What Sort of Crisis Is This?

[The following was inspired by the late, great Stuart Hall]

While the multiple crises roiling our communities were a long time in the making, the near-collapse of financial sector and subsequent bailout in 2008 revealed much about the degree to which both politics and economics have been dominated by small ruling elite whose interests run counter to those of most communities.

The financial crisis came as the result of radical deregulation and privatization that swept away the Depression-Era reforms that had kept financial speculation in check. With these protections gone, the financial sector grew at the expense of the real economy – those sectors that produce goods and services –and pulled back its investments in communities. Consequently, the financial marketplace no longer serves its ostensible purpose of providing capital for productive uses. Instead, it focuses on the pursuit of pure profit.

Alongside these changes in finance, corporations seized an opportunity to break their social contracts with unions and government, shifting resources from production into finance, and further concentrating financial power in the global North while moving physical production to the global South.

These shifts in economic shifts came accompanied – and abetted by – shifts in political power. Corporate-dominated global economic and political forces have weakened democratic governance to the point where most people no longer have access to, let alone control over, the institutional forces affecting their lives. Corporations have assumed considerable power over people's day-to-day lives but benefit from the notion that they are private actors with the rights of people, rather than legal inventions meant to serve public purposes. Yet they have great political influence and, in the United States, lawmakers show unwillingness and inability to rein them in through financial reform, health reform, and other measures.

The conjunctural crisis

The history of capitalism is punctuated by periods when the tensions that churn underneath the surface bubble up, creating possibilities for changing course, for realigning the dominant forces in society. The financial crisis of 2008 brought us to such a moment, or conjuncture. Here A conjunctural analysis, sometimes termed ‘naming the moment,’ is an analysis of the current period that looks at the social, political, economic and ideological elements that are in play, with special concern for the interactions between them. These interactions can give a period a distinctive character.

The last major conjunctural shift occurred in the mid-1970s. The crisis of the time –  characterized by growing inflation, economic stagnation, unprecedented global competition, energy shortages, declining wages, and rising unemployment – was “resolved” to the benefit of global corporate interests. This “resolution” involved a return to market fundamentalism and a diminution of the informal social contract among business, labor and government. Economic ideas that had been rejected after the Great Depression came back into style, leading to radical deregulation in manufacturing and finance and a reduced role for government in promoting a more broadly shared prosperity. As this market fundamentalism took hold, courts and legislators further extended the rights of corporations while rolling back the gains made by organized labor, civil rights, anti-war, feminist, consumer, and environmental movements. Alongside the changes came renewed emphasis on law and order and the war on drugs.

Ronald Reagan’s counterpart in Britain, Margaret Thatcher, famously stated, “There is no such thing as society. There are only individuals.” This comment sums up Reagan and Thatcher's governing philosophy, which has shaped political and economic decisions ever since. Because it draws on the classic liberal philosophies of the late 19th Century, this new world order is referred to as neoliberalism. Neoliberal logic associates “the market” with freedom, choice, individualism while positing public life and government as antithetical to freedom and liberty. The key struggle, according to neoliberalism, pits individual liberty against the state. As Stuart Hall puts it: “The state must never dictate to free individuals how to dispose of their private property, regulate a free-market economy or interfere with the God-given right to make profits and amass personal wealth.” Markets are part of the natural order.

Over time, neoliberal ideas and practices have succeeded in eviscerating much of the social safety-net, reshaping government to serve corporate prerogative, building public support for mass incarceration and criminalization of those economically and politically marginalized in the neoliberal order.

These shifts did not occur as the result of accident or chance. They are the result of effective strategizing and cultural intervention by the proponents of neoliberal ideology. Yet, often, we no longer see neoliberalism as ideology writ into practice but as the expression of the natural order of things. While the financial collapse of 2008 was potentially a conjunctural crisis –– a moment when people started to question market fundamentalism –– the 1 % and their supporters in both political parties restored the hold of neoliberal ideology.

And yet alternative ideas still exist. We can tap into them, but organizers have spent too much of the past 40 years avoiding ideological struggle. As a result, we haven’t been putting forward our narratives, leading to the dominance of neoliberal commonsense even in a time of crisis. Our movements need more coherent and coordinated responses, a sense of how to build and aggregate power, and a readiness to put forward alternatives to the status quo.