Irish private sector workers, scared they will be the next to the laid off, attack the modest job security and benefits of public sector workers; U.S. pundits debate a cap on executive pay; bombs rain down on remote Afghan villages in the name of security while the threat of economic catastrophe to global security is ignored; "green capitalism" is touted as scientists warn the toll of climate disruption will be worse than anyone feared: all exercises, in one way or another, in missing the point. What they have in common is a failure to recognize the present economic situation for what it is: a deep, systemic crisis of capitalism and indeed growth-based economics whose effects are and will be social, geopolitical, environmental, as well as strictly "economic." It is not just a crisis of neoliberalism, although it is surely that, too. This misdiagnosis is rather more than something for dismayed Marxist and other radical commentators to bemoan: it is more or less a guarantee that the recovery plans that are enacted will, in the best case scenario, merely set the scene for an even uglier day of reckoning in the future. Here's why.
The dramatic story of the economic collapse in Ireland is close to my own heart, since it is my home country. But it is an interesting case study for any observer, for at least two reasons. First, until very recently Ireland was the star pupil of neoliberalism and (capitalist) globalization, an economic miracle. Well, the Tiger's decline has vindicated those who are skeptical of miracles, for the obvious reason that the whole thing was built on a housing bubble. Second, what passes for public debate in Ireland is centered on the almost entirely unquestioned idea that the answer to the crisis is to protect banks at any cost (through guarantees and recapitalizations) and severely cut public spending-- medical care for seniors, HPV vaccines for teenage girls, resource teachers for special needs children, and, especially, wages and benefits for public sector workers. Amazingly, in the context of its response to the economic crisis, the U.S. looks like Sweden compared to Ireland.
Equally amazingly, the media and political elite have engineered a bizarre discourse of scapegoating public sector workers. Their sheer effrontery in having modest job security and benefits is cited as reason for private sector workers to demonize them, as though their "sharing the pain" will do any good whatsoever. The newspapers, television, and radio are full of this stuff. It serves the obvious purpose of diverting workers away from organizing together against the business and political elites, and it diverts attention from the real options available to deal with the country's economic crisis-- in particular, soaring unemployment rates. The tax take has plummeted; consumer spending has plummeted: it should be obvious that wage cuts and pension levies on public sector workers (as well as proposals to cut welfare) are hardly the answer. And yet, nobody except left-wing bloggers and union leaders is willing to state the obvious. The costs are likely to be enormous.
The debate occurring in many countries about the failure of the banking system is another case of missing the point. The public is encouraged to concentrate on executive pay: from Ireland to the U.S., much time and energy has been spent criticizing the pay and perks given to bankers. It is of course absurd and outrageous that these people should be paid millions of dollars or euros for running financial institutions into the ground. But that is just a sideshow. They know that it doesn't matter that they are rewarded for what seems to the rest of us to be abject failure: they know not only that they can hold governments to ransom by threatening financial Armageddon if their mess is not cleaned up for them, but also that the recovery efforts seem focused on enabling more of the same casino-banking in the future. In the U.S., the "post-crisis" future envisaged seems to be one of business-as-usual, with a smaller circle of banking behemoths creating more bubbles, with some cosmetic regulation to make everyone feel better. Beware any "solution" that restores hugely inflated house prices or, more generally, enables massive debt instead of income to fuel consumer spending-- for that is, in large part, what triggered this mess. (Beware, too, a solution merely focused on endlessly increasing consumption-- see below.) In short: executive pay is not the real issue. The long-term power that bankers have is.
Similarly, while Obama-style "green capitalism" is better than Bush-style wanton environmental destruction (talk about "generational theft"!), it is another sideshow. Capitalism requires constant growth-- growth upon growth. This is what drove colonial expansion, the consolidation of the United States, "globalization," and the consolidation of the E.U. More markets, more cheap labor, more raw materials. The trouble is, we humans simply consume too many of our planet's resources, and are busily unleashing destructive forces that, climate scientists warn, we keep on underestimating. So unless we figure out how to do economic growth without increasing resource consumption, our efforts at economic recovery will run into the brick wall of finite natural resources and increasingly severe environmental costs. There are some "green stimulus" measures that may help: building up mass transit and clean energy, for example. But the point will have to be to reduce resource consumption, all told (here, fossil fuel consumption). The reality is: fewer cars, fewer highways, fewer burgers, fewer toys, fewer tourist resorts, fewer kinds of shampoo.
Finally, as if there were not enough reasons to consider the war in Afghanistan utterly wrong, the idea that the U.S. should spend its time and resources bombing to shreds the residents of remote Afghan villages while the economic crisis stokes all sorts of global instability is shortsighted in the extreme. The International Labour Organization, a U.N. body, estimates that, if the situation continues to deteriorate, we could end the year with fifty million people unemployed worldwide. Although it is possible that this could result in mass workers' movements for economic and political democracy, it is unfortunately also possible that this could result in the nastiest reactionary forces gaining in strength. More widespread and more severe poverty is in itself the greatest global threat to human security. Wading deeper into yet another quagmire of a war is hardly going to help.
In general, even a standard Keynesian response to the economic crisis, although certainly better than a standard neoliberal one, will only do so much. If it is modest in scope, it will not do enough to help workers, will leave extant the global poverty and inequality that will threaten global human security, will allow for the development of the next crisis (through overproduction and profit squeeze or through another bubble or series of bubbles), and will not prevent environmental catastrophe. If it is ambitious in scope (merely reformist, but boldly reformist), it may ease, if not prevent, future bubbles, but will not prevent future crises (for profit margins will run into limits one way or another); it may help workers, but if investors retain effective "veto power" over policy, these measures will meet resistance, resulting in something like a repeat of neoliberalism's war on labor; it may or may not ameliorate global inequality; it probably will not prevent environmental catastrophe.
I think many commentaries have missed the point that the real debate is not between neoliberals and Keynesians, but between Keynesians and anti-capitalists: Marxists, eco-socialists, anarchists, socialist and eco- and anarcha-feminists. You heard it here.
Let me add that if you would like to find out more about the economic crisis in Ireland, Michael Taft's "Recession Diaries" at his Notes on the Front blog provides excellent, thorough analysis from a left perspective. For the establishment view, see The Irish Times.
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