12 June 2013 — New Left Project
Leo Panitch and Sam Gindin’s long-awaited The Making of Global Capitalism, said to be ten years or more in the making, is ‘about globalisation and the state’. More precisely, Panitch and Gindin use its 450 pages to provide an important, informative, and well-written account of the predisposing factors, emergence, expansion and transformations, of global capitalism, as seen through the lens of the strategic actions of the US federal government.
The book emphasises that contrary to the mythologies of a weak or liberal state, the American state has the historically unique capacities (or the capacities to acquire these capacities when necessary) to create and govern a global capitalism in the image of US capitalism. It has been the prime mover in creating a global order favourable to US capitalist interests, certain transnational fractions of capital, some interior fractions (i.e. national fractions firmly integrated into international circuits of capital), and some other national capitals. This global order, they emphasise, has depended more on economic state apparatuses than the military apparatus. Panitch and Gindin also offer comment on the short-to medium-term future of global capitalism in the wake of the recent great recession (at least in the ‘old world’), the continued significance—even non-substitutability—of the American Empire, and the limited prospects of alternative ways of organising the global capitalist order.
The book mainly takes the form of an historical, strategic and policy narrative of the development of the American Empire, the technological, economic, geo-economic and geo-political factors that facilitated its rise, and the capacities of the imperial government in different periods to prevent or manage market failures. The first four parts have a broad historical sweep. Part five deals with the governance of the most recent period of consolidated global capitalism. Part six addresses the crisis-tendencies associated with the completion of global capitalism with the integration of China into an increasingly neo-liberal order organised in the shadow of the US Empire. The authors emphasise that this imperial system is oriented towards securing conditions not only for the valorisation of specific US capitalist interests, but for the expansion of an integrated world market that enables many capitals—wherever they are headquartered and whatever the reach of their operations—to benefit from trade, the opening of investment, and the development of a series of international regimes modelled on (or generalised from) US paradigms or standards. There are discussions of failure and crisis, efforts at containing failure, and attempts, through institutional innovation and strategic interventions, to learn lessons from past failures and crises and to create state capacities that could be deployed in future emergencies. En passant there are various rebukes and refutations of alternative interpretations common in left-wing as well as mainstream understandings and theories.
It is difficult in a short review to do justice to the historical sweep of the book’s argument and the richness of its analysis, the knowledge base on which it draws, the concern with strategy and policy—and not just with structurally-inscribed tendencies—and its alternating focus on broad trends, historical details, and pointed illustrations of the influence of key figures and social forces in particular conjunctures. Taking these for granted, I want to focus on some issues that, as an inveterate theorist and possibly overzealous systematiser, strike me as worthy of debate. These issues are prompted by the paradox that the analysis is clearly theoretically-informed, but is theory-light. In this sense, rather than engage in the pointless exercise of suggesting that the authors should have looked at other issues or started from a different theoretical position, I will discuss four issues that are grounded in this particular text. No work with this historical scope and breadth of analysis can be theoretically innocent—there must be theoretically-informed criteria for selecting the material and ordering it. But establishing what these criteria might be is hard because key theoretical issues are addressed indirectly, if at all. Let me list just four issues that seem to me to be particularly troublesome: the relative autonomy of the state, the selection of strategies, the contradictions of the capital relation, and the nature of finance-led growth. A longer review would identify others, but it would also give more space to emphasise the obvious merits of this work.
First, let us accept that the differentiation and separation of the economic and political (or market and state?) does not mean that they have completely distinct and potentially antagonistic logics. On the contrary, it could mean that in certain conditions they could have complementary roles in securing profit-oriented, market-mediated accumulation. The authors refer to this latter possibility in the time-worn language of the ‘relative autonomy’ of the state. The state, by virtue of its distinctive capacities, has the ability in particular contexts to better imagine the general interests of capital than capitalists themselves and, further, on the basis of this strategic vision, to act relatively autonomously on behalf of capital, even against the protestations or resistance of capitalist interests that stand to benefit from these actions. Relative autonomy is a notoriously difficult concept, and Panitch and Gindin do not define it. Instead they rely on illustrations to establish that the state (or certain parts of its apparatuses, or political elites, or state managers, or far-sighted economic statesmen, or think tanks, or law firms, etc.) can sometimes pursue coherent strategies and introduce policies that help to secure the conditions for accumulation.
The difficulty with this is that Panitch and Gindin also give many examples of state actions that directly serve the interests of particular capitals at their behest in ways that reinforce the irrationalities of capital accumulation. The Gramm-Leach-Bliley Act (1999) is a case in point. It is presented as an incremental extension of the process of financialisation of the US and, by extension, the global economy, as if this had nothing to do with unusual deals with politicians who receive significant financial support from business interests. In another context, Gramm is described as being in the pocket of Enron. The extension of financialisation is not obviously in the interests of capital in general and has introduced quite specific crisis-generating distortions to the operation of global capitalism. Banks have changed from being intermediaries and risk managers in the circuits of capital to being financial speculators and risk takers on a dangerous scale. They now have a de facto veto power on government decisions because they are too big, too systemically important, and too politically well-connected to be allowed to fail.
The ‘relative autonomy’ of the state is also complicated when it is unclear where the boundaries of the state are drawn. Is the Federal Reserve System, for example, part of the state apparatus, a key element in the organisation of a private banking system, or a key nodal point in the exercise of class power that creatively exploits the fuzziness of the private-public divide, sometimes functioning primarily on one side of the divide, sometimes on the other?
Second, and briefly, Panitch and Gindin tend to write the history of the expansion of global capitalism and American Empire in terms of the strategies and policies that were crucial in shaping its development. We read less about the strategies and policies that were proposed but not selected or, if selected, proved not to work. The risk here is that one identifies what strategies were advanced and then looks back at the proposals, plans, and forces with which they are associated as if these could explain what happened. This could lead to a neglect of the influence of the uneven terrain on which policy proposals get debated. Given that Panitch and Gindin refer favourably to Nicos Poulantzas’s analyses of the internationalization of the state, one might have expected more attention to his account of state power as the material condensation of a shifting balance of forces. This requires attention to the changing institutional materiality of the state, as well as struggles over strategy and policy. The range of discursive, institutional, and agential factors that are relevant to success in these struggles emerge in the telling of the stories rather than in a more systematic way. Nonetheless, there are still some interesting and important remarks on the growing importance of the Treasury in economic policy-making, the loss of influence of the State Department in some areas, and the delegation of state power and prerogatives to private-public agencies, private arbitration tribunals, and so on.
Third, turning from the state to capital, we find references to contradictions, dilemmas and failures, but it is unclear where these are grounded and how they develop. It is important to reject a dogmatic Marxist position that there is a fundamental contradiction in capitalism that explains all conflicts, antagonisms, and crises. But it is also important to avoid giving the impression that failure is a problem of institutional design or poor strategy, rather than more basic aspects of a multi-faceted capital relation. A middle way would be to explore how particular phases of the development of capitalism in the process of becoming (or being transformed into) global capitalism are associated with particular sets of structural contradictions, strategic dilemmas, and patterns of failure; how these are related to basic features of the capital relation; and how attempts to resolve them produce particular kinds of failure and crisis, the resolution of which paves the way for the next set. Something like this can be discerned in the analysis of the post-war reconstruction of Western Europe along Fordist lines. It would also be good to see this done more systematically for neoliberal finance-led accumulation. In particular, it is interesting to reflect on how solving one set of problems aggravates others and on the improbability that any institutional or spatio-temporal fix can be durable. This sort of inquiry is harder to achieve in the absence of a definition of the commonalities of capitalism that are always present, if overdetermined, and which cannot be abolished without abolishing the capital relation itself.
Fourth, despite a few citations of Marx’s views on globalisation, the analysis of global capitalism is not grounded in Marx’s observations that the world market is both the presupposition and the posit (result) of capital accumulation; that the full development of the world market requires the removal of the frictions created by territorial states, the overcoming of the clumsiness of production, and the full development of an efficient global financial system; and, third, that the completion of the world market serves to generalise and intensify the contradictions of the capital relation. The promotion of American imperialism, especially since the crisis of Fordism and import substitution industrialisation, with its removal of frictions between states, the increasing global integration of production, and the development of financialisation correspond to the removal of the main barriers to world market integration and are also associated with the generalisation and intensification of capital’s contradictions. In this context it would be interesting to explore the changing forms of money as money, of money as capital, and of money as functioning capital or property, and to relate this to the shift from finance having a primarily intermediary and risk-management role in the circuits of capital, and finance as speculation and risk-taking. This distinction seems to be implicit in the book and, even more, the discussion of securitisation, debt, the bond markets, and so forth seems to point to the increasing importance of interest-bearing capital relative to profit-producing capital. These are issues that David McNally, a colleague of the authors at York University in Canada, has explored in interesting ways and would be worth considering in the context of their analysis of the current crises.
These are four among many possible issues to debate, and clarifying them is important for developing alternative accounts of the current crisis and future possibilities. This said, let me end by noting that this accessible work has an important and clearly-articulated message; that it offers direct and indirect criticisms of many current misconceptions; and that it will influence far more readers than an overtly, in-your-face, work of theory would. Moreover, any disagreements will not be resolved at a theoretical level alone, but will pass through alternative historical accounts, readings of the current conjuncture, and predictions about future potentials. This is a challenge for others, not just for Panitch and Gindin.
This article is the fifth in our series, Global Capitalism and the State.
Bob Jessop is Professor of Sociology at Lancaster University and the author, most recently, ofState Power: A Strategic-Relational Approach.
 See especially Poulantzas, State, Power, Socialism, London: Verso 1978.