Is Capitalism Dead?

[steve]

According to Jay Hansen (of http://www.dieoff.org):

In July and August of 2008, while oil prices were still very high, global crude oil production fell nearly one million barrels per day. Hubbert was right. Capitalism is dead.

When the first free trade episode (1846-79) ended, it led directly to WW1 & WW2. Historians (if any survive) will say that 2008 marked the end of the second free trade episode and that it led directly to WW3.

The capitalist system needs to continually grow or fail. Since growth in production demands growth in energy supply and one of the most vital energy supplies is in now in decline does this mean the era of capitalism is at an end?

Is there a way capitalism survive depleting energy reserves?

PS. I was thinking this debate might make an interesting meeting to organise. It might attract a different crowd of people.

[steve]

Just to add:

If capitalism is dead where does that leave all the anti capitalist groups, socialist parties etc.? I suspect they will have an interest denying capitalism is history every bit as much as the pro-capitalists.

[chris]

It appears to me that industrial society has been powered by fossil fuels and that it's going to end as the fossil energy runs out. Capitalism is not dead yet but it does appear to be starting to collapse...



The image above is from dieoff.org, see also Olduvai revisited.

A recent article by Nafeez Ahmed is good, this is how it ends...

The End of Capitalism? Not quite, but nearly....

Things will get far, far worse, before they get better. This is not yet the end of capitalism. On the contrary, the biggest financial players, like Goldman Sachs, JP Morgan, and others, have used their power over states to secure massive bailouts using public funds, allowing them to prevail while hundreds of other financial institutions have fallen like dominos. As the collapse of the financial system pulls down the real economy, shares in giant corporations which actually produce tangible goods and services have plummeted as consumers are clinging to their increasingly empty wallets. Taking advantage of their supreme position, financiers have moved in fast, buying up the cheaper shares and consolidating ownership of production. We are witnessing an unprecedented re-structuring and centralization of economic and financial power.

Yet the system has perhaps another 10-15 years before irreversible collapse as the impact of peak oil kicks in. In this time-frame, as working people are increasingly upset, confused and angry about the acceleration of socio-economic injustice, activists and researchers have unprecedented opportunity to work harder than ever to develop a vision for the future that is just, inclusive and holistic. The time to prove that there are meaningful alternatives is now.

[steve]

Yet the system has perhaps another 10-15 years before irreversible collapse as the impact of peak oil kicks in.

Hmm. Well that seems to suggest that, like most of the mainstream media, he thinks the current recession has nothing to do with peak oil. To suggest that the sharp rise in oil price, itself caused by demand outstripping supply, wasn't, at the very least, a major factor in causing this recession is untenable. Here's why:



Every oil price spike here has caused global recessions and 4 of the past 5 recessions were triggered by increased oil prices.

I'd say the impact of peak oil has already kicked in and collapse is already irreversible. The only question is how we manage it.

There's a good article on the Oil Drum about the recession and oil here.

[steve]

Ah, just read this bit of his article:

Yet pre-Crash inflation also had another specific cause in the 21st century, namely, rocketing fuel prices; fuel prices rose from 2001 through to 2008 primarily due to supply-demand issues (not purely due to financial speculation although this played a role), most likely as a consequence of peak oil.

[greg]

I think it would be great to have a debate around this issue. If Capitalism is dying then where to next and are there any precedents?

I was just surfing around to try to find out when and how Capitalism started and found this website which puts a positive spin on things in the context of the transition to re-localisation i.e. happened a few times before.

www.wsu.edu/~dee/GLOSSARY/CAPITAL.HTM

"The earliest forms of capitalism—which we call "mercantilism"—originate in Rome, the Middle East, and the early Middle Ages. Mercantilism might be roughly defined as the distribution of goods in order to realize a profit. Goods are bought at one site for a certain price and moved to another site and sold at a higher price. As the Roman empire expanded, mercantilism correspondingly expanded. But the contraction of the Roman empire from the fifth century onwards also contracted mercantilism until, by the 700's, it was not a substantial aspect of European culture, that is, European economies tended to localize."

Not so positive is this fellow Paul Virilio who suggests that "the transition from feudalism to capitalism was driven not primarily by the politics of wealth and production techniques but by the mechanics of war. Virilio argues that the traditional feudal fortified city disappeared because of the increasing sophistication of weapons and possibilities for warfare. For Virilio, the concept of siege warfare became rather a war of movement. In Speed and Politics, he argues that 'history progresses at the speed of its weapons systems'."

Greg

[steve]

Interesting article Greg. It adds a number of attributes to Mercantilism to arrive at Capitalism though.

This part of the philosophy is the bit that I would say can now no longer function:

Capitalism as a way of thinking is fundamentally based on the Enlightenment idea of progress; the large-scale social goal of unregulated capitalism is to produce wealth, that is, to make the national economy wealthier and more affluent than it normally would be. Therefore, in a concept derived whole-cloth from the idea of progress, the entire structure of capitalism as a way of thinking is built on the idea of "economic growth." This economic growth has no prescribed end; the purpose is for nations to grow steadily wealthier.

Our economy is now shrinking and that's probably a permanent state of affairs. Even if we have the odd plateau or upturn it won't alter the general downward trend. If it's goal is to increase affluence but it can no longer do that then what future does it have?

[greg]

Yes that's interesting - I have always been puzzzled by politicians harping on about economic growth. I stopped growing at around 20 and could reasonably be expected to reach 70 or 80 (economic conditions permitting). Why have Western leaders always expected humanity to have a different life-cycle to it's constituent parts? Probably something to do with enlightenment thinking based upon some earlier ideas which served humanity well when there was plenty of space to grow into. Maybe that's another thread.