I read and commented upon Mr. Garton Ash’s seemingly interminable essay here:
This section of Mr. Wolf’s essay is instructive :
Demagogic authoritarian capitalism is a hybrid. As in the Chinese system of bureaucratic authoritarian capitalism, the ruler is above the law and democratically unaccountable — elections are a sham. But power is personal, not institutionalised. This is corrupt gangster politics. It rests on the personal loyalty of sycophants and cronies. Often the core consists of the family members, viewed as most trustworthy of all. This is the political system Mr Trump wished to install in the US.
In the above paragraph ‘demagogic authoritarian capitalism’ is the cornerstone of Chinese capitalist iteration. Yet Werner Bonefeld in his 2010 paper titled ‘Free Economy and the Strong State: Some notes on the state’ offers this:
What is needed is … honest and organised coercive force. (Wolf, 2001)
However distinct the political response to the crisis of 2008, the apparent emergence of neoliberalism during the 1980s did not entail a weak state. It entailed a ‘strong state’. Andrew Gamble’s book on the Thatcher period was thus aptly entitled The Free Economy and the Strong State, which made clear reference to the ordo-liberal conception of the relationship between the national state and the global economy.2 Susan George (1988) characterized the 1980s as a time in which everything was privatized, except the losses, which were socialized by means of debt-bondage and repressive labour market and welfare state reforms. Ernest Mandel (1987) characterized the political economy of the 1980s as ‘military Keynesianism’, a Keynesianism that refinanced a financial system on the brink in the face of the then debtor crisis and bad debt exposure. Its rescue took the form of pro-cyclical global deficit financing based on the US dollar, expansion of the military industrial complex, privatization, and financial deregulation. Military Keynesianism sought to balance the books by taking money out of the pockets of workers, and by attacking conditions. Redistribution of wealth from labour to capital was such that by the early 1990s, ‘about two-thirds of the world’s population have gained little or no substantive advantage from rapid economic growth. In the developed world the lowest quartile of income earners has witnessed a trickle-up rather than a trickle-down’ (Financial Times, 24 December 1993). This one-quarter has since expanded to include more than half the world’s population, creating an unprecedented gap in incomes, domestically and on a global scale (see Glyn, 2006).
‘Military Keynesianism’ sustained capitalism on the basis of an accumulation of potentially fictitious wealth. Debt expanded to such a degree that, according to the Financial Times (27September 1993), the IMF feared in the early 1990s ‘that the debt threat is moving north. These days it is the build-up of first-world debt, not Africa’s lingering crisis, that haunts the sleep of the IMF official’. In the face of recurrent crises since 1987,3 and various stock market fears, the USA emerged as the biggest debtor country. Magdoff et al. (2002) argued that, by 2002, outstanding private debt was two-and-a-quarter times GDP, while total outstanding debt—private plus government—approached three times the GDP. Deficit spending sustained a global economy that became completely dependent upon a mountain of debt. Throughout the last thirty years, the accumulation of potentially fictitious wealth in the form of money, M…M’, and the coercive control of labour, from debt bondage to new enclosures, and from the deregulation of conditions to the privatization of risk, have belonged together. In the context of a global economy plagued by debt and threatened by the collapse of debt, Martin Wolf argued that the guarantee of global capital required stronger states. As he put it in relation to the so-called Third World, ‘what is needed is not pious aspirations but an honest and organized coercive force’ (Wolf, 2001).
In relation to the so-called developed world, Soros (2003) argued, rightly, that terrorism provided not only the ideal legitimation but also the ideal enemy for the unfettered coercive protection of debt-ridden free market relations ‘because it is invisible and never disappears’. The premise of a politics of debt is the ongoing accumulation of ‘human machines’ on the pyramids of accumulation. Its blind eagerness for plunder requires organized coercive force to sustain the huge mortgage on future income in the present. Wolf’s demand for the strong state does not belie neoliberalism. Neoliberalism does not demand weakness from the state. Laissez-faire is no ‘answer to riots’ (Willgerodt and Peacock, 1989: 6). Indeed, laissez-faire is ‘a highly ambiguous and misleading description of the principles on which a liberal policy is based’ (Hayek, 1976: 84). That is, the neoliberal state is ‘planning for competition’ (1976: 31), and there can therefore be no market freedom without ‘market police’ (Rüstow, 1942: 289). For the neoliberals, there is thus an ‘innate connection between economics and politics’ (Friedman,1962: 8): not only does the free market require the strong, market-facilitating state, but it is also dependent on the state as the coercive force of that freedom.