Capitalism is Bankrupt. So What’s Next?

Economically the world has become one, yet workers remain separate and isolated, atomised consumers instead of communities. The current economic crisis, the incompetence and corruption of capitalist corporations and politicians, has led some commentators to declare that these elites are discredited and that this development creates an opening for the socialists. There is some truth in this view, illustrated by polls that suggest that people in the United States and around the world are becoming more skeptical of capitalism and supportive of what they believe to be socialism than anyone could have imagined just a few years ago. Socialism is no longer a dirty word and Marx is no longer the despised demon he once was.

The interests of capitalists lie not in the defense of a mythical free market but in making profit. When their profit-making is served by measures that interfere with the free market, capitalists will favor and aggressively push for them. This also explains the bank bailouts. The problem with the Wall Street bailouts that have fueled people’s anger is that they are symptomatic of the inherently undemocratic nature of the capitalist economic system. This undemocratic nature derives from the ability of the capitalists to use their control of wealth and the State to pursue their interests. Capitalism allows capitalists to leverage their economic power into policy outcomes that benefit themselves. Even well-intentioned policies are inevitably shaped and constrained by the imperatives of capital accumulation. Capitalism is economically undemocratic because it is a class society that exploits workers, whereby all human beings find themselves enslaved by an abstract social logic that they are forced to reproduce through their daily social and economic activity. It is namely this subordination of all people, (including capitalists), to the imperatives of profitability and accumulation that accounts for the inability of the “invisible hand” of the capitalist market to deliver the benefits promised by Adam Smith and his followers. When the goal of profit is paramount, nature becomes no less subordinated to the logic of capital than people themselves. Natural ecosystems become degraded and depleted faster than they can regenerate themselves. It is a process of ecocide. Capitalism is also undemocratic by virtue of the fact that it tends to subordinate the majority of society to the dictates of capitalist elites who are as economically and politically powerful as they are numerically small. Their power enables capitalist elites to shift the environmental cost of their economic activity onto the rest of society.

Socialism allows all human beings to have an equal say over the priorities the economy is called upon to serve. In contrast to capitalism’s subordination of life outside people’s control socialism as economic democracy promises to give people the ability to become the true authors of their individual and collective lives. It does so because only an economically democratic socialism can create an economic system with goals and priorities that are the product of democratic deliberative processes rather than the blind logic of capital accumulation. Socialist society must replace the pursuit of economic expansion at any cost with a commitment to keep the physical scale of economic activity never exceeds the ability of natural ecosystems to regenerate.

Rethinking socialism in terms of being an economic democracy has the added benefit of making it easier to debunk those who declare socialism contrary to individual freedom, made only too plausible by the mis-identification of socialism with Soviet-style authoritarian one-party-rule.   Designating these regimes as socialism is a terrible misnomer. Rather the economy being the democratic responsibility of their citizens, determining priorities, the Soviet bloc were run by a relatively small political and technocratic elite.

Capitalism’s crisis is already fueling the right-wing with racism, nationalism and anti-immigration. To counter these forces and build a better world, socialism as a vision of economic democracy must be urgently emphasized and presented as the strategy of economic democratization which can turn the popular struggles proliferating around the world today into the means through which such a vision comes to life. What’s needed now is neither fatalism nor utopianism, but a practical path towards socialism. We need to convey the messages that emphasises the personal and community benefits of a socialist society and a vision of an attractive future where human needs are met. We need inspiring examples, engaging narratives, and opportunities for learning and teaching. The transition to a socialist future deserves a prominent, persistent place at the centre of public discourse. Those gloom and doom preachers who say that only utter ruin and extinction, awaits us may be correct. However, it need not as there are still a wide range of possible futures. People have an option to change the system and choose another type of society. The practical suggestions for socialism to adopt as sustainable are far from new, what is original in its solutions is that their applicability will be now actually possible. The true dreamers are those who believe in the utopianism of a green capitalism, that a sustainable sound ecological world is possible withing the restraints of market expansionism, capital accumulation, its planning short termism - its logic for existence.