To
say that capitalism is yet again “in crisis” is both to state the obvious and
to understate the matter. As we have argued repeatedly here, after all, crisis,
in a specific sense, is of the very essence of capitalism – something that Marx
and Schumpeter above all others understood too well. The problem then is not to
tarry on this latest crisis of capitalism but rather to try and understand what
is new in this fresh bout of difficulties that are besieging not just the
economic and financial machinery of capitalist systems but also and above all
their political institutions, from the nation-state to global economic,
financial and military co-operation.
If
we look around at the latest attempts to deal with these pressing issues, from
those who denounce “the 1 per cent” of top income earners to illustrious
authors such as Piketty and Bourguignon and Milanovic, the universal emphasis
is on “global inequality” of incomes as the worst, albeit avoidable, defect of
capitalism. The problem with these studies of capitalist economies is that they
are exclusively empirical in
orientation: they tell us what is
happening in terms of income distribution across capitalist economies – but
they do not tell us why it is
happening because they view the solution to this type of capitalist crisis to
require the re-distribution of income from high to low earners. Even when they
attempt to go beyond simple empeiria
to some form of analysis, these
studies tend to concentrate on classic Keynesian explanations of capitalist
crises – and that is on a lack of aggregate demand brought about by growing
inequality in the distribution of income, leading to a liquidity trap, if not
across national economies, then at least within them. In the perspective
presented by this empirical research, the distribution
of income is the overriding and avoidable
problem to be addressed so as to reform the capitalist system and bring it back
onto the right path of economic growth.
These
studies turn out to be misguided and inadequate to the extent that they fail to
address the fact that inequality of incomes itself cannot amount to a valid
criticism of an economic system such as capitalism that founds its vaunted
economic efficiency on that very inequality. Of itself, and in the absence of
proven exploitation, inequality is not sufficient to form the basis of a valid
critique of any economic system. Granted that incomes are distributed
unequally, why and how does this constitute a defect in the system? Clearly, such distributive critiques of
capitalism must rely on some legal unfairness in the operation of the system
such as inadequacies in the tax system or on other forms of unequal exchange or
even outright cheating in trade and commerce. What they fail to advance are
reasons why the essence of the capitalist system involves the exploitation of those whose incomes are
inferior on the part of those whose incomes are superior.
The
essential point that they miss is that the problem with capitalist industry is
not and has never been one of unequal distribution or unequal exchange – as if
capitalism depended essentially on economic exchange.
This flawed approach to the analysis and critique of capitalism resembles the
dated and in truth quite pathetic
approach of the “terzomondisti” (Third World theoreticians), from Immanuel
Wallerstein to Samir Amin, that flourished in the 1970s. (I say “pathetic” not
because these were poor studies but rather because they appeal to “pathos”, to
an ethical aversion to capitalism rather than present a rigorous analysis of
its operation as a mode of production of social wealth. Our critique of
capitalism must always be aimed at how it is exploitative on its own terms, not because of some extrinsic abuse of the system.)
The proper
critique of capitalism must move from the inequality of distribution of incomes
to the causes for the necessity of
this inequality: we must attempt to prove that exploitation is at the very core of capitalist production and that
it is not just an accident of the distribution of the social wealth it produces.
To establish such causes, then, we must move from the sphere of distribution to that of production. Put differently, we must
move from complaining that the distribution of wealth in capitalism is unfair to the fact that such inequality
is founded on the very system or mode of production of social wealth that
capitalism has instituted. This is a crucial step because, once we can
establish that capitalism is not just “unfair” due to some epiphenomenal,
adventitious and inessential flaws in the distribution of the social wealth it
produces, this unfairness is then also shown to be in fact the intrinsic factor
in the manner or mode or process whereby capitalism controls and directs the production of social wealth.
This
includes an analysis of how capitalist industry determines (a) how the factors
of production enter the process of production; (b) how the product is produced;
and also (c) what products are produced. Finally, we must inquire about how
inequality of distribution is a necessary
outcome of this system of production and also how this inequality is vital to the reproduction of the system. Understanding how the reproduction of
the system of production also reproduces its manifest inequality is vital to
developing a political assault on the capitalist mode of production and on its
political foundations.
We
all know or ought to know that capitalism involves disparity in the
distribution of incomes or social wealth. But is this just an accidental matter involving some form of
illegal or unfair abuse of what is otherwise a “fair and efficient” system of
production, or is there rather some essential intrinsic feature or property of capitalist production that
necessitates not just unfair distribution but also particular forms and
processes of production and distribution that perpetuate the inequality of
incomes and the seemingly “unfair” or “unequal” distribution of social wealth
in capitalist societies?
This
is the correct way of stating the problem of capitalist crises and of seeking a
solution to their troubling persistence. Without this crucial operation,
however commendable and justified the efforts of the aforementioned authors may
seem, we will be limited to stating the effects
of our present predicament without even remotely being able to address its root
causes except perhaps superficially
or piously or even sanctimoniously – a bit as Pope Francis
would. However welcome these repeated calls for justice and fairness may seem,
they are woefully inadequate for the simple reason that they fail to address
the operation of the capitalist system of production and therefore of
distribution itself, and not merely the “accident” or “injustice” of its
unequal distribution. To insist with the religious analogy, blaming capitalism
for social inequality is a bit like accusing the devil of heresy! We must be
able to enucleate the nature of this “heresy”.
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