[R-G] Capitalism From the Standpoint of Its Victims

[Anthony Fenton]

http://counterpunch.org/shahid03232009.html

March 23, 2009
The Fall of the Towers of Wall Street
Capitalism From the Standpoint of Its Victims

By M. SHAHID ALAM

It has never been easy offering a critique of capitalism or markets to  
my undergraduate students. Most have never heard an unkind word about  
these bedrock institutions, which they know to be the foundations of  
American power and prosperity.

These are hallowed institutions. The power of private capital to  
produce jobs, wealth and freedom is one of the central dogmas that  
many Americans absorb with their mother’s milk. To hear this dogma  
challenged – in any context – is unsettling. I sometimes suspect that  
this bitter pill is harder to swallow because it emanates from someone  
who, so transparently, is not a native-born American.

As the weeks pass, however, my students appear to settle down. In the  
past, they have been reassured to learn that markets have done a good  
job at delivering prosperity to a few centers of global capitalism.  
They do work for us, even if they have not worked for most Asians,  
Africans and Latin Americans.

Nevertheless, the thesis that ‘free’ markets have rarely worked for  
economies lagging far behind the economic leaders, does not quite take  
root. The fault could not lie with markets. For too long, the West has  
believed that Asians, Africans and Latin Americans failed because they  
were lazy, spendthrift, venal and unimaginative.

My students – like most Americans – have been conditioned to look at  
capitalism from the standpoint of the winners in global capitalism.  
Because of the accident of birth, they have been the beneficiaries of  
the wealth and power that global capitalism concentrates at the nodes  
of the system. They cannot conceive how a system that has worked so  
well for them could produce misery for others in Asia, Africa and  
Latin America.

I have been away from my teaching duties as the United States has led  
the world into a deepening recession. Within a few months, the titans  
of Wall Street have been laid low, rescued from extinction by tax- 
financed bailouts. Teetering on the edge of bankruptcy, the auto  
giants have been placed on life-support also by taxpayers, their  
future still uncertain. In this maelstrom, there steps forward Bernard  
L. Madoff, the Einstein of Ponzi schemes, who operated his colossal  
con for twenty years without notice from regulators.

Millions of Americans have lost their jobs; millions are threatened  
with loss of their homes; millions have seen their retirement funds  
melt before their eyes; millions are threatened with loss of health  
care. As Americans on Main Street were being devastated, executives of  
bailed out banks continued to receive millions in bonuses. That straw  
now threatens to break the back of the fabled American tolerance for  
the foibles of the capitalist system.

Ordinarily, American democracy directs its venom against writers and  
activists on the left, foolish enough to want to defend the  
underprivileged. For a change, Americans are threatening captains of  
finance, venerable bankers, with dire consequences – even death threats.

I was on sabbatical when Al-Qaida brought down the Twin Towers on  
September 11. Then, I was relieved to be away from my students, afraid  
that some of them might want to lump me with those who had perpetrated  
these attacks.

I am on sabbatical, again, as the towers on Wall Street were being  
toppled by greed, recklessness and fraud; by a free-market ideology  
that has no regard for human life; by capitalist elites and their  
partners in the White House and Congress, who had turned the financial  
sector into a giant Ponzi scheme.

Americans have been subjected to acts of ‘terrorism’ whose final human  
toll will make September 11 look like a tea party. The perpetrators of  
this terror are all homegrown; they were trained not in the mountains  
of Afghanistan but at Harvard, Yale and Stanford; the bankers,  
executives and legislators who preyed on Americans are the crème de la  
crème of American society.

When I return to teach in Fall of this year, I expect to meet students  
chastened by their experience. Nothing undermines capitalist  
ideologies faster and more effectively than capitalist crises. No  
critique of capitalism can be more penetrating than the depredations  
of unemployment, immiseration, homelessness that it inflicts on its  
victims. So recently victimized – at the very center of global  
capitalism – perhaps, Americans might learn to empathize with victims  
elsewhere – in Africa, Asia and Latin America – who have been ravaged  
by this system for centuries.

Capitalist ideologues will be working overtime to deflect American  
anger away from the system to a few villains, to a few rotten apples.  
Congressional hearings will identify scapegoats; they will hang a few  
‘witches.’ A few capitalist barons will be sacrificed. As public anger  
subsides, attempts will be made to shift the blame to feckless  
homebuyers and compulsive consumers. At all costs, the system must be  
saved. The capitalist show must go on, with as little change as  
possible.

Quite apart from this crisis, however, new technologies, in  
combination with the irreversible shift of sovereignty to some  
segments of the capitalist periphery, have been changing the dynamics  
of unequal development. The high-wage workers – the so-called middle  
classes in the developed countries – have been losing the protection  
they have long enjoyed against competition from low-wage workers in  
China and India.

More and more global capitalism will enrich some workers in the  
‘periphery’ at the cost of workers in the ‘centers’ of capitalism. In  
the years ahead, the great alliance that was forged between  
capitalists and workers in the centers of capitalism will come under  
greater strain. More and more, the interests of these two classes will  
diverge.

Powerful corporations will still insist on openness, while growing  
ranks of workers will press for protectionism. This revival of class  
conflict in the old capitalist centers will strain existing political  
arrangements. After a co-optation that has lasted for more than a  
century, the demos will begin to threaten the corporate elites. New  
demands will be placed on intellectual mercenaries in the media and  
academia to use new, more effective tools to dumb down the demos.

As growing segments of high-wage workers in the rich countries become  
the new victims of capitalism, will they slowly learn to see  
capitalism from the standpoint of its victims? In this new emerging  
reality, will orthodox economics migrate from its old centers in  
London, Cambridge and Chicago to new centers in Bangalore and Beijing?

A curious world this will be when seen from the old centers. In truth,  
this will only be a long-delayed correction to two centuries of  
unequal development, dominated by Western centers. Sadly, the  
correction will not go far enough: it will leave much of the world  
mired in poverty and disease.

M. Shahid Alam is professor of economics at Northeastern University.  
This essay is excerpted from his forthcoming book, Israeli  
Exceptionalism: The Destabilizing Logic of Zionism (Palgrave  
Macmillan: November 2009).He is author of Challenging the New  
Orientalism (2007). Send comments to alqalam02760 at yahoo.com.

Visit his website at: http://aslama.org.