Capitalist Crisis and Left Alternatives

In and Out of Crisis is a significant contribution to understanding the North American political and economic situation in the aftermath of the “Great Crisis.” The core premise of the book is that the building of radical alternatives with the power to truly affect change requires a serious and sober analysis of the profound socio-political and economic changes that have taken place over the last three decades. So significant have these changes been that even with a crisis of capitalism as severe as the one experienced in recent years, the labour movement and the Left continue to “remain on the defensive” within a relationship of class forces in which the capitalist class has enjoyed the political space to settle the crisis on its own terms.

In and Out of Crisis is thus a tale of two different crises. It is, on the one hand, the story of the most recent economic crisis that brought the global financial system, and with it the global economy as whole, to the brink of collapse and how capitalist classes and states responded to the crisis to bring the system “out” of crisis. It is also, and perhaps even more importantly, about the crisis of left politics. In light of so much evidence, why is it that voices against the utter cruelty, irrationality and destructiveness of capitalism — most recently the financial crisis of 2007-8 — have remained so muted and mobilizations against it so limited in North America?

In answering these questions, the book does not restrict itself to developing a mere understanding of the reasons for the weakness of the working class and left-wing politics in North America. Albo, Gindin and Panitch, have quite consciously produced the book to provoke discussion and debate about these issues as a way of finding a way out of this crisis.

It is thus fitting that the book is written in a very clear and accessible way. Without at any point becoming simplistic, the authors clearly and concisely present a wealth of economic, political and historical information to be used, discussed and debated by students, labour and social activists, and progressives of all types.

That said, the book is not a generic discussion of these trends from a “progressive” perspective. And herein lies the strength of the book. It is written with passion and conviction by three of Canada’s leading socialist thinkers whose objective is not to find technical solutions and policy alternatives to make the capitalist system work better but, rather, to find ways of fundamentally challenging “property rights in the name of democratic and social rights.” It is written not just to provide information and insight, which it does quite well in lucidly presented, tightly-packed chapters, but also to challenge theories and perspectives that are seen by the authors as barriers to our ability to mount an effective challenge to the rule of capital.

States Against Markets?

One such theory is the idea that states and markets stand against one another, in binary opposition, as it were. From this perspective, the history of the last few decades is seen as one in which the power of the state has been eroded in favour of markets. This is said to explain the excesses of the capitalist system: increased inequality and greater degradation of environmental and labour conditions, ultimately resulting in massive economic problems such as the recent financial meltdown. From this perspective, what we need is to enhance the power of the state and use it to limit market activity through greater regulation.

Against this viewpoint, In and Out of Crisis makes the case that the capitalist states and capitalist markets do not stand so much against each other as in symbiotic relationship to one another. In other words, to see the capitalist state as a neutral force that can be used to constrict capital not only misunderstands the role played by capitalist states but also, more importantly, leads to the wrong political conclusions for our side.

“Calls for ‘reregulation,’ with their assumption that states and markets stand in opposition to each other, can further confuse rather than politicize those the Left should be trying to mobilize.  As the most recent state interventions make clear, given the current balance of social forces, regulation is about finding a technical way to preserve markets in the face of their volatility, not about any fundamental reordering of relative power in society to conform to social needs.” (pp. 105-6)

Real Economy vs Finance?

Similarly, the book challenges the notion that the problem is that financial markets have become too dominant at the expense of the “real economy,” resulting in grotesque imbalances. This view sees the unencumbered movement of financial capital across the globe at incredible speeds as having produced not only the recent volatility, including the “great crisis,” but also the hollowing out of the “real economy” and the decline in social prosperity and employment opportunities.

In direct challenge to this, the book argues, quite rightly, that seeing finance as belonging to the sphere of “superstructure” in contrast to the “material base” of the “real economy” in a capitalist society is a false dichotomy. Far from being a barrier to capitalist development and growth, finance has played a key role in promoting capitalist efficiency and has facilitated the system’s dynamism over the last few decades.

There are two challenges to commonly-held beliefs on the Left presented here simultaneously. The first is the challenge to the idea that capitalism over the last 25-30 year period has lacked dynamism. If we look not just to the extraordinary 20-25 year period after WWII but to the whole history of capitalism, in capitalist terms the period of neoliberalism actually compares quite well. The problem is that many people mistake capitalist profitability with social prosperity. In reality, the two tend to stand in opposition to each other in a capitalist society.

The second belief challenged is that somehow finance can be taken out of capitalism as a system. As the book suggests, financial markets are necessary to the proper functioning of capitalism. They impose discipline on workers and capitalist firms, forcing increases in productivity and pooling social surplus to advance credit within the capitalist system, all in order to enhance profitability in a system driven by the profit imperative alone. So long as the logic of capital is accepted, so must the reality of the role of finance in the system. You cannot have one without the other. That is why the solution lies not in partial tinkering, or dreaming up new regulatory regimes, but in challenging the capitalist system as a whole.

The End of Neoliberalism?

Against the view that the current crisis spells the end of US hegemony and the neoliberal order, In and Out of Crisis claims, on the contrary, that what the recent financial crisis demonstrated was the continued strength and hegemonic role of the US ruling class. Not only was there no significant fracturing within the US ruling class in terms of objectives and actions to be taken, there were also no challengers emerging on the international arena. Moreover, contrary to suggestions by some that neoliberalism is dead, the book argues that the “political conditions that kept neoliberalism in play have not been exhausted.” Of course, certain changes have and will be instituted by the ruling class, but the overall logic will remain much the same. This is important for our side to be conscious of as capital develops its road map for getting out of the crisis on the backs of working people and the oppressed.

Another Way Out!

And this brings us to the key challenge posed by the book: what should be done? Of course, faced with job losses, cutbacks, foreclosures, etc., it is critically important that we actively participate in and encourage and support immediate demands in defence of people’s jobs, homes, savings and social programs. However, from a longer term perspective, and from the point of view of the relationship of class and social forces, the bigger strategic question is can the Left structure its responses to immediate needs in ways that “strengthen popular capacities to think ambitiously and to act independently of the logic of capitalism?”

The book devotes considerable space to exploring these issues both theoretically and from the perspective of recent activism. The chapter dealing with “labour’s impasse” highlights a series of important changes in the balance of class forces as a result of neoliberal policies, including the increasing dependence of workers on the health of capitalist markets and the implications of this for workers’ consciousness and class organization. The ideas and challenges in this section and in the chapter dealing with “strategic considerations for the North American left” require very careful consideration by serious activists for social change.

The authors conclude their assessment of recent struggles and mobilizations with three concrete suggestions/challenges for the Left: 1. the establishment of an independent infrastructure of socialist media that can contest mainstream interpretation of events, offer critical analyses of capitalism and articulate alternatives; 2. the expansion of linkages between different sectors of working classes and across gender and racial divisions to build meaningful and lasting class unity through sustained work and engagement in various struggles; and 3. Development of a socialist approach to the environment to counter facile “green” alternatives with real alternatives “that [ insist] that local socio-ecological struggles cannot be delinked from…[the] universal projects of transcending capitalism on a world scale.”

Neither the book’s conclusions nor its analysis of social, historical and economic trends should be accepted at face value. This is true about any book, and there is much that can be contested about In and Out of Crisis. In fact, the intended purpose of this book is to instigate discussion and debate.

What makes this book particularly valuable is the way it provides a clear, and in most cases very compelling, account of the social, political and economic changes of the last 30 years as a point of entry into the more important strategic considerations about the future course of the movement for fundamental social change. With the publication of In and Out of Crisis, Albo, Gindin and Panitch have set out to make a contribution to the “widest degree of discussion and debate” about economic and political possibilities in order to develop “strategies for identifying allies and building new popular, union and community capacities.” This book is an excellent contribution to this project and needs to become one of the reference points for those seriously interested in challenging the rule of capital.

Hamid Sodeifi is a supporter of the New Socialist Group.