Despite all of the noise from the right about Alexandria Ocasio-Cortez being a radical, un-American, a communist, anti-business, and so on, the Green New Deal she and Senator Edward J. Markey unveiled on Feb 7 would, if mostly implemented as planned, save capitalism. For sure, it won't be the kind of capitalism that people like Howard Schultz would be happy about—a capitalism regulated in such a way that it is nearly impossible for billionaires to arise and add billions to their billions in a matter of months or days. Nevertheless, this kind of capitalism is not new to the world. It is the same as the one that was formulated by New Dealers and became a reality after the Second World War. Capitalism at our point in time has only two choices: death (it will not survive a severe and sustained environmental catastrophe) or its continuation in the form of the Green New Deal (you can read it here).
But how does Ocasio-Cortez' green plan ensure the survival of capitalism? Because it has assumptions about the economy that only make sense under that system. Like the New Deal, which arose from the political crisis of the Great Depression, the socialism of the GND is not a socialism for socialism, but one for (or closer yet, with) capitalism.
We live in a blurred world. Our prevailing system of wealth distribution cannot, by it's own mechanisms (which are based on the private ownership social goods), survive without constant support from the state (the public). Neoliberalism is nothing but the recognition of this fact. It is a form of state capitalism without the socialistic compromises that defined post-war Western societies. The main difference between a state socialism that supports capitalism and a state that simply supports capitalism is the former is about protecting citizens from the terrible things that automatically result from the "icy water of egotistical calculation," and the latter is about protecting capitalism from democracy (the public).
Ocasio-Cortez's New Deal does not dismantle capitalism but restores its mid-century relationship with democracy. In this order, the social precedes the individual's right to make money make more money. This is why there is nothing alien in the Green New Deal document. It states clearly that it will be paid for in “the same way we paid for the original New Deal, World War II, the bank bailouts, tax cuts for the rich and decades of war—with public money appropriated by Congress.” Nothing radical about that. It also measures the dangers of climate change in exactly the same way most profits are measured, in US dollars ("a risk of damage to $1,000,000,000,000 of public infrastructure and coastal real estate in the United States"). And it plans to end the poor, 40-year performance of neoliberalism with a return to a Keynesian program of higher wages, and meaningful full employment ("...hourly wages overall stagnating since the 1970s despite increased worker productivity; the third-worst level of socioeconomic mobility in the developed world before the Great Recession").
At the moment, capital is incapable of addressing or reversing its own decline and destruction under climate change. It refuses to do what is needed for its own survival, which is pretty much laid out in the Green New Deal. And this is not the first time this has happened. American capitalism, when as close to death as it has ever been (during the Great Depression) did all that it could to prevent or kill exactly what it needed to continue, the New Deal, a program that, when finally implemented, almost immediately reduced unemployment and restored profits. But even after all of these splendid results, capitalists still fought hard to end New Deal programs, which they viewed as socialism. In 1937, they got want they wanted. The New Deal was unplugged and the result was a deep recession called the Roosevelt Recession.
The heterdox economist Steve Keen states:
...[I]n the 1930s, when President Roosevelt accepted the advice of his economic advisors that the worst of the Depression was over – with unemployment having fallen from 26 percent in 1933 to 11 percent in 1937 – and it was time to rein in government spending after the New Deal.
Government spending fell, interest rates rose, and the private sector went back to reducing its debt in response. Unemployment exploded again to 20 percent of the workforce by mid-1938, and only gearing up for WWII drove it back down again.
So, in this case, capital preferred war to the New Deal. But the war only weakened its grip on political power. After the war, the "old gang" was thrown out of power in the UK and the US, under President Dwight D. Eisenhower, imposed on the top income bracket a marginal tax rate of 91 percent. This paid for (the mostly) white middle class and its expansion into the suburbs. But the program of high wages, high taxes on the rich, and improved social services actually saved capitalism. Indeed, it experienced its greatest boom or moment of growth in real terms between 1947 and 1970.
And so this is what the Green New Deal is up against. A capitalism that does not want to be saved in the only way it can be saved: a socialism that supports (and in this support, displaces) capitalism. But what would a socialism for socialism be like?
Human history has yet to experience such a society. But one of its points of departure from the world that is is that it no longer recognizes higher wages as one of the key solutions to our deepest social problems. A world with reduced wages and living expenses and zero inflation (this part will trip many, but I will clear the matter in another post) is also one that places production limits on the new (new cars, new clothes, new domestic appliances). It's also one that cannot survive without driving to extinction the billionaire (and even millionaire), and not for moral reasons but very practical ones. The more money one makes, the more it seems satiation is out of the reach of the individual. This bad infinity makes it impossible to achieve the kind of economy that's needed for a significant reduction in carbon liberation, a zero-growth state. Or, better, yet, one where growth as we understand and experience it is negative.
The New Deal of the 1930s had the complete opposite goal. It did not redefine the capitalist economy; it tried to revive the only condition that's proper to its existence, which is growth. In a socialism for socialism, actual inefficiencies are eliminated (such as cars within cities) and the economy is organized with energy as the key input in production, rather than labor or capital. What this means is the whole idea of not only high wages, extreme wealth concentration, but also full employment is re-conceptualized. Full employment becomes meaningless in a socialism for socialism. Just because capitalists hate full employment doesn't mean it's a good thing. Capitalists are just in the habit of hating things that are good for them.