I basically agree with Aaron's formulation, except that I would add that financial power and state power are both structures of capitalist power. They are not two rival forces, they are heavily coordinated with each other and serve the same ultimate ends, yet at the same time there is a nominal and structural separation between the two. Finance capital is the dominant form of capital today, but that does not mean that states are irrelevant. States perform all kinds of functions (military, economic, social, political) that finance capital and capital as a whole do not and can not perform directly and which they desperately need, now more than ever. States may not be able to contain the economic crisis, but neither can any other power center, including finance capital. This crisis escaped anyone's control from the moment it began. The appearance of control was restored for a few years, but the crisis was just festering under the surface until it exploded again.
While the state ultimately serves the interests of capital, which effectively means the interests of finance capital since that is the strongest sector of capital today, in order for the state to perform its functions in the service of capital, it must maintain both the illusion of autonomy (which is now cracking) and at least a small sliver of real autonomy. If the state were seen to be totally in the service of capital, if it was seen as having absolutely no possibility of reform or action outside of finance capital, it would no longer be able to pacify people and keep them plugged into the system. That illusion is beginning to break down today, but we are still at the very beginning of that process. Most people still believe the state is capable of granting reforms in the interests of the majority of people. And there is actually some truth to this. In periods of extreme social upheaval, the state can act to rein in the most egregious forms of capitalist exploitation, in order to prevent even further upheavals from occurring. In fact, this is how all major reforms under capitalism happen. This is how we got the New Deal and civil rights for African-Americans. This is one of the state's key functions, and it requires that states be able to separate their interests at least temporarily from their capitalist masters.
On Mon, Oct 17, 2011 at 10:44 AM, Aaron Gemmill <firstname.lastname@example.org>
in general i don't think you can peg one as subordinate to the other (tho i don't know of any banks with aircraft carriers). financial power is an instrument of state power and vice versa.
Doug, on the question of national debt and economic growth, state power is clearly subordinated to financial power. It is the markets that decide whether it is safe to invest in state bonds or in any other financial asset in a given country. National governments and central banks have now the primary function of reassuring the markets by slashing the debt, propping up the banks (which increases in turn the debt exposure) or through quantitative easing. The mass of circulating financial assets is roughly 10 fold the global GDP. In 2010, the US GDP was estimated at $14.7 trillions whereas US financial assets at $131 trillions. It is financial capital that leads the game and it should be the primary target of this movement. You are right, Standard&Poor is a corporation. But it expresses the "collective interests" of financial capital, which needs to have arbiters that (pretend) to set the rules of the game. In this respect, it is a new form of sovereign power. The downgrading of the US debt was the first time in history in which you saw an entire political class having to justify itself before a financial institution.
(The alter-globalization movement did not ebb in Europe and other countries right after September 11, but much later--i.e. around 2005, when activists begun getting tired of chasing G8 summits. The European Social Forum in Florence was attended by 1 million people in 2003).
On 10/16/11 10:47 PM, Doug Singsen wrote:
But rating agencies and all the other players in the financial industry are themselves corporations, so they are part of the system that is described under the rubric of "corporate power." And I don't think that states are irrelevant or powerless at all. That argument was a mainstay of the global justice movement of the late nineties, but 9/11 and the events that followed blew that argument to bits, along with the global justice movement itself, which was not prepared to deal with either the massive wave of reactionary patriotism or the aggression of a suped-up, militarized US state. At a time when the US is occupying Iraq and Afghanistan, holding "terrorists" with no legal rights in Guantanamo Bay, bombing targets in Pakistan, trying to install a puppet regime in Libya, and green-lighting repression in Bahrain and Saudi Arabia, state power seems far from irrelevant.
On Sun, Oct 16, 2011 at 10:20 PM, Snafu <email@example.com>
You are right Doug, and I thank you for this observation. It was not my intention inserting any reference to the obsolescence of past struggle in the declaration. I was just noting that most statements produced and approved by the GA so far are focusing on either corporate power or (now) the two-party system, whereas none of the two are to me the hegemonic forces in contemporary capitalism.
Financial capitalism is a tough beast to fight because it is at the same time abstract and diffused at a molecular level. Yet if Standard&Poor's downgrading of the US debt has such massive effects, it means that we have entered a new phase, one in which the power of rating agencies stands above that of national governments. Hence my hesitation on supporting statements that keep focusing on the traditional enemies and seem to be oblivious to the new forms of sovereignty that are emerging. The more you claim that the state is useless and powerless the more you will have to confront financial power directly. But who will regulate the stock market as the system keeps melting, the GA?
On 10/16/11 7:08 PM, Doug Singsen wrote:
It's not true that market volatility is mainly the result of the automation of financial transactions. Markets were highly volatile long before automation. The biggest financial collapse in history took place before the invention of the microchip. Rather, market volatility is an inherent part of capitalism. We also need to beware of declarations that all previous resistance is obsolete and that we need to invent new tools from scratch. The lessons of past struggles are still very much relevant today, and ignoring them is a quick recipe for repeating their errors today.