Richard Wolff has an interesting article in MRZine about an important prepositional distinction, that between crises in capitalism and crises of capitalism. He starts,
Capitalism has generated recurring “crises” everywhere and throughout its history…Crises in capitalism (depressions, recessions, cyclical downturns, etc.) are neither new nor unusual. Because capitalism works that way, its supporters came to label the more severe or protracted down periods crises because they feared that capitalism’s victims would turn against it and seek basic social change. Capitalism’s defenders eventually developed a set of policies to manage its inherent economic instability…Past and present advocates of such policies have believed they would both overcome whatever crisis existed then and also prevent future crises. No policies have ever, to date, achieved the latter goal. Today’s global crisis proves that. Nor is there agreement about whether these policies ever overcame a crisis.
This argument takes on the whole mainstream, from new-classical laissez faire to left-Keynesianism. I’m not sure if “today’s global crisis” proves Wolff’s claim, though. Clearly the crisis was a wakeup call for the cheerleaders of the so-called “Great Moderation.” At the same time, however, once can envision scenarios whereby, despite the runup in wage inequality that Wolff touts, regulation and better monetary policy could’ve made the current crisis different. In any case, Wolff proceeds,
A crisis of capitalism is different. It is not a recurring event. A crisis of capitalism happens when cultural, political, and economic conditions combine to persuade many people that capitalism as a system has outlived its historical usefulness…Crises of capitalism may but need not stem from crises in capitalism…One obstacle preventing crises in capitalism from becoming crises of capitalism is belief that no alternative to capitalism exists. All enterprises are then thought to require the usual division between workers and boards of directors…This belief shapes the Obama administration’s response to the global crisis.
It’s hard to argue with the assertion that we see no alternative to capitalism, as the Cold War’s legacy has left a binary choice of capitalism versus communism, democracy versus authoritarianism. Of course, as Wolff notes, some see at least a little beyond capitalism, not that this helps:
A more subtle obstacle is belief that an achievable and superior alternative to capitalism exists. That alternative involves larger or smaller shifts from private enterprises to state-regulated or state-owned enterprises, from shareholder-elected boards of directors to state officials (chosen democratically or otherwise) regulating or functioning as such boards, from markets to state-planning as the mechanism to allocate resources and products. However, that alternative largely ignores and so leaves basically unchanged the internal organization of enterprises (whether private or state), their division between the mass of productive employees and the small groups making the decisions about what, how, and where to produce and how to dispose of products and profits.
This is essentially a counter to the democratic socialism model that has appeared at various points in Sweden and some other countries. The alternative Wolff seeks is not concerned so much with the distribution of profit, or surplus value, but with who is allowed to decide how it is distributed. This distinction was one that Marx made to great pains against the German Socialist party of his time.
Further, Wolff writes,
Transitions from capitalism to such an alternative have often been understood as transitions to socialism or communism…However, such transitions to socialism and communism have serious contradictions. They distract capitalism’s victims and critics from organizational transformations inside enterprises to focus instead on various kinds and degrees of state economic interventions. The distraction secures capitalism’s survival in two ways. First, those transitional movements preserve enterprises’ internal divisions between employers and employees…Second, maintaining exploitation gives the exploiters the incentive and the resources (the surplus they appropriate) to evade, weaken, and eventually eradicate whatever regulations, taxes, and other changes reformers win in responding to any crisis.
So, to summarize,
(1) crises in capitalism will recur until a crisis of capitalism provokes a transition out of capitalism that includes ending exploitation inside enterprises, and (2) the alternative to exploitation requires workers themselves democratically and collectively to appropriate and distribute the surpluses they produce.
And, of course, none of this is in the current policy discussion, much less the CST dialogue, which I’ve been outlining in a series of posts. As Wolff notes,
These focused attention away from questioning capitalism. Similarly, Pope Benedict’s Charity in Truth encyclical, released last week, responds to today’s crisis by calling for a recommitment in business affairs to Christian values of love, charity, and truth.
If only employers, out of the truth-guided charity in their hearts and minds, would hand over to their workers the decision-making. Now that would be subsidiarity.