THE POPE’S TIMELY CRITIQUE OF CAPITALISM
Pope Francis, who shows signs of becoming an innovative and reforming pontiff, has come out with a lengthy critique of contemporary capitalism. He had criticised the economics of ‘unbridled consumerism’; and went on to announce that: ‘As long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and by attacking the structural causes of inequality, no solution will be found for the world’s problems.’
I think many people, whether they are Catholic or not, will view that as a very fair and objective summary of the shortcomings of modern capitalism.
Though of course he has incurred his critics on the right, for daring to put forward such a thesis. Shika Dalmia, of the Free Market Reason Foundation, took the Pope to task for those comments in an article in the Washington Enquirer, entitled: The Pope’s Self-Defeating Anti-Capitalist rant. A line no doubt echoed by many others in the establishment press.
No one, except some fringe ideological fanatics, are arguing in favour of totalitarian socialism or asphyxiating Stalinist regimes like North Korea. That’s a bogus alternative to capitalism. And it is ludicrous to claim that it is either capitalism or something like North Korea, as the mail journalist Simon Heffer recently wrote, in another critique of the Pope’s pronouncement. Of course that reductivist either or argument is an old chestnut, that has done the rounds a few times. And it can be regularly trotted out, like a racehorse being taken round the paddock. And it’s hardly surprising that it has been taken out for another canter, in the light of the Pope’s words. To say that it is either capitalism or North Korea, is like saying that the only alternative to black is white, while ignoring all the myriad colours of the spectrum.
The fact that we are increasingly living in an oligarchy rather than an effective or coherent democracy, is thanks, in great measure, to the huge power and influence of the corporate sector. In America especially, there seems to be a sinister, undeclared synergy between the corporate elite and the political power players in Washington DC. As can be witnessed, on a regular basis, in the establishment party politicians doing the bidding of the Corporate kingpins, regardless of whether there is a Democrat or a Republican in the White House; and in vigorously pursuing dangerous, but profitable technologies, like Fracking and Genetically Modified Food, which are mistrusted, and viewed with alarm by millions of people. Though in such a political system, it’s not what the people want, it’s what the corporate bosses, acting through their political intermediaries, want. And what they generally end up getting as well.
In the American system the lobbyist is far more important and influential than the voter – who has only a choice between two corporatist parties, which share almost the same ideological assumptions; and whose differences are often more rhetorical than actual – while Wall Street and Capitol Hill can now be seen as two sides of the same coin.
Indeed look how autocratic and powerful media Moghuls, like Rupert Murdoch, have tried to skew the entire political debate – by means of their papers and TV news networks - in a more radical, right-wing direction. (Indeed a recent media study found that those who only watched Murdoch’s Fox News Station were less informed about the world than viewers of any other major news network). And we have seen the sleazy and buffoonish Italian media magnate, Sylvia Berlusconi, shamelessly use his powerful media machine to catapult him to power as the Italian Prime Minister. Though mercifully the long years of his bumptious and cringe-making rule have now come to an end, and he has been forced out of office, amid a flurry of sex and finance scandals, and he has even been indicted and found guilty of tax fraud; though with little hope of his ending up in jail, like a common criminal.
Liberal Democracy and Corporate Capitalism aren’t at all natural bedfellows. Many of the corporate bosses, or oligarchs as the Russians’ more candidly call them, have proved to be highly authoritarian, if not autocratic in character. One thinks of the appalling leadership of Lehman’s Bank in New York. More nearer home of course there is the example of Ron Goodwin, the former, lamentable boss of RBS – who made a series of blundering, cack-handed and catastrophic decisions, without seemingly any of his associates and underlings having the nerve or bottle to challenge him – which resulted in him almost crashing the bank altogether – indeed at one point it was almost in danger of crashing the entire country – at the cost of an astronomical fortune. And of course the hard pressed tax paper, who had nothing to do with those idiotic decisions, had to pick up the tab. (Through Mr Goodwin was allowed to walk away from the mess he had made with a gold plated pension, courtesy of New Labour, with the only indignity to suffer being the withdrawal of a Knighthood he should never have been awarded in the first place). But Ron Goodwin wasn’t on his own, as other crass blunders, ineptitudes, and miscalculations on the part of other empire-building bankers have shown. The old myth that capitalism is some flawless self-correcting mechanism, that will, as if by magic, repair its own flaws and fix its own problems – without needing any outside oversight or regulation – was blown out of the water by the recent Banking crash. The system imploded, through its own efforts, and was only bailed out, and saved from its own folly, by the state, and the tax-payer.
The Pope isn’t calling for some revolution to overthrow the system. He isn’t some latter-day Lenin or Trotsky, in ecclesiastical clothing. He has merely voiced some cogent and telling criticisms of the existing system; which are also shared by many commentators, academics, and I would suggest by many members of the public as well. Indeed the inherent flaws of the system are evident, all around us, in bank failures, in the current recession, in the huge and growing disparities in wealth between the superrich elite and those at the bottom of the pile, and in a rigged system where these at the top seem to be rewarded almost as much for abject failure as they are for success. Where banks are too big to fail, and bankers are too big to jail. It is a moral and intellectual mess. If this is the best we can do then it is a poor reflection on our society, our values, and our political leadership.
Any belief system, whether a religion, a political ideology, or an economic doctrine, that can’t be criticised in its assumptions and practises, can end up as a very dangerous and destabilising entity. If its inherent flaws and shortcomings are glossed over or brushed under the carpet – if actual malpractices are ignored; and the pristine ideological models and theories are preferred, to the day to day practises of the system – then such calamities as the recent banking crash are almost bound to happen; and will certainly happen again, if there isn’t greater transparency and oversight, and critical reforms and corrections aren’t made to prevent such grim scenarios unfolding once more.
There are and have been, despite what some commentators have said, other viable alternatives to the free market fundamentalism of Thatcher and Reagan which has been in the ascendant, in much of the Western world, of late. There was the welfare state, along with the National Health Service, (and of course which went in tandem with a whole plethora of newly nationalised industries, which gave work and a decent living to countless millions of people, as well as their families, across the nation) which was created by Clement Attlee’s Labour Party at the end of the Second World War; and which moreover was brought into being in a bankrupt, war ravaged nation, which had just emerged victorious, and broke, from a five year long total war against the murderous Nazi regime. There was the Swedish Social Democratic model, with its own welfare state, which began in the Thirties and lasted almost up till recent times, and which brought decades of prosperity and rising living standards to that nation. (And look what has happened since, in Sweden, with some of the recent right-wing governments, where ideological privatisation experiments in the education sector – and which have been liberally praised and eagerly followed by our own Tory Education Secretary, Michael Gove – have seen Sweden plunge, like a winged pheasant, down, particularly in maths and sciences, the international league table of education standards, from its previous high position, to almost Third World levels; in contrast to countries in the East, like China, Taiwan and South Korea, where the state education sector is strong and vibrant, and which are now top of the heap). There was the New Deal under Franklin Roosevelt in America in the Thirties, which gave work to millions of people – in huge government created projects, such as the Tennessee Valley Authority – as well as giving welfare payments to those who couldn’t find jobs; and which gave hope and prosperity to a floundering and despairing nation, that many feared was on the brink of revolution, and which had been bankrupted and ruined as a consequence of the dogmatic, evangelistic free market agenda of leaders like Warren, Coolidge and Hoover. (Hoover of course, in his campaign rhetoric, promised the American people ‘A chicken in very pot’. Though as one wag commented at the time, under Hoover, you didn’t get a chicken, and you didn’t even get a pot). Though there was what one might call a socialist or a social democratic agenda to the Roosevelt administration, though he couldn’t say it aloud; it was also the case that he saved capitalism from destroying itself, through massive, centralised, state interventionist policies. Though he got no thanks from the right, and particular the far right, who regarded him as a traitor and communist, for that service. Yet the ordinary people, many of whom were put back on their feet during those years, thought somewhat differently from the ideologues, and its small wonder that FDR was elected four consecutive times to that high office, and that his timely renewal and reinvigoration of the American economy, allowed it to be, in his own words, ‘the great arsenal of democracy’ during the critical years of the Second World War, when the future of the entire world was on the line. With an alternative America that hadn’t moved to the left – still floundering in an interminable economic depression, and trying to use a defunct market system to cure a sick economy which that very system had incapacitated in the first place – that crucial worldwide showdown with fascism could have gone the other way.
Of course there are different forms and permutations of capitalism. It doesn’t come in one standard form. And there is no such thing as a pure capitalist system. That only exists in academic, abstract theory, not in real life. There are mixed economies – with a balance of market and state, that have been favoured in Western Europe and Scandinavia. Then there is the more rigorous, deregulated model – with an emphasis on privatisation, less oversight, and a minimal role for the state – as with Reaganomics and Thatcherism. Capitalism includes the small and medium sized business sector, and the traditional family firm; as well as the powerful, centralised, corporate sector. Though the former is always in danger from the latter, as we have seen with the powerful Supermarket cartel that has squeezed the small shop and the local market to the very margins of the retail sector. And of course deregulation and ‘merger-mania’, particularly in the banking and financial sector – which created huge, faceless, monster banks, often housed in massive skyscraper blocks, manned by labyrinthine, and Kafkaesque bureaucracies, where in some cases no one seemed to be ineffective control – almost brought, with their mixture of greed and incompetence, the entire world economy crashing down.
Just as no one should put all their eggs in one basket, of the two models of a capitalist economy, the mixed economy is far preferable to the Ultra-Capitalist one, favoured by the market fundamentalists such as Milton Friedman, and the Neocons. Indeed had there been a mixed economy in America in 1929, with a strong state sector, and the cultivation of strategic industries, the Wall Street Crash wouldn’t have had such a devastating effect that it had, not just in the US, but all around the world. Just as China, with a strong and vibrant state sector, from its years under Communism, fared much better in the world economy, following the collapse of Lehman’s Bank, than did the United States and Western Europe. And there is now much speculation that China will soon overtake the United States to become the leading economic, and perhaps even, political player, on the globe. A transition perhaps much helped, though not intentionally so, by the blinkered, aggressive unilateralism, and mindboggling, ideological incompetence, of the George W. Bush regime. And just as the Wall Street Crash of 1929 didn’t prevent the Banking Crash of 2008, there is no guarantee that the capitalist system we have will have learned any lessons, from its previous blunders, or institute any significant and meaningful reforms, that will help prevent a future, similar banking or stock exchange crash in the future. The era of boom and bust isn’t over, even though our previous Prime Minister and Chancellor of the Exchequer, Gordon Brown, had the hubris and lack of insight to declare that indeed it was. Bankers are still drawing huge, telephone number salaries and bonuses, for failure and success alike. Hardly anyone seems to have been prosecuted, even for outright criminal activities, like Libor rigging; as if we had a cynical two-tier justice system where the rich get away scot free and only those in the poorer classes face the music. It seems to be very much business as usual. And we shouldn’t expect a great deal from our Prime Minister, Mr Cameron, who of course himself came from a well-heeled banking family.
Some politicians and ideologists on the right have elevated capitalism into some sort of cult or secular religion, that can’t be challenged, questioned and criticised; and that must be accepted as a self-evidently perfect system. On this skewed logic, you can criticise socialism, liberalism, and religion, but capitalism must be regarded as sacrosanct and beyond challenge or censure, despite all its flaws and drawbacks – and all the disastrous and incompetent decisions some of its practitioners have made, particularly in the banking and financial sectors – the consequences of which are all around us. They have turned it into a sacred cow – not a rational system, which can be refined, reformed and altered, to correct systemic flaws, or meet changing needs and circumstances.
You can’t put an economic or political system on a pedestal or in a shrine. In any genuine, functioning democracy, the principles and practises of economic and political systems will and must be critically tested and examined, to see how well or not they work, rather than being accepted on the rosy terms of their apologists and propagandists. Indeed if you can’t voice criticisms of the capitalist system after the recent banking crash, then when on earth can it be criticised?
Religions might require a degree of mystery and magic, but we should blow away the clouds of incense, and silence the pious plain chants of praise, from before the shrines and sepulchres of capitalism.