Marxism After Marx: Geopolitical Economy
Introduction
How can we bring Marx’s critique of political economy to the stage of contemporary global capitalism? Though he intended to, Marx never completed his planned works on geopolitical economy. Not only have we been left with few remarks from Marx himself, but the very fabric of capitalism since Marx’s initial analysis has been drastically restructured. Undoubtedly the question of world markets and geopolitics has been at the heart of many studies following Marx. For some, the global capitalist system is the most comprehensive level of analysis for the process of capital accumulation (Smith 2009). In other words, no understanding of capitalism is complete unless it is informed by a global perspective.
The notion that our world is becoming increasingly interconnected carries across multiple disciplines and theories. The strength of this interconnectivity is the subject of considerable debate. Has capital rendered the nation-state obsolete? Or do international politics still largely manifest themselves as tensions between distinct sovereign bodies? If there is a transnational capital, what does it look like? Does the presence of a transnational capital engender a transnational capitalist class? These questions are crucial if we are to lay out a model for how capitalism works on the world stage.
Debates concerning capitalism on the international level go back over a century. Perhaps one of the most pertinent contributors to this topic was Vladimir Lenin, who argued that the accumulation of capital within the borders of a given country produced monopolies which created pressures for capital to be exported abroad. Lenin’s model of imperialism insisted that pressures of capital were channeled through interstate conflicts, meaning, for example, that the American state defended capital originating from its borders. It was by result of this dynamic that geopolitical conflicts erupted between major economic centers in the world. For the cases of World War One and Two, Lenin’s model of imperialism could not have been more prescient.
In a distinctly different camp, Karl Kautsky argued that capitalism’s mature global formation would result in a sort of “ultra-imperialism,” in which capital would transcend state limitations. The result would be an end to conflict between major capitalist states. The primary global conflict would be between a transnational capitalist class and a transnational working class.
Fundamentally, the debate surrounding what global capitalism really looks like and where it is headed finds itself between versions of these two positions. Is it the state that still dictates geopolitics or has the world market washed away national boundaries for good?
Non-Marxian Positions
Before delving into what Marxists have to say about geopolitical dynamics, let’s offer a cursory glance at the other schools of thought in the field of international relations. Perhaps the most dominant school in conventional IR theory is realism.
The realist approach makes three critical assumptions to assess international relations: 1) states are the key units of action; 2) states seek power; 3) states behave rationally (Keohane 1986). Realists also argue that the international arena is anarchic, meaning there are no set structures or rules presiding over the countries of the world. There is no governing body above that of the individual state.
The liberal approach differs from the realists in that it does not assume a fully anarchic international system. Borrowing more from Locke than from Hobbes (as the realists do), liberals suggest that geopolitics is also a politics of institutions, norms, and interdependence. The latter three points constitute what is known in the liberal theory of IR as the Kantian triangle. Together, they provide the basis for a cooperative interstate structure.
Neorealism and neoliberalism are the two leading theories in international relations. Both are adjusted variations of their classical counterparts, which focused more on making claims about human nature and how it influences international relations. Neorealism brings the focus to the anarchic nature of international politics, stating that the most that can be said about humans is that they are rational. This rationality causes people to deal with the anarchic system by acting to preserve security and doing so in a self-interested manner (Scott, Carter, and Drury 63). Neoliberals also agree that human nature isn’t of great importance but their focus lies on the Kantian triangle which attempts to explain international relations and politics through three main principles: domestic institutions, international organizations and trade interdependence. These three factors, according to neoliberals, drive states toward peace rather than war, though war is certainly not avoidable.
Within the liberal tradition, there are those who defend the liberal theory about economic interdependence, believing that closely linked financial markets deter conflict by increasing the costs (Gartzke 2007); (Souva and Prins 2006); (Hegre and Oneal 2010); (Gartzke, Li, and Boehmer 2001).
For Marxists, however, there are significant problems with both the realist and liberal perspectives. Realists largely ignore transnational dynamics, but perhaps most importantly, their model does not sufficiently account for the system-defining role capital plays in international relations. Conversely, liberals overestimate the influence of international institutions and norms while obscuring the inherently uneven power relations between states. What both conventional schools miss most of all is a historically specific analysis of geopolitics. The majority of Marxist scholars strongly reject a universal model for international relations, arguing instead that there have been distinct international configurations throughout history.
The State in Global Political Economy
To consider a Marxist interpretation of the role of the state in global political economy, we must first outline a Marxist definition of the state. Tobias ten Brink suggests that there are four features in capitalism: wage-labor relations, competitive relationships, money relations, and “the political” (Ten Brink 2015, p.49–56). Wage-labor relations are “together, the dependency of wageworkers on demand for labour, the power of the capitalist to decide how to use that labour, and the right to appropriate the products that wage workers create” (p.49). Competitive relationships include the vertical — conflict between capital and labor — and the horizontal — conflict between different capitals. Money relations underlie all the features of capitalism and are themselves political in nature, namely because of the state’s power over money.
The fourth feature, the political, refers specifically to the role of the state in capitalism. The state exists to do what the above three structural features cannot do. The state, by virtue of being the body which maintains a monopoly on physical violence, is able “to perform a number of social, legal, and infrastructural functions of integration and assimilation on a permanent basis, that is, independent of crises, with the aim of safeguarding capitalist socialisation” (p.57).
The most crucial point about the state is that “because the process of accumulation is the decisive, dynamic force animating the capitalist mode of production, the state — in order to remain a viable actor — must take account of the fact that its revenues, which allow the state to set its policy in the first place, ultimately depend on the generally uninhibited accumulation of capital.” For this reason, the state will act against the immediate interests of individual capitals if such a course of action ensures the accumulation of capital in the long-term.
This is somewhat challenged by Robinson, who argues that once capital has transnationalized, “the basis upon which state managers and political elites achieve their reproduction” is also “transnationalized.To the extent that accumulation becomes transnational or to the extent that transnational capital becomes dominant among the capitals operating in their distinct political jurisdictions, state managers would come to reproduce themselves […] through the reproduction of the dominant transnational accumulation processes on which they depend” (Robinson 2010, p.68).
Robinson is however too hasty to proclaim the completion of the transnationalizing project. The global capitalist system is in the process of a transformation that is by no means guaranteed. Recent events suggest the possibility of a reconstituted nation-state which may very well favor an international over a transnational capital. Even if the capitalist system evades the return to nation-state geopolitics, it is not immediately clear whether the TCC is entirely formed. Undoubtedly the Chinese capitalist class, for example, shares common interests with its Western counterpart, but there is an unmistakable rivalry that challenges the possibility of transnational capitalist unity.
Nevertheless, Robinson rightly calls into the question the conceptual importance of the state. To this point, Teschke and Lacher suggest that “capitalism requires some form of (geo-)political organization, but it does not require the specific configuration of the geopolitical in which it historically emerged: a system of states. There simply is no straight line from capitalism to any specific geo-territorial matrix or set of international relations” (Teschke and Lacher 2010, p. 35). Global capitalism could therefore function on a political topography defined by interstate unions, regional power dynamics, or an otherwise heterogeneous political mapping of the world.
What more can we say to better understand where the state belongs in global capitalism? One point to note is that the domestic affairs of individual states are necessarily international, and the international are necessarily domestic. Currency policies, for instance, may originate in the domestic sphere but affect and are affected by international forces. The same could be said for policies regarding labor. What rights an individual state does and doesn’t afford to its labor force affect both domestic economic conditions as well as potential inflows of capital.
Ten Brink argues that the international state system in capitalism can only be understood through a global lens: “the international capitalist economy acquires its own dynamic with complex corporate interconnections, and inter- and transnational division of labour, a hierarchy of markets, production and consumption norms, all of which react back on the locally rooted relations of life and production” (65). In sum, the configuration of the international capitalist economy is necessarily global and not a simple aggregate of its parts. Consequently, not only is state-level analysis unable to articulate global power structures but it is also inaccessible without a global perspective, one that situates the various parts of the international capitalist economy in their particular historical positions.
Ultimately, the state is a critical feature of the capitalist geopolitical system. To date, only states have the capacity to enforce legal-regulatory frameworks and set economic policies. As Smith says, “in the Marxian framework […], the state is conceptualised as part of the social relations of capitalism, and not as a distinct entity separate from another allegedly distinct entity, ‘the economy’. The state is a necessary moment of capital accumulation, not some external force intervening in this process from outside. No less than the world market, it too implicitly operates on each of the theoretical levels discussed in the three volumes of Capital” (Smith 2009, p. 235).
However, none of this suggests, as Robinson and others have pointed out, that the state is a necessary political unit in global capitalism.
Power Dynamics
The next point of interest is the actual geopolitical structure of capitalism. Whatever role we ascribe to the state, we are still left with conceptualizing the incongruous political atmosphere at the interstate level. For one, capitalism on the global scale produces an uneven pace of development across regions. This is the result of both historical and structural conditions.
Countries with historical advantages based on military and economic coercion were generally speaking the first to develop fully industrial capitalist systems. Though competitors in the global capitalist arena were able to draft the technological innovations made by leading powers, the majority of the world remained underdeveloped, in large part due to explicit imperial policies. Since then, the uneven development of global economies has been perpetuated through various implicit and explicit mechanisms. Smith outlines monopolization of technology and intellectual property as one of the most crucial advantages used by developed countries today:
When a handful of giant First-World oligopolies operating at or near the frontier of scientific-technical knowledge sells inputs to, and purchase the outputs of, small-scale Third-World producers far from that frontier, the prices these producers must pay for their inputs tend to rise, while the prices they receive for outpost tend to stagnate or decline over time. In this manner, the oligopolies tend to appropriate a disproportionate share of the value produced in the production and distribution chain. As a direct result, the pressure on work conditions, wage levels, and worker communities in poorer regions remains unrelenting, a pressure quickly transferred to working men and women and their communities in the so-called North. In this manner, the drive to appropriate surplus profits through technological innovation — an essential feature of capitalist property relations and production — systematically tends to reproduce both uneven development in the world market over time and generalised economic insecurity (p.173).
This uneven development strongly justifies ten Brink’s insistence on studying specific historical constellations, which he defines as “the totality of development and social forces in a specific historical situation.” These constellations reflect an “intersection of a theory of capitalist development at specific phases with a theory of structure and agency (above all, the agency of collective actors)” (Ten Brink 2009, p. 116).
Whether a specific historical constellation is constituted by hegemonic power relations or by a looser and more competitive order, uneven development will remain a crucial factor of the capitalist geopolitical economy. Dominant figures in global politics are especially well armed to maintain a particular set of relations, though ten Brink argues that historically no state has maintained an unchallenged hegemony for extended periods of time. Even in the absence of a uniquely powerful state, the divide between developed and underdeveloped regions in the world can be reproduced with both “soft” and “hard” geopolitics (Ten Brink 2009). Whether through predatory international finance, unbalanced trade agreements, appropriation through technological monopolization, or simple threat of force, any constellation of capitalism will possess certain structures augmenting the competitive potential of a particular group of capitals.
It’s important to note that these downward pressures are not necessarily part of a deliberate attempt to suppress contenders. It is precisely the competitive framework of capitalism directing individual capital’s to seek out profits rates above the average that reproduces global inequalities. Cheap labor markets, uneven terms of trade, deregulation, and a myriad of other conditions are incentivized both for the advantage and disadvantaged parties. Struggling states may feel the pressure of deregulation to attract foreign capital or may fall prey to an endless cycle of loans (the infamous “debt trap”) which may permanently cripple any chances for sustainable economic development.
To be sure, success stories are often referenced as possible solutions to development crises. However, as Smith (2009) points out, these stories required what he terms a “catalytic state.” Even Japan and Korea, the poster children of capitalist success in Asia, relied heavily on directed state involvement in key industries, strong state currency policies, and robust legislation maximizing export-based development. Smith argues that the catalytic state, like any active state in contemporary global capitalism, is ultimately unable to address the substantial “exit options” and mobility available to capital. In other words, there is no sustainable way to account for capital’s ability to shift across territories in search of more profitable conditions. The state must necessarily adopt a “competitive” model that lends too many concessions to capital, resulting in an erosion of basic social infrastructures needed for long-term reproduction.
Financialization
Perhaps the most novel element of contemporary capitalism is financialization. Though the financial sector existed even in Marx’s time, the world of finance experienced an unprecedented explosion from the 1980s onwards. François Chesnais separates financial capital from finance capital by defining the former as “concentrated money capital operating in financial markets” (Chesnais 2018, p. 5). Finance capital, by contrast, is “the simultaneous and intertwined concentration and centralisation of money capital, industrial capital, and merchant or commercial capital as an outcome of domestic and transnational concentration through mergers and acquisitions.” Chesnais also highlights the distinction in Marx’s terms between concentration of capital and centralization. Whereas the former refers simply to capitalist production being (spontaneously) partitioned by individual capitals of varying sizes, the latter refers to the coagulation of multiple already existing capitals into increasingly larger dimensions. Centralization is therefore the process of distribution and organization of capital, specifically based on the tendency of capitals to attract.
Financial capital has acted as an accelerator for the process of capital accumulation. The more the flows of financial capital were freed up, the more money capital could be mobilized for accelerated investments.
Excess credit creation and credit bubbles have been inherent to the accumulation cycle as well as to the profitability of banks, which always depended on the amount of interest appropriated in their operations and so on the quantity but also the riskiness of the loans they made. Only the very largest could earn commissions through operations such as the search for capital required for the launching of joint-stock corporations. From the mid-nineteenth century onwards, crises of overproduction were fueled by what proved every time a posteriori to be excessive credit creation for investment. Banks were at the heart of the euphoria leading up to crashes and crises, and these seemed on the surface always to be financial crises. (Smith 2009, p.85)
Financial instruments in present-day capitalism have become unimaginably complex. With increased complexity and mobility, speculative cycles not only accelerate the pace of accumulation but endow an added degree of precarity in the system as a whole. As a result, fictitious capital (what Marx called claims on future profits) has surpassed all other forms of capital in volume. Derivatives, which are effectively claims on claims, trade in the hundreds of trillions of dollars per year. Though fictitious capital is distinct from interest-bearing capital (the term Marx used for credits and loans), it has an immense presence and downstream effect on more tangible markets. More importantly, the burden of these gambling schemes (like in 2008) is often shifted on the general population.
Chesnais is careful to contend that financialization has transcended national borders. The percentage of interlocking cross-country directors on corporate boards is not particularly high (29% in among the Fortune 500), suggesting that the establishment of a transnational capitalist class is some ways away (p. 106–107). Nevertheless, financialization augments the exit options available to capital which, as Smith pointed out, threaten to erode the power of individual states.
Capitalism’s Frontiers
Marxists argue that capitalism is not an eternal system. It came into being through a violent process of appropriation in which producers were separated from the means of production and consequently transformed into a labor force for capital. This project of primitive accumulation transformed entire landscapes into potential markets, often through the direct involvement of the state. Some have argued that the process of primitive accumulation is more or less complete (Robinson 2010), that the world is decidedly capitalist in its political, economic, and social structure. David Harvey’s (2010) famous thesis of accumulation by dispossession disputes the notion that capital ever completed the project of primitive accumulation. There is in fact an ever expanding frontier for capitalism, social spheres that have not yet been marketized or may otherwise be subjected to assimilation into the process of capital. Social formations that are not constituted by a specifically capitalist class structure are therefore spaces for potential capital penetration.
Bhattacharya and Seda-Irizarry (2017) contend that what has been overlooked in past studies is the way in which capital “may subject its noncapitalist “outside” to primitive accumulation to secure its conditions of existence” (p. 5). “In Marxian terms, non-capitalist surplus value is extracted by mercantile capitalist firms or captured as rents by firms who provide a crucial element that cannot be imitated, whether knowledge-commodities like patented designs (Nike, Reebok etc.), brand image, or consumption ambience (Starbucks). But the source of these mercantile profits and rents is the non-capitalist surplus value produced in the developing countries. The reduction of all economic sites and class processes to capitalist ones hides an important source of surplus value for merchants and rentbearing capital: non-capitalist value” (15).
It is worth drawing special attention to the appropriation of non-capitalist value and the power of accumulation by dispossession. These processes, which often involve violent privatization, financialization, and redistribution, have significant effects on local, national, and regional communities. In this sense, inventive mechanisms of value appropriation produce another faultline in contemporary capitalism with conflict between competing capitals and between capital and labor.
Conclusion
In summary, international conflict is not simply catalyzed by competing exports of finance capital. For one, capital does not require a state-oriented geopolitical matrix, though states continue to be critical political units in the international system. The complex structure of the international political economy is not a simple aggregate of national economies, not merely the sum of its parts. There are intercorporate and intersocietal connections that ultimately redefine and reproduce power dynamics. In this sense, the Marxist understanding of global politics calls into question the central assumption in conventional schools of thought regarding the universality of the state as the fundamental agent. The state is one level of the capitalist intersocietal hierarchies, albeit an especially important one.
What this suggests is that reducing political analysis to a strict dichotomization of core and periphery or imperial and colonial is insufficient for our analysis. The contemporary capitalist framework is not an intrinsically national one. It is not merely a question of American corporations penetrating sovereign barriers with the exclusive aid of the Pentagon and the US military. It is rather a heterogeneous system of implicit and explicit control mechanisms employed by capital on an international level of abstraction. The appropriation of surplus value, and especially of surplus profits, is manifested through a number of political and economic maneuvers. Privatization, foreign capital flows, deregulation, financialization, trade agreements, international political institutions — these processes and structures play an increasingly crucial role in maintaining the drive for the accumulation of capital, accelerated wherever possible. To put it in clear terms, capital’s allegiance is, in the last instance, to self-valorization.
Given the number of moving parts in the capitalist geopolitical economy, it is essential for us to be acutely aware of historical specificities. As ten Brink’s argues, historical constellations should form the basis of any systematic analysis since the four features of capitalism (wage labor relations, competitive relationships, money, and the political) are in a constant state of change. Shifting power dynamics, capital mobility, and uneven development all necessitate a careful study of any particular cross-section in capitalist history. It follows from this that, despite clear continuities, different historical constellations are not strictly comparable. The imperialism of Lenin’s time is necessarily incomparable to the imperialism of our era, even if many of the structural components have persisted. A valuable objective in the study of geopolitical economy ought to be the precise articulation of a historical constellation.
Historical specificity also rejects any notion of universality in global structures. We cannot be sure that the world is headed for Kautsky’s ultra-imperialism, in which a unified transnational capitalist class moves beyond horizontal competition. We cannot make final claims about particular hegemonic structures or any supposed systemic anarchy in the international system. The development of global capitalism is contingent on too many factors to reduce to a clear-cut teleology.
Finally, we should note that the global level of analysis cannot be separated from the others. The regional, national, and community levels should be part of a vertically and horizontally integrated approach. If we are thinking nationally, we should also be thinking globally, regionally, etc. As ten Brink suggests, none of the above dimensions enjoy a historical primacy over the others. As such, globalization is merely the reconfiguration of “overlapping and intersecting spaces” and not an “increasing primacy of the global” over the other spatial dimensions. If we are to understand capitalism’s future mutations, we must be as comprehensive as possible.
https://www.youtube.com/watch?v=MYxrd2WBsWw&ab_channel=TheMarxistProject
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