Author: john mcgowan

Responses to Neoliberalism

To summarize: Boltanski and Chiapello (B&C), like most analysts of neoliberalism, offer a fairly convincing portrait of the changes it has wrought. Specifically, neoliberalism has 1) reorganized the “firm” and its productive processes, focusing in on the “core” mission or product, while relying on “supply chains” for the delivery of ancillary services (cleaning, payroll etc.) and of needed parts. The result is high salaries and (paradoxically) job security (with benefits) for the most mobile and skilled workers—and “contract” positions for the less skilled, whose lack of mobility is exploited. In short, more and more work is “outsourced” to companies that must compete to get that work by driving down wages. Such “outsourcing” is both domestic and global. Jobs that can be moved to overseas locations where wages are lower are. Jobs like cleaning, health care, social services that must be done on site in the “developed” country are outsourced to service firms.

2) Even as the “firm” gets smaller in terms of its “core” workers, it goes global (or transnational) in order to gain the mobility required to successfully compete. Globalization means a) hiring labor or contracting with service firms anywhere in the world where costs can be driven down, b) sheltering profits and assets in locales that allow for the evasion of taxes, c) creating credible threats of capital flight and enabling blackmail of governments for “concessions” and “incentives” in return for locating the firm there, and d) continues the relentless search for new markets that has been characteristic of capitalism from the start.

3) B&C note, without giving much emphasis to, the ways in which neoliberalism “commodifies” activities, services, and (can we say) “affects” that were previously deemed private. Examples would be care of elderly family members or of children (old age homes and day care centers) and love relations (Match, Tinder, Grinder and the rest). Anything and everything can be monetized. This feature of neoliberalism can be seen as simply an intensification of capitalism’s in-built need to “grow”—with the invention of new markets along with the more complete exploitation of existing markets a signal “imperative” of capitalism.

4) B&C also note, but say very little about (and this is a fault), the growth of “finance capitalism” within the neoliberal framework. For Giovanni Arrighi in The Long Twentieth Century, the resort to finance capital (i.e. the move from a reliance on selling actual goods to a reliance on “financial products” as the major source of profit) is a recurrent feature of “mature” capitalist economies. The finance phase, in his view, marks the “end” of hegemony as capitalism moves its prime site from one locale to another. In his schema, Italy, then Holland, then Britain, and then the US served as capitalism’s center. Our current financial era would, thus, mark the end of US dominance and be setting the stage for Chinese hegemony. Such transitions, in Arrighi’s way of telling the tale, are inevitable because capitalism is never the fully mobile and dispersed entity that B&C appear to think it has become. Rather, capitalism’s competitive mode means that it combines with nationalism to breed conflict oriented to fighting over which country will be the world’s dominant economic power. The transition period from one hegemon to the next is particularly violent, so we should expect a very turbulent next 50 years if Arrighi is right. B&C, on the other hand, appear to expect/accept a transnational financial system, with multinational banks and firms (like Goldman Sachs) presiding over it—banks and firms with no particular location and no significant national loyalties. Thus, B&C are among those who see neoliberalism as marking the decline in power and relevance of the national state. Capital is more powerful than the state.

5) Finally, B&C argue that the “new spirit” of capitalism, the motivating story that neoliberalism tells in order to win consent and to get people moving, is the by-now familiar one about “human capital.” It is a story that, if spun right, is about “freedom.” You, the worker, are no longer tied to a firm or to a job. You are free to develop your talents and interests, to move from one firm to the next, or even to strike out on your own as an entrepreneur. You are in control of your own destiny, in a world in which creativity, innovation, daring, and energy are rewarded. Self-fashioning is the challenge and the thrill. Lean in. And just so that won’t seem entirely isolating and asocial, a premium skill to be developed is the ability to work in teams since it is the “network” and “networking” that are the keys to productivity.

B&C are clear that neoliberalism augments suffering. It creates many more losers than winners, it increases inequality while it shreds the safety net. It is haunted by the fact that it celebrates the creation of the relationships that are the core of “networks”—and hence the interpersonal skills that leads one to have multiple relationships—while retaining an awareness that “cashing in” on relationships renders the whole notion of such friendships suspect. Trade mars everything it touches, wrote Thoreau—and neoliberalism is energetically striving to mar everything, to turn everything to account. Dissidents will lose out, but there do remain refuseniks, those who insist on holding some things aloof from the market.

So what kinds of resistance do B&C imagine? Here we run up against the paradox that the most radical positions are so often very conservative. Radicals are all about what has been lost. (Or, alternatively, we can say that we are facing a crisis of the radical imagination, that the lack of any new ideas is a deep and paralyzing failure. Radicals are, at least right now and perhaps always, fighting the last war. B&C do talk about the ways in which the labor movement, in particular, was caught entirely off-guard by the innovations of neoliberalism and, hence, proved powerless to stop them.) It is certainly true that loss aversion provides a powerful affective tool for radical movements. It is easier to get people out into the streets to protest something that has been taken away from them than to get them motivated by an image of something they have never had.

So: B&C spend some time talking about “intrinsic value,” basically appealing to a sense that some things—art, love, family, friends, health—should not be commodified. A rear-guard action if there ever was one. (I don’t mean to sneer here. Holding some things apart from the market is central to sanity and happiness. But the issue is how to “politicize” this desire. Exhortation is not going to do the trick.)

B&C also rely on that old standard: the in-built “contradictions” of capitalism that render it unstable. They make the usual apocalyptic noises about the coming crisis, that moment when people will just have suffered too much and will do something, they know not what, but something to force some changes. We know how that story goes. Capitalism has weathered its contradictions, and the pronouncement of such threats of its inevitable demise, with aplomb for quite some time now.

More convincing is the way in which B&C talk about the need to translate “indignation” into a program. Here they have something fairly concrete to say. It goes like this. Any system has a number of “tests”—which can be best understood as sites of selection where the distribution of goods and rewards is determined. An obvious example is admission to college or the processes that decide who gets an advertised job. In order to be deemed just, those subjected to such tests in any given system must believe the tests are “fair.” That is, the test must actually a) successfully search for the talents/features relevant to the reward in question (i.e. the SAT must be a reasonably accurate indicator of intelligence) and b) only make its judgment on the relevant talent/features (one’s physical appearance or race or religion are not to be considered in deciding admission to college).

Thus, “tests” are crucial sites for conflict within any social system. They are places where injustices will be identified and where reform (the establishment of tests that are more fair) will concentrate its efforts. Indignation can be channeled into concrete action when directed toward the critique and reform of “tests.” Crucially, B&C recognize that tests are formalized into “institutions” and given some bite by being legally installed. In other words, indignation gains force, an ability to have an impact, when “collectivized” through the establishment/maintenance of institutions and acquiring the power to sanction by being written into law. “Statutes express what can be established about the position of individuals for a certain length of time and in a certain space, independently of how their interaction with others unfolds at any given moment. They presuppose reference to something like institutions capable not only of organizing tests that last, in such a way as to stabilize expectations and define their rhythm, but also of exercising an external constraint in the form of obligations and sanctions” (469-70).

The language here is all about restraining mobility, of creating stability and rules that “last.” Capitalism, in other words, must be held accountable to certain obligations. It has to deliver certain goods—primarily the satisfaction of the material needs of a whole designated population—in order to be given its legitimacy within the set of laws that enable its existence. “It remains the case,” B&C write, “that embarking on this road presupposes pretty much abandoning a quest for liberation defined as absolute autonomy, simultaneously free of any interference from others and any form of obligation laid down by an external authority” (470).

We are returned here to the political, to the need for the state. Capitalism is not going to restrain itself—and it will sing its siren song of liberation, of self-fashioning, of untrammeled freedom, all the while. For B&C, unions were crucial because they provided a way to focalize indignation—and to use its energy in opposition to the firm. “The union also has the advantage of providing points of support outside the firm—places for meeting, pooling information and reflecting, for the development of beliefs different from those put forward by employers, work methods, a socialization of means of resistance, training in negotiating—to which an isolated union representative does not have access” (274-5).

Again, we are on familiar ground. In the absence of unions, the two candidates to take their place are the political party (Lenin continues to stalk the room) and social movements (whether “new” or not). Neither seems particularly well suited to address workplace tyranny and its many abuses. Neither is “in” the firm the way a union was. Still, it would be ahistorical as well as naïve to forget that only the state’s establishment of various labor laws (length of the working day, safety regulations, minimum wage laws, child labor laws etc.) cemented the gains unions fought for. The union must negotiate with capital—but it also must have the state, with its legal powers, come into the fray at some point. Law is not utterly fixed, of course, since it is constantly moving in relation to case law. But law is relatively fixed in relation to capitalism’s endless dynamism—and must be mobilized to constrain capitalism’s restless pursuit of profit.

Finally, all of this resistance to neoliberalism (as to any form of capitalism) must be based, B&C argue, on a theory, an account, of exploitation. Critique, they insist, does change things. Capitalism must respond to critique—either by undertaking actual reforms or by “displacement” (which means the establishment of new practices that sidestep the abuses that critique has identified.) The “social critique” (contrasted to the “artistic critique” in their schema) focuses on issues of justice—and, hence, will tell a story of exploitation. Basically, that story will indicate those whose efforts, whose contributions, are not adequately rewarded.

What B&C fail to notice is that the justice critique can come in two forms. The leftist version highlights inequality—and pushes toward the notion that all should be rewarded equally. In many versions, this becomes the notion that all have a “right” to the basic necessities to lead a flourishing life. This logic leads current leftists to the idea of a “universal basic income.” But the rightist version of this critique often takes the form that the “wrong people” are being rewarded. There is no argument against inequality here. It is just that I am not being rewarded, while some undeserving other is being rewarded. Inequality is great; it is just that whites should be the ones on top, not those Jews, immigrants, or blacks who are parasites and squirreling away what is rightfully mine.

Mobility (continued) and Neoliberalism

There is something more than a little fraudulent about the celebration of—and high valuation placed on—mobility, akin to all the nonsense about risk and taking chances that accompany the current vogue of the entrepreneur. Innovation, like mobility, is almost most fully and effectively activated when underwritten by security. The dirty secret of the mobile agent’s manipulation of her mobility to command additional income or resources is that she is not paralyzed—or even much threatened by—the threat of becoming redundant in her current place. Of course, not all mobile actors in the neoliberalism have tenure, but they do have relevant guarantors of income and employment. Again, this suggests a “real” basis for their mobility, a set of skills, experiences, and achievements on which they can bank.

Boltanski and Chiapello (B&C) tell us (pp. 16-17) and elsewhere the demands that a successful “spirit of capitalism” must meet if it is to satisfy people in the way of giving them motivations to participate. There are four major “demands” for “justification” (and, in their schema, “tests” must be devised to show that the demands are being met.) 1. Demand for justice (a): capitalism must be underwritten by a plausible claim that its processes advance the common good, not just the needs/desires of a particular group (i.e. the capitalists). 2. Demand for justice (b): there must be a plausible account of the inequities capitalism produces, so that those inequities are not seen as the direct (and sole) result of exploitation. There has to be a story (usually based on merit—which includes talent, effort, educational credentials etc.) about why some people get more than others. 3. Autonomy: there has to be an account of how capitalism is connected to, even productive of, freedom. That is, how it liberates people from dependencies characteristic of feudalism, paternalism, or traditional societies, and how it opens up pathways to self-fulfillment (choosing one’s own career, developing one’s own talents, pursuing one’s own interests.) 4. Capitalism must explain how it provides basic security, the means toward life for oneself and one’s children.

A good list, even a convincing one, even if (as I have mused before) the ruthless capitalism of 2018 seems hardly bothered to try to justify itself. Except for the meritocratic arguments for inequality and some half-hearted hand-waving about how the “job creators” enable the common good of a flourishing economy, not much in the way of capitalist apologetics gets much air-time these days. The threat of unemployment or underemployment does all the heavy lifting these days. Get with the program—or join the ranks of the “excluded,” whose lives we will make as miserable as possible.

But even someone more sympathetic to the justifications of neoliberalism (justifications that I not only find hard to credit, but which I believe most people take with a full helping of salt), there are very few who would claim that neoliberalism offers security. Just the opposite. Our fullest-throated advocates of neoliberalism scorn security as a danger; it produces complacency and nothing is more fatal to economic success than resting on your laurels in an endlessly dynamic process that is only getting faster all the time. The number of cautionary tales—as Kodak, Blackberry, record companies, and taxis—about businesses that become obsolete are mobilized to dismantle all forms of security, any commitments—to people, places, processes, products—that extend beyond the short term.

One point: it is a lie to say that mobility is won by foregoing security. Instead, in the tales I win, heads you lose logic of neoliberalism, mobility is rewarded even though it is only the secure who can afford (in every sense of the word) to be mobile. The ones penalized for not being mobile are also the ones from whom security (in what Hacker and Pierson call “the great risk shift”) has been taken away.

In their emphasis on mobility, B&C stand at a tangent from other accounts of neoliberalism. The dominant accounts usually emphasize two things:

The increasing colonization of various spheres of activity/life by economic rationales (meant both as the vocabulary used to describe the interactions within those spheres and the rational reorganization of those spheres in the name of efficiency and of “monetizing” them). B&C do devote considerable attention to this feature of neoliberalism. “Capitalism has thus wrested a freedom of maneuver and commodification it has never previously achieved since, in a world where all differences are admissible, but they are all equivalent precisely as equivalents, nothing is worth protecting from commodification by mere virtue of its existence and everything, accordingly, will be the object of commerce” (466).

The second feature usually identified as crucial to neoliberalism is privatization, its robbery of the common, now put to the service of private profit. Just as the private equity raiders strip the assets of the company’s they purchase, so neoliberalism also plunders public goods, making a profit out of services previously rendered by the state (prisons, sanitation, education, transportation, utilities) while also encroaching on public lands and off-loading to the state the costs of pollution and unemployment.

How are these two features of neoliberalism related, if at all, to the extreme valuation of mobility that B&C place at the center of their analysis? Surprisingly, they don’t ask this question themselves. In the first case (of the hegemony of economic logics/discourse over all other modes of organizing activities or articulating values), a tentative connection might be made if the economics stresses the “creative destruction” that Schumpeter famously attributed to capitalism. In that scenario, to stand still is to court disaster. You always need to be one step ahead of the pack, dismantling your own operations before a hostile competitor does it for you. Back to our motto: be mobile or perish.

I think the connection is harder to make in the second instance (privatization). In fact, privatization is, it seems to me, directly connected to the stationary, the persistent. Prisons, sanitation, transportation etc. are constants, needs that are always going to be there and which are never exhausted by being satisfied today. They are needs that must be met again tomorrow. It is precisely this repetitive and necessary character that made them seem like appropriate services for the state to provide. And it is their fixed character—both fixed in place (the garbage needs to be picked up here, not somewhere overseas) and in need (the garbage needs picking up this week and next and the week after that)—that make them a safe and attractive target for capitalism (which always claims to love risk and, in fact, hates to put down its chips in any place where the odds aren’t in its favor).

In short, I think B&C are a bit credulous. They don’t pay enough heed to capitalism’s hypocrisies. Don’t just look at what capitalism says (in the management manuals that serve as their archive), but also at what it does.

My next post will look at B&C’s proposed responses to the wholesale suffering that capitalism, in its current form, doles out so nonchalantly.

Mobility

Boltanski and Chiapello argue—fairly convincingly—that is the key source of profit—and the privileged site of exploitation—in the new form of capitalism. Plenty to think about in this formulation.

To explain: the “winner” in post 1975 capitalism, or what they call “network” and “project oriented” capitalism, is the person who can extend her networks, moving successfully from one project to the next, acquiring contacts and skills in each encounter. Thus, the successful person “accumulates” contacts and work experiences/knowledge—and does do precisely by never staying in one place too long. Only by being in circulation through a variety of locales can one’s network expand.

The person who is exploited in such a system is anyone who—for whatever reason (family situation, loyalty, lack of requisite ambition or social skills)—is not mobile, is tied to one place and one job. Such people are needed by the mobile winner—because it is the people who stay in place who secure that he still has a contact in the place that he has left. And that necessary work is not compensated in proper proportion to its necessity. Hence the exploitation of the stationary person. You might say that, luckily for businesses, many people, for various reasons, are stationary, are even loyal, despite the monetary penalty paid for being so. Businesses (and other work places such as universities) are parasitic on kinds of loyalty and non-mobility that they do everything to discourage.

Certainly, in the growing individuation of incomes (i.e. the decline of unions negotiating the same wage for everyone doing the same work in favor of each worker negotiating his or her own salary for his or her own self), it is the worker who can credibly say “I am leaving” who gets the raise or the bigger bonus. This is called letting the market set wages. And certainly being able to leave is, to a large extent, based on having established networks that enable mobility.

But—and this is the first big but—having the networks is necessary, but not sufficient. I think B&C underestimate productivity. That is, to move on to another job or project, one must have some evidence of success, some record of having delivered in the past. In other words, it is not just the accumulation of contacts that matters. Also required is the accumulation of skills. B&C don’t pay any attention to the resume, to the CV. Yet the CV is precisely a document of accumulation, a site of gathering. And it is precisely its function as a “site” that counterbalances mobility. What is accumulated is the opposite of what is scattered; what is banked takes a form quite distinct from a network, which is dispersed. For all the talk of postmodern selves (a talk, I hasten to add, that B&C don’t indulge in), the CV is testimony to the ways in which the bourgeois self is still the dominant form. The self is the product of its experiences—and its experiences are meant to be educative. Return of investment during a lifetime is based on turning experience to account. That’s the essence of all the fancy talk of “human capital.” I can’t see it as much more than old wine in new bottles.

I needn’t be entirely cynical about this. There is a difference between people who efficiently and successfully produce things—and those who do not. No doubt, I am speaking from the winner’s circle in saying so. I am someone who epitomizes mobility and networking. I have worked the system extremely well—having been a good boy who does what the system sets out as the things that will be most rewarded. I have even internalized much of that system, since I did the work with enthusiasm and voluntarily. My labor was, for the most part, not alienated since I found the game intricate and difficult enough to hold my interest, to call forth my most strenuous efforts. (Yeats: “the shoulder that has not pushed against an immovable fence has not experienced its full strength” or William James on the “strenuous mode.”) Even while (as I have written about before) I maintained a somewhat (and protective) ironic sense that it was a game, with low stakes and laughably low impact, even as I pursued it ardently. I often thought of Eugene McCarthy’s comment about politics being like coaching basketball. You have to be smart enough to play the game, but dumb enough to think it important.

The game came fairly easily to me—which is why I could on another level) afford the irony. I sat easy in my chains. But—and here is the uncynical part—I did produce the work. My mobility was based on temperament (I couldn’t stick to a discipline or a topic; I roamed the academic field, even as I roamed my home institution, not sticking to my department, which led to various administrative posts), but also based on the track record, on the books I had written. There was an objective measure, not just personal contacts. And, yes, that objective measure could often be laughably disconnected from quality (when it comes to academic publication, as my friend Hans Kellner was fond of saying, quantity doesn’t count, quantity is everything.) I got offers based on the titles of my publications—books that few on the hiring committees (or those asking me to write for this or that) had actually read. Still and all, the work had to be done.

And, as I say, I enjoyed doing the work. Just as I now enjoy writing a blog that cannot have any return on investment—and which has never landed on my CV.

All of which, I guess, is to say that a “career” must be built—and as a building is more stationary and table than “mobility” would suggest. But if one wants the biggest rewards, one must prove that one is willing and able to move, and thus career building is undertaken in relation to mobility. Which leads to another way of characterizing the stationary: they don’t think in terms of a career, in terms of building toward the “next thing.” They want to stay where they are. And in this new world of post-1970s capitalism one pays a fearful price for that, since it is the stationary (the one a firm doesn’t have to worry about their leaving) who are pushed onto contract work and made redundant at the drop of a hat.

Because, at a level below the stationary, the expendable, are “the excluded.” It is the return of high unemployment since 1975 that, in many ways, drives the whole system. If you don’t keep up your contacts, don’t keep adding to your skills, don’t exist within an extended network, you risk falling off the map altogether, so isolated and unconnected that you become unemployable. You bring nothing to the table. The long-term unemployed are a, if not permanent, at least constant feature of capitalism since 1975. Publish or perish, becomes “keep moving or perish.”

The State

If, as yesterday’s post argued, trade unions are no longer in a position to effectively counter-balance the power of capitalism, then some other site of power, some other institution, must play that role. The contemporary right (the neoliberals, if we are going to use that terminology) demonizes trade unions at every turn. The moral fury they direct against even the slightest hint of collective action on the part of workers has always baffled me. Just what is morally wrong here? Why is such collective action so reprehensible? Other forms of collective action—political parties, lobbyists, trade and professional associations, the NRA and the AARP—are not anathematized, but trade unions are somehow beyond the pale. I refuse to reduce this to sheer economic interest and bad faith; their moral outrage would be unsustainable if it didn’t somehow resonate beyond the quarters in which it directly serves economic interest.

Of course, the primary rhetorical move is to claim trade unions are an infringement on freedom. Even workers who don’t endorse the union must pay their union dues. A similar argument, of course, is made against the state—with taxes standing in as tyrannical in the way that union dues are. The union and that state are both robbers.

The right’s commitment to undermining unions (which has a long and continuous history dating back to the 1870s) goes hand-in-hand with it more recent commitment to undermining the state. And I think the right is absolutely correct to see the state, like the unions, as a potential danger to its deep commitment to economic inequality. The state is a threat to profit insofar as everyone of its regulations—from labor law to environmental and public health measures—makes doing business more costly.

Despite the right’s (or neoliberalism’s) obvious desire to decrease the power of the state, the left has been much more lukewarm in its embrace of the state. [A side-note: yes, the American right wants to increase the power of the state when it comes to regulating private conduct and in matters relating to “national security.” Capitalism—as the Marriott response to socially conservative legislation shows—has no particular sympathy for the issues that motivate conservative moralists. But the right is still the “party of order”; it does want a strong police force and military; it just doesn’t want any of that state power directed toward reining in money-making practices.)

While you would be very hard pressed to find a leftist who does not think unions are a good thing, attitudes toward the state are more ambivalent. I don’t think the right is wrong when it identifies the state as a potential problem for the achievement of its ends. The state is the only plausible (it seems to me) site of a power strong enough to combat capitalist power. So why don’t leftists rally to the state’s support?

Let me try to count the ways.

The insistence that the state has been entirely captured by the capitalists—and only serves their interests. This morphs into a necessitarian doctrine that such must always be the case. The state will always be in cahoots with capitalism. (The fallacy here is turning a contingency into a necessity. Plus it would seem to encourage a fatalistic quietism; we are doubly screwed because political and economic power work hand-in-hand and it is useless to try to pry them apart. My argument, finally, is that the chances of grabbing political power are, at the moment, better than the chances of grabbing economic power. We have at least a fighting chance on the political battlefront, whereas the legal—and moral and habitual—protections afforded private property make wresting economic power away from the corporations and the wealthy much less likely. It will take a political victory to begin to undermine the sources, structures, and institutions of economic power.)

If #1 is a version of the left’s time-worn critique of “liberalism” and the “liberal state,” now we can entertain the anarchist suspicion of the state, most recently given voice in James Scott’s Against the Grain (Yale UP, 2017). The notion here is that all concentrations of power are inevitably bad. My riposte is that, yes, power tends to accumulate—and that accumulations of power are generally not conducive to the general welfare. But I don’t think there is any wishing away of power—or of its tendency to accumulate. Thus, one needs to find ways to counterbalance powers (in the plural). In a world in which economic power has concentrated on a scale perhaps unprecedented (the “perhaps” because, arguably, the Dutch and English East India companies of the 16^th and 17^th centuries were more powerful than Google and Apple today), to abandon the state as a possible counterweight seems suicidal. There is certainly no reason to think Google is going to be more beneficent than a state—or more accountable. To dismantle political power unilaterally in the face of economic power is to refuse to engage in the contest that we wish to win. It is certainly deeply concerning that, as economic centers of power get larger and larger, political units get smaller and smaller (the break-up of Czechoslovakia and Yugoslavia, the possible break-ups of Britain and Spain).

A harder to characterize, but no less real, general disillusionment with politics as dirty, corrupt, and indirect (taking so much time to effect such imperfect pieces of legislation and the cumbersome bureaucratic state action that follows legislative victories). I feel this way myself some 75% of the time. One result of this sentiment is to turn one’s back on the state and get involved in “service” work. We have seen a huge proliferation of “humanitarian organizations.” These seem “clean” in a way politics is not—and also go out into the field and actually do the work of helping people. The results—even if limited to a fairly small number of beneficiaries—are at least visible in the way that the beneficiaries of state policies rarely are. (We see that the number of uninsured has gone down after the enactment of ObamaCare, but those are numbers not visible people). Despairing of the state’s ability to deliver the goods, many leftists (especially among the young) have turned to non-state charity operations. Letting the political, the state, off the hook in this way, not pressuring it to provide for its citizens, is a bad idea in my view—even though, as a personal choice about where to put one’s efforts, it seems to me more than easy to understand, to be a more appealing course to follow.

The final position, which seems that of Hardt/Negri and some other recent writers, is that the state is a spent force, that it actually no longer has sufficient power to hem in economic power. We must mobilize another kind of power altogether if we are to bring neoliberalism to its knees—or even mitigate some of the suffering it inflicts. Conspicuously absent from such views is any plausible agent of this force that will stop neoliberalism in its tracks. Now, of course, an analysis of the state’s deficiencies need not present something to take the state’s place. If I cannot walk with a broken leg, it does nothing to undermine the truth of my statement that I cannot walk if I do not consider alternatives to walking. The argument that the state is powerless usually point to three factors: 1) capital flight in the age of globalization means the state cannot impose terms/regulations on capital because it will just move to jurisdictions that give it a better deal. We are in a race to the bottom that the state is helpless to stop. 2) Even though the multinational and international organizations—like the GHO and GATT—and the international trade agreements—like the EU and NAFTA—are not particularly effective, they are constraining upon state actions, so power is leaking away from the national state; and 3) the blackmail and direct power of capital is such that most countries are now democracies in name only. There is no path toward citizens getting the state to serve their interests as opposed to the interests of capital. [This last point is a new version of the classic complaint that the state is just an agent of the capitalists. It tends to come accompanied with the notion that the state, therefore, is at best useless and at worst another enemy that must be overcome in the larger fight against capitalism. And the solution offered is usually the direct action of the populace, bypassing the state as its instrument, against the forces of capital. Hence the recurrent dream of the general strike. Refusal, non-compliance, civil disobedience on a grand scale.]

The main burden of this post, then, is that the left abandons the battle to capture the state—and to put its power to work advancing the left’s agenda and curtailing economic power—only at the risk of making a bad situation worse. Despair about the state is really despair about the very possibility of democracy. It can never be a government of, by, and for the people. It will always be the instrument of the economic royalists.

To be concrete: what the state can do to rein in (at the very least) economic power is not a mystery. Three strategies (all of which, I believe, are necessary) are in play.

Interference (regulation and establishing the rules of the game) in productive and money-making operations themselves. This strategy covers everything from setting conditions of work, guarantees of employment and minimum compensation, worker’s rights, unemployment insurance, etc. That is, various laws that alter distribution of effort, risk, and profit internal to capitalist procedures. Protection of—nay, promotion of—union creation and activity. These are all mechanisms to shift the distribution of market inputs and outcomes.

Interference external (or after the fact) of market processes and outcomes. In a word, taxes. Progressive taxation–including income, wealth and estate taxes—that work against the tendency of capital to accumulate in a few hands. Similarly, stringent anti-trust laws to combat the tendency toward monopoly.

Regulation of “externalities”(notably pollution) in the name of the public good, along with the positive provision of certain goods (transportation, health, parks, sanitation, public utilities, and education—I would add housing) that are not well handled by market processes. Here we get environmental regulations and public health measures, plus transit systems, municipal water and electricity, parks, libraries, schools etc.

All of this provides a suitably ambitious agenda for a left that intends to capture the state to serve its vision of the public good—a good that necessarily entails limiting the power of markets to determine either public or individual fates.

Two issues remain.

Must we reconcile ourselves to the existence of markets? Not only are there factions on the left that want to ignore or dismantle the state, there are also factions who declare any tolerance for markets apostasy. I think a regulated market is preferable to any of the alternatives currently on offer (and I mean on offer theoretically as well as in reality.) I would love to be convinced otherwise, to be shown a model of a non-market society that seemed to me both plausible and desirable. Until then, I am going with regulated markets.

The big question. Can the state actually counterbalance the power of capital? If capital is mobile precisely where the state it tied to a territory and most citizens are immobile due to legalities of citizenship and the realities of economic means, then what can the state leverage against capitalism? As I have argued in previous posts, the only place capitalism is vulnerable is the bottom line. You must hold some power over profits, have some way to damage profits, if you want to bring capitalism to heel. Yet it is exactly when the state interferes in profit-making, that capital flees to a new jurisdiction. What can possibly halt capital flight? The answer, it seems to me, is stability. Despite all the rhetoric, lots of capital (hardly all, but hardly an insignificant amount either) hates risk. There wouldn’t be so much money invested in US Treasury bonds (at a paltry return) if safety wasn’t the highest priority for lots of capital. What the rich Western countries have to offer capital are stable political and social orders, along with proximity to rich consumers. This isn’t a pretty answer. It means the West has a market advantage because of its contrast to more turbulent and more impoverished parts of the world. But, at this moment at least, the West needs to trade on this strength by making capital pay for the privilege of investment in the West. It just means the cost of doing business in the West will be higher (because of taxes and regulations) and, in addition (this is where the state needs to start throwing its weight around) there will also be a cost exacted for whatever functions capital exports in order to get around those higher costs. Call this protectionism or whatever you will. But—just as we need a transaction tax to raise the costs to financial capital of its various speculative moves—we need a “flight tax” that does not allow capital to move seamlessly across borders. And if a corporation retaliates by moving wholesale to the Bahamas, then there needs to be an “access tax” to gain entry to the US or UK or French market. These things are not impossible. States have been way too timid in the face of capital flight—especially when those states have jurisdiction over very large markets and enjoy political and social stability.

Enough for today. Plenty to chew on and follow up about.