Crisis. It's such a convenient word, isn't it? Perhaps that's part of the problem. Everyone uses it and everyone means slightly different things by it. So folk on the Right like David Moller can quite easily and correctly say of the current financial crisis that,
" In marked distinction from those wearying arguments of the 1960s, 1970s and 1980s, it would seem that that great knockabout debate on capitalism versus communism has been put to one side."
Capitalism, on this view, isn't in crisis; it's just undergoing one of its necessary periodic convulsions prior to resuming its upswing. It's just the normal business cycle writ a little larger than usual. Some Marxist economists seem to agree, implying that the current problems are a dramatic, but containable, wobble in a new Kondratiev Long Wave Boom.
But I would argue we are facing three very closely interlinked structural problems, each of which, on its own, has the capacity to spiral out of control Long Wave or no Long Wave.
Firstly,we have a systematic failure of the heartland of the global financial system which is now spilling over into a more general economic crisis as unemployment figures rise across the developed world and trade volumes plummet. A response will come from the people hurt by this. Given that the Forward March of Labour has long Halted, this might amount to no more than a spate of possibly dramatic but politically superficial riots. A few governments might fall, as in Iceland, but that doesn't necessarily mean anything meaningful will have changed. Well nothing except one thing: the idea that we live in the best of all possible worlds ...the search for alternatives, however long and arduous the process, will be given new impetus.
Secondly, however, the financial crisis is intimately tied to a shift in geo-political power: put plainly North America is getting relatively poorer and the BRIC countries, especially China, and the oil producers are getting relatively and absolutely richer. People like John Ross say it is the imbalance in savings/investment and consumption between these two blocs that is at the heart of the current crisis. Indeed, America has been living high off the hog on China's savings. There's a stalemate here at the moment; China owns so much of America it doesn't want the dollar to fail, and pulling its money out - even if there was another safer currency to put it into - would automatically start that process. But this 'balance of financial terror' might not last for ever. In fact I'd be really surprised if it did. After the current credit crunch is over, China isn't going to be pouring its money back into Wall St again with such gay abandon. It's going to hedge, diversify - and perhaps even focus on domestic development, not foreign investment. & at the back of my mind is the unpleasant thought that the ownership of Top Dog Nation status rarely changes hands without some kind of armed conflict, even if that all seems a million miles away today.
Thirdly, the environmental crisis rumbles on. I am not one of those who believe that capitalism is solely responsible for this - I remember all those wasted cotton fields in Soviet Central Asia - but, to put it as mildly as possible, we're talking about those famous market signals of neo-liberalism taking a bloody long time to price in the destruction of our habitat, aren't we? What was that someone mumbled at the back about 'the Tragedy of the Commons'? This one isn't going away and is, of course, intimately connected to the whole question of the economic rise of the BRIC countries as well as the wasteful habits of the West. It remains to be seen whether even the forceful upward swing of a Kondratiev Long Wave - assuming that they exist, which is disputed - can counteract environmental disaster.
None of this means capitalism is going to collapse. It doesn't even necessarily mean it's going to be widely questioned, at least in the short run. It does mean however, there is no feasible return to 'glad confident morning' for the snake oil salesmen of the flat world of globalisation.
What capitalism now has, even though some are afraid to admit it, is a crisis of confidence in its own powers. & it's right to have such doubts.