Holiday Reading, Part 2

Presents unwrapped, getting prepared for dinner, and I'm still chuckling to myself about a passage that I read yesterday from David Harvey's The New Imperialism. Discussing the rise of the 'Washington Consensus' and the rapid dissolution of the Soviet Union and the Eastern bloc, he writes:

to top it all, the end of the Cold War suddenly removed a long-standing threat to the terrain of global capital accumulation. The collective bourgeoisie had indeed inherited the earth. Fukuyama prophesied that the end of history was at hand. It seemed, for a brief moment that Lenin was wrong and that Kautsky might be right-- an ultra-imperialism based on a 'peaceful' collaboration between all major capitalist powers (now symbolized by the grouping known as the G7, expanded to the G8 to incorporate Russia, albeit under the hegemony of US leadership) was possible...

We all know how well that peace turned out.

"A Brief History of Neoliberalism", Chapter 7

Having cornered the ideological market via naked repression and the subtler re-organization of what Gramsci calls "common sense" (i.e. "the sense held in common"), neoliberalism has on the one hand effectively foreclosed mainstream debate "as to which of several divergent concepts of freedom might be appropriate to our times" [183-184]. Under neoliberalism, freedom is simply market freedom, and rights boil down to individual property rights; even FDR's Keynesian policies and wishy-washy "Obamanomics" sound like communist extremism given neoliberalism's ideological ambiance. On the other hand, through its history of accumulation by dispossession, social corrosion and natural despoliation, neoliberalism itself accounts for "the emergence of diverse oppositional cultures that from both within and without the market system either explicitly or tacitly reject the market ethic and the practices neoliberalism imposes" [185]. Harvey argues in Chapter 7 that although there are signs of growing discontent within policy circles as regards the performance of much-touted neoliberal solutions, true change has to come from "outside the frames of reference defined by this class power and market ethics while staying soberly anchored in the realities of our time and place" [188]. To leap over our shadow in this way is possible in any case because the neoliberal organization of consent has its limits as well as its unintended consequences, and because "these realities [of our time and place] point to the possibility of a major crisis within the heartland of the neoliberal order itself" [Ibid.].


Neoliberalism is rife with economic and political contradictions. These can be contained through locally damaging but globally manageable financial crises, but only at the cost of practices departing significantly from neoliberal theory [Ibid.]. This suggests that despite its continuing hegemony in the ideological arena, neoliberalism is "in trouble if if not actually dead as a viable theoretical guide to ensuring the future of capital accumulation" [Ibid.]. Moreover, the contradictions of neoliberalism cannot rule out an Argentina-2001-type situation even in US, which would have catastrophic consequences for local as well as global capitalism [189]. This is of course a doomsday scenario, but as Harvey argues (and backs up with a painstaking reconstruction and expansion of Marx in his stellar The Limits to Capital), "there is a limit to which this system can progress" [190].


That there's a limit means not only that it is increasingly difficult for American capital to be realized (in Marx's precise sense), but that in simple terms, it's running out of frontier. Rosa Luxemburg (in The Accumulation of Capital) famously argued that capitalism needs a non-capitalist outside to survive (for example: a crisis of over-accumulation in the centers of global capitalism can be mitigated by forcing open "primitive" or "under-developed" foreign markets through economic pressure or open imperialism). This theoretical insight has been critiqued, refined and expanded by subsequent theorists, but at bottom it means that capitalism survives via periodic cycles of primitive accumulation or, as Harvey prefers to term it, "accumulation by dispossession". At the most general level, a look at recent history appears to bear this insight out. What we are witnessing now in the US, especially as regards the housing bubble and the ruination of vast swaths of the population through consumer debt, is a truly cannibalistic form of capitalism: American capital, effectively, is visiting accumulation by dispossession on American citizens.


An unworkable, cannibalistic neoliberal order will either fall on account of its own contradictions, in particular the class struggle it perpetuates and exacerbates, or it will consolidate its class rule by more and more open neoconservative authoritarianism (neoconservatism being a natural rather than monstrous or unaccountable offspring of neoliberalism). As Harvey states, "regimes of accumulation rarely if ever dissolve peacefully" [189]. Neoliberalism will not go gentle into that good night for the very reason that it is about class power, and not about economic efficiency and material abundance for the many. We can expect that the struggles surrounding the G20 coordinated austerity plan and so on will only sharpen as things develop. We can also expect increasingly open class warfare on the part of the rich to the extent that their economic "solutions" reveal themselves for what they are: accumulation by dispossession visited on the general public, with a view to further enriching the upper class. If class warfare on the part of the dispossessed is also inevitable, to the extent that this category embraces an increasingly large portion of the general population, the field is ripening for insurrection and - this is our hope in any case - for revolution.


This opens the question of the particular characteristics, direction(s) and prospects of the emergent resistance to the neoliberal order. If the recent G20 convergence in Toronto has taught us anything, it's that parliamentary politicians and the traditional organized or "official" Left continue to play the same game as their neoliberal masters. A Black Bloc of a few hundred smashing corporate storefronts caused a mass moral panic among a Left that could not even conceive of the moral rightness of property damage against the order that it professes to oppose. The official Left did the conservative government and mainstream media's job admirably in quickly denouncing militant comrades as terrorists, criminals, or agents-provocateurs. This is an exemplary case of what Lukacs long ago identified as the fetishization of legalism; apparently the mainstream Canadian Left is incapable of imaging cases where tactics may be illegal, but also morally right and pragmatically called for. Evidently, it has not even done the necessary prerequisite work of untangling the questions of legality, morality, and tactical soundness.


Harvey himself speculates on the shape of the resistance to come, taking shots at Hardt-and-Negri style abstractions as well as principled narrowly-focused local activism. There must be a global analysis to guide the resistance, but he allows that an expanded account of the local will continue to be a vital point of leverage in future struggles. Essentially, demands, agendas and tactics must be locally tailored and appropriate, but they must also be revolutionary - and this, precisely, entails a view to unity and an emergent form of activist organization. Neoliberalism's self-serving, empty and formally negative rights discourse must also be opposed by a more robust and positive vision of human rights, namely in terms of a right to economic security and prosperity.


The main lesson to take away from Harvey, in any case, is the following: "if it looks like class struggle and acts like class war then we have to name it unashamedly for what it is. The mass of the population has either to resign itself to the historical and geographical trajectory defined by overwhelming and ever-increasing upper-class power, or respond to it in class terms" [202]. In practical terms this means a subject-position cleansed of a neoliberal "common sense" that would have over seventy percent of Canadian citizens cheerfully condoning the repressive actions of a police force hired to ensure that dispossession of public assets could go unimpeded. As regards the general content of this subject-position, the Industrial Workers of the World put it best perhaps, in the preamble to their constitution: "The working class and the employing class have nothing in common."

"A Brief History of Neoliberalism," Chapter 6

Chapter Six puts neoliberalism "on trial," and the central question is whether the implementation of neoliberalism has done what its ideological proponents claim it does: protect individual freedom and increase his or her free choice.

Not to spoil the fun, but we already know. We've lived through the financial crisis and everything that's followed. But this does not render Harvey's analysis in Chapter Six redundant or obsolete. It documents many of the warning signs, and provides markers for making sense of what seems to be yet another reinforcement of class power, at least concerning the weak reforms proposed in the United States. [1]

But more importantly, Harvey provides a analytical toolkit to evaluate whether or not neoliberalism continues by different means, for he argues that neoliberalism is much more pragmatic than ideological. While its ideological proponents might bluster about mistakes they might have made (Writing this reminds me of a line from David Mitchell's novel Cloud Atlas: "Where there's bluster, there's duplicity"), much of--if not all-- the financial and institutional infrastructure is still in place. Even if, before the crash, neoliberalism had failed to stimulate worldwide growth [2], and even if "all global indicators on health levels, life expectancy, infant mortality, and the like show losses rather than gains in well-being since the 1960s" (p. 154), several tenets of neoliberalism seem unshakable.

Which leaves us with the class power thesis: neoliberalism proved appealing because it provides a system for re-entrenching class power domestically and redistributing wealth from the global south to the global north's financial centers. I don't think it's a stretch to argue that two of the crucial analytical indicators of the retreat of neoliberalism would be the reversal of these trends. There are two other indicators that I think we should watch (that is, on which we should focus in out critiques).  

First, accumulation by dispossession. Harvey renovates what Marx called "primitive accumulation," because dispossession is an ongoing, rather than completed, process. The concept includes (among other things) privatization and commodification, financialization, closure of commons, transfer of state or public property rights to private property rights, and "a raft of techniques such as the extraction of rents from patents and intellectual property rights [sometimes stolen from the general intellect of indigenous or  might we say 'underprivatized' populations --D.Z.S.]  and the diminution or erasure of various forms of common property rights (such as state pensions, paid vacations, and access to education and health care) won through a generation or more of class struggle" (pp. 159-160).

Second, the prevalence of NGOs in overexploited regions. Often NGOs fill the void left by a collapse in public services in the face of political or environmental crisis. And while they can fulfill basic needs, they do not provide a long term solution to crisis (that is, if they aren't part of fomenting a crisis as a front group for particular interested parties-- think US involvement in Venezuela). Because NGOs are not accountable to local populations and often negotiate directly with state or class power, they cannot or do not step out of the neoliberal framework, but rather reinforce it (p.177). It might be worth quoting what I wrote in a review, loosely speaking, of Peter Hallward's Damming the Flood:

Non-governmental Organizations are not neutral. This is a difficult point to get across. First, it probably has to do with the neutral sounding name, when many of these groups could properly be called, in the case of Haiti, Ideological Counter-state Apparatuses. Hallward shows how the operation of NGOs allows 'rich countries a morally respectable way of subcontracting the sovereignty of the nations they exploit' (179). While some of these groups do respectable work with the poor and exploited, the problem remains that their primary responsibility is to the sources of their funding, which means that they function according to a mandate set not by the people of Haiti, but to rich donors outside of the country. Instead of directly giving foreign aid to the government, where it has the possibility of being utilized according to a plan (here health, there jobs, there education), these tasks are privatized, fragmented, and often rely on elite contacts for local distribution, which reproduces class inequality.

Let's not forget that some of the same people who are out re-establishing class power are the same that sit on the boards of some NGOs. Which reminds me of a problem that I have about Harvey's use of 'upper class' or 'elite' to designate class power. While I admit that 'bourgeoisie' sounds dusty and Victorian, these other terms seem to be too available for capture within non-Marxist, parliamentarian, and/or wrongheaded right-wing critiques of 'power' or, might we say, class power. The question is, how can we designate the ruling class of the contemporary order, in a way that describes it concisely and accurately?

These trends can only be reversed by movements that can establish alternate forms of social organization, that can move from local resistance to broader democratic governance (and I don't mean that in a parliamentarian sense). As difficult or abstract as such projects sound, fighting the global resources of capitalism demands/requires movements that can establish-- or organize?-- "freedom of speech and expression, of education and economic security, rights to organize unions, and the like" as primary freedoms, while making  "property rights and the profit rate derivative" (p. 182).

Matt's going to finish our reading of A Brief History of Neoliberalism this week by discussing 'Freedom's Prospect.'

Notes

[1] I've previously discussed some of the proposed strong reforms here.

[2] The numbers: "Aggregate global growth rates stood at 3.5 per cent or so in the 1960s and even during the troubled 1970s fell to only 2.4 per cent. But the subsequent growth rates of 1.4 per cent and 1.1 percent for the 1980s and 1990s (and a rate that barely touches 1 per cent for 2000) indicate that neoliberalization has broadly failed to stimulate worldwide growth" even with the deficit spending of the United States and China (p. 154).

"A Brief History of Neoliberalism," Chapter 5

While Chapter 4 of David Harvey's A Brief History of Neoliberalism outlines the uneven geographical implementation of neoliberalism, Chapter 5 analyzes the "peculiar path" of China's entry, via  the reforms initiated by Deng Xiaoping, into an increasingly neoliberalized and globalized economy (although it is more proper to say 're-entry' regarding the longue durée of China's relationship to global political economy). [1] Whether the outcome is socialism 'with Chinese characteristics' or privatization 'with Chinese characteristics,' the transformation of China's economy over the last thirty years has led to high growth, a rising standard of living, but also dramatic inequalities of wealth between urban and rural populations, with the resulting unrest and instability that such inequalities produce. [2] Much of this growth has been export led, and as such, China has benefited from the international frameworks for trade and finance that have promoted neoliberalism.

Unsurprisingly, especially for those who have been following our discussion, the central question for Harvey is whether the transformation of China's economy has led to the reconstitution of upper class power. His analysis is focused and does not lapse into shock and awe that the more popular punditry has produced while discussing China (some of these tendencies are described in Perry Anderson's review for the London Review of Books entitled "Sinomania"). Harvey argues that China has constructed "a particular kind of market economy that increasingly incorporates neoliberal elements interdigitated with authoritarian centralized control" (p. 120). In this regard, the salient features of China's political economy are:

• Accumulation by dispossession. Privatization of communal property and steps toward the financialization of the economy has created speculative bubbles in real estate. Corporatization of state owned enterprises followed by buyouts of worker shareholding (sometimes through coercive means) and state bailouts of non-performing loans have transferred large amounts of wealth to the elite. Yet class formation, Harvey argues, has been a complicated affair; while reforms have prevented "the formation of any coherent capitalist class power bloc within China," they have not prevented, through a combination of corruption, clientelism, and opportunism, a "growing integration of party and business elites in ways that are all too common in the US" (pp. 123, 150).
• Steep inequalities produced by uneven geographical development. Economic reform has reinforced social inequality between urban and rural areas. Not only is there a large disparity in income, there are reductions in social services and the implementation of user fees for public services. Residency restrictions (separating town and country) have led to a labor force of peasants (especially young women) that-- lacking legal protection-- is "vunerable to super-exploitation" not only through low wages, but also through non-payment of wages and pension obligations (p. 148).
• Proletarianization. The working class has nearly tripled between 1978 and 2000, increasing from 120 million to 350 million (270 million workers plus 70 million peasants who have found wage work). Greater flexibility (that is, precariousness) in the labor market, and uneven geographical development has produced large labor surpluses that the Chinese state has confronted through public deficit spending, on dam projects, and massive projects in infrastructure and public transportation. [3]

Nevertheless, China cannot just deficit spend its way out of political upheaval. As Giovanni Arrighi notes in Adam Smith in Beijing, "public order disruptions" (protests, riots, and other forms of unrest) have increased from around 10,000 in 1993 to 87,000 in 2005. [4] Harvey concludes with remarks on the possibilities for political subjectivity and mass movements in China. Rather than paraphrase, this passage is worth quoting at length:

Both state and migrant workers, [S.K. Lee] suggests, reject the term working class and refuse 'class as the discursive frame to constitute their collective experience'. Nor do they see themselves as 'the contractual, juridical, and abstract labour subject normally assumed in theories of capitalist modernity', bearing individual legal rights. They typically appeal instead to the traditional Maoist notion of the masses constituted by 'workers, the peasantry, the intelligentsia and the national bourgeoisie whose interests were harmonious with each other and also with the state'. In this way workers 'can make moral claims for state protection, reinforcing the leadership and responsibility of the state to those it rules'. The aim of any mass movement, therefore, would be to make the central state live up to its revolutionary mandate against foreign capitalists, private interests, and local authorities (pp. 149-150).

Whether the Chinese state responds to these challenges through outright repression, opportunist intervention, class compromise, or through a more egalitarian redistribution of wealth remains to be seen.

Next week, we will conclude with Chapters Six and Seven.

Notes

[1] Recall, of course, Mao's well-known remark that Deng was a secret 'capitalist roader.'

[2] Not to mention large scale and rapid environmental degradation.
[3] Deficit spending, and Chinese state control of capital flow run counter to the "global rules of the IMF, the WTO, and the US Treasury." While Harvey notes that these kind of economic practices cannot continue "in perpetuity" due to China's agreements with the WTO (for example), it's not difficult to notice that China uses its large holdings in US debt for political leverage.
[4] See Arrighi, Adam Smith in Beijing (London: Verso, 2007), 377.

"A Brief History of Neoliberalism", Chapter 4

Harvey emphasizes the "universal tendency [of neoliberalism] to increase social inequality and to expose the least fortunate elements in society ... to the chill winds of austerity and the dull fate of increasing marginalization" [118]. This tendency is no accident. Recall that he interprets neoliberalization as a redistributive process: the rich, through force of arms, political maneuvering and the construction of mass consent, gut social infrastructure and break or co-opt organized labour and social movements in order to line their own pockets and cement their class power. Chapter 4 describes the geo-historical particulars of this process over the past few decades. Neoliberalization has had far from universal consequences on the world stage. Harvey enumerates local conditions, geo-political and other particular factors to sketch an explanation of why some countries have fared better than others, and why at particular times. Nonetheless, he suggests that neoliberalism, which touts itself as the only cure for sick economies, is neither a panacea, nor, but for the very small minority of the ultra-rich, anything resembling a medicine.

The proof that neoliberalism is about class power and not about economic efficiency and abundance is in the numbers. Harvey underscores that the true economic success stories of the 80s and early 90s belonged not to countries implementing neoliberal policies, but more mixed economies like Germany and Japan, which followed corporatist or at least more traditonal/integrated models of employment and social spending. Such models "did not, however, facilitate the restoration of class power" [89]. Those pushing the neoliberal agenda had therefore to discipline these economies and bring them full stop into the neoliberal fold. Harvey enumerates the components of their project: the "turn to more open financialization" (i.e. speculative capital) [90], "the increasing geographical mobility of capital" (outsourcing, etc) [92], persuasion, cajoling and coercion of many "developing countries" by the "Wall Street-IMF-Treasury complex" dominating the Clinton years (recall the fate of post-Apartheid South Africa) [92], and finally, the "ever more powerful ideological influence" exerted by "the global diffusion of the new monetarist and neoliberal economic orthodoxy" [93]. These factors came together to form the so-called "Washington Consensus" of the mid-90s, cementing the view that neoliberalism is the only answer to what ails the world's economies.

So here we are in 2010 in the midst of a protracted global economic crisis. Neoliberalism has continued to wreak havoc on the environment and punish the most marginalized. South American countries, having had more than enough neoliberalism (it was there that neoliberalization was first pulled off, by open violence), experiment with different economic models. Insurrectionary anti-capitalist situations are blooming in Greece, Nepal and India.

The question becomes: why, given all this mass unrest and the repeated failure of neoliberal policies to provide a stable and healthy economy, are we swallowing the neoliberal pill the G20 has offered us? Naomi Klein has pointed out in The Shock Doctrine that neoliberalism is an ideology, in the sense that it seals itself off hermetically by employing the fallacy of "the exception that proves the rule". Refuting instances, for example massive unemployment and social unrest resulting from neoliberalization, are chalked up to not enough neoliberalization. Even when austerity measures provoke widespread revolt, the neoliberal line is to continue to insist that the market is distorted by state intervention, or, more baldly, to claim that the people losing their jobs and social programs are personally responsible, and in any case simply ignorant of the benefits that will come. The argument that neoliberal policies are necessary to foster "a good business climate", so ubiquitous as to seem a tautology, is similarly ideological [117]. Given that neoliberalization consistently produces mass social unrest, it is unclear how it is able to claim that it is best suited to attract investors.

In Canada, where the G20 was recently hosted, the situation does not appear to be so bad. Nonetheless, we feel the effects of the global meltdown and are told that cutting public infrastructure will somehow get us back on our feet. The Toronto police ever so politely reminded us with rubber bullets, sound cannons, kettling, illegal searches, detentions, and even made-up laws that it is very naughty of us to show our disagreement. Heartbreakingly, over seventy percent of Canadians feel the police response was justified, and almost no one has even bothered to look into how the G20 mandate affects them. But this is only consistent with what Harvey is saying: "It has been part of the genius of neoliberal theory to provide a benevolent mask full of wonderful-sounding words like freedom, liberty, choice, and rights, to hide the grim realities of the restoration or reconstitution of naked class power, locally as well as transnationally, but most particularly in the main financial centres of global capitalism" [119].

David Harvey Animated

I know that Joshua is usually our go-to guy for the weekend Youtube videos (and he should have something up this weekend as well), but the RSA (Royal Society of Arts) Animate has created an animated version of one of David Harvey's recent talks.

I'm sure, as we've been reading through A Brief History of Neoliberalism, that not a few readers have wondered, when confronted with passages such as...

Nevertheless, these configurations of political economy remained difficult to map, although the totality of their relations are typically now referred to as neoliberalism, a concept that encompasses the aforementioned compression of time-space, the conservative counterrevolution that captured state power in various metropoles in the late 1970s and early 1980s, and the postmodernization (if I can be permitted such a term) of culture.

  ...if there wasn't some kind of animated précis of the material. And now there is. 

The video jumps at a few crucial moments (where you just know that Harvey's going to start talking about the character of the 'spatial fix,' etc.) but it does summarize the advantages of Marxist analysis, and it does so with a bit of humor.

"A Brief History of Neoliberalism," Chapter 3

Let's face it: the more prominent contemporary continental philosophers have not attempted  too many in-depth analyses of the functions of the neoliberal state form. Given that they are often focused on revitalizing a theory of the subject in our cynical and consensual times, and given that talk about seizing state power evokes whispers about Lenin or Stalin-- that is, authoritarianism-- this makes sense. Nevertheless, it also makes sense that a theory of collective subjectivity should say something about what we are up against, about the interaction of the state and capital in what David Harvey calls neoliberal governance.[1]

Hardt and Negri have already shown us the wrong direction; recall in the heady days when so many people were reading Empire, how misguided their celebration of the end of big government was even then, which they attempted to rectify in Multitude.

Since then, Zizek has taken some interest in delineating the relationship between the state and capital, but he has been unusually tentative. When talking about the use of patents to generate profit through rents, in First as Tragedy, Then as Farce, he writes:

Perhaps therein resides the fundamental "contradiction" of today's "postmodern" capitalism: while its logic is de-regulatory, "anti-statal," nomadic, deterritorializing, and so on, its key tendency to the "becoming-rent-of-profit" signals a strengthening of the role of the state whose regulatory function is ever more omnipresent (p. 145).[2]

The general point about rent extraction is correct, but it's addled with enough Deleuzian jargon and inverted commas that its impact is completely muted. I've annotated this passage in my copy; it says that Zizek could straighten this out if he spent more time reading up on political economy rather than Chesterton, Paul, etc. [3] Which is why we're now reading through the third chapter of David Harvey's A Brief History of Neoliberalism.

Probably part of the provisional character of the philosophical analysis of the neoliberal state is derived from its pragmatic variability. While the neoliberal state is relatively simple to define in theory, neoliberal governance often departs from the theoretical template. If we accept what I will call Harvey's 'class power thesis': (neoliberalism is a political project to restore class power), then these pragmatic departures should be expected.

In its theoretical form the state would promote individual choice through the guarantees of property rights, free trade, free markets, and rule of law. Individual choice is contrasted with state decision making, and in all cases-- theoretically-- the interaction of and competition between individuals in the private sphere/market is held to be more efficient and productive than public decision making (of course, more efficient and productive for what end?). The 'free choice' of the individual-- even if this is the legal fiction of the business or corporation as individual-- is "regarded as a fundamental good" (p. 64). Hence neoliberals are "assiduous" when it comes to implementing the privatization of public goods and the deregulation of markets (what, following Harvey, we've called forcing open markets), and they exhibit strong preferences for juridical resolution of individual-social conflicts rather than democratic or parliamentarian means.

Even in theory several contradictions and tensions are present. Harvey notes that neoliberalism has some theoretical difficulty when confronted with monopoly power, market failures (especially regarding environmentalism) that are often conjured away with questionable assumptions, and a fetish regarding the 'technological fix' for all problems (do I have to mention BP here?), even if technology is in some cases socially disruptive.  Nevertheless, these tensions have often been turned to pecuniary advantages through temporary fixes. Rather than resolving crises, neoliberalism provokes them:

There is an inner connection, therefore, between technological dynamism, instability, dissolution of social solidarities, environmental degradation, deindustrialization, rapid shifts in time-space relations, speculative bubbles, and the general tendency towards crisis formation within capitalism (p. 69).

Rather than interpret this situation as an accident, the class power thesis grasps these connections as means for the redistribution of wealth. Even crises, as Harvey discusses in Chapter 4, serve as a mode of redistribution.

In practice, neoliberal governance exhibits two fundamental biases that show how decisions favoring class power trump the theoretical template. First, when faced with a decision between 'fostering' a 'good business' or 'good investment' climate and labor or environmental concerns, neoliberal governance chooses in favor of business and investment. Not that on all levels these decisions are specifically made with class motives behind them. Rather neoliberal political economy is structured to coerce competition between cities, regions, countries; so while not all decisions need exhibit class motive (often at the local levels they are made to preserve a collapsing set of social relationships), the structure does.

Second, neoliberal states "typically favour the integrity of the financial system and the solvency of financial institutions over the well-being of the population or environmental quality" (p. 71). 

The neoliberal reliance (or is this a fetish too?) upon monetarism and the integrity of money means that neoliberal governance "cannot tolerate any massive financial defaults even when it is the financial institutions that have made the bad decision" (p. 73). This is a particularly perverse bias. From a theoretical perspective, the neoliberal ought to hold individual investors responsible for their bad choices, just as neoliberals would want to force people to be responsible for their actions and well-being, their health care, education, pension, etc. As Harvey notes, some "fundamentalist-minded" neoliberals argue that organizations that protect investors, such as the IMF, should be abolished. But they don't prevail over pragmatics Their failure is not unexpected if one uses class analysis.

The protection of finance also benefits the upper class at the expense of the public. Domestically, the general populace is forced to bear the burden of financial failure, just as it happened, most recently, in the 2008 bailout. Since this burden is shifted through the state-- that is, as public debt-- it also constrains future deficit spending on public goods that benefit the majority. [4] Internationally, finance-protection-- brokered through the IMF-- is used to transfer wealth from the global south to the global north through austerity measures,  debt repayment, and the removal of barriers to the flow of goods and capital /foreign investment (although the reverse does not hold).

Of course, the neoliberal response to the movement of organized labor and forms of social solidarity is, as we've already seen, the exception to the rule. One of the prime difficulties of confronting neoliberalism is that it uses competition between regions and improvements in communication and investment flow to break social solidarity. Capital accumulation benefits from uneven geographical development. Even if labor is able to move to regions with better pay and greater benefits, the state can still manage this movement through restricting immigration, or increasing it.

In addition, the state, with its monopoly on violence, can curb certain forms of "redistribution through criminal violence" (what a great phrase) through incarceration (p. 48). It is difficult to ignore both the tendency toward surveillance and incarceration as social policy over the last few decades, especially in the United States. While Harvey does not discuss these social transformations in detail, one of the purposes of reading Harvey is to establish the features of neoliberal pragmatics before turning to how it interacts with other social institutions.

Next Week: We will be working through at least Chapters 4-6.

Notes

1. On 'governance': Harvey writes that one of the pronounced features of neoliberalism is the shift from government ("state power on its own") to governance ("a broader configuration of state and key elements in civil society"). I think this distinction is useful as long as that we add the phrase "... which includes the redistribution of state resources, and transfer of state functions, to private corporations." See p. 77.

2. "Becoming-rent" is discussed in more depth in Christian Marazzi's accessible (although marred by some typographical errors) The Violence of Financial Capitalism. Trans. Kristina Lebeveda (Semiotext(e), 2010), 44-66.

3. Since I'm on the topic, has anybody else noticed how Zizek hardly references Lacan in First as Tragedy? Is this the case in Living in the End of Times as well? Matt, I'm asking you!

4. Thomas Frank's The Wrecking Crew (Metropolitan Books, 2008) argues that neoconservatives deliberately misgovern in order to later justify privatizing government functions.

"A Brief history of Neoliberalism", Chapter 2

Neoliberalization being in the most general terms a re-distribution of wealth from the poor to the very rich, Harvey asks in Chapter 2 how exactly such a blatantly unjust process could have been pulled off. The answer is fairly simple when looking at countries like Chile and Argentina: labour leaders, community organizers, socialist politicians, etc, were jailed, tortured and assassinated by police and military. Demonstrators and strikers were beaten, killed, and terrorized. Social wealth and infrastructure were sold off, in short, under truncheon blows and at gunpoint.

But what about the United States and Britain, where neoliberalism "had to be accomplished by democratic means"[39]? Harvey argues that the success of neoliberalism (i.e. from the point of view of the rich) was prepared in these countries by a construction of consent; this implied gaining hegemony over, mobilizing and manipulating what Gramsci calls "common sense", defined not as that which is sensible, but merely as "the sense held in common" [Ibid.]. Cultural and traditional beliefs, values and fears were employed, in short, to "mask other realities" - namely, the brute economic facts of post-Fordist capital accumulation and the dismantling of social institutions to further line the pockets of the wealthy [Ibid.]. Neoliberalism employed ideological tools especially where existing social mores, traditions and institutions posed barriers to neoliberalization by brute force alone.

This is not to say that Reagan and Thatcher failed to use bribery, threat and an increasingly militarized police to great effect. Rather, it is to point out that existing values were also manipulated in such a way as to render the great majority of the American and English populations blind and complicit to the looting of their own hard-earned social infrastructures. Take for instance the ideal of personal freedoms, which, many Americans flatter themselves has long been a hallmark of their country. As Harvey points out, "Any political movement that holds individual freedoms to be sacrosanct is vulnerable to incorporation into the neoliberal fold" [41]. This is because at the level of personal property rights and freedoms, neoliberalism delivers (that is, to the rich and to a certain strata of corrupt labour); moreover, through its media it aggressively drives home the point that there are no other personal freedoms worthy of the name.

The real coup pulled off by neoliberalism with respect to "common sense", however, was to separate the ideal of personal freedoms, i.e. property freedoms, from that of social justice (whereas, for instance in May 68 in France as well as other left-libertarian crests of history, these formed an ideological knot). The ideology of personal freedoms, divorced from social justice, naturally became a bulwark against state intervention in the economy. Note that corporations are considered persons; therefore the personal freedoms of, to take a contemporary example, BP, serve as a legal and ideological barrier to the idea that the company owes anything to anyone for what it has extracted, and the resultant environmental costs. The success of neoliberalism in organizing "common sense" in this way accounts for the ubiquitous and totally bizarre images of poor Americans marching in the streets for their right to not be able to afford cancer treatments. It also accounts for the dominant perception that property destruction by militants (and cops disguised as militants) at the Toronto G20 convergence was violence par excellence, whereas beatings, unlawful detentions and sexual assaults by police officers against peaceful protesters were largely ignored by mainstream media and roundly praised by all levels of Canada's (increasingly neoliberal) government.

As regards what might be called the North American scene, two points especially are noteworthy here: so-called "postmodernism" and Reagan's organization of a Christian conservative "moral majority" to back the GOP. The first, which comprises a kind of cynical-radical chic, Harvey devastatingly critiques in his The Condition of Postmodernity (required reading for anyone dabbling in the often polluted waters of continental theory). Postmodernism as Harvey reads it is an ideology of personal property rights and the "freedom" to pursue petty, amoral pleasures (Coke or Pepsi? Gay porn or straight? You see?? You're free!!!). This hedonistic ideology has hamstrung or at least significantly confused a substantial section of what would otherwise be the radical youth; therefore neoliberalism has proven "more than a little compatible" with it [50]. The flipside of postmodernism is, of course, the organization of the Christian Right. By grafting "family values" onto an economic programme destructive of the very roots of healthy family life among the poor, Reagan ensured the support of those who would have had the most to gain from his deposal. (It should of course also be underscored that the Democrats, who would otherwise represent a cultural and social counter-pressure to the GOP, have long since been compromised to the core. Chances of election under neoliberalism are slim to nil barring deals with the corporate devil, as it were.)

The story in Britain was much the same - strike breaking, bait-and switch maneuvering, selling off bits and pieces of the social safety net - but it's notable that Thatcher's approval was in the dumps prior to the Falklands/Malvinas war. Reagan and other neoliberal leaders were not slow in taking Thatcher's cue; when things look bad for the neoliberal state, organize a war against a country which can hardly defend itself, and be sure to mobilize as much fear and national pride as possible. This is a model we have inherited, with terrible consequences.

Harvey is sure to underscore the failure of the Left to beat the neoliberals at their game in terms of the "common sense" factor. They lacked an adequate response, but also a positive programme. This underscores that the educational and, dare I say it, propagandistic wing of the new social movements has its work cut out for it. But what about Obama, and his audacity of hope? Can't he be called on to save us? Here is what Harvey has to say: "[The genius of Reagan and Thatcher] was to create a legacy and a tradition that tangled subsequent politicians in a web of constraints from which they could not easily escape. Those who followed, like Clinton and Blair [and, evidently, Obama], could do little more than continue the good work of neoliberalization, whether they liked it or not" [63].

"A Brief History of Neoliberalism," Chapter 1

As I mentioned in the prefatory remarks for our reading of A Brief History of Neoliberalism, David Harvey sets out to analyze a central contradiction of neoliberalism, between the theoretical project to reorganize capitalism around and extension and intensification of property rights, free markets (especially in the financial sector) and free trade, and a political project to re-establish conducive conditions for capital accumulation and for re-entrenching elite economic power (p. 19).

Harvey argues that the theoretical side of neoliberalism primarily functions as a justification of the larger project. In fact, he calls it a "utopian" project because it is never perfectly realized (as its own proponents often say whenever a neoliberal state runs into economic trouble), but rather implemented through "a very complex process entailing multiple determinations and not a little chaos and confusion" (p. 9). Nevertheless, he argues that the redistribution of wealth to the upper classes of a given country is a consistent structural feature neoliberalism. 

The first chapter introduces both the history of the theoretical project and the political project.* As a theoretical project, neoliberalism emerged after nearly three decades on the ideological fringes as a solution to the crisis of embedded liberalism in the 1970s. Embedded liberalism-- usually called Keynsianism-- was the result of a class compromise between a strong working class and the bourgeois state, and was designed to stave off crises the crises that beset 1930s capitalism. To maintain this compromise the domestic policy of a liberal state aimed for full employment, social welfare (in health care, education, etc.) and economic growth (Harvey does not here discuss how the foreign policies of these same states sometimes involved hyper-exploitation of  the populations of colonial, post-colonial, clientele and/or lesser developed locales). Through the 1950s and 1960s embedded liberalism produced high levels of economic growth, but it was unable to resolve the crises of stagflation in the 1970s, compounded by the war in Vietnam and the OPEC oil embargo.

Neoliberalism, historically speaking and not because its era is over, was, when not implemented by military means (as in Chile or Argentina), proposed as one solution to this crisis. It had "long been lurking in the wings of public policy" (p. 19), and can be traced back to the formation of the Mont Pelerin Society in 1947, a group that seemed to view any hint of solidarity beyond meeting in exclusive clubs to be a dire threat to civilization itself. The proponents of neoliberalism did, however, possess a sense of purpose, gradually integrating the financial resources of the elite with their intellectual resources, creating think tanks, promoting their work in academia, and networking. By 1976, two neoliberal theorists-- Friedrich von Hayek and Milton Friedman-- had won Nobel prizes in economics, and by 1980 its proponents had found the sympathetic ears of Ronald Reagan and Margaret Thatcher.

Neoliberalism secured its place in public policy through an ideological process, but Harvey does not define it through its own credo. Instead, he analyzes the policy transformations that came were implemented by its proponents. I won't be rehearsing many of the details, but there are several features that define the turn to neoliberalism. First: a monetary policy "designed to quell inflation no matter what the consequences might be for employment" (p. 23). However, as Harvey argues, monetarism is a necessary but not a sufficient condition for neoliberalism (p. 24). The implementation of neoliberalism took place--takes place-- in other areas of government policy, such as  privatization and deregulation (forcing new markets open...), shifting the tax burden from the rich to the general populace, and the use of austerity measures to break down the power of social solidarity and union organization. And, most importantly, neoliberalization "has meant... the financialization of everything" (p. 33).

Where financialization has led, I've discussed before in a review of Paul Mason's Meltdown (although the review doesn't cover the 'efforts' of the IMF and WTO in enforcing austerity measures while protecting financial instruments).

Harvey;s account of financialization, unlike Mason, has a much stronger class character. I've used, like Harvey, references to the "upper class" or the "elite" instead of the classic term "bourgeoisie" because one of the features of neoliberalism is the reconfiguration of ruling class power. Along with the usual state-corporate clientelism, the rise of information technology and biotechnology, finance is at the forefront of neoliberalism. The 'financialization of everything' has transformed many Western companies from industrial producers to financial operations (like General Motors...). Harvey writes that

One substantial core of rising class power under neoliberalism lies...with the CEOs, the key operators on corporate boards, and the leaders in the financial, legal, and technical apparatuses that surround this inner sanctum of capitalist activity (p. 33).

In addition, Harvey views financialization as integral to the process and not, as many traditional and Marxists economists view it, as parasitical on real (i.e. industrial) production.

Regarding the working class, however, we largely see (described in Chapter 2) the decomposition of working class power, and disarray in the recomposition of organized resistance to neoliberalism on an international scale. This being said, not all is lost; we do know that there are consistent and local attempts to resist and refuse the exploitation of neoliberalism. The final chapter of A Brief History of Neoliberalism closes with a  general discussion of "Freedom's Prospect."

We've got several chapters to read before getting there. Over the next two chapters we will see how neoliberalism captured hegemony in intellectual, cultural, and political discourses, and how it captures and transforms the state. Through the transformation of state structures neoliberalism could establish its 'inevitability' both ideologically and structurally, "to create a legacy and a tradition that tangled subsequent politicians in a web of constraints from which they could not easily escape" (p. 63).

Later this week: Matt reading Chapter 2, and I will read Chapter 3.

*The usual caveats apply here about the distinction of theory and practice being an analytic tool, etc.

A Preface to Reading "A Brief History of Neoliberalism"

One of the central difficulties late capitalism, Fredric Jameson writes in his Postmodernism, or, The Cultural Logic of Late Capitalism (1991), is cognitively mapping its systematic features. Late capitalism-- what we now typically call neoliberalism-- is, he argues, defined by the compression of time to the point of ahistoricism (although this feature of capitalism was already grasped by Marx in his critique of the Robinson Crusoe stories of classical economists), and the suppression of distance and the saturation of space. This metaphor of 'mapping' itself, however, is paradoxical, because it does not mean that we have recourse to maps to trace this geography, but the very activity of mapping politics in time and space requires grasping the specific reconfigurations of the relationships between history, geography, and political economy in late capitalism.

Jameson's argument, was directed against the anti-systematizing tendencies of the North American reception of postmodernism, the proponents of which often refused to render accounts of politics, culture, and the like, in a systematic totality. His claim-- relevant then as much as now-- is that the variety cultural expressions in late capitalism can only be understood historically as a totality, that accounting for a large set of particular variations is not incompatible with an analysis of the global configurations of political economy.

Nevertheless, these configurations of political economy remained difficult to map, although the totality of their relations are typically now referred to as neoliberalism, a concept that encompasses the aforementioned compression of time-space, the conservative counterrevolution that captured state power in various metropoles in the late 1970s and early 1980s, and the postmodernization (if I can be permitted such a term) of culture. Even this brief description itself betrays the difficulty I'm trying to get at; it is as if each feature of neoliberalism suggests a number of exceptions, throwing us back on the problem of particularity and totality: how is it possible to conceptualize neoliberalism as both a set of particular, concrete variations through the history of the past 30 years and across geographical space, and as an increasingly global, and globalized, totality?

Starting next week, Matt and I will be re-reading one of most clear and concise responses to the preceding questions, David Harvey's A Brief History of Neoliberalism (2005). There are two reasons why this book remains, for me, a constant reference point as I slowly work out the relationships between philosophy, political economy, and praxis.

First, Harvey's arguments and expressions are clear. His terminological choices reflect his conceptual commitments, and cast a critical eye on 'common sense' phrases. Where so many have been inclined to fight over the extent of deregulation or privatization, or whether they are desirable, which locks the debate into a specific neoliberal conceptual field, Harvey re-politicizes the terms. So, for instance, talking about the role of the state in neoliberal theory, he argues that its partisans aren't against the state in toto, they are against a particular kind of state. They don't mind if the state engages in deficit spending for military action, of if it preserves the integrity of money or private property, nor if the state forces open new markets:

if markets do not exist (in areas such as land, water, education, health care, social security, or environmental pollution) then they must be created, by state action if necessary (2).

What is this state action? What is so commonly referred to as privatization or deregulation becomes, in Harvey's terms, a use of state power to accomplish political-economical goals.

This kind of analysis is possible because Harvey does not just analyze neoliberalism as a form of reorganizing  and compressing time-space through capitalism (which is a worth contribution alone), he also, second, argues that this form of capitalism is a way to redistribute wealth upwards; that is, Harvey argues that neoliberalism is a political project to reinforce elite class power, through both structural and ideological means. The force of his argument, I think, is the result of his reference to class analysis...

But we're getting ahead of ourselves here. We're only at the 'Preface,' which introduces the reader to neoliberlism and its history. Therefore, I would like to invite our readers to take their copy down from the shelf and read along, and comment, over the next few weeks as we analyze A Brief History of Neoliberalism chapter by chapter, as we discover the continued relevance of Marxist analysis in the so-called era after neoliberalism.

Next week: Chapters 1-3.

Update: I'm usually on top of these things, but I forgot to mention that Matt reviewed Harvey's Spaces of Global Capitalism" back in April.

Historical Opportunity: Marx, Heidegger, Benjamin

Two of our contributors will be participating in a round-table at the Canadian Philosophical Association's annual meeting next week. Matt McLennan, Devin Zane Shaw, and their colleague David Tkach (also completing his PhD at the University of Ottawa) will be discussing "Historical Opportunity" in the works of Marx and Marxism, Heidegger, and Benjamin. We've included a partially updated version of their panel description below (the original is here in PDF format):

The collapse of Communist regimes in the late 80s and early 90s seemed to have offered a stark choice between two competing philosophies of history. On the one hand, grand narratives of progress and emancipation were claimed to have definitively foundered, leaving in their wake a plurality of individual viewpoints and social micro-histories (Lyotard). The collapse of Communism was also read in precisely the opposite way, as heralding the triumph of a grand narrative of historical progress, specifically that of liberal democracy (Fukuyama).

McLennan, Tkach and Shaw begin from the intuition that each option, starkly posed, misses something vital: a proper assessment of the concept of historical opportunity. Events since the collapse of Communism (the rise of religious fundamentalisms, the current crisis of capitalism) fuel the suspicion that we have neither reached the end of the era of grand narratives, nor properly accounted for the power of competing micro-histories. For theoretical and practical reasons, the present historical conjuncture renders a critical re-visitation of the “happy 90s” of utmost importance.

Matthew McLennan

Presenting a grand narrative of historical progress alongside an emphatic insistence on the importance of human agency, the works of Marx contain fascinating material for the philosopher of history. The seeming tension between determinism and freedom at the heart of his work has led to widely divergent interpretations of Marx, from the more or less deterministic, evolutionary historical picture of German Social Democracy and the Second International, to the voluntarism of Lenin, Luxemburg and Guevara. McLennan begins the proposed roundtable by arguing that Marx‟s philosophy of history is not only consistent, to the extent that the tension between determinism and freedom is only apparent, but also that it better lends itself to interpretations tending towards voluntarism. More specifically, after showing to what extent Marx was able to square his notion of the end of history with his emphasis on human agency, McLennan offers an argument that the Leninist notion of historical intervention, of “hitting upon the right moment”, was a more faithful application of Marx in its day than was that of the evolutionist faction of German Social Democracy and the Second International; this will set the stage for Shaw and Tkach‟s contributions by suggesting that Germany missed its opportunity to grasp the concept of historical opportunity, at least in the way Marx intended. Finally, tentative reflections will be offered with regard to the question of how such an interpretation of Marx might figure in an approach the present historical conjuncture.

Update: Matt adds a more recent abstract:

Matt McLennan surveys the development of Marxist philosophies of history, providing a schematic interpretation. Weighing in on where he thinks the emphasis of a properly Marxian philosophy should lie with respect to the question of historical opportunity (i.e. the "right moment" for revolutionary or militant activity) as well as that of eschatology or "the end of history", he argues that the most important advances in recent Marxism come from David Harvey. The notion of historical opportunity is enriched via Harvey to include a necessary spatio-geograpihical dimension; essentially, historical opportunity is interpreted as meaning that there is a "right space-time" for revolution.

 David Tkach

David Tkach's paper is a close reading of several sections of Heidegger's Being and Time, conducted in order to outline the problem of 'historical opportunity' in relation to the understanding of political action derivable from that work. In light of the book's three interrelated concepts of historicity, freedom, and the eschatological understanding of death in relation to Heidegger's understanding of a people [ein Volk], the result for the purposes of the round table is ultimately to call into question any possibility of political action that is directed toward a better situation for everyone. Thus, in contradistinction to certain attempts to rehabilitate aspects of Heidegger's book for ostensibly 'progressive' political purposes, Tkach concludes that it is at least problematic, not to say impossible, to do so.

Devin Zane Shaw

Shaw argues that class struggle is central to Walter Benjamin's concept of history. It is Benjamin's solidarity with the oppressed class that drives his critique of progress, and that orients his discussion of the legibility of dialectical images. It is only when an image is recognized as an image of emancipation that the history of its transmission becomes legible. Thus history is not the site of realizing Progress (Soviet Marxism), nor is it the site of a recovery of a past or heritage that has been covered over by an inauthentic understanding of history (Heidegger). History can only be written by blasting the events of the past out of the continuum of linear (or as Benjamin states, "empty, homogenous") historical time. Only then is it possible to clearly evaluate the documents of culture as both redemptive and barbaric.

BE prepared to get up bright and early; the panel is on Tueday, June 1st, from 9:00 ­ 12:30 in MB ­ S2-455 -- which we hear is the John Molson School of Business building.

In addition, Devin will present a paper at this year's meeting of the Society for Existential and Phenomenological Theory and Culture, on Wednesday, June 2nd, from 3:40-4:50pm at EV 2-204. He will be presenting:

"Cartesian Reversals: Badiou and Heidegger on Mathematics and Modernity"

This paper examines the relationship between philosophy, ontology (or onto-theology) and mathematics an in the work of Martin Heidegger and Alain Badiou. Despite Badiou's praise for Heidegger's 'subtraction' of truth from the domain of epistemology, he attacks Heidegger's equation of mathematics with the essence of modern technology. Against Heidegger, Badiou shows that mathematics thinks ontology, because it must decide on what is. He does this by drawing the philosophical consequences of the continuum hypothesis. I argue that these consequences undermine Heidegger's connection between poeisis and ontology and his claims about the essence of technology. If mathematics is a thought, it cannot be essentially a projection of calculation into being or equated with the essence of technology.

David Harvey, "Spaces of Global Capitalism: Towards a Theory of Uneven Geographical Development"

(Verso, 2006)

David Harvey is one the premiere academic Marxists writing today. He's a geographer by training, but his analysis of post-Fordist capitalism and his materialist critique of cultural postmodernism have earned him a notable place in debates ranging across a number of other disciplines. Unfortunately for the Harvey neophyte, much of his work is packaged in daunting paving stone sized volumes. Spaces of Global Capitalism, clocking in at a mere 148 pages, comprises a lecture series given by Harvey in 2004. It makes for a concise introduction to Harvey and has the added benefit of drawing a neat, if somewhat artificial, division between three levels of ascending explanatory abstraction with which Harvey is concerned.

I should comment further on this last point. Much as Hegel's Phenomenology of Spirit figures as the ladder to the greater Encyclopaedic system, but at the same time a concluding gloss on the very same, Harvey's Spaces of Global Capitalism is structured to reward repeated readings. The first lecture is the most easily digestable. Having made it to the end of the third lecture, however, one will have better grasped the theoretical abstractions Harvey employs and be in a better position to start again.

Lecture 1: "Neo-liberalism and the restoration of class power"

Lecture 1 is a concise restatement of the narrative contained in Harvey's essential A Brief History of Neoliberalism (Oxford, 2005). The global fortunes and local determinations of neo-liberalism are briefly recounted, with particular emphasis on its political causes and mechanisms. Harvey argues that the history of neo-liberalism shows it to be a failed and mystifying economic program masking a retrenchment of upper-class power. He explains with precision neo-liberalism's inherent contradictions and goes on to examine both the neo-conservative and progressive responses to these. Of particular interest to me was his critique of human rights discourses as engendered by and responding to neoliberalism. Harvey ends on a hopeful note.

Lecture 2: "Notes towards a theory of uneven geographical development"

Here Harvey takes a step back and sketches the components of a "'unified' field theory of uneven geographical development" ("unified" in scare-quotes because harvey seeks a dialectical rather than a reductionist or organicist theory). In brief, Harvey uses Marxist conceptual tools (updated and broadened in certain respects; for instance, his interpretation of "primitive accumulation" as "accumulation by dispossession") to make sense theoretically of the kinds of events tracked by the first lecture. The subsection "Capital accumulation in space and time" on pages 95-96 is as concise a statement as one can find of Harvey's general theory (though it should also be understood that for Harvey, theory is not a static but rather a dynamic discourse). One will find that Harvey is open to explanatory tools from a variety of traditions, but, given his penchant for dialectics, is sensitive to where these have potential to become sclerotic and obfuscating. This lecture could be titled: "Harvey's Marxism in Brief".

Lecture 3: "Space as a keyword" 

Harvey's main contribution to Marxism, following Lefebvre, is in pushing space to the forefront of Marxian analysis. More accurately, he has insisted on a variegated category of "space-time" in studying capital accumulation and, by extension, uneven geographical development. In this lecture he analyzes the notion of "space" and how it may be cashed out into three different conceptions (Cartesian/Newtonian "Absolute space", Einsteinean "Relative space(-time)", and Leibnizean "Relational space(-time)"). All of these stand in dialectical tension with each other and form a grid with "experienced", "concepualized" and "lived" variants. One must "roam the grid" to construct or reconstruct the role of space(-time) in a given materialist explanation. There's much fuel for philosophical reflection here, and ultimately one gets a sense of how even at a highly abstract level, Harvey's spatial/geographical thinking can be brought to bear on his history of neo-liberalism and his search for a "unified" theory of uneven geographical development. He signals that such a thinking is "rich in possibilities"; his history of neo-liberalism is a skeleton to be filled in by richer spatializations which must, however, keep in mind the dialectical unity of the spatial grid and not founder on specificities. For Harvey, there are real consequences to such an error: by focusing on place, rather than space, one courts political irrelevance and defeat. Hence his call for an enriched Marxism beyond the impasse of culturalism/postmodernism.

Tom Reifer's Tribute to Giovanni Arrighi

After writing my previous post, I found Tom Reifer's tribute to Giovanni Arrighi, entitled "Capital's Cartographer," in The New Left Review, November-December 2009. Arrighi, an economist and sociologist, is one of the originators of world-systems analysis, and his book Adam Smith in Beijing (Verso, 2007) is one of the more original contributions to understanding the turbulence of our times. I read the book in June of this year (that month, Arrighi succumbed to cancer), and still, I've been trying to get my head around the ambitious scope of the book.

Arrighi, with his co-author Beverly Silver, over a decade ago, had foreseen that the expansion of global finance

of the last twenty years or so is neither a new stage of world capitalism nor the harbinger of a ‘coming hegemony of global markets’. Rather, it is the clearest sign that we are in the midst of a hegemonic crisis. As such, the expansion can be expected to be a temporary phenomenon that will end more or less catastrophically.

The hegemonic crisis in question is precisely that of the United States, and they warned that the US had unprecedented capacity to turn its power to "exploitative dominion." Iraq, maybe? Afghanistan? But, as Reifer notes,

In Adam Smith in Beijing, Arrighi returned to many of these issues in light of the re-emergence of a Chinese-centred East Asia and America’s reckless gamble to continue its hegemonic reign with the invasion and occupation of Iraq. Rather than heralding a new age of US hegemony, as its advocates hoped, Arrighi emphasized how the ambitions of the Project for the New American Century, whose members staffed key positions in the Bush White House, ironically increased the long-term likelihood that the 21st century will be the age of Asia.

That is as good of a summary of the book as I can think of, especially because it underlines that Arrighi sees hegemony as reinforced by military means, something that is often neglected or minimized by economists and sociologists (this, he argued, included Marx). I would recommend reading Reifer's tribute, if not Arrighi's work, to understand these developments. As Reifer states,

Adam Smith in Beijing, like its predecessors, is a difficult and ambitious book; not because it is poorly written—Giovanni’s prose was exemplary in its lucidity—but because of the density of its analysis and the scope of its ambitions.

Nevertheless, I don't think that should turn non-specialists away from the book. It is probably one of the more influential texts on how I think about global politics today (along with David Harvey's A Brief History of Neoliberalism), because economics is not separate from politics. We should reject the idea that economics is something self-contained that must be handled by experts, specifically because these experts work to reinforce their own power. Instead, do two things: in criticism, treat economics like anything else, that is, a system of social relationships; and in practice, not be afraid to call for heavy reform and regulation to make the system more stable and equitable.

However, while acknowledging that economics is not our expertise, we should still aim to inform ourselves and think critically about its relationship to global politics or world-systems. This is the importance of works by thinkers such as Giovanni Arrighi. The next step, that I have been thinking about off-and-on lately, is incorporating this kind of sociology/anthropology/economics approach into recent takes on hegemony (Laclau) and ideology (Zizek). My thesis is that the "Lacanian" turn, while it contributes to understanding how desire works in subjective identification, does not address the structural force played by violence and economics.

Meltdown, but Is It the End of Greed?

Paul Mason, Meltdown: The End of the Age of Greed.
London: Verso, 2009.

I imagine that writing books on current affairs can be a perilous affair, because they so quickly become obsolete. However, if done correctly, they are important because the book format allows for viewing current events as a totality, and can shape how people view the world around them. This is perhaps most difficult to accomplish with economics, which is already a difficult subject for most. I pretend to no expertise, with my education in the field being largely auto-didactic and Marxist. My own interest has revolved around educating myself about neo-liberalism and globalization, and two of the more important, and comprehensible accounts of both, in my humble opinion, are David Harvey's A Brief History of Neoliberalism and Giovanni Arrighi's Adam Smith in Beijing.

Paul Mason's Meltdown: The End of the Age of Greed displays the same rigor and clarity of Harvey or Arrighi. He shows how neoliberalism, with its creed of deregulation, privatization, and financialization led to the collapse of finance and the banking industry. According to Mason, the driving force behind financialization was a surplus of capital that people sought to invest for a profit. Due to low interest rates, this surplus could not all be invested profitably in production of goods and services, and turned toward increasing financialization and speculation. The result: low interest rates have fueled

repeated bubbles in the price of assets: stock markets, houses, and latterly commodities like oil and grain. What we have seen since the year 2000, as investment dipped and interest rates fell, is the tendency for capital to flow frantically into one asset bubble after another, with the finance system as the conduit (p.70)

These bubbles are much easier to map, as it were, with commodities such as oil. Where Mason is at his best is showing how much more difficult it is to understand what happens when the greatest crisis revolves around derivatives such as credit default swaps and collateral debt obligations. A collateral debt obligation (CDO) is a set of "bonds wrapped together, often issued only for the purpose of being wrapped up and sold, in chunks, with the risks inside not immediately obvious to the credit rating agencies that gave them a risk rating (p. 188)" and a credit-default swap is, in this case, insurance on the CDO. The credit-default swap proved irresistible for profiteering because it both enabled investors to move liabilities off their balance sheets (because they were insured) in the form of CDOs, and CDOs offered buyers a higher interest rate. For a very short time, the going was good for high finance:

The value of asset-backed securities issued each year ballooned from a few billion in the late 1990s to $2 trillion when the bubble burst. The value of the credit default swaps grew much faster: from zero to $58 trillion in 2008 (p. 92-93).

The problem, of course, with this kind of money (The total GDP of the world was $65 trillion) is that it produces institutional incentives that are perverse. As Mason points out, quickly conflicts of interest arose between creditors and ratings agencies as everybody in the finance sector sought to cash in: "bond issuers [were] paying to have their own products to be rated," and rating agencies never had a reliable method for calculating risk (p. 94).

Thus when the subprime mortgage market went bust, and investors sought to cash in on their insurance on defaults, banks had to curb their short-term lending to hold more capital on hand to pay out on bad debt and maintain investor confidence. The sheer size of the default market amplified this problem, and soon, it became impossible to put a value on much of the paper (toxic debts, as it were) they were pushing around.

What came next is what Mason calls the credit freeze (which he pinpoints to August 7, 2007): a bank would look at their stack of toxic debt, and realized that if their trading partners had the same problem, they would not get back the money they had lent them. This lack of confidence was based on the fact that CDOs were layered, or structured, with debt possessing various levels of risk, and if the riskier debt was spread around (across the globe, actually), very few of the main players would be able to avoid the consequences of debt default. Soon short-term credit dried up, which made it more difficult to finance the long-term debt. This situation was compounded with a commodities bubble driven by speculation, which resulted in the global economy entering a period of both inflation (due to the increased price of oil and other commodities from August 2007 to September 2008) and tighter credit, and finally, the financial system melted down (pp. 99-117).

Overall, Mason's analyses are clear and critical. Perhaps the most obvious shortcoming of Meltdown is his confidence that we have reached an 'end of the age of greed.' For Mason, the partial nationalization of banks is evidence that neoliberal ideology, with its emphasis on minimal government intervention in the market has been discredited. But, as David Harvey argues, in practice proponents of neoliberalism don't mind if private risk is shifted to the public. Perhaps this sounds familiar:

neoliberal states typically favor the integrity of the financial system and the solvency of financial institutions over the well-being of the population or environmental quality (pp. 70-71).

Does that sound similar to any country's bailout plan that we can think of? Only a year after the the meltdown began and, apparently, as the headline says, "Credit Swaps Lose Stigma as Confidence Returns." Revisionism has already begun:

“A functioning credit-default swaps market contributes to more efficient extension of credit” by giving investors and lenders confidence that the industry won’t implode, said Alexander Yavorsky, a senior analyst at Moody’s Investors Service in New York. The consequences of Lehman’s failure “were astronomical, broadly speaking, but the CDS market worked well,” he said.

Worked well, of course, for those who continue to profit, but the rest of us? Must have something to do with the "astronomical" part. So apparently, those in the industry haven't really learned their lesson, requiring, as Mason points out, state intervention and stricter, even more aggressive regulation. But it is not an end to the age of greed. Neoliberal practice does not abhor a crisis, in fact, crises (as Mason observes) are built into the system. Yet the term 'greed' makes it sound the meltdown was the product of ill behaving individuals, when, as Harvey argues, the transfer of wealth from the state and world's poor to the world's richest is part of the design of neoliberalism itself. The first step to a more egalitarian system, aside from regulation, is to close the revolving door between finance capitalism and government, a move neither party in the USA seems able or willing to do.