Cannibal Capitalism: How our System is Devouring Democracy, Care, and the Planet—and What We Can Do About It (2022) By Nancy Fraser
Capitalism Alone: The Future of the System That Rules the World (2019) By Branko Milanovic
Two recent books about Late capitalism that address, even if only glancingly, Karl Polanyi. Right up my retired school teacherly inquiry into political economic history alley.
Whenever I run into the phrase I just led with, “Late capitalism,” my radar goes off in two ways: 1) Ah, a fellow traveler! Someone interested in political economic history, but also 2) be wary this phrase “Late capitalism” doesn’t betray some wishful thinking, imagining an end to capitalism without any historical evidence for it. If capitalist theory can feel like a shell game sometimes then the corresponding anti-capitalist literature can feel like magical thinking. For example, if macro-economics is largely a hypothetical fiction, as Keynes showed, then the collapse of the capitalist House of Cards is inevitable, right? Not yet, anyway. So, to be clear, I’m using the phrase here, Late capitalism, in a historically specific way to refer to the period 1945 to the present.
By Late capitalism I'm referring to global capitalist authority after the world wars; after laissez-faire has been devastated and discredited by the global economic collapse of the Great Depression; after the emergence of state communist dictatorships in Russia and China; and after the New Deal in the US and post-WW2 social democratic reforms in Western Europe and Japan usher in a period when capitalist rule is now checked and regulated by the state in way it wasn’t before this period. Although laissez-faire, it should be noted, the ruling authority that came before Late Capitalism, a ruling political-economic ethos that insists markets should be free from State meddling, also known as classical liberal capitalism, or corporate rule, the dominant global economic authority that emerged out of the Industrial Revolution, was always more Big Biz propaganda than any really-existing economy even in the 19th century.
At any rate, after 1945, during the period I’m calling Late capitalism, capitalist authority no longer rules as it once had. The period might be usefully compared with a periodizing cultural term like post-modernism: Late capitalism refers to a historical period when it is not clear or stabilized yet what new form political-economic authority will take after the old authority, laissez-faire, unfettered capitalism, has failed or lost support. What should we call the new form of political-economic authority after the world wars: social democracy, welfare capitalism, the New Deal Order, the United Nations and the Bretton Woods global banking system, New Deal liberalism or Polanyi’s “embedded liberalism,” or, their Cold War antagonists, Neoliberalism, free market fundamentalism, or extreme capitalism? All have vied for recognition during this period. My point, Late capitalism, the system of political-economic authority in the period 1945 to the present, is still being contested.
And there are two historical threads to this contest that I will return to in this discussion. On the one side Polanyi’s anti-capitalist call for an “embedded liberalism,” The Great Transformation, and on the other Hayek’s free-market bromide, and “collectivist nightmare,” The Road to Serfdom, insisting on markets free from government oversight, both written in 1944, both recognized as seminal books about modern political economy in history. But I regard Polanyi, crucially, as serious and a credible historical source for speculating about the period of Late capitalism. And Hayek, by contrast, as a crude apology for oligopolistic corporate rule and a humiliating embarrassment to mainstream economics. It’s not that free enterprise does not or cannot exist but that Hayek’s market fundamentalism turns the large business, the corporation, into a blunt dehumanizing instrument of captains of industry. And renders it, primarily, as evidence for a theory that world history is a conspiracy of the rich against the poor, not unlike 19th century ideas like Social Darwinism, Eugenics and Scientific Racism.
This is my first Nancy Fraser book. According to Wikipedia, she is something of a longstanding Dean of academic philosophy. She’s written many books. She’s best known for criticizing identity politics and liberal feminism for ignoring or neglecting economic and social justice issues; she calls liberal feminism the “handmaid of capitalism.” She trashes Sheryl Sandberg’s ode to the woman CEO, Lean In (2013), for example, as a waste of time. Fraser is not for leaning in or infiltrating the system by getting a few more women in positions of power. She’s for overcoming the system, Capitalism, and its cannibalistic gender and class hierarchies. Which, also, is why she is usually identified as Marxist; she’s not for liberal reform but class revolution.
I’m more a liberal reform kind of guy than a violent revolution kind of guy myself, for one simple reason that wars (like economic busts, as another big example) hurt the relatively poor and many most. Always do and always have. It’s like one of those few rules of world history I’ve picked up, or since the emergence of cities and civilizations five or seven thousand years ago, anyway. In retrospect, obviously, the American and French revolutions were good ideas, pushing the Sisyphean boulder of human liberty and rights forward but, nonetheless, violent revolutions in world history (France, Russia, Iran, etc) frequently generate militarized Strongman police-states and violently repressive reactions that can last for decades if not centuries. This risk haunted the framers of the U.S. Constitution, for instance: i.e., how to design a system of democracy that can’t be overthrown by the forces of tyranny; a system of checks and balances, separation of powers, and the rule of law that 250 years later is seriously under threat, by the way.
I’m not sure where Fraser falls exactly on the liberal reforms to violent revolution spectrum. In recent times I see she has come out anti-war over Russia’s invasion of Ukraine, for example. And was canceled for something or other; which she called “philosemitic McCarthyism,” nice. So, I’m not suggesting Cannibal Capitalism is screaming for a violent socialist revolutionary Jan 6 but a complete overthrow of capitalism as opposed to any namby-pamby incrementalist liberal reforms of the prevailing capitalist order is a loud and unmistakable message in her book. “There can be no ‘emancipation of women’ so long as this structure remains intact,” says Fraser. And which sounds true enough but makes me a little wary, anyway.
Again, I’m drawn to anti-capitalist literature, if also reasonably, I think, skeptical about anti-capitalist politics. I’ve no illusions about Cold War police states in the communist/anti-capitalist USSR and China during the 20th century. Or socialist dictatorship’s, anywhere, violently suppressing dissent. Or, for that matter, the violent suppression of human rights and class inequalities in so-called democratic capitalist countries. Very bad. Crimes against Humanity.
(Reminder: Vote Blue No Matter Who! Or vote for humanity, NOT for punishing and hurting weak minorities of humanity you don’t like! Don’t be a fascist, it’s not that hard!)
On the other hand, I like Marxists. Marxists often write my very favorite critical history books: Christopher Hill, E.P. Thompson, and Mike Davis, to name only a few. Marx and Marxists are often good at identifying problems with society that more conventional historians often gloss over. It’s the Marxist’s prescriptive remedies, a Dictatorship of the Proletariat and the like, that deserve scorn and abhorrence. As general historians, leaving the crude revolutionary rhetoric out of it, I’ve found Marxists often make excellent historians. And now Ms. Fraser joins my favorite Marxist historian club with a profoundly simple and critical historical insight: The original sin or fatal flaw in the structure and design of capitalist society is the gender division of labor, designating Men’s labor “productive” and “paid” and Women’s labor as “reproductive” and “unpaid.”
The labor of men is exploited and cheated, as in all old school Marxist accounts, but Fraser’s case is that in capitalism’s historical origins women’s labor isn’t just cheated but entirely expropriated, taken, cannibalized and this cannibalizing so institutionalized and normalized that claims for the productive value of caring activities today are commonly mocked and dismissed. Parents in the US still can’t get any paid leave for caring for a newborn child, for a headline case in point. The sorry low wage and understaffed frontline conditions of education, childcare and elderly care a few other glaring examples. The materialist fact of the stark gender division Fraser illuminates is undeniable, and could hardly be anymore historically significant: capitalism cannibalizes the unpaid labor of social reproduction, the caring economy, traditionally, women’s labor in society.
All emphatically true but “What We Can Do About It,” part of the sub-title of Fraser’s book, or what she thinks we should do about it remains fuzzy to me.
Consider her critique of Polanyi’s “embedded liberalism.” To Polanyi society’s answer, or solution to the demolishing/cannibalizing tendencies of so-called “free markets,” self-regulating markets, or laissez-faire political rule, is to “re-embed” the economy with other governing and social values: labor rights, environmental protections, etc. In short, reforming the political economic order by bringing the predatory excesses of capitalism to heel; making markets subject to the rule of law and social and environmental justice.
Historically, Polanyi’s “embedded liberalism” is exemplified by the New Deal in the US and social safety net reforms in Europe after World War II; the Bretton Woods international system, IMF/World Bank, etc. But Fraser disparages such reforms, Polanyi’s “double movement,” as tokenistic and thinks liberal reforms perversely only end up reinforcing or rationalizing capitalist rule. I will note, Joan Robinson, close collaborator with Keynes on his General Theory, would probably agree with Fraser, if not Keynes, for what that is worth. This is a leftist critique going back to at least Marx, liberal reforms coopt resistance and essentially reify, or reinforce, capitalist rule and thereby undermine revolutionary change.
Reminds me of a discussion about the collapse of the Soviet Union I came across once. Political systems need opposition, negative rationality, critical theorists call it, to build robust and resiliently strong societies. Once opposition is snuffed out entirely authority ossifies, detaches from society, and increasingly finds itself in opposition to society, spreading alienation and eventually division and collapse. Fraser seems to view all liberal reforms in this kind of sweeping way, as so much negative rationality preserving a sick cannibalizing economic system. By contrast, I’m quite fond of any number of liberal reforms in modern history, including public education, social security, Medicare, national parks, in general, public infrastructure and social safety net programs that serve the public good. Yay!
But Fraser is exasperated with liberal reforms and generally dismissive of Polanyi’s “embedded liberalism.” Fraser calls for sterner actions against capitalist rule. Capitalist governments cannot or will not adequately protect social reproduction from the cannibalizing predations of markets. Caring activities and the caring economy (health care, food security, shelter, education, even national security) are commodified and squeezed for profits and profligately cannibalized. But does overcoming cannibal capitalism really require eliminating all private property and markets, is that what we’re talking about here?
When I finally got around to reading Marx’s magnum opus, Capital, or the first volume anyway, to help me slog through the mammoth text, I tried to keep at the front of my mind a few questions, one of which was: why does Marx advocate for such a fundamentally anti-democratic idea as a “Dictatorship of the Proletariat”? One reason, I concluded, Marx was a journalist reporting on the preposterously mendacious and stubbornly violent resistance of industrial magnates and capitalist elites to democratic pressures for even the most basic labor rights for decades. Labor would squander free time, factory employers argued doggedly, on drink and idle lazy pursuits should they be allowed an 8-hour workday. Industrialists could not afford to pay living wages, they insisted, but they did in fact pay armed militias and thugs to attack worker organizations and labor protesters at every turn. In short, wealthy capital resisted labor reforms with such ridiculously pompous rhetoric and relentless violence for so many decades that Marx likely despaired of capital’s intransigence. I probably would have sooner. In historical fact, however, workers, labor organizing, and democratic pressures on government after decades of struggle against all that corporate resistance did win the measly, if insufficient, but not insignificant labor rights workers enjoy today, like the freakin’ weekend, for instance.
At any rate, a full Marxist abolition of private property and markets doesn’t sound doable or even desirable. Markets expand exchange and at this point private property is probably as important a human right as free speech or free religion and, anyway, markets and private property are so inextricably “embedded” in modern culture that imagining their complete elimination sounds like another Enlightenment pipe dream; a scientific dream to systematically automate away political conflict and social problems, like Smith’s “invisible hand” or Marx’s stateless utopia. You think reasonable public measures to reduce private gun ownership are hard, imagine the terror and reaction that would be induced by trying to eliminate all private property and markets?!
The more practical or relevant task at hand is how to democratize the state in a way that factors in the costs of social reproduction or the caring economy. Fraser is right, of course, democratic reforms, “embedded liberalism,” have been coopted and blunted to reinforce corporate rule. Industries capture the departments of government intended to regulate them. It’s a problem, ask Ralph Nader. But completely overthrowing markets and private property sounds like far more of an apocalyptic dystopic fantasy than the possibility of a sustainable and stable liberal democratic order that respects labor and social reproduction.
Milanovic is an academic economist and a big numbers guy. He’s worked as the lead economist for the World Bank’s research department and focused much of his work on income distribution and inequality. To Milanovic there is no alternative to capitalist rule, call it whatever you like. We’re not in any undecided Late capitalism period. Capitalism rules alone now, says Milanovic, but there has emerged since ’89 two kinds of capitalist rule. And see if you don’t notice how similar his two forms of capitalism sound like the same old either/or binary conflict of the Cold War he thinks is over.
Milanovic earns his readership first with some rosy econometric observations about economic growth. With graphs and statistics, he argues that capitalism alone is not only not cannibalistic but quite progressive. The globalization of capitalist rule over the last thirty-so years, again, since 1989-ish, and the fall of the socialist alternative to capitalism, has reduced global inequality, he contends, by the tremendous economic growth in China over this time, dramatically reducing the number of people of the world living on $2 a day, a common measure of global poverty. Reducing extreme poverty is a big deal but let’s pull back a bit and consider this achievement with some other history.
There is an idea in classical capitalist theory, Simon Kuznets, I think, that says, sure, new markets are disruptive, people lose jobs, in the beginning people have to work for low wages, but it is a “creative destruction” that ultimately expands markets and incomes, and as markets mature labor organizes and demands a fair share of profit margins and eventually achieves living wages for all labor. But how long do you suppose it might take global capital to “develop” all the cheap labor of the world, as they have progressed in China over the last half-century before local markets everywhere mature to the point all workers are paid living wages? (And mind you, no way is this the case, universal living wages, I mean, now in China or even the US, for that matter.) I’m guessing a very long time. I’m also guessing if the Reagan Revolution, corporate rule since 1980, or globalization, is a fair historical example, offshoring living-wage Union jobs and expanding so-called Free Trade agreements that spread cheap global sweatshop labor and devastated living-wage working class labor in the US for now going on three generations, capitalist corporations in China, like everywhere else, will pursue and do everything they can to preserve their supply of cheap labor, to thwart labor union organizing, and lowball wages until they are stopped and regulated against the worst extremes of these practices.
In short, I’m not denying the economic growth miracle of China but suggesting Milanovic might be overstating a tad the prospects of this model of economic growth. By this path of development, we’re at minimum talking many more generations, if not centuries, of workers toiling their lives away before we achieve even anything like universal living wages for labor.
Capitalism rules the world, says Milanovic, but there are two versions of capitalist rule in the world now. The one that has been around the longest, Liberal Capitalism, is based on popular democratic support for “free markets,” opposition to government meddling in markets, laissez-faire, a form of corporate rule in the West that came together in the 19th and 20th centuries; Europe, the US, Canada, Australia, Japan, India, Brazil, and South Korea, etc. And Political Capitalism, or state directed capitalism, like that in the new capitalist growth juggernaut China since the rule of Deng Xiaoping, 1978 to the present. In China, economic growth has—again, since 1989-ish-- far surpassed that in the democratic capitalist countries, often growing at a pace two or three times faster than any Liberal Capitalist nation during the same period.
Couple things to problematize a little Milanovic’s conception of capitalist rule in the world. The State already has a role in the Liberal Capitalist economy. Liberal Capitalists just like to pretend the State has no role or should have no role in the economy, which, yes, does have consequences, like those mentioned above. And in Political Capitalism, or China’s version, anyway, political authority is a dictatorship, suppressing dissent and self-determination, opposing democracy and basic human rights, wherever it is thought to be in opposition to State authority.
The Liberal Capitalist propagandists at the Wall Street Journal hate Milanovic’s book: a "stunted recitation of the political and economic crises afflicting Western capitalism, an unpersuasive account of China's economic model as a potential alternative and an implausibly dystopian vision of global capitalism’s future." Right off, you know Milanovic is onto something to make WSJ so mad. But what is it? Essentially, I think, that there is mounting evidence that China’s state-directed Political Capitalism might be better prepared to respond to the challenges facing the world in the coming Century. China’s early dominance of the solar power industry might serve as one bright example. China’s dominant market share of the rare earth elements used in battery technology another.
Liberal Capitalism, by contrast, is struggling to address the challenges of global warming and climate change. In fact, corporate rule has obstructed such efforts for decades now. And Liberal Capitalism is beset with other problems, extreme inequality, massive tax evasion and self-dealing corruption, underfunded public infrastructure, etc. These are all big challenges that Milanovic’s book argues Political Capitalism either avoids altogether or is better prepared to manage and overcome.
Corporate capitalists in the US don’t like hearing this kind of talk either, of course. But like Chris Miller’s popular Chip Wars, I take Milanovic’s case as essentially one for more State-directed Industrial Policy in the Liberal Capitalist states. For National Security, in the Chip Wars case. But, for Milanovic, it’s more a question of sustaining global economic power without giving up on democratic freedoms.
Unfettered markets in Liberal Capitalism are too narrowly preoccupied with profit seeking and market share, they either ignore or actively obstruct democratic governments from addressing problems, climate change, poverty, problems often of corporate rule’s own making, thereby actually weakening their long-term future economic prospects. Sure, China’s police state dictatorship and violent suppression of political dissent is bad but if its State administration has figured out how to grow the economy in a way Liberal Capitalism can’t match this gives Political Capitalism and China an edge on the future.
Talk about the end of Liberal Capitalism, or the Neoliberal order, or corporate rule, generally strike me as grossly premature but state reforms are long overdue. Just look at all the Big Oil/Big Pharma, Manchinema, obstruction in the last congress; or how the mainstream media are still framing this obstruction as “moderate.” Or look at all the capitalist donor class money going to Republicans in the 2024 election. And this is in spite of the misogyny and massive fraud and criminality and treason and in spite of the violent culture war insanity and open fascist threats to the rule of law and democracy from Trump and his MAGA cult. Many Liberal Capitalists or conservatives or corporatists or “libertarians” in the US fear they are at risk of losing their freedom to gouge profits and wreck the environment in the name of free enterprise.
Milanovic suggests Political Capitalism, State-directed capitalism, might have some advantages over Liberal Capitalism, unfettered markets, or extreme capitalism, as a model of capitalist rule up to the challenges the future presents. If Liberal Capitalism wants to continue to compete for global hegemony it will have to reform itself and adapt or face increasing marginalization, Milanovic suggests.
I enjoyed both these books. I think Fraser’s book is more penetrating and insightful, but Milanovic’s book more realpolitik and so closer to current struggles in macro political economy. More generally, though, as already alluded, I think they are both stuck a little in a Cold War binary conception of capitalist political economy. Milanovic thinks the cold war is over and Capitalism won. Total victory! But both his Capitalism’s, for all extensive purposes, still present us with the same Cold War binary between Liberal Capitalism, free market rule, and Political Capitalism, socialist dictatorship. Fraser, meanwhile, is a romantic holdout for a total socialist revolution that can overthrow the cannibalistic brutality of capitalism but then replace it with what? Both are stuck a little in the binary either/or conception of the Cold War. When, really, we’re already living in inextricably mixed economies, a mixture of private property, free markets, and socialist government regulations and taxes, and could no more survive without one (markets) than the other (the State).
I remain of the thinking that the contest over Late capitalism is ongoing and still undecided. Free market capitalism and state communism, the capitalism vs socialism binary, hardened during the Cold War of the 20th century into dogmatic historical fantasies and myths and power structures, and still largely prevail at the local Chamber of Commerce and in general political discussions but where the rubber meets the road some mixed economy third way is being worked out, whether consciously or not. A hybrid of Political and Liberal Capitalisms, in Milanovic’s parlance, is being forged in markets and state governance. It isn't an either/or but a sustainable balance question and treating the political economy as an either/or question makes achieving a sustainable balance that much harder, if not impossible. The either/or conception of political economy, corporate rule or socialism, “free markets” or the State, Liberal Capitalism or Political Capitalism, obscures more than it illuminates the really-existing economy and, worst of all, obstructs building a more widely shared and sustainable economic prosperity.
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