Finance-Dominated Accumulation and the Limits to Institutional and Spatio-Temporal Fixes in Capitalism

Bob Jessop

within the ruling classes themselves, a foreboding is dawning, that the present society is no solid crystal, but an organism capable of change, and is constantly changing (Marx 1967a: 8)

This chapter explores the improbability of capital accumulation and, more generally, of the continued reproduction of present society. It assumes that crisis is an ever-present but abstract possibility in the capital relation and, hence, in its instantiation in capitalist social formations. Whether crises are actualized and, if so, their timing, forms of appearance and effects depend on many other factors, forces, and contingencies. There are well-known counter-tendencies to many crisis-tendencies. In addition, social forces continually experiment with ways to mobilize these counteracting forces and/or to handle crisis-tendencies and actual crises in other ways. These opening remarks fit well with the theme of the present volume: fragile stability, stable fragility. Indeed, I will develop two arguments below. First, given the inherent possibility of crisis in capitalism, any contingent stability of capital accumulation and capitalist societalization is necessarily fragile. And, second, despite this necessary fragility, it is nonetheless possible for specific, but always partial, selective and fragile, institutional and spatio-temporal fixes to create zones of stability here-now at the intended or unintended cost of creating zones of instability elsewhere and/or sowing the seeds of later instability. Combining these arguments, then, where these fixes succeed we find fragile stability and, in so far as the breakdown of one complementary set of fixes is followed, sooner or later, by another set, we can speak of stable fragility. This analysis entails a rejection of the idea that social order is characterized by stasis or, alternatively, by self-identical cyclical repetition, views long since refuted by historical development. But it also rests on a denial that social order always exists on the edge of chaos, if this means that order could break down at any moment. If belief in stasis privileges a spatialized conception of social order as an inherently stable structure (a fixed crystal), the notion of living on the edge of chaos privileges a temporalized perspective for which an improbable social order depends on the continuing but always contingent deferral of collap-

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se. At stake in the analysis below is a tension between: (1) efforts to stabilize an inherently fragile social order, which is capable of change and constantly changing, through institutional and spatio-temporal fixes; and (2) the problems that these fixes create in turn because of their selective focus and their role in displacing and/or deferring problems that sooner or later react back on the erstwhile zones of relative stability. This puts agency, institutions, and spatio-temporality at the centre of analyses of the fragile stability and/or stable fragility of social order. It also requires attention to the specificity of the problems of order in particular social formations as these are construed from time to time by their members, interested outsiders, and disinterested observers. The analysis proceeds in five steps. First, I consider the fragility of societalization, i.e., the production of stable society effects. While my remarks here are initially very general, they later focus on modern societies. Second, I develop these views in the particular case of capitalist social formations, i.e., social formations in which profit-oriented, market-mediated accumulation is the hegemonic or, at least, dominant axis of societalization. Third, I introduce the notions of institutional and spatio-temporal fix to indicate one way in which capitalist societalization, despite its inherent improbability, can be secured in an always partial, provisional, and precarious manner. Fourth, I illustrate this argument from the case of finance-dominated accumulation. Fifth, I return to general reflections and offer some conclusions about fragile stability, stable fragility for other modes of societalization in modern societies. 1. Fragile Societalization, Societalized Fragility Since its inception in the early nineteenth-century, sociology has taken society and its contingent reproduction as its privileged object(s) of analysis or, at least, as its ultimate horizon of analysis. Yet society is a deeply problematic notion and recent sociological contributions have questioned whether it should or, indeed, can remain the central focus of the discipline (e.g., Luhmann 1986; Urry 1999). If sociology can no longer take the existence of society for granted, is there an alternative theoretical object at a similar level of generality that does not assume fixed boundaries and that offers more scope for analysis across different sites and scales? One candidate is societalization and societal projects. Whereas societalization (Vergesellschaftung) denotes the social processes through which society effects are produced, societal projects refer to the competing social imaginaries that envision different principles of societalization and different ways to achieve society effects. This implies that, to the extent that society exists, it is

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constituted and reproduced through more or less precarious social processes and practices that articulate diverse social relations in ways that produce macro-social order. For example, against the still common methodologically nationalist equation of society with the national territorial state (or, less persuasively, the nation-state and its imagined community), the alternative approach proposed here claims that the rise of modern (national) societies simply reflects the hegemony or domination of one, time-and-space-bound, principle of societal organization. Earlier (and still current) principles include segmentation, centre-periphery relations, and diverse projects that either: prioritize the codes and programmes of one or another functional system (or institutional order); or, conversely, privilege the dominance of one or another social identity or category that is transversal to these codes (on principles of societalization, see Luhmann 1986, 1996; on the transversal character of social identities such as ethnicity, gender, generation, nation, place, race, region, and so on, see Jessop 2010). The nature of any particular society depends on its hegemonic or dominant principle of societalization and its collective identity (or self-description), if any; on how this principle is articulated with others; and on how the production of the corresponding society effects is secured despite its specific contradictions, crisis-tendencies, and conflicts. A successful societalization project typically emerges from, and is based on, a more extensive substratum of social relations that includes many more elemental relations than those that are actually combined as moments of a structurally coherent configuration to form these society effects. There are always interstitial, residual, marginal, irrelevant, recalcitrant, and contradictory elements and, in so far as alternative societies are possible, there is clearly scope for conflict over rival societal projects as well as contradictions among competing institutional logics. Competing social forces try to establish one or another societal project and its associated principle of societalization as the hegemonic or dominant frame in a given context and/or to foster complementary (sub-hegemonic) or opposed (counter-hegemonic) projects. Given the existence of competing societal projects, each with its own social bases and organizational principles, societalization is always incomplete. There are no societies (not even fully closed total institutions) in which only one project prevails and achieves closure. In addition, and equally importantly, not only can social interaction and organizational life occur in the absence of societies, but much of social life occurs without regard to their existence, if any, and, on these grounds, there is no reason to privilege society as a unit of analysis. This approach implies that society is not an actually existing entity (let alone a closed system) but a horizon against which to assess the individual feasibility

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and compossibility of competing societal or societalization projects that privilege the codes and programmes of one or another functional system or, again, that privilege identities, values, and norms that are not anchored in such systems. In these terms, the analysis of societalization does not entail a totalizing view of society as a fully formed, internally coherent, externally closed system but, rather, a concern with the relative weight of competing societalization projects and their always partial, contrary, and permeable society effects. An important question for the nature of the social and society in this regard concerns the importance of different axes of societalization: economic, political, legal, scientific, educational, religious, moral, artistic, and so on. Whereas Luhmann and his adherents tend to regard all functional systems as equal, I am less inclined, for reasons elaborated elsewhere, to accept this systems-theoretical postulate. On the contrary, to paraphrase, George Orwell, some systems are more equal than others. Which system is paramount in a given set of spatio-temporal parameters is not pre-determined (not even by some logic of the last instance that never comes) but is contingent on the prevailing societal project and structuring principles and the capacities of its associated institutional and spatio-temporal fixes to displace and/ or defer problems beyond these parameters. For present purposes, societal projects can be understood as instances of the broader notion of social imaginary. Imaginaries exist at different sites and scales of action from individual agents to world society (Althusser 1977; Taylor 2003). There are many imaginaries and most are loosely-bounded and have links to others within the broad field of semiotic practices. Without them, individuals cannot go on in the world and collective actors (such as organizations) could not relate to their environments, make decisions, or engage in strategic action. In this sense, imaginaries are an important semiotic moment of the network of social practices in a given social field, institutional order, or wider social formation (Fairclough 2003). Imaginaries have the same features as discursive relations more generally. They are polysemic and heteroglossic, i.e., have alternative meanings and involve different voices and agents. This is both a source of the discursive power of societal projects (their capacity to mobilize different social forces in an unstable equilibrium of compromise) and a source of vulnerability (their susceptibility to critique and re-articulation into rival projects). This is another way of restating the paradox that provides the theme of this volume. Where a societal project is hegemonic, it leads to the sedimentation of the resulting society effects, i.e., to relative stability. But hegemony is continually liable to re-politicization of what is only ever provisionally taken-for-granted (cf. Glynos/Howarth 2007).

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Imaginaries are most powerful where they operate across many sites and scales and can establish and connect local discourses and practices into a more encompassing hegemonic project. In this sense, they become societal projects. They will be retained (discursively reproduced, incorporated into individual routines, and institutionally embedded) when they reorganize the balance of forces and guide supportive structural transformation. Although any given societal project is only ever partially realized, those that succeed, at least in part, have their own performative, constitutive force in the material world especially when they correspond to (or successfully shape) underlying material transformations, can mobilize key social forces to form a ruling bloc, can organize popular support, disorganize opposition, and marginalize resistance. This argument is closely linked to a second aspect of societalization. This concerns the emergent pattern of social interactions, including direct or indirect human interactions with the natural world. Structuration establishes possible connections and sequences of social interaction (including interaction with the natural world) so that they facilitate routine actions and set limits to path-shaping strategic actions. Whereas structuration refers to a complex, contingent, tendential process that is mediated through action but produces results that no actors can be said to have willed, structure refers to the contingently necessary outcome of diverse structuration efforts. In this sense, structuration creates a complex assemblage of asymmetrical opportunities for social action, privileging some actors over others, some identities over others, some ideal and material interests over others, some spatio-temporal horizons of action over others, some coalition possibilities over others, some strategies over others and so on (Jessop 2007b). Structural constraints always operate selectively: they are not absolute and unconditional but always temporally, spatially, agency-, and strategy-specific. Conversely, to the extent that agents are reflexive, capable of reformulating within limits their own identities and interests, and able to engage in strategic calculation about their current situation, there is scope for strategic action to alter the strategic selectivity of current structural configurations and thereby modify strategically selective constraints. Where semiosis and structuration as forms of complexity reduction are complementary, they transform meaningless and unstructured complexity into meaningful and structured complexity. The social and natural world becomes relatively meaningful and orderly for actors (and observers) insofar as not all possible social interactions are compossible in a given set of spatio-temporal parameters (a time-space envelope). While there is usually massive scope for variation in individual transactions, the medium- to long-term semiotic and material reproduction

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demands of meso-complexes and macro-social orders narrow this scope considerably. In a complex world there are many sites and scales on which such processes operate and, for present purposes, what matters is how local sites and scales come to be articulated to form more encompassing sites and scales and how the latter in turn frame, constrain, and enable local possibilities. If these are not to be random, unpredictable, and chaotic, possible connections and sequences of action must be limited. This poses intriguing questions about the articulation of microsocial diversity to produce relatively stable macro-social configurations (Bourdieu 1990; Foucault 1976; Jessop 2007b; Luhmann 1986, 1996; Wickham 1987). Recursive selection of semiotic practices and extra-semiotic processes at these scales tends to reduce inappropriate variation and thereby secure the requisite variety (constrained heterogeneity rather than simple uniformity) that supports the structural coherence of a stable social order. Many other meanings are thereby excluded and so are many other possible social worlds. Stable semiotic orders, discursive selectivities, social learning, path-dependencies, power relations, patterned complementarities, and material selectivities all become more significant, the more that material interdependencies and/or issues of spatial and intertemporal articulation increase within and across diverse functional systems and the lifeworld. In so far as this occurs, we can talk of societalized fragility, i.e., the capacity through societal projects to constrain micro-social diversity with its potential for anything goes anarchic proliferation within limits compatible with macro-social order. This does not exclude competing imaginaries for different scales and fields of social action or, indeed, rival principles of societalization more generally. All it means is that they are marginalized, subject to a logic of negative integration (not rocking the boat) and persist as useful sources of irritation and flexibility. Just stating the conditions for macro-social order reveals the fragility and, indeed, improbability of the smooth reproduction of complex social orders. Yet they do exist. 2. Fragile Accumulation, Accumulated Fragility I now apply these general arguments to the specific problems of capitalist societalization, i.e., the organization of a social formation under the dominance of a societalization principle that rests on profit-oriented, market-mediated accumulation. The improbability and, hence fragility, of a capitalist social formation derives not just from the generic (and authentic) problems of institutional integration and social cohesion in any social formation (e.g., Hobbes, Durkheim, Parsons, Luhmann). It is also rooted in particular (and equally genuine) contradic-

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tions that are peculiar to the capitalist mode of production (e.g., Marx, Weber, Gramsci, David Harvey). These contradictions are inherent and incompressible. In other words, however they are handled, whether directly or through displacement and deferral, they are permanent features of the capitalist mode of production (or CMP). Their forms of appearance nonetheless vary across accumulation regimes and their effects depend on how they are construed and how (well) they are handled. I develop these points below. The basic features of the CMP and its nature as a distinctive ensemble of objects of rgulation/governance are such that neither capital as a whole nor the capital-labour relation on which its contradictory and conflictual dynamic depends can be reproduced purely through market relations. What most distinguishes capitalism from other forms of producing wealth is its treatment of labour-power as if it were a commodity. In short, the appropriation of surplus labour takes the form of exchange. This turns the labour market and labour process into sites of class struggle between capital and workers. This economic class struggle is overdetermined, of course, by juridico-political and ideological structures and struggles, the complexity of class relations in actually existing social formations, and the intersection of class with other social categories. Its dynamic also has many other economic and extra-economic determinants and, in addition, class (or classrelevant) struggles extend beyond production and market relations to other social fields. Class struggle and competition are key sources of capitalisms open-ended dynamic and underpin the differential accumulation that reflects the ability of some capitals to grow through market and non-market means faster than others (or, at least to suffer less in cyclical downturns and/or in periods of crisis). While the generalization of the commodity form to labour-power is peculiar to capitalism, there are three other key categories of fictitious commodity: land (or nature), money, and knowledge with corresponding forms of revenue (rent, interest, royalties) (Jessop 2007a). The relative weight of these fictitious commodities provides one way to distinguish different stages of capitalism, different regimes of accumulation, and different modes of competition within the overall framework of the world market, which is the ultimate horizon of accumulation. The most important general law of the CMP is the law of value. This describes the tendency of capitalist enterprises to allocate resources to different fields of production according to their expectations of profit. Money and credit have crucial roles in this allocation process as they do in other aspects of the circuit of capital and, indeed, the wider social formation. Although the law of value is mediated in the first instance through market forces and the price mechanism, the combined operation of which socially validates or invalidates the

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private decisions of economic agents, it is ultimately grounded in the sphere of production. It is only here that value gets created and thereby becomes available for subsequent validation, redistribution, or destruction. What this implies for finance-dominated accumulation (hereafter, also FDA) will be explored in the next section. There are also other laws that characterize capitalist economies (Dumnil 1978). These are not iron necessities that operate regardless of circumstances. On the contrary, they are doubly tendential, i.e., they exist only in so far as their associated social forms are also reproduced. Their always tendential reproduction is mediated through competition and class and class-relevant struggles based on market and non-market factors and forces. So it is far from guaranteed. Failure to reproduce these forms weakens, suspends, or terminates the relevant laws. Indeed, it undermines the capital relation itself: for there is no iron necessity to its expanded reproduction. The stability of a social formation based on the dominance of profit-oriented, market-mediated accumulation can be described, in the spirit of this volume, as fragile. Stated in the more familiar, and apposite, language of the Marxist critique of political economy, this fragile stability is rooted in three key aspects of the capital relation:

The incompleteness of capital as a purely economic (or profit-oriented, market-mediated) relation such that its continued reproduction depends, in an unstable and contradictory way, on various and changing extra-economic mechanisms whose presence cannot be guaranteed and which, even when present, cannot prevent market failures or correct them automatically and without repercussions. The interrelated structural contradictions, micro-macro paradoxes, and strategic dilemmas of the capital relation. The resolution of some may exacerbate others or, at least require hard-to-achieve complementary solutions, the combination of which depends on different accumulation regimes, modes of rgulation, and conjunctures; and Conflicts over the regularization and/or governance of these contradictions and dilemmas as expressed in the circuit of capital and the wider social formation.

The first feature is a commonplace of contemporary economic sociology as well as classical sociology more generally and is taken for granted here. The second feature is more controversial but also foundational to the present approach. It therefore merits more extended treatment. Marx (1967a) identified an essential contradiction in what he designated as the cell-form (nowadays one might well say the stem-cell form) of the CMP: the commodity. This is the co-existence in the same

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form of exchange- and use-value. While exchange-value denotes a commoditys market-mediated monetary value (expressed in the price-form) for the seller; usevalue refers to its material and/or symbolic usefulness to the purchaser. Without exchange-value, no enterprise would produce commodities for sale; without usevalue, they would find no purchaser. Starting from this contradiction, which is also the basis of capitalist societalization, Marx aimed to unfold the complex dynamic of the CMP, including the role of money and credit relations, the nature of the wage relation and the duality of production as a process of material transformation and valorization, the potential for, and mechanisms of, periodic crises, and, of course, their creatively destructive role in renewing accumulation by asserting the organic unity of capital. I suggest that all forms of the capital relation in the CMP, considered in its pure form, embody different but interconnected versions of this basic contradiction. These impact in different ways on (different fractions of) capital and on (different categories and strata of) labour at different times and places (Jessop 2002, 2011b). Thus, productive capital is both abstract value in motion (notably in the form of realized profits available for reinvestment) and a concrete stock of already invested time- and place-specific assets in the course of being valorized; the worker is both an abstract unit of labour-power substitutable by other such units (or, indeed, other factors of production) and a concrete individual (or, indeed, a member of a particular collective workforce) with more or less specific skills, knowledge and creativity able to produce particular goods and services; the wage is both a cost of production and a source of demand; money circulates both as potentially world money (ideally in stateless space) and as national currencies subject to some measure of state control (with the currency of the dominant economy tending to become the reference point for world money); land functions both as a form of property (based on the private appropriation of nature) allocated in terms of expected revenues in the form of rent and as a natural resource (modified by past actions) that is more or less renewable and recyclable; knowledge underpins intellectual property rights and is a collective resource (the intellectual commons). Likewise, the state is not only tasked with securing key conditions for valorization and the reproduction of labour-power but also with maintaining cohesion in a divided, pluralistic society. In turn, taxation is both an unproductive deduction from private revenues (profits of enterprise, wages, interest, and rents) and a means to finance collective investment and consumption to compensate for market failures. And so on (see Jessop 2002). The tension between the two co-existing poles, which in their opposition define the contradiction, generates strategic dilemmas on how best to handle the

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latter. For example, does or should the state treat the (social) wage mainly as a source of demand, a cost of production, or attempt to reconcile these aspects? The first case is illustrated in the Keynesian welfare national state, the second in neo-liberal austerity politics or export-led growth, and the third in welfare regimes based on flexicurity. Analogous arguments hold for other contradictions and dilemmas. The plurality of contradictions and their interconnections, the possibilities of handling them at different sites, scales, and time horizons, etc., creates significant scope for agency, strategies and tactics to affect economic trajectories. How they are handled also shapes the form of subsequent crises but does not determine the nature of subsequent regimes, which also depend on the formal and material adequacy outcome of path-shaping initiatives. These contradictions and dilemmas are the source of the fragile stability of capitalist social formations. They are immanent in the capital relation and insoluble in the real world. However, while they cannot be reconciled permanently and in all respects in abstracto, they can be moderated provisionally and partially through specific mechanisms and projects that provided temporary fixes that enable accumulation to continue in some economic spaces, albeit at the cost of uneven development now and future problems. When the contradictions and their associated crisis-tendencies intensify and interact with each other, we could talk of accumulated fragility. The solution to this within the framework of the CMP, as Marx noted, was crises that re-assert the organic unity of capital through their purgative effects (Marx 1968: 509). The continued search and recurrent chance discoveries of such partial, provisional, and temporary solutions helps to explain these formations stable fragility a stability that is achieved through the transformations effected in and through new fixes. The latter emerge, to the extent that they do, in a contested, trial-and-error process, involving different economic, political, and social forces and diverse strategies and projects; and they typically rest on an institutionalized, unstable equilibrium of compromise. Fixing is a contested process, involving different economic, political, and social forces and diverse strategies and projects. Hence they only appear to harmonize contradictions, which persist in one or another form. 3. Fixed Fragility, Fragile Fixes Two useful concepts for exploring the improbable partial, provisional, and temporary resolution of the contradictions and dilemmas of capitalist societalization are institutional fix and spatio-temporal fix. An institutional fix comprises a complementary set of institutions that, via institutional design, imitation, impo-

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sition, or chance discovery, helps to provide a temporary, partial, and relatively stable solution to the challenges of securing economic, political, or social order. It is not purely technical but rests at best on an institutionalized, unstable equilibrium of compromise and, at worst, on the open use of force. Institutional fixes work in part because, in strategic-relational terms, institutions have distinctive discursive-material selectivities, favouring some actors, alliances, identities, interests, projects, spatio-temporal horizons, and so forth, over others; they are linked with specific technologies of governance; and they are articulated into specific institutional orders and ensembles that create specific forms of domination (Jessop 2007b). In this sense, institutions matter. Different modes of societalization may have their own institutional fixes that provide the strategically-selective framework in which their respective hegemonies or domination may be secured. Here I focus on the case of capitalist societalization. While many institutions that belong to an institutional fix are related to the fundamental categories of the capital relation noted above (and further explored below), their specific forms and logics, their particular patterns of selectivity, and their most likely points of rupture and fragility are irreducible to these basic categories. This requires a more detailed institutional analysis but one that does not forget that these are institutional fixes tied to capitalist societalization and not to the production of society effects in general. The notion of spatio-temporal fix is an important complement to (or, better, dimension of) institutional fixes insofar as they partly overlap. A spatio-temporal fix (hereafter STF) establishes spatial and temporal boundaries within which the always relative, incomplete, provisional, and institutionally-mediated structural coherence of a given order (here, a mode of growth) are secured to the extent that this occurs. STFs facilitate the institutionalized compromises that help to sustain a given accumulation regime, mode of rgulation, governance pattern, and more general form of capitalist societalization. They depend on the capacity to secure order within this spatiotemporal framework by displacing and/or deferring inherent or contingent problems elsewhere and/or into the future. This can involve super-exploitation of internal or external spaces outside the compromise (relative to the levels within the compromise), unsustainable exploitation of nature or inherited social resources, deferral of problems into an indefinite future and the exploitation and/or oppression of specific classes, strata or other social categories. Issues of institutional design apart, consolidating an STF also involves building support in and across many conflictual and contested fields for the respective accumulation strategies, associated state projects and, where it is relevant, hegemonic visions. They are typically linked to different patterns of institution-

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alized conflict and compromise. Indeed, given that these contradictions and dilemmas are insoluble in abstracto, their moderation depends on specific visions, projects, and strategies that focus on some particular interests rather than others and link them to an always and inevitably selective definition of the general interest. Thus, even within a given STF (and as occurs in institutional fixes), some classes, class fractions, social categories or other social forces are marginalized, excluded, or oppressed. This is where the notion of social imaginaries, introduced in the preceding section, acquires more specific form and substance. Thus they only appear to harmonize contradictions, which persist in one or another form. In their interaction, institutional and spatio-temporal fixes handle contradictions and their associated dilemmas through:

hierarchization (treating some contradictions as more important than others), prioritization (giving priority to one aspect of a contradiction or dilemma over the other aspect), spatialization (relying on different scales and sites of action to address one or another contradiction or aspect or displacing the problems associated with the neglected aspect to a marginal or liminal space, place, or scale), and temporalization (alternating regularly between treatment of different aspects or focusing one-sidedly on a subset of contradictions, dilemmas, or aspects until it becomes urgent to address what had hitherto been neglected).

Different patterns of capitalist societalization can be distinguished, based on the weights attributed to different contradictions and dilemmas (hierarchization), the importance accorded to their different aspects (prioritization), the role of different spaces, places, and scales in these regards (spatialization), and the temporal patterns of their treatment (temporalization). In all cases, because the capital relation is reproduced when it is through social agency and entails specific forms, stakes, and sites of conflict and struggle, the relative importance of contradictions and dilemmas is not structurally inscribed nor strategically pre-scripted. Last, but not least, because the basic contradictions and dilemmas are incompressible, even if modified in specific stages and/or varieties of capitalism, all fixes will be incomplete, fragile, and impermanent. When the circuit of capital breaks, for whatever set of causes, space opens for struggles over different trajectories. An important caveat is needed here. To paraphrase Marx in the 1857 Introduction, there is no contradiction in general, there is also no general contradiction. Continuing the paraphrase, each contradiction has its own aspects and is actualized in its own ways in particular institutional and spatio-temporal contexts, giving rise to a complex, overdetermined, contradictory and multiply dilemmatic

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ensemble of social relations. These arguments imply that no regime has just one (fundamental) contradiction that must be regulated and/or governed appropriately to ensure continuing accumulation. The relation among contradictions and dilemmas is not mechanically additive but reciprocally, albeit asymmetrically, overdetermined: they are not simply aggregated as so many potatoes in a sack but modify each other in distinctive ways. Their significance varies, posing differently configured sets of rgulation-cum-governance problems at different sites and scales (cf. Gough 1991, 2004). The asymmetries can be analysed by deploying three key concepts elaborated by Althusser on the basis of Maos insightful, ill-specified and politically malleable essay on contradiction: (1) the distinction between the principal contradiction and other, secondary contradictions in a given social order with their articulation being complex and overdetermined rather than simple and set exclusively by the principal contradiction; (2) the distinction between the primary aspect and the secondary aspect of a given contradiction in a given conjuncture, i.e., which of its poles is more problematic for expanded reproduction; and (3) the uneven development of contradictions, i.e., changes in the principal and secondary contradictions and their primary and secondary aspects (Althusser 1965; Mao 1967). The prevailing strategies modify each contradiction, with the result that they are mutually presupposed, interiorizing and reproducing in different ways the overall configuration of contradictions. Different configurations can be stabilized based on the weights attached to (1) different contradictions and dilemmas and their dual aspects, (2) the counter-balancing or offsetting of different solutions to different contradictions and dilemmas, (3) different patterns of social conflict and institutionalized compromise, (4) differences in the leading places and spaces for accumulation, and (5) the changing prospects of displacing and/or deferring problems and crisis-tendencies. The complex structural configuration of a given accumulation regime depends on institutional and spatio-temporal fixes that establish the primacy of one or more contradictions and assign a primacy for governance to one rather than another of its aspects. Other contradictions are regularized/governed according to how they complement the current dominant contradiction(s). Nonetheless, these fixes are not magic bullets: they cannot eliminate contradictions and dilemmas and, whatever their capacity to temporarily harmonize or reconcile them, they create the conditions for the next crisis. I now illustrate these arguments from the case of finance-dominated accumulation.

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Fragile Financialization, Financialized Fragility Some commentators refer to the rise of finance-led growth in contrast with the allegedly wage-led growth associated with the Fordist regime. Whereas the latter involved a virtuous circle of mass production and mass consumption and a crucial role for the Fordist wage relation as a driver of rising prosperity in relatively closed national economies, it is the financialization of capitalist social relations (including the wage relation) that is said to provide a wealth-driven growth dynamic in this post-Fordist regime (e.g., Boyer 2000). Others prefer the term finance-dominated accumulation regime in order to separate the empirical trend towards the autonomization of finance from the question of whether it produces growth, greater volatility, or stagnation (cf. Stockhammer 2011: 3; see also van Treeck 2008: 11-12, 27). I side with the second group and will discuss financialization in this context. The recent and continuing North Atlantic financial crisis (hereafter NAFC) has finance-dominated, neo-liberal accumulation at its core; it was made in the USA and broke out there, spreading via a mix of contagion and endogenous crisis-tendencies to other parts of the world market, even when these had not undergone neo-liberal regime shifts or even when, indeed, had taken defensive measures against this very eventuality. In this part of my reflections on fragile stability, stable fragility, I consider the sources of what Hyman Minsky presciently termed financial fragility and the manifestation of which he attributed to the pithy paradox, which should be dear to readers of this volume, that stability produces instability (Minsky 1982). I begin with some general comments on financialization both as a form of economic organization and as a principle of societalization. Money, credit and debt have existed for three millennia but acquire new forms and functions with the consolidation of the CMP. In particular, capitalist credit-money is one of the basic forms of the capital relation and essential to its continued reproduction. Among these new forms of credit money is interest-bearing capital and this, in turn, can become the basis of increasingly fantastic forms of fictitious capital (Marx 1967b; Carneiro et al., 2012). In this context, I suggest that financialization involves the increased importance of interest-bearing capital both in the organization of profit-oriented, market-mediated accumulation and in societalization more broadly considered. Where the circuits of finance have become increasingly autonomous in the short- to medium-term from the circuits of profit-producing capital, interest-bearing capital and fictitious capital have also gained major roles in modern social formations more generally. In Habermasian terms, they have become major vectors of the colonization, commodification, and, eventually, financiali-

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zation of the lifeworld. This points beyond the general significance of capitalist credit-money in the circuits of capital to its specific forms and effects when interest-bearing capital as opposed to, say, production or trade credit, can make its pursuit of interest and its pursuit of its interest in interest the dominant force in economic, political, and social life. This is by no means a natural outcome of economic evolution or the invisible hand but depends on a series of deliberate economic, political, and social interventions that can be summarized broadly (albeit too schematically) under the rubric of neo-liberalism (or, better, neo-liberalization) and its role in the accelerating integration of the world market (Elsner 2012; Jessop 2002, 2009; Dumnil/Lvy 2004; Peck 2010). Exploring the relation between FDA and neo-liberalization is like solving the riddle of whether the chicken or egg came first and, however important it may be, need not detain us here. Suffice it to say that they are closely related. Although neo-liberalization takes many forms in different national contexts, the overall tendency, whether planned or not, of its preferred economic and political programme is to privilege the exchange-value moment of the various forms of the capital relation noted above. Thus it promoted value in motion, the treatment of workers as disposable and substitutable factors of production, the wage as a cost of (international) production, money as fluid international interest-bearing capital (especially due to the increased importance of derivatives) rather than national fiat money, nature as a commodity, knowledge as intellectual property, the state as a driver of accumulation by dispossession and profitable deals with political authority, taxation as a means of private enrichment, and public spending deficits as a means of debt peonage for the states citizen-subjects. The neo-liberal project of world market integration also enhances capitals capacity to defer and/or displace its internal contradictions by increasing the global scope of its operations, by reinforcing its capacities to disembed certain of its operations from local material, social, and spatio-temporal constraints, by enabling it to deepen the spatial and scalar divisions of labour, by creating more opportunities for moving up, down, and across scales, by commodifying and securitizing the future, and re-articulating time horizons. This helps to free monetary accumulation from extra-economic and spatio-temporal constraints, increases the emphasis on speed, acceleration, and turnover time, and enhances capitals capacity to escape the control of other systems insofar as these are still territorially differentiated and fragmented. This disembedding from the frictions of national power containers intensifies the influence of the logic of capital on a global scale as the global operation of the law of value commensurates local conditions at the same time as it promotes the treadmill search for super-

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profits. Supported by a stress on shareholder value, this particularly benefits hypermobile financial capital (understood here as interest-bearing capital and in its most advanced forms), which controls the most liquid, abstract, and generalized resource and has become the most integrated fraction of capital, and enhances its abilities to displace and defer problems onto other economic actors and interests, other institutional spheres, and the environment. This is even clearer in the case of highly leveraged forms of fictitious capital (see below). In short, neo-liberalism tends to promote financialization, both as a strategic objective and as an inevitable outcome. Financialization matters because it modifies the functioning of capitalist economies at the micro-, meso- and macro-levels. Specifically, it changes the calculations and behaviour of non-financial firms through the rise of shareholder value as a coercive discourse, a technology of governance, and a vector of competition. One aspect is the increased importance in the operation of non-financial firms of financial activities (e.g., treasury functions, financial intermediation, share buybacks rather than investment from retained profits, expansion or acquisition of financial subsidiaries) that are not directly tied to their main profit-producing pursuits. This in turn entails the revenues from financial speculation and risk-taking became more significant relative to profits of enterprise (cf. Nlke 2009). In addition, financialization boosts the size and influence of the financial relative to the non-financial sector. This is reflected in the growing importance of fee-producing and risk-taking activities in the operation of banking capital relative to its more traditional roles of intermediation and risk management; in the augmented role and weight of securitization, leverage and shadow banking in this regard with corresponding risks in relation to liquidity and effective prudential controls; and the greater significance of new forms of financial capital (e.g., hedge funds, private equity, vulture capital, sovereign wealth funds) in the financial sector. At the same time, as shown by the series of financial crises from the mid-1970s onwards, financialization makes the economy more prone to recession and, as the recent and continuing North Atlantic Financial Crisis demonstrates on both sides of the Atlantic (with Iceland mid-way between them), more prone to the debt-deflation-default trap that may produce an epic recession (Rasmus 2010). More generally, we see the financialization of everyday life as household debt levels rise and social welfare (or the social wage) has been re-commodified (housing, pensions, higher education, health insurance); and the intensification of income and wealth inequalities, limiting the impact of wages as a demand source (Dore 2008; Dumnil/Lvy, 2005; Fine 2010; Krippner 2005; Lapavitsas 2010).

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Drawing on the terminology of the Parisian approche en termes de rgulation, we can distinguish five main structural forms around which the institutional and spatio-temporal fixes of accumulation regimes and their modes of rgulation are organized. These are the money form, the wage form, forms of enterprise and competition, the state form, and international regimes (see Boyer 1991; Boyer/Saillard 2002; extended critique of different regulationist approaches, see Jessop/Sum 2006). Table 1 presents the institutional and spatio-temporal fixes of finance-dominated accumulation regime en rgulation (i.e., when it is relatively stable). Its principal (or dominant) structural forms are money and the (social) wage relation; the others are subordinated to these in potentially destabilizing ways as the genesis and repercussions of the NAFC have amply shown. This regime gained increasing influence in the variegated world market through the disembedding of interest-bearing capital and the importance of neo-liberalism as the driving force in world market integration (Jessop 2009). The continuing efforts to revive this model tell us something about the broader dynamics of class domination, the ability of those with power not to have to learn from their mistakes, and the growing turn to authoritarian statism and, indeed, repressive measures to maintain class power (on this see, for example, Dumnil/Lvy 2004, 2011; Harvey 2005; Lapavitsas 2011). The primary aspect of money (understood here as different forms of credit money rather than coin or bullion) in the finance-dominated regime is the role of money as the most abstract expression of capital and its disembedding from national economic controls in a space of global flows. Fictitious credit (pseudo-validated loans that are not advanced for productive investment) and fictitious capital (capital as property rather than functioning capital) acquire a much larger role compared with the Fordist period with securitized loans and credit advanced for financial trading massively boosted by neo-liberal banking and financial deregulation. Financial innovation in turn facilitates the increasing acceleration and hyper-mobility of credit money and its escape from regulation. This contrasts with the more territorial logic of Atlantic Fordism, in which national economies were relatively closed, the Bretton Woods international monetary regime imposed limits on currency volatility and relied on a gold-dollar exchange standard, and even so-called liberal market economies closely regulated financial institutions. The secondary aspect of money capital (real assets) was secured through the neo-liberal policy boost to post-ta x profits. This was not always reflected, however, in productive investment because of the pressures resulting from the logic of shareholder value.

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Table 1: Finance-Dominated Accumulation en Rgulation ?

Basic Form Money / Capital Primary Aspect Fast, hypermobile money as general form (+ derivatives) as general form Private wage plus household credit (promote private Keynesianism) Neo-liberal policies with Ordo-liberal constitution Create open space of flows for all forms of capital Secondary Aspect Valorization of capital as fixed asset in global division of labour Cut back on residual social wage as (global) cost of production Flanking plus soft + hard disciplinary measures to secure neo-liberalism Dampen uneven growth, adapt to rising economies Institutional Fixes De-regulation of financial markets, state targets price stability, not jobs Numerical + time flexibility; new credit forms for households Free market plus authoritarian strong state Washington Consensus regimes Spatiotemporal fixes Disembed flows from national or regional state controls; grab future values War for talents + race to bottom for most workers and squeezed middle Intensifies uneven development at many sites + scales as market outcome Core-periphery tied to US power, its allies and relays

(Social) wage

State

Global Regime

K E Y

Principal (or dominant) structural form Primary aspect of principal form Secondary aspect of principal form

Secondary structural form Primary aspect of secondary form Secondary aspect of secondary form

The primary aspect of the wage form is the financialization of everyday life as the labour force turns to credit (and usury) to maintain its standard of living and to provide for its daily, life-course, and intergenerational reproduction. This reflects the growing treatment of the wage as a cost of (international) production rather than as a source of (domestic) demand. It is associated with the flexibility of wage labour, precarisation, downward pressure on wages and working conditions, and cut backs in the residual social wage. The appropriate state form of such a regime en rgulation would be an Ordoliberal framework, as envisaged in the Social Market Economy paradigm. This would have provided a formally adequate institutional and spatio-temporal fix, including the embedding of neo-liberalism internationally in a new disciplinary constitutionalism and credible commitments to corporate social responsibility, i.e., a new ethicalism (Gill 1995; Sum 2010). However, the neo-liberal bias towards de-regulation, which opened the space for financialization, was more often linked to an institutional fix that relied (and still relies) on unusual deals with political authority, predatory capitalism, and reckless speculation all of

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which provided fuel for the global financial crisis. As the limits to more market, less state became apparent, there was growing resort to flanking and supporting measures to keep the neo-liberal show on the road. This was reflected in the discourse and policies of the Third Way, which nonetheless maintained the course of neo-liberalization in new circumstances. The global regime of finance-dominated accumulation was initially organized around the Washington Consensus, i.e., the promotion on a global scale of liberalization, deregulation, privatization, market proxies in any residual state services (whether infrastructural or welfare), cuts in direct taxation (especially on corporations) and a shift towards indirect taxes, thereby providing greater scope for the operation of market forces to allocate capital and distribute income and wealth on a global scale. Geo-politically, this approach was heavily promoted by the USA and its allies; it was also supported by interest-bearing capital and mobile profit-producing and commercial capital. In the short-term, financial accumulation depends on pseudo-validation of highly leveraged debt but fictitious credit and fictitious capital (let alone capital in general) cannot escape their long-term material dependence on the need for surplus-value to be produced before it can be realized and distributed. Nor can capital more generally escape its material dependence on the existence and performance of other institutional orders (e.g., protection of property rights and contracts, basic education, effective legislation, scientific discoveries). Both sets of constraints are evident in the North Atlantic Financial Crisis. On the one hand, overaccumulation of fictitious credit and fictitious capital enabled by their dissociation from, and indifference to, other moments of the capital relation and their disembedding from prudential and state control have contributed significantly to the eventual bursting of financial bubbles. In this sense, the creation of fictitious (or virtual) wealth has not provided the basis for a stable accumulation regime but has created the conditions for volatility and crisis. On the other hand, growing privatization and/or financial cuts in other functional systems (e.g., education, health, science, and politics) have undermined the capacity of these systems to deliver services needed by a productive rather than parasitic economy. Another symptom of this tendency is the deterioration of economic infrastructure previously provided directly or indirectly, even in liberal market economies, through local, regional, or national state intervention. As interest-bearing capital met the constraints of real economic growth, it upped the stakes not only be inventing and speculating in even more rarefied forms of pseudo-validation of advanced payments (e.g., securitization, purchase of government debt) but also by resorting to various forms of primitive accumulation (e.g., land-grabbing, enclosure of the intellectual commons, privatization of accumulated public wealth, colonization of

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the residual public sector, imposition of the neo-liberal programme in dependent capitalist economies, and so on) (see Harvey 2005; Elsner 2012). In short, the crisis has a specific form due to the hyper-financialization of advanced neo-liberal economies and, in particular and most immediately, practices of de-regulated, opaque, and sometimes fraudulent financial institutions that still benefit from a corrupt relation with political authority. These features reflect the hybrid nature of finance-dominated accumulation through its links to a predatory and parasitic political capitalism. Indeed, the capacity of interest-bearing capital and other capitals with a vested interest in the neo-liberal project have used their political influence to rescue too-big-to-fail financial institutions at the expense of increasing public debt which then becomes the basis of deficit hysteria and pressures for further neo-liberal policy measures. Neo-liberals are still reluctant to waste a good crisis. But such measures just postpone the moment of macro-economic truth at the cost of bigger economic, political, social, and ecological crises later. The features of FDA in crisis can be seen in the reversal of many features of the institutional and spatio-temporal fixes that provided (or could have provided) some partial, provisional, and temporary stability (Table 2). Whereas the development of banking capital and bank credit is usually justified in terms of their role in financial intermediation and risk-management, finance-dominated accumulation involved massive financial speculation and risk-taking (cf. LiPuma/Lee 2004; Haldane 2012). It is in this sense that we can talk of the autonomization of fictitious credit and fictitious capital from the so-called real (but always-already monetary) economy. While the pseudo-validation enabled by financialization initially created conditions that benefitted many economic agents, the collapse of credit bubbles and the implosion of financial speculation have thrown the stimulus of growing debt into reverse. In other words, whereas growth had depended on acceleration in fictitious credit, the writing down of bad debt, the repayment of debt, reluctance to contract new debt, and hoarding of available capital throw demand into reverse. Debt deleveraging creates conditions for a vicious cycle of debt-default-deflation dynamics and an eventual epic recession (Rasmus 2010; Keen 2011).

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Table 2: Finance-Dominated Accumulation in Crisis

Basic Form Money/ Capital Primary Aspect Rising antagonism between Main Street and Wall Street (City, etc) Credit crunch puts private Keynesianism into reverse Political capitalism undermines Ordoliberalism Unregulated space of flows intensifies triple crisis Secondary Aspect Epic recession based on debtdefault-deflation dynamics (D4) Austerity reinforces D4 double dip or epic recession Austerity policies meet resistance, harsher discipline Multilateral, multiscalar imbalances and race to bottom Institutional Fixes De-regulation crisis of TBTF predatory finance + contagion effects Growing reserve army of surplus, precarious labour Crises in political markets reinforce post-democracy Crisis + rejection of (post-)Washington Consensus Spatiotemporal fixes Protectionism in core economies, growing resistance to free trade from periphery Global crisis and internal devaluation reproduction crisis Cannot halt uneven development at many sites + scales Crisis of US hegemony, BRICS in crisis and disarray

(Social) wage State

Global Regime

This activates the potential antagonism of Wall Street and Main Street (and their equivalents elsewhere) as too-big-to-fail financial institutions benefit from bailouts and from quantitative easing that enables them to rebuild their capital base at low or no cost and to engage in further speculation; and, conversely, as small and medium capitalist enterprises find it harder to access production and trade credit and as households find it harder to secure personal credit and/or to fund their now privatized health, pension, higher education, and other life-course and intergenerational reproduction needs. Most households also lose from the attack on entitlements, previously part of the social wage, as these are even more vocally portrayed as costs that prevent the rundown of public debt, national debt, and sovereign debt. This reversal of private Keynesianism reinforces the abovenoted debt-default-deflation dynamics. The same result also follows in the Eurozone from official attempts to create an internal devaluation through reductions in the private and social wage, other production costs, and so on, to compensate for the legal restrictions on devaluation or exit from the Eurozone. The development of debt-default-deflation dynamics also strengthens other crisis-tendencies inherent in financialization and neo-liberalism. The crisis expands the reserve army of labour on a global scale, weakening the bargaining power of wage-earners over wages and conditions, and increasing precarious work. The Washington Consensus, already fragile, is even harder to maintain as

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demands for protectionism increase in the crisis-hit metropolitan economies and as opposition to free trade rises in the periphery (sometimes linked to proposals for post-neo-liberalism). Nonetheless transnational elites continue to present free trade agreements as an essential and purportedly cost-free economic recovery measure. The impact of the NAFC has also aggravated imbalances in the global economy and shifted its centre of gravity to the east and south. Specifically this was reflected in the halting rise of the BRICS economies Brazil, Russia, India, China, and South Africa -- with China gaining most nationally, regionally, and globally as the USA, the UK, and the Eurozone economies experience lean years. Nonetheless, even the BRICS have been caught up in the global contagion effects of the North Atlantic Financial Crisis in addition to suffering from their own particular, endogenous crisis-tendencies. Three further features of finance-dominated accumulation in crisis should be mentioned briefly. The first is that, as austerity policies begin to bite, there is growing, if still fragmented, resistance (which will increase as further measures are taken) and this is leading to increased surveillance, harsher disciplinary measures, and a further shift towards authoritarian statism or, as some choose to call it, post-democracy. This is reinforced, second, by the growing anger about the linkages among interest-bearing capital, politicians, and state managers as reflected in the phenomena that Max Weber classified as political capitalism. Its three modes of orientation to profit (Erwerbsorientierung) include profit-making through force and domination, through financing political parties and other enterprises, and through unusual deals with political authority (Weber 1961). All three have been implicated in the opening of the space for financialization and, more recently, in the privileged, indeed protected, position of interest-bearing capital in official crisis-management responses. They are also associated with the rise of technocratic administration of the crisis. Third, and finally, the crisis of financedominated accumulation and its neo-liberal integument has reinforced uneven development at many sites and scales. This is reflected in particular in the intensifying triple crisis: financial, economic, and ecological. The third element in this crisis represents the biggest source of fragility, indeed vulnerability, in the global economy and in world society more generally. Fragile Stability, Stable Fragility This chapter has traversed much, perhaps too much, theoretical ground. It has explored the relation between fragile stability/stable fragility on three levels, with the referent of this paradoxical couplet differing at each level. First, I reinterpreted

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the general problem of social order in terms of the production of society effects in and through specific modes of societalization, which are linked to particular social imaginaries and specific patterns of structuration. Next, I identified a distinctive set of problems in modern social formations linked to capitalist societalization, i.e., the dominance of profit-oriented, market-mediated accumulation, with the world market (and, by extension, world society) as its ultimate horizon of enactment. I also noted the potential contribution of institutional and spatiotemporal fixes to the partial, provisional, and fragile resolution of capitals basic contradictions and dilemmas as a condition of being en rgulation. This condition is fragile because the contradictions are incompressible, the dilemmas are insoluble in abstracto, and the fixes can at best displace and/or defer for a time capitals basic crisis-tendencies. Third, I explored the specific case of finance-dominated accumulation, which illustrates well the Minskyan claim that stability produces instability or, more precisely, that financial stability produces financial fragility. I used the concepts developed for the CMP to outline theoretically the nature of such a regime were it to be en rgulation and then indicated how its initial form and fixes already contained the possibility of distinctive forms of crisis. These remarks remain underdeveloped at all three levels. The general remarks still require development in terms of other modes of societalization, i.e., in relation to the fragility of segmentation and core-periphery relations as bases of societalization, as well as in relation to hybrid forms of societalization. The observations on capitalist societalization imply that modern societies (i.e., formations dominated by functional differentiation) are not necessarily organized in terms of a capitalist logic. But this is not elaborated and it would be important to explore the nature and conditions of other principles of societalization, such as national security, juridification, religion, or, cross-cutting functional systems, a social order based on ethnic or racial stratification (such as an apartheid regime). This in turn poses the problem of whether all possible modes of societalization are equal or some are more equal than others. Finally, the comments on finance-dominated accumulation are, in their present form, more of a thoughtexperiment, albeit one strongly influenced by the Marxian and Marxist critique of political economy and by theoretically-informed observation of the development, crisis-tendencies, and crises of the most advanced of these regimes. This analysis needs further development not only in its own terms but also in relation to the ability of this regime to shape accumulation and societal dynamics on a world scale even in economic, political, and social spaces where interest-bearing capital is not the dominant form and/or fraction of capital.

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Acknowledgment The writing of this chapter was enabled by a professorial fellowship funded by the UKs Economic and Social Research Council (Grant number: RES-051-27-0303). The usual disclaimers apply for errors of omission and commission.

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