The Global Crisis of Capitalism and New Global Solidarities

The causes of the present global systemic crisis are structural and long term. The origins may be traced to the 1970s and the “capital logic” and global restructuring that expressed the attempt by capital to circumvent the limits to capital accumulation imposed in the old core societies, in order to raise the rate of profit. This took the form of the “globalization of production”, the “financialisation of capital” and the “globalization of finance”, and was accompanied by economic doctrines emphasizing the “self-regulation” of capital and markets.

However, by “solving” one problem, these measures created others, including: intensified global asymmetries, social polarization and inequality; “uneven development” both within and between regions, generating serious structural imbalances such as between deficit and surplus country accounts; a “global underconsumption” tendency (caused by raising the rate of the global exploitation of labour and increasing the ratio of value appropriated by capital on a global basis); and accelerating environmental destruction and the impending global climate change scenario; thus overall greatly increasing the level of systemic instability and the “systemic risk” within the world system as a whole.

Crisis is an inherent, internally generated structural and historical tendency of the capitalist system, intrinsic in the value form of capital itself, as a social relation. Both capital and capitalism have the inherent tendency not only to produce periodic and frequent systemic crises, but also to undermine or even destroy the very basis of their own social reproduction. In this sense, capital is its own worst enemy , especially if left to pursue capital logic unrestrained by countervailing social forces or alternatives.

The Historical Dialectics of capital and capitalist development entail a process by which every move forward by capital, for example through the dissolving of solidaristic or communal forms of social existence, de-socialising, commodifying and alienating labour and nature, provokes a response, as Polanyi argued, of countervailing self-protective and socially reproductive action by social forces, and via the state form (though no progressive alliance between these should be assumed, but has to be a conscious product of collective action in the struggle to gain control or exercise power vis-à-vis capital in the state terrain).

Historically, capital requires social re-stabilisation, re-socialisation, de-commodification, and dis-alienation, through solidaristic and communal ethos, policy, and praxis- at all levels of society and social existence, in order to continue to exist at all or be reconciled within a social system. The construction of these countervailing forms in response to the expanded reproduction of capital and capital accumulation on a world scale are historically intrinsic to the process of capitalist development itself, and in fact account for its continued “success”. The construction of alternatives to “raw” capital logic, and the construction of “socialism”, is an intrinsic aspect of the history of capitalism, and this process has not ended, but still continues, and in fact, is at present more urgent and necessary than at any time in recent world history.

The removal or destruction of such countervailing forms by their dissolution and subjection to capital logic, the unleashing of the unfettered forces of capital upon the world- automatically increases the destructive self-destabilising tendencies of capital and generates the conditions for severe systemic crisis and an overall implosion of the system. THIS is the real lesson of the present global systemic crisis of capitalism. The situation of such a crisis can therefore only effectively be rectified by addressing the underlying structural and root causes of the crisis, by strengthening and restoring the solidaristic and communal ethos and its countervailing forces and practices, but this time on a truly global level.

Every systemic crisis is in some sense unique and has particular characteristics. This global systemic crisis is a “triple conjunctural crisis”, which entails not only a capitalist cyclical crisis of over-accumulation and underconsumption, but also a world systemic “centre shift” in the locus of production and accumulation, and a “hegemonic transition” in the geo-economic and geostrategic configuration of power and wealth. It entails the secular decline of US hegemonic power and the objective failure of the dominant economic ideology, to promote equilibrium, qualitative growth, full employment, universal human welfare or environmental integrity. When combined with the distinctively unique aspects of the present planetary environmental and climate change crisis, this means that the historic “limits to capital” may now finally be being reached, if they have not already been exceeded. This situation therefore calls for nothing less than a comprehensive radical global transformation and paradigm shift and the construction of a new system.

The response to the present global crisis by the governing elite and the states, some of which have long since been essentially captured by financial interests, i.e. by the financial oligarchy, especially the United States and Great Britain (Wall Street and the City of London), is to date inadequate and ineffective in substantive terms, i.e. those of addressing the real and root causes of the present global crisis, and in fact is no more than a conservative and minimalist programme of immediate stabilization. This is despite having expended some 14 trillion US dollars to recapitalize the banks and other financial institutions and to finance the “stimulus” packages, a sum equivalent to the annual GDP of the United States.

So far we have progressed from a liquidity crisis (which is also a solvency crisis), to the “paradox of thrift”, its’ inevitable consequence, i.e. a contractionary syndrome (swift, global, and synchronized), to ballooning public deficits and the emerging “debt trap”, and the coming fiscal crisis of the state(s), and the following politics of deficit reduction, and possible reaction and retrenchment, which will further deepen the contraction and worsen the fiscal crisis and produce deepened social conflict and radicalization. This scenario, and the historic precedents of the Great Depression, leads us to expect either a multiple “double dip” pattern, or a “Long Slump”, or both. The crisis is not over.

The present global governing elite, and the dominant global financial interests, (to whom they are often directly allied) offer nothing but a temporary “technical fix” to the crisis, and have no real intention of conducting any meaningful radical reform or transformation of the system itself. The rhetoric of global regulatory reform is but a legitimating fig leaf, and its substance is even now being watered down, even before any real “reform” is implemented.

So, whence will come that needed radical impetus to genuine and necessary change? Not from capital certainly, nor even from corporate versions of the so-called “Green New Deal”. But, rather, by rebuilding, with a great sense of historic urgency, those counter-vailing forces and their social responses that will “discipline capital” again, restore balance, and redirect social wealth to promote social purpose. This is only possible, in the present historical circumstances, by constructing global, transnational, and indeed post-national social solidarities, by radically de-commodifying nature and labour, and re-socialising the very basis of wealth creation and its larger uses.

The emergence of a new and radical form of global politics with the conscious intention of transforming global governance and the existing global economic system on a radically democratic basis, operating through and transforming the historically embryonic forms of transnational social action and world polity formation, is now no less than a matter of human survival. Without transformatory action through new global solidarities, the negative tendencies and effects of the global systemic crisis will continue into the future, to the detriment of all humanity. There is no alternative but to produce “another world”. Thank you.

Lecture delivered for the “Crisis and Change in Global Political Economy: The Future of Global Governance” conference, University of Helsinki, Finland, 17 November, 2009, organised by the Centre of Excellence in Global Governance Research, The Helsinki Collegium for Advanced Studies, and the Department of Political Science.