In case you hadn’t heard, we’re right in the middle of a global economic catastrophe. To be more specific, we’re actually at the end of the beginning of the crisis, with many years of stagnant GDP growth, debt deleveraging and the real human suffering that will result to come.
This article aims to question the reliance of those on the more radical left on what are often regarded as ‘legitimate’ economic authorities, those who question the efficacy of the more extreme forms of free market ideology. This would include policy-makers and economists in the vein of Joseph Stiglitz, Paul Krugman, Jeffery Sachs and their British cousins.
Whilst making it their mission to debunk the ludicrous neoclassical economic paradigm, loosely classifiable as Keynesian economists continue to support, promote and prop up a broken economic system, irrational and destructive to its very core. The current moralising against austerity measures from these quarters is hypocritical considering their intellectual support for a system implicit in the degradation of people and planet.
Of course, those on the radical left can’t afford not to make alliances of convenience at times of great crisis. The construction of a popular ideological front against the worst forms and effects of austerity policies may be the best means at our disposal right now in the fight against a socially destructive neoliberal orthodoxy. However, it is important that the radical left does not come to rely too heavily on a strain of economic thought which is itself a means of ironing out capitalism’s kinks, solely in order to reproduce it ad infinitum.
In the face of the greatest economic crisis in generations, the legitimacy of the economic orthodoxy of the past thirty years is rightly being challenged by opponents from different political and economic hues. This is an important step toward a defeat of neoliberalism, the marketisation of everyday life and the commodification of life supporting and enhancing structures and services (such as the welfare state, including education, healthcare and so on) won from the economic and political elite in the aftermath of the Second World War.
Whilst the ideological legitimacy of neoliberalism is being challenged, the far-left need to challenge it on our own terms. Instead, we are seeing an overreliance on a kind of Keynesian critique which would happily re-impose the post-war or even pre-credit crunch orthodoxy. This would include the forms of hyper-globalisation and free trade lauded by Krugman, including support for the existence of cheap labour in the Global South and the global inequality it forments. While Krugman regards cheap labour in the South as a necessary to economic development, he happily overlooked the fact that wage repression has been a global phenomenon in recent decades, part of the very political logic of globalisations itself. The ‘boom’ years did not constitute a rising tide which would rise all ships, instead, it deepened and widened inequality and poverty.
At its core, Keynesian growth strategies assume and rely upon continuous economic growth, every year, forever, via the burning of fossil fuels and the utilisation of eco-systems as planetary sinks. David Harvey has highlighted that to avoid crisis and stagnation, 3% compound growth per annum globally is required. In the wake of the real critical dangers posed by global climate change, this is as much a recipe for doom as the neoclassical push for globally enforceable austerity and privatisation programmes. This would most likely entail more cars being produced, more coal burnt, more frequent air travel, increased movement of goods within and between nations and further squeezing workers for improved productivity and greater levels of surplus not returned in wages. As Harvey points out;
If we are to get back to three percent growth, then this means finding new and profitable global investment opportunities for $1.6 trillion in 2010 rising to closer to $3 trillion by 2030. This contrasts with the $0.15 trillion new investment needed in 1950 and the $0.42 trillion needed in 1973 (the dollar figures are inflation adjusted). Real problems of finding adequate outlets for surplus capital began to emerge after 1980, even with the opening up of China and the collapse of the Soviet Bloc. The difficulties were in part resolved by creation of fictitious markets where speculation in asset values could take off unhindered. Where will all this investment go now?
Leaving aside the undisputable constraints in the relation to nature (with global warming of paramount importance), the other potential barriers of effective demand in the market place, of technologies and of geographical/ geopolitical distributions are likely to be profound, even supposing, which is unlikely, that no serious active oppositions to continuous capital accumulation and further consolidation of class power materialize. What spaces are left in the global economy for new spatial fixes for capital surplus absorption? China and the ex-Soviet bloc have already been integrated. South and SouthEast Asia is filling up fast. Africa is not yet fully integrated but there is nowhere else with the capacity to absorb all this surplus capital. What new lines of production can be opened up to absorb growth?
It is clear that ‘growing’ our way out of the current crisis would not only be environmentally catastrophic, but probably isn’t even possible anymore. This is the case even with recourse to the stripping citizens of their hard fought rights and asset values such as pensions and healthcare. The over reliance and fetishishisation of technological fixes to problems and limits created by capitalism reveals a blinkered view of environmental destruction by those arguing in favour of everlasting growth. The attempt to wish away climate change via the development of new green technologies seriously underestimates the scale of the problem we’re facing as a species and the practical issues related to the development of such technologies. Can technology dig us out of this mess, or further entrench our dependence upon environmentally damaging global production and distributions processes?
In the face of long term economic stagnation, many of us fall prey to the wish to see an uptick and return to the ‘boom’ times. Although we may not believe this to be the case, many on the left (including myself) revert to a form of pragmatic Keynesianism in the face of the most insane growth limiting austerity. Growth in these terms translates into increased output of services and commodities. Do we really want a booming construction sector, endlessly building upon dwindling acres of currently free land? Would a return to good health on the part of the automobile industry improve our everyday lives, or more likely further pollute our air, damage our lungs and dangerously heat our planet?
What did the boom times involve for the great majority of the population in the Global North, let alone the South? Wildly inflated house prices, a more effective squeeze on wages, de-industrialisation, job insecurity, de-skilling, hedonistic polluting, and overreliance on easy credit in place of decent wages? The ‘golden age’ of capitalism in the Global North not only coincided with, but relied upon the existence of a strong patriarchy which gave women a role confined to the household concerned with the social reproduction of their family, creating a form of social surplus that went largely unrewarded in the public sphere.
The truth is, there has never been a golden age of capitalism, for anyone but the capitalist class (and even their benefit from such a society can be questioned). I for one do not wish to return to a softer form of capitalism that many of the mainstream critics hark back to, bearing in mind the inequalities required for its smoother (but never smooth) functioning and the environmental costs involved.
This is where we must depart with our mainstream allies in the attack on neoliberal austerity. Piggy-backing on their stature due to the offices they’ve held, or the awards they’ve one may be convenient in the choppy waters of an intellectual debate, but politically and morally, we cannot travel any further with these advocates of a slightly more generous exploitation of women and men’s minds, bodies and environment.
