Shame? If we've learned anything over the last year, it's that Wall Street has none. Ten months ago Wall Street lobbyists beat back a proposal to give bankruptcy judges the right to amend mortgages in order to pressure lenders to reduce principle owed, just like Wall Street lobbyists are now beating back tough regulations to prevent the Street from causing another meltdown. ...But if Wall Street doesn't have any shame, why should Congress and the Obama administration have any?
Shame won't work. Only political muscle and courage will. Congress and the Obama administration should give homeowners the right to go to a bankruptcy judge and have their mortgages modified.
Reich is correct: Only political muscle and courage will work. But it has to be the political muscle and courage of the people, not the faction of the capitalist class that Obama represents.
In What is to be Done?, Lenin makes a fundamental point, a point ignored by most modern progressives: The government does not stand outside society, imposing some "Kantian" morality. The government is part of society, subject to all the same pressures of economic and political self-interest as the rest of society. It is just as delusional as belief in God to believe that the government can do what's "right" independently of the self-interest of its members.
Thus the progressives' dilemma: If the masses of people were organized and disciplined sufficiently to exercise political muscle and courage, there is no way they would tolerate the private ownership of capital: it is in the self-interest of the people to take away the economic rent that capital affords for the individual benefit of its private owners and appropriate it for social uses.
The appropriate of capital for social use is the essence of communism; everything else is the "how". If the people have sufficient political power to "regulate" capitalism, they have sufficient power to eliminate capitalism, and it is in their rational self-interest to do so.
"But," a person like Paul Krugman might argue, "we successfully regulated capitalism in the 1950's and 60's, to the mutual benefit of both the capitalists and the people."
Indeed we did, at least if we define "successful" and "mutual benefit" loosely enough to exclude black US citizens, to exclude women, and to exclude most of the rest of the world subject to our economic imperialism. (Keep in mind that the Civil Rights movement, the Feminist movement and the rebellion of middle-class youth directly against the Vietnam war and indirectly against the stultifying social conformity of the era marked the beginning of the end for New-Deal capitalism.) New-Deal capitalism was an improvement over Gilded-Age capitalism only because the latter set such a low bar.
But New-Deal capitalism is, as we have seen, not an evolutionary improvement. The sine qua non of an evolutionary improvement is that the it persists and becomes the new baseline. An improvement that eventually regresses to the status quo ante is not an evolutionary improvement. It might seem better, but it does not actually respond better to the only thing that matters in evolution: selection pressure. It is plainly apparent that New-Deal capitalism has been regressing to Gilded-Age capitalism since the 1970's.
Fundamentally, the New-Deal era resulted not from a fight between the working class and the capitalist class. It resulted from a fight between factions of the capitalist class; Roosevelt's faction successfully co-opted the political will of the people. The difference is subtle but important. The New-Deal era did not result in more power for the people themselves, it resulted in more power for a faction of the capitalist class, a faction that can be described only as somewhat less hostile to the interests of the people than their opponents.
Our "democracy" is structured to include only factions of the ruling class. We vest power in elected representatives for a period of years, which insulates their day-to-day decisions from political consequences. Supposedly, we do vest power to ensure representatives can "do the right thing" even when it's unpopular, but there's no such thing as the objectively right thing; the effect is to do what's in the interest of the capitalist ruling class when this interest is opposed to the people's interest.
Elected representatives have a standard of living greatly in excess of the ordinary person. This standard of living is not their own (we pay the President a
The people are fundamentally alienated from their representatives. How often does the ordinary person actually interact with any of their representatives about public policy, even at the local level? All the communication between the people and their representatives is through institutional channels: the commercial media and polls. The only "voice" the ordinary person has is the vote, an extraordinarily low-bandwidth channel.
The effect of all of these factors is that the people have been trained for generations not to seize and hold political power for themselves, but rather to give their loyalty to some faction of the capitalist ruling class.
The interests of the capitalist class on the one hand and on the other the working and (today much more important than in the 19th and 20th century) the unemployed classes are fundamentally irreconcilable. There is only one finite, limited pie worth fighting for — the surplus labor of the working class — and there is no long-term meta-stable distribution of this pie. All the economic, social, and political feedback mechanisms lead eventually to either pure laissez-faire libertarian capitalism or communism.
A meta-stable distribution must have a robust mechanism for negative feedback: a successful attempt to increase an individual's share of workers' surplus labor would automatically create pressure to decrease that share. In much the same sense, tipping a roly-poly toy changes the distribution of forces in such a way as to push the toy upright again.
However, in capitalism, when an individual capitalist successfully increases his share of surplus labor, he has more power to affect the economic, social, and political systems to continue to increase his share. Microsoft and Bill Gates continues to be successful precisely because they have been successful in the past, not because they are inherently better at creating software (<cough> Windows Vista). We have only chance and providence to thank that Mr. Gates is predisposed to be more-or-less politically liberal rather than a gung-ho Randian.
Indeed the positive feedback mechanisms are whole point of capitalism, what caused its survival under the economic selection pressures in the 18th and 19th centuries during the struggle against feudalism. Capitalism causes exponential economic growth, which is possible only when positive feedback dominates without countervailing negative feedback. A substantial part of the political and social changes that capitalism effected were removing the negative economic feedback systems that evolved under feudalism. In Marx and Engels' words,
The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors”, and has left remaining no other nexus between man and man than naked self-interest, than callous “cash payment”. It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.
The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked up to with reverent awe. It has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage labourers.
The bourgeoisie has torn away from the family its sentimental veil, and has reduced the family relation to a mere money relation.
The bourgeoisie has disclosed how it came to pass that the brutal display of vigour in the Middle Ages, which reactionaries so much admire, found its fitting complement in the most slothful indolence. It has been the first to show what man’s activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals; it has conducted expeditions that put in the shade all former Exoduses of nations and crusades.
But no positive feedback system can go on forever. At some point nature will impose its draconian limits. We are human beings, we can foresee and respond to those limits, it is our choice whether we intelligently respect those limitations, or let nature impose them catastrophically.
All the mechanisms of capitalism concentrate wealth into the hands of owners of capital, regardless of the social and moral predispositions of the individual capitalists. A capitalist who forswears unlimited accumulation will eventually be defeated or absorbed by another who pursues unlimited accumulation. All the mechanisms of capitalism concentrate labor into the production of commodities, objects or services that can be exchanged for profit. But eventually we must turn our labor to the general good, to create conditions that cannot be commoditized: clean air, good health, leisure and actual happiness and satisfaction (unlike the transient pseudo-happiness of pure material accumulation, which trades a momentary rush for a greater emotional crash).
It is an open question whether capitalism represents an advance in any sense over feudalism; it may be that capitalism's only claim to success — vastly increased material productivity — affords only the opportunity for a proportionally larger population to live at the edge of starvation. But there's no going back; even if capitalism is an advance over feudalism, and even if capitalism does regress, it will regress into something very different from 17th century feudalism. But our task today is not to look backwards with regret.
Our task today is to take what we actually have — a mighty engine of material productivity — and choose to employ it in the benefit of the people. And the only way to do so is for the people themselves to decisively seize and hold economic, social political power, and forever destroy the power of the capitalist class. If we do not take up this task, we have nothing to look forward to but an ever-decreasing standard of living and eventually literal enslavement.