Critical Encounters. Wolfgang Streeck

Чтение книги онлайн.

СКАЧАТЬ unthinkable’. And ‘if the future is radically uncertain, the modern central bank practice of giving markets “forward guidance” may be, well, misguided’, since it ‘creates the illusion that the future is predictable’.

      Rising political-economic volatility implies a loss of power for Vogl’s central banks, and a loss of respect as well. In July 2017, a year after its embrace of radical uncertainty, the same investment house explained to its clients why interest rates were, and would remain, so low. Central banks do not figure in the story at all. Instead the culprit is the ‘superstar firm’, its rise made possible by new technology and globalized markets. To quote: ‘Superstar firms make higher profits, save more than they invest, and pay out a smaller share of their value-added to labour.’ This explains ‘key macro phenomena such as the global ex ante excess of saving over investment, rising income and wealth inequality, and low wage inflation despite falling unemployment, all of which have contributed to the current environment of low natural … and actual interest rates, which in turn supports high valuations for the superstars.’

      In this ‘winner takes most’ world, economic concentration is increasing. Large firms sit on huge cash hoards while labour’s income share declines. High wages for the privileged few employed by superstar firms, combined with weak wage pressure in an increasingly fragmented low-wage sector, make for worsening inequality, adding to the global savings glut as ‘high-income, wealthy individuals have a higher propensity to save than low-income, less wealthy ones’ – an account remarkable for its similarity with standard ‘radical’ explanations of the crisis of contemporary capitalism.

      Together, these dynamics keep inflation down even if central banks want prices to go up. Therefore, the experts say, ‘the investment strategy of choice’ must be one calibrated to a ‘long-term low interest-rate environment’. PIMCO mentions three potential risks for such a strategy: (1) ‘A surge in protectionism that leads to accelerating deglobalization’; (2) ‘Aggressive antitrust policies that curb superstar firms’ quasi-monopoly profits and benefit potential competitors’; and (3) ‘a sudden surge in labour’s bargaining power’. The investment house considers none of these possibilities likely. But as Greenspan himself noted at an American Enterprise Institute conference in February 2018, under present conditions rates can move in only one direction, upwards, and when they do, they will have devastating consequences for stock prices. The organizer of the event, Desmond Lachman, a former economist at the IMF, predicted a catastrophic economic and financial crisis in the near future as a result of rising interest rates.

      In a final chapter titled ‘Reserves of Sovereignty’, Vogl deals with the submersion of nationally organized financial sectors – rendered politically unmanageable by financial innovation and the internationalization of capital – into an emerging global regime. Here again, Vogl’s command of his conceptual apparatus enables him to make sense of a highly complex process, conceived as yet another permutation of the relationship between the public and the private, and amounting to the conversion of ‘regulation’ into ‘governance’ – in particular, ‘global governance’. Financialization for Vogl essentially involves the transfer of financial oversight to the financial markets themselves, ultimately establishing oversight of states by markets. Subjected to the dictates of capital accumulation, the relations that make up the infrastructure of social life are financialized, depoliticized and indeed de-socialized. Responsibility for economic order shifts from constitutional, potentially democratic, governments to ‘a patchwork of public entities, international organizations, treaties and private actors which superintends the privatization of regulation and, as a consequence, the marketization and informalization of law and legal institutions’. As governance is privatized, finance becomes the sole remaining sovereign. ‘Global governance’, Vogl writes,

      is neither a straightforward liberation of market freedoms nor a suppression of state institutions, nor is it a rigid dichotomization of market and state. Since the 1990s, a mutual embedding has taken place; permeability has been created, allowing credit conditions to dictate the rules of political restructuring. In this process, state institutions function as bodies for the anchoring of market mechanisms.

      Vogl’s critics, many of them from the ‘public choice’ crowd, have argued that central bank autonomy-cum-supremacy constitutes the only effective precaution against frivolous democratic politicians recklessly spending their way into office and thereby emptying the public purse. Democratic governments paying for schools and roads are equated with absolutist rulers combating personal boredom by making war. Vogl wastes no time arguing with this. Still, it might have been worth his while to place the evolving relationship between public spending, public debt, taxation and interest, and the public-choice rhetoric surrounding this, in a larger political-economic context transcending institutional analysis proper. What if the pressure for ever-higher public spending was a reflection, not of democratic ‘irresponsibility’, but of what in Marxian language would be described as a secular tendency toward the ‘socialization of production’, giving rise to a functional need for private profit-making to be supported by an increasingly elaborate, and correspondingly more expensive, public infrastructure?

      It is here that Vogl’s institutional analysis of the bipolar world of his zone of indeterminacy might have benefited from being embedded in a political economy of contemporary capitalism, a context in which it would greatly contribute to our understanding of a, shall we say, dialectical ‘contradiction’ between the limited supply of tax revenue on the one hand – caused by capital’s reluctance to be taxed – and on the other, the growing demands, including capitalist demands, for public prepare-and-repair work, from education to environmental clean-up; for public security, from citizen surveillance in the centre to anti-insurgency on the periphery; and for public compensation of citizens for loss of income and status due to capitalist creative destruction. Too little public spending might keep capital away, but too much taxation might have the same effect, while too much public spending would unacceptably narrow the corridor for private profit-making.

      Privatization of public provision can, of course, be of help, and has been for some time. But there are limits to it, not least those set by citizen resistance. The remaining option is to finance the growing demands on the state by swelling the public debt – and indeed, if capital must decide between a debt-free tax state and a low-tax debt state, it doesn’t find the choice difficult. For under-taxed capital, public debt is a convenient opportunity to lend to the state as private investment what would otherwise be confiscated by the state through taxation. Money lent to the state remains private property, yields interest – at least in normal times – and can be passed on within the family to the next generation. For this to occur, of course, states must be willing and able to service and repay their debt reliably, and it is here that central banks still seem to play an important role in the management of ‘financialized’ capitalism. Not only can they mediate between states and the financial industry – bankrolling the former and allowing the latter to trade government debt for profit – they also help to keep public debt at a level where states can still be trusted by their private creditors. They do this, for example, by warning the public, with all the authority of their pseudo-scientific theories, about the dangers of excessive government debt – inflation and other maladies – and by advocating a move to balanced budgets through ‘austerity’ on everything except debt service. Whether this will be enough to close the gap between the maximum taxability of a globally embedded national-capitalist economy, and the rising demands for public infrastructures and services under advanced capitalism, is an open question. It probably falls some distance short, and like privatization, simply postpones the coming clash between private profit-making and its public underwriters.

      __________

* Joseph Vogl, The Ascendancy of Finance, trans. Simon Garnett, Cambridge: Polity, 2017

CHAPTER 3

       СКАЧАТЬ