Economic Crisis from a Socialist Perspective

The crisis in capitalism today is not, or not yet, a crisis of capitalism. Whether it evolves into a crisis of capitalism – when the system itself is in question for significant numbers of people – depends on three factors. The first is the extent of the economic meltdown now underway, and the mass suffering, resentment, and opposition it provokes. The second factor comprises the policies undertaken to contain and reverse the crisis, their effects, and their public perception. Finally, how socialists assess the crisis in capitalism and intervene in it will also help determine whether it becomes a crisis of capitalism. Appreciating the difference between crises in and of capitalism is, we shall argue here, crucial for socialist strategy. Crises within capitalism are mostly endured; sometimes they are also managed by changing capital-ism’s form. For example, in the US today, a serious crisis in a “private” sort of capitalism (relatively less state intervention and control of productive property and markets) provokes a change to a “state ” form (relatively more state intervention). Similarly, when crises overtake rela-tively state-interventionist forms of capitalism (as happened in the US, the UK, and many less developed economies in the 1970s), “solutions” often entail change to more private forms of capitalism. Socialists thus need to distinguish their critique of capitalism, per se, from the repeated critiques of each form of capitalism (especially during their crises) by partisans of the other. Otherwise they risk being absorbed – usually by partisans of state interventionist capitalism, but sometimes by the parti-sans of the private form of capitalism. Then their distinctive contribution, a critique of capitalism that rejects both its forms, is lost and the prospects for a socialist transformation reduced. The oscillations of capitalism Capitalism has always and everywhere oscillated between two phases. One phase is characterized by relatively little state intervention