Review Essay: Economic Power, Liberalism, and Crisis — Nate Holdren

Lenin once wrote that “what is most important, that which constitutes the very gist, the living soul, of Marxism” is “a concrete analysis of a concrete situation.”[1] The concrete is not immediately given, however, being itself “concrete because it is the concentration of many determinations,” as Marx wrote in the Grundrisse.[2] Concrete analysis, then, requires theory. The Marxist intellectual tradition as a whole can be thought of as a collective process over time of using theory to generate points of departure for empirical investigation, investigation which in turn raises new questions and spurs further theorizing – all informed by and hoping to assist emancipatory politics.

In what follows I present a review of three recent Marxist books, each of which significantly enriches Marxism as both theory and concrete investigation. Søren Mau’s Mute Compulsion argues that economic power is a specific kind of power which operates only in capitalist societies, and explicates what exactly that power consists of. Tony Smith’s Beyond Liberal Egalitarianism stresses that both the state and an overly restrictive version of politics are built-in to capitalism, an argument helping place economic power within a larger context of other elements of capitalist society. Jack Copley’s Governing Financialization demonstrates that the capitalist state is transformed over time as a result of the pressures of economic power – specifically economic crises – and in turns transforms society. In addition, Copley draws out that some of the time economic power takes the form of state action. Together, these important books highlight how the ostensibly apolitical character of economic coercion interacts with capitalism’s tendency toward crisis, and how that interaction both shapes and is shaped by the capitalist state.      

Capital’s Economic Power

The heart of Mau’s superb Mute Compulsion is that there is a specific kind of social power in capitalist societies: economic power or mute compulsion. This power is ‘mute’ by contrast to repressive violence and to uses of ideology. The latter involve intentions, specifically the intention to make people act certain ways, and are in a sense discursive in that they are addressed to people as subjects. Mau argues that economic power, on the other hand, operates relatively thoughtlessly and so in a sense without intention and is in a sense non-discursive, in that it is not addressed to people. Instead, economic power is a kind of pressure exerted on people via shaping the contexts they live in. To put it another way, capital inscribes itself into the social and physical environment thus making that environment reproductive of capital. People thus become compelled by their social environment to behave in ways which are compatible with or serve that reproduction. This makes capital’s hold on society self-reinforcing: to some extent, economic power is a cause and effect of itself.

Mau’s book is organized in three sections, each containing multiple chapters. The sections each both develop the overall conceptual framework of the book and apply parts of that framework to issues that are interesting in their own right. The first section provides some theoretical background from the Marxist tradition as well as laying out some of the conditions of possibility for economic power to exist as a social phenomenon. As part of that section, Mau argues that Marx came to reject his early humanism and the theory of alienation, while also arguing that over his entire body of work Marx remained committed to an account of human nature. Mau expands on that concept of human nature arguing that human beings have no given natural social organization but are always-already social. This conception is incompatible with romantic appeals to being in tune with nature because it means that there is no pre-social condition humanity should return to and that no social arrangement is any more or less natural than any other. Furthermore, he argues that human capacity for constructing complex tools and social relationships has two important ramifications: first, it underscores human plasticity/social open-endedness, and second, it explains that human social life as such involves a form of object-mediated interdependence. That is why it was possible for humanity to become ensnared in capitalist social relations that we created.

Mau makes numerous other arguments likely to spark debate. To name just a few, he argues that Marx understood commodity fetishism as a form of ideology and not, as many value form theorists have argued, as a form of non-ideological domination. He also argues that capitalism tends to reproduce historically existing sexism and racism but that these and other forms of oppression are not inherent in capitalism per se. (Mau takes pains to stress that this does not undermine feminist and anti-racist politics as oppression should be opposed whether or not it arises from capitalism.) In what I found to be a particularly fascinating discussion, Mau argues that capitalism over time has begun to remake the natural world so that parts of non-human nature come to be organized in a way that actively promotes the reproduction of capital, a claim he illustrates with the examples of industrialized farming and seeds that are incapable of reproducing beyond one generation.

One of the most compelling sections of the book in my view is Mau’s discussion of capitalism’s crises. Many Marxists have discussed capitalism as tending to generate crises. Each overproducing capitalist is individually rational insofar as they are in effect gambling that they will be able to sell their product and by doing so profit and get an advantage over competitors. Indeed, failing to do so is to risk being outcompeted. At the same time, as many capitalists take this locally rational action, the result is system-level irrationality in the form of more capital than the market can bear. Over time, excess capital is destroyed in crises which deeply disrupt society and many individuals’ lives. What is novel about Mau’s otherwise relatively standard (but certainly capable) summary of capitalism’s crisis tendencies, is his discussion of crises as not only caused by but as actively enacting and reproducing economic power. In their effects crises tend to reinforce capital’s hold on society. Crises interrupt people’s income, which tends to leave people disorganized and scrambling, so that they (understandably) look for system-compatible solutions to their immediate needs. Mau points out that while crises tend to generate social unrest, they also tend to weaken revolutionary efforts.[3]  Crises, then, are time periods wherein we see the proliferation and intensification of a specific type of conflicts: conflicts over what kind of capitalism to have. 

As Mau stresses, these tendencies are not reducible to intentions: the power of capital and the power of capitalists are not synonymous terms. The capital relation is a dynamic process, a pattern of motion, operating through – and in important respects constitutive of – agents and their actions. Both workers and capitalists themselves are caught in the grip of capital’s social logic, though not in the same ways.

While I think the book is very good, in a comradely spirit I want to challenge two of Mau’s points. First, Mau describes class domination as being a division between “those who control the conditions of social reproduction and those who are excluded from direct access” to those conditions.[4] I don’t think it makes sense to say that capitalists control social reproduction. Society’s reproduction occurs through the ongoing and crisis-prone accumulation of capital by many productive units, as other parts of Mau’s book make clear. As such, in capitalism social reproduction is to an important degree under no one’s control.[5] Class domination within capitalism is rooted in market dependency, and whether people’s access to money arises from the sale or from the purchase of labor power. Members of the proletariat, living off the sale of labor power, face the significantly greater threat of sudden and intense hardship than capitalists, and those threats give capitalists terrible power. This brings me to my second point, violence.

Mau argues that the power of capital is distinct from violence. This is convincing as an argument about the repressive state apparatuses: capitalism’s power is not only the result of state ideology and state violence. But states are not the only violent actors in capitalist society. In the chapters on the working day and machinery in the first volume of Capital, Marx details terrible harms inflicted on workers in the production process, and in workers’ consumption of adulterated bread – food rendered unhealthy because made for profit rather than need. In addition, Mau argues that Marx develops concepts dialectically over the course of Capital’s chapters, which implies that Marx intended his discussions of these harms to add to the conceptual armature provided by his account of capitalism. Furthermore, as Mau alludes to, personal violence by supervisors and managers is far from unheard of in capitalist production.[6] While such violence is not constantly practiced in all instances of capitalist production, it seems clear that production in capitalism contains an ineliminable potential for such violence, resulting from proletarian vulnerability and competitive pressures on capitalists.[7]

Both physical violence and occupational hazards should be seen as built into capitalism as such, even though the particular locations of these harms at any given moment are underdetermined. When such harms occur, they are certainly caused by the power of capital      and, moreover, they reproduce that power by leaving workers injured and in dire financial circumstances. In my view, then, Mau’s book does not show that economic power is, in its concept, separable from violence. Rather, the book shows that economic power, the form of power unique to capitalism, tends to generate, and in some cases actively takes the form of, a kind of apolitical violence within the production process, which is distinct from the political coercion exercised by the state. One interesting corollary of this point is that Marxists who focus on the role of violence by the repressive apparatus of the state in maintaining capitalism emphasize social phenomena that exist in multiple modes of production rather than the phenomena specific to capitalism which Mau skillfully dissects.

The Limits of Liberal Social Theory

In general, left liberal thinkers are certainly aware of the kinds of social pathologies that Mau and other Marxists point out. These thinkers, however, tend to treat these pathologies as accidental and avoidable through sufficient policy interventions. This kind of thought is Marxism’s primary intellectual competitor. Left liberalism unwittingly encourages us to lower our political aspirations to a somewhat restrained version of capitalism, not least by encouraging us to misunderstand capitalist society. Luckily, we have Tony Smith’s Beyond Liberal Egalitarianism.

Smith takes the best thought left-liberalism has to offer, represented by academics he refers to as liberal egalitarians. He shows how they fail to adequately deal with problems inherent to capitalism and that this failing arises because they lack the concept of capital as articulated by Marx. In doing so, Smith presents a concise and powerful summary of Marx’s account of capitalism.

Capitalist society is subordinated to capital, meaning the process of continually turning money into more money. Marx depicted this as the circuit M-C-M’. Money advanced by capitalists must become more money which is then re-invested: M must continue to become M’, and M’ must be used to launch another repetition of the circuit. This must occur because the production of key social goods and services is organized in the form of the circuits of M to M’, so that widespread interruption of those circuits generates terrible harms. As such, society must generally foster the ongoing completion of that circuit. Smith refers to the compulsory character of repeating that circuit, and society serving that repetition, as the valorization imperative. Furthermore, as Smith notes, those circuits tend to interrupt themselves or each other in the form of ordinary competition and, more catastrophically, periodic crises. This means capitalism is a type of society where the production of crucial goods and services is regularly self-interrupting. (Mau’s point that capitalism’s social crises render capital’s grip on society stronger, not weaker, is an example of it being rewarding to read Mau’s and Smith’s books in tandem.) In addition, the power that accrues to capitalists over the working class and in society generally due to their position relative to capital’s circuits is objectionable, and the pressures of repeating that circuit predisposes capitalists to use that power in especially objectionable ways.

Of course, liberal egalitarians can and often do criticize elements and results of these social patterns. Smith argues that their criticisms consistently fall short, however, because they lack a concept of capital in Marx’s sense of the term. That lack means they fail to grasp that the ills of capitalist society are not contingent outcomes but rather result from capitalism’s fundamental logic. In Smith’s treatment, liberal egalitarians appear as in effect utopian capitalists who believe in the unrealistic possibility of a perfected capitalism that fosters rather than tramples on human flourishing. This makes them unwitting – and thus more effective – representatives of capitalist ideology.

I can imagine some readers getting impatient with Smith’s attention to academics. Smith’s point, however, is that taking on the thinkers who put forward the most intellectually rigorous left alternatives to Marxism can help Marxists both demonstrate the superiority of Marx’s account of capitalism and also help improve that account. Learning to criticize explicit social theories can help socialists be better prepared for the implicit theories that many people hold as common sense. For example, visions of a boss-less capitalism of worker co-ops have repeatedly arisen over time. Smith examines an idea proposed by the philosopher John Rawls of a democracy of property owners, which is this same idea expressed in a different vocabulary. In such a society there might be no individual capitalists, yet society would still be in the grip of the valorization imperative and the pathologies it generates, despite whatever merits such a society might have over other versions of capitalism.

I want to highlight three of Smith’s points I found especially thought provoking. First, Smith argues that capitalist social relations are relatively indeterminate, meaning they can take a wide range of specific institutional forms. Smith’s insight here is important in part because the left has tended to conceptualize capitalism as such via specific institutionalized versions of capitalism (such as the relatively regulated mid-twentieth century capitalism that predated neoliberalism) and so to misunderstand the significance of the transition between different kinds of capitalist society (such as the shifts involved in relative deindustrialization). Recognizing capitalism’s relative indeterminacy helps us understand capitalism’s ability to transform its particular institutional organization in order to continue to exist as a general type of society.

Second, Smith argues that Marx shares with liberal egalitarians what Smith calls the moral equality principle, according to which no individual can be justifiably sacrificed for the good of another, at least not without consent. This makes Marx what Smith calls a normative individualist, an individualist in the sense of demanding a good life for each and all, which is fully compatible with understanding that each individual is a product of society and requires specific collective and institutional conditions in order to flourish. This argument offers a powerful if implicit criticism of past political projects in the name of socialism which have been willing to sacrifice members of the working class. The argument also draws out more explicitly why capitalism is objectionable: capitalism tramples on human beings, and each human being has moral worth. Some Marxists seem skittish about this way of stating what makes capitalism objectionable, dismissing such matters as mere moralism. Smith’s account of Marx as a normative individualist shows that such Marxists are mistakenly neglecting ways in which Marx’s writing can assist social criticism.

Third, Smith argues that capitalist societies are characterized by what he calls the bifurcation of the political. A host of issues that are by any reasonable definition political – such as who gets to live, to thrive, to what extent, and how – are the result of ostensibly apolitical and institutionally private economic processes. This means capitalist societies have an attenuated notion of politics, treating large swathes of political matters as private, apolitical, and relatively fixed, allowing only an overly narrow area of social life to count as political and subject to collective re-organization. This narrowing of politics is not a matter of belief alone but rather is inherent in the combination of production being carried out by privately owned organizations and products generally taking the form of commodities.

Smith’s concept of the bifurcation of the political has important ramifications. It means the capitalist state is intrinsically a part of capitalist societies such that state action is not less capitalist when less marketized nor is the capitalist state less state-like for its service to the valorization imperative. The concept also raises questions about the relationship between the state and politics. To many people it’s intuitively obvious that the state is where politics happens and that the state’s actions are political. The concept of the bifurcation of the political, however, suggests that the capitalist state does important work to keep economic power private and depoliticized. That means that to the degree that fields like political science, political philosophy, political history, and legal thought work within the categories of the capitalist state, they are conceptualizing politics and social relations in overly narrow ways. More importantly, insofar as working-class collective action occurs within or in ways acceptable to state institutions, that collective action will have a limited capacity for social transformation. Social progress requires that class struggle occur to a significant degree outside of and against capitalist society’s officially-political institutions.

While capitalist societies in general separate domains conceptualized as economic and as political, and treat politics overly narrowly by doing so, the exact placement of the line bifurcating the economic from the political differs in different actually-existing capitalist societies. In Smith terms, capitalist social relations are indeterminate, and this relatively open-endedness extends to the concrete particulars of how different capitalist states are organized. Furthermore, those concrete particulars change over time, meaning that the line between economic and political sometimes blurs and moves, especially in response to crisis and class struggle. This means in part that capitalist societies are beset by instability in their institutions, and so to an important degree in the everyday lives of members of society, as both cause and effect of social conflict.      

Policy as the Detritus of Crisis

Numerous writers have described late 20th century capitalism as having undergone financialization. In Governing Financialization Jack Copley argues that this transformation is rooted in the relationship between capitalism’s crises and the capitalist state. Copley makes his case through an examination of UK policy and the relationship between the UK economy and the world economy in the 1970s and 1980s. In doing so he demonstrates the greater explanatory power of Marxist analysis – especially the tradition of Open Marxism – relative to other perspectives.

The book begins with an overview of three competing accounts of financialization. One approach understands financialization as the condition where financial practices are more present or prominent in society and come to remake other social practices. A second approach focuses on the relationship between finance and production, where finance is seen as an effect of shrinking growth in production. A third approach focuses on the relationship between the above phenomena and the state.

Within these accounts, Copley finds three implicit theories of the state: the state as an instrument of powerful actors, often as ideological instrument; the state as functionally and relatively mechanically serving economic development; and the state as itself a strategic actor that operates with some significant independence from both powerful blocs of and underlying social forces. He notes that the former two accounts, the instrumentalist and functionalist accounts, tend to have no room for or interest in the politics of what the government actually does. Attention to the politics of governance is the primary merit of treating the state as a strategic actor, Copley argues. At the same time, accounts of the third type tend to under-theorize the state.

Against all of the above, Copley presents a fourth account, drawn from the tradition of Open Marxism, of capitalist social relations as having a logic to them. A key part of this logic is capitalism’s tendency toward crises, which form the context within which the state is a strategic actor. Within this account, the state is still significantly pressured by powerful actors and forces, but it also has an important level of independence in responding to those pressures. This means that while the state acts relatively it does so reactively, in response to the turbulence and disorder of capitalism as a crisis-prone form of society. Furthermore, the state’s actions in response to crisis are often surprisingly haphazard. As a corollary to this claim, Copley argues that other accounts of the state and the shift to financialization have retroactively ascribed a far greater degree of coherence to both state action and the rise of financialization than is warranted. Thus, while financialization was to a significant extent the result of state action, it was specifically an emergent and unforeseen result occurring behind the backs of state actors who responded to a degree of genuine disorder resulting from global and national crises.

While I have focused on Copley’s theoretical perspective, most of his Copley’s book consists of a fine-grained historical account. One of the virtues of this account is to demonstrate how empirical and historical inquiry can be not only theoretically informed, but theory-generating. Copley shows how both Labour and Conservative governments responded to crises in ways that ended up bringing about financialization. As they did so, governments engaged in two basic approaches to policymaking: palliative policy, directed at shoring up legitimacy and often simply staying in office, and disciplinary policy, directed toward stabilizing the economy and competing on the global market, at the expense of the working class.

Disciplinary policy posed a challenge to the political legitimacy and electoral fortunes of the government given the at least nominally democratic character of the UK. The government sought to place its own disciplinary actions at a remove from itself, by ceding authority to international bodies, automatic benchmarks, and technocratic agencies including financial institutions. This approach was a specifically depoliticized approach to discipline. This depoliticization was not merely rhetorical but a matter of the allocation of decision-making power: by ceding power to determine financial policy to market-based benchmarks, supranational authorities, and supposedly neutral experts, democratically accountable officials could dodge responsibility for policy and its results. It was through these two approaches to policy, and especially depoliticized discipline, that the UK government fostered financialization, as financial institutions and measures served as means of ceding power to avoid accountability.

Capitalist social relations are, as Smith puts it, indeterminate, in the sense that they do not require any particular institutional arrangements, allowing for significant variation in how an actually-existing capitalist society is organized. This indeterminacy is bounded, however, in that institutions must be compatible with mute compulsion as it operates concretely in a specific time and place, and they are unstable, because capitalism is prone to both crisis and unrest. Furthermore, Copley’s book demonstrates that the institutions of any actually-existing capitalist society are constructed and transformed relatively haphazardly. He shows how the replacement of one set of institutions that concretely instantiated capitalist social relations with another set in the UK in the 1970s and 1980s occurred through relatively disorganized state responses to economic crisis and class conflict.

Copley provides an account of state actors as powerful but still themselves compelled by mute compulsion, specifically in the form of crisis, though their responses are significantly underdetermined. In effect, governments scramble to ride the tiger rather than proceeding via any grand master plans and in doing so they generate policy outcomes that then influence the actions of future governments. Those outcomes are analogous to Marx’s characterization of machinery as dead labor that constrains living labor: past activities of governance, made in the context of capitalist society’s contradictions in the past, form a weight conditioning the scope of current activities of governance, occurring in the context of capitalism in the present.

Both this book’s theorizing and archivally based investigation of policy history are impressive in their own right, let alone in tandem. Even more so is the way Copley navigates different levels of analytical abstraction (macro, meso, and micro, in occasional social science parlance) and not only moves between them but integrates them such that each level of analysis sheds light on the others. The book demonstrates both the power of Marxist theory to inform empirical inquiry and of such inquiry to generate concepts which apply to other objects of analysis in other times and places.     

Possible Further Inquiry

I hope I have presented these books in ways that make them each of interest on their own and suggest how they resonate with one another. In lieu of a conclusion, I would now like to briefly suggest some directions of future inquiry that might be edifying for those of us in the Legal Form milieu, inquiry drawing on and, eventually, speaking back to the combined insights of these books.[8] Two general avenues of further inquiry seem to me especially rich with potential: the examination of intra-systemic tensions and conflicts, and the examination of theories and ideologies for the management of those tensions and conflicts – i.e., of other liberal egalitarians. As these books helpfully illuminate, capitalism has built into it a tendency to generate a range of tensions and often open conflicts – capitalists vs. proletarians, capitalists vs. other capitalists, proletarians vs. other proletarians, parts of the state vs. members of either or both classes, and states vs. one another or vs. supranational authorities. All those relationships play out in a wide range of concrete forms and interact in complex ways with the larger context of capitalism’s crisis tendencies and bifurcation of the political. These social patterns in turn tend to give rise to various kinds of liberal egalitarians who seek to understand specific facets of these dynamics, often for the practical purpose of tweaking the currently existing form of capitalism to mitigate its current worst excesses. I am thinking not primarily of theorists but of intellectual practitioners in positions of relative institutional power within the state or in positions of influence within social movements (the kind of experts that “The Internationale” called condescending saviors).

Scholars across many fields of empirical inquiry have generated a lot of studies of specific examples of all the above, though often those studies are not conceptualized as such. These three books could certainly inform new empirical investigations. They could also helpfully inform syntheses of existing empirical inquiries, which could help generate new theoretical questions or insights in how to apply these books’ insights to other concrete conditions.

Within such further inquiry it would be especially worthwhile to attend to law in its various facets. Capitalism’s tensions and conflicts tend to be legally mediated or inflected as well as generative of new institutions and practices of law and new modes of legal thought. Furthermore, legal practitioners and scholars tend to be relatively prominent among the liberal egalitarians generated on an ongoing basis by these social processes. Inquiry into all the above might fruitfully begin by asking when and how law is variously a cause, effect, or both and cause and effect of the social processes in question, and the degree and manner to which law works to contest and/or reproduce those processes.

There are, I’m sure, many other directions of inquiry that this fine trio of books could enrich. I hope they are widely read, discussed, and put in further discussion with each other.

Nate Holdren is a legal historian of American capitalism. He holds a PhD in History from the University of Minnesota and is the author of Injury Impoverished: Workplace Accidents, Capitalism, and Law in the Progressive Era (Cambridge University Press 2020). He is employed as an Associate Professor in the Program in Law, Politics, and Society at Drake University.

[1] Lenin, “Kommunismus,” Collected Works, Volume 31, p. 166.   

[2] Karl Marx, Grundrisse: Foundations of the Critique of Political Economy, London: Penguin, 1993, p. 101.

[3] Mute Compulsion, 316.

[4] Mute Compulsion, 129.

[5] The ambiguity in some of Mau’s usage of the term ‘social reproduction’ may come from his borrowing from recent work under the heading of social reproduction theory. On the importance of the distinction between the reproduction of labor power and the reproduction of society, and on the role of the state in the reproduction of capitalist society, see: Kirstin Munro, “‘Social Reproduction Theory,’ Social Reproduction, and Household Production”, Science & Society, Vol. 83, No. 4, October 2019, 451–468.

[6] Mute Compulsion, 231.

[7] It is important to note that violence in production is not only inflicted on employees by employers and their representatives. Reva Siegel’s discussion of the changing forms of sexual harassment provides examples of both boss-on-worker and worker-on-worker violence and the economic organization of each, overlapping with the organization of gender and sexuality.

[8] I think the work of Marxist scholars of international law offers models the rest of us might seek to emulate, as well as raising interesting questions that speak back to these three books. I am thinking specifically of scholarship by Ntina Tzouvala and Rose Parfitt. They have each written in different ways about how the international legal order forces societies to adopt the capitalist state and also disciplines individual capitalist states to act within the imperatives of the global economic and political order. This suggests that the bifurcation of the political operates differently within the international legal order than it does within a single state’s domestic territory, and also suggests a complex dialectic between law and mute compulsion (in its form as crisis or otherwise), wherein the latter relates to law as sometimes cause, sometimes effect, and sometimes both cause and effect.