Subscribe to Dollars & Sense magazine. Recent articles related to the financial crisis. TDCotE (xi): Littlle Zakaria Dresses Like GrownupThe Dull Compulsion of the Economic (xi)A series of blog postings by D&S collective member Larry Peterson Little Zakaria Dresses Like Grownup I usually don't pay much mind to Fareed Zakaria. The Newsweek columnist and frequent television commentator has seemed to me for some time to epitomize most of the familiar failings of the mainstream press: the endless recycling of conventional wisdom, failure to think creatively or with integrity, the obsequiousness towards insiders, you name it: but with a palpable dosage of telegenics thrown in, which no doubt reinforces a "good Muslim" sentiment in its turn. But this week, he published the pompous-sounding "Capitalist Manifesto" in Newsweek, and I found myself reading it, driven by a perverse desire to see how bad it could possibly be. Instead of awful, though, I found the piece totally banal: if this is the best the ruling classes can do by way of propaganda, we socialists shouldn't have much to fear at all. Too bad that propaganda isn't all that matters. The striking thing about Zakaria's piece is that is doesn't amount to much of a manifesto at all. Manifestos, of which Marx and Engels' is the immortal exemplar, both summarize the past and show how past and present trends are set to contribute to a discernable future. Zakaria's piece, except for one brief section which I'll discuss presently, is totally oriented towards the past and present; and all he does is to regurgitate conventional wisdom, as is his wont, for two purposes. First, he wants to say that, despite its unfortunate excesses, capitalism is the most productive means of arranging social production known to man, and, secondly, that for all the talk of crisis, that capitalism isn't likely to be replaced by anything else. In support of the latter idea, he points at similarly dire assessments of the Asian crisis of 1997-8 and the dot.com meltdown, and proclaims that life goes on, with Asia rebounding and Twitter replacing Pets.com. Regarding the former claim, Zakaria takes refuge in paraphrasing that great democrat Winston Churchill (who called Gandhi a "half-naked fakir", and enthused over the carpet-bombing of Arab villages) to the effect that capitalism is the worst system, except for all the others. He also salutes the notion that capitalism has taken more people out of dire poverty in less time than any other system. But most of the essay consists in historical assessments characterized by huge generalizations and simplifications (one example: Zakaria salutes Canada's banking sector, attributing its containment of exposure to the global financial crisis to its conservatism. But it is arguable that Canada's economy, so based on natural resources and exports to the United States--both of which require a certain modicum of stability--could hardly develop a banking sector characterized by free-wheeling deals of the sort Britain or the US did; and Zakaria's breathtaking generalization leaves little room for such subtleties to influence his unruly argument). In this sense, as I said before, his piece is dull, not so much dumb; and one can easily brush aside the tribute to capitalism's productivity by recalling that such successes are disproportionately centered in China, which is hardly capitalist in the conventional sense, and that for all the gains there, there have been huge losses (in healthcare and education, particularly, and one of the chief reasons underlying the world financial crash, the accumulation of excess savings in poor countries, has much to do with the withdrawal of the primitive safety net that existed in China up to the 1980s). And, we must remember that rises in living standards in the developing are being accompanied by the development of huge "precariats" in the developed one. Also, many of the gains of the boom years--in asset values, jobs created, you name it--have been virtually wiped away by the crisis, and will be a long time in returning. So when Zakaria fatuously mentions Twitter replacing Pets.com, he can't extend the same argument about all the jobs created since the mid-nineties that have simply vanished. One more thing Zakaria says that deserves mention: he opines that a world brought to its knees in terms of growth will probably opt for more capitalism, not less, in the coming years. And he refers to economist Robert Schiller, who says more derivatives are required by modern finance, not less, if investments are to be made as efficient and secure as they can be. Regarding the latter, I can only quote from Paul Mason's fine book on the crisis, Meltdown: "however useful derivatives trading might be for finding the true price of shares (and it is), the end result is that profits are funnelled from ordinary savers into the pockets of the rich" (page 78). As long as savings continue to be generated in this lopsided way (and, despite movements in this direction both in the poor and rich worlds, the same situation essentially holds), derivatives will almost certainly be dedicated to destructive uses. Zakaria's comment about growth, along with a few commonplace suggestions on financial re-regulation, are about as much there is regarding the future. A manifesto worthy of the name would be dedicated to teasing out developed suggestions regarding how capitalism will adapt to climate change, the changing balance of power in the world, or perhaps how it will succeed in providing employment opportunities despite the fact that job-creating power is diminished in most upcoming industries compared to their predecessors, or that capitalism seems more challenged where harnessing technology profitably is concerned (consider its retarded uptake of green technologies, biotechnology, and even information technology) anyway. Or how older workers, whose pensions have or will evaporate due to the crisis, are to be re-integrated into the workforce along with legions of youngsters in the developing world. Considering that the former are, in most economic models, supposed to provide much of the demand for the labor of the latter, you'd think a "manifesto" would address this new complication. But all we get from Zakaria is, of all things, an appeal to morality. I have in the past fulminated on the tendency of economists and financial commentators to reduce the crisis to a deficiency in confidence, or "animal spirits", rather than acknowledging the real economic disasters that culminated in the crisis. But Zakaria goes beyond this, opting for the last refuge of the soft-headed, morality, to point toward a future for capitalism: Throughout this essay, I have avoided treating this economic crisis as a grand morality play—a war between good and evil in which demon bankers destroyed all that is good and true about our societies. Complex historical events can rarely be reduced to something so simple. But we are suffering from a moral crisis, too, one that may lie at the heart of our problems. And here's Zakaria's big idea: There's a need for greater self-regulation not simply on Wall Street but also on Pennsylvania Avenue. We get exercised about the immorality of politicians when they're caught in sex scandals. Meanwhile they triple the national debt, enrich their lobbyist friends and write tax loopholes for specific corporations—all perfectly legal—and we regard this as normal. The revolving door between Washington government offices and lobbying firms is so lucrative and so established that anyone pointing out that it is—at base—institutionalized corruption is seen as baying at the moon. Not everything is written down, and not everything that is legally permissible is ethical. Who was the last ex-president to refuse to take a vast donation for his library from a foreign government that he had helped when in office? But the politics of "gut check" have culminated in the victory of Obama, whose "change we can believe in" has consistently amounted to little except (besides rhetoric) the recruitment of the same interests to regulate the downturn as they did the bubble. From financial re-regulation to health care, this administration has committed itself firmly to the least ambitious proposals imaginable to combat intractable problems. In the Communist Manifesto and other works, Marx and Engels spoke eloquently of the ways in which modern production, despite its benumbing and exploitative effects, also contained a progressive element, that of cooperation, which could allow the working class to organize politically and change the productive system in ways that would enhance the latter and potentially be harnessed without the friction of competition to result in a more effective mode of production, as well as one that fostered incalculably greater human happiness. Zakaria, precisely because he does not interest himself adequately in the material forces conditioning conventional wisdom, can say nothing eloquent about his beloved capitalism whatsoever aside from an empty and ineffectual appeal to morality. It's all the more a shame that those material forces have had such a corrosive effect on working class consciousness (and in this respect Marx and Engels did not come close to anticipating actual developments)--and culture generally--that more people are going to look to Zakaria's manifesto than Marx and Engels'. Labels: Barack Obama, Fareed Zakaria, Friedrich Engels, Karl Marx, Larry Peterson, Paul Mason, the dull compulsion of the economic Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). |
