By FERNANDO NOGUEIRA DA COSTA*
The system is characterized by periodic crises, disruptive innovations and rapid change, with emerging patterns of growth and collapse. Stability is usually a temporary exception, not a rule.
1.
To carry out an analysis of the contemporary capitalist system based on the principles of complexity, instability and intersubjectivity, it is necessary to go beyond traditional linear and reductionist models to incorporate a more dynamic and interconnected approach. In the context of the new paradigmatic science, the emergent and multifaceted nature of this complex system is emphasized.
Methodologically, I will structure the analysis below into three parts: constituent elements, interconnections and purpose of the capitalist system.
The elements are the individual components that make up the system. In contemporary capitalism, these elements include, among others: (i) transnational companies and corporations: the main economic agents organizing the production and sale of goods and services, on a national and international scale, coordinating large global supply chains; (ii) workers and consumer families: they act as productive labor and consumers of goods and services, influence the costs of companies and aggregate market demand and accumulate surplus income for financial enrichment.
(iii) States and governments: regulate the system, intervene in crises, determine fiscal and monetary policies, participate as major economic agents through state-owned companies, including exporters, and issue public debt securities; (iv) banks and other financial institutions: notably the stock market of transnational companies, are platforms for the allocation of capital in the world economy, speculation on the market values of different existing assets and the accumulation of financial wealth of workers and capitalists, integrating institutional investors such as pension funds, international investment banks and mutual funds (hedge funds).
(v) Technology and digital innovations: drivers of productive transformation through enterprises, redefining labor relations, consumption and global trade; (vi) environment and natural resources: material base from which inputs for production are extracted, but also a natural element suffering from the harmful consequences of the productive system; (vii) international institutions and supranational organizations: IMF, World Bank, WTO, UN, etc. regulate global governance and mediate economic conflicts; (viii) social movements and non-governmental organizations (NGOs): represent agents of contestation and social transformation, reacting to inequalities or injustices generated by the system through identity struggles.
These elements are interdependent. Their capitalist systemic behavior cannot be understood in isolation, as they are in constant interaction with each other, generating effects of feedback or feedback.
Interconnections are the dynamic relationships between the elements of the system. They produce emergent and often non-linear behaviors. The main interconnections of contemporary capitalism include: (a) global capital flows: capital flows freely between markets, productive sectors and countries, driven by speculation on market values, investment policies and in the face of economic crises. Investment decisions in a hegemonic country, such as the US or China, have global impacts such as the GCF 2008; (b) Global Value Chains (GVCs): products are produced in several countries with economies of scale in production systems of their fragmented components, involving cheaper labor, accessible technology and natural resources from different parts of the world further up the equator.
(c) Public policies and regulation: local governments influence the market through regulations, fiscal and monetary policies. In contrast, corporations influence governments through LOBBY and campaign financing; (d) technological innovations and their externalities: technological innovation redefines the interactions between capital and labor (such as automation, robotization and Artificial Intelligence), altering the distribution of income and employment, while being able to create markets and destroy obsolete economic sectors.
(e) Environmental interdependence: the relationship between the productive system and the environment is critically connected. The extraction of natural resources generates externalities (such as climate change and biodiversity loss) and these feed back into the system through global social and economic impacts; (f) inequality and social conflict: the contemporary capitalist system generates and sustains social and economic inequalities that feed cycles of social conflict, resistance movements and redistributive policies, which in turn affect the conditions of political and social stability of the system.
2.
These interconnections in contemporary capitalism are characterized by feedback loops – feedback loops, where the output of a system is used as input for future operations – both positive and negative. They amplify or stabilize certain behaviors.
For example, globalization increases interdependence between countries and amplifies crises. This was the case with the Great Financial Crisis (GCF) of 2008 and the “pandemonium of the pandemic” of 2020-2021 with trade and inflationary shocks.
The purpose of the contemporary capitalist system is seen, in a reductionist or Marxist way, as simply maximizing profit and capital accumulation. However, by adopting a more complex view, we understand this purpose to be multiple, adaptive and emergent. I would dare to say: ungovernable and/or uncontrollable.
The immediate goal of transnational corporations and global stock market participants is the persistent accumulation of capital through the exploitation of resources, labor, and technological innovation. Therefore, contemporary capitalism is continually searching for new markets, resources, and labor in order to expand, being attracted by the deregulation of borders and norms in a global economic integration.
Part of the dynamism of capitalism lies in its ability to generate disruptive technological innovations. They restructure the economy and society, creating automated forms of production and consumption via e-commerce, for example.
It seeks to create and meet the demand for household consumption. In turn, market expansion fuels new cycles of production, innovation and accumulation.
Although the system generates periodic crises and instability, according to fluctuations between the values of existing assets and the costs of producing new assets, it also has an adaptive purpose of self-sustainability. Crises are seen as opportunities for restructuring and innovation within the system, suggesting a resilient capacity for adaptation.
The system's purpose is challenged by social movements and reacts in systemic re-evolution without central command. Social movements, environmental issues and debates about inequality are reshaping the paths of capitalism, as internal and external forces pressure it to adapt to new social, political, cultural, demographic and natural realities.
In order to follow the principles of complexity, instability and intersubjectivity, the analysis of this system should not assume that it is seeking economic equilibrium and/or has a deterministic logic of linear progress. Contrary to what is said by economic or Marxist orthodoxy, it is necessary to recognize that it is transcending traditional assumptions.
Contemporary capitalism is a highly interconnected system, with multiple agents, interests and forces acting in non-linear ways. Small changes at one point in the system (such as government policies or technological innovations) often have large and unpredictable global impacts.
The system is characterized by periodic crises, disruptive innovations and rapid change, with emerging patterns of growth and collapse. Stability is usually a temporary exception, not a rule.
It is shaped by the perceptions, expectations and decisions of diverse agents with conflicting interests, including governments, corporations, institutional investors, workers and consumers. Values, ideologies and risk perceptions, for example, influence the behavior of agents, reflecting an intersubjective and adaptive nature of the system without being a “command economy”.
For effective intervention in the contemporary capitalist system, it is essential to understand that it is complex, adaptive and changeable. Intervention, even local, must be thought of in a systemic way, taking into account global interconnections, the emergent nature of behaviors and the dynamics of feedback generating instability.
Any attempt at intervention or regulation must be aware of the limitations of predictability and the potential for unintended consequences. The actors within the system, whether governments, corporations or social movements, act interdependently and with varying (and changing) degrees of influence and power.
*Fernando Nogueira da Costa He is a full professor at the Institute of Economics at Unicamp. Author, among other books, of Brazil of banks (EDUSP). [https://amzn.to/4dvKtBb].
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