NY Times Discovers Capitalism's Crisis of Legitimacy

Posted by Joshua Holland, AlterNet at 4:32 PM on April 1, 2009.

I find this article from Sunday's New York Times fascinating in that it appears that the authors, John Burns and Landon Thomas, are just now realizing that there are a lot of people around the world who have long contested the legitimacy of the Anglo-U.S. model of corporate capitalism.

Some nut graphs:

Sitting in a gilded upper room at 10 Downing Street last week listening to Prime Minister Gordon Brown outline his ambitions for reforming the world economy had something of an out-of-this-world feeling. With Mr. Brown seated beneath a 16th-century oil painting of Queen Elizabeth I, it was tempting to imagine for a moment that Britain was again rising grandly to the challenges of the age, in the way of Good Queen Bess.

Are you tempted to so imagine? I know I'm not.

The occasion was a briefing for reporters on the Group of 20 summit meeting to be held Thursday at a conference center in the London docklands, close to the historic City of London, Britain’s financial hub.

... it will help determine the extent to which the economic model shaped largely by Britain and America after World War II — call it Anglo-American capitalism — survives as the touchstone for economic growth worldwide.

Now, a wave of voices around the world would like a new Big Bang to sweep away the Bretton Woods template and the era of Anglo-American dominance it ushered in. Prime Minister Vladimir Putin of Russia has suggested as much, to nobody’s great surprise, and even France’s otherwise pro-American president, Nicolas Sarkozy, has said the “Anglo-Saxon” presumption of dominance should be abandoned.

Against this background, what the British and American leaders will be attempting at the G-20 conference, along with their partners from around the world, will be to begin building a new global financial system that curbs the rampant and often conscienceless free-marketeering of the past 20 years with a new sense of accountability and restraint, but without extinguishing the spirit of enterprise that arrived in America with the Pilgrims who landed at Plymouth Rock.

Sure they'll be attempting to curb the rampant excesses of the past 20 years. As for that last point, see Walden Bello's piece, "The G-20 Faces the Global Econopocalypse, But It's Nothing But a Big Show."

Speaking of Bello, one of a few people I don't mind describing as "brilliant," he's been discussing what the Times just now recognizes -- that the "liberal world order" is an emperor with no clothes -- for years.

Here's Bello speaking more than 8 years ago ...

When the Seattle Ministerial of the World Trade Organization collapsed in chaos in December 1999, the aura of invincibility of capitalism in the time of globalization crumbled and its ideological leaders were deeply shaken. But Seattle was no one-off event, encouraging as it did the massive protests that struck the World Bank-IMF spring meeting in Washington in April, stole the agenda of the 33rd annual conference of the Asian Development Bank in Chiang Mai, Thailand, in May, disrupted the Davos Group's assembly in Melbourne in early September, and forced the World Bank-IMF annual conference to end in disarray, one day before its scheduled closing, in Prague in late September.

Seattle and these succeeding events did not happen by accident. They simply catalyzed the energies of dissent that had been gathering for years globally. Yet what makes the current conjuncture so critical is that the explosion of these energies has combined with two developments: an increasing lack of confidence of the global elite in its key institutions of global economic governance; and intensifying conflicts among the big three state/corporate bloc-the US, Japan, and European Union-within these and other multilateral institutions, a development highlighted by the US-EU conflict that contributed to the WTO Ministerial collapse in Seattle and the recent EU-US standoff that destroyed the Hague Conference on climate change.

C. Fred Bergsten, head of the Institute of International Economics and one of the most influential advocates of globalization, captured the key dimension of this crisis when he warned the Trilateral Commission in Tokyo last April that "the anti-globalization forces are now in the ascendancy." Or, to amend Yeats' famous line, the time has come when "the worst lack all conviction and the best are full of passionate intensity".

In short, a classic crisis of legitimacy has struck the multilateral institutions that serve as key elements of the system of global economic governance: the WTO, IMF, and the World Bank. It is likely, however, that what we might characterize, following Gramsci, as a "withdrawal of consent" is likely to spread to the core institutions and practices of the current system itself.

I guess I should give the Times' writers credit for even vaguely acknowledging that all those folks it's spent years portraying as wild-eyed anti-globalization nutcases in fact represent the views of a huge majority of the planet's population, but I'm just not feeling that generous today.

Tagged as: capitalism

Joshua Holland is an editor and senior writer at AlterNet.