Capitalism Crashes, Politics Changes

This widening and deepening economic crisis is transforming US politics.  New possibilities are emerging for activists and potential activists if they can see and respond creatively to them.

One possibility follows from rethinking the Obama candidacy in the light of recent German politics.  Obama has already garnered an historically disproportionate share of the campaign contributions of the US business leadership.  The next president will arrive at an historic moment when most of the business leadership will be looking to (if not also begging) Washington for massive intervention to save the private capitalist economy.  These conditions may then ripen a major realignment within US politics.

The economic crisis is further straining the already stressed Republican alliance between traditionally conservative business and libertarian interests, on the one hand, and the small business and religious groups, on the other.  McCain’s political difficulties and attempts to solve them — for example, the Palin choice — provide further evidence.  Pressed by mounting business needs for massive government help, a sizeable portion of the Republican Party may be ready for a “grand coalition” to govern the country with a sizeable portion of the Democrats.

The centrist Democrats gathered around the Clintons and also Obama may well see the political possibilities of splitting the Republicans in this way.  Such a grand coalition with the Republicans could control both the executive and legislative branches (and thus, within a very few years, also the judicial).  Such a grand coalition would be uniquely capable of undertaking the difficult and costly interventions required to manage the economic crisis and its dangerous political and cultural consequences at home and abroad.  Both components of such a coalition might see it and its task of crisis management as politically inevitable no matter how unpopular.  This might be an attractive prospect for major portions of both parties.

Recent German politics offers an obvious, instructional parallel because there a similar “grand coalition” now governs Europe’s most powerful economy.  Another kind of crisis in Germany provoked its grand coalition.  Some years ago, Germany’s social democratic commitments (a regulated capitalism with workers’ protections and social welfare programs such as socialized medicine, generous pensions, subsidized education, etc.) clashed with the neoliberal demands of its leading capitalists.  They wanted to compete more profitably both within the European Economic Community and globally.  They resented the competitive advantages of US and UK firms whose governments (since Reagan and Thatcher) had rolled back earlier regulations on corporations and social programs.

Pushing the two major German parties — Christian Democrats and Social Democrats — proved insufficient for German business interests.  Too many constituencies inside both parties opposed those interests’ neo-liberalism.  The end result was a stalemated German politics.  Its resolution was an explicit, formal “grand coalition.”  The two parties agreed to share governing power.  It was clear that this coalition could and would pursue a neoliberal rollback of Germany’s social welfare system (although likely more slowly than in the US and UK).  Germany’s grand coalition aimed to overcome what its supporters saw as an economic crisis: German global competitiveness subverted by costly state regulation of business and taxes used for social welfare programs.

A similar grand coalition in the US could likewise be packaged as necessary to manage an economic crisis threatening the entire society.  This US election and its interaction with the capitalist crash have produced many of the preconditions for such a result.

Germany’s grand coalition provoked unexpected consequences that raise intriguing possibilities for the US as well.  The most arresting consequence was the development of a new left political party, Die Linke (“the Left” in German).  It was formed by a merger of two political groups: (1) the left wing of the Social Democrats who opposed the party’s grand coalition strategy, and (2) the successor party to the former communist party of East Germany.  Die Linke has been growing very quickly and receiving much larger votes than was expected in both regional and national elections.  With proportional representation, Die Linke won a significant number of seats in both the national and some regional parliaments.  It takes positions clearly and explicitly to the left of the grand coalition and thus of that coalition’s Social Democratic component.

Die Linke is thus now the left opposition to German neo-liberalism.  It has been drawing massive voter support away from the grand coalition’s Social Democrats whom it easily portrays as having abandoned Germany’s working classes.  Yet, Die Linke confronts the problem of what alternative program to offer.  After all, the Social Democratic Party may leave the grand coalition and resume its historic role as the regulator of business and the protector of state social programs.  This would leave the far smaller DieLinke with no distinctive political identity and at the mercy of Social Democratic Party decisions.  The key issue for Die Linke thus has become what new left program it can devise and effectively project to keep attracting voters, especially the young, and to chart a new direction for Germany different from the traditional Social Democratic notions of state intervention.

Something similar may visit US politics.  If a grand coalition forms in the US, perhaps the left wing of the Democratic Party might find that unacceptable.  Perhaps some trade unions would finally decide that their relentless decline while allied with the Democrats would only be accelerated by becoming very junior partners in such a grand coalition.  Perhaps such breakaways from the Democrats and from traditional union politics would need and even want to build a new left party with the large but largely unorganized left constituencies across the US.  And like Die Linke, a new left party in the US would need to develop a new program different from the conventional “US liberalism.”

Politics always mixes representations of what exists now, what could exist, and what should exist.  Not the least influence on the future of US politics will be the conceptions of possible futures we can now glimpse, debate, and pursue.  Those on the political Right may find the grand coalition described above a goad toward developing new right parties.  That only strengthens the case for new political thinking and action on the Left.

Rick Wolff Rick Wolff is Professor of Economics at University of Massachusetts at Amherst. He is the author of many books and articles, including (with Stephen Resnick) Class Theory and History: Capitalism and Communism in the U.S.S.R. (Routledge, 2002) and (with Stephen Resnick) New Departures in Marxian Theory (Routledge, 2006).  

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