Wednesday, February 09, 2011

End Of A Capitalist World-Economy And Detroit

Detroit must fail. Detroit is failure. That's the artistic theme of so-called "ruin porn". In the latest issue of Foreign Policy, Immanuel Wallerstein contends that the end is nigh for capitalism:

The problem is that the basic costs of all production have risen remarkably. There are the personnel expenses of all kinds -- for unskilled workers, for cadres, for top-level management. There are the costs incurred as producers pass on the costs of their production to the rest of us -- for detoxification, for renewal of resources, for infrastructure. And the democratization of the world has led to demands for more and more education, more and more health provisions, and more and more guarantees of lifetime income. To meet these demands, there has been a significant increase in taxation of all kinds. Together, these costs have risen beyond the point that permits serious capital accumulation. Why not then simply raise prices? Because there are limits beyond which one cannot push their level. It is called the elasticity of demand. The result is a growing profit squeeze, which is reaching a point where the game is not worth the candle.

The image on the opposite page is the Grand Hall in Michigan Central train station. That building might be the most iconic piece of Detroit's ruin porn. Crumbling "capitalist monuments" stand as proof that the "game is not worth the candle." The government bailout of Chrysler only extends the ruse, a house of cards that has lasted for 500 years.

What happened to Detroit will eventually blight the entire earth. Toughness and grit cannot save it. Like empires, all systems eventually die.

That's the Marxist critique, a powerful paradigm for explaining how the world works. Only the Freegans can save Detroit. Capitalism is out of answers. Eventually, every city and state will be bankrupt.

That's one theory.

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