This was written for a class in response to chapter 2 of David M. Kotz’s 2014 book The Rise and Fall of Neoliberal Capitalism, and while reading that is not necessary to understand the discussion below, that is the context for which it was written.
Something I couldn’t get out of my head during this reading was the concept of “sabotage”, that in order for business to remain profitable some degree of sabotage of the productive capacity of industry is necessary (e.g., if industry operated at 100% capacity all the time, then the whole system would collapse in on itself). Through this descriptions of Keynesian “regulated capitalism” and “neoliberal capitalism”, Kotz discusses questions of employment, with the Keynesian view being that maintaining “full employment” as a goal of a state operating in a capitalist system, but throughout all the years where Keynesianism was the dominant economic ideology, this goal of “full employment” was never actually achieved. Employment, or rather unemployment, can be used as a gauge to determine the approximate “degree of sabotage”, as if capitalists wanted to operate industry at its maximum capacity they would simply hire as many workers as possible to do as much work as possible. But obviously they don’t do that, it would be silly, because capitalism isn’t about producing as much as possible in order to accumulate as much as possible by a gross measure. It’s about out-competing other dominant forces in the market and in politics, by increasing one’s capitalization relative to your competitors, including possible non-market threats to power such as organized workers (workers have very little incentive to not make demands, unionize, quit, or slack off if employment is guaranteed). So some degree of unemployment is necessary for the system to work, and is tolerable up to the degree that dominant forces in the market can still accumulate differentially to each other. This can be demonstrated by graphing the income of capitalists (in the form of profit and interest) vs the unemployment rate, and one finds that excessive sabotage and excessive employment both leading to decreases in capitalist income (this specific graph comes from an outside source, Nitzan and Bichler, “Capital As Power” (2009), Fig. 12.2, but there’s various figures throughout Kotz’s book that contribute to this point as well). Also notable that according to this data, the peak of capitalist income over time is trending upwards and towards greater unemployment, indicating that a greater degree of sabotage is becoming more profitable over time.
I was thinking about this more in relation to the current happenings in the news: Trump’s attempts at a trade war with, well, everyone. The easy answer to Trump’s proposals are that he’s stupid and a populist who impulsively says and does whatever he wants to get his base fired up and angry at someone. This is probably true at least to some extent, but there’s very little to actually think about if that’s the whole answer. And furthermore it’s unlikely someone could get as far in politics as Trump has without at least some support from dominant capital groups. Obviously the proposed tariffs have had devastating results in the stock market taken in absolute terms, but if we were to analyze it in relative terms instead, rather than seeing a situation where everyone is losing, we’d see a situation where some sectors of industry and particular corporations are gaining relative to others. From this we can determine that Trump’s policies might be representing a shift in the relative power of certain dominant capital groups and thus a shift away from neoliberal capitalism (or at least away from neoliberalism as we knew it, likely into something even worse). The tariffs themselves and the resulting crises can be seen as a form of sabotage, one that for the last 40 to 50 years of neoliberalism has been frowned upon, but now is front and center of our global politics. For some reason this form of sabotage is popping up now in the post-2008, post-covid landscape when it did not before. Perhaps it’s just a result of rising nationalism, perhaps it’s just Trump throwing whatever gets people excited at the wall and seeing what sticks—no doubt these played a part—, perhaps new dominant capital in industries like tech and software find tariffs to be beneficial to their relative power, perhaps unemployment hit a sort of asymptote where further increases risked civil unrest and yet capital accumulation required an increased degree of sabotage as the trend implies. These hypotheses require further research before a particular conclusion can be drawn, but they inspire a lot more thought about our political climate and potential for change in the future than simply writing it off as the monkeys running the circus.
Kotz, David M. The Rise and Fall of Neoliberal Capitalism. Harvard University Press, 2014.
Nitzan, Jonathan, and Shimshon Bichler. Capital as Power: A Study of Order and Creorder. Routledge, 2009.