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Are we at a critical point in the ‘capitalist’ cycle?

October 29, 2020

Any socioeconomic system in which a tiny minority owns or controls essentially all material power is by its nature hostile and unstable. It’s an indelible link and cannot be otherwise. This instability plays out on two different axes: one being the relationship between the propertied minority and the propertyless majority (call it the population axis) and the other being within the minority class itself which perpetually fights for its share of power (call it the oligarchy axis).

Minority power in this sense, regardless of its many possible mutations, can and I believe must be viewed as a single systemic type which, as noted in my book and following Jeffrey Winters, I have chosen to call oligarchy. Its opposite is equality/egalitarianism. The entire 5,000 years of recorded civilization right down to the present day, with all its wars, power concentrations, mass exploitations, and majority suppressions is that of the former while the preceding hundreds of thousands if not millions of years of human evolution before that is of the latter. This represents the most fundamental divide in human social history and is the absolute foundational divide in politics.

The past couple hundred years mark a distinct phase of the 5,000-year oligarchic system and we commonly refer to it as ‘capitalism’. This is a problematic term, however, as it wrongly elevates ‘capitalism’ as the primary system and demotes what actually IS the system–minority power (inequality/oligarchy) to a mere side-effect of it. Our discourse thereby becomes confused. As just one of many possible examples, we have the likes of Elizabeth Warren who can within center-left circles safely proclaim she’s a capitalist to her bones without implying anything particular about inequality, supporting the status quo without admitting what it actually is. Could she safely say she was an oligarch to her bones? I think not.

I want to focus today on the hostile instability of this ‘capitalist’ phase of oligarchy and how its broad historical development can help us see where we’re situated today, a few days before the 2020 US presidential election. I believe it can shed a great deal of light.

I noted about seven years ago in this blog that extreme outbreaks of instability seem to occur in a cyclic way. I think it’s important to revisit this topic now because 1) developments in the world are warning, more than at any point in my lifetime, that we’re heading toward a major crisis AND 2) the 2020’s happen to be where the next cycle point would hit if it continues its past dynamics.

The instability cycle I refer to is roughly 60 years and always seems to involve in one way or another both the population and the oligarchic relationship axes. Let’s look briefly at this long cycle.

I begin with the French Revolution in 1789 which opened a 25-year period of extended war in Europe lasting until 1814. France and the French Revolution, particularly its Jacobin phase with its liberté, égalité, fraternité, is widely seen to this very day as the key inspiration for populist revolt against undemocratic power.

Fifty-nine years after 1789, we find the cataclysmic explosion of 1848, the first revolution in modern European history and the widest. According to historian Eric Hobsbawm, no revolution spread more rapidly, “running like a brushfire across frontiers, countries and even oceans.”  Within weeks, no government was left standing in all or part of today’s France, Germany, Austria, Italy, the Czech Republic, Hungary, Poland, the former Yugoslavian nations, Rumania and parts of Latin America. All were “in fact, or immediate anticipation, social revolutions of the labouring poor.”  The revolution quickly failed as the original governments were able to retake power within a few months but the events demonstrated an extremely dangerous “romantic-utopian” atmosphere, a “springtime of the peoples.” The US Civil War began just 12 years later.

The next cycle point is in 66 years with the explosion in 1914 of World War I, followed by the Russian Revolution and 30 years of war, chaos, and depression. Communist regimes eventually came to rule over substantial percentages of the global population and the anti-oligarchic ideology represented a clear and considerable systemic threat.

Finally, 54 years after 1914, we witness the outbreak and instability of the 1960s and 1970s, using 1968 as the specific date. On the population axis, we see the height of the protest movements in the US, France, Germany, and elsewhere. The May 1968 uprising in Paris drew inspiration from the French Revolution and appeared close to overthrowing the conservative de Gaulle government. The decade was marked by dramatic attacks on the oligarchic status quo, including the Civil Rights movement, Woodstock, the broad countercultural movement and so on. It also saw the top popular leaders in the US, John Kennedy, Robert Kennedy and Martin Luther King, assassinated. The Cultural Revolution in China began in 1966. The US war on Vietnam and its broader ‘Cold War’ against communism lies on both axes: suppressing populations in favor of ‘capitalism’ (oligarchy) and an inter-oligarchic fight for American supremacy over rival national oligarchs.

That brings us to today. If the cycle holds, the next instability point will be between 2022 (54 years) and 2034 (66 years). I think it will hold.

All past cycle points were the inevitable explosions arising from the ever-building pressures that were only momentarily and inadequately mitigated in the previous cycle. It’s in the nature of oligarchy that things can’t fundamentally change. Dangerous pressures can never be eliminated, only delayed. In the words of the great Italian writer Giuseppe Tomasi di Lampedusa, “everything needs to change, so everything can stay the same”.

The many pressures from 1968 were temporarily relieved by, among other events, the ending of the Vietnam War and the passing of civil rights legislation. But what followed was an intensification of a soulless consumer culture, the Reagan/Thatcher attack on unions, wages, job security, and population welfare programs, and the general subjugation of populations around the world to the laissez-faire economic policies that have come to be called neoliberalism.

Oligarchic greed and lust for power has caused the system throughout this cycle to bounce from crisis to crisis like some drunkard on a ship deck. The seventies saw a bubble in bank loans to Latin American countries leading to a massive debt and foreign exchange crisis in the early eighties. In the latter eighties, we witnessed the gigantic bubble in Japanese real estate and stocks and the failure of thousands of US savings and loans. The early nineties brought us the collapse of the junk bond market with losses (and gains to some) of over $100 billion along with the British exchange rate crisis of 1992 involving speculative attacks against the pound. Speculative fever in real estate and stock prices in Thailand, Indonesia, and other Asian countries took off with stock prices doubling in 1993, leading ultimately to the Asian Crisis of 1997 and the related currency crashes in Russia and Brazil. The Mexican peso crashed by more than half versus the dollar in the 1994-95 crisis leading to the collapse of almost all its banks. The close of the twentieth century brought us the crash of the US stock bubble concentrated in the information technology and sectors. Massive accounting fraud was exposed in a number of large multinational corporations (Enron, WorldCom, Global Crossing, and so on) in the early years of the twenty-first century. And of course, the subprime mortgage collapse of 2007 replete with widespread fraud among mortgage banking firms, investment banks, and rating agencies, is still even to this day working its way through the global political economy. Austerity for populations and bailouts for the oligarchs has been the consistent theme.

Center-left parties throughout the world, buoyed by the collapse of communism in the Soviet Union and China, stopped all pretense of representing their populations and, under the banner of centrism, the Third Way, and the Washington Consensus became active oligarchic agents on a scale that would have been impossible in most of the previous cycle. The Democratic Party in the US led the way in the population attack with both Bill Clinton and Barack Obama offering no meaningful relief. Oligarchic power as measured by wealth inequality has increased to levels unseen in a hundred years.

Systemic pressures are thus building to levels which seem as high or even higher than any previous cycle point.

And here we are in 2020 suffering under a pandemic and seeing yet again bailouts for the oligarchy and insufficient protections for the population. And on top of it all, we have the intensifying global warming crisis which cannot be adequately addressed without a significant move toward anti-oligarchic collectivization.

An explosion is coming. The system simply can’t continue as is. Evidence is everywhere—the Arab Spring, Occupy Wall Street, the Spanish M-15 protests, rising global neo-fascism, growing popularity of socialism among the young, the Sanders movement, and the massive global Black Lives Matter protests. Inter-oligarchic war in the Middle East is unending and we’re increasingly threatened with the cataclysm of war between the US, China, and Russia.

But the US presidential election, a choice between neo-fascist Donald Trump and ‘centrist’ Joe Biden, offers no release. Another four years of Trump would be an unmitigated disaster as the progressive Left would then face a near fascist police state which would be extraordinarily difficult to overcome. On the other hand, Biden offers absolutely nothing but a continuance of the ‘centrist’ policies which brought us to this situation in the first place, perhaps minimally modified to temporarily relieve a bit of the pressure.

I voted yesterday for Biden with the belief that Democratic Party ‘centrism’ is an easier enemy to defeat than police state neo-fascism. But the important thing in my mind, assuming he wins, is that the Left must expose ‘centrism’ as the existential enemy it is, perhaps the most effective ideological front for inequality. It must immediately and perpetually attack it from every possible egalitarian angle.

The hope is to peacefully abolish, right here and now in the 2020’s, the dismal ever-repeating cycles of ‘capitalist’ oligarchy and move finally toward a second egalitarian age.

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