Capitalism is DEAD... or Welcome to the New Economy... Good Luck!

As we keep rehashing the same old debates in Washington and elsewhere, we have all become complicit in a lie that we feel we must convince ourselves is true. That this capitalist we endure today can survive. Indeed, like many a poor doctor, we try to treat the symptoms because we have either misdiagnosed the problem or simply have no way to address the disease. The disease being that capitalism, as we know it, is dying.

It is a slow death for sure. It is not something that will happen suddenly (barring a Zombie Apocalypse of course…) nor is it something that will happen completely. There will always be markets but our current economic system is going to fail us. It has been failing us for decades already and it is only going to get worse.

When we think back on the most recent stock market crashes what does not stand out is the corruption. There has always been schemers out there who have figured out a way to make a lot of money by selling something that has no real value. It is neither surprising that our emotional stock market’s prices had grown to be way out of line with the real value of the stocks offered. This has always happened. It is the nature of the beast which we depend on way too much.

Instead, what does stand out is that nearly all the growth of the US economy since the 1980’s has been fictional. Indeed, those good years in the 1990’s were largely fueled by the unrealistic and unfulfilled expectations of the emerging technology sector. Sure, a few companies would eventually emerge as economic powerhouses but one has to consider that even though they have some financial might, they employ relatively few people. They are in many respects multinational small businesses. Their financial good fortunes affect a very small group of people and, consequently, their impact on the overall economy is minimal.

In the last decade, we were treated to less of a collapse than a brutal reality check. Americans growing up in families with parents who had succeeded and bought houses and kept jobs expected they would do just as well themselves… if not better. As children, they witnessed their parents working hard, advancing in their careers and making more money. They naturally assumed that their lives would follow a similar arc. They bought homes that were too expensive for them when they bought it but they assumed since they worked hard, they would be making more money soon enough. The people that gave them the loans had the same assumptions. Similarly, all those schemers on Wall Street who sold those mortgages figured that real estate would keep going up. After all, real estate had been rising their entire lives. It was as sure of a bet as spring following winter. Nobody was telling the homebuyer that his expectations of as good a life as his parents was unrealistic. No one was saying that housing market was inflated. Nobody was saying that the real economy was far behind Wall Street. It is not that we could not see such things were true at the time. We just did not want them to be true.

So we did not look.

Not surprisingly, our increasingly corrupt and corporatized government reacted to the crash like they always do. They stuck some bubble gum in the biggest leaks, repaired the engine with a blunt hammer, put a little duct tape on the exhaust and sent it merrily on its way. They say “We have hit bottom now. Things will get better now. It always has.”

Which is exactly what we want to hear.

Nothing could be further from the truth. By interfering to save the big banks, we have preserved the system which has failed us and will fail us again. I know that gets said a lot but it usually gets said for all the wrong reasons. The real reason is that corporate capitalism, which in the past centuries has brought us some progress, is now unfit and unable to serve humanity.

What?! You say. Is this some leftist rant? You ask.

Not at all.

I would never advocate the resurrection of communism. It deserves to be left in the past. What I think is apparent now, however, is that our form of capitalism will soon join it.

Why?

The very nature of the beast relies on the unrealistic principle of endless growth. For the last couple of centuries, the Earth was abundant with resources, the people were always hungry for more and there was always more to be done. While those things were true, capitalism did pretty well for itself. There were a couple of busts here and there not to mention wars but, overall, we progressed and even prospered a little. Still, the question everyone seems to be afraid to ask is how much of those above conditions still exist?

None.

Resources.

Over the last two centuries, exploitation companies had it not only good… but great. The Earth was filled to the brim with untapped, easy to get, natural resources. They had virgin forests, oil reserves literally in people’s back yard and mineral deposits just below the surface. Now the forests are scarce and often defended by a slowly rising environmental movement. Mining companies are forced to dig deeper. Oil companies are drilling through a mile of ocean to find new reserves… sometimes with disastrous results. In every case, what was once a low risk and high reward industry has become a high risk and limited reward industry. Sure, some of those companies still reap huge profits but they know their day is ending. Of course, they are not about to stop enjoying that slow ride downhill.

Labor.

We have always had this unfortunate habit to point to the other little guys first when we feel threatened rather than the big guy who is actually bullying us all. People in America like to say the Chinese or the Mexicans took our jobs. They are slightly less quick to blame the executives who outsourced their jobs and usually too daft to realize that, more likely, no one took their job.

Indeed, for every outsourced job there are just as many, if not more, jobs that have completely vanished. Corporations merge and throw out thousands of redundant employees. The corporate beast has been getting more and more efficient and while we should like to think of that as a good thing, it has not been so good for the worker… no matter where he lives.

Every year we become more productive per worker. Every year, new machines are invented to do the work of hundreds or even thousands of people. Since the beginning of the Industrial Revolution we have been making machines to do the work of people and now we have reached the point where most people can be written off entirely. We have robots to stand in our assembly lines. A farmer that not that long ago would have struggled to manage forty acres now struggles to pay the bills while managing forty thousand acres.

This is not a simple matter of factories becoming more and more automated. Our consumption is becoming more and more automated as well. I love my computer but it is an economic disaster. I can purchase music without every setting foot in a record store. I can take a thousand pictures without ever visiting a film lab. I can find out what is going on without reading a newspaper. I can make an album without ever going into a studio. On and on it goes. Entire industries are going the way of the dinosaurs.

President Obama likes to speak of building up a new technologically savvy workforce able to compete in the new economy. Sure, that sounds pretty good but what he does not tell you is this new economy will not offer anywhere near the amount of jobs it has already replaced. In fact, no matter how well people prepare themselves, jobs will be increasingly tenuous. More and more people will only find employment as subcontractors or temps. They will be brought in for a project and discarded when it is completed. People will be forced to become dynamic. They will have to constantly update their skills or get left behind. This might keep people going in their thirties but as they get older it will be a lot harder to convince employers that they are as dynamic as the new crop of young hotshots. Given the new mantras of raising retirement ages emerging from governments in Europe and in the US, people who find themselves unemployed in middle age are going to be in serious trouble.

We can’t all be Wal-Mart greeters.

Similarly, while the new “green economy” will grow, it offers only limited job opportunities and those opportunities may be further limited if our economy continues to struggle and people lose their ability to address long term issues in face of clear and present dangers.

Demand.

With the American economy limping, if not sinking, that ever increasing hunger on which capitalism depends will take a hit as well. The world economy can no longer depend on American over-consumption. Increasingly, not only are Americans going to buy less crap overall but they are going to demand that what they do buy outlasts its warranty. As a culture, we are beginning to realize the perils of our disposable lifestyle. While this is perhaps a great thing in many ways, it is yet another economic disaster. It would be naïve to think that the emerging economies in China, India or Brazil will ever become the big mouths we once were. Those markets will grow some but the peak of global consumption is likely much nearer than people today realize.

…

It is hard not to guess the results of these emerging trends in the global economy. You can see them already. Long term unemployment. This not likely to go away any time soon. We can “throw the bums out” every two years and it will make no difference. A great many jobs are gone and will never return. Those who do find work will often find themselves underemployed. Even people who equipped themselves for the modern job market with education will find themselves languishing in minimum wage service industry jobs waiting for something better to finally come along. Even more people will find themselves knocked down into a life of perpetual panic… living paycheck to paycheck… one bad break from complete disaster. Those of us who manage do a little better should not be surprised to find their thirty-something child with a college degree sleeping on our couch or even their fifty-something parents needing our spare bedroom.

Welcome to the Real New Economy.

Although it is probably hard to accept the notion the economy is not going to really “recover”, it is easy enough to make that case. What is harder, of course, is finding a solution. What is known for sure is that we will get no help from either the Democrats or Republicans. Hopelessly lost in the past, all they offer us is a choice between bad ideas and terrible ones. Obviously, neither was able to conceive of the very real possibility that had we let the big banks collapse, it could have possibly cut off a great deal of the cancerous growth or what could be best described as the “fake economy” and given room and fertile ground for smaller… more ethical and nimble… new economy to emerge. No one can know for sure but the prospects of success for a repaired broken system to work are somewhere between limited and hopeless… at best.

As I said at the outset, this is no time to argue for huge government interference or any of the “isms” of the past. I think history has panned out that simple solutions don’t fit complicated problems. It would be nice if the government became responsible to the people rather than the corporate interests that fund their campaigns. Fighting for a voice in Washington is something we have to do but Washington cannot save us. It serves us no better to have the government take over the economy than to continue to let mega banks have the reigns. If we can learn one thing from history it is the veracity of this one simple equation:

Power given to the few equals misery for the many.

So where is the “hope” in the new economy?

It is all around you. It is in the local farmer’s market. It is down the street at the local brewery. It is in the communities that most of us have long since abandon behind our white picket fences and down the aisles of Wal-Mart. We have been duped into thinking that we need these mega-corporations for everything. It is perhaps this terrible mistake that dooms us above else. Sure, maybe you need to get the latest smart phone from Apple or Motorola but there is no reason you need to go to Budweiser for beer or Wal-Mart for food. There is no reason you can’t go to a cobbler instead of Foot Locker or a reupholster instead of Ikea. We can no longer afford to sit and whine about our jobs going away. We need to start employing each other ourselves. It is either that or we will have to live in a country with a lot of people sleeping on couches or under bridges feeling useless.

Like it or not, the party is over. Corporations will not help you. The government will not help you. We are all going to have to help ourselves and each other. If we are going to survive as a people, we are going to have to start thinking outside the box… and outside the big box. It is sad to say but it is probably true that there is going to be a lot of suffering ahead no matter how our government acts. Like it or not, our great swaths of outer suburbia are unsustainable. No amount of government intervention or idiotic attempts to resuscitate the asinine concept of laissez faire economics will save them. We cannot afford to live in little isolated castles anymore.

Though the prevailing winds of the great economic machine of our time would have us all believe that there is only enough for the few and none for the many, deep down we know they are wrong. We are a smart, efficient and technologically advanced race. There is enough. We just need to offer it to each other rather than let the greed machines take it from us, hoard it, and then distribute it as they see fit.

Nothing is going to be easy. We have for far too long lost our way. Conservatives like to suggest we need to return to traditional values and you know what? They are right… but not in the way they like to think. We don’t need to return to a day when the government allowed business to run free and rape and pillage as they see fit. We do need to return to an ethic where people are worth more than property. We need to look at our neighbors not as competitors for jobs and resources but as… well… neighbors. We need to return to a time when we understood that our quality of life has little to do with the quantity of crap we have but, instead, a lot to do with… well… the quality of the life we live.

The hardest change is… sadly… is getting off that “ME!” trip most of us are on. This ethic of grabbing all you can and screwing the rest is no way to survive as a country… a people… or a race. We need to think a little deeper than just ourselves and, unfortunately, it will take a long time for the people in this country to develop that skill. We have no choice but what remains to be seen here is the amount of pain people are willing to endure before they can accept that fact that things will not be as they once were and the solution is no longer keep doing what we have always done.