Upload
jan-loheit
View
242
Download
3
Embed Size (px)
Citation preview
The World Market, Variegated Capitalism, and the Crisis of European Integration1 Bob Jessop
Drawing on Marx, the regulation approach, and the varieties of capitalism literature,
I present an alternative to theories that either posit one world market with a singular
logic or else suggest that there are several varieties of capitalism, each with its own
distinctive logic. The alternative to be presented is that we have a variegated
capitalism within a world market organized in the shadow of the ecological
dominance of neo-liberalism (now in crisis). The specific features of ‘variegated
capitalism’ will be developed and related to the notion of ecological dominance. I
further argue that, even in crisis, neo-liberalism continues to have path-dependent
ecological dominance (i.e., causes more problems for other accumulation regimes
and modes of regulation than they can cause for it). The theoretical case is
illustrated from the development of European integration from its initial stages of
integration among six “Rhenish” economies to an incoherent variegated capitalism
organized increasingly at EU level along neoliberal lines that have proved
inconsistent with the expanded reproduction requirements of regional, national,
cross-border, and transnational economies. This in turn has major implications for
the roles of states at different scales from the local through regional and national to
supranational states and international regimes. This is particularly evident in the
repercussions of the US crisis and the crises in Eastern and Central Europe.
1. The World Market
All those laws developed in the classical works on political economy, are
strictly true under the supposition only, that trade be delivered from all
fetters, that competition be perfectly free, not only within a single country, but
upon the whole face of the earth. These laws, which A. Smith, Say, and
Ricardo have developed, the laws under which wealth is produced and
distributed -- these laws grow more true, more exact, then cease to be mere
abstractions, in the same measure in which Free Trade is carried out. ...
Thus it can justly be said, that the economists -- Ricardo and others -- know
1
more about society as it will be, than about society as it is. They know more
about the future than about the present (Marx 1976 <1847>: italics added).
One could add that Marx, too, knew more about our future than he knew about his
present. For he argued that “the most developed mode of existence of the
integration of abstract labour with the value form is the world market, a place in
which production is posited as a totality together with all its moments, but within
which, at the same time, all contradictions come into play” (Marx 1973: 227). The
current crisis of a global economy organized predominantly on neo-liberal lines
certainly seems to vindicate this position. For neo-liberal globalization is associated
with the privileging of profit-oriented, market-mediated economic calculation at the
expense of wider concerns with use-value, sustainable development, or the
repercussions of unbridled accumulation on the wider society. Conversely, when
Marx was writing Capital, capitalism was still being formed, production was not yet
posited as a totality, and the world market was far from fully integrated. Despite
claims that the world market was more integrated in 1913 than in the interwar years
or the 1990s, we can say that it was more integrated in the last quarters of both the
19th and 20th centuries than it was when Marx was penning his critique of political
economy. The acceleration of world market integration in real time, especially in the
fields of global finance and world money, also marks a qualitative change in the
dynamics of the world market compared with the nineteenth century. Thus, if we
adopt a world-historical perspective on the development of the world market, the
latter’s increasing integration under the dominance of neo-liberalism should make
Marx’s analysis especially relevant in the current period.
Marx emphasizes that the world market ‘is directly given in the concept of capital
itself’ because the world market constitutes the presupposition of social reproduction
‘as well as its substratum’ (Grundrisse: 163, 228).2 Indeed, as he later notes in
Capital, 'it is the tendency of the capitalist mode of production to transform all
production as much as possible into commodity production. The mainspring by
which this is accomplished is precisely the involvement of all production in the
capitalist circulation process. … The intervention of industrial capital promotes this
transformation everywhere [and] with it the transformation of all direct producers into
wage-labourers too' (Capital I: Ch. IV, italics added).3 Elsewhere Marx notes that
2
capitalist production is unthinkable without foreign trade (1978: 456). This implies
that circulation - not production - is the initial driving force behind the formation of
the world market.4 However, while the development of the world market is promoted
initially by world trade, it is radically reinforced by the rise and consolidation of big
industry: "[t]he immanent necessity of this mode of production to produce on an
ever-enlarged scale tends to extend the world-market continually, so that it is not
commerce … that revolutionizes industry, but industry that constantly revolutionizes
commerce. Commercial supremacy itself is now linked with the prevalence to a
greater or lesser degree of conditions for a large industry. Compare, for instance,
England and Holland. The history of the decline of Holland as the ruling trading
nation is the history of the subordination of merchant's capital to industrial capital
(Capital III: XX). Whereas merchant capital continually compares purchase and sale
prices for its merchandise (the source of mercantile profit),5 '[t]he industrial capitalist
always has the world-market before him, compares, and must constantly compare,
his own cost-prices with the market prices at home, and throughout the world"
(Capital III: XX).6
One might now add, of course, that it is the increasing integration of financial as well
as productive capital that has enabled the logic of capital to operate more
completely than ever before on a global scale. As Marx noted, the effective
operation of the world market requires the full development of the credit system and
of competition on the world market (Capital III: VI). For
the credit system accelerates the material development of the productive
forces and the establishment of the world-market. It is the historical mission
of the capitalist system of production to raise these material foundations of
the new mode of production to a certain degree of perfection. At the same
time credit accelerates the violent eruptions of this contradiction - crises -
and thereby the elements of disintegration of the old mode of production
(Capital III: XXVII).
Indeed, one could argue that the continuing internationalization and globalization,
especially of financial capital, are crucial processes in enabling the logic of capital to
operate more completely than ever before on a global scale. And, as recent events
in global credit markets indicate, this has been reinforced by developments in
financial instruments such as securitization and derivatives (see below).
3
The increased relevance of Marx’s analysis of capital is all too often disguised by
the use of the term 'globalization' to describe the contemporary world economy and
its implication that there is something qualitatively different between the present
situation and earlier periods of mercantilism, free trade imperialism, and imperialism
based on territorial conquest and trade blocs7. Increasing integration does not, of
course, exclude uneven development and temporary leads and lags but these
should be seen in part as factors driving neo-liberal globalization forward rather than
as fundamental obstacles that will sooner or later bring it to a halt. One aspect of
this relevance, also too often ignored, is that the true limits to capital accumulation
reside in the capital relation itself and in its increasing destruction of nature rather
than in short-term fluctuations, medium-term cycles and crises, and long-term
waves of accumulation. The expanded reproduction of the capitalist mode of
production has long constituted the most pervasive and powerful influence over the
dynamic of the world market. The latter is 'the most developed mode of existence of
the integration of abstract labour with the value form is the world market, a place in
which production is posited as a totality together with all its moments, but within
which, at the same time, all contradictions come into play’ (Marx 1973: 227). The
realization of all these contradictions is crucial to understanding the dynamics of
world society. It remains to consider whether this justifies analyzing the logic of
capital at the level of the world market qua world system.
The World System (to be elaborated in second draft ) Let us consider one attempt to do this: Wallerstein’s world system theory. This
posits a single logic of capital based on the reproduction of a unitary world system
with a single division of labour and multiple cultural systems and within which
capitalist powers engage in economic and military competition to capture surplus
produced through this division of labour. Wallerstein regards exploitation as
occurring at a world scale, based on the threefold division of the world into a centre,
semi-periphery, and periphery. The core comprises those economies that are
technologically advanced, produce capital-intensive goods and advanced services
(and enjoy a relative monopoly in their export to the semiperiphery and periphery);
the semi-periphery comprises industrialized economies with significant urban areas
4
(such as Brazil or South Africa) but lack the power and dominance of the core
economies and have significant areas of rural poverty; and the periphery provides
raw materials, primary products, and cheap labour power to the semi-periphery and
the core. While this threefold division is fixed, positions within it are not. Economic
and social formations can move between them (albeit typically in single rather than
double steps). Such mobility is shaped by the logic of the system plus players’
strategies. The ‘strength of the state machinery in core states is a function of the
weaknesses of other state machineries’. This is reflected in military competition as
well as economic competition, leaving peripheral formations open to intervention
through war, subversion, and diplomacy. Wallerstein also noted that there were
external economies that maintained their own economic systems based primarily on
internal commerce, which enabled them to stay outside the world system and,
perhaps, to escape from the logic of dependency and underdevelopment.
It would seem that world system theory has an important advantage in relation to
methodologically nationalist political economy in seeking to explain the development
of a given national or regional economic and social formation in terms of how it fits
into the overall logic of the world system. This seems to correspond to Marx’s
account of the world market. The fate of individual economies is shaped not only by
its own resources and capacities but also by those available in other parts of the
world system and, in the case of the periphery, on military domination and
diplomatic divide-and-rule strategies as well as economic exploitation that produces
underdevelopment. But this claim comes at the price of assuming the relative
constancy of the logic of the world system rather seeing it as emergent and variable.
While there may be a directional tendency in the logic of capital accumulation, this
does not guarantee a specific threefold division of international labour. This entails a
crude a priori simplification compared with Marx’s more nuanced analysis of the
world market as the final step in the concrete-complex understanding of the
emergent logic of capital accumulation on a world scale – a step reflected in the fact
that the theme of the world market and crisis was planned to inform the final volume
of Capital and as such constitutes one of its notorious ‘missing books’.
Referring to the world market in Marx’s sense of the term commits us to the view
that capital accumulation can be commensurated and even integrated on a world
5
scale. It does not commit us to the proposition that there is a single, generic, unified
mode of production. As Marx notes in the 1857 Introduction, there is 'no production
in general' or 'general production', only a 'particular branch of production' and the
'totality of production' (1973: 24). Moreover, particular production is always
associated with 'a certain social body, a social subject' (ibid). This argument can be
re-specified to capitalism: there is no such thing as capitalist production in general
or general capitalist production, only particular branches of capitalist production and
the totality of capitalist production. Adopting contemporary terminology this might
seem to justify distinguishing analytically among varieties of capitalism (VoC) and
exploring their interaction within the framework of the world division of labour.
Varieties of Capitalism or Variegated Capitalism Does the notion of varieties of capitalism provide a superior alternative to the theory
of a singular world system? While it does allow for greater contingency in the
dynamic of capital accumulation, there are four main grounds for refusing to adopt
this view without qualification.
First, the VoC approach is overly concerned with distinct (families of) national
models of capitalism, treating them as rivals competing on the same terrain for the
same stakes. This is, of course, a form of methodological nationalism in which
national states and their boundaries serve to define the scope of different models.
This focus on territorial logics clearly conflicts with the logic of the space of flows
associated with the world market (cf. Harvey 2003; for a critique, Jessop 2006).
Second, these supposed varieties of capitalism are often studied in terms of their
respective forms of internal coherence on the false assumption that they can and do
exist in relative isolation from each other. This problem cannot be solved by invoking
the key role of national states in shaping institutional and regulatory frameworks for
all economic players in a national economy – especially as state formations on other
scales and networked international regimes also have increasingly important roles.
Third, and relatedly, this approach tends to study the temporal rhythms and horizons
of VoC as internal, specific, short- or medium-term, unrelated to the long-term global
dynamic of capital. And, fourth, the VoC approach tends to assume that all varieties
6
are equal and, if one is more “productive” or “progressive”, it could and should be
copied, exported, or even imposed elsewhere. One qualification is appropriate here
for certain versions of the VoC, in which self-consistent models (liberal market or
coordinated market economies) are said to be more stable than hybrid models (Hall
and Soskice).
If the VoC approach risks reducing the logic of the world market to a mechanical
juxtaposition and interaction of ‘varieties of capitalism’, is it possible to synthesize
the world system thesis and VoC antithesis? One possibility is to analyze the logic
of capital in terms of ‘variegated capitalism’. This highlights how changing divisions
of labour in an increasingly integrated world market tend to create a single
variegated capitalism rather than reproducing a more or less enduring set of
national varieties of capitalism that fill potentially independent niches. This has
major implications for changing forms and functions of states viewed as specific
mechanisms of government and governance.
First, rather than describing and interpreting different forms of capitalism as if each
occupied a separate silo within a segmented world market or world society, it would
be better to explore the scope for rivalry, competition, antagonism, complementarity,
or co-evolution across different forms (cf. Crouch 2005) and their spatio-temporal
fixes within a wider international or global division of labour. This encourages the
identification and explanation of zones of relative stability in terms of their changing
complementarities, asymmetries, contradictions, and crisis-tendencies in a complex
‘ecology’ of accumulation regimes, modes of regulation, and spatio-temporal fixes.
Importantly, it also involves noting their respective capacities to displace and defer
contradictions and crisis-tendencies into the future and/or elsewhere into zones of
relative incoherence, instability and even catastrophe.
Second, a focus on internal coherence ignores the extent to which comparatively
successful performance in certain economic spaces depends not only on external
as well as internal conditions but also – and crucially – on the ability of a given
model to externalize costs onto other spaces and/or future generations (on the
significance of spatio-temporal fixes in this context, see Jessop 2002, 2006). This
includes the uneven ability to displace or defer contradictions, conflicts, and crisis-
7
tendencies to other places and times. In other words, zones of relative stability are
typically linked to instability in or beyond national spaces in a complex ecology of
accumulation regimes, modes of regulation, spatio-temporal fixes. Moreover, in
case this gives the misleading impression (associated with mainstream VoC work)
that competition among different models of capitalism is essentially pacific because
it is market-mediated as well as profit-oriented, one should note that competition can
also occur through predation, structural domination, and resort to military means.
Spatio-temporal fixes are rarely purely pacific solutions to structural contradictions,
strategic dilemmas but also extend to conflictual and/or coercive geo-economic and
geo-political institutions and practices.
Third, there is a double problem with the methodological nationalism that seems to
inform much of the varieties of capitalism literature. On the one hand, there is often
wide variation within any individual national economy across its different sectors
and/or regions, casting doubt on the national economy as an analytical unit and
raising questions about divisions of labour defined in terms of place and/or scale,
both within national frontiers and across them in transnational networks. And, on the
other hand, if we recognize that methodological nationalism is misleading even
when the significance of the national territorial state is invoked to justify this
assumption, then we should consider how variegated capitalism depends on inter-
scalar articulation and the role of government and governance on other scales
above, below, and transversal to the national scale. This is especially important
given the “relativization of scale” that characterizes the contemporary world market,
i.e., the loss of taken-for-grantedness of the primacy of the national scale in post-
war economic and political organization and the absence of an alternative scale that
exercises a comparable primacy. Indeed, a focus on national economies ignores
alternative socio-spatial configurations such as emerging supranational blocs, global
city networks, or global commodity chains. Interestingly, such cross- and intra-
national variations are connected to the socio-spatial configurations associated with
forms of capitalism as well as to the changing dynamic of the world market. These
patterns preceded, co-existed with, and/or have emerged following the relatively
short period (in world-historical terms) of the primacy of the national scale.
8
Fourth, concern with varieties of capitalism may lead to neglect of the market-
mediated competitive pressures and political initiatives that encourage convergence
among them, whether through European integration and harmonization and/or US-
sponsored expansion of networked, world market-friendly international economic
regimes. In this regard, states, the inter-state system, and international regimes are
critical factors in shaping VoC dynamics. In this context, neo-liberalism is not just
one variety of capitalism among others that has proved more or less productive and
progressive (or more or less inefficient and exploitative) and could be adopted
elsewhere with the same positive (or negative) results, as if the whole world
economy could be organized along these lines. An emphasis on ‘horizontal’
comparisons and/or competition among national or regional varieties of capitalism
diverts attention from the ‘vertical’ relations between core and periphery (Radice
1999; Wallerstein 1974, 1980) and ignores important asymmetries in the
competition and co-evolution among varieties of capitalism due to differences in
their capacities to shape the world market. In short, to paraphrase the well-known
revisionist principle in Orwell’s Animal Farm (1945), while all varieties of capitalism
are equal, some are more equal than others. The dominant model cannot be
generalized to all others. Thus, we must reject, as Radice (1999) argues, claims
about the suprahistorical superiority of one or another disembedded model of
capitalism that could then be adopted elsewhere. For example, not all economies
can establish their national money as the world currency and run massive and
growing trade deficits, not all national states can be military masters in a unipolar
world, and so on. This is not just a matter of logical compossibility.8 It also concerns
discursive-material, spatio-temporal compossibility, i.e., the substantive fit (or
otherwise) among varieties of capitalism. This involves not only the economic
competitiveness of a given form of capitalist organization but also the capacity of its
political regime(s) to promote this form in and beyond its frontiers in relations among
places, interscalar relations, and networks.
In short, to re-interpret the world market as 'variegated capitalism' improves, I would
argue, on two alternative claims that: (a) there is a single world system that,
operating through the logic of capitalist competition, tends to drive all capitals and
their associated 'space economies'9 towards convergence around a single model of
capitalism;10 or (b) there are only separate varieties of capitalism that co-exist within
9
a differentiated world economy. The growing integration of the world market makes
it especially inappropriate to study ‘varieties of capitalism’ in isolation and indicates
the conceptual use-value added of thinking in terms of variegated capitalism.
Expressed in terminology developed elsewhere (Jessop 2007, Jones and Jessop
2009), this can be read as a call to explore the structural coupling, co-evolution, and
mutual complementarities-compossibilities as well as the contradictions and mutual
exclusivities among varieties and stages of capitalism and their implications for the
future dynamic of capital accumulation on a world scale. In short, ‘variegated
capitalism’ at the level of the world market provides an important theoretical and
practical horizon for the study of the capital relation. This casts new light on Marx’s
claim that the world market is the arena at which all relevant forces interact. For he
did not refer thereby to a singular logic operating with singular directionality at the
global level (the mistake in crude versions of world system theory) but an emergent,
tendential, and synthetic logic.
The Uneven Development of Variegated Capitalism A dialectical analysis need not stop with the first synthesis – this would be too easy.
The move from varieties of capitalism to variegated capitalism runs the risk of
reproducing the assumption that all varieties of capitalism are equal even though
casual observation and theoretical first principles suggest that some varieties are
more equal than others. I will develop this argument in two steps. First, I consider
the heterogeneity and uneven development of the world market, refusing the idea
that the world market is an exclusively capitalist phenomenon subordinate to a
single logic. And, second, I elaborate the implications of the concept of ecological
dominance for an analysis of the development of variegated capitalism in a world
market organized in the shadow of neo-liberal, finance-led accumulation.
The formation of the world market must be seen as 'doubly tendential' on the
grounds that, first, the formation of the world market is itself tendential, subject to
leads, lags, and reversals; and, second, the world market, in so far as it is formed,
provides the global context in which all the laws of capital accumulation and their
overdetermination come to operate. Marx and Engels note both these tendencies.
For example, in The German Ideology (1845-46), they remark: ‘The movement of
10
capital, although considerably accelerated, still remained, however, relatively slow.
The splitting up of the world market into separate parts, each of which was exploited
by a particular nation, the exclusion of competition among themselves on the part of
the nations, the clumsiness of production itself and the fact that finance was only
evolving from its early stages, greatly impeded circulation' (1976: 56). They add that
this limitation was overcome in part by the rise of big industry, which
'universalized competition, established means of communication and the
modern world market, subordinated trade to itself, transformed all capital into
industrial capital, and thus produced the rapid circulation (development of
the financial system) and the centralization of capital. By universal
competition it forced all individuals to strain their energy to the utmost. It
destroyed as far as possible ideology, religion, morality, etc., and where it
could not do this, made them into a palpable lie. It produced world history for
the first time, insofar as it made all civilized nations and every individual
member of them dependent for the satisfaction of their wants on the whole
world, thus destroying the former natural exclusiveness of separate nations.
… Generally speaking, big industry created everywhere the same relations
between the classes of society, and thus destroyed the peculiar individuality
of the various nationalities. And finally, while the bourgeoisie of each nation
still retained separate national interests, big industry created a class, which
in all nations has the same interest and with which nationality is already
dead; a class which is really rid of all the old world and at the same time
stands pitted against it. Big industry makes for the worker not only the
relation to the capitalist, but labour itself, unbearable" (1976: 00).
Marx also examines uneven and combined development in occasional remarks on
differences in the national intensity and productivity of labour, the relative
international values and prices of commodities produced in different national
contexts, the relative international value of wages and money in social formations
with different degrees of labour intensity and productivity, the incidence of surplus
profits and unequal exchange, and so on (e.g., Marx, Capital I: Ch 12).
Thus variegated capitalism can only be a first, albeit important, step to analyzing the
world market in terms of an uneven and combined development that integrates not
11
only particular branches of capitalist production with their related 'social bodies' (or
forms of social embedding) but also a wide range of pre- or non-capitalist forms of
production into the logic of the world market. The totality of production includes
subsistence production, petty commodity production, household production, informal
productive and reproductive labour and, a fortiori, their dynamic interrelations with
capitalist production in all its variety. These modes of production and forms of labour
are unified, to the extent that they are, through the increasing 'ecological dominance'
[see below] of capital accumulation in the world order. Indeed, the more strongly
integrated is the world economy, the stronger do we find the contradictions of capital
accumulation operating on a world scale. This has positive and negative effects. For
uneven and combined development not only propels world market integration but
may also serve as fetter thereon. How this logic works itself out depends on the
relative strength of different circuits of capital and varieties of capitalism.
The concept of ecological dominance refers to the capacity of one system or
institutional order within a complex self-organizing ecology of systems or orders to
cause more problems for other systems (or orders) than they can cause for it (for a
fuller account of the concept, see Jessop 2007 and the appendix to this paper).
Ecological dominance can be understood either in terms of the relative weight of
different varieties of capitalism and/or in terms of the relative impact of different
circuits of capital. Thus one can ask about the uneven development and structural
coupling of different varieties of capitalism within a regional or global division of
labour (e.g., the Rhenish, Scandinavian, and liberal market models in European
economic space or the dominance of the liberal market model within the global
economy); or about the relative dominance of commercial, industrial, or financial
capital within circuits of capital on different scales. These aspects are typically inter-
related. Thus the ecological dominance of neo-liberal market coordination is a
function of the relative predominance of finance-led accumulation in neo-liberal
economies within the world market and of the relative ecological dominance of
financial capital within the global circuits of capital within an emerging world society.
The logic of financialization (wherever it occurs, i.e., not just in relation to US
financial capital, if, indeed, this can be identified as a distinct fraction of capital
outside the global financial system in general) undermines or restricts the operation
12
of economic determination in the first instance (i.e., the primacy of productive
capital) within the overall logic of capital accumulation. In contrast with the
structured coherence of Fordism and the post-Fordist knowledge-based economy,
the post-Fordist neo-liberal financial regime militates against the long-term
structured coherence of accumulation regimes and their modes of regulation. In
particular, it weakens the spatio-temporal fixes with which regimes based on
the primacy of productive capital manage the contradictions between fixity and
motion in order to produce zones of relative stability by deferring and displacing
their effects. This can be seen in the impact of financialization not only in Atlantic
Fordism but also in the export-oriented economies of East Asian and the viability of
import-substitution industrialization strategies in Latin America and Africa. The
destructive impact of financialization in this regard is reinforced through the neo-
liberal approach to accumulation through dispossession (especially the politically-
licensed plundering of public assets and the intellectual commons) and the dynamic
of uneven development (enabling financial capital to move on when the disastrous
effects of financialization weaken those productive capitals that have to be valorized
in particular times and places). It is also supported by the growing markets opened
for the ‘symbionts and parasites’ of the ecologically dominant fractions of capital in
their heartlands – associated in turn with their own forms of uneven development on
regional, national, and global scales.
Variegated Capitalism and European Integration Varieties of capitalism can be explored in terms of their responses to the
contradiction between the economy considered as a pure space of flows and the
economy as a territorially and/or socially embedded system of resources and
competencies. The liberal market economy is linked in ideal-typical terms to a liberal
state. It is important to note here that the liberal state also constitutes a form of
intervention in the organization of the market (Gramsci 1971; Foucault 2008) and, in
the current period, this is associated with policies that promote liberalization,
deregulation, privatization, resort to market proxies in the public sector,
internationalization, and cuts in direct taxes. The Rhenish version of the coordinated
market economy is linked to a neo-corporatist mode of state intervention, which
involves the state in modulating the balance of competition and cooperation, de-
13
centralized ‘regulated self-regulation’, a widening of the range of private, public, and
other ‘stakeholders’ in the pattern of corporatist negotiation, an expanded role for
public-private partnerships, policies to protect the core economic sectors in an
increasingly open economy, and efforts to maintain high levels of taxation to finance
social investment. Dirigiste (or statist) coordination of market economies involves in
turn resort to regulated competition, state guided national strategies rather than top-
down planning (indicative or prescriptive), increased governmentalized audit of
private and public sector performance, the expansion of public-private partnerships
under state guidance, neo-mercantilist protection of the core economy (extending in
the current global economic crisis to so-called financial mercantilism), and the
development of new collective resources to facilitate economic security and global
competitiveness. In turn, the East Asian export-oriented model involved a Listian
developmental state that guided economic growth, initially for national security, then
catch-up development, and, most recently, innovation-led competitiveness. Despite
neo-liberal policy shifts and imposed structural adjustment policies, a post-
developmental neo-mercantilist state still engages in meta-guidance, in part through
networks, of the economy, privatization measures are selective and tied to state
strategies (or the interests of state managers), liberalization of collective
consumption (under GATTS) has been limited, free trade under WTO rules has
been imposed gradually (outside of the IMF crisis) and protection continues in the
name of national security, and the tax system is still largely developmentalist.
I now apply these general arguments to European state formation, where economic
and political forces are seeking to restructure national states and economies in the
hope of solving the long-standing structural ‘problem’ of competitiveness within
regions, national economies, and the wider European economic space. The
resulting policies and their historical sequencing can be studied in terms of the
principle that not everything that is possible is compossible. Central to this analysis
is a focus on the potential for incompatibility, antagonism and contradiction within
and between the four first-order socio-spatial structuring principles of territories,
places, networks, and scales (and, by extension, possible second- or third-order
principles) and their implications for the compossibility of different state spatial
strategies and state spatial projects.
14
The six founding members of the European Economic Community (EEC) had
modes of growth and regulation belonging to one or another of the regulated
varieties of capitalism as well as one or another form of conservative-corporativist
welfare regime or, in Italy's case, a clientelist Mediterranean welfare regime (cf.
Ruigrok and van Tulder 1996; Hantrais 2000). The initial steps towards European
integration aimed to integrate Western Europe into Atlantic Fordism; and the
'Monnet mode of integration' was concerned to create a 'Keynesian-corporatist' (sic)
form of statehood on the European level favourable to different national Fordist
modes of development (Ziltener 1999). Rather than involving a strong principled
commitment to economic liberalism at almost any cost at this stage, market
integration was expected to have spillover effects that would consolidate regulated
capitalism on a wider scale and also lead to deeper political integration. For this
reason, the early stages of integration encouraged the development and coherence
of the European Communities as instances of variegated regulated capitalism.
The situation changed as the European Community expanded to include members
with different modes of growth, regulation, and welfare. Initially the United Kingdom
was relatively isolated as a liberal market economy (and this in part motivated the
French veto on earlier entry) but nonetheless served an important intermediary role
in spreading the influence of de-regulated international finance into the Continental
heartland.11 The growing incompossibility of different varieties of capitalism was
aggravated by the emerging crises of Atlantic Fordism and its differential impact
across national models in Europe – with some making neo-liberal regime shifts at
different times and some making neo-liberal policy adjustments, thereby increasing
the economic and social heterogeneity in the original core, intensifying the crisis in
European integration, and prompting the search for a new mode of integration. This
made it harder to create the conditions to re-scale state planning from the national
to the European level and/or to establish a tripartite Euro-corporatism (on Euro-
corporatism, see Falkner 1998 and Vobruba 1995; on its limits, Streeck 1995). The
Monnet mode of coordinated market integration was replaced by the more liberal
internal market project, creating conflicts among neo-liberal, neo-corporatist, and
neo-statist currents. Eastwards expansion of the European Union has aggravated
the incoherence of the EU – an effect that is far from accidental but was promoted
by neo-liberal forces within and beyond the European Union and that has, more
15
recently, seen neo-liberal chickens come home to roost because of over-rapid
deregulation and debt-fuelled speculation, threatening the overall stability of the EU.
These problems encouraged a turn to the open method of coordination (OMC) in the
1990s, which was officially consolidated in the Lisbon agenda. The latter had strong
support from the founding members of the EEC and from Austria, Denmark,
Portugal, and Sweden. It combines a commitment to international competitiveness
with retention of the European social model and can be seen as a compromise
between neo-liberal and social democratic variants of capitalism. The emerging
Lisbon project is closely tied to the shift from a Keynesian-welfarist mode of
integration to a more Schumpeterian-workfarist mode. This involves the de- and re-
territorialization of the state, the de-statization of crucial economic and social
policies, the re-scaling of state power, and an increasing emphasis on networked
power. Retaining older forms of European statehood would have been incompatible
with the changes in accumulation regimes and hindered after-Fordist re-regulation.
The growing incompossibility of an increasingly variegated European economic
space with the Monnet model of integration helps to explain the shift away from
policies of harmonization and the development of the open method of coordination
as one among several examples of ‘multi-scalar meta-governance conducted in the
shadow of post-national hierarchy’ (Jessop 2007a). In contrast to the earlier pursuit
of various measures of positive integration alongside the pursuit of negative
integration, growing incompossibility has produced a bias in economic and, to a
lesser extent, social policy towards negative integration and collibration. Pursuit of
measures that tend to eliminate restrictions on ‘the four freedoms’ (the free flow of
goods, services, capital, and labour) tends to weaken the coherence of the
respective national cores of coordinated market economies and to advantage
mobile capital (on the neo-liberal bias of negative integration, see van Apeldoorn
2002; Altvater and Mahnkopf 2007). The OMC is a distinctive form of collibration,
i.e., the judicious mixing and remixing of market, hierarchy, networks, and solidarity
to improve overall outcomes (cf. Dunsire 1996), that represents a major response to
the growing incompossibility of distinct varieties of capitalism within an increasingly
integrated economic and political space that has been subject to growing pressures
from an increasingly integrated (and, more recently, crisis-stricken) world market.
16
From one viewpoint, given the ecological dominance of neo-liberalism on a world
scale from the 1980s onwards (cf. Jessop 2007a), the pursuit of neo-liberalism
within the EU appeared to be the line of least resistance given the co-existence of
several ‘varieties of capitalism’ with their complex contradictions. One indicator of
this is the changing position of the European Round Table, which is an important
site of compromise between contending fractions of capital and a major vector of the
interiorization of external constraints as well as intra-European conflicts and
contradictions (cf. van Apeldoorn 2002). The OMC helps to mediate the resulting
variegation without relying purely on negative integration and without imposing a
one-size-fits-all economic and political programme. It does this by allowing states to
pursue different approaches to shared EU objectives, thereby facilitating the
extended reproduction of a variegated capitalism based on the structural coupling
and co-evolution of different modes of growth and regulation with different modes of
insertion into the European and wider world markets.
This emerging trend in institutional restructuring and strategic reorientation can be
contrasted with the usual alternative accounts of the rescaling of the traditional form
of sovereign statehood or the revamping of liberal intergovernmentalism inherited
from earlier integration rounds. The emphasis is on efforts at continuing collibration
in a changing equilibrium of compromise rather than on systematic, consistent resort
to a single method of coordination to deal with a fixed pattern of complex
interdependence. Effective collibration depends in turn on 'super-vision' and
'supervision', i.e., a relative monopoly of organized intelligence combined with
overall monitoring of agreed governance procedures (Willke 1996). Thus we have
seen repeated rounds of constitutional debate over the design of the Europolity as
well as growing resort to and expansion of comitology, social dialogue, public-
private partnerships, mobilization of non-governmental bodies and social
movements, etc., as integral elements in attempts to guide European integration
and steer European Union policy-making and implementation (Scott and Trubek
2002). The recent and continuing crisis over the European constitution and its
validation through national referenda and/or legislative decision-making indicates
the problems of economic and political incompossibility in an expanding European
Union that is itself located in an increasingly heterogeneous world market and polity.
17
Reflecting the complex position of the European Union within a variegated
capitalism that is not confined to European economic space but extends to the world
market, EU meta-governance has become a crucial site for contending political
forces both within and beyond the EU as they seek to shape its overall strategic
direction and/or specific economic and social policies (cf. Ziltener 2001; van
Apeldoorn 2002). Thus it has been a vector for American neo-liberal pressures to
redesign the world order and for attempts to promote an alternative European
model. While the initial compromise position was embedded neo-liberalism, the
current economic crisis illustrates how the balance of forces has shifted in this
regard against neo-liberalism within the European framework. Even before this volte
face, however, the tendential Europeanization of economic and social policy had
been closely linked, in line with the principle of subsidiarity, to the increased role of
subnational and cross-national agencies, territorial and/or functional in form, in its
formulation and implementation. In this regard there has been a significant scalar
division of labour between the EU, national states, and sub-national tiers of
government linked to different forms of networking and efforts at governmentality.
The current struggle over the most appropriate response to the global crisis of neo-
liberalism that was ‘made in America’, first emerged there, and has since spread to
Europe with a vengeance. This has revealed significant differences once again
between the economies that undertook the most marked neo-liberal regime shifts
(Eire, Iceland, the UK, Spain, the Baltic Republics, and Eastern and Central Europe)
and those that inclined more to neo-liberal policy adjustments (notably the Benelux
economies, Scandinavia, and Germany) and the limits to their compossibility within
the current constitutional, institutional, and meta-governance arrangements.
European Economic and Political Space(s) within the World Market Even though the global neo-liberal highpoint had already passed in terms of elite
consensus (let alone popular support) and a retreat had begun both from neo-
liberalism as system transformation in post-socialist economies and from the
coercive imposition of neo-liberalism on crisis-ridden economies, the ecological
dominance of the logic of neo-liberalism within the context of capital accumulation
on a world scale is still present. This reflects the continuing ecological dominance of
the American economy within the world market, the continued dominance (despite
18
declining hegemony) of the US federal state in the world political order, and the
ecological dominance of the world market within world society more generally. In
other words, the crisis of global neo-liberalism triggered by the financial crisis that
originated in the USA is causing more problems for other forms of economic
organization at scales from the urban and regional through the national to supra-
regional economies than their dynamics (and crisis-tendencies) can cause for neo-
liberalism. An interesting example of this is the pathological co-dependency of the
US and Chinese economies. In addition, the overall logic of the world market,
organized in the shadow of neo-liberalism, causes more problems for other systems
and the lifeworld than they can cause for the economy.
This approach should change how we think about the United States in the world
market and world society. The US is often discussed as a hemispheric or global
hegemonic power in world society and/or as the economically dominant power in the
world economy. But it no longer enjoys the hegemony that it exercised in the
immediate post-war economic order, when it sacrificed immediate economic
interests to promote its longer term interests in global economic expansion whilst
promoting the economic-corporate interests of other advanced capitalist formations
through their integration, directly or indirectly, into the circuits of Atlantic Fordism or
the wider international economy. In the immediate post-war period the US also
enjoyed the benefits of economic dominance through its technological supremacy,
control over oil reserves and other strategic commodities, gold and foreign currency
reserves, possession of the master currency, and ‘soft’ power exercised through the
cultural industries. In the last two decades the US has been losing this dominance,
especially relative to the European Union, Japan, and the BRICS economies (Brazil,
Russia, India, China, and South Africa). The neo-liberal regime shift developed as a
response to this crisis in political hegemony and economic dominance. This has not
reversed the loss of US political hegemony (despite its appeal in post-socialist
economies) or the overall decline of American economic dominance (witness the
continuing fiscal, budgetary, and trade deficits in the US economy). But the US still
retains the (destructive) power of ecological dominance, i.e., it still causes more
problems for other economies than they can cause for it. It is better able to displace
and defer the contradictions of neo-liberalism onto other spaces and times than
other varieties of capitalism in other spaces can displace their problems into the
19
American economy. This illustrates on a global scale the old aphorism that, if a firm
owes a bank 10,000 dollars, it has a problem, but if the debt is 10,000,000 dollars,
the bank has a problem. In other words, the threats posed by current economic
imbalances in the neo-liberal USA and its relations to other major economic players
(especially China and Japan) threaten the stability of the world market and, a fortiori,
world society. Indeed, the blowback effects of US policies are more likely to damage
the growth dynamic of the US economy than the policies pursued in other varieties
of capitalism.
Among the most obvious indicators of the ecological dominance of the American
economy have been the positive feedback effects of the growing international trade
and financial imbalances between the United States, China, and Japan as well as
their implications for environmental destruction through the unsustainable growth of
production in China and consumption in the United States. As we have seen, the
necessary adjustments cannot be made without a major global crisis that forcibly re-
imposes proportionalities in the global circuit of capital that proved impossible to
resolve politically. These positive feedback effects are especially significant in the
current period because of the specific neo-liberal and neo-conservative policies
pursued under the exceptional political regime presided over by George W. Bush
and its domination by a distinctive set of particular capitalist interests. It is far from
clear that the underlying balance of force has shifted decisively away from neo-
liberalism (except at the level of ideological contestation and political rhetoric on the
political scene) within the first 100 days or so of the Obama Administration. It seems
more likely that we are witnessing another iteration of the turn in neo-liberal regimes
to ‘Third Way’ rhetoric and policy solutions that serve primarily to provide flanking
and supporting mechanisms in the transition from roll-back to roll-forward neo-
liberalism. The Obama victory and subsequent transition ended one particular
political mediation of neo-liberalism but neo-liberal financial capital is likely to
provide more fundamental and more durable in so far as crisis-management in the
USA seems to be premised on the assumption that the global economic crisis stems
from a crisis in neo-liberal finance-led accumulation rather than, as is the case in
Europe, from a crisis of neo-liberal finance-led accumulation.
Conclusions
20
This paper has emphasized the need to look beyond conventional approaches to
the analysis of the global and/or European economies and their implications for
European integration. It has proposed an approach that is concerned with
variegated capitalism within a world market that is organized under the dominance
of finance-led, neo-liberal accumulation. I have suggested that the logic of roll-back
neo-liberalism is still ecologically dominant at the level of the world market even
though it is in retreat at other levels (with the significant partial exception of the
USA) in favour of a roll-forward neo-liberalism flanked and supported by other
mechanisms to maintain and reinvigorate the momentum of neo-liberal restructuring
in the subset of neo-liberal regimes. It is this period of ‘Third Way’ roll forward neo-
liberalism that recent attempts to promote European integration have been pursued
– with the failed Lisbon Agenda providing an excellent exemplar of a neo-liberal
slanted project. Conclusions to be further elaborated.
21
Appendix: Conditions making for Ecological Dominance of Social Systems
Internal
• Scope for continuous self-transformation because internal
competitive pressures are more important than external adaptive pressures in the dynamic of a given system
• Extent of internal structural and operational complexity and the
resulting scope for spontaneous self-adaptation in the face of perturbation or disruption (regardless of the external or internal origin of adaptive pressures)
• Capacity to distantiate and/or compress its operations in time
and space (i.e., to engage in time-space distantiation and/or time-space compression) to exploit the widest possible range of opportunities for self-reproduction
Transversal
• Capacity to displace its internal contradictions, paradoxes and dilemmas onto other systems, into the environment, or defer them into the future
• Capacity to redesign other systems and shape their evolution
by context-steering (especially through organisations that have a primary functional orientation and also offer a meeting space for other functional systems)12 and/or constitutional (re)design
External
• Extent to which other actors accept its operations as central to
societal reproduction and orient their operations in this light (e.g., integrating its needs into their own decision-making premises and programmes as naturalised constraints). Organisations also have a key role here through their ability to react to the irritations and expectations of several functional systems
• Extent to which a given system is the main source of external
adaptive pressure on other systems (e.g., through the impact of recurrent system failures, worsening social exclusion, and positive feedback effects)13 and/or is more important than their respective internal pressures for system development
Source: Modified version of Jessop (2007)
22
23
Endnotes 1 This is a draft version of a paper prepared for conference on Globalisation and
European Integration: ‘The Nature of the Beast’, University of Warwick, 5-6th June
2009 2 Cf. Capital III, Chapter 6, p 146, on the world market as 'the basis and vital
element of capitalist production'; also "The world-market itself forms the basis for
this mode of production" (Ch 20). 3 The tendency to create the world market is directly given in the concept of capital
itself. Every limit appears as a barrier to be overcome. Initially, to subjugate every
moment of production itself to exchange and to suspend the production of direct use
values not entering into exchange, i.e. precisely to posit production based on capital
in place of earlier modes of production, which appear primitive [naturwüchsig] from
its standpoint. Commerce no longer appears here as a function taking place
between independent productions for the exchange of their excess, but rather as an
essentially all-embracing presupposition and moment of production itself (Marx
1973: 163). 4 Mandel also notes that the capitalist world market universalizes market relations,
not the capitalist mode of production of commodities (Mandel 1978: 61, 84). 5 In this context, Engels notes that 'the first maxim in trade is secretiveness -- the
concealment of everything which might reduce the value of the article in question.
The result is that in trade it is permitted to take the utmost advantage of the
ignorance, the trust, of the opposing party, and likewise to impute qualities to one’s
commodity which it does not possess' (1844/1975: 422). 6 The industrial capitalist always has the world-market before him, compares, and
must constantly compare, his own cost-prices with the market prices at home, and
throughout the world. In the earlier period such comparison fell almost entirely to the
merchants, and thus secured the predominance of merchant's capital over industrial
capital (Capital III: XX, 446-447) 7 For example, the changed nature of world money, the growth of derivatives, and
the increased importance of intellectual property as an economic category.
24
8 Cf. McMichael 1990 on the role of incorporated comparison where one model has
a strong constitutive impact on the structural environment in which other models
operate; Jessop 2007a on ecological dominance; and Konings 2008 on the
influence of asymmetrical intermediary capacities in global circuits of finance). 9 I use this term from geography to avoid taking for granted that an economy is
necessarily national in scope. The notion of 'space economy' is compatible with
local, metropolitan, regional, national, supranational, or cross-border economies. 10 Cf. Marx's comment on The Gotha Programme that there is no generic 'present'
state but, rather, a 'motley diversity of present states'; nonetheless, despite some
variation in the level of capitalist development, they share certain essential
characteristics by virtue of their common ground in modern bourgeois society (Marx
1875). 11 Konings (2008) notes that continental banks also exploited the separation of
industry and finance in the Anglo-Saxon model to move some of their international
financial activities to the City of London, which, in turn, modified the way in which
the liberal financialization model operated. 12 Luhmann notes that the structural coupling of function systems is especially promoted by
organisations whose multi-functionality is the most likely to be disturbed by artificial
distinctions among systems (1997; 2000). Simsa reinforces this in noting that organisations
are the source of the societally most relevant, most stable, and most far-reaching decisions
(2002: 162). 13 Luhmann (2002: 55), as cited by Wagner (2006: 5).