Saturday, December 1, 2018

Whither Capitalism?

I've flogged Adam Tooze's book, Crashed, here several times. Let me point you as well to an excellent interview with Tooze by Seth Ackerman that is out on the Jacobin site. In this interview, Tooze has a lot things to say about the current directionality of capitalism and implications for the left.
The interview's still behind a paywall (though subscriptions to Jacobin are pretty inexpensive and they have a lot of great stuff). Here is the last part of the interview, where implications for the left are directly discussed:
Ackerman: When it comes down to it, though, it won’t just be the Daily Mail. If and when the rubber meets the road and we start seeing a roll-out of [left interventionist economic] policies —
Tooze: Sure, you’re going to see all sorts of types of resistance, there’s no question. Even the bailouts have a radically different political economy depending on how power is configured. Even something that is transparently in the interest of stabilizing the financial system they’re a part of will still face resistance from, say, Barclays or Deutsche Bank. So sure, if they were confronted with anything that smacked of socialism, there would be hell to pay. I’m not saying that we should underestimate that.
But you were asking about ideas, political framing, the emergence of a new model. I would agree: no one has put a label on it yet. But look at the swap lines, or these trade agreements — which are not really trade agreements at all; the tpp and ttip are deep structuring mechanisms meant to stabilize long-term investment and supply chain arrangements. To just pack all that under “neoliberalism” and say it’s a continuation is, I think, just really uninteresting. One could do that, but it doesn’t grasp the level of innovation that those kinds of measures entail.
If you look at area after area of governance, modes of governance are responding to the deep transformations in capitalism that we have seen in the last fifteen to twenty years. There is, I think, on the part of intelligent bits of the system, a profound awareness of what that entails.
This is one big theme of the book: the financial crisis was a cognitive shock. It was a crisis of macroeconomics. We require a new mode in thinking, and the crisis produced it. It’s kind of there for us already, in the work that so-called “macrofinancial” economists are doing. I agree there’s no single label for it, and it’s not clear what its politics are at this point, but in terms of a reimagining of the architecture, the plumbing, of global capitalism, there’s a lot going on.
This is one of my frustrations with bits of the Left, and why I hope this book will make a constructive contribution.
Ackerman: But it’s not as if there’s been a political agency that has grasped that and put forward any political alternative, except possibly Corbyn and McDonnell.
Tooze: The vehicle and the driver was the inequality discourse, that massive shift in public consciousness about capitalism and its social structure, which rips through from Occupy to the Piketty moment. It’s really broad-based, and it has really shifted the way people think about income and wealth. There has been a political reaction to that, too: new left-wing movements in Europe, in democratic-socialist activism in the US, and in adjustments in fiscal policy. We’re no longer in the full austerity moment.
The full austerity moment was quite narrow — it was in 2011–13, and it was basically unsustainable. And we’re now in some sort of crazed, Republican giveaway moment in the US. Which is good for labor markets: we’re running the Kaleckian experiment — how far can you pump up labor markets until there begins to be a pushback?
The great disappointment, of course, is that it’s not a left-wing administration doing it. It’s not obvious what a left administration would get if it did attempt it.
Ackerman: Yet the core labor-capital contradiction is still operating in the same direction as it was in the previous decades. Labor-market regulations continue to be dismantled, unions are weaker, strikes are fewer — in the US and in Europe.
Tooze: Yes, there has been a fracturing of neoliberal ideology. Yes, there has been a fracturing of the There Is No Alternative consensus. What hasn’t emerged is a new There Is No Alternative.
Tooze also pronounces the German SPD as dead as a doornail and likens European bond vigilantes to Guatemalan death squads. Fun interview!
About this website
Economic historian Adam Tooze on a decade of shattered illusions and the limits of the neoliberal imagination.

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