Modern Imperialism, Monopoly Finance Capital, and Marx's Law of Value. Samir Amin

capable of “regulating” capitalism and forcing it to take into consideration the legitimate social demands of workers and citizens. They fear being called “unrealistic radicals” (or even “Marxists”!) were they to come up with anything more. But it is their propositions that are completely unrealistic, for reasons given by Baran, Sweezy, and Magdoff in their precocious analyses of “financialization,” which they grasped at its very beginning in the 1980s.

      The financial collapse of 2008 has occasioned a flood of disinformation, organized by the dominant media with the help of “experts,” accusing the banks of having “abused deregulation,” of having “made errors of judgment” (subprime mortgages), even of dishonesty—thus distinguishing and whitewashing the “good capitalists” who are innovators and who invest in real production. Such dissociation is meaningless; the same oligopolies dominate quite equally places of production and financial institutions. Even worse, this dissociation proceeds from a “theory” that knows not that a class state can function, precisely as a class state, only by placing itself above the interests of particular parcels of capital so that—especially through finances—the collective interests of capital should prevail. “Regulation” is the name given to this permanent and unavoidable state intervention.

      This regulation takes place in two domains where the collective interest of the class has predominance. The first is regulation of the trade cycle and the second is regulation of international competition.

      4.

      Regulation of the conjunction does not signify suppression of the cycle but, on the contrary, an ordered intensification of its scope, as a means whereby to maximize the pace of accumulation in time of prosperity and then to control this through liquidations, restructurings, and concentrations in times of crisis. This form of regulation is given ideological expression in the monetarist theories of the conjuncture—that is, in the attempt to rationalize the bourgeois practice of competition. The rate of interest appears as the supreme instrument for this regulation.

      When the state acts through the monetary system to impose an increase in the rate of interest, the central authority is intervening actively in economic life in the collective interest of capital. The raising of the rate of interest intensifies the crisis, multiplying bankruptcies. But it thereby accelerates the process of concentration of capital, the condition for the modernizing of the apparatus of production and the conversions that have become necessary. Contrariwise, the reduction in the rate of interest accelerates the growth rate and enables the economy in question to derive maximum benefit from its restored external competitiveness.

      5.

      The second domain is that of competition among national capitalisms. In the nineteenth century, in Marx’s time, the rule of the game where international competition among the central capitalist formations was concerned was that of the gold standard (dual convertibility, internal and external). The flow this way and that of the yellow metal therefore responded to the differences among interest rates. This flow constituted a source, positive or negative, of the supply of money at the disposal of the national monetary institutions. The practicing of monetary policies—that is, the manipulation of rates of interest—was therefore a means of intervening in the conduct of relations among the different national formations. Here, too, increasing the rate of interest in times of crisis helped to reestablish the external equilibrium when this was threatened during the conversion period, by attracting into the country “floating” capital from abroad.

      The methods of managing international competition are no longer those known and criticized by Marx. The abandonment of the gold standard and the generalization of flexible exchange rates on the one hand, and the puffing up of the Department III for the absorption of excess surplus-value, on the other, have simultaneously imposed and allowed extreme diversity in economic and financial policy methods. These interventions are based on a healthy dose of empiricism: there is “what has worked” and what has not. But they likewise deploy a vast repertory of “theories,” ranging from Keynes to Hayek and on to Chicago monetarism. They continually reformulate models that claim to integrate the “givens” provided by observation and, consequently, to guarantee the efficacious working of the policies envisaged on that basis. To extend the critique that Marx began of the bases and methods of vulgar economics requires, in turn, the critique of all these post-Marxian theories emerging from the field of vulgar economics.¹

      Naturally, study of the domain of international competition cannot be reduced to abstract analysis of the mechanical relations linking different economic magnitudes, national and foreign: the volume and price of imports and exports, the flow of capital and its response to the rates of profit and of interest, and so on. In this domain it is always possible to claim that one can derive economic laws from empirical observation of the facts. Thousands of econometric models have been constructed with this end in view, but the results obtained from them have proved meager. In most cases, the laws inferred from observation of the past cannot be confirmed in the future and do not endow the public authorities with effective instruments of control. The reason for this is that what is essential often lies outside these models: the rate of progress of the productive forces, the results of the class struggle, and the effects of the latter upon the former.