There is a lot of material out there produced by Marxists trying to get their head around Neoliberalism and its role in the current crisis. So as part of my Occupy the Marxist Academy I am going to do a few posts on it.
First up: Alfredo Saad-Filho’s “Neoliberalism in Crisis: A Marxist Analysis”, which can be found here. Saad-Filho argues Neoliberalism is not simply an ideology or a set of policies, but the “current configuration” of capitalist accumulation. In particular, Neoliberalism is a response to the “structural problems of capitalist reproduction after the displacement of Keynesianism”.
Neoliberalism, Keynesianism and the Systematic Use of State Power
I think he is trying to say here that Neoliberalism emerges in the aftermath of the first Keynesian depression — the Great Stagflation. It is never clear with Marxists, who insists on dressing their meager analysis in twenty dollar words. Assuming I got that correct, Saad-Filho argues Neoliberalism is the “systematic use of state power” to impose the reorganization of capitalism, under the guise of a ‘free markets ideology’. (At least, I think that is what his argument comes down to. It is hard to tell, because Saad-Filho insists on cloaking his actually very simple argument in this stupid fucking academic phraseology.)
Basically he seems to be saying, the depression of the 1970s forced capital to restructure itself; and this restructuring took place in the guise of ‘free market’ propaganda, while actually ruthlessly using state power to pursue its aims. I get this even though English is my second language, and Marxist Academy-speak is not. This restructuring, Saad-Filho argues, occurred in five areas:
- the financialization of capitalist accumulation;
- the financialization of the global economy;
- the financialization of the state;
- the financialization of ideology; and,
- the financialization of the reproduction of the working class.
It seems to me that is a lot of financialization, and Saad-Filho could have dealt with it all under one topic: financialization. Under one heading Saad-Filho would have then been required to tell us how this financialization differed from Keynesianism.
One thing is clear: Neoliberalism does not in the least differ from Keynesianism in either its use of state power, nor in its hypocritical employment of terms like “free market” to disguise this naked use of state power. If Saad-Filho can demonstrate one example where I am wrong on this I will kiss his ass in Times Square at noon on the busiest day of the year. The naked use of state power masquerading as “free market” intervention is so much a part of American culture even anarchists and Marxists swear this unicorn existed somewhere back in the mists of times.
The idea that Neoliberalism represents some break from the so-called Keynesian welfare state is a myth constantly reproduced in Marxist literature. This myth is akin to the myth white working people reproduce when they talk about the good old days of the 1950s. You know, back before there was all this integration and intermarrying, and women working, and gays kissing in the streets. Its funny because Marxists really are that fucking stupid. Somehow in this imaginary past there was a social welfare state that cared about the working guy and gal. Kennedy was president, and when he wasn’t fucking the steno pool, he was building a brighter tomorrow.
Saad-Filho has bought into this stupidity and dressed it up in Marxist phraseology to render it familiar to his fellow Marxist academics. He uses phrases like “recomposition of the rule of capital” and “the systematic use of state power to impose a hegemonic project”; but in the end he is just pining for some imaginary utopia from a time when Howdy Doody occupied our television time. Coming off the depression of the 1970s, which Marxists — like all economists — swear doesn’t exist, capitalism changes. In place of the sunny utopia of Keynesianism, the 1970s saw the dark clouds of Neoliberalism begin to gather.
Financialization and the State
Since we have already dispensed with the nonsense regarding the use of state power to impose the “hegemonic project”, we are left with the alleged “financialization” of the “system of accumulation”. Saad-Filho claims under Neoliberalism the state’s function to move investment “intertemporally, intersectorally and internationally” was shifted into a globally integrated financial sector dominated by US interests. He offers no evidence that the fascist state was stripped of this power to manage capitalist accumulation. Nor does he offer any evidence that the US dominated global financial sector now manages capitalism.
Moreover any evidence in this regard would be a new finding for Marx’s labor theory of value, since Marx’s theory argues exactly the opposite. Rather than predicting management of the global production process by a handful of bankers, Marx and Engels argued control would entirely escape combinations of private capitalists and have to be undertaken directly by the state. Marxists like Hilferding argued, to the contrary of Marx and Engels, that bankers would assume this role, not the state.
The terms “intertemporally, intersectorally and internationally” are nonsense. Capitalism already had the credit system and the ability to be moved from one branch of industry to another, as well as to be exported, in the search for higher rates of profits. From what I can figure, state involvement in the credit system begins with the emergence of credit itself. What constitutes the next step in this process (where we are concerned) is the state’s assumption of what constitutes “money” and “credit”. And this occurs in the Great Depression when gold money is replaced by state issued inconvertible currency as the form of payment of debts. Gold clauses in contracts were abolished at that time. It is only on this basis we can even speak of a fascist state managed capitalist economy.
Saad-Filho seems to be arguing Neoliberalism represents a reversal of state management of the capitalist economy back to management of the capitalist accumulation process by a cartel of private financial interests, a la Hilferding. Instead of Marx’s and Engels’ argument the state asserts control over the capitalist production process, Saad-Filho argues “…finance commands the attributes of industrial policy, and controls the main sources of capital in the economy.”
The problem with Saad-Filho’s argument is that it does not account for the shift he is proposing — he calls financialization a “structural feature of social reproduction under neoliberalism” that gradually and systematically displaces the state, but nowhere offers an explanation why, from the standpoint of the law of value, this occurs. I think there is a reason why he doesn’t offer an explanation: none exists. Both state management and financialization result from the same rising organic composition of capital, which produces both a falling rate of profit and a mass of capital no longer able to act as capital. It is this superfluous capital that results in the financialization Saad-Filho proposes as the “structural feature” that replaces the fascist state, when it is nothing more than the superfluous capital thrown off by the mode of production itself. Financialization exists precisely because an ever increasing portion of the total capital is rendered superfluous to productive activity and must, as a consequence, depend on state management for the creation of fictions of profits.
Saad-Filho’s argument is nothing more than a pseudo-Marxist version of progressive critiques, which hold the state is captive of financial interests. Rather than generating a radical alternative to bourgeois politics, Saad-Filho’s argument leads us to advocate reforms falling short of a really communistic alternative aimed at the abolition of wage slavery. Perhaps you think I am overstating this, but look at his proposed reforms to combat the crisis at the end of the paper. They consist of three suggestions for policy:
- “if the citizens must pick up the losses, especially when they are large, there is no justification for profits in the financial sector. In this case, the citizens should also get the profits.”
- “nationalization of all financial institutions in trouble, without compensation beyond what has already been paid, transferred or loaned to them; closing down the hedge funds and other institutions trading only between themselves and performing no discernible productive role for the economy, and the abolition of bonuses and the limitation of the bankers’ compensation to that of civil servants with equivalent responsibilities.”
- “centralize currency trading, abolish the secondary markets for public securities, and the nationalization or closure of the remaining financial institutions, with the creation of a democratically accountable management structure for the financial system.”
The difficulty here, in part, for Saad-Filho’s analysis is that he assumes that just because Brazil, Greece, Zimbabwe or Iran are unable to resist the predation of American financial cartels, these financial cartels are dictating state policy. In fact the opposite is true: insofar as these cartels are not simply front-running policy decisions made in Washington, DC, they are merely carrying out decisions made in Washington. The very same rising organic composition of capital that gives rise to fascist states and the public management of national capitals, also gives rise to the concentration and centralization of fascist state power in Washington, and the reduction of national sovereignty all other countries more or less to fictions that simply wait for the next big crisis to be exposed.