The current crisis is in rather than of capitalism. On the one hand, the system now demonstrates its massive social failures in dramatic ways. Yet there is not yet a serious and politically significant social movement that explicitly targets the capitalist system as the problem and an alternative system as an essential part of the solution.

 

Tens of millions of workers have been deprived of work, 20-30 per cent of productive capacity (tools, equipment, factories, offices, and stores, etc.) sits idle and unused, and just as governments need to do more for people they face declining tax revenues to pay for that. Meanwhile governments go into massive debt to save credit markets and the largest capitalists whose decisions contributed to the crisis and their own bankruptcy. These are all signs of a deep crisis in capitalism.

 

For this to become a crisis of capitalism requires a mass movement that demands not merely adjustments and reforms (more jobs, better wages, greater provision of public services, etc.), but also a change from capitalism to an alternative system. A crisis of capitalism arrives only when such a social movement acquires the strength to make its demands for system change central to a society’s political struggles. Such a movement would thus have to win mass support for certain basic goals and a basic political position. The basic goals are democracy and social justice. The basic position holds that to secure those goals or even just the adjustments and reforms sought by others, there needs to be an end to the capitalist system and thus an end to the economic and social position (and hence resources) of capitalists. Otherwise, capitalists will continue to use their position and resources to obstruct those goals just as they oppose, evade, weaken or repeal those adjustments and reforms leftists sometimes achieve.

 

In all capitalist crises, markets serve as transmission mechanisms enabling capitalists to shift the costs and burdens of the crises on to one another and/or the state and/or the workers. The state and the workers resist, but usually lack the economic solidarity and political strength to prevail. In the current crisis, as debt instruments defaulted and credit markets collapsed, banks and other lenders stopped making credit available to non-financial corporations who, in turn, laid off their workers. As the latter reduced their purchasing, consumer goods markets shrank which plunged still more capitalists into crisis, so they also laid off workers. The typical spiral of capitalist downturns thereby generated the unemployment that, at least in the US, continues to grow. At the official beginning of the current “recession” in the US (December 2007), unemployment stood at 7 million; today it is 15 million and continues to grow.

 

Yes, in the US, the bailouts and stimulus programs have kept the credit crisis from getting worse (although it remains extremely difficult for most businesses and individuals to secure credit) and have recovered about 50 per cent of the decline in stock prices that occurred across 2008 and to mid-March of 2009. The federal bailout money is also serving to reduce the size of the fiscal crisis of states and municipalities. However, since unemployment and foreclosures keep growing, the mass of US citizens are becoming angrier as they observe a deepening gap between the economic conditions of the richest corporations and citizens and the continuing decline for the vast majority. The internal divisions inside US society deepen.

 

In the US, the dogma of neo-liberalism – and the professional reputations of the dominant “neoclassical” economic theory and its academic establishment – is under growing attack. A new Keynesianism is rising in professional and political leadership circles; from there it is seeping into the general population. The idea that private enterprise and minimally regulated markets are guaranteed means to achieve prosperity and growth is dead. Now the only debate is about how much government intrusion is needed in the short, medium, and longer runs. Meanwhile, the public space, including in the mass media, for explicitly anti-capitalist perspectives is growing fast.

 

As has happened before, the Left in the US was so demoralized and divided during the 1980-2007 period, that it has been unprepared to intervene effectively in the new capitalist crisis. Most of the left had largely abandoned a politics that included (1) an explicit critique of capitalism as a dysfunctional class structure, and (2) a demand and program for changing to a different, non-capitalist class structure. Inside the US left, now, there is a rapidly developing interest in and openness to such a politics. The situation is similar to the 1960s when the horrors of the Vietnam war brought a generation of US citizens to rediscover the critique of capitalist imperialism and work that into their political understanding and programs.

 

One aspect of the current internal learning process of the US left concerns differentiating class from issues of power. A tradition of conflating these issues – of reducing everything to matters of who has authority over whom – is breaking up. Many are beginning to recognize that leftists have long meant very different things when using the term “class.” Some mean property (rich versus poor); some mean power (rulers versus ruled); and some mean surplus (the exploiters versus the exploited); and these meanings differ in politically important ways. Programs to reduce wealth inequalities, to democratize political power, and to end exploitative class structures are different. The left has stressed the first two and largely de-emphasized or altogether abandoned the last.

 

That is now changing. Increasingly it is recognized that to secure positive changes in the distributions of wealth and power, a fundamental transformation of class in its surplus sense is required. In other words, only if the class structure in production – the organization of the surplus inside enterprises – is radically transformed, can the left gain and secure its goals. This means, for example, that the left is moving toward a basic demand – within trade unions and left social movements – that workers become their own boards of directors. This means that the economic and social position of capitalist boards of directors selected by and responsible to major corporate shareholders becomes a major object and target of abolition. The US left is thus slowly moving toward a debate that replicates the debate among anti-slavery activists in the mid-nineteenth century. Some of those activists then demanded better diets, working and living conditions for slaves, while other activists demanded the abolition of slavery itself. Similarly now, the US left is engaging the debate between those struggling for greater equality and democracy (and ecological sustainability) and those for whom achieving and securing those goals depend on including the abolition of capitalist class structures in the left’s agenda. Otherwise, the capitalist boards of directors and major shareholders will continue to block, undermine, or reverse – as their profits dictate – most of what the left seeks.

 

The period from the 1970s to the current crisis was a long, unprecedented boom for capitalists. Real wages stagnated while productivity rose resulting in huge profit rises for employers. They used those profits to massively reshape public opinion and buy political power for a thirty-year reign of neoliberal fundamentalism. Capitalism’s crisis is smashing that situation for them. Meanwhile, that period exhausted the working class (with more hours per person per year in labor, with the stresses of rising debt, etc.) and weakened its organizations (labor unions, left political parties, etc.). It strengthened the sense among many workers that the only viable solutions to their difficulties were individual.

 

However, the current crisis is changing all that. The reputation and self-confidence of neo-liberalism is badly damaged. Workers, partly still in shock at capitalism’s failures and mounting costs in their lives, are beginning to appreciate the old lesson: we cannot solve social problems with individual solutions. Hence they are rediscovering the relevance of class structures and of social movements to solve the problems exposed and worsened by this crisis. The future for the Left in the US – and likely beyond as well – lies in speaking directly to and building upon both the deteriorating conditions and those growing recognitions of the working class.