Catching up on some of the reading I’ve missed over the last week, I notice there’s a new piece by Jonathan Nitzan and Shimshon Bichler, the interesting Canadian-Israeli economist duo. I’ve always been amazed by their ability both to precisely locate the problems with neoclassical and leftist-Marxist diagnoses of contemporary capital and to offer up such narrow, modest accounts of their own. Same thing here, as they explain that the war-on-everything can be accounted for by differential accumulation and competition. In other words, a different kind of economism. But still, I like where the following quote starts, and perhaps differential accumulation does have some explanatory power, particularly if it’s integrated with George Caffentzis’s work(pdf) on oil profits and the Iraq war.
The New Wars
The demise of the welfare-warfare state opened the door for the new rhetoric of neo-liberalism. Proponents of free markets hailed the new regime for its peaceful tendencies. Its detractors agreed – but only partly. On the one hand, they concurred that neoliberalism, in its quest to secure free trade and open capital flow, tries to establish political stability and international peace. On the other hand, they faulted neoliberalism for its invisible violence, inflicted through hyper exploitation, mass poverty, rising inequality, economic uncertainty and human insecurity.
Both the adherents and the critics, therefore, were surprised by the sudden bellicosity of the early twenty-first century. Old theories of imperialism and militarism were quickly dusted off and tucked onto neoliberalism. Instead of productivity miracles and No Logo, analysts started to talk about “new imperialism” and “neoliberal wars.”
For the most part, though, these hybrid theories are misleading. The new conflicts of the twenty-first century – the “infinite wars,” the “clashes of civilization,” the “new crusades” – are fundamentally different from the “mass wars” and statist military conflicts that characterized capitalism from the nineteenth century until the end of the Cold War. The main difference lies not so much in the military nature of the conflicts, as in the broader role that war plays in capitalism.
To begin with, in a world open for business there is no need to physically conquer new territory – not for raw materials and not for additional markets (note that Iraqi oil production has nearly ceased since its conquest in 2003, while its market for foreign imports, negligible to begin with, has contracted).
The same goes for military spending: with the share of foreign profits soaring, there is no longer a business imperative for high military expenditures. While U.S. military budgets have risen marginally in the wake of the new wars – from 3.9 percent of GDP at the end of Clinton’s presidency to 4.7 percent presently – this is an increase whose effect on aggregate demand is insignificant by historical standards.
The U.S. attacks of the 2000s also make little military sense. Countries with proven nuclear capabilities, such as Pakistan and North Korea, have been left alone, while others that presented no real danger – specifically Afghanistan and Iraq – were invaded, occupied and now tie down much of the U.S. standing army, with no end in sight.
Finally, the televised war footing and constant talk about terrorism may have frightened the Western population. But unlike the success of nationalist-liberal ideologies during the two world wars and the Cold War that followed, the new rhetoric of infinite war hasn’t made the masses fall for neoliberal capitalism.
The wars of the 2000s are indeed new. And they are new, at least in part, because capitalism itself has changed.
The New Order of Capital
The central change concerns the underlying nature of capital, a transformation that began in the late nineteenth century but became evident only recently.
Existing theories, anchored in the reality of the early nineteenth century, continue to examine capital from the “material” perspective of consumption and production. Neoclassical economists anchor their analysis in utility, while classical Marxists base it on labor time. In contrast to these approaches, we suggest that, under modern conditions, capital can no longer be viewed as a “material” entity. As we see it, capital represents neither neoclassical utility nor Marxist abstract labor, but rather power – the power of its owners to shape the process of social reproduction as a whole.
Based on a power understanding of capital, we argue, first, that the analysis of capitalism should focus not on capital “in general” and many capitals “in competition,” but specifically on the dominant capital groups at the centre of the political economy. Second, we claim that accumulation should be understood not absolutely, but differentially – that is, in reference to the ability of dominant capital to “beat the average” and increase its relative power. […]