[Fresh Ink] The Crisis of Finance Capitalism: Challenges For The Left

[Richard Menec]

http://www.socialistproject.ca/bullet/bullet202.html#continue

The   B u l l e t

Socialist Project . E-Bulletin No. 202

April 11, 2009

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The Crisis of Finance Capitalism
Challenges For The Left

Rosa Luxemburg Foundation

The brave new world of neoliberalism lies in ruins. Its wealth turned out to 
be based on robbery, sham and deceit. The Left is in a new situation. 
Without its self-transformation and development of a capacity to act that is 
adequate for these times, it will squander for a long time any possibility 
of becoming a force of social, ecological, democratic and peace-promoting 
social transformation beyond capitalism. This paper, presented here in a 
shortened form, aims to contribute to the discussion about the strategies of 
a Left that is renewing itself in the crisis of neoliberalism.

Neoliberalism in Crisis The hard-pressed, insecure, plundered community is 
supposed to pay the bill of a more than thirty-year long orgy of 
redistribution from below to above, from the public to the private. Millions 
of workers have lost not only their jobs, but also their homes and pensions. 
The financial crisis is intertwined with a cyclical economic crisis and the 
exhaustion of previous fields of growth of a self-centred society and the 
information technology revolution. At the same time, the costs of global 
warming explode and take away from hundreds of millions of people the 
foundation of their life. The economic crises interwoven with each other 
threaten to flow into strengthened constraints of repression and competition 
and to become the lever of a perfected system of neo-colonial exploitation.

Neoliberal Responses to the Over-Accumulation Crisis The crisis of 
neoliberal financial capitalism broke out in its core and has a systemic 
cause: it was triggered by a previously unrecognised self-governance of the 
financial sphere with respect to other economic fields and the inclusion of 
all social fields into speculative financial businesses beyond any 
possibilities of social or state organisation.

Fundamentally, in the face of the real relations of forces, different ways 
of overcoming the current economic crisis are thinkable and are to be viewed 
from an historical perspective as possible. Each of these ways is of a 
political nature and does not emerge spontaneously from the economy. They 
all presuppose active dimensions of the state. It would be a catastrophe if 
the economic crisis were to be coupled with a collapse of such dimensions of 
the state.

One can attempt to direct the surplus capital into new areas of investment. 
A current possibility, in no way to be discounted, is also an inflation 
policy, linked with extreme social and international tensions. Both - the 
opening up of new fields of accumulation or the inflationary devalorisation 
of capital - can also go together hand in hand. If the current tendency of 
over-accumulation of capital is not stopped, the explosive material of an 
even greater financial, economic and social crisis will build up.

The Social Crisis of Financial Capitalism and the Necessity of Alternatives 
Whether or not the current crisis will become a systemic crisis is an open 
question. As a structural crisis of capitalism, however, it is in many 
respects a social crisis of capitalism.

First: with the crisis of the market radical mode of regulation whose 
exposed expression is the financial crisis, the ideology of neoliberalism 
has been shaken.

Second: neoliberalism has brought forth structures that are not viable. 
Important goods for a life with human dignity were only completely 
unsatisfactorily produced. The current crisis pushes large parts of the 
global society into growing insecurities and leads increasingly to revolts 
among those who are hit most hard in the foreign and domestic peripheries. 
Protest and resistance are forming on all levels, still fragmented and many 
without clear direction, but growing.

Third: democratic governmental forms have been implemented in many countries 
in the last twenty years. At the same time, the social, economic and 
cultural basis of democracy is undermined.

Fourth: neoliberal capitalism has also squandered its legitimation on the 
terrain of domestic and foreign security. In the Iraq war, the imperial 
claim to structure order in every region of the world according to the 
paradigm of the West with military violence when other methods were not 
possible has failed. Expenditure for armaments and war are lacking for the 
financing of development in the South and the public services even in the 
rich countries.

A New Orientation of Social Forces Very different forces are working on 
projects, tendencies and scenarios for the re-establishment and/or 
development of bourgeois capitalist domination. Just like in the crisis of 
Fordism from 1968 onwards, different crisis moments come together, which are 
met by an intensification of the old mechanisms of regulation, while already 
something new is coming into existence. The following tendencies within 
neoliberalism, which at the same time point beyond it, are developing at the 
moment in parallel.

(A) New State Interventionism The rulers are reacting to the crisis by 
changing rapidly and suddenly the open, decades-long contempt for the 
state - in reality, regularly active even in neoliberal capitalism - into 
massive state interventions.

The state rescue actions also include elements - even if very limited - of a 
consensus securing support for social groups with low incomes, the 
limitation of manager incomes and even consideration of state participation 
in industry enterprises. The bank rescue packages were followed by state 
anti-cyclical conjuncture programmes. Within the EU the Lisbon strategy, 
with all its problems, is maintained.

(B) The Regulation of the Financial Markets and the Fight over a New Bretton 
Woods Now the future of the global financial system becomes the centre of 
the debates: restorative forces that want to use the state and its finances 
for the re-establishment of the old order and "crisis gamblers" who try to 
become winners out of the crisis are pitted against reformist initiatives 
that clearly want to go beyond the previous status quo. A real break with 
neoliberalism, however, cannot yet be discerned.

(C) Public New Deal With the renewal and the building up of the public 
sphere above all through new investment programmes in public 
infrastructures, education and health systems and the creation of new jobs 
in those branches, particular groups around President Obama attempt both to 
make up for the crash of the U.S. economy and to deal with the crisis of 
reproduction and jobs and to submit new offers of consensus to the lower 
social groups. A Public New Deal is supposed to deliver the reconditioning 
of the general conditions for the reproduction of capital.

(D) Green New Deal A green New Deal contains a state initiated and massively 
subsidised transition (transformation) to an "ecological" mode of production 
that opens up new fields of accumulation for capital seeking investment 
possibilities (the further commodification of natural resources in the field 
of bio-diversity or gene technology; technologies for ecological increase in 
efficiency in production and energy conservation); new investment and 
speculation possibilities open both new markets in certificate or emissions 
trading and in ecological consumption. Nature and environmental protection 
becomes a commodity, which limits the possibilities of solving the 
ecological crisis. The green New Deal is thus not the solution of the 
ecological crisis; rather, it is the attempt of its elaboration in the sense 
of a re-establishment of expanded capitalist accumulation and hegemony over 
the inclusion of progressive oppositional groups and interests of the 
subalterns.

(E) Millennium Goals and Struggle for a more Just World Order Global 
catastrophe or global cooperation - tendencies toward a global cooperative 
capitalism are intensified under the pressure of this alternative.

A great signal for the cooperative reduction of poverty in wide regions of 
the globe was the decision on 8 Millennium Goals at the Millennium Summit of 
the United Nations in September 2000. Supplementary steps were agreed upon 
at previous and following conferences. However, the reality in the 
developing countries admonishes the weakness of cooperation against poverty.

Tendencies toward international cooperation exert an effect on global 
environmental politics. In the last minute of the negotiations, the USA, 
still under Bush's presidency, saw itself forced at the environment 
conference in Bali in December 2007 to vote for a compromise suggestion, 
which opened the way for Kyoto follow up controls. The ecological components 
in Obama's conjuncture programme confirmed that.

(F) The emergence of an entire range of variations and the competition of 
post-neoliberal development The Washington consensus was already 
delegitimated before the crisis; after the crisis it will be completely 
gone. Neither can the USA and Europe determine alone the rules of the game, 
nor is a transnational consensus recognisable.

In South America, strong social movements have upset governments, 
centre-left governments have been brought to power, approaches of 
participative politics and economies based on solidarity have been 
established, and indigenous movements have forced another way of dealing 
with representation, public life and property.

Also in India strong movements have been formed, of peasants, the landless, 
"untouchables" and networks critical of globalisation.

Even more clearly, China's state capitalism or the investment policies of 
the Gulf States seek - from above, that is - to bring capitalist dynamics 
and state controlled development with selective opening into another 
relation, and thus to determine (more) independently the future of their 
countries.

In Scandinavia, despite neoliberal hegemony, different elements of another 
type of capitalism as well have been maintained.

Internationally, there was formed inside the WTO another G20+, as a loose 
union of countries of the 'global South,' in order to put something against 
the negotiation power of Europe, the USA and Japan and to strengthen the 
position of the 'global South.' Whether or not these developments will lead 
to the formation of a new capitalist bloc with its own hegemonic political 
or imperial ambitions, is still not clear.

As counterweight to the transnational institutions like the IMF, the World 
Bank or the WTO, regional integration projects that go beyond them like 
Mercosur or ALBA in Latin America are promoted, cooperation between China, 
Japan and South Korea or the ASEAN states is slowly deepened, and regional 
development banks like the Banco del Sur have been founded.

Nevertheless, this should not be overlooked by any means: people in Africa 
are further taken down and are nonetheless confronted massively with free 
trade demands. The Millennium Development Goals were not reached.

(G) A New Authoritarianism For years, the movement of particular social 
groups toward the right has been observable. The precaritisation of modes of 
labour and life and the thinning out of the so-called middle classes is 
linked to the return of strong boundaries of exclusion and respectability, 
authoritarian educational and service notions as well as an intensification 
of migration politics and exclusion. With the assumption of governmental 
power by clearly right wing governments, there is the attempt to forge a 
social consensus, under the cover of nationalistic invocations, between the 
upper and lower layers of society.

In terms of foreign politics, imperial policies, the war against terror is 
emphasised as a war of cultures and linked to the intensification of 
security and control politics. The asylum and migration politics of the EU 
aims overridingly at economic gain and treats people as "security risks." 
Repressive measures are implemented in an intensified form against 
oppositional positions, and also in social policy: the strengthening and 
broadening of the police and "punishment of the poor" are supposed to 
guarantee their assimilation and prevent their unrest.

For their own hegemonic project, authoritarianism is certainly not 
sufficient, since attractiveness and economic potential remain limited. Just 
as bio-dictatorial measures are only imaginable as a tendency within other 
hegemonic projects or for limited and defined spaces, so authoritarianism 
and even elements of fascist-like politics can only have an effect in a way 
complementary to other projects, thus supporting them.

What is to be done? Left Politics in Times of Crisis The depths of the 
current crisis will lead to no enduring solution being implemented in the 
short term. The still unbroken predominance of neoliberal forces of 
financial market capitalism blocks fundamental alternatives. There is a 
constellation of openness and of transition that can perhaps last for a 
decade. Since many fundamental problems will not be substantially dealt 
with, the danger of even worse financial, economic, ecological and social 
crises grows.

The rulers are divided. The interest conflicts that are linked to this and 
debates, the unavoidable search for compromises and the consequence of ever 
new partial steps, offer the chance of actualising and making efficacious 
some positions.

In large parts of German society, however, neither the Left Party nor unions 
and many social movements are granted a capacity for building the future. In 
Europe, it is not the Left that determines the agenda. Globally as well, the 
positions developed above all in the context of the World Social Forum 
process are certainly strong enough to place in question the legitimacy of 
neoliberalism and the current search for solutions from above, but still too 
weak to intervene directly in setting the course.

The chief tasks of a renewed Left will be:

to link up the resistance against the shifting of the consequences of the 
crisis onto the backs of workers, socially weaker and the global South with 
the development of a perspective oriented to the values of global 
solidarity, to organise social struggles and to network, to create room for 
collaborative work and self-organisation of actors who are ready to develop 
and to live alternatives, to meet reactionary answers of continued 
expropriation, de-democratisation and new wars with all decisiveness, to 
prevent the conservative continuation of neoliberalism by other means, to 
support progressive forms of state intervention, of renewal of the public 
sphere, of socio-ecological transformation and global development in 
solidarity, and in this, to develop approaches of transformation beyond 
capitalism, as well as to introduce and to realise steps toward 
socio-ecological transformation and to implement elements of a society based 
upon solidarity. That requires transformative processes in the left 
movements themselves, transformation of the relation between them and the 
ways of life represented by them.

The Strategic Triangle of Left Politics The Left can intervene 
simultaneously on three levels: by protest, critique and education, struggle 
over the meanings of the crisis and the development of forms of elaboration 
based on solidarity as well as by intervening in decisive processes and 
practical organisation. It must prove itself in the strategic triangle of 
left politics of social learning, the broadest coalition politics and the 
transformation of social property and power relations.

Education and Effective Development of Common Alternative Positions in the 
Public Sphere Emancipatory educational work in unions, social movements, 
citizen initiatives, in firms, schools, universities, in parties and 
churches as well as in the media and in the parliaments is the condition for 
overcoming the cultural hegemony of neoliberalism and its guiding principles 
of a market society, of the authoritarian state and people as entrepreneurs 
of their own labour power and social services. Education means, against this 
background, creating the foundations for common action in solidarity and 
encouragement for the self-organisation of all actors interested in 
alternatives from the local to the global level.

The Left should submit in parliamentary and also in extra-parliamentary 
contexts proposals that pick up on and push further determinate aspects of 
this agenda (reconstruction of the social security system, tax reform, state 
intervention in private property rights, capital regulation, ecological 
transformation, conjunctural programmes, security policy etc.).

In conditions of economic crisis this struggle must be bound together with a 
new internationalism.

Mass propaganda of concrete examples that show that things can be different, 
the promotion of forms of exchange of experience, in which the experiences 
of the individual can become a common good, are in this situation important 
forms of learning and education. Forms like social accounting from below or 
the monitoring of budget policies also belong to this, forms that aim at 
education through transparency.

The confrontation with the causes and the global consequences of economic 
crisis must flow into its own culture of resistance in the face of the 
insecurities and threats. Precisely in crisis periods, left wing movements 
need to understand themselves as networks where solidarity can be lived and 
security can thus be found.

Putting Alternative Concrete Projects on the Agenda Left wing movements must 
in particular work where they are strong - and that is above all on the 
local and municipal level and in their workplaces. Political actions should 
be put in the foreground that similarly aim at the implementation of 
democratic forms of social regulation and against the pushing of the 
consequences of the crisis onto society.

The Struggle against Poverty: 2010 in the EU is supposed to be the year 
against poverty. Its effective preparation and realisation shouldn't be 
subordinated to "the crises."

Redistribution from above to below and from private to public: the 
accumulation of wealth in the hands of ever fewer people and social groups 
imposes a monstrous nightmare on society. Belonging to this dimension, above 
all, is subtracting the field of social security from the grip of the 
financial markets and renewing the social security systems on foundations of 
democracy and solidarity.

The Socialisation of the Finance Sector: the finance system in its totality 
must be brought under public control. It is to be directed to the needs of 
municipal and regional development, to the support of projects of 
supranational integration and cooperation in solidarity.

First, it must be assured that the cooperative banks and municipal savings 
banks are maintained and democratised. Second, there must be a fundamental 
new organisation of the business model of public banks. The European Central 
Bank (ECB) must be drawn into the dialogue on European economic strategy 
alongside the Council and the European Parliament. There should be a further 
pillar: a council or a board of civil society actors.

Economic democracy: all enterprises and workplaces are to be compellingly 
enjoined to take up co-determination. The economy should no longer remain a 
democracy-free space. Here it is a case of the development of alternative 
economic models in the context of enterprise and job co-determination and 
beyond. Central here in the current crisis context is the question about the 
future of the auto industry and armament production, but also those sectors 
that are now promoted in the context of ecological modernisation. Public 
support should follow in the form of direct enterprise participation by the 
public hand, and be linked to an extension of co-determination rights, 
including a new type of co-determination also of the regions as well as 
ecological and consumer organisations, and the obligation of orienting 
themselves to socio-ecological transformation. This is at the same time the 
foundation of a broad support of small and middle-sized enterprises.

Democratising democracy: democratic cooperation and radicalisation of 
democracy are important forms of learning about politics, about power 
relations, about room for manoeuvre and limits of society. They legitimate 
alternatives and resistance, they can be used in order to give acting in 
solidarity a space. This calls for democratisation of budgetary policy 
through public budget analysis and participatory budgets as well as support 
of initiatives for remunicipalisation, in order to take away legitimacy from 
the integration of municipal finances and public property in speculative 
businesses as well as in questionable concepts of budget consolidation.

Politics of New Full Employment and Decent Work: it is time to take the idea 
of publicly supported employment sectors out of its current direction 
oriented to a cure and to gear it toward an actively and democratically new 
economic politics supporting social structures. Publicly supported 
employment sectors should be understood as a process of the creation of new 
spaces of cultural and social service delivery, self-organisation and 
initiative from below, integration of solidarity and thus as a basis of new 
paths of an economy of solidarity as well as of the development of 
economically and socially sustainable business.

An Education System of Solidarity and the Renewal of Public Spaces of 
Democracy and Culture: social transformation is only possible if access to 
education, democratic cooperation, art and culture are decisively 
transformed and the social selection in the education system is overcome. 
Here we need fundamental reorganisations of the education system, beginning 
with the extension of an integrative early childhood support, the 
introduction of community schools as "schools for all" and places of being 
together in solidarity, of a meaningful life in childhood and youth, of the 
interrelation of learning, playing, mutual help, democratic 
co-determination, of self development and practical social projects.

Renewal and Democratisation of the Municipal Economy as central axis of 
economic-political initiatives with the focus of energy provision, health 
care, transport. Going along with that is a corresponding qualification of 
the labour of municipal representatives in observing bodies in the sense of 
a real participative communalisation of public serves beyond old patronage 
economies and paternalistic welfare. The municipal economy must be the point 
of departure of a socially and ecologically oriented regionalisation of 
economic cycles.

For a Free Public Transport System: an essential step of social and 
ecological transformation would be to implement a transition to a public 
transport system that would make it free for the users and ensure high 
levels of individual mobility also for socially weak groups.

Peace Politics and Commitment to Global Development in Solidarity: We need a 
gain in capacity to build the future in the greater part of the world as a 
precondition for sustainable development in the world in general: the 
security and defence politics strategies and guiding principles of the EU 
and its member countries should be subjected to moratoria. Wide ranging 
debates at all political levels should clarify what "security in a 
globalised world" means.

For a Society of Solidarity The time of a lack of alternatives is over. If 
the rulers are compelled to address systemic causes, then possibilities of 
intervention from the Left and below open up. But how can they be unlocked 
and used?

It is time to put the perspective of a transformation that points beyond 
capitalism on the agenda, the goal of a society of solidarity.

The socialisation of losses can and must be opposed by the demand for 
socialisation of the control over property. Help for the industry of the 
fossil epoch has to be replaced by a conversion to solar energy sources. The 
Left should respond to the proclaimed return to a failed "social" market 
economy with the demand for going forwards toward a society of solidarity 
with a socially and ecologically regulated mixed economy with strong public, 
common economic sectors as a step in the direction of a socio-ecological 
transformation. The continuation of a politics of world trade and 
development in the interests of the North can be opposed by the concept of 
common work together in solidarity.

If the belief is diffused that it would only be a matter of informing better 
the selfish private individual, the Homo Oeconomicus, and more explicitly 
taking responsibility, so the Left should stand for another image of the 
human - that of self-determined acting people who take matters into their 
own hands in solidarity and strive after the whole wealth of life.

The concept of a society of solidarity is a concept of the re-appropriation 
of these productive forces with the goal of overcoming the destructive 
tendencies of the last decades and the self-awareness of the masses of their 
own power to solve together the problems of the world. This regards all 
levels - the local, the regional and the global. Another world, a world of 
solidarity, is not only necessary - more than ever, it is also possible. .

~~~~~~~~~~~~~~~(((( The   B u l l e t ))))~~~~~~~~~~~~~~~