As the first part of a short series examining the current crisis of capitalism, Lewis Akers argues the end of a specific phase of capitalism is not the same thing as an existential challenge to the system itself.
The coronavirus pandemic and the wider crisis it has generated has been a shock to some left wingers, who seem surprised that the government has turned to state intervention on the scale it has to save capitalism from its own noose. Should we be surprised?
Not if we remember that the chaotic response to coronavirus is not the crisis in itself, but merely a symptom of the ongoing crisis of capitalism: in the most brutal manner, coronavirus illustrates the system’s longstanding failure to deliver stability and basic needs. Still, it would be premature to predict the end of capitalism and a socialist rebirth out of the ashes of the pandemic.
This crisis will mark the end of the neoliberal order – the dominant form of capitalism in recent decades, set in motion by leaders like Thatcher in the UK and Reagan in the US, and characterised by state-backed economic liberalisation and the hollowing-out of working class power. But there is no reason to think that, on its own, it will bring down capitalism as such.
The distinction between capitalism and neoliberalism thus assumes huge significance to the future of the left. Many continue to regard neoliberalism as the root of all our problems, an enemy that can be considered independently of the capitalist system that it serves and organises. But this involves a fundamental misunderstanding. Neoliberalism, like Keynesianism or the era of classical liberalism, is a phase of capitalism – the same system in different forms.
Some of the institutional left, like Paul Mason, have suggested “that it will be impossible for capitalism to return to normal.” And to some extent Mason is correct: capitalism as it currently functions will not return to “normal.” However, this does not mean that somehow Rishi Sunak will realise the unfulfilled dreams of Corbynism. It rather represents capitalism finding new ways to protect itself by shedding its skin and developing a different nature.
Previous crises teach us that capitalism’s extraordinary destructiveness paradoxically makes it more resilient and helps it to bounce back. This is exactly what happened in the post-war period. Governments abandoned some of their liberal ‘laissez faire’ chracteristics and simply adopted the new intellectual trend of the day, “Keynesianism” blending a greater degree of state action in the economy with a new international settlement. To ignore capitalism’s shape-shifting nature is foolhardy at best. Capitalist forces will use this crisis to reinforce their own dominance: thousands of businesses will crash, only to be eaten up by those who survive the pandemic. This will in itself change some of the dynamics of the system. We must be alive to the new and predatory forms of capitalism.
Certainly, there will be resistance across the globe, just as we saw resistance in the wake of the 2007-8 crisis with the Occupy Movement, the London riots and student protests, and with the subsequent and sharp polarisation in politics. But there will also be opposition to that resistance from established power and the movements and arguments they can organise to defend their dominance. All these contending forces will also shape the new model of capitalism.
If we cannot be certain what capitalism will morph into, what can we be certain of? We know the next phase will not be socialism but colossal economic wreckage: as pointed out by Iain Macwhirter, a crash more protracted and severe than the last decade, a crash to rival the 1930s. We know this crash is coming as we have already seen more job losses than in an equivalent stage of the Great Depression. Similar trends apply across the world.
The policies implemented by the UK government, such as 80% furlough pay, represent less a change of economic heart and more, as Ben Wray contests, an effort to monetize the economy and suspend it in its current state until after this pandemic. These measures are not being taken to protect working people across world but are being implemented to protect capitalism from its own inefficiencies. To suspend the slump till it can be managed.
Therefore, everything is up in the air. The only thing we can be certain of is that there is an economic crash coming the likes of which we have not experienced within our lifetime. What follows – in the changes capitalism will need to adapt to the new reality – will likely be the end of neoliberalism. What we end up with will be determined in large part the fight over what comes next.
