Sam Gindin

Finance and American Empire

Despite the hubris that has attended the global ambitions of American financiers for over a century, the actual rise to world dominance of American finance was far from smooth or inevitable. The goal of ‘building the world’s capital for all time to come’ in New York, already articulated in the late nineteenth century, looked set to be realized by the end of the First World War. Yet it was only a decade later that the Wall Street crash triggered the Great Depression and the breakdown of the international financial order. And while New York took its place as the world’s principal financial centre at the end of the Second World War, this seemed much less important when the new Bretton Woods order had supposedly marginalized finance relative to production and trade. As the story of twentieth-century capitalism is usually told today, only the neoliberal ‘revolution’ of the 1980s and 1990s finally unleashed the forces that made Wall Street the central location of the world economy. But far from this marking the end of history, the scandal that enveloped Richard Grasso in 2003 over his

Euro-Capitalism and American Empire

150 million salary not only epitomized the venality of New York as the capital of global finance, but it also appeared to symbolize its fragility. And Hank Paulson’s bold statement of confidence in New York as the financial capital of the world — expressed in the midst of the global credit crisis that had its roots in the collapse of the US domestic subprimemortgagemarket (with Paulson’s ownWall Street firm Goldman Sachs having played a large role in making that market) — could be taken as yet another example of whistling in the dark (Stein 2007).

The Political Economy of the Subprime Crisis

For some two decades now, progressive American, British and Canadian intellectuals, determined to resist neoliberalism’s ‘there-is-no-alternative’ mantra, have looked to continental Europe for an alternative model. One virtue of this academic and political project — which within the field of comparative political economy has now come to be known as the ‘varieties of capitalism’ or VoC approach — has been that it challenged the notion that capitalist globalization inevitably needed to take the form it has, apparently entailing, as so many of its proponents imagined, the growing impotence of nation states and the increasing homogenization of social formations. The insistence on variety among states has meant trying to refocus attention on the continuing salience of institutional arrangements and social relations specific to particular social formations and their histories, the very dimensions largely ignored in the equations of neoclassical economics and the policy prescriptions of the International Monetary Fund (IMF). Above all, this approach has suggested that whether and how societies adapt themselves to global competition remains an open and important question.

Forum the current crisis: a socialist perspective

The current financial crisis has forcefully, if perversely, demonstrated the centrality of the US in the global capitalist system. It is difficult to make any sense of recent events without emphasizing the imperial dimension of America’s relationship to the rest of the world. The crisis began in the US, rapidly spread to other parts of the world and continues to be shaped by American political and economic developments.

Marxist Theory and Strategy: Getting Somewhere Better

They say they won’t intervene. But they will.” This is how Robert Rubin, Bill Clinton’s Treasury Secretary, responded to Paul O’Neill, the first Treasury Secretary under George W. Bush, who openly criticized his predecessor’s interventions in the face of what Rubin called “the messy reality of global financial crises.” The current dramatic conjuncture of financial crisis and state intervention has proven Rubin more correct than he could have imagined. But it also demonstrates why those, whether from the Right or the Left, who have understood the era of neoliberalism in terms only of ideology — i.e., a hegemonic ideological determination to free markets from states — have had such a weak handle on what really has been going on over the past quarter century. Clinging to this type of understanding will also get in the way of the thinking necessary to advance a socialist strategy in the wake of this crisis.

American empire and the relative autonomy of European capitalism

The first three sections of this lecture address the need for better historical-materialist theorisations of capitalist competition, capitalist classes and capitalist states, and in particular the institutional dimensions of these – which is fundamental for understanding why and how capitalism has survived into the twenty-first century. The fourth section addresses historical materialism’s under-theorisation of the institutional dimensions of working-class formation, and how this figures in explaining why, despite the expectations of the founders of historical materialism, the working classes have not, at least yet, become capitalism’s gravediggers. While recognising that a better historical materialism along these lines will not necessarily provide us with a gpsroute to a socialist world beyond capitalism, it does suggest a number of guidelines for socialist strategy, with which the lecture concludes. This includes the need for building new institutions capable of defining, mobilising and representing the working class broadly, as well as recognising that the types of parties that can transform working classes into leading agents of social transformation have yet to be invented. A strategic priority must be to start anew at creating the kinds of working-class political institutions which can rekindle the socialist imagination, and develop the socialist capacities to get there.

The Integration of China into Global Capitalism

This article examines the relationship between European states and the informal American empire following the Second World War. Building on neo-Marxist theory, it argues that any attempt to understand the political response to the ongoing euro crisis has to consider the deeper determinations of the trajectories of the states of North America and Western Europe through the course of the making of global capitalism since 1945. This involves, in particular, taking seriously the leading responsibility that the American state has had, and still has, for securing the conditions for capital accumulation internationally, even while other capitalist states retain their ‘relative autonomy’ within the informal American empire.

Prelude to the Crisis: The US Treasury, Financial Markets and ‘Failure Containment’

Although the current crisis has amply demonstrated the many challenges and contradictions the American state faces, it has also demonstrated that it nevertheless remains critical to the systems survival. Whereas it was still possible in the 1960s and 1970s to represent the capitalist relationship between the global north and south in terms of “the development of underdevelopment,” by the new millennium there was clearly a very remarkable, if still highly uneven, process of capitalist development taking place in the global south. Nowhere was this clearer than with the integration of China into global capitalism. At the same time, the severity and duration of the latest crisis in a global capitalist economy that the American state had been so central to constructing has, unsurprisingly, led to a resurgence of pronouncements that US hegemony was coming to an end. Chinas entry into the circuits of the international economy, many commentators now predicted, marked a fundamental “re-orientation” of the global capitalist order. However, far from displacing the American empire, China rather seems to be duplicating Japans supplemental role in terms of providing the steady inflow of funds needed to sustain the USs primary place in global capitalism. Were this to change, it would require deeper and much more liberalized financial markets within China, which would entail dismantling the capital controls that are key pillars of Communist Party rule. Furthermore, a major reorientation of Chinese patterns of investment and production away from exports towards domestic consumption would have incalculable implications for the social relations that have sustained Chinas rapid growth and global integration. In this regard, though the outcome of the working class struggles now underway in China cannot be known, this cannot but impinge on, and possibly even be affected by, the direction working classes elsewhere take out of the current crisis.

Notes on Labor at the End of the Century

This article traces the central role of the American state, led by the Treasury, not only in the spread and deepening of global finance, but also in containing the financial crises to which this gave rise. The first part examines this role in relation to the financial crises abroad in the 1990s. The second part focuses on the Treasury’s opting for failure containment over failure prevention amidst the financialization it promoted through the 1990s. The third part shows how this laid the basis for the interpenetration of US and foreign financial markets in the mortgage credit boom in the years leading up to the 2007 financial crisis.

AMERICAN EMPIRE OR EMPIRE OF GLOBAL CAPITALISM

With the publication of Marxs The Communist Manifesto 150 years ago, came modern socialism. To the many critiques of capitalism that already existed at the time, one of Marxs most important contributions was to add the dimension of agency: the emerging working class was placed at the center of a conscious movement to go beyond capitalism. As workers struggled within capitalism, they would, Marxists argued, transform themselves and develop the potential to transform society. This article can also be found at the Monthly Review website , where most recent articles are published in full. Click here to purchase a PDF version of this article at the Monthly Review website.