Dominant Capital and the New Wars

* Article: Dominant Capital and the New Wars. By Shimshon Bichler and Jonathan Nitzan. Journal of World-Systems Research, 10(2), 255-327, 2004. doi

URL = https://jwsr.pitt.edu/ojs/jwsr/article/view/304 pdf

Contextual Quote

"The new wars of the early 2000s mark a significant turning point in world affairs. During the 1980s and 1990s, it was popular to talk about the return of ‘unregulated capitalism.’ It was the dawn of a new era, many said, the era of ‘neoliberal globalization.’ The hallmarks of this new-old order appeared unmistakable. Falling budget deficits, tight monetary policy, deregulation, free trade and capital decontrols became the new orthodoxy. Th e ideological rhetoric spoke of ‘democracy,’ ‘global villageism’ and ‘peace dividends.’ The welfarwarfare state was on its way out. Laissez faire was back in fashion. The trajectory seemed so obvious that some were even tempted to announce the ‘end of history.’

In the early 2000s, though, the tables suddenly turned. Fiscal and monetary policies were ‘loosened,’ ‘protectionist’ measures were reintroduced and the tidal wave of capital fl ow turned to a trickle. Talk of a ‘global village’ quickly disappeared and was replaced by a global ‘war on terror.’ Democracy has given way to Homeland Security. Expectations for peace dividends have dissipated in favor of ‘war profits.’ History was back with a vengeance."

- Shimshon Bichler and Jonathan Nitzan [1]

Abstract

"The recent shift from global villageism to the new wars revealed a deep crisis in heterodox political economy. The popular belief in neoliberal globalization, peace dividends, fiscal conservatism and sound finance that dominated the 1980s and 1990s suddenly collapsed. The early 2000s brought rising xenophobia, growing military budgets and policy profligacy.

Radicals were the first to identify this transition, but their attempts to explain it have been bogged down by two major hurdles:

(1) most writers continue to apply nineteenth century theories and concepts to twenty-first century realities; and

(2) few seem to bother with empirical analysis.

This paper offers a radical alternative that is both theoretically new and empirically grounded. We use the new wars as a stepping stone to understand a triple transformation that altered the nature of capital, the accumulation of capital and the unit of capital. Specifically, our argument builds on a power understanding of capital that emphasizes differential accumulation by dominant capital groups. Accumulation, we argue, has little to do with the amassment of material things measured in utils or abstract labor. Instead, accumulation, or capitalization, represents a commodification of power by leading groups in society. Over the past century, this power has been restructured and concentrated through two distinct regimes of differential accumulation breadth and depth. A breadth regime relies on proletarianization, on green-field investment and, particularly, on mergers and acquisitions. A depth regime builds on redistribution through stagflation that is, on differential inflation in the midst of stagnation. In contrast to breadth which presupposes some measure of growth and stability, depth thrives on accumulation through crisis. The past twenty years were dominated by breadth, buttressed by neoliberal rhetoric, globalization and capital mobility. This regime started to run into mounting difficulties in the late 1990s, and eventually collapsed in 2000. For differential accumulation to continue, dominant capital now needs inflation, and inflation requires instability and social crisis. It is within this broader dynamics of power accumulation that the new wars need to be understood."