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The End of Neoliberalism and the Crisis of Capitalism

by Social Struggles collective Wednesday, May. 20, 2009 at 9:08 AM
mbatko@lycos.com

"Guaranteeing the social infrastructure and social security for everyone should be central instead of guarantees for banks and corporations and socialization and democratization of the economy instead of nationalization!"

THE END OF NEOLIBERALISM AND THE CRISIS OF CAPITALISM

On concrete revolutionary politics and reorientation of the left

By Gruppe Soziale Kampfe

[This article published 2/20/2009 in: ak-analyse & kritik is translated from the German on the World Wide Web, http://www.akweb.de/ak_s/ak536/25.htm. The Gruppe Soziale Kampfe actively supports the demonstrations “We will not pay for your crisis” on March 28, 2009 in Berlin and Frankfurt. More articles on the crisis and anti-capitalist perspectives are available at www.gruppe-soziale-kaempfe.org.]




While neoliberal capitalism is rapidly losing trust and approval, openness for considering alternatives to capitalism increases. However the left did not take advantage of the situation for a long time. Many leftist reactions are limited to constructive proposals on better and more social state crisis programs. Still in this situation of a legitimation crisis of capitalism, leftist perspectives must be measured by whether they contribute to organizing countervailing social power, uniting defensive battles and taking the offensive with perspectives critical of capitalism. The demonstrations “We will not pay for your crisis” on March 28 could be a step in this direction.

Capitalist accumulation along with neoliberal regulation is mired in a fundamental crisis. However the crisis processes extend far beyond the incipient world economic crisis and the crisis of the financial system. Several crises of capitalism occur. While the rulers call to a “re-invention of capitalism” (Merkel/Sarkozy), redistribution in favor of the dominant capital fractions is intensified. The costs of the crisis are shifted to the global subordinates or underlings. The crisis process does not represent either the ending of capitalism or the beginning of an alternative. The rulers are divided and unnerved. The new state interventionism is crisis management in the scope of neoliberal finance capitalism, not a solution to the capitalist crisis.

To open up perspectives, broad alliances that can win a majority and concentration on mobilizing demands are necessary. The planned nation-wide demonstrations on March 28 in Berlin and Frankfurt in the framework of a worldwide day of action should be a beginning. A radical reorientation of the left is vital. In the sense of a “real revolutionary politics” (Rosa Luxemburg), we want to combine concrete demands that can gain a majority with criticism of capitalism and steps to alternatives beyond capitalism.

This reorientation must take the multiple crises of capitalism as its starting point. We experience a crisis of the social relation to nature intensified by neoliberal finance capitalism causing more and more “costs” (climate- and water crises, ecological destruction) and a crisis of energy supply (oil and fossil energy). In the form of neoliberalism, globalized capitalism met worldwide rejection and resistance in the last years that leads to dwindling approval and a crisis of representative rule (above all as a consequence of the destruction of the welfare state and increasing precariousness and poverty).

MULTIPLE CRISES OF CAPITALISM

The dramatic consequences of the worldwide economic crisis still in its beginnings may not be underrated: rapidly increasing unemployment in almost all countries (around 600,000 jobs are destroyed monthly in the US), increasing worldwide precariousness, the danger of state bankruptcies and over-indebtedness crises with further social cuts, privatization, increasing poverty and intensified hunger crises. To what extent will the rulers succeed in mitigating, distributing and shifting these crisis consequences to weak social groups?

It is very possible that a legitimation crisis of capitalism could lead to an upheaval of the living conditions of many people and a crisis of trust in the parties and civil democracy so anti-capitalist perspectives could become globally tenable. The discrepancy between the extent of the crisis and the weakness of leftist countervailing power is clear in the economic, political and ideological relative strengths.

The crash in the fall of 2008 was described as the “end of neoliberalism.” While the return of the state is evidence for that, the state was never absent in neoliberalism. This is often forgotten. In leftist discussions, neoliberalism was often equated with “less state and more market.” The surface of neoliberal ideology was taken for the whole.

Neoliberalism is a strategy to change the relative strengths within the state – in favor of finance capital, property owners and transnational corporations. The political relative strengths in the state machine are not fundamentally changed by the crisis. The capitalist interests and especially transnational and finance capital still dominate in the state.

The financial crisis of finance-dominated accumulation leads to an intensified crisis of neoliberalism. The neoliberal ideology of the efficiency of the market, deregulation, privatization and its promises of freedom coupled to the market are visibly shown up in reality. The massive economic crisis processes necessitate a stabilizing intervention of the state and even force rulers to measures like nationalizations that were completely inconceivable in the past. First neoliberalism lost its hegemony. Now it loses its dominance as an organizing ideology of the ruling class.

The crisis has forced the rulers to immediate actions and a flexible crisis management to prevent a sudden crash of the whole financial system. The “new state interventionism” (cf. Candeias, ak 533) represents a short-term crisis management in which orientation in the interests of finance- and international capital is joined with staging a strong government committed to public welfare that decries the “greed of managers.”

SOCIALIZATION OF LOSSES, NOT A CHANGE OF COURSE

Politics tries to shift the consequences of assets distribution to the lower classes. The private risks of owners of capital are cushioned by the state; the losses of corporations and property owners are limited and transferred to the state. At the same time, the tendency to concentration of banks and corporations intensifying in crises is promoted by this crisis policy.

(Partial-) nationalizations represent a socialization of losses, not a change of the relative strengths. A change of the banking policy through democratic control and organization awarding credits according to social-ecological criteria instead of financial market criteria are not currently envisioned.

Contrary to what some leftist analysts believe, the state in crisis defends the interests of different capital fractions in diverse ways and does not act as the “ideal final capitalist.” The dominance of finance capital and export-oriented industrial corporations continues. The hope in the middle class camp is that the “state as helper in time of need” will soon withdraw again and that the markets will be stabilized in the crisis by a strong state.

The crisis dynamic was neither stopped nor limited in the past. Today’s policies of state interventionism aim at guaranteeing finance capital and shifting losses and are not a fundamental change of course. What accumulates in gigantic debts and risks should be unloaded on the subordinate classes in the next years through social cuts, privatizations, dismantling of the public infrastructure – by means of instruments of debt limits and returning to restrictive budgetary policy. Redistribution from bottom to top will continue.

IT IS TIME FOR REAL REVOLUTIONARY POLITICS

The crisis has not completely arrived in everyday consciousness. A striking contradiction exists between the extent of the global crisis dynamic and the everyday consciousness of people that could promote location-nationalist and authoritarian forms of crisis management. The passivity and uncertainty of the subservient classes corresponds to the absence of leftist projects against the crisis capable of radiating enthusiasm. With intensified social contradictions and increasing competition, this can lead to strengthening nationalist and racist forces and an ethnic anti-capitalism.

Intensified global social contradictions can be expected as a consequence of the crisis. The social battles of the next years will be defensive battles focused on how the capitalist devaluation process will be organized and who must bear the costs for the crisis of finance capitalism. These will also be struggles over a new reality: a new (green?) capitalism or a solidarity society beyond capitalism.

In the next months, the left must prepare for mass short-term battles and sudden changes of relative strengths and everyday understandings because of the economic upheavals. Simultaneously, the long-term shifts must be analyzed and popular strategies developed. Leftist politics cannot be unchanged. To effectively intervene in the crisis with anti-capitalist perspectives, a revolutionary real politics must be developed that mediates mobilizing demands for concrete changes, beginnings of another society with anti-capitalist goals.

To that end, the left must also turn away from a verbally radical criticism of capitalism. Our proposals must be understood offensively as concrete projects in a non-capitalist society that asks about the non-capitalist organization of the economy and way of life. Guaranteeing the social infrastructure and social security for everyone should be central instead of guarantees for banks and corporations and socialization and democratization of the economy instead of nationalization!

The neoliberal transformation of the state has also led to an authoritarian capitalism and a creeping erosion of middle class democracy. The current call for a strong state without redistribution of social wealth and a strengthening of counter-vailing social power and self-organization can reinforce this development.

On the other hand, we insist on a social organization of social production. The property question should be raised again. Under the present relative strengths, nationalization of banks and corporations alone does not represent any alternative to profit maximization and growth pressure. Themes like socialization, transnational economic democracy and democratization of decisions affecting everyone must be set on the agenda by the left. The demand for socialization of the banking sector is strategically conceivable and makes possible setting the property question on the agenda of political discussions.

For a socially effective critique of capitalism, the juxtaposition of concrete reforms and anti-capitalist perspectives must be overcome to go beyond criticism of neoliberalism and demands to strengthen the state. To that end, building social counter-veiling power is necessary. A starting point could be the alliance of union mobilization, student protests, the unemployed, precarious workers, migrants, illegals and peace- and environmental groups against the crisis. In the medium term, an initiative for political strikes and social disobedience would be possible that aims at uniting the different groups of wage-earners and social movements and developing counter-power beyond demonstrations.

RELATED LINKS:

“Capitalism Hits the Fan” by Richard Wolff

www.capitalismhitsthefan.com

“We Want to Overthrow Capitalism” by Oscar Lafontaine

http://www.spiegel.de/international/germany/0,1518,druck-624880,00.html

“The Quiet Coup” by Simon Johnson

http://www.theatlantic.com/doc/200905/imf-advice

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