Watching events unfold in Westminster yesterday, I reflected, not for the first time, that David Harvey's analysis of neo-liberalism becomes more persuasive by the day. There are those Marxists, such as Robert Brenner and Giovanni Arrighi, who understand neo-liberalism primarily in terms of the restoration of profitability via enforcement of labour flexibility - reduction of labour market rigidities and weakening of trade union power. So a rebalancing of class power occurs, away from labour and towards capital, but accumulation still occurs within the production process. This is the 'optimistic' view of the last 30 years.
Harvey understands it as 'accumulation by appropriation'. Where capital can no longer extract adequate surpluses through exploiting labour in the production process, it simply grabs assets wherever they happen to be lying around, seemingly unowned. This logic doesn't simply apply to capital; it is carried out by various elites, in the style of Russian oligarchs. Hence bankers and executives have appropriated from capital (via the shareholder value revolution), just as much as they have done so from labour.
See these two quotes from some eminently non-Marxist observers in the last couple of weeks:
If British bankers had paid themselves 10% less per year between 2000 and 2007, they would have had more capital, some £50bn more, to help them to withstand the crisis. The extent of the undercapitalisation of our banks was £50bn, and was exactly the sum put up by the taxpayers for the emergency stabilisation of our banking system.
Gordon Brown, The Guardian, 7th December
If banks reduced the proportion of their revenues that they pay out in pay and bonuses back to what it was in 2005 (which was a pretty good year for the banks), they would free up £10bn - which could be used to strengthen themselves by retaining it as capital (which is what the Bank of England and FSA would prefer) or to pay higher dividends.
Robert Peston, BBC, 25th November
Bonuses have reached a scale now where they can quite legitimately be understood as a fiscal issue. Once again, the concept of 'fairness' obscures the issue. The fact that a banker earns in 15 minutes what a cleaner earns in a year (or whatever) is mind-boggling, but slightly distracting from the political logic. More significantly, next month banks will pay out £7bn in bonuses to their own staff, earned through trades and fees earned as intermediaries. Given that this is occurring in a semi-nationalised, government-backed industry, it is surely far more relevant to compare that £7bn to the £3bn being cut from university tuition.
That £3bn figure also needs examination. Given the strength of feeling on this issue, and the damage the policy has done to the Coalition (via the Liberal Democrats) it seems like a small economic return on a very large outlay of political capital (it's equivalent to privatising the BBC, though I would of course smash up Parliament Square to defend Radio Four). One of the commentators yesterday pointed out that if tuition spending was cut at the identical scale to cuts going on elsewhere (which is already unprecedented), there would be no question of fees rising much above £4,000 a year, rather than the £9,000 that has been legislated for. So why have they gone quite so far?
The theme here, as Georges Bataille would not have been surprised to observe, is one of excess, leading to violence. If bankers had just managed to keep a limit on their already-extreme levels of personal appropriation, then the financial crisis may not have turned into a fiscal crisis. Banks may even have remained a private industry, independent of the state. If George Osborne were just willing to treat higher education as a public good amongst many - in need of a harsh squeeze, but no more (he is, after all, a Tory) - then Churchill's statue may not be dawbed in graffiti this morning. But at a certain point, you have to consider the possibility that going too far is an economic and political strategy in its own right.
When the pursuit of economic excess runs out of economic opportunities, it seeks it via political excess instead. When a positive sum game becomes zero sum, violence becomes a factor, as signalled by the eruptions in London. The government currently under-writes one industry, which is about to pay £7bn in bonuses to individuals. Meanwhile, it is withdrawing less than half that sum from another 'industry' (on which our 'competitiveness' is, by the government's own estimation, no less important), and is prepared to endure the worst civil disorder in 60 years to do this. It's hard not to conclude that political excess, ultimately manifest in violence, is now a normal part of our governing logic, and not an exception.