DH

There are various ways you can think about crises. There are those who like to think that crises signal the end of capitalism. I tend to think they’re more about means for the reorganization of capital — its reshaping to meet new circumstances, with the rebuilding of an alternative model.

We often get situations in which the economy does well, but the people do badly. What happened in 2007–9 was a major disruption. But there was a big distinction in the response to the crisis.

In the West, by and large, the response was austerity. We were told this was a crisis of excessive debt and that we’d have to cut things back. The result was declining living standards for the mass of the population. This did not, however, affect the ultrarich: most of the data we have suggests that the top 1 or 5 percent came out of the crisis much better off and probably gained. There’s a phrase, “never let a good crisis go to waste,” and the financiers and such like came out of the crisis very well.

But there was another, totally different response — China’s. It didn’t engage in austerity policies. It instead massively invested in infrastructure, urbanization, and the like. This massive expansion increased the demand for raw materials, so countries supplying China — for instance, Chile with its supply of copper, Australia with its iron ore, Brazil with its iron ore, soy beans, and the like — came out of the crisis pretty fast. China itself has single-handedly saved global capitalism from serious collapse. I think this is not generally well understood in the West, but China has created more growth since 2007–8 than North America, Europe, and Japan combined.

All previous crises produced some new mode of the organization of capital. In the 1930s that meant Keynesianism, state interventions, state management, and so on, whereas the 1970s crisis brought neoliberal solutions. But this time around, I don’t think 2007–8 produced anything. The resulting policies were, if anything, even more neoliberal. But the problem is that neoliberalism has lost its attractiveness and legitimacy, so is now enforced by authoritarian and right-populist means. We see this in Donald Trump, whose policies are very neoliberal — they mean deregulation and lowering taxes for the rich.