Haiku Politics

William Pfaff of the International Herald Tribune has written an interesting article that places the current conflict in France in the context of broader changes that he sees taking place in the world economy.

Pfaff believes that a series of changes have taken place in global capitalism since the 1960s that are having dire consequences for the future of capitalism. One of the changes, he argues, is that a new corporate model has taken over in which

corporation managers are responsible for creating short-term "value" for owners, as measured by stock valuation and quarterly dividends.

The practical result has been constant pressure to reduce wages and worker benefits (leading in some cases to theft of pensions and other crimes), and political lobbying and public persuasion to lower the corporate tax contribution to government finance and the public interest.

The result, he argues, is that

In short, the system in the advanced countries has been rejigged since the 1960s to take wealth from workers, and from the funding of government, and transfer it to stockholders and corporate executives.

Pfaff seems to hold in his mind an ideal vision of an idyllic capitalism of yore. In reality, capitalism, based on the profit motive, has always been geared toward this end. The idea of capitalists seeking to make more money at the expense of workers and social needs is hardly new; it has been around since the beginning of capitalism. If it is true, as Pfaff argues, that the worst traits of capitalism have started to become exacerbated in the last 40-50 years, the question is, why is this happening, and why now? This is something that requires serious analysis, and rather than praising some past capitalism of another era, one might ask what it is about capitalism that seems to have inevitably taken us to the state we are in today. And although Pfaff does not say this, I believe that what is really new about Pfaff's "new model" of capitalism is that the old social democratic (or, in US parlance, liberal) model of trying to tame capitalism and rein in its worst excesses is now clearly failing, and has been failing for some time. Can the profit motive really be "tamed"? It seems to me it cannot. And that is the real problem--liberalism and social democracy, as reformist rather than radical ideologies, were ill equipped to fight the evils of capitalism, and ultimately capitalism won.

Pfaff also describes the process of globalization as having a critical impact on the evolution of modern capitalism. Globalization, as he points out, "puts labor into competition with the poorest countries on earth." Again, there is nothing particularly new about this particularly critique of globalization, but it is Pfaff's conclusion that is quite interesting. He writes:

We need go no further with what I realize is a very complex matter, other than to note the classical economist David Ricardo's "iron law of wages," which says that in conditions of wage competition and unlimited labor supply, wages will fall to just above subsistence.

There never before has been unlimited labor. There is now, thanks to globalization - and the process has only begun.

These are serious conclusions, and it is fascinating to find these words, not on the pages of a marxist journal, but in a serious bourgeois newspaper. When he writes of "the human consequences of a capitalist model that considers labor a commodity and extends price competition for that commodity to the entire world", he is not writing anything that any socialist would not have said over the course of the last century and a half. And yet, Pfaff is no socialist. That does not prevent him from understanding the crisis that is overtaking capitalism at this point in history. And if even supporters of capitalism are beginning to understand this, there is hope that those of us with a different vision may be more able to get our own message out.

Posted by The Haikuist on Thursday, March 30, 2006 at 12:48 PM | Permalink