Deltarian Déjà Vu: The Structural Problems of International Capitalism as the Source of Repeated Economic CrisesAuthor(s): Richard Novák (University of Naban)
Published: Indralan Journal of Economics: Applied Economics, 4858, Vol. 558, No. 1.AbstractIn less than a century, Deltaria has twice triggered economic crises whose effects have been felt through most of the globe. The aim of this article is to position these repeated episodes in the context of an international capitalist system that requires infinite growth, thus leaving it inherently structural vulnerable to crisis. The first section provides a recent background of the most recent crises. In the second and third section, two features of the international system are identified and critiqued. The final section considers the alternatives to this system.Political and economic contextIn the past one hundred years the international order has twice experienced significant economic instability in direct response to the domestic politics of Deltaria. The first
Deltarian-triggered economic problems that began in 4782 should have been sufficient indication to policymakers that the economic system was structurally flawed and needed immediate radical change. The consequences were felt far beyond Deltaria's borders with particular problems for regional neighbours like Jakania and Jelbania. No such change was forthcoming though and the
Deltarian government resorted to the same tired Kodonomics to prop up their broken system.
At the beginning of 4855, the predictions of many economists came to fruition and
the Deltarian crisis of almost a century earlier repeated itself. Just as before a number of countries experienced economic hardship in response to the Deltarian situation. As expected the
Deltarian government implemented the exact same response as they did the last time around with another round of intense government investment to increase the level of demand for Deltarian goods and services at home and abroad.
Despite what the conservative administration and their supporters in the press will tell you, this is not a solution in any sense. The wellbeing and livelihoods of millions of people from Yingdala to Endralon should not be placed at the whim of a small group of economic and political elite in Čachtice. The economic dependence and instability that characterises the current system is neither necessary nor inevitable. The purpose of the rest of this article is to outline these conditions and how they can be changed.
Economic dependenceLinked intrinsically to the policy of free market capitalism is a need to expand the size of markets. In traditional Metzist literature this was generally considered in terms of a colonial logic whereby capitalist economies who reached the capacity of demand from their own populations would invade a foreign country in order to resolve the problem. Over the past thousand years this has largely fallen away as a feasible policy response (with a few notably tragic exceptions). The replacement has been a kind of neo-colonial economic dependence in which developed economies treat developing populations principally as consumers for their goods.
If there is a budget crisis in Talmoria then the average Istalian citizen might not even read about it in the newspaper. A similar situation in Deltaria represents a threat to their entire economy. Unrestricted pursuit of international integration between deregulated market economies means that instability in one instability creates a situation of economic contagion that permeates throughout the rest of the world. Figuring this out does not take an economic genius but it is remarkable the extent to which political decision-makers across the Majatra and beyond have followed unquestioningly in this economic death-march.
For a developing economy reliant on exports to drive economic growth, the prospect of access to the Deltarian economy is an appealing one. No doubt this was the logic driving decision-making in Jakania, Badara and other key oil exporters when they signed up to the
Majatran Economic Association (MEA). In essence though they are making a proverbial deal with the devil by signing up to a form of economic dependence that treats them as markets for Deltarian goods when necessary and then pulls up the drawbridge when the going gets tough.
The situation is more perplexing in the case of major developed economies like Dorvik and Yingdala. Both are perceived to be international rivals for Deltaria, with Yingdala in particular competing for economic and political influence in Dovani and Majatra throughout the last two centuries. Nonetheless both countries signed expansive free trade agreements with the MEA (though notably the
Deltarian ratification of the Dorvish agreement has stumbled). The willingness of these major economies to sign on to this project of economic entanglement is a major proximate cause of the repeated crises and they did so for primarily ideological reasons.
FinancialisationEconomic dependence only gets you so far. At some point you are going to hit the same contradiction that plagues all capitalist economies: keeping labour costs repressed to maintain profits means reducing the wages that are used to buy your good and services. Capitalism always wants to expand and there will never be enough foreign economies to integrate into your economic death spiral.
In response to this problem the Deltarian government has embarked on a long term project of financialisation. As part of this project they have made various policy and monetary decisions that attempt to utilise "financial ingenuity" to ensure that households continue to increase their spending even as they lose their jobs and experience negative wage growth. In the most recent episode the
Deltarian government's knee jerk reaction was to cut regulation in a desperate to get the financial sector to create more money in the form of credit.
The problem was that the rest of the economy recognised their hopelessness and responded by cutting their spending in expectation of an impending economic crisis. The contradictions inherent in this system only became clearer. Ultimately the
administration returned to their tried and true method of propping up this system with massive debt spending in an attempt to stimulate a demand that will never be enough for the forces of capital.
Future outlookEach time we witness a fresh bout of economic instability and a corresponding policy response that attempts to buttress the system that created it, the conditions become worse for the working class and additional innovation in international agreements and the financial sector is required. Karlstein Metz and most of those who engaged with his analysis of the capitalist system believed that these contradictions and crises would lead inevitably to the collapse of capitalism.
All were wrong. Capitalism has an unparalleled ability to mutate and adapt as necessary. In the current political climate there are no end of politicians, economists and writers who are willing to do whatever is required in order to preserve this system. The result is a kind of zombie capitalism in which economic policy is constantly framed in different terms but with no change in the real economic outcomes of the working population of the developed world and an entrenched economic dependence for the majority of the world's population.
Alternative systems are possible though and political movements across the world are attempting to demonstrate that. The only major economy to avoid entering a period of recession this time around was Vascania. Successive governments in the world's largest economy have attempted to provide a counter-weight to the appeal of disaster capitalism in the unstable context of many Dovanian economies.
Policymakers searching for long-term solutions do need to look far in either. Political movements in countries ranging from the
avowedly socialist Kalistan to the
traditionalist conservative Selucia have recognised the problems associated with reckless pursuit of economic expansion. The zenith of an alternative movement undoubtedly existed in Seko under the administration of the
Liberation Movement. With the
Yamashima Degrowth Declaration and the
Kuzacotl Principles they laid down a challenge that an increasing number of countries around the globe will need to meet for the continued existence of humanity.
Out-of-character note: The text of this essay clearly is not entirely original in the sense that it draws on a number of real-life writers in the Marxist tradition.
The phrase "Deltarian Déjà Vu" was originated by Wu Han.