Austerity measures as a response to the GFC seem to be the abhorrent reality many of the world's population are faced with today. Australia is now following the example of the European catastrophe. Why?
Is it simply nasty right-wingers doing nasty things like they always do? Is it because there is no alternative?
No. Put simply, it is the only way the current mode of accumulation can continue.
The mechanics of this process are simple; the self-expansion of capital necessitates the creation of private debt in conjunction with the over-production of commodities.
Capital must mop-up its excess through expanding private debt, lest the next round of production, the reproduction of the system, not take place. The struggles involved in maintaining/destroying this mode of production are infinitely more complex.
According to some, imperialism today is more than monopolising capitals. There has been a qualitative change in the dynamics of global capital accumulation since the 1970s. The process did not just speed up, it has fundamentally altered.
Monopolising capitals have become generalised and globalised monopolies that manipulate an imperialist rent across commercial jurisdictions.
These generalised and globalised monopolies set the general rate of profit and discipline the rest of the so-called market with their investment and, just as, if not more, importantly, divestment decisions. Governments prop-up firms to ensure they meet the general rate of profit set by these monopolies and this creates an illusion of competitive markets.
In reality, the workers are taxed and this is then redistributed among the warring fractions of capital to ensure the maintenance of capitalism through the illusion of competition.
Competitive markets do not exist except in the imaginations of the apologists for capital. Compulsion not choice is the driving force of 'market' participation. As if I could refuse to earn my daily bread in sweat?
Tightly integrated monopolies
Fractions of capital are constantly at war but competition is still illusory. How? Fractions of capital are no longer relatively autonomous companies that jostle for market share. They are tightly integrated monopolies that control key systems of production.
Consider the global mining industry. BHP Billiton and Rio Tinto have tried to merge on three occasions with the ready acquiescence of Australia's Foreign Investment Review Board. Had Chinalco not blocked the venture, mineral production worldwide would be under monopsony control, that is, control by a single buyer.
This is not to say that there aren't other firms competing with these colossal miners for tenders and leases. To be sure, competition is fierce in this regard.
But how does one extract the ores? 60% of the technology used in all global mining ventures is the intellectual property of BHP Billiton. The rents on this technology transfer alone put to bed any notion of free and open competition between mining firms. Even if the Australian government nationalised the mines they would need to cough-up their profits to BHP in the form of monopoly rent.
But what about funding independent research into developing alternative technologies? Not a problem, now we just need to approach oligopoly-finance capital in order to secure a line of credit.
The point is that ownership is subordinate to control in the age of generalised-monopoly capital. There can be as many firms as you like competing for a slice of the market but if they all have to purchase their raw materials and instruments of labour from the same supplier, what kind of competition is this? Of course, the dialectical kicker in this equation is that the supply of variable capital can only come from one supplier; the working class.
So, can we say that competition is truly non-existent and capitalism today is merely collusion? No, of course not.
The logic of capital accumulation is still driven by the need of capital to self-expand. Before characterising imperialism, Lenin warned of 'the conditional and relative value of all definitions, which can never include all the concatenations of a phenomenon'. Perhaps it is time we sought to redefine 'competition'?
Does all this mean that struggle is futile? That the operations and consequences of capital accumulation are somehow inevitable? No. The self-expansion of capital is always mediated by political struggles and the agency of economic actors. Class struggle not only still matters; it matters more than ever before. But struggle informed by what?
The bourgeoisie have been pouring money and resources at the problem of accumulation since it was interrupted in 2008. They know what the new dynamics are and this is what drives their vicious attacks on working people all over the globe.
Austerity measures were never proven to be the right policies for achieving the stated ends of our politicians. Thomas Herndon, a 28 year old PhD student, proved that the mathematical basis of pro-austerity economic arguments were a farce. Did the world renounce austerity? Rather, it has been embraced.
If there is any chance of mounting a meaningful resistance to this resurgent bourgeoisie, the contours of the class struggle, that is, the dynamics of capital accumulation, must be understood correctly. No solution can be sought until the problem itself is properly understood.