Sociology 621 Lecture 8 Capitalist Dynamics: a sketch of a Theory of Capitalist Trajectory October 3, 2005 In the past several sessions we have explored the basic underlying structure of classical historical materialism, both as a general theory of history and as a specific theory of capitalist history. In both cases the objective of the theory was to provide us with the foundations for at least a sketch of a theory of the future. The ambition was to provide a theory which firmly predicts the long-term non-sustainability of capitalism, for a theory which could establish that would go a long way towards providing the central ingredients of a theory of the achievability of an emancipatory alternative to capitalism. We have seen how that ambitious theory is unsatisfactory, both in its general epochal form and in its narrower form as a theory of capitalism’s demise. Nevertheless, there are elements from the general impulse for that ambitious theory which have proven more durable and provide at least the basis for a less determinate theory of history. These are not really theories of the future, but theories of the way qualitative changes are generated within capitalism. The argument thus points the direction to how to think about capitalism’s development, and perhaps – ultimately – about how to think about historical possibility if not destinations. I. The trajectory of crisis and contradictions of capitalist development. 1. The historical and intellectual context of my analysis. I wrote this chapter at a time when the LTV was more or less take for granted by Marxists. Within the broad framework of the LTV-type analyses, there were a series of contending veiws about the nature of economic contradictions of capitalism and how, out of these contradictions, crises were generated. This was in the mid-1970s when the post-WWII economic boom seemed to have come to an end, when there was “stagflation” – stagnation and inflation combined – and a general sense of gloom and doom. 2. The core argument I argued that the competing Marxian theories of crisis should each be viewed as tapping different historically specific crisis-mechanisms. The “dialectic” of historical development can then be understood as a process that has very much the same logic as the forces/relations of production argument that Marx used in classical historical materialism to explain epochal change, but instead it is used to explain transformations in the nature of capitalism. That is, at its core, there is an argument of the specific institutional conditions of production becoming fetters on the development of the forces of production which generates crisis and then a transformation of those institutions.Lecture 8. Capitalist Trajectory 2 Here is how the argument works: $ each stage of capitalist development generates distinctive constraints on continued capital accumulation $ as accumulation continues, those constraints are encountered and they become increasingly pervasive fetters on continued capitalist development $ this generates crises of different intensities and disruption $ the crisis sets in motion a “search” for structural solutions $ since the solutions advantage different groups of capitalists to varying degrees, and affect the economic conditions of the working class in different ways, this search takes the form of struggle combined with trial and error institution building $ when it happens that institutional changes occur which unbottle accumulation, crisis pressures subside and the search/struggle over institutions recedes $ actors then adapt their strategies to the new institutional opportunities $ over time the institutional solutions tend to eventually become less effective because (a) the PF develop, and (b) class actors take advantage of contradictions in these solutions to advance their interests. $ and thus crisis tendencies re-emerge The basic account of this trajectory I laid out in Figure 3.6 in my book Class, Crisis and the State. I am not at all sure that the actual mechanisms of development, fettering, crisis, and transformation which I posit in that chart are sound, but I think this way of approaching a systematic, structural account of transformations remains valuable. You should note that my predictions of what would be the emergent solution to the crisis tendencies of the 1970s have proven to be completely wrong. Not just a little wrong, but completely wrong. I saw the stagnation of the 1970s as the result of a political dynamic in which the costs of reproducing capitalism through the provision of what is sometimes called a “social wage” had grown more rapidly than the capacity of capitalism to pay for those costs. The result was a profit-squeeze generated by the expansion of the interventionist, Keynesian state. My prediction was a further politicization of accumulation and a move from the Keynesian state to the affirmative, productivist state. I did not imagine a massive role back of state regulation towards a restoration of a freer market. So much for futurology.Lecture 8. Capitalist Trajectory 3 II. Arrighi’s trajectory of long-cycles of capitalist expansion Arrighi’s analysis is much more ambitious than mine and proposes a general model of the long-term trajectory of capitalist development. It also comes closer to making real determinate predictions about the future. 1. M-C-M’ The starting point of Arrighi’s account is an analysis of the fundamental nature of capitalist accumulation. He argues, following Marx, that capital accumulation is rooted in what is often called “circuits of capital” which involves two connected processes: Capitalists begin with a quantity of money, M, which they invest in one way or another. “Investing” means that they purchase machines, or purchase goods for trade, etc. They only do this, however, because of the belief that this investment will lead to an augmentation of M, or what is called M-prime. The purpose of investment is not actually production, it is the accumulation of capital, the augmentation of the initial stock. M means flexibility: these are resources that can be flexibly deployed in whatever way is most profitable C means rigidity: funds are locked up in some purpose, a narrowing down of options M’ means expanded flexibility and opp ortunity 2. The general argument The basic idea of Arrighi’s analysis is that M-C-M’ does not only represent the logic