Revindicative politics in an era of financial leadership ofdominant blocs: toward a framing of a research agenda.

Gavin Smith19 July 2013

[T]he capitalist mode of production can never be reproduced in an identical manner. It is impossible to reproduce the relations of production in the same form in which they existed at a certain moment in history, in a certain phase of accumulation… Capitalism is forced to transform itself, its own modes of exploitingthe labour force, its mode of socializing individuals. It is therefore impossible for capitalism not to evolve, and this is the only possible form of “reproduction”. This is capitalism’s necessity.

… We must admit therefore that the necessity of capitalism to continuously transform its own relations of production is also the possibility of a social practice that is incompatible with the “system”. It is the possibility for those anti-capitalist forces that the Marxist tradition identified with the working class or the proletariat, and also for other unpredictable forces and movements, to insert themselves into the play of the contradiction. Pp117-18. [All but final italics in original]

Balibar, from “Structural causality, overdeterminsim and antagonism.” 109-119 in A. Callari & D.F. Ruccio (eds): Postmodern materialism and the future of marxist theory: eassays in the Althusserian tradition. Wesleyan University Press. Hanover. 1996.

In my abstract I proposed taking an historical journey

into forms of popular mobilization and strategies of

political leverage. But I don’t have time for this, and so

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instead I want to reflect on the kinds of politics that

arise as a result of the programmes pursued by dominant

blocs in which finance capital is regnant. A principle from

which I start is that, as intellectuals, we should begin the

design of our social enquiries by asking about the potential

for resistance to the capitalist system. This means

contributing to the effectiveness of popular mobilizations

a) through organization and alliances and b) the assessment of the

most suitable strategic actions for maximizing the leverage of

popular praxis. Both of these require c) characterizing the

specific form current capitalism takes as well as the state

so as to arrive at the conditions of possibility for

subaltern praxis.

In previous work (Smith, 2010; 2014 Forthcoming) I have

argued that a shift in the hegemonic projects of dominant

blocs as production capital gave way to finance capital has

resulted in two distinct kinds of political response. One of

these is a politics of negotiation with which we tend to be quite

familiar and to which, I would argue, most Left public

intellectuals direct their attention. The other is

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something I refer to as counter-politics in which those rejected

by the current political economy – the residuum – themselves

reject the principles of that political economy itself.

Mimmo Porcaro puts it thus: “two modalities of popular and

class struggle: one that remains with the logic of the

reproduction of capital and the other which builds the

organizational, cultural and political conditions to get out

of it.” (2012: 93) So we may need to think of two entirely

different kinds of popular praxis: an issue-sensitive

politics of negotiation and a kind of social and political

identity that arises as a result; and then a kind of

politics that rejects the current principles of political

economy itself, producing an array of different kinds of

political actor. Unfortunately we know very little about

these latter kinds of people and their various forms of

politics and are conceptually ill-equipped to know much

more. Rather than trying continuously to make these latter

politics into versions of negotiated politics I suggest that

we need to work across a crucial threshold terrain between

the two qualitatively distinct forms of revindication.

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Here I will briefly rehearse the argument that brought

me to these conclusions. I will then say something about the

immanent features of a society of capital dominated by

finance and first what this means for negotiated politics

and then what it might mean for counter-politics. If there

is time I will conclude with some speculation about the

threshold that might arise between these two kinds of

revindication – the idea being to identify the areas where

collusive politics of negotiation and frustrated counter-

politics might together be re-conformed into the politics of

praxis.

The immanence of Marx’s analysis led him to the

conclusion that the form of capital he studied gave rise to

certain kinds of working people, and praxis for him arose

from the politics they might engage in. With obvious

variations for the specificities of history these conditions

continued well into the period of the dominance of the mass

production industrial capitalist whose profits derived from

extracting the surplus value of ideally ever-more productive

labour. As a result regimes of rule had as their ideological

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goal the expansion of hegemony to a conceptually uniform

productive citizenship. What Lefebvre sees as the ultimate

goal of social democracy.

An analysis framed in the same terms as Marx’s but now

addressing a social formation dominated by finance capital

would need to reformulate the conclusion Marx draws. But the

question is what conclusions can we draw? Obviously in

seeking the immanent features that give rise to potential

counter forces in a particular conjuncture we would need to

study a vast array of variables. Even if we put aside for

the moment the vast array of historically embedded social,

cultural and political forces not arising from the class

contouring of capital, we would still need to know about the

very particular ways and means in which these class blocs

used techniques to shape a particular state and hence its

regime of rule. All that can be done here is to propose

possible steps we might make as intellectuals assessing the

conditions of possibility with the initial purpose of

exposing the points of leverage for effective popular

mobilization and strategic action.

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As finance capital began to dominate capitalist blocs so

the value of production, and hence the citizen-producer, was

replaced by the profits to be had from asset values assessed

in terms of rents and realised through transactions. The

result was a twofold shift – first toward hegemonic projects

that selected citizens rendered distinct from one another to

be the beneficiaries of policy; and second, as a result of

capital-concentration-without-increased-productivity a shift

toward the generation of an absolute surplus population.

From the perspective of the population there are of

course many social, economic and cultural principles by

which one might assert one’s claim to be among society’s

various selected citizens. But the significant feature of

finance capital is the way in which it uses forms of

property to extract surplus value as distinct from the ways

in which industrial capital uses production relations to

exploit labour to secure surplus value. It goes without

saying that the state plays a major role in making pervasive

the language of the value of assets over the language of the

value of labour and that as a result such a language

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resonates throughout the politics of negotiation – not just as a

language but as a series of goals for politics themselves.

I argue that two features of the technical project of

finance capital have their extensions into political

society. The first feature results from the fact that

finance capital operates by capturing and channelling value.

Because current forms of investment are directed not to

advance credit for future production but rather pre-

eminently towards existing assets, or corporate returns

based on share-value, so its modus operandi is to

concentrate wealth not to expand overall assets through

production and innovation.1 As a result the relation between

its operational logic and surplus populations is quite

different from the process that produced Marx’s relative

surplus population. Because it does not expand overall

wealth but only concentrates it the residual population that

results cannot be absorbed in future rounds. So I hope I

have made clear why the growing concern of people like

1 ‘‘The rise of the shareholder value movement caused the dividend payout ratio to double from the mid-1980s to the late 1990s, severely draining (nonfinancial corporation) funds’’ (Crotty 2005, pp. 96-97)

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Baumann, Butler and so on with people whose lives are

inconsequential is by no means unconnected to the current

form of capitalism.

The second feature has to do with selection within the

field of hegemony. This results from the reliance on credits

and rents to channel wealth and its own characteristic form

of regulation – securitization – which relies on

diversification of risk. This is extended into political

society through the fetishization of a wide variety of

social relations in terms of ownership of properties,

essentially making them into asset values, As Davis puts it

(2009:6), “the investment idiom becomes a dominant way

of understanding the individual’s place in society’’

As I have said, in the realm of the constitution of

the population the search for risk management through real

and effective diversification translates into diversity and its

proper assessment in ways that really count. Nothing is more

useless than securitization based on phoney or insignificant

diversification. Diversity therefore counts. One way to

make it count is to target specific classifications of

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people for selected benefits thereby reinforcing expressive

distinction through material difference. Another way is for

those being classified to get into the business of

classification themselves: targeted groups thus collude in

the selection process.

Left intellectuals need to think about the multiple

forms of politics for those people who are slipping off the

edge of the field of selective hegemony to become surplus

populations, as well as the politics of those already part

of this residuum. I see this as the threshold where

revindicative politics can be developed.

I think it is important to understand a social formation

– a society perhaps, even a country, in terms of the

changing inter-related forms of the capitalist economy on

the one hand and political society or the state on the

other. Obviously this requires empirical and historical

enquiry into the case in question, but such enquires might

be guided by a series of logical questions. Broadly speaking

we need to understand how the disconnect occurred between

the state as a productive project and the state as an

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expression of popular sovereignty legitimized through

liberal democracy: what I call tecnos versus demos.

We are familiar with the identification of the 1970s

with the transition from welfare capitalism to to neo-

liberal capitalism, but it is far more important to note how

the political economy itself changed as productivity

declined in the northern countries while the ratio of GDP

taken up by payments to labour in the form of salaries and

wages versus payments to capital in terms of dividends and

share-payouts was reversed. (Navarro, 2013) This meant that

the costs of the tripartite pact were outstripping states’

means for garnering income from domestic sources: either

from domestic bond sources or from national taxation on

salaries and wages that were in decline or from corporate

taxes where productivity was declining or taxables were

being moved offshore.

The tripartite alliance in which the political

representatives of organized elements of the working class

made deals with capital mediated by the state relied on a

shared understanding of the relationship between the rewards

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garnered in the present and what value the future should

hold. It was faith in future promise that legitimated

controlled inflation. The agreement not to bring out the

cudgels today was delayed by the promise of higher profits

and better wages tomorrow. Faith in continued productivity

legitimated such a promise. But inflation relied on an

increasingly false promise and, with the shrinking of

national surpluses for financing public debt (through taxes

etc) other sources had to be found. Two solutions brought us

from the Keynesian National Welfare State (KNWS) (Jessop)

to its successor. One was to increasingly finance state

expenditures through international finance markets: Instead

of inflating the currency, governments began to borrow on an

increasing scale to accommodate demands for benefits and

services on the one hand (Streeck, 2011:162) and for

salvaging packages and subsidies to industry on the other.

The other was to facilitate the instruments and institutions

that would make possible increases in private debt.

2 It is surprising that Streeck, in an otherwise sharp analysis, supposes that it was only social pay-outs that ledto the crisis.

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Then, as finance capital became more influential

inflationary currencies were not to their benefit, since

they needed above all to control the money supply and reduce

inflation to ensure the value of their money in the future.

Inflation was therefore attacked. Governments increased

public debt via the financial markets by floating bonds whose

value was based on anticipated future national productivity.

Yet as productivity declined in real terms so state

subsidies or tax-breaks to industrial capital became vital -

so the role of finance increased still further: both its

role in ‘civil society’ (private debts) and its role in

‘political society’ (public and sovereign debt) thereby

driving on further modifications in policy.

So it is vitally important to understand that this

switch states made into financial markets was only at the

outset an attempt at sleight of hand to keep up the fiction

of the welfare state. As this dependence in markets rapidly

deepened its principle aim was to prop up corporate capital

as governments competed to cut corporate taxes.

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“In the 20 key OECD countries, the average corporate tax

rate fell from 44 percent in 1985 to 29 percent in 2009

… ; in the Eastern European transformation economies the

reductions after 1990 were even more marked (Genschel

and Schwarz 2011, p. 356).” Deutschmann 2011: 361

As Deutschmann notes,

Public debts nevertheless continued to increase, and

again the investors profited from rising interest

payments on state bonds. As a consequence of their

increasing dependence on the capital market, many

states themselves have come to act like private

financial corporations. (ibid)

It is now possible to see the class project that

underlies such expressions as “the citizen becomes the

entrepreneur of him or her –self”. But here I want to

suggest that the class relation itself has been deeply

modified as assets become the principle means by which

finance capital garners profits. I want to do this by re-

thinking the issue of out-sourcing from the evident problems

it generates in terms of labour and think instead about what

it means in terms of the valuation of the social in terms of

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assets. In doing so I can only speculate on possible

differences between the two kinds of populations and the two

kinds of politics I have proposed.

I have left myself very limited time to draw extensive

conclusions from the framework I have tried to lay out here.

I want to focus on just two features that shift attention

from macro programmes to practices at the sites of

livelihood and of dwelling, one in respect to the politics

of negotiation, the other in respect to counter-politics.

Across a broad swath of people in lower-middle to low

incomes the precariousness of their engagement in the labour

market has the effect of rendering the sites of their work –

be it the jobbing workshop or the household itself – in

terms of entrepreneurial activity. In the US between 1998

and 2007 the lowest  and second lowest income quintiles

increased their holdings of assets from 13.6% to 34%.

Meanwhile in Europe a recent survey showed that that a high

percentage of respondents holding assets - 30% in Belgium,

57% in Spain – have no higher education.

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First within the arena of selective hegemony and the

politics of negotiation I simply want to draw attention to

the fact that to the top-down programmes of selection and

distinction produced by finance capital people respond by

themselves constituting the world in analogous terms. As a

result political negotiation takes place to protect

enterprise/household assets from a state whose activities

appear pre-eminently plundering within the context of

society understood in terms of externally competitive and

internally integral communities.

But the integrity of associative groups be they broader

social collectivities – on ethnic or regional grounds for

example – and narrower economic units like firms and

domestic enterprises is further under threat. As I have

said, finance capital is a channelling operation that works

by speculating among difference through time and space.

Taken together channelling and diversity have the effect of

breaking up targeted populations along a variety of

criteria. The domestic debt and life-course risk management

that result cannot be isolated from the entire reach of

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financial securitization when distinctions among categories of

people become simultaneously the source for multiplying

transactions and the means for diversification against risk.

This means the carving up of values within units – the

household, the firm, the household-as-firm and so on. And

then in what Guerrero (2011) refers to as “a process of

identification ruled by the ‘common sense’ of private citizens.”

people engage in the business of distinction themselves,

workers whose regional culture has supposedly given them

crucial entrepreneurial skills distinguishing themselves

from those not possessing that kind of ‘culture’ and so on.

The politics of negotiation within the arena of selective

hegemony is therefore expressed through the pursuit of

recognition: at first by varieties of capital and the state

and then among the people themselves.

At some point we cross a threshold from these kinds of

politics to something quite different. I do think it is a

threshold and I do think it is uneven and shifting but I

nonetheless believe that at some point we arrive at a

qualitative distinction that I refer to as counter-politics.

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Some of the people I have been speaking of are referred to

in the conventional European literature as “entrepreneurs by

opportunity”. These are contrasted to “entrepreneurs by

necessity” (Lippmann et al, 2005). According to EU

statistics, the percentage of the latter increased sharply

between 2002-2010, and these appear to be across a broad

spectrum of countries from Greece and Italy to Germany and

the Netherlands. It is worth noting that Sanyal makes a

similar distinction for India, speaking of a distinct

“economy of needs”

It is conventional to refer to this part of society as

the informal sector, precarious workers or the grey economy.

Two features are usually associated with it. As the term

“grey” implies, the visibility of these pursuits is

obscured. And the people who participate have dubious

features – as citizens, as social persons, possibly even as

ordinary human beings. They are illegals, gypsies and so on.

In short the residuum. I think it might be heuristically

useful to reject these features as emergent the one from the

other: “working in the grey economy pushes people toward

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semi-legal practices which then renders them poor citizens

in the eyes of others;” or “Sans-papiers find themselves in

semi-legal work situations because they have no choice” and

so on.

Instead we might begin by examining the role played by

the disappearing of what are now a vast array of social and

economic activities in all social formations, and asking if

the refusal to see them is a first-order condition for the

principle characteristics of these activities. Along with

this intentional myopia it might be useful to propose that

the denigration of certain elements of the population arises

prior to and is thus a pre-condition for these kinds of

economies. The denigration and the disappearing in any event

are the bedrock from which counter-politics flows.

I have argued elsewhere (2012) that a case can be made

for the fact the reproduction of domestic enterprises of

necessity (to combine the terms) relies on certain kinds of

necessary resistances and refusals on the part of a variety

of the actors involved: protection of certain arenas from

commodification, refusal to render instruments, spaces or

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practices in terms of asset value, and so on; while at the

same time being forced into the very conditions they are

fighting against. This creates a perpetual alter-discourse

and practice, always to be fought for always fraught and

perpetually under threat. There is I think an element of

what we used to call “structural resistance” here, in the

sense that, if these conditions are not somehow retained,

the reproduction of the domestic enterprise or what-have-you

cannot be secured. What I am suggesting here is analogous to

Mintz’s proposal to view Caribbean peasantries as “a mode of

resistance” (1974: 131-4)

It is these three features that inclines me toward the

notion of counter-politics: the denigration of people, the

disappearing of the essential role of their practices for

normative society, and the structural resistance built into

the way their livelihoods can be reproduced. I would

therefore design a research project that begins by asking

questions about the potential for revindicative politics by

exploring the issues along these lines, while also being

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attentive to the threshold between this world and the

fraying edge of selective hegemony.

References Cited

[incomplete]

Davis, Gerald. 2009. Managed by the markets: how finance reshaped

America. Oxford. Oford University Press.

Deutschman, Christoph. 2011. “Limits to financialization:

sociological analysis of the financial crisis.” Archives of

European Sociology. LII.3: 347-89

Mintz, Sidney. 1974: Caribbean Transformations. Chicago. Aldine.

Navarro, Vicenç. 2013 “Capital-trabajo: el origen de la crisis actual” nuevatribuna.es. 12 de Julio. http://www.nuevatribuna.es/articulo/espana/capital-trabajo-el-origen-de-la-crisis-actual/20130710141539094608.html Accessed 15 July 2013.

Smith, Gavin 2012. “ ‘I demand the value of my own labour asa commodity but my heartbeat derives its value from a more intimate calculus’: from morti di fame to sonversivo.” Paper presented to the Wenner Gren Conference. “Crisis, Value, and Hope:  Rethinking the Economy,” Sitges, Portugal [Available at Academia.edu]

Streeck, Wolfgang. 2011: “The crises of democratic capitalism” New Left Review 71. 5-29.

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