http://www.guardian.co.uk/commentisfree/story/0,,2018451,00.html
Global capitalism now has no serious rivals. But it could destroy itself
Our planet cannot long sustain the momentous
worldwide embrace of the manufacture of desires
Timothy Garton Ash
Thursday February 22, 2007
The Guardian
What is the elephant in all our rooms? It is the
global triumph of capitalism. Democracy is
fiercely disputed. Freedom is under threat even
in old-established democracies such as Britain.
Western supremacy is on the skids. But everyone
does capitalism. Americans and Europeans do it.
Indians do it. Russian oligarchs and Saudi
princes do it. Even Chinese communists do it. And
now the members of Israel's oldest kibbutz, that
last best hope of egalitarian socialism, have
voted to introduce variable salaries based on
individual performance. Karl Marx would be
turning in his grave. Or perhaps not, since some
of his writings eerily foreshadowed our era of
globalised capitalism. His prescription failed
but his description was prescient.
Here is the great fact about the early 21st
century, so big and taken for granted that we
rarely stop to think how extraordinary it is. It
was not ever thus. "Can capitalism survive?"
asked the British socialist thinker GDH Cole, in
a book published in 1938 under the title
Socialism in Evolution. His answer was no.
Socialism would succeed it. Most readers of this
newspaper in 1938 would probably have agreed.
What are the big ideological alternatives being
proposed today? Hugo Chávez's "21st century
socialism" still looks like a local or at most a
regional phenomenon, best practised in oil-rich
states. Islamism, sometimes billed as democratic
capitalism's great competitor in a new
ideological struggle, does not offer an
alternative economic system (aside from the
peculiarities of Islamic finance) and anyway does
not appeal beyond the Muslim umma. Most
anti-globalists, altermondialistes and, indeed,
green activists, are much better at pointing out
the failings of global capitalism than they are
at suggesting systemic alternatives. "Capitalism
should be replaced by something nicer," read a
placard at a May Day demonstration in London a few years back.
Of course there's a problem of definition here.
Is what Russian or Chinese state-owned companies
do really capitalism? Isn't private ownership the
essence of capitalism? One of America's leading
academic experts on capitalism, Edmund Phelps of
Columbia University, has an even more restrictive
definition. For him, what we have in much of
continental Europe, with multiple stakeholders,
is not capitalism but corporatism. Capitalism, he
says, is "an economic system in which private
capital is relatively free to innovate and invest
without permission from the state, green lights
from communities and regions, from workers, and
other so-called social partners". In which case
most of the world is not capitalist. I find this
much too restrictive. Surely what we have across
Europe are multiple varieties of capitalism, from
more liberal market economies like Britain and
Ireland to more coordinated stakeholder economies like Germany and Austria.
In Russia and China, there's a spectrum from
state to private ownership. Other considerations
than maximising profit play a large part in the
decision-making of state-controlled companies,
but they too operate as players in national and
international markets and increasingly they also
speak the language of global capitalism. At this
year's World Economic Forum in Davos, I heard
Gazprom's Alexander Medvedev defend the company's
record by saying that it is one of the world's
top five in market capitalisation and constantly
looking for value for its shareholders - who
happen to include the Russian state. At the very
least, this suggests a hegemony of the discourse
of global capitalism. China's "Leninist
capitalism" is a very big borderline case, but
the crab-like movement of its companies towards
what we would recognise as more rather than less
capitalist behaviour is far clearer than any
movement of its state towards democracy.
Does this lack of any clear ideological
alternative mean that capitalism is secure for
years to come? Far from it. With the
unprecedented triumph of globalised capitalism
over the last two decades come new threats to its
own future. They are not precisely the famous
"contradictions" that Marx identified, but they
may be even bigger. For a start, the history of
capitalism over the last hundred years hardly
supports the view that it is an automatically
self-correcting system. As George Soros (who
should know) points out, global markets are now
more than ever constantly out of equilibrium -
and teetering on the edge of a larger
disequilibrium. Again and again, it has needed
the visible hands of political, fiscal and legal
correction to complement the invisible hand of
the market. The bigger it gets, the harder it can fall.
An oil tanker is more stable than a sailing
dinghy, but if the tanker's internal bulkheads
are breached and the oil starts swilling from
side to side in a storm, you have the makings of
a major disaster. Increasingly, the world's
capital is like oil in the hold of one giant
tanker, with ever fewer internal bulkheads to stop it swilling around.
Then there is inequality. One feature of
globalised capitalism seems to be that it rewards
its high performers disproportionately, not just
in the City of London but also in Shanghai,
Moscow and Mumbai. What will be the political
effects of having a small group of super-rich
people in countries where the majority are still
super-poor? In more developed economies, such as
Britain and America, a reasonably well-off
middle-class with a slowly improving personal
standard of living may be less bothered by a
small group of the super-rich - whose antics also
provide them with a regular diet of tabloid-style
entertainment. But if a lot of middle-class
people begin to feel they are personally losing
out to the same process of globalisation that is
making those few fund managers stinking rich,
while at the same time outsourcing their own
middle-class jobs to India, then you may have a
backlash. Watch Lou Dobbs on CNN for a taste of
the populist and protectionist rhetoric to come.
Above all, though, there is the inescapable
dilemma that this planet cannot sustain
six-and-a-half billion people living like today's
middle-class consumers in its rich north. In just
a few decades, we would use up the fossil fuels
that took some 400 million years to accrete - and
change the earth's climate as a result.
Sustainability may be a grey and boring word, but
it is the biggest single challenge to global
capitalism today. However ingenious modern
capitalists are at finding alternative
technologies - and they will be very ingenious -
somewhere down the line this is going to mean
richer consumers settling for less rather than more.
Marx thought capitalism would have a problem
finding consumers for the goods that improving
techniques of production enabled it to churn out.
Instead, it has become expert in a new branch of
manufacturing: the manufacture of desires. The
genius of contemporary capitalism is not simply
that it gives consumers what they want but that
it makes them want what it has to give. It's that
core logic of ever-expanding desires that is
unsustainable on a global scale. But are we
prepared to abandon it? We may be happy to
insulate our lofts, recycle our newspapers and
cycle to work, but are we ready to settle for
less so others can have more? Am I? Are you?
www.timothygartonash.com
