Samir Amin: the era of social compromise is over


At the start of this important essay, Samir Amin writes that:

“Contemporary capitalism is a capitalism of generalized monopolies. By this I mean that monopolies are now no longer islands (albeit important) in a sea of other still relatively autonomous companies, but are an integrated system. Therefore, these monopolies now tightly control all the systems of production. Small and medium enterprises, and even the large corporations that are not strictly speaking oligopolies are locked in a network of control put in place by the monopolies. Their degree of autonomy has shrunk to the point that they are nothing more than subcontractors of the monopolies.”

One of the important consequences of this total power, is that “Monopolies Have Declared War”.

Therefore, the classic responses, outlined here below, will no longer work, and ‘audacity’ in formulating alternatives is required:

We are not living in a historical moment in which the search for a ‘social compromise’ is a possible option. There have been such moments in the past, such as the post-war social compromise between capital and labour specific to the social democratic state in the West, the actually existing socialism in the East, and the popular national projects of the South. But our present historical moment is not the same. So the conflict is between monopoly capital and workers and people who are invited to an unconditional surrender. Defensive strategies of resistance under these conditions are ineffective and bound to be eventually defeated. In the face of war declared by monopoly capital, workers and peoples must develop strategies that allow them to take the offensive.

Samin Amin explains:

“The period of social war is necessarily accompanied by the proliferation of international political conflicts and military interventions of the imperialist powers of the triad. The strategy of ‘military control of the planet’ by the armed forces of the United States and its subordinate NATO allies is ultimately the only means by which the imperialist monopolies of the triad can expect to continue their domination over the peoples, nations and the states of the South.

Faced with this challenge of the war declared by the monopolies, what alternatives are being proposed?

First response: ‘market regulation’ (financial and otherwise). These are initiatives that monopolies and governments claim they are pursuing. In fact it is only empty rhetoric, designed to mislead public opinion. These initiatives cannot stop the mad rush for financial return that is the result of the logic of accumulation controlled by monopolies. They are therefore a false alternative.

Second response: a return to the post-war models. These responses feed a triple nostalgia: (i) the rebuilding of a true ‘social democracy’ in the West, (ii) the resurrection of ‘socialisms’ founded on the principles that governed those of the 20th century, (iii) the return to formulas of popular nationalism in the peripheries of the South. These nostalgias imagine it is possible to ‘roll back’ monopoly capitalism, forcing it to regress to what it was in 1945. But history never allows such returns to the past. Capitalism must be confronted as it is today, not as what we would have wished it to be by imagining the blocking of its evolution. However, these longings continue to haunt large segments of the left throughout the world.

Third response: the search for a ‘humanist’ consensus. I define this pious wish in the following way: the illusion that a consensus among fundamentally conflicting interests would be possible. Naïve ecology movements, among others, share this illusion.

Fourth response: the illusions of the past. These illusions invoke ‘specificity’ and ‘right to difference’ without bothering to understand their scope and meaning. The past has already answered the questions for the future. These ‘culturalisms’ can take many para-religious or ethnic forms. Theocracies and ethnocracies become convenient substitutes for the democratic social struggles that have been evacuated from their agenda.

Fifth response: priority of ‘personal freedom.’ The range of responses based on this priority, considered the exclusive ‘supreme value,’ includes in its ranks the diehards of ‘representative electoral democracy,’ which they equate with democracy itself. The formula separates the democratization of societies from social progress, and even tolerates a /de facto/ association with social regression in order not to risk discrediting democracy, now reduced to the status of a tragic farce.

But there are even more dangerous forms of this position. I am referring here to some common ‘post modernist’ currents (such as Toni Negri in particular) who imagine that the individual has already become the subject of history, as if communism, which will allow the individual to be emancipated from alienation and actually become the subject of history, were already here!

It is clear that all of the responses above, including those of the right (such as the ‘regulations’ that do not affect private property monopolies) still find powerful echoes among a majority of the people on the left.

*6.* The war declared by the generalized monopoly capitalism of contemporary imperialism has nothing to fear from the false alternatives that I have just outlined.

So what is to be done?

This moment offers us the historic opportunity to go much further; it demands as the only effective response a bold and audacious radicalization in the formulation of alternatives capable of moving workers and peoples to take the offensive to defeat their adversary’s strategy of war. These formulations, based on the analysis of actually existing contemporary capitalism, must directly confront the future that is to be built, and turn their back on the nostalgia for the past and illusions of identity or consensus.”

In the rest of the essay, Samin Amin outlines the necessary alternatives, and amongst his proposals, we excerpt the one on:

* De-Financialization: A World Without Wall Street

Samir Amin:

“Nationalization/socialization of monopolies would in and of itself abolish the principle of ‘shareholder value’ imposed by the strategy of accumulation in the service of monopoly rents. This objective is essential for any bold agenda to escape the ruts in which the management of today’s economy is mired. Its implementation pulls the rug out from under the feet of the financialization of management of the economy. Are we returning to the famous ‘euthanasia of the rentier’ advocated by Keynes in his time? Not necessarily, and certainly not completely. Savings can be encouraged by financial reward, but on condition that their origin (household savings of workers, businesses, communities) and their conditions of earnings are precisely defined. The discourse on macroeconomic savings in conventional economic theory hides the organization of exclusive access to the capital market of the monopolies. The so-called ‘market driven remuneration’ is then nothing other than the means to guarantee the growth of monopoly rents.

Of course the nationalization/socialization of monopolies also applies to banks, at least the major ones. But the socialization of their intervention (‘credit policies’) has specific characteristics that require an appropriate design in the constitution of their directorates. Nationalization in the classical sense of the term implies only the substitution of the State for the boards of directors formed by private shareholders. This would permit, in principle, implementation of bank credit policies formulated by the State — which is no small thing. But it is certainly not sufficient when we consider that socialization requires the direct participation in the management of the bank by the relevant social partners. Here the ‘self-management’ of banks by their staff would not be appropriate. The staff concerned should certainly be involved in decisions about their working conditions, but little else, because it is not their place to determine the credit policies to be implemented.

If the directorates must deal with the conflicts of interest of those that provide loans (the banks) and those who receive them (the ‘enterprises’), the formula for the composition of directorates must be designed taking into account what the enterprises are and what they require. A restructuring of the banking system which has become overly centralized since the regulatory frameworks of the past two centuries were abandoned over the past four decades. There is a strong argument to justify the reconstruction of banking specialization according to the requirements of the recipients of their credit as well as their economic function (provision of short-term liquidity, contributing to the financing of investments in the medium and long term). We could then, for example, create an ‘agriculture bank’ (or a coordinated ensemble of agriculture banks) whose clientele is comprised not only of farmers and peasants but also those involved in the ‘upstream and downstream’ of agriculture described above. The bank’s directorate would involve on the one hand the ‘bankers’ (staff officers of the bank — who would have been recruited by the directorate) and other clients (farmers or peasants, and other upstream and downstream entities).

We can imagine other sets of articulated banking systems, appropriate to various industrial sectors, in which the directorates would involve the industrial clients, centers of research and technology and services to ensure control of the ecological impact of the industry, thus ensuring minimal risk (while recognizing that no human action is completely without risk), and subject to transparent democratic debate.

The de-financialization of economic management would also require two sets of legislation. The first concerns the authority of a sovereign state to ban speculative fund (hedge funds) operations in its territory. The second concerns pension funds, which are now major operators in the financialization of the economic system. These funds were designed — first in the U.S. of course — to transfer to employees the risks normally incurred by capital, and which are the reasons invoked to justify capital’s remuneration! So this is a scandalous arrangement, in clear contradiction even with the ideological defense of capitalism! But this ‘invention’ is an ideal instrument for the strategies of accumulation dominated by monopolies.

The abolition of pension funds is necessary for the benefit of distributive pension systems, which, by their very nature, require and allow democratic debate to determine the amounts and periods of assessment and the relationship between the amounts of pensions and remuneration paid. In a democracy that respects social rights, these pension systems are universally available to all workers. However, at a pinch, and so as not to prohibit what a group of individuals might desire to put in place, supplementary pension funds could be allowed.

All measures of de-financialization suggested here lead to an obvious conclusion: A world without Wall Street , to borrow the title of the book by François Morin, is possible and desirable.

In a world without Wall Street, the economy is still largely controlled by the ‘market.’ But these markets are for the first time truly transparent, regulated by democratic negotiation among genuine social partners (for the first time also they are no longer adversaries as they are necessarily under capitalism). It is the financial ‘market’ — opaque by nature and subjected to the requirements of management for the benefit of the monopolies — that is abolished. We could even explore whether it would be useful or not to shut down the stock exchanges, given that the rights to property, both in its private as well as social form, would be conducted ‘differently.’ We could even consider whether the stock exchange could be re-established to this new end. The symbol in any case — ‘a world without Wall Street’ — nevertheless retains its power.

De-financialization certainly does not mean the abolition of macroeconomic policy and in particular the macro management of credit. On the contrary it restores its efficiency by freeing it from its subjugation to the strategies of rent-seeking monopolies. The restoration of the powers of national central banks, no longer ‘independent’ but dependent on both the state and markets regulated by the democratic negotiation of social partners, gives the formulation of macro credit policy its effectiveness in the service of socialized management of the economy.”

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