It’s capitalism Mike but not as we know it

The trailer for Michael Moore’s latest film “Capitalism: A Love Story” is now out. The film is due for release in October and Moore says he made it as if it was “the last film I was ever going to make.” Looks like he’s aptly chosen M.I.A.’s Paper Planes as the soundtrack too.

Despite criticism that he cherry picks footage and data to suit his own ends, I’m looking forward to seeing this. However, I hope Moore looks at how capitalism doesn’t really exist in the real world. As the bailouts proved in its crudest form, what we actually have is closer to socialism – socialism for the rich that is. Markets are so distorted by governments and corporations working hand-in-hand that calling it “capitalism” is about as accurate as calling Stalinist Russia “communist”. Using the term capitalist only serves to maintain misunderstanding of the current system and give ammunition to those who support it to dismiss opponents as simply “anti-capitalists.” Don’t ask me what a better term would be but something along the lines of “state-sponsored-capitalism” rolls off the tongue, erm, badly.

You can read more on the film here.


The bailout wake-up to real world capitalism

The post I wrote yesterday about Eric Hobsbawm’s article was picked-up by Tobin Harshaw writing in the New York Times Opinionator Blog which looks at the interesting issue of what socialism really is and what it means to Americans.

Harshaw quotes a Rasmussen poll that found only 53% of Americans feel that capitalism is better than socialism. This result and the results of an earlier poll perhaps indicate that more and more Americans are starting to question whether they really live in a capitalist society. The earlier poll found that 70% of Americans would prefer a “free-market economy” to “capitalism” indicating that Americans feel that the system they’re living in is not as “free” as it’s made out to be.

As the Rasmussen poll notes:

The fact that a “free-market economy” attracts substantially more support than “capitalism” may suggest some skepticism about whether capitalism in the United States today relies on free markets. Other survey data supports that notion. Rather than seeing large corporations as committed to free markets, two-out-of-three Americans believe that big government and big business often work together in ways that hurt consumers and investors.

Although the telephone poll is hardly representative of the whole country, it should be no surprise that many Americans feel this way. As far back as 1996, Noam Chomsky made a speech on this subject at Harvard University on what he calls “really existing free market theory”. Chomsky points-out that time after time, the public are made to pay for the financial troubles and misadventures of corporations:

So, if Third World debt gets out of control, you socialize it. It’s not the problem of the banks that made the money. When the S&Ls collapse, you know, same thing. The public bails them out. When American investment firms get into trouble because the Mexican bubble bursts, you bail out Goldman Sachs. And — the latest Mexico bail out, and on and on. I mean, there’s case after case of this.

Of course, the latest round of high profile bailout packages passed by the Bush and Obama administrations have brought this fact into the American consciousness more than ever. If this makes them question the authenticity of real-world capitalism, then it may be at least one silver lining in the economic crisis.

Eric Hobsbawm: Socialism has failed. Now capitalism is bankrupt. So what comes next?

So argues Historian Eric Hobsbawm in The Guardian today. Hobsbawm is right that after years of capitalist dogma that there is no alternative, the time has never been better to seek alternatives.

Many of the comments that follow his piece however take issue with his assertion that socialism has failed. The communist brand of “socialism” practiced in Russia wasn’t socialism at all – more a vicious state centralised authoritarianism that had little to do with true socialist ideals. The same could be said however for the type of neo-liberal capitalism we have today which has strayed so far from the principles and ideals of pure capitalism as outlined by founders such as Adam Smith that it’s almost unfair to say that capitalism has failed also.

The problem is that if a new socio-economic system emerged, it would have to be adopted by every country in the world. Countries are so inter-linked nowadays through exports and imports that a country could have the most stable and healthy economic system on the planet but it wouldn’t be able to cope if other countries around it were collapsing.

Incidentally, Hobsbawm’s volumes The Age of Revolution, The Age of Extremes and The Age of Capital are excellent reads.

A superficial solution to a deeper problem

A Brief History of Neoliberalism - David Harvey

A Brief History of Neoliberalism - David Harvey

Democracy Now have an interesting interview with David Harvey about the G20 summit and the bailouts. He makes the point that the billions of taxpayer dollars that have been funneled into bailouts are merely preserving an economic system that is fundamentally flawed.

Capitalism almost collapsed entirely in the 1930’s, played a large part in the rise of Hitler and the Second World War and went through another serious crisis in the 1970’s.  This cycle of boom and bust is set to continue until the current brand of neo-liberal capitalism is replaced with something more sustainable. One suggestion Harvey makes is that we have to move towards a “zero-growth” economy i.e. one where profit is not the single motivating factor behind the economy. In other words, simply existing should be enough and factors other than profit – such as the environment, jobs, education and human wellbeing – should be the focus.

Harvey however doesn’t pretend to offer any blueprint as to how such a society would look like and critics would no doubt jump to point out that such a system would not foster progress or innovation. In capitalist society, profit is the basis behind innovation and without a financial incentive, no individual or company would invent or design anything new and mankind would effectively stagnate. However, maybe it could be argued that much of what passes for “innovation” and “progress” – such as bigger cars, more sophisticated marketing and advertising industries, cheaper electronics and travel – constitute the wrong kind of progress anyway.

Before a zero-growth economy could be conceived, there would have to be a fundamental shift in human thinking about what profit and progress should really be all about.

Incidentally, David Harvey has uploaded videos of his classroom lectures plus you can read excerpts from his book A Brief History of Neoliberalism.

Bush’s burst bubble

Lawrence B. Lindsey, Mr. Bush’s first chief economics adviser, said there was little impetus to raise alarms about the proliferation of easy credit that was helping Mr. Bush meet housing goals.

“No one wanted to stop that bubble,” Mr. Lindsey said. “It would have conflicted with the president’s own policies.”

An interesting story here in the New York Times where White House insiders explain how it was Bush’s own determination to encourage people to buy their own homes that was a major factor in the credit crunch that lead-up to the financial crisis. Nobody at the top wanted to confront him over his own personal Messianic mission.

This is what happens when political targets and economic goals are put before plain common sense. It was obvious to anyone with even a basic grasp of economics that the country could not go on borrowing like it was. In Bush’s blind attempt to increase the wealth of Americans, he’s actually ended up impoverishing them instead.

Michael Moore on the auto industry bailout

Michael Moore on MSNBC with Keith Olberman

Michael Moore on MSNBC with Keith Olberman

Michael Moore makes some good points here on the Countdown show with Keith Olberman on MSNBC. If General Motors are only worth $3 billion, why are they asking for an $18 billion loan from the government? He also makes the point that the auto industry has been going downhill for the past 30 years because they keep sacking people so there’s simply not enough consumers to buy their cars. And if the government and auto industry were serious about building clean transport (US cars pump out more pollution than European and Asian motorists put together) they would come together as they did in World War 2 and find cheap, clean alternatives for people to use.

During WW2, Franklin Roosevelt’s government effectively took over the car industry in the USA and demanded that they build tanks and transportation to help the war effort. The current economic crisis is an economic war and requires the same kind of collaboration – not a $34 billion gift to the auto industry.

Incidentally, Michael Moore’s first film Rodger & Me was made almost 20 years ago about the closing down of a General Motors plant in his hometown of Michigan at a time when the company was making record profits.

One technical point – MSNBC’s website does not allow embedding of their videos in WordPress on blogs that are hosted by WordPress and not your own domain host (even if you use Vodpod to try and do it) so you’ll have to view the interview directly on their site here.

Everyone’s talking about something called “capitalism”

One silver living to come out of the economic crisis is that the so called capitalist system (which in reality is an extreme form of unfettered free market capitalism) that most of the West lives under is being questioned again for the first time in more than half a century. Previous to the crisis, merely questioning whether capitalism really works was enough for people to suspect you were a raging socialist or more likely, a communist. Nowadays, even the Financial Times is featuring the word “capitalism” in it’s headlines – anyone would think the editors are trying to turn it into the Communist Manifesto! On the other side of the pond, even The Washington Post is asking, “Is Capitalism Dead?“.

In the last great depression in the 1930’s, it was normal to see capitalism talked about and debated in the media and political arena. After the war, when corporations and government simply decided capitalism was the only way, and we all got punch drunk on consumerism and ceased to care about how our countries were run, any debate about whether capitalism was a decent, functional and humane economic system went out the window. Then people like Thatcher and Reagan came along and put the nail in the coffin by decreeing that there simply is no other way – so just forget about it and go and watch TV.

The current economic crisis is a great opportunity for all those that have had their doubts about capitalism and it’s effectiveness to come together and discuss a new way forward. In my mind, we’ve never truly seen either a pure capitalist or communist system largely because corporate or state powers have consistently perverted both systems for their own means. It’s clear to me that something in between the two systems, along the lines (but not the same as) that practiced by the Nordic countries, would be the ideal.

Check out legendary Marxist historian Eric Hobsbawm give his take on the current crisis on the BBC’s terribly civilised Today radio programme. His trilogy of books covering contemporary history since 1789 starting with The Age of Revolution are also a must read.