Ok, we’re back after a brief hiatus for the
third in this four-part lecture series,
‘Marx After Growth’. In case you’re just tuning
in for the first time, my name’s Sean O’Brien
and I’m a research fellow at Birkbeck, University
of London. As always, big thanks go out to
the 87 press and the editing team. In the
previous lecture on what’s been called the
‘esoteric’ Marx—which you can find along
with the rest of the lectures in the series
on the 87’s blog, the Hythe—I explored
a subterranean current of Marxian thought
distinct from the ‘exoteric’ Marx of the
workers’ movement.
This ‘esoteric’ Marxism, sometimes called
value-form theory, finds its roots in the
abstract conceptual logic of Marx’s critique
of political economy and its emphasis on the
objective but non-empirical character of value,
a ‘supra-natural property’ of the commodity
that is ‘purely social’ and exists only
as a relation, and must therefore assume various
forms of appearance as it passes through its
cycle of valorisation: money, commodity, profit,
and so on.
Marx describes this ‘value-relation’ as
a ‘phantom-like objectivity’, an actually
existing or ‘real abstraction’ that emerges
in the act of exchange, which necessarily
abstracts from the concrete characteristics
of commodities in order to render them commensurable
as values. So, the abstraction that emerges
from exchange is a product not of human thought
but one of human action.
Okay, the talk of actually existing abstractions
that can’t be empirically verified can get
you labelled a fanatic, prone to flights of
fancy, and not just by the positivists. As
Alberto Toscano has argued, the denigration
of ‘abstractionists’ is a tendency shared
by figures as disparate as Edmund Burke and
Bruno Latour, who both equate
‘critical negativity with religious zealotry’.
Perhaps this is why Marx’s value theory
was largely neglected by Marxists. The theory
of value as something ‘supra-natural’
that ‘transcends sensuous’, as Marx puts
it, distinguishes his own approach not only
from that of classical political economy,
but also from much of what has been called
traditional, orthodox or worldview Marxism,
which tends, like classical political economy,
to treat capitalist categories like value,
the commodity and money as natural and transhistorical
forms.
This ‘traditional Marxism’ tends to affirm
the labour theory of value as a universal
truth in human society, insisting that labour
is the substance of value, that value—quite
literally—is embodied in the commodity,
and that the magnitude of value embodied in
the commodity is determined by the amount
of labour socially necessary for its production.
Like classical political economy, traditional
Marxism never asks ‘why labour is expressed
in value, and why the measurement of labour
by its duration is expressed in the magnitude
of the value of the product’.
As a result, traditional Marxism also misses
how the ‘phantom-like objectivity’ of
value constitutes a form of objective domination.
Unlike ancient slave societies and medieval
feudal societies, in which one group is ruled
by another in a form of direct or personal
domination and dependency, capitalist domination
involves no personal relationship of domination
or direct relationship of force.
Legally and formally speaking, capitalists
and labourers are free and equal, but in reality,
both are bound by forms of objective constraint
that are historically unique to capitalist
society. Capitalists are compelled to put
the profit motive before other concerns if
they wish to survive in the market, while
workers, who own nothing but their labour
power, are compelled to seek wage work in
order to survive. As Michael Heinrich puts
it, ‘capitalism rests upon a systemic relationship
of domination that produces constraints to
which both workers and capitalists are subordinated’.
In other words, proletarians are forced by
the given conditions of their existence to
quite literally go searching for their own
subordination in the form of waged work, since,
as Michael Denning notes, ‘under capitalism,
the only thing worse than being exploited
is not being exploited’. In this way, the
capitalist mode of production constitutes
a historically distinct society in which human
beings are ‘ruled by abstractions’, as
Marx says, rather than by individuals or institutions.
This is what Moishe Postone means to emphasise
when he writes that ‘the abstract domination
and the exploitation of labor characteristic
of capitalism are grounded, ultimately, not
in the appropriation of surplus by the nonlaboring
classes, but in the form of labor in capitalism’.
Here, we might recall Norbert Trenkle’s
description of abstract labour as a ‘merciless
sovereign’ that shapes the form of labour
through violent historical processes.
Highlighting Marx’s own emphasis on the
crucial and consistently overlooked importance
of the form of value, Postone offers a succinct
summation of the difference between traditional
Marxism and Marx’s own method of form-analysis
in terms of a distinction between ‘a critique
of capitalism from the standpoint of labour’
and ‘a critique of labour in capitalism’.
Postone associates critique ‘from the standpoint
of labour’ with ‘class-centred’ readings
of Marx, which position the proletariat as
subject of history. Arguing against such approaches,
Postone emphasises Marx’s characterisation
of capital as an ‘automatic subject’ and
argues that class struggle is in fact ‘structurally
intrinsic to capital’. As you can imagine,
this position has been met with fierce criticism
from a number of corners, perhaps most notably
from within the strand of Marxian theory associated
with the German New Reading of Marx in a series
of arguments advanced by Werner Bonefeld,
to which I’ll return in the final lecture
on the history of the class relation.
For now, though, I want to emphasise how this
argument in Marx unfolds at a high degree
of abstraction. As I mentioned in the opening
lecture, Marx analyses the capitalist mode
of production at what he describes as its
‘ideal average’. So while Marx is of course
aware that capitalism only ever exists in
concrete historical forms, his aim is to analyse
‘the internal organisation of the capitalist
mode of production’, in other words, the
features which make it distinct, historically.
This is why Marx begins Capital with the systematic
development of a series of categories and
only turns to the historical account at the
end of Volume 1, in the final section on so-called
primitive accumulation and the emergence of
the ‘free’ wage worker as a precondition
for the establishment of the capital-labour
relation. In the Grundrisse, Marx describes
this mode of presentation as a ‘method of
rising from the abstract to the concrete’,
and we’re going to follow suit here.
That is to say, in this lecture I want to
shift gears from an abstract analysis of capital
at its ideal average to the concrete history
of capital accumulation over the longue durée.
Rather than oppose logic to history, however,
our aim—like Marx’s own—will be to determine
the extent to which the abstract categories
of the critique of political economy illuminate
the concrete history of capitalism.
There’s a diverse body of work that emerged
in the wake of the capitalist restructuring
of 1970s and aims to offer periodizing models
that can help explain what happened in that
pivotal moment and why. In what follows, I’ll
lean primarily on the work of Giovanni Arrighi
and Robert Brenner, and the debates the two
have had over this very moment of transition,
but it’s worth remembering that they’re
by no means the only Marxists who have offered
frameworks for periodizing the transformations
in global capital that mark the late twentieth century.
Michel Aglietta, for instance, also responded
to the economic restructuring of the 1970s
by attempting to construct a historical model
of capital accumulation adequate to the emergence
of new economic and social forms. Emphasizing
the role institutions play in the regulation
of the capitalist economy, Aglietta founds
his theory of regulation on two interrelated
formulations central to the French Regulation
School: the regime of accumulation and the
mode of regulation.
A regime of accumulation is a historically
bounded and relatively stable system comprising
production, circulation, consumption and distribution,
while a mode of regulation refers to the institutional
networks of governance that provide supportive
environments for a given regime of accumulation.
Together they form what the regulationists
call a mode of development. When tensions
between the regime of accumulation and the
mode of regulation reach a critical point,
a structural crisis ensues, and from the chaos
and conflict of crisis a new mode of development
eventually emerges.
Marx’s categories of absolute and relative
surplus value form the basis of the Regulation
School’s periodizing model, which correspond
in their theory to extensive and intensive
regimes of accumulation understood, respectively,
in terms of the domination of one over the
other in a given phase of capitalist development.
As Aglietta argues, ‘under the regime of
extensive accumulation, where absolute surplus-value
predominates, the length of the working day
is the principal means of extracting surplus
labour’. For the Regulation School, the
extensive regime of accumulation leads for
most of the nineteenth century until the rise
of Taylorist scientific management around
World War I, under which investments in fixed
capital increased productivity rates and cheapened
consumer goods.
Taylorism thus marks the advent of the intensive
regime of accumulation, but remains unstable
until the shift, following the Great Depression
of the 1930s, from the competitive to the
monopolistic mode of regulation. The combination
of an intensive regime of accumulation and
a monopolistic mode of regulation inaugurates
a mode of development they call Fordism.
This is a term many of you will be familiar
with. This is sort of one of the kind of key
origins of that term.
Aglietta and the periodizing models offered
by the Regulation school have proven influential
for a number of thinkers interested in the
relationship between cycles of accumulation
and cycles of struggle, and their periodizing
frameworks—organised around the categories
of absolute and relative surplus value—reflect
those advanced by Theorié Communiste, which
we’ll look at in lecture four.
But it’s worth noting that, as Robert Brenner
and Mark Glick argue, ‘where capitalist
social-property relations are fully established,
we can, all else being equal, expect to find:
development on the basis of relative surplus-value’.
It’s on this point that Brenner and Glick
reject the notion of an extensive regime of
accumulation grounded in absolute surplus-value
extraction, given that capitalist production
tends to cheapen consumer goods through productivity
increases from the outset, which suggests
that it doesn’t really make sense to talk
about a ‘period of formal subsumption’.
Brenner’s own account of the history of
capitalist development and, in particular,
of the agrarian origins of capitalism in England,
caused widespread debate in the late 1970s.
With the defeat of the English peasant revolts
and the introduction of tenant farming in
Great Britain in the 1400s, Brenner argues,
feudal tribute was eliminated and the profit
motive was established, sparking an explosion in
agricultural productivity that paved the way
for industrial development.
This position is referred to commonly as the
Brenner thesis, and the debate it triggered,
known as the Brenner debate, which played
out largely in the pages in Past & Present,
laid the foundations for the school of Marxist
historical analysis called Political Marxism.
These days, however, Brenner is increasingly
well known for his account of the transition
from long boom to long downturn in the late
twentieth century.
In The Economics of Global Turbulence, Brenner
argues that ‘The evolution of the advanced
capital economies since World War II naturally
divides itself into two roughly equal parts,
each about a quarter-century in length: a
period of prosperity from the later 1940s
to 1973 and an era of slowed growth and increasing
economic turbulence from 1973 onwards, marked
by deeper recessions and the return of devastating
financial crises absent since the Great Depression’.
For Brenner, capitalist competition tends
to produce global overcapacity, exerting downward
pressure on prices and lowering returns on
capital investments. As a result, profitability
declines, which in turn places downward pressure
on wages and triggers rising unemployment
rates.
In Brenner’s account, over-competition between
the US, Germany and Japan reached a point
of saturation in the early 1970s, leading
to a protracted period of economic downturn.
As Brenner notes, ‘average rates of growth
of output, capital stock (investment), and
real wages for the years 1973 to the present
have been one-third to one-half of those for
the years 1950-73, while the average unemployment
rate has been more than double’.
As I mentioned earlier, the other major figure
on whose work I’ll draw in this overview
of the history of accumulation is Giovanni
Arrighi, a sociologist and world-systems theorist
whose theory of historical capitalism has
also proved widely influential in recent years,
in particular his magisterial book, The Long
Twentieth Century, which was the result of
nearly three decades of research.
Arrighi’s point of departure for his landmark
study is the widespread observation that,
since the 1970s, something has changed fundamentally
in the structure of the capitalist world-system.
He notes a series of shifts that have occurred:
First, a greater geographical mobility of
capital (this is sometimes called globalisation,
a term world-systems theorists don’t tend
to use since in their account globalisation
has actually been underway for centuries)
Second, a shift from ‘Fordism’, with its
regulated forms of production in the factory,
to the ‘flexible’ forms of accumulation
associated with ‘post-Fordism’. So once
again we can see the influence of the regulation
school here.
Third, the decline of the Keynesian social
democratic promise and the postwar welfare
state system. Usually associated with the
rise of neoliberalism
And finally the rise of the FIRE sector and
the explosion of financial markets (which
have claimed an ever greater share of GDP
since the 1970s)
So Arrighi is concerned with all of these
shifts but wants to broaden the scope and
scale of the analysis to place these developments
within the longer history of capital accumulation.
‘Once we stretch the space-time horizon
of our observations and theoretical conjectures’,
Arrighi writes, ‘tendencies that seemed
novel and unpredictable begin to look familiar’.
In his structuralist account of late-twentieth-century
developments in the capitalist world system,
Arrighi adopts Fernand Braudel’s model
of the longue durée, which Michael Ermarth
characterizes as a model of historical time
‘not as it presents itself to the existential
awareness of modern man, i.e., as the dramatic
spectacle of surface events, but rather the
deeper rhythms and structures hidden in layers
underneath’.
Over the course of his research, Arrighi notices
something interesting: in the history of capitalism,
there are a series of cycles of accumulation
or ‘long centuries’, each associated with
a hegemonic centre, in which an era of material
expansion reach a pinnacle, as competition begins to
exert downward pressure on the rate of profit,
at which point capital abandons commodity
production and leaps into liquidity.
In Arrighi’s model of systemic cycles of
accumulation and long centuries, each cycle
is made up of three phases, and the transition
from the first phase to the second constitutes
an epoch of material expansion in which commodity
production is central. Then the transition
from the second to the third phase can be
understood as a shift from production to circulation,
where profit is sought through financial trading
as capital becomes more mobile and flexible.
As Arrighi writes, ‘In phases of material
expansion, money capital ‘sets in motion’
an increasing mass of commodities (including
commoditized labour-power and gifts of nature);
and in phases of financial expansion an increasing
mass of money capital ‘sets itself free’
from its commodity form, and accumulation
proceeds through financial deals’.
Arrighi develops this framework from a reinterpretation
of Marx’s “general formula for capital,”
or M-C-M', whereby monetary value congeals
in the commodity-form only on the condition
that it be realized at a profit. Here, M (or
money) means liquidity and flexibility, while
C (or commodity capital) means investments
in industry and manufacture. Arrighi uses
this expanded understanding of the formula
to describe two epochs in a given cycle of
accumulation:
So the first epoch: moment of material expansion,
where capitalism moves from its mercantilist
phase to its industrial phase. During this
epoch, a new hegemon rises to dominance in
the capitalist world-system. This is the movement
from circulation to production, or from M
to C
Then the second epoch is the moment of financial
expansion, where industrial production ceases
to be sufficiently profitable and so profit
is sought through financial transactions.
This then is the movement from production
to circulation, or from C to M’.
Following on from this model, Arrighi identifies
four systemic cycles of accumulation (SCAs),
each increasing in scope and intensity but
contracting in duration: So there’s a Genoese
cycle, from the fifteenth to the early seventeenth
centuries; a Dutch cycle, from the late sixteenth
century through most of the eighteenth century;
a British cycle, from the latter half of the
eighteenth century through the early twentieth
century; and a US cycle, which began in the
late nineteenth century and has continued
into the current phase of financial expansion.
And so you can see here on this at this point,
I think, somewhat famous chart, the way in
which each cycle of accumulation increases
in scope and intensity, but contracts in duration,
and also how they overlap.
And you can see as well how it’s based on Braudel’s model of the longue durée.
So each systemic cycle of accumulation follows
a ‘tripartite schema’, as Arrighi puts
it, beginning with a phase of debt-financed
mercantilism, followed by a phase of industrial
expansion, and coming to a close with a phase
of financialization, the last of which constitutes
a period of hegemonic transfer characterized,
in Arrighi’s words, by ‘systemic chaos’
and internecine conflict:
So then the three parts, the tripartite schema,
is made of these three moments:
The first, Mercantilism: where goods are bought
on the cheap and sold at a higher price (as
in the West Virginia Company or the East India
Company). In Mercantilism its important to
note that there’s no production taking place.
So its a zero sum economy. You’re effectively
buying cheap and selling dear. That’s how
profit is generated.
The second is Industrialism where wealth is
generated through commodity production (on
an increasing scale, as in the industrial
revolution in Britain, or the post-war ‘golden
age’ and booming economy of twentieth-century
US consumer capitalism).
And finally, Financialization where capital,
having exhausted the profitability of manufacture,
moves away from commodity production into
trading, or financial trading, specifically:
so making money off of money, as in Marx’s
abbreviated formula M-M’ (e.g. through stock
exchange activity, or through loans/debt,
etc).
So Arrighi illustrates how periods of material
expansion reach a point of market saturation,
as we noted, capitalist competition exerts
downward pressure on the rate of profit, at
which point finance capital comes to dominate
the hegemonic power, manipulating policy in
a scramble to restore profitability. We’re
going to look in a little bit sort of at what
that means, particularly around so called
monetary policy or the monetarist revolution
of the Reagan-Thatcher era.
For a time, financial expansion appears to
signal renewed prosperity, but, and this is
crucial, this is actually an illusion, concealing
a crisis of over-accumulation. As Braudel
puts it, ‘every capitalist development of
this order seems, by reaching the stage of
financial expansion, to have in some sense
announced its maturity: it [is] a sign of autumn’.
So, usually, for a declining
hegemon, autumn means spring for the next, right.
Although it remains unclear how this transition might
ultimately unfold in present circumstances,
and we’ll think more about this possibility
in the second half of the lecture.
But I want to pause here and consider why
1973 has become such a key moment for Marxists
interested in periodizing the postwar history
of capital. As both Brenner and Arrighi have
argued, the 1973 Recession marked the decisive
moment at which an already sputtering global
economy abruptly lurched into a process of
large-scale restructuring. This shift signalled
the beginning of the end for American hegemony
and its organization of the capitalist world-system,
ushering in a protracted period of economic
stagnation and contraction in the West.
In the wake of the 1973 oil shock, and the
collapse of the Bretton Woods Agreement in
1973 following the Nixon Shock of 1971, the
1973 stock market crash made evident at an
economic level what the Fall of Saigon in
1975 would subsequently demonstrate at the
level of geopolitics: the postwar economic
order was unravelling and the American century
was in a profound state of crisis.
After World War II, the leading capitalist
economies enjoyed what Arrighi describes as
‘a worldwide virtuous circle of high profits,
high investments and increasing productivity’.
But, as Brenner argues, between the years
of 1965 and 1973, as output rates in Germany
and Japan caught up with their US counterparts,
what had been previously ‘a symbiosis,
if a highly conflictual and unstable one,
of leader and followers, of early and later
developers, and of hegemon and hegemonized’
became a zero-sum game of cutthroat competition.
Global profit rates plummeted. The response
of governments and industry leaders in the
advanced capitalist countries to the steep
fall in profitability across major sectors
of the economy only exacerbated the crisis,
plunging the global economy into extended
decline. So what happened? Brenner and Arrighi
both offer their own distinct accounts of
this moment of transition.
Against ‘supply-side’ explanations, which
tie falling profit rates after the postwar
boom to wage inflexibility understood exogenously
as "vertical”, that is to say market
and socio-political power relations between
capitalists and workers’, Brenner stresses
the centrality of the ‘economic contradictions’
that ‘arise from the “horizontal” competition
among firms that constitutes the capitalist
system’s economic mainspring’ in bringing
about the extended crisis of the long downturn.
In Brenner’s account, capitalists are subject
to competitive constraints that compel them
to innovate, accumulate and move from line
to line in search of the highest returns,
but over time these same constraints tend
to trap firms in stagnant lines, placing downward
pressure on extant profit rates. His description
of the transition from boom to downturn details
a ‘historical pattern of uneven development
and international competition’, whereby
the process by which German and Japanese manufacturing outputs caught up with productivity rates
in the US first sustained and then undermined
the postwar boom.
In other words, the transformation had dwelt
within the conditions of the expansion itself:
as Germany and Japan played catch-up with
the US, higher-cost incumbent American firms
found that their large-scale investments in
fixed capital—which had previously afforded
them a competitive advantage in the global
economy—now prevented them from abandoning
their increasingly unprofitable lines or scaling
back on production without suffering catastrophic
losses. This crisis of what we might call
capital density is what Brenner describes
in terms of ‘over-capacity and over-production’.
A crisis of capital density requires what
economists term a ‘shake out’, but in
the years following the 1973-1975 Recession,
a ‘wide-ranging system of mutual support,
ultimately guaranteed by the government, that
protected core industrial and financial corporations
from going out of business’, allowed higher-cost
incumbent firms to avoid ‘purging superfluous,
high-cost means of production by the standard
capitalist methods of bankruptcy, downsizing,
and layoffs’.
Commodity production continued apace, tightening
the profitability squeeze. Brenner describes
this state of affairs as a situation in which
there is simultaneously ‘too much entry’
and ‘too little exit’. Because an incumbent
firm’s fixed capital “can be realized
only in their established lines of production
and would be lost were they to switch lines
… they will have every reason to defend
their markets and counterattack by speeding
up the process of innovation through investment
in additional fixed capital. The adoption
of such a strategy on the part of the firms
originally caught with the high costs will
tend to provoke the original cost-reducing
innovators to accelerate technical change
themselves, further worsening the already
existing over-capacity and over-production.”
So here you can see the kind of core of Brenner’s
thesis.
Faced with a rapidly devaluating dollar, the
US government executed a series of policy
moves—the Volcker shock and the Reagan-Thatcher
monetarist revolution of 1979-1981, the Plaza
Accord of 1985, and the so-called reverse
Plaza Accord of 1995—which would inflate
the financial booms and bubbles of the 1990s
and 2000s, deferring the shake out until the
reckoning of 2008. Even after the dot-com
bubble burst in 2001, just yet another deferral,
and one could argue in fact there was a deferral
following the 2008 reckoning and perhaps we
are now following the Coronavirus recession
which is only really just beginning to open
up in front of us, about to enter the real
kind of shake out.
In any case, we can see how the persistence
of stagnation follows from the manner in which
businesses and governments responded to falling
profitability between the years of 1965 and
1973, and then in the decades following the
1973-1975 Recession, worsening the dynamics
that underwrite over-capacity and over-production
and bringing about an extended squeeze on
profitability.
If Brenner details the economic and political
mechanisms by which the postwar US industrial
economy swung dramatically from boom to crisis
and got stuck there, dragging the whole thing
down with it, Arrighi situates the long downturn
in world-historical perspective, tying declining
profit rates and the collapse of Bretton Woods
to the mounting costs of the Vietnam War,
and shifting focus from the crisis of manufacture
in the advanced capitalist countries to the
financialization of the capitalist world-system.
Arrighi argues that ‘the crisis of profitability
that marked the transition from the long boom
to the long downturn, as well as the great
stagflation of the 1970s—so the combination
of stagnation and inflation, theoretically
impossible according to Keynesian models,
were themselves deeply affected by the parallel
crisis of American hegemony which ensued from
the escalation of the Vietnam war and the
eventual US defeat’.
The escalation of the war in Vietnam and the
rising costs of the conflict both politically
and economically were decisive in both the
breakdown of the gold standard and the subsequent
financialization of the global economy. Arrighi
notes that financialization occurs
whenever returns to capital invested in trade
and production fall below a certain threshold
and inter-capitalist competition becomes a
zero- or negative-sum game. Under these conditions—precisely
those which, according to Brenner, have characterized
the long downturn—the risks and uncertainties
involved in reinvesting incoming cash flows
into trade and production are high, and it
makes good business sense to use them to increase
the liquidity of assets as a defensive or
offensive weapon in the escalating competitive
struggle.
In the post-1973 period, to be sure, staggering
profits have been generated in the US financial
sector, while profit rates in manufacture
have suffered a dramatic decline. In this
way, Arrighi highlights how deindustrialization
and financialization are two sides of the
same coin.
Crucially for Arrighi, this declension in
industrial growth and the subsequent explosion
of finance that together characterize the
post-1973 US economy are part of a recurrent
pattern spanning the longue durée of capital
accumulation, marking the collapse of the
Italian, Dutch and British financial empires
in previous ‘long centuries’, giving rise
to a fleeting period of restored profitability
for the waning hegemon. As Arrighi argues,
this upturn can be traced to a response to
system-wide intensifications of competition
that has characterized world capitalism from
its earliest, pre-industrial beginnings right
up to the present. This response consists
of a system-wide tendency, centred on the
leading capitalist economy of the epoch, towards
the ‘financialization’ of processes of
capital accumulation. Integral to the transformation
of inter-capitalist competition from a positive-
into a negative-sum game, this tendency has
also acted as a key mechanism for restoring
profitability, at least temporarily, in the
declining but still hegemonic centres of world
capitalism. From this standpoint we can detect
resemblances, not just between the great depression
of 1873-96 and the long downturn of 1973-93,
but also between the Edwardian belle époque
and the US economic revival and great euphoria
of the 1990s.’ So the period of boom in
the 1990s often described as the dot-com bubble.
So as I mentioned earlier, Arrighi turns to
Fernand Braudel’s theory of the ‘long
century’ to model what he calls ‘systemic
cycles of accumulation’. He identifies four
cycles, each tied geopolitically to a global
hegemon, and each divided into three phases
held in sway, in turn, by the logics of mercantile,
industrial, and financial capital.
Each cycle’s movement through these three
phases follows a seasonal logic of transition:
from the blossoming of spring, through the
flowering of summer and into the decay of
autumn, with a brief and final moment of financial
flourishing before the sun goes down for good
on a global hegemon.
Pinpointing 1973 as the signal crisis of the
US cycle of accumulation, Arrighi recasts
Brenner’s account of the boom and bubble
of the 1990s—during which time the US economy
enjoyed a sudden surge in growth—in world-historical
perspective, arguing that the financialization
of the capitalist world-system in the post-1973
period repeats ‘the tendency for uneven
development, in Brenner’s sense, to generate
a long boom, followed by a long period of
intensifying competition, reduced profitability
and comparative stagnation; itself followed
by an upturn of profitability, based on a
financial expansion centred on the epoch’s
leading economy’.
In Arrighi’s model though, this financial
bubble cannot rescue an ailing hegemon, which
at the end of each cycle must inevitably give
way to its successor. For Arrighi, as for
Braudel, financialization is ‘a sign of
autumn’. What distinguishes the present
moment of American decline, as Arrighi himself
as well as a number of other critics have
argued, is that there appears to be no new
cycle of accumulation on the horizon, no ascending
hegemon that might inaugurate a renewed expansion
of the capitalist economy on a global scale.
A series of candidates have vied for the position—first
Japan in the 1980s before the collapse of
the Japanese asset price bubble in 1991 and
the subsequent long-term stagnation of the
Japanese economy—sometimes called Japanification,
and since the 2008 financial crisis a term
that has come back along with another term
which has come back, secular stagnation, from
the period of the great depression to describe
the kind of ongoing slow growth rates of the
advanced capitalist core. So first Japan suffered
that collapse and then the emerging economies
of the BRICS (Brazil, Russia, India, China
and South Africa) in a kind of multi-nodal
hegemony—only to stumble under the weight
of global overcapacity and a high organic
composition of capital.
In recent years, of course, while other emerging
economies have faltered, the Chinese economy
has surged ahead, and now seems the most auspicious
contender for a long twenty-first century,
as Arrighi himself suggested in the postscript
to the second edition of The Long Twentieth Century.
‘Since opening up to foreign trade and investment
and implementing free-market reforms in 1979,
China has been among the world’s fastest-growing
economies, with real annual GDP growth averaging
9.5% through 2018’. So, that’s quite an
astounding number.
It’s also crucial to note that, in the years
following the 2008 financial crisis, the Chinese
economy has transformed from an export powerhouse
to a domestic consumer market, while trade
patterns have shifted from a consumer goods
model tied to the advanced capitalist countries
to Capital goods exported to emerging economies.
So a major really crucially important set
of transitions there. Meanwhile, the Chinese
continue to make strides in their international
aspirations under the Belt and Road initiative,
a development strategy that seeks to establish
a transcontinental single market with China
at its centre.
Despite this remarkable trajectory, however,
there are a number of significant problems or
contradictions undermining the prospects for a Chinese long twenty-first century. For one, the rate of
GDP growth has slowed considerably from more
than fourteen percent in the early 1990s to
just over six percent in 2019—still a big
number but still a major slow down. Then there’s
enormous amount of sunk capital tied up in
large-scale infrastructure projects, not to
mention a growing mountain of national debt,
a swelling real estate bubble, the ongoing
trade war with the US, and the looming coronavirus
recession, to say nothing of climate change.
But perhaps the most damning indicator of
Chinese economic prospects is the country’s
rapid transition from farm to factory to services—so
from the primary sector, agricultural economy,
to the secondary industry, and to the tertiary,
which is to say services. A definitively low-growth
sector that has ballooned to absorb huge numbers
of internal migrants leaving the Chinese countryside
for the urban centres as agricultural employment
has declined and the industrial sector butts
up against its limits to absorb new labour
inputs. This development trajectory actually
mirrors that of the advanced capitalist countries,
but in a much more condensed timeframe, as
industrialisation for late starters tends
to be more capital-intensive from the start.
And it’s this connection between growth
and capital density that brings us back to
the question of value, a category largely
absent in the work of both Brenner and Arrighi.
In their focus on inter-capitalist competition,
the analyses offered by Brenner and Arrighi—as
illuminating as they are in tracing the contours
of the post-World War II period—operate
at the level of price, and therefore cannot
account for the extent to which the current
conjuncture is defined by a crisis of value.
‘Competition executes the inner laws of
capital’, Marx writes, ‘but it does not
invent them. It realizes them’. Here, Marx
suggests we can discern in the motion of inter-capitalist
competition a trace of the operations of capital’s
secular tendencies. But the underlying process
driving this motion—what Marx calls valorization—remains in the final instance obscured.
Threading Brenner, Arrighi, and Marx’s value-theoretical
account of crisis, Joshua Clover has outlined
an ‘arc of accumulation’, ‘rising from
commerce with the Industrial Revolution and
descending into finance with widespread deindustrialization, with no reversal in view’.
Whereas Arrighi and Brenner focus on inter-capitalist
competition at the level of price, as Clover
reminds us, ‘for Marx’s value analysis,
the movements of profits are surface phenomena
corresponding to an underlying shift in the
balance of constant to variable capital’,
or what we discussed in the first lecture
in terms of what Marx calls a rising organic
composition of capital.
So, to sum up that argument about the shape
of capitalist development from the first lecture,
and to gesture ahead to the final lecture
in which we’ll discuss the relationship
between cycles of accumulation and cycles
of struggle, I want to conclude by considering
what the end of growth might mean for the
possibility of an anti-capitalist politics today.
So to put it rather succinctly, and this is
an argument that we looked at in particular
in our account of real subsumption in Lecture
1, Marx’s critique of value offers three
distinct moments of insight into the logical
and historical trajectory of capital accumulation.
First, the capitalist form of value, as an
actually existing abstraction, ‘form-determines’
the labour process and its reproduction. Next,
in its drive to self-expansion, capital constantly
reorganizes the labour process to boost productivity.
Finally, through this rationalization of the
labour process, capital erodes the very source
of value, expelling increasing numbers of
workers from the production process and thereby
slipping inexorably into crisis.
So my argument is going to be, when capital
reaches this level of density, the affirmation
of labour—which is to say the traditional
Marxist project of its liberation and socialization—becomes
increasingly difficult to realise. Labour
struggles to represent an opposition to capital
or to be the agent of its overcoming in an
era of deindustrialization, not simply because
it is always already an alienated form of
human activity, but because it no longer occupies
a structural position within the class relation
from which to assert itself as an antagonist.
This is the autumnal logic of seasonal torpor
for a labour movement in terminal decline.
Brenner and Arrighi disagree about the extent
to which labour militancy brought about the
long downturn, but how do they view the consequences
of the downturn for anti-capitalist struggle?
So Arrighi argues that a wave of labour action
between 1968-73 and a subsequent pay explosion
play a key role in bringing on the long downturn,
and that this in turn accounts for the waning
of the workers movement in the late twentieth
century: So, here’s Arrighi:
'by the end of the long post-war boom, the
leverage of labour in core regions was sufficient
to make any attempt to roll it back through
a serious deflation far too risky, in social
and political terms. An inflationary strategy,
in contrast, promised to outflank workers’
power far more effectively than international
factor mobility could. It was, indeed, the
great stagnation-cum-inflation of the 1970s—“stagflation” as it was called at the time—and its
effects on inter-capitalist competition and labour-capital
relations, that effectively wore down workers’
power in the core, opening the way for its
collapse under the impact of the Reagan-Thatcher
counterrevolution.'
Brenner, as we noted above, explicitly rejects
the wage-squeeze thesis in which labour militancy
plays a key part in triggering the long downturn,
arguing that capital can always look for cheap labour elsewhere.
Which of course it did under the rubric of so called globalisation.
And off shoring, and so on and so forth, right? The establishment of the maquiladoras, special economics, and so on and so forth.
Yet Brenner does argue that,
‘by the middle of the 1990s, US corporations
had significantly improved their condition
compared to a decade previously largely by
means of extended and brutal processes of
rationalization and redistribution’, arguing
that ‘manufacturers had, over a decade and
a half, engaged in wave after wave of shakeout,
scrapping masses of outdated and redundant
plant and equipment and ejecting tens of thousands
of employees, achieving in the process substantial
improvements in productiveness’, and that
‘they had hugely amplified their profits
at the expense of workers by means of a decade-long
freeze on the growth of real wages’. So
this is sort of despite kind of the more large
scale, kind of totalising shake out that Brenner
argues was required to restore profitability
on a global scale. You have these kind of
series of waves of shake outs amongst manufacturers
in isolated locations, then nevertheless its
kind of a devastating impact on the workers
livelihood but also their power to organise
and challenge capital.
So Brenner and Arrighi thus agree that the
long downturn has had a devastating impact
on the lives of working people, undermining
their ability to effectively organize to better
their working conditions or contest the power
of capital, giving way to a new era of rising
inequality that a number of economists and
historians have dubbed the Second Gilded Age.
In Arrighi’s view, as we’ve seen, there’s
a fundamental similarity between the era of
American decline and the downturn that marked
the decline of British hegemony at the end
of the nineteenth century, a repetition confirmed
for Arrighi by the financial flourishes of
both periods. Noting the role of the US Fed
in generating the massive asset price bubbles
of the late twentieth century, which he argues
was as part of a ‘an accelerating shift
to the right in the polity as a whole’,
Brenner too describes the present moment of
widespread inequality as a ‘New Gilded Age’.
What distinguishes the two positions, as I’m
arguing, is the emphasis each theorist places
on either politics or economics in their accounts
of post-1973 downturn. In his take on the
collapse of labour militancy, Arrighi stresses
the importance of the neoliberal turn in the
Raegan-Thatcher era, while Brenner’s account
of the long downturn highlights the economic
basis of political defeat, even if he also
argues elsewhere that ‘working people have
been ravaged by capitalism in its neoliberal
form’.
So for Brenner, there is an important political
dimension to the long downturn, and monetary
policy plays an crucial role in giving lower-productivity
firms the ability to hang on, but his detailed
analysis of the advanced capitalist countries
in the post-1973 period clearly spells out
the death of the historical workers’ movement
in economic terms.
Nevertheless, and despite their differences,
both Arrighi and Brenner ultimately liken
the current downturn to the era of British
decline. Arrighi in terms of the way in which
this decline is part of a recurrent pattern
and for Brenner in particular the idea that
with rising inequality and other kinds of
political developments we might describe the
present as a new gilded age. During the transition
from British to US hegemony, however, and
I think this will be key, the industrial proletariat
was expanding in size and increasing in concentration—a
process of mass integration and expansion
that would accelerate in the twentieth century—whereas
in the post-1973 period the proletariat has
been defined by expulsion and fragmentation.
As Aaron Benanav argues, ‘Since 1973, rising
precarity has been associated not only with
the decline of the welfare state, but also
with a slowdown in capital accumulation, a
rise in unemployment, and a decline in the
availability of industrial jobs, all of which
mark off the present from the Gilded Age past’.
This distinction will prove crucial in our
next discussion on political possibility in
the post-1973 period, and so we’ll return
to this question about the consequences of
downturn for a twenty-first century anti-capitalist
politics in the final lecture. Thanks.
