The crowing of the Marxists at the dawn of a new night
Capitalism as we used to know it is on its deathbed. And those whopredicted that the old brand, the unfettered, American-promoted system,was a danger to the world, are being vindicated. They include KarlMarx, whose thinking on banks seems oddly contemporary these days.
The credit crisisthat began in August last year and turned into near-catastrophe thismonth is not over, despite the hundreds of billions of dollars thatgovernments are spending to save banks in the United States and Europefrom collapse and thereby prevent a global depression. But there is anemerging consensus that capitalism needs a 21st century overhaul, notjust emergency rescues, to save it from itself.
When that will happen is not clear. “What we are seeing right nowlooks like a very slow train wreck,” says James Boughton, the historianof the International Monetary Fund, or IMF.
British Prime Minister Gordon Brown has suggested an internationalmeeting on the pattern of the 1944 Bretton Woods conference thatresulted in the post-World War II financial order and created the IMFand the World Bank. That system was dominated by Washington.
The United States, from where the credit crisisspread like a virulent epidemic, is not likely to play as large a rolein whatever new “financial architecture” world leaders construct. AsPeer Steinbrueck, the German finance minister, put it: “One thing seemsprobable … The U.S. will lose its status as the superpower of theglobal financial system.”
“The world is at risk of losing its anchor … the United States,”U.S. financial strategist David Smick writes in his just-published bookon financial globalization, The World is Curved: Hidden Dangers to theWorld Economy.
The opening chapter is darkly entitled The End of the World. Smicksaid in an interview he thought a global depression was still possibledespite the steps taken by the United States and Europe to restoreconfidence.
Those measures included buying stakes in major banks – in effectpartial nationalization – and would make Marx smile if he could risefrom his grave. In the Communist Manifesto he and his collaboratorFriedrich Engels published in 1848, Marx listed government control ofcapital as one of the ten essential steps on the road to communism.Step five: “Centralization of credit in the hands of the state …”