Capitalist decline

The United States’ recent wars in Afghanistan and Iraq were neither necessary nor successful in military terms. They did enable massive government spending and justified rising “defense” outlays in federal budgets. The Soviet Union as a great enemy had gone. A limitless, global war on “terrorism” provided an interim foreign danger until today’s pivot toward a new Cold War with China could settle in as a prime justification. But whatever global protection the US military provides to today’s global and vulnerable supply chains, huge military spending also helped cause neglect of infrastructure maintenance. That has now become urgent. The old guns versus butter problem typically attends economic system declines.

As the US government tries desperately to manage the mushrooming costs of its foreign and domestic programs, it resorts to a modern version of the ancients’ “debasing of the coinage.” The Federal Reserve System monetizes deficits in fast-growing magnitudes. Given unemployment, constricted wages, and excessive personal debt levels, the money creation does not flow into real investment but rather into stock markets.

Inflation there has thus been real, fueling ever-deepening wealth inequality. We get promises that money creation will never shift its focus onto goods and services, thereby provoking classic inflation. We get assurances that the Fed will register and control such an inflation if it threatens. Those promises and assurances aim to help prevent what those in charge know are terrifying possibilities.

The January 6 assault on the Capitol made a shocked nation more aware of how deep its social divisions have become and how its social cohesion has disintegrated. Those who attacked the Capitol reacted to the decline of capitalism by desperate resistance: to an election result, to political liberalism, to multiculturalism, to secularism, and so on. Like Trump, they tried to reverse capitalism’s decline. Because their ideology precludes them from recognizing that decline, they reason otherwise. They blame and therefore seek to dismantle the government.

Yet, the US government, via the two-party oligopoly in US politics, has single-mindedly supported US capitalism. The parties differ partly and only on how best to do that. As decline proceeds, despite the parties’ efforts to stop it, building frustration eventually boils over. Efforts become extreme and thereby worsen rather than solve the problem. Trump’s Cabinet members often devoted themselves to destroying their respective departments. The January 6 attackers sought to destroy as well. Such self-destruction is a sign of advanced system decline.

Excerpted: ‘Increasing Desperation as the US Capitalist System Declines’

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