The following article originally appeared in OpenDemocracy. You can view it by clicking here.
It is a commonplace that since the 1970s, capitalism has left the western working class as roadkill on the road to globalization. What is new about our contemporary moment is that the same is increasingly true for the Euro-American middle class.
Be kind, forward wind. What if, despite all the recent left’s hesitation about prophecy, we still feel something is going to happen? Perhaps we are in a similar moment to the early 1960s – only four or five years away from a ‘May 1968’ moment, with all its spontaneous eruptions and consequential structural rearrangements.
Do we need a weatherwoman to recognize the winds of insistence for change blowing through the Middle East, the Mediterranean basin, the ‘north’ Euro-American cities, and Latin America, let alone the vastly under-reported tensions elsewhere? If all these are social trembles, foreshadowing a greater quake, how ought we to prepare in the streets, the classrooms and all the interconnecting spaces in between?
Some preliminary answers come through the keywords: neoliberalism, occupy, and world-system. Within the last decade, ‘neoliberalism’ has replaced ‘globalization’ as the preferred term to describe the latest regime of capitalist accumulation.
Thanks to writers like David Harvey and Naomi Klein, we have a common sense about inequality-producing tactics that overlap and reinforce each other. These maneuvers include privatization, deregulation, financialization, return to the watchman state of police surveillance, opportunistic austerity, and crony collaboration among financiers, civil society institutional administrators, and political elites.
Yet we still need to consider the difference between neoliberalism and neoliberalization: not just a matter of academic term splitting. The terms differentiate between an unchanging, homogeneous thing-form—an ‘ism’— and a process that involves multiple, sometimes contradictory, processes—an ‘ization’. While social actions do cross thresholds to achieve a nameable consistency, like neoliberalism, we also need to remember the fluxes of an “ization” for, at least, two political reasons.
Firstly, the use of the latter term prevents us from losing our nerve and slipping into demobilized apathy. While market fundamentalists certainly do have the upper hand at the moment, they are by no means a juggernaut. Resistance is not futile, Dorothy!
‘Neoliberalization’ reminds us that social movements of right and left are constructions of tactics and coalitions. What was built up over decades by the right can also be disassembled and replaced. The reconstruction of a broadly articulated left will need a host of generalizing and particularizing analyses and actions.
Secondly, the term neoliberalization also reminds us that the current moment belongs to a longer history of capitalist class struggle. Because capitalism is fundamentally an organization of the circuit of value through commodity chains of labor-power, raw materials, and energy inputs, neoliberalism has to be placed in context with prior moments.
Capital volume I’s emphasis on telling a history of sequential ages of capitalist developments (the Age of Handicrafts, Manufacture, Large-scale Industry, etc.) looks to define historical periodization, the differences between one time and another. But Marx also sought to consider capitalist periodicity, repeating or recurring capitalist activities. Perhaps neoliberalism seems new only because it presents the return of capitalist logistics that have not been dominant for some time, or even within an older generation’s active memory.
Neoliberalism might be the reappearance of capitalist tactics that have been dormant, but never forgotten or absent. Consequently, we need to return to the entire set of Marx’s Capital and Gramsci’s Prison Notebooks to relearn the manifolds of capitalism and the construction of Left coalitions. David Harvey has encouraged us to relearn the later volumes of Capital; we still need voices for Gramsci. The so-called posthumous writings of Louis Althusser, those written after his incarceration, especially the essay ‘Marx in his Limits’ or the shortly to be published Verso translation of On the Reproduction of Capitalism are good starts.
Gerard Duménil and Dominique Lévy’s The Crisis of Neoliberalism uses long-wave economic theory to provide a longer perspective and argue that post-1800 capitalism produces two kinds of recurring crises. They call these inflections a crisis of profitability and a crisis of financial hegemony. Both types result in shifting alignments as what they call the professional-managerial class either cleaves to the business class of haute capitalists or the ‘popular’ (working) class. Crises of profitability have appeared in the 1890s and the 1970s. When the professional-managerial class becomes frightened that their prerogatives are being eroded by rising proletarian empowerment, they grant the business class the right to take profit in return for managing to subordinate workers.
Duménil and Lévy see neoliberalism as an interlocking set of tactics arising during the 1970s within a returned crisis of profitability. They understand privatization, deregulation, and financialization less as goals in themselves (no matter what capitalist ideologues might proclaim), than as a means to an end. Capitalists’ target here was the rising standard of living for labourers and the waves of racial, sex-gender, and postcolonial democratization signposted by the phrase ‘May 1968.’ As a result, government was to be transformed into a watchman state mainly dedicated to securing monopolies of private property and the abandonment of public oversight into corporate criminality.
The other kind of crisis that Duménil and Lévy discuss is the one of financial hegemony, seen during the 1930s. In this phase, the middle classes lose faith in capitalists’ ability to manage society. The middle classes, often reluctantly, begin to divorce themselves from their thrall to high capitalists and seek to promote their own members, like John Maynard Keynes, as having superior technocratic skill in social arrangements.
In order to wrest themselves from control from above, the professional-managerial classes seek working-class support by regulating speculators and redirecting speculators’ capital investment towards social welfare and entitlement schemes in return for a more stable period of decreased labour unrest. We variously call this realignment the New Deal (USA), the Welfare State (UK), or the social market (continental Europe).
The current moment, especially after 2008, is likewise a crisis of financial hegemony, a period that allows otherwise technical terms, like neoliberalism, to become common even outside the academy.
A crisis of financial hegemony also means that previously held truths become questioned. One example involves our explanation regarding credit derivatives. The traditional definition of derivatives is that they are trades based on the exchange of an underlying commodity. For example, the future price of pork bellies becomes itself a number to be speculated upon. What was originally a means of hedging against market unpredictability then become a means to commoditize risk, a means to sell price variability as if it were the commodity rather than any actual usable object.
There is a received history of the rise of derivatives involving the convergence of new mathematical equations to calculate risk (canonically, the Black-Scholes equation); the technological revolution allowing for the massification of computer power that can handle these equations, beginning with the handheld calculator in the 1970s; deregulation of banking that allowed speculators access to vast new pools of capital that had otherwise been effectively illiquid due to post-Depression era restrictions, such as the Glass-Steagall Act of 1932; and the rise of a new generation of bankers who were culturally more comfortable with risk than the post-war cohorts.
Yet what this story still mystifies is that in all likelihood derivatives are probably no more or less profitable than other kinds of speculation. Derivatives become seemingly profitable only through the unexamined presence of corporate criminality that manipulates systemic determinants, as seen with the LIBOR scandal; the use of offshoring treasure islands, as Nicholas Shaxson calls them, for tax avoidance purposes; and the generation of lucrative transaction fees for bankers at the expense of all other parties, who are often reluctant to whistle-blow, since it would have career damaging prospects for the corporate executives or government officials who personally negotiated these agreements.
In this sense, we do not have to outlaw derivatives, since they effectively only work through already illegal procedures. If the above lines seem convincing to you reader, it is because the presence of a crisis of financial hegemony has already prepared you to consider claims that would have seemed almost inconceivable had they been written ten years ago.
Occupy Wall Street – a realignment waiting to happen
If Duménil and Lévy are right that we are amidst neoliberalism’s crisis of hegemony, then Occupy Wall Street’s fusion of college graduates and labour unions was a realignment of interests waiting to happen, due to larger structural forces.
Occupy Wall Street came, if anything, too late. The tenth anniversary of 9/11 had to happen undisturbed, otherwise police repression in the vicinity of the Twin Towers would have been swift and sealed by mainstream media consent. Yet the late September start meant the summer months were lost and from the start they faced the challenges of colder Manhattan.
Occupy Wall Street’s breakthrough was to catapult a language about inequality, austerity, and neoliberalism beyond the containers of the academy or small press left journalism. In an age of the Murdoch contamination of media, this alone was an achievement and prepared for the next wave.
In this light, Occupy is best considered as a dandelion movement: a failure in its own limited terms of composition, but a success as its dispersed seeds float to root more broadly elsewhere.
The crisis of 2008 made visible the cracks in the hegemonic culture of neoliberalism wherein the middle-class was encouraged to assume a lifestyle of the rich, famous, and wealthy through debt burdens that individuals had been previously warned against. Yet several left economists, like Michel Roberts inThe Great Recession, suggest that 2008 was only a forewarning of a much greater downfall that may occur in 2014. David Wiedemer, Robert Wiedemer, and Cindy Spitzer’s Aftershock makes similar arguments, but they are less willing to settle on a precise date. Counterpunch’s Mike Whitney repeatedly delivers forensic arguments on the fragility of the post-2008 bandage of fiat fictitious capital for bankers and austerity for the rest of us.
Middle class realignment come what may
Even if a cataclysmic moment does not happen over the next few years, the process of middle-class realignment will continue for reasons suggested by Immanuel Wallerstein and Giovanni Arrighi as they argue that we are coming to the end of a long-wave configuration in the capitalist world-system.
It is a commonplace that since the 1970s, capitalism has left the western working class as roadkill on the road to globalization. What is new about our contemporary moment is that the same is increasingly true for the Euro-American middle class. For this group is not simply facing a momentary downturn of stalled wealth accumulation, but a more general developmental crisis as the core of the capitalist-world-system moves eastward to South and East Asia.
In this new phase, business interests have themselves sought a new class trophy partner, abandoning the western bourgeoisie for a more vibrant East and South Asian nascent middle class. Global capital, consequently, has stopped caring about the Euro-American bourgeoisie’s present longevity and sees it as little more than a meat puppet ready for asset stripping by increasing the cost for those non-negotiable elements taken as defining middle-class identity: home ownership, higher education, healthcare, and pension security.
As the certainty of any generational transfer of accrued wealth becomes less tenable, the middle class becomes more willing to realign and work with the working class, not because it has become more socially egalitarian, but because it has become more frightened.
One cultural expression of this fear of falling is the recent mass popularity of Gothic tales that hyperbolically display the splatter of a middle-class character’s stuffing. Neo-Gothic fiction, films, and television conveys less a forlorn inability to imagine democratic alternatives to apocalyptic release, than an initial inconvenient self-truth. Many of the most popular, such as AMC’s The Walking Dead, stage realignments where the working-class characters, like the “white trash” Daryl rise in authority and fan popularity, not due to their muscularity or sharp-shooting, but by the more middle-class characters’ and viewers willingness to listen to working-class figures and work alongside (or underneath) them.
Similarly, the popularity of green-thinking and esoteric practices, like yoga, can be read as a bourgeois means of adjusting to a lack of purchasing power that the working class always had, through a self-protecting rhetoric that makes it seem as if downward consumption was the bourgeoisie’s free choice, rather than a response to structural pressure.
A similar gesture may exist within all our discussions of neoliberalism. For every critique of capitalism’s erosion of civil society, no matter how abstruse or elitist sounding, also prepares the way for what Raymond Williams called a new structure of feeling.
Truly progressive change can come about even when some of its most active collective agents do not necessarily seek the full implications of their own movement. For this reason, the Left more than ever needs to think once more about the ways in which we organize within the ongoing transformations.
Whether we call such planning the communist ‘hypothesis’ or ‘horizon’, as Jodi Dean has suggested, the main point is that history has no place for regret for those who tarry.
For purchasing information on Stephen’s books, simply click the covers below and you’ll be re-directed to our web shop.