Capitalism fails, again

If there is one quote that summed up the 1980s for me, it's from Mel Watkins: “Those who repeat to us that there is no such thing as a free lunch, would have us believe that there is such a thing as a free market, free trade and indeed, the free world.”

That was capitalism speaking, 50 years after it collapsed, driving the world into the great depression. Joseph Schumpeter, former Finance Minister in Austria, and leading economist at Harvard in the 1930s, and after, surveyed the state of the world in his Capitalism Socialism, and Democracy, and concluded that capitalism was doomed.

Yet is was Schumpeter who restored the credibility of capitalism with his portrait of the entrepreneur, the risk taker, as the great economic agent.

In fact, the true entrepreneur is a student trying for a scholarship to study Ancient Greek, not the local indentured labourer with a McDonalds franchise, who had been conned into thinking he is capitalist. But the myth of the entrepreneur carried the day after the Second World War ended the great depression, and many forgot what the true nature of the capitalist beast was about.

In the early 1990s, with the Berlin Wall down, and the Soviet Union breaking up, Watkin's colleague at the University of Toronto, philosopher Frank Cunningham asked, “Now that communism has failed what are we going to do when capitalism fails?”

The ironic response is that Chinese communist capitalism is what has happened. But the reality is otherwise. China uses markets, for sure, but, it is still making goods in order to buy other goods. Capitalists are the people using money to make more money, and to hell with everything else. That describes American corporate capitalism, not the Chinese economy.

The heady days before Enron, Iraq and Nortel are long gone, and with them, the credibility of the capitalist ethic: whatever you can get away with.

The oh-so-1980s disdain for anything other than capitalist economics has been replaced by utter disbelief in the ability of capitalists to police themselves. Even the accountants were making things up to please those who paid the bills. Hardly anyone believes a big business ad or public relations campaign.

In some ways we are living a crisis not unlike the one that brought down the Soviet Union. Communism failed well after the point when people ceased to believe in it. It only failed when the people telling the lies about the system got tired of lying. Those who were lied to had quit listening years before

Skepticism about the ability of capitalists to see us into a better world is offset by corporate media singing the praises of the latest star job exporter. CEO of the year today, sell off the company tomorrow.

At some point the apologists for the system are going to be replaced by independent thinkers, who will refuse to read a newscast full of untruths or write about the wealthy as if rich equaled knowledge about what is best for all. That will be the day all recognize the failure of capitalism.

In the meantime, thinking about other ways of organizing our material life is what is on the agenda.

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