Do Global Financial Crises Inevitably Reinforce Capitalism?

A Conversation Between Maja Kantar and the Late David Graeber

The following conversation appears in Everything Must Change!: The World after COVID-19, available now from OR Books.

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Maja Kantar: I, like many people, have been closely following the news for updates on Covid-19. And one thing I have picked up on is this discourse urging people to be “reasonable” in their expectations of potential economic routes out of this crisis. The European Union recently looked at ways to help countries most affected by this crisis, such as Italy or Spain, and the idea of “coronabonds” was proposed to help them recover their economic losses.

However, Germany and the Netherlands (in particular) declined the idea because they did not want to risk sharing in the debt. This should not surprise us, of course, especially in light of the EU’s response to the 2008 crisis. Then, as now, we were told again and again to be “reasonable,” and that rich countries should not bear the burden of less organized, poorer countries. How is it possible that the ritual of rich countries declining to act in solidarity or cooperation is being received, this time, with a certain outrage and surprise?

David Graeber: I think that 2008 blew the cover, to a certain degree, on the line we had all been given about debt and finance in general. We were told about the financialization of the economy, but as though this occurred in a kind of casino that is completely detached from the real economy, where financiers are just rolling the dice and making bets amongst each other.

Before 2008, there was a general consensus that we, the public, don’t really understand how finance works, that it’s some kind of arcane science beyond our understanding. At the same time, debt was redefined in basic moral terms. This discourse of being “reasonable” is very surprising in this context, because normally “reasonable” means compromising, and debt is one of the few things that can make completely unreasonable things seem reasonable. It is used to justify things that people would never approve of in any other context. So there is this moral element, on the one hand, but there is also the idea that financiers are exceptionally clever people who have understood the science of economics in a way that most people cannot.

No one was quite sure how finance was supposed to be driving the world economy toward greater happiness and prosperity, but we kept being reassured that it was and to trust in the experts. After 2008, both the moral and intellectual justifications completely collapsed. It turned out that not only was the world of finance built on scams, but on really stupid scams. The supposed “experts” were completely corrupt as well as very clumsy. There was a brief moment in which many people then reconsidered everything they knew about money, capital, finance, and debt.

Even the Economist was running headlines like “Capitalism: Is it Really a Good Idea?” Of course, their answer was yes, but nonetheless there was a moment when it seemed like everything was thrown into question. Even when things returned to a form of normality, there was an enduring sense that we were sitting on a time bomb and that “next time” those in power would not be able to cover things over again. People realized that the entire economy was based on a series of completely dishonest delusions, and the idea that there is anything moral about debt was shown to be completely absurd.

“The traditional justifications for capitalism have almost all withered away, they are indefensible.”

The EU attempted to portray the Greek people as improvident for having made irresponsible loans and, therefore, as breaching the basic morality of economics and deserving any resulting hardship. However, the reason the economy was able to turn into a gigantic bubble in the first place was precisely because those who were making irresponsible, stupid loans never had to take a hit.

MK: Your own book on debt and that of Maurizio Lazzarato finally presented the problem in a clear way that enabled us to do away with the notion that economy is a science completely detached from any other aspects of life.You point out that three centuries ago, “the economy” did not exist as a discrete sphere as it does today, but was always connected to other aspects of life such as the family and religion. Today, we have this narrative of morality surrounding debt, which almost always turns into moralism, especially, as Lazzarato discusses, in connection with guilt.

DG: Yes, it’s all theology. We have to remember that even three or four hundred years ago, economics was a branch of moral science which fell under theology. Economic questions were handled largely by clerics in the Middle Ages. Even Adam Smith was a professor of moral philosophy.

MK: In terms of the situation unfolding now, we have IMF officials reiterating that debts have to be repaid, structural adjustment programs have to be implemented, and so on.

DG: They won’t even cancel the African debt, which, of course, has been repaid five times over and it is now just interest payments that are owing. They will drag the payments out no matter how many have to die. Noam Chomsky often makes the point that when Stalin arranges an intentional famine in Ukraine, knowing that this will lead to the deaths of thousands of people, we count that as mass murder, but we don’t apply the same charges to the actions of the IMF. If the IMF insists on policies that it knows will kill people, how is this not mass murder?

I am not sure that it will last because so many bubbles have been punctured this time around. The traditional justifications for capitalism have almost all withered away, they are indefensible. For instance, almost nobody still believes the claim that “the rising tide will lift all boats.” It’s very clear, especially in rich countries, that the next generation—leaving aside the climate disaster—will be economically worse off than their parents. The second major justification was the idea that technology would save us, which, again, nobody sincerely believes anymore.

The third appealed to the democracy and political stability that capitalist countries supposedly inevitably create in creating a larger middle class. Now, this argument has given way to a weaker one which seeks to justify capitalism by holding up North Korea or Venezuela as the alternative. In place of these traditional justifications, proponents of capitalism resort to moral arguments of the sort that “if you don’t pay your debts, you’re a bad person.”

This morality of debt is also connected to a morality of work. People have internalized the so-called “Protestant work ethic,” according to which if you are not working hard, you are a bad person undeserving of public support. I wrote a book on each of these moral justifications (Debt and Bullshit Jobs, respectively) because both have really stuck.

MK: The morality aspect of debt always comes to mind when this discourse of being “responsible” and “reasonable” emerges, in a constant reiteration of the confinement of the “possible.” Suddenly, when a crisis like the Covid-19 pandemic happens, we can see that everything that was deemed impossible somehow becomes possible, whether that is writing off the National Health Service’s debt in the UK, the nationalization of private hospitals, or squatting a McDonald’s in Marseilles and turning it into a food bank.

DG: There has been a 30- to 40-year war against human political imagination. In the 1930s through to the 1960s, it was just assumed that we were living in a somewhat terrifying, but nonetheless exhilarating, new age where almost anything was possible. Creations such as the United Nations or the space program were epical feats of statesmanship. This is inconceivable now. We are given this line that there are economic machines beyond our control that are propelling us toward a better future and we just have to trust in them; we certainly can’t intervene in history.

It’s a strange version of historical determinism, in a way, which I think is one reason why many old apparatchiks in Eastern Europe were able to quite easily switch from a Marxist-Leninist philosophy to neoliberalism without too much conceptual dissonance. It is this idea that history moves in a determined direction and if we just listen to the experts we will arrive at a better world.

It entails giving up on the idea that human beings can have an impact on history and, today, it has gotten to the point where even those in power can no longer control the mechanisms they have created—they seem at a total loss in the face of urgent calls for them to mobilize on a global scale.

MK: To merely have someone in power who actually behaves like a leader is an impossibility now.

DG: I’ve always thought Obama represented the ultimate death of visionary politics. He managed to get elected by portraying himself as the kind of person who would have a vision—but it never occurred to anybody to ask what the vision actually was. I have said, for some time now, that capitalism is obviously on its last legs and what I fear is not a capitalist future but something even worse. If there was ever a stupid time to give up on trying to imagine a better future, this is it.

MK: Keeping our political imagination alive is more important now than ever. Some will dismiss our efforts to reimagine the future as theoretical musings, but the real fictions of today are those of finance. Ours is a much more material project. My favorite political group at the moment is a UK-based group called Nihilists for Labour that appeared during the Covid-19 lockdown. Two or three weeks ago, they did a shout out to everybody who just realized how pointless their job is. Bullshit Jobs has perhaps never been so pertinent.

DG: That book sort of inflicted itself on me. I kept meeting these people who, when I asked them what they did, would reply, “Oh, nothing really.” At first I figured they were just being modest, but when I pinned them down, they would admit, “No, actually, I meant that literally. I do nothing all day, I just pretend to work. Maybe I do 15 minutes’ work a day, but, basically, I’m just on Facebook.”

“This idea of labor as work that is productive, either of grain or of babies, is envisioned in a certain way in political economy.”

I wrote a piece postulating that perhaps bullshit jobs were the reason that we are not working 15-hour weeks, as was predicted with increasing automation. We are so dedicated to the idea that if you are not working hard you are undeserving that we invented dummy jobs just to keep people off the streets. Basically, it was kind of a joke, but within two weeks of publication it was translated into a dozen different languages. A survey was then done and it discovered that over a third of people said that if their jobs disappeared it would make no difference at all.

MK: Your style resonates, at least to my mind, with Bob Black and other old-school anti-work anarchists. The opening sentence of Black’s Abolition of Work is clear and simple: “Nobody should ever work.” Of course, what he meant was work on the basis of the capital–wage relation. He makes the case for play as another form of creative engagement. The problem comes down to the system of production, which needs justification through different kinds of nonsensical activities. And part of our work is developing a new system of production.

DG: The idea of production itself needs to be examined because it’s one of these theological notions. One of the odd features of Abrahamic religions is the idea that God created the universe out of nothing, ex nihilo, and it is very important, because production literally means to “shove out” (from the Latin produire). In the Bible, Adam is cursed to work by the sweat of his brow and Eve is cursed by God, who says, “I will multiply your pain in childbirth,” which of course we call “labor.”

This idea of labor as work that is productive, either of grain or of babies, is envisioned in a certain way in political economy. The image of production in Adam Smith, Ricardo, and Marx, carries with it a sort of male fantasy of birth: factories are shoving out objects, fully formed, through a painful process, which, through consumption, are used or eaten up, and we also “produce” workers who are then consumed in the workplace. That whole image assumes that work is “productive,” that it makes something. But, of course, it ignores most work.

It is an incredibly gendered conception that is rooted in the male fantasy of pregnancy. It ultimately implies that the work of making something is more important than the work of maintaining or caring for it, which is absurd. Most labor isn’t making things, or even transforming them, but maintaining and taking care of them. Feminist economists always point out that even productive labor can be thought of as a form of caring labor. We need to expand our notion of care and see meaningful production as a subset of that.

Care and freedom, instead of production and consumption, should be the bases of our economy. Obviously, if you endlessly maximize consumption it will ultimately lead to disaster, but freedom can be maximized without killing anyone, necessarily. I would propose that care be considered as any sort of behavior, productive or not, that is aimed toward maintaining or enhancing another person or entity’s freedom.

MK: That’s a beautiful idea. There always seems to be this clash between freedom and necessity, even on the left.

DG: Play is a key concept here, because, if you think about it, play is the quintessential form of human freedom: freedom for its own sake.

MK: I would add that we are talking about a play that is not childish or reckless, but is passionate and has high stakes and, similarly, a care that is not reliant on a patriarchal notion of femininity, but is militant, almost, and generates a solidarity that is non-compromising. Do you think it is likely that more useful jobs and forms of global justice will be produced by the Covid-19 pandemic and related economic crisis?

DG: That’s up to us, isn’t it? One of the most telling things for me was this debate about whether to shut down Wall Street for a few weeks when it kept crashing incessantly. I remember reading a fairly long debate about this in a mainstream magazine, and I noticed that at no point in the article did anyone suggest that shutting down Wall Street would itself have negative economic effects. So, why does it exist? The point of Wall Street seems to be itself: the economy is there for it, rather than the other way around, and this is the quintessence of how we got things backward.

Now, we have certain politicians saying, “We need to save the economy, and if a lot of pensioners die, that’s too bad,” but that is just the latest version of this ongoing insanity.  In the 1990s, we heard people trained by the World Bank, who are now ministers of health, saying, “We need to stop the AIDS crisis because, if we don’t, in ten years’ time half of the population will be gone and that will have terrible effects on the economy.”

Economy was supposed to facilitate the provision of necessary material goods; now, the best reason we can think of not to be dead is that it will hurt the economy. Today, we are again in a situation where politicians will tell us that what we just went through was a dream, that it’s now time to wake up and return to normal. But, actually, “normality” was a dream; the crisis is reality, for through it we discovered again what is necessary and what is not.

MK: Do you think this pandemic is marking the beginning of a fascist technocratic new world order?

DG: I don’t know, actually. Has it ever not been at least a technocratic order? I must admit, I was writing a piece right before the pandemic hit about climate change, and it began by saying that, at this point, when there are large portions of the earth that are literally on fire, and every year is the hottest year on record, even the most stubborn right-wing climate change denier will have to concede to what is happening. If there is anything scarier than a fascist who denies climate change, it’s one who doesn’t, because we know what kind of “solutions” they would implement.

“This is a similar jolt—a completely random event which has given us a moment of breathing space and reminded us that we have the ability to take dramatic action.”

We have to assume that the right has been brainstorming plans for when the climate crisis gets to genuine emergency levels. There are plenty of people employed to brainstorm contingencies and agencies tasked with predicting and modeling bad things that may eventuate, some of which are secret and some of which are not.

We need to grapple with these possible approaches that are being played around with, because they can give us an idea of what we can expect if we do try to pretend that we can just go back to “normal” after the current pandemic—an apocalyptic climate scenario.

MK: Yes, the “normal” is what started this whole thing.

DG: The normal is standing on the tracks looking at an oncoming train and arguing with each other about how fast it’s going. We’ve now had somebody knock us off the tracks, out of the way, and what are we going to do, get back on? In fact, about ten years ago, a scientist showed that a series of sunspots had slowed down global warming and we’d be in a much worse position had that not happened.

This is a similar jolt—a completely random event which has given us a moment of breathing space and reminded us that we have the ability to take dramatic action, that, perhaps, we should stop listening to those who tell us what is possible and impossible.

MK: We all recognize the problems, but the question is how to organize to solve them? This is, of course, an eternal question, and I like the answers we gave in terms of rebuilding economics around play, freedom, and care, but what about political organization? In the United Kingdom, many people have recently been surprised to see that people within the Labour Party have worked to sabotage its chances of success in the December 2019 election.

Why do we still count on forms of liberal representation, and why are we still surprised to see that politicians from the left and right remain opportunists playing power games? Are there other ways to be politically present besides representation as we know it?

DG: When you ask “Why are we surprised?” my question is, who is “we”? There is an attempt to have politics polarize around an opposition, between what is called the left, the neoliberal center built around the perspectives of the professional managerial classes, and what is called the radical right, crypto-fascists, or “populists.” This opposition is based on a disaffected working class being divided between the two poles.

In fact, the professional managerial classes that now represent centrism are the only people who really believe in the rules. For them, life is built around rules, regulations, and institutional structures and they claim that all people want is for the integrity of these to be upheld. I noticed this in America in the Bush–Gore election. The spokespeople of this centrism that campaigns on form over content are the same people who questioned why, if Hillary Clinton didn’t break any laws, people accused her of corruption. These people, who truly believe in rules and regulations, are those who are continually shocked and surprised.

In contrast, right-wing figures like Trump manipulate the cynicism to trick people into thinking that they are the tricksters and aren’t being tricked. That’s the real secret of so-called right-wing populism. After Trump won, he embarked on a series of rallies. At one point, he mentioned Hillary Clinton and everybody started chanting, “Lock her up, lock her up.” He said, “No, no, you don’t have to use that line anymore—it was good during the campaign, but now that we’ve won, we don’t need it.”

He manages to convince everybody in the audience that they are all part of the scam, and they are so cynical that they are not surprised by anything. Against this, the centrists remain defiant and insist on “the rules.” While the one is manipulating intentional cynicism as a weapon, the other is manipulating intentional naivety.

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Everything Must Change!: The World after COVID-19, edited by Renata Ávila and Srećko Horvat, is available from OR Books.

David Graeber and Maja Kantar
Maja Kantar is a researcher currently living and working in London. She completed studies of Political Science and Peace Studies in Serbia and Postcolonial Theory in the UK. Current research fields combine political and cultural theory, philosophy of nihilism and utopian studies.

David Graeber was an American anthropologist, anarchist activist, and author known for his books Debt: The First 5000 Years (2011), The Utopia of Rules (2015) and Bullshit Jobs: A Theory (2018). He was a professor of anthropology at the London School of Economics.





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