One of the metaphors Katherine and I use in our book is that of an overripe economy – how we’re at risk of letting the fruits of growth rot before we get to enjoy them. I hadn’t seen anyone else use that particular comparison until I saw the title of Alan Nasser’s new book, . I thought I’d better check it out. I’m running through the copy edits this week. If Nasser had any particularly pithy fruit-related quotes, I’d be able to jam them in.
As it happens, the metaphor is used as fleetingly as we use it ourselves. In a nutshell, “secular stagnation, bubble-driven slow growth, declining living standards and growing inequality” are what Nasser considers to be the “abiding features of mature, overripe capitalism.” It’s late stage capitalism, captured by finance and being stretched by automation and globalisation. Inequality is surging, the middle classes are falling behind, and elites are capturing more money and power. This ‘exhausted’ capitalism “can be prolonged only at the expense of democracy and of material and psychological security.” Unless something radical is done about it, austerity and stagnation are the new normal.
In fact, Nasser argues that capitalism that benefits everyone is the exception and not the rule. Most of the time the wealth does not flow to ordinary people, but to the elites. There are just two periods in America history when downward redistribution was working and everyone was gaining – the roaring 20s, and the postwar period from 1949 to 1973. The rest of the time, wealth has gone to the wealthy, and living standards have been boosted by debt and credit to give the illusion of progress.
The book explains this through a chronological histroy of American capitalism, from the boom years of railroad building, through the great depression, the post war settlement, crisis, Reaganomics and so on. As a socialist scholar, the book highlights the roles of unions and the labour movement, showing how collective bargaining and labour power was able to win concessions, and how it has at various times been suppressed. There’s a lot of little details here that I hadn’t heard before.
Later chapters cover the more familiar territory of the financial crisis, automation, and globalisation. You can see the conclusion coming: what America needs is “organized working-class resistance”, wrestling the means of production back into public hands, and a new democratic socialism. Perhaps if Bernie Sanders had won the primary, we’d be seeing right now what American appetite for that might really be.
Those conclusions are par for the course. What I found more disappointing is that the environment is completely invisible in the book. No mention of climate change, waste, resources, or pressure on the natural environment. As far as Nasser is concerned, the American working classes are underconsuming. They need higher wages so that they can stimulate demand and break free of stagnation. But further American growth isn’t wise or ethical in our hot and crowded world. We need more imaginative solutions than that.
“Every industrially mature capitalist society reaches a critical developmental stage” Nasser writes. “At that point the kind of real economic growth that brings secure employment and living standards to the majority, much less to every working household, slows down.” Correct. That point of maturity is what I call Arrival, and it presents us with a choice. I argue that what comes next is a switch to a postgrowth economy that embraces quality rather than quantity, inclusion rather than endless enlargement. But for Nasser, it’s all about handing responsibility for wealth creation back to government to deliver that endless neverending more.
- Overripe Economy is published by and is available , and .