More from The Age of Aesthetics.
The basic premise of capitalism has always been scarcity. Economists see deprivation, or “opportunity cost,” or the necessity of giving up something one wants in order to have something else instead, as the primordial – and necessary – condition of humankind. Even when we do not suffer from absolute want, we are still menaced with the fate of Buridan’s ass, which starved to death because it could not decide between two equally desirable sources of food. Such is the underlying premise of all neoclassical economics, including Virginia Postrel’s fantasy of consumer plenitude. Life is a matter of making difficult “choices,” as we measure costs and benefits “at the margin.” Aesthetic style, Postrel warns us, “is still one of many different possible goods. Choosing more aesthetic value means forgoing some alternative. The age of look and feel, like every other era, demands trade-offs.” Even in the Age of Aesthetics, we are still compelled to economize, to prioritize, and to sacrifice.
The classical justification for capitalism is precisely that it generates maximal returns from its presupposed initial conditions of scarcity. Scarcity is equivalent, in theological terms, to original sin. We can never know abundance, because we have been expelled from the Garden of Eden. “In the sweat of thy face shalt thou eat bread, till thou return unto the ground.” No matter how affluent we become, we are still condemned to a form of life in which every decision we make, and every action we take, involves a concomitant sacrifice. This is the way in which Weber’s “Protestant Ethic” – that old Calvinist/Puritan asceticism, with its valuation of toil and rejection of waste and expenditure – still persists in the frenzied consumer capitalism of today. Even for F. A. Hayek, the intellectual godfather of postmodern free-market ideology, with his vision of the market as a marvelous information-processing, self-organizing, and evolving system, the bottom line is still that the market is good and right because it subjects “man” to “the bitter necessity of submitting himself to rules he does not like in order to maintain himself against competing groups.” Producers must always battle over limited resources, and consumers must always decide how to allocate limited means. The Malthusian/Darwinian struggle of market competition is supposed to ensure that these resources are used, and these means expended, as efficiently as possible. Abundance would cause market rationality to fail, just as it would put a stop to the process of natural selection. It is only insofar as scarcity continues to work as a goad and a spur, so that “the discipline of the market” remains in full force, that production and innovation are able to continue.
Even Marx and Engels are far from despising this logic. In the Communist Manifesto, they note how toil driven by scarcity has created unprecedented accumulations of wealth. They celebrate how “modern industry has established the world market,” and how the capitalist mode of production has brought into being “more massive and more colossal productive forces” than ever before in history. Marx and Engels evince no nostalgia for pre-capitalist modes of production. Nor do they condemn capitalism, as many later critics have done, for multiplying artificial needs. The impact of capitalism, Marx and Engels say, is revolutionary; and to this extent the system is something to be praised and admired, rather than scorned. For “the bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society.”
The irony behind Marx’s praise of revolutionary capitalism is really the “objective irony” of the capitalist system itself. For capitalism’s dirty little secret is that it cannot endure its own abundance. This is the key to Marx’s theory of crisis. Again and again, Marx and Engels say, “there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity – the epidemic of over-production.” The wealth that capitalism actually produces undermines the scarcity that remains its raison d’etre. For once scarcity has been overcome, there’s nothing left to drive competition. The imperative to expand and intensify production simply becomes absurd. In the face of abundance, therefore, capitalism needs to generate an imposed scarcity, in order to keep the system going. Capitalism refutes Malthus, but finds it necessary to reinvent him. We can see the fruits of this dilemma today when, even amidst unparalleled worldwide prosperity, and unprecedented accumulations of wealth, the Western welfare state is driven into bankruptcy, and Third World debt is made to mount to unsustainable levels.
What Marx and Engels call “over-production,” William Greider describes as the “supply problem” of global capitalism today. You can increase productivity and efficiency by paying workers less, and by hiring less of them. This is the point of capitalism’s continual “revolutionising [of ] the instruments of production.” In the last thirty years, new information and communications technologies, together with improvements in shipping and transportation, have made such a “revolution” possible. But every transformation has its price. Lowering wages and intensifying the exploitation of labor leads to losses in consumer purchasing power, even as there is more and more stuff for consumers to buy. In theory, lower prices based on lower production costs are supposed to compensate for the imbalance. In practice, however, the compensation is never enough. On a worldwide level, too many goods still remain unsold. Today, as Greider shows, we’re stuck with a”permanent oversupply.” It is not the case that there are too many people who want to drive, compared to the number of automobiles available (or even environmentally sustainable). It is rather the reverse: far more cars are being produced – even without using existing factories to capacity – than there are people who can afford to buy them. The system is stifled by its very success.
Scarcity is never a problem for capitalism; only abundance is. In the mid-twentieth-century, there were two great efforts to resolve the difficulties of oversupply. Both of them worked by stimulating demand. Fordism involved paying workers more, so that they could afford to buy the cars they made. Keynesianism increased demand directly, through government deficit spending. But in the 1970s, with the switch to flexible accumulation, these policies were largely abandoned, because they impeded the smooth flow of capital. Today, although the Bush Adminstration runs huge budget deficits, these do not serve to stimulate demand, since their main effect is to transfer wealth from the ma jority of the population to the extremely rich, who do not correspondingly raise their level of consumption. On the other hand, military Keynesianism – the United States government’s extravagant spending on its armed forces, – is the one “demand-side” policy still in effect. America’s weapons of mass destruction are perhaps the most spectacular examples of Bataillean unproductive expenditure that the world has ever seen. But aside from this, the social stimulation of demand is condemned as “waste”; all that is supposed to be left to the private sector. Even the basic “social safety net” – that last-ditch guarantees of subsistence that is all that remains of the welfare state – is denounced as paternalistic and intrusive. Institutions like the Federal Reserve Bank and the International Monetary Fund insist on deregulation, and only permit market-based, “supply-side” adjustments. Abundance is reigned in, in the name of market stability. In consequence, the more that productivity is unleashed, the more the “supply problem” returns with a vengeance.