Neo-liberalism is naked capitalism on its death bed. It preaches more market but actually uses more state intervention. It will die only when capitalism dies. Marxist economist Michael Roberts takes on Noah Smith’s claims that neo-liberalism is making a comeback and is actually increasing GDPs and reducing inequality. But to make that claim Smith has to use China and India as examples of successful neo-liberal economies. Roberts says that growth in these two countries comes not from market reforms but from heavy state intervention.
In fact, Roberts is making the mistake here. Neo-liberalism is capitalism in extremis, not more market. He overlooks the reality that from the turn of the C20th capitalism became state monopoly capitalism, aka imperialism. The market did not set prices as it did in the heyday of competitive capitalism, but increasingly nation states created trading agreements which influenced prices. Nor has this lead to a massive reduction in poverty and inequality. Capitalism historically lifts workers out of poverty. But today both rising inequality and rising poverty are associated with stagnating growth.
China stands out as the only large economy where growth is showing up in some reduction in poverty. Neo-liberalism is therefore capitalism as we know it today, the state concentrating all its power behind the market to fix the crisis and restore profits.
But it cannot win in the long run. That’s because for all its reactionary fury, the neo-liberal state attacks on workers have not restored enough profits to put global capitalism out of our misery. That will be the job of the revolutionary workers who refuse to pay for capitalism’s terminal decline by standing up and overturning the system.
Capitalism won’t die peacefully, it will try to scramble onto our shoulders to avoid paying for its rip-shit destruction of society and nature. That’s where our attitude comes in. Do we agree to be trampled on by a panicking ruling class pushing us into genocidal wars for carbon, or do we choose to accept our historic mission of saving humanity by putting capitalism out of its misery?
Meanwhile, the bourgeois ‘experts’ are debating whether there is any life left in capitalism. What if the long depression is now over and we are into a boom, rather than facing a bust to end all busts? We agree with Roberts that the bust is coming. Whether global capitalism can emerge from that bust into a new boom, is another question. We disagree with Roberts view that capitalism can survive what we call its terminal crisis.
Dave Brownz is The Daily Blogs guest Marxist blogger