A capitalist dilemma
If you want to hear some capitalists going at it over one of the biggest questions for capitalism right now, listen to this Squawk on the Street podcast starting at around 27:00.
The host presents a pretty big contradiction from the last week: the stock market just had its best week since 1974. But then almost 17 million people are out of a job.
Which leaves a big policy question.
Do you keep doing what's good for the stock market by plugging holes in company balance sheets, preserving financiers' ability to trade credit, and helping firms so the stock market keeps going up--or do you prioritize working class? Do you let firms crumble if they’re over-leveraged, make direct payments to people who can't pay their rent, and then bolster public programs that run on taxes?
The host of the podcast plays a clip by Chamath Palihapitya, leader of a social capital fund, who takes the latter position. He says Wall Street and Main Street are too separate. He says the Fed is propping up zombie companies. He says airline companies should fail.
What's more important to him are people in the working class: give them their wages they made last year for the entire shutdown. Companies and financiers should be wiped out, but workers--labor itself--should be made whole, since that's the backbone of the economy. A pretty labor friendly position.
Then Kevin O'Leary, host of Shark Tank, totally rejects this. It's pretty funny to hear him froth at the mouth.
He says the soul of capitalism is at stake. He says you have to preserve the 'DNA' of firms so they can hire people back. He says you can't just give people money. You can't just let firms sink. That’d be unAmerican! That’d be downright…anticapitalist!
And that’s the class struggle right there. Capital or labor. In a debate between billionaires!
A capitalists’s dilemma
To me, this debate between O’Leary and Palihapitya is a manifestation of a capitalist dilemma the production crisis is creating. I like to use existentialism to articulate it.
The best slogan to summarize Jean-Paul Sartre’s existentialism is ‘existence before essence’. It basically means that there’s a fact-of-the-matter about stuff that is more profound than what that stuff is supposed to be.
Like a chair. You might think the essence of a chair is to sit in it because that’s what it’s meant for.
But you can also tame a lion with it, throw it out of a window to escape a burning building, or use it as a step-stool to change a lightbulb. So you can see clearly that the chair’s existence comes before its essence: it’s not supposed to be for sitting, or anything in particular.
The capitalist’s dilemma right now is between capitalism’s existence and its essence.
The ruling class can either can keep capitalism’s essence and give up its existence by prioritizing capital. O’Leary is defending that view. Or the ruling class can keep capitalism’s existence but give up its essence by prioritizing labor, like Palihapitya says.
Where would socialists stand?
So what should a socialist make of the dilemma? There are two positions. One would be an accelerationist (what some might call ‘revolutionary’): let the ruling class choose capital’s essence over its existence. We want the system’s destruction and the best way for that to happen to let it destroy itself.
But a different position would be that we should get the ruling class to forgo capital’s essence, extract policy changes that have concrete material benefits for the working class, and maybe let the existence stick around. Some might call this ‘reformist’.
A third position would try to do a bit of both, treat it as a terrain rather than an either/or. You could see this dilemma as a flash point in the class struggle, and then navigate it to push the tension far enough so that we get both concrete material benefits for the working class in such a way as to push the balance of forces towards a transition to a new mode of production. I like this third position best.
This is where socialists want capitalists, to some degree: on their heels, choosing between the existence and essence of their preferred mode of production. It’s a good lesson in the kind of debates we want to force them to have.
Ideally, we’d be able to organize and create this situation to have a bit more control over next steps, but a virus is doing that work now (which is pretty messed up—I don’t support the virus, I’d rather there be coordinated strikes, socialist politicians elected, and street movements creating this situation but here we are).