Marx, Money and the Modern World - Imperialism and Finance Capital Today

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Marx, Money and the Modern World - Imperialism and Finance Capital Today MARX,MARX, MONEYMONEY ANDAND THETHE MODERNMODERN WORLDWORLD FINANCE CAPITAL AND IMPERIALISM TODAY Contents 1. Theories of late capitalist development: Harvey and Callinicos on contemporary imperialism Luke Cooper 1.1 Imperialism and the post-Cold War world 1 1.2 The long shadow of the classical legacies: contesting the nature of the system 3 1.3 The classical tradition in imperialism theory today 5 1.4 Mechanisms of surplus extract on: parasitism, ‘high finance’ and the system 7 1.5 Accumulation by dispossession – Harvey on the nature of imperial predation 13 1.6 Class structure in the imperial heartlands: the ‘labour aristocracy’ 19 1.7 Finance capital – the evolution of the capital form and imperialism 23 1.8 History, concepts and analysis: the method of non-deductive concretisation 28 1.9 Markets, states and ‘the international’: between Nicolai Bukharin and Hannah Arendt 30 2. Marx, money and modern finance capital 53 Markus Lehner 2.1 Money and the contradictions of capital accumulation 55 2.2 Money and crisis 57 2.3 Money as capital 64 2.4 The long-term tendencies of capital accumulation 68 2.5 The long-term tendencies and imperialism 70 2.6 The modification of the average rate of profit in the circulation of capital 71 3. The formation of finance capital 72 3.1 Interest-bearing capital 72 3.2 The many forms of interest 76 3.3 “Capital value” and employer’s profit 79 3.4 The accumulation of interest-bearing capital and the formation of fictitious capital 82 3.5 Derivatives 85 II Marx, Money and The Modern World - Imperialism and Finance Capital Today 3.6 Commercial credit 88 3.7 Bank capital and capital credit 90 3.8 State debt, issuing banks and credit money 95 3.9 Speculative bubbles 101 4. Finance and monopoly capitalism 105 4.1 International capital flows 108 4.2 Periods of imperialism 112 4.3 The business cycle and interest-bearing capital 114 4.4 Finance capital and the long-term tendencies of capital accumulation 117 4.5 Current developments and the structure of real and money capital accumulation 120 4.6 Finance market cycles since 1973/74 121 4.7 Finance capital and socialism 124 5. Finance capital unleashed: British imperialism today 129 Keith Spencer 5.1 1979-97: Tory onslaught on the working class 129 5.2 Labour embraces the market: 1987 to 97 132 5.3 ‘Supply side socialism’ 134 5.4 New Labour’s policies in practice 136 5.5 Investment in public services 138 5.6 Was New Labour successful in restoring the dynamism of British capitalism? 140 5.7 Did productivity and profits improve? 141 5.8 Profitability 143 6. The UK as an imperialist state 144 6.1 The rise and rise of British monopolies 146 6.2 The importance of capital flows 148 6.3 The City of London and the export of capital 148 6.4 Imperialism and the working class 150 6.5 The sources of profit in the finance industry 151 6.6 Labour and the economy 153 6.7 Long-term contradictions 155 III Introduction There are two moments in the first would deepen US economic woes as it decade of the 21st century that will be struggled out of recession. In retro- etched sharply in the historical record spect this was another telling expres- for many years to come. sion of the under-the-surface weakness • On 11 September 2001 the attacks by and volatility of the US-led order. Al- Al-Qaeda terrorists, on the World Trade most exactly seven years later this Centre made history turn on a diabolic would explode to the surface in the cat- course. The most right-wing adminis- astrophic financial collapse triggered tration America had seen since the by the bankruptcy of US investment Reagan years, took the opportunity Lehman Brothers on 15 September presented to declare a permanent war 2008. The biggest ever bank bail out on states and people’s considered hos- failed to avert the most synchronised tile to US influence. world recession ever. The turn to the ‘war on terror’ con- If the 1990s was the decade of a tained just as much hubris and tri- great ascent and expansion of the cap- umphalism as the claim to universalism italist world order under the auspices and the “open door” policies of previous of US hegemony, then the last decade years. But under the surface the new – and these two key turning points discourse expressed a sense of uncer- within it – has seen this project enter a tainty and loss of superiority. The once new phase of crisis. How this crisis will frequent comparison amongst the polit- unfold, which individuals, classes and ical elite with Pearl Harbour died away states, will win in the struggle under- as it became an uncomfortable re- way for the future of the system, is the minder of American failure. Bogged pressing question of our time. down in two un-winnable imperial ad- Answering it will mean going be- ventures; this was a very different neath the surface of events and looking America to the one that had emerged for a deeper explanation of the mecha- unchallenged in the capitalist world nisms that govern today’s crisis-ridden after just five years of fighting follow- system. ing the attack on the US navy by the The starting point for the collection Japanese air force in 1941. of articles presented here is that we • One of the memories that remain so can find the answers we need in the striking about the days after 11 Sep- classical canon of Marxist political- tember is Bush’s request to “shop for economy. America”, fearing the paralysis and in- Thus, this anthology seeks to do link activity sparked by the terrorist attacks together two things: the contradictions IV Marx, Money and The Modern World - Imperialism and Finance Capital Today of the global economic system and the American banking system. developing tensions and frictions in in- Luke Cooper surveys the work of two ternational relations with the rise of recent high profile Marxist theories of new global powers. imperialism developed by David Harvey Marcus Lehner offers an outline of and Alex Callinicos. Karl Marx’s theories of money, banking And Keith Spencer makes a case- and finance and shows how it can pro- study analysis of a ‘Great Power’ that vide a compelling account of what caused the great financial crisis. Updat- was at the centre of the global financial ing an earlier analysis written for the whirlwind: Britain. German Marxist journal Revolutionärer This is a special issue of the Marxist Marxismus he applies the theory to the journal Fifth International. Tables and graphs Foreign Direct Investment inflows, 1992-2003 (Billions of dollars) 9 Composition of international capital flows, 1980-2005 10 External Debt Stocks as proportion of Exports and Gross National Income (GNI) for Low and Middle Income Countries 12 Interest payments on External Debt as proportion of Exports and Gross National Income (GNI) for Lower and Middle Income Countries 13 Deindustrialisation - The fall in proportion of total employment in industry in the most advanced capitalist economies across the 20th and 21st centuries 23 “Growth of the mass of money M3 in comparison to GDP in current values and in real values” 60 Components that influence inflation (propensity to save, M3-increase, producer price index) and consumer price index for Germany, 1995-2007 63 Long-term tendency of different types of interest rates in the USA, 1954 - 2009 74 Comparison of profit after tax and interest payments with interest paid/received and dividends paid for US non-financial corporations, 1954 - 2008 (in billions of dollars) 81 Share of the top 10% wage earners in regard to the total wage income in the US, 1927-2007 72 Lehmans' Leverage (borrowed capital in relation to own capital), 2003-2009 93 Key data of US commercial and saving banks, 2004-2009 94 Development of the money supply in relation to real GDP in the USA, 1981-2006 98 Development of the value of outstanding contracts on the Derivatives Markets ($ trillions), 1995-2007 99 Price/Earning Ratios for Standard and Poor's 500 102 Development of commodity futures in comparison to spot markets 104 Volumes of daily turnover on foreign exchanges ($bn) 1992-2007 109 Share of major financial institutions in foreign exchange trade, 2007 110 The relationship of the cycle and interest rate movements 117 Investment per worker where UK equals 100 135 VI Marx, Money and The Modern World - Imperialism and Finance Capital Today Changes in the UK economy. Share of gross value added by sector (per cent) 141 Gross value added 1998 (black) and 2008 (grey) at basic prices (£ billions) 142 Annual rates of return (gross) for UK private non-financial companies 144 Changes in employees by sector (millions) 150 British trade in goods and services 152 Theories of late capitalist development: Harvey and Callinicos on contemporary imperialism Luke Cooper 1.1 Imperialism and the post-Cold War world The last decade has seen an upturn of interest in Marxist theories of imperialism.1 The background has been, of course, the drive of the last American administration to fundamentally alter the balance of power in the strategically important, oil-rich region of the Middle East, by using unilateral military power to achieve ‘regime change’ in states considered hostile to US influence. The bellicose rhetoric of the Bush administration and the idea of an unending number of supposedly ‘preventa- tive’ wars (‘the Bush Doctrine’) put forward by leading neo-conservative protago- nists at the time, provided fertile ground for a renewal of debate and argument on the Marxist left over the concept of imperialism.
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