The End of an Era: A Postmodern and Phenomenological Examination of Socialism and Capitalism

I thought I would add to the festive season by offering my interpretation of the long-running debate over whether there can be, or whether there will ever be for that matter, a system characterised by both capitalism and socialism in tandem. Much recent discussion of this matter has been undoubtedly shaped by the advent of postmodernism, and by scholars' attempts to reconcile the need to re-evaluate and update common conceptions with the more tangible human experience that the school of phenomenology has striven to comprehend ever since the days of Hegel. The overarching argument of this article is that, given the constant fluidity of the commercial and political world, perhaps we have reached the end of the epoch defined by the capitalism/socialism dichotomy, and we therefore ought to move beyond categorical rigidity when attempting to understand contemporary society in order to better grasp its flexible and changeable nature. Consequently, I shall begin by conveying why the claim of socialist leaders that they combat capitalist greed is hypocritical and self-refuting, with a chief focus on Venezuela's late-20th-Century economic policies. I shall thereafter explain why a conciliatory relationship between capitalism and socialism is difficult to achieve, with a focus on post-19th-Century Chinese economic development, while at the same time explaining why arguments from so-called neo-Marxists are futile and render themselves rather useless as they do not provide a clear frame of progression; only further contradiction and confusion. I shall finally elaborate, from a postmodern and phenomenological perspective, on the possibility and feasibility of escaping the confines of the aforementioned dichotomy.

Venezuela's current politico-economic crisis, catalysed by turmoil within the oil industry, will likely have deleterious effects in the future, for given the current structural organisation of the state, which has prevailed ever since the mid-to-late 20th Century, the status quo will likely remain the same.   Daily oil production has fallen by 1,000,000 barrels in the country that possesses the greatest oil reserves on the planet and where the economy is heavily dependent on the oil industry for its health. In other words, 95% of national revenue comes from oil exports. Corruption in Venezuela’s state-controlled oil industry, which has led to former ministers and senior managers being incarcerated, is the most recent piece of evidence that the most oil-savvy nation on Earth, as well as the sector it most heavily relies on, are collapsing. The corruption situation became particularly staggering earlier this month, when the Venezuelan Attorney General jailed 67 PDVSA (Petróleos de Venezuela, S.A.) executives and managers for crimes that range from falsifying production figures to embezzlement and acting counter to national interests. Even more astounding has been the Attorney General's ongoing criminal investigation against Rafael Ramirez, the oil minister and PDVSA president between 2002-2014, and up until November, the most recent Venezuelan ambassador to the United Nations, for his possible involvement in money laundering activities through employing the services of a private bank in Andorra. According to Spanish newspaper El Pais, those close to Ramirez earned at least 2 billion euros in illegal commissions between 1999 and 2013. Because of this, the PDVSA suffers and will continue to suffer serious damage: the state-owned enterprise was created at the height of the oil industry nationalization of 1975, given that for years it had boasted about being among the top 5 oil companies in the world.

In terms of trying to understand this trend in Venezuelan history from an academic standpoint, it is worth mentioning North's (1990) public choice theory, which essentially explains why particular status quo situations, such as the widespread oil-related corruption, come to solidify in socialist regimes. For North, Venezuela is the most clear exponent of the argument that formalised rules present in institutions interact with other state organisations in order to create a collection of incentives that they themselves create powerful beneficiaries who, as a result, are likely to resist any sort of progressive change. The conditions necessary for said situation to occur are: patrimonialism, clientelism, poor law enforcement, and a widespread disregard for property rights (North, 1990). For example, a tumultuous set of circumstances had become prevalent within the country by the late 1980s: popular expectations were insurmountable following a long period of democratic rule and of high oil prices, but state institutions had, at the same time, begun to function poorly and to cause widespread popular discontent. In other words, Venezuela’s political leaders genuinely attempted to design a system which had the potential of ridding the country of its authoritarian past. For example, the political spearheads of the post-1958 democratic transition believed that the main danger facing government was the threat of ideological polarisation leading to the possibility of another armed conflict. Consequently, such fear led to the emergence of the Punto Fijo Pact, which delineated a system that shunned 'extremist' parties, such as the Communist Party, from participation in government affairs, and allowed for the development of a set of institutions designed to allow any problems to be resolved by backdoor negotiations. Therefore, in places where forms of collective organisation had already existed, the lower classes were coaxed into accepting the system of clientelistic appointment to public office. This move was regarded as necessary in order to attract and reward support for established political parties. However, all this achieved was a practical and ideological oligarchy, for such a political system allowed the dominant parties an excessive degree of control over administrative affairs and the judiciary, resulting in a lack of check on government corruption.

Therefore, Venezuelans' belief that their apparently populist-leaning democratic government had become corrupt beyond any redemption while squandering the nation's vast oil reserves for their own benefits is what led to the overwhelming electoral victory of Hugo Chavez. Mass support for Chavez's campaign was rooted in widespread anti-capitalist sentiment that resonated with the former's claims that corruption within the Venezuelan state had become commonplace due to a partnership with American imperialists who, during the 1990s, imposed self-benefiting market reforms throughout most countries pertaining to the Western Hemisphere. Taking advantage of ordinary discontent, Chavez was overly dramatic in his accusations of Washington's interference in state affairs, and used Venezuela's oil income in order to subsidise neighboring states that had been heavily hit by development failures and particularly high oil prices, for example, through the PetroCaribe and PetroAmerica initiatives, with the latter serving as a state project of integrating the state-owned oil companies and promoting regional independence in South America.

That said, despite the overt dissatisfaction of the majority of Venezuela's rich and poor with the amount of money that Chavez was injecting into neighboring countries, he continued to pursue his transformative policies within the Latin American hemisphere. In reality, what this served was Chavez's own reputation-building crusade as the continent's most prominent humanitarian and anti-imperialist, which effectively clouded the administrative inefficiency of the Venezuelan government. For example, the government claimed that by mid-2005, oil production had stood at 3,312,000 barrels per day, of which 352,000 barrels came from the then-privately-operated companies but, according to a report published by the independent consulting firm Stratfor around the same time, the PDVSA had been afflicted by poor management and lack of capital, resulting largely from increased government controls and taxation and aggravated by administrative incompetence. 

What is of even worthier consideration with regard to Chavez's socialist rule is the close relationship that he aimed to solidify with China, whose post-Maoist political ideology has been characterised by a "to get rich is to get glorious'' mantra which, to a certain extent, has led to an eschewing of moral integrity in the sense that China has struck deals with authoritarian regimes, such as Sudan and Iran. The Chavez factor is of paramount importance in Chinese foreign economic policy for it had significant repercussions for Sino-American relations. Venezuela became an important player in Chinese economic affairs as a result of the latter's aims to diversify its oil sources. In turn, Chavez lauded China as being the perfect example of "a world power without being an empire", yet his praise of Maoism and the Cultural Revolution were a source of great shame for Chinese leaders, given that their embarkation on a Western-centric road to modernisation has meant wiping the slate clean of any Communist taint. In other words, for the Chinese, with their growing need for energy, oil was their primary interest in Venezuela; Chavez, on the other hand, saw China more as a source of ideological inspiration and a tool to exploit the sensibilities of Washington political leaders. Yet despite Chavez's intention for Venezuela to become one of China's more prominent oil suppliers in the future, the latter did not hype said conditions as much, for given the former's geographic location, the most obviously tangible markets for Venezuelan oil were North and South America. Consequently, the main force driving China in its relations with Venezuela has been an unfaltering pragmatism. Such a radical departure from the communitarian spirit that Maoist rule had inspired warrants closer critical inspection because it sheds light on developments in socialism and capitalism, as well as on the possibility of having binary socialist-capitalist regimes.

In the spirit of fostering a harmonious society, it would be useful to adopt the consensus that China must succeed in its search of the 'modern' ideal, in order to achieve said goal. Yet what is considered to be 'modern' is almost always associated with Western socio-political ideology. As such, by the dawn of the 19th Century, China was forced to open itself up to trade and modern civilisation. In the following decades, as China was gradually integrated into the modern world-system, it was diminished from one of the pre-eminent cultures of the globe to one of the poorest countries in the world, as well as playing a more peripheral role as a semi-colonial state in the worldwide inter-state system. Consequently, the "to get rich is to get glorious" thought stemmed from China's realisation that to successfully reach the 'modern' revolved around the strengthening of its position on the international political stage of inter-state systems, so that one day China would catch up with the West and become rich and powerful. That said, while one would assume that in order to do so, a nation would adopt economic systems characterised by the competitive drive that is prevalent within Western economies, in China, the rise of modernity required the widescale mobilisation of the oppressed masses that had reached a stage of destitution as a result of Western economic exploitation within the country. In other words, the Cultural Revolution was seen as the first step towards a modern China that would not be restrained by Western chains.

Furthermore, as modern China had emerged from a great popular revolution meant that the post-revolutionary social conditions would have to favour the peasants and workers. Indeed, during Mao's rule, urban workers were provided with an extensive range of welfare and social protections, such as job security, medical care, free education, and housing, which became collectively known as the "iron rice bowl". However, post-revolutionary China very much remained part of the wider transnational capitalist modern world system and both its domestic and foreign affairs were restricted by the same rules and regulations that had been implemented in other modern capitalist states. In other words, China had to constantly participate in a military and industrial competition with Western superpowers. This therefore not only meant that China would have to pursue policies aimed at fomenting industrialisation, but also a social surplus product would have to be extracted from workers' and peasants' labour in order to accumulate capital. Consequently, due to the technical and managerial expertise required, a new privileged and managerial technocracy emerged. Henceforth, the overwhelming support that workers had received prior to China's capital-accumulation adventure was reduced somewhat, albeit neo-Marxist critics have had a tendency to over-inflate the situation of the new Chinese working class as universally exploited. In reality, what had to be achieved was more of a balance between social spending and investment, with revenue accrued from transnational financial operations then being proportionally redistributed to the various sectors of society. The unwarranted scorn that neo-Marxists espouse towards all areas of so-called 'bourgeois' capitalism verges on the ludicrous. For example, Minqi's (2009) positioning of human rights in-between inverted commas when discussing potential gains from workers' political mobilisation indicates a dissatisfaction with the human rights framework proposed by Western nations in order to foster progress and harmony. This is characteristic of Marxists' 'guilty by association'-like typification of all aspects of capitalist societies, which borders on extremism. Simply put, if there had not been a capitalist selection of states to delineate what human rights are but instead a socialist one, their definition of human rights could not have been wholly different, for they are all framed around the moral duty to protect one's right to live, albeit a potential universal socialist human rights discourse could be skewed towards favouring the worker at the expense of others. Therefore, what this discussion has shown is that it is almost impossible to survive the global competitive marketplace through a fully socialist regime of rule that closes its doors to foreign capital, all in the name of resisting imperialism. 

However, the long rivalry between socialism and capitalism has been fervently challenged in recent times via the advent of postmodernism, with many scholars claiming that liberal elements from both the left and right sides of the political spectrum ought to transcend the categorical rigidity that has perpetuated said dichotomy. As such, the final section of this article shall chiefly focus on postmodern and phenomenological conceptualisations of socialism and capitalism, and that the dawn of a new paradigm shift is necessary for social progression. 

Postmodernism, in its broadest form, is a movement that emerged in the mid-to-late 20th Century through media such as architecture, literature, music and cinema, that took issue with modernist understandings of society. More specifically, postmodernism is characterised by an ardent skeptic, and occasionally mocking, attitude towards meta-narratives and the universalising tendencies of ideologies, including through academia. As a result, because of its critique of universalisation, postmodernism has been confronted with derisive leftist opinions purporting that the former actually serves the interests of right-wing hegemony through its opposition to mass structural change. As such, it has been occasionally labelled a 'reactionary postmodernism' or 'postmodernism of resistance' by left-leaning critics due to its apparent cynicism and nihilism. It is somewhat of an ironic criticism though, for most leftist political movements that have led to widespread socio-structural change have in fact turned out to be reactionary in the long-term, by halting both economic progress and implementing the rule of oppressive institutions. Having said that, one may argue that such scathing remarks addressed to postmodernism's apparently apolitical orientation are flawed and misguided. For example, as Ebert (1991) argues, what sets apart 'resistance postmodernism' from 'ludic postmodernism' (mainstream postmodernism that is present in the works of Jean Baudrillard on hyperreality), is the fact that said postmodernism understands the difference between words, languages and social reality as the effect of social struggles. In other words, language acquires its meaning not from its formalised system of grammatical rules, but rather from its place in ''the social struggle over meanings". Consequently, this strand provides a basis for political movements to build transformative agendas. It may be argued even further that the non-dualism that resistance postmodernism and, by extension, mainstream postmodernism highlights as being present in all areas of social life could serve as a productive tool for devising a new, potentially universal socio-political ideology that would surpass dichotomous thinking in order to accommodate for the fluid and constantly changing political and commercial world. 

Such an argument hints at, but also links directly to, the phenomenological proposition that human beings are 'historical'. Alexandre Kojève, elaborating upon Hegel's criticism of equating 'man' and 'thing' i.e. that while worldly objects have eternally fixed laws, man differs from things in both the real and the ideal in the sense that he has no sedimented, eternally unchangeable properties, argued per the phenomenological tradition, that man is "essentially historical". In terms of ontological dualism, what this means is that humans are innately historical products and are thus radically different from the world that they inhabit. For example, while space serves as the ontological determination of nature, time acts counter to it in the sense that negation becomes the ontological determination of man. In simpler terms, when man ceases to negate what he sees in the world around him, then the end of history is reached, for man stops being 'historical', or what he was previously defined as in order to negate it and continue the fluid process of definition. To put this in the context of socialism and capitalism, it is worth considering Stalin's seminal 1907 essay titled "Anarchism or Socialism?", which posits Kojève's ontological dualism as the pre-existing condition of historical time, in terms of Orthodox Marxism acting as the dynamic between material conditions and human consciousness.

The reflection of Kojève's Hegelian phenomenology is reflected in Stalin's essential argument that the disjointed nature of material conditions and human consciousness defines pre-socialist times, yet this disjunction is not stable, but rather may decrease or intensify according to circumstance, and it is at peak intensity that consciousness, or negation per Kojève's argument, changes. Stalin wrote that not only are they interchangeable but also, while material conditions may change as a result of technological progress, consciousness does not necessarily go hand-in-hand with it, thus making possible further negation, and thus making possible historical change. In other words, what Stalin aimed to convey was that as long as consciousness and material conditions remain fragmented, socio-political change will persist. Quite ironically, Stalin's phenomenological argument that change is possible only insofar as materialism and consciousness are divergent, could actually pave the way for a transcendence beyond the socialist-capitalist dichotomy, and as of yet, it is difficult to determine what future socio-political systems not pertaining to this typology could look like, for we still find ourselves within the confines of dichotomous reasoning. What is therefore important is that negation continues to exist albeit, contrary to Stalin's argument, despite the fact that change is brought about by dualism, perhaps Kojève's phenomenological stance could be re-thought in order to foster a more harmonious view of social progress. For it is arguably due to the ontological dualism that Stalin espouses that reactionary movements, more often than not influenced by left-wing ideology, prevail as a result of the fitful relationship between material conditions and human consciousness. 

In conclusion, this article has debated an array of academic viewpoints in order to exemplify the problematic nature of the socialist/capitalist opposition, as well as the fruitless criticisms of neo-Marxists. Perhaps we have reached a stage where this conflicting dualism has run its course, and it is important to abandon the rigidity in common socio-political categorisation, in order to achieve a theoretical framework of society that could very well grasp the ever-changing nature of the 'modern' world. 


  1. The word "rigidity" struck me in the beginning of this post. That's the culprit, to me. Unbalanced gov't. tend to micromanage everything, leaving contemporaneous events & individuality out of the picture. It becomes so tediously heavy it collapses under its own weight (as it should). In the past there may have been a need to over-regulate ourselves but that time is past (except in relation to how we treat our common, global environment). By sheer number we have to accept the expansion of everything else that comes along with it. But our wannabe "owners," the wealthy want to decide who they let in their world. But the world has grown & progressed enough to realize they can stand up & have a say & that it's THE most important force on our planet today. BTW, if this was for a class, I give you an 'A.'


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