networkideas.org - An Essay on the Crisis of Capitalism

The paper argues that a crisis of collective agency is at the root of the global economic crisis we face today. The secret of prosperous capitalism, the so-called golden age, was the ability of the state to uniformly impose welfare-enhancing market restrictions that made it possible to invest in common pool resources. This ability has waned during the neoliberal era and the result has been a resurgence of forces of competition – what Marx called the law of value – generating long-term collective costs that go increasingly unaddressed. This is reminiscent of classical capitalism's main weakness with respect to organizing corrective collective action, making a couple of Marx's points resonate today. What is profitable at the micro level ends up being at variance with human welfare as well as the long-term collective interest of capitalists, because coordination failure is not only endemic but also a defining characteristic of capitalist competition.

July 26, 2012.