Crises of Capitalism and Social Democracy

The Stagnation-Financialisation Trap

In your new book, The Endless Crisis, you and Robert McChesney talk about the ‘stagnation-financialisation trap’.  What do you mean by this?

People commonly see what happened in 2007 and 2008 when the bubble burst as a financial crisis and nothing more.  But the real problem is a tendency towards economic stagnation in the mature economies, and the long-term slowdown in the rate of growth.

Our argument is that financialisation, the series of financial bubbles that we’ve had over a period of decades, has been the main thing lifting the economy.  I think this is fairly well understood now, but it wasn’t understood so well five or six years ago.  And while financial expansion has been lifting the economy, financial bubbles always have their limits.

As the bubbles burst the government of course tries to act as the lender of last resort, pouring in liquidity and loans, to get the financial system going again.  But it’s not able to deal with the underlying problem which is stagnation, and this time we’re stuck, they can’t get the financial system really going again, and we’re faced with a problem of economic stagnation that’s surfaced as a result.

We call this the ‘stagnation-financialisation trap’ because the financialisation is the answer to stagnation but it creates bigger, more complex problems, and eventually the two problems together get us into a condition where we really can’t move forward.

What are the roots of this condition of stagnation you’re describing?

Basically, to understand the problem of stagnation, and also financialisation, you have to go back in time.  We can go back as far as the Great Depression, which was a period of severe economic stagnation.  And of course, we got out of the Great Depression mainly as a result of the Second World War, and after the War there was the period which we sometimes call ‘the golden age’ (although it had all sorts of problems itself), where the economy was going fairly well for all sorts of reasons.  This had to do with the rebuilding of the European and Japanese economies after the War; basically the economy was very liquid because consumers hadn’t been able to spend during the War, so there was a lot of purchasing power; there was the second wave of automobilisation; there was the Cold War which led to further military expansions.  And all these things propelled the economy forward for a time.

But eventually, in the 1970s we ended up with a crisis and the economy started to slow down.  In the 1970s the rate of growth was slower than in the 60s, it was slower in the 80s and 90s than the 70s, and it was slower in the first decade of this century than in the 1990s, and it looks like the economy is now slowing further.  This was true of the United States; it’s also true of Europe and Japan.  So this is a problem of stagnation that’s quite acute at this point.

Beginning in the late 1970s, for a few decades the economy was lifted by financial expansion, one financial bubble after another; the whole financial system grew relative to the underlying economy.  Business elites couldn’t find outlets for investment within what’s called the real economy, or production, so they poured the economic surplus or savings at their disposal increasingly into financial speculation.  That had the effect of lifting the economy in a secondary way, but then it eventually created bigger and bigger bubbles, bigger and bigger financial crises, and finally we come to one that the state as lender of last resort can barely handle at all, and we’ve got this interminable crisis.  It’s put us back into stagnation in a big way because we can’t use financialisation effectively to expand the system, and there’s no other way that anybody knows of, of how to expand the system on a long-term basis given the current conditions.

The Limits of Minskyism

You mentioned earlier how the key role of financialisation in keeping the growth of the economy going has become only latterly more widely understood.  Now, one of the key names in relation to that wider understanding more recently is Hyman Minsky.  But I know that you part company with him, and I wonder if you could just spell out exactly where that is?

Starting in the 1960s, Hyman Minsky developed a theory of financial crisis.  He came out of Keynes, and he was a socialist, but he focused on financial crises largely independent of what was going on in production — so he didn’t look at the stagnation problem, or the underlying class dynamics much.  He simply had a pure theory of financial crisis, where a financial system over time gets more and more unstable, because the more debt that’s created, the quality of it diminishes, it becomes more speculative, and essentially you have a Ponzi system, and the whole financial structure threatens to come down, and the government has to come in as lender of last resort.

He didn’t really deal with the relationship of this with the real economy, and he didn’t deal with what we call financialisation, that is, the long-term trend in the growth of finance relative to production; instead he just focused on financial crises, one after the other, without looking so much at the long-term trend, the build-up of debt over decades.  Only after the 1987 stock market crash, he wrote a piece for a book that I contributed to as well [Gottdiener and Komninos,1989], and he introduced a new notion of money-manager capitalism.  He said, look, this is systemic now, we have an entire economic system that’s dominated by money managers, who are basically running the show, and capitalism is fatally flawed.  He was trying to work this out, but he didn’t get very far.

Harry Magdoff and Paul Sweezy, meanwhile, in the 70s, 80s, and 90s, had written about the growth of financialisation as a response to stagnation in the underlying economy, and that’s where I come out of.

Those who subscribe to the Minskyist view seem to argue that what we need to do is limit the role of the financial sector and then we can get back to ‘good growth’, and restore the primacy of the real economy.  Now you’re suggesting basically that this can’t happen.  This is presumably why you’re calling this the ‘endless crisis’?  But in that case, how endless is it?

First of all, why can’t the government and the central banks just regulate the financial system?  Well, there’s one main reason, and that’s that you’ve got this underlying problem of economic stagnation.  The expansion of the financial system, of the whole debt and credit apparatus, has been a way of utilising the economic surplus which isn’t utilised in productive investment.  It’s instead poured into speculation, and that creates a wealth effect that has a secondary stimulus to the underlying economy, because as people who benefit from asset price increases get wealthier, they spend more on consumption, and that stimulates the economy.  Finance also provides some jobs, although not as much as other sectors of the economy.  So the financialisation of the economy has been this major stimulus, and it’s helped keep the mature capitalist economies growing at a rate that’s fairly low but considered adequate.  And without the financialisation there’s no real stimulus to growth.  And this is the problem they have.

As a financial expansion slows, the authorities know they have a bubble.  They know it’s out of control.  They know that the speculation’s going to go so far, and that it will eventually burst.  And what can the regulators do?  They can try to clamp down on the speculation; but if they do, the bubble will burst, and the economy will go into crisis, and maybe into a very deep crisis and recession.  Nobody wants that to happen on their watch.  So they don’t do it, they don’t try to prick the bubble in advance.  The government can’t stabilise things under these circumstances because they’re worried about pushing corporations that are ‘too big to fail’ over the edge; they’re worried about the bubble bursting.  The only thing they can do under these circumstances is give the investors more rope, and hope that when the bubble finally bursts, they’re not the ones in office.  And so this is the way the system works, it’s not something that can be controlled in any rational sort of way.

In terms of The Endless Crisis [Foster and McChesney, 2012] — of course, nothing is really endless.  Marx once referred, following Epicurus, to ‘death the immortal’.  In other words the only thing that is permanent is change, the passing away of existing conditions.  But it does of course make sense to refer to an endless crisis in a more historically specific sense — in terms of the system itself and its current phase.  The whole stagnation-financialisation trap is endemic to mature monopoly-finance capitalism.  It might be that some new innovation will come along and save the day temporarily, but we’ve had the whole computer revolution, and it still hasn’t stimulated investment adequately.  Google might be seen as standing for such innovation.  But it only employs some 20,000 workers in the entire United States, which is tiny.  There’s just no sign of anything on the horizon that will solve the demand-side problem of saturated markets and an increasing underemployment gap.  The only solution of those in power, really, has been financialisation, and that in itself is very dangerous.

On top of all this we now have the additional problem that, because of the shift in accumulation from the industrial sector to the financial sector, we have a financial power elite that is basically running the show, which makes it doubly difficult to solve these things.  Neo-liberalism is really a reflection of this shift towards a financialised system, or as I call it monopoly-finance capital.

The Response to Stagnation and Recession in America and Britain

If we could turn now to the response to the crash and subsequent recession, in the UK over the last couple of years, people have pointed to the Obama Administration, and said that he has been responding to the recession in a much better way than the Conservative-Liberal Government here — that Obama has still maintained some stimulus spending and has achieved some growth as a result.  What are your views about the way Obama has handled the recession?

When Obama came into office I wrote a piece with Robert McChesney called ‘A New New Deal under Obama?’ [Foster and McChesney, 2009].  But it was clear from the beginning that Obama would not offer much of an economic stimulus.  And so there was a very small economic stimulus in the United States, $750 billion — that’s over two years — and a very big part of it was tax reductions.  The actual government spending increases that came out of it were meagre.  So there really wasn’t much of a direct government stimulus.  I always imagine that when Obama was elected president the big boys at the Federal Reserve and the financial interests and Geithner brought him into the room and said: ‘We’ll let you have your little stimulus, but we’re going to put more than $10 trillion into bailing out the financial system and that’s where the real game is, and yours is just for show.’  I’m just making this up of course, no one has any way of knowing how this played out behind closed doors in the White House, but it was sort of like that.  What was done in terms of fiscal policy was meagre compared to what was done through the Federal Reserve and monetary policy, essentially printing money.

The US economy is not doing very well — it’s stagnating, the big issue is economic stagnation, because unemployment is enormously high — especially if you look at the U6 instead of the U3 figures (the real unemployment, which takes into account the effects on labour participation and so on).  Unemployment and underemployment by the U6 figure is currently over 14 per cent.

In Britain, of course, you’ve had a double-dip recession, and are worried about a triple-dip.  This has to do in part with the fact that Britain has gone much further in adopting austerity programmes that go against everything that we know about economics and what you do in a recession.  The country that produced John Maynard Keynes seems to be totally ignorant of fiscal policy and strategy — but it’s more than that — it’s not simply a question of bad policy.  In Britain, as I understand it, the City is much more central even than Wall Street is in the United States.  Basically, the British system is more dependent on financial power than is the United States.  Under these circumstances the authorities are doing what the financial interests want — which isn’t necessarily what’s good for production or for the economy or for employment or income.  But it does help those with money.

Those with money capital — especially the big financial interests, the banks, insurance companies, hedge funds — are primarily concerned about one thing right now, and that’s preserving their capital.  We’re in a period where maintaining the value of existing financial assets is actually the number one issue, and this is clearly driving British policy, and to a lesser extent that of the United States.

Monthly Review‘s Influence

Can I ask about the influence now of your ideas, and of Monthly Review more generally?  To what extent has the financial crisis given Monthly Review wider influence in the mainstream media?

Well, we struggle.  Monthly Review has, I think, a growing influence on the left in the United States and worldwide, among those willing to listen, but in the mainstream US media — which means the corporate media — we’ve made very little in the way of inroads at all.  The media is conservative by any standard, and it’s very corporate-controlled.  Indeed, the media are themselves giant, monopolistic corporations.  Hence, we represent a viewpoint that’s off-limits.  Although certain business and financial interests follow us closely, it is certainly not something that normally comes out into the open too often.  We do, however, have an impact within the left and the movement in general, and also among political economists and heterodox economists — and I think all of this is growing.

What is interesting today, and I would certainly not attribute it to our direct impact at all, is that some prominent liberal economists are gradually moving under the force of events toward an assessment that reflects where we’ve been all along.  Paul Krugman in recent years has rediscovered stagnation, and after the financial crisis he started reading Minsky, followed by Kalecki.  Now in the last few months or so he’s discovered monopoly power and labour versus capital — he says he never realised that labour-saving innovations could be so destructive to labour.  And he says that he’s basically discovering the value of an old-fashioned Marxist sort of view!  Of course this doesn’t mean he is about to become a radical; only that he is forced to approach the economy these days with a greater degree of realism.

The issues that we’ve been talking about in Monthly Review are more and more central to current conditions, and so we have an impact on the discussions taking place amongst informed individuals in the financial community as well as left intellectuals.  But in the United States the political climate is still very different to that in Britain.  In the UK, the fact that a Labour leader had a Marxist father might not actually destroy his political future in Parliament, but in the United States the right-wing is very powerful.  They’re constantly trying in the mass media to link Obama to the left, and to demonstrate that he’s a ‘socialist’, which of course is a patent absurdity.  There’s still this kind of mini-McCarthyism that’s never really gone away.  The ‘respectable left’ itself frequently gives into this, policing itself to be as liberal-sounding as possible, and to downplay any lingering socialism in words as well as deeds.

What about on university campuses in North America?  I’m wondering to what extent the younger generation is exposed to and seeking out your kind of arguments?

Well, I personally have more invitations to speak on campuses than I can possibly ever fulfil, they’re just growing massively.  I do a few and I try to farm out talks to others.  Monthly Review is now known for three things — it’s known for its analysis of the ecological crisis and for its understanding of monopoly capitalism, stagnation, financialisation, and the whole economic trap that we’re in.  Plus there is the third area, that goes way back, of the critique of imperialism.

There’s a lot of people who are calling on us for the environmental analysis, and have been for some time; and now there’s more and more people who are focusing on the economic failures of capitalism.  It’s the youngest (and perhaps the oldest) activists today who are mostly focusing on the economy; whereas, let’s say those in their thirties and forties on the left have been concerned more with the environment.  It’s a strange situation.  Because a while ago, the economy wasn’t so much the issue, while the environment was; now it’s the economy, but especially among younger people, people who were influenced by the Occupy movement.

The End of Capitalism?

The bigger question hanging over all this, going back to what you said about how of course nothing is really endless, is: how do you see things playing out?  And is this the end of growth?  And does that mean it’s the end of capitalism?

There are old theories of economic breakdown (where Henryk Grossman is the most famous example) that still have some currency among the left — the notion that the system will just economically break down due to a falling rate of profit, and in the midst of it the left will rise.  But capitalism isn’t going to exactly economically break down: what we have is a problem of stagnation, which is very slow growth and rising unemployment (and underemployment) and excess capacity.  So the system doesn’t really collapse, but because the pie is not increasing, in order for capital to get its profits and accumulation, they have to take bigger slices of the pie, which means everybody else gets smaller slices, so inequality increases.  The system just sort of splutters along, and the conflicts get more intense, but there’s no actual economic breakdown.  Gar Alperovitz is calling the economic situation one of ‘punctuated stagnation’, that is slow growth, punctuated with deeper economic setbacks, maybe due to bubble-bursting events.  What we need is for people to realise how disastrous this system is, and especially those on the bottom who are really losing out — they have to organise, and begin to create something quite different.

The ecological crisis of course makes this even more pressing.  We have just a few decades at most in which to solve that problem, or we lose control of climate change, and the ability to prevent the world reaching a planetary tipping point.  We’re looking at the possibility that if we reach 2-degrees Celsius we are facing extremely dangerous climate change with all sorts of feedbacks so that things will likely be beyond our ability to control.

Economically and environmentally we don’t really have a lot of latitude now.  We have a system that’s economically performing very poorly, and becoming more unequal all the time, it relies on a global labour arbitrage that exploits people in the global South at horrendous rates, it’s destroying the planet as a place for human habitation.  We’re facing overlapping material crises and we can’t think simply in economic terms any more.

Just to clarify what you were saying there, you don’t see a classic breakdown of the capitalist system in terms of pure economics, but you do see a genuine potential for a fundamentally different economic system to actually replace it?

The potential is there, of course.  In the United States, almost everything that we produce is a form of waste.  There’s very little that we produce that is actually useful to human beings; very, very small percentages of production have to do with genuine use values.  And we have the potential to reorganise the economy to meet people’s needs and to decrease all of this waste, but we have to decide to do it.  We spend a trillion dollars a year, conservatively speaking, in the United States on marketing, just every year convincing people to buy things that they don’t really want.  And what we produce as a result of that is mostly waste as well.  Consequently, we have the means to improve people’s lives with the resources we have, and while even shrinking the economy.

We have the capacity to solve these problems, but only if we are willing to change our social relations fundamentally.  It’s also an actual necessity — since if we continue the way we are for much longer, in ecological terms we’ll go over the cliff.  In economic terms people aren’t doing very well either.  We just simply need a different kind of society, and we have to try to build it; there’s no blueprint.

And this would not be a society based on continuous economic growth?

That’s right, it can’t be a system geared to exponential economic growth.  You know, the word growth is so distorted now that people think it is primarily an economic term.  But in classical economics they didn’t even use the term ‘growth’.  And of course everybody believes in growth, that’s why it’s such a nice metaphor — but growing what?  What we measure as economic growth in today’s society is often negative — we should be subtracting what we’re actually adding.  For example, if there is an oil spill we end up adding to, not subtracting from, GDP.  All the clean-up costs and litigation costs increase GDP.  There is no subtraction, though, for environmental losses, welfare losses, or anything else.  And this is a large part of the problem.  We consider it growth so long as something passes through the market, whatever it is.  And inversely those things that don’t pass through the market (such as the sea turtles that are rapidly being driven into extinction) have no value.  Their loss is simply an ‘externality’ — of no real significance to the economy or growth.  But we can’t afford to approach things this way anymore — because that means a system that’s only interested in one thing, and that’s production of profits at the top, regardless of what we’re actually producing or the damage we are inflicting on the planet and global society.  We can’t afford such a crude perspective in a world that is so limited, where there are real planetary constraints.  Moreover, despite their emphasis on abstract economic ‘growth’ those at the top can’t even promise to the population a ‘trickle down’ any more.  There are no real economic benefits for the majority of the people from today’s pattern of accumulation.  All we can do under this system geared to endless accumulation of capital is to destroy the environment and our lives.

What This Means for Social Democracy

Social democracy has sought to work within the capitalist system but to redistribute its fruits more equally, and indeed to make it work more efficiently.  So where does the current crisis of capitalism leave social democracy and parties such as Labour?

Well, I think social democracy in the traditional sense is really in an impossible situation now.  For one, the idea was to promote growth and redistribute it, but there is no way to definitely promote growth.  You could have a Keynesian-style expansion for a short while, and it would probably be a good thing to do given the present crisis.  But the problem is that we have a highly financialised, not to speak of globalised, system now, so we really have a system that’s dominated by monopoly-finance capitalism — and the old Keynesian strategy doesn’t work in that context, because that strategy goes against the financial interests which really dominate the system.  Keynes argued for the euthanasia of the rentier.  Today’s rentiers have demanded the euthanasia of Keynesianism.  There’s no other way to expand the system at present that is acceptable to the financial power elite but by promoting financialisation, which also increases the power of the financial power elite.

In the United States, we of course still rely heavily on military spending, we have a history of military Keynesianism — you do too.  The United States in reality spends a trillion dollars on military spending.  We do this rather than promoting civilian government spending.  Even by the official figures the United States spends as much on the military as all the other countries of the world put together, but this isn’t enough of a stimulus anymore.

Social democratic policies are predicated on a growth that doesn’t exist anymore.  They are predicated on an industrial capitalism that doesn’t exist anymore, or not in the same sense.  And they are predicated on a more national than globalised system.  So it’s very hard to promote any kind of social democratic policy now.  Social democratic politics always had its contradictions because of its compromise with capitalism, which was problematic from the start.  Capital always maintained overall social power.  But today things are more complicated.  We are now in a phase not so much of monopoly capital, during which labour and capital were able to negotiate to a degree, as monopoly-finance capital, where labour is pushed to the wall.  Financial interests are a much stronger part of the whole; the industrial sector, particularly labour, is weaker; and production is increasingly globalised.  I think you could probably reinvent social democracy.  But it would have to be a movement that turned back to the people and mobilised the population in new ways, marking radical changes fundamentally opposed to what social democracy has traditionally stood for.  It would have to, in other words, become more not less socialist.  It also has to be part of a more international strategy, involving international labour alliances.  Social democracy grew out of the socialist movement, now it has to return to the genuine socialism it abandoned.  Of course another way of saying this is: social democracy is dead, long live socialism.

You were a friend of Ralph Miliband’s.  What advice do you think he would want to give to Ed Miliband today?

That’s a difficult question!  I didn’t know Ralph really well, I met him a number of times, but I was so junior to him that it was not really on anything like an equal basis.  He encouraged me.  I wrote for the Socialist Registerwhen he was editor.  And I remember him as the harshest editor (in a good sense) I ever confronted.  He was really a serious scholar.  He was strong on rooting out non sequiturs.  I wrote a piece on liberal practicality and the US left, based on C. Wright Mills, and Mills’ notion of vocabulary of motive and crackpot realism [Foster, 1990].  The argument was that, if the left continually adopted liberal discourse or vocabularies of motive and liberal ways of thinking in order to try to present its ideas, eventually it would lose its grasp on reality, and its ability to respond to the population.  I had all sorts of examples like the common use on the left of the notion of a ‘social contract’ between capital and labour, which hardly existed in fact.  Ralph liked my argument.

I think the left has been faced with this issue of liberal practicality for a long time, watering down its ideas to conform to the dominant view to the point that it is no longer able to develop a strategic orientation.  There has been a long attrition with respect to critical ideas, and a kind of long march back towards liberalism.  Today the social democrats are basically in the position of the capital ‘L’ Liberals of old, and they’ve lost sight of the more radical views and the links to unions and workers and so on that were so vital to their origins.  Somehow they have to get back to that, to those roots, but to do it in a new way.

Ralph was famous of course for the debates on the state.  He used to argue in works like The State in Capitalist Society that the relative autonomy of the capitalist state from the capitalist class or the plutocracy in today’s world wasn’t very great, which meant a much stiffer social struggle.  Others like Nicos Poulantzas (with whom he was chiefly in dispute) argued that there was much more relative autonomy, and that you could have a euro-socialist or euro-communist movement, which if it managed to get itself into office could effectively change things within the existing rules.  It seems to me that in terms of this debate Ed Miliband is closer to Poulantzas’ way of thinking than to that of his father — or that has been his attitude so far.  Labour in reality can only move forward in one way, and that’s by enlisting the population as a force in society, mobilising them in terms of a new social project — exactly what Ed Miliband’s father would have recommended.  In other words, what relative autonomy there is for the state to foster social change within capitalism requires a huge social/class struggle on an extra-parliamentary even more than parliamentary basis and the creation of an entirely new social project.  This has always been the conundrum of what Ralph called ‘parliamentary socialism’.  (Incidentally, Monthly Review Press published Ralph’s book by that title in the United States).

Would you say that there is a previous period of debate on the left which contemporary social democrats could go back to and reread, in terms of trying to rediscover something to relaunch social democracy as you’re describing it here?

The debates within the British left in this area were at one time very meaningful, the debates around parliamentary democracy, the debates around the state.  All of this has been forgotten.  I would suggest reading those who were classified like Ralph Miliband as instrumentalist theorists — theorists who believed that the state at present was primarily the instrument of the capitalist class.  We need this deeper understanding to develop a sophisticated state-society strategy that addresses capital’s social power.  The most powerful strategic version of change ever presented to the British Labour Party I think was that of Michał Kalecki in his 1942 essay on ‘The Essentials for Democratic Planning’, which was written for Labour Discussion Notes [reprinted in Kalecki, 1986].  I have written about that in an upcoming article in Monthly Review [Foster, 2013].  The situation has changed but Kalecki’s understanding of political-economic strategy is still invaluable.

The question is: how do you enlist the population as a force, how do you reinvigorate people, give them a social project that’s being developed from the ground up, that will enlist their support?  Look at Venezuela — obviously the situation is very different, but they’re very good at enlisting the mass support of the population by social projects at the ground level, giving them the sense that they can do something to change their own society.  If you don’t do that, you can’t possibly have any force for political change on the left.

My final question continues my interest here in social democracy and its past record — one of the things I’m particularly interested in is the contrast between Monopoly Capital, as in the book Paul Sweezy and Paul Baran wrote [1968], and Supercapitalism, the 2007 book by Robert Reich.  Reich describes the post-war period as the ‘not quite golden age’, and makes the case that it was actually monopoly capitalism which enabled giant corporations, who felt insulated from competition, to do deals with unions which delivered greater shares of wealth to working people.  I wondered what you thought about that argument, and what, if any, relevance does it have for today?

SIDEBAR
The thought of Robert Reich as of 2019: Why, cogent as it is, it is also misleading.

Robert Reich is very smart and genuinely concerned about labour.  But his argument as a whole, as I understand it, strikes me as wrong.  It’s based on the notion that’s very common in liberal circles that somehow we could get back to the ‘golden age’ (or as he calls it ‘not so golden age’), and that this was based on some kind of corporatism, or what he calls ‘democratic capitalism’, where large firms and large labour got together.  In this view, Fordism was promoted, there was a social contract, and so on and so on.  I think it’s just fundamentally a wrong reading of history.  The post-Second World War prosperity was a very special historical result, coming out of the War, McCarthyism, the Cold War, etc.  To view the period as the triumph of democratic capitalism, which we have to somehow recapture, is to misread, I think, both the past, and even more what is possible in the present.  It is true that monopoly capital had a very limited accord with big labour in the context of the Cold War, militarism, imperialism, the struggle with the Soviet Union, the destruction of the radical unions, etc.  But this was a complex history.  It was also a period that led straight down the path to the decisive defeat of labour in the United States.  There is no possibility of a new democratic capitalism or corporatism today in a context where only some 11 per cent of workers are organised, and most of those are in the state sector; where 14.4 per cent of the real labour force wants but cannot get a full-time job; and where labour’s power within the state has receded to almost nothing.  Reich is no doubt correct to say that we live in a more vicious world of capitalism (as far as US workers themselves are concerned) than in the 1950s and 60s.  However, it is not some sort of supercapitalism (or neo-liberalism) that is the problem, nor the displacement of democratic capitalism.  Rather the problem lies with capitalism itself, which has necessarily evolved in this direction.  Moreover, it is not a world of unrestrained competition but of greater global, monopolistic control in a highly financialised, globalised system.

The revenues of the top 200 US corporations account for more than 30 per cent of all gross profits in the U.S. economy, and there are millions of firms in the economy, so you have a very highly concentrated system.  But labour has shrunk almost into non-existence.  It certainly would be great to rebuild the labour movement, but you’re going to have fight corporate capital all along the way, there’s not going to be any corporatist solution.  Socialism is the only answer.  But there is no royal road to genuine socialism.  It requires what Raymond Williams [1961] used to call a ‘long revolution’.