Cycles Within Capitalism

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Giovanni Arrighi's Systemic Cycles of Accumulation

Christopher Chase-Dunn:

"Giovanni Arrighi's (1994) evolutionary account of ‘systemic cycles of accumulation’ has solved some of the problems of Wallerstein's notion that world capitalism started in the long sixteenth century and then only went through repetitive cycles and trends. Arrighi's account is explicitly evolutionary, but rather than positing ‘stages of capitalism’ and looking for each country to go through them (as most of the older Marxists did), he posits somewhat overlapping global cycles of accumulation in which finance capital and state power take on new forms and increasingly penetrate the whole system. This was a big improvement over both Wallerstein's world cycles and trends and the traditional Marxist national stages of capitalism.

Arrighi's (1994, 2006) ‘systemic cycles of accumulation’ are more different from one another than are Wallerstein's cycles of expansion and contraction and upward secular trends. And Arrighi (2006) has made more out of the differences between the current period of the U.S. hegemonic decline and the decades at the end of the nineteenth century and the early twentieth century when British hegemony was declining. The emphasis is less on the beginning and the end of the capitalist world-system and more on the evolution of new institutional forms of capitalist accumulation and the increasing incorporation of modes of control into the logic of capitalism. Arrighi (2006), taking a cue from Andre Gunder Frank (1998), saw the rise of China as portending a new systemic cycle of accumulation in which ‘market society’ will eventually come to replace rapacious finance capital as the leading institutional form in the next phase of world history. Arrighi did not discuss the end of capitalism and the emergence of another basic logic of social reproduction and accumulation. His analysis is more in line with the ‘types of capitalism’ and ‘multiple modernities’ literature, except that he is analyzing the whole system rather than separate national societies. Arrighi sees the development of market society in China as a consequence of the differences between the East Asian and Europe-centered systems before their merger in the 19th century, and also as an outcome of the Chinese Revolution. His discussion of Adam Smith's notions of societal control over finance capital is interesting, but he is vague as to what the forces that can counter-balance the power of finance capital might be. In China it is obviously the Communist Party and the new class of technocratic mandarins. This is somewhat similar in form to Peter Evans's (1979) discussion of the importance of technocrats in Brazilian, Japanese and Korean national development, though Arrighi does not say so.

Arrighi also provides a more explicit analysis of how the current world situation is similar to, and different from, the period of declining British hegemonic power before World War I (see summary in Chase-Dunn and Lawrence 2011: 147–151). Wallerstein's version is more apocalyptic and more millenarian. The old world is ending. The new world is beginning. In the coming systemic bifurcation what people do may be prefigurative and causal of the world to come. Wallerstein agrees with the analysis proposed by the students of the New Left in 1968 (and large numbers of activists in the current global justice movement) that the tactic of taking state power has been shown to be futile because of the disappointing outcomes of the World Revolution of 1917 and the decolonization movements (but see below)."


Wallerstein on the Transformations between Modes

"For Immanuel Wallerstein (2011[1974]), capitalism started in the long sixteenth century (1450–1640), grew larger in a series of cycles and upward trends, and is now nearing ‘asymptotes’ (ceilings) as some of its trends create problems that it cannot solve. Thus, for Wallerstein, the world-system became capitalist and then it expanded until it became completely global, and now it is coming to face a big crisis because certain long-term trends cannot be accommodated within the logic of capitalism (Wallerstein 2003). Wallerstein's evolutionary transformations come at the beginning and at the end. There is a focus on expansion and deepening as well as cycles and trends, but no periodization of world-system evolutionary stages of capitalism (Chase-Dunn 1998: ch. 3). This is very different from both the older Marxist stage theories of national development and Giovanni Arrighi's depiction of successive (and overlapping) systemic cycles of accumulation. Wallerstein's emphasis is on the emergence and demise of ‘historical systems’ with capitalism defined as ‘ceaseless accumulation’. Some of the actors change their positions, but the system is basically the same as it gets larger. Its internal contradictions will eventually reach limits, and these limits are thought to be approaching within the next five decades.

According to Wallerstein (2003), the three long-term upward trends (ceiling effects) that capitalism cannot manage are:

1) the long-term rise of real wages;

2) the long-term costs of material inputs; and

3) rising taxes.

All three upward trends cause the average rate of profit to fall. Capitalists devise strategies for combating these trends (automation, capital flight, job blackmail, attacks on the welfare state and unions), but they cannot really stop them in the long run. Deindustrialization in one place leads to industrialization and the emergence of labor movements somewhere else (Silver 2003). The falling rate of profit means that capitalism as a logic of accumulation will face an irreconcilable structural crisis during the next 50 years, and some other system will emerge. Wallerstein calls the next five decades ‘The Age of Transition’. Wallerstein sees recent losses by labor unions and the poor as temporary. He assumes that workers will eventually figure out how to protect themselves against globalized market forces and the ‘race to the bottom’. This may underestimate somewhat the difficulties of mobilizing effective labor organization in the era of globalized capitalism, but he is probably right in the long run. Global unions and political parties could give workers effective instruments for protecting their wages and working conditions from exploitation by global corporations once the national and North/South issues that divide workers are overcome. Wallerstein is intentionally vague about the organizational nature of the new system that will replace capitalism (as was Marx) except that he is certain that it will no longer be capitalism. He sees the declining hegemony of the United States and the crisis of neoliberal global capitalism as strong signs that capitalism can no longer adjust to its systemic contradictions. He contends that world history has now entered a period of chaotic and unpredictable historical transformation. Out of this period of chaos a new and qualitatively different non-capitalist system will emerge. It might be an authoritarian (tributary) global state that preserves the privileges of the global elite or it could be an egalitarian system in which non-profit institutions serve communities (Wallerstein 1998)."



Christopher Chase-Dunn:

"Do do recent developments constitute the beginning of a terminal crisis of capitalism or just another systemic cycle of accumulation?

As mentioned above, predominant capitalism has not been around very long from the point of view of the succession of qualitatively different logics of social reproduction. But capitalism itself has speeded up social change and its contradictions do seem to be reaching levels that cannot be fixed. Declarations of imminent transformation are useful for mobilizing social movements, but an even greater contribution would be a clear specification of what is really wrong with capitalism and how these deficiencies can be fixed. Regarding a new systemic cycle of accumulation, Arrighi's bet on the significance of the rise of China also needs clarification. As he has said, other countries have not experienced the trajectory that produced ‘market society’ in China, so how can forces emerge elsewhere that could counter-balance the power of national and global finance capital. And what kinds of forces could do this? The rise of the anti-austerity movements in Spain and Greece and the Occupy Wall Street movement in the USA may portend the emergence of strong and effective anti-capitalist social movements in the core. The Occupy and anti-austerity movements interestingly borrowed tactics from the Arab Spring, including the use of social networking for organizing revolt and camping in central public spaces. The Occupy movement probably improved President Obama's chances for re-election by shining a spotlight on the growing inequalities within the USA and further movements of this kind might inspire the reelected Obama administration to more energetically push for re-industrialization of the USA. This could slow or even reverse the USA economic decline. But the movements and the regime would have to overcome the still-strong legacy of Reaganism-Thatcherism, the political muscle of Wall Street and the Tea Party right-wing populists and disgruntled white voters who see the rise of Hispanic voting as a threat. Continued political stalemate in the USA is the most likely outcome, and this will result in the continued slow decline of U.S. hegemony. This is not surprising from the point of view of world-systemic cycles of hegemonic rise and fall. But things seem more interesting in the semiperiphery and the Global South. So far the United States has not used much muscle in opposition to the rise of the Pink Tide in Latin America.

Expensive U.S. military involvements in the Middle East and Central Asia have continued, and these may partly explain the relative inaction in Latin America. Can the progressive transnational social movements and the left populist regimes of the Pink Tide forge a coalition that can move toward greater global democracy? Could the emergent democratic regimes in the Arab world and protests against the austerity imposed by finance capital in the European second-tier core lead to a situation in which a strong force for global social democracy would challenge the powers that be? As in earlier world revolutions the institutions of global governance are likely to be reshaped by forces from below. Hopefully a more democratic and collectively rational global commonwealth can emerge without the violence and totalitarianism that was so prevalent in the first half of the twentieth century. Both a new stage of capitalism and a qualitative systemic transformation are possible within the next three decades, but a new stage of capitalism is more likely. The evolution of global governance occurs when enlightened conservatives implement the demands of an earlier world revolution in order to reduce the pressures from below that are brought to bear in a current world revolution. We think that the most likely outcome of the current crisis and world revolution will be some form of global Keynesianism in which part of the global elite forms a more legitimate and democratic set of global governance institutions to deal with some of the problems of the 21st century. If U.S. hegemonic decline is slow, as it has been so far, and if financial and ecological crises and conflicts between ethnic groups and nations are spread out in time then the enlightened and pragmatic conservatives will have a chance to build another world order that is still capitalist but meets the current challenges at least partially. But if the perfect storm of calamities (Kuecker 2007; Kuecker and Hall 2011) should all come together in the same period the movements will have the chance to radically change the mode of accumulation to a form of global socialism."