RE: [OPE] Corporate state capitalism

Date: Wed Oct 08 2008 - 09:49:02 EDT

> The question Michael and many other Marxists political economists seem to
> hesitate to answer is whether we can talk of a general global economic crisis and if yes,
> in what sense can the contemporary crisis can be described as a general crisis.
> What is more interesting to me as a political theorist is that though we have to do with
> global crisis leading capitalists states/blocks were not able to develop a common plan to
> tackle the problem together. In particular Germany whose economy is expanding is keen
> for national solutions.

Hi Dogan:

Recent developments seem to put to rest the idea of "de-linking" of the capitalist

economies. Yes, I think that the world capitalist economy is experiencing the

early phases of a crash. Is that what you mean by a "general crisis"? In one

(the most important) sense the crash has not yet turned into a "general crisis":

i.e. the level of working-class resistance to capital's solutions to the crisis has been

relatively weak and uncoordinated and certainly hasn't to any significant way

challenged capitalism per se (with the possible exception of some regions in Latin


(In the rest of this post I am "thinking aloud".)

To turn to your second question, I'm not sure if there will be a "common

plan" which is accepted by states from the leading capitalist nations to

overcome the crisis. *But*, I think we are seeing the likely emergence of

a new period - which I will call "Corporate state capitalism". You can call

it the beginning of a new conjuncture, or a new regime of accumulation,

or a new social structure of accumulation if you wish. I don't want to get

into the relative merits of these expressions here.

The point is that we are entering a new period/stage - which contrasts in

some ways to the preceding stage of Neo-Liberalism (or whatever you want

to call it).

What will characterize this new "period"?

This is a very fluid period so a lot remains to be seen about what will happen.

To paraphrase someone else (I can't remember whom), what we are seeing is

the *privatization of benefits and the nationalization of risk*.

As Michael Rainey put it (in "Is the bailout 'socialist'? Not even close"):

       "private corporations are allowed to aggressively pursue profit

        while the state shields firms and their managers from the danger of

        systemic meltdown".

In some nations (this seems to be the current "European model") this

takes the form of nationalizations. In the US it has taken the form of


While I am hesitant to use this expression (because of the baggage

the expression 'state capitalism' has - i.e. it is a highly miss-used

designation), we might call this period "corporate state capitalism"

(used by Doug Page in "Cross Examining Capitalism") or "state

corporate capitalism" (Rainey). Again - I don't want to argue at this time

about the relative merits of different expressions. Nor will I discuss

at this time related concepts (like "long swings"). What I am concerned

about is the meaning of the new period and its possible implications.

At the risk of being accused to crystal ball gazing, I'll innumerate some

of what looks to me to be the likely characteristics of this new period.

For purposes of simplification alone, let's look at this in terms of the "key

relationships" suggested by Bowles, Edwards, and Roosevelt (in _Understanding

Capitalism_, 3rd edition) of a "Social Structure of Accumulation".

These relationships are:

* capital-capital

* capital-labor

* labor-labor

* government-economy

So, here goes:


Likely characteristics: We will see the continued trend of the formation

of *regional trade associations* (customs unions) in which blocs of

capital from different regions will (at least, conjuncturally) merge

together and pursue joint economic policies. This suggests that the

new period will be characterized in part by increased *inter-imperialist

rivalry* (and, with it, increased threats of global military confrontations).

We will also witness, as part of this, a relative weakening of the power

of US imperialism (i.e. an end to US hegemony) while other blocs

attempt to take over as the leading hegemon. Protectionism, rather

than further trade 'liberalization' (of the kind we saw in the preceding

period), is likely. In some ways, this could be seen as the end of


*capital-labor*: corporations, under the guise of nationalism, will

demand that unions and workers make "concessions": i.e. sacrifices

aimed at increasing corporate profitability. The threat of capital strikes

and outsourcing will be - once again - employed to attempt to induce these

concessions. The relative weakness of the union movement (due in

part to its "leadership") will probably mean that more bargaining power

will be with capital than with workers in the early phase of the new

period (especially if the size of the industrial reserve army is high).

This might very well change as the period "matures", i.e. there

could very well be another working-class radicalization (or maybe NOT -

we CAN'T SAY at this time anything with conviction about that at this time

because this has yet to happen).

*labor-labor*: Although _relative_ wages in some areas (e.g. China) have

been increasing, there is no reason to suppose at the present time that

the divisions among unions will be surpassed. On the contrary, the

formation of the economic blocs among nation states referred to above,

might very well lead to an increase in 'regionalism' among the working

class rather than internationalism.


Bail out corporations and pass along the cost (for the most part) to

workers: nationalize risk while still supporting (and propping up)

corporate profits. This could be thought of as a regressive change in

the tax burden of different classes and hence a lowering of the customary

living standards of the working class. On the spending side, further austerity

(for workers, that is). This will be rationalized on the grounds that

"everyone has to make sacrifices for the good of the nation" (even while

corporations and the highest-income earners will only be asked to make

*nominal* sacrifices). The "war on terrorism" will again be used as a pretext

for military actions by the US (and its international cronies), but - because

of the increased regionalism and inter-capitalist rivalry, this might very

well lead to hightened resistance by other capitalist powersw (most

notably, Russia and China). Designing effective policies to deal with

climate change will be put on the back burner at least in the early

stage - and, afterwards, the costs associated with dealing with it will

mushroom as the global climate, perhaps, goes beyond the "tipping point").

Not a very rose picture for workers, is it?

OK, I just stuck out my neck with some comments about what I think will

characterize the 'new period'. Do others agree or disagree? What have I

omitted in my very sketchy outline above?

In solidarity, Jerry

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Received on Wed Oct 8 10:00:48 2008

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