Looking at the Causes of the Crisis

April 6, 2009

ponzi_scheme_greedLike many people, I suspect, I’ve been doing lots of reading to try and get a grasp on the current economic crisis. The topic is incredibly important, as we’re look at an unprecedented failure of capitalism and the distinct possibility that capitalism will radically transform — possibly into something post-capitalist (especially if we push it). While economics can be confusing and intimidating, there are a number of good pieces on the subject out there, including some that capture more of the bigger picture, in terms of power relations and potential outcomes. I’m going to suggest a few of my favorites here:

This article takes particular note of the power plays initiated by the financial section oligarchs — in particular from the perspective of an IMF economist whose job in the past has been to break up such oligarchies in emerging nations.

A great overview of the historical root causes of the current crisis from a decidedly left perspective.

This piece is more of a populist call out, naming names and taking note of specific sleezy actions. Notable as a reflection of current popular sentiment.

Literacy is power. In the age of the CDS and CDO, most of us are financial illiterates. By making an already too-complex economy even more complex, Wall Street has used the crisis to effect a historic, revolutionary change in our political system — transforming a democracy into a two-tiered state, one with plugged-in financial bureaucrats above and clueless customers below.

The most galling thing about this financial crisis is that so many Wall Street types think they actually deserve not only their huge bonuses and lavish lifestyles but the awesome political power their own mistakes have left them in possession of. When challenged, they talk about how hard they work, the 90-hour weeks, the stress, the failed marriages, the hemorrhoids and gallstones they all get before they hit 40.

“But wait a minute,” you say to them. “No one ever asked you to stay up all night eight days a week trying to get filthy rich shorting what’s left of the American auto industry or selling $600 billion in toxic, irredeemable mortgages to ex-strippers on work release and Taco Bell clerks. Actually, come to think of it, why are we even giving taxpayer money to you people? Why are we not throwing your ass in jail instead?”

But before you even finish saying that, they’re rolling their eyes, because You Don’t Get It. These people were never about anything except turning money into money, in order to get more money; valueswise they’re on par with crack addicts, or obsessive sexual deviants who burgle homes to steal panties. Yet these are the people in whose hands our entire political future now rests.

A solid Marxist/communist analysis of the historical roots of the situation and contradictions within capitalism. Wraps up with the predictable call for a communist worker’s party, of course.

For us the real question was “why did it take so long to come about in the first place?”. Global capitalist growth over the last fifteen years has been largely based on two inter-related features — the exploitation on an enormous scale of cheap labour power in the so-called “emerging economies”, especially China, and the ever burgeoning sums of money produced in the global financial system which seemed to have less and less connection to the production of surplus value. We were using metaphors such as capitalism seems to be defying the law of gravity (as well as the law of value) in that more and more fictitious capital was being created which had less and less relation to the actual production of real commodities. However, like the cartoon characters who can run off cliffs and hang suspended in the air for a time before finally falling to earth, capitalism’s apparent defiance of the law of value has now come to an end.

Don’s piece is a far more complex and nuanced view on the crisis, responding to numerous other writings on the subject, and taking particular note of the potential opportunities for more repressive social democracies or  insurgent fascism.

Here’s my point. The left is going to have to organize itself, not the working class or the ‘people’. One of the French post structuralists noted that the question isn’t so much why the masses don’t rebel against power as it is why they internalize that power relationship and enforce their own subordination and misery on themselves. At moments of crisis such as we are entering, this internalized acceptance of subordination will break at many points and masses of people will start to think and act in ways that would have seemed irrational to them a short time before. The role of the left is to recognize these elements of epistemological break and attempt to generalize them and incorporate them into an anti-capitalist social bloc. To accomplish this, the left must learn for itself what is to be done and how to do it, before presuming to educate others on these questions. And when we makes a start on this task, it will involve a little boldness, taking a few chances, some might prove to be embarrassingly inadequate; some might fail the risk/benefit analysis; but that’s the path to being a part of a revolutionary process, though it’s not necessarily the path to a comfortable life.

Some follow-up discussion on this article can also be found at the Three-Way Fight blog.

This writer makes an intriguing effort to map out how the crisis will play out over the next few years, making specific note of the likelihood of a resurgence of racism, nationalism, and fascism. I don’t agree with all of the assertions, of course, but it’s well worth reading.

If anyone has other recommendations, please post them in the comments.

Jamais Cascio over at Open the Future notes some similar sources.

2 Responses to “Looking at the Causes of the Crisis”

  1. fred jones Says:

    Hey! Thanks for contributing this. This is a great list of stuff and definitely a step up from what I’m used to.

    I’m sort of looking for a place to throw out a question to anarcho-transhumanists: have the outlines (or generally accepted ones) for a critical/anarchist science been drawn up anywhere? I think I’m about to sketch out one diagram of it at the Finding Our Anarchist Roots Conference in Chicago, April 24-26…its a pro-science and tech reading of Virilio…also an update on electronic toxicity, also pro-critical and ethical science…


    Great job on this list of reads!!!

    all best,

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