Sunday, 11 August 2013


There have been more social uprisings, more civil unrest, more political upheaval around the world in the last five years than at any time since the 1960s amid the Vietnam War and the civil rights and feminist movements in the US.  Despite the fall of Communism and the triumph of capitalism over the entire world, it appears that the political economy rooted on the capitalist system and supporting institutions are showing signs of aging and deterioration, instead of revitalization.

Whether the opposition comes from leftist groups, non-Marxist progressive secular ones, or from conservative religious groups in the Christian and Islamic communities, there is definitely an ever larger popular undercurrent against capitalism. The question is whether these mass popular trends are fairly innocuous for the political economy or whether they actually mean that the system's inherent contradictions are becoming more obvious. Can the system deliver the best possible life for the majority of the population, or is it fooling people to believe in this dream that will never materialize?

If there are tangible signs that globalization is signaling a long decline of capitalism, then we are currently living the nascent stage of social discontinuity that is not very different from the periods of social discontinuity between the ancient to the Medieval world (200-500 A.D.), and from the Medieval to the Modern period (1300-1700).  The classical theory of the decline of capitalism is rooted in Marxist political philosophy that argues the system develops contradictions and despite its attempting to find solutions out of them the contradictions become even more glaring and the structural crisis deepens to the point of the mode of production unraveling toward eventual demise. 

Besides leftist scholars who believe that the system develops contradictions that lead to  social discontinuity, critics from the non-Marxist camp argue that the system has become 'too statist' and deviates from Adam Smith's classical theory of economics based on free enterprise. Some point to the fact that capitalism is decline in the West that was its birthplace, and a new type of capitalist system is emerging in non-Western regions that will permit the system to survive for a number of centuries. In short, capitalism is merely shifting its core from West to East, and that transition appears as though it is declining when in fact it is rejuvenating.

Still, other theories advocate that a new social structure will emerge that will replace the current bourgeois-dominated one, while keeping aspects of the capitalist system in a mixed political economy where the state is a much stronger arbiter that imposed rigid regulation over markets. Finally, there are those who argue that "the old capitalism" based on fairness, prudent transactions and above all ethical has given way to the new predatory capitalism where legitimate banks with global reach are involved in money laundering for drug lords. Therefore, capitalism is rotten and distorted because its 'harmonious nature' has changed owing to the unethical greedy people in the system that ha-s been reduced to "mafia-style economics" under political regimes that uphold such a system.

Although there is some truth in every argument about the causes for the decline of capitalism, the question is whether it is possible to predict a permanent decline of the existing economic system and the imminent emergence of social discontinuity that goes hand in hand with the structural demise of a mode of production. If capitalism has been evolving since the 14th century, how do we know that it is not currently evolving and instead it is in decline? After all, scholars have been predicting the demise of the system for the past two centuries. In a book entitled Imperialism: The Highest Stage of Capitalism, Vladimir Lenin argued the same thing during the outbreak of the Great War. The Bolshevik Revolution did take place, as did other social revolutions that overthrew capitalism, but less than a century later, those regimes and economic systems have reverted to capitalism. So how can we be so sure that globalization is the beginning of capitalism's decline?

Partly because of the global recession of 2008-2013, some have argued that at the very least, 'democratic capitalism' is finished because globalization has replaced it with neoliberal policies that are anti-democratic, anti-labor, and undermine social justice. Globalization has diminished the social welfare, while strengthening the corporate welfare state. Moreover, globalization has strengthened international finance capitalism that could not possibly survive in the absence of vigorous government intervention to sustain it. But is it a fair assumption that the capitalist system can only survive under bourgeois representative democracy, considering that it evolved under a large political umbrella that includes everything from absolutist regimes and Nazism to Norwegian-style social democracy and the current one-party Communist state in China.

If we follow the dialectical materialism based on Hegel's concept of thesis-antithesis-synthesis model, it may stand to reason that globalization represents the decline of the capitalist world-economy, a decline that could potentially take as three to five centuries until a new synthesis (mode of production) emerges. After all, social discontinuity, from the ancient world's mode of production (master-slave social structure) took several centuries to evolve into the Medieval (Lord-serf), and so did the modern capitalist mode take several centuries (14th to the 17th) in order to consolidate. In fact, the issue of social discontinuity is key to understanding how modes of production evolve; an issue with which the great French scholar Fernand Braudel had dealt in his studies (The Mediterranean; Civilization and Capitalism).

In The Poverty of Historicism, Karl Popper, one of the philosophical pillars of modern neo-conservatives, argues against Hegelianism and the famous dialectic. Popper dismisses the assumptions that old modes of production can be predicted to fall and new ones to rise on the basis of studying social discontinuity trends. Popper dismissed the idea that there are laws of development in history which can be discovered  by man in the manner that Sir Isaac Newton discovered the laws of gravity or that Albert Einstein discovered the theory of relativity. 

While history was a social science operating on Hegelian laws as far as  Marx was concerned, it was a branch of the "humanities" for Popper.  The reality of the socioeconomic gap in the advanced capitalist countries, and geographical gap (northern v. southern hemisphere) is widening rather than closing (the BRICS nations notwithstanding), despite the promise of prosperity if only people accept globalization and neoliberal policies. There is a great deal of truth to Popper's basic thesis that there are no laws of historical development in the same manner as there are laws of physics. It is true that human beings are complex and multidimensional - rational, irrational, spiritual, spontaneous etc., and their actions and institutions they build cannot be reduced to the same category as Newtonian laws. However, is history and long-term historical trends an indication of anything that we can study and from which we can arrive at some logical conclusions as those who advocate dialectical materialism believe?

The Marxist version of historicism based on dialectical materialism has a great deal of truth which can be proved by what has transpired in history during the transition periods (social discontinuity) from the ancient world to the medieval (see Ferdinand Lot, Recueil des travaux historiques) and from the feudal-manorial system to the capitalist (Fernand Braudel, The Mediterranean World in the Age of Philippe II ). Hegel and Marx have given scholars the theoretical tools to explain social discontinuity. Globalization does not represent social discontinuity. It will continue because of modern technology, means of transportation and communication, and of course, merging of capital. But is it a catalytic stage in human history, or even a trend that will not itself be transformed by the dialectical forces of human beings?  

The vast majority of people go about their daily lives today, as they have for centuries, never thinking if they support the existing political economy and mainstream institutions that they simply believe there is nothing they can do about them except to adjust their lives within the societal milieu. Social discontinuity, therefore, is not something that anyone thinks about or plans, but it simply happens over a very long period of time, to the degree that it goes unnoticed until there is a systemic change in society, at which point people assume that too is as natural as what existed before.  It may be argued that capitalism has survived for as long as it has because it best reflects the irrational tendencies in human nature, and that any system based on rationalism cannot survive because human beings would quickly undermine it, as they value social justice and rationalism in society far less than they do competition and inequality that we find in nature.

It is obvious that the capitalist world economy is not about to become extinct during this generation, and not even during this century. But it is also true that no mode of production has lasted forever, because they become obsolete in meeting the needs of people, thus useless to maintain life the feudal-manorial system. Could revolutionary change come from the weaker state structures as it did in the 20th century in Russia, China, Eastern Europe, Vietnam and Cuba? Or will revolutionary change that will m,ark definite signs of social discontinuity come from the most advanced "Old World" countries, including the US, that will be unable to compete globally and would constantly be reducing living standards for the middle classes that sustain the bourgeois institutional structure?  Will social discontinuity come as a result of financial collapse (unsolvable public and private sector debt crisis), or from a series of military conflicts that will absorb precious capital from the civilian economy to the detriment of the majority of the population?

Because throughout the history of capitalism the state has been the catalyst to its existence, and because the role of the state in the political economy has become much more significant as we move forward in time - it is more significant today that it was in the 19th century - the question is whether a supposedly 'free enterprise' system can possibly survive in any form other than the current corporate welfare phase. Would the banks in the capitalist countries have survived from 2008 to 2013 if the state had not intervened to save them with taxpayer money? If the state uses public capital to strengthen the private sector, and if the state constantly subsidizes the private sector through the fiscal system, then the private sector is very ill and the only question that remains is when will the world see the death of this system.  

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