The crisis of 2008 and its aftermath did nothing to cause capitalism to either weaken or to accommodate the needs of ordinary working people.
In the period following the financial ruptures in the autumn of 2008, there has been a tendency among some on the left to talk, yet again, about a “crisis of capitalism.” If such talk is not to be dismissed as pure rhetoric, then we must examine whether we are indeed living, or have lived, in a period of crisis and whether any good can come out of it.
So what is a crisis? A crisis in a politico-economic system occurs when the practices, behaviour and structures that have allowed the system to reproduce itself hitherto are no longer comfortably able to do so. Crises may eventually resolve themselves in the restoration of the current system, or they may lead to the breakdown of the existing system and the establishment of a new state of affairs.
In the autumn of 2008 the market fundamentalist form of capitalism suffered a major ideological setback - we might even say crisis - when the banks could only be saved from meltdown by state intervention. Gone in a matter of a few days was the ruling ideological axiom of market fundamentalism, dominant for a generation, that the economy functioned best with only a night watchman state enforcing contracts, but otherwise allowing full reign to the market. The state came out of the shadows to save capitalism and received a new lease of life.
The convulsion was not just ideological. The Blair boom of the mid-2000s was fuelled by an accumulation of private and public and debt. The impossibility of the continued financing of private consumption and public expenditure through borrowing led to falling living standards, unemployment, cuts in social welfare and widespread disenchantment. Most heavily hit were the poorest and the young.
Yet, perhaps paradoxically, if we look at the situation in Britain today, capitalism is extremely strong. Never has a lower percentage of national income been allocated in wages and salaries; and the percentage is still falling. And these mega levels of inequality see next to no political threat to their continuation, with the political situation for the left worsening.
The Westminster Labour Party, led by the insipid Ed Miliband, has made no meaningful break with its own past in government 1997-2010, and is ensnared by its own market fundamentalist inheritance. Electoral organisation to the left of Labour is virtually non-existent. Yet, the political right has strengthened in three ways. In the 2010 General Election the Conservative party emerged yet again as the largest party and re-entered government. The Liberal Democrats, who through much of the New Labour years had masqueraded as an alternative centre left party, entered government in coalition with the Tories and demonstrated their commitment to market fundamentalism, anti-working class politics and state authoritarianism. And thirdly, the only new development in English party politics has been the growth in the early 2010s of UKIP, a right-wing xenophobic party.
The 2011 riots aside, popular protest against existing conditions in favour of equality and liberty has so far been the preserve of the educated young, and has taken the form of theatrical demonstrations and occupations of public squares and private offices and shops. The so-called Occupy Movement based its strategy on grabbing media attention through circus-like protest, which often involved the participants engaging in masochistic displays, such as camping in public places in sub-zero temperatures, as if the amount of discomfort they were experiencing equated with their level of political success.
Occupations and demonstrations, particularly those by students, were crushed and contained by a combination of police violence and harsh penalties. Demonstrators faced arbitrary beatings and containment for hours in street holding pens (kettling) and even the slightest misdemeanour, e.g. throwing an empty plastic bottle, landed the culprit in jail for several months. Political activity itself attracts the label of “domestic extremism” and is monitored by intrusive police photographing, internet surveillance and the deployment of police spies in civic organisations. The result is that political protest ends up as a ludic-tragic duel with police that does nothing to engage ordinary working people or build a political movement.
Yet by the mid 2010s even these forms of protest had more or less petered out. At the same time 2014 saw modest levels of growth in the economy as the recession bottomed out - but with wage levels still falling in real terms none of the benefit ends up in the hands ordinary working people. The worst off stave off starvation thanks only to charity food banks.
Socialism and social democracy are disappearing as ideas from popular memory. Three decades ago if you has asked people in Britain the meaning of socialism - or Labour’s then version of social democracy - a majority could have told you, whether they themselves agreed with the aims of the left or not. The idea of organised structural social improvement based on notions of equality was embedded in the populace, and it was a narrative to which even the Tories had to respond. Today, mostly thanks to New Labour, the idea of socialism has vanished from popular consciousness. We cannot move forward to a place when ordinary working people do not know where that place is.
Yes, capitalism has gone through a kind of crisis, but to me, it seems improbable, in the absence of socialist organisation or ideas, that capitalism - or even the market fundamentalist variation of it which has been dominant in the past three decades - will implode in the near future; and even if it did, it seems even less likely that any kind of socialism would emerge from the ruins. How one responds to that situation is a matter of choice. One can join or support the anomic protest movements, go into one of the far-left micro-parties, work with a single-issue campaign, write comments on Facebook, make jokes, or do nothing. We can enjoy with Schadenfreude the current difficulties of capitalism, but to think that those difficulties will deliver socialism - or even a better world is a delusion.