How Capitalism Fails US

 
Hello internet, I’m Jackie Fox and I’d like for you to join me in a thought experiment. Imagine an ideal world. What do you see? How do you know it’s ideal? If you’re anything like me, you’re imagining a world without homelessness or hunger, where life expectancy increases along with quality of life, everyone has access to healthcare, the world is healthy and our ecosystem isn’t on the verge of collapse. Following the logic of Capitalism though, you’d really just want a strong stock market and around three percent market growth per year; everything else is just icing on the cake. 
 
The problem is that while these two sets of goals aren’t entirely mutually exclusive, focusing entirely on market wealth over individual health and outcomes seems to make many of the goals of my idealized world much more difficult. Even more difficult would be maintaining these freedoms in an economic system that prefers everything to be privatized and sold for the highest price the market can support. 
 
This can often mean the market that’s supposed to make everything more efficient may use things like planned obsolescence and artificial scarcity to make the products you consume either lower quality or higher cost than they really could/should be just to maximize profit. capitalism probably isn’t the worst system in theory; a lot of basic market principles extolled by capitalists make sense, but the problem is humans are adept at breaking or gaming systems to maximize rewards. When the system is capitalism, the reward maximized will generally be profit even if this comes at the cost of human health or our environment. We have seen this acutely in the US over the last year as stock markets soared even while a record number of people suffered the ravages of being unemployed during a pandemic. 
 
Wouldn’t we all be better off if the variable we used to cheat the system maximized human happiness and quality of life? Capitalists might say that capitalism is such a system, noting the various ways life has improved since trading feudalism for capitalism, but these are lucky side effects of the pursuit of maximizing profit, not actually the goal. 
 
In Mark Fisher’s Capitalist Realism, which I discussed in my last video, Fisher explains that because of how ingrained capitalism is in our culture and even our minds, it might be very difficult to imagine a world that isn’t somehow capitalist anymore. Or as early neoliberal Margaret Thatcher was fond of saying, there is no alternative to capitalism. Others posit that capitalism has placed us at the end of history. 

The end of history is a political and philosophical concept that supposes that a particular political, economic, or social system may develop that would constitute the endpoint of humanity’s sociocultural evolution and the final form of human government. But is capitalism really the best we can do?  

The Big Other 


The Big Other seems to think so, at least, for now, and at least according to Fisher, as he describes in his book: “The Big Other is the collective fiction, the symbolic structure, presupposed by any social field. The Big Other can never be encountered in itself; instead, we only ever confront its stand-ins… One important dimension of the Big Other is that it does not know everything. It is this constitutive ignorance of the Big Other that allows public relations to function.  

Indeed, the Big Other could be defined as the consumer of PR and propaganda, the virtual figure which is required to believe even when no individual can. To use one of Žižek’s examples: who was it, for instance, who didn’t know that Really Existing Socialism was shabby and corrupt? Not any of the people, who were all too aware of its shortcomings; nor any of the government administrators, who couldn’t but know. No, it was the Big Other who was the one deemed not to know – who wasn’t allowed to know.  

Yet the distinction between what the Big Other knows, i.e., what is officially accepted, and what is widely known and experienced by actual individuals, is very far from being ‘merely’ emptily formal; it is the discrepancy between the two that allows ‘ordinary’ social reality to function. When the illusion that the Big Other did not know can no longer be maintained, the incorporeal fabric holding the social system together disintegrates.
 
In our society, and here in America our government, our Big Other believes in capitalism and even neoliberalism. This creates a dangerous limitation presupposed in all political conversations. Bernie Sanders running for president showed us a good example of this, as news organizations said he couldn’t win because he referred to himself as a democratic socialist. It wasn’t that the people weren’t interested in socialism, for much of the last decade socialism has garnered more favorability in American polls than capitalism, so it must be the Big Other who couldn’t stomach the talk of socialism, democratic or otherwise. 
 
Those of us fighting to make the general public aware of Modern Monetary Theory face a similar problem. Everyone in government – from their actions – seem to understand just how backwards their rhetoric is on the US debt and deficit and behave often as though they understand MMT when it benefits them politically and disavow it when austerity serves their interests. Their ability to do this hinges upon what the Big Other knows, and I would argue that we behave as though the Big Other is either ignorant or opposed to MMT. How can we fight such a large battle and convince a purely symbolic figure whom we can never confront that we’re right? It’s not as hard as it might sound, at least, in theory, as Fisher explains. 

“Khrushchev’s speech in 1965, in which he ‘admitted’ the failings of the Soviet state, was.. momentous. It is not as if anyone in the party was unaware of the atrocities and corruption carried out in its name, but Khrushchev’s announcement made it impossible to believe any more that the Big Other was ignorant of them.” 


Similarly, this means politicians don’t have to be ignorant of MMT to favor unnecessary austerity programs or to limit what they think it is possible in pursuing their own goals. Instead, they simply have to think most are unaware of such a thing because the Big Other cannot be said to know. Breaking this barrier, turning to action, at least in theory, is pretty simple. Someone important, preferably from the establishment whom no one could easily call a radical, must publicly and vocally embrace MMT. Once a respected establishment figure has embraced and legitimized such an idea, it may be much more difficult to claim things cannot be done with government spending, though I doubt even this will really pull Republican politicians’ heads out of the sand. We came close to a moment like this with Bernie Sanders, who was advised by major MMTers, but when it came down to it, his ideas of what is economically possible were a little too old-fashioned to really publicly embrace it. Perhaps he still has the fiscal mindset of a mayor on some level, where there’s no Federal Reserve to keystroke in money and therefore everything must be covered by taxes. 
 
Actually, the ideal person to break the silence on MMT is probably Joe Biden. I’m not saying he’s likely to do so by any means, but if a moderate who has historically supported austerity and strict budgeting in Congress could support MMT, then perhaps with the right media coverage this would be an event that could cause the Big Other to listen up and take notice. 
 
As a recent Guardian editorial puts it,

“Mr. Biden aims to control the virus and then create jobs with infrastructure investments to reinvent the post-crisis economy for a zero-carbon world. Call it a spend-then-tax policy. If he succeeds, Mr. Biden will go some way to repudiate the conventional economic wisdom that argues that if governments keep borrowing too much, they risk defaulting, will end up printing money and be forced in a panic to put up interest rates. The pandemic revealed this to be bunk. Central banks can keep interest rates low by buying government bonds with money created from thin air. Last year, they bought 75% of all public debt.” 

Overnight, all of our political opportunities could change.

“The long, dark night of the end of history has to be grasped as an enormous opportunity. The very oppressive pervasiveness of capitalist realism means that even glimmers of alternative political and economic possibilities can have a disproportionately great effect.” 

Main Street needs a Bailout 


In a number of ways, the COVID crisis in the US in 2020 ended up showing us many small moments of a phenomena like this. In the Democratic primary for president in 2020, Andrew Yang’s initial call for a Universal Basic Income was unheard of because it’s an idea that had few charismatic public facing champions. The Big Other hadn’t heard of it, for sure. While he had a platform full of interesting and forward-thinking proposals that made all the policy wonks swoon, his elevator pitch and his stump speech were all about the UBI. Because it was unheard of, it wasn’t spoken of, and because no one had said the words before on the Presidential debate stage before, people thought it was impossible a President might offer you some sort of income as a supplement to your income. Your relationship to the government was supposed to be more of the opposite, with you paying them taxes instead of them giving you a dividend on the American wealth creation machine you’re a part of, or at least, that was how Yang pitched it to those watching the debates. 

 
Then the pandemic hit, and people as diverse as Bernie Sanders and Josh Hawley were calling for as much as $2,000 checks which some plans had recurring until the pandemic ends. As a part of the initial debate over how to deal with COVID on the national level it was a bold minority proposal. It was unheard of. But they spoke it into being. 
 
Bernie shifted tactics to get a bonus of $2,400 a month added into the stimulus, leaving Hawley to vocally push for direct payments. Meanwhile, Bernie stared down multiple powerful GOP senators threatening to derail the whole bill,  

and after a few tense days he got his demands. Hawley wasn’t as influential or effective, but the initial stimulus included direct payments to Americans on an unprecedented scale. 
 
This changed the realm of what it was possible for the government to do to help its people. It had been clear the government wasn’t scared to pump trillions in new money into the economy in a single year, 2008 and the resulting bail out showed us that. This was a great rebuke of neoliberal austerity; it wasn’t that the money wasn’t there as they frequently told us, because when Wall Street had to pay up on its bad bets the money flowed fast and furious. 

This incident showed us two important things very publicly; the ‘banking sector’ and ‘low risk’ investments were often built on a series of bets about things like housing prices and that the whole thing could come tumbling down catastrophically. And when that happened, they bailed out Wall Street and prescribed more austere measures for Main Street. After all, they’d just spent all that money covering the losing bets of the richest Americans. The Big Other said, “No money left.” 
 
Occupy Wall Street came and went, demanding a people’s bailout. In 2016, Bernie Sanders’ campaign rhetoric reflected this point. Main Street needed a bailout too.  

As Fisher puts it, “The War on Terror has prepared us for such a development: the normalization of crisis produces a situation in which the repealing of measures brought in to deal with an emergency becomes unimaginable.” 
 
If 2008 normalized the idea that in a crisis the government could bail out America to the tune of trillions of dollars without much inflation, 2020s stimulus bill normalized the idea we could be bailed out too. The idea of additional direct payments grew in popularity since and it’s nearly a year later, and we’ve only seen an additional $600, even though the former Republican President called for immediate $2000 checks during his second campaign as a Hail Mary to help him get the edge in the November election. 
 
 

Democrats won an unlikely clean sweep in Georgia’s second voting in January on calls for passing a $2000 check in the months after November’s Democratic Presidential victory. Biden has said passing a $2000 check is a priority he wants to achieve by passing $1400 checks, which, in addition to the previous check would be $2000. The problem with this logic is that it’s a lot like the issues surrounding the minimum wage – after years of calling for an increase to a $15 living wage, the actual living wage is now above $20 an hour, so even passing $15 now wouldn’t bring us to a living wage. 
 
Likewise, with pandemic relief, and especially after Bernie’s increases to Unemployment Insurance benefits wore off, debts have piled up for the record numbers of unemployed Americans a lot faster than $1200-$2000 every six months.  For many unemployed Americans, the stimulus payments hardly covered a month’s rent. The second $600 check wouldn’t even cover a month’s rent in most of America.  

It was brought back into the discussion just before the election, without a plan for follow up, like a national payroll system like what many European nations did for their citizens which many likened to an emergency UBI. By then $2000 just wasn’t enough to pay the months of back rent for the Americans who were beginning to lose their homes. 
 
We need a bail-out now more than ever, and recent polling shows direct payments are the number one demand for Americans, topping aid for small businesses and even vaccines. 

But just the idea that it was reasonable to ask for this was impossible for many to imagine in early 2019 before that series of events transpired. 

“The tiniest event can tear a hole in the grey curtain of reaction which has marked the horizons of possibility under capitalist realism. From a situation in which nothing can happen, suddenly anything is possible again.” 

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