Now Stockman is a
renegade from corporate Republicanism; he actually believes in the ancient
principles put forward by Adam Smith and other classical capitalist thinkers.
While corporate Republicans cozy up to their party’s ugly, fascistic outliers,
they always, in the end, make their bed with the rich and powerful. Stockman,
on the other hand, actually embraces the mythical virtues of small business
ownership and town hall democracy. In classical Marxist terms, he represents
the ideology of the petite-bourgeoisie.
In the swamp occupied
by Democratic and Republican politicos—the breeding ground for conventional
politics—such views are unwelcome. Principled politics from the right or the
left are alien equally to the snakes and the rats that prey on the cognitively
weak and unwary.
Stockman is in a panic
because he sees beyond the stock market euphoria and Pollyanna commentaries
that have induced the mass delusions of the last several months. And what he
sees angers him.
Stockman constructs
an indictment, a list of charges against the current US economy: growth of
output is woefully inadequate, jobs are both indecently scarce and low paying,
the incomes and the net worth of “ordinary” citizens are dropping while poverty
is on the rise. To anyone with a grip on reality, these are not signs of real
economic recovery or systemic success. He notes that “we’ve had eight decades
of increasingly frenetic fiscal and monetary policy activism intended to
counter the cyclical bumps and grinds of the free market and its purported
tendency to underproduce jobs and economic output. The toll has been heavy.”
And yet imagine the toll if no remedial action had been taken! Surely, this
unintended critique of eighty years of state-monopoly governance counts as a
devastating charge against modern capitalism. If the era of state-monopoly
capitalism can do no better than produce the sad state outlined by Stockman, it
is decidedly a failure.
Stockman dares speak
the truth so discomforting to liberals and social democrats: [World War II]
“did far more to end the Depression than the New Deal did,” though he
misleadingly praises the Eisenhower years for its “sound money and fiscal
rectitude.” Perhaps he is too young to remember the massive increases in
military spending, the ambitious interstate highway system, and the enormous
growth of public spending brought on by the Cold War and the Sputnik panic. In
any case, the dose of war socialism and the “frenetic… activism” of
state-monopoly capitalism kept the capitalist ship afloat, though with fewer
and fewer rewards for the majority of US citizens.
Stockman correctly
sees that the remedies pursued by US state-monopoly capitalism directed more
and more of the lubricant of public funds towards the financial sector over the
last decades: the Greenspan “put,” the Long-Term Capital Management bailout,
extended ultra-low interest rates, TARP, Fed purchases of bank junk, the
support of federal bond prices, and support for equity markets. He calls this,
not incorrectly, “Keynesianism—for the wealthy.”
And this is a salient
point. It is commonplace to express the differences between Democratic and
Republican policy makers since the Reagan era as pro- and anti-Keynesianism.
But this is wrong. Ironically, it was only during the Clinton administration
that growth of government spending was at all curtailed and today fiscal and
monetary expansion remains a ready tool of the ruling class well after Reagan's
departure. Certainly Keynesian pump priming has taken new and evolving forms
over decades: direct job creation, military spending, massive space programs,
infrastructure projects, public-private partnerships, repair of financial
institutions, and stimulation of financial demand. While one or the other may
be the favored priming tool of rulers at any given time, the similarities of
the forms are far more important to recognize than their differences. State
intervention in markets continues to be at the core of contemporary
state-monopoly capitalism. Stockman sees this; others don't.
In Stockman's
account, the enabler of pump priming in all of its forms has been debt.
Borrowing or printing money is the means to continue the regimen of “frenetic
fiscal and monetary policy activism.” But, in his view, this regimen is running
out of steam. “The future is bleak.” And the “Fed has incited a global currency
war (Japan just signed up, the Brazilians and Chinese are angry, and the German
dominated euro zone is crumbling) that will soon overwhelm it...”
A bleak picture
indeed, but one entrenched in reality.
So if modern
capitalism-- in its state-monopoly form-- is a disaster, does that mean that
Stockman advocates socialism?
Definitely not.
Instead he holds out for a nostalgic return to the gold standard. Avoiding what
he calls “end-state metastasis,” “would necessitate a sweeping divorce of the
state and the market economy [the wholesale rejection of state-monopoly
capitalism! ZZ]. It would require a renunciation of crony capitalism and its
first cousin: Keynesian economics in all its forms. The state would have to get
out of the business of imperial hubris, economic uplift and social insurance
and shift its focus to managing and financing an effective, affordable,
means-tested safety net.”
In short,
Stockman advocates going back to a conjured idyllic time before state-monopoly
capitalism, a time imagined by the petite-bourgeoisie as one of healthy
competition, entrepreneurship, and opportunity. For him, the golden age of
capitalism would be the pre-depression era of small town USA, family farms,
vibrant and expansive industry and foreign policy isolationism. Of course any
pretense of continuity or viability of that era was dashed by the Great
Depression. In fact, the policies decried by Stockman (and associated by
Marxists with state-monopoly capitalism) served as a temporary backstop to the
further contraction of the capitalist system produced by that fantastic era.
Stockman may wish for
a return to an earlier time just as others may wish to time travel back to the
court of Louis XIV, but it isn’t going to happen. Capitalism, like any
organism, has its own life span, its own history. Saved from a critical
illness, capitalism passed from its laissez
faire period to a period of intensifying state intervention and management.
Today, that phase of capitalism’s development—state-monopoly capitalism-- is
also threatened with a critical illness. I would not be so bold as to predict
capitalism’s imminent death, but certainly it will not be revived by reliving
its past as Stockman fantasizes.
At a time when
liberals and conservatives argue pathetically over the right mix of austerity
and stimulus, Stockman is a welcome mainstream herald of the profound crisis
pummeling global capitalism. His anxiety and anger reflect a deeper
understanding of the contradictions of the moment. His rant, spiked with
sarcasm and vitriol, stands in stark relief against the smugness of the lap dog
punditry.
Krugman
Strides into the Ring
The Stockman
screed generated a storm of opposition. Liberals and the fuzzy, mushy left were
particularly affronted. Unlike Stockman, they would like to only turn the clock
back to the early seventies, another supposedly “idyllic” time when business
unionism was generating satisfactory contracts, the “Great Society” programs
were blooming, and war in Vietnam was winding down (at least for US
combatants). The fruits of the civil rights struggles and urban uprisings were
realized in the creation of programs, bureaucracies, and other buffering agents
against domestic insurgency. Jobs servicing the Great Society generated a
stratum of social liberals who matured into the base of a social democratic
left inside and outside of the Democratic Party. For them, the world turned
evil and foreboding with the Reagan “revolution,” a movement they characterize
as neo-liberalism.
In the dust-up with
Stockman, Paul Krugman, columnist for The New York Times, assumed the
role of savior and protector of their interests and perspective. Krugman, the
darling of the “respectable” left, attacked Stockman for his audacious critique
of the track record of state intervention in the capitalist economy. Anyone who
follows Krugman knows that his response to the crisis is a simple solution:
spend more public funds and spend freely until growth perks up. The soft left
finds this an agreeable solution because it promises to save capitalism (and
forestall socialism!) while creating a potential material basis for pet welfare
programs. It is simply the fantasy of another New Deal. And never mind that
Krugman doesn’t share the fantasy!
Apparently, the
Stockman-Krugman battle merited a major media appearance before the Sunday
morning gasbags, the big stage for what our media passes off as intellectual
fare. While I lacked the stomach to watch the sparring between the two,
refereed by the likes of Huffington, van Sustern, and Will, I would commend an
entertaining account of the match by Mike Whitney in Counterpunch (Krugman vs.
Stockman, April 11, 2013).
The merit of
Stockman’s account is that he is righteously indignant with an economic system
that has failed the great majority of people and inflicted great pain and
uncertainty. He goes beyond the dominant rhetoric of “we are all in this
together” and “we are all at fault” to find systemic rot in capitalism. He
correctly places the blame for this at the doorstep of state-monopoly
capitalism, the stage of capitalism evolved to rescue the system from the
accumulated contradictions of laissez
faire capitalism, contradictions brought to light by the Great Depression.
But he cannot go where logic would take him. He cannot entertain options that
would transcend capitalism. Thus, he is resigned to a pathetic nostalgia for a
bygone era where the contradictions of capitalism did not appear in such sharp
focus. While he stretches the bounds of mainstream thinking, he can not see
beyond markets and private ownership; he cannot see socialism.
Krugman and most of
the US left are thoroughly conventional in their thinking—they offer a more
“enlightened” management of the economic system and a cheerful capitalism with
a human face. They would be hard pressed to point to a period when capitalism
bore a human face, however. Nonetheless, they are undaunted before a rising
tide of interest in the socialist option. They are resolute in their fear and
rejection of real socialism.
Pressured by five
years of relentless economic crisis and increasing signs of favor towards
socialism, especially with the young, our feckless left offers a cold plate of
empty slogans of localism, anti-consumerism, platitudinous “participatory”
democracy, cooperatives, and a vacuous “new” economy. As if these are answers
to the $17 trillion dollar US multinational, monopoly capital behemoth. In
truth, these are simply evasions and dissemblance.
If Stockman is right and capitalism is
“state-wrecked,” then its time to leave the wreckage and turn to socialism.
Zoltan
Zigedy
zoltanzigedy@gmail.com
