Out of the Woods

 

Is the sky falling?

Leftists, readers of Marx, socialists, communists, anarchists and others have held for a long time that capitalism was bound to collapse. It would be brought down by its internal stresses and strains that produced a steady series of commercial bubbles, recessions, depressions and large-scale calamities. It would be followed by socialism—a society more equal, more free, more humane than ours.

But instead of capitalism, it was the (supposedly) socialist Soviet Union that collapsed and reinstalled a version of capitalism. It was communist China that emerged from mass poverty and underdevelopment by adopting capitalist methods for organizing its economy.

Today we are, once again, in a deep recession. Unemployment does not recede; poverty advances. Banks and financial giants are nevertheless making a lot of money. They are thriving and in firm control of the government. Contrary to left expectations, capitalism is in the saddle even though the people are suffering.

It looks as if we should surrender the hope that capitalism will come to an end to be replaced by a more humane and livable society. Must we give up the socialist dream and prepare ourselves with capitalism forever?

Many people think so; capitalism is here to stay. But there is another and more ominous way of reading current events.

Since the early 1970s, real wages for most people have stagnated. In recent years they have begun to decline. According to the government, families earning barely more than $22,000 are poor. (Could you and your family live on roughly $2000 a month?) Half the workers in the United States earned a little bit more at $26,000 a year, $4000 over the poverty line. More and more people are moving below the poverty line. Except for the now famous 1%, US capitalism is not doing well by the majority of Americans.

But there's more. In the capitalism of Adam Smith, daily touted by conservatives, so many enterprises in any given line of business competed with each other that no one could affect prices by their economic decisions. Whether you raised your prices or lowered them, market prices remained unaffected. In the real capitalism of Adam Smith there were no monopolies, no oligopolies. There was no GM, no Boeing, no Walmart, no Bank of America, or Microsoft. What we call capitalism today is a very different kind of system. In the last 40 or 50 years American business has become notably more concentrated and that process continues. There are free markets only in the interstices of this monopoly economy.

 

Traditionally, capitalism was associated with democracy. In the 1970s Milton Friedman claimed in his Capitalism and Freedom that capitalism is a precondition for democracy.

But as economic power has become concentrated in fewer and fewer hands, political power has been taken from the people and placed in the grasp of the business elite. According to some reports, the number of lobbyist in Congress have doubled in the last two years. Since the end of World War II corporate taxes have been cut by more or less 1/3. Individual income taxes have risen by 25%. Add to that, that some of the largest corporations, such as General Electric or Exxon, managed not to pay any taxes at all. The GAO reported in 2008 that “two out of every three United States corporations paid no federal income taxes from 1998 through 2005.” While our government becomes less responsive to our needs, large corporations can pretty much have everything their way.

At the same time there are ominous signs that our traditional liberties are being slowly undermined. In the Citizens United decision, the Supreme Court allowed wealthy corporations to spend as much money as they please to support candidates in elections. That obviously gives corporations disproportionate political influence.

 

The USA Patriot Act, passed after 9/11 allows our government new powers of surveillance over ordinary citizens and limits the government's obligations to let us know when they are snooping. The CIA, originally founded to operate outside the United States, is now doing intelligence work in the United States. We have added another major surveillance agency to all the other ones already keeping an eye on each of us.

The Constitution guarantees that persons arrested that will be arraigned promptly and told what they are being accused of. In the so-called war on terror at least two American citizens found themselves in jail without arraignment, and, for long periods, without access to legal advice. Our government also has a significant number of citizens of other countries under indefinite detention without recourse to legal processes.

More recently the government killed two American citizens—Anwar al-Awlaki and his assistant-- who were accused of encouraging and even organizing terrorist activities in the United States. That is a serious departure from constitutional tradition. If someone is accused of murdering someone else, the police do not simply shoot him dead. Even though he is accused of a very serious crime, he is entitled to a trial. But if the accused is a Muslim imam in Yemen, our government is willing to simply murder him.

These are small beginnings. Maybe they are temporary aberrations. But perhaps they are the beginning of the successor system to capitalism: an economy dominated by global corporations, whose wealth allows them to control national governments. They use their political power to pillage the national treasury in order to increase their profits. They keep wages low while the social safety net is slowly being shredded. The government, being in the hands of the corporations, is likely to take their side when the people finally rebel. Police actions in Oakland are one fine example of that. Equipped with more and more surveillance agencies, ready to ignore constitutional protections, the government is getting ready to execute American citizens without benefit of a trial.

Maybe capitalism is not collapsing as predicted. Maybe it is morphing into a new fascism that rules with an iron hand to benefit corporate bottom lines.

The next 50 years will tell which it will be.