various ‘fixes’ that capitalism uses to navigate its way out of continuous crises of profitability. These include the spatial fix, where capital moves to cheaper and cheaper locales of production; the product fix, where capital moves from one niche product to another, chasing increased profitability (for example, from textiles to automobiles to information technology); and the technology fix, where through innovation labour-saving technology increases the productivity of labour. These fixes, however, only partially or temporarily address the accumulation crisis.
As in the past, a crisis in profitability in manufacturing boosts the financialisation of capitalism. This time, however, with a more globalised economy and new computer technology at their disposal, investments in ‘fictitious’ capital to increase profit rates rapidly overtook investments in the real economy. In the USA, the heart of global capitalism, the percentage of financial profits over total domestic profits in 2007 was just below 40 per cent, compared to well below 20 per cent in the early 1980s and below 15 per cent in the 1960s (Foster and Magdoff 2009: 93). By contrast, manufacturing profits steadily declined from over 50 per cent of domestic profits in the late 1960s to less than 15 per cent in 2005 (Foster and Magdoff 2009: 55).
To cut a long and complex story short, the financialisation of capitalism is not the cause of the capitalist crisis, but was itself a response to the crisis of the 1970s (Brenner 2009; Arrighi 2007). This is what Beverly Silver (2004) calls the financial fix. Inherently crisis-ridden, this ‘fix’ spawned a number of short-term crises in different parts of the world over the past two decades, including the US savings and loan crisis (1989–91), the Japanese asset price bubble collapse (1990), the Scandinavian banking crisis (early 1990s), the European exchange rate crisis (1992–3), the Mexican debt crisis (1994–5) the East Asian crisis (1997), the Russian crisis (1998), the Argentinian meltdown (2001), and the dot com bubble burst (2001). The current financial crisis, which hit the core developed countries directly, is the deepest since the Great Depression.
Foster and Magdoff (2009), in an extension of the Sweezy and Baran analysis, characterise the new stage of capitalism as monopoly-finance capitalism. It is based on ever-increasing concentrations of capital, under the rule of mega-financial institutions that straddle the globe, where manufacturing firms are intermeshed with financial firms and investments. Despite the anger against these institutions for ‘causing’ the financial crisis, governments in the USA and Europe are reluctant to take decisive action against them, regarding them as ‘too big to fail’. Indeed, executives of these institutions continue to pay themselves enormous salaries and bonuses, with much talk but little action against them. This is unsurprising, given the fact that core government elites are themselves part of what David Rothkopf (2009) calls the ‘superclass’ – six thousand people in a planet of six billion who, in addition to powerful governments and international finance, also run transnational corporations and global media houses (Rothkopf also includes world religions and underground criminal and terrorist empires).
Fossil capitalism is a system of accumulation based on mass consumerism (the creation of everlasting wants), but because of rising global inequality and stagnant or declining real wages, these new wants cannot be satisfied because potential consumers do not have the means to purchase the commodities produced. The only way out is increased indebtedness – household debt in the USA has increased from 62 per cent of GDP in 1997 to 92 per cent of GDP in 2005 (Foster and Magdoff 2009: 47). Consumer debt as a percentage of disposable income increased from 62 per cent in 1975 to 127 per cent in 2005 (Foster and Magdoff 2009: 29). This mirrors the increased indebtedness of the US economy as a whole, as it borrows on the financial markets to maintain its position as global hegemon – by fuelling its war machine (a form of military Keynesianism), preserving its legitimacy through social and internal security spending, continuing to provide subsidies to threatened industries (particularly agriculture) and, of course, bailing out the banking system.
ACCUMULATION, ‘AFFLUENZA’ AND THE RISE OF THE ‘AMERICUM’
The end result of over two centuries of ‘accumulation by dispossession’ is a system of uneven development, with rising inequality at both the national level, in general, and at the global level. According to noted African economist Samir Amin (2008), the proportion of ‘precarious and pauperised’ members of the working classes (broadly defined to include formal and informal workers and the unemployed) has over the past fifty years risen from less than one quarter to more than one half of the global urban population.
Economic globalisation has, since the 1980s, simultaneously enlarged the periphery within the core countries (within increased informalisation of work and unemployment, and a declining social wage), as well as enlarged the core within the periphery and particularly within the semi-periphery (countries such as Brazil, South Africa and India, and increasingly China), as capital moves around globally. However, with a few exceptions such as the now ‘developed’ status of east Asian countries like South Korea, the overall global picture of uneven, enclave development remains intact, at least for the foreseeable future. This is despite ostentatious claims by national elites, such as in India, that their country will be ‘fully developed’ within the next thirty to fifty years – conveniently ignoring that 95 per cent of its workforce is informalised labour (Bieler et al 2008), while in the rural areas ‘development’ has deepened immiseration, causing a massive increase in farm suicides and the rapid rise of Maoist groups championing the cause of the rural poor (Perry 2010).
These islands of privilege are, of course, modelled on western patterns of consumption – particularly that of the USA. Thomas Friedman (2008) warns about ‘too many Americans’ in the world today – meaning too many hyper-consumers, influenced over the past decades by American mass media (particularly films, advertising, television shows and magazines) that celebrate the ‘American dream’ of unsustainable consumption based on the creation of incessant wants (as opposed to real needs). Friedman, a short while ago a celebrant of economic globalisation based on spreading growth everywhere (see Friedman 1999 and 2005) now warns against ‘America’s affluenza’, ‘an unsustainable addiction to growth’ (2008:54, my emphasis).
Friedman (2008: 56) quotes Tom Burke of the NGO 3GE (Third Generation Environmentalism), who coined the term ‘Americum’ – a unit of 350 million people with an income above US$15 000 and a ‘growing penchant for consumerism’, particularly American-style energy-sapping living spaces, cars, fast foods and levels of unrecycled garbage. According to Burke, current growth and consumption trends suggest that by 2030 the number of Americums will have increased from two to eight or nine – at least a fourfold increase within the space of between thirty and forty years: in other words, from 700 million people to over 3 billion – half the current world population. Of course the total population will also have grown (some say to about 7–8 billion by 2030).
If the crisis of accumulation is temporarily arrested, and global growth and ‘prosperity’ increases as suggested, these carbon copies of American consumerism will threaten the very
