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MARXISME OG NYEREMARXISTISK TEORI:

KRITIKK AVKAPITALISMENS

POLITISKE ØKONOMI

Alf Gunvald Nilsen –

Høsten 2010

http://www.zonezero.com/editorial/diciembre99/photo2.html

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“Market Democracy” – The End of History?

“The most remarkable development of the last quarter of the twentieth

century has been the revelation of enormous weaknesses at the core of the world's seemingly strongdictatorships … [L]iberal democracyremains the only coherent politicalaspiration that spans different regions

and cultures around the globe. Inaddition, liberal principles ineconomics — the “free market” —have spread, and have succeeded inproducing unprecedented levels of material prosperity, both inindustrially developed countries andin countries that had been, at theclose of World War II, part of theimpoverished Third World. A liberalrevolution in economic thinking hassometimes preceded, sometimesfollowed, the move toward political

”

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The End of History – A Phyrric Victory?

The idea of “the end of history” and the triumphalismit expressed emerged in thecontext of the collapse of three variants of state-centred economies …

Twenty years later, the

context is a different one –the recent financial crisis,recession, and subsequentausterity policies have givenrise to a wave of popularunrest and academic criticism

of the “pensée unique” of theneoliberal era …

This in turn is an expressionof how the claim that “TINA”has increasingly been

challenged by the claim that“Another World is Possible”

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Marx and the Marxist Critique of Capitalism

In this context, Marx and the Marxistcritique of capitalism gains new

importance and relevance.

But what are the defining features of Marx’s theorization of the political

economy of capitalism?

QUOTE

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Capitalism as a Historical Mode of Production

In Marx’s materialist conception of history – historical materialism– capitalism is a particular mode of production, i.e. a particular

way of structuring the relation between forces of production and

relations of productionThe Feudal Mode of Production:

• The direct producer is (i)tied to feudal obligations,

and (ii) in possession of means of production

• Surplus is acquiredthrough extra-economicmechanisms

• Local economies are self-sufficient, andcomplemented only bylimited exchange

• The economic dynamic is

characterized by ”simplereproduction” – most of the

The Capitalist Mode of Production:

• The direct producer is (i) freefrom feudal obligations, and (ii)

separated from the means of production

• Surplus is acquired throughpurely economic mechanisms

• Generalized commodity

production – the activity of production yields commodities

that are exchanged onextensive markets; labour

power is a commodity

• The economy is characterizedby ”expanded reproduction” –Robert Brenner: ”Agrarian Class Structure and Economic Development in Pre-industrial Europe”

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Contrary to the claims of theclassical political economy of AdamSmith and others, Marx emphasized

the historicity of capitalism

Capitalism was not a trans- orahistorical expression of the human

propensity to “truck, barter andtrade”, but a historically specific

way of organizing the social

economy that came into being asthe result of the determinedcollective action of specific socialclasses at a specific conjuncture

where a previous mode of production went into decline and

eventual collapse due to theworkings of its internal

contradictions and conflicts

This was also a political point: If capitalism is historical, it is not

eternal; if capitalism has a historicalbeginning, it is also conceivable

“The solitary and isolatedhunter or fisherman, whoserves Adam Smith andRicardo as a starting point,

is one of the unimaginativefantasies of eighteenth-century romances a laRobinson Crusoe …This isan illusion and nothing butthe aesthetic illusion of the

small and bigRobinsonades. It is, on thecontrary, the anticipationof “bourgeois society,” …The prophets of theeighteenth century, onwhose shoulders AdamSmith and Ricardo werestill wholly standing,envisaged this 18th-century individual … as an

ideal whose existencebelonged to the past. They

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Primitive Accumulation: The Historical Origins of Capitalism

The Capital – Labour Relation

Capital: The owners of means of production

Labour: The sellers of labour power

This social relation is the cornerstone of the capitalist mode of production and the process through which it was createdconstitutes the historical origins of capitalism: primitive

accumulation

Primitive accumulation was a collective act of force – supportedby the state and its legislative/coercive apparatus – that

converted “social wealth” into “private capital” and created theworking class” As a matter of fact, the methods of primitive accumulation are

anything but idyllic … The process, therefore, that clears the wayfor the capitalist system, can be none other than the process

which takes away from the labourer the possession of his meansof production; a process that transforms, on the one hand, the

social means of subsistence and of production into capital, on theother, the immediate producers into wage labourers. The so-

called primitive accumulation, therefore, is nothing else than thehistorical process of divorcing the producer from the means of

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“Accumulate, accumulate! That is Moses and the prophets!“

Capitalism is characterized by a dynamic of “expandedreproduction”

M - C … P … C' - M', M' - C' … P … C'' - M'' etc.

MP

LP

MP’

MP’

- Intensive expansion: The market logic extends inwards –spheres of society and human activities that have been outside

the domain of the market are incorporated into the orbits of capitalist accumulation

- Extensive expansion: The market logic extends outwards – toinclude areas and peoples that are not part of market exchange

and commodity production

A capitalism that does not expand is a capitalism in crisis – Acrisis is a conjuncture in which (a) a particular way of organizing

capitalist accumulation encounters a barrier, (b) where there isconflict over how this barrier should be overcome – Crises are

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So far we have an abstract theoretical model of the politicaleconomy of capitalism – this is what Marx constructed in Capital and he constructed his model on the basis of an examination of

the locus classicus of industrial capitalism: England

NB! Marx objected to the usage of his “historical sketch of thegenesis of capitalism in Western Europe into an historico-

philosophic theory of the marche generale imposed by fateupon every people, whatever the historic circumstances in

which it finds itself” – this points towards an awareness that

the development of capitalism will be uneven and variegatedacross geographical space and historical time

We have to move from an analysis of abstract capitalism to ananalysis of historical capitalism – i.e. an analysis of phases

in/of capitalist development, how these phases are shaped bythe balance of power between social forces, and how shifts

from one phase to another are associated with crises andpolitical struggles

”The history of this expropriation, in different countries,assumes different aspects, and runs through its variousphases in different orders of succession, and at different

periods. In England alone, which we take as our example, has

it the classic form.”

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Understanding Historical Capitalism

In order to analyze the trajectories/epochs of historicalcapitalism, we need a conceptual apparatus

• Accumulation strategies: Ways of organizing production andaccumulation which define an economic growth model completewith extra-economic preconditions and a general strategyappropriate to its realization (Bob Jessop: State Theory )

• Forms of state: The characteristic activities undertaken by astate in a certain historical phase in order to achieve a certainset of results for society/economy (Robert Cox: Power,Production and World Order )

• Hegemonic project/Historical bloc: (i) A political project thatsecures unity between (a) factions of capital and (b) dominant

and subaltern classes, and (ii) a configuration of social forcesand corresponding balance of power that the state rests upon,and which defines in practice the limits and parameters of theactivities of the state (B. Jessop/R. Cox).

• World hegemonies: The power of a state to exercise functions

of leadership and governance over a system of sovereignstates as a consequence of its ability to leading the system of

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AS

FS

HB

WH

Liberalcapitalism

Organizedcapitalism

Neoliberalcapitalism

Small-scalefactory

production,colonial divisionof labour

The liberal state,the colonial state

Industrialbourgeoisie and

landowningaristocracy

Pax Britannica –British worldhegemony

Fordism, import-substitution

industrialization

The Keynesianwelfare state, the

developmentalstate

Industrial capitaland organizedworking class,“development

alliance”

Pax Americana –US world

hegemony

Flexibleaccumulation,

global commoditychains

The neoliberalstate

Transnationalcapitalist class

Renewed UShegemony?Hegemonictransition?

David Harvey – The Condition of Postmodernity

Giovanni Arrighi – The Long TwentiethCentury

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Liberalcapitalism

Organizedcapitalism

Neoliberalcapitalism

Cycles of crisis, struggle and“disembedding”/“reembedding” in the

political economy of historical

capitalism

Economic crisis – 1870s to1890s; rise of workers

and anticolonialmovements; WWI;economic crisis – 1930s;

WWII

Economic crisis – late 1960sand throughout 1970s; rise of

new social movements on aglobal scale; emergence of theNew Right

Historical class compromise,decolonization –

“reembedding” of thecapitalist system

Restoration of class powerof capital – “disembedding”of the capitalist system

Sandra Halperin – War and Social Change in Modern Europe

Beverly Silver – Forces of Labour David Harvey – A Brief History of Neoliberalism

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The Political Economy of Organized Capitalism

Economiccrisis

Radical socialmovements

Two World Wars

Systemic demands for reform – Shift from “liberal” to“organized” capitalism

Organized Capitalism

An international order of “embedded liberalism”,anchored in:

a)American hegemonyb)The Bretton Woods system

Global North/”Labour-friendly

regimes”:a)Mass production for massconsumption (Fordism)b)State intervention in economicmanagement and welfare

(Keynesianism)

Global South/”Development-

friendly regimes”:a)Import-substitution

industrialization/agriculturalmodernization

b)Developmental state

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The central concern of the 1944 Bretton Woods conference wasto create a system of global governance that would prevent the

political and economic disasters of the period 1930-1945

Outcomes

“Reembedding” of globalfinance – the dollar/goldstandard

“… world money came to beregulated by the US FederalReserve System acting inconcert with selectedcentral banks of other

states, in sharp contrast tothe nineteenth centurysystem of private regulationbased on and controlled bythe London-centredcosmopolitan networks of

haute finance”

Institutional framework of governance:

• IMF• World Bank

• GATT

These institutions werecharacterized by western

dominance, but:

“… the chief instrument of worldmarket formation under US

hegemony, the [GATT], left in thehands of governments in general,

and of the US government inarticular, control over the ace

Giovanni Arrighi – The Long Twentieth Century

E. Helleiner: States and the Re-Emergence of Global Finance

Ray

Kiely:

ClashofGlo

balizations

a

nd

TheNewPo

liticalEcono m

yof

Developm

ent

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“Anatomy” of the Development-Friendly Regimes of theGlobal South

Developmentalism: A national project of development, centredon social and economic modernization

Agricultural modernization:

• Land reforms

• Green revolution

Import-Substitution Industrialization:

• Promotion and protection of domesticindustry

• Reduction of import dependence

Developmental State:

An interventionist state that gave direction to, mobilizedresources for, and coordinated national development

strategiesDevelopmentalism was based on a compromise – a

“developmentalist alliance” – between domestic elites anddomestic popular classes, where the former retained their

power and property after decolonization and the latterbenefited from public employment, subsidized forms of

consumption, and expanded public services John Walton and David Seddon: Free Markets and Food Riots

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The Trajectory of Organized Capitalism

1950s-60s = The Golden Age of Capitalism, i.e. anera of high growth, improvements in standards of living, and social stability across the North-South

divide

Late 1960s-1970s: A period of transition characterized byeconomic crisis and the revival of radical social movements

“Stagflation” inthe advancedcapitalistcountries – theexhaustion of Fordism

Erosion of UShegemony in global

economy – thecollapse of theBretton Woods

system

New socialmovements in

North and South– the end of

popular consent

“One condition of the post-war settlement … was that the economicpower of the upper classes be restrained and that labour beaccorded a much larger share of the economic pie … To have astable share of an increasing pie is one thing. But when growthcollapsed in the 1970s … then the upper classes everywhere felt

threatened … The upper classes had to move decisively if they were

to protect themselves from political and economic annihilation.”David Harvey – A Brief History of Neoliberalism

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The decisive move came in the form of neoliberalism – a policyregime which restructured the relationship between state and

market that had prevailed during the era of organizedcapitalism, and that disembedded the economy from the social

regulations and restrictions of that era

Neoliberalism rose to global hegemony during the 1980s and1990s through New Right and New Labour regimes in the

global North and structural adjustment in the global South andthe post-communist states

Accumulation strategies:

• The rise of flexibleaccumulation

• Financialization and thecentrality of shareholdervalue

• The rise of atransnational production

process

Form of state:

• Restrictive monetary and fiscalpolicies

• Reduced levels of stateintervention

• Reduced public expenditures

• Tax cuts

• Privatization/liberalization

NaomiKlein

:TheShockDoctrine

DumenilandLevy–CapitalResurgent

How do we analyze neoliberalism and the phaseof capitalist development it has given rise to?

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David Harvey – Neoliberalism as the Restoration of ClassPower

After three decades of neoliberalrestructuring, we are left with:

- Increased levels of inequalityand poverty

- Unprecedented levels of unemployment

- Steady decline in growth rates

But:“…neo-liberalism has been a

huge success from the standpointof the upper classes … If the

main achievements of neo-liberalism have been

redistributive rather thangenerative, then ways had to befound to redistribute wealth and

income either from the mass of the population towards the upper

classes or from vulnerable toricher countries”

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Accumulation by Dispossession

“The practices that restored class power to capitalistelites … are best described as an ongoing process of accumulation by dispossession that rose rapidly to

prominence under neoliberalism”

Neoliberalism has been a political project for the restorationof the class power of capital over labour – It has worked byreversing the gains made by social movements across the

North-South divide in C20

Privatization

FInancialization

Crisismanagement

Stateredistributio

n

The key effect of accumulation by dispossession is toredistribute existing social wealth rather than generate newsocial wealth – This is done by converting assets that were

previously the common property of the public – typically throughstate ownership or in the form of a social wage – to private

property and the realm of capital accumulation – The outcome =Increase in inequality and erosion of the position of citizen in

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The fall of Communism and the developmental states in theglobal South + The globalization of global

production/commodity chains =

The culmination of the extensive expansion of capitalism

But – does this entail that the global capitalist economy ischaracterized by a process of convergence?

“Countries that align themselves with the forces of globalization and embrace the reforms needed to do so,

liberalizing markets and pursuing disciplined macroeconomicpolicies, are likely to put themselves on a path of convergencewith advanced economies, following the successful Asian newly

industrializing economies (NIEs).”

International Monetary Fund

VS.

“… after more than thirty years of developmental efforts of allkinds, the gaps that separate the incomes of the East and of the South from those of the West/North are today wider than

ever before.”

Giovanni Arrighi

The Myth of Global Convergence

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The global division of labour – and with it, global capital flows– are characterized by patterns of concentration and exclusion

(Core – Periphery structures)

- Production: Rich countries dominate the most profitable

parts of production/distribution/marketing; poor countries inthe South are concentrated in low value-added segments of

global production/commodity chains.- Trade: Over 90% of manufactured imports still come fromadvanced capitalist countries in the North; Africa and Latin

America’s share of world trade and merchandise exports hasdecreased since the 1960s.

- Countries in the North receive the majority of FDI (2/3); FDIto the South is concentrated to a few “emerging markets” in

East Asia and Latin America.- Global financial flows are increasingly directed at the South,

but as with FDI remain targeted towards a few select“emerging markets”.

“… developing countries face a problem not because they areinsufficiently globalized or integrated into the world economy,

but because the form that such integration takes serves to

reinforce their (relatively) marginalized position”

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Neoliberalism, Financialization, and the Current Crisis

“Neoliberalization has meant, in short, the financialization of everything”

David Harvey

The shift from organized capitalism to neoliberal capitalism wassignalled by the “disembedding” of global finance from the

Bretton Woods system, in which financial flows were subject tostate regulation and capital controls – and since then the global

financial system has expanded tremendouslyFrom 1980 to 1995 international currency transactionsincreased six times more than world trade – the ratio of currency transactions to total world exports increased

from 8:1 in 1980 to 48:1 in 1995

The ratio between international currency transactions and

world total GDP has increased from 2:1 in 1980 to 11:1 in1995

1980s – “By the end of the decade, the old structure of the economy, consisting of a production system served by

a modest financial adjunct, had given way to a new

structure in which a greatly expanded financial sector hadachieved a high degree of independence and sat on top of

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Financial liberalization has been intimately linked to the eruptionof crises in the world economy – 1982/1987/1995/1997/2001/2008

– and the concurrent policy responses have been shaped toadvance further neoliberalization through the implementation of

austerity regimes via IFIs

Where did the current crisis come from?

Two decades of “financial innovation”: “The new Wall Streetsystem” and the emergence of new financial trading models:

•

After WWII: WS banks did little trading in securities on theirown account.

• Mid-1980s: Trading in financial assets became increasinglycentral to the WS investment banks – “prime brokerage”: lending

to hedge funds/private equity groups/SIVs to trade in assets

• This was not long-term investment – it was “speculativearbitrage”: buying/selling to exploit price differences/price shifts

• “Asset price bubbles” – e.g. dot com bubble – as a strategy of creating price differences/shifts

Peter Gowan – “Crisis in the Heartland” JB Foster – “The Financialization of Capital and the Crisis”

Robin Blackburn “The Subprime Crisis”

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The Shadow Banking System

New form of banks – e.g.

hedge funds, private equitygroups, SIVs – that engage in“speculative arbitrage”without regulatory control

New forms of financial products

and practices – especially thecredit derivatives market:collateralized debt obligations

(CDOs)

CDOs Bundles of securitized

consumer debt, combininghigh/medium/low risk mortgages, along with other

types of debt, with high creditratings

Banks found lucrativebusiness in converting

consumer debt intosecurities and sellingthese to pension/mutualfunds

In order to finance this the banks took on more debt against thewager that returns on securities would remain above the cost of

borrowingThe housing bubble From January 2001 the Federal Reserve

Board lowered interest rates 12 times – in June 2003 the interestrate stood at 1%

Low interest rates combined with “generous” repayment

schedules enabled low income groups to buy houses even whenprices were rising – the “sub-prime housing market” – and their

Robin Blackburn – “The Subprime Crisis”

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Amount of sub-prime mortgages embedded in Mortgage BackedSecurities rose from $56 billion/2000 to $508 billion/2005

New mortgage borrowing increased by $1.11 trillion dollarsbetween October and December 2005 – Outstanding mortgage

debt = $8.66 trillion, i.e. 69.4% of US GDP

Last quarter of 2006 Interest rates were hiked to protect afalling dollar …

”Houses of cards, chickens coming

home to roost - pick your cliché.The new low in the financial crisis,which has prompted comparisons

with the 1929 Wall Street crash, isthe fruit of a pattern of dishonesty

on the part of financial institutions,

and incompetence on the part of policymakers”

Joseph Stiglitz

Not quite – the crisis should not be

understood as simply a problem of moral standards and political

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Asset Price Bubbles and the Stagnation of USCapitalism

Since the 1970s US industry has been characterized by

stagnation –Efforts to revive growth have been unsuccessful

There is a crisis of profitability in the USeconomy

Stagnant/declining incomesamong the mass of the

population

No growth motor from newinvestment – public or private

GDP growth in the US has been based on consumer demand –In a context of stagnant and declining real wages consumer

demand has been fuelled by (i) increased supply of credit and(ii) the “wealth effect” of asset price bubbles – aided by cheap

Chinese imports

Total debt in the US economy: 1997 = 225% of GDP – 2007 =352% of GDP

US household debt: 1997= 66.1% of GDP – 2007 = 99.9& of GDPBank/financial entity debt: 1997 = 63.8% of GDP – 2007 =

113.8% of GDPThe credit expansion which has fuelled growth in the USeconomy is rooted in a key strategy of the neoliberal project –

“financialization”Robert Brenner – The Economics of Global Turbulence and The Boom and the Bubble

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The current crisis is the direct outcome of a strategy resorted toby capital in order to “offset” the detrimental impacts of (a)declines in real wages and (b) declines in economic growth –

These impacts are in turn related to the ways in whichneoliberalism as an accumulation strategy sought to curb thepower of labour in favour of capital – The policy response has

been characterized by (a) bailouts of financial institutions and (b)austerity policies

This policy response mirrors the response to the internationaldebt crisis of the 1980s – in a context where international bankshad borrowed large sums of money to regimes in the South with

stagnant economies, the crisis was interpreted as (a) anexpression of the damaging impacts of state intervention in theeconomy which (b) required the implementation of austerity and

free market policies – without impairing the “integrity” of the

global financial architecture

Whereas “structural adjustment programmes” did a lot to openup the markets of countries in the South to imports, made

available cheap labour and cheap assets, and enabled elites inthe South to seek integration in a global market economy, it did

little to revive development and combat poverty – the 1980s was“l t d d ” i d l t l t d d li i li i

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