Eric Hobsbawm: End of Capitalism?

In his brilliant article in yesterday's Guardian, the Marxist historian Eric Hobsbawm offers his assessment of the impact of the current economic crisis. According to Hobsbawm, the meltdown has not only destroyed the fetishism of the free-market, but has also confronted the Left with a seemingly unsolvable puzzle: what alternative can it offer? In other words, while the crisis might have left the Reagan/Thatcher-worshipping Right speechless, it has also accelerated the identity crisis of the Left that has been brewing since the fall of the Berlin Wall in 1989.

Hobsbawm argues that the meltdown of capitalism has brought the experimentation of the 20th century to a full circle: the failure of the Soviet-style socialism led to the global march of Thatcherism which is being destroyed in front of our eyes. But, Hobsbawm convincingly argues, there are no ready-made solutions. The Left has no coherent progressive policy that can offer to the millions of unemployed and disenfranchised in offering a new way for the world's economy.

A huge part of the reason for our stunning lack of alternatives, according to Hobsbawm, is the fact that the British Labor had uncritically adopted the Thatcherite fetishism of free-market because the British Left had become fearful of the dominance of the Conservatives. Thus, both, Blair and Gordon Brown--both of whom Hobsbawm brilliantly dubs "Thatcher in trousers"--did exactly what Bill Clinton, a liberal Republican, did in the US: opened up markets to the influx of foreign capital, turned London into the financial capital of money-laundering and a haven for the zillioners of the world. But what this policy ignored were the results it had produced: while London might have become more chic and wealthier, it had become so only for a select few while most Brits could no longer afford to live in the city, or send their kids to good schools. Hobsbawm blames Thatcherite economics for making Britain into the ground-zero of the current economic meltdown.

But what is brilliant about Hobsbawm is his soberness. The failure of free market capitalism does not mean a return to socialism. No one is suggesting this not only because of the latter's potential political illiberalism and oppression, but also because of its sluggishness and inefficiency (although educational achievements of the system should not be underestimated). So what next?

Hobsbawm's prescription for a new progressive policy is based on one simple principle: economic growth should be seen as the means to an end, and not an end in itself. Economic policy can no longer be about maximizing the GDP and the individual incomes, but the public "capabilities" through collective action. This must mean public non-profit initiative even if it only includes redistribution of wealth. In the words of Hobsbawm, a truly progressive policy for the early 21st century should consist of "public decisions aimed at collective social improvement from which all human lives should gain." But isn't this what socialism is all about? And if so, isn't Hobsbawm himself trapped in his own maze?

I am also not sure that Hobsbawm is correct in his assumption that the current meltdown represents a whole-scale destruction of capitalism as we know it. As he himself admits, most governments are still deeply wedded to the idea of free capitalism and the very policy they have implemented to get us out of the crisis (i.e. Obama and Gordon's bank bailouts) are based on the principle that might have gotten us here in the first place: free market is still the best option. The recent "glimmers of hope," to quote our President, when it comes to our economy (the slowly rising consumer confidence, DOW's gains, decrease in job loses, and profits for banks), might actually prove Hobsbawm wrong.

After all, it was Hobsbawm who in the early 1990s predicted the end of nationalism, just 2 years before nationalist violence would ravage what it had been known as Yugoslavia. Thus, his assessment now might be more product of wishful thinking than a sober prediction. But this remains to be seen...