Death of an Ideology [Capitalism]
Source: Capitalism as we know it is on its deathbed. Those who predicted that the old brand, the unfettered, US-promoted system, was a danger to the world, are being vindicated. They include Karl Marx, whose thinking on banks is surprisingly contemporary.The financial meltdown on Wall Street has provoked a severe ideological crisis.
Capitalism itself is under scrutiny. In the corporate media, one can now find regular discussions of Marxism, capitalism and socialism – not always positively presented to be sure, but at times the discussion has been thoughtful.
Even former Federal Reserve Board Chair Alan Greenspan, long an outspoken champion of free-market fundamentalism, told Congress in late October that he was in the midst of “an existential crisis.”
Greenspan confessed that he had “made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms."
Another example of this trend is the recent Reuters analysis by Bernd Debusmann who writes that “Capitalism as we used to know it is on its deathbed.
"And those who predicted that the old brand, the unfettered, American-promoted system, was a danger to the world, are being vindicated. They include Karl Marx, whose thinking on banks seems oddly contemporary these days."
On the other end of the spectrum, consider the confused display of logic in this op-ed from the Washington Post in October: "Is this the end of American capitalism?” The answer is that “we are not witnessing a crisis of the free market but a crisis of distorted markets."
In the Post’s opinion, the collapse of the current system is not a capitalist crisis, because we are not living under “true capitalism.” The Post's editors, however, seemed unable to elaborate a vision of true capitalism.
Former World Bank chief economist Joseph E. Stiglitz has offered more thoughtful observations. In a recent article in Vanity Fair entitled Reversal of Fortune, Stiglitz lists the chief characteristics of the ideology of free-market capitalism as practiced in the US: "special interest pressure, populist politics, bad economics, and sheer incompetence," characteristics which he views in turn as the root causes of the current crisis.
Stiglitz hammers away at the anti-government ideology behind right-wing economic policy.
“[This] ideology proclaimed that markets were always good and government always bad.... [but] the fact is that key problems facing our society cannot be addressed without effective government."
In his criticism of neoliberalism, Stiglitz displays an independent streak and goes much further than most orthodox American economists dare.
Like their counterparts among the nation’s CEOs, most US economists have long abandoned any pretense of practicing objective science.
Instead, for the past three decades they have preferred to view the American economy through rose-colored glasses. Why shouldn’t they? When things go wrong, there is no price for their academic mistakes.
This is perhaps the most distinctive feature of today’s no-fault capitalism. On the one hand “robbing with a fountain pen” often goes unpunished; on the other, acting as academic cheerleaders for neoliberalism carriers no risk for today’s practitioners of the “dismal science.”
Among those who prophesy about the future of the American economy, there are always far more Pollyannas than Cassandras.
Joseph Stiglitz is different. Having seen at close hand the damage wrought by the IMF and its neoliberal policies, especially among the world’s poorer nations, Stiglitz listened to his conscience and resigned his position as chief IMF economist in 1999.
Since then he has criticized the neoliberal dogma of free-trade, an ideology which has served as a convenient fig leaf to conceal the multitude of crimes perpetrated by unregulated corporate greed operating on a global scale. More...