Abstract
This chapter provides a qualitative analysis of the disintegrative tendencies of the Euro-Atlantic core and of the new authoritarian polities that underpin it, as they are trying, unsuccessfully, to contain those tendencies. The focus will be the fracturing of the EU/Eurozone caused by the failure of Germany’s and the EU’s ordoliberalism to shield Europe’s economies and banking system from the global financial crisis that emanated from the Wall Street and the City of London. The current crisis in the Eurozone drew our attention to two separable, but not separate, public policy projects: the Anglo-American-led neo-liberal financialisation/globalisation, which is truly global in scope, and the German-led project of ordoliberalism, which is more territorial and is mostly confined to the EU/Eurozone and its immediate peripheries, such as East-Central Europe, the Balkans and the MENA region. The crisis has exacerbated the friction between these two stylised and distinct projects. As we shall see, in this constellation of the Euro-Atlantic fracturing, China figures prominently: it tries to drive a wedge and assume leadership of the globalisation project per se.
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Notes
- 1.
It is beyond the scope of this chapter to entertain debates and controversies within Marxist and progressive scholarship. As a result, we give here this definition of the “rate of profit”, which is broadly accepted among heterodox and post-Keynesian economists in general.
- 2.
- 3.
For a large part of the Cold War period (1950–1974), Greece pursued monetarist/“neo”-liberal policies, and it was in Pinochet’s Chile that the first full-fledged neo-liberal experiment took place; see Fouskas and Dimoulas (2013).
- 4.
By “system”, we mean the intra-imperialist core of global capitalism still dominated by the USA.
- 5.
There are two levels of analysis that intermingle here. First, entrepreneurs switched to financial activity and speculative arbitrage—what Marx used to call “money begetting money”—because it is there that they could achieve high returns on their invested capital . The financialisation of non-financial enterprises and the massive augmentation of “fictitious” forms of capital and trade activity (equity, derivatives, CDOs, CDS, special vehicles, etc.) constitute major new developments in contemporary capitalism (Lapavitsas 2013; Weeks 2016; Fouskas and Gökay 2012). Under financialisation , the service sector and all professions attached to it (banks and investment banks, lenders of every sort, hedge funds, legal and accountancy services, head-hunters, asset and equity managers and personnel, etc.) proliferate. Services become the backbone of the economy and interest-bearing capital spreads across economy and social reproduction (Fine 2017). Following the defeat of inflation and the return of interest rates at low levels, credit became available for all sort of consumption activities. On the eve of the financial crisis in 2007, consumer debt as a percentage of disposable income had risen to stratospheric levels. The “financialisation of everyday life” occurred mainly through the consumer debt mechanism and access to loanable capital by wider popular strata, including unemployed and those employed in part-time and precarious jobs, as a way of replacing the real social wage obtained during the Keynesian/Fordist era: it was imperative that neo-liberal economics “solve” the problem of under-consumption caused by lack of Keynesian demand management. The “solution” came by boosting the aggregate demand management via a new borrowing-spree, especially by offering easy access to mortgages and speculation on housing markets (see also previous chapters).
- 6.
After the withdrawal of the USA, the TTP has been renamed to the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership”. Members include: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Singapore. A partial agreement on the CPATPP has been reached on 11 November 2017.
- 7.
This has started from the USA with the Wall-Mart and expanded quickly to the UK and elsewhere. This is the very meaning of Tony Blair’s “stakeholder society”, launched in Britain in the late 1990s and embraced by the ideologues of “Third Way”. In this respect, it could be argued that Tony Blair, as leader of the Labour Party, contributed far more than Thatcher’s Tory party in embedding aspects of Germany ’s ordoliberalism in the UK.
- 8.
Strictly speaking, Lapavitsas’s argument is not “orthodox” Marxist, but this is not necessarily disadvantageous, as it tackles aspects of economic reality that “orthodox” approaches have failed to deal with in depth (“orthodox” Marxist approaches usually focus on the fall of the rate of profit). Lapavitsas argues that neo-liberal economics created a demand problem across Europe, which the Eurozone crisis intensified, especially in the periphery . He sees no crisis of profitability at the present phase and his explanation of the crisis is confined to analysing the financial/banking sector, the financialised enterprises and the balance of payments. In this context, his argument is close to an under-consumptionist argument. A good critical review of the various approaches to the Eurozone crisis is offered by Stavros D. Mauroudeas (2016).
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Fouskas, V.K., Gökay, B. (2019). The Disintegrative and Authoritarian Logics of Euro-Atlanticism. In: The Disintegration of Euro-Atlanticism and New Authoritarianism . Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-96818-6_6
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