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by Peter Franklin
Tuesday, 15
October 2019

Late Capitalism? Don’t you believe it.

In the 1930s, the capitalist system faced an existential threat from communism and fascism; but what does it have it worry about today?...
by Peter Franklin

Late capitalism? Don’t you believe it. A timely blogpost from Branko Milanovic reminds us that the capitalist system, love it or hate it, is far from on its way out:

Geographically, capitalism is now the dominant (or even the only) mode of production all over the world whether in Sweden where the private sector employs more than 70% of the labour force, the United States where it employs 85% or in China where the (capitalistically-organized) private sector produces 80% of the value added.

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This was obviously not the case before the fall of communism in Eastern Europe and Russia, nor before China embarked on what is euphemistically called ‘transformation’ but was in reality replacement of socialism by capitalist relations of productions.

- Branko Milanovic

Furthermore, he says, capitalism (especially the tech sector) is creating new markets (and thus turning non-capital into capital) all the time – “a huge market for personal data, rental markets for own cars and homes… market for housing of self-employed individuals.”

Milanovic is hardly an uncritical observer. Indeed, he’s one of the world’s foremost experts on economic inequality and its creation through the unevenly distributed consequences of globalisation.

One might also ask that if capitalism is about to be replaced, then where are the replacements?  When pressed for an answer, anti-capitalists are reduced to wish-fulfilment fantasies.

Extinction Rebellion protestors call for net zero carbon emissions by 2025 – this would require a shift to a command economy and the total suppression of consumerism, so would definitely disrupt the capitalist system. However, as a political proposition in a democratic society it has a net zero chance of being accepted at the ballot box.

An alternative to this alternative is the accelerationist socialism popularised by Aaron Bastani in his recent book Fully Automated Luxury Communism. This rests on the assumption that technology will become so productive as to abolish scarcity and thus the very basis of capitalism. Instead, robots will do all the work and the state will ensure we all share in the fruits of their labour.

But far from dispensing with human workers, the capitalist system has never employed more of them. As for the idea that markets can’t cope with hyper-abundance, tell it to Silicon Valley which seems all too adept at turning ‘free’ into enormous profits.

Capitalism is deeply flawed. However, its weaknesses have not stopped it from strengthening its grip. That’s why it’s vital that fantasies of replacement do not distract us from the urgent task of reform.

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