In our New Moment, New Movement essay, I attempted to describe the basis for integrating anti-militarist politics into a larger progressive program. I made three points: first, that the military budget needed to be tackled head-on in order to restore the social safety net; second, that militarism was of one piece with a repressive authoritarianism that held back all movements; third, that in the twilight of neoliberalism the interests of the U.S. working class were, at a material level, more deeply aligned with the anti-militarist cause than previously. This third point has been the subject of discussion internally. How direct and tight is that alignment of interest, and what contradictions might afflict it? In a series of posts, I will explore this by reviewing the ideas of Giovanni Arrighi, Sam Gindin, and Leo Panitch. It is unfortunate that these scholars, who stand at the summit of the field of political economy, do not engage substantially and directly with theories of race and gender. There is still much to be learned from their work.
Let's start with two rather well-known bits from Karl Marx's Capital. The first, Marx's general formula for capital: M - C - M'. The capitalist brings her money (M) to the marketplace, buys some raw materials, machinery, and labor-power (C, for commodities). After setting it all to work, voilá -- she sells the finished products for more money (M') than she started with.
The second bit: the tendency towards concentration and centralization of capital. Concentration -- small capitals (business firms, if you like) grow into larger ones; and centralization -- a multitude of small firms are absorbed into a few very large ones. The compulsion to accumulate and the law of 'survival of the fittest' together result in monopoly power.
What if these pieces of Marxist theory are applied to the capitalist system at the global level? This is precisely what Giovanni Arrighi does, based on the centuries long trajectory of capital, in his books The Long Twentieth Century and Adam Smith in Beijing. Rather than a description of the business process of an individual capitalist, Arrighi sees M - C - M' as the structure of a global-scale cycle of capital accumulation.
Arrighi identifies four major cycles, each centered on and dominated by a different political entity: Genoa, Holland, the U.K., and the U.S. The initial phase of a cycle begins when the economy of the emerging center pours the capital it has previously accumulated into expanding commodity production and international trade (M - C). Inevitably, this growth runs into limits as inter-capitalist conflict intensifies and commodity production begins to be less and less profitable. Surplus capital is increasingly routed not into commodity production but into financial markets (C - M'). This provides the hitherto declining center with renewed economic prosperity and political dominance. It does not, however, resolve the problems that drove capital out of commodity production in the first place, and during this belle époque a new, larger region begins to ascend as the future center of the capitalist world-system.
It's a provocative and elegant thesis, and one that leads us down all kinds of interesting paths. From this perspective, the rise of financial capital in 14th century Florence, and the social polarization that resulted from it, is an archetype for the contemporary ascendancy of Wall Street and the dramatic rise of income inequality.
The first key result of Arrighi's theory is that geopolitical struggles and capitalist competition are tightly integrated in one framework. The central contradictions of a historical period are as much geopolitical as they are economic. The crisis of the U.S. economy in the 1970's was a crisis of hegemony.This is the main thrust of Arrighi's critique of Robert Brenner's account of the U.S. postwar economy.
Brenner argues that the U.S. economy, indeed the global economy, rests on a structurally weak manufacturing sector. After the Second World War, the rapid industrial development of Japan and Western Europe proved crucial outlets for U.S. capital investment, generating an unprecedented capitalist golden age. But once these laggards eventually caught up with the U.S., the manufacturing sector became burdened with over-capacity, leading to intensified competition and depressed profits.
The rise of neoliberalism was as much about global power as it was about ruling class wealth
Arrighi agrees that this is an important part of the story, but claims that Brenner accomplishes "a virtual eviction of world politics from the analysis of capitalist dynamics." Both the economic problems faced by the U.S. capitalist class, and the policies adopted by the ruling class in response, were driven by challenges to U.S. hegemony and legitimacy.To take three examples: the problem of inflation which led Nixon to end fixed currency exchange rates was ultimately rooted in spending on the Vietnam War, the run on the dollar that drove up the price of gold in 1980 sprang from "Arab fears over Afghanistan and Iraq", and the wave of decolonization and the Yom Kippur War gave OPEC members the confidence to raise oil prices.
The rise of neoliberalism, then, should be understood not simply as a response to lower rates of profits, as it is portrayed in touchstone accounts such as David Harvey's. It was as much about global power as it was about ruling class wealth. And, while Arrighi agrees with Brenner that neoliberalism -- Reaganomics, the monetarist counter-revolution, financialization, etc. -- has not dealt with the structural problems of global manufacturing, it did restore U.S. power and advance its political objectives.By the end of the century, the Soviet Union had collapsed under the financial burden of the arms race and the political confidence of the Third World evaporated in the scramble for funding from the IMF and World Bank. Domestically, the workers' movement was dealt one defeat after another.
This would seem to provide a basis for uniting working-class movements in the U.S. with anti-imperialist struggles around the globe, with a neoliberal-imperial order as a common enemy. But the U.S. working class' relationship to imperialism is not so simple. I leave aside here the direct economic links many communities have to the military-industrial complex, and consider some more diffuse impacts of the neoliberal-imperial order.
Peculiarly, the United States' belle epoque has turned it into the world's leading debtor. In contrast to the British Empire, which was able to use its control over India's economy to finance itself, the United States empire is funded by borrowed money. The neoliberal-imperial order sucked the world's surplus capital into U.S. markets. Welfare-state Keynesianism was replaced by asset-bubble Keynesianism, which propped up the U.S. working class' standard of living, meager as it was. The other prop was the global division of labor and anti-inflationary policies. A floundering labor movement meant that workers would have access to goods primarily through lower prices, or increasing indebtedness, rather than higher wages.
The United States empire is funded by borrowed money
It remains my opinion that the U.S. ruling class will not concern itself with a stagnant domestic economy while it is able to advance its economic and geopolitical prerogatives around the globe. But, a direct challenge to the United States' imperial privilege of drawing essentially unlimited capital from the rest of the world, would therefore probably not be experienced as a moment of working-class emancipation. Instead, it would threaten to detonate the basis of the domestic economy. Unless, of course, we have the strength to demand an alternative order.
In the next post, we'll take a deeper look at the relationship between finance and militarism in the history of capitalism.
The views expressed here are those of the author and do not necessarily represent those of the entire War Times project
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