Crisis? What Crisis?

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Review of 'Socialist Register 2005: The Empire Reloaded', editors Leo Panitch and Colin Leys, Merlin Press £14.95

The editorial to this year's edition of Socialist Register, a collection of essays from left wing academics, describes it as a companion to last year's instalment that had eventually proved to be too large for one volume. Whereas last year's dealt with the strengths and weaknesses of US imperialism, this year's would focus on 'finance, culture and the way the new imperialism is penetrating major regions of the world'.

The longest essay by Leo Panitch and Sam Gindin provides the theoretical core for much of the collection. It seeks to show how finance capital dominates, replenishes and ultimately insulates the US economy against the worst effects of crisis. They argue against more orthodox understandings that locate the current long term problems of capitalism with the breakdown of the Bretton Woods regulatory arrangements of the 1970s. They situate the rise of financial capital with US dominance immediately after the post-1945 reorganisation. The policy changes of the 1970s and the rise of neoliberalism is seen as more of a continuation than a complete break. This new imperialism, they argue, is qualitatively different from anything that existed before the First World War. While long term investment marked the old imperialism, the new is characterised by short term investment, and in the absence of gold as a standard, the dollar reigns supreme.

Their assessment of the health of the US economy today is petty bleak reading for socialists: 'Clinging to the notion that the crisis of the 1970s remains with us today flies in the face of the changes that have occurred since the early 1980s... What kind of crisis of capitalism is it when the system is spreading and deepening... while the opposition to it is unable after three decades to mount any effective challenge... We must dispense with a notion of 'crisis' as something that leads capitalism to unravel on its own.'

The problem with this essay seems to me to be one of balance and perspective. Although it should be obvious that we shouldn't sit back and wait for capitalism to implode, these arguments overestimate the strength of US capitalism, and should surely be counterbalanced by a look at the serious problems with its long-term economic performance, like why rates of profit were not as high as they had been during the post-war boom, and looking at the supporting role of high borrowing and consumer spending. Other essays flesh out this imbalanced view of US economic power.

Take Yuezhi Zhao's piece on China, for example. He chooses to focus on the insidiously pervasive nature of US soft power, or cultural penetration into China, and demonstrates how the Chinese watch more Hollywood movies and their news channels are beginning to resemble CNN. All of this is undoubtedly true, but it is argued at the expense of a more rounded account that might see China as a potential US imperialist rival because 'it is more plausible, at least at the current historical conjuncture, to view China as a regional power being integrated into the "informal American empire".'

Luckily, some other essays show the tensions and weaknesses of US power. Boris Kagarlitsky's on Russia shows how Putin has been pursuing two contradictory strategies: concessions to the US with less regulations on US imports, disarmament, and the abandoning of military bases in Cuba, Vietnam and Central Asia, contrasted with nationalistic domestic rhetoric boosted by the 'war on terror' in Chechnya. A third dimension can be added: while the US currently dictates Russia's political direction, Germany has become its most important business partner and source of foreign investment.

Patrick Bond's essay argues that the rate of extraction from Africa is increasing not because of the strength of the global system, but as a result of capitalism's long term structural crisis. He is much more successful in showing the tensions that exist between carrot and stick diplomacy on the one hand that create compliant states and legitimise neoliberalism, and necessary direct military intervention on the other that undermines that legitimacy. Countries such as South Africa play a crucial role in uniting African nations with anti-imperialist rhetoric while surrendering to the demands of the Bretton Woods institutions. A role, as argued elsewhere in this collection by Vivek Chibber, that has been historically played by the national bourgeoisie of developing countries who consistently put their own interests ahead of the nations to the detriment of any development.