Vol. 10, No. 2, May 2009

Where do we go from here?

by Nicki Lisa Cole

University of California, Santa Barbara
Nickilcole@umail.ucsb.edu

Much is being written about the current “economic crisis,” or “crisis of capitalism,” as others call it. What will become of the world, as this is popularly understood as a global crisis, is a question that many are concerned with. Social scientists are quickly turning to the crisis to assess and analyze it, and predict how the crisis and measures for mediating it will unfold. But despite all the fuss, those who understand the history of the capitalist system understand that a periodic collapse of the designed-to-fail system is not only expected, but necessary. Capitalism has, since it was instituted as the dominant global economic system, periodically experienced a crisis of over-accumulation, to which it has responded by slightly changing the rules and destroying capital, thus preserving and strengthening the central structure and relations of the system.

Global capitalism isn’t going anywhere in the wake of this self-made crisis. More likely, it will emerge more forcefully entrenched and oppressive after its phoenix-like reincarnation because it will be popularly received as a global capitalism softened and contained by state intervention. Whether capitalism will survive is not a question to spend our time on, at least as it applies to this current moment. What changes might be made in order to maintain its overall dominance, though, is a worthy question that many are addressing. How will the system of global capitalism adapt in order to persist? Can we see evidence of shifts and adaptations already? What cultural logic will accompany the changes to the system? What will consumption and consumer identity look like in the post-crisis landscape?

In this essay I respond to these questions by building upon a lecture recently delivered by Dr. William I. Robinson, Professor of Sociology and Global Studies, at the University of California, Santa Barbara (2009). In this lecture Robinson outlined five possible paradigms of response to this crisis of global capitalism based on his theory of global capitalism. In his work, Robinson recognizes the truly transnational nature of the relations of capitalism in our era, and the significance of transnational configurations of power and governance that accompany this organization of capital (1996a; 1996b; 2002; 2006).

In his lecture Robinson emphasized that the five paradigms are not mutually exclusive, and that they reflect already observable trends in the world. These are: 1. A shift toward global reformist/neo-Keynesianism that would embrace heightened regulation of transnational capital; 2. A global resurgence of the left, accompanied by radical reforms driven by popular movements, such as have been seen across Latin America over the last decade; 3. A global return to national protectionism in the vein of Russia, China, and India, that is similar to, though not the same as previous historical forms; 4. A twenty-first century fascism that fuses capital with reactionary political power, as was employed by the neo-conservatives of Bush administration and the McCain/Palin team; and 5. A global systemic and structural collapse that results in global warlordism, total social breakdown, and global ecological demise.

Robinson figures that options two and three are unlikely for reasons that are easily understood. A global resurgence of the left and the strengthening of effective global popular movements are unlikely because the population of “surplus labor,” the poor, working poor, and workers of the world, is scattered across the globe. They systematically experience inequality; they lack resources, power, and access to the means to forge a unified movement to challenge a global system. Robinson points out that even in Latin America, where such ideals have produced significant change on a state-by-state basis, those changes themselves are the product of a precarious and self-conflicting relationship with transnational capital. The leftist movements and gains we observe in our era operate with, and within, the system of global capitalism. They have not subverted or overturned it.

This observation points to why Robinson thinks the third scenario unlikely. Capital and labor are truly transnational now in terms of how they are brokered and valued as resources, and the relations of global capitalism are too globally dispersed and integrated with nation state economies to simply be undone. Robinson thinks the fifth scenario, of global collapse, is unlikely too. He argues that the global capitalist system has not reached the kind of structural breaking point that would result in such an outcome. To date, he argues, capitalism is experiencing systemic crisis, but not yet structural crisis, and so far the power elite have moved to protect and preserve the system, not to undo it.

What does seem likely, Robinson argues, is that we will continue to see evidence of the first and fourth scenarios. The neo-conservative, fascist movement in the U.S. took a hit with the resounding ejection of the Bush administration, and the hearty dismissal of the McCain/Palin candidacy, but that the tip of the iceberg has been temporarily evaded does not mean the behemoth that lies beneath has been vanished. Neo-conservative, racist fascism is widely popular among poor and working class whites across the country. They are the displaced workers of the United States who have suffered from the globalization of capital, and these conditions have cultivated a distaste for immigrants and international trade. The old “nativist” ideology celebrated by Anglo-Saxons at the dawn of the nation’s birth is alive and well today.

But at least for now, those in charge are celebrating a different agenda. Since the coming of the Obama administration early this year, evidence of Robinson’s first scenario, of a global reformist, or neo-Keynesian trend, is pervasive. The policies and objectives of the Obama administration clearly exhibit this tendency, as do the “bail-outs” and interventions enacted by other wealthy nation states throughout Europe. Robinson reminds us though that this is not a traditional Keynesianism, but a neo-Keynesianism. It reflects our present historical moment, with its particular global relations of capitalist production and consumption. Regulation in this context is different from the Fordist era Keynesianism. Regulation is still in service of the nation state and the population, but now the fates of the nation state and the population are inextricably bound to the fate of the global economy. Thus, neo-Keynesianism protects transnational capital at the behest of the nation state. A prime example is the U.S. funded bailout of AIG, which does not bail out a business operating within the confines of the economy of the United States, but rather, a transnational corporation that is foundational to the global economy as it exists today.

This kind of response is certainly counter to the dominant free-market ideology, but then again, the market has never been all that free anyway, so it is not much of a shake-up from standard operating procedure, all things considered. While major systemic change of global capitalism is unlikely to happen, the kinds of subtle nods toward socialism described above are taking place. We can thus expect that the cultural logic of capitalism, particularly consumer practices and values, are shifting too.

Though we are not looking at a revolution, popular regard for the system has indeed changed. Given widespread loss of wealth, homes, jobs, and financial security, the popular classes in the United States who have born the brunt of the necessary destruction of capital are fed up and disenchanted. People have less faith in the power elite to steward them. They see gross manifestations of avarice and malice in the largest firms in the nation and among transnational corporations. State budgets are failing and public services are drying up. Things are a mess, and people are aware. A recent poll shows that growing numbers of Americans believe socialism would be better than capitalism (Rasmussen Reports 2009). The jig is up. At least, this particular jig, for the time being.
It is at times of social instability such as these that the possibility of change increases. As fissures in the system appear they offer opportunity for rearrangement of social relations. Right now, the material conditions for change are ripe, just as they were when Marx wrote of the Industrial proletariat class. But whether the ideological conditions are ripe, is a different concern altogether. People are not looking for change so much as they crave stability. People want a return to normalcy and social order. They want the system repaired and its legitimacy redeemed. This would be the most comfortable solution for all because it does not represent change -- particularly for those who are empowered and advantaged by this particular set of relations.

What I suggest here is that the source of redemption and legitimacy that people crave and that the capitalist system requires already exists. This crisis of legitimacy facing the global capitalist system occurs at an historical moment when the concept of “ethical” capitalism, with its attention to environmental, social, and health concerns, and practices and discourses of ethical consumerism have spread to a mainstream, everyday level. Elements of ethical capitalism are incorporated into most products to some degree at this point, and are employed to address a range of concerns. Ethical capitalism, itself a symptom of global capitalism, emerged in response to more minor crises of legitimacy that have plagued capital in the United States and Europe since it went global, and reports of abuse and misconduct started trickling “home” to the consuming countries.

Thus, ethical capitalism was conceived in direct response to the illumination of the bad corporate actor, who is assigned the role of the destructive villain who reaps poverty and injustice in producing regions, misleads consumers as to their corporate image, and all the while earns record-breaking profits. The bad corporate actor is a trope against which the ethical capitalist is juxtaposed, and the ethical consumer in turn is defined in contrast with the uneducated, or careless consumer. In this conceptualization of social problems there is nothing wrong with the system of global capitalism, rather the problem is bad actors who necessitate moral regulation.

The current “crisis” of global capitalism has done nothing but reinforce the trope of the bad corporate actor in the minds of American citizens and others around the globe. In particular, after the “bail-outs” were doled out to leading banks and corporations, and with that money, bonuses were handed out by the tens of millions and lavish corporate retreats at expensive resorts were enjoyed, people are balking, and rightfully so. But they are not balking at the system, they are balking at the behavior of the bad corporate actors. There is a nostalgic zeal to the aggression and death threats directed at the corporate elite who enjoyed bonuses and benefits on the tax payers’ dollars. It calls to mind the racial lynch mobs and food riots of early America. Like those crowds of yore, this manifestation of social effervescence is not an attempt at overthrowing the system, rather, it is expressed in defense of the system. This kind of event occurs when egregious violations of moral sensibilities have been observed. People want the system stabilized and its legitimacy repaired. They crave demonstrations of morality in the wake of rampant greed and recklessness.

Numbers for 2007 show that, even during what is now recognized to have been a period of economic recession, sales of ethically branded products in the U.S., appealing to concerns for the environment, for laborers, and for consumer health, have grown and out-performed their competitors in their respective product markets (TransFair USA 2009). Classic economic theory of supply and demand, and cost benefit analysis cannot account for the increase in distribution and sales of ethical products, for this is a moral issue -- it is not a process of “rational” choice. Recent studies conducted in the U.S. and the U.K. show that concerns for “responsibility” and “sustainability” are common among consumers polled, and that a dedicated minority are consistently willing to pay more for ethical products (Carbon Trust Standard 2009; Cohen 2009). Individuals I’ve recently interviewed in Seattle have said that they are living with a tighter budget right now, and that they are cutting expenses like dining and drinking out. But they are not cutting back on ethical choices they embrace in their consuming practices.

I advance, then, that this crisis, and the state responses to it we can observe to date, only strengthen and more deeply entrench practices and discourses of ethical capitalism/consumerism across the globe and in our everyday lives. This mode of capitalism and its cultural logic appeal to the popular desire for morality and social order. In truth, ethical capitalism/consumerism has been responding to the crisis of global capitalism for years now, but those of us in the comfortable position of privileged consumer are only now just seeing the crisis, much like how a sonic boom is perceived as audible after the sound barrier has broken.

Ethical consumerism, the cultural logic of ethical capitalism, runs deep and strong in the currents of our social world. As a symptom of global capitalism, and an assuaging response to the current crisis of legitimacy, it can only grow under these conditions. The cultural logic of ethical capitalism fits well with what some are calling “Obamaism,” others “fascism” or “socialism.” What the Obama administration has done is neither fascist nor socialist. Rather it is a softening of the bonds of inequity that bind people to capitalism. It is not a true state take-over, but an attempt at equalizing the playing field just a little bit. It is a tip of the hat to socialism. Simultaneously though, and rather counterintuitively, the state funded bail-outs sustain that which disempowers most of the players: the system of global capitalism. This kind of regulation plugs the holes in the dyke of global capitalism, and so provides temporary relief from the systemic crisis of over-accumulation. In doing so, the Obama administration both reinforces global capitalism, and offers a mantra of hope that pulls at the anomic heart-strings of a nation looking for something to believe in. Two birds, one stone.

In much the same way, ethical capitalism makes symbolic gestures at change and maps morality and legitimacy onto the whole system. But it can only last so long. Another crisis of over-accumulation is inevitable, and the state can’t “bail-out” the sinking ship of global capitalism interminably. It is hard to predict where we will be in ten or twenty years, but for now at least, the more things change, the more they stay the same.

References
Carbon Trust Standard, The. 2009. Businesses should seize opportunity to demonstrate green credentials. The Carbon Trust Standard. Resource document. http://www.carbontruststandard.com/Latestnews/Pressreleases/NewresearchfromtheCarbonTrustStandard/tabid/222/language/en-US/Default.aspx. Accessed 12 May 2009.

Cohen, S. M. 2009. Making the case for environmentally and socially responsible consumer products. Forrester Research. Resource document. http://www.forrester.com/Research/Document/Excerpt/0,7211,53746,00.html. Accessed 12 May 2009.

Rasmussen Reports. 2009. Just 53% say capitalism better than socialism. Rasmussen Reports. http://www.rasmussenreports.com/public_content/politics/general_politics/just_53_say_capitalism_better_than_socialism. Accessed 15 May 2009.

Robinson, W. I. 1996a. “Globalisation: nine theses on our epoch,” Race and Class, vol. 38.2: 13-31.

Robinson, W. I. 1996b. Promoting Polyarchy: Globalization, US Intervention, and Hegemony. Cambridge: Cambridge University Press.

Robinson, W. I. 2002. “Capitalist globalization and the transnationalization of the state,” in Rupert & Smith (Eds.). Historical Materialism and Globalization. New York: Routledge.

Robinson, W. I. 2006. “Theories of globalization,” in G. Ritzer (Ed.). The Blackwell Companion to Globalization. Malden, MA: Blackwell Publishing.

Robinson, W. I. 2009. “The crisis of global capitalism.” Lecture delivered in department of sociology, University of California, Santa Barbara. January 28. Video archive. http://video.google.com/videoplay?docid=-5909444875088969582&hl=en. Accessed 15 May 2009.

TransFair USA. 2009. Fairtrade flows against the economic tide. April 17. TransFair USA. Press release. http://transfairusa.org/content/about/pr/pr_090416a.php. Accessed 15 May 2009.

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