Bryn Jones on the case for economic transformation
“Capitalism and Its Critics” – A Battle of Ideas in the Modern World by John Cassidy published by Allen Lane
Capitalism was rocked by the 2008 financial crash, the worldwide Occupy movement, the Covid pandemic and shut-down of 2020-21. All these shocks seemed to signal a terminal crisis for financialised, neo-liberal capitalism, or, at least, a demonstration that substantial reforms to the system were urgent and imminent. Yet there were no significant changes. Banks and regulations were restructured. Guilty parties were censured, and ethical make-overs urged, but then it was business as usual. The same institutions, the same top people and the same outlooks remained. Indeed, following similar moves overseas, Labour Chancellor Rachel Reeves, in her wisdom, has started relaxing restrictions on bank lending and bankers’ bonuses. What needs changing and how should the change be done?
In times of crisis, leftists tend to scour the writings and actions of their predecessors for guidance. Such thinking underlies John Cassidy’s epic review of 30 critical figures – from the nineteenth century (Adam Smith and the Luddite movement) to recent times. Along the way, he includes Marx and Marxists, then 20th and 21st century economists: Kondratieff, Keynes, Sweezy, Kalecki, Robinson, Amin, Rodrik and Stiglitz. Confusingly, Thatcher’s guru, Friedrich von Hayek, makes a brief appearance, though mainly to provide an account of the economic disruption of the 1980s. Closer to today, Thomas Piketty gets a chapter to himself. The “critics” are a very mixed bag and Cassidy admits that many will question his inclusion of activists like feminist Silvia Federici and her now obscure wages for housework movement. I would question the inclusion of the essentially cultural theorist Stuart Hall. Particularly as Hall led the British left into misdiagnosing international neoliberalism as a domestic affliction: “Thatcherism”.
From such a panoramic and commendably well-researched review, one would hope for lessons for Left ways to seriously challenge financialised and, still, largely globalised capitalism. The nearest Cassidy comes to this is a half-hearted approval for Picketty’s policy triad: workers on company boards, progressive wealth taxes and a universal basic income. Otherwise, he concludes, “capitalism” will continue to slip the nets of social democracy and reinvent itself as it has done for 200 years. Maybe, but de-throning capitalism requires grappling with its underlying logic. What are its crucial components that critics should target, both intellectually and practically? This is what Cassidy’s analysis lacks. He is content with a one-size-fits-all definition of capitalism and then to let his chosen critics speak for themselves. But why did their efforts fail?
In the Introduction, he defines capitalism as any market-based economic system in which the means of production were/are owned by private proprietors who hire managers and workers. This, of course, would mean that changes such as Picketty’s reforms would leave the system intact. A more radical and penetrating analysis could have come from probing deeper more analytical definitions; those of Marx, Karl Polanyi and the Cambridge émigré economist Piero Sraffa. From the latter, Polanyi derived his diagnosis of capitalism’s perverse and unstable conversion of natural entities into commodities and capital, or, as Sraffa succinctly put it, the “production of commodities by means of commodities”. It is there that the simultaneous strength and weakness of capitalism are located. Resistance to such commodification can generate change and potential transformations – “de-commodification”. According to Polanyi, the key resources and relationships of labour, money and nature are “fictitious commodities”, whose commodification provokes countervailing reactions. (Think the environmental movement, workers’ rights and monetary regulation).
Transformation, as opposed to transient reforms, requires recognition that these are the pillars of capitalism and that their de-commodification is the route out of capitalism. This framework would provide a way of assessing the relative value of past and contemporary critics. Cassidy has provided an impressively detailed almanack of major thinkers and campaigners, especially for those new to socialist politics. But, lacking such an analytical framework, their relative utility is not possible.