Neoliberalism in Crisis, Accumulation, and Rosa Luxemburg's Legacy PDF
Preview Neoliberalism in Crisis, Accumulation, and Rosa Luxemburg's Legacy
CONTENTS LISTOFCONTRIBUTORS vii PARTI:THEDISCIPLINARYROLEOFCAPITALUNDER NEOLIBERALISM RESPONDINGTONEOLIBERALISMINCRISIS: DISCIPLINEANDEMPOWERMENTINTHEWORLD BANK’SNEWDEVELOPMENTAGENDA MarcusTaylor 3 AMERICANIMPERIALISMANDNEWFORMSOF DISCIPLININGTHE“NON-INTEGRATINGGAP” SusanneSoederberg 31 THELOGICOFNEOLIBERALFINANCEANDGLOBAL FINANCIALFRAGILITY:TOWARDSANOTHERGREAT DEPRESSION? AnastasiaNesvetailova 61 DISCIPLININGLABOUR,PRODUCINGPOVERTY: NEOLIBERALSTRUCTURALREFORMSANDTHE POLITICALCONFLICTINARGENTINA VivianaPatroni 91 GLOBALHIGHCULTUREINTHEERAOF NEO-LIBERALISM:THECASEOFDOCUMENTA11 KarynBall 121 v vi PARTII:ACCUMULATIONANDFINANCE MARXANDTHETHEORYOFTHEMONETARYCIRCUIT AndrewB.Trigg 143 HILFERDING’STHEORYOFBANKINGINTHELIGHTOF STEUARTANDSMITH CostasLapavitsas 161 ECONOMICCRISISANDSOCIALISTREVOLUTION: HENRYKGROSSMAN’SLAWOFACCUMULATION,ITS FIRSTCRITICSANDHISRESPONSES RickKuhn 181 SPURIOUSVALUE-PRICECORRELATIONS:SOME ADDITIONALEVIDENCEANDARGUMENTS AndrewJ.Kliman 223 PARTIII:ROSALUXEMBURG THECOHERENCEOFLUXEMBURG’STHEORIES ANDLIFE EstrellaTrincadoAznar 241 “LIKEACANDLEBURNINGATBOTHENDS”: ROSALUXEMBURGANDTHECRITIQUEOF POLITICALECONOMY RiccardoBellofiore 279 LIST OF CONTRIBUTORS KayrnBall UniversityofAlberta,Edmonton,Canada RiccardoBellofiore UniversityofBergamo,Bergamo,Italy AndrewKliman PaceUniversity,Pleasantville,NY,USA RickKuhn AustraliaNationalUniversity,Canberra, Australia CostasLapavitsas UniversityofLondon,London,UK AnastasiaNesvetailova UniversityofLiverpool,Liverpool,UK VivianaPatroni YorkUniversity,Toronto,Canada SusanneSoederberg UniversityofAlberta,Edmonton,Canada MarcusTaylor UniversityofWarwick,Coventry,UK AndrewB.Trigg TheOpenUniversity,MiltonKeynes,UK EstrellaTrincadoAznar ComplutenseUniversityofMadrid,Madrid, Spain vii RESPONDING TO NEOLIBERALISM IN CRISIS: DISCIPLINE AND EMPOWERMENT IN THE WORLD BANK’S NEW DEVELOPMENT AGENDA Marcus Taylor* ABSTRACT This paper examines the recent process of transformation within the World Bankasaseriesofreactivemediationstothecrisis-ladencourseofcapitalist development on a global scale over the last two decades. Two aspects of the Bank’s attempt to construct a new development agenda as a response to contradictions emergent within neoliberal-style social restructuring are highlighted.First,ithasembracedthetheoreticaltrendsandpolicyimplica- tionsofinstitutionaleconomics.Second,ithasrefashioneditsrelationswith client countries and their civil societies under the rubrics of “ownership,” “participation” and “empowerment.” The paper proceeds to indicate why theBank’scurrentreformulationofdevelopmenttheorypresentsitselfwithin mainstreamtheoreticalparadigmsasanappropriateprescriptiontocounter thecrisisofneoliberal-stylesocialrestructuring.Concurrently,onthebasis ∗AsofJuly2004,MarcusTaylorwillbeanAssistantProfessorattheDepartmentofSociologyand Anthropology,ConcordiaUniversity,Montreal. NeoliberalisminCrisis,Accumulation,andRosaLuxemburg’sLegacy ResearchinPoliticalEconomy,Volume21,3–30 Copyright©2004byElsevierLtd. Allrightsofreproductioninanyformreserved ISSN:0161-7230/doi:10.1016/S0161-7230(04)21001-X 3 4 MARCUSTAYLOR of a materialist critique of capitalist development, the paper proceeds to indicate the substantive limits to these present reforms by indicating their theoreticalweaknessesandtheirpracticalcontradictions. At the turn of the millennium, the leading international organisation of global capitalistdevelopment–theWorldBank–wasundergoingaperiodofupheaval and transition. Whilst its sister organisation, the International Monetary Fund (IMF), remained relatively resolute in its defence of the structural reforms that it had propagated globally since the debt crisis of the early 1980s, the World Bank embraced comparatively substantial changes to its policy prescriptions and modes of interaction with client countries. These changes in the Bank’s discourseareconsideredtobepartofwhatJosephStiglitz(2000)haschristeneda “post-Washingtonconsensus,”orwhatWorldBankPresidentJamesWolfensohn (1999)labels“ComprehensiveDevelopment.”1ContrarytowhatStiglitzcriticised asthe“simplistic”natureoftheoriginalWashingtonConsensus,theWorldBank’s new framework is presented as a dual sided approach that combines sound economic policy with social and institutional reform and, in so doing, professes thatthereismoretofosteringsustainabledevelopmentandreducingpovertythan assertingtheunbridledplayofmarketforces. The ongoing changes have not been limited to the content of World Bank development prescription alone. Fundamentally, the Bank now stipulates that profound changes to the way development practices are conducted are essential forsuccess.Theseincludeclientcountryownershipofdevelopmentprogrammes andtheinvolvementofallrelevantstakeholders–includingcivilsocietygroups – in design and implementation. In this vein, the World Bank claims a mandate to empower poor people in order that they are able to achieve development and lift themselves out of poverty (World Bank, 2001a). In the words of James Wolfensohn: “Poor people are not liabilities, but assets. We have to invest in them,andempowerthem.Developmentmustnotbedonetothem,butbythem” (Wolfensohn,2001,p.4).Empowermentisnowpresentedasacentralaxisinthe WorldBank’sdevelopmentpracticesandhasbeenintegratedintotheprescription forarangeofinstitutionalreforms. This paper offers a critical examination of the origins and character of this transition in the World Bank. It is argued that the transformations in theory and practicewithintheWorldBankatthecloseofthemillenniumrepresentaseries of reactive mediations to the unanticipated results of capitalist development within the context of neoliberal-style structural adjustment. Such contradictions are manifest in the increasingly uneven character of capitalist development on a globalscale,recurrentcrisesacrosstheglobalSouth,andtheexpansionoflocal and global struggles that target the social limits of development in its capitalist RespondingtoNeoliberalisminCrisis 5 form. The paper indicates why the current reformulation of development theory within the Bank presents itself within mainstream theory as an appropriate prescription to counter the crisis of neoliberal-style societal restructuring. Concurrently, on the basis of a materialist critique of capitalist development, the paper proceeds to indicate the substantive limits to these present reforms by indicatingtheirtheoreticalweaknessesandcontradictionsinpractice. CAPITALISTDEVELOPMENTAND MODERNECONOMICS The World Bank’s principal function, as laid out in its founding articles of agreement,istheglobalpromotionofcapitalistdevelopment.Tounderstandthe characteroftheWorldBankattheturnofthemillennium,therefore,itispertinentto surveybrieflythematerialandsocialbasesofcapitalistdevelopment,thewaythis processrepresentsitselftothesocialagentsinvolved,andhowithasbeensubse- quentlycomprehendedwithintheparadigmofmoderneconomics.GiventheWorld Bank’srelianceonthepresuppositionsofneoclassicaleconomicsforitsattempts torationalisethetrajectoryofglobalcapitalistdevelopmentandtoprescribeappro- priatepolicyresponses,thissectionformsanimportantpreludetothesubsequent critiquesofneoliberalstructuraladjustmentandtheBank’scurrentreformulation ofthelatter. As highlighted by the first theorists of capitalist development – the classical political economists – the rise of capitalism was correlated with a tendency towards dramatic increases in the productivity of human labour (e.g. Smith, 1991). The importance of this trend cannot be understated, as it constitutes the material basis of the notion of development as a social process. Through productive revolution, growing numbers of socially useful items (use-values) could be produced and, in so doing, capitalist development offered a potential solution to material scarcity. Furthermore, the process of removing humankind fromanunendingtoilforsubsistencetheoreticallyofferedthebasisforpersonal and social development by increasing the amount of time available to augment human potentials. Material advancement could therefore be seen as paving the way for social, cultural and political progress, a formulation that remains the basisformoderntheoriesofdevelopment(Weisband,1989,p.16). However,thenewlyemergentrelationshipbetweencapitalistlabourandwealth creation was a complex one. Although labour was widely recognised as the sourceofsocialwealth–asexploredinthelabourtheoriesofvaluedevelopedby Smith,Ricardoandothers–thelatterassumedapeculiarlydualformthatgreatly challenged the conceptual apparatus of classical political economy. On the one 6 MARCUSTAYLOR hand, the wealth creating properties of labour were represented in the material formofanexpandedquantityofuse-values.Ontheother,however,socialwealth wasrepresentedintheabstractformofaquantitativevalueascribedtothesecom- moditiesandmadetangibleintheformofmoney.Thetendenciesassociatedwith fluctuationsinvalue,moreover,appearedascomplexlawsdivorcedfromthedirect controlofhumankindandwhichledrepeatedlytosociallyirrationaloutcomes. With the development of modern economics in the late of the nineteenth century, however, the original questions that had underlain classical political economy’s interrogation of capitalist development – the revolution in the form of labour, the complex appearance and determinations of value, and the causes of the conflictual relationship between classes – were entombed within the petrified categories of bourgeois economics that saw no need to go beyond surface appearances to examine the relations constitutive of social phenomena. Thisso-called“marginalistrevolution”representsthetheoreticalmovementthat “freedpoliticaleconomyfromextraneouspoliticalconsiderations,andsofounded modern‘scientific’economics”(Clarke,1991,p.182). The marginalist revolution provided the basis on which material production could be constrained within its own asocial discipline of economics without concernforthespecificsocialformsofcapitalistsocialrelations.Thefundamental theoreticalpostulateofmoderneconomicsisthatmarketrelationsaretheexpres- sionofinherentlyrationalindividualswho,inconditionsofscarcity,maximisethe utilityofthecommoditiestheypossessbymakingmutuallybeneficialexchanges. Inthismanner,themarketisrepresentedasa“device”or“mechanism”forcoor- dinatingtheplansofmanyindividuals(Hayek,1978)andproductionissimplya naturalextensionoftheseprinciplestothecreationofmorecomplexgoods. Onthisbasis,developmentiscomprehendedasauniversal,timelessandasocial process of overcoming scarcity and associated human deprivations through the realisation of the rationality of individuals. Material development is maximised when the innate rationality of individuals is liberated allowing them to make mutually beneficial exchanges resulting in the optimal distribution of resources within a society, including within the productive realm. Intrinsic to this process is the free circulation of the factors of production and, as such, the creation of the commodity of labour-power through the separation of the labourer from the means of production (primitive accumulation) is merely a further step towards thedevelopmentofoptimalrationality. Whilst restrictions upon individual utility maximisation can be imposed by specific institutional arrangements (slavery, feudalism, communism, etc.), the latter are conceived as artificial and illegitimate impediments upon a natural state in which individual rationality and freedom – and therein production – is maximisedtothebenefitofthecommongood.Fromthisperspective,development RespondingtoNeoliberalisminCrisis 7 is to be achieved through the formal liberation of the individual from society, a statusachievedbystrippingawaytheinstitutionalaberrationsthathaveimpeded individual rationality and utility maximisation. Capitalism therefore represents theperfectionofthishistoricalmovement. Thefundamentalweaknessofliberaleconomictheory,however,isthatmodern societyisnotasocialgroupingofprivateindividualsbutiscomposedofsocially constituted individuals within the context of an historically specific form of social relations. Whereas the genesis of capitalist social relations does indeed disintegrate the overtly social coordination of production that characterised pre-capitalist relations, this does not entail the creation of a society of freely interacting individuals liberated from social mediations. On the contrary, within capitalismsocialmediationisreconstitutedasanabstractsocialrelationor,more precisely, as impersonal forms of social domination that create and structure everydaysocialpractice(Postone,1993). Atheartliesthequestionofthecontradictorydualityofcapitalistdevelopment, one that neoclassical economics does not formally acknowledge. Capitalist development is predicated on the expanded reproduction of the material basis of society through the development of the forces of production and the creation of ever increasing quantities of useful things (use-values). This appears as the formal and rational provision for human needs and is based on a simple circuit startingwithproductionaccordingtoneeds,distributionofrevenuesallocatedto factors of production, exchange to circulate goods to match human desires, and consumption(Marx,1973,pp.83–87). However,whilstthenotionofdevelopmentrestsontheconcretematerialization ofanever-growingnumberofuse-values,itscapitalistsocialformistheexpansion of value (the abstract form of social wealth) through the drive to accumulate capital. The formal independence of freely contracting individuals, therefore, maskstheobjectiveinterdependenceofsocietymanifestedthroughtheimpersonal movementofvaluethatimposesitselfuponactorsasanobjectiveandalienated socialforce.Abstractdominationofthisnatureisthesocialfabricofcapitalistso- cietyuponwhichisinscribedincreasinglycomplexformsofsocialrelations.Itis theabstractbasisuponwhichthemoreconcreteandimmanentformsofexploita- tion and domination rest and its necessary development is towards a particular relationship between classes predicated on the extraction of surplus value in the productionprocess.2 At a more concrete level, the subordination of use-value production and distributiontothecontradictorydynamicsofvalueistheessenceofthemanifest substantiveirrationalitiesofcapitalism–asmanifestedinclassstruggle,uneven development, un- and under-employment, poverty and recurrent crises. Owing to its theoretical presupposition of the essential rationality of production and 8 MARCUSTAYLOR exchange, however, liberal theory has no adequate manner by which to account forthelatterexceptbylabellingthemascontingentirrationalitiesthatarisefrom eitherthefailureofcapitalistsocialrelationstobeadequatelyestablishedorfrom theinadequaciesofexternallyimposedinstitutionalforms. In this respect, neoclassical theory remains theoretically shielded from the contradictoryessenceofcapitalistdevelopment.Guidedbyitsconceptualisation of money as a technical tool to facilitate mutually beneficial market exchanges it is unable to recognise the exploitative essence of market relations sanctified by the impersonal power of money as a fetishised form of value. It therefore disregards the substantive and conflict-inducing irrationalities of capitalist developmentconcretelymanifestedinthesubordinationofsocialneedtoprofit, the pervasiveness of human resistance to processes of commodification and exploitation,andthecontinualcrisistendenciesofsocialrelationsthatstubbornly refusetoconformtogeneralequilibriummodels. THEWORLDBANK,RESTRUCTURINGANDTHE ESSENCEOFNEOLIBERALISM Inshort,developmentincapitalistformconstitutestheextensionoftheproductive forcesthroughtheincessantyetprofoundlycontradictorymovementofvalue.It isonthisbasis,moreover,thattheinstitutionalformandthesubstantiveagencyof theWorldBankmustbeunderstood.TheBankisanorganisationsuffusedwithin the contradictory dynamics of capitalist development on a global scale, which impact upon it through various mediated forms including its position within the interstate system, its relationship with client countries, and its prominence as a target for global social movements. On the one hand, it is driven continuously to consolidate the conditions for the accumulation of capital at a global level as this drives the process of material development in capitalist form. On the other, ithasbecomeincreasinglyinvolvedinmediatingtheunseemlydynamicsofthis process in the global South, including escalating inequality, trenchant poverty, recurrentcrisesandnewformsofsocialstruggle. TheaugmentedinvolvementoftheWorldBankinthesocialrelationsofglobal capitalistdevelopmenttookagiantstepforwardinthecrisis-ladendecadeofthe 1970sunderthetutelageofBankpresidentRobertMcNamara.UnderMcNamara’s expansionofBankactivities,theBankshiftedfromanemphasisonpromulgating the infrastructure for capitalist industrialisation, and became integrally involved in a project to mediate the social dynamics of capitalist development in the South. As Colin Leys (1996, p. 12) elaborates, this period of transition was promptedby: RespondingtoNeoliberalisminCrisis 9 thegrowingrealizationthatthehopesofrapidandwidespreaddevelopmentweregoingto bedisappointed...[leadingto]sympathyforthemassesintheex-coloniesandfearoftheir reactions. The Bank’s interventions in global capitalist relations, moreover, underwent a furtherdramaticshiftinthe1980swhenthepervasivecrisisofglobalaccumulation reachedthecataclysmicproportionsofthe1982DebtCrisis.Indirectresponse, drivennotleastbythepredicamentoftheWesternbanksthreatenedwithfinancial collapse owing to mass default, the IMF and World Bank began to pipeline billionsofdollarstodebtstrickencountriesinordertofacilitatecontinuedinterest payments on their old debt but in return for a commitment to neoliberal-style structuraladjustmentpolicies(cf.George&Sabelli,1994). Alongside the IMF, the Bank therefore began to assume an extended role as a global accumulation caretaker and a purveyor of drastic social engineering in theSouth.Theimmediatephaseofadjustment,commonlymanagedbytheIMF, focusedontheimpositionofsevereausteritymeasurestorestoremacroeconomic balances,particularlythesuppressionofinflation.Byundergoingashocktherapy programme of rapid liberalisation of prices, currency devaluation, and fiscal discipline, a deflationary period could be engineered through which “excessive demand” was curtailed and inefficient producers sacrificed, along with their workforces,uponthealterofsoundmoney. Anemphasisonliquidity,moreover,wasexpectedtoenablecapitaltoovercome the barriers to valorisation by escaping unprofitable engagements and concen- trating in those sectors that offered more lucrative returns. Capital in mobile money-formwouldundergoasubstantialrecomposition:itcouldrenounceinef- ficientengagementsand,freedfromestablishedspatialandpoliticalconstraints, seek a new and profitable relationship with labour. Societal “rationalisation” in thismanneralmostinvariablyentailedasubstantialdestructionofexistingcapital and was commonly reflected in high levels of unemployment, with significant portions of the labour force relegated to the reserve army (cf. Weeks, 1999). The decomposition of labour would subsequently provide the conditions under whichanewandmoredisciplinarymodeofcapitalistworkwithhigherlevelsof absolute surplus value extraction could be imposed, sometimes labelled “labour flexibilisation”(cf.Taylor,forthcoming). Alongsidethe“creativedestruction”ofshocktherapymeasures,theBankbegan toadvocateanincreasinglyrigoroussetofreformsthatentailedmajortransforma- tionsintherelationshipbetweenstatesandsocietiesintheSouthandthemodeof integration of Southern economies into the world market. The wider parameters of these reforms represented an attempt to transcend the immediate question of economic stabilisation by laying down a longer-term development strategy that disavowedtheformeremphasisonstate-lednationaldevelopmentalism.
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