Financial turbo-capitalism could be described as an extractive industry, albeit sui generis. It is, in fact, a powerful apparatus for abstraction, centralization, and capture of common goods and social value, in accordance with the concept of “accumulation by dispossession” evoked by David Harvey in A Brief History of Neoliberalism, in reference to the neoliberal paradigm and the transition from bourgeois-manufacturing capitalism to post-bourgeois-financial predatory capitalism.
Such accumulation is often carried out with the mediation of the government in its liberal version, through maneuvers such as the replacement of pension agencies by private insurers or even through the defunding of the public sector. Credit thus emerges as the main system through which financialized turbo-capitalism can extract wealth from the population. It uses multiple stratagems to implement its project of wealth extraction and expropriation of money for the benefit of the already hyper-owning ruling class. All of them revolve around cunning predatory practices that are formally supported by the law, either by drafting it ex novo or simply bending it to their interpretations, in such a way as to guarantee, in the words of Thrasymachus (The Republic, 339 a), “the interest of the strongest.” This explains the usurious interest rates on credit cards, the seizure of companies that are denied liquidity in times of difficulty, the promotion of share certificates, corporate fraud, market manipulation, and the use of pyramid schemes such as the infamous “Ponzi scheme.”
Varying the title of Weber’s masterpiece, one could rightly speak of accumulation by dispossession and the new spirit of capitalist order. This dispossession is not limited to the levers of financial extraction, but is also determined, explains Harvey, by many other related phenomena (“privatization,” “gentrification,” “mass incarceration”), among which the return of Atlantic imperialism in its most brutal forms occupies a prominent place, especially after 1989 and the collapse of the Welt dualismus (world dualism). Harvey himself acknowledges this in The New Imperialism (2003) and, in addition to him, Giovanni Arrighi in The Long Twentieth Century (1994) and in Adam Smith in Beijing (2007): outside the borders of the West, capital once again resorts to the violence of direct expropriation, modestly calling it “privatization,” in forms not so different from those studied by Marx in relation to “primitive accumulation” in chapter 24 of the first volume of Capital. Marx himself, on the other hand, teaches us that “the profound hypocrisy and intrinsic barbarism of bourgeois civilization are revealed to us without veils when we turn our eyes from the metropolis, where they assume respectable forms, to the colonies, where they are naked.”
As an example, suffice it to recall the work of the “dollar civilization” in Iraq, which was occupied by imperialist forces in 2003. The politician Paul Bremer enacted four ordinances that provided for the total privatization of public enterprises, the full right of foreign companies to private ownership of Iraqi economic activities, the total repatriation of the profits obtained by these companies, the opening of Iraqi banks to foreign control, the equal treatment of foreign companies with national companies, and the elimination of almost all barriers to trade. The first laboratory for these strategies, sponsored by Washington, was Pinochet’s Chile.
In short, the neoliberal plutocratic oligarchy presents itself as an extractive aristocracy, since it enriches itself by extracting wealth from the social body without contributing in any way to its production. And so it appears to all intents and purposes as the Parasitenklasse (parasitic class) evoked by Marx. Accumulation by dispossession—or, if you prefer, “finance-dominated accumulation” (finanzdominierte Akkumulation)—which is characteristic of the absolute phase, is based on the assumption that the quickest and most immediate way to get rich is to take wealth away from others or, more precisely, to extract it by force: this is obtained, in concrete terms, by defrauding savers and investors, emptying banks (after preventing the use of cash and thus the flight of savings), plundering the “assets” (assets as they are called in neolanguage) of companies and states through the use of killer loans.
In specie, the credit system weaves a web of obligations for the debtor such that, in the end, the debtor has no choice but to surrender his property rights to the lender. This strategy, moreover, was already known to Marx, who mentions it frequently in the third volume of Capital. For example, when hedge funds—also known as “speculative funds”—acquired control of pharmaceutical companies, they bought up huge numbers of foreclosed homes and then made them available to consumers, who needed them, at exorbitant prices, scientifically organizing accumulation by expropriation. It often happens, in fact, that crises leave behind a mass of devalued assets, which can then be obtained at bargain prices by those who have the liquidity to buy them: this is what happened in 1997—1998 in East Asia and Southeast Asia, when perfectly healthy companies went bankrupt due to a lack of liquidity and were acquired by foreign banks, only to be resold at impressive profits.
If the entrepreneurial bourgeoisie generated wealth through work and exploitation, the globalist elites sans frontières enrich themselves through dispossession at the expense of workers and the ilotized middle classes. They extract wealth from the productive social body and do not contribute to the production of that wealth: in other words, they do not participate in the work that produces it, making them similar—mutatis mutandis—to the old aristocracy of the Ancien Régime. The masters of techno-feudal finance, who manage private money creation for private purposes (hidden and exempt from any responsibility), direct the parasitic and extractive domination of the product and labor of others. In view of this objective, which is consistent with their class domination, the globocrats—accustomed to living “on other people’s money,” according to Luciano Gallino—operate the predetermined diversion of credit from the productive economy to speculative finance, a process followed by deindustrialization, disinvestment, de-salaryization, and layoffs.
The middle class and the working class, for their part, are forced to work and pay extremely high taxes to enrich a financial global class that holds a monopoly on the creation of monetary symbols and, in exchange for its loans, retains a large part of the product of labor in the form of usurious interest. Finance itself, in its essential dynamic, operates by favoring the transition from bourgeois manufacturing to the hegemony of post-bourgeois multinational corporations and their monopolies. This leads to the lethal inversion between finance and industry already outlined, in its most peculiar features, by Lenin and, albeit in a different way, by Rudolf Hilferding in his Finanzkapital (1923).
Both, albeit from different perspectives, had fully deciphered the quid proprium of financial capital and the replacement of industrialists by bankers that it brings about. The bourgeois industrialist is involved in and close to the production processes and directs cooperation (in chapter XXIII of Capital, Marx uses the example of the orchestra conductor); the banker, on the other hand, is distant from production and is not linked to its eventual tragedies (indeed, he often has every interest in ensuring that they occur).
Like all income-generating activities, finance also functions according to the figure of the actio in distans: it abstracts itself from production and governs from a distance, without showing itself, acting parasitically on real production and society as a whole. Finance is not interested in stable construction and, in fact, thrives on instability and precariousness, according to the foundation of the new form of flexible accumulation that we have analyzed in our book Storia e coscienza del precariato (History and Consciousness of the Precariat).
Contrary to what is usually detected by an ideologically contaminated gaze, financial capital does not operate in an indeterminate terra nullius, nor does it generate wealth out of nothing: in reality, it extracts value from the common good of society and, in general, from the “class-that-lives-from-work,” that is, from the precarized servant. In this way, liquid-financial capital presents itself as a powerful and falsely anonymous apparatus of expropriation. It operates by transferring public goods such as railways, water, telephone lines, and cultural heritage into private hands, freed from any national location. From this, we can also deduce the analogy with the processes of “primitive accumulation” described by Marx in Capital.
Only in this light can we explain both the so-called American crisis of 2007 and, closer to home in Europe, the loss of around 40 percent of the Italian people’s purchasing power with the transition from the lira to the single currency, the euro (grosso modo the same can be said of the Spanish people). The banking-monetary capitalist appears as a money-maker and, at the same time, as a money-giver: he creates money ex nihilo and lends it with the clear aim of indebting the “beneficiaries.” He extracts not only the fruits of labor, but also the savings of the entire dominated class.
By its very nature, finance generates “wealth” by creating money at zero cost. But the truth is that it creates paper and not wealth: with the obvious consequence that the wealth it obtains must be taken away, through taxes and usurocratic tricks, from those who actually produce it, that is, from the precariat as a class that lives from work. In its aspiration to rule the entire planet in the name of profit and infinite growth, the global class of the Lords of Finance has imposed changes in taxation for its own exclusive benefit. In the West, the progressivity of taxation has been gradually declining since 1989, as one moves up the hierarchy of bank accounts. The bourgeois middle class in the process of ghettoization sees an average of 45 percent of its modest income extracted from it. In short, to put it succinctly, while labor is increasingly taxed, financial speculation and the big business of the financial aristocracy remain free of taxes and controls, usually in the form of a veritable legalization of tax evasion.
For their part, multinationals, their shareholders, and their CEOs pay taxes set at derisory rates, which regularly range between 1 and 5 percent (and which they avoid whenever possible by using “tax havens”). Any worker at the giant Amazon is taxed ten times more than the multimillion-dollar multinational they work for. In this respect, the fight against tax evasion, always invoked as a figure of universal justice, is systematically waged by the liberal state against the middle and working classes for the benefit of the financial global class. Far from being a guarantee of universal justice, the “fight against tax evasion,” as managed by the neoliberal order, is one of many instruments of the class massacre carried out by the hooded financiers and the liberal state at their service.
This is compounded by the fact that tax evasion by the middle and working classes, when not made impossible by taxation that plunders wages even before they are earned (as is the case with public employment, which is also being dismantled in the name of liberalism), is prosecuted by law, while tax evasion by the giants of cosmopolitan commerce, speculative finance usurers, and mammoth multinationals is condoned as the rule of law. This confirms, for the umpteenth time, how the law, in the order of capitalist relations, does not guarantee universal justice, but rather the interests of the ruling class, whose domination it “juridifies” and “legalizes.”
Courtesy: Posmodernia.
Featured: Coada la pâine (Queuing for Bread), by Nicolae Tonitza (1920).
