H-2013 Financialization-Democracy-Jessop.pdf
Transcript of H-2013 Financialization-Democracy-Jessop.pdf
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Financial Capital and the Decline of Democracy
Bob Jessop
Lancaster University
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Financial Capital and the Decline of Democracy
Bob Jessop
This paper revisits the argument, advanced by advocates and critics of capitalism
alike, if somewhat hyperbolically, that liberal democracy is the ‘best possible political
shell for capitalism’. This is contestable theoretically, historically and comparatively.
Indeed, the relationship between capitalism and democracy is deeply contradictory
and historically contingent. The connection is further challenged by recent trends in
national politics such as authoritarian populism, authoritarian statism, and ‘post-
democracy’. More doubts are raised by growing gaps between world market
integration, the continued importance of national territorial states, and the forms of
global governance. These are producing an increasing democratic deficit, especially
regarding control over the international, transnational, and supranational economic
and extra-economic aspects of the emergent world market, and are reflected in the
resort to technocratic and other forms of unelected, non-accountable executive
powers linked to international regimes and obscure parallel power networks. These
trends are decades-old but have been strengthened by the expansion of a finance-
dominated accumulation that is tied to new forms of political capitalism. After
reviewing some of these general issues, I turn to financialization as another
debilitating factor, largely overlooked in neo-classical but not libertarian economics,
in the decline of democratic governance.
WHICH CAPITALISM, WHICH DEMOCRACY?
Capitalism is usually defined as a system of commodity production involving private
ownership and control of the means of production plus formally free labour power.
On this basis, mainstream economics models the economy as a universal,
harmonious, and self-equilibrating system. Likewise, for political theorists,
maintaining free markets is an important source of legitimacy in capitalist societies
compared to the despotism in pre-capitalist class societies and the party
dictatorships of state socialism (e.g., Friedman 1962). But this account of itsdemocratic virtues highlights and idealizes one specific account of capitalism:
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rationally organized capitalist production and trade oriented to free markets. This
comprises only one of six modes of orientation to profit that Max Weber identified.
The other five are: (1) traditional commercial capitalism, based on traditional types of
trade or money deals; (2) rational trade and speculation in money and credit
instruments; (3) predatory profit from political activities, including from financing of
wars, revolutions, or party leaders; (4) profits from continuous business activity
based on force or a monopoly granted by political authority; and (5) profit from
unusual transactions with political bodies (Weber 1978: 164-166). An analysis that
looks at these other modes of securing profit might reach different conclusions about
the formal correspondence between capitalism and democracy. Indeed, the more
that capital accumulation rests on politically oriented capitalism (types 3-5), the
harder it is to maintain more than a façade of democracy. I explore this thesis below
for finance-dominated accumulation, which is heavily inflected by forms of political
capitalism (see also Jessop 2013b).
Democracy is also a problematic term. One definition, inspired by Joseph
Schumpeter, treats it as an intermittent, quasi-plebiscitary competition between
circulating political elites for the votes of individual citizens (Schumpeter 1943; cf.
Weber 1994). Defined in this minimalist, elitist manner, democracy survives
nationally and sub-nationally in most advanced capitalist states. But if we turn from
competitive elections to the institutional and socio-cultural conditions necessary to
democratic accountability, then the past and present of effective democratic
participation in policy- and decision-making appear in less favourable light.
Moreover, as the world market gets more integrated and the space of flows
(including finance) grows more important relative to territorially-delimited economic
activities, there are mounting challenges to the territorial (and temporal) sovereigntyof states, whether or not these are democratic in substance or form.
THE BEST POSSIBLE POLITICAL SHELL?
Various theoretical traditions have attempted to establish the mutual implication and
reinforcement of capitalism (defined for this purpose as trade in free markets and
rationally organized capitalist production) and democracy (understood as liberalrepresentative democracy). Despite contrasting political and ideological positions, a
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common theme is that the separation of the economic and political spheres limits the
concentration of power to the mutual benefit of economic and political agents.
Economic power can be used to prevent the abuse of political power; political power
can be used to counteract market failures. Where this separation exists, according to
bourgeois apologists, competitive capitalism can expand in a crisis-free manner
through the smooth operation of market forces and, in addition, dispersed economic
power will help to block the abuse of political power. Indeed, Milton Friedman,
among others, argued that a market economy combined with authoritarian rule (e.g.,
fascism, Nazism, military dictatorship) is preferable to a planned economy under
totalitarian rule (i.e., communism). He reasoned that, while the former contains the
seeds of democratization, the latter always suppresses democratic pressures,
economically and politically (Friedman 1962: 10-11). Or, as the conservative
historian, Niall Ferguson, put it, capitalism and democracy are the ‘double helix’ of
modern societies (2000: 10). Radical political economists dispute that liberal
democracy is the co-guarantor (with competitive capitalism) of individual freedom
and regard it, instead, as the co-guarantor of capitalist rule. Thus the Canadian
ethical socialist, Crawford B. MacPherson, argued:
the more nearly the society approximates Friedman's ideal of a competitive
capitalist market society, where the state establishes and enforces the
individual right of appropriation and the rules of the market but does not
interfere in the operation of the market, the more completely is political power
being used to reinforce economic power (MacPherson 1973: 148-9).
Frankfurt critical theorists, structural Marxists, and some radical political scientists
add that, as long as the state does not engage in production but draws its revenuesfrom the private sector through taxation and/or public debt, it will be indirectly
subordinate to the logic of profit-oriented, market-mediated accumulation and open
to pressures from one or another fraction of capital. Neo-liberal pressures to reduce
direct taxation (see below) and the role of credit-rating agencies in relation to
sovereign debt reinforce these pressures. The vulnerability of radical governments to
a ’strike of capital’ is the material basis to Friedman’s claim that diffuse economic
power restricts and limits totalitarian (or socialist) political rule. This threat increasesthe chances that the national interest will be defined to favour capital.
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Such criticisms aside, capitalism is not always linked to political democracy.
Friedman noted that it can co-exist with authoritarian rule; and radical political
theorists have distinguished between 'normal' (democratic) capitalist states and
'exceptional' political regimes that abolish free elections in favour of executive
authority. Such contingencies are summarized neatly in Stanley Moore’s aphorism
that, 'when exploitation takes the form of exchange, dictatorship tends to take the
form of democracy' (1957: 85, italics added). In short, the relation is not guaranteed.
This indicates a need to explore the historical trajectory of the modern state and its
articulation to capitalist development. Several theorists have proposed that different
stages in capitalist development have different implications for this relation. First,
during the transition to capitalism, state action is needed to create the conditions for
economic exchange among 'equals'. An absolutist state pursuing mercantilist
policies is appropriate. Second, once competitive capitalism has been consolidated,
a liberal state form gives the fullest freedom to individual capitals compatible with
securing the general conditions for accumulation. It combines general laissez-faire
with specific interventions to redress the effects of unfettered competition (e.g.,
factory legislation). Although the liberal state need not be democratic , it is based on
the rule of law and often coupled with parliamentarism. This reinforces the illusion of
equality among citizens to match the illusion of equality between buyers and sellers
of labour-power. Even so, as voters elect large numbers of social democratic and
communist deputies, parliament is less able to arbitrate among competing capitalist
interests and this task is therefore transferred to the executive. Third, as capi tal’s
crisis-tendencies intensify, the state is pressured to intervene to renew accumulation,
often at the cost of subaltern classes. This leads to a strong state and there are evenfewer opportunities for popular participation in policy formation (cf. Holloway and
Picciotto 1977; Mandel 1972; Gerstenberger 2011).
At most, this simplistic three-stage model holds for metropolitan societies that
underwent early industrialization and had an extended period of competitive
capitalism. Britain, Holland, Belgium, and the United States, for example, could have
competitive capitalism, a strong bourgeoisie, and a liberal state. However, asGerschenkron (1962) and others note, banks and the state had bigger roles in
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second-wave industrialization: competitive capitalism was therefore weaker, even
where it existed, and political capitalism had a bigger role. In such cases, the phases
of mercantilism (with or without absolutism) and interventionism tend to merge and
liberal states are absent or ineffective. Examples include Bonapartism and
Bismarckism and Tsarist autocracy. Similar arguments apply to developmental
states (which were often anti-democratic national security states) and their
successors in third-wave industrialization and to many post-socialist ‘transition’
states (notably those that are resource-rich). As developmental states sought to
catch-up with advanced economies through export-led growth, there were strong
incentives for low-waged, labour-repressive primitive accumulation. The experience
of imperialism also indicates the limits to any simple equation of capitalism and
democracy and this is reflected in the legacies of post-colonial states in Africa, Asia
and Latin American states. In short, any study of the relations between capitalism
and political regimes must consider variant forms and stages of capitalism and the
insertion of societies into the world market and the international division of labour.
The commodity fetishism of free markets and the political fetishism of a constitutional
state cannot ensure a stable fit between free markets and liberal democracy.
Something more is required. A crucial material basis for the reproduction of liberal
democracy is the institutional separation between the economic and political in
capitalist societies and its reflection in a clear demarcation between economic and
political class struggle. From capital’s viewpoint, the ideal position is one where
economic class struggle is confined within the limits of the market relation and
political class struggle occurs within those of bourgeois parliamentarism. Thus,
whereas trade union struggles would focus on wages and conditions, political
struggles would seek social reforms by mobilizing public opinion and seekingparliamentary majorities. Trade union power would be confined to industrial disputes
rather than used to support parliamentary action; and state power would be limited to
the 'public' sphere and not used to interfere in private disputes or constrain the rights
of private property, including capital’s rights to manage their enterprises and freely
allocate their capital. Insofar as this institutional separation and its impact on class
struggle are reproduced, subaltern classes find it hard to mobilize their full potential
for collective action, whether defensively or offensively. Moreover, where capitalismrests on equal exchange (trade in free markets and rationally-organized production),
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the bourgeoisie need not control the state directly provided that it maintains the
juridical, monetary, and other extra-economic conditions for accumulation.
Thus the adequacy of the bourgeois democratic republic depends on the overall
economic, political and ideological situation and its implications for the unstable
equilibrium of compromise necessary to the democratic constitution. Thus,
commenting on the French constitution in 1850, Karl Marx noted a ‘comprehensive
contradiction’:
… the classes whose social slavery the constitution is to perpetuate –
proletariat, peasantry, petty bourgeoisie – it puts in possession of political
power through universal suffrage. And from the class whose old social power
it sanctions, the bourgeoisie, it withdraws the political guarantees of this
power. … From the first group it demands that they should not go forward
from political to social emancipation; from the others that they should not go
back from social to political restoration (Marx 1978: 77, italics added).
This comprehensive contradiction means that the form of political regimes and
content of state policies depend on the dynamic of political struggles rather than
immediate economic circumstances. It follows that political analysis must consider
state forms, political regimes, political discourses, and the changing balance of
political forces as well as basic economic relations, economic crises, and the
economic conjuncture.
Any resolution of this contradiction is partial, provisional, and temporary because it
depends on the changing balance of political forces. A key challenge, as AndrewGamble (1973) observes, is to create one or more political parties that can reconcile
the politics of support and politics of power. The former involves the democratic
electoral constraints entailed in a 'one-person-one-vote-one-value' system in which
success depends on securing a majority or large plurality of votes. Conversely, the
politics of power denotes the constraints on the exercise of state power in conditions
where power is not allotted equally to each and every citizen but depends on the
changing economic, political, and ideological conjuncture. Thus the politics ofsupport must be pursued within the constraints imposed by the politics of power.
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Politicians and parties that exceed these constraints will be electorally unpopular
(because their programmes seem sectional, extreme, or unrealistic) or, if elected, will
be forced to make U-turns and/or to embrace the prevailing orthodoxies. In brief,
unless political movements accept the rules of the electoral game and the realities of
political power, they face electoral impotence or, if elected, the need for U-turns.
Natural governing parties are those that win majorities (or pluralities) with electoral
programmes that are ‘politically’ realistic. Different parties with different social bases
may achieve this status at different times. If they exist, liberal democratic politics is
possible. Where these conditions are not met, we find a representational crisis of the
political system and a crisis of hegemony .
These constraints also affect the dominant classes and class fractions. Democracy
offers different fractions the chance to bargain, compromise, and adjust their
interests in ways that promote their long-term interests. Nicos Poulantzas elaborated
some of these mechanisms (1973, 1978). He argued that the institutional matrix of
the state in advanced capitalist democracies facilitates the organization of the
hegemony of the dominant power bloc and the disorganization of subaltern classes.
This dual task is facilitated by the architecture of the state: individual citizenship
fragments and atomizes the members of civil society (the 'isolation effect'); and the
legally sovereign state is expected and empowered to define and promote the
'national interest' and 'public good' on behalf of these citizens (the 'unification effect').
Moreover, since citizenship is not based on class location but on the formal equality
of all members of society, their common interests are expected to cut across class
antagonisms. This encourages aspiring governing parties to articulate and aggregate
the interests of the dominated classes and connect them to those of dominant
classes. In addition, electoral competition and parliamentary politics permits changesin the balance of power without serious threat to the stability of the state system as a
whole. The circulation of power among natural governing parties thereby reinforces
the belief in a neutral state that can reconcile class conflicts.
In addition, where surplus-labour is appropriated through market forces rather than
coercion, capital can offer political concessions (such as welfare state benefits)
without threatening accumulation. In these conditions, universal suffrage, competingparties, the separation of powers, parliamentary government all contribute to the
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flexibility of a political system which means that power can be continually readjusted
to secure social cohesion. And, since the cohesion thereby secured is that of a
class-divided society, this also maintains class domination. Indeed, working class
struggles can sometimes force policies on capital that advance its long-term
interests. Two examples are nineteenth-century factory legislation and the Cold War
class compromise that facilitated a virtuous circle of mass production and mass
consumption during the post-war Atlantic Fordist boom. There are limits to such
policies, of course, seen in the developing fiscal crisis of the state and its
repercussions on legitimacy.
Another important feature of the modern state is the formal separation between
representation and administration as reflected in the partisan neutrality of officials
compared to the partisanship of elected representatives. Bureaucratic domination
separates citizens from control over the means of administration. This holds as much
for economic intervention and welfare administration as for the means of coercion
and repression. It leads to the individuation and potential mutual isolation of citizens
as clients or consumers of distinct, multi-scalar public services. This fragments the
agents and targets of political struggle and transforms ‘the people’ into a series of
client groups competing for state resources. The separation of powers has similar
effects, especially when the administration is protected by official secrecy and state
control over information flows. As neo-liberalism privatizes state services and or
delegates their provision to public-private partnerships, there is even less public
accountability, even if only in an irregular plebiscitary form.
FROM PARLIAMENTARY DEMOCRACY TO AUTHORITARIAN STATISM
During periods of political crisis, the ‘comprehensive contradiction’ of liberal
democracy prompts open struggles between subaltern and dominant classes over
the nature and ends of government. Three recurrent responses to this situation are:
(1) reorganize the system of representation (especially its electoral aspects) to
weaken the prospects of radical, popular-democratic or socialist governments; (2)
promote governments of national unity based on cooperation among the natural
governing parties and the co-option or suspension of other parties; and (3) limit thepowers of parliament and elected officials by reinforcing the independence of key
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administrative apparatuses (e.g., central banks, the security apparatus) and/or
declaring states of economic or political emergency. All three responses have been
seen since the crisis of Atlantic Fordism became clear in the mid-1970s and have
been reinforced during the North Atlantic Financial Crisis (NAFC). Before reviewing
recent events, however, I summarize two earlier accounts of these (and related)
tendencies in metropolitan capitalism and refer to a subsequent account of the rise
of ‘post-democracy’ in the metropolitan heartlands.
State Monopoly Capitalism
Theories of state monopoly capitalism (SMC) emerged during the Great War to
describe the ‘war socialism’ adopted by the belligerent capitalist states. They were
elaborated in response to trends during the Great Depression, the Second World
War, and the rise of Atlantic Fordism and its subsequent crisis. They focus on the
economic policies and overall organization of the state as an apparatus of political
class domination. They highlight ten trends: (1) the political commanding heights are
occupied by persons with family, economic, or ideological ties to monopoly capital;
(2) governing parties become key instruments of ideological control over the
population through monopoly financing of parties, party conferences, and election
campaigns and the centralization and bureaucratization of party organization; (3)
monopolies extend their control over ‘the means of mental production’ (e.g.,
education, advertising, mass media) with a view to limiting and channelling popular
pressures for state intervention; (4) associations, lobbies, and individual firms gain
influence in all fields of domestic and foreign policy, thanks to their direct contacts
with ministries and politicians and the expansion of state-monopoly complexes in
many areas, such as the military-industrial complex, energy supplies, big pharma,infrastructure, and agriculture; and (5) a financial oligarchy tends to dominate here
because it has the central role inside the network of cross-cutting monopoly interests
and/or its organizing role in the key peak organizations.
In addition, the state is reorganized. Thus: (6) parliament loses power to the political
executive and to an expanding array of functionally-oriented ministries, special
tribunals, ‘soft law‘, quasi-state organs, state-sponsored economic institutions, etc.;(7) the police, paramilitary, and military apparatuses are reinforced and, at the same
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time, (8) the state’s own ideological functions are also strengthened; (9) there are
complementary processes of deconcentration und decentralization of power at the
micro-economic and/or local political levels, which helps capital to manage the
smallest sites of valorization and to penetrate all areas of social life; and (10) these
changes are accompanied by massive growth in international state monopoly
apparatuses on the political and economic levels and these lie beyond the control of
national governments.
Although these theories often equate SMC with state planning, this relation does not
always hold. For example, Heinz Jung distinguished a ‘statist’ variant of SMC, based
on extensive state economic intervention and the social-reformist integration of
subordinate classes, and a 'private' variant, which pursued market-oriented
economic management and relied on a strong state with a more repressive
integration of the dominated classes. He argued that this second [eventually neo-
liberal] form was becoming more important, especially in Germany (Jung 1979).
Another scholar, Philippe Herzog, noted that these trends are shaped by the balance
among all classes, fractions, and strata (not just monopolies) and that the search for
policy coherence means that state actions rarely meet directly all the demands of
specific interests but require (uneven) sacrifices on all sides. Indeed, if the state tried
to resolve problems on behalf of just one fraction, it would aggravate them for capital
as a whole and thus for all fractions. Conversely, even if it tried to realize the
collective interests of capital, the state still needs support from some capitals to
execute its policies and may favour these more – thereby disturbing the prevailing
equilibrium of compromise among these fractions and their allies (Herzog 1971).
Authoritarian Statism
In the 1970s, Poulantzas gave a similar account of democratic decline, describing
the ‘new normal’ form of capitalist state as ‘authoritarian statism’. Thus, continuing
the earlier metaphor, this is now ‘the best possible political shell for capital’. Its basic
tendency is ‘intensified state control over every sphere of socio-economic life
combined with radical decline of the institutions of political democracy and withdraconian and multiform curtailment of so-called “formal” liberties’ (1978: 203 –4).
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More specifically, drawing on several of Poulantzas’s analyses, ‘authoritarian
statism’ can be said to have six key features. F irst, the state’s legislative, executive,
and judicial branches are increasingly fused, with real power now concentrated and
centralized in the administration. Second, Parliament becomes a mere electoral
‘registration chamber’ with circumscribed powers and there is a decline in the rule of
law. Third, political parties no longer fulfil their traditional functions in policy-making
(through compromise around a common programme) and in political legitimation
(through electoral competition for a mandate). Instead, fourth, the ‘natural governing
parties’ (as defined by Gamble 1973) now function to legitimate state policy and
transmit the prevailing state ideology to the masses through quasi-plebiscitary
electioneering – as Schumpeter (1943) had already posited – and, in this context,
engage in electoral manipulation based partly on cultivating close ties to the mass
media, which also acquire a key role in legitimation. Conversely, fifth, as monopoly
capital finds it hard to organize its hegemony through parties other than the dominant
mass party (which can comprise an entrenched single party or a centrist tendency
with wings in all ‘natural governing parties’), it also relies on an expanded lobby
system to influence the administration. Sixth, a ‘parallel power network’ cross-cuts
the formal divisions of the state and wields a decisive role behind the scenes on
behalf of monopoly capital in coordinating official, semi-official, and ‘private’ activities
across various policy fields. It follows the evolving strategic line of the dominant
mass party (when it is in power) and plays an obstructive role if a radical party wins
office (Poulantzas 1978: 203-40; for similar arguments, see Armin 2005; Greven
2010; and, on parties in particular, Blyth and Katz 2005).
Poulantzas related the ‘irresistible rise’ of authoritarian statism mainly to the state’s
increasing assumption of economic functions to tame the ‘wilder’ manifestations of
capital’s crisis-tendencies (witness the Great Depression), promote international
competitiveness, and extend the profit-oriented, market-mediated logic of capital
accumulation into ever more spheres of social life (1978: 163-99). In the era of
finance-dominated accumulation, taming the wilder manifestations also means to
‘intervene periodically to underwrite the solvency of banks, to provide extraordinary
liquidity and to guarantee the deposits of the public with banks’ (Lapavitsas 2013a:27-28). This expanding range of activities undermines the rule of law based on
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general, formal, and universal norms enacted by a parliament with a popular
mandate. Instead legal norms are set by the political executive and administration in
the light of particular conjunctures, situations, and interests. Nowadays one might
add that their elaboration is increasingly delegated to non-accountable private
authorities at different scales up to and including the global (for example, Cutler
2009; McKeen-Edwards and Porter 2013). While this summary may imply that
Poulantzas believed that the ‘authoritarian statist’ path runs smoothly, he stressed
that state power continually runs up against limits inherent in its political matrix and
operations (reflected in internal divisions and political resistance) as well as limits
imposed by the contradictory and dilemmatic capital relation. Thus he argued that
this trend involves a paradoxical strengthening-weakening of the state. Muddling
through, crises of crisis-management, and pre-emptive policing of resistance were
other symptoms of the incompressibility of capital’s contradictions and the
intensifying crisis-tendencies of an increasingly integrated world market (Poulantzas
1978: 241-247 and passim; for a detailed exposition and critique, see Jessop 1985).
Post-Democracy
Colin Crouch has recently won acclaim for an analysis that is superficially similar to
those just presented. But he focuses on symptoms at the level of the political scene
and fails to connect trends there to more fundamental shifts in capitalism. He starts
from the vacuum in mass political participation created by the decline of the working
class in advanced capitalist societies. The political class is now linked to society
more or less solely via business lobbyists (Crouch 2004: viii). While elections
continue and can change governments, electoral debate is now a tightly controlled
spectacle, managed by rival teams of professional experts in persuasion andfocusing on a few issues chosen by these teams. The mass of citizens plays a
passive, quiescent, even apathetic part, responding only to the signals given them.
Behind the scenes, however, politics is shaped by interaction between elected
governments and self-serving elites, which overwhelmingly represent business
interests (2004: 4, 19). This trend occurs not only in interventionist welfare states but
also in neo-liberal regimes with limited state spending. Indeed, ‘the more that the
state withdraws from providing for the lives of ordinary people, making them
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apathetic about politics, the more easily can corporate interests use it more or less
unobserved as their private milch-cow’ (Crouch 2004: 19).
Crouch adds that the political party form has changed from a set of concentric circles
tied to its social base towards a complex organization of leaders, activist
professionals, sympathetic experts who work for money, pure professionals (who
may not be supporters), and groups of lobbyists who move between party, lobbying,
and business organizations (2004: 72-73; cf. Wedel 2009). An activist base is no
longer vital to electoral success: electioneering is now funded by the private sector.
So ‘the classic party of the twenty-first century would be … a self-reproducing inner
elite, remote from its mass movement base, but nested squarely within a number of
corporations, which will in turn fund the sub-contracting of opinion-polling, policy-
advice and vote-gathering services in exchange for firms that seek political influence
being well regarded by the party when in government’ (2004: 74).
FINANCE-DOMINATED ACCUMULATION
These three accounts indicate a declining affinity between capitalism and
democracy, although they trace its origins to the interwar period, the mid-1970s, and
the 1990s respectively. This paper now explores this decreasing fit in three ways.
First, it identifies changes in the circuits of capital linked to financialization and the
ties between interest-bearing capital and the state apparatus – ties that become
especially evident during economic crises. Second, it notes that the resulting crisis of
bourgeois political hegemony (whether this is based on claims to democratic
legitimacy or on delivering growth and prosperity for all or most citizens) is
nonetheless combined with a remarkable survival of bourgeois political as well aseconomic domination. It relates this apparent paradox to the further extension of a
‘post-democratic’ authoritarian statism. And, third, in line with Poulantzas’s analysis,
it argues that this is related to a simultaneous strengthening-weakening of state
power that is expressed in the current crisis of crisis-management in relation to the
North Atlantic Financial Crisis, the Eurozone crisis, and the problems of dealing with
public and sovereign debt.
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For a while, some commentators held that the rise of ‘finance-led growth’ following
the crisis of ‘wage-led growth’ linked to Fordism would facilitate economic
democracy. This would not involve some form of workers’ control but the freeing of
citizen-clients to become sovereign-consumers. Fordism involved a virtuous circle of
mass production and mass consumption and a crucial role for the Fordist wage
relation as a driver of rising prosperity in relatively closed national economies, the
financialization of capitalist social relations (including the wage relation) would
enable workers to share in wealth-driven growth based on their patrimony in home
ownership, shares, funded private pensions, and so on (e.g., Aglietta and Rebérioux
2005; see also Boyer 2000). Some believed that this ‘private Keynesianism’ was an
adequate substitute for the Keynesian welfare state. Following the NAFC, however,
advocates of this view are less sanguine. Well before this crisis, however, other
commentators had already suggested the term ‘finance-dominated’ to describe this
post-Fordist regime in order to separate the empirical trend towards the
autonomization of finance from the question of whether it produces growth, greater
volatility, or stagnation (Stockhammer 2011: 3; see also van Treeck 2008).
Financialization is a principle of societal organization as well as a form of economic
organization. Money, credit and debt have existed for three millennia but acquire
new forms and functions with the consolidation of profit-oriented, market-mediated
capitalism based on formally free labour-power. In particular, capitalist credit-money
is one of the basic forms of the capital relation and essential to its continued
reproduction. Among the forms of credit money emerging with capitalism is interest-
bearing capital (to be distinguished from more traditional usury capital) and this, in
turn, can generate increasingly fantastic forms of fictitious capital (Marx 1967;
Carneiro et al., 2012). Where the circuits of interest-bearing capital becameincreasingly autonomous from those of profit-producing capital (which can only occur
in the short- to medium-term before serious crises occur), the impact of fictitious
credit, fictitious capital, and fictitious profits reshaped the wider social formation in
many respects. These fictitious forms are major vectors of the colonization,
commodification, and, eventually, financialization of everyday life. This points beyond
the general significance of capitalist credit-money in the circuits of capital to its
specific forms and effects when interest-bearing capital, as opposed, for example, tosuppliers of trade or production credit, becomes the dominant force in economic,
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political, and social life. This did not result spontaneously from the operation of the
‘invisible hand’ but required a series of deliberate economic, political, and social
interventions mediated through the iron fist of the state (often in a velvet glove) and
invisible handshakes that can be placed under the rubric of neo-liberalization and its
role in accelerating world market integration (Duménil and Lévy 2004; Harvey 2005).
Neo-liberalization varies nationally but everywhere tends to favour exchange- over
use-value. The neo-liberal project treats workers as disposable and substitutable
factors of production, the wage (including the social wage) as a cost of (international)
production, profit-generating capital as value-in-motion rather than substantive
assets, money as hypermobile interest-bearing capital than national fiat money,
nature as a commodity, knowledge as intellectual property, and so on (Jessop 2002).
The neo-liberal form of world market integration enhances capital’s capacity to defer
and/or displace internal contradictions and other problems onto other economic
actors and interests, other spheres of society, and the environment in several ways
(Jessop 2012). Interest-bearing capital gains strongly from this because it controls
the most liquid, abstract, and generalized resource and because it has become the
most integrated fraction of capital. More generally, the disembedding of capital from
the frictions of national power containers and national politics means that the law of
value tends more and more to operate globally by commensurating local conditions
at the same time as it promotes the treadmill search for superprofits. Among other
effects, this treadmill pressured banking capital to supplement the ‘boring banking’
activities of financial intermediation and risk-management with financial speculation
and risk-taking in the search for higher profits (cf. LiPuma and Lee 2004; Haldane
2012; Elsner 2012). Indeed, as more scandals emerge in the financial sector, it isbecoming clear that these superprofits derive in part from predatory and, indeed,
criminal activities that were facilitated by successive measures of deregulation
enacted thanks to the financing of political parties and unusual deals with political
bodies (Smith 2010; Will, Handelman, and Brotherton 2013).
In short, neo-liberalism tends to promote financialization, both as a strategic
objective and as an inevitable outcome. As this process expands and penetratesdeeper into the social and natural world, it transforms the micro-, meso- and macro-
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dynamics of capitalist economies. First, it alters the calculations and behaviour of
non-financial firms through the rise of shareholder value as a coercive discourse,
technology of governance, and vector of competition. One aspect is the growing
importance for non-financial firms of financial activities (e.g., treasury functions,
financial intermediation, using retained profits for share buybacks and/or acquisition
or expansion of financial subsidiaries) that are not directly tied to their main profit-
producing pursuits. Thus financial revenues became more important relative to
profits of enterprise for these firms (Krippner 2005; Nölke 2009; Lapavitsas 2013a).
Second, it boosts the size and influence of the financial sector. Fee-producing and
risk-taking activities increase relative to banking capital’s more traditional roles in
intermediation and risk management; securitization, leverage and shadow banking
with corresponding liquidity risks and weak prudential controls also expand; and so
does the significance of new forms of financial capital (e.g., hedge funds, private
equity, vulture capital, sovereign wealth funds). Third, everyday life is financialized
(see below). Fourth, as successive crises from the mid-1970s show, financialization
makes the economy more prone to recession and, in severe cases, more liable to
the downward spiral of debt-deflation-default dynamics (Dore 2008; Duménil and
Lévy, 2005; Fine 2010; Lapavitsas 2013a; Rasmus 2010).
Table 1 summarizes some of these themes and also presents some key aspects of
the institutional and spatio-temporal fixes of an ideal-typical finance-dominated
accumulation regime when it is relatively stable. This account is based on a modified
régulation approach perspective that returns to its first-generation studies that took
seriously the contradictions of the capital relation (for details, see Jessop 2013a).
In these terms, the principal (or dominant) structural forms are money and the(social) wage relation; others are subordinated to these forms in potentially
destabilizing ways – as the genesis and repercussions of the NAFC show. The
primary aspect of money (understood as credit money rather than coin or bullion) in
this regime is its role as the most abstract expression of capital and its disembedding
from national economic controls in a space of global flows. Fictitious credit (pseudo-
validated loans that are not advanced for productive investment) and fictitious capital
(capital as property rather than functioning capital) gain a much larger role comparedwith Fordism – with the volumes of securitized loans and of credit advanced for
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financial trading massively boosted by neo-liberal banking and financial deregulation.
Financial innovation in turn facilitates the increasing acceleration and hyper-mobility
of credit money and its escape from regulation. This contrasts with the more
territorial logic of Atlantic Fordism, in which national economies were relatively
closed, the Bretton Woods international monetary regime was based on a gold-dollar
exchange standard and set limits to currency volatility, and even ‘liberal market
economies’ regulated their financial institutions. The secondary aspect of money
capital (real assets) was secured through the neo-liberal policy boost to post-tax
profits for profit-producing capital, reflecting the importance of ties to political
authorities in finance-dominated regimes and the general dynamic of competitive
fiscal policy in the world market in other regimes. The boost to post-tax profits has
not always been reflected, however, in productive investment owing to pressures
from the logic of shareholder value (Aglietta and Rebérioux 2005).
The primary aspect of the wage is its treatment as a cost of (global) production
rather than as a source of (domestic) demand; this is linked to re-commodification of
social welfare in housing, pensions, higher education, health insurance, and so on.
This leads to growing flexibility of wage labour (especially increasing precarization),
downward pressure on wages and working conditions, and cuts in the residual social
wage. A further result is the financialization of everyday life as the labour force turns
to credit (and usury) to maintain its standard of living and to provide for its daily, life-
course, and intergenerational reproduction. Combined with the increased returns to
profit-producing and interest-bearing capital, this also intensifies income and wealth
inequalities in the economies subject to finance-dominated accumulation, which now
match or exceed their levels in just before the 1929 Crash (Elsner 2012; Saez 2013).
The best possible state form for such a regime, more noted for its absence than
presence, is an Ordo-liberal framework, as envisaged in the original Social Market
Economy paradigm. This would provide a formally adequate institutional and spatio-
temporal fix, including the embedding of neo-liberalism internationally in a new
constitutionalism with credible commitments to corporate social responsibility.
However, the neo-liberal bias towards de-regulation, which widened the space for
financialization, was more often linked to an institutional fix that relied (and still relies)on ‘unusual deals with political authority’, predatory capitalism, and reckless
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speculation – all of which have fuelled the global financial crisis. As the limits to
‘more market, less state’ emerged, there was growing resort to flanking and
supporting measures to keep the neo-liberal show on the road. This was reflected in
the discourse and policies of the ‘Third Way’, which maintained the course of neo -
liberalization in new circumstances, and is linked to the NAFC (witness its eruption
under ‘New Labour’ in Britain as well as the Bush Administration in the USA).
Table 1: Finance-Dominated Accumulation en Régulat ion ?
Basic
Form Primary
Aspect Secondary
Aspect Institutional
Fixes Spatio-
temporal fixes
Money /
Capital
Fast, hyper-mobilemoney as generalform (+ derivatives)as general form
Valorization ofcapital as fixedasset in globaldivision of labour
De-regulation offinancial markets,state targets pricestability, not jobs
Disembed flows fromnational or regionalstate controls; grabfuture values
(Social)
wage
Private wage plushousehold credit(promote privateKeynesianism)
Cut back onresidual socialwage as (global)cost of production
Numerical + timeflexibility; new creditforms forhouseholds
War for talents +race to bottom formost workers and‘squeezed middle’
State Neo-liberal policieswith Ordo-liberalconstitution
Flanking plus soft +hard disciplinarymeasures to secureneo-liberalism
Free market plusauthoritarian “strongstate”
Intensifies unevendevelopment atmany sites + scalesas market outcome
Global
Regime
Create open spaceof flows for all formsof capital
Dampen unevengrowth, adapt torising economies
WashingtonConsensus regimes
Core-periphery tied toUS power, itsallies and relays
KE
Y
Principal (or dominant) structural form Secondary structural form
Primary aspect of principal form Primary aspect of secondary form
Secondary aspect of principal form Secondary aspect of secondary form
The global influence of financialization was facilitated by the Washington Consensus,
which was heavily promoted by the USA and its allies to roll out liberalization,
deregulation, privatization, and market proxies in any residual state services
(whether infrastructural or welfare). This Consensus also promoted cuts in directtaxes (notably for corporations and financial institutions), aided by a fiscal race to the
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bottom to attract or retain investment and by greater use of onshore as well as
offshore tax havens) and a shift towards indirect taxes. This was supposed to
increase the scope for market forces to allocate capital globally but, in conjunction
with political capitalism and the logic of shareholder value, it has also re-distributed
income and wealth towards the ‘have-lots’ at the expense not only of the ‘have-nots’
but also of the ‘squeezed middle’.
The crisis of finance-dominated accumulation emerges from the contradictions of the
capital relation as these are modified by this regime and its specific instantiations.
Because continued expansion depends heavily on the pseudo-validation of highly
leveraged speculative and Ponzi debt, this regime contains its own inherent crisis-
generating mechanism rooted in the systemic conflict between interest-bearing and
profit-producing capital. Wolfram Elsner explains this as follows. Financial capital in
this regime has a target rate of return that is several times greater than the historic
norm for profit-producing capital and, worse still, in an effort to achieve this target,
engages in massive leveraging of fictitious credit and capital. In aggregate, the
eventual validation of this massively leveraged capital would demand a total volume
of surplus-value that far exceeds the productive and exploitative capacity of existing
profit-producing capital. Attempts to square this circle depend on three strategies
that are individually and collectively unsustainable. One is to create and manage
bubbles, the main redistribution mechanism in finance-dominated accumulation, and
then bail out (or get bailed out) at the right moment (Elsner 2012: 146-7). This is
impossible without the complicity of central banks and government in the finance-
dominated economies and those subject to their contagion effects. Another is to
invoke a system-threatening ‘financial emergency’ that justifies efforts to reduce
individual and social wages, impose internal devaluation, and privatize publicservices and assets to pay off the public debt incurred in massive bailouts. States at
different sites and scales have key roles here too. The third strategy involves
primitive accumulation (e.g., land-grabbing, capitalizing nature and its services
enclosing the intellectual commons, privatizing accumulated public wealth, colonizing
the residual public sector, and so on). This is also impossible without state
involvement. In short, the most rarefied and leveraged forms of fictitious credit and
capital are now primarily, and systemically rather than merely contingently, problem-makers; and the rest of the economy, society and nature are the problem-takers.
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Through these and other mechanisms the NAFC reverses many features of the
institutional and spatio-temporal fixes that (could have) provided it with some partial,
provisional, and temporary stability. Fictitious profits and wealth combined with
private Keynesianism did not ensure stable finance-led growth but created volatility
and crisis. Because of these reversals, and without decisive intervention to roll back
the power of financial capital that neo-liberalism has facilitated, the crisis tends to
feed on itself economically, politically, and socially (see Table 2). Contagion in the
Eurozone has additional causes and consequences, rooted in attempts to use
monetary union to reinforce neo-liberalism and promote the euro as a quasi-world
money without establishing the necessary institutional conditions for an effective
currency, banking, fiscal, and transfer union (cf. Lapavitsas 2013b).
Table 2: Finance-Dominated Accumulation in Crisis
Basic
Form Primary Aspect Secondary
Aspect Institutional
Fixes Spatio-temporal
fixes
Money/Capital
Rising antagonismbetween “MainStreet” and “WallStreet” (City, etc.)
Epic recessionbased on debt-default-deflationdynamics (D4)
De-regulationcrisis of TBTFpredatory finance+ contagion effects
Protectionism in coreeconomies, growingresistance to free tradefrom periphery
(Social)wage
Credit crunch putsprivate Keynesian-ism into reverse
Austerityreinforces D4double dip or epicrecession
Growing reservearmy of surplus,precarious labour
Global crisis andinternal devaluation
reproduction crisis
State
Political capitalism
undermines anyOrdo-liberalism
Austerity policies
meet resistance,harsher discipline
Crises in political
markets reinforce“post-democracy”
Cannot halt uneven
development at manysites + scales
GlobalRegime
Unregulated spaceof flows intensifies“triple crisis”
Multilateral, multi-scalar imbalancesand race to bottom
Crisis + rejectionof (post-)WashingtonConsensus
Crisis of US hegemony,BRICS in crisis anddisarray
While financialization initially benefitted many economic agents, the collapse of credit
bubbles and the implosion of financial speculation have reversed this stimulus effect.
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Whereas growth in this regime depended on acceleration in fictitious credit, the
writing down of bad debt, the repayment of debt, reluctance to contract new debt,
and the hoarding of available capital throw the mechanism of pseudo-validated
demand into reverse. Thus debt deleveraging, especially when it occurs in both the
private and public sectors, creates conditions for a vicious cycle of ‘debt-default-
deflation’ dynamics and an eventual epic recession (Rasmus 2010; Keen 2011).
The unwillingness of interest-bearing capital to sacrifice its short-term economic
interests to protect its long-term political hegemony or, at least, domination activates
the potential antagonism between ‘Wall Street’ and ‘Main Street’ (and their
equivalents elsewhere) in three ways. First, too-big-to-fail financial institutions benefit
from bailouts and from quantitative easing that enables them to rebuild their capital
base at low or no cost and to undertake further speculation. Second, small and
medium enterprises find it harder to access production and trade credit. And, third,
households find it harder to secure personal credit and/or to fund their now privatized
health, pension, higher education, and other life-course and intergenerational
reproduction needs. Most households also lose from the attack on ‘entitlements’,
previously part of the social wage in democratic welfare states, as these are
portrayed even more vocally than before as costs that prevent the rundown of public
and sovereign debt. This reversal of ‘private Keynesianism’ reinforces the debt-
default-deflation dynamics that threaten to shift economies from recession into epic
recession or even another depression. Similar results follow in the Eurozone from
official attempts to create an ‘internal devaluation’ through cuts in the private and
social wage, other production costs, and so on, to compensate for the legal
restrictions on devaluation or exit from the Eurozone. I deal with the some of the
political preconditions and effects of these crisis measures in the next section.
Debt-default-deflation dynamics also strengthen other crisis-tendencies inherent in
neo-liberalism. The global ‘reserve army of labour’ expands, weakening workers’
bargaining power over wages and conditions, and increasing precarious work.
Privatization and austerity in areas needed for a productive rather than parasitic
economy (e.g., infrastructure provision, education, health, and science) are
undermining their capacity to promote growth in the ‘real economy’. A fragile
Washington Consensus is challenged by demands for protectionism in crisis-hit
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metropolitan economies and opposition to free trade in the periphery (sometimes
linked to proposals for ‘post-neo-liberalism’). Yet transnational elites continue to
present free trade agreements as an essential and purportedly cost-free economic
recovery measure and to veil the extent to which such agreements would actually
entrench the rights of capital as private property against subaltern groups and less
market-friendly states and regimes. The NAFC has also aggravated imbalances in
the global economy and shifted its centre of gravity to the east and south but even
beneficiaries such as the BRICS have suffered contagion from the NAFC in addition
to experiencing their own particular, endogenous crisis-tendencies.
‘From Social to Political Restoration’?
The reversals noted above, the conflicts they provoke, and the resulting political and
economic challenges for crisis-management, are reinforcing the trend toward post-
democratic authoritarian statism. The genesis and survival of the finance-dominated
regime are linked to a predatory and parasitic politically oriented capitalism. Interest-
bearing capital and other capitals with vested interests in the neo-liberal project have
used their political influence to rescue financial institutions that are too big, too
systemically important, or just too well-connected to be allowed to fail. Rather than
allowing market forces to discipline financial institutions through losses and
bankruptcy, states have socialized losses, translating private debt into public and/or
sovereign debt. They have also taken direct responsibility for managing contagion
effects in the always-already monetized ‘real economy, albeit in the pro-cyclical,
counterproductive form of private and public austerity. These measures have been
pursued at national level by ‘natural governing parties’ from the centre-left and
centre-right as well as by more ‘technocratic’ (i.e., bank-friendly, non-accountable)
regimes at the international, European, and some national levels. Indeed, the
Federal Reserve, the Bank of England, and the ‘troika’ in Europe (ECB, EU and IMF)
asymmetrically defend too big to fail institutions, protect tax-avoiding, tax-evading
companies and wealthy elites, and impose the costs of crisis on the general
population (cf. Johnson 2009; Hudson 2011; Elsner 2012). This has involved virtual
coups d’état in Greece and Italy and the more general fuelling of ‘deficit hysteria’ to
justify yet more neo-liberal policy measures in other indebted economies. Part of theideological campaign in this regard is the spurious conflation of necessary but ‘boring
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banking’ with financial speculation and risk-taking and the claim that shrinking and
regulating the latter activities will undermine the former.
Efforts to renew the finance-dominated, neo-liberal model tell us something about
the ability of those with power not to have to learn from their mistakes as well as
about the broader dynamics of class domination. Indeed, as interest-bearing capital
has finally encountered the constraints of real economic growth, it has upped the
stakes in the pursuit of neo-liberalism. The ‘new normal’ regime involves a
paradoxical strengthening and weakening of state power. Resort to bailouts and
quantitative easing that rely on the state’s role as lender of last resort and its
monopoly of taxation indicate the limited powers of the state to tame the effects of
crisis and, thanks to the influence of financial interests, to introduce reforms that
would present its resurgence. All the fisco-financial measures taken to date (July
2013), which are unprecedented in scale, have failed to resolve the underlying
contradictions and crisis-tendencies of finance-dominated accumulation and there is
a palpable crisis of crisis-management in many states and international agencies.
One sign of this is the growing split between the exit strategies proposed by profit-
producing capital and the policies favoured by those identified with the more
fantastical, irrational forms of interest-bearing capital and their allies. The neo-liberal
project has produced: (1) representational crises as the electorate grows more
detached from stable alignments with natural governing parties; (2) a legitimacy
crisis following from the failure to deliver sustainable finance-led growth and the
costs associated with crisis-management; and (3) a crisis of intellectual and moral
leadership associated with outright deception, official secrecy, populist rhetoric, and
media spin. In short, declaring states of economic and political emergency and
resorting to emergency measures indicate weakness rather than strength.
Furthermore, as austerity policies begin to bite, there is growing, if still fragmented,
resistance and growing anger about the kind of linkages among interest-bearing
capital, politicians, and state managers that Max Weber would have called ‘political
capitalism’. The best-known expressions of this resentment were for a while the
Occupy Movement with its slogan of the 99% the 1% and the Astro -turf ‘Tea Party’
movement in the USA. But there are many other grass-roots manifestations in, for
example, Greece, Spain, and Italy and many commentators have related the ‘Arab
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Spring’ to the impact of neo-liberal policies and financialization in the Middle East
and North Africa. But these movements mainly operate at a distance from the state,
changing the calculations of economic and political elites, but lacking access to the
real levers of power in the circuits of capital, the inner sanctums of national and
supranational state authorities, and the international agencies that exercise decisive
private authority in the world market.
Overall, this reconfiguration of the state and governance in response to the NAFC,
its contagion effects elsewhere, and the associated but distinct Eurozone Crisis
involves more than a simple continuation of trends that were already being
discussed in the 1920s and 1930s and again in the 1970s and 1980s – well before
the inherent crisis-tendencies of neo-liberalism, financialization, and finance-
dominated accumulation emerged in their heartlands (as opposed to the semi-
periphery and periphery) during the 2000s. Indeed, to flirt with evolutionary
language, the development of authoritarian statism seems to have been a pre-
adaptive change that is even more beneficial in the current crisis of finance-
dominated accumulation. We are still witnessing a step-change in the move to post-
democratic authoritarian statism and this is grounded in the increasingly tight web of
connections between interest-bearing capital and the political class along the lines
indicated in theories of (privatized) state monopoly capitalism. This nexus created
the conditions for financialization. It also enabled the de facto declaration of a state
of economic emergency that justified (1) the use of exceptional powers to rescue
insolvent financial institutions rather than to nationalize them or allow normal
bankruptcy procedures to be implemented and (2) the parallel declaration of a state
of political emergency that justifies increased surveillance, pre-emptive policing, and
paramilitary suppression of dissent. Even if there is a return to ‘financial business as
usual’ and interest-bearing capital has been fully restored socially , political
restoration of democratic rule will not be delivered voluntarily by the financial
oligarchy. This must be wrested from below.
The Challenges of Political Restoration and Social Emancipation
The bourgeois democratic republic is no longer, if ever it was, the best possiblepolitical shell for capitalism. The declining affinity between profit-oriented, market-
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mediated accumulation and constitutional democratic states is especially marked
where neo-liberal, finance-dominated accumulation has prevailed under the aegis of
interest-bearing capital. Yet the emerging conjuncture is taking a form different from
that envisaged by Marx in his comments on the fundamental contradiction in the
democratic constitution (see above). It is not the privileges of some national Ancien
Régime that is being restored politically as well as socially; instead we are seeing the
political consolidation of a new transnational power bloc organized around the
interests of interest-bearing capital.
This is a fresh illustration in another period of the comprehensive contradiction at the
heart of the democratic constitution and shows the fragile nature of the correlation
between capitalism and democracy. Where this correlation has existed, it depends
on trade in free markets and the rational organization of capitalist production in
conditions where an unstable equilibrium of compromise between capital and labour
allows labour to share in productivity gains through the wage and social wage (a
classic case is Atlantic Fordism). Neoliberalism and finance-dominated accumulation
challenge this relation. For, as Michael Hudson (2011) notes, for neoliberals, ‘a free
market is one free for a tax-favoured rentier class to extract interest, economic rent
and monopoly prices’ (Hudson 2011). This kind of free market, with its heavy
dependence on political lobbying, on unusual deals with political authorities, and on
force and domination to promote accumulation through dispossession, is
incompatible with the stripped-down formal democracy that currently exists.
By way of illustration, Wolfram Elsner suggests:
The EU ‘Economic and Financial Governance (or Government)’ by thePresident of the EU Commission, the ECB president, the heads of IMF and
ESM, the Council of Economic and Finance Ministers, and top bankers, may
easily become the post-democratic prototype and even a pre-dictatorial
governance structure against national sovereignty and democracies (Elsner
2012: 158, italics in original).
The post-democratic, authoritarian state of political emergency that is beingconstructed in this conjuncture will continue as the ‘best possible political shell’ for a
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predatory, finance-dominated accumulation regime even if, and when, the financial
crisis is resolved. For, as noted above, the survival of this new bloc depends heavily
on Weber’s three forms of political capitalism. The longer it survives, the more
harmful its effects on the ‘real economy’, human flourishing, and the natural
environment. Crises do not engender their own solutions but are objectively
overdetermined moments of subjective indeterminacy. How they are resolved, if at
all, depends on the balance of forces in each case. The manner and form of
resolution determines the forms of appearance of subsequent crises. It remains to
see whether the many fragmented forms of resistance can be linked up horizontally,
vertically, and transversally to provide an effective challenge to this new bloc, its
finance-dominated accumulation regime and its the ‘new normal’ state form by
exploiting their fragilities. This will require connecting economic and political power in
ways that are ‘proscribed’ by the democratic rules of the game but are realized
continually in non-democratic ways by the new transnational financial bloc.
Acknowledgements
This paper derives from an ESRC-funded Professorial Fellowship (RES-051-27-
0303). It benefitted from discussions with Alex Demirović, Alexander Gallas, Mathis
Heinrich, Thomas Sablowski, and Walter Oetsch. The usual disclaimers apply.
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