Newsweek: "The Capitalist Manifesto"

[Jimmie Higgins]

Interesting... would like to see what comrades think this says about the state of ruling class thinking these days.

The establishment can be so impressionistic and always seems to miss the forest for the trees so it's interesting when they attempt to take on the larger questions about trends in the world.

[SocialismOrBarbarism]

http://www.newsweek.com/id/201935


In undertaking them, it is important to keep in mind what exactly went wrong. What we are experiencing is not a crisis of capitalism. It is a crisis of finance, of democracy, of globalization and ultimately of ethics.

Damn that democracy.

[GPDP]

I'm sure the Miseans will lap that up like dogs thirsty for ideological reassurance that the capitalist god has not failed them, but rather its incompetent magistrates and assistants.

[Jimmie Higgins]

http://www.newsweek.com/id/201935



Damn that democracy.
Ha! Good catch.

"Grrr! I knew I shouldn't have voted for that Neoliberalization ballot initiative!"

Or

"I meant to vote for worker's power but the butterfly ballot was confusing and my vote went to capitalism instead!"


Also, did I simply forget to post the link to Newsweek or do I not have that ability?

[GPDP]

It's not long ago that I considered myself an advocate of capitalism and associated with a number of others, and that couldn't be more accurate. You've got guys like Peter Schiff going on TV all the time and claiming that the economic crisis is, in fact, not a result of capitalism, but a lack of capitalism. Apparently if the US were a little bit more like Somalia, everything would be A-OK! Ridiculous. It's like on the old cartoons when somebody would run off the edge of a cliff, but rather than falling right away, they'd just keep on running in midair for a couple of seconds, gawking at the viewer with those helpless eyes. The capitalists are running in midair right now and they know it.

And when you press them on the fact that the closer we have gotten to laissez-faire, the weaker the economy seems to get, they still harp on about how it's not a true free market, and thus it's still the government's fault.

Basically, we're expected to believe the closer you get to laissez-faire, the worse things will get, until, of course, you actually do get there, in which case the economy will magically rebound and all will be well!

Keynesianism - Big bad socialism! We need to get rid of it!
neoliberalism - Ugh, no! This is shit! Keep getting rid of government involvement and things will get better!
anarcho-capitalism - THE FREE MARKET WORKS!!!!!!1

Seriously, how does this work?

Kinda reminds me of Doctor Octavius in Spiderman 2, when he first gets that fusion reaction going, and when it starts going haywire and consuming everything, he keeps telling everyone that it's gonna stabilize eventually. His wife dies, Spiderman shuts the reactor down, and he starts to think that maybe, just maybe, his calculations were wrong. A thought which he dismisses immediately, adamant that his calculations were correct, and that the reaction would've stabilized. Hence he does it again, and surprise, the same shit happens.

Well, by that point, the tentacles were controlling his mind, but you get the point. Plus, I like to think the Miseans have the equivalent of Doc Oc's tentacles in praxeology.

[rednordman]

Kinda reminds me of Doctor Octavius in Spiderman 2, when he first gets that fusion reaction going, and when it starts going haywire and consuming everything, he keeps telling everyone that it's gonna stabilize eventually. His wife dies, Spiderman shuts the reactor down, and he starts to think that maybe, just maybe, his calculations were wrong. A thought which he dismisses immediately, adamant that his calculations were correct, and that the reaction would've stabilized. Hence he does it again, and surprise, the same shit happens.

Well, by that point, the tentacles were controlling his mind, but you get the point. Plus, I like to think the Miseans have the equivalent of Doc Oc's tentacles in praxeology.Sorry to go of topic for a second (i totally agree with you) but that example is really really interesting. Do you think its was deliberatly put in the film as a very subtle (almost sublinimal) dig at capitalism? I know this sounds bonkers, just it makes me wonder.

[El Rojo]

yeh, that article made my blood boil. someone should write in n hand then a slice of truth. they won't publish it, but still.

I love the bit about how 400 million have been raised from poverty across asia. well, 1 billion are starving jackass!

the really rich bit is how they cite the constant crashes and depressions as evidence of sucess. joder

[El Rojo]

sorry about the double post, but does anyone think it is worth writting an email addressed from revleft to newsweek denouncing thier crap?

[GPDP]

Sorry to go of topic for a second (i totally agree with you) but that example is really really interesting. Do you think its was deliberatly put in the film as a very subtle (almost sublinimal) dig at capitalism? I know this sounds bonkers, just it makes me wonder.

I very much doubt it. It's just an interesting analogy I came up with upon observation of libertarian claims that a truly free market would be all that and a bag of potato chips, but approximation to the ideal with less-than-stellar results only results in them clamoring for more liberalization.

[Psy]

And when you press them on the fact that the closer we have gotten to laissez-faire, the weaker the economy seems to get, they still harp on about how it's not a true free market, and thus it's still the government's fault.

Basically, we're expected to believe the closer you get to laissez-faire, the worse things will get, until, of course, you actually do get there, in which case the economy will magically rebound and all will be well!

Right all the speculators back in 1929 would have stopped being so greedy if the government didn't intervene, oh wait the government didn't intervene till after the market already was in free fall, the first bailouts in 1929 was done by the large capitalists (that flooded the stock market with cheap credit) not the US government that only delayed the main crash.

[ckaihatsu]

Dealing with the main apologists of capitalism is *always* an instructive exercise -- for Marxists / revolutionaries, it's as basic as doing push-ups.





If, in the years ahead, the American consumer remains reluctant to spend, if federal and state governments groan under their debt loads, if government-owned companies remain expensive burdens, then private-sector activity will become the only path to create jobs. The simple truth is that with all its flaws, capitalism remains the most productive economic engine we have yet invented.


So what is Zakaria's definition of capitalism here -- is it free markets or not? By this statement alone his definition would be that capitalism is inseparable from government (taxpayer) subsidization of it, since he acknowledges federal debt loads, state debt loads, and government-owned companies.

In the next two excerpts we witness a blatant *contradiction* -- he can't decide whether the last decade or two has seen *increased* government regulation or the *easing up* of monetary controls.





The failure of self-regulation over the past 20 years—in investment banking, accounting, rating agencies—has led inevitably to the rise of greater government regulation. This marks an important change in the Anglo-American world, away from informal rules often enforced by private actors toward the more formal bureaucratic system common in continental Europe.




Yet at the same time, we should proceed cautiously on massive new regulations. Many rules put in place in the 1930s still look smart; the problem is that over the past 15 years they were dismantled, or conscious decisions were made not to update them. [...]

The simplest safeguard American regulators have had, of course, is the interest rate on credit. In responding to almost every crisis in the past 15 years, former Fed chairman Alan Greenspan always had the same solution: cut rates and ease up on money.


So over the past 15-20 years has there been *greater* government regulation, or has the Fed *cut* the interest rate and *eased up* on the regulation of the money supply?





No economic system ever remains unchanged, of course, and certainly not after a deep financial collapse and a broad global recession. But over the past few months, even though we've had an imperfect stimulus package, nationalized no banks and undergone no grand reinvention of capitalism, the sense of panic seems to be easing. Perhaps this is a mirage—or perhaps the measures taken by states around the world, chiefly the U.S. government, have restored normalcy. Every expert has a critique of specific policies, but over time we might see that faced with the decision to underreact or overreact, most governments chose the latter. That choice might produce new problems in due course—a topic for another essay—but it appears to have averted a systemic breakdown.


Here's another contradiction, this time manifesting as a mischaracterization -- how can he say that the U.S. government has taken the decision to "overreact" when it's implemented "an imperfect stimulus package", "nationalized no banks", and "undergone no grand reinvention of capitalism"?

The facts of the world economy do *not* support his thesis, for if the U.S. government has "averted a systemic breakdown" and "restored normalcy" with whatever little action it has taken, then where is the positive growth in GDP???

(Side note: Be careful to be *very* precise with this argument when you use it against capitalist hacks -- one guy, when I mentioned the lack of GDP, sidestepped the point by saying, "It's the *growth* in GDP that matters." He didn't bother to acknowledge my point that there *is no* *growth* in GDP, which was the whole reason I brought up the rapidly slipping GDP number to begin with.)





"Capitalism messed up," the British tycoon Martin Sorrell wrote recently, "or, to be more precise, capitalists did." Actually, that's not true. Finance screwed up, or to be more precise, financiers did. [...]

Finance has a history of messing up, from the Dutch tulip bubble in 1637 to now. The proximate causes of these busts have been varied, but follow a strikingly similar path. In calm times, political stability, economic growth and technological innovation all encourage an atmosphere of easy money and new forms of credit. Cheap credit causes greed, miscalculation and eventually ruin.




What we are experiencing is not a crisis of capitalism. It is a crisis of finance, of democracy, of globalization and ultimately of ethics.


Here he twists, turns, and wriggles in every direction possible in order to avoid admitting that it's a crisis of capitalism -- instead he tries to separate the financing function of capitalism from capitalism itself, preferring to scapegoat finance, democracy, globalization, and ethics / morality, instead of admitting that the problem is rooted in capitalism.





No matter what reforms we put in place, without common sense, judgment and an ethical standard, they will prove inadequate. We will never know where the next bubble will form, what the next innovations will look like and where excesses will build up. But we can ask that people steer themselves and their institutions with a greater reliance on a moral compass.




But fundamentally, markets are not about morality. They are large, complex systems, and if things get stable enough, they move on.


Here's *another* contradiction -- he admonishes economic players to temper their rational, individualistic drives to greater profits, yet acknowledges that capitalism is a *system*, and is *not* dependent on individual agents' actions, or "morality".





More broadly, the fundamental crisis we face is of globalization itself. We have globalized the economies of nations. Trade, travel and tourism are bringing people together. Technology has created worldwide supply chains, companies and customers. But our politics remains resolutely national. This tension is at the heart of the many crashes of this era—a mismatch between interconnected economies that are producing global problems but no matching political process that can effect global solutions. Without better international coordination, there will be more crashes, and eventually there may be a retreat from globalization toward the safety—and slow growth—of protected national economies.


Zakaria makes a Trotskyist point here -- why doesn't he just admit that nationalist-oriented politics can *never* transcend nationalist borders to adequately address the interconnected nature of the globalized economy?





In 2006 and 2007—the peak years of the boom—124 countries around the world grew at 4 percent a year or more, about four times as many as 25 years earlier.

Many of these countries had more cash than they knew what to do with. China sits on a war chest of more than $2 trillion, while eight other emerging-market nations have reserves of more than $100 billion. They've all looked to the safest investment they could imagine—U.S. government debt. In buying so much debt, they drove down the interest rate Washington had to offer, which in turn made credit in America cheap. So the effect of all this money sloshing around the world was to subsidize Americans in their favorite activity: shopping. But it affected other Western countries as well, from Spain to Ireland, where consumers and governments loaded themselves up with debt.


So, finally, we can summarize the world economic situation rather easily once we admit that economic imperialism is the method used by domineering countries to escape their crises of capitalism. The managers of world capitalism have somewhat, temporarily, mitigated the current crisis by doing mergers-and-acquisitions on major national economies, namely those of the U.S. and China -- or, to put it another way, it's just colonialism all over again, this time on China's exposed, hyper-exploited working class.


Chris




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-- Of all the Marxists in a roomful of people, I'm the Wilde-ist. --

[fabiansocialist]

sorry about the double post, but does anyone think it is worth writing an email addressed from revleft to newsweek denouncing their crap?

No. Newsweek is a propagandistic mouthpiece of American capitalism and imperialism. And Farid Zakaria, like Tom Friedman, is a running dog and whore of the capitalist imperialist establishment. The article by Zakaria is complete shit, like everythibng else this whore says and writes.

[fabiansocialist]

So, finally, we can summarize the world economic situation rather easily once we admit that economic imperialism is the method used by domineering countries to escape their crises of capitalism.

And when the velvet glove of economic imperialism fails then the military imperialism -- which is the foundation of economic imperialism -- comes in.

It's a waste of time discussing a worthless piece of dog shit like Farid Zakaria. He's another whore of the system, like Tom Friedman.The "arguments" aren't sophisticated -- it's just propaganda.

[ckaihatsu]

And when the velvet glove of economic imperialism fails then the military imperialism -- which is the foundation of economic imperialism -- comes in.


Right -- precisely.





It's a waste of time discussing a worthless piece of dog shit like Farid Zakaria. He's another whore of the system, like Tom Friedman.The "arguments" aren't sophisticated -- it's just propaganda.


Exactly. It's propaganda because it's not even internally cohesive -- all I did was go through and pick out the contradictions in his statements / position, like his vacillation between blaming the "morality" of the individual participants versus his blaming the financial aspect of capitalism.

One can pin down anyone who dares to defend capitalism by simply counterposing the actions of individuals to the nature of the system itself. We *know* that "ethics" and "morality" have *nothing* to do with participation within a capitalist economy because the *point* is profit-making -- even to the extent of genocide through military means.

Here's an illustration of Marx's Declining Rate of Profit -- it may be helpful....


A Business Perspective on the Declining Rate of Profit

http://tinyurl.com/2bvq3a

[fabiansocialist]

Exactly. It's propaganda because it's not even internally cohesive ...

It serves as window dressing, a cloak of pseudo-intellectual veneer, to cover a brutal system of expropriation and plunder -- which is what the last few centuries have been about (and which today we call "global capitalism"). My fury is all the greater because as an impressionable young person I used to read this shit and think we were living in the Panglossian "best of all possible worlds." But then again, that's the purpose of propaganda.

[Kwisatz Haderach]

Beneath all the silly propaganda, this "Manifesto" does point out a painful truth: It looks like capitalism will survive this enormous crisis with minimal changes.

Which very likely means that we'll get another, similar crisis in 10-15 years or so.

[ckaihatsu]

Beneath all the silly propaganda, this "Manifesto" does point out a painful truth: It looks like capitalism will survive this enormous crisis with minimal changes.


I really don't see it happening -- right now the shit is hitting the fan like never before -- the stock market took a major tumble today on some serious reality-check news, namely that world economic growth will only continue to fall. As we Marxists have been anticipating for years now, the engine of capitalism has finally come to a complete stop. There are *no* avenues for real growth, the Dow Jones recently went back to 1990s levels (from 14,000 to 7,000 - 8,000), and GDP is in the *negative* zone, meaning continuous *shrinking* of the world economy -- and now there is a modernist revolt in the Middle East -- possibly a revolution -- refusing to go away in Iran.

Time continues to move forward, but capitalism ain't. The discrepancy between the two means that people are expected to sit on their hands indefinitely without jobs, and history has shown us that the working class is *not* that patient. While not everyone who takes to the streets will necessarily have the same class consciousness as practiced revolutionaries like ourselves, these days it's only a click away -- many will go through a rude political awakening because of the bankruptcy of capitalism.





http://www.bloomberg.com/apps/news?pid=20601087&sid=aqNg.FOkoSYY


U.S., Europe Stocks Fall, Commodities Drop on Recession Concern


By Lynn Thomasson

June 22 (Bloomberg) -- U.S. and European stocks tumbled, sending the Standard & Poor’s 500 Index down the most in two months, as the World Bank said the recession will be deeper than previously forecast. Treasuries rose, while oil fell below $67 a barrel and metals slumped.

Freeport-McMoRan Copper & Gold Inc. and Alcoa Inc. sank at least 8.9 percent, while BP Plc and Occidental Petroleum Corp. lost more than 3.8 percent amid the biggest retreat in the Reuters/Jefferies CRB Index of 19 raw materials in almost three weeks. Bank of America Corp. dropped 9.7 percent as two board members resigned. Both the S&P 500 and Dow Jones Industrial Average erased their gains for the year.

“The worries are still out there,” said John Wilson, who helps oversee $120 billion as chief market technician at Morgan Keegan & Co. in Memphis, Tennessee. “Nobody is ready to get the trumpets out and herald the end of the recession.”

The S&P 500 slid 3.1 percent to 893.04 at 4:05 p.m. in New York following last week’s 2.6 percent slump. The Dow average sank 200.72 points, or 2.4 percent, to 8,339.01. Europe’s Dow Jones Stoxx 600 fell 2.8 percent and the MSCI World Index decreased 2.7 percent. Almost 14 stocks fell for each rising on the New York Stock Exchange, the broadest sell-off since May 13.

Stocks and commodities slid as the World Bank said unemployment and poverty will rise in developing nations and predicted a 2.9 percent contraction in the global economy this year. That compares with a prior estimate of a 1.7 percent decline. Growth is expected to return in 2010 at 2 percent, less than the 2.3 percent forecast about three months ago.

Rebound Pared

While the S&P 500 is still up 32 percent from a 12-year low on March 9, the index has fallen 5.6 percent since June 12. Executives at U.S. companies are taking advantage of the biggest stock-market rally in 71 years to sell their shares at the fastest pace since credit markets started to seize up two years ago. Insiders of S&P 500 companies were net sellers for 14 straight weeks as the market rallied, according to data compiled by InsiderScmaore.com.

The S&P 500 today slid below 900.77, its average level over the past 200 days, in a bearish signal to analysts who study charts to predict market movements.

Nouriel Roubini, the New York University economics professor who predicted the financial crisis, said the global economy may suffer another slump due to higher oil prices and widening budget deficits.

“I see the worry of a double whammy” from energy costs and fiscal burdens, increasing the risk of a setback in the economic recovery, Roubini told a conference in Paris today. Oil may rise to $100 a barrel, he said.

Commodities Slump

Freeport-McMoRan, the world’s largest publicly traded copper producer, plunged 11 percent to $45.18 for the biggest decline since March 2. U.S. Steel sank 9.2 percent to $34.12. Alcoa decreased 8.9 percent to $10.02. The strengthening dollar dulled the appeal of commodities as an alternative investment, helping send copper, gasoline and oil prices lower.

Exxon Mobil Corp. retreated the most in three months, losing 3.1 percent to $68.84. BP, Europe’s second-largest oil company, lost 3.8 percent to 478 pence in London. Crude oil fell for a second straight day in New York, sliding 3.8 percent to $66.93, on concern that fuel demand will remain depressed.

Commodity shares declined even as Anglo American Plc rallied 4.6 percent in London after Xstrata Plc proposed a “merger of equals” with the mining company.

Banks Slide

Bank of America tumbled 9.7 percent to $11.94, the steepest decline in more than a month. The lender that took $45 billion in U.S. aid said board members Tommy Franks and Joseph Prueher resigned, pushing the total of departing directors to seven since April.

Wells Fargo & Co. and JPMorgan Chase & Co. lost more than 6 percent, dragging a measure of financial stocks down 6.2 percent for the biggest slump among the 10 industry groups.

Mortgage originations in the U.S. may total $2.03 trillion this year, 27 percent less than earlier forecast, as rising interest rates reduce home refinancings, the Mortgage Bankers Association said.

Walgreen Co. lost 5.7 percent to $29.64. The company reported profit of 53 cents a share, missing the average analyst estimate by 6 percent, according to Bloomberg data.

CarMax Inc. declined 8.3 percent to $14.04. The biggest U.S. used-car dealer was cut to “hold” from “buy” at Deutsche Bank AG, which said the risk-reward ratio for the company’s stock is more balanced after its recent rally.

‘Remain Weak’

Federal Reserve officials on June 24, at the conclusion of their two-day meeting, may say the U.S. is showing signs of emerging from the worst recession in a half century. Following their last meeting in April, policy makers said the economy will “remain weak for a time.” The central bankers will also keep the benchmark interest rate in the range of zero to 0.25 percent, economists said.

Apple Inc. slipped 1.5 percent to $137.37. Apple Chief Executive Officer Steve Jobs had a liver transplant about two months ago, a person familiar with the matter said. Jobs, a cancer survivor, went on medical leave in January after saying he wanted to take himself out of the limelight and focus on his health. Apple should disclose whether he had a liver transplant if he returns to work this month in the role of CEO, corporate governance experts said.

Apple slipped even after saying it sold more than 1 million iPhone 3G S units in the device’s opening weekend. Piper Jaffray & Co. predicted sales of about 750,000 after initially forecasting 500,000 in the debut weekend. Apple also said 6 million people have downloaded its new iPhone 3.0 software in the five days it’s been out.

Bonds Gain

Treasuries advanced for a second day as the World Bank forecast made it more likely the Fed will keep interest rates near zero for longer. Traders reduced bets the central bank will raise borrowing costs by the end of the year, according to futures on the Chicago Board of Trade.

Today’s slide extended losses from the S&P 500’s 2.6 percent drop last week, its first weekly decline in more than a month. Last week’s retreat came as lower crude oil hurt fuel producers and S&P downgraded the credit ratings of 18 banks.

The benchmark index for U.S. stock options jumped the most since April 20 today. The VIX, as the Chicago Board Options Exchange Volatility Index is known, increased 11 percent to 31.17. The index, which measures the cost of using options as insurance against declines in the S&P 500, is down from a record 80.86 in November yet above its 20 average over its 19-year history.

The S&P 500 has risen or fallen by more than 3 percent on 23 trading days this year, the third-most in the benchmark’s 81- year history after 1932 and 1933, according to Howard Silverblatt, the senior index analyst at S&P in New York.

To contact the reporter on this story: Lynn Thomasson in New York at [email protected]
Last Updated: June 22, 2009 16:43 EDT

[Psy]

Beneath all the silly propaganda, this "Manifesto" does point out a painful truth: It looks like capitalism will survive this enormous crisis with minimal changes.

Which very likely means that we'll get another, similar crisis in 10-15 years or so.
I think this is a collective capitalist delusion.

Production is falling off a cliff as the crisis of over-production grows more serious every month while labor is slowly growing more class conscious due to circumstances.

Capitalists want to believe the worse of the crisis is mostly over when in reality this crisis is just getting started and has put the proletariat and the bourgeoisie on a collision course. The capitalists only plan to solve the crisis is to squeeze the proletariat that will amply the crisis of over-production causing a feedback loop were over-production causing even more over-production.

[More Fire for the People]

Fareed Zakaria is a witless prick. He has no idea what he's talking about, he's just a pundit.

[Die Neue Zeit]

Beneath all the silly propaganda, this "Manifesto" does point out a painful truth: It looks like capitalism will survive this enormous crisis with minimal changes.

Which very likely means that we'll get another, similar crisis in 10-15 years or so.

When this crisis began, I said that the bourgeoisie would survive this crisis. Without working-class considerations, things just didn't seem right for a total collapse.

The next crisis you speak of will be worse, though.

[ckaihatsu]

This really isn't the time to try to be objectively analytical -- partisanship is what's needed now.

[Psy]

When this crisis began, I said that the bourgeoisie would survive this crisis. Without working-class considerations, things just didn't seem right for a total collapse.

The bourgeoisie has yet to stop the bleeding, it is like saying in 1930 that the bourgeoisie would likely survive because they survived up to that point without know the depth and duration of the crisis.