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Where is capitalism going?

Eric Hobsbawm, Age of Extremes: The Short Twentieth Century 1914-1991, Michael Joseph, London, 1994. xii + 627 pp., £19.95 hb., 0 7181 3307 2.

Giovanni Arrighi, The Long Twentieth Century: Money, Power and the Origins of Our Times, Verso, London, 1994. 416 pp., £39.95 hb., £14.95 pb., 1 85984 915 6 hb., 1 85984 015 0 pb.

In marked contrast to liberal complacency about the future of global capitalism, both Arrighi and Hobsbawm conclude their otherwise sharply contrasted studies of the twentieth century with broadly similar warnings about the dangers of ‘the escalating violence that has accompanied the liquidation of the Cold War world order’ (Arrighi), and the need for a new political project to counteract the approaching ‘darkness’ (Hobsbawm). Sharing a profound scepticism about – even hostility to -the kind of argument made notorious by Fukuyama, Arrighi and Hobsbawm argue that capitalism has reached some kind of historical turning point, beyond which it cannot survive in anything like its present form. In both cases, this sense of crisis registers much more than the dislocations and transformations attendant on the ends of the Cold War. On the one hand, Arrighi suggests that we are reaching the end point of a succession of hegemonies which have progressively expanded the scope of the capitalist world economy. On the other, Hobsbawm speaks of a ‘landslide’ in a ‘world which has lost its bearings’, and which is sliding towards a crisis ‘not … of one form of organising societies, but of all forms’.

These are bold claims and they are, at first glance, perhaps difficult to take seriously. But they are advanced in a reasoned and cautious manner, without any accompanying confidence that a revolutionary alternative is ready to hand. Indeed, it is the very fact that such dystopian conclusions emerge from positions which have no credence in revolutionary alternatives that invites further scrutiny. For the situation with which we are presented is as refreshing as it is perplexing. It is refreshing in so far as Arrighi and Hobsbawm seek to demonstrate that global capitalism is in crisis by means of an analysis of historical capitalism, rather than by short-circuiting the issue with assertions about the anticipated revolutionary role of a historical subject. But it is equally perplexing because the idea of capitalist crisis (understood not as local turmoil, but as global dissolution), in the absence of a revolutionary challenge, seems hard to fathom.

What, then, are the grounds offered for the claim that global capitalism has reached an epochal turning point? Let us begin with Hobsbawm’s history of the ‘short twentieth century’ (1914-91). This is by no means an easy work to discuss. As a ‘participant observer’ for most of the century, whose political formation and touchstone of moral and political judgement lie in the anti-fascist Popular Front, and as a professional historian of the ‘long nineteenth century’, Hobsbawm brings both a specific structure of political imagination and a particular reading of the course of capitalist history to bear on his account of the twentieth century. Moreover, since the cause and movement to which Hobsbawm was committed -historical Communism – has ended the century in ruins, it is perhaps inevitable that his reflections, for all their occasional brilliance and wealth of insight, are partial, distorted and uneven. Though there is little in the work that could be called autobiographical, the moral and political stance of Hobsbawm as participant exercises a powerful sway over the organization of the argument as a whole and the selection of particular emphases in the material.

At the most general level, Hobsbawm’s treatment is organized around a periodization of capitalist development from its general crisis in the ‘Age of Catastrophe’, via its subsequent reform and unparalleled global expansion during the ‘Golden Age’, to its loss of bearings and erosion of normative regulation in the contemporary ‘Landslide’. However, while the logic of this argument lies in a characterization of the course of capitalist socio-economic development, the overall narrative is conducted in a rather different register – in terms of the political and ideological conflict between capitalism and Communism. These somewhat discrepant principles of composition are held together by a twofold claim on behalf of historical Communism: first, that the apparent strength of the Communist challenge to the capitalist order was a reflection of capitalist weakness; and second, that Communism nevertheless helped to save capitalism from itself, both from without, through the Soviet defeat of fascism, and from within, via political incentives to ameliorative currents of reform. In turn, this assessment of the Communist experience rests upon an identification of both liberal capitalism, especially as reformed by social democracy, and historical Communism as the legitimate heirs of the Enlightenment, in contrast to the forces of reaction, ranging from the authoritarian right to the exclusivist claims of identity politics and contemporary nationalism. These differing threads do not always combine readily and consistently, and it was perhaps only in the conjuncture of the Popular Front that they could have been woven in an apparently seamless unity. For, in other respects, do they not exist in some tension with one another? Considered as a global process, can the historical development of capitalism, from the eighteenth century through to the First World War, be un-problematically assimilated to the progress of ‘reason’? Marx, to say nothing of Max Weber, certainly did not think so. Was Stalinism simply another variant and embodiment of Enlightenment progressivism? Hobsbawm’s evasive account of Stalinism, both domestically and internationally, suggests that he is not wholly comfortable with such a judgement. Are the contested claims of identity as manifestly antithetical to the universal norms of reason as Hobsbawm implies? After all, nationalist movements played a powerful role in the nineteenth century, and not all the claims of identity politics are inherently particularistic. These are no doubt complex questions, and it would be hard to offer a simple ‘yes’ to any of them. And yet something like that is required to sustain Hobsbawm’s depiction of an epochal crisis of capitalism in the contemporary period.

Stated positively, Hobsbawm’s case for the ‘Landslide’ of contemporary capitalism is simple enough: the global economy is out of control, having outgrown the national economies ‘defined by the politics of territorial states’, and the mixture of universal norms and traditional social relationships that once provided the basis of progressive political regulation, on the one hand, and the glue of social order, on the other, are under threat from an antinomian and nihilistic culture. Both of these trends – the globalization of production and the breakdown of social and cultural stability – are the product of a relentless commodification of human existence, generated by the very material successes of capitalism in its Golden Age. In these circumstances, and confronted with a combined demographic and ecological challenge, capitalism appears to lack the resources for renewal and stability. On this account, then, it is not an internal logic of contradiction and class struggle that threatens the survival of capitalism. Instead, the breaching of its outer limits – political, cultural and now even ecological – by the sheer power of commodification betokens its potential dissolution. The logic of the market is self-destructive, ruthlessly consuming all that it encounters, including those external sources of political, social and cultural support that once provided it with a degree of stability.

Implicit in this analysis are a substantive thesis and a theoretical claim. The substantive thesis is that it was the admixture of pre-capitalist and pre-industrial traditions to the logic of the market that enabled capitalist societies to function. The theoretical claim is that pure logic of the market is self-destructive, rather than self-correcting. The evidence for both is to be found negatively in the interwar depression, and positively in the success of capitalism in its Golden Age. In the interwar years, the inadequacies of a private international financial system, and the absence of international leadership by a hegemonic power, transmitted the US depression across the globe; while the impotence of political liberalism in the face of the slump bolstered the power of fascist and Communist alternatives. In the Golden Age, by contrast, capitalism prospered when it broke with economic and political liberalism under pressure from the interwar experience, the example of Soviet Communism, and the organizational initiatives imposed by US leadership in the Cold War international system.

There is much to be said in favour of this kind of analysis. But in what sense can the stabilizing influences in capitalist development be seen as external to the logic of capitalist society? And how far did such external arrangements prove stabilizing? Could one not argue the converse? In other words, the main sources of stability within capitalist societies derive from logics internal to their development – perhaps from the introduction of the mass of the population into political participation and the regulative demands thereby imposed upon the state; and the main barriers to capitalist development, and the sources of its periodic instabilities, are a result of the external resistance that its expansion has generated.

Hobsbawm does not really consider these possibilities. The substantive reasons for this neglect have much to do with a stance that is often difficult to disentangle from a form of nostalgia: for the stabilizing role of Communist forms of organization and for traditional cultural – and especially kinship – relations. Leaving these particular attachments aside, however, what conception of capitalism underpins Hobsbawm’s analysis? The answer is simple, but surprising: Hobsbawm here employs a concept of capitalism, and especially of capitalist crisis, that owes more to Karl Polanyi than to Karl Marx. Capitalism is theorized primarily in terms of markets, and capitalist crisis is seen to result from the absence of non-market norms and institutions. This is surprising, not because a Marxist historian cannot learn from Polanyi, but because so much of Hobsbawm’s outstanding trilogy on the long nineteenth century is a major advance on the latter’s account of The Great Transformation, being an exploration of capitalist society, demonstrating how capitalist transformation uproots and reshapes culture and politics quite as much as socio-economic production, and also how these things ‘hang together’.

Indeed, probably the single biggest omission from Age of Extremes is any sustained analysis of the ways in which the reconstruction of the world market and the consolidation of the nation-state system in the Golden Age made the structures that Hobsbawm analysed so brilliantly in The Age of Capital 1848-1875 – those of the capitalist world market and the liberal state form -the near universal, as well as dominant, features of the international system. For the enduring achievement of the Golden Age, and specifically the project of US hegemony within it, might be seen as the fashioning of an international system in which sovereignty and the relatively free mobility of capital have been reconciled through the global spread of capitalist relations of production, on the one hand, and the growing dominance of liberal-capitalist state forms, on the other. The world announced in the Communist Manifesto is now (some 150 years later) upon us; and, in the absence of a political challenge to its basic structural principles, there is no reason to suppose that it won’t be reasonably stable. It may not look very nice, judged from the standpoint of the highest achievements of European social democracy, but that is another matter. Contra Hobsbawm, if the working class will not dig capitalism’s grave, there is precious little evidence that the commodity form will take up the shovel for it.

Notwithstanding the many differences between Hobsbawm’s history of the short twentieth century and Arrighi’s theory of the cycles of capitalist hegemony, from the Genoese in the late sixteenth and early seventeenth centuries, through to the American in the twentieth, there are important points of contact between the two works. Arrighi attempts to analyse the historical development of world capitalism from the vantage point of its successive cycles of expansion, crisis and restructuring, and renewed and expanded reproduction. In order to accomplish this, he focuses on a series of ‘regimes of accumulation’, supporting particular alliances of state and capitalist interests, which have been linked ‘to processes of state formation on the one side, and of market formation on the other’. Each of these ‘systemic cycles of accumulation’ has been associated with the hegemony of a particular state, where hegemony is understood not as a cycle of rise and fall within an unchanging structure, but as a process of active construction and leadership in the international system.

The peculiar novelty of Arrighi’s account lies in the specific direction taken by the analysis: whereas Marxist analyses of accumulation and hegemony have typically moved ‘below’ the sphere of the market to the relations of production, Arrighi proposes to move ‘above’ the market, where ‘the possessor of money meets the possessor, not of labour power, but of political power’. This undoubtedly yields some illuminating insights, and Arrighi has much to say that is interesting about the contrasting character of British and US hegemony and the present decline of US leadership in the face of the rise of East Asian capitalism. But these gains are bought at the price of a radically incomplete account of capitalist reproduction and crisis. The systemic cycles of accumulation associated with successive hegemons are divided by Arrighi into a phase of material expansion, in which the advance of money-capital is subordinated to the expansion of productive activity; and a period of financial expansion, during which finance is severed from production and seeks speculative gains. In its progressive phase, the hegemon configures market relations to encourage the former – productive growth and an expansion of the market; while in its decline, it promotes the latter – a flight of capital from real material expansion. Profitable activity is thus portrayed as the result of a favourable articulation of material expansion and political power, which is destined to prove transient as the reinvestment of profit eventually results in margins falling faster than the growth of the market increases economies of scale. This logic is seen to operate across all the cycles since the Genoese, and its course is not markedly altered by the advent of capitalist production in the British cycle during the nineteenth century.

Specifically, Arrighi reinterprets Marx’s remarks about the real barrier of capitalist development being capital itself – a point about the contradictory character of use-value and exchange-value under capitalist relations of production – ‘as reflecting the same underlying contradiction between the self-expansion of capital and the material expansion of the world economy’. But this means that the self-expansion of capital is merely posited by Arrighi (whereas Marx claimed to explain it); and that Marx’s point about the contradictory nature of capitalist development, arising from the fact that capital has seized hold of production, is entirely missed in favour of what amounts to a quantity theory of competition and a theory of profit based on politically regulated unequal exchange. Arrighi’s conclusion on the future of capitalism follows naturally enough: if US hegemony is now waning and is incapable of imposing a new imperial order, and if it is irreplaceable because the new poles of accumulation (East Asia) lack the state-military power necessary for hegemonic status, then the resulting absence of authoritative political regulation of the world market must signal an end to the conditions for capitalist expansion. In the absence of means for generating a new cycle of expansion through hegemonic restructuring of the world market, anarchy, chaos and escalating violence are the likely consequences.

Thus, just as Hobsbawm sees the end of the Cold War as presaging not the triumph of global capitalism, but its incipient dissolution into ‘darkness’, so Arrighi foresees rivalry and conflict as the face of the future. Once again, the root of this understanding lies in a conception of capitalism as a self-expanding market which requires external (hegemonic) regulation in order to prosper. Without this externally imposed order and direction, capitalist reproduction is inherently unstable and prone to crisis. Even in the absence of a systemic political challenge to capitalism, this lack of normative and institutional control threatens its survival. But in both cases the focus on the anarchical character of capitalist markets neglects two other critical aspects of contemporary global capitalism. In the first place, capitalist relations of production are now the universal and dominant form of productive arrangements; for all the continuing conflicts over their reproduction, they currently face no systemic, organized alternative. And second, the global dominance of the liberal state form, with greater or lesser additions of a welfare component, is for now an accomplished fact. Together, these secure a formidable capitalist hegemony that shows little sign of retreat in the face of the problems of market instability rightly emphasized by Hobsbawm and Arrighi.

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