Some Big Things Ha-Joon Chang Doesn’t Tell You About Capitalism

In a word, the problem isn’t neoliberalism – it’s capitalism.

– Ruth Wilson Gilmore, 2011

The popular neo-Keynesian Cambridge (United Kingdom) economist Ha-Joon Chang is a clever man who might do well to think and/or care more about the ecological catastrophe that the modern disaster called capitalism1 has all too characteristically cooked up for humanity – and a few other things about that system along the way. Don’t get me wrong. Chang’s recent bestselling book 23 Things They Don’t Tell You About Capitalism (New York: Bloomsbury, 2010) deserves some success. In one often entertaining, chapter after another, Chang exposes deadly falsehoods in many of the prevalent neoliberalism’s supposedly self-evident “free market” truths. His volume’s market accomplishment makes sense in the wake of epic global economic crisis of 2008-2009 – capitalism’s worst meltdown since the Great Depression, what the perceptive Marxist analyst David McNally calls (in a much better book that could never become a bestseller under the existing social relations of North American book production and distribution) “the first systemic crisis of the neoliberal stage of capitalism.”2 The crisis – far from over beneath comforting media and political blather about “recovery”3 – has significantly damaged the credibility of mainstream neoliberal economic theory, allowing books with titles like The Myth of the Rational Market to receive considerable and positive attention in places like the Washington Post, Financial Times, and even The Economist.4


23 Things They Don’t Tell You About Capitalism
By Ha-Joon Chang
Publisher: Bloomsbury, New York, 2010
ISBN: 978-1-60819-166-6


Political Economy

Beneath Chang’s exercise lay a simple but important idea: “all economic choices are also political ones and its time for us to be honest about them.” Yes. We have a political economy, even when the masters of that economy and economic “science” claim to act and think in purely objective accord with technically neutral, strictly economic requirements. This is a reasonably refreshing thing to hear in a time when the leading mainstream economists and the many policymakers they influence and apologize for routinely proclaim that their supposedly non-ideological and apolitical understanding of economic reality requires public decisions that just happen to dangerously concentrate wealth and power into ever fewer hands and to spread poverty and inequality within, across, and between nations.

Contrary to the anti-planning claims and biases of “free market” doctrine, Chang also usefully reminds us that “capitalist economies are in large part planned by capitalist governments and by “large hierarchical corporations that plan their activities in great detail.” As Chang observes, “the question is not to plan or not. It is about planning the right thing at the right levels” (p. 200)… It is [about] appropriate levels and forms of planning for different activities” (209). Neoliberal economics, sold as purely economic market rationality, is in fact political intervention and directed activity on behalf of the rich and powerful.

Ha-Joon Chang to Neoliberal Wisdom: WRONG

That regressive model of planning (sold as anti-planning) thrives on belief in, and the dissemination of a number of ideas that Chang shows (in the 23 chapters that match his title and provide the major substance of his book) to be woefully wrongheaded:

* Government must never interfere with “the free market.” (Chang says WRONG: modern economies would collapse without numerous forms of government intervention. Smart capitalists know very well that “there is no such thing as a free market.”)

* Companies should always be run in the interests of their owners/shareholders (WRONG: shareholders often damage the long-term prospects of companies by over-emphasizing short-term profit.)

* Economic health requires the assumption that people think only about themselves (WRONG: the most successful firms and national economies understand how to harness peoples’ cooperative and altruistic sentiments and instincts.)

* Poor counties need to adopt “free market” (neoliberal) policies (especially “free trade”) to achieve sustained growth. (WRONG: developing countries experienced superior growth in the period of state-led Third World development [1945-1970] than in the period of neoliberal, market-oriented “reform.” This is richly consistent with how the world’s richest nations – the ones who preach neoliberalism to the rest of the world – rose to ascendancy in the past: “through a combination of protectionism, subsidies, and other [state- and not market-led) policies that today they advise developing countries not to adopt” [63].)

* The relatively free market, capitalist-friendly neoliberal United States enjoys the highest standard of living in the world. (WRONG: thanks to the nation’s remarkably high levels of inequality [itself a symptom of its extreme neoliberalism], millions of Americans do not enjoy the United States’ remarkable average living standard. That extreme inequality and the poverty it generates are the main factors behind comparatively poor health indicators and crime levels in the U.S. Higher immigration and poor working conditions explain are the main reasons that many services are purchased more cheaply in the U.S. At the same time, Americans work considerably longer hours than Europeans so that “per hours worked, their command over goods and service is smaller than that of several European countries [103].”)

* Making rich people richer makes the rest richer too since it is rich people who seek out marketing opportunities and then invest to create jobs (WRONG: pro-rich policies have failed to produce economic expansion in the last three decades. “Trickle down economics” doesn’t work. It can have no positive outcomes in the absence of polices that (contrary to neoliberal doctrine) that make the rich deliver higher investment and share the benefits with – and put spending power in the hands of – non-affluent people, who spend a higher portion of their income than do the rich).

* Government must give maximum freedom to big corporations for the good of the countries in which those companies reside (WRONG: it is often better for the national economy and even the individual company for government to impose reasonable restraints and obligations on those companies).

* Capital has no nationality in the age of multinational corporations and globalization and therefore it nationalistic government policies towards transnational capital is “at best ineffective and at worst counterproductive” (WRONG: “most transnational companies in fact remain national companies with international operations, rather than genuinely nation-less companies” and it is “very naïve to base economic policies on the myth that capital does not have any national roots anymore”)

* Governments lack the ability (including the required expertise and information) to make intelligent business choices and thereby “pick winners” through state-led industrial policy. (WRONG: governments can and do regularly choose winning firms and industries over and against “market signals” and in ways that can and do “improve national economic performance”).

* The only equality that is economically functional or advisable is equality of opportunity. Policies that seek to generate more equality of outcome are inherently inefficient and unjust (WRONG: the equality of opportunity that is required to broaden the spread of economic benefits does not really exist without at least some measures to enhance equality of outcome. Free public education is woefully insufficient to broaden opportunity when it is not accompanied by policies that put a basic decent minimum standard of material living for households on the bottom end of the scale).

* The big government welfare state damages economies by depriving the rich of the incentive to create wealth and making the poor lazy. It creates resistance to the change that modern economies require. (WRONG: by providing second and third chances and a safety net to the non-affluent, the welfare state encourages workers to be more open to change when comes to choosing their first jobs and letting go of their existing jobs).

* Efficient financial markets – capable of the rapid allocation and re-allocation of capital across time and place – are the source of economic health and expansion Recent financial disturbances aside, smart policy makers should do nothing to slow down and complicate the operation of the world’s high speed financial markets (WRONG: U.S. and western financial markets are actually too efficient. The currently over-developed financial sector is now so proficient and organized in the pursuit of short-term profits that it is a leading source of economic instability and is incapable of giving emergent enterprises and industries and complex national economies the patient nurturance they require to develop over time.)

Many of these and other key points in 23 Things seem to make a lot of common sense in the current slump. Chang’s point about the continuing relevance of policy at the national level is important. The arch-regressive capitalism of the post-Cold War era has thrived on the inflated claim that “there is no alternative” (TINA) since globalization has trumped the possibility of regulation and political action and social justice at the geographic levels real people, government agencies, and popular organizations inhabit. Exaggerated notions of globalization have dangerously encouraged us to see economic life as hopelessly beyond the sphere of possible popular and political influence.

Capitalism: What’s in a Name?

Still, Chang’s book is plagued by key difficulties that belie its claim to iconoclasm, suggesting Chang’s own conservative adherence to dominant Western power structures and doctrines. I find it odd that a book titled 23 Things They Don’t Tell You About Capitalism never stops to define, well, capitalism, a system that has long been subject to various and contested definitions. “Despite its problems and limitations,” Chang proclaims, distancing himself from Marxists and other anti-capitalists, “I still believe that capitalism is the best economic system that humanity has invented.” But what precisely does Chang mean when he refers to this “economic system,” which leftists have long seen as itself a sociopolitical system of class power? (capitalism, like neoliberalism, is political, after all)?

By “capitalism,” for what its worth, Marxists do not mean simple human greed or profit-seeking or even the development or prevalence of trade, money, and market/commodity exchange. Nor of course do they mean “democracy” or a highly competitive “free market” economy free of significant government intervention – concepts with which the capitalist (“free enterprise”) system is routinely connected and conflated in dominant U.S ideology. They refer to a particular, historically specific socioeconomic regime of class power in which (a) the key economic institutions are privately owned and operated for private profit on an increasingly concentrated basis and (b) an ever larger proportion of society is made largely powerless over its material existence by (a) and the disposses-ive march of “proletarianization:” the requirement that most working-age people rent out their labor power to employers in order to get by.

The 1979 edition of Webster’s New Twentieth Century Dictionary (unabridged) usefully defines capitalism as follows: “The economic system in which all or most of the means of production and distribution as land, factories, railroad, etc., are privately owned and operated for profit, originally under fully competitive conditions: it has generally been characterized by a tendency toward concentration of wealth and, in its later phase, by the growth of great corporations, increased government control, etc.” This definition, essentially accurate in my opinion, is notable for what it excludes as well as what it includes. Like the mature Karl Marx (though with the caveat that it includes “distribution” along side “production”) it finds “the essence of capitalism,” to quote the post-WWII British Marxist economist and historian Maurice Dobb, “neither in a spirit of enterprise nor in the use of money to finance a series of exchanges, but in a particular mode of production.” By capitalist “production” (and distribution) moreover, Webster’s (like old Marx) “did not refer merely to the state of technique – to what [Marx] termed the state of productive forces – but to the way in which the means of production are owned”5 – that is, as private investment property (capital) – and to how they are operated: for the profit of their ever more concentrated and small class of owners. Webster’s, definition does not require “laissez faire” policy (no or weak government interference in economic life), widespread proprietary ownership of firms, or highly competitive conditions (with many firms in various industries). There is no reference whatsoever to democracy (a political system and ideal) in Webster’s definition, concerned as it is with an “economic system” that has long co-existed with numerous political tendencies and government forms, including dictatorship and monarchy. Indeed, Webster’s rightly notes underlying tendencies towards concentration of wealth – something that works in opposition both to a competitive market and to the democratic ideal of one person, one vote and equal policymaking influence for all – along with increasing state involvement.

There are four relevant and interrelated things from radical left analysis (“Marxist” and otherwise) that are missing (for doctrinal reasons) in Webster’s definition. The first thing absent is the emergence and ever-rising expansion of a property-less class for whom the sale of their living labor power – the ultimate source of profit for capitalist firms – is their only source of livelihood. As McNally notes, Karl Marx’s innovation was to show that capital is above all “a social relation between owners of [business] assets [‘capitalists’] and wage-earners who are dispossessed of means of producing for themselves.”6 A social relation of exploitation, in which the wage earners produce more value for the owners than they receive from those owners as compensation for being compelled to rent out their work capacity.

The second thing omitted is the conflict between (a) capitalism’s core and only true objective – investor profit and exchange value – and (b) social use value and the common good when it comes to determining the purpose of economic activity. Conventional economics, McNally, in his recent book Global Slump: The Economics and Politics of Crisis and Resistance (PM Press, 2011), “imagines that capitalism is governed by production for human use.” But: “the mere fact the millions of houses sit empty while millions of people are homeless shows that usefulness is not the issue….under capitalism, use is irrelevant: profit is king. Capitalist enterprises have no particular attachment to what they turn out, be it flat-rolled steel, loaves of bread, or pairs of blue jeans. They produce these things if, and only if, they think they can make a profit in doing so… For capitalists, bread, jeans, and steel, and everything else are merely means to an end: profit. This is what it means to say that capitalism is a system of production for exchange, rather than for use… it is the [exchange] value, rather than the use value of goods, that ultimately matters for capital.”7 If capitalists determine that things people need to survive and thrive cannot be produced and sold at profitable exchange value, then those things ultimately go un-produced in a capitalist economy. If capitalists calculate that wage-earners cannot be profitably exploited, workers go without employment. If capital can make a profit from producing goods and/or services that harm people and communities, it will generally pursue that productive activity unless prevented from doing so. The greater good of working people, national economies, and human communities more broadly is simply not capital’s concern.

A third thing deleted in Webster’s definition is capitalism’s recurrent and inherent tendency towards great crises like those of 1929-1930 and 2008-09. The profits system moves through booms and slumps every bit as much as people sleep and wake. Recurrent phases of expansion and contraction are locked into capitalism because of the inherent systemic irrationality involved in the fact that capitalists are driven by market competition to over-invest and over-accumulate, creating excess capacity and undermining overall profitability, and in the related fact that competition compels capitalists to mechanize production to a degree that undermines their capacity to access the ultimate source of profit: the exploitation of living labor power.8

The fourth thing missing is the death sentence capitalism imposes on rational and democratic planning and regulation of economic activity – the “common control” enjoyed by “socialized man… rationally regulating [humanity’s] interchange with nature” (production) in Marx’s formulation.9 Capitalism is by its nature a system in which the key economic decision points and levers ultimately remain popular control and egalitarian direction.

Is Neoliberalism a Failure and the Real Culprit in the Current Global Slump?

Can this system really be made better and more responsible and balanced along the lines that Chang wishes to see? Has not-so “free market” neoliberalism really failed capitalism and capitalists in the last three decades? And do we really wish to see a revitalized capitalism with a more Changian, neo-Keynesian face (assuming that that is possible) as we move deeper into the 21st century? Working my way through Chang’s repeated claims that various neoliberal policies and beliefs don’t really work for capitalists, their system, and for national economies, I could not shake the suspicion that the Keynesian era of the “deliberately reformed” (Eric Hobsbawm) and at least slightly democratized and socialized capitalism of the post-WWII “golden age” (1945-1972)10 is the real historical capitalist anomaly and that the neoliberal period of so-called free market global capitalism is a reasonably appropriate if miserable representation of what this system is really all about and where it is, historically speaking, in the financial-ized wake of the long lost New Deal “golden age.”

At the same time, I could not stop wondering why western capitalists and capitalist policymakers would have run with the neoliberal policy mix and ideology3 for so long (from the 1970s through the present in fact) if it was as dysfunctional for capital as Chang seems to think it is. In a favorable review of Chang’s book, the senior British economist and prizewinning biographer of John Maynard Keynes Lord Robert Sidelsky that the neoliberal “formula is bound to deliver inferior outcomes.”11 But, as McNally notes in his important recent book Global Slump: The Economics and Politics of Crisis and Resistance (PM Press, 2011), many radical economists have for too long mistakenly seen the last four decades as one long crisis of uninterrupted stagnation. McNally observes that the neoliberal period brought a quarter-century of impressive capitalist profit performance and related global economic expansion. Capitalist profits rates rebounded dramatically at the end of the 1970s slump and through the late 1990s. “To be sure,” McNally elaborates, “world capitalism did not attain the growth [or profit] rates characteristic of the Great Boom that followed World War II – though China not only achieved, but actually exceeded those rates. But for twenty-five years after 1982, the trend line for profits was a rising one and the world system underwent a sustained wave of expansion in which the world economy tripled in size and new centers of accumulation, such as China , emerged. The world working class grew even more dramatically during this era…” Along the way, wealth and income underwent significant upward concentration in the leading capitalist nations and across the world system. Inequality expanded dramatically at home and abroad. The “free market” formula has worked out fairly well for capital. The collapse that came in 2007-2008, leading to massive public bailouts of private capital and a new era of austerity, did not, McNally shows, result simply from fancy, hyper-“efficient” financial instruments and the related “free market” deregulation of financial markets.12

It resulted more fundamentally from the overall, recurrently crisis-prone dynamics of capitalist profitability and accumulation – dynamics that took on a distinctly financialized cast in the neoliberal phase of capitalism. As was the case with the onset of the Great Depression with the collapse of the stock market in 1929, capitalism and its inherent tendencies toward excess capacity (over-investment) and a declining rate of profit are the deeper disease and content beneath the surface financial forms that inflated profits at the peak of the boom and then exploded in an orgy of destroyed capital value. The current epic and ongoing crisis (the first major capitalist and global slump since the 1970s [technically 1973-1982] and the second since the Great Depression) is above all a reflection of how capitalism (not merely neoliberalism, a phase of capitalism) works. “Economic crises and the human suffering they create cannot be eliminated short of a radical change in the very basis of social life”13 – revolutionary change that Chang does not want to see.

Curiously enough, even at the level of reform, Chang has nothing to say on behalf of the sort of popular social and political action and movements (unions and left parties especially) that helped (along with the terrible lessons of extreme inter-imperial global war, in-power fascism, and the existence of ostensibly state socialist and Marxist alternatives and threats to western capitalism in the Soviet bloc and Red China) impose reform on leading western policymakers during the “golden years.” Unlike his role model John Kenneth Gailbraith (an earlier Keynesian mocker of “free market” capitalist mythology who also sought to write in clever and readable terms for a public, non-specialist audience), there is no argument in 23 Things for the economic “countervailing power”14 of unions and other popular organizations beneath and beyond the state. In the absence of any call for the rebuilding and expansion of popular social movements and protest, Chang seems to be placing all his hope in the intelligence of sophisticated top-down coordinators who get it that their system needs to be more intelligent and humane for its own good. Whether capitalism’s short-term, amoral, and chaotic logic can be meaningfully overcome and the system can be subjected to the comparatively humane and egalitarian direction of enlightened, far-seeing coordinators within and beyond the capitalist class will, I suppose, remain an open question, but the ongoing historical record does not read well for what Chang wishes to see, particularly in the relative absence of strong left movements.

Not Caring About “The Biggest Thing That Has Ever Happened in Human History”

Less conjectural is the problematic nature of Chang’s adherence – shared with the neoliberals he criticizes – to the reigning growth ideology that has greased the human species’ ever-escalating slide into ecological self-extermination. What is the primary sin of the “free market” doctrinaires who are so skillfully skewered in 23 Things? Failure to deliver on – and the undermining of – the great Western capitalist promise of growth, the leading and desirable goal of smart economic policy as in Chang’s view: see pages 52 (“the [neoliberal] policies that were intended to bring lower inflation have produced only anemic growth since the 1960s”), 63 (“there were some spectacular failures of state intervention, but most of these [state-led developing] countries grew much faster”), 89 (“the limited scope for productivity growth makes services a poor engine of growth”), 113 (“In the 1960s and 70’s … [Africa] actually posted a decent growth performance” with state-led development policies); 137 (“pro-rich policies have failed to accelerate growth in the last three decades”), 222 (“the European countries with the biggest welfare states… were able to grow faster than, or at least as fast, as the U.S….”), 228 (“Countries with bigger governments can grow faster”), and 247 (“Over the last three decades, economists… advanced theories that have led to slower growth”).

Chang touches upon numerous problems with the unbridled profits system in 23 Things, but the most grave and urgent one of those problems – modern capitalism’s15 carbon-addicted environmental overreach (predicted and warned against by smart statisticians and anti-growth economists in the early 1970s) – receives essentially no attention. It’s a disturbing omission given what we know about the depth and degree of the ecological apocalypse we are already experiencing. An abundance of recent data and observation demonstrates that even many of the most pessimistic climate scientists got it wrong when they started seriously sounding alarms about anthropogenic (human-generated) global warming in the late 1980s and early 1990s. For quite a while, the experts seemed to think that that the “tipping point” beyond which human life was gravely threatened was 550 carbon dioxide parts per atmospheric million (double the historical norm of 275 parts per million.) The more accurate measure, recently discovered, is closer is closer to 350, a benchmark we have already passed. We are currently at 390 parts per million and projected to hit 650 before final collapse barring any fundamental change in our energy use patterns. And already, at 390 we have triggered a number of ominous and viciously circular warming-induced feedback effects that exacerbate the warming problem. The melting of Arctic ice “replace[s] a shiny white mirror” that reflects the suns rays back to space “with a dull blue ocean that absorbs most of those rays.” Inland glaciers and snow-packs in the Himalayas, Andes, Sierras, and Rockies are retreating, threatening local and global water and food supplies. They are “melting very fast,” ecological writer and activist Bill McKibben noted in his chilling book Eaarth: Making Life on a Tough New Planet, “and within decades the supply of water to the billions of people living downstream may dwindle.”16

The thawing out of arctic tundra and icy ocean clathrates releases massive quantities of methane, a major heat-trapping and climate warning gas. Melting northern peat moss releases carbon in large amounts. Scientists have recently reported that northern marshes and ponds are staying unfrozen over the winter because methane is gurgling up from below. Beyond the massive amount of carbon we have extracted from the old earth and pumped into the new one (Eaarth) through our tailpipes and chimneys, we are now setting off the planet’s own internal “carbon bombs.” We’ve caused it but “we’re not directly releasing that methane” and “we can’t shut it off.” To make matters worse, the heat-induced softening of permafrost and the drying up of peat moss opens new northern lands up to oil drilling. As the last reservoirs of readily accessible petroleum run dry in a new era of “peak oil,” we will increasingly “rely on even more use of our most abundant fossil fuel, good old coal. And the certain result of using more coal will be… more global warming, since it’s the dirtiest of all fossil fuels, producing twice the carbon dioxide of oil.”17

Meanwhile the growing market for relatively inefficient bio-fuel production combines with warming to drive global deforestation, which exacerbates climate heating and triggers erosion, mudslides, and epic flooding. Climate heating allows certain beetles known to destroy certain trees to “overwinter” and thrive, to the detriment of forests, which become more vulnerable to fires, which themselves spew carbon into the air. The retreat of the Amazonian rainforest – the great “lungs of the planet” (currently “drying on its margins and threatened at its core”) is depriving Latin America and the U.S. corn belt of critically needed regular rainfall and removes one of the world’s great oxygenating carbon sinks (forests suck in carbon and breathe out oxygen). The “great boreal North America is dying in a matter of years.”18 The decomposition of forest is itself a great source of carbon release.

The list and interplay of disastrous “negative feedback loops” like this goes on and on. And it is going on now: “global warming,” McKibbben observes, “is no longer a philosophical threat, no longer a future threat, no longer a threat at all. It’s our reality” in ways that are “already wrecking thousands of lives daily”19 in the poorest parts of the world where, where climate-related food crises and environmental collapse are most pressing and people have fewer defenses. Welcome to the vicious carbon circle that could be the death knell of the human species. It’s already wiping out more than a few others as we “run Genesis backwards, de-creating.”20 This is all happening in the present moment – not in some distant far off future inhabited by “our grandchildren.” As McKibben shows, the previous Earth is already dead, giving way to a polluted and perverted one (what McKibben dubs “Eaarth”) created by Western-led global capitalism’s rapacious over-exploitation of the planet’s stock of fossil fuels. “This,” McKibben muses, “is the biggest thing that has ever happened in human history.”21 It is in fact just the biggest of many giant and interrelated disastrous ecological rifts facing humanity in the 21st century.22

The Treadmill of Accumulation

Anthropogenic planet heating and the other deadly environmental things are (like recurrent economic crises) directly traceable to the capitalist system that Chang wants to make efficient, stable, and growth-friendly. As the Marxist environmental critic John Bellamy Foster noted sixteen years ago, the profits system yokes humanity to the disastrous logic of “what might be called the global ‘treadmill of production.” As Foster elaborated:

The logic of this treadmill can be broken down into six elements. First, built into this global system, and constituting its central rationale, is the increasing accumulation of wealth by a relatively small section of the population at the top of the social pyramid. Second, there is a long-term movement of workers away from self-employment and into wage jobs that are contingent on the continual expansion of production. Third, the competitive struggle between businesses necessitates on pain of extinction of the allocation of accumulated wealth to new, revolutionary technologies that serve to expand production. Fourth, wants are manufactured in a manner that creates an insatiable hunger for more. Fifth, government becomes increasingly responsible for promoting national economic development, while ensuring some degree of ‘social security’ for a least a portion of its citizens. Sixth, the dominant means of communication and education are part of the treadmill, serving to reinforce its priorities and values.

A defining trait of the system is that it is a kind of giant squirrel cage. Everyone, or nearly everyone, is part of this treadmill and is unable or unwilling to get off. Investors and managers are driven by the need to accumulate wealth and to expand the scale of their operations in order to prosper within a globally competitive milieu. For the vast majority the commitment to the treadmill is more limited and indirect: they simply need to obtain jobs at livable wages. But to retain those jobs and to maintain a given standard of living in these circumstances it is necessary, like the Red Queen in Through the Looking Glass, to run faster and faster in order to stay in the same place.23

The same irrational systemic imperatives that drive capitalism into recurrent cycles of boom and bust turn the profits system into a cancerous threat to human existence. The extermination of the species is practically an “institutional imperative” (Noam Chomsky, see note 31 below) for the western business class that stands atop this cancerous treadmill of endless accumulation. The environment that sustains life can never be anything more than an irritating “externality” under the soulless, egoistic and accumulation-addicted logic of capital.

The Growth Ideology

Can capitalism’s assault on livable ecology be reversed in reformist, Changian ways? I doubt very much that it can given the system’s ruling class’s insatiable need to accumulate capital, the severe limits its “unelected dictatorship of money”24 places on effective policy for the common good, and its dependence on the ideology (see the next paragraph) as well as the reality of economic growth to keep popular rebellion at bay. Consign me to the lunatic fringe, but my impression is that – like many other things unmentioned in Chang’s book (recurrent systemic crises, the triumph of exchange value over use value, the widespread exploitation of living labor, rampant existential nothingness resulting from capitalism’s dissolution of personal worth into exchange value, alienating and hierarchical labor processes, vapid and propagandistic mass media, subverted and impossible democracy, and much more that is terrible to contemplate and even worse to experience) – ecocide is written into the amoral and antisocial DNA of capitalism itself, whatever the intelligence and moral level of its coordinators.

Chang’s commitment to growth in the name of a more “humane” capitalism only deepens this impression. As indicted in Chang’s 23 Things, neoliberalism’s greatest crime is not its role in furthering capitalism’s inherent tendency towards inequality and concentration of wealth but rather its role in allegedly slowing and undermining growth. Of course, as many perceptive observers have noted, growth has long been western capitalism’s false and environmentally (some would add spiritually) lethal “solution” for the inequality that capitalism creates. “A rising tide lifts all boats,” the conventional western growth ideology proclaims, supposedly rendering irrelevant popular anger over the fact that an opulent minority sails in luxurious yachts while millions struggle on rickety dinghies and in leaking rowboats. As the liberal economist Henry Wallich explained in 1972, “Growth is a substitute for equality of income. So long as there is growth there is hope, and that makes large income differentials tolerable.” As a Federal Reserve governor, Wallich was defending western capitalism against ecological economists who had recently arisen to warn about the environmental limits of unchecked growth. A stronger and critical version of Wallich’s theme comes from the leading British environmental writer and activist George Monbiot. “Governments love growth,” Monbiot noted in the fall of 2007, “because it excuses them from dealing with inequality…. Growth is a political sedative, snuffing out protest, permitting governments to avoid confrontation with the rich, preventing the construction of a just and sustainable economy.”25

“In other words,” the perceptive left liberal author William Greider notes, “when growth fails, the political system loses its cover. The safety valve is off. The comforting mythology about growth loses its power to distract the public from anger and to discourage critical inquiry into how the system actually functions.”26 But the pressure on business and political elites to keep the safety valve on – the secret behind the growth attachment that has snared even a clever economic critic (of neoliberalism at least, but not of the deeper problem of capitalism) like Chang – comes at an ever more obviously unsustainable price, setting up a devil’s choice between jobs and income for proletarianized masses on one hand and livable ecology for humanity (and other living things) on the other hand.27

If there are silver linings in the current epic slump (2008-??), it is that the system’s capacity for environmentally disastrous expansion is being slowed somewhat, along with its capacity to pacify the global working class, which has for some time now been engaged in a remarkable surge of resistance that has flowed across national borders28 in ways that naturally reflect the global nature of financialization in the late, neoliberal phase of capitalism. Faced with the “necessity” of bailing out giant, parasitic financial institutions and corporations with public money stolen from the working majority, the growth ideology has taken a hit, and the ruling class knows it. As McNally notes:

Desperation, anxiety, and hopelessness preside. The dominant class seems no longer to believe in itself….At the beginning of the neoliberal era,… politicians such as Margaret Thatcher and Ronald Reagan strode forth triumphantly, full of evangelical vigor about the righteousness of their crusade on behalf of markets and liberal individualism. But yesterday’s optimism has been replaced by a glum pessimism. Rather than trying to inspire belief in their system, society’s rulers seem to have no higher purpose than maintaining the status quo, squeezing profit and privilege out of a decrepit but well protected machinery of power. They know that talk of growth, development, and human improvement is idle chit-chat. They understand that their task is to make life worse for the majority.29

Their task is to advance austerity around the world in the wake of the epic absorption of private capitalist debt by the public sector – something that hardly puts core state30 policymakers and ideologues in the mood for Chang-style change.

Capitalism, Chang proclaims, is “the worst economic system in the world, except for all the others” and “still the best economic system that humanity has invented.” Well, then, with all due respect, we had better damn well invent a new and better system – a democratic, participatory, and egalitarian one31 that might actually deliver on humane promises – as soon as possible. As the newly minted septuagenarian Bob Dylan put it many years ago, “let us not talk falsely now, the hour is getting late.”32

  1. I have always found the leading left-liberal critic of neoliberalism Naomi Klein’s widely cited term “disaster capitalism” to be somewhat tautological and redundant. For useful Marxist criticisms of Klein’s famous book The Shock Doctrine: the Rise of Disaster Capitalism (New York: 2007) – and of capitalism (“always… a shock doctrine of selfish predation, as one can discover from Hobbes and Locke. Marx and Weber,” Alexander Cockburn notes) – see Doug Henwood, “Awe, Shocks!,” Left Business Observer, no. 117, March 2008; Alexander Cockburn, “On Naomi Klein’s ‘The Shock Doctrine,” CounterPunch (September 22-23, 2007). Despite Klein’s stronger language and more shocking findings and her connection to left movements and media, Klein’s book shares with Chang’s the fact that it is directed more at neoliberalism than it is at capitalism as such. []
  2. For a compelling analysis of the global financial collapse of 2008-2009 as “the first systemic crisis of the neoliberal stage of capitalism,” see David McNally, Global Slump: The Economics and Politics of Crisis and Resistance (PM Press, 2011). McNally defines neoliberalism as “the policies, practices, and ideas associated with the sharp turn to market regulation of social life since the 1970s. Because this glorification of the market was first preached by the liberalism of the eighteenth and nineteenth centuries, the recent version is commonly referred to as a new or neoliberalism… The effects of neoliberalism,” McNally adds, have included increased social inequality, indebtedness for much of the Global South, and heightened policing and militarism.” I would elaborate a bit. Neoliberalism contains a significant measure of escalated victim-blaming, with a strong emphasis on how working people and the poor are personally and culturally responsible for their own declining fortunes. Contrary to its free market pretensions, it does not undo ubiquitous state supports and protections for capital and it involves the expansion of the “right hand of the state” (Pierre Bourdieu) – the parts of government that serve the rich and corporate few, distribute wealth and power upward, and discipline and punish the poor – at the expense of the “left hand of the state” (the parts that protect workers and the poor, reduce mass insecurity and inequality, and advance social and political democracy, social inclusion, and security). Contrary somewhat to his obvious intention of communicating with a popular audience, Chang does not offer basic definitions of either neoliberalism or capitalism in his book. []
  3. Jack Rasmus, “The Coming Double-Dip Recession,” ZNet (June 2, 2011). In Friday’s New York Times, the leading liberal economist Paul Krugman refers to “the reality of an economy that remains deeply depressed, at great cost both to today’s workers and to our nation’s future.” See Krugman, “Rule by Rentiers,” New York Times, June 10, 2011, A21. [] []
  4. Justin Fox. The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street ( New York : Harper Collins, 2009). []
  5. Maurice Dobb, Studies in the Development of Capitalism (New York: International, 1947), p. 7. []
  6. McNally, 195. []
  7. McNally, 70. []
  8. McNally, 61-84; Karl Marx, Capital, Volume 3: The Process of Capitalist Production as a Whole (New York, International, 1967), 211-266. []
  9. Marx, Capital, Volume 3, 820. []
  10. For important historical reflections on why and how and this capitalist reform took place and on the consequences, see Eric Hobsbawm, The Age of Extremes: A History of the World, 1914-1991 (New York: Pantheon, 1994), 257-286. []
  11. Lord Robert Skidelsky, “For a New World, New Economics,” New Statesman, (August 30, 2010). []
  12. McNally, 9, 25-60. []
  13. McNally, 9, 57-84. []
  14. John Kenneth Gailbraith, American Capitalism: The Concept of Countervailing Power (1952). []
  15. For a recent acknowledgement that capitalism is the problem behind the environmental crisis on the part of a leading and longstanding establishment U.S. environmentalist, see James Gustave Speth, The Bridge at the End of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability (New Haven, CT: Yale University Press, 2008). []
  16. Bill McKibben, Eaarth: Making Life on a Tough New Planet (New York: Times Books, 2010), 45. []
  17. McKibben, 21, 33. []
  18. McKibben, 45. []
  19. McKibben, xiii-xiv. []
  20. McKibben, 25. []
  21. McKibben, 46. []
  22. John Bellamy Foster, Brett Clark, and Richard York, The Ecological Rift: Capitalism’s War on the Earth (New York: Monthly Review, 2010), 13-19 and passim. []
  23. John Bellamy Foster, “Global Ecology and the Common Good,” Monthly Review (February 1995). []
  24. This phrase belongs to Edward S. Herman and David Peterson in their essay, “Riding the ‘Green Wave’ at the Campaign for Peace and Democracy and Beyond,” Electric Politics, July 22, 2009. []
  25. Wallich and Monbiot are quoted in William Greider, Come Home America: The Rise and Fall (and Redeeming Promise) of Our Country (New York: Rodale, 2009), 202. []
  26. Greider, 202. []
  27. Since I have been using McNally’s Global Slump to criticize Chang in an essay that accuses Chang of excessive indifference to environmental issues, it is only fair to add that the increasingly grave assault on livable ecology is essentially a non-issue in McNally’s book as well. []
  28. For my own already dated (a major anti-austerity rebellion subsequently broke out in Spain) attempt to chart this rolling global rebellion, see Paul Street, “North American Report: The Wisconsin Rebellion and its Limits in a Global Perspective,” May Day International, May 1, 2011. []
  29. “In this climate, our rulers grow increasingly spiteful and unaccountable… Society seems bereft of any uplifting human cause.” McNally, Global Slump, 187. []
  30. By core states, I mean the richest nations that have ruled the world economy and imperial system since the 1950s: the U.S., Japan, and the Western European nations. []
  31. For one working outline, see Mike Albert, Parecon: Life After Capitalism (New York: Verso, 2003). For a useful discussion of various “alternatives to marketplace capitalism,” see Stanley Aronowitz, Left Turn: Forging a New Political Future (Boulder, CO: Paradigm, 2006), 199-220. []
  32. Noam Chomsky, somewhat older than Dylan (but forever young in his willingness to challenge received orthodoxy) recently seconded this judgment: “I do not want to end without mentioning another externality that is dismissed in market systems: the fate of the species. Systemic risk in the financial system can be remedied by the taxpayer, but no one will come to the rescue if the environment is destroyed. That it must be destroyed is close to an institutional imperative. Business leaders who are conducting propaganda campaigns to convince the population that anthropogenic global warming is a liberal hoax understand full well how grave is the threat, but they must maximize short-term profit and market share. If they don’t, someone else will.” Noam Chomsky, “Is the World Too Big to Fail? Contours of Global OrderZNet, originally Tom’s dispatch (April 22, 2011). []

Paul Street (paulstreet99@yahoo.com) is a veteran radical historian and independent author, activist, researcher, and journalist in Iowa City, IA. He is the author of Empire and Inequality: America and the World Since 9/11 (Paradigm 2005); Segregated Schools: Educational Apartheid in the Post-Civil Rights Era (Routledge 2005): and Racial Oppression in the Global Metropolis (Rowman&Littlefied 2007). Street's new book Barack Obama and the Future of American Politics can now be ordered. Read other articles by Paul.