This is an excerpt from a dialogue on our p2p-research mailing list, in which Ryan Lanham has challenged our faith in post-capitalist developments.
The b-quotes are from Ryan Lanham, the plain responses from Kevin Carson.
Ryan: After some consideration, I’ve decided that the post-capitalism talk is largely Utopian fantasy.
Kevin: Well, a lot of it depends on what you mean by “post-capitalism,” and hinges on just how much things would have to deviate from the current model of corporate capitalism before it qualifies as fundamentally different. I believe that within a generation we’re going to see a radical shortening of supply and distribution chains from Peak Oil, a combined relocalization of most production and an explosion of LETS and barter networks as official money and wage employment dry up for a major part of the population, and a collapse of the old corporate proprietors in the culture and software industries. I believe there’ll still be some long-distance trade (albeit a fraction of the present value), and things called stock markets and corporations will still exist (albeit at a fraction of their present importance in the overall economy); if this means that “capitalism” will exist in your terminology, well and good.
1. Current financial assets are considerably more than all non-cash assets >in the world. Over the counter derivatives alone in 2007 were over 600 trillion USD. (that’s trillion with a T). The innovation that has been > financial markets goes on strong and the wealth created is anything but fictitious.
The growth of the financial sector compared to physical assets is a major symptom of the problem. Given corporate capitalism’s chronic tendency toward overproduction and overinvestment, you can’t invest the surplus in plant and equipment that will generate even more goods when people can’t consume existing output. So you pile up the surplus investment capital in a FIRE sector that only works until the ponzi scheme collapses.
2. The total global gross product (GDP of the world in 2007) was about 47 trillion USD (almost 14 trillion of that in the USA). So far in the > recession/depression, it has sunk globally by about 2% and certainly not more than 4%. Total stock market valuations were 51 trillion in 2007 and are perhaps slightly less than that now.
The U.S. stock market valuations a couple of months ago were about 50% of their 2007 high, and still less than two-thirds. Real estate prices have plummeted as well.
7. Unemployment in the US is just reach 10% where it has been sustained for years in other nations like Germany.
When adjusted realistically for underemployed and discouraged workers, it’s more like 15% or 16%, which is about the equilibrium FDR managed to achieve in the late ’30s, and would probably have continued indefinitely had not WWII saved corporate capitalism. That’s not a very high bar for success.
8. Capitalism in Asia and Africa is taking off considerably. The potential for growth is probably only bound by climate change issues.
That’s a big “only.” First of all, one reason for the growth of the FIRE economy from the ’90s on was that the export of industrial capital had reached its limits as a strategy for solving the crisis of overinvestment. China is saturated with more industrial capital than there is a market for. And second, there’s not much future in shipping goods overseas from Chinese factories when fuel costs two or three–or more–times what it did this time last year.
12. Even with a collapse of the dollar, oil exploding to several hundred dollars a barrel (both of which are reasonably feasible), there is little to suggest that this would be more than a hiccup for markets and capitalism.
This is hard to believe. Had oil stayed at its summer 2008 prices indefinitely, some 20% of airline routes would have shut down and a comparable percentage of long-haul trucks left the market. And this was indeed a “hiccup” compared to what we can expect from Peak Oil in the future. Even a supply shortfall of a few percent can cause prices at the pump to double. What can we expect when supply falls by half or two-thirds over the next generation? I expect we’ll see a total collapse of intercontinental supply chains except in vital minerals, and an order of magnitude of reduction of continental supply chains for most manufactured goods. The factories in China and Vietnam will become useless for anything but producing goods for people in–well, in China and Vietnam. Production of spare parts and modular accessories will grow massively at the expense of production of new goods, and the growth in such production of spare parts and modular accessories will occur mainly in flexible manufacturing nets in relocalized industrial economies. In-season produce will be almost entirely relocalized by backyard gardening and market gardening, and a much larger percentage of our diets will be either in-season or canned local stuff.
We’re barely two years into the real crisis: two years from when real estate prices began to slide, a year from when Peak Oil first became a household word, and nine months since inventories and employment began a free-fall.
To say “everything’s OK so far” this early in the process is IMO about like saying, immediately after Alaric’s first repulse from the gates of Rome, “Well, the system’s still got a lot of life in it.” Or the old joke about the optimist who fell off a 100-story skyscraper and shouted to the people on the 99th floor, “OK so far!”
That said, I think P2P is exciting, vital and an excellent tonic to excesses of capitalism and markets. However, I am convinced the main issue is climate change. If there is an Achilles’ heel of capitalism, it is climate change.
Well, yeah. But that’s a biggie. The whole export-oriented pattern of growth you keep appealing to in China, and possibly in Africa in the future, was becoming increasingly untenable even with oil at $140/barrel last year, when McKinsey Quarterly was running articles about corporations looking to shorten their supply chains from China to Mexico. What happens to that “warehouses in container ships” distribution model when oil is $1000/barrel? My guess is the ships will be rusting, the shipping containers will serve as houses, and the industry in China will be redirected to the Chinese domestic market if it survives at all.
To say that things look good for capitalism except for Peak Oil is a bit like saying your uncle is just like your aunt except for his testicles.