The current state of economics and politics in the western world makes me wonder if revolution in both areas is now on the agenda. Are both in a process of revolutionary change? In the past there have been several such turning points and it might be enlightening to review them.
The revolutions of 1848
The first are the revolutions of 1848 in Europe (in France, Germany, Austria, Hungary) that influenced each other. They were caused by economic crisis, harvest failures, and opposition to old feudal and dictatorial practices. Everywhere there was a call for the end of personal monarchical regimes and the installation of democratic elections, some went even further and asked for ‘communism’. These revolutions failed politically but had as a consequence the abolition of serfdom and coerced labour in most of Europe outside Russia and Turkey.
The following decades saw a movement for free trade and free economic enterprise that led to an unprecedented economic development, world migration and explosion of international trade.
Industrial capitalism and mass politics in the 19th century
This freeing of economic reigns had its repercussions after 1873 when an economic crisis on world scale set in. It was the world’s first industrial based crisis. Agrarian communities had been undermined in their sustainability by new transport and trade connections; migration to cities and far away countries was the solution for millions of people. The social question became pre-eminent with the poverty and crowded housing in the cities, and the absence of regulation of working conditions. Politics after 1848 became mass politics, and public opinion a foremost concern of politicians. Nationalism developed as a mass political movement. To solve these questions a new kind of state and social politics was invented in the last quarter of the 19th century that tried to regulate economic enterprise and sustain a working class in its daily living. But the end of international liberalism also led to international rivalry and economic nationalism concluding in a rush for political and economic gain we call imperialism. So, 19th century political and economic development shaped new states and economics.
The great depression of the 1930s
Other parallels come from the crisis of 1929 and the following Depression. The American economist Kenneth Gailbrath has pointed – in ‘The great crash, 1929’ – to the mood of speculative overoptimism as a cause of this crisis. And also to the consequence of a wide gap in incomes, making the economy vulnerable to shocks. Then economic crisis and limits of social reform brought about a crisis of politics and capitalism that shook the world. Economic cooperation broke down and lack of support for far reaching reforms among the middle classes led to authoritarian solutions and worse. When American loans were withdrawn German banks fell one after the other and a suspicious France blocked international help. In Europe the trajectories of the crisis were diverse, but the result is known: war changed the political and economic shape of the world completely.
The present crisis
Now that the social arrangements of the welfare state have been broken down from the 1980s onward and neoliberalism has undermined trust in the state, economic structural change on a world scale is subverting the geopolitical structures of the 20th century. The new social strata that have liberated themselves from state fetters are not looking solidarity solutions. The crisis of 2008 can like the one in the 1930s be attributed to extreme optimism, this time finding its way in the creation of a virtual economy that has undermined stable investment and widened income inequalities. Again political distrust is blocking solutions of the crisis in Europe like in the 1930s. The position of the USA is telling: in the 1920s a creditor and upcoming power, now it is in debt and showing signs of decline.
So, the political and economic situation appears to be in a revolutionary state. States have to forge new relations to worldwide capitalism on the run. The outcome is uncertain, some think the prospects of democracy are bleak. From the overview of previous crises it is clear that many parallels point to signs of structural change. But this does not mean that capitalism is at risk, it is rather changing its global and spatial make-up. Political outcomes are on the other hand much more uncertain. Politicians have not shown new ways to tame the ‘monster’ that we call capitalism.