[The ideology of neoliberal capitalism was the promise of growth.
But with neoliberal capitalism reaching a dead end, this promise
disappears and so does this ideological prop.] [https://portside.org/]



 Utsa Patnaik and Prabhat Patnaik 
 July 1, 2019
Monthly Review

	* [https://portside.org/node/20832/printable/print]

 _ The ideology of neoliberal capitalism was the promise of growth.
But with neoliberal capitalism reaching a dead end, this promise
disappears and so does this ideological prop. _ 

 From the series, "The logic of Neoliberalism (2010)," (biro on paper,
70X110cm) , John B. Ledger 


Harry Magdoff’s _The Age of Imperialism_ is a classic work that
shows how postwar political decolonization does not negate the
phenomenon of imperialism. The book has two distinct aspects. On the
one hand, it follows in V. I. Lenin’s footsteps in providing a
comprehensive account of how capitalism at the time operated globally.
On the other hand, it raises a question that is less frequently
discussed in Marxist literature—namely, the need for imperialism.
Here, Magdoff not only highlighted the crucial importance, among other
things, of the third world’s raw materials for metropolitan capital,
but also refuted the argument that the declining share of raw-material
value in gross manufacturing output somehow reduced this importance,
making the simple point that there can be no manufacturing at all
without raw materials.1

Magdoff’s focus was on a period when imperialism was severely
resisting economic decolonization in the third world, with newly
independent third world countries taking control over their own
resources. He highlighted the entire armory of weapons used by
imperialism. But he was writing in a period that predated the onset of
neoliberalism. Today, we not only have decades of neoliberalism behind
us, but the neoliberal regime itself has reached a dead end.
Contemporary imperialism has to be discussed within this setting.

Globalization and Economic Crisis

There are two reasons why the regime of neoliberal globalization has
run into a dead end. The first is an _ex ante_ tendency toward
global overproduction; the second is that the only possible counter to
this tendency within the regime is the formation of asset-price
bubbles, which cannot be conjured up at will and whose collapse, if
they do appear, plunges the economy back into crisis. In short, to use
the words of British economic historian Samuel Berrick Saul, there are
no “markets on tap” for contemporary metropolitan capitalism, such
as had been provided by colonialism prior to the First World War and
by state expenditure in the post-Second World War period
of _dirigisme_.2

The _ex ante_ tendency toward overproduction arises because the
vector of real wages across countries does not increase noticeably
over time in the world economy, while the vector of labor
productivities does, typically resulting in a rise in the share of
surplus in world output. As Paul Baran and Paul Sweezy argued
in _Monopoly Capital_, following the lead of Michał Kalecki and
Josef Steindl, such a rise in the share of economic surplus, or a
shift from wages to surplus, has the effect of reducing aggregate
demand since the ratio of consumption to income is higher on average
for wage earners than for those living off the surplus.3
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en3] Therefore,
assuming a given level of investment associated with any period, such
a shift would tend to reduce consumption demand and hence aggregate
demand, output, and capacity utilization. In turn, reduced capacity
utilization would lower investment over time, further aggravating the
demand-reducing effect arising from the consumption side.

While the rise in the vector of labor productivities across countries,
a ubiquitous phenomenon under capitalism that also characterizes
neoliberal capitalism, scarcely requires an explanation, why does the
vector of real wages remain virtually stagnant in the world economy?
The answer lies in the _sui generis_ character of contemporary
globalization that, for the first time in the history of capitalism,
has led to a relocation of activity from the metropolis to third world
countries in order to take advantage of the lower wages prevailing in
the latter and _meet global demand._

Historically, while labor has not been, and is still not, free to
migrate from the third world to the metropolis, capital, though
juridically free to move from the latter to the former, _did not
actually do so_, except to sectors like mines and plantations, which
only strengthened, rather than broke, the colonial pattern of the
international division of labor.4
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en4] This
segmentation of the world economy meant that wages in the metropolis
increased with labor productivity, unrestrained by the vast labor
reserves of the third world, which themselves had been caused by the
displacement of manufactures through the twin processes of
deindustrialization (competition from metropolitan goods) and the
drain of surplus (the siphoning off of a large part of the economic
surplus, through taxes on peasants that are no longer spent on local
artisan products but finance _gratis_ primary commodity exports to
the metropolis instead).

The current globalization broke with this. The movement of capital
from the metropolis to the third world, especially to East, South, and
Southeast Asia to relocate plants there and take advantage of their
lower wages for meeting global demand, has led to a desegmentation of
the world economy, subjecting metropolitan wages to the restraining
effect exercised by the third world’s labor reserves. Not
surprisingly, as Joseph Stiglitz has pointed out, the real-wage rate
of an average male U.S. worker in 2011 was no higher—indeed, it was
marginally lower—than it had been in 1968.5

At the same time, such relocation of activities, despite causing
impressive growth rates of gross domestic product (GDP) in many third
world countries, does not lead to the exhaustion of the third
world’s labor reserves. This is because of another feature of
contemporary globalization: the unleashing of a process of primitive
accumulation of capital against petty producers, including peasant
agriculturists in the third world, who had earlier been protected, to
an extent, from the encroachment of big capital (both domestic and
foreign) by the postcolonial _dirigiste regimes_ in these countries.
Under neoliberalism, such protection is withdrawn, causing an income
squeeze on these producers and often their outright dispossession from
their land, which is then used by big capital for its various
so-called development projects. The increase in employment, even in
countries with impressive GDP growth rates in the third world, falls
way short of the natural growth of the workforce, let alone absorbing
the additional job seekers coming from the ranks of displaced petty
producers. The labor reserves therefore never get used up. Indeed, on
the contrary, they are augmented further, because real wages continue
to remain tied to a subsistence level, even as metropolitan wages too
are restrained. The vector of real wages in the world economy as a
whole therefore remains restrained.

Although contemporary globalization thus gives rise to an _ex
ante_ tendency toward overproduction, state expenditure that could
provide a counter to this (and had provided a counter through military
spending in the United States, according to Baran and Sweezy) can no
longer do so under the current regime. Finance is usually opposed to
direct state intervention through larger spending as a way of
increasing employment. This opposition expresses itself through an
opposition not just to larger taxes on capitalists, but also to a
larger fiscal deficit for financing such spending. Obviously, if
larger state spending is financed by taxes on workers, then it hardly
adds to aggregate demand, for workers spend the bulk of their incomes
anyway, so the state taking this income and spending it instead does
not add any extra demand. Hence, larger state spending can increase
employment only if it is financed either through a fiscal deficit or
through taxes on capitalists who keep a part of their income unspent
or saved. But these are precisely the two modes of financing state
expenditure that finance capital opposes.

Its opposing larger taxes on capitalists is understandable, but why is
it so opposed to a larger fiscal deficit? Even within a capitalist
economy, there are no sound economic theoretical reasons that should
preclude a fiscal deficit under all circumstances. The root of the
opposition therefore lies in deeper social considerations: if the
capitalist economic system becomes dependent on the state to promote
employment _directly_, then this fact undermines the social
legitimacy of capitalism. The need for the state to boost the _animal
spirits_ of the capitalists disappears and a perspective on the
system that is epistemically exterior to it is provided to the people,
making it possible for them to ask: If the state can do the job of
providing employment, then why do we need the capitalists at all? It
is an instinctive appreciation of this potential danger that underlies
the opposition of capital, especially of finance, to any direct effort
by the state to generate employment.

This ever-present opposition becomes decisive within a regime of
globalization. As long as finance capital remains national—that is,
nation-based—and the state is a nation-state, the latter can
override this opposition under certain circumstances, such as in the
post-Second World War period when capitalism was facing an existential
crisis. But when finance capital is globalized, meaning, when it is
free to move across country borders while the state remains a
nation-state, its opposition to fiscal deficits becomes decisive. If
the state does run large fiscal deficits against its wishes, then it
would simply leave that country _en masse_, causing a financial

The state therefore capitulates to the demands of globalized finance
capital and eschews direct fiscal intervention for increasing demand.
It resorts to monetary policy instead since that
operates _through_ wealth holders’ decisions, and hence does not
undermine their social position. But, precisely for this reason,
monetary policy is an ineffective instrument, as was evident in the
United States in the aftermath of the 2007–09 crisis when even the
pushing of interest rates down to zero scarcely revived activity.6

It may be thought that this compulsion on the part of the state to
accede to the demand of finance to eschew fiscal intervention for
enlarging employment should not hold for the United States. Its
currency being considered by the world’s wealth holders to be “as
good as gold” should make it immune to capital flight. But there is
an additional factor operating in the case of the United States: that
the demand generated by a bigger U.S. fiscal deficit would
substantially leak abroad in a neoliberal setting, which would
increase its external debt (since, unlike Britain in its heyday, it
does not have access to any unrequited colonial transfers) for the
sake of generating employment elsewhere. This fact deters any fiscal
effort even in the United States to boost demand within a neoliberal

Therefore, it follows that state spending cannot provide a counter to
the _ex ante_ tendency toward global overproduction within a regime
of neoliberal globalization, which makes the world economy
precariously dependent on occasional asset-price bubbles, primarily in
the U.S. economy, for obtaining, at best, some temporary relief from
the crisis. It is this fact that underlies the dead end that
neoliberal capitalism has reached. Indeed, Donald Trump’s resort to
protectionism in the United States to alleviate unemployment is a
clear recognition of the system having reached
this _cul-de-sac._ The fact that the mightiest capitalist economy in
the world has to move away from the rules of the neoliberal game in an
attempt to alleviate its crisis of
unemployment/underemployment—while compensating capitalists
adversely affected by this move through tax cuts, as well as carefully
ensuring that no restraints are imposed on free
cross-border _financial_ flows—shows that these rules are no
longer viable in their pristine form.

Some Implications of This Dead End

There are at least four important implications of this dead end of
neoliberalism. The first is that the world economy will now be
afflicted by much higher levels of unemployment than it was in the
last decade of the twentieth century and the early years of the
twenty-first, when the dot-com and the housing bubbles in the United
States had, sequentially, a pronounced impact. It is true that the
U.S. unemployment rate today appears to be at a historic low, but this
is misleading: the labor-force participation rate in the United States
today is lower than it was in 2008, which reflects
the _discouraged-worker effect_. Adjusting for this lower
participation, the U.S. unemployment rate is considerable—around 8
percent. Indeed, Trump would not be imposing protection in the United
States if unemployment was actually as low as 4 percent, which is the
official figure. Elsewhere in the world, of course, unemployment
post-2008 continues to be evidently higher than before. Indeed, the
severity of the current problem of below-full-employment production in
the U.S. economy is best illustrated by capacity utilization figures
in manufacturing. The weakness of the U.S. recovery from the Great
Recession is indicated by the fact that the current extended recovery
represents the first decade in the entire post-Second World War period
in which capacity utilization in manufacturing has never risen as high
as 80 percent in a single quarter, with the resulting stagnation of

If Trump’s protectionism, which recalls the Smoot-Hawley tariff of
1931 and amounts to a _beggar-my-neighbor_ policy, does lead to a
significant export of unemployment from the United States, then it
will invite retaliation and trigger a trade war that will only worsen
the crisis for the world economy as a whole by dampening global
investment. Indeed, since the United States has been targeting China
in particular, some retaliatory measures have already appeared. But if
U.S. protectionism does not invite generalized retaliation, it would
only be because the export of unemployment from the United States is
insubstantial, keeping unemployment everywhere, including in the
United States, as precarious as it is now. However we look at it, the
world would henceforth face higher levels of unemployment.

There has been some discussion on how global value chains would be
affected by Trump’s protectionism. But the fact that global
macroeconomics in the early twenty-first century will look altogether
different compared to earlier has not been much discussed.

In light of the preceding discussion, one could say that if, instead
of individual nation-states whose writ cannot possibly run against
globalized finance capital, there was a global state or a set of major
nation-states acting in unison to override the objections of
globalized finance and provide a coordinated fiscal stimulus to the
world economy, then perhaps there could be recovery. Such a
coordinated fiscal stimulus was suggested by a group of German trade
unionists, as well as by John Maynard Keynes during the Great
Depression in the 1930s.9
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en9] While
it was turned down then, in the present context it has not even been

The second implication of this dead end is that the era of export-led
growth is by and large over for third world economies. The slowing
down of world economic growth, together with protectionism in the
United States against successful third world exporters, which could
even spread to other metropolitan economies, suggests that the
strategy of relying on the world market to generate domestic growth
has run out of steam. Third world economies, including the ones that
have been very successful at exporting, would now have to rely much
more on their home market.

Such a transition will not be easy; it will require promoting domestic
peasant agriculture, defending petty production, moving toward
cooperative forms of production, and ensuring greater equality in
income distribution, all of which need major structural shifts. For
smaller economies, it would also require their coming together with
other economies to provide a minimum size to the domestic market. In
short, the dead end of neoliberalism also means the need for a shift
away from the so-called neoliberal development strategy that has held
sway until now.

The third implication is the imminent engulfing of a whole range of
third world economies in serious balance-of-payments difficulties.
This is because, while their exports will be sluggish in the new
situation, this very fact will also discourage financial inflows into
their economies, whose easy availability had enabled them to maintain
current account deficits on their balance of payments earlier. In such
a situation, within the existing neoliberal paradigm, they would be
forced to adopt austerity measures that would impose income deflation
on their people, make the conditions of their people significantly
worse, lead to a further handing over of their national assets and
resources to international capital, and prevent precisely any possible
transition to an alternative strategy of home market-based growth.

In other words, we shall now have an intensification of the
imperialist stranglehold over third world economies, especially those
pushed into unsustainable balance-of-payments deficits in the new
situation. By _imperialism_, here we do not mean the imperialism of
this or that major power, but the imperialism of international finance
capital, with which even domestic big bourgeoisies are integrated,
directed against their own working people.

The fourth implication is the worldwide upsurge of fascism. Neoliberal
capitalism even before it reached a dead end, even in the period when
it achieved reasonable growth and employment rates, had pushed the
world into greater hunger and poverty. For instance, the world
per-capita cereal output was 355 kilograms for 1980 (triennium average
for 1979–81 divided by mid–triennium population) and fell to 343
in 2000, leveling at 344.9 in 2016—and a substantial amount of this
last figure went into ethanol production. Clearly, in a period of
growth of the world economy, per-capita cereal absorption should be
expanding, especially since we are talking here not just of direct
absorption but of direct and indirect absorption, the latter through
processed foods and feed grains in animal products. The fact that
there was an absolute decline in per-capita output, which no doubt
caused a decline in per-capita absorption, suggests an absolute
worsening in the nutritional level of a substantial segment of the
world’s population.

But this growing hunger and nutritional poverty did not immediately
arouse any significant resistance, both because such resistance itself
becomes more difficult under neoliberalism (since the very
globalization of capital makes it an elusive target) and also because
higher GDP growth rates provided a hope that distress might be
overcome in the course of time. Peasants in distress, for instance,
entertained the hope that their children would live better in the
years to come if given a modicum of education and accepted their fate.

In short, the ideology of neoliberal capitalism was the promise of
growth. But with neoliberal capitalism reaching a dead end, this
promise disappears and so does this ideological prop. To sustain
itself, neoliberal capitalism starts looking for some other
ideological prop and finds fascism. This changes the discourse away
from the material conditions of people’s lives to the so-called
threat to the nation, placing the blame for people’s distress not on
the failure of the system, but on ethnic, linguistic, and religious
minority groups, the _other_ that is portrayed as an enemy. It
projects a so-called messiah whose sheer muscularity can somehow
magically overcome all problems; it promotes a culture of unreason so
that both the vilification of the _other_ and the magical powers of
the supposed leader can be placed beyond any intellectual questioning;
it uses a combination of state repression and street-level vigilantism
by fascist thugs to terrorize opponents; and it forges a close
relationship with big business, or, in Kalecki’s words, “a
partnership of big business and fascist upstarts.”10

Fascist groups of one kind or another exist in all modern societies.
They move center stage and even into power only on certain occasions
when they get the backing of big business. And these occasions arise
when three conditions are satisfied: when there is an economic crisis
so the system cannot simply go on as before; when the usual liberal
establishment is manifestly incapable of resolving the crisis; and
when the left is not strong enough to provide an alternative to the
people in order to move out of the conjuncture.

This last point may appear odd at first, since many see the big
bourgeoisie’s recourse to fascism as a counter to the growth of the
left’s strength in the context of a capitalist crisis. But when the
left poses a serious threat, the response of the big bourgeoisie
typically is to attempt to split it by offering concessions. It uses
fascism to prop itself up only when the left is weakened. Walter
Benjamin’s remark that “behind every fascism there is a failed
revolution” points in this direction.

Fascism Then and Now

Contemporary fascism, however, differs in crucial respects from its
1930s counterpart, which is why many are reluctant to call the current
phenomenon a fascist upsurge. But historical parallels, if carefully
drawn, can be useful. While in some aforementioned respects
contemporary fascism does resemble the phenomenon of the 1930s, there
are serious differences between the two that must also be noted.

First, we must note that while the current fascist upsurge has put
fascist elements in power in many countries, there are no fascist
states of the 1930s kind as of yet. Even if the fascist elements in
power try to push the country toward a fascist state, it is not clear
that they will succeed. There are many reasons for this, but an
important one is that fascists in power today _cannot overcome_ the
crisis of neoliberalism, since they accept the regime of globalization
of finance. This includes Trump, despite his protectionism. In the
1930s, however, this was not the case. The horrors associated with the
institution of a fascist state in the 1930s had been camouflaged to an
extent by the ability of the fascists in power to overcome mass
unemployment and end the Depression through larger military spending,
financed by government borrowing. Contemporary fascism, by contrast,
lacks the ability to overcome the opposition of international finance
capital to fiscal activism on the part of the government to generate
larger demand, output, and employment, even via military spending.

Such activism, as discussed earlier, required larger government
spending financed either through taxes on capitalists or through a
fiscal deficit. Finance capital was opposed to both of these measures
and _it being globalized made this opposition decisive_. The
decisiveness of this opposition remains even if the government happens
to be one composed of fascist elements. Hence, contemporary fascism,
straitjacketed by “fiscal rectitude,” cannot possibly alleviate
even temporarily the economic crises facing people and cannot provide
any cover for a transition to a fascist state akin to the ones of the
1930s, which makes such a transition that much more unlikely.

Another difference is also related to the phenomenon of the
globalization of finance. The 1930s were marked by what Lenin had
earlier called “interimperialist rivalry.” The military
expenditures incurred by fascist governments, even though they pulled
countries out of the Depression and unemployment, inevitably led to
wars for “repartitioning an already partitioned world.” Fascism
was the progenitor of war and burned itself out through war at,
needless to say, great cost to humankind.

Contemporary fascism, however, operates in a world where
interimperialist rivalry is far more muted. Some have seen in this
muting a vindication of Karl Kautsky’s vision of an
“ultraimperialism” as against Lenin’s emphasis on the permanence
of interimperialist rivalry, but this is wrong. Both Kautsky and Lenin
were talking about a world where finance capital and the financial
oligarchy were essentially national—that is, German, French, or
British. And while Kautsky talked about the possibility of truces
among the rival oligarchies, Lenin saw such truces only as transient
phenomena punctuating the ubiquity of rivalry.

In contrast, what we have today is not _nation-based_ finance
capitals, but _international_ finance capital into whose corpus the
finance capitals drawn from particular countries are integrated. This
globalized finance capital _does not want the world to be partitioned
into economic territories of rival powers_; on the contrary, it wants
the entire globe to be open to its own unrestricted movement. The
muting of rivalry between major powers, therefore, is not because they
prefer truce to war, or peaceful partitioning of the world to forcible
repartitioning, but because the material conditions themselves have
changed so that it is no longer a matter of such choices. The world
has gone beyond both Lenin and Kautsky, as well as their debates.

Not only are we not going to have wars between major powers in this
era of fascist upsurge (of course, as will be discussed, we shall have
other wars), but, by the same token, this fascist upsurge will not
burn out through any cataclysmic war. What we are likely to see is
a _lingering fascism of less murderous intensity_, which, when in
power, does not necessarily do away with all the forms of bourgeois
democracy, does not necessarily physically annihilate the opposition,
and may even allow itself to get voted out of power occasionally. But
since its successor government, as long as it remains within the
confines of the neoliberal strategy, will also be incapable of
alleviating the crisis, the fascist elements are likely to return to
power as well. And whether the fascist elements are in or out of
power, they will remain a potent force working toward the
fascification of the society and the polity, even while promoting
corporate interests within a regime of globalization of finance, and
hence permanently maintaining the “partnership between big business
and fascist upstarts.”

Put differently, since the contemporary fascist upsurge is not likely
to burn itself out as the earlier one did, it has to be overcome by
transcending the very conjuncture that produced it: neoliberal
capitalism at a dead end. A class mobilization of working people
around an alternative set of transitional demands that do not
necessarily directly target neoliberal capitalism, but which are
immanently unrealizable within the regime of neoliberal capitalism,
can provide an initial way out of this conjuncture and lead to its
eventual transcendence.

Such a class mobilization in the third world context would not mean
making no truces with liberal bourgeois elements against the fascists.
On the contrary, since the liberal bourgeois elements too are getting
marginalized through a discourse of jingoistic nationalism typically
manufactured by the fascists, they too would like to shift the
discourse toward the material conditions of people’s lives, no doubt
claiming that an improvement in these conditions is possible within
the neoliberal economic regime itself. _Such a shift in discourse is
in itself a major antifascist act_. Experience will teach that the
agenda advanced as part of this changed discourse is unrealizable
under neoliberalism, providing the scope for dialectical intervention
by the left to transcend neoliberal capitalism.

Imperialist Interventions

Even though fascism will have a lingering presence in this conjuncture
of “neoliberalism at a dead end,” with the backing of domestic
corporate-financial interests that are themselves integrated into the
corpus of international finance capital, the working people in the
third world will increasingly demand better material conditions of
life and thereby rupture the fascist discourse of jingoistic
nationalism (that ironically in a third world context is not

In fact, neoliberalism reaching a dead end and having to rely on
fascist elements revives meaningful political activity, which the
heyday of neoliberalism had precluded, because most political
formations then had been trapped within an identical neoliberal agenda
that appeared promising. (Latin America had a somewhat different
history because neoliberalism arrived in that continent through
military dictatorships, not through its more or less tacit acceptance
by most political formations.)

Such revived political activity will necessarily throw up challenges
to neoliberal capitalism in particular countries. Imperialism, by
which we mean the entire economic and political arrangement sustaining
the hegemony of international finance capital, will deal with these
challenges in at least four different ways.

The first is the so-called spontaneous method of capital flight. Any
political formation that seeks to take the country out of the
neoliberal regime will witness capital flight even before it has been
elected to office, bringing the country to a financial crisis and
thereby denting its electoral prospects. And if perchance it still
gets elected, the outflow will only increase, even before it assumes
office. The inevitable difficulties faced by the people may well make
the government back down at that stage. The sheer difficulty of
transition away from a neoliberal regime could be enough to bring even
a government based on the support of workers and peasants to its
knees, precisely to save them short-term distress or to avoid losing
their support.

Even if capital controls are put in place, where there are current
account deficits, financing such deficits would pose a problem,
necessitating some trade controls. But this is where the second
instrument of imperialism comes into play: the imposition of trade
sanctions by the metropolitan states, which then cajole other
countries to stop buying from the sanctioned country that is trying to
break away from thralldom to globalized finance capital. Even if the
latter would have otherwise succeeded in stabilizing its economy
despite its attempt to break away, the imposition of sanctions becomes
an additional blow.

The third weapon consists in carrying out so-called democratic or
parliamentary coups of the sort that Latin America has been
experiencing. Coups in the old days were effected through the local
armed forces and necessarily meant the imposition of military
dictatorships in lieu of civilian, democratically elected governments.
Now, taking advantage of the disaffection generated within countries
by the hardships caused by capital flight and imposed sanctions,
imperialism promotes coups through fascist or fascist-sympathizing
middle-class political elements in the name of restoring democracy,
which is synonymous with the pursuit of neoliberalism.

And if all these measures fail, there is always the possibility of
resorting to economic warfare (such as destroying Venezuela’s
electricity supply), and eventually to military warfare. Venezuela
today provides a classic example of what imperialist intervention in a
third world country is going to look like in the era of decline of
neoliberal capitalism, when revolts are going to characterize such
countries more and more.

Two aspects of such intervention are striking. One is the virtual
unanimity among the metropolitan states, which only underscores the
muting of interimperialist rivalry in the era of hegemony of global
finance capital. The other is the extent of support that such
intervention commands within metropolitan countries, from the right to
even the liberal segments.

Despite this opposition, neoliberal capitalism cannot ward off the
challenge it is facing for long. It has no vision for reinventing
itself. Interestingly, in the period after the First World War, when
capitalism was on the verge of sinking into a crisis, the idea of
state intervention as a way of its revival had already been mooted,
though its coming into vogue only occurred at the end of the Second
World War.11
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en11] Today,
neoliberal capitalism does not even have an idea of how it can recover
and revitalize itself. And weapons like domestic fascism in the third
world and direct imperialist intervention cannot for long save it from
the anger of the masses that is building up against it.


	* ↩
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en1backlink] Harry
Magdoff, The Age of Imperialism
[https://monthlyreview.org/product/age_of_imperialism/] (New York:
Monthly Review Press, 1969).
 	* ↩
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en2backlink] Samuel
Berrick Saul, Studies in British Overseas Trade,
1870–1914 (Liverpool: Liverpool University Press, 1960).
 	* ↩
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en3backlink] Paul
A. Baran and Paul M. Sweezy, Monopoly Capital
[https://monthlyreview.org/product/monopoly_capital/] (New York:
Monthly Review Press, 1966).
 	* ↩
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en4backlink] One
of the first authors to recognize this fact and its significance was
Paul Baran in The Political Economy of Growth
[https://monthlyreview.org/product/political_economy_of_growth/] (New
York: Monthly Review Press, 1957).
 	* ↩
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en5backlink] Joseph
E. Stiglitz, “Inequality is Holding Back the Recovery
[https://opinionator.blogs.nytimes.com/2013/01/19/inequality-is-holding-back-the-recovery/],” New
York Times, January 19, 2013.
 	* ↩
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en6backlink] For
a discussion of how even the recent euphoria about U.S. growth is
vanishing, see C. P. Chandrasekhar and Jayati Ghosh, “Vanishing
Green Shoots and the Possibility of Another Crisis
[https://www.thehindubusinessline.com/opinion/columns/c-p-chandrasekhar/vanishing-green-shoots-and-the-possibility-of-another-crisis/article26773404.ece],” The
Hindu Business Line, April 8, 2019.
 	* ↩
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en7backlink] For
the role of such colonial transfers in sustaining the British balance
of payments and the long Victorian and Edwardian boom, see Utsa
Patnaik, “Revisiting the ‘Drain,’ or Transfers from India to
Britain in the Context of Global Diffusion of Capitalism,”
in Agrarian and Other Histories: Essays for Binay Bhushan Chaudhuri,
ed. Shubhra Chakrabarti and Utsa Patnaik (Delhi: Tulika, 2017),
 	* ↩
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en8backlink] Federal
Reserve Board of Saint Louis Economic Research, FRED, “Capacity
Utilization: Manufacturing,” February 2019 (updated March 27, 2019),
http://fred.stlouisfed.org [http://fred.stlouisfed.org].
 	* ↩
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en9backlink] This
issue is discussed by Charles P. Kindleberger in The World in
Depression, 1929–1939, 40th anniversary ed. (Oakland: University of
California Press, 2013).
 	* ↩
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en10backlink] Michał
Kalecki, “Political Aspects of Full Employment
[https://mronline.org/2010/05/22/political-aspects-of-full-employment/],” Political
Quarterly (1943), available at mronline.org.
 	* ↩
[https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/#en11backlink] Joseph
Schumpeter had seen Keynes’s The Economic Consequences of the
Peace as essentially advocating such state intervention in the new
situation. See his essay, “John Maynard Keynes (1883–1946),”
in Ten Great Economists (London: George Allen & Unwin, 1952).

_Utsa Patnaik is Professor Emerita at the Centre for Economic Studies
and Planning, Jawaharlal Nehru University, New Delhi. Her books
include Peasant Class Differentiation (1987), The Long
Transition (1999), and The Republic of Hunger and Other
Essays (2007). Prabhat Patnaik is Professor Emeritus at the Centre
for Economic Studies and Planning, Jawaharlal Nehru University, New
Delhi. His books include Accumulation and Stability Under
Capitalism (1997), The Value of Money(2009), and Re-envisioning


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