Amin urges audacity

Audacity, More Audacity
by Samir Amin

The historical circumstances created by the implosion of contemporary capitalism requires the radical left, in the North as well as the South, to be bold in formulating its political alternative to the existing system.

The purpose of this paper is to show why audacity is required and what it means.

Why Audacity?

1. Contemporary capitalism is a capitalism of generalized monopolies.

By this I mean that monopolies are now no longer islands (albeit important) in a sea of other still relatively autonomous companies, but are an integrated system.

Therefore, these monopolies now tightly control all the systems of production.

Small and medium enterprises, and even the large corporations that are not strictly speaking oligopolies are locked in a network of control put in place by the monopolies.

Their degree of autonomy has shrunk to the point that they are nothing more than subcontractors of the monopolies.

This system of generalized monopolies is the product of a new phase of centralization of capital in the countries of the Triad (the United States, Western and Central Europe, and Japan) that took place during the 1980s and 1990s.

The generalized monopolies now dominate the world economy. ‘Globalization’ is the name they have given to the set of demands by which they exert their control over the productive systems of the periphery of global capitalism (the world beyond the partners of the triad). It is nothing other than a new stage of imperialism.

2. The capitalism of generalized and globalized monopolies is a system that guarantees these monopolies a monopoly rent levied on the mass of surplus value (transformed into profits) that capital extracts from the exploitation of labour.

To the extent that these monopolies are operating in the peripheries of the global system, monopoly rent is imperialist rent.

The process of capital accumulation – that defines capitalism in all its successive historical forms – is therefore driven by the maximization of monopoly/imperialist rent seeking.

This shift in the centre of gravity of the accumulation of capital is the source of the continuous concentration of income and wealth to the benefit of the monopolies, largely monopolized by the oligarchies (‘plutocracies’) that govern oligopolistic groups at the expense of the remuneration of labour and even the remuneration of non-monopolistic capital.

3. This imbalance in continued growth is itself, in turn, the source of the financialization of the economic system.

By this I mean that a growing portion of the surplus cannot be invested in the expansion and deepening of systems of production and therefore the ‘financial investment’ of this excessive surplus becomes the only option for continued accumulation under the control of the monopolies.

The implementation of specific systems by capital permits the financialization to operate in different ways:

the subjugation of the management of firms to the principle of ‘shareholder value’

the substitution of pension systems funded by capitalization (Pension Funds) by systems of pension distribution

the adoption of the principle of ‘flexible exchange rates’

the abandonment of the principle of central banks determining the interest rate – the price of ‘liquidity’ – and the transfer of this responsibility to the ‘market.’

Financialization has transferred the major responsibility for control of the reproduction of the system of accumulation to some 30 giant banks of the triad. What are euphemistically called ‘markets’ are nothing other than the places where the strategies of these actors who dominate the economic scene are deployed.

In turn this financialization, which is responsible for the growth of inequality in income distribution (and fortunes), generates the growing surplus on which it feeds.

The ‘financial investments’ (or rather the investments in financial speculation) continue to grow at dizzying speeds, not commensurate with growth in GDP (which is therefore becoming largely fictitious) or with investment in real production.

The explosive growth of financial investment requires – and fuels – among other things debt in all its forms, especially sovereign debt. When the governments in power claim to be pursuing the goal of ‘debt reduction,’ they are deliberately lying. For the strategy of financialized monopolies requires the growth in debt (which they seek, rather than combat) as a way to absorb the surplus profit of monopolies. The austerity policies imposed ‘to reduce debt’ have indeed resulted (as intended) in increasing its volume.

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