Primacy of the Economy, Primacy of the Political: Critical Theory of Neoliberalism
Neoliberalization is a distinctive economic, political, and social project that promotes profit-oriented, market-mediated accumulation as the primary axis of societalization. This might suggest that neoliberalism promotes the primacy of the economic but, since its extension and reproduction require continuing state support and, indeed, involve what Weber called political capitalism, one might also argue that it entails a primacy of the political. To address this paradox, my article offers a baseline definition of neoliberalism and identifies four ideal-typical historical forms thereof; relates neoliberalism to the world market, geopolitics and global governance; disambiguates the primacy of the economic; and addresses the role of the political in promoting neoliberalism and handling its contradictions and crisis-tendencies. It illustrates this exercise in critical theory from the North Atlantic Financial Crisis and how its (mis)management has strengthened the neoliberal project, enabled its main promoters and beneficiaries to escape the need to learn from their mistakes, and even enabled them to further enrich themselves.
KeywordsCritical theory political economy critique of neoliberalism finance capitalism finance dominated accumulation primacy of the economy primacy of the political
1 What is Neoliberalism?
In some respects neoliberalism can be seen as a socially constructed Kampfbegriff with a ‘productively fuzzy’ role in economic, political and ideological contestation. But it is certainly worth exploring whether it can be integrated into materialist analysis and used to develop the critique of political economy. This requires an initial account that can be located and elaborated in this context and linked to the relative primacy of the economic and political. To this end, neoliberalism can be defined as a political project that is justified on philosophical grounds and seeks to extend competitive market forces, consolidate a market-friendly constitution, and promote individual freedom. The specific content and overall weight of these three goals vary, as do the motives of those who promote them. The neoliberal project was initially formulated as an intellectual-cum-political project in 1938; it enjoyed growing acceptance as an economic and political strategy in the 1970s; it witnessed panic-stricken meetings in New York and Washington a generation later at the height of the global financial crisis; and, most recently, it is returning to ‘business as usual’ (Butterwegge et al. 2008; Mirowski and Plehwe 2009; Mirowski 2013).
Four main forms of neoliberalism can be distinguished analytically, although hybrid forms also exist. The most radical form was neoliberal system transformation in post-Soviet successor states. Russia and Poland provide two contrasting cases and outcomes, namely, Chicagoan ‘creative destruction’ induced by neoliberal shock therapy and a more Ordoliberal ‘market therapy without shock’ respectively. Next are neoliberal regime shifts. Breaking with the post-war Atlantic Fordist settlements, based on an institutionalized compromise between capital and labour, these shifts introduced neoliberal policies intended to modify the balance of forces in favour of capital. They have largely succeeded: witness stagnant real wages, cuts in welfare, increasing personal debt, and a growing share of income and wealth in the hands of the top decile (especially the top percentile) of their respective populations. Well-known cases are Thatcherism and Reaganism but similar shifts occurred in Australia, Canada, New Zealand, Ireland, Iceland, and Cyprus. While often identified with rightwing parties, neoliberal regime shifts have also been initiated, maintained or supported by centre-left parties, often under a ‘Third Way’ label (e.g., New Labour, the Clinton Administration, ‘die neue Mitte’ in Germany). Moreover, with a little help from northern friends and/or military dictatorships, many Latin American economies undertook neoliberal regime shifts in response to crises in the previously dominant import-substitution growth model. Indeed, Pinochet’s Chile pioneered neoliberal regime shifts. Type three involves economic restructuring processes and regime shifts that were primarily imposed from outside by transnational economic institutions and organizations backed by leading capitalist powers and their local partners among domestic political and economic elites. This type adopts ‘Washington Consensus’ principles in return for financial and other assistance to crisis-hit economies in parts of Africa, Asia, Eastern and Central Europe, and Latin America. Fourth, there are more pragmatic and potentially reversible neoliberal policy adjustments. These comprise modest changes deemed necessary to maintain alternative economic and social models in the face of internationalization and a global shift in the balance of forces. The Nordic social democracies and Rhenish capitalism provide some examples. However, such adjustments can cumulate despite the fluctuating political fortunes of the parties more favourably included towards them and, almost by stealth, lead over time to neoliberal regimes (witness Germany in the last 25 years). None of these four forms result from the spontaneous operation of market forces: they all involve the exercise of political power to establish and consolidate them.
The highpoint of neoliberalization occurred in the 1990s. This decade saw a largely coincidental combination of neoliberal system transformation, a stepwise shift from ‘roll-back’ to ‘roll-forward’ policies in neoliberal regimes, a temporary ascendance of cyclical neoliberal policy adjustments elsewhere, and continuing efforts to impose neoliberal structural adjustment in many places. Yet neoliberal system transformation largely failed as a ‘grand project’; neoliberal regime shifts required flanking and supplementing by ‘third way’ policies, networks, and public-private partnerships; neoliberal policy adjustments did not seem to produce lasting neoliberal regime shifts even where that was a long-term aspiration; and the quack cure of neoliberal structural adjustment often aggravated the underlying disease, leading, in Latin America, to the revival of populist politics and demands that governments distance themselves from the neoliberal excesses and, in East Asia, to defensive measures to prevent a repeat of what was known there as the ‘IMF crisis’.
Although overall elite and popular support for the global neo-liberal wave has declined since its peak, it still has major path-dependent effects through its impact on the forms, timing, and dynamics of economic crises not only in countries where neoliberalism was adopted or imposed but elsewhere too. This is because it disrupts the structured coherence of modes of regulation and/or governance where alternative policies prevailed and, via contagion, can weaken already vulnerable economies. One example is the wider geo-economic and geo-political legacies of failed neoliberal system transformation and structural adjustment programmes. Another example is the global economic, political, social and environmental repercussions of the crisis of finance-dominated accumulation, a regime promoted under neo-liberal regime shifts.
2 Primacy of the Economy
Possible meanings of the primacy of the economy include: (1) economic determination in the last instance; (2) the formal correspondence between base and superstructure in a capitalist society; (3) the primacy of economic class struggle over other forms of struggle; (4) domination through control over strategic economic resources; (5) hegemony based on the widespread acceptance of an economic imaginary; and (6) the ‘ecological dominance’ of profit-oriented, market-mediated accumulation within the wider social formation.
Regarding (1), despite the claims of some variants of orthodox Marxism, there is no ‘determination in the last instance’ even where the economy is sufficiently disembedded from the wider social formation that it could have independent causal effects. Even in these circumstances, profit-oriented, market-mediated accumulation still depends on extra-economic conditions that it cannot guarantee; it is always structurally coupled to other societal systems and the ‘lifeworld’ and never follows a purely economic logic. This does not exclude economic determination in the first instance, i.e., the primacy of production in the overall circuit of capital and hence the long-term primacy of profit-generating capital over other fractions of capital. In short, where wealth takes the form of an ‘ungeheure Warensammlung’ [immense accumulation of commodities], value must be produced before it can be realized, redistributed, and reallocated. This gives a key role to valorization and its mediation through the capitalist law of value – especially where the commodity form is generalized to fictitious commodities (land, labour-power, money, and knowledge) and where market relations penetrate/colonize other societal spheres. But there is wide variation in how far capitalist market forces (and the associated logic of profit-seeking) come to dominate the overall organization and dynamics of social formations and, indeed, there are structural limits to the extent to which this occurs.
Ad (2), Marx argued that the form of state sovereignty corresponds to the form in which nature is appropriated and transformed in a given mode of production (1983, p. 799 f). This claim about isomorphism can be generalized to other social forms and linked to social praxis in Gramsci’s (1992, p. 876) analysis of the geschichtlicher Block, i.e., “ein gesellschaftliches Ensemble, in dem die materiellen Kräfte der Inhalt sind und die Ideologien die Form”. This does not mean that economic forms determine the specific politics and policies of juridico-political institutions or the content of hegemonic and sub-hegemonic visions. For, within the limits set by any contingent formal correspondence, it is social practices that shape content.
At stake in (3) is the primacy of economic class struggle as the motor of history. Where class belonging and identities are grounded exclusively in economic relations, this involves a strong form of agential economic determination. Where class struggle is overdetermined by political and ideological forms and relations, with their own logics and organizational principles, we have class rather than economic reductionism. This no longer entails a narrow primacy of the economy. One might add that political and ideological class powers are not confined to extra-economic spheres but are also important in the social relations of production (cf. Poulantzas 1979).
Ad (4), economic domination refers to the capacity to control strategic resources in a given commodity chain or broader set of economic activities, e.g., oil in the Fordist and post-Fordist economies, gene patents in bio-capitalism, or credit during a liquidity crisis. It concerns the power of a fraction of capital (or a cartel or single firm) to impose its immediate interests on other fractions, regardless of their wishes and to their disadvantage. It can derive directly from the position of the relevant agent in the overall circuit of capital in a specific conjuncture and/or indirectly from the use of extra-economic coercion (including state power). By extension, economic domination also includes the relative ‘strike power’ or ‘blackmail power’ of the profit-oriented, market-mediated economic order vis-à-vis other institutional orders and civil society because their activities require certain economic inputs (specific goods and services, general income, or credit). This second aspect refers to the capacity of capital in general, of a fraction of capital, or of particular capitals to oblige other institutional orders to adapt to the demands of capital accumulation as expressed in structural power and/or specific strategic capacities.
Ad (5), economic hegemony involves the capacity of given social forces to develop the leading economic imaginary, prompting other forces to (re-)articulate their own technical paradigms, business models, and growth strategies around this imaginary. It exists where a given imaginary (e.g., an accumulation strategy) underpins an institutionalized compromise between opposed social forces and orients their activities within and across different institutional orders around the pursuit of that strategy, including its extra-economic supports. The hegemonic economic imaginary specifies which identities and interests can be synthesized within a general interest, orients the articulation of different temporal horizons (short-, medium- and long-term, business cycle, electoral cycle, long wave, etc.), and delimits spatial horizons (local, regional, national, supranational, etc.) over which the strategy will be pursued. A successful hegemonic project may also establish accumulation as the dominant principle of societal organization. This is illustrated by the neo-liberal claim that global competition requires wholesale restructuring of any economic or extra-economic organizations and institutions that may affect competitiveness.
Ad (6), ecological dominance exists insofar as, in a social formation with several formally equal, non-substitutable functional subsystems, one system (here, the profit-oriented, market-mediated economy) is actually ‘less equal’ than others. In other words, it has more influence on their development – including from its negative as well as positive externalities – than they have on it. Indeed, it is the system with the highest tendency to fail with the most significant consequences for other systems that is likely to be ecologically dominant. This concept is not a new way to defend ‘economic determination in the last instance’ because no mechanism can guarantee that any given system is always and everywhere able to impose its logic on other systems and/or colonize the lifeworld. On the contrary, where ecological dominance does occur, it results from political and ideological struggles around political projects and hegemonic visions as well as on the specific properties of the circuit of capital on a world scale. In addition, its effects are always differential, contingent, contestable, and reversible, and it is also open to reflexive self-limitation.
Seven mechanisms contribute to the ecological dominance of profit-oriented, market-mediated accumulation as a principle of societalization (cf. Jessop 2011).
First, as the market economy is disembedded from the wider society, its organization and performance become less subject to external adaptive pressures and more exposed to internal imperatives to reduce socially necessary labour-time, socially necessary turnover time, and naturally necessary reproduction time. Indeed, external pressures are mediated increasingly through inter-capitalist competition to profit from them and/or to move capital (including in liquid form) to escape these pressures. This increases the ‘indifference’ of the profit-oriented, market-mediated economy to its social (and natural) environment except to the extent that this is a potential source of profit/loss.
Second, the anarchy and flexibility of market forces, and the dual role of the price mechanism in re-allocating capital and facilitating learning, mean that capitalism tends, other things being equal, to have greater resilience than other systems in the face of exogenous disturbances. This resilience is well-developed (but by no means infinite) because of the greater internal complexity (multiplicity and heterogeneity of elements) of rational capitalism, the looser and more flexible coupling among these elements, and the high degree of reflexive capacity (self-monitoring). A wide range of organizations, institutions and apparatuses express different aspects of the contradictions, dilemmas and paradoxes of capital accumulation and provide the requisite variety to compensate for, and exploit, market failures.
Third, technological innovation and institutional change enable capital to engage in time-space distantiation and/or time-space compression to extend and intensify its operations in and across the world market in real time. This gives capital greater flexibility to reorganize its activities and continue its self-expansion in response to internal and external perturbations. These capacities are related to the anarchic, formal, procedural rationality of the market, its reliance on the symbolic medium of money to facilitate economic transactions despite disjunctions in time and place, its highly developed abstract and technical codes (with well-developed mechanisms of capitalist accounting and monetary returns as its easily calculable formal maximand), and the requisite variety of its internal operations.
Fourth, world market integration in real time weakens the structural constraints associated with other societal subsystems or institutional orders and/or limits their agents’ abilities to control the activities of capitalist forces. This holds especially for international finance. Key mechanisms here include capital’s internal operations in time (discounting, insurance, risk management, futures, derivatives, hedge funds, etc.) and/or space (capital flight, relocation, outsourcing abroad, claims to extra-territoriality, etc.). A further factor (see Sect. 5) occurs when the logic of the market colonizes organizations that are central to other systems’ operation or, indeed, capitalist interests resort to force, fraud, and corruption to secure favourable decisions and treatment.
Fifth, in addition to boosting capacities for technological and economic innovation, social agents can redesign the rules that govern the market economy and its social embedding. This is highlighted in interpretations of neoliberalism as a class offensive by capital against labour. This may extend to efforts to shape the co-evolution of organizations, systems, and, eventually, world society and to change the mode of social evolution (e.g., through extending market relations into ever more spheres of social life). It also informs accounts of neoliberalism as an epistemic-intellectual project to rewrite the economic constitution (Mirowski and Plehwe 2009) and to establish ‘disciplinary neoliberalism’ based on a ‘new constitutionalism’ (Gill 1995).
Sixth, the primacy of accumulation vis-à-vis other axes of societalization (e.g., national security, ‘racial’ supremacy, religious fundamentalism, adherence to the rule of law, social solidarity) is related to differential capacities to exercise political, intellectual, and moral leadership. This relates to the preceding discussion of economic hegemony but connects it to the more general conditions that privilege one principle of societalization over others. Parallel power networks tied to transnational power blocs are especially powerful here. The global dominance of financial capital over other fractions of capital and the hegemony of the United States as an imperial power were central in constructing neoliberal reason and marginalizing (in some cases, repressing) opposition from other economic forces and less powerful states.
Seventh, as the other mechanisms indicate, an ecologically dominant system is the primary source of external adaptive pressure on other systems. So, as the world market grows more complex, so does the environment of other institutional orders, institutions, organizations, and networks. This obliges non-market forces to increase their own internal complexity (requisite variety relative to the environment) to retain their operational autonomy and resilience to cope with external shocks, such as a loss of economic resources and revenues resulting from capital mobility, economic downturns and crises. For example, the recent global recession has forced accommodations to the logic of capital in the form of bailouts, welfare and entitlement cuts, and major adaptations in other institutional orders.
To suggest that world market integration is promoting the ecological dominance of profit-oriented, market-mediated accumulation is not the same as to claim that the economic system narrowly defined is becoming ecologically dominant. What becomes ecologically dominant is a tightly coupled nexus of functional systems (minimally the economy, law, and politics) that, through structural coupling, blind co-evolution, structural drift, and strategic coordination, comes to be organized around the logic of differential accumulation. This development is shaped by new forms of government and governance as well as by the mobilization of class powers in production and the operation of market forces. This is why the primacy of the economic and/or political is such a challenging topic.
3 The Economic Significance of Neoliberalism
The four forms of neoliberalism tend to have different effects. Nonetheless a broad generalization is that the global roll-out of neoliberalism reinforces the ecological dominance of capital accumulation because it disembeds economic relations from other social relations. It tends to judge all economic activities in terms of profitability and all social activities in terms of their contribution to capital accumulation. Inter alia, the proponents of neoliberalism seek to open, extend and further integrate the world market, to reduce the frictions of national ‘power containers’ (and analogous borders), and to weaken the capacities of subordinate groups to resist accumulation through class struggle and/or to defend alternative Vergesellschaftungsprinzipien. It has reinforced the dominance of exchange-value in economic relations and calculation because it is capital in its exchange-value aspect that is most easily disembedded from broader socio-spatial-temporal contexts and thereby freed to ‘flow’ relatively smoothly through space-time. In particular, it frees money capital as the most abstract expression of the capital relation to move almost at will within the world market to maximize opportunities for profit. Consequently it advances the influence of world market dynamics in world society more generally.
To establish how and why this occurs and why neoliberalism has been and, despite its various crisis-tendencies, remains so influential on a world scale, we must relate its emergence and subsequent development to the logic of capital. Of special relevance here is Marx’s distinction between the use-value and exchange-value aspects of the commodity (cf. Warum Werttheorie? Werttheorie von Marx über Adorno bis Backhaus und Postone in this handbook). Analogous properties characterize other dimensions of the capital relation. The worker is a concrete individual with specific skills, knowledge, and creativity and an abstract unit of labour power substitutable by other such units (or, indeed, other factors of production); the wage is a source of demand and a cost of production; money functions as a ‘national’ currency circulating within a monetary bloc and subject to state control and as an international money exchangeable against other monies in currency markets; productive capital is a more or less concrete stock of time- and place-specific assets undergoing valorization and abstract value in motion (notably as realized profits available for re-investment); land is a gift of nature and a monopolistic claim on revenues; knowledge circulates as part of the intellectual commons and can also become the object of intellectual property rights; and so on.
In each case, neoliberal policies privilege exchange-value over use-value. The neoliberal policy set comprises liberalization (more competition), deregulation (fewer state and legal controls over capital), privatization, market proxies in the residual public sector, internationalization (reducing the frictions of national boundaries), and a shift in the tax burden from direct to indirect taxation and, additionally, from mobile transnational capital to less mobile SMEs and citizens. It emphasizes cost reduction and cost recovery and subjects all economic activities to the treadmill of matching or exceeding the prevailing world market average rate of profit. Such one-sided treatment can only disguise, but not suppress, the significance of the use-value aspect of these relations. Eventually, the importance of use-value to capitalist reproduction (and, of course, to social life more generally) is reasserted and, without appropriate ways to handle the contradictions between use- and exchange-value, crises emerge that effect a forcible re-imposition of the unity of the capital relation.
4 The Ecological Dominance of Interest-Bearing Capital
One aspect of neoliberalism is its promotion of finance-dominated accumulation. Compared to the largely intermediary role of finance in Atlantic Fordism and a more productivist, post-Fordist knowledge-based economy, the deregulation of finance increases the significance of the financial sector relative to the non-financial sector. Specifically, it tends to privilege hypermobile financial capital at the expense of capitals that are embedded in broader sets of social relations and/or that must be valorized in particular times and places; it creates the conditions for differential accumulation in favour of the financial sector based on financial innovation and speculation; and it increases inequalities of income and wealth, limiting the impact of the wage as a source of demand. And it is also a powerful mechanism of world market integration, for good or ill, affecting different varieties of capitalism in different ways and transmitting crisis-tendencies through diverse mechanisms.
Combined with an emphasis on shareholder value, then, neoliberalism particularly benefits hypermobile financial capital, which controls the most liquid, abstract, and generalized capitalist resource, reinforcing its competitiveness and ratcheting up its ability to displace and defer problems onto other economic actors and interests, other systems, and the natural environment. Yet, as Marx foresaw, this also enhances the scope for the contradictions and dilemmas of a relatively unfettered (or disembedded) capitalism to shape the performance of other systems, undermining key extra-economic conditions for accumulation. Finance-dominated accumulation militates against the long-term structured coherence of accumulation regimes and their modes of regulation. It weakens the spatio-temporal fixes with which regimes based on the primacy of productive capital manage the contradictions between fixity and motion in order to produce zones of relative stability by deferring and displacing their effects. This can be seen in the impact of financialization not only in the circuits of Atlantic Fordism (including the Eurozone) but also in the export-oriented economies of East Asian and the viability of import-substitution industrialization in Latin America and Africa. The destructive impact of financialization is reinforced through the neo-liberal approach to accumulation through dispossession (especially the politically-licensed plundering of public assets and the intellectual commons) and the dynamic of uneven development (enabling financial capital to move on when the disastrous effects of financialization weaken those productive capitals that have to be valorized in particular times and places). It is also supported by the growing markets opened for the ‘symbionts and parasites’ of the ecologically dominant fractions of capital in their heartlands – associated in turn with their own forms of uneven development on regional, national, and global scales.
Yet the logic of financialization, especially the accumulation of fictitious capital, can only restrict the operation of ‘economic determination in the first instance’ (i.e., the primacy of profit-generating capital) in the short- to medium-term. Eventually the latter will trigger the forcible re-imposition of the unity of the circuit of capital through the destruction of fictitious capital, deleveraging, and deflation. The longer financial capital is ecologically dominant in the circuits of capital (and their extension into social fields previously not subordinated to the logic of profit-oriented, market-mediated accumulation), the bigger the fall and the worse the impact of failure. Indeed, a key aspect of ecological dominance is the effect (which one could interpret as the duration, depth, and scope) of the failure of the relevant system.
5 Primacy of the Political, Neoliberalism, and Finance-Dominated Accumulation
The primacy of the political also needs disambiguation – especially in the German language, which requires special constructions to distinguish the political, politics, and policy. Thus the primacy of the political could refer to: (1) the politicization of economic institutions and economic practices such that they are subordinate to political priorities set by a strong state (e.g., a national security state); (2) the importance of extra-economic coercion (especially when sanctioned by the state) in securing the conditions for profitable economic activities; and (3) the key role of particular policies in particular conjunctures in securing institutionalized class compromises and/or counteracting capital’s crisis-tendencies. In orthodox Marxist work, Primat der Politik often has the second meaning, referring to the role of force in primitive accumulation, in promoting imperialism and resolving imperialist rivalries, in underwriting monopoly capital profits, and in sustaining state monopoly capitalism. The development of neoliberalism could be interpreted in terms of the second and third meanings of the primacy of the political.
A useful reference point in this regard is Max Weber’s ideal-typical distinction between six modes of Erwerbsorientierung: (1) trade in formally free markets and the rational organization of capitalist production; (2) speculation in financial markets; (3) profits through force and domination, such as colonialism, tax farming, unjust enrichment in office; (4) financing of political ventures, including wars, revolutions, electoral campaigns, and lobbying; (5) unusual deals with the state and other political bodies; and (6) traditional merchant capital (Weber 1922, pp. 95–96). While Marx certainly recognized all six modes (although not always in these terms) and also discussed them, he focused mainly on the genesis, structural features, and dynamic of what Weber regarded as rational capitalism (type 1). This focus stemmed from his intellectual and political project to critique classical political economy and disclose the antagonisms, contradictions and crisis-tendencies inherent in the capitalist mode of production, which was based on the generalization of the commodity form to labour-power and its role in facilitating the rational organization of capitalist production. Yet the rise of finance-dominated accumulation that has been enabled by the spread of neoliberalism has as much to do with the forms of political capitalism (types 3–5 above) as with rational capitalism and, even if its crisis-tendencies can be explained in terms of the privileging of interest-bearing over profit-generating capital, the handling of the North Atlantic Financial Crisis owes far more to political factors than to the operation of free market forces.
Neoliberalism did not emerge from the spontaneous operation of free market forces but was created through a long politico-ideological war of position, relentless lobbying, targeted legislation, and judicial decisions (Mirowski and Plehwe 2009). Financialization also required a whole series of legislative changes to reduce taxes, deregulate finance, legalize new forms of derivatives and securitization, and so on. Likewise, the crisis of finance-dominated accumulation prompted state action to bail out banks that were too big, too systemically important, or too well connected to be allowed to fail. Extraordinary measures such as quantitative easing, zero interest rate policies, and forward guidance also involve political action. The condoning of control fraud, appraisal fraud, foreclosure fraud, the manipulation of LIBOR, trade in commodities, and so on also show the role of unusual deals with political authority. In short, while neoliberalism and financialization may prioritize exchange-value throughout society, they are largely the product of political, not free market, forces.
This suggests that the primacy of the economy and the primacy of the political are not necessarily opposed. Drawing on the analytical distinctions introduced above, we could conclude that: Neoliberalism is a political project that is intended to extend the logic of exchange-value within the profit-oriented, market-mediated economy and to extend market forces and economic calculation into spheres of social life where they were absent before (primacy of the economic) but the pursuit of this project depends on integrating neo-liberalism not only into accumulation strategies but also into state projects and hegemonic visions, which requires both struggle for hegemony and control over the state apparatus (primacy of the political). This is even truer of finance-dominated accumulation, which benefits from different forms of political capitalism as well as from a more general neoliberal environment. As such its leading forces have a strong interest (as does transnational profit-producing capital) in weakening liberal bourgeois democracy in favour of an authoritarian statist ‘post-democracy’ that can reinforce financialization, manage financial crises, and channel or defeat economic and political resistance.
The primacy of the political also affects the logic of resistance to neoliberalism. First, insofar as profit-oriented, market-mediated accumulation extends and intensifies the subsumption of other social domains to its logic, class struggles proper can develop. This holds both for the organization of production – the main site of economic antagonism between capital and labour – and the extra-economic fields linked to capitalist exploitation. Moreover, as Karl Polanyi (1973) argued, if commodification is pushed beyond certain limits, ‘market failure’ will threaten capitalist reproduction. Second, because institutional orders and social relations outside the immediate logic of valorization typically have their own values and norms, bases of social inclusion or exclusion, their own forms of structured conflict, and so forth, social forces will seek to resist marketization in the name of defending the autonomy of these spheres. Third, attempts to establish capitalist hegemony provoke counter-struggles to resist the claim that accumulation (and/or competitiveness) is essential for realizing other social goals. This also affects the lifeworld (civil society), which can become a major stake in many of these conflicts. ‘Civil society’ is the site both of colonizing struggles to integrate civil society more effectively into the service of one or another specific institutional order (for example, through commodification, juridification, scientization, the rise of the ‘learning society’, politicization, militarization, etc.) and of struggles to resist and roll back such colonization attempts in defence of identities and interests that lie outside and/or cross-cut them (for example, class, gender, sexual orientation, ‘race’, nation, stage in the life-course, disability, citizenship, human rights, or the environment). If society’s ‘fight back’ (to use Polanyi’s term) is to transcend dispersed, disorganized, and mutually contradictory struggles, however, attention must turn to the ways in which ‘society’ acquires sufficient unity and cohesion to resist the destructive impact of liberal and/or neoliberal market forces. This requires movement beyond sectional interests to actions oriented to the general interest of society as a whole – in short, to actions framed within an alternative hegemonic project based on political, intellectual, and moral leadership and oriented to other principles of societalization rather than to securing particular economic-corporate advantages within the capital relation. In this context, the primacy of the political acquires another meeting – the primacy of struggles over the dominant axis of societalization and hence over the scope of profit-oriented, market mediated accumulation relative to forms of ‘material provisioning’ based on other modes of production and distribution (Polanyi 1973).
The North Atlantic Financial Crisis has not as yet (May 2016) undermined the privileged position of finance-dominated accumulation within neo-liberal regimes. Although the neoliberal project may have lost some of its hegemonic appeal among elites, the ‘squeezed middle’, and subaltern social forces, it remains dominant because of the entrenched structural position, built up over 30 or more years, of a neoliberal power bloc. This power bloc is sufficiently strong economically, politically, and ideologically that it has not yet been forced to learn from its mistakes. The North Atlantic Financial Crisis and its specific, overdetermined expression in the Eurozone have not produced an effective challenge to neo-liberalism or, despite popular resentment and fragmented resistance, undermined the power of interest-bearing capital to damage the rest of the economy and the wider society. This cannot be explained in terms of economic determination in the last instance (an empty and unsustainable axiom) or in terms of the centrality of profit-generation within the circuits of capital. The centrality of valorization is a genuine mechanism crucial to capital accumulation in the long-run but currently limited in its operation thanks to the extraordinary measures taken in the current state of economic emergency, which have served only to displace and postpone the inevitable debt-default-deflation dynamic of the next great recession. The economic domination of interest-bearing capital and the economic hegemony of neoliberalism are relevant, however; and so is the continued operation of the mechanisms that sustain the ecological dominance of capital accumulation as a principle of societalization and, on this basis, promote the ecological dominance of interest-bearing capital and its negative externalities. These mechanisms are not purely economic. They also involve important institutional features and social practices that can be interpreted in terms of the primacy of the political – notably distinctive forms of political capitalism and the reorganization of state power on post-democratic, authoritarian statist lines to defend finance-dominated accumulation and the broader neoliberal project.
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