It is therefore wedded to the liberal-democratic state. In contrast, when taken by itself, the lower-middle class, made up mainly of small business owners, middle management, and corporate-based white-collar salaried and sales workers particularly the white, less-educated, rural, and fundamentalist-religious sectors , is generally antistate, procapital, and nationalist.
It sees the state as chiefly benefitting its two main enemies: the upper-middle class and the working class—the former perceived as benefitting directly from the state, the latter increasingly designated in racial terms. The biggest threat to capital today, as in the past, is the working class. This is true both in the advanced capitalist countries themselves and even more so in the periphery, where the working class overlaps with the dispossessed peasantry.
The 1 percent thus find themselves potentially without a political base, which remains necessary to continue the neoliberal, absolute-capitalist project. Thus, from Donald Trump to Jair Bolsonaro, we see the emergence of a tenuous working relationship between neoliberalism and neofascism, meant to bring the rear guard of the system into play.
Here, the goal is to enlist the white, rural, religious, nationalistic lower-middle class as a political-ideological army on behalf of capital. But this is fraught with dangers associated with right-wing populism and ultimately threatens the demise of the liberal-democratic state. The major gender, race, community, and class contradictions of capitalist society today reflect crises that extend beyond the narrow confines of workplace exploitation to the wider structures in which the lives of working people are embedded, including the major sites of social reproduction: family, community, education, health systems, communications, transportation, and the environment.
In absolute capitalism, absolute, abstract value dominates. In a system that focuses above all on financial wealth, exchange value is removed from any direct connection to use value. The inevitable result is a fundamental and rapidly growing rift between capitalist commodity society and the planet.
As we have seen, Mises employed the notion of destructionism to characterize the role of socialism.
Karl Polanyi Explains It All
So important was this in his perspective that he devoted the entire fifty-page-long Part 5 of his book Socialism to this topic. For destruction is the essence of it. Destructionism was best characterized, in his view, as a society that in the present consumed to the utmost extent, with no concern for the future of humanity—a future which he saw as residing in the accumulation of capital.
Although technological change particularly via the military continues to advance, capital accumulation investment is stagnant at the center of the system, except where spurred on temporarily by tax cuts on corporations and privatization of state activities.
Meanwhile, income and wealth inequality is rising to stratospheric levels; workers worldwide are experiencing a decline in material conditions economic, social, and ecological ; and the entire planet as a place of human habitation is in jeopardy. All this is the result of a system geared toward the most egregious forms of exploitation, expropriation, waste, and predation on a world scale. Irish soil nutrients were being exported with Irish grain, without return, to feed English industry.
This encouraged further rounds of clearances, expulsion of the peasantry, consolidation of farms, and the replacement of tillage with pasture geared to English meat consumption. Today, analogous conditions are arising on a planetary scale, with subsistence farmers everywhere finding their conditions undermined by the force of global imperialism. Moreover, ecological destruction is no longer mainly confined to the soil, but has been extended to the entire Earth System, including the climate, endangering the population of the earth in general and further devastating those already existing in the most fragile conditions.
In the s, Marxist historian E. Innumerable numbers of species are now on the brink of extinction. The neoliberal drive to absolute capitalism is accelerating the world toward exterminism or destructionism on a planetary scale.
In perpetrating this demolition, capital and the state are united as never before in the post-Second World War world. But humanity still has a choice: a long ecological revolution from below aimed at safeguarding the earth and creating a world of substantive equality, ecological sustainability, and satisfaction of communal needs—an ecosocialism for the twenty-first century. But this volume demonstrates the extent to which that interpretation relies on a single analytical axis that ranges from radical non-interventionism to centralized control.
It is the purely economic lens through which to analyze the state. His social program does not follow primarily from economic arguments, but instead from social ones. Such social reasons could be progressive, i.
Some of the early neoliberals were more progressive and therefore more willing to allow for states to step in to secure individual autonomy, others were more conservative and therefore more willing to allow for states to step in to maintain existing social structures.
For both conservatives and progressives in favor of social policies the idea that some efficiency has to be sacrificed for other goals is a given, not a counter-argument to state intervention.
UFRJ | Daniel Barreiros - Guerra, Cognição, Evolução
To understand his work therefore, we have to understand what other values were important enough to sacrifice some economic efficiency and possibly economic freedoms. These are issues that the book grapples with, although occasionally one would have wished they were addressed more directly. Just like in his arguments against monopolies we encountered above, it is the social and cultural that take precedent not the economic.
Both men sought to prevent the advent of socialism, through the revision of the role of the state in society. And, more importantly, both believed that social order required state policies that supported this social order. One might fault him for it, but I think it makes him into a deeper thinker than some of his neoliberal contemporaries. What is the social order that fosters individual responsibility, as well as a strong civil society able to resist centralizing tendencies in the state?
If we regard this question as the most fundamental, then we should ask of economic policies to what extent they sustain and foster this particular social order.
Although the book contains little explicit engagement with contemporary issues, it is not hard to realize that this challenge too is still with us: local, regional and national identities and variations in economic structures have proven incredibly resistant to the homogenizing forces of markets, and often a powerful opponent of them. Current anti-globalist and anti-EU sentiments stem to a considerable extent from the fact that global markets are believed to endanger these identities and structures.
Not because the book manages to resolve the tensions, but because it takes them seriously. He is also assistant professor in cultural economics at the Erasmus School of History, Culture and Communication. How can we understand the growth of a system of credit provisioning outside of the realm of bank regulation since the s which linked non-banks and banks in a convoluted system of market-based banking, securitization and wholesale finance which burst into the public consciousness with the crisis as the shadow banking system?
While we can observe this general trend, why do we see differences in this trend fractured according to different national legal and supervisory traditions? My recent book The Growth of Shadow Banking: A Comparative Institutional Analysis Cambridge University Press, aims to provide answers to these questions by exploiting the variance in the exposure of banking systems around the world with respect to shadow banking, using in-depth process tracing and focusing on the US, the country where modern shadow banking originated, Germany and the Netherlands as countries with high exposure, and France as a country with low exposure, despite common EU regulation.
The book is based on more than 80 expert interviews with banking regulators, bankers, auditors and accounting scholars in these 4 countries. The book seeks to explain these divergent trends without falling into the traps of a literature that explains these issues by regulatory or cognitive capture. Not because these issues did not play a role, but because these theories employ a view of the agency of regulators which is too simplistic at best.
Instead of treating regulators as either bought or dopes, I seek to place the decisions of banking regulators to not regulate these off-balance sheet activities of banks, on the one hand, into their structural context, both on the national and the transnational level and, on the other hand, to their embeddedness in the regulatory networks that determine the compliance with national banking regulation. Instead, I link its growth to the particular structural situation in which banking regulators found themselves, where regulatory competition with non-banks domestically and banks from other jurisdictions globally structured their behavior, as they formed a dialectical unity with the regulated, sharing common interests at the same time.
The book first traces the growth of shadow banking to the rising competition between banks and capital market activities since the s in the United States , which threatened the disintermediation of banks and the impossibility of the Fed to prudentially intervene in the behavior of non-bank actors. Being thus constrained, they instead sought to facilitate the capital market activities of their banks from the s onwards.
Focusing on the Asset-Backed Commercial Paper market, I show however that this support was not unconditional and that it was subject to persistent reviews over what was and what was not allowed. This critical stance of the Fed, which in turn provoked industry innovations, came to a halt with the shift from Paul Volcker as the chair of the Fed, who had become increasingly critical of these activities, to Alan Greenspan, who was largely hands-off. Evidence drawn from interviews with the Fed officials shows how the Fed itself was internally riven between those who wanted to clamp down on these activities and force them back into the balance sheets of banks and those favouring a hands-off approach.
Interestingly, this conflict would come to the fore again with Enron scandal in and would be resolved through the anticipated introduction of rules envisioned in Basel II in the US. And here is the second element I point out in the book: the attempt to pry open the global banking market, in full swing since the s leads to a difficult position for national banking regulators. Since the first Basel Accord in , banking regulators as an epistemic community have sought to level the playing field by introducing transnational rules which could and should be implemented nationally.
And yet, here is the paradox: as global rules establish a level playing field, they put a disadvantage on the national re-regulation of activities that are designed by legal engineers to circumvent these global rules. The normal delays between innovation and re-regulation are expanded on the global level from Basel I to Basel II it took 15 years to agreement and implementation and national re-regulation in the meantime is disadvantaged due to the competitive disadvantages that national banks face in a global market for banking activities when their rules are stricter than those of their competitors.
I show that both these arguments were advanced by bankers and demonstrate how they structured the agency of banking regulators. Aggravating this dynamic is the fact that global rules are placed upon national accounting rules, which by chance provide competitive advantages to banks from certain countries, as certain shadow banking activities are excluded from the purview of banking regulation by accounting definition. This in turn exerts pressure on other countries to adjust their rules to allow the expansion of these activities domestically.
Europe is the looking glass for these trends. Since , with the first European banking directive, the competitive struggle to open national banking markets has been on the agenda. Due to the impossibility to agree to common banking rules and to install a common banking supervisor, European bureaucrats and politicians adopted the compromise of implementing Basel I on a binding European level and of enforcing it through national regulators.
This institutional set up enshrined the contradictions mentioned before and amplified them by binding the fate of national regulators and the fate of national banking champions together. In Germany , which possibly is closest to a case of regulatory capture, the banking regulator is subordinated to the ministry of finance, which follows a conscious strategy to encourage shadow banking, seeking to wean Germany off its dependence on bank credit. Lastly, the case of France presents a case of successful pre-crisis regulation of parts of the shadow banking sector.
This happened, on the one hand, due to the discretionary powers of the banking regulators to enforce its own interpretation of rules, its strong interactions with the compliance officers in the banking and auditing community which allowed for awareness of rule evasion as well as sanctioning power with respect to these agents. Hence, it was proximity to the regulated, not distance, which allowed the French to regulate shadow banking.
After the crisis, several regulations regarding the interaction between banks and crucial capital market actors have been strengthened in Europe, the US as well as globally and some of the shadow banking activities seen pre-crisis have disappeared. And yet, the structural conditions, which facilitated its growth still exist. In that sense, the book does not expect the phenomenon of growing shadow banking activities to shrink see for instance the recent developments in the leveraged loan market in the US.
And yet, it offers several insights how the regulation of shadow banking activities could function better, by encouraging more, not less contact between regulators and financial institutions and by relying on expertise of compliance officers and other intermediaries to overcome information asymmetries. In this respect, the book opposes simple accounts of capture theory and shows that the current focus on transparency and arms-length relationships cuts regulators off from industry knowledge.
He holds a PhD in Sociology from Columbia University and has published widely on financial regulation pre- and post-crisis as well as the role of European public development banks in these newly reconfigurated financial markets. Neoliberalism portrays them as a result of individual failures, masking the power relations and structural violence embedded in the political economies. Five great short pieces on this topic published in Cultural Anthropology. These are Merit and Demerit, the qualities of deserving reward, and of deserving punishment. In line with this argument, Smith depicts in this book the character of a virtuous person.
Such a person, he suggests, would embody the qualities of prudence and self-command. Morality, according to Smith, is created by nature. The abstract reads as follows:. As individuals are required to engage with financial products and services as the main way of protecting themselves from risks and uncertainties, their economic welfare and security are construed as depending largely on their own financial decisions. Within this setting, the concept of financial literacy and accompanying practices of financial education have emerged as a prominent institutional field handling the formulation and communication of the attributes and dispositions that arguably constitute the proper financial actor.
This article analyzes financial education programmes currently conducted by state agencies in Israel, examining the notions and principles they articulate when defining and explaining proper financial conduct. The study indicates that moral themes and categories occupy a salient place in the formulation of the character traits that constitute the desired literate financial actor. Notions of individual responsibility, planning ahead and rational risk management are presented not merely as instrumental resources, but as moral imperatives.
Through these notions, the programmes moralize a broad array of everyday practices of personal finance such as saving, investing, borrowing and budget management, thereby connecting the sphere of financial matters to the domain of moral virtues. Offering a representation of particular modes of financial conduct as constitutive components of morally virtuous personhood, these practices imbue the financial field as a whole, especially its current generalized logic of individualized and marketized risk management, with moral meanings, hence contributing to the normalization and depoliticization of the financialization of everyday life.
Now, let us return to Adam Smith. The depoliticizing impetus features most of his economic writings, but it contrasts with other parts The Theory Of Moral Sentiments. Justice limits the harm we do to others and it is essential for the continuation of social life; beneficence improves social life by prompting us to promote the happiness of others. One thing is certain: in neoliberal capitalism moral sentiments play a key role in the extraction of economic value. Maman, Daniel and Zeev Rosenhek. The keynoter: Kathi Weeks. No fee. DL: August 9.
DL: August Karl Polanyi. Beacon Press, If Hirschman presents capitalism as a "revolutionary ideology" tied to a specific form of state, Karl Polanyi's classic shows how the development of markets has been a political project pioneered by the state as opposed to something that emerged in opposition to it. The limited liberal state has spread the market, Polanyi argues, but its very success has called forth other sorts of states charged with protecting the society that markets have dislocated: fascist, communist, and social democratic.
By Ha-Joon Chang. Anthem Press, Economists since David Ricardo have seen states that practice free trade rather than trade controlled by the state as the engine of development in the global economy. Ha-Joon Chang disagrees. He develops Friedrich List's mercantilist idea that free trade between equally developed and differentially factored states may be welfare improving, but free trade between unequally developed states locks in the advantages of the more developed ones, thus "kicking away the ladder" from those beneath.
Drawing on extensive data from the nineteenth century, Chang shows how the United States had the highest tariffs in the world during its period of exceptional growth; how the United Kingdom's practice of free trade was selective at best; and how the much-trumpeted Cobden-Chevalier Treaty of effectively halted French industrialization for 50 years.
Embedded Autonomy: States and Industrial Transformation. By Peter Evans. In the modern era, only some poor countries have managed to achieve strong, continued economic growth and development. Those that have succeeded primarily in East Asia and, more recently, South Asia are outnumbered by also-rans in Latin America and chronic cases of underdevelopment in sub-Saharan Africa.
Peter Evans argues that the explanation for this pattern lies in the difference sorts of states countries have been saddled with or acquired. Where the state has "embedded autonomy" -- that is, where it can rise above societal interests and implement long-term projects but remains embedded in society's networks and information flows -- it can foster growth and development. Such "developmental" states avoid klepto-patrimonialism, corrupt clientelism, and stagnation.
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The take-home lesson is that certain kinds of state can be developmental hindrances but other kinds can help promote growth and development. By Eric Helleiner. Cornell University Press, By Rawi Abdelal. Harvard University Press, Eric Helleiner gives the clearest historical account of how the world moved from restricted capital flows in the s to open and integrated financial markets by the s.
He takes readers through the emergence of the "embedded liberal order," the challenges it faced in the s, and its denouement in the s and s.
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Combining economic and political analysis, Helleiner shows how the neoliberal order that has emerged is not a turnaway from the state but rather dependent on the state for its deployment and operation.