Boldly Going Nowhere
The ‘Lost Decades’ of a Moribund Capitalism
Summer 2013, Vol:XIV-3
By: John Bellamy Foster and Robert McChesney
New York: Monthly Review, 2012, 219 pp., $24.95
Reviewed by Philip Louro
The financial collapse of 2008 was a sudden, shrill alarm that abruptly exposed neo-liberalism to be nothing more than a fool’s paradise. For decades, many Americans marched to the hypnotic music of free market fantasy and willfully ignored the low, droning crescendo of social decay. The hypnotic melody of constant growth, full employment, low taxation, and rugged entrepreneurialism muffled the warning sirens that had gone off around them. Bankruptcies had become widespread, infrastructure crumbled, wages were stagnant, access to healthcare was increasingly unaffordable, and an army of unemployed swelled its ranks as jobs slipped away overseas.
Curiously, free-market ideology has defied obsolescence despite all its bubbles bursting and all its sand castles falling into the sea. The music may have stopped playing, but people have not stopped marching to its beat. For many Americans, a swift recovery from the Great Recession is taken for granted: it is not a question of whether it will happen, but when and under which presidency. Coverage in the mainstream media treats the recession as if this downturn is merely a passing storm, and reassures us that these bitter days of stagnation are an abnormality. Radicals, on the other hand, are far less naive about capitalism in all respects except for its resilience to total collapse. While the Great Recession triggered a frenzy of debate in radical circles, many economists offered merely a baffled shrug of the shoulders and moved the debate towards austerity.
It is refreshing, therefore, to read such a mature and sobering analysis from John Bellamy Foster and Robert McChesney in their latest work, The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the U.S.A. to China. The authors argue that the natural state of advanced capitalism is not endless growth punctuated by freak periods of recession. Rather, capitalism has long been mired in a state of stagnant equilibrium punctuated by occasional periods of superficial growth. The Endless Crisis breathes new life into the once-prominent analysis of monopoly capitalism and rescues it from the quiet oblivion of discarded academic thought. The book has no interest in being a political pamphlet for social movements or focusing on the sociological ramifications of our moribund economy. Foster and McChesney demonstrate tremendous reserve by not filling the pages with polemical calls to action and discussing thorny questions of political strategy. Rather, the authors issue a wake-up call to the leftist intelligentsia who have largely abandoned the critiques of capitalism and retreated from the field of economics altogether. Marxists have been largely driven out of economics since allowing “capitalism,” a term embedded with history and sociological conflict, to be replaced with the sterilized and ahistorical term, “market economy.” The Endless Crisis is a focused and muscular work that ranks alongside the works of John Kenneth Galbraith, Paul Sweezy, Paul Baran and other great political economists who were unafraid to deliver sobering criticisms of modern capitalism. It is a robustly researched testament to the enduring relevance of Marxist theory in the 21st century.
A fundamental belief of orthodox economists is that growth is not only infinitely possible, but is also the normal state of a market economy unpolluted by government actions, unions, and other coercive non-market actors. Growth is the inevitable product of the invisible hand of the market freed from restraints, and this theory has been aggressively put into action around the world for over three decades. Yet, growth rates have been steadily dwindling, or stagnating. The 21st century has seen the slowest growth rates in economies of the United States, Europe, and Japan since the 1930s and shows no sign of improving. Foster and McChesney say that this stagnation is the direct result of monopoly-finance capitalism on an international scale — a system that drives out the insecurities of the perfectly competitive market that economists base their models upon. Low growth is the normal state of advanced economies dominated by large, powerful corporations. Thus, contrary to the optimistic expectations that a swift recovery is just around the corner, the authors believe that world economies are headed for “lost decades” of low growth and stagnation instead. Governments have adopted a creative arsenal of tricks and tools, such as deregulation, privatization, and massive financial bubbles, to rescue our economies from this ugly face of capitalism…