Remember Mark Fisher.

Cultural theorist Mark Fisher died last week. He was just 48 years old. Ideologically committed to the ethos of Punk Rock, Mark Fisher was an influential music critic and blogger at K-Punk. Unlike liberal critics, Fisher did not engage with pop culture without recourse to critical theory and politics. And by politics, I mean radical politics.

From what we know, Fisher committed suicide after a lifelong struggle with depression. I hesitate to use the dreadful cliche ‘struggle’ together with depression. This condition requires greater nuance, and he himself wrote a lot about the politics of depression and what he called ‘depressive hedonism’, the cycle of pleasure and sadness enforced and regulated by social media and other forms of enjoyment. The inability to escape from the relentless treadmill of desires brings us to despair again and again.

He was right to see depression as a key figment of the era. It’s not just that the capitalist system has produced an alienated working class, the new threat is an all encompassing gloom – feelings of powerlessness and helplessness. This takes subtle forms. Fisher talks about ‘magical voluntarism’, which he describes as “the belief that it is within every individual’s power to make themselves whatever they want to be”.

After all, if you are a truly free individual then you have only yourself to blame for your problems. It’s not just right-wing politicians pushing this idea. It’s in Reality TV, CBT and the popular guff of self-help therapy, ‘positive thinking’ and ‘mindfulness’. We’re rendered still by ‘reflexive impotence’, Fisher argues, but it’s not an individual matter. It’s political and socio-economic in the end. It’s about the induced decline of class consciousness. And this is where it gets interesting.

There is an alternative

The politics of depression fit neatly within a broad political analysis of our predicament. This brings us to the notion of ‘capitalist realism’. In his book of the same name, Mark Fisher attempted to encapsulate the ideological field which prevents us from seeing beyond the horizon of the capitalist system. It’s easier to imagine the end of the world than the end of capitalism itself.

As a term, ‘capitalist realism’ is an obvious play on socialist realism – the stultifying aesthetic and cultural policies of the Soviet Union that snuffed the life out of the Russian avant-garde in the 1920s. This is itself a wonderfully subversive tactic of appropriation. In an interview with Ceasefire Magazine, Fisher summed up his analysis:

Put simply, capitalist realism is the view that it is now impossible even to imagine an alternative to capitalism. Capitalism is the only ‘realistic’ political economic system, and, since this is the case, all we can do is accommodate ourselves to it. This leads to the imposition of what I have called ‘business ontology’ – a version of social reality in which every process is modeled on corporate practices.

‘Business ontology’ is Fisher’s name for the incapacity to see the world outside of business and corporate terms. This is probably a play on Alain Badiou’s phrase ‘market ontology’. Even leftists struggle to see the world outside of market forces and the structures of business, big and small. In this sense, capitalist ideology – in the domination of culture, not just the economy – shapes the limits of thought and discourse, not just practical action.

Fisher was adept at coining such terms. ‘Market Stalinism’ was another great invention, referring to the enforced practices of companies. He singles out examples like employees being obliged to wear items expressing their individuality. Later, Fisher would use the phrase ‘liberal Stalinism’ to refer to the increasing tendency of the left towards moralism on social media. He would use this to dissect the Twitter mob as a new puritanical force.

Far from a conservative, Fisher was concerned by the decline of left-wing political experiments as a loss to revolutionary politics. Note, this was before Occupy Wall Street broke out in 2011. He wanted the left to avoid the drift into purely theoretical discourses, but not move towards action for the sake of action. This is not a desperate call for the Black Bloc to save us. And it’s not a diversion into the obscure corners of academia.

Instead, the focus is on the system and how it ensnares us. Capitalist realism dissolves agency and politics as we know them. It leaves, in its wake, the notion of individual responsibility and guilt. If you can’t find a job, that’s your fault. It’s not down to the structural functions of the economy, and its need for cheap labour and unemployment as a pressure for keeping wages low. All the while, we’re told we can do anything and be anybody.

Much like Slavoj Zizek and other thinkers, Fisher was responding to the ‘end of history’ and its almost universal acceptance. This led Mark to question the stagnant, managerial politics of the New Labour era. His work called into the question one of the fundamental assumptions of neoliberalism, namely the idea that “there is no alternative” to a liberal market economy. Fisher was not alone in his efforts to tear down the limits being foisted upon the human imagination. But, at the same time, he was not uncritical of the contemporary left.

The retreat into identity

In Exiting the Vampire Castle, Mark Fisher attempted to diagnose the ailments of the modern left, singling out its fetish for social media and the growing trend towards so-called ‘identity politics’. The loss of a sense of organisational form, instead drifting into petty bourgeois moralism about personal conduct and individual virtue. He takes the posh left’s animosity towards Owen Jones and Russell Brand as key instances of this.

Taking issue with ‘call out culture’, Fisher sees the fixation on moral failings (whether real or imagined) as a return to a new puritanism on the left. He points us to the abusive outbursts of Twitter mobs, and he is right. Ultimately, he argues, this shift serves to paralyse us – feeding back into the hopelessness endemic to the system. In short, petit-bourgeois moralism isn’t a substitute for political theory and action, in fact, it might actually be a hindrance to it.

At the same time, Mark is careful to make clear he does not think straight white guys should be treated with reverence. Nor does Fisher dismiss the struggles of queer people, women and people of colour. Rather he takes issue with the creeping influence of petit-bourgeois moralism, which appropriates these struggles and ties them to liberal reformism. He detects this influence in university life, and suggests it deters working people from getting involved.

Of course, Fisher was not alone in his scepticism of the shift towards identitarian politics on the left. He was very critical of what he called ‘neo-anarchism’, a name for a specific breed of anarchism espoused by privileged millennials – who have never known life before neoliberalism. The neo-anarchists fall back into the ditch of neoliberal thinking, as they hold twentieth century social democracy and communism in contempt, but refuse to concede parliamentary or state politics ever achieved any good at all.

It sounds like a close cousin to what Nick Srnicek and Alex Williams call ‘folk politics’. They argue that the organised left has fallen by the wayside and become enamoured with spontaneous local action over organised, hegemonic projects for universal emancipation. Instead, the collective focus is on localism and the immediacy of particular struggles rather than vertical, hierarchical attempts to restructure the world and build a far-reaching alternative.

This may be why horizontalism and anarchism are in vogue. Yet Fisher doesn’t see any hope in a return to old leftist ‘economistic’ notions of class. He sees the limitations of social movements at present, but does not see salvation in past models. In this regard, Fisher sounded like most other so-called postmodern theorists, but he was not necessarily wrong in this emphasis. The post-capitalist future is in the present, and the struggle is not just to defeat the present system but to bring about that future.

This article was originally published at Souciant.

Capitalism is Dead.

The Monstrosity of Capital.

To report the death of capitalism is to exaggerate, to say the least, given we find ourselves subject to austerity measures as the global economy stumbles from one crisis to another in a little under 4 years. In the past capital has been likened to a vampire insofar as it is parasitic in its relation to labour. But it is no longer a suave count as capital is seemingly dead when it comes to the suffering of ordinary people. At the same time it is still capable of violent bursts of energy and it is mindlessly destructive in the pursuit of it's sustenance. So it seems appropriate to describe the current order as zombie capitalism, it requires a minimum of 3% compound growth in order to continue and that translates into a need for profitable investments of $1.5 trillion. In the future the system might demand even more, maybe $3 trillion in growth and we are struggling to find $1.5 trillion right now. One day the banking sector could be so big that it cannot be saved and we will be dragged into the abyss as it collapses. For us to gauge where we are today, and where we might be heading, it is important to remember the causes of the Crash of 2008.

A Popular Capitalism?

As David Harvey has noted, this crisis can be understood if we go back to the crises of the 1970s when organised labour posed a threat to capital. To the extent that the workers' share of GDP peaked in 1967. The unions had demonstrated a capacity to undermine the Establishment in Britain with the fall of the Heath administration in 1974. So the need for a broken labour movement emerged, which gave rise to Thatcher and Reagan to impose such discipline on the working-class. With the full-on assault on organised labour and its political allies came the mobilisation of a global labour surplus; the development of labour-saving technology and increased competition as neoliberalism emerged. The consequence was a sharp decline in the share of wages in total GDP almost everywhere, an enormous disposable labour reserve emerged and survived under marginal conditions. In fact some of the biggest wage-cuts in the world were endured in the US in 1985 and the UK in 1990 which was a direct consequence of the way trade unions were crushed.

The structures of monopoly power was undermined, with the state-monopoly capitalism being displaced in the meantime as the system was opened up to fearsome international competition. Ultimately the intensity of global competition led to lower corporate profits in non-financial domains. The early signs of a hegemonic shift of power towards East Asia came as uneven geographical development and inter-territorial competition had become key factors in capitalist development. The most fluid and mobile form of capital was utilised to reallocate capital resources at a global level, which led to the deindustrialisation in traditional heartlands of industry whilst new forms of industrialisation and resource extraction began in emergent markets. The character of these new forms might be labelled appropriately as ultra-oppressive, for instance in the Congo around 4 million people have been killed for the extraction of coltan. The ultimate aim was to enhance the profitability of financial corporations, thus the need for new ways to absorb risks through the creation of fictitious capital markets.

There is No such Thing as Society.

Accumulation by dispossession became a means to increase class power for the ultra-rich and so a new round of primitive accumulation - against indigenous and peasant populations - was in order to augment the asset losses of the working-classes in the developed world. We have only to turn to the African-American victims of the sub-prime housing crash. The mass-privatisation of social housing in Britain, which took place in the 1980s, appeared as a gift to the working-classes as it enabled them to convert from rental ownership at a relatively low cost to the control of a valuable asset which might make them rich. Speculation soon took over the housing market, eventually pushing low-income earners out to the outskirts of cities. David Cameron is about to further this process as part of a bid to recreate the property boom. It used to be that the capitalist invested in production. But for the last 30 years the economy has underwent financialisation as the capitalist has invested heavily in making money out of money rather than out of anything productive.

The increase of sagging effective demand was accomplished by pushing the debt economy - in governmental, corporate and household spheres - to its limits. This became standard method in the West, so it should be no surprise that in the US the household debt relative to income doubled from 1982 to 2007. By 2007 the ratio of financial assets to GDP had doubled since the early 80s. Incidentally the household debt in the UK was around £1,560 billion in 2010 and may rise to £2,126 billion by 2015 as a result of the cuts. The compensation for anemic rates of return in production came in the construction of a whole series of asset market bubbles and culminated in the property bubble that burst around 2007. Each of these asset bubbles drew upon finance capital and were facilitated by extensive financial innovations, specifically derivatives. The control of assets and resources at the heart of international finance became central to the system in the last 30 years. We no longer make things, we just make money out of money.

There is no Alternative.

The way that the crisis of the 1970s was circumvented led to nearly 16 years of growth in Britain from 1992 to 2008. It led to Gordon Brown claiming that Boom and Bust had been abolished. The current crisis has to be circumvented somehow, in the past that has required the enforced destruction of productive forces, the conquest of new markets and an even more thorough exploitation of old ones. So British manufacturing went into a decline from which it has yet to recover under Thatcher, employment in that area plummeted by 30 years from 1979 to 1990. The very means by which the system regenerates itself typically paves the way for even more extensive and destructive crises, as the means whereby crises are averted are diminished in doing so. The financialisation of the economy led to the financial crises of the last 30 years. The infinite capacity of capitalism to regenerate itself at the expense of the majority of the population should not be underestimated, but with each recovery the foundations for another crisis are laid.

The pressure is on for the ruling class to crank out profitable investments for $1.5 trillion, so it can meet that minimum of 3% growth for the time being. The state's reaction to the crises has opened a door which we're being led through and we don't yet know what is on the other side, it is just a mysterious darkness to us right now. This is nothing new, with the Crash of 1929 came such an opening and we all know what happened in Europe as Germans were marched into the darkness. Then there was the crisis of 1973 in Britain as a result of the oil crisis, which led to the collapse of the Heath government then the pathetic reign of a weak Labour government and then the emergence in 1979 of Thatcherism. This is not cheap fear-mongering, it doesn't seem realistic that either of these will emerge but we have to keep in mind what is possible. We might take comfort in the fact that when the Americans were marched into the same abyss it was the New Deal which emerged and not National Socialism. But it is not necessarily the case that history is on our side.

We're All in this Together.

The Master and Medvedev.

So, it looks like Vladimir Putin will be President of Russia by March 2012 due to a convenient arrangement with Dmitry Medvedev, who succeeded Putin in 2008 though Putin stayed on as Prime Minister. By 2008 Putin had served two terms as Russian President and had to allow someone else to take office for at least a term because of a constitutional technicality. So Medvedev stood for the Presidency and Putin became Prime Minister for 4 years. In return Medvedev will serve as Prime Minister and lead United Russia. This is not a surprise to anyone familiar with the highly cynical and corrupt nature of Russian politics. It has reached the point that there is not even a whiff of shame to be found at such scenes anymore. It was in front of an audience of dutiful bureaucrats that the decision was announced, then came an embrace which the bureaucrats were keen to welcome with applause. Then it was openly stated that Putin and Medvedev had come up with this arrangement several years ago. The obvious had been admitted.

The possibility of 12 years of Vladimir Putin draws the inevitable comparison with Joseph Stalin in the Western media, e.g. if Putin retains power until 2024 he will be Russia's longest serving ruler since Stalin. When faced with a Russian authoritarianism the Western media can only refer us back to the shibboleths of the old Communist Party. Sadly it doesn't go without saying that the rise of Putin cannot be understood without context. The Economist would have you believe that it is Putin who has undermined Russian democracy before it got a chance to flourish; created a "Mafia state" of crony capitalism via the Kremlin and poisoned the benevolent experiment with liberal capitalism. The conclusion being that the West should adopt a tougher policy towards Russia, e.g. to support Ukraine and Georgia. There is no room for a deeper look at the roots of Putinism, because we might find that the post-Communist world is not just an orgy of consumerism where the sky is the limit when it comes to free-choice and rates of growth.

For the journalists at The Economist it was Putin's failure to shirk from liberalisation of the economy which will lead Russia into future crises. According to The Economist these "weaknesses may make Russia unstable and nationalistic, which will make it harder for foreigners to deal with." Even though nationalism has been a strong tendency in Russia for a long time and the economy was plunged into a deep crisis in the 1990s as a result of reforms. After the collapse of the Soviet Union, with the advice and support of the US, Boris Yeltsin initiated economic "shock therapy" - a wave of spending cuts, removal of price-controls, deregulation and a spree of privatisation. It was "creative destruction" as millions were plunged into poverty, prices shot through the roof and ruthless businessmen grabbed as much as they could. The country was effectively looted as the state became increasingly ensnared by the oligarchs that had managed to seize large chunks of Russian industry in the chaos. Ultimately the structural adjustments of the Russian economy provide the pretext and create the conditions for a figure such as Putin to emerge on top.

There is no attempt to even reflect on this point in the pages of The Economist. Of course, what really bugs the squealing pigs at The Economist is that the new Russia has yet to join the World Trade Organisation and that the rampant corruption in the country has a disruptive impact on the market. This is not a fundamental critique of Putinism. Primarily The Economist is displeased with Putin's specific choice of Prime Minister and would prefer it if he had chosen Alexei Kudrin over Medvedev. The reason: Kudrin stands for "fiscal responsibility" which means spending cuts for the plebs. The fact that Kudrin can balance a budget means more to this lot than the fact he's just another crony. Kudrin has an affinity for civil liberties, human rights and political pluralism, so he is much more appealing than Medvedev. But he is even more appealing as a "martyr" to liberal values in a barbarous land, it feeds into the self-serving narrative in the Western media. If Alexei Kudrin was Prime Minister under Putin then he would no doubt walk the same line as Medvedev.

The Economist notes that the swap between Medvedev and Putin "opens a new chapter in Russian history - one that may well end in crisis." The fact that it was a crisis in 1998 which allowed Putin to slither into the Kremlin in the first place. The "new chapter" began with the fall of the Berlin Wall, after which Fukuyama heralded the "End of History" and a pisshead named Boris Yeltsin became the President of the new Russia. The collapse of Communism left a void, it was as if all ideologies had failed and the world had entered a post-political age of managerial governance which fed into a climate of cynical anti-politics. Since then an ultra-nationalist populism has emerged, as well as anti-Communist hysteria and even a conservative nostalgia for the Cold War. In a similar way to Berlusconi in Italy Putin stands as a bulwark to the chaos of the marketplace which is conveniently situated at the apex where ultra-politics and anti-politics collide. The only "alternative" permitted by the Kremlin is the Russian Communist Party, everywhere the politics of Russia is riddled with ultra-rightist and proto-fascist groups such as the National Bolsheviks. All the while the Western media is only capable of liberal day-dreams about the new Russia.

Capitalisme ou Barbarie?

We find ourselves incapable of even imagining another society, a better world and an alternative to capitalism. It is even easier to imagine the end of the world itself than the end of the capitalist system. The motto of the ideological constellation which currently holds us hostage might as well be a pun on the old socialist saying, instead of "Socialisme ou Barbarie" the capitalist can say "Capitalisme ou Barbarie". As the system can only defend itself at this point as the only way, all other roads have led to barbarism, so we must stick to this last route carved out by the managerial aristocracy on the way to a plutonomous future. According to this view, all the "experiments" with socialism have failed and that proves there is no alternative to capitalism available. Any attempts to change the world are doomed to fail, to descend into totalitarianism and horrors beyond our wildest dreams. In Celsius 7/7 the neoconservative Michael Gove posits Islamism as the new great evil of the world, in line with National Socialism and Communism.

Unsurprisingly, the radical Left is the natural ally of radical Islam in the eyes of Michael Gove and for him both have to be combated. First of all, the presupposition is that the problems of the 21st Century are ethical-cultural (e.g. the right to choose, free-speech, niqabs etc.) and that socio-economic issues have been solved. This in itself is a result of the ideological struggle that has repressed the socio-economic dimension in recent decades. For Gove the Left are simply the purveyors of a backward economics that impoverished and killed millions in the 20th Century. So the economic system is unquestionable, the debate is about freedom which is under threat from Islamism. Even though it was the economic crisis of the early 30s that led to the rise of National Socialism and the sustained deprivation under the Tzars which preceded the Russian Revolution. It can hardly be said that the rise of Islamism is unconnected from the failures and collapse of Arab nationalism, which was dedicated to economic justice along secular lines.

The way that the problem of economics has been submerged is befitting in a world in which capitalist realism is prevalent. Mark Fisher defined capitalist realism as "the view that it is now impossible even to imagine an alternative to capitalism. Capitalism is the only ‘realistic’ political economic system, and, since this is the case, all we can do is accommodate ourselves to it." As a product of the emergence of capitalist realism, we seek to solve societal problems within the narrow framework of which we are allowed to think about change. In the midst of crises we seek refuge in a business ontology, in which everything will be remodeled on the practices and forces of the market. This is what lurks behind the austerity measures which are sweeping the Western world right now. The cuts to public spending are an expression of the inability to even imagine a better world, in Britain we dare not tax the 10% of the population who owns £4 trillion in wealth. Instead we revert to the neoliberal shibboleths of austerity measures, debt reduction and fiscal responsibility etc.

In the 21st Century we have found this extends to health-care, education and warfare, but also as far as terrorism. We ought not forget that al-Qaeda is active in private-terrorism which funded by the Saudi bourgeoisie, Osama bin Laden inherited his wealth from his father - who died in a helicopter crash in 1968 - which would swell through lucrative investments over the years. In other words, the attacks on the World Trade Centre were cross-subsided with money extracted from the stock market as well as the generous donations made to the group by wealthy Arabs who are sympathetic to the cause. Consequently, the military-industrial complex has in turn been able to secure greater and greater funding for the stated purpose of "defence". Due to the interconnected nature of high-tech industry and the military in the US the increased funding functioned as a huge injection of capital into the economy. The convergence of interests which benefited from the attacks then went on to invade Iraq on the basis that the war was necessary to prevent another devastating attack on American soil.

The US had made it out of the Great Depression until the early 40s just as the country began to build up for war as Japan attacked Pearl Harbour in 1941. By 1949 the US government was concerned that the country could fall back into economic depression if the military apparatus was dismantled and so Truman opted for perpetual war for perpetual peace. The military functions as a cover for the state-sector of the American economy and has done for a long time. Since then the US has spent over $7.1 trillion on defence and today the US military budget accounts for 50% of military spending in the world. Incidentally, from the end of the Second World War to today the US has "intervened" in over 70 countries around the world. This has played a vital role in the development of the US as a economic superpower, without it Bill Gates and Steve Jobs may not be so wealthy today. It was massive state-intervention which created the internet and computer technology before it was handed over to the private sector. This is the dirty secret of the American economy.

When reminded that "capitalism works" and "socialism fails" we ought to remind the reactionary  that the system only works as long as 3% compound growth can be attained forever. That if we can just find profitable investments for just $1.5 trillion a year and every year forever, even as the amount rises to $3 trillion and beyond, then we let billions of people slip into poverty and starvation. The Right are sceptical of climate change because it threatens growth ad infinitum but are comfortable with Peak Oil because it seems to be another "obstacle" for capitalism to circumvent in order to go on indefinitely. Suppose climate change is a hoax and the energy crisis can be solved, that will not alter the potentialities of capitalism to push onwards to new crises. We may find ourselves in a position where the banks are too big to bailout and we are dragged kicking and screaming into the darkness of the abyss which we have managed to avoid for so long.

  

At one of his more gloomy moments Karl Marx thought that the class struggle might lead to the "common ruination" of all classes and he did not have the thrill of living in a world of nuclear weapons, chemical warfare and environmental decay. It would seem the infinite growth paradigm is incompatible with a world of finite resources and the ultimate trajectory is fatal in destination. Thus capital is an abstract parasite, an insatiable vampire and a zombie-marker. As Mark Fisher notes "the living flesh it converts into dead labour is ours, and the zombies it makes are us." We are edging ever closer to an unprecedented state of crisis which has been generated by the system and all the while we can envisage the end of the world but not even begin to think about the alternative. The dichotomy of capitalism or barbarism keeps us chained to the status quo. That is the intended goal of those champions of the free-market who cheer on the entrepreneurial spirit of Bill Gates and Rupert Murdoch.

Ayn Rand, Computers and Capitalism.

The first in the series All Watched Over by Machines of Loving Grace was brilliant and marked with the intellectual characteristics of Adam Curtis. The focus of the series is the way in which machines have risen and led us to believe that we could create a stable world that would last forever. Admittedly it is a strange story, it all began with an even stranger woman called Ayn Rand and a philosophy she called Objectivism. The philosophy might be described simply as a highly rigorous form of individualism, essentially meaning that man should put his own happiness first and spend his time improving himself to his utmost potential. He should use common sense and reason in every instance, whilst finding motivation in his own existence. There is no room for altruism and charity in this philosophy. The ideological procedure of Objectivism is an identification with capitalism which is so stringent that it actually undermines the ruling ideology. So we must understand Ayn Rand as part of the tradition of over-conformist authors.

Rand's masterpiece was Atlas Shrugged (1957) was trashed by the critics, even conservatives like William F Buckley called it "ideological fabulism" and distinguished it from The Fountainhead (1943) which he considered to be an engaging book. In spite of this Atlas Shrugged became the bestseller of the century and the most influential book in America second only to the Bible. In the book Rand attacks the idea of altruism head on, she depicts an America in which all aspects of life are controlled and regulated by the government. But then all of the creative individuals who have made America great go on strike and hideout in a remote valley whilst American society collapses. The creative geniuses only emerge to rebuild society after political power has collapsed and the country has descended into an apocalyptic hellhole. The new world which would be born from this would be built without politics and would be based upon the virtue of selfishness.

For the book Ayn Rand returned to a moment from her childhood, when her father went on strike to protest against the Bolsheviks and she imagined the super-rich in America going on strike against the rate of taxation in the US on high-earners. At the time it was 91% on incomes over $400,000 and would be chiseled down to 70% within Rand's lifetime. Though she would not live to see it chopped down to 28% under Ronald Reagan. In her lifetime she saw the rise of social democracy in the US and Bolshevism in Russia, the latter of which left her in an almost permanent state of post-traumatic stress disorder. In fact it could be said that as an intellectual Rand developed in the footprint of the Bolsheviks and only to oppose the fundamental ideals of socialism in order to defend the status quo. Thus, the thorough rejection of equality and descriptions of the masses as "refuse". The influence of Ayn Rand runs deep in American society, her writing has shaped the politics of people like Rand Paul, Glenn Beck and Jimmy Wales. Many of the nouveau riche of Silicon Valley see themselves as Randian heroes and some even name their children after Rand.


In California the idea emerged that political power was no longer needed, instead with the help of computer technology we could all become heroic individuals and an order could be maintained through the networks established by computers. With each individual totally free to follow their desires and each a component in a intricate system. The feedback of information between all individuals connected through computer networks could lead to a system which can stabilise and regulate itself. The experiment by Loren Carpenter supported the thesis that stability and order could be maintained without hierarchy and interference. This meshed well with the Californian ideology which is a combination of the anti-authoritarianism of the Hippie counter-culture with Yuppie techno-utopianism. Nation-states were rendered meaningless as the world had become an interconnected system of individuals and governments should leave the system to spawn a new kind of democracy.

In the first episode it appeared that Adam Curtis is taking a good hard look at fundamental aspects of capitalism, as he has in previous films like The Trap in which he examined freedom in the negative and positive conception. In this series the partial focus is on the idea of a stable system which is self-regulating and has no need for government. The notions of stability and perpetuity are fundamental to capitalism, for it requires 3% compound growth forever and it requires a way of managing crises as it is crisis-prone. Similarly important is the theoretical equilibrium between supply and demand as a direct result of the inherent efficiency of markets. Though supply and demand are actually in a state of perpetual flux. So even if the economists could initiate a change in aggregate supply to balance with aggregate demand it would never meet a perfect balance because demand would have already changed by the time supply had been altered. There is always a disequilibrium in the system.

The future chairman of the Federal Reserve Alan Greenspan was a devotee of Ayn Rand and a loyal member of the Collective - a carefully policed group of intellectuals which had grown around Rand. Years later as chairman of the FED Greenspan met with Bill Clinton and told the President that his election promises of social reform could not be carried out without increasing the deficit, which would lead to higher interest rates and lower rates of growth. Greenspan advised the Clinton administration to slash spending in order to lower interest rates and leave the markets to boom. A boom began in the 1990s and it was believed that it would not end because the rise of computers enabled banks to predict the risk of particular investments and loans. The chaos of the markets might finally be brought to a stable and instantaneous order characterised by unending increase in the rates of productivity and economic growth.

By 1996 it appeared that the US economy had lapsed into irrational exuberance, there was no increase in productivity but profits continued to increase and it appeared that a speculative bubble had been created. But Greenspan buckled to political pressure and argued that the computers were increasing productivity in ways that were so innovative that the data was not picking it up. Around the same time, under pressure from the US countries like South Korea and Thailand jettisoned all constraints on the flow of capital. From the flood of Western capital that followed a huge speculative bubble in property emerged and the capital would flee as the crisis began, leaving the countries devastated. Just as the bubble burst in 1997 and the 'Asian miracle' came to an end the sex scandal engulfed the White House. Here the forces of power and love converged, the dream of a stable world was assaulted. The IMF flew in to the affected countries and stipulated market reforms in the economies in exchange for loans.

After 9/11 and the Enron debacle Alan Greenspan took action to stabilise the economy by repeatedly slashing interest rates to bolster consumption. The consumers would be the mechanism by which the system would be stabilised. In the past such an influx of cheap money into the economy had led to inflation, but it did not in this case and there was a boom over the next several years. The illusory boom gave Western leaders reason to believe that the system can stabilise itself without state-intervention. The Chinese Politburo had come up with a way to manage America, the Politburo deliberately held the exchange rate at a low level to ensure that exports would remain cheap. America was flooded with Chinese goods whilst dollars flooded into China, which were then lent back to the US by buying American bonds. The flow of cheap goods and cheap money created a false stability in America, whilst an orgy of lending and speculation spiraled out of control. The vast property bubble which emerged in the US as a result led to the Crash of '08 and in doing so the dream of perpetual stability were revealed to be totally deluded.

Faith in computers had led the politicians and bankers to believe that the boom would just go on and on no matter what. The machines had brought stability to the system, risk had been removed entirely. The fantasies of Alan Greenspan were exposed as just that in 2008, fantasies predicated on a wave of speculation. The market democracy had not emerged from financialisation and stability had not actually emerged. The banks mobilised political power to receive bailouts and the price for the boom would be paid by the Americans who were least capable of doing so. This also generalises to the austerity measures in Britain and other countries. The total wealth of Britain adds up to around £9 trillion, with the majority of that wealth concentrated in the top 20% of the population and the richest 10% holding £4 trillion in wealth. The cuts will hit the affect of forcing the bottom of 50% of the population, who hold less than 10% of the total wealth, to pay for it. The bottom 10% have less than nothing, negative wealth in the form of debt.

In the midst of the crisis we found ourselves incapable of imagining a better world or even a different system, instead we have opted to recreate the system as it was before the Crash and we have handed our public services the bill to do so. Capitalist realism is the only phrase to describe this state of affairs in which we are embedded. Capitalism is the only realistic system for us and all we can do is adjust to it. A business ontology has become all pervasive, so all areas of social reality are to be reorganised along corporate lines and this extends to everything from forests to health-care. This might help us understand the reawakened fascination in Ayn Rand as the crisis hit in 2008 which, as Slavoj Žižek has noted, came about around the same time that social democratic thought was partially unearthed. We can't even begin to imagine a better world so we merely reinvent the current order in a more radical way, perhaps this is the only message Rand offers to us.

Where's the Theory?!

Comfortable Illusions.

The lack of a theoretical case for the cuts may be indicative of a new era we're entering, a political age without shame, instead of the old hegemony we find blatant domination. Even the Thatcherites had a combination of monetarism and rational expectations in the early 80s to fall back on, it was this combination which Thatcher used to defend a platform of spending cuts and raising interest rates to reduce the money supply. The theoretical framework, from which an economic platform could be defended, could be embellished with gestures of traditionalism and nationalism. For Keith Joseph there was something about the monetarist project which had the aura of a messianic mission, a belief that it could rejuvenate Great Britain and restore the glory of Empire. There is no such clear zeal in this cabinet for a particular theory or even a school of thought, merely a self-proclaimed pragmatic dedication to the national interest.

Really, the Conservative Party are the embodiment of the class-interests of the rich and the practicality of a policy can be measured by how much it affects the wealthy. Thus, the economic strategy laid out by the artful oik George Osborne has no clear theoretical base or even a loyalty to a specific school of thought. The criticism of the British government has come from the IMF and monetarists like Samuel Brittan. There has yet to emerge a clear economic theory in defence of the cuts, all we have had for years now is fear-mongering about the debt that our grandchildren will inherit. Even Larry Summer, the Ariel Sharon of Higher Education, has described the austerity measures as "oxymoronic". Of course, the Right who support these cuts in Britain will remind us that the Obama administration has recently unveiled plans to cut the US deficit at a rate faster than the British. No mention of the incompetence of Geithner. No mention of the role Geithner played in creating the crisis.

Despite what is claimed in the media there is nothing new about government debt, practically all governments work with debt and the logic is one of "return on investment". The government can borrow money to invest in productive capacity to create jobs and stimulate demand, whereby a recovery may be secured and the tax-revenues can increase. The rate of spending in a recession can be justifiably increased along these lines. Keep in mind that the deficit is not the result of "over-spending" as the Tories claim, in a recession tax-revenues go into sharp decline because of rising unemployment and businesses going bust. As the tax-revenues are in decline then spending, which would normally be sustainable, becomes unsustainable and debt is inevitably increased even if the expenditure is not raised. The narratives that the Right are trying to build around the crisis are counter-historical as well as counter-theoretical. The traditional way the economy recovers from a crisis is through spending and borrowing, not by cutting.

The "debt crisis" that the commentariat and the political class are obsessed with is a complete fiction. The current levels of debt are low by historical standards, just take the high estimated 70% of GDP which government debt adds up to and compare it to the 260% of GDP which debt accounted for in 1945. There are alternatives to cutting to decrease the debt, we can boost economic growth through public spending but there are other options as well. We might consider Greg Philo's proposal to implement a wealth tax on the richest 10% of the British population - who have accumulated £4 trillion in wealth. There is a mythology which has been created in the media over the last couple of years, which pins the blame of the deficit on benefit claimants and immigrants in the usual manner. As a proportion of GDP debt repayments were around 7% in 2010 and in 1997 the repayments were around 9%. New Labour paid a lot of debt back and spending was not "out-of-control" under them.

Spawn of Thatcherism.

The management of a deficit typically takes into account major indicators such as growth, interest rates, exports and so on. So the aim of a zero-deficit by 2015 is either a sign of economic illiteracy or cunning on the part of the oik. It is as if Osborne looked at his calendar, saw when the term will run out so he highlighted the date and now we're on track for General Election 2015. This does not smell at all like pragmatism or even business ontology, it could be that the aim is to push the plans ahead as far as possible - before the economy starts to tank and public opposition becomes insurmountable. We might even see a U-turn as seen under George HW Bush on tax-cuts, when his administration saw that the deficit could not be reduced through tax-cuts for the mega-rich. It cost him his second term, but in the case of the Tories and Lib Dems a sudden change in trajectory would probably prolong their stay in government (depending on the details). But it would only provide another opportunity for market reforms and privatisation.

Paradoxically, the spending cuts have the potential to increase the debt as seen in the late 1970s when some economies initiated sweeping cuts to spending. There are only a handful of cases in which austerity measures have promoted growth. Even with the cuts that smashed the British economy in the early 80s, the recovery had little to do with the cuts and a lot more to do with the supply-side stimulus in the United States and financialisation which regimes in South-East Asia at the centre. For the sake of argument, let's assume that the cuts work out and that the economy recovers fully within the next couple of years. The contraction of the economy might only be avoided in such a scenario if aggregate demand is not decimated. The losses in wages could be supplemented through credit, as seen in previous decades, which would necessitate the rise of debt per household.

So here we are one year into what The Times called the Five Year Plan of the Con-Dem Coalition, only the Murdoch press could imply such a tendency in a majority government of neoliberals - the spawn of Thatcherism. We've just lived through Year One and we have already seen protests against the party-line of "CUTS!" with estimates ranging from 500,000 to 850,000 of those who took to the streets on March 29th to demonstrate against austerity measures. All along there had been talks about cuts across the board and market reforms in the usual areas, with Cameron trying to put a 'moderate' stamp on the Conservatives and then a 'progressive' stamp on the Coalition. So that the reheated slop of Blairism can be smuggled into government via the backdoor. Of course, I use the term Blairism to refer to the reinvention of Thatcherism through the mirage of centre-leftism and quasi-evangelical rhetoric of Tony Blair. Now the Con-Dems have used the claims to leftism by New Labour to grind down what remains of the welfare state.

We have seen the beginning of the spending cuts, a sprinkling of privatisation and market reforms, for example health-care reform is still on the table, though attempts to privatise the forests were stopped and cuts in education have been 'moderated' slightly. We've seen Tories talk with glee at the possibility of cuts that Margaret Thatcher could only dream of and we have seen large-scale activism against the austerity measures. Soon the majority of universities will be charging £9,000 and the Institute for Fiscal Studies has predicted that 200,000 children will be pushed into poverty by the cuts. Ironically the plan to reduce public debt by £43 billion could lead to household debt rising from £1.56 billion to £2.13 billion by 2015. So the Rally Against Debt was actually a Rally For Debt. At this point we have to keep going to force the Coalition into compromise just before the axe can be swung again.

Heretical Truths about Thatcherism.

The rise of monetarism came in the 1970s when Keynesian economists were baffled by stagflation. The orthodoxy of the day was rattled by the continued rise of inflation, alongside a rise in unemployment, and monetarism provided a theoretical answer to the crisis. It was the consequence of spending more than we produced and inflation was caused specifically by too much money chasing too few goods. The transition from Keynesianism to monetarism came before Thatcher, Callaghan began to use the theory to explain the problem of inflation that had wracked Britain since the war. The purpose of economics began to shift from job creation to combating inflation as Britain accepted a loan from the IMF in 1976, which stipulated huge cuts to public expenditure and deficit reduction. As a result interest rates were lowered, the value of the pound increased and the balance of trade began to improve because of new oil revenue. The crisis forced Labour to consider scrapping nuclear weapons.

In 1979 Callaghan was booted out of office and Margaret Thatcher was elected Prime Minister. Inflation had risen over 10% and unemployment was continuing to rise, monetarists argued that higher interest rates and lower spending would lead to less inflation. By 1980 under Thatcher the cuts to public spending led to even higher unemployment and inflation doubled in spite of the fiscal squeeze. By 1981 interest rates had to be lowered in order for the exchange rate to be reduced, the hope was that this would lead to an increase in exports. Thatcher opted to cut even more in order to keep up appearances with monetarism, which it could not publicly dump for the sake of rational expectations. These expectations demanded consistency of government, as a way of maintaining the illusion of integrity and avoiding bad press. As a consequence of rising unemployment, as well as the strain of inflated prices on citizens, the country was shaken by riots.

When inflation finally began to fall the money supply was actually still rising and it could be that the rise in unemployment led to the fall in inflation. In 1982 it appeared as though the Thatcher government was walking into the election equivalent of an abattoir, wherein the Thatcher cabinet would have been slaughtered for the economic destruction of the preceding 3 years. The Falklands War is what doubled the popularity of Thatcher, which left 910 dead, as the rising tide of nationalism gave them something to ride into the election against socialist Michael Foot. The War became a football match with guns, the people were mobilised through 'national pride' to save Thatcherism. In a post-colonial era of decline Britain was particularly vulnerable to despair, especially given the reliance on tradition to uphold the fabric of society rather than a constitution as in the US. So it should be a surprise that the Thatcherites were able to surf on a tidal wave of jingoism into a second term in 1983.

Triumphantly the Thatcherites then moved to privatise gas, electricity, telecommunications, steel and the airline. The government effectively declared war on the unions, the point at which the ideological battle shifted in full to the favour of government was when the Miners' Strike was finally brought to an end in 1985 with the defeat of the NUM. The concerted effort to crush the unions went as far as M15 surveillance . The impact of the defeat could be seen by 1990 when the working-class were subject to some of the biggest wage-cuts in the world and the number of poor in Britain had increased by 100% throughout the Thatcherite era (1979-1997). The gap between rich and poor peaked in 1991, though Britain is still far more unequal than it was in 1968 and the impact of inequality has been seen in various forms of social deprivation. It has been estimated that the costs of the increased inequality and unemployment to lie within the range of 5% to 8% of GDP, compare this to the productivity (which increased alongside wages before Thatcher) gains of 5% to 10% under Thatcher.

Inflation finally dropped to 3% in 1986, but monetarism had been quietly discarded by the Thatcherites long before. It was in 1985 that Margaret Thatcher claimed to have never subscribed to some of the theories of Milton Friedman. The theories of monetarism would be replaced by Goodhart's Law which held that if the government ever adopted a particular theory or doctrine as a basis for policy, the relationship between theory and policy would quickly fall apart. The government was incapable of creating a better world, therefore it should not disturb the markets too much and leave individuals to make the best of the situation. Later the destruction caused by the policies would be "justified" by a boom which ultimately led to the Crash of 1987 and ended in the recession of the 1990. The financial crisis in 1987 came just after the election and Thatcher was safe until 1990, when events would lead to her being ousted so that John Major could lead the Tories to victory once more in 1992.

The neoliberal theories of Milton Friedman came to influence policy and were the expression of a convergence of particular interests manifested in government, in order to devastate the working-class that had done so well in the post-war settlement. By raising unemployment and crushing the unions Thatcher succeeded in creating a reserve army of labour that would be desperate enough to work for stagnant wages. Similarly the work of Adam Smith was used as window-dressing. This can be seen in 1990 when some of the biggest wage cuts hit the working-class in Britain, which could generate greater profits. The selling-off of council houses and the deregulation of finance opened up possibilities of investment for the future, just as manufacturing began to go into decline, where money could be made from money and not wasted on unprofitable ventures. This has been the source of boom years ever since the late 80s, property and finance have taken the place of industry.

The boom of the 80s was a result of the deregulation of finance, a huge increase in arms deals and a property boom created by the selling-off of council houses. The low interest rates were conducive to the property boom. The tax-cuts increased the wealth of the richest 10% of the population, majority of investments were made in property and finance where there were stupendous profits to be made at the time. Manufacturing went into decline and employment in that area declined by 30% between 1979 and 1990. Though it should be noted that the boom had little to do with Thatcherite cuts, the recovery had a lot to do with international events as there was a supply-side stimulation in America that helped keep Britain afloat for a while. Similarly the deregulation of finance in Britain coincided with a new regime of accumulation kicking off in South-East Asia. It was only a minority of people who benefited from the boom, rates of growth might have fluctuated around and above 5%, but the growth was not unprecedented by historical standards.

The fall of Thatcher in 1990 came after the Poll Tax demonstrations descended into riots in Trafalgar Square, unemployment reached around 7%, working-people had been by some of the biggest wage cuts in the world as inflation began to rise into double figures once again. Without the leader that had never been as popular as her own party the Conservatives secured one last victory and remained in office until 1997. After 18 years of Thatcherism the public expenditure had returned to slightly over 42% of GDP, which is what it was when she took over. Just as the rates of growth had not been spectacular (though profits were stupendous) nor was the "reduction" of debt and the "rejuvenation" of Great Britain, which was left broken and unequal. The images of the 80s as crass and flamboyant, that we all know, represent the zenith of Thatcherism which had made a minority of citizens very rich from privatisation, deregulation of finance and the exploding cost of real estate.

Capitalism, Regular not Diet.

There is a sense in which capitalism is a utopian ideal, particularly in it's untrammeled free-market conception, ironically this is quite like the communist ideal of a classless society and in both cases it appears that the idea itself seems to have a power of its own. Not only is the notion of the free-market essentially a tool to argue for greater deregulation, mass-privatisation and large tax-cuts, the features of the concept itself are ideals: perfect competition, no barriers to entry and the absolute transparency necessary for perfect information - which would require a world without advertising. Theoretically these features are what is needed for market efficiency and the kind of equilibrium dreamt up by free-market fundamentalists everywhere. But supply and demand are not static, market forces are in a constant state of change and as a result we are always in disequilibrium - e.g. there will always be some unemployment in a market system.

Not only is the vision utopian, the necessary conditions are impossible to construct without massive state-intervention in the economy, a "Big Government" is the nightmare of the average free-marketeer, and that still assumes the conditions can be achieved and maintained. A limited state is desirable because state-interference in the economy, whether it be in the form of regulation or subsidy, can constrain and influence market forces. This is why it has been argued that neoliberalism is most compatible with a liberal domestic programme. Although it can be argued that capitalism does not tend towards racism, misogyny and homophobia, the system requires racism to defend itself and it's flaws. Populist rebellions are led against positive discrimination, abortion, political correctness, unions, multiculturalism and welfare to push through a right-wing economic programme. The people are deprived of organisation while the business community is left intact and fully organised.


However, it is reductive to merely focus on free-market capitalism, as this ideal does not exist, especially in the developed world where a pure capitalist system has never existed. The systematic violation of free-market principles has been the key to economic growth and development for centuries. Today it is the "secret" of the economic dynamism we can all see in China, capitalism with Asian values which is essentially capitalism without any semblance of democracy. The fundamentalists typically deride any statist deviation from laissez-faire theory as "socialist" or "social democratic". But that would presuppose a level of welfarism and nationalisation as part of the deviation. In the 19th Century it was common for the state to exert power for the benefit of business, while it did not provide welfare for the poor. In the US there is plenty of tax-dollars to provide welfare for rich white men, but not for the poor and the vulnerable. It might be more accurate to label this kind of economic system as state-capitalist or even corporatist. We ought to look at liberalism more closely at this point.

In economic liberalism social constraints are predicated on economic freedom, whereas in political liberalism individual freedom is derived from economic constraints. But the basic assumption of capitalism, whether social democratic or neoliberal, is that there can be endless economic growth in a world of limited resources. This is precisely the reason that the Right have been in denial about climate change. Not only does this secure the world-view, holds that infinite growth and finite resources are compatible, it appeals to the elites who believe that there could be greater oil reserves under the polar ice-caps and to get to it we should let the ice-caps melt. A suicidal logic of socialised costs and privatised profits, let the world slide towards oblivion for the sake of short-term profits and short-term tax breaks. The environmental costs of capitalism are huge and it may take another energy crisis for the governments around the world to take these costs seriously and move away from fossil fuels altogether. But I won't be holding my breathe, change comes from the grass-roots.

The same distinction between really existing capitalism and the "unknown ideal" of capitalism is often drawn by right-wing intellectuals who are on the defensive. This posits the failed system, really existing capitalism, as social democratic or even socialist in order to justify a call to return to free-market principles and ultimately the rejuvenation of the system as it is. When the Crash of 2008 came around, a result of a debt-driven boom, the recession that followed led to a shift to Keynesian economic policies, e.g. bailouts, as a way of resolving the crises. But this was just an transitional phase from the recession back to market liberalism is in the works in the form of a harsh austerity on an international scale. After landing in the safety-net, provided by the tax-payer, the banks will resume lending practices and further intensify such practices whilst delving into new areas. The opening up and exploitation of new markets also "opens up" new possibilities for future crises, that could be potentially more extensive and destructive than the last. At the same time the means by which another crisis could be averted are being undermined. Predictably the end result will be another crash.

Over the platform, of tax-cuts for the rich and spending cuts for the poor, the Right will often hoist up a banner of "freedom". Along with words like "justice" and "democracy", "freedom" is a hurray word which can easily be emptied of all meaning and used as a cover for policies that are practically the opposite. Freedom is a slogan that appeals to everyone, no one could oppose freedom and it appeals to the rugged individualist in all of us. In other words it's a public relations wet-dream of a slogan, the kind that can rally support for any policy no matter the content. Note the Conservative Party in the UK proposed "free schools" which would be schools set up by middle-class families and private companies at the expense of state-schools and free lunches for pupils. Free for the middle-classes and the ultra-rich. Similarly the free-market and free-enterprise are often used as banners for economic policy in the US. Newt Gingrich proudly cuts spending on welfare and public education in the name of the free-market, whilst funneling the billions saved into high-tech industry.

Capitalism is not only an economic system it is ideological and its politics are an extension of its economics. The rising standards of living and significant development of the last century are often posited as a defence of capitalism. For economists, theory is supported by the fact that it works and meets particular standards, e.g. it leads to greater economic growth, but this seems insufficient upon closer inspection.  It is joined at the hip with the falsity that the system is justified by the "failure" of all other alternatives. This is the rationale behind Thatcher's famous motto "There is no alternative." This is the pragmatic tendency which runs through economics and beneath the surface lurks utilitarianism. The pursuit of the greatest aggregate happiness enters as a justification for the vast inequalities produced by the system. Along these lines the justification for capitalism is the greatest happiness overall, which will be tipped by the ecstasy of the opulent minority against the class interests of the majority. The people are best off (e.g. happy) with as much individual freedom as possible and untrammeled capitalism leads to prosperity - "private vices reap public benefits".


We could go down this road to justify Fascism, as there was a great deal of economic growth and development in Nazi Germany. Hitler was the most popular leader in German history in the 1930s because the Nazi Party carried out a social revolution, the lives of working-people improved significantly. In fact the economic miracle under Hitler was driven by state-intervention in the economy on a huge scale. The major accomplishment of the Fascists was to play to the interests of the workers and the bosses, it was effectively done by buying-off socialism and liberal capitalism. This came in the form of social services, job creation, subsidies and protection for industry. It was also done through anti-Semitism, for the rich the Jew was a communist and for the poor the Jew was a banker. The concentration camps provided a slave labour force for manufacturing companies, as well as a traffic management system which could be designed by private companies like IBM. It worked and it could have lasted if Hitler had waited until 1942 to invade Poland. Do these facts justify Fascism?

Notice the defence of capitalism on pragmatic grounds also starts to fall apart once you take into account the fact that the system requires 3% compound growth, in order to avoid collapse, every year forever. We live in a world of finite resources and the system is a infinite growth paradigm. Even without taking into account environmental degradation, which also threatens delusions of growth ad infinitum. Today the economy needs new investment opportunities for over $1.5 trillion and in 20 years it will be for over $3 trillion. Not only do the opportunities for investment need to be there, the investments need to be profitable. The lack of profitable investments in industry for the last 30 years is partly what has led to the financialisation of the economy. Money is not poured into production anymore, instead capitalists invest in assets, stock and other ways in which they can make money out of money. It is not enough to tame the system with social democratic reforms, the time has come for something a lot more radical.