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 GarcÃa, 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.
Doris Lessing wrote five novels in the science fiction vein. They are really very fascinating works. Reading from your book I started to imagine the paragraphs above in an appendix to a sixth novel . . . set thousands of years from now after the earth has been abandoned and being part of a sociological study carried out by one of the characters who is compiling a history of failed planets. Your books just happened to be part of a collection made centuries ago when explorers spent time on the earth examining its then current conditions. In their report they mention that the earth is increasingly radioactive due to the breaking down of the thousands of nuclear bombs and the failure of nuclear power plants after the earth inhabitants lost all control due to a powerful Carrington-class coronal mass ejection! At the time of this visit no mammalian life was found.
ReplyDeletePerhaps something like that will happen or perhaps all planets inhabited by human like sentient beings eventually go in the direction of destruction through science and technology. Memories of extreme hardship drive these creatures to extreme efforts to prevent what killed them off over the centuries and in the process create a whole new but largely invisible threat. One great danger is replaced by an even greater danger which finally causes extinction.
William I have a story I'm writing in my mind about a future where everything and everyone is slowly dying and no one understands why as death and suffering become normative.
DeleteThat's a good idea. What we call fiction often has a far greater impact than factually based material. Lawrence Durrell wrote: 'Great truths are not necessarily facts, facts are dreams'. Star Wars has become part of the social mythology in the way that Shakespeare was once or the Bible. Possibly Person Of Interest will achieve some kind of cult status as well. I have found the latter quite remarkable.
DeleteClose
DeletePreview
Edit Anonymous said...
I had to read the dispossessed by LeGuin in college in the late 70s. It contrasted an ethical society with a harf core ugly capitalist society. All the lies we have been told. I went to LA with a church group in 2008. There are literally over a hundred thousand homeless people in la county and it has grown. They are old people , diabetic people, people who had cancer , lost their houses worked for gm in flint michigan, made bad investment, grew up in poverty and hell. Being homeless is enough to make anyone insane and or abuse substances. We live in such an ugly society. Show a liberal quaker unitarian non orthodox jewish liberal or anyone who claims to be liberal a homeless person and they are likely to be judgemental like the worst fox a-hole or hide, or walk away . They will be in denial. That is not happening in this great country just as any republican is. They might not blame the victim but they are put of it. What a great country we live in.
October 19, 2015 at 8:14 AM
Please prove you're not a robot