Are There Viable Alternatives to Capitalism?

Are there viable alternatives to capitalism?

I.

A recent article from the Daily Telegraph written by Nigel Farndale discussed whether there may be alternatives to capitalism. Farndale: "First we blamed bankers for the financial collapse, and now the system itself is under attack. But do economists have any better ideas?"

Farndale opened the discussion with Francis Fukuyama's idea that humanity has reached the "end of history" in capitalism: "Communism had failed. Liberal democracy, and the capitalism that underpinned it, had triumphed." That being the case, we are now starting to see very serious cracks in the capitalist survival-of-the-fittest economic model. Farndale: "[W]hen taxpayers have to bail out banks because they are 'too big to fail', that surely, is a contradiction of capitalism."

The problem is that while individuals can see inherent cracks in laissez-faire, free-market capitalism, we appear to be without viable, practical alternatives. Farndale: "[w]hen you stop believing in capitalism you will be believe in anything..." Farndale referenced a group of protesters who said that capitalism "should be replaced by something nicer."

After discussing ideas on how to revitalize capitalism, Farndale discussed Karl Marx's critique of capitalism: "Capital for [Marx] was all about the private ownership of the means of production [and exploitation]." That being the case, Farndale conceded that "capitalism has come a long way" even if, as Marx decreed, "capitalism carried the seeds of its own destruction." Nevertheless, even in light of Marxist theory, capitalism is an evolving system, a dynamic system. As for whether we will see the demise of capitalism, Farndale commented, "Capitalism, like the poor, will always be with us, because trade is how society operates. Trade is the human condition." Farndale concluded his analysis in that "Churchill said that democracy is the worst form of government, except for all the others that have been tried. He could have said the same of capitalism."

While Farndale's analysis is eloquent and succinct, we have to remember that for much of human history, capitalism was not humanity's economic system. Farndale referenced Marx as having "more or less invented the term" to explain the superstructural economic system after feudalism, but as some scholars may contend, for about 95 percent of human history, primitive communism was humanity's superstructural economic system -- hunter-gatherer communities without society being divided into classes. In terms of Marx's historical analysis of humanity's economic superstructures, in the beginning there was (1) primitive communism with hunter-gatherer societies, then (2) ancient society began roughly 10,000 years ago, then (3) feudalism from roughly 500 AD to 1500 AD, and then (4) capitalism emerged out of feudalism. Marx believed that the course of capitalism would then give way to (5) a lower form of socialism that eventually evolved into (6) a higher form communism with no classes, no private property, and no state. And yes, as Farndale wrote, trade is part of the human condition -- that being the case, capitalism is by no means necessary for the human experience. Historical free-market capitalism as an economic superstructure should not be confused with mere trade between humans. We often take it for granted in this time period that capitalism is not the necessary economic system for humanity; there have been others for most of human history.

II.

Farndale discussed that capitalism is dynamic and evolving. Thus, as capitalism is now a global system, the operative question becomes not if there is a viable alternative to capitalism, but rather we must ask, "Into what is capitalism evolving?"

Breitbart reported Sunday that economic and political leaders are meeting this week at the Swiss resort of Davos to figure out ways of reforming "a capitalist system that has been described as 'outdated and crumbling.'" Klaus Schwab, host and founder of the World Economic Forum said, "We have a general morality gap, we are over-leveraged, we have neglected to invest in the future, we have undermined social coherence, and we are in danger of completely losing the confidence of future generations." Schwab later added, "Capitalism in its current forum has no place in the world around us." In light of the eurozone crisis, global youth unemployment, and environmental issues, it would seem that the viability of capitalism is being scrutinized and reassessed.

In the wake of the global financial crisis, from stories on news outlets ranging from Zero Hedge to the Wall Street Journal to the Malaysian Star to Financial Times to the UK's Independent, across the world the recurring theme emerges: "We need to rethink capitalism." But for those of us who know nothing other than the capitalist system, what else is there? It is as if capitalism is in the midst of a serious global identity crisis. Or perhaps, per the words of the London School of Economics' Meghnad Desai, while Eastern capitalism is yet in its youth, Western capitalism "has gone geriatric". Maybe global capitalism has matured and is merely reaching a point of old age.

In light of the aforementioned stories and many others, I am classifying these quasi-Marxian sentiments as a sort of emerging new economic perspective: "gray Marxism." Derived from a mix of the uncertainty plaguing the globe and the idea that capitalism is aging to the point of becoming elderly, unlike the vibrant and militant "red Marxism" of the past with boisterous propaganda, colorful imagery, and bright hopes of destiny, gray Marxism has emerged in a post-Soviet, post-Mao-Chinese era. Ours is an era where totalitarian communism has been discredited & viewed with disdain and humanity has, for the most part, come to terms with the equilibrium of capitalism and the free market.

As for the verbiage of this emerging gray Marxism, former historical buzzwords like "proletariat", "bourgeoisie", "exploitation", "alienation", and "industrial reserve army of labour" have been replaced with new buzzwords like "crony capitalism", "the one percent", "the 99 percent", "class warfare", "the unemployable", and "bureaucracy". Far from Marx's previous discussion of a reserve army of labor, in light of global unemployment and the rise of the service industry, it's as if we now have a "reserve army of pine-riders and sideliners". In this way, though we see cracks in the capitalist superstructure, the idea that socialism or communism will emerge from the ashes of capitalism seems quite far-fetched. The free market reigns supreme, doesn't it? That being the case, per MarketWatch's Darrell Delamaide, the situation is gray, pessimistic, doom and gloom. And per Bertell Ollman, after capitalism (far from communism) humanity could resort to some form of barbarism. Ollman: "Like the projections Marx made of the future of capitalism itself...what he foresaw for communism is no more than highly probable. Marx, whose excessive optimism is often mistaken for crude determinism, would not deny that some [form] of barbarism is another alternative [to capitalism], but a socialist victory...is considered far more likely." Unlike the "red Marxism" of the past marching towards the bright future, the emerging "gray Marxism" portends that capitalism's demise could result in global tumult, pain, and suffering with an overexploited, devastated planet and a weary populace -- thus, the superstructure emerging after capitalism's demise remains precarious: communalism, barbarism, totalitarianism, or perhaps something else.

III.

It is significant to note that the transition from capitalism via "revolution" that Marx suggested appears historically equivalent to the "revolution" that brought about ancient society and the "revolution" that brought about feudalism. A better term in this time period for this concept would be a global "turning". In a historical context, ancient society did not shift to feudalism in a matter of months via revolution, but rather the historical timeline is dotted with significant events that led up to the shift to feudalism -- for example, Alaric's sack of Rome in 410. As for the "revolution" or "turning" from feudalism to capitalism, we see such events as the Magna Carta, the Glorious Revolution, the American Revolution, and the French Revolution. Clearly, these events led up to the advent of capitalism.

In this way, in looking for a turning from capitalism to something else, we may see various historical events dotting the timeline. Thus, even the Russian or Chinese revolutions could be seen as historical equivalents to the Magna Carta and the Glorious Revolution to capitalism...or Spartacus' slave uprising and Alaric's sack of Rome to feudalism. Even the Great Depression or our current Great Recession need not necessarily herald the ultimate end of capitalism, but rather another step in the historical superstructural process.

Even in light of the rise and fall of the USSR, an analogy could be made to that of a child putting on his father's white lab coat and pretending that he is a doctor. Obviously, the child is not a doctor, the time is not right, and were the child to undertake the role as a doctor, the child would fail miserably and could possibly cause great harm to others in pretending that he is a doctor with the child thinking that he is acting with the "common good" in mind. However, if the child grows up further, gains a sense of understanding, consciousness, and realization via college, medical school, and licensure, that child who once failed as a doctor (given enough time and education) can become an actual doctor. It comes down to a sense of growth and maturity.

This discussion leads us into the topic of class consciousness. Obviously, at this point in human history, (for the most part) communism does not and cannot work -- people are greedy, desiring capital. Save for those various pockets of communalism around the world (such as traditional Inuit communalism or Bruderhof communities), communism cannot efficiently & effectively be put into place as a viable economic system. For now, the free market reigns, but could a shift in the collective consciousness change things? For now, such ideas may seem far-fetched, but comparatively, in ancient times, the idea that humans would be able to one day trade internationally was also far-fetched. The idea that civilization would reach a point where slavery was not commonplace may have seemed unlikely. The idea of basic civil rights for women and minorities was also far-fetched, but a gradual, historical shift in consciousness changed things. The idea of having civil liberties and not living under a monarch was once far-fetched, but humanity evolved. One of our last hopes for a better planet in the future may very well rest in a maturing, developing human consciousness.

In light of possible changes in class consciousness, we may one day find a viable system to replace capitalism should capitalism grow old and perish. Even so, at least for many of us in the US, we understand the advantages of the free market system and we consent to living in such a system. I am sure many in the previous historical superstructures of primitive communism, ancient society, and feudalism understood their ways and acquiesced just as we do today. In trying to imagine what a truly communist society would look like, a comparison could be made to fish living in one aquarium and perceiving another aquarium from afar, questioning if the other aquarium is even real at all or just a painting or a mirage. What is important to see is that the fact that many of us prefer free-market capitalism does not give free-market capitalism any greater credibility as to being the "greatest economic system", at least on a historical level. After all, the history of humanity is a history of humanity's growing up.

As for viable alternatives to capitalism, the issue then becomes whether capitalism is the end of economic history or whether capitalism is merely one historical period out of a series. Given recent discussion on climate change and technological development affecting private property rights, our current state of affairs suggests that this current superstructure is evolving; capitalism (though arguably capable of perpetual equilibrium in theory) seems to be aging. As for what may come after capitalism, I can only repeat the words of another thinker, "We make our history ourselves, but, in the first place, under very definite assumptions and conditions. Among these the economic ones are ultimately decisive." As Marx once wrote, "History is nothing but the activity of man pursuing his aims." The question then remains: After capitalism, if not private property and personal wealth, what will be the aims of humanity? Only time will tell.