Friday 26 September 2008

Taking a break from politics to fix capitalism?

US election blog - part two

At the time of writing, it’s not clear whether tonight’s scheduled debate between the two presidential candidates will go ahead. John McCain wants to put it off, effectively suspending his campaign unless or until the government’s plan for bailing out America’s crisis-ridden financial institutions is agreed. But Barack Obama’s determination to go ahead does not reflect a different approach to the financial crisis. Both candidates, and both parties, agree in principle that the government has to step in.

Even the alternative proposed by a group of more conservative Republicans – to make Wall Street pay for its own bailout – only highlights the fact that for all the talk of a tension between Wall Street and Main Street, the nature of capitalism is that the two cannot be separated. The appeal of a government bailout is that it will help stabilise the economy and protect ordinary depositors from ruin; the downside is that it costs taxpayers and seems to absolve irresponsible bankers from the consequences of their actions. ‘Financial socialism’ or ‘crony capitalism’? Both. And neither. 

It is partly because of the lack of anything resembling a credible socialist movement in American history that apparently anti-capitalist rhetoric has always been used by the right as much as the left. The particular association of the Republicans with big business obscures the fact that both parties are parties of capitalism, and yet both are wont to take aim at Wall Street when it suits them. But limiting compensation for executives of companies involved in the bailout hardly represents a challenge to the system, and nor would leaving things to the market.

To the extent that the crisis has become an election issue, it concerns the generic character traits of the candidates, and their perceived ability to handle ‘a crisis’, not any political differences in terms of ‘this crisis’. McCain’s desire to suspend the campaign is supposed to indicate his soldierly willingness to put the country before his own ambition; though as David Letterman suggested at length following McCain’s withdrawal from his show, it may also indicate doubts about the ability of his prospective VP to lead things in his absence.

Obama’s position, that the candidates have a responsibility to tell the public where they stand, is rather more credible, though Obama himself has little more to offer than bipartisan pragmatism. British historian Simon Schama has hailed the crisis as marking the end of petty politics and precipitating ‘the second coming of Big Politics’. This seems unlikely. A financial crisis does not by its nature lead to a political debate, and the signs so far are not encouraging. While there is of course plenty to be said about the banking crisis, and what it indicates about contemporary capitalism, a critique only has resonance if it touches on - or challenges - people’s own experience.

The dominant way of thinking about the politics of the crisis so far is ‘Main Street versus Wall Street’, posing taxpayers and respectable businesses against reckless financial shysters; even the more radical critiques tend to reinforce this paradigm, while both Democrats and Republicans seek to use it to their own political advantage. But what exactly is Main Street, and how do its people relate to Wall Street and what it represents? Deeper questions about the nature of American society and the cleavages within it will have to be asked, if not answered, if the crisis is to generate a truly political debate. Challenging the conventional way of thinking about contemporary capitalism would be a good start.


Dolan Cummings is co-producing the Battle for America strand, and chairing a keynote session on Capitalism - what is it good for? at the Battle of Ideas festival in London on 1-2 November 2008

Part one of this blog: The scene is set: the phony culture war election


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