Precarity capitalism

James K. Galbraith:

The shifting political paradigm that Azmanova describes is becoming more and more apparent. Donald Trump spotted it in 2016. And he won the presidency by placing himself, if only rhetorically, at the head of a revolt of the insecure, of people whose world no longer offered stable middle-class employment in regions enriched by the taxes paid by industrial corporations and their workers. To his followers, Trump offered a return to national capitalism under national control—an illusion, but one with resonance and bite. One could also see the Azmanova impulse in the youth movement that swept Bernie Sanders forward in 2016 on a platform of a $15 minimum wage, Medicare for All, tuition-free public college, and the Green New Deal—a quartet uniquely effective in speaking to the insecurities of the youngest voting cohort. Notably, when Sanders speaks about his education plan, for example, it is the basic issue of cost that dominates, not the vague concepts of opportunity and competitiveness that characterized the education rhetoric of the Clinton-Gore-Obama era. One can see here, as well, why Sanders could not break through in 2020; his approach could not reach the older set who have spent their lives imbibing the neoliberal tropes.

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A mixed economy featuring corporations with long time horizons, stable relationships with their bankers and countervailing power was never wholly dismantled in Germany, in Scandinavia or Japan, and it took root in Korea, where it survived several severe financial shocks that would have demolished it in Europe or North America. These serve as the prime examples of successful resistance within the West to untrammelled exercise of financial power.

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What these societies share is that over four neoliberal decades they maintained their large industrial corporations as going concerns in line with national strategies, along with their productive base and social organization; they did not give everything over to the market. And over those decades, put to the test against the neoliberal corporation dominated by Wall Street, there is no doubt which side won out. The Galbraithian firm fostered and protected by a vigilant state now dominates world markets in most advanced sectors and many that are more modest but no less basic. It is also capable of meeting the challenge of mobilization facing the world in this pandemic; in the production of medical masks, for instance, China ramped up capacity almost six-fold in a month. Money-market capitalism, in a vast transformation initiated in the early 1980s by Reagan and Paul Volcker, has left an industrial shell, with capacity in some areas limited by bottlenecks in others, and by the failure, so far, of clear and effective chains of command. The Anglo-American model is therefore now under enormous stress, as capital markets crumble and market-based networks begin to break down.

In the crisis now upon us, the issue before the Anglo-American side is whether the reality of our situation will now sink in. Will we recognize, in time, the need to mobilize all our resources, to socialize our health system and keep the supply chains open until the virus can be contained? Will we realize that when this is done, life will not be what it was before, and that a vast reorganization of economy and society will be necessary? Or will the neoliberal ideologues in control succeed in squelching that debate—which they are trying to do, at this writing, by focusing on bailouts and stimulus in the belief that somehow the bubbles now bursting can be reinflated in a few months? Will we remain mired in illusions of growth, with or without equity and inclusion?