THE CRISIS IS ONE AND INDIVISIBLE

To paraphrase Heinrich Heine,
THE CRISIS IS ONE AND INDIVISIBLE

Common knowledge
Since the get-go of this latest episode of turmoil in world economy, the mainstream narrative made mention of several types of crises transforming one into another, as well as several geographic hotspots whose hardships were of a nature specific –if not limited- to them. Empirical evidence to support its claims were drawn from the (sometimes dubious) domain of “common knowledge” and overall, there has been a very consistent effort to make things appear as compartmentalized as possible. After all, what made capitalism look more robust than its cold war adversary, was partly its ability to create and properly utilize bulkheads.

A bipolar disorder
Instead of following a narrative that stresses what sets turbulent hotspots apart, we could start differently, by asking what connects them together. A different narrative suggests that the current situation is not that fragmented and did not start in 2008 as a finance/credit crisis. The 2008 events are not the cause, but a recent manifestation of a much deeper and longer crisis that started back in the stagnation years of the 1970s. It is a crisis of capital accumulation instead. What back in the 70s was called a “crisis”, later went by the much more positive name of “globalization”, before ending up again as a “crisis”. A typical bipolar behavior.

The mother of all bubbles
The last thirty years of neoliberal economic dominance are essentially a long and not very successful attempt to overcome the stagnation capitalism experienced in the 70s. The declining capacity for profit in the developed economies of the west stands at the base of a series of interconnected phenomena, such as the “freezing” of real wages, rising unemployment, deindustrialization, the expansion of the credit economy and most importantly, the booming of financial capital, with all its inherent bubble-forming tendencies. In 2009, the total world GDP was estimated at 55 trillion dollars. At the same time, the total value of financial derivatives (public and private bonds, CDSs, hedge funds) stood at a staggering 900 trillion dollars.

The Matrix gets unplugged
From the early 90s until the late 00s, developed capitalist nations seemed to enjoy a period of economic rejoicing to the level of historical hybris. After having danced on the decomposing corpses of socialist regimes, they declared liberal democracy to be the terminal station of pretty much the evolution of human societies. The bad news were that apparently, what was been measured as “development” is turning out to be a long series of gravity-defying account imbalances, inflated asset values and mass expansion of debt on state, corporate and household levels. The era of globalization was not a period of no crisis, it was a time where the underlying crisis had been masqueraded to resemble prosperity and as long as this illusion could be maintained, going along seemed like the rational thing to do. The bursting of the US real-estate bubble triggered the beginning of the disintegration of this Matrix-style reality. It was time for it to be unplugged.

A way out?
As different (but interconnected) parts of the present economic system are starting to shake, the violently enforced “remedies” for returning to “normality” prove detrimental to the lives of millions of people world-wide. The realization that there should be a fundamental change in how we understand and implement our socioeconomic realities is starting to noticeably compete on the arena of “common knowledge”. Everyone’s looking for a way out of the current situation, but a critical question to be answered is: Towards what?

Reclaiming words, learning to speak out
Liberal democracy, inseparably linked to free market capitalism, emerged victorious out of the cold war and its ultimate trophy was the privilege to define what democracy is. Once and for all, democracy had to consist exclusively of massively representational political processes, formal “equality” to social entities that can squash any individual like a bug if they wish so, freedom of speech where voices of dissent can be drowned into a sea of static with the flip of a switch. Many people today would consider past forms of socioeconomic organization (such as a slave-based economy) as vulgar and inhuman. We need to seriously consider the possibility that future historians will look at our own form and consider it as nothing else other than a clever scam. We already have this word, democracy. We need to load it with content that could make it worthy of its name. And we need to learn to speak it aloud in ways that make people proud of taking part in it and not just content that it saves them from something even worse.

Scratching an itch where the sun don’t shine
There is one key sector of social life that liberal democracy, quite consciously, chooses to touch very superficially, if it touches it at all. It is the production of goods and services. For sake of safeguarding the “natural” right of ownership of their means, it leaves their managerial right to a tiny minority, exclusively motivated by short-term profit and accountable only to itself, while the actual producers of wealth just follow orders and get compensated with a small fraction of the wealth they have produced. The right of ownership of means of production is something radically different than the right of ownership of the means an individual or a community has, in order to achieve and maintain an acceptable level of dignity and well-being. This is a sharp distinction that needs to be investigated for the equal benefit and empowerment of all members of the community.

Asking the right questions
A meaningful form of direct democracy ought to collectively address not only the issues we consider political but also the ones that currently lie in the economic sphere, not just as taxation or redistribution, but down to the level of the work floor. It needs to dissolve the suspiciously artificial separation between the political and the economic and do it at a human scale. We should envision a production system that the questions of who, why, how and how much, are answered in a direct way, by all the relevant participants in it and always in close cooperation with the community that makes that production unit possible and necessary. The true empowerment of citizens not as voters once per four years, but as producers of wealth every single day of their lives is an ideal that, however far it might look at this moment, it can equip people with a strong sense of direction out of the current crisis. And of course it goes without saying that making capitalism history, unsurprisingly takes care of its crises, structural or not.

And for the sake of accuracy, Heinrich Heine spoke not of crisis, but of revolution.

George P. 09-2011