The final stages of what we call capitalism, as Marx grasped, is not capitalism at all. Corporations gobble down government expenditures, in essence taxpayer money, like pigs at a trough. The arms industry with its official $612 billion defense authorization bill -- which ignores numerous other military expenditures tucked away in other budgets, raising our real expenditure on national security expenses to over $1 trillion a year -- has gotten the government this year to commit to spending $348 billion over the next decade to modernize our nuclear weapons and build 12 new Ohio-class nuclear submarines, estimated at $8 billion each. Exactly how these two massive arms programs are supposed to address what we are told is the greatest threat of our time -- the war on terror -- is a mystery. After all, as far as I know, ISIS does not own a rowboat. We spend some $100 billion a year on intelligence -- read surveillance -- and 70 percent of that money goes to private contractors such as Booz Allen Hamilton, [which] gets 99 percent of its revenues from the U.S. government. And on top of this we are the largest exporters of arms in the world.
The fossil fuel industry swallows up $5.3 trillion a year worldwide in hidden costs to keep burning fossil fuels, according to the International Monetary Fund (IMF). This money, the IMF noted, is in addition to the $492 billion in direct subsidies offered by governments around the world through write-offs and write-downs and land-use loopholes. In a sane world these subsidies would be invested to free us from the deadly effects of carbon emissions caused by fossil fuels, but we do not live in a sane world.
Bloomberg News in the 2013 article "Why Should Taxpayers Give Big Banks $83 Billion a Year?" reported that economists had determined that government subsidies lower the big banks' borrowing costs by about 0.8 percent.
"Multiplied by the total liabilities of the 10 largest U.S. banks by assets," the report said, "it amounts to a taxpayer subsidy of $83 billion a year."
"The top five banks -- JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc. -- account," the report went on, "for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits. In other words, the banks occupying the commanding heights of the U.S. financial industry -- with almost $9 trillion in assets, more than half the size of the U.S. economy -- would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders."
Government expenditure accounts for 41 percent of GDP. Corporate capitalists intend to seize this money, hence the privatization of whole parts of the military, the push to privatize Social Security, the contracting of corporations to collect 70 percent of intelligence for our 16 intelligence agencies, as well as the privatization of prisons, schools and our disastrous for-profit health care service. None of these seizures of basic services make them more efficient or reduce costs. That is not the point. It is about feeding off the carcass of the state. And it ensures the disintegration of the structures that sustain capitalism itself. All this Marx got.
Marx illuminated these contradictions within capitalism. He understood that the idea of capitalism -- free trade, free markets, individualism, innovation, self-development -- works only in the utopian mind of a true believer such as Alan Greenspan, never in reality. The hoarding of wealth by a tiny capitalist elite, Marx foresaw, along with the exploitation of the workers, meant that the masses could no longer buy the products that propelled capitalism forward. Wealth becomes concentrated in the hands of a tiny elite -- the world's richest 1 percent will own more than half of the world's wealth by next year.
The assault on the working class has been going on now for several decades. Salaries have remained stagnant or declined since the 1970s. Manufacturing has been shipped overseas, where workers in countries such as China or Bangladesh are paid as little as 22 cents an hour. The working poor, forced to compete with the labor of those who are little better than serfs in the global marketplace, proliferate across the American landscape, struggling to live at a subsistence level. Industries such as construction, which once provided well-paying unionized jobs, are the domain of nonunionized, often undocumented workers. Corporations import foreign engineers and software specialists that do professional work at one-third of the normal salary on H-1B, L-1 and other work visas. All these workers are bereft of the rights of citizens.
The capitalists respond to the collapse of their domestic economies, which they engineered, by becoming global loan sharks and speculators. They lend money at exorbitant interest rates to the working class and the poor, even if they know the money could never be repaid, and then sell these bundled debts, credit default swaps, bonds and stocks to pension funds, cities, investment firms and institutions. This late form of capitalism is built on what Marx called "fictitious capital." And it leads, as Marx knew, to the vaporization of money.
Once subprime borrowers began to default, as these big banks and investment firms knew was inevitable, the global crash of 2008 took place. The government bailed out the banks, largely by printing money, but left the poor and the working class -- not to mention students recently out of college -- with crippling personal debt. Austerity became policy. The victims of financial fraud would be made to pay for that fraud. And what saved us from a full-blown depression was, in a tactic Marx would have found ironic, massive state intervention in the economy, including the nationalization of huge corporations such as AIG and General Motors.
What we saw in 2008 was the enactment of a welfare state for the rich, a kind of state socialism for the financial elites that Marx predicted. But with this comes an increased and volatile cycle of boom and bust, bringing the system closer to disintegration and collapse. We have undergone two major stock market crashes and the implosion of real estate prices in just the first decade of the 21st century.
The corporations that own the media have worked overtime to sell to a bewildered public the fiction that we are enjoying a recovery. Employment figures, through a variety of gimmicks, including erasing those who are unemployed for over a year from unemployment rolls, are a lie, as is nearly every other financial indicator pumped out for public consumption. We live, rather, in the twilight stages of global capitalism, which may be surprisingly more resilient than we expect, but which is ultimately terminal. Marx knew that once the market mechanism became the sole determining factor for the fate of the nation-state, as well as the natural world, both would be demolished. No one knows when this will happen. But that it will happen, perhaps within our lifetime, seems certain.
"The old is dying, the new struggles to be born, and in the inter-regnum there are many morbid symptoms," Antonio Gramsci wrote.
What comes next is up to us.