From a Marxist perspective the only thing unexpected about these events is the fact that they didn't happen 100 years ago.
Marx's prediction is that capitalist business cycles will grow increasingly severe until they reach a point of such violence that the system itself collapses. This prediction didn't come true for two reasons. 1. government used some unexpectedly ingeneous controls to buffer capitalism's excesses and restrain those cycles. 2. new products (like the automobile) create a wholly new economy, which kind of re-sets the self-destruct clock. These are the most convincing "capitalism can survive" arguements i've heard. I can't remember the sources though.
So, a decade or so ago it could be argued that capitalism can maintain itself through a combination of more aggressive socialism when things get ugly and creating innovative technologies to re-set the cycles.
But, recent events counter this argument. First, with the tech bubble we discovered that capitalist business cycles can become so violent that new technologies, rather than re-setting the self-destruct system can actually accelerate it. The PC and the internet promised much more as far as building a whole new economy than the automobile did. But the economy was already too unstable when these things were invented, and instead of creating long term growth in new industries and new markets, the internet and the PC created a severe short term spike, a bubble. Then investors, hungry for something to invest in, became addicted to bubbles and artificially created a housing bubble, which burst even more quickly and violently. New technology didn't save us.
We're left with creative governance, then. Problem with that is, it seems economic cycles fit within political cycles and these political cycles grow more severe over time as well. When the ups and downs of the market become severe enough to create a major crash or depression, the government can swing more aggressively socialist to get things back under control. Once things are more stable the government loosens the reins and we get more growth, more pro-business government, and less of the ugly things associated with socialism (waste, corruption, entitlement programs). This continues and periods of socialism and laissez faire ideologies occilate regularly. Theodore Lowi has chronicled trends to support this idea in his books "The End of Liberalism" and "The End of the Republican Era". Since the 60s the american government has been on a steady deregulation track and it's no wonder economic instability has accompanied it.
So it's time for this political cycle to swing back the other way, right? Unfortunately that doesn't seem likely. With the democrats continuing to pander to "the center" rather than leading from the left and the republicans debating over expanding the free market or just bailing out corporate cronies, I don't see any chance that any politician will have the guts to use the word "socialism" positively.
I suspect that capitalism's political cycle is as unstable as the business cycle. Our political systems are so controlled by businesses (the media, the lobbiests, the parties) that a swing back to socialism just isn't in the cards.
This concerns me, not because i beleive in socialism. I don't. Socialism is not a complete system, it's merely capitalism with comprmises and redistribution of the wealth. It concerns me because while i want to see capitalism replaced, i do not want to see it go down in a fiery wreck where i'm liable to get burned.
I need capitalism to stick around long enough for a viable replacement to get up on it's feet. A more aggressively socialist policy has the best chance of getting us there. Trouble is, such a policy is anathema to American politics. This is an ideological question and the ideological structures in American politics are totally fucked. The reason laissez faire capitalism appeals to so many on an ideological level is because it is a set of principles that in the imagination of it's proponents will create a utopian society. Regardless of how far off the actual results are from this prescription, free marketeers are at least giving us a prescription. Socialism offers nothing at all in this area. It's not a system, it's a compromise. It might be based on simple moral ideals, but that only makes it seem impractical and naive.
I don't think the economy can be fixed, i only think it can be buffered, and i think the buffering of it requires not only a drastically different set of government policies, it requires an ideological shift in the american population. We need to stop beleiving in the broken system that free marketers and libertarians keep selling us, and unfortunately, we have to replace that ideology with an uninspiring compromise. In other words, america needs to grow up and stop beleiving in itself.
I hate the way that sounds as much as i'm sure everyone else does. But the fact is we're facing a choice between a self-destructing system (capitalism), a compromised slower version of that system (socialism) or a new replacement system that hasn't yet emerged organically and would have to be forced prematurely with disasterous results (communism).
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