The Winding Paths Of Capital

[Dr. Arrighi passed away peacefully in his home in Baltimore on June 18, 2009 at 11 a.m. He had been diagnosed with cancer in July 2008. He is survived by his partner Dr. Beverly Silver and his son Andrea.]


Giovanni Arrighi Interviewed by David Harvey in New Left Review 56, March-April 2009


Could you tell us about your family background and your education?


I was born in Milan in 1937. On my mother’s side, my family background was bourgeois. My grandfather, the son of Swiss immigrants to Italy, had risen from the ranks of the labour aristocracy to establish his own factories in the early twentieth century, manufacturing textile machinery and later, heating and air-conditioning equipment. My father was the son of a railway worker, born in Tuscany. He came to Milan and got a job in my maternal grandfather’s factory—in other words, he ended up marrying the boss’s daughter. There were tensions, which eventually resulted in my father setting up his own business, in competition with his father-in-law. Both shared anti-fascist sentiments, however, and that greatly influenced my early childhood, dominated as it was by the war: the Nazi occupation of Northern Italy after Rome’s surrender in 1943, the Resistance and the arrival of the Allied troops.


My father died suddenly in a car accident, when I was 18. I decided to keep his company going, against my grandfather’s advice, and entered the Università Bocconi to study economics, hoping it would help me understand how to run the firm. The Economics Department was a neo-classical stronghold, untouched by Keynesianism of any kind, and no help at all with my father’s business. I finally realized I would have to close it down. I then spent two years on the shop-floor of one of my grandfather’s firms, collecting data on the organization of the production process. The study convinced me that the elegant general-equilibrium models of neo-classical economics were irrelevant to an understanding of the production and distribution of incomes. This became the basis of my dissertation. Then I was appointed as assistente volontario, or unpaid teaching assistant to my professor—in those days, the first rung on the ladder in Italian universities. To earn my living I got a job with Unilever, as a trainee manager.


How did it come about that you went to Africa in 1963, to work in the University College of Rhodesia and Nyasaland?


Why I went there was pretty straightforward. I learnt that British universities were actually paying people to teach and do research—unlike the position in Italy, where you had to serve for four or five years as an assistente volontario before there was any hope of a paid job. In the early 1960s the British were setting up universities throughout their former colonial empire, as colleges of British ones. The ucrn was a college of the University of London. I had put in for two positions, one in Rhodesia and one in Singapore. They called me for an interview in London and, because the ucrn was interested, they offered me the job as Lecturer in Economics. So I went.


It was a true intellectual rebirth. The mathematically modelled neo-classical tradition I’d been trained in had nothing to say about the processes I was observing in Rhodesia, or the realities of African life. At ucrn I worked alongside social anthropologists, particularly Clyde Mitchell, who was already doing work on network analysis, and Jaap Van Velsen, who was introducing situational analysis, later reconceptualized as extended case-study analysis. I went to their seminars regularly and was greatly influenced by the two of them. Gradually, I abandoned abstract modelling for the concrete, empirically and historically grounded theory of social anthropology. I began my long march from neo-classical economics to comparative-historical sociology.


This was the context for your 1966 essay, ‘The Political Economy of Rhodesia’, which analysed the forms of capitalist class development there, and their specific contradictions—explaining the dynamics that led to the victory of the settlers’ Rhodesian Front Party in 1962, and to Smith’s Unilateral Declaration of Independence in 1965. What was the initial impulse behind the essay, and what is its importance for you, looking back?


‘The Political Economy of Rhodesia’ was written at the incitement of Van Velsen, who was relentlessly critical of my use of mathematical models. I had done a review of Colin Leys’s book, European Politics in Southern Rhodesia, and Van Velsen suggested I develop it into a longer article. Here, and in ‘Labour Supplies in Historical Perspective’, I analysed the ways in which the full proletarianization of the Rhodesian peasantry created contradictions for capital accumulation—in fact, ended up producing more problems than advantages for the capitalist sector. [1] As long as proletarianization was partial, it created conditions in which the African peasants subsidized capital accumulation, because they produced part of their own subsistence; but the more proletarianized the peasantry became, the more these mechanisms began to break down. Fully proletarianized labour could be exploited only if it was paid a full living wage. Thus, instead of making it easier to exploit labour, proletarianization was actually making it more difficult, and often required the regime to become more repressive. Martin Legassick and Harold Wolpe, for example, maintained that South African Apartheid was primarily due to the fact that the regime had to become more repressive of the African labour force because it was fully proletarianized, and could no longer subsidize capital accumulation as it had done in the past.


The whole southern region of Africa—stretching from South Africa and Botswana through the former Rhodesias, Mozambique, Malawi, which was then Nyasaland, up to Kenya, as the north-east outpost—was characterized by mineral wealth, settler agriculture and extreme dispossession of the peasantry. It is very different from the rest of Africa, including the north. West African economies were essentially peasant-based. But the southern region—what Samir Amin called ‘the Africa of the labour reserves’—was in many ways a paradigm of extreme peasant dispossession, and thus proletarianization. Several of us were pointing out that this process of extreme dispossession was contradictory. Initially it created the conditions for the peasantry to subsidize capitalist agriculture, mining, manufacturing and so on. But increasingly it created difficulties in exploiting, mobilizing, controlling the proletariat that was being created. The work that we were doing then—my ‘Labour Supplies in Historical Perspective’, and related works by Legassick and Wolpe—established what came to be known as the Southern Africa Paradigm on the limits of proletarianization and dispossession.


Contrary to those who still identify capitalist development with proletarianization tout court—Robert Brenner, for example—the southern Africa experience showed that proletarianization, in and by itself, does not favour capitalist development—all kinds of other circumstances are required. For Rhodesia, I identified three stages of proletarianization, only one of which was favourable to capitalist accumulation. In the first stage, the peasants responded to rural capitalist development by supplying agricultural products, and would only supply labour in return for high wages. The whole area thus came to be characterized by a shortage of labour, because whenever capitalist agriculture or mining began developing, it created a demand for local produce which the African peasants were very quick to supply; they could participate in the money economy through the sale of produce rather than the sale of labour. One aim of state support for settler agriculture was to create competition for the African peasants, so that they would be forced to supply labour rather than products. This led to a long-drawn-out process that went from partial proletarianization to full proletarianization; but, as already mentioned it was also a contradictory process. The problem with the simple ‘proletarianization as capitalist development’ model is that it ignores not just the realities of southern Africa’s settler capitalism but also many other cases, such as the United States itself, which was characterized by a totally different pattern—a combination of slavery, genocide of the native population and the immigration of surplus labour from Europe.


You were one of nine lecturers at ucrn arrested for political activities during the Smith government’s July 1966 clampdown?


Yes, we were jailed for a week, and then deported.


You went to Dar es Salaam, which sounded then like a paradise of intellectual interactions, in many ways. Can you tell us about that period, and the collaborative work you did there with John Saul?


It was a very exciting time, both intellectually and politically. When I got to Dar es Salaam in 1966, Tanzania had only been independent for a few years. Nyerere was advocating what he considered to be a form of African socialism. He managed to stay equidistant from both sides during the Sino-Soviet split, and maintained very good relations with the Scandinavians. Dar es Salaam became the outpost of all the exiled national liberation movements of southern Africa—from the Portuguese colonies, Rhodesia and South Africa. I spent three years at the University there, and met all kinds of people: activists from the Black Power movement in the US, as well as scholars and intellectuals like Immanuel Wallerstein, David Apter, Walter Rodney, Roger Murray, Sol Picciotto, Catherine Hoskins, Jim Mellon, who later was one of the founders of the Weathermen, Luisa Passerini, who was doing research on Frelimo, and many others; including, of course, John Saul.


At Dar es Salaam, working with John, I shifted my research interests from labour supplies to the issue of national liberation movements and the new regimes that were emerging out of decolonization. We were both sceptical about the capacity of these regimes to emancipate themselves from what was just starting to be called neocolonialism, and actually deliver on their promises of economic development. But there was also a difference between us, which I think has persisted until today, in that I was far less upset by this than John was. For me, these movements were national liberation movements; they were not in any way socialist movements, even when they embraced the rhetoric of socialism. They were populist regimes, and therefore I didn’t expect much beyond national liberation, which we both saw as very important in itself. But whether there were possibilities for political developments beyond this is something that John and I still quarrel about to this day, good-humouredly, whenever we meet. But the essays we wrote together were the critique that we agreed upon.


When you came back to Europe, you found a very different world to the one you’d left six years before?


Yes. I came back to Italy in 1969, and I was immediately plunged into two situations. One was at the University of Trento, where I had been offered a lectureship. Trento was the main centre of student militancy, and the only university in Italy that gave doctorates in Sociology at the time. My appointment was sponsored by the organizing committee of the university, which consisted of the Christian Democrat Nino Andreatta, the liberal socialist Norberto Bobbio, and Francesco Alberoni; it was part of an attempt to tame the student movement through hiring a radical. In the first seminar I gave, I only had four or five students; but in the fall semester, after my book on Africa came out in the summer of 1969, I had almost 1,000 students trying to get into the classroom. [2] My course became the big event of Trento. It even split Lotta Continua: the Boato faction wanted students to come to the class, to hear a radical critique of development theories, whereas the Rostagno faction was trying to disrupt the lectures by throwing stones at the classroom from the courtyard.


The second situation was in Turin, via Luisa Passerini, who was a prominent propagator of the Situationists’ writings, and therefore had a big influence on many of the cadres of Lotta Continua who were picking up on Situationism. I was commuting from Trento to Turin, via Milan—from the centre of the student movement to the centre of the workers’ movement. I felt attracted and at the same time bothered by some aspects of this movement—particularly its rejection of ‘politics’. At some of the assemblies, very militant workers would stand up and say, ‘Enough of politics! Politics is dragging us in the wrong direction. We need unity.’ For me, it was quite a shock, coming from Africa, to discover that the Communist unions were considered reactionary and repressive by the workers in struggle—and there was an important element of truth in this. The reaction against the pci unions became a reaction against all trade unions. Groups like Potere Operaio and Lotta Continua established themselves as alternatives, both to the unions and to the mass parties. With Romano Madera, who was then a student, but also a political cadre and a Gramscian—a rarity in the extra-parliamentary left—we began to develop the idea of finding a Gramscian strategy to relate to the movement.


That’s where the idea of autonomia—of the intellectual autonomy of the working class—first emerged. The creation of this concept is now generally attributed to Antonio Negri. But in fact it originated in the interpretation of Gramsci that we developed in the early 1970s, in the Gruppo Gramsci co-founded by Madera, Passerini and myself. We saw our main contribution to the movement not as providing a substitute for the unions, or for the parties, but as students and intellectuals who were involved in helping the workers’ vanguards to develop their own autonomy—autonomia operaia—through an understanding of the broader processes, both national and global, in which their struggles were taking place. In Gramscian terms, this was conceived as the formation of organic intellectuals of the working class in struggle. To this end we formed the Colletivi Politici Operai (cpos), which became known as the Area dell’Autonomia. As these collectives developed their own autonomous practice, the Gruppo Gramsci would cease to have a function and could disband. When it actually was disbanded in the fall of 1973, Negri came into the picture, and took the cpos and the Area dell’Autonomia in an adventurous direction that was far from what was originally intended.


Were there any common lessons that you took from the African national liberation struggles and Italian working-class struggles?


The two experiences had in common the fact that, in both, I had very good relations with the broader movements. They wanted to know on what basis I was participating in their struggle. My position was: ‘I’m not going to tell you what to do, because you know your situation much better than I ever will. But I am better placed to understand the wider context in which it develops. So our exchange has to be based on the fact that you tell me what your situation is, and I tell you how it relates to the wider context which you cannot see, or can see only partially, from where you operate.’ That was always the basis of excellent relations, both with the liberation movements in southern Africa and with the Italian workers.


The articles on the capitalist crisis originated in an exchange of this kind, in 1972. [3] The workers were being told, ‘Now there is an economic crisis, we have to keep quiet. If we carry on struggling, the factory jobs will go elsewhere.’ So the workers posed the question to us: ‘Are we in a crisis? And if so, what are its implications? Should we just stay quiet now, because of this?’ The articles that comprised ‘Towards a Theory of Capitalist Crisis’ were written within this particular problematic, framed by the workers themselves, who were saying: ‘Tell us about the world out there and what we have to expect.’ The starting-point of the articles was, ‘Look, crises occur whether you struggle or not—they’re not a function of workers’ militancy, or of "mistakes" in economic management, but fundamental to the operations of capitalist accumulation itself.’ That was the initial orientation. It was written at the very beginning of the crisis; before the existence of a crisis was widely recognized. It became important as a framework that I’ve used, over the years, to monitor what is happening. From that point of view, it has worked pretty well.


We’ll come back to the theory of capitalist crises, but I wanted first to ask you about your work in Calabria. In 1973, just as the movement was finally starting to subside, you took up the offer of a teaching position at Cosenza?


One of the attractions of going to Calabria, for me, was to continue in a new location my research on labour supplies. I had already seen in Rhodesia how, when the Africans were fully proletarianized—or, more precisely, when they became conscious that they were now fully proletarianized—this led to struggles to get a living wage in the urban areas. In other words, the fiction that ‘We are single males, our families continue to live peasant lives in the countryside’, cannot hold once they actually have to live in the cities. I had pointed this out in ‘Labour Supplies in Historical Perspective’. It came into clearer focus in Italy, because there was this puzzle: migrants from the south were brought into the northern industrial regions as scabs, in the 1950s and early 1960s. But from the 1960s, and especially the late 1960s, they were transformed into class-struggle vanguards, which is a typical experience of migrants. When I set up a research working group in Calabria, I got them to read the social anthropologists on Africa, particularly on migration, and then we did an analysis of the labour supply from Calabria. The questions were: what was creating the conditions for this migration? And what were its limits—given that, at a certain point, instead of creating a docile labour force that could be used to undermine the bargaining power of the northern working class, the migrants themselves became the militant vanguard?


Two things emerged from the research. First, capitalist development does not necessarily rely on full proletarianization. On the one hand, long-distance labour migration was occurring from places where no dispossession was taking place; where there were even possibilities for the migrants to buy land from the landlords. This was related to the local system of primogeniture, whereby only the eldest son inherited the land. Traditionally, younger sons ended up joining the Church or the Army, until large-scale, long-distance migrations provided an increasingly important alternative way to earn the money necessary to buy land back home and set up their own farms. On the other hand, in the really poor areas, where labour was fully proletarianized, they usually could not afford to migrate at all. The only way in which they could do so was, for example, when the Brazilians abolished slavery in 1888 and needed a substitute cheap labour force. They recruited workers from these deeply impoverished areas of southern Italy, paid their fares and resettled them in Brazil, to replace the emancipated slaves. These are very different patterns of migration. But generally speaking, it is not the very poor who migrate; it is necessary to have some means and connections in order to do so.


The second finding from the Calabrian research had similarities with the results from the research on Africa. Here, too, the migrants’ disposition towards engaging in working-class struggles in the places to which they had moved depended on whether the conditions there were considered as permanently determining their life chances. It’s not enough to say that the situation in the out-migrating areas determines what salaries and conditions the migrants will work for. One has to say at what point the migrants perceive themselves as deriving the bulk of their subsistence from wage employment—it’s a switch that can be detected and monitored. But the main point to emerge was a different kind of critique of the idea of proletarianization as the typical process of capitalist development.


The initial write-up of this research was stolen from a car in Rome, so the final write-up took place in the United States, many years after you moved to Binghamton in 1979, where world-systems analysis was being developed.Was this the first time you explicitly situated your position on the relationship between proletarianization and capitalist development vis-à-vis those of Wallerstein and Brenner?


Yes, although I was not sufficiently explicit about this, even though I mentioned both Wallerstein and Brenner in passing; but the whole piece is, in fact, a critique of both of them. [4] Wallerstein holds the theory that relations of production are determined by their position in a core-periphery structure. According to him, in the periphery, you tend to have relations of production that are coercive; you don’t have full proletarianization, which is a situation that you find in the core. Brenner has, in some respects, the opposite view, but in other ways it is very similar: that relations of production determine position in the core-periphery structure. In both, you have one particular relationship between position in the core-periphery and relations of production. The Calabrian research showed that this is not the case. There, within the same peripheral location, we found three different paths developing simultaneously, and mutually reinforcing each other. Moreover, the three paths strongly resembled developments that had, historically, characterized different core locations. One is very similar to Lenin’s ‘Junker’ route—latifundia with full proletarianization; another to Lenin’s ‘American’ route, of small and medium farms, embedded in the market. Lenin doesn’t have the third one, which we called the Swiss route: long-distance migration, and then investment and retention of property back home. In Switzerland, there is no dispossession of the peasantry but rather a tradition of migration that led to the consolidation of small farming. The interesting thing about Calabria is that all three routes, which elsewhere are associated with a position in the core, are found here in the periphery—which is a critique both of Brenner’s single process of proletarianization, and of Wallerstein’s tracing of relations of production to position.


Your Geometry of Imperialism appeared in 1978, before you went to the US. Re-reading it, I was struck by the mathematical metaphor—the geometry—which you use to construct the understanding of Hobson’s theory of imperialism, and which performs a very useful function. But inside it, there’s an interesting geographical question: when you bring Hobson and capitalism together, the notion of hegemony suddenly emerges, as a geometry-to-geography shift in what you’re doing. What was the initial spur to writing The Geometry, and what is its importance for you?


I was disturbed, at the time, by the terminological confusions that were swirling around the term ‘imperialism’. My aim was to dissipate some of the confusion by creating a topological space in which the different concepts, which were often all confusingly referred to as ‘imperialism’, could be distinguished from one another. But as an exercise on imperialism, yes, it also functioned as a transition to the concept of hegemony for me. I spelled this out explicitly in the Postscript to the 1983 second edition of The Geometry of Imperialism, where I argued that the Gramscian concept of hegemony could be more useful than ‘imperialism’ in analysing contemporary dynamics of the inter-state system. From this point of view, what I—and others—did was simply to re-apply Gramsci’s notion of hegemony to inter-state relations, where it had originally been before Gramsci applied it to an analysis of class relations within a national political jurisdiction. In doing so, of course, Gramsci enriched the concept in many ways that had not been graspable before. Our re-exportation of it to the international sphere benefited enormously from this enrichment.


A central influence in the conception of The Long Twentieth Century, published in 1994, is Braudel. After absorbing it, do you have any significant criticisms of him?


The criticism is fairly easy. Braudel is an incredibly rich source of information about markets and capitalism, but he has no theoretical framework. Or more accurately, as Charles Tilly pointed out, he is so eclectic that he has innumerable partial theories, the sum of which is no theory. You can’t simply rely on Braudel; you have to approach him with a clear idea of what you are looking for, and what you are extracting from him. One thing that I focused on, which differentiates Braudel from Wallerstein and all other world-systems analysts—not to speak of more traditional economic historians, Marxist or otherwise—is the idea that the system of national states, as it emerged in the sixteenth and seventeenth centuries, was preceded by a system of city-states; and that one has to look for the origins of capitalism there, in the city-states. This is the distinguishing feature of the West, or Europe, compared to other parts of the world. But you easily get lost if you just follow Braudel, because he takes you in so many different directions. For example, I had to extract this point and combine it with what I was learning from William McNeill’s Pursuit of Power, which also argues, from a different perspective, that a system of city-states preceded and prepared the emergence of a system of territorial states.


Another idea, to which you provide much greater theoretical depth, but which nevertheless comes from Braudel, is the notion that financial expansion announces the autumn of a particular hegemonic system, and precedes a shift to a new hegemon. This would seem a central insight of The Long Twentieth Century?


Yes. The idea was that the leading capitalist organizations of a particular epoch would also be the leaders of the financial expansion, which always occurs when the material expansion of productive forces reaches its limits. The logic of this process—though again, Braudel doesn’t provide it—is that when competition intensifies, investment in the material economy becomes increasingly risky, and therefore the liquidity preference of accumulators is accentuated, which, in turn, creates the supply conditions of the financial expansion. The next question, of course, is how the demand conditions for financial expansions are created. On this, I relied on Weber’s idea that inter-state competition for mobile capital constitutes the world-historical specificity of the modern era. This competition, I argued, creates the demand conditions for the financial expansion. Braudel’s idea of ‘autumn’—as the concluding phase of a process of leadership in accumulation, which goes from material to financial, and eventually to displacement by another leader—is crucial. But so is Marx’s idea that the autumn of a particular state, experiencing financial expansion, is also the springtime for another location: surpluses that accumulate in Venice go to Holland; those that accumulate in Holland then go to Britain; and those that accumulate in Britain go to the United States. Marx thus enables us to complement what we have in Braudel: autumn becomes a spring elsewhere, producing a series of interconnected developments.


The Long Twentieth Century traces these successive cycles of capitalist expansion and hegemonic power from the Renaissance to the present. In your narrative, phases of material expansion of capital eventually peter out under the pressure of overcompetition, giving way to phases of financial expansion, whose exhaustion then precipitates a time of inter-state chaos which is resolved by the emergence of a new hegemonic power, capable of restoring global order and restarting the cycle of material expansion once again, supported by a new social bloc. Such hegemons have been in turn Genoa, the Netherlands, Britain and the United States. How far do you regard their punctual appearance, each putting an end to a preceding time of troubles, as a set of contingencies?


Good and difficult question! There is always an element of contingency. At the same time, the reason why these transitions take so long, and go through periods of turbulence and chaos, is that the agencies themselves, as they later emerge to organize the system, go through a learning process. This is clear if we look at the most recent case, that of the United States. By the late nineteenth century, the United States already had some characteristics that made it a possible successor to Britain as the hegemonic leader. But it took more than half a century, two world wars and a catastrophic depression before the United States actually developed both the structures and the ideas that, after the Second World War, enabled it to become truly hegemonic. Was the development of the United States as a potential hegemon in the nineteenth century strictly a contingency, or is there something else? I don’t know. Clearly, there was a contingent geographical aspect—North America had a different spatial configuration than Europe, which enabled the formation of a state that could not be created in Europe itself, except on the eastern flank, where Russia was also expanding territorially. But there was also a systemic element: Britain created an international credit system that, after a certain point, favoured the formation of the United States in particular ways.


Certainly, if there had been no United States, with its particular historical-geographical configuration in the late nineteenth century, history would have been very different. Who would have become hegemonic? We can only conjecture. But there was the United States, which was building, in many ways, on the tradition of Holland and Britain. Genoa was a bit different: I never say that it was hegemonic; it was closer to the type of transnational financial organization that occurs in diasporas, including the contemporary Chinese diaspora. But it was not hegemonic in the Gramscian sense that Holland, Britain and the United States were. Geography matters a lot; but even though these are three spatially very different hegemons, each built on organizational characteristics learned from the previous one. There is considerable borrowing by Britain from the Netherlands, and by the United States from Britain; these are an interlinked set of states—there is a kind of snowball effect. So, yes, there is contingency; but there are also systemic links.


The Long Twentieth Century doesn’t cover the fate of the labour movement. Did you omit it because you regarded it, by then, as of lesser importance, or because the architecture of the book—its subtitle is Money, Power and the Origins of Our Times—was already so far-reaching and complex that you felt to include labour would overload it?


More the latter. The Long Twentieth Century was originally supposed to be co-authored with Beverly Silver—whom I first met in Binghamton—and was to be in three parts. One was the hegemonies, which now actually forms the book’s first chapter. The second part was supposed to be capital—the organization of capital, the business enterprise; basically, competition. The third part was supposed to be labour—labour and capital relations, and labour movements. But the discovery of financialization as a recurrent pattern of historical capitalism upset the whole project. It forced me to go back in time, which I never wanted to do, because the book was really supposed to be about the ‘long twentieth century’, meaning from the 1870s Great Depression through to the present. When I discovered the financialization paradigm I was thrown completely off balance, and The Long Twentieth Century became basically a book about the role of finance capital in the historical development of capitalism, from the fourteenth century. So Beverly took over the work on labour, in her Forces of Labour, which came out in 2003. [5]


Co-authored by the two of you in 1999, Chaos and Governance seems to respect the kind of structure you’d initially planned for The Long Twentieth Century?


Yes, in Chaos and Governance there are chapters on geopolitics, business enterprise, social conflict, and so on. [6] So the original project was never abandoned. But it certainly was not adhered to in The Long Twentieth Century, because I could not focus on the cyclical recurrence of financial expansions and material expansions and, at the same time, deal with labour. Once you shift the focus in defining capitalism to an alternation of material and financial expansions, it becomes very difficult to bring labour back in. Not only is there too much to cover, but there is also considerable variation over time and space in the relationship between capital and labour. For one thing, as we point out in Chaos and Governance, there is a speeding up of social history. When you compare transitions from one regime of accumulation to another, you realize that in the transition from Dutch to British hegemony in the eighteenth century, social conflict comes in late, relative to financial expansions and wars. In the transition from British to us hegemony in the early twentieth century, the explosion of social conflict was more or less simultaneous with the take-off of the financial expansion and wars. In the current transition—to an unknown destination—the explosion of social conflict in the late 1960s and early 1970s preceded the financial expansion, and took place without wars among the major powers.


In other words, if you take the first half of the twentieth century, the biggest workers’ struggles occurred on the eve of the world wars, and in their aftermath. This was the basis of Lenin’s theory of revolution: that inter-capitalist rivalries turning into wars would create favourable conditions for revolution, which is something that can be observed empirically up to the Second World War. In a sense one could argue that, in the present transition, the speeding up of social conflict has prevented capitalist states from waging wars on one another. So, to return to your question, in The Long Twentieth Century I chose to focus on elaborating fully the argument about financial expansions, systemic cycles of capital accumulation and world hegemonies; but in Chaos and Governance we returned to the issue of the inter-relations between social conflict, financial expansions and hegemonic transitions.


In his discussion of primitive accumulation, Marx writes about the national debt, the credit system, the bankocracy—in a way, the integration between finance and state that occurred during primitive accumulation—as being absolutely critical to the way in which a capitalist system evolves. But the analysis in Capital refuses to deal with the credit system until you get to Volume Three, because Marx doesn’t want to deal with interest, even though the credit system keeps on coming up as crucial to the centralization of capital, to the organization of fixed capital, and so on. This raises the question of how class struggle actually works around the finance-state nexus, which plays the vital role that you’re pointing to. There seems to be a gap in Marx’s analysis: on the one hand, saying the important dynamic is that between capital and labour; on the other hand, labour doesn’t seem to be crucial to the processes that you’re talking about—transferences of hegemony, jumping of scales. It’s understandable that The Long Twentieth Century had a hard time integrating labour into that story, because in a sense the capital-labour relation is not central to that aspect of the capitalist dynamic. Would you agree with that?


Yes, I agree, with one qualification: the phenomenon I mentioned of the speeding up of social history. The worker struggles of the 1960s and early 1970s, for example, were a major factor in the financialization of the late 1970s and 1980s, and the ways in which it evolved. The relationship between workers’ and subaltern struggles and financialization is something that changes over time, and has recently developed characteristics that it didn’t have before. But if you are trying to explain the recurrence of financial expansions, you cannot focus too much on labour, because then you will be talking only about the latest cycle; you are bound to make the mistake of taking labour as the cause of financial expansions, when earlier ones took off without the intervention of workers’ or subaltern struggles.


Still on the question of labour, then, could we track back to your 1990 essay on the remaking of the world labour movement, ‘Marxist Century, American Century’. [7] You argued there that Marx’s account of the working class in the Manifesto is deeply contradictory, since it stresses at once the increasing collective power of labour, as capitalist development proceeds, and its increasing immiseration, corresponding in effect to an active industrial army and a reserve army. Marx, you pointed out, thought that both tendencies would be united in the same human mass; but you went on to argue that, in the early twentieth century, they in fact became spatially polarized. In Scandinavia and the Anglosphere, the first prevailed, in Russia and further east the second—Bernstein capturing the situation of the former, Lenin of the latter—leading to the split between reformist and revolutionary wings of the labour movement. In Central Europe—Germany, Austria, Italy—on the other hand, you argued that there was a more fluctuating balance between active and reserve, leading to Kautsky’s equivocations, unable to choose between reform or revolution, contributing to the victory of fascism. At the end of the essay you suggested that a recomposition of the labour movement might be coming about—misery reappearing in the West, with the return of widespread unemployment; and collective power of workers, with the rise of Solidarity, in the East, perhaps reuniting what space and history had divided. What is your view of such a prospect today?


Well, the first thing is that, along with this optimistic scenario from the point of view of uniting the conditions of the working class globally, there was a more pessimistic consideration in the essay, pointing to something that I’ve always considered a very serious flaw in Marx and Engels’s Manifesto. There is a logical leap that does not really hold up, intellectually or historically—the idea that, for capital, those things that we would today call gender, ethnicity, nationality, do not matter. That the only thing that matters for capital is the possibility of exploitation; and therefore the most exploitable status group within the working class is the one they will employ, without any discrimination on the basis of race, gender, ethnicity. That’s certainly true. However, it doesn’t follow that the various status groups within the working class will just accept this. In fact, it is precisely at the point when proletarianization becomes generalized, and workers are subjected to this disposition of capital, that they will mobilize whatever status difference they can identify or construct to win a privileged treatment from the capitalists. They will mobilize along gender lines, national lines, ethnicity or whatever, to obtain a privileged treatment from capital.


‘Marxist Century, American Century’ is therefore not as optimistic as it might have seemed, because it pointed to this internal working-class tendency to accentuate status differences, to protect themselves from the disposition of capital to treat labour as an undifferentiated mass that would be employed only to the extent that it enabled capital to reap profits. So the article ended on an optimistic note, that there is a tendency toward levelling; but at the same time one should expect workers to fight to protect themselves through status-group formation or consolidation against this very tendency.


Does this mean that the differentiation between the active army and the industrial reserve army also tends to be status-divided—racialized, if you will?


It depends. If you look at the process globally—where the reserve army is not just the unemployed, but also the disguisedly unemployed and the excluded—then definitely there is a status division between the two. Nationality has been used by segments of the working class, of the active army, to differentiate themselves from the global reserve army. At a national level, this is less clear. If you take the United States or Europe, it’s much less apparent that there is actually a status difference between the active and reserve army. But with immigrants currently coming from countries that are much poorer, anti-immigration sentiments which are a manifestation of this tendency to create status distinctions within the working class have grown. So it’s a very complicated picture, particularly if you look at transnational migration flows, and at the situation where the reserve army is primarily concentrated in the global South rather than the North.


In your 1991 article, ‘World Income Inequalities and the Future of Socialism’, you showed the extraordinary stability of the regional wealth hierarchy in the twentieth century—the extent to which the gap in per capita income between the core North/West and the semi-peripheral and peripheral South/East of the world had remained unchanged, or actually deepened, after half a century of developmentalism. [8] Communism, you pointed out, had failed to close this gap in Russia, Eastern Europe and China, though it had done no worse in this respect than capitalism in Latin America, Southeast Asia or Africa, and in other respects—a more egalitarian distribution of income within society, and greater independence of the state from the North/Western core—it had done significantly better. A couple of decades later, China has obviously broken the pattern you were describing then. How far did this come—or not come—as a surprise to you?


First of all, we should not exaggerate the extent to which China has broken the pattern. The level of per capita income in China was so low—and still is low, compared to the wealthy countries—that even major advances need to be qualified. China has doubled its position relative to the rich world, but still that only means going from 2 per cent of the average per capita income of the wealthy countries to 4 per cent. It is true that China has been decisive in producing a reduction in world income inequalities between countries. If you take China out, the South’s position has worsened since the 1980s; if you keep it in, then the South has improved somewhat, due almost exclusively to China’s advance. But of course, there has been a big growth in inequality within the prc, so China has also contributed to the world-scale increase in inequalities within countries in recent decades. Taking the two measures together—inequality between and within countries—statistically China has brought about a reduction in total global inequality. We should not exaggerate this—the world pattern is still one of huge gaps, which are being reduced in small ways. However, it’s important because it changes relationships of power between countries. If it continues, it may even change the global distributio

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