The International Political Economy of 'Actually Existing Capitalism': Rethinking Globalisation and the Retreat of the State

THE INTERNATIONAL POLITICAL ECONOMY OF ‘ACTUALLY EXISTING CAPITALISM’: RETHINKING GLOBALISATION AND THE RETREAT OF THE STATE Emma Bircham London School of Economics Thesis submitted for the degree of Doctor of Philosophy University of London 2004 UMI Number: U615859 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U615859 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 ACKNOWLEDGEMENTS For various reasons, this thesis took much longer than it should have and took much more effort than I ever imagined it could have. For those reasons, I have many people to thank for their support. My biggest intellectual debts are to Colin Barker and Mike Haynes for their inspiration in Marxist theory and practice. I also thank them for their academic and personal support and encouragement throughout this thesis. It could not have been done without their example and enthusiasm. Over more than a decade I have been extremely fortunate to have the guidance and friendship of Professor Michael Webb. His advice and support have motivated me at every stage of my studies. He is an exemplary academic, intellectually generous, and principled in his approach. I am deeply grateful for his influence. Mark Hoffman has been a model supervisor, encouraging and motivating throughout. His openness to new directions in theory has allowed me the freedom to develop this project as I have done. His patient and close reading of my work at various stages has been enormously helpful. Hannes Lacher, Gareth Dale, and Sam Ashman all read parts of this thesis in various versions and gave me invaluable feedback and support. Their own uncompromising approach to developing a dynamic Marxist theory has been inspiring. Without the generous financial support of the Social Sciences and Humanities Research Council, I could not have started this research. I also thank the London School of Economics, and the London Goodenough Trust for their financial assistance. I thank John Rigg for providing me with a place to work. My friends and family have been extremely patient and helpful. I would like to thank my parents, Lesley McVey and Tom Bircham, and Sarah and Paul, for all their support. Judith Orr for so very many things that I could not have done without. Maria Lensu and Sue Seal for their friendship throughout. Elizabeth O’Hara and Caroline Paskell, for helping concretely without hesitation. Thank you. Finally, I would like to thank China Mieville for all the many things that only China Mievilles can do. I could have asked for no greater friend, comrade, and partner. If this thesis has a dedicatee, it is he. Library British Library01 Political and Economic Science I H£S£'S r q°l lO ABSTRACT This thesis presents an alternative tradition of classical Marxism capable of understanding what appears to be a shift in power from states to markets over the last two decades. It provides a theory of international political economy which explains both state ownership and control of the economy and its relinquishment, as aspects of ‘actually existing capitalism’ on a global scale. It is argued that this approach is superior to both Weberian-influenced International Political Economy (IPE), and the current tradition of classical Marxism in International Relations (IR), in that it has the potential to provide a deeper understanding of the apparent ‘retreat of the state’ as an aspect of so-called ‘globalization’. The core contribution of the thesis is a critique of the current classical Marxist approach in International Relations and the proposal of an alternative which differs in its analysis of the space, time and motion of capitalism. It is argued, through a rereading of Capital volumes 1 to 3, that this alternative is truer to Marx’s intentions. It is further argued that this more nuanced understanding of capitalism is well-represented through the writings of Hilferding, Bukharin, and Lenin, and is identifiable, though underdeveloped, in the work of contemporary Marxists influenced by these theorists. This alternative tradition of classical Marxism provides an understanding of capitalism in phases of both ‘nationalization’ and ‘privatization’, deepening our understanding of capitalism as it ‘actually exists’. The thesis has two main tasks. The first is to show that both Weberian-influenced IPE and classical Marxism in IR have an inadequate model of capitalism, a theoretical limitation that has become evident in the globalization debate over ‘the retreat of the state’. The second is to suggest an alternative theory of capitalism based on a rereading of Capital volumes 1-3. This theory of ‘actually existing capitalism’ is better able to capture the complexity of changing state market-relations including what is superficially described as the ‘retreat of the state’. The International Political Economy of Actually Existing Capitalism: Rethinking Globalisation and the Retreat of the State Introduction The Privatisation Revolution as the ‘Retreat of the State’ 1 Chapter 1 The Globalisation Paradox 13 1.1 Introduction 13 1.2 The Globalisation Thesis 15 1.2.1 The Nation State 17 1.2.2 The World Market 22 1.2.3 State-Market Relations 28 1.2.4 Paradox Within 35 1.3 The Internationalisation Counter-thesi s 37 1.3.1 Paradox Retained 40 1.4 An Attempt at Transcendence 41 1.4.1 Paradox Lost? 44 1.4.2 Paradox Postponed 47 1.5 Conclusion 50 PART ONE: STATES AND MARKETS: A QUESTION OF METHOD 52 Chapter 2 Weberian Pluralism: The Separation of State and Market in IPE 55 2.1 Introduction 55 2.2 Why IPE? 57 2.2.1 IPE on Interdependence 58 2.2.2 The IR Counter-thesis 60 2.2.3 Third Wave Interdependence Theory 62 2.2.4 IPE Beyond Interdependence 66 2.3 The IPE Method 70 2.3.1 Weberian Pluralism 1 1 2.3.2 The Spectre o f Weber in IPE 75 2.4 A Classical Marxist Critique 83 2.4.1 A Marxist Critique of Weberian pluralism 83 2.4.2 A Marxist Critique of IPE 86 2.5 Conclusion 94 Chapter 3 Classical Marxism: The ‘Apparent’ Separation of State and Market in IR 96 3.1 Introduction 96 3.2 TheEmpire of Civil Society 98 3.3 Rethinking Empire of Civil Society 108 3.3.1 The Poverty o f Analogy 109 3.4 Rethinking the ‘Apparent’ Separation of State and Market 117 3.4.1 The Purely Political State 117 3.4.2 The State Debate and the Relative Autonomy Trap 122 3.4.3 A Tale of Two Sovereignties 125 3.5 Conclusion 130 PART TWO: ACTUALLY EXISTING CAPITALISM: AN ALTERNATIVE TRADITION 134 Chapter 4 RereadingCapital: From Volume One to Volume Three 137 4.1 Introduction 137 4.2 The Dialectical Method in Capital 139 4.3 The Geographical Scope of Capital 147 4.3.1 The Country Model of Capitalism 148 4.3.2 Reading Capital 152 4.3.3 The Society of Capital 156 4.4 The Historical Trajectory of Capital 161 4.4.1 Arrested Development 162 4.4.2 Reading Capital 165 4.4.3 The History o f Capital 169 4.5 The Core Dynamic of Capital 172 4.5.1 The Pristine Law of Value 173 4.5.2 Reading Capital 177 4.5.3 The Dynamic of Capital 183 4.6 Conclusion 186 Chapter 5 Imperialism and World War: Competing State Monopoly Trusts 188 5.1 Introduction 188 5.2 Hilferding 192 5.2.1 Historical Trajectory 192 5.2.2 Hilferding Revisited 202 5.3 Bukharin 209 5.3.1 Geographic Scope 209 5.3.2 Historical Trajectory Extended 214 5.3.3 Bukharin Revisited 222 5.4 Lenin 226 5.4.1 Core Dynamic 227 5.4.2 Lenin Revisited 234 5.5 Conclusion 239 Chapter 6 Cold War: State Capitalism and Beyond 241 6.1 Introduction 241 6.2 The Russia Question 247 6.2.1 Orthodox Trotskyist Position 247 6.2.2 New Class Theories 249 6.2.3 Internal Theories o f State Capitalism 251 6.2.4 International Theories of State Capitalism 254 6.3 The State Capitalist Answer 258 6.3.1 Geographic Scope 259 6.3.2 Historical Trajectory 260 6.3.3 Core Dynamic 261 6.4 Beyond Russia 267 6.4.1 State Capitalism and Free Wage Labour 268 6.4.2 The Nationalisation Revolution on a Global Scale 275 6.5 Beyond State Capitalism 283 6.5.1 Geographic Scope 284 6.5.2 Historical Trajectory 287 6.5.3 Core Dynamic 293 6.6 Conclusion 297 PART THREE: RETHINKING GLOBALISATION AND THE RETREAT OF THE STATE 299 Chapter 7 Actually Existing Globalisation 303 7.1 Introduction 302 7.2 Globalisation in Practice 303 7.2.1 The 1970s 305 7.2.2 The 1990s and Beyond 313 7.3 Globalisation in Theory 323 7.3.1 Geographic Scope 323 7.3.2 Historical Trajectory 326 7.3.3 Core Dynamic 332 7.4 Rethinking States and Markets 338 7.4.1 A Riposte to Volume One Marxism 338 7.4.2 A Rejoinder to IPE 341 7.5 Rethinking the Retreat of the State 343 7.5.1 The Globalisation Paradox Resolved 343 7.6 Conclusion 346 Conclusion The Privatisation Revolution as Post Cold-War Reconstruction 348 References 366 Introduction The Privatisation Revolution as the ‘Retreat of the State’ The state seems to be accepting its own demise.

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