The Doubtful Consciousness of Capitalism – Counterfire
The notion of a more ethical and socially responsible version of capitalism is a cosmetic illusion that does not alter the fundamental nature of the system, argues John Clarke
There is a very long story behind the idea that capitalism, although it has a sinful side to it, can still be redeemed. In 1843, Charles Dickens offered a dramatic account of the redemption of remorseful capitalist Ebeneezer Scrooge. “A Christmas Carol” is a beloved piece of literature that contains powerful elements of social commentary, but also delivers the message that capitalism, while it can often be cruel, can also be responsible. and benevolent affair.
In the many years that have passed since Scrooge “became as good a friend, and such a good master, and such a good man as good old town knew”, there have been many attempts, with far fewer literary merit, to develop the theme of benevolent capitalism. The infamous International Monetary Fund (IMF) has been dealing with its own version of the three ghosts of Christmas lately, in the form of “growing anger at rising inequality blamed on globalisation”.
In 2019, the IMF’s acting managing director, David Lipton, suggested that capitalism, while it “has been the driving force behind so much of the successes we’ve had”, is also “an imperfect system that needs to be a course correction.” As the IMF continued to act as an enforcer of the neoliberal order, imposing harsh conditions on some of the world’s poorest countries, it began making disconnected and hypocritical calls for a more compassionate world order. .
Since the start of the pandemic and its devastating effects, the IMF blog has become a veritable confessional of global capitalism. It is quite remarkable that the same organization which caused the phenomenon known as “the IMF riot‘ can now piously declare that:
“The pandemic is a test of social solidarity, cohesion and governmental efficiency. Similarly, when the crisis subsides, if governments are perceived to have supported wealthy individuals and corporations more generously than those who sacrifice and suffer the most, there is a risk of political backlash or social unrest. Policy makers need to put in place… policies that promote a more equitable distribution of income and access to government services.”
The World Economic Forum has also joined in the act with considerable enthusiasm. The exploiters and their various enablers who meet annually in Davos in the Swiss Alps are calling for nothing less than “the great reset” of the capitalist system which they say will involve “a new social contract that honors the dignity of every human being.’ Scrooge’s erratic acts of charity were positively amateurish compared to grand visions of 21st century “stakeholder capitalism”.
In 2019, the Business Roundtable, a very powerful and hugely influential voice of the American capitalist class, decisively adopted this conciliatory and contrite approach. Declaring that “the American dream is alive, but unraveling”, the organization released a new set of its “principles of corporate governance”. In this revised version, he abandoned his longstanding promotion of “shareholder primacy” and took the formal position that private companies should “commit to meeting the needs of all stakeholders”. These are now defined as “customers, employees, suppliers, communities and shareholders”.
These examples show a willingness on the part of very powerful capitalist interests to put some distance between themselves and the crudeness of Milton Friedman’s candid statement that “corporate social responsibility is to increase profits.This does not mean, of course, that there is a substantial difference of opinion with Friedman’s view of things. However, these times of crisis and uncertainty call for a far more image-conscious form of global exploitation than sufficed at the dawn of the neoliberal era.
It would, however, be wrong to assume that the stakeholder capitalism approach is only a quest for legitimacy in the face of rising anger. This is in fact a desire of the “business community” to increase the level of control it exercises over the orientations of public policies. Bringing his wealth and power to the table just as public services are being undermined and privatized, the company’s “community partner” works to ensure choices are made that favor his profit-driven priorities. As an in-depth study of the matter puts it:
“By colonizing the ‘public’ world of governments, international organizations and NGOs, this ‘post-democratic’ project of redesigning institutions to insulate capitalism from resurgent popular democratic pressures linked to worsening crises effectively depoliticizes economic domination. continues the accumulation of capital on society and nature. Indeed, despite claims to go beyond profit maximization, corporate attempts to satisfy extra-economic interests remain firmly rooted in the same capitalist market imperatives as proponents of “stakeholder capitalism” pretend to address.”
The real world is not subject to the liberal creativity of Charles Dickens and hopes for a softer, gentler pursuit of profits should be taken with many grains of salt.
The dangerous illusion of “stakeholder capitalism” has been fully supported and enthusiastically promoted by the Biden administration and to considerable effect. In the summer of 2020, “the largest and most diverse anti-racism protest movement in U.S. history was springing mightily forwardfollowing the police killing of George Floyd in Minneapolis. The Biden campaign, with its hollow promise to “build back better,” has been hugely successful in demobilizing this struggle by channeling much of it into campaign activity.
This hijacking of a mass movement of social resistance points to a major danger with the false idea that capitalism can be made socially just or environmentally friendly. The message can reinforce reformist illusions and resonate seriously on the left. Even more than the financial crisis and the Great Recession of 2007-2010, the shock of the pandemic fueled expectations that a period of sustained economic stimulus and class compromise was about to begin. The conflict in Ukraine, the cost of living crisis and the ensuing rise in interest rates are all strong evidence that such expectations are unrealistic and do not form the basis for effective policy action.
Even as the IMF continues to make its calls for “social solidarity, cohesion, and effective government,” preparations for an escalation of class warfare are underway. Influential voices are now rising in favor of much more aggressive measures to raise interest rates. Deutsche Bank says the US Federal Reserve has “never been able to correct ‘inflationary pressure’ without plunging the economy into a significant recession.” He coldly asserts that there is not enough unemployment and states categorically that “something stronger than a mild recession will necessary to do the job.”
Adam Posen, a former Bank of England and now representing a Washington-based think tank, is convinced that BofE must now shrink the economy. “It is its duty to bring inflation down after more than a year when it has been more than 2 percentage points above its target level of 2% during a period full employment“, he says. For some years now, some members of the main institutions of global capitalism have argued that zero interest rates and other measures used to try to maintain a slow economic recovery were simply not sustainable and that a return to the methods of ” creation destruction” were claimed. The inflationary crisis has given this view a much firmer basis and it is gaining ground as a result.
In 2019, Martin Wolf thundered against “rigged capitalism” and told readers of the Financial Times that:
“We need a vibrant capitalist economy that gives everyone the justified belief that they can share in the profits. What we increasingly seem to have instead is unstable rentier capitalism, weakened competition, low productivity growth, high inequality and, not coincidentally, increasingly more degraded democracy.”
These fine words may have their uses, but a series of supply shocks and the imperatives of global rivalry playing out in Ukraine have made them far less fashionable. Financial Times European economics commentator Martin Sandbu now offers a somewhat different view. For him, it is a question of preparing the public for a “war economy” with all the hardships and all the sacrifices that go with it. Sandbu even had the kindness to write a statement for politicians who want to get this message across. Stopping just before a call to fight on the beaches, he declares that “something like a wartime financial system is imposed on us – not of our choice, but we must not shy away from it. This forces us all to place the well spread first.”
The radiant promises of a new “stakeholder capitalism” are as hollow as the call for all to serve a “war economy” is impossible to accept. One offers partnership with capitalists on the false promise of changing habits and blocking tomorrow, while the other demands voluntary sacrifices in the service of supposed “common interests”, but both are cynical and false. The question is being asked who will pay for the multidimensional crisis of capitalism now unfolding and working class people must absolutely refuse to foot the bill.
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