and high amounts of capital concentration (what laymen would call wealth inequality) are positively correlated with research and innovation.

[Endus]

Capitalism is about the private ownership of capital goods, what Endus calls "the means of production." This distinguishes it from socialism with its public ownership of capital goods, and previous systems of despotism with what's tantamount to the state ownership of capital goods.

I would amend "public ownership of capital goods" to be "collective ownership"; "public ownership" suggests ownership by the State, and socialist systems don't require that as such; member-owned co-operatives are "socialist" in concept.

But otherwise, yeah. If your definition of "capitalism" doesn't effectively distinguish it from things like "socialism" and "communism" and "mercantilism", then it's an overly broad definition.

[Nadiru]

I would amend "public ownership of capital goods" to be "collective ownership"; "public ownership" suggests ownership by the State, and socialist systems don't require that as such; member-owned co-operatives are "socialist" in concept.

But otherwise, yeah. If your definition of "capitalism" doesn't effectively distinguish it from things like "socialism" and "communism" and "mercantilism", then it's an overly broad definition.

True, I was overly broad with that definition. That said, the global economy seems to function sufficiently well with both incrementalist innovators (Japan and Germany) and radical innovators (the US and previously, the UK.) What people perceive of as collapse in the radical innovators is demolition, sometimes uncontrolled, to clear space for the next set of ideas. One of them eventually takes off and creates entire new industries in its wake.

[Independent voter]

I would amend "public ownership of capital goods" to be "collective ownership"; "public ownership" suggests ownership by the State, and socialist systems don't require that as such; member-owned co-operatives are "socialist" in concept.

But otherwise, yeah. If your definition of "capitalism" doesn't effectively distinguish it from things like "socialism" and "communism" and "mercantilism", then it's an overly broad definition.

You seem to like the Marx definition

Capitalism is an economic system based on private ownership of the means of production and their operation for profit.[1][2][3] Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets.

If you own a factory you own the means of production but by definition my labor which I own is also a means of production. I can quit and get a higher paying job, greed is my motivation, my means of production my skills and labor are the way I profit.

Any exchange that is an attempt to profit is capitalism.

[Glorious Leader]

Private ownership isn't going away. The large structures of capitalist nations may collapse, but that doesn't mean the end of capitalism itself. Perhaps the end of the capitalist era, in terms of how nations define their economic policies, but not the concept itself. If anything, we're seeing a democratization of capitalism, an emerging world where we don't need to concentrate wealth to own means of production in the first place; individuals can produce goods for themselves to an increasing extent.

As you pointed out capitalism is defined by ownership of the means of production. This is called private property (as opposed to pure possesion). To democratize capitalism would be the end of capitalism as a system of private property. No man could or would be a boss and the relationship between capital and labor (wages) would be disolved.