No better model

The Making of Global Capitalism: the political economy of American empire, by Leo Panitch and Sam Gindin, reviewed by Patrick Bond

This morning, in the most important newspaper in Africa, Johannesburg’s Business Day, I come across this remark in the publisher’s weekly column: ‘The thing is that Americans, in a way none of the rest of us fully appreciate, are driven by an unshakeable conviction that if they work together they can do almost anything better than anyone else. That sort of conviction only occurs in democracies and the more pure the democracy, the stronger the consensus in society.’

Fortunately I can quickly turn to an antidote sitting on my desk, a vast tome that took more than a decade to construct, but that bullshit-detects such romanticism by revealing – better than anything else now available – Washington’s combined, uneven and fatally contradictory processes of imperialist expansion, catastrophic financialisation, excessively liberalised trade, intensifying class struggle and crisis mismanagement.

In The Making of Global Capitalism, Canadian political economists Leo Panitch and Sam Gindin provide a masterful century-long history of US corporate activity and state economic strategy. Insofar as capitalist states are where class interests are codified, their spicy reading of dry officialdom’s milquetoast narratives is absolutely vital to our knowledge about power.

Having worked with Panitch and Gindin during 2003-04, I can testify that their on-ground practices and building of a formidable community of radical scholars at York University’s political science department and in the Toronto left are exemplary, as is the Socialist Register project, which is properly catholic in treating the most crucial debates.

Grappling with the past five years of world turmoil, Panitch and Gindin were probably shaken by the recent period, for it was my experience that the very word ‘crisis’ was previously frowned upon in their Empire seminar, so convinced were they that mechanisms of accumulation and class domination were firmly in place. Financial markets did, then, appear smooth and seductive, especially to workers who shouldered unprecedented debt burdens along with widespread belief in ever-rising real estate prices. But this in turn created both a collaborative labour aristocracy steadily losing privileges, and the repo man’s knock at the door of the sub-prime house. As Panitch and Gindin explain, this was a divisive and atomising process in the US, compared say to earlier collective-action episodes such as Mexico’s 1995 ‘El Barzon’ debt rebellion or early 1990s South African ‘bond boycotts’.

It is here that Panitch and Gindin add so much to our understanding of too-clever elite displacement of persistent crisis, in my view. Still, though, they would describe the mid-1980s-2000s as an era of growth in which crisis tendencies of prior decades – born of a ‘profit-squeeze’ (i.e. worker militancy) – were actually resolved. But given those steadily rising debt ratios from the early 1980s, which can only partly be explained by technological advances in financial engineering , I still don’t buy it. My sense is that, like David Harvey’s argument in Enigma of Capital and Limits to Capital, global capitalism relied upon the spatial fix (globalisation), temporal fix (financialisation, stretching out payment times), and ‘accumulation by dispossession’ (imperialism) as crisis management techniques: i.e. shifting, stalling and stealing instead of the restructuring required to restart accumulation properly.

Yet thanks to Panitch and Gindin, we know much more about how this was arranged. Writing in their Washington-centric world (so unlike Hardt and Negri’s Empire), there are two corollaries that I hope are further debated. First is their tenacious denial of ‘the collapse of investment due to general overaccumulation’, which is disputed in other recent books by John Bellamy Foster, David McNally and Alex Callinicos. We could unpack whether vast software investments during the late 1990s splurge were real or bogus from the standpoint of surplus value extraction. And then, regarding profit rates, we might strip out rentier profits earned by most of the west’s biggest ‘productive’ firms and conclude with a different interpretation of genuine corporate health, contrary to the tycoons’ botoxed, steroided appearance, disguising their muscle-bound paralysis.

Second, we need to consider the lack of inter-imperialist rivalry in this story, at a time when world–1 per cent fragmentation foils globo-governance initiatives such as renewing the World Trade Organisation Doha round, legitimising the Bretton Woods Institutions, refashioning the currently anarchic world financial ‘architecture’, subduing Latin America’s pink tide, or making the UN security council work better for imperialism.

Most valuable, though, are the ways these Canadians set out anti-capitalist principles and critiques of reformism, and defend socialist aspirations. In perhaps no other site in the English-speaking academic world are such committed, principled and generous leaders so warmly received by colleagues and students, and more importantly, by workers and communities in struggle. This means taking with utmost seriousness both their analysis and strategy, for even if they do not always jump the gap perfectly, no one I know has a better working model.