Maybe we can call it “late late capitalism” now?

(9 am. – promoted by ek hornbeck)

This diary will muse upon the events of the last week or so, with especial reference to recent DKos diaries which I’ve been reading, putting them in the context of the real conditions in which we live…  the end result will be to characterize the political economy of the present as “late, late capitalism” while reflecting upon as a site of lively discussion about current events.

(crossposted at Big Orange)

OK.  This week, there were a few business failures and a precipitous drop in the stock market, followed by a number of dire predictions.  Everything appeared to be in upheaval.  This was exciting, if disturbing.  Jerome suggested the enormous scope of the problem.  Magnifico pointed out that some of the “reforms” are in fact designed to worsen the problem.  gjohnsit, who predicted the end of the American empire, also gracefully pointed out that Lehman Bros. was in fact bailed out and not merely “allowed to fail.”  Cenk Uygur called it “socialism”; Stranded Wind offered us the strength to cope.  The mood was pessimistically smart. had settled in with catastrophism.  This stuff made good reading.

Later in the week, the mainstream media attempted to fortify the picture by suggesting that the US government’s promises to print enough money to bail out all the rich folk affected counted as a “dramatic recovery.”  Perhaps the machineries of dollar hegemony are still running smoothly?  Now and then, we see predictions that, eventually, the world community will get tired of propping up the value of the US dollar (by buying up the national debt), and the buck will collapse.  Maybe this will happen someday; it hasn’t happened yet.  So I guess we’re good to go, after all.  Or not.

Meanwhile, some in the progressive community called for an “economic stimulus” of the old-fashioned, populist Keynesian type.  A Siegel suggests a “green stimulus,” Meteor Blades granted us a rousing diary, with references to In These Times and The Nation magazines, suggesting a “new New Deal.”  BruceMcF brazenly suggested that “Just like the Great Depression, Keynes can fix this.”  

Now, much as I am sympathetic to “Obama = FDR Redux” as a genre of optimistic, inspiring nonfiction literature, and much as I myself am searching for a solution, I feel obliged to point to three conditions for the application of Keynesian “pump-priming” solutions to economic situation, such as was once used successfully during the Great Depression:

1.  There needs to be at least a semi-autonomous national economy.

2.  The economy needs to have “room to grow” — economic expansion needs to be broadly possible, in the sense in which John F. Kennedy suggested that “a rising tide lifts all boats.”

3.  Within the economy, there needs to be some sort of a need for economic stimulus, to get people to buy more.


OK, so let’s look at each of these three conditions in turn:

1.  The semi-autonomous national economies of the Bretton Woods era were replaced by economies dependent upon the US dollar, the world’s “reserve currency,” and so the US exists in this globalized economic system in which dollars have “run amok,” with foreign economic power now possessing enough to buy a significant chunk of our Nation’s assets.

Under such an economic system, “stimulus” is automatic; the US government simply prints out dollars and issues them to the four winds.  The problem is that this “stimulus” isn’t backed by any real increase in the quantity of goods and services: thus you have Robert Brenner, at the end of The Economics of Global Turbulence, telling us:

the odds therefore favor a still further opening up of the already enormous chasm between the income and profits actually produced by the world economy and the paper claims generated by it” (343).

There are books out there now on the Enron scandal suggesting that the sort of accounting fraud that was uncovered in Enron’s demise wasn’t an anomaly.

2.  Economic expansion is hampered today by the extent of prior economic growth, and its ecosystem effects.  Thus Minqi Li writes:

…too much damage has been done. After centuries of global capitalist accumulation, the global environment is on the verge of collapse and there is no more ecological space for another major expansion of global capitalism.

The economic expansion efforts of China and India thus appear as “last gasp” efforts, trying to get some economic growth in “under the deadline” before an even broader ecological crisis makes such growth impossible.  China is hastening this day, to be sure, through its heavy use of medium-grade coal as an energy source.  Coal!  cough cough

3.  People with money already have plenty of junk; the problem is not that they need some brand of “stimulus” to spend more and thus stimulate economic growth, but that they are maxed out on debt, or they have lost their shirts on the real estate crash.  Yuk!

Okay, so I don’t think the Keynesian thing will work.  The 21st century economy isn’t the economy of 1932.  I’m sure that a few bucks for the average guy would be a great stopgap measure (I could use a few myself); however, I think that the main problem here is that the corporate-dominated economy has reached a stage that we should perhaps call Late Late capitalism.


This pronouncement, of course, comes with an apology to Ernest Mandel, who coined the term “late capitalism.”  Well, I think of this as “late late capitalism”: the economy of the present day is to the history of capitalism as a whole what Craig Ferguson is to network television:

Not bad, for TV.  But, generally, we deserved all the flack we got from Ferguson, for our lack of good democratic habits.

At any rate, what we have now, late late capitalism, is an economic system which requires so much government intervention that we can imagine a day, not so far off it seems, when “capitalism” is merely preserved as a simulacrum, its every movement in fact guided in some sense by legislative fiat so as to grant America the appearance of having a “real” capitalist economy.  America’s a capitalist country, you know, and we’re proud of it.  We believe in the virtue of hard work, though we give away the store to folks who are born rich; look at who our President is.  Moreover, W.’s “elections,” both of them rather illegitimate, made a mockery of the principle of “meritocracy,” not to mention democracy, but that doesn’t deter us from moralizing as such about how each of us has “earned” our station in good ol’ American class society.  Do you wonder why we bother?  I do.

We have an economic system which can, and probably should, produce enough for everyone, measured brutally in terms of basic physical needs; yet of course soaring food prices have added 75 million to the world’s hunger rolls.  We could probably feed them all from food cadged out of the dumpsters behind your local supermarket — or we could do what I do… go to the local farmer’s market every Sunday:

collect the farmers’ unwanted vegetables and fruit and store them in my truck:

and give them away the next day at the local food bank:

It’s better that way, I argue — everyone should have organic food, as its nutrients come from compost and not from petroleum-based fertilizers.  There’s now this rumor floating about the Farmer’s Market, I am told, that I actually sell the vegetables and fruit I collect.  I guess folks just can’t believe that a red-blooded American such as myself wouldn’t engage in commodity culture at the first opportunity.

One way of knowing how decrepit our commodity culture is is by looking at the state of labor in America.  The professions are disappearing; this is because labor is no longer a meaningful commodity.  Any profession that involves real production (and plenty of stuff like answering the phones) can be done in the Third World cheaply; if you’ve been reading Doonesbury lately, you’ll notice that Trudeau has picked up on the fact that journalism is going through its death spiral as a commodity.  When anyone can get news for free off of the Internet, nobody will pay for it.  

As Stan Cox points out in his book Sick Planet, what we now have is a malignant economy, filled with the manufacture and consumption of harmful or useless products.  Moreover, the sum of our present-day economy is that, in another dimension, in its total dependence upon the burning of crude oil, coal, natural gas, and other fossil fuels, it promises to create a roaringly hot global climate, thanks to all of the carbon dioxide it has injected into Earth’s atmosphere.  (I have diaried this phenomenon elsewhere.)  

Well, when you have an economy based on the principle of effective demand, demand backed by money, you will have an economy in which artificial “needs” must be instilled into consumers (largely through advertising, but also through infrastructure planning) in order to continue to extract money from the money-holding public (in reality a small segment of humanity’s sum), and thus to maintain the capitalist economy.  Real needs, on the other hand, are easily satisfied — oh yeah, except for that little problem of money.  The starving are starving because they can’t afford to eat well, or so say the charities.

I suppose that the professions which have the most stability in such an economy are those which require putting a gun to someone’s head: cops, lawyers, judges, crooks, and the like.  And also their beneficiaries: landlords, insurers, regulators, and so on.  “Exchange” can always be forced out of people.

Rule #1 of the late, late capitalist economy: make a necessity scarce so that you can charge people for something they have a human right to get for free.  Otherwise our cities would line the streets with fruit trees and make it acceptable to plant edible landscaping on every available spot of land.  Let’s change this one, shall we?

I can see the economy of prostitution persisting for some time; yet I am not cute enough to be whore or gigolo and not mean enough to be pimp.  My commodity value is thus low in those terms.

In the poor parts of the world, people sell their surplus organs to organ traffickers, and in exchange they get a small sum, with which they can live comfortably for a few years, until they find themselves broke once again, this time minus a kidney or whatever.

So, yeah, we are now in late, late capitalism.  The banks and investment firms fail; the government bails them out.  In Moldova, though, your best bet is to sell one of your kidneys.  What distinguishes this era is that the ritual of exchange, necessary to the capitalist economy, drags on listlessly into the future even though its connection to the human life-force grows weaker by the day.  Let’s hope that we as a society can find an alternative to late, late capitalism at some point.  It makes me nervous as hell.


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    • srkp23 on September 20, 2008 at 08:46

    I don’t even know what to say. Although your diary describes a very grim situation and with great accuracy, reading it, I felt not alone. I thank you.

    I hope we can find an alternative.  

    • Robyn on September 20, 2008 at 14:52

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