From the TUC

What’s on offer now that capitalism and communism have failed?

13 Apr 2009, by in Economics

Eric Hobsbawm has written in the Guardian that, following communism’s failure in the last century, capitalism has now followed suit. So what’s still available, ideologically speaking? He states that social democracy as practised by the Blair and Brown administrations has run out of steam as well – this is, after all, the author of “The forward march of labour halted”, so this is familiar territory. But does it have much to offer us in the way of prescriptions? I think not.

First, let’s get a grip. Many people, since the recession began last year, have written capitalism’s obituary. Certainly the TUC believes that the mystique of the neoliberals, the deregulators and Wall Street and the City of London’s ‘masters of the universe’ has been badly dented. We aren’t going to take lectures about how there is no alternative any more, and we suspect that most people feel the same way (there have been some polls in the US recently suggesting that even there, people have abandoned a belief in capitalism – but not, instructively, the free market).

But we shouldn’t make the mistake to believe that capitalism is dead. I rather suspect that Marx was right in seeing endless reinvention as capitalism’s unique selling proposition (I think that’s what he said in Das Kapital, anyway!) It will be a matter of political choice whether free market capitalism is re-established after the recession ends. There are still plenty of people arguing that the objective should be to get back to business as usual, and they may yet win.

Our objective should be to persuade people that this would be the wrong direction. But what would be the right one? Hobsbawm says that New Labour social democracy, where the free market is key but the state has a major role in distributing its proceeds more equitably (I’m simplifying, of course) is also dead. What he proposes in its place is … er … a more extensive role for the state in a predominantly market economy.

Perhaps this is left social democracy, compared with the failed right social democracy of New Labour.  And this is the correct, but hardly milleniallist, answer.

5 Responses to What’s on offer now that capitalism and communism have failed?

  1. Charlie Marks
    Apr 17th 2009, 5:47 am

    Communism failed? What about China? And again: Capitalism failed? What about China? ;-)

    A key struggle will be over ownership. The private banking sector has failed completely. The mutual banking sector has survived and even benefited from the loss of faith in the private banks.

    The issue will be: do we hand more of our economy over to big business or do we defend and expand public and cooperative forms of ownership?

  2. Owen Tudor

    Owen Tudor
    Apr 17th 2009, 5:56 am

    Yes – good joke – I’ll tell my friends in the Chinese Communist Party that they’re evidence of the success of communism AND capitalism! Although actually today’s China growth figures suggest all is not well.

    On the issue about banks, you’re right about mutuals, and we should make that point again and again. However, the main reason mutuals have done comparatively well is that they stayed away from complex commercial banking deals and stuck, effectively, to retail banking. Private-sector banks that did the same were similarly protected.

    I’d be interested to know, also, how far retail-only banks have actually kept their reputations intact per se, or only comparatively. Given the collapse in consumer confidence generally (and the increase in saving therefore going on), that money has to go somewhere, after all.

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  4. Charlie Marks
    Apr 18th 2009, 11:05 pm

    When growth of six percent looks worrying… What can you say? I found it interesting that there are rumours that the Chinese govt is propping up their stock market…

    Obviously, the mutuals are playing on their status as customer-owned institutions and the evidence on consumer confidence in banking suggests that there’s been a big swing to building societies and the cooperative bank, and ownership is clearly a factor in the increased desposits.

  5. chris
    May 5th 2009, 2:08 am

    Neither capitalism nor communism have failed just certain ideological and economic forms of these have failed. when the USSR collapsed it wasnt communism ending it was Stalinism ie a beuracratic dictatorship over a workers state. When the credit crunch came it wasnt the death of capitalism but just neoliberal capitalism. alls will happen is that a new form of capitalism will take its place unless of course it is overthrown in a socialist revolution.