Commentary on Political Economy

Sunday 31 July 2016

Achilles's Heel: The Coming Collapse of Global Capital

Capitalists are good at selling things. Long before the wealth they controlled was applied to the expropriation of the English peasantry and then to the alienation of their living labour for the purpose of industrial production to cover expanding consumption – long before that time, the industrial bourgeoisie was a class of merchants who profited from moving or trading merchandise between different ‘markets’. Indeed, the earliest definition of ‘entrepreneur’ was given by Cantillon and it referred exclusively to merchants, not to ‘producers’ who in his time were still predominantly artisans.

Even to this day, when we think of capitalists we think almost exclusively of ‘businessmen’ – in other words, we think of either managers and bankers or of merchants ‘cutting deals’ or trading merchandise. We never think of engineers, for instance. The notion of capitalist is thus identified with that of someone ‘selling a product’. The most important aspect of capitalism is not that of producing for need but rather that of creating artificial ‘needs’ or wants, and specifically needs and wants that do not emancipate workers but instead ensure that workers remain chained to or enslaved by wage labour.

Capitalism therefore has the overwhelming intrinsic tendency to present its products and its industries in the most appealing light. That is why the ‘reality’ that we see in advertising is so different from the daily reality most of us must face. And now that capitalist enterprise has come to dominate the entire world of information (which is now ‘misinformation’ and explains why no-one trusts ‘experts’ any longer), even the so-called ‘news’ is entirely removed from reality. This dis-connection or discrepancy between social reality and the image that capitalism promotes (from cigarettes called ‘fresh’ to cars filmed on mountain hills to ‘smartphones’ used to play Candy Crush, to the Republican and Democratic Conventions) is something that is now finally coming back to bite the bourgeoisie very hard. The bourgeoisie reaps what and where it sows.

This discrepancy between capitalist image and human reality was once easy to hide from view – for the simple reason that national bourgeoisies could use the nation-state to export, as it were, all their ‘contradictions’ to other regions of the world, from India to Australia, or even to the American mid-West or to Central and South America and, more recently, to China. Indeed, as Hannah Arendt acutely reminded us (see the first volume of The Origins of Totalitarianism called ‘Imperialism’), in its early phase the capitalist bourgeoisie’s most important export were its angry young leaders who may otherwise have caused havoc at home. This operation was easy in the past because the capitalist West, through its nation-states and their armies and navies, could easily impose control over “the Third World” through either ‘formal’ or ‘informal’ imperialism. As we know, this task is well-nigh impossible now for obvious reasons, the most important of which is that such attempt would run against the very ‘consumerist-pacifist’ (quiet and private enjoyment) ideology of capitalist societies; but also because the Western population has fallen dramatically as a percentage of global population; and finally because the very selfish individualism promoted and sanctified by the bourgeoisie is simply inconsistent with the effort and sacrifice that empire, formal or informal, always entails and engenders.

The mythology of liberalism was built in part on the notion that a ‘liberal’ nation-state was also a ‘minimalist’ nation-state in the sense that it was reduced to the bare essentials to ensure social order. But in reality capitalist or ‘liberal’ nation-states have always been militarily very powerful and extremely aggressive – although now in an increasingly ‘mercenary’ manner through technological superiority and paid professional armies. Were it not for this, it is hard to imagine how the cravenly selfish capitalist bourgeoisie could ever convince its populations to fight for its “liberal democracy”. Thus, not only was the notion of “liberal democracy” a total antithetical myth, but also that of “the liberal State” and of “laissez faire” was an utter lie. As Franz Neumann established (in The Democratic and the Authoritarian State), it was never the case that the Western-capitalist ‘liberal’ nation-state was ‘weak’ in this military and repressive sense.

What has changed after World War II where the Western-capitalist nation-state is concerned is that formal empire has become impossible and even informal empire has grown more difficult in the sense that it can be imposed only through minimal and targeted military interventions but far more often through financial flows (the capital mobility that Benjamin Constant confused with ‘democracy’), through espionage and ‘destabilisation’ or else through various forms of political, economic and military pressure from “the international community”. But this very ‘mobility’ of capital which in the days of capitalist imperialism could be used in a mercenary way to exert direct economic pressure on capitalist populations themselves and above all on “the Third World” – this very mobility of capital that Constant thought was the greatest political asset of modern capitalism – this very mobility of capitalist financial flows now constitutes the biggest threat to the political stability of capitalist liberal regimes. We shall turn to this crucial new development in the historical dynamic (or ‘logic’) of capitalism in the next intervention.

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