Crisis and Capitalism

Crisis is a fundamental and indispensable concept for understanding any capitalist society. Not simply a breakdown or malfunctioning, capitalism also thrives on crisis, renewing itself on the opportunities created by a natural disaster or even (and especially) crises of its own making, which result in sudden and dramatic devaluation of people and property. To say that capitalism is a crisis-prone system does not at all mean that it is bound for collapse or complete self-destruction. However, it does mean that humanity periodically finds itself at a sort of crossroads where multiple possibilities are conceivable, where the only path we cannot travel is the one we took to get there.

In the twentieth century, there were two decisive moments of crisis, transformation, and regeneration in the capitalist world economy. Both were global in their scope, though certainly with different variations and responses across the Western hemisphere. The first was in the 1930s with the Great Depression, which was met with fascist statism (e.g., Nazism) in some nations and social democratic reformism (e.g., the New Deal) in others. The second was in the early 1970s, which paved the way for neoliberalism, the Reagan-Thatcher attacks on the welfare state, the "Washington consensus" about the sanctity of free markets, and all the rigid forms of "structural adjustment" which continue to be imposed around the world through the powers-that-be of international finance. I would venture to say that we are now living through a period of crisis whose most dramatic symptom has been the financial collapse of 2008, and not only is the crisis still unresolved but nobody has any ideas about how to move forward rather than just backward.