Just recently Nigel Farndale has had published an interesting article in ‘The Age’ concerning the future of capitalism. The financial crisis of 2008 and the more recent degeneration of the
In response to Farndale, it is important to challenge his conception of both modern capitalism and socialism.
In recent decades these variants have themselves been displaced by resurgent laissez faire capitalism. Falling profits have been responded to with assaults on the rights of labour and labour’s share of the economy. Hence exploitation has intensified with a mix of ‘labour market deregulation’ and increasingly draconian limits on the industrial action available to workers. (so much for the ‘liberty’ held high by faux-liberals!) Various forms of ‘corporate welfare’ have emerged. This has involved an effective subsidy through maintained provision of infrastructure, education and training even in the context of corporate tax cuts, and increasingly regressive taxes for workers, consumers and citizens. But the myth of triumphant capitalism has remained partly through the effect of technological innovation on peoples’ lives; and partly because of enduring myths about socialism; and the reality of Stalinist implosion in the late 20th Century.
A mixed system including economic socialisation and democratisation, here, is one possible response. In Sweden socialists attempted to extract a greater share of democratic ownership in the economy as a trade-off for years of restrained wages; as compensation for resulting excess profits in some areas; and as a response to centralisation of private capital ownership. That effort (for ‘Meidner wage earner funds’) failed because it attempted too much too quickly – and because it promoted exclusively wage earner funds rather than funds controlled by
Many of the problems identified by Marx still exist for modern capitalism. There is a tendency for profits to fall – though ameliorated by the countervailing impact of qualitative technological leaps in productivity and material living standards. Labour and Nature remain the sources of all material goods: and regardless of objectivist and subjective interpretations of value, the reality of surplus extraction remains – even if it cannot be nailed down with precision. (there is the question of fair return on investment; considering the deferred gratification of small investors; as well as return for innovation and initiative) For capitalists there remain uncomfortable questions about distributive justice – and the impact of plutocracy upon attempts to forge real democracy.
Capitalism remains unstable. As well as demand management there is a need to capture the forces of innovation and efficiency that are unleashed by competition, while at the same time experimenting with more co-operative forms, and countering the effects of unnecessary and counter-productive cost-structure duplication and private monopolistic abuse of market power. Hence strategic re-deployment of natural public monopoly and other appropriate forms of public sector extension. Finally, collective consumption via the social wage and welfare state provide the most efficient and equitable means for citizens and consumers to access essential services in health, aged care, education, unemployment insurance, and other necessities.