A Reassessment Beyond the Global Crisis
3.1 THE TWO FACES OF THE CAPITALIST ‘MACHINE’ ‘Capitalism has accomplished wonders’, wrote Marx and Engels in the Communist Manifesto (1848), ‘it has released humanity’s productive potential’. For once, Marx was right. The Manifesto’s praise for capitalism, however, only served as background to dramatize the system’s inevitable collapse according to the ‘laws’ of historical materialism. The basis of these laws, however, ‘inherent antagonisms’, turned out to be flawed: Instead of collapsing, the capitalist system generated prosperity, lifting hundreds of millions out of poverty and thereby turning a miserable proletariat into well-to-do middle classes. But there is also a reverse side of free-market capitalism: periodic crises, destructive structural change and protracted periods of mass unemployment. Capitalism has always had these two faces – on the one hand, the face of a unique engine of prosperity and innovation, on the other the face of casino capitalism, of speculation and crash. The strength of market capitalism is its ‘unequalled flexibility in absorbing shocks and adapting to changed circumstances’ (Scitovsky 1980: 1); but markets are also plagued by instabilities that threaten to undermine the very foundations of their own functioning. For all of its grand achievements, without adequate governance capitalism is liable to turn into a systemic risk. The fragility uncovered by the present financial crisis is not attributable to any obstinate internal antagonisms of the accumulation process (as postulated by Marx and his followers) or to ‘the dysfunctional nature of the financial system’ (as postulated by Paul Krugman) but to deficiencies of the politico-economic...
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