Tag Archives: fiscal cliff

The Real Culture War II: Utopia, Austerity and the F***** C****

18 Dec

Yesterday we argued for carrying the culture war into the heart of the American political economy. We made the very broad claim that a defining feature of our economic culture is the acceptance of limits. This might seem like a strange thing to say. Surely the last decade was marked not by limits but by a failure to acknowledge them. Individuals, businesses and eventually governments borrowed well beyond their means. That, so the story goes, was what created the credit crunch and the stagnant new normal. It is certainly the narrative behind the growing deal, in which Republicans appear to be ‘conceding’ on some tax hikes while Democrats accept 5-10% cuts to Social Security.

But that narrative exactly misreads the role of credit and consumption. The expansion of credit was largely an attempt to overcome the limits of capitalism within capitalism. As is now common knowledge, the expansion of consumer credit presupposed stagnant wages:

Real Household Debt Wealth Income

And, as the graph shows, it began with sagging profit rates of the late 1970s – perhaps most famously marked by Volcker’s revanchist announcement that “the standard of living of the average American must decline.”


(graph from Robert Brenner, see also Henwood.) What the expansion of consumer credit permitted, in other words, was the appearance that capitalism could accommodate the expansion of desires, the demand for ‘more,’ even while suppressing labor costs and increasing the expropriation of the expropriated.

The expansion of credit over the past thirty years was in a sense a massive bridge loan to cover the transition to a leaner set of arrangements, in which more jobs would be low-paying, part-time and insecure, labor would be less able to defend attacks on the standard of living, ‘job-creating’ capital would take home a larger share of the pie and then basically sit on it, and politicians could pretend serious economic issues could simply be managed by technocrats.

The major problem with the credit crunch was not the attempt to surpass existing limits to consumption, but with the implicit practical belief that credit could in any way rise above and compensate for the class defeats of the past twenty years. Just as Obama has frequently tried to rise above politics in the name of some abstract non-partisan unity, so too did the borrowing public hope it could rise above the real disparities in society, without having to face them directly.

To put it another way, the ‘fiscal cliff’ is not just a false emergency engineered by Republicans and Democrats, it is the culmination of decades of attempting to paper over the limits, not merely injustices, of the American economy. It is not just that both parties have joined the austerity bandwagon, they in the process are attempting to neutralize the only utopian moment of the past few decades: the satisfaction of desires that the current society cannot satisfy. The expansion of debt would have been unlikely to succeed had that desire not been there to sublimate.

Of course, critics may say that many of these desires took a form not at all challenging to a consumer society. That criticism has some teeth, and we will take it up in tomorrow’s post. However, moving too quickly towards anti-consumerism not only misses the utopian moment, but also blurs quickly into the bland and conservative narrative of arguing we should do more with less. The starting point for an economic culture war must be to reject the austerity party and its culture of low expectations. Any reconstruction of meaningful alternatives must begin by rejecting that piece of our economic culture. After all, the so-called ‘solution’ of a grand bargain is really just a an attempt to throw back on society the political class’s own lack of imagination and inability to deal with the problems it has inherited.

(to be continued)

The Real Culture War, Or, The Ideological Mountain in front of the Fiscal Cliff

17 Dec

This is the first in a series following up on a previous post, in which we argued that the culture war should be carried into the heart of the American political economy, rather than presuppose the separation between culture and economics.

During the contest between Romney and Obama, lefties argued that the election was an instrument of political distraction. It focused attention on a false choice between Democrats and Republicans, which served mainly to narrow our sense of possibility and the full range of alternatives. They looked forward, therefore, to the day after the election, when ‘real’ politics could begin again. However, as the fiscal cliff debate reminds us, the American political system continuously produces and reproduces a narrow range of choices. How to cut trillions in dollars in spending in the midst of a post-crisis economic stagnation is a competition over who better fits in with the hegemonic idea of our time: limits.

What both sides agree on is that we have to expect less. The lesson of the past decade is people irresponsibly demanded more than the economy could provide, whether privately, through credit markets, or publicly, through state provision. Somehow we can only return to growth and progress by living within our means. Even the more significant recent expansions of the state – Obamacare in particular – have come with the rider that we should expect only the minimal humanization of capitalism, not its transformation. Extend health care to the poor, but don’t think that there could be a public option, and don’t even mention single payer.

Likewise, the fiscal cliff debate manufactures a climate of emergency that, in the name of sharpening the minds, just narrows our focus. While some liberals have fairly pointed out that fears about the cliff are exaggerated, and the product of wars and tax cuts issued the right-wing Keynesians of the Republican party, Democrats are just as much, perhaps more, the party of austerity. Even some liberals admit as much, though entertain the false hope that the party can be saved from itself. The oppressiveness of our political culture lies in its unrelenting ability to force upon us these limited choices, continually lowering our expectations. If there is a culture war to be had, it is this one.

(to be continued)



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