Though many suffer, the crash of 2008 was not as system threatening as in 1929.
The financial turmoil of the past five years reminds many of the crash of 1929, which led into the Great Depression of the 1930s. That depression threw millions out of work and forced millions more off their farms, both in Europe and in the United States. It also bankrupted thousands in the business classes of Europe and the United States and dispossessed thousands from the remaining European aristocracy. That crash resulted in a moderate rise in support for radical political movements plus a near total demoralization of the establishment forces. Nobody could stomach defending capitalism in debate, it was a ghastly word. Capitalism was defended of course, by the sword, and under the guise of other issues.
The aftermath of the crash of 2008 appears quite different. The “Great Recession” has thrown millions out of work just like the Great Depression did, but the rigidity of generations of farming or working at a particular craft had already (all but) disappeared. Furthermore, though there is a lot of talk about ‘entitlement mentality’ from conservatives, they are clearly overstating. In 1929, people lost occupations they felt entitled to out of an inheritance over generations. Today unemployment and instability/flux in careers is considered normal, at least by the majority of the population. More often, people don’t feel they are “entitled” to a job, and certainly not to a particular one. Correspondingly, the sense of moral outrage on losing one’s job and home is also less.
But there is a bigger difference from the 1930s than this. While there is no doubt that many business and professional people all over the world lost a lot of money over the last few years, they have largely been protected—bailed out—from the kind of catastrophes that so many endured, or failed to endure back in the 1930s. Today, the top “one-percenters” and people among roughly the next ten percent of the income distribution feel sufficiently secure to remain morally and politically invested in the current regimes. So while there has been plenty of worry, there has been no mass panic and no mass demoralization in business and financial circles. The ruling parties are a little embarrassed, opposition is greater than normal, there is a lot of protest, the situation provides little significant support for alternatives.
This has given rise to a series of disappointments for the left. In Greece, anti-austerity socialists lost to establishment parties in an election considered as significant in Europe as the failed Wisconsin recall effort was in the United States. In Egypt, the military has reestablished effective control and the left has to decide whether to celebrate or mourn the election victory of a “president” from an Islamic party. The upcoming elections in Mexico will yield similar results. While there is a great deal of discontent, there is little support for a militant alternative to the current order, and the current order continues to enjoy significant minority support. In the upper and middle classes, in fact, it still enjoys majority support.
What about the left? Let us consider two distinct grouping– the militant left and the left counterculture.
The militant left has suffered defeat after defeat for forty years, with the partial but notable exception of a number of countries in South and Central America and perhaps Thailand. This cannot be explained solely by bitter memories of Soviet “Communism.” The main reason is that socialism appeals most to property-less but somewhat educated and at least semi-secure employees—the working class as it has typically been imagined. That said, this group has never been a majority in any country and is currently a shrinking proportion in most. In developed countries, many working people are also small property owners and may even participate in a pension fund: they are at least somewhat invested in capitalism. More important by far, however, is that in many developing countries and increasingly in developed countries, a large proportion of people are casual laborers or petty entrepreneurs—small business without the glamour. In countries like India or Mexico, it is considered a great privilege to be officially hired for a job. It means an employer is willing to make a long-term commitment. The majority of poor people have no official job at all. This explains why, with all the migrants seeking jobs in the US, Mexico has never had an official unemployment rate of over 5%. Most people are not officially in the labor force and so are not counted, but you can bet that they are working harder and suffering more than their officially employed and unionized counterparts.
Ironically, therefore, socialism has often come to appear as a movement of the partially privileged, both in the developed and in the developing world. Unions and union struggles, social security, pensions, working conditions—all these are important issues for people who see themselves as employees for most of their lives. For those, however, who see themselves as “self-employed” in petty business, petty crime or casual labor, these are all issues affecting only people more secure and privileged than they. Unions and socialists are more likely to inspire resentment than sympathy. Only the most militant type of communism involving mass redistribution of property and privilege is likely to appeal to this growing underclass, whose life style already includes the kind of violence and fear such communism threatens. In short, traditional socialism has never had enough of a constituency, and year by year is losing more.
There is another part of the left that is largely untouched by the defeat of the militant left. This is the counterculture left. Here the strategy is not to “fight capitalism” so much as to “opt out.” This is the left of alternative communities and alternative lifestyles, and it prefers moral critique and personal character development to political campaign and military combat. Unlike the militant left, this counterculture left actually stands to grow under depression conditions. As more and more people are separated from rewarding roles in the capitalist mainstream economy, they become available for/open to alternatives. On the periphery of the plenty created by capitalism, these alternative lifestyles provide structure and meaning to people until perhaps a new boom brings them back into the mainstream.
There used to be a bumper-sticker that said something like ‘if you think capitalism is working, ask someone who isn’t.’ That reflects a major misunderstanding. Capitalism works as much by excluding as by including people, and as many an executive of the last thirty years will tell you, there’s profit to be made in firing people–more than any other way.