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FEB 2018

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Fantasies of Secession: A Critique of Left Economic Nationalism

“All the notions of justice held by both the worker and the capitalist, all the mystifications of the capitalist mode of production, all capitalism’s illusions about freedom, all the apologetic tricks of vulgar economics, have as their basis the form of appearance discussed above, which makes the actual relation invisible, and indeed presents to the eye the precise opposite of that relation.”

Marx, Capital, vol. I

Over the past few years, financial power has become a political black hole, collapsing ideological space into itself. Common ideas on the left, right, and center trace confused and overlapping trajectories as they spiral towards it.

In the political mainstream, hostility to “big finance” is a bipartisan affair. The Trump administration gestures toward breaking up the largest banks. The progressive wing of the Democratic Party, led by Senators Bernie Sanders and Elizabeth Warren, agrees with Trump that a massive downsizing of the U.S.’s largest banks is desirable and necessary. Like their supposed enemies on the right, they see free and fair market competition as an important goal for any reorganization of the banking system, indeed for economic affairs generally. A growing circle of liberal economists also support the notion that if banks are too big to fail, then they are too big to exist.

In contrast to these rather awkward elective affinities, some who describe themselves as on the left are putting forth various alternative proposals that instead of downsizing finance would effectively ntionalize it.1 By imposing strict capital controls, converting financial institutions into public utilities, and purging the profit motive from routine monetary transactions, banks could allegedly be democratized by subordinating them to publicly accountable state supervision. These proposals would supposedly open the door to socialism by submitting the vast resources of financial markets to the discretion of the government—by nationalizing them. They reflect a healthy sense that those who identify with the left should be expanding, rather than contracting, the scale of their ambition, reconsidering the prospects for economic planning and collective ownership as the present order grows more moribund by the day. But they are based on a deeply flawed analysis. 

Financial nationalization is a particular strain of a general virus, what I will refer to as left economic nationalism. In a nutshell: left economic nationalism is the idea of subordinating financial institutions to the national state by withdrawing or sheltering them from the world market. Whatever form it takes, its claims are typically drawn from illusory premises in the service of a central myth: that national social democracy, or democratic socialism in one country, could be achieved by rolling back economic globalization. An integral plank in what has come to be labeled the “democratic socialist strategy,” left economic nationalism, is a futile attempt to rewind history that stems from a basic misrecognition of the nature of capitalism.

In a snapshot: the question of modern financial power calls for an irreducibly transnational level of analysis, and thus of politics. But the schemes for nationalization re-impose narrowly local solutions on worldwide problems, scrambling any link between theory and practice. This amounts to simply wishing away the forces of global financialized production. Because these forces form a transnational whole that is larger than the sum of its parts, demands to nationalize or collectivize the commanding heights of finance would not bring forth the egalitarian world they aim at.2 Rather, they would more likely accelerate current trends toward world economic breakdown and geopolitical belligerence. This means that socialists, progressives, communists, democratic socialists, social democrats—in short, the various tendencies within what is usually called “the left”—need to start taking internationalism seriously as both a theoretical and strategic premise, rather than merely paying lip service to it.

That, at least, will be the claim in what follows. The essay begins with an exposition of the economist J.W. Mason’s theory of nationalized finance, which at the time of writing is one of the most fully imagined blueprints for the idea. Although the analysis takes this case as an ideal type, it applies not just to Mason, but by extension to a whole range of self-styled socialists and social democrats who share the same theoretical commitments.3 So my argument will advance a critique of an entire political tendency, as well as the analysis it is based upon. It is offered in the spirit of working-class internationalism, on the basis of the idea that the workers of the world know no country, and with the conviction that, without a rejuvenated theory and practice of internationalist politics, the organizations currently identifying as “leftist” will once again end up the dupes of history. 

My argument as a whole is motivated by a central proposition: that theory and politics are intimately linked, and that the type and quality of our theory shapes how we imagine the politically possible. The assorted currents of thought flowing into left economic nationalism take historical appearances for essences and parts for wholes, moving within distorted premises that lead to a dead end of incoherent politics. The ultimate purpose of the following is to outline, if only negatively, an alternative analysis and political strategy that could be adequate to this historical moment.

Breaking Away

J.W. Mason’s 2016 article, “Socialize Finance,” offers a sophisticated formulation of financial nationalization as a mode of economic planning. As such, it provides an ideal point of departure to examine the case for economic nationalism as it appears to democratic socialists and their fellow travelers.

The argument boils down to a simple but powerful observation: at its core, finance is the actually-existing form of economic planning, having grown in its scope and power, paradoxically, as competitive market production has itself become an increasingly utopian project.

A glance at the architecture of the world economy seems to confirm this: the social surplus is increasingly centralized in the hands of giant financial oligopolies, which determine the flow and forms of credit; a few dozen firms, whose profits depend on their own financial dealings and intellectual property laws, dominate the world market; and central banks attempt to control savings, investment, and the money supply through bond-market transactions, while serving as “lenders of last resort” in crisis situations. Not impersonal market mechanisms but human decisions determine when and where credit should be extended, withheld, or recalled. Hiding in plain sight, these operations already function in practice to suspend or allow market outcomes. Why not seize them to advance collectively-defined social goals, instead of leaving them to the venal whims of the rentiers who now control them?4

The result, “socialized” finance, would supposedly amount to its sweeping democratization. In Mason’s words, this would “reclaim as a site of democratic politics the social planning already carried out through finance,” shifting key investment decisions away from the short-term myopia of the profit motive and toward the long-term needs of society. The program rests on the assumption that “it is likely that any left program will require some degree of delinking from the global economy,” as such a radical program to democratize investment requires insulation from predatory, international financial markets that only the state can provide. This means breaking off from the world market to pursue socialist politics.5

Thus, to “socialize” finance in this scheme means to nationalize it in the name of a sweeping program of redistribution. It is worth noting that Mason’s argument echoes Rudolf Hilferding’s classic analysis in Finance Capital.6 As one of the first to develop a critical, systematic understanding of the role of finance within capitalist dynamics, Hilferding’s analysis was sharp. Appearing in 1910, it presciently predicted that the fusion of industrial and banking capital into national cartels would soon plunge the world into an inter-imperialist bloodletting. At the same time, it looked as if this synergy was gradually creating the conditions for full-scale economic planning in the capitalist powers, meaning the socialist left needed only to seize political power to find the tools for a rationally coordinated economy already at hand. Obviously this is not how history played out, but even if the Social Democratic Party had taken full control of state power in Germany, it is hard to imagine the planning regime coming together as Hilferding envisioned it. The Austrian social democrat located the driving dynamics of capitalism in the forms of market competition, rather than in the historically specific, social relations of production themselves.7 This meant that his analysis remained blind to how the political options available to any individual state are determined by its relative place in the world market, which, in turn, is itself embedded within a globally articulated pattern of capital accumulation.

While it is presented in a Keynesian idiom, Mason’s case is similar. It rests upon Keynes’s vision of the “euthanasia of the rentier,” in which the functionless class of owners parasitically living off its wealth is gradually displaced in the transition to a stable, planned regime of socialized investment. This idea looked plausible to some earlier in the 20th century when, in the midst of the worldwide Great Depression and its aftermath, it seemed possible and necessary for governments to take direct control of their national economies. It looked crystal clear to Keynes and his colleagues, for example, that this was where the future lied, as is evident in The General Theory, which assumes a hypothetical “national community” as the basic standpoint for economic analysis. But whatever its merits then, today this is clearly a misguided perspective. It does not accurately reflect a world in which production, ownership, management, and control are all transnational in scope, a gestalt of globally-articulated supply chains, monopolistic corporate behemoths, and the financial circuitry that fuses them together and makes them possible. This world cannot be simply repealed by the fiat of nationalization. The belief that it could rests on a persistent mirage, namely that capitalist financial markets could be neatly repurposed for a major domestic redistribution without addressing the world circuits of value, production, and commerce in which they are embedded.

The Illusion of Detachment

Whether it is explicitly called for or not, “delinking” from the global economy to nationalize finance is a major premise of current proposals to resurrect social democracy in one country. To have any chance, the argument runs, this plan would require strict capital controls.8 These are needed to combat massive capital flight in the event that a serious social-democratic government accedes to power. Likewise, strong bulwarks against cross-border transactions would free national governments and their banking systems to direct credit into socially useful ends by sharply curtailing international flows of funds, literally “closing borders to money,” in Mason’s words.9

At the moment, left-wing intellectuals are generally favorable to the notion of splitting off from the world market to pursue national economic sovereignty. Besides Mason, Peter Gowan has recently made the case for reviving full capital controls as a key part in a comprehensive plan for democratic socialism.10 Vivek Chibber, with his full-throated defense of market socialism, would also presumably support them, insofar as socializing a country’s financial assets to return them to its citizens would require walling them off from the international investor class.11 This orientation is also clearly evident in some strange panel comments from perhaps the best known Marxist economist, Robert Brenner. Perversely, in speaking engagements following the 2016 U.S. Presidential elections, Brenner lamented the dim prospects for a genuinely anti-neoliberal “statism” from the Trump administration. Such “statism,” in Brenner’s view, is obviously the only way to counter “neoliberal global capitalism.” It only needs to have a “leftist” rather than a reactionary form.12

But it is not only left-wing intellectuals who find these ideas attractive. Marine Le Pen has supported bank nationalization in the protectionist economic platform of the National Front, while Jeremy Corbyn’s Labour Party has floated the notion of hard capital controls to choke off an investment strike in the event of a Labour government in the U.K.13 And while Bernie Sanders himself has not explicitly endorsed it, the idea of converting banks into nationalized public utilities is seen as a live option among some of his supporters.14

All of these positions revolve around a central economic image. This is an image of the national economy that abstracts from its relative position and function in the international division of labor, conceptually separating the national unit from the financial web of the world economy. On the basis of it, today’s nationalists of various stripes imagine a clean break from that order to pursue their various agendas. But this image is a mirage. It sets up a formal dualism in which global finance is a pure expression of elite class power, and individual states are the seat of popular, democratic opposition to them. The idea of a collective subject untainted by the corrupting influences of finance is understandably appealing for those who wish to curb its power. Yet at this late date, the very idea of such a subject is nothing more than a pernicious myth.

 Contrary to popular versions of the “neoliberal financialization” thesis, financial markets are not, first and foremost, a contingent political project imposed on the “real” economy that is mainly meant to reinforce ruling class power, though of course they do serve that purpose.15 They are rather an organic outgrowth of global capitalist production itself. Essentially, they are the anarchistic flipside of capitalism as an integrated, tightly-structured world system.

The arcane circuitry of finance is deeply and inextricably interwoven throughout the planetary organization of human material activity. Historically, it has played a key role in the unification of capitalism as a universal, crisis-ridden form of social life. For instance, stocks and bonds, as the basic building blocks of finance, have fostered the circulation of capital and the expansion of the world market since the eighteenth century.16 Following the emergence of industrial capital in the early nineteenth century, the circulation of financial claims began to fuel the fitful bouts of expansion and collapse that characterize the world economy.17This distinctive historical pattern, a crisis cycle internal to the social relations of commodity production and exchange, is not incidental to capitalism; capital is crisis, its growth as a world system can only proceed through it. Finance is at the heart of this trajectory of chaos, which touches the lives of everyone on earth.

Stocks and bonds are expressions of a common, more abstract form—the security. The financial security is simply a tradable, legal claim on a future revenue stream. At a basic level, this could mean claims on equity dividends or interest on loans, but of course in late neoliberal capitalism the security can have far more exotic sources and structures. 

Financial derivatives are tradable claims based on the price movements of an underlying security. As a type of meta-security, they have emerged as essentially an elaborate form of price insurance, a baroque set of techniques for managing global economic risk.18 For example, contracts such as cross-currency interest-rate swaps, foreign exchange options, and commodity futures are bought and sold on a massive scale to hedge a wide range of borrowing, investment, and transportation costs. Developed and marketed mainly by international banks, but purchased constantly by major “non-financial” corporations like airlines, car companies, IT firms, and chip manufacturers, derivatives are woven directly into capital accumulation.19 Combined with the fractional reserve banking system, they are the oil, or liquidity, in the global machine. By linking together the factory worker forging computer chips in Taipei, the software engineer programming code in Palo Alto, the options trader in London, and myself as I type these words on a laptop in Chicago, finance forms the texture of our collective economic life. In Tony Norfield’s formulation, it is the “speculative heart” of capital.20      

 Of course, the wizards of capitalist finance can only create liquidity, and so power production, through a tempestuous, permanent speculative frenzy. The churning chaos of digital high-frequency trading is a necessary counterpart to the stabilizing role of derivatives in managing risk: without some version of it, banks could not create the liquid markets in financial securities that make the world economy possible. This, paradoxically, sows a great deal of instability of its own, ensuring a deeper, explosive volatility underlying the routine daily trading in the financial markets. So even assuming the more vertiginous excesses of speculation could be reined in, normal speculative trading remains integral to the productive and commercial activities of multinational organizations, including national governments, which are just as thoroughly enmeshed as private corporations.21 In short, world finance and world production are fused together in a permanently unstable unity of contradictions.

As I’ve argued elsewhere, this means that finance and production cannot be cleanly peeled off from one another.22 The speculative logic of finance traverses the global division of labor and makes possible, for all its faults, the cosmopolitan society we inhabit.

Of course, none of this has emerged from a historical vacuum. As Saskia Sassen argues, the emergence of decentralized, global supply chains required a corresponding centralization of control in specialized, coordinating services to make it possible. This is the historical core of the finance, insurance, and real-estate (FIRE) nexus at the heart of today’s world cities, which function as the nerve centers in the global geography of production. The apparently insane proliferation of derivatives is thus an excrescence of the increasingly precarious, crisis-ridden yet tightly-woven global division of labor in contemporary capitalism.23

Speculative finance cannot, therefore, be neatly subtracted from the equation to yield “pure” forms of investment in industrial production and commercial exchange. To believe that it can, whatever the “democratic” character of the investment scheme, is to fall back into an anachronistic dualism of productivism versus finance, a regression into a structural fantasy inherent in modernity.24 To put it bluntly, it is another version of “capitalist production good, capitalist finance bad.”25 And as Tobita Chow has recently pointed out, this fantasy can shape political analysis on the left just as much as the right. Social-democrats and ethnonationalists alike can, and do, find common ground by lining up with national capital against the invidious elites of international (“rootless”) finance.26 

Arguments for nationalizing finance take the only apparent independence of financial markets from the productive sector of the economy as a given, positive fact. The extrusion of the mechanisms of credit, securitization, and money-creation from the transnational sprawl of capital production is an actual historical abstraction that is apprehended as it appears on the surface, as a wholly autonomous realm separate from that of production. The deeper unity of the two, the historical essence of capital, remains obscured from view. Severed from the whole question of alienated labor, class politics and the irreducibly transnational scope of both, finance is then reified into a mere technical tool to be appropriated by and for a (mythical) national community.

At this historical moment, any analysis that draws a merely formal opposition between the “productive” nation-state and the “financialized” global society conjures mythological patterns of thought that undercut the very possibility of a true left internationalism.

Furthermore, and from a historical perspective, if finance and production are two sides of the same historical coin, then the goal of national financial autarky would be all but impossible. This is where the distinct positions of different countries within the international, financial division of labor needs to be clearly understood. Any nation-state pursuing financial nationalization within its borders would remain dependent upon the world market for its own self-reproduction. But were such a program to be carried out in the U.S., which is the keystone of the global financial system, then the world market, the interdependent unity of the production and circulation of capital, would be directly contradicted by it. One need only consider some of its probable consequences to see that this is the case. For one example, consider the two-sided role of the U.S. dollar as world money in the global capitalist economy.

World money, as Marx says, is the mode of existence in which money becomes “adequate to its concept.” “It is in the world market that money first functions to its full extent as the commodity whose natural form is also the directly social form of realizing abstract human labor.”27 As the dominant currency of late-twentieth century globalization, the dollar is an example of world money. It functions as a universally-accepted measure of value and means of payment for international transactions, credit creation, securitization, flows of funds, and the entire division of labor in world production these make possible. It is the form taken by sixty percent of the reserve assets and securities in the world.28 To wall off U.S. borders to the flow of money and nationalize the banking system would be to abolish the nexus of central bank, treasury, and state power that structures this order. As soon as it were to become evident that this was the policy goal, financial markets would initiate a massive global sell-off of dollar assets, sending interest rates skyrocketing. This course of events alone would be enough to wipe out close to $140 trillion of notional value in dollar-denominated interest rate derivatives, to say nothing of the impact on currency-swap, foreign exchange, and other contracts that would follow it.29 This would be like abruptly sucking all of the oxygen out of a very crowded room. It would mean the likely collapse of the world market as a whole, which will have had its dominant, liquid standard of value pulled out from under it.30 Amidst the collapse, zero-sum competition would intensify for resources and markets; this would, in turn, almost certainly accelerate the division of the world into rival power blocs, a development that inevitably feeds the martial, nationalist right in every country.

The proposal to nationalize finance exists in an analytical vacuum, isolated from the broader historical context in which it is made. As such it amounts to an unworkable, politically incoherent demand, undercutting its own purpose. To reiterate, capital is a whole that is greater than the sum of its parts. This means that restricting our vision to the concerns and boundaries of a single nation state would invite disaster while escalating the very competition between states that the proposal is meant to defuse. 

The Splendor and Misery of Social Democracy

As Marx famously observes in the Eighteenth Brumaire of Louis Bonaparte, the spirits of past ages haunt the present, manifesting themselves especially in times of social upheaval. The memory of twentieth-century social democracy might lie smashed on the scrap heap of history, but its ghost haunts the progressive left, tempting it with an empty promise to solve the riddle of history.

The nationalization of finance is the political horizon of the present movement to restore social democracy in order to eventually go beyond it. As the argument goes, any neo-social-democratic movement must reckon with the eventuality of a capital strike if and when it begins to approach holding real power. The only plan on offer is a full-scale nationalization of financial institutions, including capital controls. But as I’ve shown for reasons both theoretical and historical, that plan is a self-defeating illusion.

It is certainly true that any emergent mass-left politics will have to reckon with the power of finance. But the programs for financial nationalization are based on an analysis that, to be plausible, must assume we do not actually live in a world capitalist society. Reviving the classical model of socialism in one country would require a fundamentally different global economic order than the one we are in, one in which finance is not fused with transnational production chains in a totality that is greater than the sum of its parts. As such, the analysis floats freely in an ethereal realm of empty abstractions, cut loose from the concrete historical conditions it attempts to grasp.

Most importantly, by ruling out the possibility of a distinctly progressive form of globalization, left economic nationalism—like its mirror-image on the right—destroys any chance of a truly egalitarian, global society based on the equitable investment of resources based on human need, rather than profit.31 There is no future without some version of this international program, because capitalism weaves the lives of everyone on earth together into a common fate. Ignoring this fundamental fact, the proposal to nationalize finance is based on a romantic notion of local sovereignty that is as seductive as it is anachronistic. 

Any left politics that would be adequate to the current moment will proceed from international premises, just as capital itself does. Rather than assuming that national sovereignty must first be won over global financial markets, it must proceed from the insight that the options available to any national state depend upon its international position, its place in the global division of labor and the world market.

The potential for a world beyond neoliberalism lies buried beneath the rising wreckage of the present. To get there, the left must reject the siren call of economic nationalism and, with sober senses, turn to face the global scale of this task. I will take up that question in a future essay.32



  1. Some version of financial nationalization forms the political and economic horizon of the present movement for neo-social democracy. For a few examples, see J.W. Mason, “Socialize Finance,” Jacobin, November 28, 2016; Joseph M. Schwartz and Bhaskar Sunkara, “Social Democracy Is Good. But Not Good Enough,” Jacobin, August 9, 2017; Seth Ackerman, “The Red and the Black,” Jacobin, December 20, 2012; Leo Panitch and Sam Gindin, “From Global Finance to the Nationalization of the Banks: Eight Theses on the Economic Crisis,” Global Research, February 25, 2009; Gar Alperovitz, “Wall Street is Too Big to Regulate,” New York Times, July 22, 2012; Peter Gowan, “A Plan to Win,” Jacobin, November 9, 2017; and Robert Brenner’s remarks in, “David Harvey and Robert Brenner at the CUNY Grad Center – Dec 2016, part 3,” YouTube video, 30:06, panel discussion, posted by “Left Voice,” December 2, 2016, Although Brenner does not explicitly mention financial nationalization in that video, it is obvious from his remarks that he favors some version of “left statism” that would include that program as part of its rebellion against “neoliberal global capitalism.” Incidentally, it is no coincidence that all of these theorists ignore the Marxian theory of value, as without that theory’s conceptual perspective it is easy to imagine economic nationalism as a real solution to the problems created by the international financial system.
  2. The crucial relations between whole and part as well as essence and appearance in the self-reproduction of capital is trenchantly analyzed by Michael Lebowitz in Following Marx (Haymarket: Chicago, 2009).
  3. For some representative figures see note 1, above.
  4. Notably, Mason does not specify who should actually do the seizing.
  5. Mason, “A Cautious Case for Economic Nationalism,” Dissent, Spring, 2017.
  6. Rudolf Hilferding, Finance Capital: a Study in the Latest Phase of Capitalist Development (Routledge: New York, 2006). Simon Clarke offers a penetrating but sympathetic critique of Hilferding’s analysis in Marx’s Theory of Crisis (Palgrave Macmillan: London, 1994). Most of Clarke’s exceptional work in Marxian theory is out of copyright and can be found on his University of Warwick webpage.      
  7. Briefly put, Hilferding saw the increasing density of fixed capital within the major capitalist powers as the basis of the emerging order of national cartels, as well as a new source of general crises. Based on an ever-tighter fusion between banking and industrial capital, the rapid expansion of fixed capital led to consistent barriers in the equalization of supply with demand, as the growth of capital-intensive heavy industry tied up larger investments over longer periods of time, reducing the mobility of national capital and tying it down. According to Hilferding, the sharply reduced flexibility of capital prevented the equalization of the rate of profit and the balancing of supply with demand. The main point is that his analysis, based as it mainly was on the German national case, lost sight of the forest for the trees, as it were, dissecting German national capital while overlooking the global division of labor that conditioned the German case. The same point obtains with regard to today’s left economic nationalists.  
  8. In addition to “Socialize Finance,” see Mason, “A Cautious Case.”
  9. China might be floated as a counter-example that shows how a nationalized financial structure can be integrated with global financial markets, validating the argument for financial nationalization. This is a misguided analogy for two main reasons. First, nationalizing the banks, as the proposal is being formulated on the left, is seen as a means toward a massive program of reinvestment and redistribution of wealth to empower the working class. Such an economic program clearly does not characterize the current Chinese political economy. But second, and more fundamentally, the comparison assumes the Chinese model could be cleanly reproduced elsewhere. In reality, that model depends upon the unique role of the U.S. in the global economy and the free convertibility of the dollar as world money. Roughly put, China would not have been able to pursue its export-led growth strategy, and so accumulate massive foreign exchange reserves, had it not been possible to fix the renminbi’s exchange rates with the dollar as the world’s main, fluctuating reserve currency. Likewise, the credit binge that has sustained the illusion of consumer and middle-class prosperity in the U.S. is directly dependent upon the downward pressure on interest rates from the historic build-up of Treasury bonds and dollar reserves in China, as well as other countries. To rehearse a theme to which I will return, China and the economies of the Global North play different but complementary roles in a whole that is greater than the sum of the parts, making it meaningless to suggest that the “China model” could be reproduced freely in other countries. The role of the dollar as world money, in Marx’s sense, is addressed in more detail below.
  10. Gowan, “A Plan to Win.”
  11. Vivek Chibber, “Our Road to Power,” Jacobin, December 5, 2017. I will address market socialism in more detail in my next essay.
  12. See the remarks in the video cited in note 1, above.
  13. Carol Matlack, “The Far-Left Economics of France’s Far-Right,” Bloomberg News, November 20, 2013; Simon Wilson, “The return of capital controls,” MoneyWeek, September 12, 2017.
  14. See, for example, Ellen Brown, “The Populist Revolution: Bernie Sanders and Beyond. Nationalizing the Failed Megabanks,” Global Research, January 26, 2016.
  15. For a well-known example of this line of argument, see David Harvey, “Neoliberalism Is a Political Project,” Jacobin, July 7, 2016.
  16. As a key to the formation of the joint-stock company, the early-modern ancestor of the modern, corporate form of industrial organization, securities, or abstract, exchangeable ownership claims, allowed capitalists to pool their resources, and thus their risks, to invest in the production of national capital and greatly expand multinational trade. See, for example, the discussion of the joint stock company in Dick Bryan and Michael Rafferty, Capitalism with Derivatives: a Political Economy of Financial Derivatives, Capital, and Class (Palgrave Macmillan: London, 2008). Giovanni Arrighi, of course, has famously suggested that distinct cycles of “financialization” can be traced all the way back to the origins of capitalism and the modern world, in the Genoese trading empire of the late sixteenth and early seventeenth centuries. See his magisterial The Long Twentieth Century: Money, Power, and the Origins of Our Time (Verso: New York, 2010).
  17. I use “industrial capital” in Marx’s sense from volume 2 of Capital, which includes his analysis of industrial capital as the unity of the circuits of productive, money, and commodity capital. See the first four chapters of Capital, vol. 2 (Penguin Classics: London, 1992).
  18. Like bourgeois economists who take the capitalist form of commodity exchange to be the universal, transhistorical basis of human society, modern financial theory is based upon a similar naturalization of the idea of “risk.” Also like economics, which originates from an inept translation of concepts from classical mechanics into what we now know as general equilibrium theory, financial managers use weird models built out of nineteenth-century theories of statistical probability. “Risk” is quantified and measured using stochastic processes, like Brownian motion, which supposedly allow it to be effectively analyzed. It is sufficient to point out that, again like economics, the track record of this mode of analysis is rather dismal. On risk in financial theory, see Ole Bjerg, Making Money: The Philosophy of Crisis Capitalism (Verson: New York, 2014); Satyajit Das, Traders, Guns, and Money: Knowns and Unknowns in the Dazzling World of Derivatives (Financial Times Press: London, 2010); and on the role of naturalistic metaphors in the construction of economic thought, see Philip Mirowski, More Heat Than Light: Economics as Social Physics, Physics as Nature’s Economics (Cambridge UP: Cambridge, UK, 1991).
  19. Bryan and Rafferty offer a useful descriptive analysis of the derivative form in Capitalism with Derivatives, but Tony Norfield’s analysis in The City develops a sharper critical analysis that grasps the historical role of financial derivatives, and of fictitious capital generally, as rooted in the dynamics of capitalist crisis. See Tony Norfield, The City: London and the Global Power of Finance (New York: Verso, 2016), particularly chapter 6.
  20. Tony Norfield, “Derivatives and Capitalist Markets: The Speculative Heart of Capital.” Historical Materialism 20, no. 1 (2012). doi: 10.1163/156920612X634735.           
  21. Of course, the form in which particular states are enmeshed is crucial, determining their relative power and position in the world market. Again, Tony Norfield has the best analysis of this aspect of neoliberal capitalism.
  22. Jamie Merchant, “We Don’t Need to Break Up the Big Banks: We Need to Put Them Under Democratic Control,” In These Times, February 2, 2016. While I still think the basic analysis in that article is correct, I would draw different conclusions from it today.
  23. See Norfield, The City, chapter 6; Saskia Sassen, The Global City: New York, London, Tokyo (Princeton University Press: Princeton, 2001).
  24. See Moishe Postone, “Anti-Semitism and National Socialism: Notes on the German Reaction to ‘Holocaust.’” New German Critique 19, no. 1 (Winter, 1980). doi:10.2307/487974.
  25. Tony Norfield, “Capitalist Production Good, Capitalist Finance Bad,” Economics of Imperialism, January 6, 2014.
  26. Tobita Chow, “Internationalism as a Strategic Opportunity: Tobita Chow Responds to Max Elbaum,” Organizing Upgrade, October 24, 2017.
  27. Karl Marx, Capital: A Critique of Political Economy, volume 1 (Penguin Classics: London, 1990) 240.
  28. Eswar Prasad, “The Dollar Reigns Supreme, By Default,” Finance and Development 51, no. 1 (March 2014).
  29. The Bank for International Settlements tracks the notional values of derivative contracts outstanding; see a recent report here:
  30. As Marx would put it, money will have transformed from a basic unit of account and circulating medium into a symbol of hard value, as capitalists scramble desperately to cut losses by locating the “real” source of value in the face of the monetary crisis. See Capital vol. I, 235-236.
  31. See Tobita Chow, Michael Collins, and Jake Werner, “The Movement We Need,” available at
  32. I would like to thank Jake Werner, Toby Chow, Chris Sherman, and Paul Mattick for their critical comments on the earlier versions of this essay.


Jamie Merchant

Jamie Merchant lives in Chicago. His book, Endgame: Economic Nationalism and Global Decline will be published in 2024 by Reaktion, in the Field Notes series.


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