Leo
Panitch and Sam Gindin
Capitalism
has become like the air we breathe. Its logic and operational requirements so
dominate everyday life that many cannot conceive of an alternative way to
organize our economics and politics. Even the Chinese Communist Party has been
converted.
Capitalism
and its human agents have been busy trying to penetrate every corner of the
globe for centuries. But the project to fashion capitalism into a truly
integrated global system has only come close to realization under the
stewardship of the United States in the period following the Second World War. In
The Making of Global Capitalism: The
Political Economy of American Empire, Sam Gindin and Leo Panitch provide us
with a rich history of how the architects of our new world order have used
frequent and endemic economic crises to deepen the commitment of economic and
political elites everywhere to institutions and policies that broaden and
further entrench the system.
Far
from resurrecting the catastrophic national rivalries unleashed by the Great
Depression and subsequent march to war, the United States has been highly
successful in coordinating unified responses to post-war crises across all core
capitalist countries. Consensus of economic and political elites has been
achieved through US leadership in the G-7/G-20 process, the International
Monetary Fund (IMF), and the World Bank, as well as the US Federal Reserve's status
as de facto central bank "lender of last resort" for the entire
system.
Of
course, if all else fails, the American military is also ready to assume the role
of "defender of last resort."
Conventional
analyses use public versus private sector or "small government"
paradigms to interpret neo-liberal assaults on government programs, but Gindin
and Panitch argue convincingly that economic and political elites everywhere
rely on ever-stronger state support to manage the capitalist system's crises
and contradictions. As anyone dealing with issues of economic or environmental
justice knows, it's income redistribution programs and industrial regulation
policies that are under the gun, not government subsidies for tar sand
development, military "essentials" like the F-35, or programs for buying
up toxic mortgage assets from world-class banks.
Gindin
and Panitch also reject political analyses that portray finance capital, whose
unregulated, greed-fuelled excesses caused the 2008 financial meltdown, as
simply a parasitical drag on the real economy. To be sure, the incessant development
of innovative financial products, such as the sub-prime mortgages at the center
of the 2008 meltdown, increases the volatility of the system. At the same time,
however, finance is such a necessary component of global investment cycles,
including government debt recycling, that states have little choice but to
accept the volatility and periodic crises that go with financing and to focus
their activities on "failure containment" rather than "failure
prevention."
Of
course, in the absence of strong oppositional social movements and working-class
political organization, that failure containment, as we have seen with the
current crisis, can have massive social consequences. The associated "too
big to fail" costs are "socialized" and passed on to those who had
no responsibility for crisis in the first place and who also lack an effective
means to protect themselves.
It is
often said that knowing the rules of any game makes you a better player. And perhaps
that knowledge might also encourage some players to periodically rethink the rules
or invent a new game altogether. The
Making of Global Capitalism is not an easy read. But it is an important one
for anyone interested in combatting everything from growing income inequality
to climate change.
Gindin
and Panitch will be at the Bookshelf Cinema for a Building Common Ground - Guelph public conversation about their book on Sunday, January 27 between 1:00
p.m. and 3:00 p.m. It should be a stimulating afternoon—we hope to see you
there.
- Terry
Moore, Building Common Ground - Guelph
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