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.
The full original posting by Ryan Lanham:
After some consideration, I’ve decided that the post-capitalism talk is largely Utopian fantasy:
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.
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.
3. Most of Africa and large portions of Asia including China are still growing.
4. There are real signs that the green capitalism is starting to take off. Last year there was more increase in alternative energy production in the US than in all other forms of energy production (including nuclear power.)
5. Venture Capital has spent 29 billion without production on Web 2.0 companies and there have been no bankruptcies.
6. The majority of US banks will soon be nationalized (along with those in the UK and Germany) with very little immediate impact.
7. Unemployment in the US is just reach 10% where it has been sustained for years in other nations like Germany.
8. Capitalism in Asia and Africa is taking off considerably. The potential for growth is probably only bound by climate change issues.
9. There are no serious labor movements in the US, China nor India.
10. Japan, China and India have no debt and can sustain negative growth for at least a generation.
11. There are no function democracies that are non-market oriented. There are increasingly few nations that are moving sharply to the left. Many that have, including Argentina (formerly) and Venezuela (now) are emerging from or headed toward bankruptcy. Venezuelan foreign reserves are falling faster as a percentage of total than any other nation’s.
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.
13. While the nation state may be in decline for financial reasons, there is no sign (anywhere) if disintegration. Even where hollow states are the norm, continual processes of rehabilitation suggest that few believe a non-state solution is seriously feasible in the near term with any reasonable standard of living.
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. That places those who are anti-capitalist in a strange place–to advocate most effectively against what they dislike they must align to a degree with what is the greatest threat to humanity overall. I seriously doubt that in the next 50 years there is much threat to capitalism from any non-coercive process. If this was even the first wave of a massive crisis 10x the scale of the current, capitalism and markets could easily endure it in most of the globe and probably all of the globe that has significant production.
For these reasons, I believe decoupling P2P research and advocacy from supposedly associated advocacy against markets would tend to advance the legitimacy and contribution of P2P theory to be more productive in a reasonable time frame.
My own thought is that market anarchism is a realistic evolutionary development for many backwater geographies of capitalism (central England, mountain districts, Central Africa, rural Europe (especially Eastern Europe and Southern Europe)–where it already shows signs of developing into a characteristic peripheral mode of operation. It will not be relevant in the increasingly powerful city-states/small states of tomorrow like Singapore, Switzerland, Austria, London, Sidney, Jakarta, New York, Shanghai etc. Those areas will continue as highly industrialized market-oriented trading entities with banks, capital, financial markets, etc. for the distant foreseeable future.
I am for sustainable wealth by the best means. I am for as much freedom as is possible. But I am also for not advocating unrealistic Utopias that simply are not going to matter.
Ryan Lanham
Dmytri Kleiner, via email:
I believe that we must use money and markets in building the new society
in the shell of the old, I do not however hold them as an ideal.
I fully believe that specialization of labour implies exchange, however exchange does not need to be money-denominated itemizedi, transactions, but can be significantly more fuzzy.
Until Capitalist social relations where imposed on society, money and
markets functioned quite differently than they do today. Actual specie
was rarely used in “market” transactions, even though money has existed
as long as writing, it’s use was mostly limited to paying tribute and
for prestige (usually imported) goods. Most other goods where either
traded on account or ad-hoc, this is certainly exchange and certainly
reciprocial, but the valuation was not done on each item and not
denomonated in money, but rather value was attributed to the
relationship, not the transaction or the item. Markets formed on
periphery of communities, not at their core, to dispose of surplus.
The more distant the relationship the more formal the accounting of the
transaction, ad-hoc for close relations, on account for more distant
relations, and actual negotiated trade of specie or good for other goods
only when there is no relationship, whith distant trading partners or the
State.
It is neither nuetral or natural to have markets central to communities,
to have all sharing transformed into itemized transaction, but rather
these social relations where imposed as a prerequisite of Capitalism,
and are a symptom of the degree to which Captalism has destroyed human
community, now limited only to the “Nuclear” family, and even this
paltry and normalized vestige of human community is breaking down.
The uquiqity of money and markets is very much a feature of capitalism
that was, like the rest of system, systimaticaly and forcefully imposed.
I agree with Kevin that Markets do not cause exploitation, but feel that
the degree to which they permeate communities is a symptom of
exploitation, and thus money and markets may, once again, play a vastly diminished role in the new society, once broken out of the shell of the old.
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hi, i appreciated Kevin’s arguments very much and agree wholeheartedly that peak oil will spell the doom of a system predicated on infinite expansion. however, i think we need to be aware of the many different post-capitalist paths that are available, because not all of them are good, some are even worse than what we have now. it’s to this question that i directed my comments when reposting excerpts of this article on my website endofcapitalism.com
http://endofcapitalism.com/2009/06/12/capitalisms-immortality-a-fantasy-but-what-will-outlive-it/
also i have a question, can Kevin, or someone, provide sources which elaborate on this line of argument?:
“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.”
my understanding has always been that the flight of industry from the Global North was largely in response to higher labor costs, i.e. the welfare state, and the US was able to remain dominant largely BECAUSE of the financialization of its economy. i’m not clear on what you mean by “crisis of overinvestment”.
didn’t the US, Europe and Japan consuming vaster and vaster quantities satiate the crisis? if so i’m not sure this strategy ran into significant problems until the drastic price-rise of the past few years (caused by oil shortage). if what we’re seeing now is a “crisis of overinvestment” because consumption and prices have collapsed, then what was the crisis when consumption was high and markets hungry?
i might be twisting your words but i am seriously interested in clarification of the role of industrial flight and globalization and how this relates to the crisis that is capitalism.
thanks, please respond to [email protected]
alex
[email protected]
endofcapitalism.com
Democracy and capitalism is doomed – dirigiste heurism is what will replace it.
here is the basic argument more details at http://www.condition.org
1 – ‘Democracy is an artifact of (thus-far) intellectual development’ -a fact of biological and anthropological sciences.
2 – Genetic imperative drives the life-form to ‘live as long as possible as a life-form’ -human in particular here -a same such fact.
3 – Science (and mathematics), therefore, is ineluctably ‘stuck’ as the only agency of such doing -destined therein.
4 – All ‘government and economics’, then, will inevitably come to be reconstituted about science-and-mathematics toward that heuristic end -Democracy included.
(-from the very short-
How We Came to ‘Democracy -The Best Form of Government’
Why It Isn’t -and Where It’s Going
)