We’re not within the throes of late-stage capitalism; we’re dwelling via the late phases and the demise rattle of the post-1971 fiat system. Mistaking the 2 (and basing options or insurance policies on this error) is a recipe for counterproductive interventions and missed alternatives.
Never in my life have I felt a extra urgent sense that we are approaching the top of one thing; that, to paraphrase William Butler Yeats, the metaphorical heart cannot and is not holding. I feel this sensation of approaching finality, of historic transition and of fraying order has saturated and knowledgeable our politics as effectively.
The collective creativeness and can of our two political events is restricted to revivifying Franklin D. Roosevelt or Ronald Reagan, with more and more diminished outcomes. Each occasion needs to return the nation to its most well-liked trajectory, however these paths have converged and ended. Hence the creeping sense that we now have reached some terminal level.
Many, notably these on the progressive left, refer to this state of affairs, this liminal section, as “late-stage capitalism,” a phrase rooted in Marxism (however not coined by its founder). The time period’s which means has developed over time however has lately change into a type of nebulous catch-all time period, a meme of lament for the yawning wealth hole and the absurdity of on a regular basis life, which has come to resemble, in its (at occasions) cartoonish futility, a Samuel Beckett play.
Current occasions have solely intensified the lament. This has led some to speculate (or boldly assert) that we now have reached the top of capitalism as a viable financial system; that capitalism, left to its personal units, will proceed to take away or degrade our societal Jenga blocks till all the pieces collapses. We are merely witnessing the inevitable conclusion of a self-defeating system, they say. Its pure finish level is both a neo-feudalism through which ultra-rich overlords mete out crumbs to the destitute plenty or a collapse that, in its wake, begets an anarchic, balkanized state of nature, favoring the sturdy and the well-endowed who, minimally constrained, will trample the weak with impunity.
Faced with this bleak outlook, why not preemptively intervene and chart a course into a distinct system? Why not grant the state extra energy to coordinate financial exercise? Why not redistribute the wealth earlier than all of it results in the arms of the already-powerful few?
I feel most of us perceive the impulse right here. The concept that one thing is basically damaged and that one thing basic should change is pervasive. But the reply is not to conjure the senile ghost of Reagan, nor is it to remix Roosevelt. And it is actually not to abandon capitalism altogether in favor of basically tutorial options — whether or not socialism’s worker-run state or some imprecise conception of a prelapsarian, agrarian utopia. But too typically our discourse appears confined to these paradigms.
There are a number of causes for this mental logjam. First, I feel we’re making an attempt to jam spherical reality-pegs into sq., partisan holes. Second, I feel we’re mislabeling the second and misdiagnosing its flaws as a result of our language has not developed past Cold War binaries of capitalism and socialism, bourgeoisie and proletariat, employees and capitalists.
I posit that we are, certainly, within the late phases of one thing, however this “something” is not capitalism. Now, we might ultimately attain the top of capitalism — I’m not foreclosing that risk, nor am I suggesting that capitalism doesn’t have inherent, intractable points. But a lot of the up to date tragicomic grotesqueness we ascribe to “late-stage capitalism” is uniquely enabled and facilitated by fiat foreign money and never wholly inevitable or innate to capitalism. What we are at the moment witnessing is late-stage fiat. More expansive options in regards to the finish of capitalism are theoretical and untimely. Consequently, our efforts shouldn’t be marshaled towards the jettisoning or transcendence of capitalism, however slightly towards error-correcting the introduction and proliferation of the fiat financial order.
Contemporary conceptions of late-stage capitalism are based totally on or born out of the accelerating and intensifying inequality of wealth, which is seen because the inevitable and inescapable results of capitalism. These outcomes, the argument goes, are inherent to and thus predetermined by a capitalist system.
But this is merely not as axiomatically true as we’re led to consider. Sure, capitalism entails levels of wealth inequality, excessive iterations of which we’ve traditionally sought to rein in with myriad authorized guardrails. But the obscenely stretched ranges we now have at present, and which have been particularly exacerbated within the final 15 years, are causally associated to financial insurance policies enabled by fiat foreign money.
These charts present an inequality of wealth that has change into more and more acute since 1971, after we formally deserted the gold customary and went to a full fiat system. From this level ahead, we began increasing the cash provide at an accelerating price, culminating within the COVID-19 liquidity infusions.
Increasingly, a rising tide doesn’t elevate all boats. This is as a result of the underside 50% of boats are not uncovered to the tide. They’re not even within the water as a result of they don’t personal property. This has solely gotten worse in current many years.
The more and more acute disparity is not the inevitable results of capitalism. Rather, it is the results of a fiat system through which these closest to, and exercising probably the most affect over, the principles of the financial community reap probably the most advantages.
The anti-capitalism refrain reached fever pitch within the run-up to the 2020 election, because the fortunes of most of the world’s billionaires grew exponentially in the course of the course of the COVID pandemic.
Almost totally not noted of this dialogue was the function performed by financial coverage. Let’s study Elon Musk and Jeff Bezos, the poster boys of this rising wealth inequality all through COVID. I’m no apologist or cheerleader for both, however their fortunes had been elevated primarily by the Federal Reserve’s financial coverage. We flooded the economic system with new cash which, due to the Cantillon Effect, went first to probably the most creditworthy establishments and people, e.g., the rich, who then poured them again into property, juicing the costs of these property, which are disproportionately owned by the rich. You get the thought.
Here’s a chart of Tesla’s inventory. Look what occurred from March of 2020 onward:
Here’s Amazon, which principally doubled after March of 2020:
Someone like Musk, who owns a ton of Tesla inventory, is made fantastically rich on paper. It’s not as a result of he was ramping up exploitation over the pandemic. It’s as a result of we printed a ton of cash that, as is at all times the case, ended up pooling in property and creating asset-price inflation.
The capacity to print cash at will (and bear in mind, 40% of the dollars at the moment in circulation had been created in 2020-2021), is an inherent characteristic of fiat foreign money. It is not an inherent or vital characteristic of capitalism.
I’d argue different phenomena typically attributed to late-stage capitalism are uniquely enabled by a fiat system. The capacity to wage struggle totally on credit score, for instance, which distances the common citizen from the truth of struggle and thereby diminishes resistance to partaking in struggle, is enabled by the fiat system. This is elucidated within the work of Alex Gladstein.
The offshoring of labor and the hollowing out of our manufacturing capability, which has crushed the working courses, has been facilitated and, in reality, necessitated by the greenback’s place because the reserve foreign money. This offshoring has solely exacerbated wealth inequality.
I’d lastly argue that the broad and ubiquitous breakdown of belief in establishments is associated to fiat foreign money, as effectively. In a fiat-currency world, cash itself lies. It will be manipulated and weaponized. To paraphrase Jeff Booth, when there’s misinformation on the base layer of society (which is the cash), this misinformation leaks out in every single place. And we’re solely firstly of this course of.
This is not an issue inherent to capitalism. It’s a fiat-currency downside. The binary is not capitalism vs. socialism; It’s fiat vs. sound cash. Much of our politics now is involved with fixing the fallacious downside and jamming our very actual systemic flaws into utterly inaccurate Cold War binaries.
Properly figuring out the aircraft on which the issue exists permits us to pursue efficient options, like changing the fiat system with one based mostly on a impartial reserve asset with non-manipulable guidelines, i.e., Bitcoin.
This is a visitor put up by Logan Bolinger. Opinions expressed are totally their personal and don’t essentially mirror these of BTC Inc. or Bitcoin Magazine.