I've mentioned before that I've had difficulty understanding the current phase of Capitalism. I learned little to help me from the few Economics lectures and seminars I attended at university, since, cruelly, they had been scheduled at the beginning of the working week, when I was suffering from drink and drugs hangovers. This is something I've regretted, but never put right in any systematic way.
So when I've found myself asking fundamental questions about how late Capitalism works I've only been able to come up with impressionistic answers. For example, the basic question of the source of society's wealth was formally straightforward. The Northern English city where I live used to be a major centre of heavy industry, surrounded by coal mining areas. When I was a child the whole city was blackened by the fumes from factory chimneys. Whole swathes of the city had nothing but factories and workshops. The forge hammers thumped night and day. My first job, after leaving school at 15 years old, was inevitably in a steelworks. I recall catching the bus to work for the 6am shift. It was packed with smog damp workers, smelling of cutting oil and Swarfega, hacking their lungs up and pulling on Park Drive cigarettes. (One morning, halfway to my stop, I got off the bus, having decided then and there to join the upcoming social revolution I hoped might spread from sundrenched California.) The steelworks and mines are mostly all gone now, only a few small manufacturing concerns remain.
Yet the city is incomparably wealthier. The city centre gleams with stainless steel and glass. People don't catch the bus to their jobs in factories, but drive new cars to offices and shops. New office blocks and apartment buildings appear overnight. The city skyline has bristled with cranes for the past two decades. Young people no longer start working at 15, they go to university. No one listens to half-baked talk of social revolutions.
What has troubled me is this: if nothing much seems to be produced anymore, where does this fabulous wealth come from? In a phrase I dimly remember from one of my old Economics textbooks, what makes Sammy run?
The current economic crisis has brought the question into sharper focus, and provided a partial answer. Credit. Like most people, I couldn't fail to be aware of this, but I never developed a proper grasp of how the magic worked. Clearly, the past couple of decades have witnessed an unprecedented transformation, with living standards and prosperity, for the overwhelming majority, growing as never before. It takes an effort to steady yourself so as to look back some thirty years and see the world as it was then. It was another country, populated by an entirely different people.
The political elites have proclaimed the final triumph of Capitalism, heralding a future of continual economic growth and increasing prosperity, and most people had good reason to believe it. In old-fashioned terms, what used to be called the working class, which once included a range of people from teachers and nurses to skilled industrial workers and labourers - the majority of the population - has been dissolved into a huge class of prosperous property owners, that sits in the social scale below the hyper-rich and the owners of capital. An underclass of the disadvantaged, the feckless or unlucky has emerged, but comprising perhaps no more than 10% of the population.
For myself, the routine act of taking out bin bags full of rubbish has often prompted the question, is this sustainable? This question I sometimes fleetingly ask myself arises not solely from environmental concerns. Relative to most people I have a modest income, and not much access to credit, yet the contents of the binliners I throw out bear witness to an extraordinary level of consumption. This is not a trivial observation. My eldest daughter is a nurse, and her partner has an adequately remunerative job that involves wearing a tie, yet the bin provided by the local council for the waste produced by their consumption regularly overflows, with many more binliners having to be piled up beside it. Aside from the mortgage on their house, they owe the banks about £50,000 for credit extended to buy consumer goods. This is an average family, and the situation is not by any means extraordinary. Is this sustainable?
Rummaging through the contents of these binliners reveals that most of the consumer goods come ultimately from abroad: peelings from exotic fruits and vegetables, wine bottles, empty couscous and sundried tomato boxes, grounds from Monsooned Malabar coffee, a slightly stained shirt and a pair of socks with a hole in them, spent batteries and disposable razorblades...Yours will tell the same story. From the point of a curmudgeon, most of what we consume is obviously junk, to others it's fun, part of the pervasive living to shop culture, though from an environmental perspective it's ludicrous. Environmental concerns seem to be just another lifestyle choice available to the prosperous, but does importing all this stuff make sustainable economic sense?
The government assures us that the current economic difficulties will not last long. These problems have been brought about by certain regulatory oversights, and are not systemic. There will be a few hardships as firms go out of business and people lose their jobs, but in a year or so, once credit begins to circulate again after the various stimulus packages kick in, we can get back to more spending and growth. More of the same, but better regulated. Of course, the government is bound to radiate optimism, because for markets to function effectively confidence is everything. They may well be right.
I've deliberately underplayed the environmental aspect of the issue, but my personal intuitions lead me to the suspicion that the scale of consumption we're being urged to continue indefinitely are not environmentally sustainable, and will eventually bring disaster. The fact is though that no government or mainstream political party would ever dare lay hands on the notions of permanent growth and expanding consumption, because to do so would undermine the whole basis of the economy. After decades of spectacular growth, and rising prosperity for most of the population, there is no constituency willing to listen to a message of austerity in any form.
But what if the current crisis in the economy is terminal? It would not resemble the classical Marxist model of the demise of Capitalism, which may be why what remains of the Left in Western countries seems to have been taken aback by it.
As I've mentioned, and you will have gathered, my grasp of Economics as it currently functions is impressionistic. For what seems to me a more focused analysis, and one certainly not coming from the Left, I recommend a visit to Howitends.co.uk It's not clear who's behind this site, but it offers a clearly presented and plausible account of the current crisis, and, as might be gathered from the title, one that considers it indeed systemic, and probably terminal.
It's worth reading the whole thing, but if that can't be done, then at least have a look at the Executive Summary, and The Future.
So when I've found myself asking fundamental questions about how late Capitalism works I've only been able to come up with impressionistic answers. For example, the basic question of the source of society's wealth was formally straightforward. The Northern English city where I live used to be a major centre of heavy industry, surrounded by coal mining areas. When I was a child the whole city was blackened by the fumes from factory chimneys. Whole swathes of the city had nothing but factories and workshops. The forge hammers thumped night and day. My first job, after leaving school at 15 years old, was inevitably in a steelworks. I recall catching the bus to work for the 6am shift. It was packed with smog damp workers, smelling of cutting oil and Swarfega, hacking their lungs up and pulling on Park Drive cigarettes. (One morning, halfway to my stop, I got off the bus, having decided then and there to join the upcoming social revolution I hoped might spread from sundrenched California.) The steelworks and mines are mostly all gone now, only a few small manufacturing concerns remain.
Yet the city is incomparably wealthier. The city centre gleams with stainless steel and glass. People don't catch the bus to their jobs in factories, but drive new cars to offices and shops. New office blocks and apartment buildings appear overnight. The city skyline has bristled with cranes for the past two decades. Young people no longer start working at 15, they go to university. No one listens to half-baked talk of social revolutions.
What has troubled me is this: if nothing much seems to be produced anymore, where does this fabulous wealth come from? In a phrase I dimly remember from one of my old Economics textbooks, what makes Sammy run?
The current economic crisis has brought the question into sharper focus, and provided a partial answer. Credit. Like most people, I couldn't fail to be aware of this, but I never developed a proper grasp of how the magic worked. Clearly, the past couple of decades have witnessed an unprecedented transformation, with living standards and prosperity, for the overwhelming majority, growing as never before. It takes an effort to steady yourself so as to look back some thirty years and see the world as it was then. It was another country, populated by an entirely different people.
The political elites have proclaimed the final triumph of Capitalism, heralding a future of continual economic growth and increasing prosperity, and most people had good reason to believe it. In old-fashioned terms, what used to be called the working class, which once included a range of people from teachers and nurses to skilled industrial workers and labourers - the majority of the population - has been dissolved into a huge class of prosperous property owners, that sits in the social scale below the hyper-rich and the owners of capital. An underclass of the disadvantaged, the feckless or unlucky has emerged, but comprising perhaps no more than 10% of the population.
For myself, the routine act of taking out bin bags full of rubbish has often prompted the question, is this sustainable? This question I sometimes fleetingly ask myself arises not solely from environmental concerns. Relative to most people I have a modest income, and not much access to credit, yet the contents of the binliners I throw out bear witness to an extraordinary level of consumption. This is not a trivial observation. My eldest daughter is a nurse, and her partner has an adequately remunerative job that involves wearing a tie, yet the bin provided by the local council for the waste produced by their consumption regularly overflows, with many more binliners having to be piled up beside it. Aside from the mortgage on their house, they owe the banks about £50,000 for credit extended to buy consumer goods. This is an average family, and the situation is not by any means extraordinary. Is this sustainable?
Rummaging through the contents of these binliners reveals that most of the consumer goods come ultimately from abroad: peelings from exotic fruits and vegetables, wine bottles, empty couscous and sundried tomato boxes, grounds from Monsooned Malabar coffee, a slightly stained shirt and a pair of socks with a hole in them, spent batteries and disposable razorblades...Yours will tell the same story. From the point of a curmudgeon, most of what we consume is obviously junk, to others it's fun, part of the pervasive living to shop culture, though from an environmental perspective it's ludicrous. Environmental concerns seem to be just another lifestyle choice available to the prosperous, but does importing all this stuff make sustainable economic sense?
The government assures us that the current economic difficulties will not last long. These problems have been brought about by certain regulatory oversights, and are not systemic. There will be a few hardships as firms go out of business and people lose their jobs, but in a year or so, once credit begins to circulate again after the various stimulus packages kick in, we can get back to more spending and growth. More of the same, but better regulated. Of course, the government is bound to radiate optimism, because for markets to function effectively confidence is everything. They may well be right.
I've deliberately underplayed the environmental aspect of the issue, but my personal intuitions lead me to the suspicion that the scale of consumption we're being urged to continue indefinitely are not environmentally sustainable, and will eventually bring disaster. The fact is though that no government or mainstream political party would ever dare lay hands on the notions of permanent growth and expanding consumption, because to do so would undermine the whole basis of the economy. After decades of spectacular growth, and rising prosperity for most of the population, there is no constituency willing to listen to a message of austerity in any form.
But what if the current crisis in the economy is terminal? It would not resemble the classical Marxist model of the demise of Capitalism, which may be why what remains of the Left in Western countries seems to have been taken aback by it.
As I've mentioned, and you will have gathered, my grasp of Economics as it currently functions is impressionistic. For what seems to me a more focused analysis, and one certainly not coming from the Left, I recommend a visit to Howitends.co.uk It's not clear who's behind this site, but it offers a clearly presented and plausible account of the current crisis, and, as might be gathered from the title, one that considers it indeed systemic, and probably terminal.
It's worth reading the whole thing, but if that can't be done, then at least have a look at the Executive Summary, and The Future.
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