A society cannibalizing itself: symphony musicians kicked to the curb, school closings hitting Black and brown communities in Philadelphia (23 schools) and Chicago (54 schools), the overthrow of democratic governance in Detroit, attacks on civil servants in nearly every state. I had promised an explanation of why these scenes may be symptoms of imperial decay. Here it is.
If you think the people running this economy don't care about you, you're right. If capitalism is typified by the accumulation of profit derived from the exploitation wage labor, then the working class has an ambivalent relationship to the system. On the one hand, it is exploitative, as well as unstable; on the other hand, being exploited as a wage laborer is how you pay the bills. Furthermore, capitalism's compulsion to accumulate and expand generates more wealth, albeit concentrated in few hands.
But what if this is not the only, or primary way, that capitalists generate profit? In The Predator State, James Galbraith tracks the emergence of a class of oligarchs predisposed to generating as much wealth as quickly as possible, while on the look out for a higher paying executive position.
"Predation, fraud, and violence" are in fact central to the functioning of capitalism today
At the same time, globalization weakened organizations that had typically served as a counterbalance to corporate greed -- unions first and foremost. Galbraith argues that, without countervailing forces, the new oligarchs have every reason to resort to simple looting - what he terms predation - rather than engage in the tedious business of capital accumulation by standard means.
In David Harvey's book, the New Imperialism, he describes a similar phenomenon but from a different angle. He argues that "predation, fraud, and violence" are in fact central to the functioning of capitalism today (144). The name he gives to this phenomenon is “accumulation by dispossession.” look out for a higher paying executive position. At the same time, globalization weakened organizations that had typically served as a counterbalance to corporate greed -- unions first and foremost. Galbraith argues that, without countervailing forces, the new oligarchs have every reason to resort to simple looting - what he terms predation - rather than engage in the tedious business of capital accumulation by standard means.
Harvey, of course, is not the first to make this claim. He is actually just renaming Marx’s “primitive accumulation,” in order to emphasize the fact that those particular forms of accumulation are ongoing. In this regard, he follows the likes of Maria Mies, Arundhati Roy, Rosa Luxemburg, and Hannah Arendt. Harvey is quite fond of quoting Arendt, and she does provide a wonderful description of how this all works:
[The bourgeoisie realized] for the first time that the original sin of robbery, which centuries ago had made possible ‘the original accumulation of capital’ (Marx) and had started all further accumulation, had eventually to be repeated lest the motor of accumulation suddenly die down.’
Accumulation by dispossession is one way for capitalism to deal with its recurrent contradictions: overaccumulation, underconsumption, global imbalances, etc. Harvey provides a partial list of processes that fall under this category: The commodification and privatization of land and the forceful expulsion of peasant populations; the conversion of various forms of property rights (common, collective, state, etc.) into exclusive private property rights; the suppression of rights to the commons; the commodification of labour power and the suppression of alternative (indigenous) forms of production and consumption; colonial, neo-colonial, and imperial processes of appropriation of assets (including natural resources); the monetization of exchange and taxation, particularly of land; the slave trade; and usury, the national debt, and ultimately the credit system as radical means of primitive accumulation. (145)
The bourgeoisie thus are able to grab up resources at bargain rates. By making inputs for capital accumulation available for low cost, accumulation by dispossession opens up a whole new front for profitable capital investment. The motor of accumulation sputters back to life.
What accounts for the tenacity of this mode of operation despite being rocked by crisis and stuck in stagnation? The prime suspect is, in most analyses, the
At the same time, finance's imbrication in the imperial workings of global capitalism means that they are more than willing to write off the economic future of the U.S.
Finance has been central to the dynamism of capitalism in the entire postwar era
As I've written elsewhere: "Why worry about deindustrialization and U.S. workers' mounting debts when you can privatize water in Latin America, grab land in Africa, manipulate currencies, and make money hedging risk for multinational corporations?"extraordinary power of financial capital. They have proven willing to sabotage any reform, no matter how moderate, in order to double-down on neoliberalism. But I think it is also incorrect to view financial capital as merely parasitic on a supposed real or productive economy. As Gindin and Panitch argue in their book, The Making of Global Capitalism, finance has been central to the dynamism of capitalism in the entire postwar era, and especially since the stagflation crisis of the 70s.
How do we assess the Obama administration’s relationship to predatory capitalism? On offer from his State of the Union address: an increase in the minimum wage, a federal program to rebuild infrastructure, the revitalization of manufacturing, universal pre-K education, set against secretly-negotiated free trade agreements, acceptance of so-called entitlement reform, and the pledge to not increase the deficit by a dime. Contradictory and bewildering, perhaps, but more than a simple reflection of contesting interest groups within the Democratic Party coalition.
In 2009, I thought that the economic and political elites that had cast their lot with Obama did so to break with the worst practices of US militarism and neoliberalism. I speculated that these elites would attempt to restructure the economy in ways that would be beneficial to the working-class in the short term, but which would weaken the collective organizational and fighting capacity of the class in the medium and long-term. Over the next three years, I became convinced that even this estimate was overly optimistic; in fact, the most powerful capitalists that had supported Obama -- ensconced, quite securely after their bailout, in their Wall Street boardrooms -- opposed every economic reform, no matter how anemic. They quickly flipped sides, and opted for an alliance with the Tea Party; although key ruling class institutions such as the Federal Reserve or International Monetary Fund clamored, in their own way, for economic stimulus, no significant section of the capitalist class developed an alternative economic vision to the status quo. The chattering classes sold the slow and stagnant economic burn as a recovery. The ruling class was, I concluded, unwilling, inept, or corrupted by decadence. Which one it actually was did not matter a great deal.
Global economic dynamics significantly shapes the domestic politics of austerity on both sides of the Atlantic. The strangulations of Greece and Ireland are intimately related to Germany's position as a regional imperial power; the UK's push to reduce the standard of living of their working class aims at transforming its economy from one supported by domestic consumption to one that exports products created by a globally competitive low-wage workforce. In the US, the ruling class sees itself as responsible not simply for buttressing the profits of its own capitalists, but also for managing the system of global capitalism.Now, in 2013, I am not so sure. Of course, the capitalists that backed Romney might as well have their heads in the ground.
Assessing the Obama's relationship to austerity politics is more complicated, and needs to be understood in terms of the ruling class' goals of maintaining US global hegemony
Their program of austerity is quite simply to return to the predator state, in order to use access to state power to transfer wealth upwards by any means necessary. Assessing the Obama's relationship to austerity politics is more complicated, and needs to be understood in terms of the ruling class' goals of maintaining US global hegemony.
Several macroeconomic trends undermine the capacity of the US ruling class to play this role. Stagnant wages meant households relied on debt for their consumption; combined with the US trade deficit, this meant that the US economy was essentially financed by the rest of the world. Declining amounts of corporate revenue went back into investment, diverted instead to sky-high CEO salaries and shareholder dividends. Demand-side stimulus, whether of the asset bubble variety of otherwise, was a necessary prop under these circumstances, but contributed to the volatility of finance capital, upon whose international centrality the whole system rested.
So whereas I used to think that our ruling class was stupid or short-sighted, now I believe their actions are rather consonant with their imperial project: long-term deficit reduction, upping domestic investment and manufacturing capacity, a modest increase in the minimum wage. I don't think their attempt to reshape the economy will be successful without far more radical use of state capacity, or that it will provide another 'capitalist golden age' for the working class. But we can expect that the administration will neither advance a European-style austerity agenda nor --need it be said -- a populist one. Its reference points are not merely corporate profits nor the fate of the masses, but that of capital as a whole.
 Sections of this article are taken from book reviews that will be published in the future on War Times
 Seymour, Richard. "Why the British elite insist on more austerity." The Guardian. 27 November 2012.
 Gindin, Sam and Panitch, Leo. "Superintending Global Capital." New Left Review II 35.
 Extensively explored in Dumenil and Levy. The Crisis of Neoliberalism.
The views expressed here are those of the author and do not necessarily represent those of the entire War Times project
Add a Comment
Dear Reader: Please help us keep our comments section a safe space of respectful and healthy dialogue that furthers the work against militarism and toward justice. Comments will be moderated.