Beyond Karl Marx: Globalization and the onset of post-capitalist dystopia
By
Sealing of the Bank of England Charter (1694)
JOHN-THOMAS DIDYMUS
Author’s note: This article is a follow-up to: "Karl Marx: Globalization and the end of historical capitalism"
Opinion
Analysts have speculated in recent times on the subject of post-capitalism with regard to its form and the timing of its onset.
Although historical epochs or eras are often defined in retrospective analysis and only very rarely in contemporary analysis, there are strong indications that the historical era of capitalism is over, and that we are already in the early stages of a transitional post-capitalist era of collapse of global capitalism as we have known it.
.
Future historians will likely identify the beginning of globalization as marking the onset of this dystopian transitional stage characterized by an advanced stage of the insidious process — spanning the 20th century — of replacement of global industrial capitalism with full-fledged financial capitalism in alliance with "real estate, mineral extraction, oil, gas and monopolies" to exploit gains from economic rent.
.
One could come up with a host of alternate formal definitions of capitalism. But to avoid needless quibbling over theoretical issues, I have focused my analysis on its historical process in Western history.
.
Thus, when I speak of capitalism, I do not speak of what any theorist might think it is or what it ought to be, but what it has been in history regardless of whether it could have been different.
.
In the context of such understanding, my equation of historical capitalism with arbitrage trading in the international market by Western European powers beginning in the 15th and 16th centuries when the New World was first discovered is meant to be taken literally and not as a hyperbole.
.
Arbitrage simply is "buying from a market where prices are low and selling in a separate market where prices are high for the same assets ... taking advantage of price differences for the same assets between two markets to reap profits."
.
The miracle of industrial capitalism to which the wealth of Western nations is ascribed is a gigantic myth. The foundation of historical capitalism is in maritime arbitrage trading. That foundation has been undermined by globalization that commenced in the 20th century; that is why capitalism is dying today.
.
The research economist Michael Hudson, author of "The Bubble and Beyond: Fictitious Capital, Debt Deflation and Global Crisis," argued idealistically that industrial capitalism has been subverted by today's predatory financial capitalism.
In a phone interview with Dimitris Yannopoulos for Athens News, published in the website Naked Capitalism, he argued that the "original hope of banking and finance capitalism in the 19th century was that banks would make productive loans to finance industry."
.
According to Hudson:
"The aim was for banks to do something new, that no economy had done in the past: make loans not merely to ship and market goods once they were produced, but to finance new capital investment by manufacturers and producers, as well as by the public sector to build infrastructure. The idea was for these investments to create profits out of which to pay the interest and the principal back to the lenders."
.
Although accurate in its limited analysis of the crisis of capitalism in the 21st century, Hudson's analysis excludes some foundational issues essential to constructing the big picture of things and thus acquiring a piercing insight into real nature of the challenges facing global capitalism in the 21st century.
.
His circumscribed analysis is typical of Western scholars and analysts unwilling to come to terms with the insight that leads to my equation of historical capitalism with arbitrage in the era of maritime internationalization of trade that preceded globalization.
The vast extension of the global credit system in Western Europe was in response to the financing requirements of the internationalized maritime trade that kicked off in the 15th and 16th centuries. Bankers never set up to support industrial capitalist ventures.
Banks could lend to finance the Industrial Revolution that took off in Britain in the late 1700s only because Western Europe was literally awash with surplus capital accruing from maritime arbitrage trading that could be channeled to financing industrial capitalist production.
What is known today as industrial capitalism was largely epiphenomenonal to the maritime arbitrage trading economies of the West in the 18th, 19th and early 20th centuries. Thus, it lives and dies with international arbitrage as its historical backbone.
.
I have and will continue reiterating this line of argument tirelessly, in the hope that the reader who has been following my argument in this series of articles will fully grasp its all-embracing implication and come to see why the onset of globalization, promoting a more symmetric global flow of information, marks the onset of a transitional dystopian post-capitalist era characterized by the financial sector abandoning the real sector entirely and allying itself fully with what Hudson describes as the "rentier tollbooth sector of the economy."
.
Any analysis of the crisis of global capitalism in the 21st century that excludes the historical role of arbitrage trading in the emergence of capitalism is incomplete and perpetuates analysts running round in circles in the dark trying to come to theoretical mastery of the perplexing crisis features of global capitalism the 21st century.
.
Contrary to mainstream analysis that seeks to explain the cause of the crisis of global capitalism with reference to the replacement of the industrial economy with the financial economy, distortions of the major capitalist economies such as Hudson describes in his paper "The Transition from Industrial Capitalism to a Financialized Bubble Economy" are symptoms rather cause of the problem.
.
The essential mismatch between the global institutions of credit and industrial capitalism has its roots in the historical facts I have enumerated.
.
With the demise of arbitrage trading opportunities in the global maritime market in the era of globalization, the financial economy and the credit system developed to serve the maritime trading economies of the West simply allies itself with the "rentier tollbooth sector" to the neglect of the productive real sector of the economy initiating fundamental distortions of capitalist economies that set them on the path of implosive demise.
 |
Sealing of the Bank of England Charter (1694)
|
Opinion
Analysts have speculated in recent times on the subject of post-capitalism with regard to its form and the timing of its onset.
Although historical epochs or eras are often defined in retrospective analysis and only very rarely in contemporary analysis, there are strong indications that the historical era of capitalism is over, and that we are already in the early stages of a transitional post-capitalist era of collapse of global capitalism as we have known it.
.
Future historians will likely identify the beginning of globalization as marking the onset of this dystopian transitional stage characterized by an advanced stage of the insidious process — spanning the 20th century — of replacement of global industrial capitalism with full-fledged financial capitalism in alliance with "real estate, mineral extraction, oil, gas and monopolies" to exploit gains from economic rent.
.
One could come up with a host of alternate formal definitions of capitalism. But to avoid needless quibbling over theoretical issues, I have focused my analysis on its historical process in Western history.
.
Thus, when I speak of capitalism, I do not speak of what any theorist might think it is or what it ought to be, but what it has been in history regardless of whether it could have been different.
.
In the context of such understanding, my equation of historical capitalism with arbitrage trading in the international market by Western European powers beginning in the 15th and 16th centuries when the New World was first discovered is meant to be taken literally and not as a hyperbole.
.
Arbitrage simply is "buying from a market where prices are low and selling in a separate market where prices are high for the same assets ... taking advantage of price differences for the same assets between two markets to reap profits."
.
The miracle of industrial capitalism to which the wealth of Western nations is ascribed is a gigantic myth. The foundation of historical capitalism is in maritime arbitrage trading. That foundation has been undermined by globalization that commenced in the 20th century; that is why capitalism is dying today.
.
The research economist Michael Hudson, author of "The Bubble and Beyond: Fictitious Capital, Debt Deflation and Global Crisis," argued idealistically that industrial capitalism has been subverted by today's predatory financial capitalism.
In a phone interview with Dimitris Yannopoulos for Athens News, published in the website Naked Capitalism, he argued that the "original hope of banking and finance capitalism in the 19th century was that banks would make productive loans to finance industry."
.
According to Hudson:
"The aim was for banks to do something new, that no economy had done in the past: make loans not merely to ship and market goods once they were produced, but to finance new capital investment by manufacturers and producers, as well as by the public sector to build infrastructure. The idea was for these investments to create profits out of which to pay the interest and the principal back to the lenders."
.
Although accurate in its limited analysis of the crisis of capitalism in the 21st century, Hudson's analysis excludes some foundational issues essential to constructing the big picture of things and thus acquiring a piercing insight into real nature of the challenges facing global capitalism in the 21st century.
.
His circumscribed analysis is typical of Western scholars and analysts unwilling to come to terms with the insight that leads to my equation of historical capitalism with arbitrage in the era of maritime internationalization of trade that preceded globalization.
The vast extension of the global credit system in Western Europe was in response to the financing requirements of the internationalized maritime trade that kicked off in the 15th and 16th centuries. Bankers never set up to support industrial capitalist ventures.
Banks could lend to finance the Industrial Revolution that took off in Britain in the late 1700s only because Western Europe was literally awash with surplus capital accruing from maritime arbitrage trading that could be channeled to financing industrial capitalist production.
What is known today as industrial capitalism was largely epiphenomenonal to the maritime arbitrage trading economies of the West in the 18th, 19th and early 20th centuries. Thus, it lives and dies with international arbitrage as its historical backbone.
.
I have and will continue reiterating this line of argument tirelessly, in the hope that the reader who has been following my argument in this series of articles will fully grasp its all-embracing implication and come to see why the onset of globalization, promoting a more symmetric global flow of information, marks the onset of a transitional dystopian post-capitalist era characterized by the financial sector abandoning the real sector entirely and allying itself fully with what Hudson describes as the "rentier tollbooth sector of the economy."
.
Any analysis of the crisis of global capitalism in the 21st century that excludes the historical role of arbitrage trading in the emergence of capitalism is incomplete and perpetuates analysts running round in circles in the dark trying to come to theoretical mastery of the perplexing crisis features of global capitalism the 21st century.
.
Contrary to mainstream analysis that seeks to explain the cause of the crisis of global capitalism with reference to the replacement of the industrial economy with the financial economy, distortions of the major capitalist economies such as Hudson describes in his paper "The Transition from Industrial Capitalism to a Financialized Bubble Economy" are symptoms rather cause of the problem.
.
The essential mismatch between the global institutions of credit and industrial capitalism has its roots in the historical facts I have enumerated.
.
With the demise of arbitrage trading opportunities in the global maritime market in the era of globalization, the financial economy and the credit system developed to serve the maritime trading economies of the West simply allies itself with the "rentier tollbooth sector" to the neglect of the productive real sector of the economy initiating fundamental distortions of capitalist economies that set them on the path of implosive demise.
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