It is five years since the collapse of Lehman Brothers, on 15 September 2008. Since then, the legitimacy of capitalism as a way of organizing society has been undermined; its promises of prosperity, social mobility and democracy have lost credibility. But there has been no radical change. The system has repeatedly come under fire, but it has survived. Part of the price for capitalism’s failures has been the end of some social advances previously wrested from it. “Free-market fundamentalists have been wrong about everything-yet they now dominate the political scene more thoroughly than ever,” wrote the US economist Paul Krugman. But the system is still holding up, even if on autopilot, and that is not to the credit of its opponents. What has happened? What can be done about it?
The anti-capitalist left rejects the idea of economic inevitability because it realizes the economy is shaped by political forces. It should have deduced that the financial disaster of 2007-08 would not clear an easy path to its objectives. The precedent of the 1930s suggested this: depending on national circumstances, social alliances and political strategies, the same economic crisis produced such diverse outcomes as Hitler’s rise to power in Germany, the US New Deal, the Front Populaire in France, and nothing much in Britain. In the 1980s, Ronald Reagan entered the White House and Francois Mitterrand the Elysee within months of each other; and in the 2010s, Nicolas Sarkozy failed and Barrack Obama succeeded in being re-elected around the same time. This suggests that luck, talent and political strategy are not supplementary variables that can be trumped by a country’s social make-up or the state of its economy.
The neoliberals’ recent victory owes much to the arrival of rescue from emerging countries. When the world’s axis shifted after the financial crisis, it also marked the arrival of producers and consumers from China, India and Brazil in the capitalist game, who served as reservists just as the system appeared to be dying. In the past ten years, the major emerging nations’ share of global output has risen from 38% to 50%. The new workshops of the world have also become some of its most important markets: since 2009 Germany has exported more to China than to the US.
The existence of national middle classes and the implementation of national solutions now encounter the obstacle of the world’s ruling classes acting in concert. Unless you still believe in 1960s anti-imperialism, it would be hard to rely on political elites of China, Russia and India for progressive solutions to current problems, since they are just as self-serving and venal as their western counterparts.
Capitalism’s resurgence has not been universal, however. The sociologist Immanuel Wallerstein wrote “Latin America has been the success story of the world left in the first decade of the 21st century … left or left-of-center parties have won a remarkable series of elections during the decade. And collectively, Latin American governments have established for the first time a significant degree from the United States. Latin America has become a relatively autonomous geopolitical force.”