The paucity of theoretical (left-wing) analysis concerning the present financial crisis has been bothering me for the last several months. In recent days, however, theorists have begun to examine the context in which this crisis has occurred and its various ramfications.
First of all, there's John Bellamy Foster's essay in the April 2008 edition of Monthly Review, which can also be read online here. I'd suggest that one first read a piece he wrote for Monthly Review a year earlier, in April 2007, to flesh out the theoretical picture, which can be found here. As I understand Foster, the gist of what he's saying appears to be that the shift from an earlier industrial capitalism to today's finance capitalism was prompted by stagnating profit and the concomitant lack of profitable outlets for investment. But a corollary of this move has been a national economy (and increasingly, a global one) that is susceptible to booms and busts (in contrast to the relatively mild cycles of forty and fifty years ago), to speculative fevers and savage "corrections" of the sort not seen in an earlier post-WW2 age. And that what we have today is the inevitable collapse of a financial house of cards, which has been built on -- and succumbed from -- inherent contradictions such as insufficient purchasing power on the part of ordinary people, the explosion of credit, and the frantic and feverish search for super-profits. I hasten to add that I'm not sure to what extent I'm paraphrasing Foster and to what extent I'm depicting my own weltanshauung.
What troubles me now is how little theory informs current political discourse. The ideas put forward so far appear to be to lower interest rates, to provide some relief to mortgage holders, to "stimulate" the economy, to (half-heartedly) attempt some mild regulation of the markets -- all patch-and-mend. What's really needed is an ideological alternative: one that provides a theoretically different perspective from the neoliberal dogma of the last three decades. One that proposes that there may be an alternative to (ostensibly) free markets and ever-widening disparities in wealth and income; one that situates the present crisis as systemic and reveals the ideological bankruptcy of neoliberalism. One cannot, of course, expect the paid apes of the Democratic Party to initiate any such discourse; as I maintain, if the Republicans are killers, the Democrats are whores. So any such discourse will have to come from elsewhere, from some fringe or periphery. Yesterday evening I serendipitously stumbled across a couple of analyses which resonated with me; they can be found here and here. I'd just like to mention a couple of points that I found particularly noteworthy about Chazelle's essay.
First of all, he contends that any real ideology has to be disbelievable just as any real scientific theory has to be falsifiable: this resonates with me because I'm trained as a scientist. Thus saying that the sun will arise in the east doesn't constitute a theory; predicting the existence of Uranus or the existence of radio waves does. And if an ideology is to be disbelievable, it needs to be making concrete proposals that are based on tough choices. Any ideology that doesn't 1) indicate that there are alternatives and 2) suggest which of these alternatives should be chosen (i.e., tough decisions) and why, is no ideology. This is precisely why the Democratic Party is talking through its backside most of the time: it's not proposing a rival ideological framework. It merely puts a smiley-face on harsh realities and "feels your pain." And Democratic politicians assiduously avoid portraying any alternatives to the current status quo. But I digess. Both of the analyses are well worth reading and should provide food for thought.