This year marks the 160th anniversary of the Communist Manifesto and
capitalism, aka “free enterprise,” seems willing to observe the occasion by
dropping dead. On Monday night, some pundits were warning that the ATMs might
run dry and hinting that the only safe investment left is canned beans.
Apocalypse or extortion? No one seems to know, though the populist part of the
populace has been leaning toward the latter. An email whipping around the web
this morning has the subject line “Sign on Wall St. yesterday,” and shows a
hand-lettered cardboard sign saying, “JUMP! You Fuckers!”
The Manifesto makes for quaint reading today. All that talk about “production,”
for example: Did they actually make things in those days? Did the proletariat
really slave away in factories instead of call centers? But on one point Marx
and Engels proved right: Within capitalist societies, or at least the kind of
wildly unregulated capitalism America has had, the rich got richer, the workers
got poorer, and the erstwhile middle class has been sliding toward ruin. The
last two outcomes are what Marx called “immiseration,” which, in translation, is
the process you’re undergoing when you have cancer and no health insurance or a
mortgage payment due and no paycheck coming in.
Marx predicted that capitalism would fall in a spirited, pro-active, fashion:
The workers, fed up with immiseration, would revolt, seize the “means of
production,” and insist on running the show themselves, that being the original,
pre-Soviet, notion of socialism. The revolution didn’t happen, of course, at
least not here. For the last several years, American workers have sweetly
acquiesced to declining wages, rising prices, speed-ups at work, disappearing
pensions, and increasingly threadbare health insurance. While CEO pay escalated
to the 8-figure range and above, so-called ordinary Americans took on second
jobs and crowded into multi-generational households with uncomfortably long
waits for the bathroom.
But all this immiseration – combined with fabulous enrichment at the top – did
end up destabilizing the capitalist system, if only because , in the last few
years, America’s substitute for decent wages has been easy credit. Until about a
year ago, we got almost daily messages, by telemarketer and by mail, urging us
to consolidate our debts, refinance our homes, transfer our debts from credit
card to another, and try tasty new mortgages that didn’t even require a down
payment. All too often, we bit. It sounded so reasonable, for example, not to
let our assets just “sit” in our houses but to start spending that money now.
At the other, Lear jet, end of the economic spectrum, there was the problem of
what to do with too much money. Yes, this can be a problem. Some of the
super-rich have to hire consultants to help them spend their money: Where do
you get a $20,000 bottle of wine or find a Picasso for the bathroom wall? More
seriously, there was the problem of what to invest in. As Chuck Collins of the
Working Group on Extreme Inequality has pointed out, huge concentrations of
wealth can function like rogue waves, smashing around recklessly in their search
for ever higher returns. A lot of these money waves flowed, directly or
indirectly, into the dodgy credit schemes that were engulfing the un-rich
majority, leaving even the fat cats imperiled by the toxic debts of the subprime
class.
Marx’s argument was that the coexistence of great wealth for the few and growing
poverty for the many is not only morally objectionable, it’s also inherently
unstable. He may have been wrong about the reasons for the instability, but no
one can any longer deny it’s there. When the greed of the rich collided with the
needs of the poor – for a home, for example – the result was a global credit
meltdown.
Obviously, the way to address the crisis is to deal with the poverty and
inequality that led to it: bail out people facing foreclosures, increase food
stamp allotments, extent unemployment insurance, and, make a massive
job-generating, public investment in infrastructure, and, since medical debts
are the number one cause of personal bankruptcy, enact universal health
insurance immediately. But not even Obama, whose lawn sign I still proudly
display, seems to have the stomach for such a “trickle upwards” approach. He has
announced that he won’t bother taking the bail-out as an opportunity to change
the bankruptcy law so that people facing foreclosure can renegotiate their
mortgages.
So happy birthday, Communist Manifesto – although I’m hoping that capitalism
survives this one, if only because there’s no alternative ready at hand. At the
very least, we should get some regulation and serious oversight out of any
bail-out deal, meaning that, yes, the economy will look a little less like “free
enterprise.” But one thing we should have learned in the last week, if not the
last year, is that, when applied to enterprise, “freedom” can be just another
word for someone else’s pain.
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