We’re not within the throes of late-stage capitalism; we’re dwelling via the late phases and the dying rattle of the post-1971 fiat system. Mistaking the 2 (and basing options or insurance policies on this error) is a recipe for counterproductive interventions and missed alternatives.
By no means in my life have I felt a extra urgent sense that we’re approaching the top of one thing; that, to paraphrase William Butler Yeats, the metaphorical heart cannot and is not holding. I believe this sensation of approaching finality, of historic transition and of fraying order has saturated and knowledgeable our politics as properly.
The collective creativeness and can of our two political events is proscribed to revivifying Franklin D. Roosevelt or Ronald Reagan, with more and more diminished outcomes. Every get together needs to return the nation to its most well-liked trajectory, however these paths have converged and ended. Therefore the creeping sense that now we have reached some terminal level.
Many, notably these on the progressive left, confer with this state of affairs, this liminal section, as “late-stage capitalism,” a phrase rooted in Marxism (however not coined by its founder). The time period’s that means has developed over time however has lately turn into a sort of nebulous catch-all time period, a meme of lament for the yawning wealth hole and the absurdity of on a regular basis life, which has come to resemble, in its (at instances) cartoonish futility, a Samuel Beckett play.
Present occasions have solely intensified the lament. This has led some to invest (or boldly assert) that now we have reached the top of capitalism as a viable financial system; that capitalism, left to its personal gadgets, will proceed to take away or degrade our societal Jenga blocks till every little thing collapses. We’re merely witnessing the inevitable conclusion of a self-defeating system, they are saying. Its pure finish level is both a neo-feudalism during which ultra-rich overlords mete out crumbs to the destitute plenty or a collapse that, in its wake, begets an anarchic, balkanized state of nature, favoring the sturdy and the well-endowed who, minimally constrained, will trample the weak with impunity.
Confronted with this bleak outlook, why not preemptively intervene and chart a course into a unique system? Why not grant the state extra energy to coordinate financial exercise? Why not redistribute the wealth earlier than all of it results in the arms of the already-powerful few?
I believe most of us perceive the impulse right here. The concept that one thing is essentially damaged and that one thing elementary should change is pervasive. However the reply is to not conjure the senile ghost of Reagan, neither is it to remix Roosevelt. And it’s actually to not abandon capitalism altogether in favor of primarily educational alternate options — whether or not socialism’s worker-run state or some obscure conception of a prelapsarian, agrarian utopia. However too typically our discourse appears confined to those paradigms.
There are a number of causes for this mental logjam. First, I believe we’re attempting to jam spherical reality-pegs into sq., partisan holes. Second, I believe we’re mislabeling the second and misdiagnosing its flaws as a result of our language has not developed past Chilly Warfare binaries of capitalism and socialism, bourgeoisie and proletariat, employees and capitalists.
I posit that we’re, certainly, within the late phases of one thing, however this “one thing” is just not capitalism. Now, we might ultimately attain the top of capitalism — I’m not foreclosing that risk, nor am I suggesting that capitalism doesn’t have inherent, intractable points. However a lot of the modern tragicomic grotesqueness we ascribe to “late-stage capitalism” is uniquely enabled and facilitated by fiat forex and never wholly inevitable or innate to capitalism. What we’re at present witnessing is late-stage fiat. Extra expansive recommendations in regards to the finish of capitalism are theoretical and untimely. Consequently, our efforts shouldn’t be marshaled towards the jettisoning or transcendence of capitalism, however slightly towards error-correcting the introduction and proliferation of the fiat financial order.
Modern conceptions of late-stage capitalism are based on or born out of the accelerating and intensifying inequality of wealth, which is seen because the inevitable and inescapable results of capitalism. These outcomes, the argument goes, are inherent to and thus predetermined by a capitalist system.
However that is merely not as axiomatically true as we’re led to imagine. Positive, capitalism entails levels of wealth inequality, excessive iterations of which we’ve traditionally sought to rein in with myriad authorized guardrails. However the obscenely stretched ranges now we have as we speak, and which have been particularly exacerbated within the final 15 years, are causally associated to financial insurance policies enabled by fiat forex.
These charts present an inequality of wealth that has turn into more and more acute since 1971, after we formally deserted the gold normal and went to a full fiat system. From this level ahead, we began increasing the cash provide at an accelerating price, culminating within the COVID-19 liquidity infusions.
More and more, a rising tide doesn’t elevate all boats. It is because the underside 50% of boats will not be uncovered to the tide. They’re not even within the water as a result of they don’t personal property. This has solely gotten worse in latest a long time.
The more and more acute disparity is just not the inevitable results of capitalism. Quite, it’s the results of a fiat system during which these closest to, and exercising probably the most affect over, the foundations of the financial community reap probably the most advantages.
The anti-capitalism refrain reached fever pitch within the run-up to the 2020 election, because the fortunes of lots of the world’s billionaires grew exponentially throughout the course of the COVID pandemic.
Virtually completely unnoticed of this dialogue was the function performed by financial coverage. Let’s look at Elon Musk and Jeff Bezos, the poster boys of this rising wealth inequality all through COVID. I’m no apologist or cheerleader for both, however their fortunes have been elevated primarily by the Federal Reserve’s financial coverage. We flooded the financial system with new cash which, due to the Cantillon Impact, went first to probably the most creditworthy establishments and people, e.g., the rich, who then poured them again into property, juicing the costs of these property, that are disproportionately owned by the rich. You get the concept.
Right here’s a chart of Tesla’s inventory. Look what occurred from March of 2020 onward:
Right here’s Amazon, which mainly doubled after March of 2020:
Somebody like Musk, who owns a ton of Tesla inventory, is made fantastically rich on paper. It’s not as a result of he was ramping up exploitation over the pandemic. It’s as a result of we printed a ton of cash that, as is all the time the case, ended up pooling in property and creating asset-price inflation.
The power to print cash at will (and keep in mind, 40% of the dollars at present in circulation have been created in 2020-2021), is an inherent function of fiat forex. It’s not an inherent or obligatory function of capitalism.
I might argue different phenomena typically attributed to late-stage capitalism are uniquely enabled by a fiat system. The power to wage struggle completely on credit score, for instance, which distances the common citizen from the truth of struggle and thereby diminishes resistance to partaking in struggle, is enabled by the fiat system. That is elucidated within the work of Alex Gladstein.
The offshoring of labor and the hollowing out of our manufacturing capability, which has crushed the working courses, has been facilitated and, in truth, necessitated by the greenback’s place because the reserve forex. This offshoring has solely exacerbated wealth inequality.
I might lastly argue that the broad and ubiquitous breakdown of belief in establishments is said to fiat forex, as properly. In a fiat-currency world, cash itself lies. It may be manipulated and weaponized. To paraphrase Jeff Booth, when there’s misinformation on the base layer of society (which is the cash), this misinformation leaks out all over the place. And we’re solely in the beginning of this course of.
This isn’t an issue inherent to capitalism. It’s a fiat-currency downside. The binary is just not capitalism vs. socialism; It’s fiat vs. sound cash. A lot of our politics now’s involved with fixing the fallacious downside and jamming our very actual systemic flaws into fully inaccurate Chilly Warfare binaries.
Correctly figuring out the airplane on which the issue exists permits us to pursue efficient options, like changing the fiat system with one based mostly on a impartial reserve asset with non-manipulable guidelines, i.e., Bitcoin.
It is a visitor publish by Logan Bolinger. Opinions expressed are completely their very own and don’t essentially replicate these of BTC Inc. or Bitcoin Journal.