Seventeen Contradictions and the End of Capitalism (24 page)

The kind of rationality the state typically imposes is illustrated by its urban and regional planning practices. These state interventions and investments attempt to contain the otherwise chaotic consequences of unregulated market development. The state imposes Cartesian structures of administration, law, taxation and individual identification. The technocratic and bureaucratic production of space in the name of a supposedly capitalist modernity has been, however, the focus of virulent critiques (most notably that of Henri Lefebvre
³
). What tends to be produced is a soulless, rationalised geographical landscape against which populations periodically revolt. But the application of state powers to these purposes never did run smooth. They are all too easily subverted, co-opted and corrupted by moneyed interests. Conversely, the foundational interests of the state in, for example, the case of national security can be subverted by capital and turned into a permanent feeding trough for capitalist ambitions – hence the historical role of the infamous ‘military–industrial complex’ in the development of capital.

States can use their powers to orchestrate economic life not only through their command over infrastructural investments but also
through their powers to create or reform basic institutions. When, for example, local banking was supplanted by national banks in Britain and France in the nineteenth century, the free flow of money capital across the national space altered regional dynamics. More recently, the abolition in the United States of restrictive local banking laws, followed by a wave of takeovers and mergers of regional banks, changed the whole investment climate in the country away from local and into a more open and fluid construction of regional configurations. Reforms in the organisation of international banking coupled with information technologies have over the last forty years revolutionised the global mobility of finance capital.

There has been a long-standing impulse towards the transformation of the geographical scale at which capitalist activity gets defined. Just as the coming of the railways and the telegraph in the nineteenth century completely reorganised the scale and diversity of regional specialisations, so the more recent round of innovations (everything from jet transport, containerisation and the internet) has changed the scales at which economic activity gets articulated. In the 1980s much was made of the ‘global car’, with parts produced almost anywhere in the world being assembled rather than produced at the final factory. This is now normal practice in many lines of production so that labels like ‘made in the USA’ no longer make much sense. The corporate shift to the global scale is far more emphatic now than it was in the past.

The sovereign powers of the state over capital and money flows have definitively been eroded over the last few decades. This does not mean the state is powerless, but rather that its power is more contingent on that of finance capital and the bondholders. State powers and practices have been more and more directed to satisfying the demands of corporations and bondholders, often at the expense of citizens. This entails strong state support for the creation of a good business climate favourable to capital. The result in many instances is that states can be doing very well while their populations fare poorly. This even applies, somewhat surprisingly, to countries like Germany, where wage repression contains working-class consumption at the
same time as German-based capital and the country’s financial state look to be in very good shape.

Changes in the molecular movement of capital are also putting strong pressures upon the scale at which state power might be constructed. Political reterritorialisations such as the European Union become not only more practicable but more and more of an economic necessity. These political shifts are not a simple function of material transformations in space relations: matters are far more complicated than that. But changing space relations on the part of capital circulation and accumulation do have transformative implications for the new political configurations (for example, the formation of NAFTA, Mercosur, the European Union, as well as the expansion of what used to be the G7 to the G20 as a decision-making body).

The geographical landscape of capitalism (as opposed to that of capital) is plainly shaped by a multitude of interests as individuals and groups seek to define spaces and places for themselves against the background of the macroeconomic processes of uneven geographical development that the rules of capital accumulation and state power jointly effect. Capital has to be somewhat sensitive to the wants and needs of the populations it exploits, of course, and even if it were not, social and class struggles would surely force it to the table to compromise with critics and tamp down on some of its wilder ambitions. It is, however, all too easy to blame the victims for what happens when capital leaves town. The ruling narrative is that it was greedy unions, profligate politicians, bad managers and the like who forced capital out. But it was capital and not people that abandoned and deindustrialised Detroit, Pittsburgh, Sheffield, Manchester, Mumbai and the like. While there have been obvious examples of mismanagement and heightened class conflicts in this or that region or city, it is preposterous to claim that these can account for the total devastation of industrial regions that had for generations been the backbone of capital accumulation in so many different parts of the world. For this we have to thank the neoliberal counter-revolution that began in the 1970s and has intensified to this day.

Uneven geographical developments conveniently mask the true
nature of capital. Hope can spring eternal because there is always a successful neighbourhood, region or state where things are going right even in the midst of multiple calamities. Macro crises get disaggregated into localised events that others elsewhere care or even know very little about. Major crises in Indonesia or Argentina pass by but the rest of the world says ‘Too bad’ or ‘So what?’ Particular rather than systemic explanations of crises dominate thinking. Argentina, Greece or Detroit should reform their ways, it is said, but capital gets off scot-free.

There is something else remarkable about the landscape of capital that plays a vital ideological role in contemporary life and politics. The capitalist city, for example, is built as a work of art in its own right, replete with fabulous architecture and competing iconic meanings. The mansions and penthouses of the ‘masters of the universe’ working now in palatial offices in gleaming skyscrapers in global financial centres contrast with the older industrial architecture of the traditional factories. Spectacular palaces of consumerism and the perpetual creation of postmodern urban spectacle contrast with suburban sprawl and gated communities, which in turn contrast with tenement housing, working-class and immigrant neighbourhoods and, in many cities of the world, large tracts of self-help housing. The capitalist city is the high point of capital’s attempt to appear civilised and to represent the grandest of human aspirations.

There is a sense in which this claim is effective. We can marvel at the product and admire the views of Paris, Barcelona, Hong Kong and Shanghai in part because this urban spectacle hides the processes and the human labour that went into its production. Capital does not, apparently, want to have its own distinctive image. Judging from anti-capitalist cartoons, it would be far from flattering! The city landscape of capitalism exists as a diversionary image of another world closer to some transcendental sense of human longing and desire. To look upon Venice, Rome, Istanbul, San Francisco, Brasilia, Cairo or Lagos is to look upon the hopes, achievements and chronic failures of that human endeavour. And it is not only the great cities that we are talking of here. The different rural landscapes that have
been carved out around the world can inspire as much affection, loyalty and admiration as any city. The English countryside, the French
paysage
, the Tuscan villages, the Argentinian pampas, the rolling plains of the Tigris valley in Anatolia, the endless cornfields of Iowa, the soya bean plantations of Brazil, all form palimpsests of the human endeavour increasingly though by no means uniquely mobilised by and for capital.

How powerful a force has uneven geographical development been for challenging capital to reinvent itself? Without uneven geographical development capital would surely have stagnated, succumbed to its sclerotic, monopolistic and autocratic tendencies and totally lost legitimacy as the dynamic engine of a society that has pretences to being civilised even as it is in danger of heading towards barbarism. Unleashing interurban, interregional and international competition is not only a primary means whereby the new comes to supplant the old, but a context in which the search for the new, billed as the search for competitive advantage, becomes critical to capital’s capacity to reproduce itself. Above all, uneven geographical development serves to move capital’s systemic failings around from place to place. Those failings are a perpetually moving target.

The homogeneity now being imposed by an international order dominated by the central banks and a few international institutions, such as the IMF, is from this perspective potentially devastating for capital’s future chances of survival. Capital could not long survive the advent of a strong centralised global government unless, as has happened in China, that government not only orchestrated but liberated interregional and interurban competition. Given the constraints now imposed upon them by the international disciplinary apparatus, there is no chance that Greece, Portugal, Spain and Italy can rise from the ashes as did West Germany and Japan after the Second World War to reinvigorate the capitalist dynamic. They may recover somewhat, but it cannot be anything other than an anaemic recovery. Whether unchaining uneven geographical development can today work by itself as a panacea for capital’s malaise is doubtful, given the storm clouds of systemic stagnation that are gathering
strength and darkening the future. Instead, we see an emergent unholy alliance between state powers and the predatory aspects of finance capital to create a form of ‘vulture capitalism’ that is as much about cannibalistic practices (economies of dispossession) and forced devaluations as it is about achieving harmonious global development. The vultures, like the hedge funds and the private equity funds, will feed off the destruction of ways of life in whole territories if necessary.

Capital survives not only through a series of spatio-temporal fixes that absorb the capital surpluses in productive and constructive ways, but also through the devaluation and destruction administered as corrective medicine to those who fail to keep up and who fail to pay off their debts. The very idea that those who irresponsibly lend should also be at risk is, of course, dismissed out of hand. That would require calling the wealthy property-owning classes everywhere to account and insisting that they look to their responsibilities rather than to their inalienable rights to private property and accumulation without limit. The sinister and destructive side of spatio-temporal fixes (just look at how Greece is being pillaged and devastated) becomes just as crucial to capital as its creative counterpart in building a new landscape to facilitate the endless accumulation of capital and the endless accumulation of political power.

So what, then, should an anti-capitalist movement make of all this? It is first vital to recognise that capital is always a moving target for opposition because of its uneven geographical development. Any anti-capitalist movement has to learn to cope with this. Oppositional movements in one space have often been defanged because capital moved to another. Anti-capitalist movements must abandon all thoughts of regional equality and convergence around some theory of socialist harmony. These are recipes for an unacceptable and unachievable global monotony. Anti-capitalist movements have to liberate and coordinate their own dynamics of uneven geographical development, the production of emancipatory spaces of difference, in order to reinvent and explore creative regional alternatives to capital. Different social movements and resistances are emerging
from within the framework of capital’s uneven geographical development, from Stockholm and Cairo to São Paulo, Shanghai, Paris and London. These constitute a mosaic of different but loosely interconnected seedbeds for transformations of capitalism towards an anti-capitalist future. How they might be put together is the question. We live in chaotic and volatile times, particularly with respect to uneven geographical developments. It is not unreasonable to expect that resistances and oppositions will be equally chaotic, volatile and geographically specific.

An analysis of the Internal Revenue Service income tax returns for New York City in 2012 showed that the average income of the top 1 per cent in that year was $3.57 million, while half of the population in this extremely high-rent and high-cost-of-living city were trying to get by on $30,000 a year or less. In three days the ultra rich made more money than most New Yorkers made in a year. By any standards, this level of income inequality is astonishing, surely making New York City one of the most unequal cities in the world. On the other hand these figures should not surprise anyone, given the enormous earnings of the leading hedge fund managers (five of whom earned, in the wake of the crisis, more than $3 billion each in 2009) and the huge bonuses customarily doled out by the leading banks in the city. Nationally, as might be expected, the income disparities are nowhere near as dramatic, even though they had been increasing markedly since the 1970s or so.

There is no point here in attempting anything other than a highly simplifed account of aggregate global trends in inequalities of wealth and income. Struggles over distribution of the social wealth have been incessant throughout the history of capitalism. Outcomes have varied greatly from one state, region or city to another, as different groups have struggled for advantage against others as well as against dominant groups and classes for what they regard as their fair and proper share of the product of social labour. Given the powers of the state to extract taxes and to redistribute wealth and income, much has depended on which faction or political alliance holds state power and what it does with it.