[p2p-research] Why Post-Capitalism is Rubbish

[Kevin Carson]

On 5/27/09, Ryan Lanham <rlanham1963 at gmail.com> wrote:
> After some consideration, I've decided that the post-capitalism talk is
> largely Utopian fantasy:

Well, a lot of it depends on what you mean by "post-capitalism," and
hinges on just how much things would have to deviate from the current
model of corporate capitalism before it qualifies as fundamentally
different.  I believe that within a generation we're going to see a
radical shortening of supply and distribution chains from Peak Oil, a
combined relocalization of most production and an explosion of LETS
and barter networks as official money and wage employment dry up for a
major part of the population, and a collapse of the old corporate
proprietors in the culture and software industries.  I believe
there'll still be some long-distance trade (albeit a fraction of the
present value), and things called stock markets and corporations will
still exist (albeit at a fraction of their present importance in the
overall economy); if this means that "capitalism" will exist in your
terminology, well and good.

> 1. Current financial assets are considerably more than all non-cash assets
> in the world.  Over the counter derivatives alone in 2007 were over 600
> trillion USD.  (that's trillion with a T).  The innovation that has been
> financial markets goes on strong and the wealth created is anything but
> fictitious.

The growth of the financial sector compared to physical assets is a
major symptom of the problem.   Given corporate capitalism's chronic
tendency toward overproduction and overinvestment, you can't invest
the surplus in plant and equipment that will generate even more goods
when people can't consume existing output.  So you pile up the surplus
investment capital in a FIRE sector that only works until the ponzi
scheme collapses.

> 2. The total global gross product (GDP of the world in 2007) was about 47
> trillion USD (almost 14 trillion of that in the USA).  So far in the
> recession/depression, it has sunk globally by about 2% and certainly not
> more than 4%.  Total stock market valuations were 51 trillion in 2007 and
> are perhaps slightly less than that now.

The U.S. stock market valuations a couple of months ago were about 50%
of their 2007 high, and still less than two-thirds.  Real estate
prices have plummeted as well.

> 7. Unemployment in the US is just reach 10% where it has been sustained for
> years in other nations like Germany.

When adjusted realistically for underemployed and discouraged workers,
it's more like 15% or 16%, which is about the equilibrium FDR managed
to achieve in the late '30s, and would probably have continued
indefinitely had not WWII saved corporate capitalism.  That's not a
very high bar for success.

> 8. Capitalism in Asia and Africa is taking off considerably.  The potential for growth is     > probably only bound by climate change issues.

That's a big "only."  First of all, one reason for the growth of the
FIRE economy from the '90s on was that the export of industrial
capital had reached its limits as a strategy for solving the crisis of
overinvestment.  China is saturated with more industrial capital than
there is a market for.  And second, there's not much future in
shipping goods overseas from Chinese factories when fuel costs two or
three--or more--times what it did this time last year.

> 12. Even with a collapse of the dollar, oil exploding to several hundred
> dollars a barrel (both of which are reasonably feasible), there is little to
> suggest that this would be more than a hiccup for markets and capitalism.

This is hard to believe.  Had oil stayed at its summer 2008 prices
indefinitely, some 20% of airline routes would have shut down and a
comparable percentage of long-haul trucks left the market.  And this
was indeed a "hiccup" compared to what we can expect from Peak Oil in
the future.  Even a supply shortfall of a few percent can cause prices
at the pump to double.  What can we expect when supply falls by half
or two-thirds over the next generation?  I expect we'll see a total
collapse of intercontinental supply chains except in vital minerals,
and an order of magnitude of reduction of continental supply chains
for most manufactured goods.  The factories in China and Vietnam will
become useless for anything but producing goods for people in--well,
in China and Vietnam.  Production of spare parts and modular
accessories will grow massively at the expense of production of new
goods, and the growth in such production of spare parts and modular
accessories will occur mainly in flexible manufacturing nets in
relocalized industrial economies.  In-season produce will be almost
entirely relocalized by backyard gardening and market gardening, and a
much larger percentage of our diets will be either in-season or canned
local stuff.

We're barely two years into the real crisis:  two years from when real
estate prices began to slide, a year from when Peak Oil first became a
household word, and nine months since inventories and employment began
a free-fall.

To say "everything's OK so far" this early in the process is IMO about
like saying, immediately after Alaric's first repulse from the gates
of Rome, "Well, the system's still got a lot of life in it."  Or the
old joke about the optimist who fell off a 100-story skyscraper and
shouted to the people on the 99th floor, "OK so far!"

> That said, I think P2P is exciting, vital and an excellent tonic to excesses
> of capitalism and markets.  However, I am convinced the main issue is
> climate change.  If there is an Achilles' heel of capitalism, it is climate
> change.

Well, yeah.   But that's a biggie.  The whole export-oriented pattern
of growth you keep appealing to in China, and possibly in Africa in
the future, was becoming increasingly untenable even with oil at
$140/barrel last year, when McKinsey Quarterly was running articles
about corporations looking to shorten their supply chains from China
to Mexico.  What happens to that "warehouses in container ships"
distribution model when oil is $1000/barrel?  My guess is the ships
will be rusting, the shipping containers will serve as houses, and the
industry in China will be redirected to the Chinese domestic market if
it survives at all.

To say that things look good for capitalism except for Peak Oil is a
bit like saying your uncle is just like your aunt except for his
testicles.


-- 
Kevin Carson
Center for a Stateless Society http://c4ss.org
Mutualist Blog:  Free Market Anti-Capitalism
http://mutualist.blogspot.com
Studies in Mutualist Political Economy
http://www.mutualist.org/id47.html
Organization Theory:  A Libertarian Perspective
http://mutualist.blogspot.com/2005/12/studies-in-anarchist-theory-of.html