The global capital leviathan

The money mandarins of global capitalism and their political agents are utilizing the global crisis to impose brutal austerity and attempting to dismantle what is left of welfare systems and social states in Europe, North America and elsewhere. The budgetary and fiscal crises that supposedly justify spending cuts and austerity are contrived. They are a consequence of the unwillingness or inability of states to challenge capital and their disposition to transfer the burden of the crisis to working and popular classes. Global mobility has given capital enhanced class power over nationally based working classes and extraordinary structural influence over state managers who seek economic reactivation and macroeconomic stability.

To understand the current conjuncture we need to go back to the 1970s. The globalization stage of world capitalism we are now in itself evolved out the response of distinct agents to previous episodes of crisis, in particular to the 1970s’ crisis of Fordism–Keynesianism, or of redistributive capitalism. In the wake of that crisis capital went global as a strategy of the emergent transnational capitalist class and its political representatives to reconstitute its class power by breaking free of nation-state constraints to accumulation. These constraints – the so-called ‘class compromise’ – had been imposed on capital through decades of mass struggles around the world by nationally contained popular and working classes. During the 1980s and 1990s, however, globally oriented elites captured state power in most countries around the world and utilized that power to push capitalist globalization.

Globalization and neoliberal policies opened up vast new opportunities for transnational accumulation in the 1980s and 1990s. The revolution in computer and information technology (CIT) and other technological advances helped emergent transnational capital to achieve major gains in productivity and to restructure, ‘flexibilize’ and shed labour worldwide. This, in turn, undercut wages and the social wage and facilitated a transfer of income to capital and to high-consumption sectors around the world that provided new market segments fuelling growth. In sum, globalization made possible a major extensive and intensive expansion of the system and unleashed a frenzied new round of accumulation worldwide that offset the 1970s’ crisis of declining profits and investment opportunities.

But crises of overaccumulation follow periods of hyperaccumulation. The current global crisis is one of overaccumulation, or the lack of outlets for the profitable absorption of surpluses. Crisis theory suggests that overaccumulation may be manifested in different ways. ‘Profit squeeze’ theorists demonstrated falling profits in the crisis of the 1970s, but this does not explain the current situation as profits soared in the period leading up to crisis and have recovered since their drop in 2008–09…

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