It was the great promise of our time: abundance, together with freedom from worrying about survival. The awakening has been bitter and painful.
There actually is great abundance, of food, energy, raw materials, knowledge. But this plenitude is misleading. The more it grew, the more it collected into fewer pockets. And technology? Instead of liberating humanity from worry and hard labor, it has merely tightened the chains and the controls. The sobering-up from capitalism’s promise of happiness is the underlying reason for the erosion of security evident on every continent.
Food is produced in abundance unparalleled in human history, but millions of people go hungry at the same time that enormous production surpluses are destroyed in order to raise prices. Marvelous, ostensibly labor-saving technologies have been incorporated into every area of manufacturing and services, but the vast majority of people work even longer hours for pay whose relative value is steadily shrinking.
Humanity has enormous energy resources at its disposal, with unprecedented access, and raw materials are also widely available. It would seem that nothing is easier, simpler and cheaper than building homes. Yet housing only gets more expensive. Large parts of the population have become real-estate serfs, bound for most of their lives to suffocating mortgages.
Historians aren’t surprised. Fundamentally similar processes caused the collapse of the democratic order and the rise of fascism and Nazism. Out of the smoking ruins they left arose the modern welfare state, which dramatically improved standards of living and also injected stability into the economic system by means of international treaties, starting with the Bretton Woods agreement of 1944.
Keynesian economics ruled through the mid-1970s. Its great achievements were taken for granted: education and health care for all, workers’ rights, democracy. As if that’s how things always were.
The welfare state stagnated, and the piggishness lurking around the corner launched a counterattack: U.S. President Richard Nixon canceled the Bretton Woods agreement and threw the international currency system into structural instability, South America bled under right-wing dictators and the rise of Margaret Thatcher in Britain and Ronald Reagan in America completed the process. In 1977, the revolution reached Israel.
Ever since, neoliberalism has reigned supreme: dissolving the social services, creating tycoons and above all, been taken as absolute, irrefutable truth. The collapse of the Soviet Union was presented as the ultimate proof of this truth, as if the Soviet abomination had any connection to social democracy. Even now, any effort to curb the rule of capitalism incurs the demagogic cry, “Do you want to be like North Korea?”
After decades of rampant privatization, even the middle class has discovered that it is disintegrating. As in the 1930s, the inherent inability of a state to operate solely through competition and the market is being exposed. That led to the colossal 2007 collapse in the United States, whose traumatic effects are still felt.
The shock waves hit Israel four years ago. Huge crowds took to the streets to protest the high cost of food, child care and housing. Night after night, the same questions: “Something is fundamentally broken. We work like crazy but have less and less money. What if something happens to us?”
But piggishness, exploiting the disunity and political blindness of the protesters, went into battle and won, but it lost the war. Capitalism has no solutions to the property panic, the natural-gas robbery, the hopeless situation of Israel’s financial sector. And above it all hovers a heavy cloud of anxiety and existential fear.
Where does this psychological distress lead? To another, and much more violent, false dream — religious extremism, ultranationalist impulses, racism and aggression. That is what unites the Republicans in the United States, President Vladimir Putin in Russia, the frenzied extremists in the Arab world and Prime Minister Benjamin Netanyahu in Israel. All are disciples of unbridled capitalism. In the face of all this, it is time for the welfare doctrine to once again take center stage.