It is easy to see today that in the course of implementing neo-liberal strategies, the state is being increasingly restricted in its function as the guarantor of social peace and compromise between the classes, while the various modes of operation of the social police are being intensified step by step. It must be taken into account that the social police is not exclusively executed by the repressive state organs, but also requires new operational organs, control techniques and governmental arts, including civil society institutions, institutionally supported social technologies and a variety of privatized evaluation mechanisms. Today, the state must register the population comprehensively and thus freeze it, but it must also constantly mobilise it and increasingly police the control of the labour markets, the labour force and the population as a whole. Why is this so?
The current imperialist world system, as we have briefly outlined, generates constantly shifting frictions and conflicts between the nation states, the financial system and the multinationals within an interlocking matrix, the central nervous system of which is the financial system. In the capitalist core countries, the state is forced to increasingly fulfil its function as a social police force precisely because certain effects of globalisation have, at least in these countries, favoured stagnation of economic growth and crisis processes, thus weakening the possibilities of pacifying the class conflict via the welfare state. On the other hand, the state itself can only function effectively as a social police force if it, as a national and collective (idealistic) total capitalist, supports the maintenance of internal economic growth as much as possible. Imperial globalization is increasingly eroding the conditions that allow the state to function simultaneously as a social police force (caring and repressive at the same time) and as a national, idealistic all-capitalist (balancing class conflicts via the welfare state).
However, governments cannot completely abandon their role as national, idealistic all-capitalist and therefore they must also try to drive economic growth with all possible means so that the social cohesion of the capitalist society formation is not endangered. However, there are a number of limits to this today. The multinational and financial capital, by continuing to execute the processes of liberalization and global money capital flows, reinforces the tendency of economic depression of the “real economy” (not at the level of total capital) and the impoverishment of parts of the population in the capitalist metropolises. Thus, on the one hand, the state lacks the means to organize social arrangements, and on the other hand, social conflicts may, at least in the future, at least tend to become more acute there, so that the states must act more strongly as social police today, simply for reasons of prevention and cybernetisation of social conflicts. Although one should assume that the neo-liberal strategies of flexibilisation of the labour force, propaganda of creative work and libertarian singularisation of cultural policies, especially among the middle classes, should correspond exclusively to soft control systems, self-technologies and flexible governance policies characterised by social networks, mutual surveillance in citizen factories, psychologisation and physiotherapy, urbanisation and the event industry, this is not the case. While these soft phenomena, techniques and practices have not disappeared, quite the contrary, they are increasingly being overlaid by the mechanisms of social policing. Here we understand the concept of the police in a broad sense, similar to Foucault, as a repressive administrative system whose control systems penetrate deeply into the working and living conditions of the population, and thus as a specific form of governance. However, the expansion of privatized power and governmental techniques does not mean that the state becomes meaningless or is absorbed into a network of governing bodies, as Foucault assumes. The fact that many state institutions and facilities (schools, universities, hospitals, etc.) now function like private companies not only points to the weakening of the political autonomy of the state, but also requires, precisely because of the way in which the workforce is organised, a more intensive implementation of the social police in the social field, especially since governments can no longer implement expansive monetary and fiscal policies, for example to guarantee full employment or the welfare state to
be maintained at a satisfactory level for the population. Ultimately, governments can only react with “workfare policies” on the domestic markets, which means that the state, precisely in its function as a social police force, is becoming immensely more important.
In the long phase of neo-liberal restructuring since the 1980s, the “welfare state” was gradually replaced by the “workfare state”, i.e. a new political model of the ruling classes, which transformed the old social policy and subordinated it to the aim of making labour turnover on the labour markets more flexible and at the same time more restrictive, absorbing the decline in industrial employment by a low-wage sector in the service sector and redistributing income in favour of profits and to the detriment of wages. The neoliberal austerity policy is a strategy for reducing the costs of companies, in particular by reducing wage costs, increasing profits per unit of work and thus increasing profit rates. It is accompanied by an economy of financialisation (and institutional changes), which increases the mobility of capital and the power of the financial sector, managers and shareholders, while at the same time curtailing social rights and cutting wages for large sections of the population, whereby even in the metropolises a part of the population falls out of the official labour markets altogether and has to be regarded as part of the global surplus population. Significantly, the ECB’s policy in the case of Greece has shown that for states that temporarily lack sufficient liquidity to service their government bond holders, the drastic reduction of the welfare state is a necessary condition for their financial solvency. Greece is a laboratory in which the neo-liberal experiment in austerity policy is clearly evident, namely as the governance of civil civil war, which relies on wage cuts and redundancies in the public sector, the extension of short-term temporary work and the removal of protection against dismissal, the increase in VAT and the raising of the retirement age, privatisation measures, etc.
The contradiction that exists today on a global level between the freedom of movement of promises of payment and money capital flows on the one hand and the limited and regulated mobility of population flows on the other hand, requires, especially with regard to the latter moment, effective and efficient apparatuses of control and regulation (differentiated migration policies), which are currently, as a result of the specific reorganization of the state apparatuses, certainly inherent in a fascist tendency. Especially against the background that the strategies of total economic war, which are currently enforced with the means of capitalization, leave the governments of many countries no other option than to unconditionally comply with the structural adjustments demanded by capital, which also include cold strategies that the IMF has implemented since the 1970s, especially in crisis countries. Today, global financialised accumulation is accompanied by a continuum of bloody and bloodless wars that spread from Europe to Turkey, the Middle East and Afghanistan.
In the efforts to reorganize the state, constant frictions and frictions can be observed, because the state must continue to function in its two functions of social police and – albeit in a weakened form – of the ideal total capitalist, especially if the service for the multinational and financial companies is to continue to be provided. On the other hand, the multinationals still need the great state powers in order to survive on the world markets. The leading imperialist state must be able to fulfil three functions of global governance (for the multinational companies and the world economy as a whole) beyond its national policies: The function of global sheriff, global banker and driver of capital accumulation. (Cf. Screpanti 2014: 157f.) All three functions are still assumed today, albeit to an increasingly weaker extent, by the USA. The execution of the function of global sheriff by the leading state requires enormous military power (the US military budget is 716 billion dollars in 2018), in particular to discipline those countries that try to resist globalisation and US dominance and do not open their markets to multinational capital without further ado. The second function, that of the global banker, includes the possession and use of the entire arsenal of financial instruments, such as the implementation of
a currency that acts as a reserve and reserve currency on the globe, inter alia to ensure the maintenance of international payments and foreign reserves. The supremacy of the US financial industry and the dollar is based on the closely interwoven global network of private banks, hedge funds and financial markets, with Wall Street and the City of London as its core locations. The structural dynamics of this network were also responsible for the financial crisis of 2008, because it was not so much a developing crisis in the real estate market that caused Lehman Brothers, for example, to stumble, but rather the anticipatory actions of the banks in response to their imbalances that caused the interbank market to collapse, as well as the downgrading of securitised mortgages and the derivatives related to them. The latter triggered a wave of demands for additional funding in the form of new collateral required for the downgraded mortgages, and billions of dollars of collateral caused even corporate giants such as the insurance company American International Group (AIG) to falter. The government interventions following the 2008 financial crisis thus reaffirmed the dominant role of the dollar and the US Federal Reserve. The third function is that of a driver of national and international capital accumulation and economic growth. Since capital accumulation is still driven by exports, especially in the emerging markets, but also in countries such as Germany and Japan, a strong economy must exist on the world market that can absorb imports to an enormous extent and even grow itself by increasing its imports. This has so far been the case with the USA, which has financed this process by increasing its private and public debt. Moreover, the size of GDP and its weight in world markets has allowed the US to implement expansive monetary and fiscal policies that were hardly limited by external limitations in world markets. The US is still able to finance its own trade deficit because the dollar is the international reserve currency. Under these conditions, the expansionary monetary policy of the USA led to the creation of an aggregate demand for its own population and the rest of the world. Moreover, the possibility of an almost limitless expansion of the money supply by the US Federal Reserve allowed the Fed to make the necessary military expenditures to continue to assume the role of global sheriff. Finally, the implementation of these three functions serves above all to satisfy the interests of US capital. Today, however, US imperialism can fulfil them less and less.
The international financial system, which is still under the dominance of the US financial industry, today “controls” globalised production, the transnational division of labour (global production networks) and state policies, which in relation to the latter leads to new demarcations, restructurings and interactions in political activities, while finance escapes any effective regulation even at the level of domestic markets. However, the global insecurity captured by financial capital creates the conditions and the need for security governance by capitalist states. With every sign of the exhaustion of the economic system, instability becomes a permanent phenomenon to which one reacts, among other things, with the further militarization and technologization of the state apparatuses. All the state reconstructions and reorganizations are today economically and financially transformed, but conversely, the management of monetary capital still requires centralized institutions that can make efficient decisions to repair unstable situations.
The relationship between state and capital today leads to constant friction between the geopolitical ambitions of states and the economic interests of multinational capital. Thus, the geopolitical ambitions of the great state powers generate inter-state rivalries, but on the other hand, multinational companies need precisely a pacification of the rivalries between states, a regular exercise of the three functions of governance as smoothly as possible, and above all the use of the economic and military power of the great imperialist states to keep the world markets open and to discipline especially the countries on the periphery. The dominance of the multinational companies partly realizes the capitalist idea of a minimal state, which does not mean that the state is abstinent, but rather that the state’s power to play the national ideal capitalist is somewhat reduced,
while at the same time adapting to the operations of the large multinationals and finance by intensifying its role as a social police force.1
Where the accumulation of capital as such is threatened, as was the case after the financial crisis of 2008, the governments of the core countries have no alternative but to keep the accumulation of capital going by all possible means, because otherwise they themselves would have to cease their operations – and in the era of fictitious and speculative capital this means nothing more than the massive support of the financial system and its returns and at the same time the further promotion of austerity policies. The Social Democratic idea of reviving Keynesian regulatory policy is now completely unfounded, since it consisted of improving the profitability of capital invested in the “real economy” within a nation-state framework, while reducing the returns on financial assets. While it is true that in countries that are still among the few winners of the crisis, especially Germany, some social law standards can be maintained and even individual welfare state improvements (minimum wage) can be implemented, their selective nature and very limited impact indicate that there is no longer any basis for a comprehensive reformist programme of social democracy today. And since the reasons for this are to be found in the historical dynamics and crisis logic of capital itself at the global level, this basis cannot be restored by attempting to strengthen national sovereignty.
In general, it can be said that the state can reach capital primarily through money, but this always involves a delay, so that the state will never operate in the real time of capital and will never catch up with it, which once again places a barrier in the way of Keynesian strategies that aim to solve the problem of accumulation by increasing aggregate demand. In the phase of dominance of financial capital, in which the dynamics of money capital flows have shifted to the financial markets in the absence of sufficient profit rates in the “real economy”, not only state and politics have largely become dependent variables of financial capital, but also parts of industrial capital. While the fictitious and speculative capital invested in the financial system circulates around the globe in nanoseconds, industrial locations cannot be relocated in real time despite transnational production structures, digitalized logistics chains and flexible supplier networks. Or, to put it another way, while for the accumulation of financial capital the world market has become an immediate environment that can be traversed in nanoseconds, parts of industrial capital and middle capital remain restricted to national territory despite the possibility of export in principle.
The process of financialized capitalization began in the 1980s, when the barriers and limits to capital mobility were progressively dismantled, so that global capital flows rose from about five percent of world GDP in the mid-1990s to over twenty percent in 2007. They have thus grown three times faster than the global flow of goods. However, this free monetary capital mobility applies only to individual capital and not to (national) total capital, which as a superordinate total complex sets the conditions for individual capital. Since total capital is not a thing and cannot be sent abroad as the dominant production relationship, i.e. it is immobile and nationally constituted, it is sometimes argued that the above description lacks justification. (Cf. Milios 2018) But: Although the nation-state constitution of total capital still leads to borders within the global circulation spaces, which are indicated, for example, by the diversity of national currencies or the lack of a common international currency, the virtual-transcendental character of total capital does not allow it to be thought of primarily spatially. Today, multinational companies are able to break through these boundaries and thus also modify the effectiveness of the respective national total capital. This type of local reduction and location fixation also affects the state in its modes of action and access, which remain largely confined to the nation-state territory and are therefore in a structurally conditioned position of dependence on multinational capital and finance. However, the state is far from being able to exercise all its decision-making powers through capital
and precisely as long as capital accumulates at a certain level and at the same time drives overall economic growth in a country, states still have the capacity to act in terms of economic policy.
In the context of its “self-fulfilling prophecy”, the social influence of neoliberalism, particularly with regard to the calculation and monetarisation of risks, is aimed at maintaining and at the same time controlling a situation of general insecurity by simultaneously spreading political strategies that consist of generating fear and insecurity as widely as possible in the population and at the same time making the economic conditions of certain parts of the population increasingly worse (as a punishment for insufficient attention to and handling of risks, so to speak). What is at stake here is a new governance of civil warfare, conducted through constant security campaigns against the allegedly omnipresent insecurity. This will not restore the old sovereignty of the state, but will result in a state of flexibilised biopolitics and social policing, which, while still resorting to soft forms of social peace (urban politics, cultural institutions, places of care, etc.), will be accompanied by warlike, thanatotic policies. In these, the population functions as an object of biopolitics in so far as it is totally subjected to the logics of financial capital and the repressive policies of the state, so that in this respect there is no longer any difference between the time of peace and that of war. This type of peaceful war is fractal, that is, war reproduces itself indefinitely and always with the same model, but in different ways and at different levels of reality.
The relative loss of sovereignty of the nation states, their subordination to the economic and financial policies of big capital, the reduction of parliaments to executive organs and new forms of governance have been intensifying in their interpenetration and in their multiple aspects since the 1970s. After the worldwide crisis of 1973, the legal-political model of the state and its Keynesian policies no longer allowed the economic crisis processes to be cushioned or even controlled, so that the neoliberal strategies of capital, which also implied a reconfiguration of the modalities of the organization, governance and administration of the states, simply did not come out of nowhere. It should be borne in mind that the Keynesian-inspired economic policy interventions were not primarily based on the sovereignty of the nation states, but were relatively sovereignly implemented mainly due to Fordism based on industrial mass labor and mass consumption.
Poulantzas and his analyses of authoritarian etatism and interventionist states published in the late 1970s show that the economic functions of the state clearly have a dominant position in state policy, and this is expressed in the fact that state interventions are designed to reorganize all state apparatuses in terms of their economic functions. (Poulantzas 1978: 153) In addition to state interventions by means of monetary and fiscal policy and their integration into the reproduction processes of capital, examples include the economic restructuring of the education and health care system, urban planning and the qualification and reproduction of the workforce, the creation of new space and time matrices in the apparatuses, the strengthening of repressive ideological measures and the high-tech new surveillance mechanisms.
David Harvey calls the provision of state services for capital the “fixed capital of independent form” or the “secondary capital cycle” (cf. Wiegand 2013: 42). If the state provides these systems and infrastructures, larger amounts of money, machinery and labour are tied up over longer periods of time, the productivity of the economy is usually increased, effective demand is stimulated and, under certain circumstances, individual companies also generate added value here (in the case of user charges), although the state expenditure required for this in the form of taxes and levies is largely paid from the revenues of the economy. This, in turn, counteracts to a certain extent the positive effect on the economy, because the state taxes profits and income and thus burdens capital with deductions. However, the permanent issue of government bonds, which is not possible without the financial capital, can open up new capital cycles, i.e. long-term investments in
this will allow for a higher degree of long-term investment in physical and social infrastructure. The investments made in the secondary capital cycle, which are mediated via the financial system, are thus part of the general circulation of capital. For Harvey, investments in physical (secondary capital circulation) and social infrastructures (tertiary capital circulation: education, research, health, etc.) are at least potentially productive, but this is not primarily because these government expenditures cause individual companies to produce added value, but because they increase the productivity of the economy as a whole and thus improve the conditions for the primary industrial capital cycles. In addition, government investment remains integrated into the circulation of financial capital through the issue of government bonds.
However, the state also creates new markets that do not emerge spontaneously. Rather, the markets for water, education and health must first be created by means of material, technological and legal structures provided by the state. This kind of expansion of state functions can increase the state’s dependence on economic cycles and accumulation processes, whereby the significance of state intervention now also lies in shifting the dominant discourses of economic policy towards a new technocratism that is seen as a guarantor of growth and prosperity. This influence of the economic is also evident in the various state apparatuses themselves, whether at central, regional or local level, all of which are infiltrated by committees and bodies that permanently set economic efficiency targets.2
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Foto: Stefan Paulus