I'm finishing up my book on "liberalism" crisis. This project synthesizes years of research on the financial crisis, the BP oil crisis, and the Fukushima nuclear crisis.
These crises are examined as failures of liberal governance. Two of my previous books, Governmentality, Biopower, and Everyday Life AND Governing Childhoood have examined threats to liberal democracy in great detail.
Dispossession: Liberalism's Crisis provides specific institutional analyses of the energy and financial complexes that pose the greatest endogenous threat to liberal democracy.
Here is an excerpt from my conclusion that summarizes focus of chapters 1-2:
The financial, carbon and nuclear complexes’ power derives from their historical institutionalization in global infrastructures and their centrality in western governments’ core conceptions of national security. This book has demonstrated that national security is too often defined narrowly in terms of the complexes’ preservation despite catastrophic risks posed by their operations. The complexes’ infrastructures theorized and studied empirically in this book encode extractive principles and employ risky “innovative” technologies, and too often operate heedless of externalities. Capitalism’ moral flaws are aided and abetted by captured regulators. The financial and energy complexes historic control over money, oil, and uranium means their supply chains are well-represented in government. Liberal principles of transparency, rational governance, and individual rights are increasingly being cast aside in escalating financial and ecological crises. Liberal government, as envisioned in western ideals of rational democratic governance, has been captured by mercantile logics and cannot escape sectional interests that are drawing the globe into unprecedented ecological, social, and political crises.
The catastrophic risks identified in this book include those associated with escalating social inequality and instabilities, growing authoritarianism, depleted natural resources, and growing environmental chemical and radioactive toxicity in a context of rapid climatic disturbances. This project is but one among many addressing the escalating nature of human wrought ecological and social crises. Broadly conceived, we have entered the Anthropocene, a zone of mass extinction events wrought and/or exacerbated by human conduct. As noted previously, biodiversity is currently collapsing at a rate comparable to previous mass extinctions, causing some scientists to predict that 75 percent of species will be gone over the next few centuries if present trends continue.[i] A 2015 study found “the average rate of vertebrate species loss over the last century is up to 100 times higher than the background rate.”[ii] The crises explored in this book demonstrate tremendous and devastating ecological impacts from the financial and energy complexes’ routine operations and catastrophic accidents. However, as noted by sociologist Ulrich Beck, our ability to reflect upon catastrophic risks is unfortunately not necessarily accompanied by the will or technology to resolve them. Reflexivity and incapacity help define the parameters of the risk society within which we dwell.
In exploring escalating economic and ecological crises, this book has documented “shock doctrine” type crisis management in the wake of foreseeable, human-engineered catastrophes. Known hazards were ignored by industry and government or falsely made manageable in weak risk-management plans. Fraud infuses regulatory compliance at every level we learn in the financial, BP, and Fukushima crises. Regulators look the other way and then fail to rein in offenders by leveling civil penalties while supporting offenders financially with national monetary policy, absorption of debt (e.g., socialization of TEPCO’s debt from nuclear crisis), government contracting, etc. These responses encourage moral hazard, reinforcing malfeasance, and deepen offenders’ institutional entrenchments. Across the financial, BP and the Fukushima nuclear crisis we see failures of liberal ideals of rational and representative governance. Instead we see:
o Failures in Transparency, Ethics and Legal Compliance
o Failures in Regulation
o Failures in Crisis Communications
o Sustained Externalization of Costs
§ Externalization of costs to government and to individualized citizens Destruction of property & livelihoods with no hope of full accounting for long-term costs
§ Destruction of eco-system
§ Non-sustainable futures
Lack of transparency and democratic accountability are integral in the operations of the financial and energy complexes explored in this book. The complexes lack of political accountability stems from the regulatory capture deriving from revolving door relationships and mercantile and warlike formulations of national security. Each failure has been exacerbated by neoliberal regimes of government that further centralize wealth and ownership and dispossess the rights of individuals by concentrating decision-making in powerful institutions that enjoy limited liability. Each failure illustrates the tipping that occurs as neoliberal contradictions are resolved through increasingly fascist logics that carve out exceptions to liberal rights of personhood and property
As discussed in Chapter Two, powerful financial and energy complexes rising in the nineteenth century have prevailed, becoming across time more centralized and more powerful as the global economy renders more localized spaces subject to centralized power. Mercantile governments in the nineteenth and twentieth centuries largely collaborated with these complexes, although the monopolies and crises delivered through their machinations resulted in mid-twentieth century regulatory reforms. However, finance and energy reforms sought to temper unruly and ruthless corporations, rather than replace them with less risk-laden and centralized forms of organization for the production of financial value and energy. Although demanding reforms, twentieth century western governments were willing to wage war for control over foreign carbon and uranium supply chains profiting their national extractive industries. Oil fueled industrial and military infrastructures while uranium underpinned the most devastating weapons built by the military-industrial complex, a complex that was recognized at the time of its foundation as holding potential dangers for eroding American democracy. Chapter Two also introduced innovations under neoliberal political and economic government over the last few decades. These innovations contributed to the crises explained in subsequent chapters by facilitating de-regulation and enabling concentrated ownership, although one shouldn’t forget that extractive and mercantile capitalist and governmental logics precede neoliberalism.
Chapter Three explains how de-regulation and neoliberal monetarist policy during the 2007-2008 financial crisis reinforced the power of the oligarchic financial complex that has caused global financial chaos and further centralized ownership of wealth. The financial complex funds extractive commodity enterprises in myriad ways that affect energy futures, ranging from financing to commodities trading activities. The financial complexes “innovative” financial instruments, such as collateralized debt obligations and credit default swaps allowed the accumulation of unprecedented leverage, debt and fraud while instruments such as ETFs incorporate ever more of the world’s commodity supply chains, allowing localized activities to be drawn into global commodities markets, thereby enabling expropriations of value that increase prices and market volatility, especially in emerging markets. In essence, today’s “innovative” financial instruments are often designed to lack transparency while extractive financial logics drive efforts to render ever more aspects of the “global economy” visible and subject to financialization. The consolidated power of the western financial complex facilitates resistance to regulatory reforms, as illustrated by failed reforms in the wake of the 2007-2008 crisis described in Chapter Three and expanding neoliberal trade agreements, such as the TransPacific Partnership, which remained cloaked in secrecy after being ratified by the US and 11 Pacific Rim nations in October 2015.[iii] The arrogance of western financial capital is perhaps best illustrated by Goldman Sachs’ CEO Lloyd Blankfein’s assertion that he was pursuing “God’s work” in November of 2009.[iv] This arrogance is demonstrated by the series of financial frauds revealed in the years after the 2007-2008 crisis, including manipulation of LIBOR and currency market exchange rates, documented in Chapter Two.
The Federal Reserve Bank is a captured regulator, as illustrated by its recent remarks concerning financial stability made at a the 59th Economic Conference on Macroprudential Monetary Policy, held at the Federal Reserve Bank of Boston October 2 and 3, 2015.[v] The conference aimed at addressing the Federal Reserve’s best response to financial crisis, for example, through the use of interest rate adjustments or macroprudential policy aiming at reducing systemic risk. William C. Dudley, president of the Federal Reserve Bank of New York, endorsed the idea of reducing systemic risk but opined that macroproduential tools were missing: “My own view is that while the use of macroprudential tools holds promise, we are a long way from being able to successfully use such tools in the United States.”[vi] Dudley’s comments ignore the proven successes of strict financial regulation in limiting financial crisis after Glass-Steagall and before offshoring and deregulation of commodities markets. Financial regulation that reduces systemic risks is impossible for the Federal Reserve to deliver because of its positionality within the financial complex and because of the neoliberal world of global flows it promoted and helped implement. Hence, The New York Times concluded from the conference that “Policy Makers Skeptical on Preventing Financial Crisis.” Financial crises are intrinsic to the form of neoliberal capitalism that now dominates the global economy and captured regulators have proven their incompetence in remediating recurring crises constitutive causes.
[i] Richard Monastersky, “First Atomic Blast Proposed as Start of Anthropocene,” Nature (January 16, 2015): Accessed January 20, 2015, doi:10.1038/nature.2015.16739.http://www.nature.com/news/first-atomic-blast-proposed-as-start-of-anthropocene-1.16739.
[ii] Gerardo Ceballos, Paul R. Ehrlich, Anthony D. Barnosky, Andrés García, Robert M. Pringle and Todd M. Palmer (2015, June 19). Accelerated modern human–induced species losses: Entering the sixth mass extinction. Science Advances , 1(5) 140025
[iii] Jackie Calmes, “Trans-Pacific Partnership Trade Deal Is Reached,” The New York Times, October 5, 2015. Accessed October 5, 2015. Available: http://www.nytimes.com/2015/10/06/business/trans-pacific-partnership-trade-deal-is-reached.html?_r=0.
[iv] Blankfein Says He’s Just Doing ‘God’s Work,’” The New York Times, November 9, 2009. Accessed October 5, 2015. Available: http://dealbook.nytimes.com/2009/11/09/goldman-chief-says-he-is-just-doing-gods-work/.
[v] US Federal Reserve Bank. 59th Economic Conference on Macroprudential Monetary Policy, held at the Federal Reserve Bank of Boston October 2 and 3, 2015. No date. Accesssed October 8, 2015. Available: http://www.bostonfed.org/macroprudential2015/.
[vi] Binyamin Appelbaum, “Policy Makers Skeptical on Preventing Financial Crisis,” The New York Times, October 4, 2015. Accessed October 5, 2015. Available: http://www.nytimes.com/2015/10/05/business/economy/policy-makers-skeptical-on-preventing-financial-crisis.html?emc=edit_th_20151005&nl=todaysheadlines&nlid=32962000&_r=0.