So Capitalism Failed. Now What?

Contrary to repug claims, economic inequality has always been inimical to democracy. The wider the gap between the richest and the poorest in society - especially if that gap lacks a strong middle class - the more political power is concentrated in the hands of the super wealthy.

 

That's been economic wisdom for decades. The question now is whether capitalism itself, through its creation and maintenance of inequality, poses an existential threat to democracy. 

 

Digby, on Exploding the Myth of Capitalism:

From  Demos:

Despite near-record levels of economic inequality, many politicians and pundits still don't think this widening chasm is much of a problem in a country supposedly dedicated to egalitarian ideals.

SNIP 

In truth, inequality in America tracks more closely with a classic Marxist analysis whereby the owners of capital exploit a surplus of labor to keep wages low and generate high profits for themselves -- depriving workers of a fair share of the value they are creating for companies. Yes, there are smart entreprenuers taking big risks in America, but the more dominant face of the economy is well-established corporations run by professional managers who keep finding new ways to drive labor costs down and profits up.

Consider a new study out today by the National Employment Law Project (NELP), which shows that most low-wage workers aren't employed at struggling start-ups or local businesses trying to expand. Instead, says NELP, the majority of such workers are employed by large corporations. And the reason these workers make chump change is not because such corporations are battling to maintain their razor thin profit margins in tough times. Rather, these companies are making plenty of money -- more in many cases then before the recession. According to NELP, of the top 50 low-wage employers in America: 92 percent were profitable last year; 63 percent are earning higher profits now than before the recession; and 73 percent have higher cash holdings now than before the recession.

Just a little FYI. 

Yet no one is talking about fundamental change.

Here's Erik Loomis from Lawyers, Guns and Money on the failure of a netroots panel on replacing the failed capitalist economy to actually discuss replacing the failed capitalist economy.

Capitalists and governments only reform when pressured from the left. Fix the problems of the Gilded Age so the anarchists quit shooting our presidents in the stomach and our industrialists in the face is a useful way to think about the Progressive Era. FDR enacted the New Deal to save capitalism from itself and undermine communism and fascism from spreading in the United States. The War on Poverty and other Great Society programs were in large part a response to the horrible inequality of the nation so powerfully articulated by the civil rights movements of the 1960s.
Today, there is no real pressure from the left. With the decline of the USSR, extremist capitalism was in full ascent and the political spectrum swung hard to the right. Any questioning of capitalism meant one was totally irrelevant. The economic left collapsed and the triumphal era of Clinton capitalism ascended.

 Obviously, old school state socialism is never coming back; probably it shouldn’t. But until we articulate options to capitalism that scare the capitalists, nothing will stop them from destroying the rest of the social safety net and middle class. We need to be thinking about better systems than supposedly free-market capitalism, organizing around them, and threatening the capitalists’ dominance over the nation and the world.

I realize this is long-term, maybe even pie-in-the-sky. And capitalism with a benevolent face might be a pretty good way for a lot of people to live. But we aren’t going to get that benevolent capitalism until people force the capitalists to grant it in order that they don’t reject the system entirely. That’s why we need to think about radical alternatives to capitalism.

In other words, we need to actually think about a post-Occupy economy and not use the OWS name as an excuse to get people into the room and then hold a big party for mildly-regulated capitalism.

One of the main reasons FDR was able to shove the New Deal down the throats of conservatives in
Congress was the very real threat posed in the streets by actual native-born American communists. These activists were rapidly persuading large numbers of Americans that the Depression proved that capitalism had indeed failed and the only alternative was labor ownership of the means of production.

Compared to that, even the socialistic New Deal was preferable.

Occupy had the potential to pose that same threat, if only the Obama administration had had the guts to wield it: "There's a critical mass of public opinion in favor of burning Wall Street to the ground and salting the earth so no finance will ever thrive there again. You morons can start packing for the Caymans now, or you can accept restored Glass-Steagall and Eisenhower-era tax rates (91 percent for the super-rich.) Choose now."