Zizek BTFO by a Post-Modernist?

     Recently, a particularly uninspired and uninspiring article on counterpunch caught my eye. The article is written in the really trite open letter style that swamps articles on social media,  which despite the best attempts of a few brave souls still hasn't earned the mass derision that it richly deserves. Every so-often the politically correct Left decides to launch an attack on Zizek and the reason why is patently obvious--his books sell well and theirs don't. This attempt will probably not do any more to dint his popularity than previous attempts and its notable that this is the first article for counterpunch written by the "concerned" letter writer. Typically open letters often start with false praise and this letter is no different when the author isn't praising Zizek's brain, books or contrarianism, she is informing him that he is wrong about everything.  It is often said that nothing identifies a hipster more than the rabid denial that someone is one and the charge of post-modernism is no different: "...but my criticism is not in the post-modern vein of refusing the notion of the universal." Who else sees where this is going?

      My intention here is not to defend Zizek whose eclecticism and shock jock antics are well-known, but to point out that he is here merely a rorschach test for those portions of the Left that the author would like to attack directly but for some reason has chosen not to. The author excerpts a section from one of Zizek's well-known hobby-horses of emphasizing the need to defend Western values on the Left and his analysis of "capitalism with Asian values" which emphasizes that capitalism no longer needs the Western-centric radically emancipatory universal values that the (postmodern) Left commonly critiques. The author decides it opportune to engage in a rather shallow discussion of the nature of the Enlightenment without touching his essential point. Zizek in first presenting his argument confined it mainly to the authoritarian polities of Singapore (where the term "capitalism with Asian values" originated) and China and proceeded with some well-worn academic tripe about Buddhism and capitalism in the Weberian vein. But since then recent developments have far from disproved his contention with the rise of Hindu fascist Nahrendra Modi to power who Zizek calls "a most brutal neoliberal" and even the acceptance of many elements of capitalism by the so-called Islamic State. We analyzed Westra's bare-bones conception of capitalism as a mode of production for profit that is oriented towards the abstract accumulation of mercantile wealth from the perspective of the seller. From that perspective its pretty clear that the Enlightenment thought and values that served as capitalism's justification is no longer really necessary, especially after escaping its European shell.

       To be clear, the values of the Enlightenment are no longer really necessary in the rest of the West, in fact they've been or are being steadily abandoned. Some feints towards those values will always probably be necessary but that is a distraction from the real substantive content. Michael Hudson in his book Killing The Host: How Financial Parasites and Debt Bondage Destroy the Global Economy makes a solid case that the economic legacy of the Enlightenment and classical political economy is in their program to liberate the barely post-feudal economies of Europe and its offshoots from rentier interests for the purposes of reducing economic costs and increasing efficiency. Under the umbrella of what may broadly be called rentier interests were the landlord classes, chartered monopoly merchants and financial/usurer's capital. In his superb book Beyond Mainstream Explanations of the Crisis: Parasitic Finance Capital Ismael-Hussein Zadeh explains some of reasons that the European bourgeoisie began to retreat from this radical legacy of attacking the unearned economic privilege of the rentier classes: 1. the necessity of forming a united front among the propertied classes against the proletariat 2. changes in the structure of capitalist ownership bringing the world outlook of the productive bourgeoisie closer to that of the rentiers they had previously decried. I will go more in-depth in the post on economic thought and the Enlightenment but for now it is sufficient to say that these changes began to occur in the late 19th century and that economic thought has increasingly reflected it.

     Returning to the author's conception of the Enlightenment the author starts from a loaded position about how the Enlightenment could be defended and then seems to work in a discussion of Hegel's merits and demerits--as if he was the entire Enlightenment or a substitute for the phenomenon as a whole. Hegel has not been fashionable since the 1840s and hence rarely deeply studied but here the author is repeating a narrative about him that anyone vaguely familiar with post-colonial studies must already know. But this shallow dismissal of Hegel reminds me of a habit of intellectual derision and feigned knowledge popular in academia today that John Dolan sums up: "The notion that Stevens might be a racist AND a great poet, just as Dworkin might be a fat loon AND a crucial figure in feminist intellectual history is simply beyond our Beige compatriots." he goes on to cite a scene from the day after tomorrow where a male character argues that Nietzsche was the most profound thinker of the 19th century only to be trumped by the female love interest who says that he was a chauvinist in love with his sister. So suffice it to say that the notion that Hegel might have been a racist as well as one of the greatest philosophers in intellectual history with something still salvageable in his thought is beyond our author here. Just like the notion that the Enlightenment could have been a major progressive step for mankind as well as also having devastating consequences.

       Implicitly understanding that her position is the politically correct orthodoxy of the academic "Left" the author attempts to lure us in with false contrarianism. Zizek may seem like an unorthodox radical contrarian, the author seems to say, but are YOU ready for the redpill about Europe that even Zizek won't touch? The author sets it up for us: Enlightenment Europeans didn't just fail to live up to their values but Enlightenment ideals were far from innocent. This position, in one form or another, was expressed to great academic acclaim by Adorno, Focault, Furet, Blaut, Said and others decades ago.  What is the clincher for her? That slavery and the Atlantic slave trade took place during the Enlightenment. Neglecting that it also took place before the Enlightenment and was also plied in the Indian Ocean over a longer period of time, the author fails to point out that Enlightenment-inspired movements were the first to successfully abolish slavery and challenge a barbaric social relation that was practiced nearly everywhere. But that history is small beans compared to the author's main contention: the Enlightenment's conception of freedom is racist. And why is that? "What freedom meant, and what being a human being meant, was premised on having an opposite--the non-being of the slave." You can see where this is going. A similar argument is presented Greg Grandin's overall decent book The Empire of Necessity if anyone needs a reference, which argues that for people at the time to conceive of themselves as free beings they needed an opposite for reference. Now, for people in pre-modern times living in traditional class societies, "freedom" in the modern sense usually never meant much more then the absence of slavery. The Roman Patricians taught their children that the worst fate that could befall a person was to become a slave--while keeping slaves themselves. Nor was there anything unique in European slavery in considering the slave "a non-being"; Orlando Patterson in studying slavery in sixty-six societies argues that the position of the slave as being a "socially dead" being is common practice. The other position that what made European slavery in the Atlantic world unique was that it was a racialized and heritable position is also questionable in my view. Michael Parenti in his book The Assassination Of Julius Caesar: A People's History of Rome (whatever its flaws) draws on some sources and scholars that convincingly argue that German slaves in Rome were "racialized" by the slaveholding class and that the remittance of the children of slaves from slavery was far less common than usually thought. I would not be surprised to find out that other romantic views about the benign character of slavery in non-western societies also turned out to be false.

       But returning to the author, from all this the privileging of whiteness flows, so that therefore it is impossible to have Enlightenment-inspired freedom without privileging "whiteness" and therefore oppressing the Other. I'm going to take a small moment here to ask: who invented the concept of white privilege? Was it the Weathermen? Was it Fanon? Was it Du Bois or even Frederick Douglas? It was actually none of these. During the French Revolution, the French radicals were on the outs with the American revolutionaries that had partially inspired the French Revolution in the first place. At this point they began to critique what they increasingly saw as the American Revolution's conservative nature: they had thrown off Britain, a state dominated by old regime aristocrats, and had moved towards instituting many popular liberties amongst themselves but what they retained was what the French radicals called "the aristocracy of the epidermis." according to Domenico Losurdo. Its notable that the reactionaries that opposed the radical revolutionaries tried to re-institute the slave trade and slavery. Similarly, during this same time, critiques of Empire, however limited, began to emerge; Empire and colonialism were hardly dirty words before modern times, they seem to have existed in most class societies.  The direct correlation between the Enlightenment and King Leopold's Congo or the Holocaust hardly seems sustainable as Anthony Pagdin correctly argues in the preface to his book on the Enlightenment.

      When the author tells us that all the hopes and horrors of modernity are intertangled and therefore it should be dispensed with, she may think she is saying something profound but only tells us that there are contradictions in history and the world. Utilizing Jaffe's reading of Western democracy as a global form of apartheid she chides Zizek that "our" democracies cannot be disentangled from whiteness. There is a theoretical problem with equating settler-colonial societies like South Africa and others with European ones--imperialist nations they maybe. It is not as if Zizek doesn't talk about "new apartheids" as a feature of our age, anyway. But it raises the question, is bourgeois democracy white? One feature of our time, has been the spread of bourgeois democracy through the Third World beginning in the late 80s and continuing into our time through the so-called third and fourth waves of democratization. These developments thrilled identity circles even when they led to ruin like during the Arab Spring. Even in the mid-19th century most of the world's political democracies were actually in Latin America.  We will leave aside the true nature of these democracies.

         With the disappointments of national liberation struggles in the 1960s the discourse has increasingly shifted to "race" as the mode of analysis. Now the struggle and accepted parameters of debate revolves around abolishing "whiteness" whatever that may actually mean; the more sophisticated notions of this discourse hold that anyone who has darker skin is inherently more oppressed than someone who has lighter skin. The latter increasingly encompasses people who are not European or who do not have skin traditionally considered "white". Some people realize the problems of this shifting scale and try to form a united front against Europeans and European settlers on an anything-but-class basis. In reality, hatred of whites usually isn't enough to hold the various oppressed nations together in the United States or anywhere, much less lead them to victory. What is necessary is to identity specific conditions of national oppression and to organize on the basis of a particular nation, as a cultural and social entity, not just a skin color. A "white" left-wing Venezuelan patriot can do more to advance revolution than someone on twitter  or tumblr denouncing whiteness. But the post-modern project does not respect nation-states, even those of the oppressed, and what they profess is a kind of cosmopolitanism of différance to use Derrida's term.
     
      Styve proceeds with the usual postmodern performative contradiction: "Don't get me wrong, I was incredibly hopeful and in awe when the Greeks went to the polls last year and voted OXI." This should be read: "look, its not like I don't see what your saying but...you (we) need to check your (our) privilege." she continues by mournfully admitting: "...we have come to the extreme position where even arguing for a full welfare state seems incredibly radical." And here it is, the friction between "white" imperialist social democracy and neoliberal identity politics. As a liberal, Styve wants to believe but also what about people of color™? If we can't guarantee that everything will be perfect for them then it would be better just to not do anything. Don't build solidarity; break down barriers.
While this all might seem like a serious competition between Zizek's evil modernist white male communism and Styve's "radical" post-modern racial abolitionism it is nothing of the sort. It is a struggle between two competing post-modernisms, the one we are analyzing currently, and Zizek's weird project of trying to push communism through the EU. She refers to the dependency theorists of the 1970s who sought analyze how the core working class was benefiting from imperialism and says: "Now, despite the relative and increasing poverty of the European precariat to what extent are they (we!) willing to give up the privileges that being a citizen of the Core gives?" I have already analyzed the issue of the labor aristocracy here but it pains me to say that while as much I found Third Worldist (again for lack of a better term) theory exhilarating in its willingness to question popular Left orthodoxy the politics of it are sometimes not much different than neoliberalism. It maybe forgotten that some of Milton Friedman's most acclaimed work was when he appropriated Marx and Engels concept of a labor aristocracy for capitalist purposes and argued that unions hurt members of the working class outside of its membership and in developing countries. What feeling human being or revolutionary could argue with such logic? It didn't help that the leadership of the developed nation unions were often reactionary.

         For Adolph Reed, identity politics isn't just co-opted by neoliberalism, it is neoliberalism. Aside from the superficial similarity between identity politics and neoliberalism in the promulgation of a strange brew of ultra-individualism, anti-communism, and red baiting, we see a proliferation of talking points designed to handle privilege from the Right.  This is indeed where the original neoliberals got their start; Union-busting for the less fortunate. It is pretty blatant in some of Friedman's documentaries, when he wasn't tipping his fedora and going on about how inheriting millions is the same as inheriting musical ability and eye color, he was walking around the streets of Singapore or Hong Kong showing vibrant displays of lights and commodities, small street venders cart-pushing their way out of poverty. The message: stepping in the way of capitalism's exploitation of the less fortunate was not only the privilege of the fortunate but a racist Euro-centric approach. Don't protest sweatshops. For that matter, you shouldn't protest political repression in a place like South Korea either because capitalism is bringing home the goods there.

        Fortunately, for neoliberalism and the resentful right, there is no end to privilege politics, and it never will, as capitalism will never be able to provide prosperity, much less employment for all of humanity. What the ruling class fears is not paying more or having to bestow more privileges to certain segments of the population but independent working class organization. Contrary to Styve who says we have no credibility to lead the revolution in the West, the real privilege is that of doing nothing. Many non-Westerners have said it, the idea that Westerners should await liberation from capitalism while non-Westerners die fighting to overthrow it is a privileged one. The historical case shows that revolution was easier when there was a highly-organized radical movement in the global North.

     Fortunately, some on the Left are questioning identity dogma and its practice. Contrary to identity politics attacking "whiteness" or encouraging mass migration of "non-white" people into Europe will not destroy the European or white identity. If we follow Stalin's theory of nationalism, nations aren't completely a creation of capitalism and they won't disappear until the advanced stage of communism. Stalin maybe getting his revenge as the EU is increasingly torn apart by nationalist divisions proving not only the hard reality of inter-imperialist struggle within the EU banner but also the division between core and periphery in Europe. A common subcontinental civilization may not be enough to unite Europe especially under capitalism. Likewise, there's more to being German or French then being white and many oppressed groups and nations in Europe and Russia are "white". Stalin in his time criticized Zionism as being an unscientific idea as it posited that Jews as members of a "race" were the same everywhere and thus ignored real national differences between Jews across countries. Unfortunately for people who live in imperialist nations there are cultural and ideological reasons for chauvinism and if the intention in joining the struggle is to purify oneself of it there then we will never be pure. People are trained to think that the way to undo "racism" from their minds is to not think or express any chauvinist thought rather than trying to change social relations or build solidarity. Imperialism uses this to its advantage by thinking the less offensive it makes itself and the more people from oppressed nations it invites to join the oppressor nations, the longer it can prolong this existence. In some ways, immigration bolsters oppressor nation privileges by inviting workers from the outside to fill the lowest and hardest work in society, in order to dent class consciousness or contradiction within or to move more native citizens into the middle class. This is not always the case though but the irony is that immigration can advance "white privilege" or at the least help keep imperialism going contrary to stated intentions.

       History offered us one glimpse into a terrifying vision of capitalism without "whiteness" when fascist Japan was rampaging across Asia killing millions of people in the nations it "liberated"; it was proclaiming the end of white colonialism in Asia in its propaganda and maybe even the world. Its propagandists proclaimed that communism was a European ideology and that it was a screen for greater "white" domination. It is eeiry how much post-modernists echo Japanese fascist propagandists  sometimes. It wasn't for nothing that the German philosopher Habermas called Focault: "a young conservative" because of the way he and other post-modernists integrated irrational conservative ideas reminiscent of the interwar period into a left-guise. It is likely that as capitalism dies it will increasingly conceal itself beneath a "non-white" mask. What we need is real proletarian politics and that is admittedly difficult to develop and push in the West but class is the key to ending other oppressions. Identity politics offers an ameliorative and libertarian edge for the system, implicitly feeding the illusion that imperialism would end of its own accord if the more repressive and chauvinistic elements of it disappeared. To appropriate Zizek *sniff* the Truth is exactly the opposite as what Styve maintains: "whiteness" could collapse and capitalism could keep going. This is especially the case that now that so much of its key architecture is located in Asia and elsewhere. Styve says that only the end of the world would end whiteness; but as Jameson and Zizek point out in the developed nations it is easier to imagine than the end of the world than the end of capitalism.

        Hopefully this will be the last time I write about the identity wars on this blog for sometime because of discomfort with it, boredom with it, and the pens of superior critics out there. But I could not avoid commenting on this little piece because as bad as Zizek can be at least he doesn't lie to the people and say he's not part of the European elite, he admits that it would be a lie, as European to say that he does not have a Eurocentric point of view. Can we say the same about those feigning anti-racist purity?

Review: "Unleashing Usury" by Richard Westra

      While not my favorite book on finance capital or financialization generally, Unleashing Usury: How Finance Opened The Door For Capitalism Then Swallowed It Whole by Richard Westra offers some novel arguments and interesting information about the state of global capitalism today. Perhaps Westra's most novel argument is that capitalism as a mode of production no longer exists; that may seem like a very strange argument to make when capitalism seems stronger than ever before. According to Westra we are living in a very peculiar form of post-capitalism that he dubs "capitalists without capitalism" inverting Peter Drucker's conception of "capitalism without capitalists" from which he draws the argument. Drucker was referring to the rise of so-called "institutional investors" retirement funds, pension funds, insurance funds etc. which constituted new forms of social saving which unleashed a veritable capital glut upon global markets. Drucker rejected the idea that these funds could really be called "capital" and found no pre-existing theory or framework that could explain it. He posited that this form of post-capitalism would move forward in a rational and positive way, i.e. everyone would more or less be a capitalist, meaning no one would be--the need for the social role provided by either individual capitalists or the collective class has disappeared. Like many revisionist Marxists of Old,  for Drucker capitalism was moving towards its opposite; something very much like socialism. Westra views things differently, for him, the unleashing of these huge pools of idle money (or M) on the market which cannot be invested productively signals the end of the capitalist system which can only be kept alive through intensified human misery. The faustian energies conjured by letting loose these idle funds, are rushing to the point that the neoliberal revolution which unleashed these forces will eat its own children--as well as the mother that spawned it. The argument here is pretty good for the most part: so-called assets under management (AUM) makes up 181% of OECD GDP. This clearly shows the social obsolescence of the role played by the capitalist class in the core countries and for Westra the inability to invest even a large proportion of this "capital" productively means that the form it must take to valorize itself is that of usurer's capital of profit earned without production M-M^ in Marxist terms. Profit (^) made purely from lending money and charging interest.

         At this point, some person either an internationalist neoliberal or a Third Worldist might object that while there are serious barriers to further real accumulation in the core capitalist countries that in fact new avenues and conditions for capitalism have been opened in the developing world. Westra rejects this on the grounds that many nations now are experiencing a phenomenon dubbed "premature deindustrialization" where gains made in industrialization are rapidly disappearing and many peasants are moving from subsistence agriculture straight to service work with no stage of productive industrial employment in between. Even in China with its enormous labor force of over 100 million manufacturing workers there have been reported stagnations in the overall number of workers for sometime (though some argue the real number is revised downwards for political reasons) and even workers at the notorious Foxconn plant are facing fierce challenges posed by automation. Few developing nations have made the transition to a fully-fledged industrial society over the course of the 20th-21st centuries. South Korea and Taiwan are two of the few that have ever boasted manufacturing  proportions of the labor force on par with that in the advanced countries (between 40-60% on average) and the window for other upstarts is closing. The core countries are likewise stagnating or declining in terms of the proportion of the labor force employed productively, with a few exceptions like Germany and South Korea as I noted in the last post.  For many Marxists and other economists, this trend might be worrying but not much of a big deal as far as the continued function of the system is concerned but for Westra it is essential. To sustain human society any economic system must "round the bases" as far as Westra is concerned which means 1. meeting the minimum standards of societal reproduction and growth 2. allocating resources with some degree of efficiency.

      The relationship between this and the trends outlined is simple but still carries with it some nuance--for Westra, the primary consideration and necessity for the reproduction of any capitalist society is the reproduction and commodification of productive labor. The price of productive labor is the primary cost and consideration of any ruling class in a capitalist society. In the past, peasantries making up 80-90% of the population were employed in agriculture and had direct recourse to the means of production, for this reason it was historical necessity for the capitalist mode of production that larger proportions of the laboring population be employed in manufacturing. As labor productivity in agriculture rose on the one hand and means of production/land were increasingly concentrated in the hands of the bourgeoisie on the other, this meant an alternate outlet of productively employed labor had to be found. This was found in the industrial society, a novelty in human history, where the proportions employed in manufacturing that we previously mentioned prevailed along with a population employed in agriculture constituting 20% or less of the population. For Westra, the increasing proportion of workers selling their commodified labor productively and rising real wages constitute one of the bases that must be rounded in order for a capitalist society to survive. We will explain his reasons for thinking so later on.

                                 Westra on capitalism and the "economic"
    Westra's definition and conception of the rise of capitalism as a system should be treated briefly. For Westra, capitalism is the subordination of human society to the pursuit of the abstract accumulation of mercantile wealth. Westra points out that typical Smithian conceptions of trade (John trades a shirt he made for a keg of beer made by Jack) is similar to sharing even if money is used to facilitate the trade. Whether the commodities are exchanged directly or the difference in time and input is split using money, the trade in this situation revolves around the two individuals desire in terms of use-value. The object in this case is to save time and resources, for each person to compensate the other for the particular use-value (commodity) that he lacks, not to earn a profit. The historical/anthropological case also lies against Smith as historical evidence suggests that trade first evolved as a form of exchange between communities and not between individuals. As you could imagine, people living in tight-knit communities with close kinship bonds would probably just share their produce in the first place instead of bothering with money or barter. Contrary to marginalist orthodoxy that tries to make sense of capitalism from the perspective of a rational consumer, capitalism instead makes the most sense from the perspective of the seller.  In other words, from the perspective of an individual or class whose primary purpose is not fair exchange but rather to make profit. Classical economics at least implicitly understood this essential aspect of capitalism.

      But as Marx explained, if every individual strove to cheat everyone whom he exchanges with then all the cheating would eventually be balanced out and collectively society would enjoy no increase in wealth (or profit for that matter). Thus to enjoy an increase in wealth and to produce a collective profit the capitalist class must at some point take up the capitalist production process of: M-C-P-C-M^ (P=Production). Thus capitalism as a system of production is qualitatively different from the  profit-making, labor exploitation, commodity trade, monetary exchange, speculation or huckstering that has existed through most of the history of civilization in some form or extent. These are all features of capitalism but are somewhat different from a society reliant on a system of production for profit. The capitalist class must collectively squeeze more value out of productive labor then what it costs to acquire it to make a collective profit. Theoretically, when freely-contracted, the worker enters this relationship as a seller of labor power and this would seem to put the worker on the same level as the capitalists as they are both sellers of a "product" looking out for their individual interests.  But the object of the individual industrial capitalist here is to acquire labor that is as cheap and productive as possible. The objective of the worker is to find work that is as pain-free, safe, and well-compensated as possible. Here interests begin to diverge and we have already noted that exceptions to the rule cannot collectively be the norm.  Therefore, Westra is completely correct to argue that the primary cost from the perspective of the capitalist system of production is (and should be) the cost of acquiring productive labor. A quick aside, if we take choice out of the equation and a capitalist buys a slave for labor as was common in the South before the Civil War, the slaves cannot collectively cost the slave-owning capitalists collectively more than what they are paid for or what it costs to keep them up.

      To re-emphasize with regards to exceptions on the labor-side of capitalism such as labor laws, government subsidies for workers, worker-owned businesses, other ethical/legal concerns and even trade between capitalist countries and nominally communist countries either must be twisted to conform to the logic of this system of production or is not strong enough to overthrow or impede the system's implicit function. For the record, no "pure" capitalist society has ever existed and it never will given the contradiction between human desires and need and the "abstract" push of the system to arbitrarily seek maximum profits. Westra emphasizes that in this respect it is an inhuman system and is not in the long-term compatible (whether we are talking decades or centuries) with human society. To use an extreme example, a hypothetical society that monetarized the relationship between mother and child and expected new born babies to pay the mother (and by extension society) the costs of "investment" in the child at profit on pain of cessation of care (death) would collapse very quickly. It is not necessary to resort such extreme thought experiments to come to the conclusion that the cumulative effect of a relentless and absent-minded quest for profit will inevitably be the collapse of human society.

       For capitalists themselves, the all-out war to produce as much as the market will bear in order to earn profit is a more efficient (though brutal) pricing mechanism than what prevailed under previous systems of production. Inefficient producers are wiped out. Meaning that even the integrity of capitalist property itself in individual cases is put on the chopping bloc when it does not conform with  the principles ordained in the system as part of an inter-ruling class promise. The intention of promoting efficiency and lower consumer prices being that every capitalist is also a consumer himself as he obtains many different things form the market (usually from other capitalists) in order to carry-on business in addition to his personal revenue. The bourgeoisie and their economists often misconstrue their own interest as the interests of society as a whole; while a case can be made that lower prices are in the interest of workers, the real intention is often to lower the costs of living in order to avoid over higher wages or to be able to get away with paying lower wages. Selling overproduced goods is often a goal as well. But this pricing system itself is not perfect, it does not merely assume itself through the magic of the market and for Westra this pricing system has been consistently malfunctioning in the leading sector of the global economy in what is probably by now the majority of capitalist history. For Westra (though perhaps not for all Marxists) this malfunctioning is a signal of the system's coming doom.

       At this point we begin to leave the realm of the "economic" in the sense that Westra understands it (but perhaps not in Marx's sense himself) which is in the emergence of bourgeois economics as an independent field of study separate from the study of history, religion and society as a kind of sphere operating autonomously independent from historical factors or anyone's will. The key to this conception of economics is the naturalization and idealization of capitalist social relationships that began as capitalism started to become dominant and has only intensified as this dominance increased. Of course this reading of classical political economy as merely a device for justifying de facto slavery of the wage-worker and the tyranny of the capitalist "meritocracy" is a shallow reading of that canon as well as its overall importance.

       We will treat the legacy of classical political economy and the Enlightenment in relationship to the capitalist system of production in another post.

               Value-Production Complexes, Finance and The End of Capitalism (?)
     Westra puts forth an interesting argument about what he terms "value-production complexes" in the history of capitalism. The first great and most successful value production complex was cotton production and cotton goods manufacturing. I have already written on new literature on cotton and cotton-led industrialization here. Suffice it to say, it is hard to disagree with his assertion. What is interesting about his argument is that he calls cotton production and manufacturing the perfect value production complex for capitalist pricing which we referred to earlier. He doesn't completely explain why this is but I can suggest some reasons for it. Unlike other crops, the primary limit to cotton production was the human labor necessary to pick, haul, and gin the cotton. The semi-tropical nature of cotton-growing precluded the use of free European labor and made slavery necessary.  The nature of the social relations used to produce cotton made it easy to produce it cheaply and the diffuse nature of cotton growing and slave-ownership lent itself to what bourgeois economists have dubbed perfect competition. No farmer held more than 1% of the market share hence no one could rest on his laurels as landowning classes were apt to do,  intense competition reigned in this sphere that drove farmers to produce cotton as cheaply as possible. American cotton farmers also produced primarily for the world market and not a local or national one.

     Cotton manufacturing on the other hand emerged from regions where textile weaving and manufacturing historically had relatively strong roots. Although the production of cotton cloth and goods was relatively new in European history it was relatively easy to do and hence also constituted a highly-competitive market. The invention of the water-frame initiated the labor productivity explosion of the Industrial Revolution. Now a worker in Northern England getting paid four times as much (in money wages) could produce cotton goods at a lower cost than Indian artisans on the open-market whereas previously Britain could not compete with India in textiles. Many more inventions for simplifying labor tasks and increasing productivity began to proliferate, including the steam engine. During this period of time, the technology used to produce cotton goods was easy to copy and  factories with identical capabilities could be set up next door, in the next county,  across the channel, or across the Ocean. Cotton-led industrialization resulted in one of the most rapid proliferation of advanced industry in modern history and most of the nations who had joined the club of cotton-based industrializers would go on to remain in the category of advanced industrial nations for the next 150 years. In mid-19th century Britain, which held a near-monopoly on world industrial production, there were over 4,000 owners of textile mills. While not seemingly impressive in proportion to Britain's population it would be hard to imagine 4,000 individually owned steel mills in the United States (or anywhere). Industrialists heavily utilized the labor of women and children in order to get the best price for productive labor and these child and female workers were largely classed as being "unskilled".  Inefficient producers and artisans were constantly being bankrupted but the conditions of competition were such that new industrialists or particularly motivated artisans could take up some of the slack if the large producers stagnated or went bankrupt themselves. The cotton textiles themselves were popular with all social classes and had near-universal worldwide appeal; it fit the near-universal human need and want for clothing. Clothes and Cloth not sold in London could be sold in China, India and Latin America. Poorly made American clothes that couldn't be sold abroad or even find an enthusiastic domestic market could be sold to American slave owners to fit the enslaved ("Lowell"in the parlance of Southern slaves). German or French workers could afford to buy their own nations manufactures without experiencing a drastic increase in the size of their wages.  The trend for commodity prices in most Western nations was deflationary for most of the 19th century.

       For Westra, the existence of the value-production complex of the global cotton industry was the pre-requisite for taming usury and orienting finance towards socially productive activity. Without the power of cotton as the leading industrial sector of the world-market then capitalist growth would be slow, if it occurred at all, European civilization would have been wracked by the debt claims of finance. No one (who is not a banker) believes that debt service can realistically continue if an economy experiences no economic growth so this is not in much dispute. But Westra's conception of finance contains some questionable claims as he does not explain how or what the "socially productive" that finance carries out actually is.  He correctly points out that finance does not actually finance Industry and I'm sure other critics of financialization would argue that it never has had much of a history of doing so. He points out correctly that the bank of England actually funded war and had little to do with financing the Industrial Revolution. Westra gets the odd-idea that the private banking cartels that served as de facto state banks in much of the Western world were somehow the same in this era as a "socialized" and "national" state-bank. As the hoarder and creditor of last resort, these banks play and continue to play an important role in holding up states and national economies but their primary intention was (arguably still is) to change governments for the privilege of using their own money. Westra argues that they de facto played this role by socializing the gold bullion of the country and preventing credit from exceeding this, but credit-money and claims to credit money always went beyond the actual gold in reserve or circulating. When downturns came, credit money would be destroyed with bankruptcy of private banks, cashed in for gold or securities, taken out of circulation or denied convertibility; debtors would pay back loans using by taking out even bigger loans at higher interest, or undergo bankruptcy. Precious metal often fled abroad as a means of settling debts abroad leaving reserves depleted. Every time this happened, the depth and seriousness of the crisis intensified each time, leading to the near-bankruptcy of the Bank of England on more than one occasion.

     The English banking system is often portrayed in idyllic terms by Marxist theorists because of the role it holds in Volume III but a cursory reading of that section reveals that Marx feared that segment of the British economy was growing more parasitic, more opulent, and more dangerous.  It seems very far from the role of a state bank intended to provide cheap money to the productive bourgeoisie as well as the economic needs of ordinary citizens. The main economic purposes of the British banking system during the heyday of free competition appears to have been providing loans for long-distance trade, the bills of which circulated as the debts were traded to third parties which evolved a cottage industry of discounting the bills and the other function appears to have been providing cheap loans for stock market gamblers. One practice, even if it adds cost to the economy, greases the wheels of trade by providing a type of informal fiat currency that the bank itself was unwilling to issue; the detriment caused by the other practice is obvious. This is part of what Hudson terms the "destructive Anglo-Dutch model of finance" as opposed to French-German model of state universal banks. This latter model was intended to finance industry but perished with the reconstruction of continental banking after WWI. Finance, it seems, thrives by being ruthless and even the caution of others can provide subsidy for its own excess.The argument that Westra initially presents about social saving being monetized into the global economy probably isn't nearly as novel as it seems. Marx noted in 1865 that workers deposits were increasingly a factor in undergirding bank reserves, so that the savings of least in society come to finance the speculation and spending of the great. Much of what capitalism does is about transforming social endeavors into private profits, therefore the glut of AUM as a form of social capital is problem of quantity and not necessarily something fundamentally at odds with the system.

     To move back to Westra's conception of capitalist history in the 1870s something strange happened in the history of capitalism. In 1873, Europe and America entered a depression that it would struggle for over 20 years to escape. Around that time, according to Westra, the West began to move to a new value production complex. But this new value production-complex was focused on the production of a new use-value that was far more difficult to subject to the rigors of capitalist pricing: steel. Steel rarely moved outside national borders and it was too expensive to find much of a market in developing nations. Unlike cotton it wasn't a true consumer good but was typically a constituent of production in other commodities. Steel companies also did far more business with national militaries than textile companies. The production of steel on a modern scale was a high-tech process involving large quantities of capital which few individual capitalists were willing to undertake. As a result, steel firms were more and more founded through joint-stock operations and the practice of using joint-stock corporations to found companies proliferated. Steel companies quickly developed into monopolies both due to the high composition of capital required, the difficulty of replacing shuttered steel firms, and the low-rate of profit. As steel oligopolies formed they spurned competition both nationally and internationally. Whereas in the previous epoch of capitalist production, individual ownership both justified entrepreneurship and obscured industrial capitalist profits by portraying them as the wages of productive managerial labor and risk-taking, in the joint-stock operation this was no longer obscured. Firms were founded by monied men who earned both interest on their initial stake in ownership (dividends) and who shared in company profits,  the real business of management and technical knowledge was demoted to a mere waged occupation. This was a new type of social property designed to benefit the bourgeoisie an effective abolition of tangible private property. The work was dangerous and physically arduous and hence steel industrialists could not long get away with using the least valuable forms of productive labor available. It was a labor force of adult men and therefore far less easy to control. This meant the cost of reproducing the working class and that of socially necessary productive labor would have to rise.

      For Westra, it seems the malfunctioning of this mechanism resulted in imperialism: the policy of the export of financial capital to underdeveloped countries as both a source of raw material and super-profits. This explanation is not wholly convincing and is somewhat analogous to the monthly review school's argument (whatever their merits) that the rise of finance is tied to the malfunctioning of real accumulation. In reality, finance is probably its own parasitic entity with its own nature, although it has linkages that meet with rest of the real economy. The structural cause of the Long Depression was probably a result of a crisis in the cotton industry as the result of the Civil War which was overcome only with great difficulty; cotton was likely surpassed by steel and oil somewhere around 1900. The theory of technologically induced waves of depression has its merits. What is also noticeable during this period is the rising proportion of state spending from 5% of economic activity in mid-Victorian Britain to 13% in 1913.  In the present day, the US and UK often portray themselves as the most liberal, free trading and capitalistic nations of the developed nations but maintained proportions of government spending as a percentage of GDP at near half. Brutal austerity campaigns only managed to knock that down by five percent.

        Increasingly, developed capitalist nations have been forced over the past century to increase state-spending seemingly in spite of itself. This entails redistribution in some form which Westra maintains is a violation of capitalist principles. As capitalist pricing mechanisms on new use-values malfunctioned and state spending increased, the bourgeoisie was still unwilling to admit defeat wholesale and concede that private production for profit for the market was not the best way to organize society. To return to the question of rising real wages as "a base to be rounded" in capitalist society we should point out that much of the "easy" development was through by the end of the 19th century. Previously, much of society had been confined to premodern sectors of society and so they were often not  direct competitors on workers wages but also often played the role of subsidizing the working class, such as when the rest of a farmer's family helps support a member who gets a job in a factory. But when the majority of society enters the workforce, thanks to rising agricultural productivity and rural proletarianization, that means nearly all of a working class's wants and needs must be provided through the market--and that raises the cost of living considerably. Perhaps another reason why real wages must rise for Westra is that a working class that is too impoverished not only cannot buy back (some) of the products it produces but it also cannot reproduce itself. Westra argues that living standards are socially and historically determined and therefore workers had to have a great deal more money for their new needs and wants produced by capitalist society than they did in say 1850.  Westra does not show himself hostile to the labor aristocracy question but stays the course here on pretty firm Marxist grounds. He argues and cites others who make the same argument that without the social democratic welfare state the working class probably could not have survived but he does not explain why this actually is. I would argue it is probably because unlike before, and in many Third World nations today, there was no premodern or alternative sector of the economy to go back to. 10-15% unemployment may not mean much when most of the labor force is seasonal and much of the population is still traditionally employed in agriculture but in a society where the vast majority consists of full-time workers it is devastating. Therefore unemployment insurance is necessary to keep members of the working class alive or from falling into deep deprivation. Old people and disabled people cannot be left with rural extended families and therefor the state steps in to provide care. Beyond reproductive considerations for the working class, the specter of revolution also weighs heavily on the mind of the ruling class.

      One thing Westra pays particular attention to is the transition from an economy where steel was the leading industry to one dominated by automobile production. This transition was a long-time coming and did not fully manifest itself until two World Wars and a Great Depression had cleared up the structural capitalist crisis. Market-solutions did not work in paving the way for this transition as even with Henry Ford's vaunted $5 day workers largely could still not afford cars.  And in the United States and Europe there were efficient and cheap public transportation alternatives. Real workers wages had to rise significantly in order for them to afford the cars and other consumer durables at the prices they were being sold. If steel posed difficulties for capitalist pricing then the car was near-impossible--with thousands of moving components that were all produced within the same company and many aligned industrial-sellers who only produced for the big monopoly car firms. Westra is not far off base when he argues the car industry is an enormous Soviet-style planned economy where parts are not properly valued by capitalist principles but in fact are produced, bought, and sold within the company through noncompetitive transfer-pricing. Many firms had to offer financial services as a car was still (and still is) a very large lump-sum payment for a consumer to make. At the height of the Cold War the car might've been called "ideology on four wheels" as an individualized mode of transit with consumerist comforts but its production was intimately social.

     By the 1980s, the US car market was saturated and foreign competitors had succeeded in breaking into the US market. At this time, Information Communication Technologies began to proliferate as Cold War technological secrets were allowed to concentrate in private hands. This became a major leading industry but has so far been even more insulated from capitalist pricing then the car industry. Over 60% of the cost of an iPhone comes from intellectual property not production costs. Most of the costs of tech industry goes towards paying rents and unproductive labor. Production in many more traditional industries, which might have taken up the slack, has shifted to Third World nations were goods can be produced at low-prices in authoritarian polities. While this may seem like a victory for nations that have struggled for 200 years to achieve industrial development in reality a vast majority of global production is concentrated in Special Economic Zones (SEZs) where foreign-owned companies and their subsidiaries can can skirt the laws of the host country. These now operate in 130 foreign countries up from 25 in 1975. Likewise, even this has been a development hard-won through great pain, the Volcker shock in 1979 that raised US interest rates under the guise of fighting inflation leveled many Third World debtors.  These nations did not regain their 1979 levels of output until 1996. The car industry is still the largest global industry in the traditional sense according to Westra.

       So far no new "value-production complex" suitable to take up the slack in the global economy has emerged. Credit has been the most "outstanding" growth market since the 1980s.  No segment of the global economy appears able to drive the global economy to a new boom, or even prevent an inevitable super-crisis. Financial bubbles appear to be an essential way of maintaining seeming equilibrium. More Americans are on food stamps than the population of Kenya and 95 million Americans aren't even in the labor force.  As productive sector sector workforces decline, many Americans do not even have the "privilege" of having their labor productively commodified. With such high proportions of state-spending one economist cited in the book argues that "austerity" or budget slashing to promote capitalist "efficiency" effectively is economic collapse in slow-motion.

      To my mind,  the space-industry, as far-fetched as it seems, is probably the only new "value-production complex" capable of driving the global economy to new heights and providing the stimulative effects experienced by old leading industries.  But this is largely in the hands of governments, and the vast majority of the R&D is done by governments. So far private space-exploration is tiny and lacks a clear capitalist goal that would attract anyone besides wealthy hobbyists. The fraught transitions from cotton to steel to cars would seem far easier than creating a "space-based" economy.

     This book contains a great interesting facts and concepts but is very one-sided and deterministic in its presentation of economic trends and the legacy of political economy. It is not my favorite book on financialization, as the author spends to spend more time explaining his conception of the rise of capitalism and capitalist economic history than even the casino capitalism that one would assume would be the main subject of the book. But this book will certainly remain challenging for both orthodox economists and radical reformers in its conclusions and outlook.