Monetary Imperialism

It follows that “no type of state can avoid passing through a phase of economic-corporate primitivism” and that “the content of the political hegemony of the new social group which has founded the new type of state must be predominantly of an economic order” to borrow from Gramsci. This new economic order forged by ‘big finance’ or ‘high finance’ involves wholesale “the reorganization of the structure and the real relations between men and the world of the economy or of production.” Any type of cultural promotion, philosophical thought, or artistic humanism amounts to “the negation of the economic world” which this particular order has forged, and it is this particular order which now has a grip over the American state.

Why big finance or high finance wields supremacy over the state and “what allows banks to live by a different set of rules from the rest of society” is “the privilege that derives from being the exclusive purveyor of credit in the economy” to borrow from Stefan Eich. He added:

“In the private-public partnership by which the state delegates the provision of a crucial public good – money – to private agents, the people ended up as hostage to the agents it itself once empowered. The result has been a perverse situation of central-bank supremacy in order to provide financial liquidity for banks rather than in the service of broad-based credit provision and a more egalitarian financial citizenship.”

But the banks are now in a “bind” due to government debt and the deteriorating economic and social conditions which stem from the imposition of their economic model, despite their long-standing supremacy. In turn, governments are in greater need of credit from the big banks because of the debt. Thus, both the banks and the governments are in a bind. As Eich wrote: “Global finance desperately needs the state to provide liquidity and safe assets. And yet this does not seem to give the state the upper hand, because the state in turn depends on banks to provide credit.” 

‘De-industrialization’ in America is “the result of financialization” throughout the overall economy as Michael Hudson noted. Productive powers diminished by de-industrialization are diminished even further by the creation of unlimited credit and the fostering of indebtedness, and this combination of de-industrialization and indebtedness weakens the power of collective bargaining and unions and so forth. Moreover, the core aim of financiers is “enhancing stock prices.” As Hudson noted: “Over 90 percent of U.S. corporate revenue…is used for share buybacks and dividend payouts to support company stock prices and hence the value of the stock options held by financial managers and speculators.” Hudson added: 

“The financial sector lives in the short run. A longer-term time frame would have led U.S. managers to reinvest their corporate revenues in expanding productive powers and cutting costs. But that traditional road to industrial dominance would have left less revenue to flow into the financial markets, and therefore was not the aim of financial management.” 

Perhaps most important and significant of all the facts which Hudson highlighted is that “centralized economic planning is now being centered not in the hands of government but in those of the financial centers.” Hudson added: “The aim of this new financialized central planning is not to increase production or living standards as promised by monetarist economic textbooks, but to squeeze out interest and dividends and transfer them abroad.” ‘Financialized central planning’ has been imposed on the United States as well over the course of the last few decades. In turn, the intellectual, philosophical, and theoretical jargon of “free market economics” and so forth conceal and deflect attention from what essentially amounts to an attack on all governments who are “intent on protecting their societies from this corrosive exploitation.” 

The demise of the American “unipolar moment” and the impulse towards “economic self-determination” on the part of foreign countries may prompt alternatives to American “monetary arrangements” between other countries that were made soon after World War II. But the conception and development of such alternatives between other countries are in their nascent stage at the moment.