The latest movie from Michael Moore, Capitalism: A Love Story, is an enthralling expose into the current structure of American capitalism. The movie pulls at the heart-strings of the viewers by showcasing working and middle class Americans being evicted from their homes after taking loans from predatory lenders. It shows how their loved ones, without their knowledge, have life insurance policies taken out on them by corporate America in what they call ‘dead peasant’ policies, to make millions off the death of their employees. Corporate America then leaves the families with the debt of healthcare and burial without offering any financial support from the death they profited from. The movie also, effectively, targets those individuals who exploit the foreclosure crisis, otherwise the poverty and desperation of others, as ‘vultures’--a term that the ‘vultures’ have proudly coined themselves.
It also brings to light the reactionary logic of capitalism’s 'organic intellectuals', like Stephen Moore’s--editor at The Wall Street Journal--rant against democracy as a obstacle to the true ‘freedom’ of the market. Lastly, it uncovers the elite’s self-laudatory proclamation of a ‘plutonomy’ in a leaked Citibank memo to their top-investors. The memo tells them that, due to the gross inequality of income in the ‘plutonomies’--United States, United Kingdom, Canada, Australia, New Zealand--, the problems that affect the ‘average’ worker, i.e. high oil prices, rising food costs, lower wages, etc., will not seriously undermine the economy; thus, since much of the country’s effective demand now emanates form the top 1-20%, it negates the need to structurally change the economy in a way to make the lives of millions better, so the paper argued. However, it is an assumption that has proven false in the current economic crisis. Why? Because the top 20%, and especially the top 1% depend on rentier income, basically redistribution from workers to themselves, via the debt mechanism. Since workers no longer could afford to pay back their loans, the contradictory logic of the 'plutonomy' exposed itself leading to a virtual implosion, an implosion that was stopped by another massive regressive redistribution of income, via tax-payer bailouts.
Moore goes to contrast this sad, socially regressive state of affairs to the boom-time of the ‘golden age’ of capitalism, when the gains of the ‘New Deal’ were starting to bear fruit. These fruits included the increasing standard of living for virtually everyone in the society, the emergence of the civil rights movement and the socialization of large parts of the economy for the benefit of the ‘social good’, e.g. healthcare, education, the highway system, etc. All of this was possible due in large measure, to the taxes levied on the rich--the marginal income tax rate in the 1950s was ninety percent--to pay for the necessary social infrastructures like schools, hospitals, highways that engender greater economic growth through greater productivity and innovation, while at the same time retaining effective demand among the mass of the population creating a virtuous cycle of economic growth. It was also possible due to the ideological legitimization of having the state play an important role in our lives economically and socially, in an egalitarian way--otherwise termed as 'modernism'--embodied in Keynesianism. Arguably, it was during this time when the greatest innovations in our history took place, largely within the non-profit, public sector, i.e. artificial and human space flight, particularly the innovations brought about by the landing on the moon; telecommunications, particularly fibre optics and satellite communications; computers; the internet; polio and small pox vaccines, which saved tens of millions, etc. Many of these publicly funded advances were later privatized to benefit dominant capital, even-though they invested little or nothing in the creation of these technologies; starving the state of possible revenues from providing these services.
The importance of high progressive rates of taxation cannot be understated: when capital retains most of its income it tends to go, rationally, to where it can make the most income (profit) and within a capitalist system that tends to be the financial markets, especially when they are deregulated as they were during the neoliberal era. It is no coincidence that as the income and corporate tax rates in the United States have fallen, gross fixed investment--not even counting net fixed investment--has fallen; while, financial investments--the capitalization of the stock markets--has increased. Finance went from being a means--the allocation of capital to productive and sound investments--to an end unto itself, to the detriment of employment. When the state had control over much of the capital's income, that capital was invested in productive and democratically demanded social programs that actually smoothed capitalism's vicious cycles of crisis, both economically and socially. It is no conicindence that East Asia's, particularly China's, massive economic growth is due to the state's control of the financial sector in the allocation of resources to strategic industries.
However, Moore makes a false distinction that the current era of capitalism is not some idealized ‘real capitalism’, but a perverted form of capitalism nearer to bureaucratic-corporatism. The reality is that the particular period of capitalist development that Moore idealizes, the ‘golden era’, was a result of decades of struggle from labour and other progressive social forces that coalesced around the populist movement around FDR in 1932; thus, it was not a natural state of capitalism--an argument that Moore and other progressives make, but it is a position that is actually impossible to conceptually grasp, since capitalism is a social system based on relations of power and not on 'natural' laws--and the current capitalist reality is a ‘perverted’ form of capitalism proper. With progressive forces accepting that capitalism is actually functional on its own, in some idealized neoclassical form, legitimizes the libertarian, Haykeian argument that less government and more market is needed; even-though as Gramsci argues:
"Thus it is asserted that economic activity belongs to civil society, and that the State must not intervene to regulate it. But since in actual reality civil society and State are one and the same, it must be made clear that laissez-faire too is a form of State "regulation", introduced and maintained by legislative and coercive means. It is a deliberate policy, conscious of its own ends, and not the spontaneous, automatic expression of economic facts. Consequently, laissez-faire liberalism is a political programme, designed to change-in so far as it is victorious-a State's leading personnel, and to change the economic programme of the State itself-in other words the distribution of the national income" (Prison Notebooks 160).
This is the confusing part of Moore's discourse and according to David Cheal, arguably this is due to 'contradictory consciousness' among the working masses--this should not be confused with 'false consciousness'. Moore is right to question capitalism proper and seek its destruction, but Moore then contradicts himself with the aforementioned arguments that capitalism can be saved by becoming MORE capitalist. What we must realize is that the only thing in capitalism cannot change, at pain of death, is accumulation. The means by which accumulation occurs--Keynesianism, neoliberalism, etc.--is not set in stone. Marx's axiom that capitalism is a system that ‘turns all that is solid into air’ holds true today more-so than it did even when he wrote it 160 years ago.