by
Sasha Lilley
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What was the chain of events that helped facilitate the process of developing countries becoming beholden to institutions like the IMF and the
World Bank which dictated neoliberal policies—starting with the OPEC oil crisis of the early 1970s and the petrodollars that were produced by those countries in the Middle East that had oil?
DH: There’s a very interesting story to be told about that and I’m not sure it has been fully elaborated upon yet. With the OPEC oil price hike in 1973, a vast amount of money was being accumulated by the Saudis and other Gulf states. And then the big question was: well, what’s going to happen to that money? Now, we do know that the U.S. government was very anxious that that money be brought back to New York, to be circulated back into the global economy via the New York investment banks, and persuaded the Saudis to do that. Why the Saudis were persuaded to do it remains a bit of a mystery. We know from British intelligence sources that the U.S. was actually prepared to invade Saudi Arabia in 1973, but whether the Saudis were told: recycle the money through New York or you get invaded … who knows?
Now, the New York investment banks then had vast amounts of money. Where were they going to invest it? The economy wasn’t doing very well at all in 1974–75, as, all over, it was in depression. Citibank head Walter Wriston came up with the comment that the safest place to invest the money is in countries, because countries can’t disappear—you always know where they are. And so they started to make the money available to many countries like Argentina, Mexico—Latin America was very popular—but also places like Poland even. They lent a lot of money to those countries.
That worked out quite well for a while, but then in 1982 there was this general fiscal crisis, particularly after Volcker had raised the interest rate. What this meant was that the Mexicans who had borrowed money at 5 percent were now having to pay it back at 16 percent or 17 percent, and they found they couldn’t do it. Mexico was about to go bankrupt in 1982. That was the point at which neoliberalism kicked in. The U.S. via the International Monetary Fund and the U.S. Treasury said: we’ll bail you out, but we’ll bail you out on condition that you start to privatize and open up the country to foreign investment and start to adopt a neoliberal stance. Initially the Mexicans really didn’t do that very much, but by the time you get to 1988 they start to do it sort of big time.
But here’s the interesting thing: it’s unreasonable to think that actually the U.S. imposed neoliberalization on Mexico. What happened was that the U.S. was putting neoliberalizing pressures on Mexico and an elite inside of Mexico seized the opportunity to say: yes, that’s what we want. So it was a coalition between the elite in Mexico and the U.S. Treasury/IMF that put together the kind of neoliberalization package that came to Mexico in the late 1980s. And actually, if you look at the pattern, it’s very rare for there to be a straight imposition of neoliberalizing policies through the IMF or the U.S. It’s nearly alwaysan alliance between an internal elite, as it had been in Chile, and U.S. forces that put this thing together. And it’s the internal elite who are as much to blame for neoliberalization as the international institutions.
shieeet
DH: Accumulation by dispossession is, to me, a very important concept. And it doesn’t simply apply in the periphery of the global capitalist economy. For example, in Mexico, the reform of the land system there, privatizing land, has forced many peasants off the land. The result is the land has gone into few people’s hands. So you get concentration of wealth and power in agriculture in Mexico going on very fast and the creation of a landless proletariat asa result. Now, in this country we have analogous things going on in terms of what’s happening to family farming. That lot of family farmers can no longer make it and they’re being taken over by agribusiness. One of the mechanisms there, of course, is through indebtedness, that people borrow, they get into debt, they can’t pay off their debts, and in the end they have to sell out sometimes at rock bottom prices.
Accumulation by dispossession takes many local forms. I think, for example, the whole use of eminent domain in this country to dispossess people of their housing is a very good example of this. But then also we have the loss of pension rights. People who thought they had very good pensions with United Airlines suddenly find they don’t, because the company went bankrupt and then shed its pension obligations. The same thing happened through Enron and the like. So there’s a tremendous amount of dispossession of wealth and assets going on around the world. And then when you ask yourself the question, how is it, for instance, that healthcare has become less and less affordable in this country, more and more people are being dispossessed of the right to healthcare? You ask yourself the question, who is getting rich in this situation? Well, it’s those very, very small elite who are getting so much money they don’t know what to do with it. You look at the Wall Street bonuses, or something of that kind, you say, how come they’re getting bonuses of millions of dollars when people are losing their healthcare? And I want to say we have to connect those things.
What we see there is a dramatic asymmetry in the power of the state. The nation-state remains the absolutely fundamental regulator of labour. The idea that it is dwindling or disappearing as a centre of authority in the age of globalization is a silly notion. In fact, it distracts attention from the fact that the nation-state is now more dedicated than ever to creating a good business climate for investment, which means precisely controlling and repressing labour movements in all kinds of purposively new ways—cutting back the social wage, fine-tuning migrant flows, and so on. The state is tremendously active in the domain of capital–labour relations. But when we turn to relations between capitals, the picture is quite different. There the state has truly lost power to regulate the mechanisms of allocation or competition, as global financial flows have outrun the reach of any strictly national regulation. One of the main arguments in The Condition of Postmodernity is that the truly novel feature of the capitalism that emerged out of the watershed of the seventies is not so much an overall flexibility of labour markets as an unprecedented autonomy of money capital from the circuits of material production—a hypertrophy of finance, which is the other underlying basis of postmodern experience and representation. The ubiquity and volatility of money as the impalpable ground of contemporary existence is a key theme of the book.
[...] Throughout my years in Baltimore, I always tried to maintain some relationship to local politics: we bought up an old library, and turned it into a community action centre, took part in campaigns for rent control, and generally tried to spark radical initiatives; it always seemed to me very important to connect my theoretical work with practical activity, in the locality. So when I got to Oxford, the local campaign to defend the Rover plant in Cowley offered a natural extension of this kind of engagement. For personal reasons, I couldn’t become quite as active as in Baltimore, but it provided the same kind of connection to a tangible social conflict. It also led to some very interesting political discussions—recorded in the book, The Factory and the City, which Teresa Hayter and I produced around it—a fascinating experience. Soon afterwards I read Raymond Williams’s novel, Second Generation, which is exactly about this, and was astonished by how well he captured so much of the reality at Cowley. So one of the first essays in Justice, Nature and the Geography of Difference became a reflection on his fiction.
<3 <3
My answer is—oh, but you do: you do subordinate competition in all kinds of areas. Actually, the whole history of capitalism is unthinkable without the setting up of a regulatory framework to control, direct and limit competition. Without state power to enforce property and contract law, not to speak of transport and communications, modern markets could not begin to function. Next time you’re flying into London or New York, imagine all those pilots suddenly operating on the competitive principle: they all try to hit the ground first, and get the best gate. Would any capitalist relish that idea? Absolutely not. When you look closely at the way a modern economy works, the areas in which competition genuinely rules turn out be quite circumscribed. If you think of all the talk of flexible accumulation, a lot of it revolves around diversification of lines and niche markets. What would the history of capitalism be without diversification? But actually the dynamic behind diversification is a flight from competition—the quest for specialized markets is, much of the time, a way of evading its pressures. In fact, it would be very interesting to write a history of capitalism exploring its utilization of each of the six elements of the basic repertoire I outline, tracing the changing ways it has brought them together, and put them to work, in different epochs. Knee-jerk hostility to Wilson isn’t confined to the Left, but it is not productive. Advances in biology are teaching us a great deal about our make-up, including the physical wiring of our minds, and will tell us much more in the future. I don’t see how one can be a materialist and not take all this very seriously. So in the case of sociobiology, I go back to my belief in the value of rubbing different conceptual blocks together—putting E. O. Wilson in dialogue with Marx. There are obviously major differences, but also some surprising commonalities—so let’s collide the two thinkers against each other. I’m not going to claim I’ve done it right, but this is a discussion we need. The section of Spaces of Hope which starts to talk about this is called ‘Conversations on the Plurality of Alternatives’, and that’s the spirit in which we should approach this. I have questions, not solutions.
[...] the most far-reaching and significant of Marx's assumptions concerns the unchallenged power of private property rights in both production and exchange. It is in this context that he also assumes perfect competition in the market place. He accepts Adam Smith's theory of 'the hidden hand' although he insists that the hidden hand is that of labour not that of capital. Monopoly power is assumed away. Why he adopted these assumptions is an interesting question. My guess is that Marx's primary intent in Capital is to deconstruct the utopian vision of free market capitalism that the political economists of the time were promoting. He wishes to show how market freedoms do not produce a result that is beneficial for all, as Smith and others supposed, but that it would produce a dystopia of misery for the masses and immense wealth for the propertied capitalist class.
[...] we know from the analysis of the circulation of capital that a great deal of appropriation of value through predation occurs at the point of realisation. Increasing the minimum wage or creating a basic income will amount to naught if hedge funds buy up foreclosed houses and pharmaceutical patents and raised prices (in some cases astronomically) to line their own pockets out of the increased effective demand exercised by the population. Increasing college tuitions, usurious interest rates on credit cards, all sorts of hidden charges on telephone bills and medical insurance could steal away all the benefits. A population might be better served by strict regulatory intervention to control these living expenses, to limit the vast amount of wealth appropriation occurring at the point of realisation. [...]
he goes on to say that it's not a surprise that VCs support UBI, cus otherwise there'll be no demand for their products etc
which raises a deeper question: in such a world, where you have to jump through hoops to ensure that money circulates as a way of distributing goods, why stick to money? to think about more
[...] What originally appeared as a means to promote production becomes a relation alien to the producers. As the producers become more dependent on exchange, exchange appears to become more independent of them. Money is introduced as the servant of exchange but soon becomes its despotic master. Adam Smith's 'hidden hand' begins to take over. [...]
I like the analogy (aligns with mine for capitalism as a whole)
The irony is that the need to find a physical material representation for social values led to the adoption of an unimpeachable metallic base (gold and silver) for money that was so dysfunctional for daily use that it required symbolic representation of itself (paper and electronic moneys) to be effective. The symbolic moneys gradually became more dominant as trading expanded. Cutting out the metallic base in the early 1970s produced two symbolic systems--value and money--side by side in an awkward dialectical embrace.
can you think of value and money as being like the signified/signifier in a Saussurean view of language? or money as a Wittgensteinian language game
[...] debt is a claim on future value production that can be redeemed only through value production. If future value production is insufficient to redeem the debt then there is a crisis. Collisions between value and anti-value spark periodic monetary and financial crises. In the long run, capital has to confront ever-escalating claims on future values to redeem the anti-value building up within the debt economy and credit system. Instead of an accumulation of values and of wealth, capital produces an accumulation of debts that have to be redeemed. The future of value production is foreclosed.