Introduction

Notes Introduction 1. Spain’s rate of annual growth was bettered only by Ireland in this period, with both countries reflecting a wider trend within the EU: ‘for a decade, 1995– 2005, the countries of Europe’s “South” (Spain, France, Greece, Ireland, Italy, Portugal) had growth rates almost one per cent higher than the countries of the “North” (Germany, Austria, Belgium, Finland, the Netherlands)’ (Husson, 2012: 331). 2. By late 2010, the OECD (2010) had already reported youth unemployment in Spain (then at 40.7 per cent) to be 22.2 per cent above the OECD average. 3. The rate of unemployment in the eurozone as a whole in June 2013 was 12.2 per cent, with youth unemployment then at 24.4 per cent (Elliott, 2013; Allen, 2013). 4. As the German Chancellor, Angela Merkel, told the Bundestag during a debate on the Greek bailout: ‘This is about nothing less than the future of Europe and the future of Germany in Europe’ (quoted in Deutsche Welle, 2010). 5. By 2007, Irish banks’ liabilities were the equivalent of 75 per cent of GDP (World Policy Journal, 2011). Much of these were connected to speculative investment in the construction sector. 6. By June 2012, unemployment had more than doubled in Ireland from its pre- crisis level, to reach 14.8 per cent – the third highest rate in the EU after Spain and Greece at that time (Halpin, 2012). 7. Matsaganis (2012: 413) estimated that by the end of 2012 income losses in Greece had pushed 30 per cent of the population below the pre- crisis poverty line in terms of purchasing power. 8. The fifth eurozone bailout would come in March 2013, when the Troika agreed a €10 billion bank recapitalization package with Cyprus (worth some 57.1 per cent of GDP). 9. Italy’s national debt stood at 130 per cent of GDP in early 2013; unemployment stood at 11 per cent, with youth unemployment at 36 per cent (Economist, 2013a). 10. Both sets of accusations have sometimes been tinged with casual racism and prejudice – from the widespread use of objectionable acronyms as a short- hand for these countries, to the stereotyping comments made on 17 May 2011 by the German Chancellor to a meeting of the Christian Democratic Union party: ‘It is also important that people in countries like Greece, Spain and Portugal are not able to retire earlier than in Germany – that everyone exerts themselves equally … We can’t have a common currency where some get lots of vacation time and others very little’ (quoted in Spiegel Online, 2011). The speech was widely criticised, not least for being factually spurious (for example, Böil and Böcking, 2011). 130 Notes 131 11. See, for example, a speech made by Lorenzo Bini Smaghi (2009), then on the Executive Board of the ECB and now a Harvard University Professor of Economics: ‘… it’s human nature to drive fast, over the limit. So accidents are inevitable. You can only try to make them less serious by fitting stronger brakes in cars, or by giving them airbags or by improving the roads. This analogy is frequently used to explain the financial crisis and to suggest that since we can’t really avoid new crises, we should rather try to reduce their impact and enhance our defences by having tougher regulations and more effective supervisory mechanisms … We know what the solution to this problem is – more regulation … It took the high inflation of the 1970s to convince the political authorities that monetary policy should be imple- mented by independent central banks. It would be better not to ‘waste’ another crisis to come to the same conclusion for financial stability’. 12. On the confinement of human social practice to the mere execution of ‘objective’ economic laws in capitalism – including ‘adjustments’ under- taken under the ‘necessity’ of austerity in times of crisis – see Bonefeld (2000; 2012a). 13. Here, we are paraphrasing a passage from Marx’s Theories of Surplus Value ( 1861– 3): In the crises of the world market, the contradictions and antagonisms of bourgeois production are strikingly revealed. Instead of investigating the nature of the conflicting elements which erupt in the catastrophe, the apol- ogists content themselves with denying the catastrophe itself and insisting, in the face of its regular and periodic recurrence, that if production were carried on according to the textbooks, crises would never occur. Thus the apologetics consist in the falsification of the simplest economic relations, and particularly in clinging to the concept of unity in the face of contradiction (http://www.marxists.org/archive/marx/works/1863/ theories- surplus- value/ch17.htm, date accessed 3 July 2013). 14. This is certainly the case within the US academy – to the extent that Cammack (2007; 2011) has argued that most American IPE ‘cannot identify, let alone address, the questions posed by the issue of global economic inter- dependence today’ (2011: 166; see also Burnham, 1994). 1 The Limits to Capital 1. Marx discusses the natural limits to the production of absolute surplus value and the historical establishment of a normal working day in England in chapter 10 of Capital, Volume One (1976). 2. ‘When the various instruments of labour are produced as commodities, exchanged as commodities, productively consumed within a work process given over to surplus value production and, at the end of their useful life, replaced by new commodities, they become, in Marx’s lexicon, fixed capital’ (Harvey, 1982: 205). Fixed capital therefore takes the material form of plant, equipment, and the physical infrastructures of surplus value production. 132 Notes 3. Harvey (1982: 187) clarifies his own concept: ‘[T]he credit system provides the mechanism to reduce different turnover times to a common basis, and … this “common basis” is the rate of interest … [T]he market processes surrounding money itself (in particular, that part of the money market called the capital market) reduce diverse concrete production processes with their specific and often highly idiosyncratic time requirements to a standard socially necessary turnover time’. 4. Marx (1981) argues that the appropriation of surplus value is also the basis for the accumulation of ground- rent, as discussed in further detail in Chapters 2 and 4. 5. See Clarke (1988: 107– 10) and Harvey (1982: 300– 5) for representations of the accumulation cycle through its successive phases (stagnation, recovery, credit- based expansion, speculative fever, and the crash). 6. In the preceding account, we have followed Clarke (1990/1, 1994) and Heinrich (2012, 2013) in downplaying the significance attached to the ‘ten- dency for the rate of profit to fall’ in some readings of Marx’s theory of crisis in capitalism. Several heterodox analyses of the development of capitalism in Spain do rely heavily upon tracing trends in the rate of profit (for example, Cámara Izquierdo, 2007; Román, 1971 and 2002). These will be drawn upon in Chapter 2 but only insofar as they allow us to make empirical obser- vations about successive cycles of accumulation from the 1950s onwards. Similarly, although we discuss the contradiction between the reduced scale of production in Spain, on the one hand, and the expanding scale of social consumption, on the other, in Chapters 3 and 4, we see this as a necessary expression of the limited development of the forces of production in Spain within the new international division of labour and the uneven development of European integration. 7. Bonefeld (1992: 105) adds that ‘the term “mediation” is of vital importance here since it connotes the mode of existence of a dynamic relation of antago- nism which allows antagonistic relations to exist side by side’. 8. This insight is not explicitly conceptualised by Marx, but is developed as an extension of Marx’s writings in, for example, Bonefeld (2000). 9. This is because the national state is a differentiated, particular form of the general social relation in capitalism. This insight also explains why in this book we discuss global economic transformations in terms of the difference- in- unity of the (new) international division of labour, rather than in terms of the ‘internationalisation’ of production which tends to confuse the result of transformations within the global system of surplus- value production with the ‘conscious’ strategies of transnational corporations (TNCS). Both the national state and TNCs mediate the underlying material unity of the global process of capital accumulation in their competitive relations with other national states and capitals (see Starosta, 2010a). 10. Inflation brings the possibility of centralising and socialising devaluation so that the process of overaccumulation can be attenuated and its impact spread across society (see Harvey, 1982: 307– 11). However, Harvey points out that inflation also tends to refocus the class struggle in terms of the real wage and against the state’s management of monetary and fiscal policy. Ultimately, Harvey explains how inflation can only ever stave off a crisis of overaccumulation while making its likely impact more destructive – an Notes 133 argument supported by Bonefeld (1996a: 199– 200). Clarke (1988: 144– 5) similarly explains that, while ‘inflationism’ has proven attractive to opportunistic politicians historically, inflation ‘threatens to provoke domestic industrial and political conflict as it erodes wages and devalues rentier capital, and to provoke speculation against the currency. The limits of the ability of the state to resolve the crisis by such expansionary means appear in the form of the political conflicts unleashed by escalating inflation, on the one hand, and the financial pressures of a deteriorat- ing external position, on the other’. This more general observation will have resonance in the particular experience of Spain, as discussed in Chapters 2 and 3.

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