We don’t need wars or widespread disease to say that capitalism is in crisis. Of course, recent events on a global scale do not make it any easier. At present, capitalism is in crisis in three ways that reinforce each other. These are the banking crisis, the crisis of state incomes and the crisis of the real economy. (Streeck 2014A, 7-9) Wolfgang Streeck, among others, believes that capitalism is not just in crisis this time: it is falling apart. What we are witnessing today can be seen in retrospect as a continuous gradual decline. A single crisis might still be manageable, but not long-term intertwined developments. For a long time, OECD countries have kept their economies afloat with ”injections” of fiat money. However – as Streeck points out – the architects of this monetary expansion know that it cannot go on indefinitely. (Streeck 2014B, 38-39.) And he wrote all this back in the 2010s, after which things have certainly not improved and the unpleasant surprises of the past few years have added to the predicament.
The crisis can be viewed through the three stages of the social structure of accumulation. The first, the search phase, is followed by a crisis of economic recession and profitability. This is the stage, according to Prechel and Harms, in which state managers and capitalists try to restructure the political-legal dimension in order to reach a situation in which capital accumulation is facilitated. The next stage is consolidation. Now the new social structure of accumulation forms the basis for higher profits. The last stage is disintegration, where the inability of the institutional order to sustain accumulation is revealed. This is when markets weaken and the economy declines and becomes more unstable. This forces another phase of search and starts the cycle all over again. (Prechel & Harms 2007, 5.) But what if the new cycle is not about to start?
If we accept the idea, emphasised by David Harvey, among others, that capital is not a thing but a process (Harvey 2010, 40), the situation becomes even more interesting. Capital is the blood that flows through the political body of society in those societies that are called capitalist (ibid. vi). For what happens to the body if the blood stops circulating? Death arrives. Before then, as the circulatory problems progress, we see a variety of symptoms and attempts to correct the situation. Every former factory worker knows what happens when the blood stops carrying oxygen. So if we are witnessing continued circulatory failure on a global scale, our attitude will have to change. If blood is only circulating in the body artificially, what should be the political conclusion? This is a good question, because if we compare the situation with, say, the crisis of the 1930s, there was at least some political economy on the right as well as on the left (see Streeck 2014B, 47). Today, we are all miserably confused about what should be done.
One symptom of this confusion is, I think, the morbid need to talk only about values in politics. I don’t even know how happy I would be if I ever heard a proper political-economic analysis from the mouths of party leaders. I do not want to argue that values are unnecessary, but I repeat the general point: whose values are we talking about? It is quite another thing to talk about bourgeois justice than socialist justice. There is as much difference between them as there is between the different religions’ concepts of salvation. In general, they are also incompatible – if one does not allow oneself to be completely fooled.
Harvey has described six possible obstacles to capital flows and accumulation. The first is insufficient money capital. The second is labour supply scarcity or ”political difficulty”. The third is inadequate means of production, including ’natural limitations’. Fourthly, unsuitable forms of organization or technologies. Fifth, resistance or inefficiency in the work process. Sixth, lack of demand. If capital encounters difficulties in any one of these dimensions, trouble is on the horizon (Harvey 2010, 47). If we are in the self-reinforcing crisis described by Streeck, it is clear that there are major problems at least in one of these dimensions. There are not many options for a solution. Either we find a new economic base in which disruptions to capital flows do not cause chaos, or we manage to overcome the obstacles. The latter solution is frightening because it would require the near-total domination of capital over society and humans, where all functions are organized to maintain the flow.
When it comes to solving the problems, the proposals have been more or less bad. I will highlight one of them. Indeed, I have probably already messed up in my calculations how many times there have been calls for a return from financial speculation back to the ’real economy’. Zizek has well observed that such calls overlook one essential point: in capitalism, there is no ’main street’ without a ’wall street’. If the ’wall street’ is overthrown, the result is only panic and inflation (Zizek 2009, 14.) The ’wall street’ is an integral part of the six elements listed earlier. Without it, capital will not flow through the arteries of society. One could write at length on the subject – and perhaps I will do so later – but financialisation is precisely a response to the crisis of the Fordist form of the capital relationship. It involves a new political organisation of capital, taking advantage of monetarist monetary policy and financial market liberalisation (e.g. Virén & Vähämäki 2015, 60).
So what conclusions should be drawn from the situation? If the real economy cannot be saved from the financial world, if the crisis is self-reinforcing and no new model of accumulation can be found? Perhaps it is time to think about it from the perspective of the Gordian knot.
Harvey David 2010. The Enigma of Capital and the Crises of Capitalism. Oxford Univerity Press.
Prechel Harland & Harms John B. 2007. Politics and neoliberalism: Theory and ideology. Teoksessa Politics and Neoliberalism : Structure, Process and Outcome. Edit. Prechel Harland N. s. 3-17
Streeck Wolfgang 2014A. Buying Time – The delaeyd crisis of democratic capitalism. Verso. London/New York.
Streeck Wolfgang 2014B. How Will Capitalism End? Teoksessa New Left Review 87, May-June 2014. s. 35-64. Get: https://newleftreview.org/II/87/wolfgang-streeck-how-will-capitalism-end cited: 29.9.2017
Virén Eetu & Vähämäki Jussi 2015. Seutu joka ei ole paikka. Tutkijaliitto. Helsinki.
Zizek Slavoj 2009. First as tragedy, then as farce. Verso. London.