In the summer of 2001, the first meeting of the World Social Forum was held under the slogan ‘Another World is Possible’. Delegates to this socialist alternative to the World Economic Forum stated their intention to disrupt capitalist globalisation, champion the rights of the global South, and resist American imperialism. Few heeded their rallying cry. Just over a decade earlier, the contours of the new global system had emerged with the fall of the Soviet Union, and free market cheerleaders were all too happy to declare that this new global system was now set in stone. History was over. Capitalism had won. Globalisation — constructed as a neutral, inevitable process — would bring the benefits of the free market to the more backwards parts of the world if they would only let it in. The planet was suffering from an acute collective depression that Mark Fisher termed ‘capitalist realism’: it would have been easier for most people to imagine the end of the world than the end of capitalism.
Seven years later, those same people could have been forgiven for thinking that they were living through both. The financial crisis of 2008 rocked the global economy to its core, exposing the economists’ dreams of taming the economic cycle as pure fantasy. When the US housing bubble burst, the financial flows that sustained the global banking system suddenly ground to a halt. The fictitious capital that had been created in asset markets over the preceding decades evaporated and many financial institutions, corporations, and households found themselves insolvent as a result. The financial crisis that had begun in the US housing market swept around the world, creating the longest and deepest global recession experienced since 1929. Trade and investment flows fell sharply, marking the beginning of a slowdown in globalisation that endures to this day.
Political leaders were quick to employ their own version of capitalist realist discourse. The financial system must, they argued, be saved. There was no alternative. Ordinary working people would be the ones to suffer if it was not. National governments pumped liquidity into the financial system, hiked up deposit insurance, and eventually provided their ailing domestic banks with much needed capital. They rushed to implement stimulus programmes, cut interest rates, and launched the biggest monetary experiment since Bretton Woods in the form of quantitative easing. Those countries not in control of their own monetary policy found themselves facing the wrath of the bond markets. The financial crisis swiftly mutated into a sovereign debt crisis, with a particularly acute impact on the eurozone. States all over the global North looked at the unfolding Greek tragedy with horror. Austerity, they claimed, was the only way forward. In few other parts of the world did austerity proceed as swiftly and as brutally as in the UK, where the Conservative–Liberal Democrat coalition government implemented a programme of cuts so harsh that it has been linked to 120,000 deaths over the last decade.
This succession of injustices was shrugged off by centre-left parties around the world, themselves unable to imagine that there might have been a different way to respond to the crisis. In the immediate aftermath of the crash, there didn’t seem to be any resistance at all. By 2015, the near collapse of global capitalism had come and gone without once threatening the political system that underpinned it. But all was not as it seemed. For those in education when the financial crisis hit, the spell of capitalist realism was broken. Their identities were formed during a time of deep uncertainty, polarised political discourses, and crumbling institutions. They lived through the death of the world of neoliberal prosperity, and the birth of the world of post-crisis stagnation. They could see the contingency of the existing order. Suddenly, another world was possible again. But what kind of world would it be?
Ten and a half years to the day after the collapse of Lehman Brothers, the planet was presented with two potential futures. On 15 March 2019, a white supremacist opened fire on a mosque in Christchurch, New Zealand, killing forty-nine people, from young children to the elderly. The killer, Brenton Tarrant, posted a ‘manifesto’ on Twitter before the shooting, in which he claimed that it was necessary to create a ‘climate of fear’ for Muslims living in the West to prevent a ‘white genocide’. He claimed to have been inspired by Dylann Roof, who killed nine African Americans in a church in the US, and Anders Breivik, who detonated a van bomb in Oslo, killing eight people, and then massacred sixty-nine young leftists at a camp for the Worker’s Youth League, to publicise his own anti-migrant, anti-Islam manifesto.
On the same day, one million students from all around the world took part in an international school strike to protest politicians’ inaction over climate change. Two thousand protests took place in 125 countries, with students from all corners of the globe demanding that their governments take action to protect their futures. Whilst commentators from the mainstream press jeered, students in the UK chanted ‘Oh Jeremy Corbyn’ in support of the opposition leader, whilst holding up banners criticising the Conservative government. The British demonstrators had their own manifesto. Their rallying cry: ‘Change is needed, and it’s needed now!’
These were not random, isolated events — they are symptoms of a decaying system. Finance-led growth collapsed in 2007, leaving stagnation and entropy in its wake. Our political and economic institutions were built during the boom and are not equipped to deal with the tensions that have arisen since the crash. Ruling elites have buried their heads in the sand, desperately defending the remnants of a dying model, whilst everyone else looks into their future and sees only hardship and decline. Collective sense-making, supervised by a media out of touch with the conditions faced by ordinary people, has broken down. In its place, new narratives have emerged among new political communities — whether white supremacists on the internet, or climate strikers in their schools. All around the world, people are turning to one another and saying the same thing: ‘things cannot go on as they are’.
The gravity of this moment is hard to grasp for those who lived through the period of stability following the fall of the Berlin Wall. But perhaps the most important lesson to have emerged from the events of the last decades is that no capitalist system can remain stable for long. The global economy does not operate according to the predictable laws of neoclassical economics, thrown off course only by external shocks. Instead, capitalism engenders complexity, meaning that even the best organised capitalist economies inevitably tend towards chaos. Capitalist political and economic institutions attempt to contain complexity by subjecting capitalist societies to rigid hierarchies, in which owners have all the wealth and power. But, as Marx has shown us, such institutional configurations — whatever their nature, from social democratic to free-market libertarian — cannot contain the chaos unleashed by the profit motive. When these institutions can no longer control the contradictions they were designed to accommodate, they strain, and even break. Such periods are marked by political, legal, and social upheaval, frequent transitions of power, and even revolutions.
A Decaying Order
The decade since the financial crisis has been one such period. Finance-led growth is a system premised upon wage suppression and rent extraction by elites — a process that creates little of value even as it transfers resources from the bottom to the top. With ever more resources controlled by the owners of capital, the only thing sustaining Anglo-American capitalism before the crash was the creation of ever greater amounts of debt. But as this debt has dried up, the stagnation created by a system premised upon rising inequality has been revealed. Economics increasingly resembles a zero-sum game, in which more for one group means less for another. And those with the political power are using it to monopolise the shrinking gains from growth for themselves. As long as the foundations of our finance-led growth model remain the same, then these contradictions will continue to escalate.
In this febrile political climate, the so-called centre — committed to propping up the status quo — cannot hold. When the liberal establishment decries the rise of ‘populism’, they are demonstrating once again that they lack any understanding of the current political moment. The disdain directed at those who attempt to create political change outside of the ‘civilised’ institutions of liberal democracy involves a total failure to understand that those institutions no longer work — something that is quite easy to forget when you are situated comfortably inside them. Rather than articulating a vision of what a new society could look like, the liberal elite comfort themselves by suggesting technocratic tweaks to various policy areas in an attempt to make the system work again. The old order is sinking, and the ruling classes are rearranging the deck chairs.
Elites may continue to claim that ‘there is no alternative’, but deep down they know that capitalist realism is dead. The students who took strike action to protest the death of their planet are not bound by its constraints. But neither are the far-right extremists we see on our TV screens — either those who inhabit positions of power, or those who conduct brutal acts of mass-slaughter. Only those who know that a new world is coming can prepare for its arrival, and today, we face a choice between socialism and barbarism. When the international financial press praised the election of far-right President Jair Bolsonaro in Brazil, we saw where the allegiances of the ruling classes really lie. The establishment would much rather watch human beings turn against one another in a fit of fascist hysteria than watch them work together for a new and better world built on equality rather than hierarchy.
Ultimately, capitalism will end in a great battle between those who want to see human beings fight one another over the scraps of a dying system, and those who want to build something new. For those who wish to avert the rebirth of fascism, socialism is the only way forward. Those who claim that socialism could never work tend to do so on the basis that societies and economies are too complex to be governed by the logic of planning — only the decentralised logic of the market can provide for an optimal allocation of resources. But as more and more economic activity is concentrated within huge, bureaucratic, hierarchical firms, and equally huge, bureaucratic and hierarchical states, this argument becomes ever more ridiculous. In fact, those who claim that hierarchy and complexity do not mix have a point. As humanity has become more technologically advanced and more interconnected than ever, the capitalist model has become less and less viable. Subjecting complex societies to the rigidity of a capitalist hierarchy based on concentrated ownership can only lead to instability and injustice.
Unable to control the forces of complexity it has called forth, capitalism must now make way for democratic socialism, which, rather than seeking to contain complexity through the hierarchy of the firm and the state, extends the liberatory principles that the opponents of socialism hold so dear to all areas of political and economic activity. Rather than being constrained by a boss or a bureaucrat, democratic socialism provides a way for people to self-organise in pursuit of a collective endeavour. Working in this egalitarian, decentralised and cooperative way allows human beings’ creative dynamism to be harnessed in response to some of the greatest challenges the world has ever faced. Democratic socialism allows people to take control of their communities, their workplaces, and their lives; it allows people to come together to build a better world.
Finance-led growth in many ways represented the apogee of capitalist development — trillions of dollars of capital being moved around the world, not to produce anything of value, but to seek out the next big speculative gain. The owners of capital became unimaginably wealthy on the back of this broken system, but when it collapsed under the weight of its own excesses, it was ordinary working people who were forced to bear the costs. The death of capitalist realism has led to the rebirth of ideology, and of history. The political upheaval of the last decade is a response to the re-emergence of fundamental questions about what kind of society we want to live in. Politics is no longer a question of making technocratic tweaks to a stable system; it is once again a great battle of ideas and the movements that champion them.
But with the death of capitalist realism, the greatest challenge faced by contemporary capitalist societies is no longer imagining a different kind of future, it is getting from here to there. Building a new politics does not simply mean changing the party of government. It involves a coordinated political project to radically rebalance power in society away from capital and towards labour. Doing so requires a series of overlapping interventions, mirroring those undertaken by the parties who built finance-led growth in the first place.
In other words, socialist governments must take on the banks the way Thatcher and Reagan took on the unions. Modern financial systems have created complex but effective mechanisms for the owners of capital to gain control over large swathes of the economy. Collective control of finance capital would mean collective ownership of these resources, as well as drastically limiting the power of those who currently monopolise them for their own ends. Such a plan must be premised upon the assumption that a socialist government will face resistance from those who occupy positions of wealth and power and put in place contingency plans as a result. The immensely challenging task of establishing a new institutional settlement, whilst battling with the powers that undergird the old, will be the central task of any socialist party that comes to power during the interregnum.
Together, this set of reforms would serve to radically shift wealth and power in society away from those who currently monopolise it, and towards those who have been forced to pay for the excess of these extractive elites. Implementing such a strategy would create a fairer, more equal, and more prosperous society. But it would also represent the beginnings of a far more profound shift. As a public banking system emerges and grows, alongside a People’s Asset Manager, ownership will steadily be transferred from the private to the public sector. As the state invests strategically to boost growth, employment, and equity whilst reducing carbon emissions to zero, living standards will improve, and the UK will become a model for green, sustainable growth. And as the democratic reforms to the country’s economic institutions are embedded and scaled up, public engagement with economic decision making will grow, making democratic collective ownership a reality. And as we reform or replace the imperialist institutions that currently govern the international system, we will put in place the conditions for this model to spread around the world. Were the planet not staring down the barrel of a gun, such a project might seem like nothing more than a utopian dream. But capitalism is dying, and it is bringing the extractive, neo-colonial international order down with it.
At this critical juncture — at the crossroads between extinction and utopia — human beings must take back control of our history. For decades, we have allowed our futures to be determined by the wealthy and the powerful in the hope that they will use their influence for the good of the whole. But the financial crisis exposed many of our political and business leaders for what they are: self-interested, exploitative, and reckless elites, who would rather see the planet burn than sacrifice an iota of their wealth. It is now clear that the only power we can rely on is our own. To those who believe that selfishness, a resistance to change, and an inability to cooperate are the defining features of the human condition, this is a source of despair. But for those who have faith in the power of working people to change the course of human history, it should come as a beacon of hope. We have the technology and resources to build a world based on cooperation rather than competition — it is time for politics to catch up.