[Marxism] David Harvey *not* apocalyptic

[Louis Proyect <lnp3@xxxxxxxxx>]

Their crisis, our challenge

In a far reaching interview with Red Pepper, David Harvey argues that 
the current financial crisis and bank bail-outs could lead to a massive 
consolidation of the banking system and a return to capitalist ‘business 
as usual’ – unless there is sustained revolt and pressure for a dramatic 
redistribution and socialisation of wealth

Does this crisis signal the end of neoliberalism ? My answer is that it 
depends what you mean by neoliberalism. My interpretation is that it’s a 
class project, now masked by a lot of rhetoric about individual freedom, 
liberty, personal responsibility, privatisation and the free market. 
That rhetoric was a means towards the restoration and consolidation of 
class power, and that neoliberal project has been fairly successful.

One of its basic principles that was set up in the 1970s was that state 
power should protect financial institutions at all costs. This is the 
principle that was worked out in the New York City crisis in the 
mid-1970s, and was first defined internationally when Mexico threatened 
to go bankrupt in 1982. That would have destroyed the New York 
investment banks, so the US Treasury and the IMF combined to bail Mexico 
out. But in so doing they mandated austerity for the Mexican population. 
In other words, they protected the banks and destroyed the people – and 
this has been the standard practice in the IMF ever since. The current 
bailout is the same old story, one more time, except bigger.

What happened in the US was that eight men gave us a three-page 
document, which pointed a gun at everybody and said ‘give us $700 
billion or else’. This to me was like a financial coup against the 
government and the population of the US. Which means you’re not going to 
come out of this crisis with a crisis of the capitalist class ; you’re 
going to come out of this with a far greater consolidation of the 
capitalist class than there has been in the past. We’re going to end up 
with four or five major banking institutions in the United States and 
nothing else.

Many on Wall Street are thriving right now. Lazard’s, because it 
specialises in mergers and acquisitions, is making megabucks. Some 
people are going to be burned, but overall it’s a massive consolidation 
of financial power. There’s a great line from Andrew Mellon (US banker, 
secretary of the treasury 1921-32), who said that in a crisis assets 
return to their rightful owners. A financial crisis is a way of 
rationalising what is irrational – for example, the immense crash in 
Asia in 1997-98 resulted in a new model of capitalist development. 
Disruptions lead to a reconfiguration, a new form of class power. It 
could go wrong, politically. The bank bailout was fought over in the US 
senate, so the political class may not entirely go along – they can put 
roadblocks in it, but in the end they caved in.

full: http://www.redpepper.org.uk/Their-crisis-our-challenge

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