Call for Rationality
I mentioned Leo Panitch and Sam Gindin a couple of posts back, both radical economists doing some of the more serious work I've seen lately on the global economic crisis.
They have done an historical analysis and explained why capitalism morphed so heavily in the direction of financialisation, breaking it down into four main headings.
1.The spatial expansion and social deepening of capitalism in the last quarter century could not have occurred without innovations in finance.
2. The competitive volatility of global finance produced a series of financial crises whose containment required repeated state intervention. (goodbye Von Mises)
3. Both finances central role in the making of global capitalism and the American states role in sustaining it produced the bubble that emerged inside the US housing sector.
4. The crisis reinforced the centrality of the American state. Hell, even Mort Zuckerman is for intervention! Here is their conclusion and call to action.
"The call for nationalization of the banks provides an opening for advancing broader strategies that begin to take up the need for systemic alternatives to capitalism. The severity of today's economic crisis once again exposes the old irrationality of the basic logic of capitalist markets. As each firm (and indeed state agency) lays off workers and tries to pay less to those kept on, this has the effect of further undercutting overall demand in the economy. At the same time, the financial crisis exposes new irrationalities, not least those contained in the widespread proposals for trading in carbon credits as a solution to the climate crisis, which involve depending on volatile derivatives markets that are inherently open to the manipulation of accounts and to credit crashes. In the context of such readily visible irrationalities, a strong case can be made that - to save jobs and the communities that depend on them in a way that converts production to ecologically-sustainable priorities during the course of this crisis - we need to break with the logics of capitalist markets rather than use state institutions to reinforce them. We need to put on the public agenda the need to change our economic and political institutions so as to allow for democratic planning to collectively decide how and where we produce what we need to sustain our lives and our relationship to our environment. However deep the crisis, however confused and demoralized are capitalist elites both inside and outside the state, and however widespread the popular outrage against them, making this case will certainly require hard and committed work by a great many activists, many of whom will see the need for building new movements and parties to this end. This is what is really needed if this crisis is not to go to waste.