From the Socialism Or Your Money Back blog
In the 1980s, with Reagan in America and Thatcher in Britain, it became acceptable amongst the system’s supporters to use the word "capitalism" again. Before that if you used it you risked being called a "communist". But by capitalism they meant the ideology of free-market, private-enterprise capitalism, a capitalism with much less state intervention and regulation than up till then.
The supporters of the old form of mixed private/state capitalism were appalled. They denounced the new form taken by capitalism as "neo-liberalism", using the term "liberal" in its 19th century sense when the Manchester cotton lords who wanted free trade were supporters of the old Liberal Party.
Both supporters and opponents of free-market capitalism now seem agreed that the current financial and economic crisis represents a turning point. Even the free-marketeers recognise this, though they don't like it. "An historic turning point has been reached", wrote Anatole Kaletsky in the London Times (12 September) following the State take-over of the US mortgage companies, Freddie Mac and Fannie Mae, "the West is ditching its faith in free markets and private enterprise".
The decision of the US State to let Lehman's go bankrupt revived their spirits a little. "What critics are too hasty to see as capitalism in crisis is, in fact, capitalism in action", the London Times editorialised on 17 September, explaining: "It might be brutal and unforgiving but this is how capitalism works. The market ensures that those who make mistakes are accountable for them". But that was before the US State intervened to try to save AIG, the insurance giant that sponsors Manchester United. Collapse of the stout party.
On the same day the Guardian asked a number of well-known, self-proclaimed "anti-capitalists" -- among them Daniel Cohn-Bendit, Ken Livingstone, Tony Benn, George Galloway, George Monbiot and the leaders of the SWP -- for their views on the current crisis . None of them saw this as a final crisis of capitalism (as of course it isn't). Most of them called for an end to "neo-liberalism" and a return to the more state-regulated capitalism of previous decades. As if this hadn't proved a failure too from the point of view of meeting the needs of wage and salary workers and their families.
Ken Livingstone put it this way: "Sadly, I don't think this will be the end of capitalism. But there is going to have to be a return to a much, much more interventionist state". 1968 students' leader and now a Green MEP Daniel Cohn Bendit followed suit: "It's not the end of capitalism because capitalism has always had the intelligence to reform itself. It will be the end of capitalism when it's incapable of reforming. However, the belief that the market is god is over. It must now be regulated". Fellow Green MEP Caroline Lucas, from the UK, agreed: "This is a defining moment; the end of the kind of unbridled, deregulated capitalism of the past few decades. We are going to have to return finance to its role as servant rather than master of the global economy".
George Monbiot wanted to revive Keynes, the discredited 1930s economist: "A Keynesian solution along the lines of Roosevelt's New Deal could deliver many of the things the left is calling for -- more public spending, more training and education". Respect Party councillor, Salma Yaqoob, and Lindsey German of the SWP were more moderate. They called for just one reform measure. "Why not do something literally concrete on the ground and start building cheaper social housing?" said the one. "The left needs to put forward answers. People have the right to work; we have a housing crisis, so why not employ people to build more houses?" echoed the other. It's true that by concentrating on one reform such as housing these would-be vanguardists have a better chance of fooling people into following them than if they raised a demand for a "Keynesian solution". That wouldn’t "mobilise the masses" and would also expose them for the reformers of capitalism they are in practice.
Chris Harman, Tony Cliff's successor as the SWP's theoretical guru replied, curiously: "This is a very, very serious crisis of capitalism: it has been the build-up of private borrowing that has kept the system going, and it's coming unstuck". Since when has capitalism been kept going by consumer spending, whether financed by borrowing or not? This is a new version of the SWP's old mistake of thinking that what kept capitalism going was arms spending (exposed as wrong when arms spending was cut and capitalism kept going).
What keeps capitalism going as an economic system is the pursuit and attainment of profits. It falters when profits are not attained, though it can also be temporarily upset by a financial crisis. What also keeps capitalism going is of course, politically, the support or acquiescence of the vast majority of the population who see no alternative to the money-wages-profit system that is capitalism. Livingstone, Galloway, Benn, the SWP and the Greens, in only criticising "neo-liberalism" and advocating instead what might be called a "neo-statism", are not helping to dissipate this acceptance of some form of capitalism as the only possible way of organising the production and distribution of wealth.
The only real alternative to capitalism, whether private enterprise or state capitalist or a mixture of the two, is a society based on the common ownership and democratic control of the means of production, with production to meet people's needs not to make profits and distribution on the principle of "from each according to ability, to each according to needs". A view the Guardian too omitted to mention.