Did anyone notice SMH Political Editor, Peter Hartcher, announce the death of Capitalism yesterday? No? I thought you might have missed it. I’m pretty sure it wasn’t intentional – I don’t think Hartcher is a secret agent of Marxism. His piece yesterday, “Hit by the debt boomerang” was typical Hartcher – right topic, hilarious analysis. It’s also an interesting insight into what the elites are thinking (and it’s kind of scary) – they no longer know WTF is going on.
Hartcher touches on a deeply troubling truth, and then masks the horror with the rose-tinted glasses of how awesome Australia is. His deeply troubling truth? That ‘there is no such thing as private debt’. Let me repeat that in case you missed it – THERE IS NO SUCH THING AS PRIVATE DEBT. Let’s chew that over for a while and consider what it means firstly for capitalism as the dominant mode of structuring global society, and then work out what that means for Australia.
Take the ‘no such thing as private debt’ insight to its logical conclusion, and we find the ethical/normative platform for the private control of capital falling away. That’s because debt is capital, capital that is owed by one entity to another. It’s also an investment – banks and other financial institutions lend capital for others to invest, and then repay to the lender at a profit. Debt is also the bedrock of capitalism – it’s the only way that sums of capital large enough for large-scale profit making projects can be gathered together. Without debt there are no longer (private) large scale sources of capital, without debt there are no longer large scale (private) projects. Debt is nothing other than the Faustian bargain of capitalism. It’s the inferno that must be constantly fed more capital/profit to keep on burning – once the fire stops the system runs out of steam. It’s why nation-states all over the world stepped into bail out the banks – according to the logic of the system there was no other choice.
In short, if all debt is public then the private control of capital is essentially pointless, except for a few individuals profiting from sitting at the top of the shit heap. As I tweeted recently about Peter Reith’s ‘advice’ to Egypt to privatise its banks – all my problems would be solved if I owned a private bank.
Bringing this post back to the here and now – it means that Australia needs to get ready for the politics of both private sector and public sector austerity. If there is no such thing as private debt, then Australia is stuffed. While Commonwealth debt is sitting at or around 7 per cent of GDP (according to Hartcher), Australia’s private debt is now over 100 per cent of our collective incomes.It’s why Australian consumers have had the good sense to maybe start saving a bit more recently.
But Hartcher’s response is to find comfort in the current elite myth of Australian exceptionalism. According to Hartcher, Australia is a safe-haven where everything will be alright if we continue the hard task of pursuing (neoliberal) economic reform. He writes, the “Hawke-Keating and Howard-Costello governments collectively spent 23 years reforming the economy, a bipartisan project of opening it to the world, making it more competitive, improving its systems and institutions.” In other words, the US and Europe are stuffed because of their turn to neoliberal economics and Australia is going to be alright because we’ve gone down the neoliberal path. Cognitive dissonance much? Maybe Australia has been temporarily shielded because we have a lot of natural resources to invest in, in an otherwise resource depleted world?
I don’t mean to be tough on Hartcher as an individual but rather highlight is position as a well-paid spokesperson of elite thinking. His concluding advice, quite frankly scares me, “[t]he Gillard government needs to press ahead with a serious reform agenda and look to new ways of consolidating the federal budget. And the Abbott opposition needs to stop scaring the pants off the public.”
The neoliberal social settlement was different to the Keynesian one though – it was predicated on profiting off its own destruction. Like the human body eating away at its own organs to ensure its short-term survival. Profit has come from flogging off bits of shared wealth such as public services, and getting families with less and less to cough up more and more. This has made us sicker and sicker – especially as we continue to draw down upon nature as the true lender of last resort. We may have reached a new stage 0f capitalism where it is no longer able to provide for a majority of people in a minority of privileged nations. The only things which now bind us to the system are force and fear of the unknown.