If the bailout package of the Bush administration, a last ditch effort to save American capitalism, does not succeed, then even the ruling class will start preaching European style social democracy in the US
After the financial meltdown, and the massive intervention by the Bush administration through a bailout package of over a trillion dollars, there is a lot of noise about ‘socialism’. Many call this bailout ‘socialism for the rich’. Others smell a rat over the state’s overreaching moves in private markets.
Republican presidential nominee John McCain has attacked his opponent Barack Obama for being a socialist, because Obama plans to tax the rich for a more equitable distribution of wealth. In the US, therefore, socialism is mostly used as a bogeyman to attack opponents.
But has the American brand of extreme capitalism really come to an end, and is a new economic system, like that of the socialist welfare state, in the offing?
Whatever happens, one thing is abundantly clear: if the markets are left to their own devices, the economic system collapses at one point or the other.
A similar phenomenon has been occurring over and over in the capitalist economies. The depressions of 1893 and the 1930s were an outcome of market excesses in the US. Previous economic cycles had followed a similar pattern. This is explained through the business cycle theory, which has become part of mainstream economics but originally was articulated by Karl Marx. Will the present business cycle prove to be like its predecessors or will it bring the capitalist system down, replacing it with some form of socialism?
The emergence of a socialist era requires, according to Marxist theory, the capitalist system to have exhausted its productive potential and a degenerative process to have set in. The theory also states that every society has to pass through the inevitable stages of history in the order of slavery, feudalism, capitalism, socialism and communism.
Therefore, if Marxist theory is taken to be scientific — sequence of occurrences are determined in science — no society can bypass a stage voluntarily, as was experimented in the Soviet Union, China and Vietnam. The very fact that these areas had to revert to a capitalist mode may be taken as a validation of the inevitability of the definitive stages of history.
This also means that the kind of societies that emerged in the former Soviet Union, China and Vietnam may be called anything but socialist, as they did not pass through a capitalist stage whose potential had been exhausted. At the time socialism, or whatever one calls it, was adopted in these societies, they were either feudalistic or just entering the capitalist stage.
From this angle, can we take the United States as a possible candidate that has exhausted its potential as a capitalist society and has no option but to adopt socialism? Of course, the US economic system is taken to be the pinnacle of the capitalist mode, and its present woes can lead to certain unexpected outcomes. However, the US can adopt European style capitalism and survive for many decades to come. Some welfare measures were adopted after World War II, but the US is nowhere close to the transformation of Europe from free markets to state-controlled institutions and concession of some essential economic guarantees to the citizens.
We tend to forget that European capitalism was also based on the US-type laissez faire system during the 18th and early 19th centuries. It was headed towards disaster, and that is why Karl Marx and Friedrich Engels forecasted the end of capitalism, giving way to socialism.
However, things did not work out that way, and European capitalism adopted ‘socialisation’ instead. Health and other necessary services for survival were recognised as basic rights of the individual. In this manner, the adoption of ‘socialist’ measures by many European countries saved the capitalist system from total collapse.
The US, being far right of the centre as an economic and social system, may have reached a detrimental stage with the old laissez faire system. The system where capital owners have all the rights, while the common citizen cannot claim health and other necessities to survive, may be eroding. Presently, citizens have to earn essential service or finance it themselves. It has left a fifth of the American population with no health services and many sections of society are in a desperate state without any help from the state. This may have to change to save the capitalist system from collapse.
Up until now, any government intervention, even for the benefit of the rich, and any hind of distribution of wealth like Barack Obama’s plan to tax individuals making over $250,000, is ridiculously termed socialism. Therefore, any effort to reform the American economic system, recognising the individual’s rights like in Europe, will face fierce opposition from many quarters. However, if the bailout package of the Bush administration, a last ditch effort to save American capitalism, does not succeed, then even the ruling class will start preaching European style social democracy in the US.
The writer can be reached at email@example.com
Reproduced by permission of The Daily Times