Chapter 1: LIMITATIONS OF CAPITALISM
2. Capitalism is not out of control.
Since the dissolution of the Soviet Union in 1991, the spread of capitalism all over the world—global capitalism—has begun to show a qualitatively different aspect from the capitalism that preceded it.
In other words, global capitalism is the so-called deregulation and privatization (commercial capitalization) to expand economic freedom, the flexibility of the labor market through the deregulation of labor laws, and social security cost control measures that emphasize fiscal balance. It has come to openly advocate a neoliberal program and press governments to implement it.
This situation is sometimes criticized as "runaway capitalism." This criticism intensified in the wake of the 2008 global recession triggered by the financial crisis in the United States, the headquarters of capitalism. Did capitalism, intoxicated by its "victory" over collectivism, set off a revelry?
That is part of it. During the Cold War era, capitalism advertised itself as a rational economic system unrelated to socialism, communism, and other "ideologies." However, after the proclaimed "victory" against Soviet collectivism, capitalism began to absolutize itself as an ideology, and began to develop itself as a doctrine as if to say "there is no other way but capitalism." Neo-liberalism can be said to be the manifestation of such fundamentalization of capitalism.
The ideological aspect of neoliberalism is most clearly expressed in the axiom of shareholder supremacy, which holds that the distribution of profits to shareholders, the legal owners of capitalist companies (joint-stock companies), should be more important than the distribution of wages to workers, the employees of those companies.
But that is not all. Inherently, capitalism has an internal tendency toward a laissez-faire competitive economy. Since the dissolution of the Soviet Union, this inherent tendency of capitalism has seemed to be reproduced as a historical reaction in the course of the process in which not only the Eastern European countries that were under the control of the former Soviet Union, but also emerging countries such as China and India have entered international capitalist mega-competition in earnest.
Therefore, it can be said that the trend of so-called neo-liberalism also has an ideological aspect as well as an aspect of economic strategy that corresponds to the inherent tendencies of capitalism.
In a bold simplification of the latter aspect, it is a tactical platform for the advanced capitalist countries to compete with the the late capitalist countries that emerged after the dissolution of the Soviet Union. Also,it is the platform that applies to the emerging countries themselves.
Since the middle of the 1990s, this neo-liberal strategy has already carved a history of nearly thirty years. It is about time to drop the adjective "neo-liberal" and change the name to "capital supremacism" in line with the fact that the freedom of enterprise is given top priority as the supreme value.
2.2. The pitfalls of the theory of "out-of-control capitalism"
In light of the above, it is somewhat problematic to use the word "runaway" to describe the development of global capitalism. Those who emphasize the "runaway" of capitalism seemingly want to believe that there could be a "capitalism with a human face" that is different from the one we are presented with.
Perhaps what is assumed by those humanitarian capitalists is a modified form of capitalism that considers the lives of the working class. It was certainly a form of capitalism during the Cold War. However, the modified capitalism was the figure of capitalism, which was taken as a self-defense measure when it still felt the real threat of communist revolution. Now that the situation has changed and capitalism has realized that it no longer needs to wear heavy makeup, it has begun to expose its true face - the face of money.
Instead of facing this reality head-on, immersing yourself in nostalgia for the capitalism of the days when it were wearing heavy makeup can actually lead you into a pitfall. A significant example of this is the issue of deregulation of the labor market.
There are arguments—which are morally justifiable—that regulations should be tightened again in order to stabilize the status of workers again, for the reason that the deregulation of labor laws, which has been implemented as a program of capital supremacism, especially the expansion of so-called non-standard employment, has widened the income disparity among workers and led to poverty.
However, saving labor costs, that is, "exploitation," is the very essence of capitalist enterprise management. If labor laws were to be reinforced, capitalist companies would, for the time being, adopt a tactic of narrowing down the number of workers while proceeding with the standardization of the labor force. Naturally, this will lead to high unemployment, which could happen in countries with strict regulations on non-standard employment.
Not only that, but the business community will demand a relaxation of labor standards for regular workers, especially provisions regulating dismissal, as legal compensation for tightening regulations on non-regular employment. If this is not accepted, capitalist companies will likely resort to a strategy of hollowing out domestic industry by moving production bases overseas, where labor laws and regulations are lax and wages are low.
In any case, the tightening of labor market regulations runs the risk of having the opposite effect in terms of job creation. Considering this, I cannot help but think that the idea of modified capitalism, which denounces capital spremacism only morally and calls for its withdrawal, underestimates the nature of capitalism. It is impossible to reverse the wheels of history to push capitalism back to the nostalgic Cold War days before the dissolution of the Soviet Union.
