Financialization of States

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By JUAREZ GUIMARÃES*

If there is financialized capitalism in the XNUMXst century, it is because of the financialization of national states.

The identification of capitalism in the era of neoliberalism as a financialized capitalism can be proved in five dimensions combined. In “The Long Twentieth Century”, Giovanni Arrighi tells us that financialization is a trend of conjunctures of crisis of hegemony in the world system. But this process of financialization in XNUMXst century capitalism certainly has singularities, typical of the crisis of the hegemony of the US State and the degree of maturation and systemic integration of world capitalism.

Financialization is understood, first of all, by the dominance of financial capital over industrial, agrarian, commercial capital. Finance capital weakens its virtuous systemic function in the capitalist cycle, of financing production, investments, consumption, to become itself the privileged sector of accumulation, more lucrative and more profitable. And, more than that, it begins to internally subordinate the very dynamics of accumulation of industrial, agrarian and commercial capital.

Secondly, this financialization is expressed by the growth of the mass of financial assets in relation to world GDP, that is, the former move from an equivalence ratio to a dimension three times greater than world GDP at the end of the second decade of the XNUMXst century. Not subject to the strict control of any national State, this mass of financial assets operates with its own dynamics of reproduction, political power and destabilization of the world economy.

This cosmopolitan character of the financialization process maintains a contradictory relationship with the North American State, its main supporter, and the States of the capitalist center. On the one hand, it has served the US imperial domain, which still controls the main currency, the main financial centers and the main regulatory institutions of the world capitalist order; on the other hand, they act with their power of corruption, speculation and predation to undermine the very internal bases of legitimacy of the North American liberal State.

The fourth dimension of this financialization process is its speculative, rentier (non-productive), predatory (of companies and public funds, of nature) and tax evasion characteristics. Financialized capitalism is a system of recessive trends and low growth, of destruction of sociability typical of the Fordist era, of growth in inequalities and unemployment, of civilizing regression.

Finally, financialization promotes cultural and media protagonism from large financial corporations to all spheres of social life. With its power of mobility and flexibility, financial capitals manage schools, museums, films and series, newspapers and magazines, advertising, concert and entertainment venues, billboards, virtual networks, soccer teams, health or pension plans, alternative cultures and assistance programs, green economies and agro: they dominate due to the saturation and naturalization of their presence.

 

A new political regime of accumulation

The theses of class struggle (neoliberalism as a kind of revenge by capitalists against the rights and gains of the working classes achieved after the first post-war decades), the critique of Marxist political economy (neoliberalism as a reversal, even insecure and of long-term decreasing trends in the capitalist rate of profit), schools of regulation (neoliberalism as a dynamic of permanent systemic crises), development and decolonial theories (neoliberalism as globalization and deeper resumption of colonial dynamics) certainly capture core dimensions of neoliberalism. But they are partial if they do not place financialization at the center, which concentrates and synthesizes all these dimensions.

It is due to Bob Jessop, the great theoretical heir of Poulantzas, in “ Authoritarian Neoliberalism: periodization and critique” and in the entry “Neoliberalism” in the Blackwell Encyclopedia of Globalization (2012, vol. 3), a fundamental concept to operate a political synthesis of financialization. Returning to Poulantzas' latest elaborations on the crisis of the capitalist State and working on his theory of the State as articulated by the hegemony of one sphere of capital over the others, Bob Jessop tells us of a new regime of financially centered accumulation, which would imply a new bourgeois hegemony within it.

In summary, neoliberalism would be a new liberal state regime, different from that organized after the war in the core countries of democracies organized by social or Keynesian liberalism, organized by new political coalitions organic to large financial corporations. If there is financial capitalism in the XNUMXst century, it is because there was first a victory of this new political coalition in the central capitalist States, starting with the US and also in an important way in the governance of the European Union, of this new political regime of financially centered accumulation.

The conquest of this new political regime of accumulation required and still requires a process of destruction/creation, in the various temporalities of contemporary capitalist states. This process of changing the political regime of accumulation can be called the financialization of the liberal States, that is, the functionalization of their Constitutions, macroeconomic institutions, jurisprudence and governance to the interests of financial capital, as well as the capture of their centers of power by political coalitions managed by these interests.

More than other accumulation regimes of capitalism, this new financially centered regime is strictly dependent throughout its cycle on control over state powers. The management of currency, credit, exchange, public debt management, the budget, the tax system, public funds and companies, all this institutionality more than conditions, it determines the reproduction of financial capital. Therefore, its central antagonism is democracy.

 

Sovereignty of banks or popular sovereignty?

This conceptual and historical synthesis of neoliberalism claims to place financialization at the center of criticism, dispute and construction of alternatives. Because the financialization of states, as defined, means exactly their profound and structural de-democratization, even within the limits classically posed by liberal democracy.

This de-democratization implies precisely undermining or simply destroying the traditional spaces in which the working classes organized their cultures of resistance and struggle for rights within the liberal order. For the logic of financialization, which values ​​itself in circuits that maintain a highly autonomous relationship with the production of goods, does not exactly imply defeating work, creating correlations of forces unfavorable to it, but in fact eliminating it as an identity, culture and program.

It would be necessary to understand better and in a deeper way how neoliberalism proposed to destroy work as an identity, culture and program.

*Juarez Guimaraes is a professor of political science at UFMG. Author, among other books, of Democracy and Marxism: Criticism of Liberal Reason (Shaman).

 

To access the first article in the series click on https://aterraeredonda.com.br/por-uma-teoria-critica-do-neoliberalismo/

To access the second article in the series click on https://aterraeredonda.com.br/por-um-dicionario-critico-ao-neoliberalismo/

To access the third article in the series click on https://aterraeredonda.com.br/neoliberalismo-como-jaula-de-ferro/

To access the fourth article in the series click on https://aterraeredonda.com.br/neoliberalismo-e-regressao/

To access the fifth article in the series click on https://aterraeredonda.com.br/a-razao-da-desigualdade/

To access the sixth article in the series click on https://aterraeredonda.com.br/da-batalha-das-ideias-ao-poder-global/

 

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