The age of American capitalism can really be said to have begun the day Robert E. Lee signed the agreement to surrender to Ulysses S. Grant. It was then that capitalism in our modern sense achieved absolute hegemony over the country, destroying the economic system of slavery in the West.
The United States was founded as a compromise between those two systems, with the constitution being a power sharing agreement between the southern aristocrats, and the bourgeoisie capitalists of the north. It was first and foremost a political agreement, and only through the nostalgic annuls of history for a country still built from that document was it turned into a mythic scripture.
I say all this because it is important when talking about the end of an era to discuss its beginning and how it came about, especially in regard to the material conditions. The rural, agricultural nature of the south required slavery to sustain high profits for the southern aristocrats. Therefor, traditional, religious and ethnocentric ideology flourished there so as to justify the use of other humans as property. In contrast, the north didn’t need slaves since it had a largely industrial and urban economy, but it did need cheap labor and also numerous consumers to buy the goods its factories produced. Therefor liberal ideologies became most prevalent there calling for all races to be “free”, therefore widening the amount of people capable of participating in their economy.
Let us skip forward a bit, to 2015. The US has spread its corporate style of capitalism to the rest of the world by using its military to enforce free trade for the sake of economically outmaneuvering its rivals in the communist bloc. Liberalism, while still used as the framework for our government, has been corrupted by conservatives such as Ronald Reagan in his battle against the communists into neoliberalism. An ideology that compelled politicians to roll back the reforms and welfare of the New Deal, deleting regulations, cutting welfare. The capitalists were finally able to counter the efforts of the socialists and unions. The populist anger after the massive contradictions of capitalism collapsed in the form of the Great Depression was long gone, now replaced with a disengaged public and the presence of a foreign enemy to scapegoat.
Since the self-destruction of that foreign enemy in 1989, this neoliberal ideology maintained hegemony in the US, with the two major parties fighting over how to mitigate the social and crime issues created by capitalism, all while foreign policy alternated between a colorful theater for the public and keeping trade routes and markets open.
The material conditions are changing once again. The factory jobs and industry that once characterized American capitalism are leaving to China and Mexico thanks to the free trade the US itself created. The welfare that served to lessen the suffering of the working class has been cut back, and the regulations that served to stave off volatility and economic collapse were cut back even further. The tough on crime policy, instead of solving the conditions that created so much crime, simply imprisoned all the people who were likely to commit acts of violence, creating a permanent underclass of poverty with disproportionate minorities.
After the 2008 financial crisis, the worst since the Great Depression, the true nature of neoliberalism was revealed for everyone: less constraints for the rich and powerful, and political theater for everyone else.
The hegemony of neoliberalism has collapsed, with the rise of more reactionary ideologies such as in the tea party and Donald Trump, as well as social democrats like Bernie Sanders who wish to undo the damage it has done.
But the problem is, it might already be too late. The massive inequality capitalism created was compounded by the crisis, millions became unemployed or underemployed and while some of these jobs were recuperated, wages never recovered. Similarly, individual ownership of stocks is at all time lows and the stock market is now dominated by institutional investors. This does several things. One, it continues to expand inequality, allowing the wealthy capitalists to increase their wealth at an exponential level at the expense of American workers. Two, because institutional investors are more likely and better positioned to be activist investors, the decisions of American companies are now more and more centered around increasing stock prices at the expense of everything else.
The majority of publicly trading US companies are now spending more money on stock buybacks to increase share price than they are spending on either their own workers or research and development. For example, McDonalds recently spent 20 billion on stock buybacks and dividends. Had they been a worker owned enterprise, they could have put, on average, an extra 11 thousand dollars towards each worker’s salary. Workers whose average salaries are about 20 thousand dollars a year as it stands.
This is a recipe for stagnation. Even by conventional economic standards, by taking so much money from the workers in a consumer based economy not only will growth slow down if not stop completely, many of the companies these bourgeoisie are squeezing money from will totally fail thanks to their focus on stuffing their pockets over creating a sustainable enterprise.
The United States was heaved out of the Great Depression thanks to the massive military expenditures of World War Two. Had that not happened, I wonder where we would be. Our nuclear deterrent ensures that we won’t have to fight a total conventional war again, and even if that weren’t an issue, our conventional forces are probably just as good of a deterrent considering no other country comes anywhere close to the US in military spending.
So, even if Bernie Sanders comes to power and restores the regulations that made capitalism bearable for some of the workers of the US, if not for all nor for those all across the world oppressed and exploited by the system we instituted, it may very well be that our economy will never fully recover.
Considering that global recessions come in about 7 or 8 year cycles, we’re do for another one soon. The signs currently point for us importing a recession for the first time, with the Chinese stock market taking massive hits and its housing/commodity bubbles ready to collapse any month now.
It’s often said that the Chinese regime, whose own state capitalist system and ideology stem from a corruption of the communist ideas it was founded on, have their legitimacy predicated on economic success. But that is also true for the American regime. The only major difference is the hegemony of ideology in Washington can be disrupted by votes whereas the hegemony in Beijing can only be disrupted by civil unrest.
The stagnation of the American economy has already begun. Despite our vast natural resources, large, youthful population, and excellent geopolitical positioning, our whole society is going to hell in a shiny plastic hand-basket called capitalism.
And when that happens, we may finally see the end of American capitalism, ended by the only people who could: Americans.
There are signs already that a new, socialist, economic system is emerging. Currently, 130 million Americans are members of co-ops, and public ownership of utilities/services is flourishing on a municipal level. Roughly one fourth of all electricity produced in the US is produced by co-ops or municipally owned utilities. Technological developments in media and communications may make it even easier to make co-ops and non-hierarchical economic activity as well as to politically organize.
However, these things, on their own, do not spell the end of capitalism.
Paul Mason, in his own analysis of the economy and how it was approaching “post-capitalism,” described how technology, by creating a situation where information had already achieved post-scarcity status and becoming something of a social good would lead to the end of capitalism once technology also made it possible for normal goods to be produced and distributed at such volumes to eliminate scarcity. He suggests that we we work as hard as possible towards this transition, and disregard preserving and improving the achievements made by the labor movement in the last century. As he says, we must learn “to use governmental power in a radical and disruptive way; and to direct all actions towards the transition – not the defence of random elements of the old system. We have to learn what’s urgent, and what’s important, and that sometimes they do not coincide.”
But the fact of the matter is that this transition, which requires the material conditions of a total post-scarcity society, is a long way away. Perhaps even generations. Making information available to everyone is relatively easy (just copy and paste), but material goods are a more difficult and tedious matter as it stands, and it will take unknown innovation and effort to amend that.
And while I am all for abandoning some of these elements of the old system some leftists support, such as the welfare state in exchange for universal basic income, the suffering of the general population at the hands of capitalism cannot be ignored. Nor will they allow themselves to be ignored.
There is something to be very weary about in regard to simply waiting for this post-capitalist event horizon and thinking that a marvelous communist utopia is just waiting on the other side. Like Mason says, in a post-scarcity world information is king. And yes, there are communities and organizations pushing for the collection and use of much information as a public good like wikipedia, but there are also states and corporations that are doing the exact opposite. It is his suggestion that we focus all our efforts in disrupting this, but so long as they have such wealth and power, that is impossible. The “dark enlightenment” ideology (which is just as idiotic and frightening as it sounds) formed in some obscure corners of the tech community is already creating the refuge and justification the powerful need to create a hierarchical society that puts them at the top even in a post-scarcity society, although if this becomes the ideology for post-capitalism exploitation remains to be seen.
The transition between economic systems is almost certainly one marred by conflict. The last one in the United States was fought in a bloody civil war. Considering that the proponents of the two current economic systems aren’t also a part of opposing geographic or cultural regions, that probably won’t happen this time.
Nonetheless, the fall of neoliberalism thanks to economic crisis has set the stage for just such conflict. The left will have to face off against reactionaries in the form of libertarians who blame this crisis and many other things on government itself, as well as neofacists in the style of Trump who blame a foreign other such as Muslims or Mexican immigrants. The new “left” must also deal with its own problems as well, even if it has been given an unprecedented opportunity. Decades of embracing identity politics and rejecting materialism have made it weak to the influence of the powerful. Things are changing, if only a little, thanks to the efforts people such as Elizabeth Warren and Bernie Sanders and their grassroots supporters. But there is much work to be done.
If we fail to “cut the balls,” so to speak, of the powerful, we will still see the end of capitalism with the arrival of full automation and the end of scarcity. But it will cede, not to a socialist paradise, but to an economic and social nightmare for everyone not in a small technocratic elite.
Change is inevitable; nothing lasts forever. That is the fundamental truth of the universe we live in. What kind of change, well, that depends on us.