I could kiss Oliver Letwin, if he weren't so physically, intellectually, and morally repellent.  Marxists could spend weeks, months and years trying to prove that the Tories, the party of the ruling class, are trying to restructure British capitalism in the interests of capital; that the extension of markets across the board is at least partly about improving the class power of employers; and that everything they say about trying to 'free' public sector workers from bureaucracy and central targets is so much cant when they actually mean to enslave them.  Save your breath.  Here's our Oliver:

'Providers' in this statement, as the newspapers have noticed, is synonymous with public sector workers.  Essentially, the idea is, through marketisation and competition, to introduce the usual discipline of the market - fear of losing one's livelihood - to drive up productivity and force down labour costs.  People will be working harder and receiving less for it.  In marxist terms, that's an absolute increase in the rate of exploitation.  That's their growth strategy for British capitalism. 

Letwin, of course, may calculate that this sort of provocation amid delicate negotiations with unions - it has been noticed - won't matter too much to the general public.  After all, if you want to sell markets to people, you address them as consumers rather than workers, talk about 'choice', better 'delivery', and persuade them that they will benefit from ratcheting up the rate of exploitation among fellow workers (even though, as users of trains, gas, water, PFI hospitals, etc., know very well, markets routinely fail consumers).  Even assuming that to be the case, he is still an incredibly stupid man and hence an asset for the Left.  After all, the government's strategy with the unions has been to separate the larger, more moderate unions from the smaller, militant ones.  Keeping them apart is absolutely essential to undermining the confidence and combativity of those workers who do want to fight.  So, to the former, the government offers some marginal and localised concessions, while seeking to marginalise the latter.  But in order to do so, it has to at least seem to be negotiating.  Every time Steve Hilton or Oliver Letwin or one of the coalition apparatchiks let slip what they're really about, this strategy is weakened.

From the New York Times: "The nation’s workers may be struggling, but American companies just had their best quarter ever. American businesses earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or noninflation-adjusted terms ... Corporate profits have been doing extremely well for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history. As a share of gross domestic product, corporate profits also have been increasing, and they now represent 11.2 percent of total output. ... This breakneck pace can be partly attributed to strong productivity growth — which means companies have been able to make more with less — as well as the fact that some of the profits of American companies come from abroad."

What the New York Times doesn't explain is that the struggles of the "nation's workers" bear a direct relationship to high corporate profits. Strong productivity growth here basically means an increase in the rate of exploitation. As the Daily Finance explains: "That productivity boost came as workers spent more hours working, and getting paid less to do it. Specifically, between the third quarter of 2009 and the same period on 2010, productivity was up 2.5% as output rose 4.1%, hours worked increased 1.6%, and unit labor costs fell 1.9%, according to the Bureau of Labor Statistics. The profits of U.S. corporations are growing much faster than their revenues. S&P's Howard Silverblatt estimated that corporate profits in 2010's third quarter would rise 18% from 2009, while sales would be up a mere 5.5%. "

Since domestic demand remains relatively weak in the US, despite some boost from the stimulus and despite some weak wages recovery, corporate investors are also using the cheap money made available by quantitative easing to invest in their overseas operations. And as the NYT acknowledges, much of the increase in profits is coming from abroad. Thus, US capital has used two key advantages to revive profitability. First, it has used its overwhelming strength - political, economic, institutional - over workers to extract more labour from a smaller workforce. The flip-side of high profits are more gruelling work, tighter work discipline, more people unemployed, lower wages, longer lines at the soup kitchens, and so on. Second, it has used its overwhelming international dominance, which we might call imperialism, to extract more value from emerging markets, which remain dependent on and subordinate to the US. The obverse of this increased yield is, of course, violent territorial struggle in Afghanistan and Iraq, as well as violent subversion in Honduras and Haiti.

These, aspects of an increasingly brutal, exploitative and repressive capitalist system, are among the reasons why Obamamania has bitten the dust. Obama's electoral coalition was built around the promise of amelioration, a better deal for workers and peace abroad, and neither has been delivered. Obama has been far more completely Wall Street's president than anyone expected. This also helps explain why the corporate media has felt it necessary to act as a mouthpiece and booster for a layer of corporate-funded middle class Poujadists. It is to pre-emptively colonise a political space that might otherwise be filled by the millions of working class Americans who are angry over wages, unemployment, the banks, repossessions, and the endless war. It is to drown out the rational concerns of more popular political constituencies with pageantry, noise and fury, irrational howling, and home-made bigotry. It is to stage the fight that capital wants to see - between ostensibly liberal, cosmopolitan, internationally-oriented, capital-intensive industry, and a parochial, nationalist, bigoted populace, often small business owners working in labour-intensive industries. And the viewer's role is to pick a side, and forget that neither represents their interests.

So Cameron relaunched his "Big Society" propaganda campaign today. The Prime Minister did not so much spell out his proposed changes as semaphore them with a series of nauseating platitudes. We are told, for instance, that he wants "communities with oomph", sounding for all the world as if he's a fucking daytime television motivational guru. He also favours widespread "voluntarism" though sadly not so much in the metaphysical sense as in the sense of people doing for free what public sector workers used to do for a wage. And, of course, he has set his canon against "centralised bureaucracy" in the public services. Eric Pickles MP suggests that the basic aim of the "Big Society" is to "get more for less", a telling turn of phrase that I will allow you to parse for yourselves - but only after you've juxtaposed it with David Cameron's claim that it is "not about trying to save money".

The "Big Society" is an emetic name for an emetic project. It is, above all, a class project, a war with labour over the share of the social product. The contest is being launched on multiple fronts simultaneously. On the one hand, there is the project of accumulation-by-dispossession, an attempt to raid the public sector in a very audacious way and turn its assets into highly profitable enterprises at just the point when most sectors of industry are showing very lacklustre returns, and when companies are reluctant to invest elsewhere. On the other, there is the very naked effort to increase the rate of exploitation, and restore profitability in that fashion, which involves weakening the bargaining power of labour through legislative means but also by weakening the still sizeable public sector unions. Thirdly, there is an attempt to still further reverse the political gains made by the working class, rolling back democracy within the state under the rubric of 'empowerment' and similar new-age managerial bollocks. This is not just a project of the capitalist class with respect to the working class.

It also a programme for the continued hegemony of the financial fraction within the ruling class. Whatever regulations and stabilizing measures emerge to (try to) prevent the financial sector from completely sinking the capitalist system with its next crisis, there is every sign that the ConDems want to maintain the authority of the City as the main driver of growth and consumption. The 'free schools' and 'GP-led' NHS trusts will provide the financiers with an excellent source of raw material for further financial 'innovation', since these costly entities will have to borrow private capital, which borrowing can be repeatedly refinanced, and the debt itself sliced, diced, tranched and repackaged into bundles of debt parcels that can be speculated on - a blue chip investment since the schools and hospitals, though administered for private profit, will be owned by the public and finally maintained at public expense. The construction, manufacturing and service industries will also make a mint out of these, just as their profit margins will continue to be bumped up by their financial investments.

There are grave risks associated with this "Big Society" project, about which more in a later post. Suffice to say, however: the capitalist class is not stupid, and neither are the Tories. They are not merely engaged in an unintelligent or rigidly doctrinal ploy. This is unlikely to restore dynamism to capitalist industry, but there will be rewards from successfully pulling off this project even if it doesn't restore growth, and there is little else coming down the pipeline. The ruling class is not stupid - it is desperate.

We live in interesting times. The hawkish governor of the Bank of England is railing against the City, and the government's failure to fundamentally reform the financial system. He is railing against the debt/speculation model of the economy that has been in place for decades, and which both Labour and the Tories have sought to conserve. He notes that taxpayer money is now being used to fuel another speculation bubble, and that economic outcomes for millions of people depend on the activities of a small, powerful group of institutions whose profits depend on risk and instability. True, his agenda is a conservative one that fits neatly into the coming Tory administration's theme of an 'age of austerity'. Yet, it does express more than that, coming as it does amid some dubious talk of 'green shoots'. For example, last Wednesday's Evening Standard exulted, in response to a rise in share prices, the value of Sterling, and in City bonuses, that "Britain bounces back". That sort of short-sighted cheerleading already looks stupid. Bear in mind that industrial production in the advanced capitalist economies contracted at least as rapidly in 2008-9 as it did in 1929-30. The fact that the states governing these economies are committed to continuing with stimulus plans for the foreseeable future is indicative of how deep they think this crisis can go. King's warning shot suggests that he knows how tentative any recovery signs are. Meanwhile, other forces on the right are drawing some novel conclusions. Niall Ferguson, a neoconservative known for his hostility to marxism, has even been bigging up Bukharin and Lenin's critique of state monopoly capitalism, albeit in the name of some chimerical 'free market'.

First principles
These are not the first examples of ideological disorientation that I have had cause to comment on. Neoliberalism has not been over-ridden as a growth strategy yet, but its intellectual sustenance is increasingly threadbare. Perhaps it is time to go back to marxian first principles. At least, I'd like to do that, as much as to help me process the ideas as anything else. What does marxism tell us about capitalist crisis? Capital enjoins us to start with the things being bought and sold, commodities, and asks us to consider what is novel about them. Any good that you possess, be it a DVD or your ability to perform mental and physical labour, can become a commodity if you just enter it into circulation as a good to be exchanged. You put the DVD on eBay, and advertise your availability and CV on Totaljobs or whatever, and both goods are instantly commodities. And if you do decide to exchange a good, you want to exchange it with something of equivalent value. Marx puts it thus: "To the owner of a commodity, every other commodity is, in regard to his own, a particular equivalent, and consequently his own commodity is the universal equivalent for all the others." If you sell your DVD for a fiver, you figure that the goods which could be bought with that fiver are in some sense equivalent to the good you've just sold.

But this value is a mysterious kind of substance. It isn't the subjective value that a good might have for an individual, as that can hardly be the basis for an exchange of equivalents. It isn't 'use value', in other words. There has to be another 'exchange value' which all commodities have, and which render them commensurable with one another. I was told by teachers that the value of goods traded on the market was determined by supply and demand: a healthy supply and poor demand would reduce prices, and vice versa. Yet, supply and demand merely equilibriates the system: it accounts for price fluctuations but not for the underlying value that they fluctuate around. If you assume perfectly equivalent supply and demand, you still have to account for why the price settles at a particular rate and not another rate. For Marx, as for the classical political economy that he was trying to reformulate, the source of value is in labour. The exchange value of a commodity is determined by the "average amount of socially necessary labour" embodied in it. That is, if a coat is of equal value to a mobile phone, this reflects the total amount of labour that has gone into making each good. A good can be very useful to us without having any exchange-value. Air is obviously a use-value of supreme importance, and it would be difficult to support a mortgage and an average-sized family without it. But to make it saleable, you would have to - in Lockean terms - mix your labour with it, or buy someone else's labour to mix with it. You could, say, make 'air in a can' with certain unique properties not found in nature, thereby producing it in such a way that it would both have an exchange value, and a use value for the potential market that would enable one to realise that exchange value.

It is worth pointing out, en passant, that even at its most abstract, Capital is always historicising. So, for example, Marx traces these conceptual operations - use value, and exchange value - to the historical origins of markets themselves out of barter between different communities. As the productive capacity of each community develops, "the need for foreign objects of utility gradually establishes itself. The constant repetition of exchange makes it a normal social act. In the course of time, therefore, some portion at least of the products of labour must be produced with a special view to exchange. From that moment the distinction becomes firmly established between the utility of an object for the purposes of consumption, and its utility for the purposes of exchange. Its use-value becomes distinguished from its exchange-value."

The money fawcet
If, for the sake of this argument, we accept this account of value, then the mystery only deepens. For we are constantly exhorted to believe in another account of value which clashes with it: the 'golden egg' theory. Save your money, you are told, or invest it, and it will just magically increase in value. Buy a private pension scheme for a fraction of your weekly earnings, and when you retire you can have a lavish, hedonistic lifestyle that would make Jan Moir choke with fury. Better yet, save enough money to use as start-up capital, become a capitalist and one can, with sufficient nous, acquire enough dough to get Lord Mandelson's telephone number. Something very nebulous and mystical about the process of abstaining from immediate consumption, and entering this money into circulation as money-capital, causes it to produce a 'surplus value', above and beyond what was originally invested. In neoclassical accounts, this added value is a reward for abstinence. That might serve as a moral-religious justification for profit, but unless we just assume that God, or Providence, or the Geist actually intervened to produce this bonus, it doesn't actually work as an analysis. The added value must come from somewhere, and we have already accepted that the source of value is labour.

Yet, we have also said that exchanges in the market take place as an exchange between equivalents. If that's true, no one should end up with more value than they started with. We can't have it both ways. So, if a capitalist employs labour, he buys a person's labour power for eight hours a day for precisely its exchange value (setting aside odd examples of de facto slavery, partially voluntary wage systems involving tips, etc.), no more and no less. But what is the exchange value of labour power? On the basis of what we have said, it must be the amount of labour required to reproduce it, ie the socially necessary labour embodied in that combination of goods and services that will enable a worker to return to work the next day and perform her duties in a normal way. So, where does this surplus value come from? How does one extract value from the consumption of a commodity?

Marx's answer, of course, is that labour is a unique kind of commodity in that it has the capacity to produce more value than it is actually worth on the market. You know how that goes. If you're employed in medium-sized service sector company that supplies goods, say market research, to other companies, they typically include the cost of your labour in the bill. If you ever see this bill, and the breakdown, you're likely to find that the cost of your labour is substantially higher than your wages. Merely as an anecdotal example, in a firm I worked for some years ago I discovered that when I was seconded to a sister organisation for a week or so, they charged that sister organisation £40 an hour for my services. I wasn't being paid £40 an hour, though I was being paid the correct market rate for my labour power (which was less than £10 an hour). So, there was a gap between the exchange value of my labour power and the value produced by my labour.

Class struggle, and the composition of capital
This distinction between labour-power, the "aggregate of those mental and physical capabilities existing in a human being", and labour, which is the exercise of those capacities, is clear enough. It is the former which the capitalist purchases, and the latter which produces his surplus value. That is the exploitative basis of the labour-capital relationship, the main axis of class relations in a capitalist society, and of course the basis for constant struggle. This struggle isn't just collective, in the sense of trade union bargaining over wages, or left-wing political struggle for reform or revolution. It is more often than not individual, in the sense of cutting off work early, taking long breaks, arriving late, throwing sickies, working slow, wasting time on the internet, etc. Parenthetically, the latter comes with a certain kind of shifty, guilt-ridden disavowal. I recall at a previous workplace, where individualism and competitiveness predominated, if someone was caught skiving by the boss they would always try to rationalise it to the rest of us. They either didn't understand that everyone but the most deluded and dedicated workhorse was doing exactly the same things, or they maintained the pretence of being part of a 'team' because they were careerists. Anyway, the basis of surplus value and thus of profits is labour. The largely notional values that circulate in the stock market, are all derivative of values produced by labour.

Yet, there's another problem right away. Capitalists wouldn't be capitalists if they didn't want to augment that value as much as possible. They operate in a competitive system, and they have to invest some of their profits in new means of increasing their surplus value throughout each cycle of production. They can find ways to make the workers go faster, labour harder, and so on, though always at the risk that some of them might get truculent. Here, another distinction is of use: between constant capital (machines, equipment etc used in the production process) and variable capital, which is the human input. If investment in a labour-saving device will enable a capitalist to produce more goods and vie for a greater market share, while expending less on that variable capital (labour power), then this is the sensible thing to do. This drives technological innovation, though it also drives job losses - eg, while American commentators have been given to blaming job cuts on international competition and outsourcing to China and Mexico, the major source of job losses in recent years has been downsizing by American companies. Yet, if every capitalist acts in this way, as it seems to be sensible for them to do, then the aggregate amount of socially necessary labour embodied in the goods they produce is depressed, thus depressing their exchange value. This means that there will be a tendency for capitalists to find it increasingly difficult to realise their original investment plus surplus. In the long term, profits are likely to decline as the ratio of constant to variable capital (which Marx calls "the organic composition of capital") increases. This can be offset by various factors. Among these are the opening up of new avenues for investment and thus new deployment for labour, and financialisation, which can equilibriate the system by redistributing investment and supporting consumption. Financial innovation also opens up new investment opportunities, with speculation on future profits, speculation on that speculation, the sale of debt, speculation on the profits from the sale of debt, speculation on that speculation, etc. Yet, if these countervailing tendencies prove insufficient to offset the overall tendency of the rate of profit to fall, then investment will decrease, employment will fall, consumption of all goods will decline, and the economy will cease to grow. Without growth, capitalism is in crisis. The only way to restore growth is to destroy capital - through war or protracted depression - and resume the whole process of accumulation.

Destruction of capital
So, here we are in this disastrous consummation of neoliberalism, which itself was negotiated and imposed as a solution to a crisis of profitability that emerged in the 1970s. Profitability throughout the neoliberal era has been sustained by repressing real wages (in the leading industrial economy, they didn't rise in real terms for thirty years), breaking down the bargaining power of labour, increasing the crude rate of exploitation (longer working hours, productivity deals, etc.), and financialisation. Lower wages meant consumption had to be supported through debt, and financialisation meant that investment was increasingly dependent on Wall Street. That debt/speculation arrangement is what has just collapsed. According to Andrew Kliman (paper with detailed empirical evidence here [pdf], some further arguments here), the underlying problem that arose in the 1970s was not resolved. Insufficient capital was destroyed in the recessions of the 1970s and 1980s, in contrast to the immense destruction of the Depression and WWII which resulted in the prolonged post-war boom. In that sense, the current crisis was merely deferred for a generation.

Kliman is interesting on the theory of crisis for a whole number of reasons, but mainly because he is one of the few economists to defend the labour theory of value in its marxian variant. I said earlier that, for the sake of argument, we would accept that Marx's theory of value was correct and proceed from there. One outstanding problem with the theory, though, has always been the 'transformation problem'. How do we get from exchange values, which we don't see on a daily basis, to prices, which we do? This is a crucial question. Bear in mind that the account of crisis that I have just sketched, with a pained and slightly comical expression on my face, depends on the idea that the prices of the goods sold on the market will not be sufficient to recoup the original investment, as the 'organic composition of capital' rises. To establish this, we need an account of how exchange values become prices. Many economists argue that no function can be established that will transform exchange values into prices. If that is the case, then Marx's crisis theory is presented with a serious problem. Prices may be decoupled from values in such a way as to render the latter a merely metaphysical construct with no relation to the real economy.

Marx's answer was presented in Capital Volume III, chapter 9. In it, he dealt with an issue arising from his previous analysis: if the organic rate of capital differs from industry to industry, the profit rates should vary considerably Yet, the observable tendency is for profits to equalise across economies. Marx argues that this is because investment flows between capital sectors to the most profitable areas - thus increasing the amont of goods produced, reducing prices, and lowering the overall profit rate - and away from the less profitable areas - thus decreasing the amounts of goods produced, raising prices and profits. While surplus value is redistributed through market transactions and realised in different ways, a 'general rate of profit' is formed. Thus, capitalists determine the price of their goods by looking at their input costs and adding a mark-up based on the general rate of profit obtained in that economy. In aggregate, then, the total price of commodities produced will equal their total value; the total profits will equal the total amount of surplus value produced. Thus, a wholistic view of the economy gives us the basis for transforming exchange values into prices. This account has been subject to numerous criticisms, mainly on the grounds that Marx inconsistently applies the transformation, failing to transform the values of inputs (constant and variable capital) into prices. Kliman defends Marx's account against these charges, though, arguing for what he maintains is an internally consistent picture of Capital that also conserves the argument concerning profit rates.

I raise all that, aware that Kliman's account remains controversial. Resolving such issues is far from my competence, but it's worth being acquainted with these arguments because if we are going to account for this 'age of austerity' that we face (actually an age of naked class war in which the rich are trying to place the burden of this crisis on us), we have to develop a consistent and viable theory of capitalist crisis. Despite the aporiae of marxian political economy, no other competing theory has come close to accounting for the empirical evidence of the crisis-ridden nature of capitalism.

Consider this. There is a staggering amount of spare capacity in the economy. Existing productive resources lie unused, while social needs are unmet, because there is no profitable means by which such resources might be used. Companies are not investing, and are not hiring. The banks are still not lending, preferring to hoard funds against future shocks, because their managers do not believe there are sufficient profitable investment opportunities in the economy. This situation is actually absurd. We have, collectively, all the means we require to house, feed, educate and employ the population, but we may not dispose of those means because there is no profit in doing so.

The approach of governments in response to this has first been to defend the financial sector at all costs - or rather at the cost of a trillion dollars in bailouts and stimulus, and $5 trillion in quantitative easing programmes. This has been branded 'socialism', but it is a staple of neoliberal ideology that the banking system is so central to the system's ability to reproduce itself that the state must spare no means in protecting it. It is no surprise either - the financial sector has been the single biggest source of corporate profits in both the US and UK economies in recent years. In 2006, Wall Street accounted for 40% of all corporate profits in the US economy. Obama has therefore faithfully cleaved to neoliberal doctrine, not just with TARP and its sequels, but by orchestrating a system of lending to the banks that actually results in the additional expropriation of the treasury to the tune of $33bn per year. The result is a massive transfer of wealth from the majority to the major owners of shares and assets.

The left-Keynesian solution to such absurdities is to socialise that spare capacity, use deficit-financing to fund jobs, boost incomes and stimulate demand, and boost the bargaining power of labour so that consumption is supported by reasonable wages rather than debt - all of which would be a good start. However, to the extent that governments have engaged in job creation, income-boosting and stimulus, they have been timid and reverential as regards existing property arrangements. Even moderate moves to cap bonuses are being resisted by the UK government at G20, and they have sternly chastised the FSA head Adair Turner for calling the banks bloated and socially useless, and advocating a Tobin Tax. (Bear in mind that Turner is a former head of the CBI, not a radical reformer). This refusal to socialise assets and make meaningful efforts to redistribute wealth is one reason why employment continues to fall, and why demand remains weak - and this is in turn a large part of the reason for Nouriel Roubini's cheerlessness as regards the 'recovery'. The effects of the stimulus will exhaust themselves by next year at this rate, but private sector demand is unlikely to have recovered by that point.

Another reason for cheerlessness is what David Harvey has called the "capital surplus absorption problem". In the best of times, he has pointed out, the system is always going to come up against limits to its ability to find profitable investment opportunities for trillions of dollars - he pointed out that about $1.5tn of new investments need to be found every year just to maintain the average growth rate of approx. 3%. A healthy growth rate has to be maintained because otherwise capitalism isn't doing what it's supposed to do. It is an inherently expansionist system, and if it isn't expanding that means that capitalists aren't competing for market share, aren't investing, and aren't obeying the basic imperative of capital accumulation: they aren't being capitalists, in other words. Finding such investment opportunities becomes more and more of a daunting prospect, though - notwithstanding the ecological catastrophe that awaits us if we can't find a new paradigm of economic well-being, the fact is that the total sum of new investment required rises each year, and by 2029, the sum needed will be double what it is now. Capital's ability to overcome these limits depends upon usurious capital, or what would now be called finance capital. However, one result of financialisation is a long-term problem of surplus liquidity: this is when the banking system is so loaded with money that it will throw dough at any project that a capitalist can dream up. This is what is usually referred to as 'venture capitalism'. New financial devices of slicing and tranching debts and assets have to be invented. That's called innovation. New bubbles emerge, whether in the dot.conomy or in the housing market. That's called a bull market. This is usually resolved, temporarily, through a financial crash. In 2001, the system lost $7tn in stock market value. Last year, $55tn of asset values were wiped out, which is equivalent to the total GDP for the whole planet - one year's work by several billion people, completely obliterated. (You know that feeling when you build a tower out of playing cards, and just as you add the last storey the whole thing collapses? Well, this is 55 trillion times worse.) By means of such mass destruction, the system reboots itself, but the basic problem of finding profitable avenues for speculation etc. remains.

So, this is the dilemma that capital presents us with. There is spare capacity, there is abundant labour, and there is money ready to enter into circulation as capital. And there are real, pressing social needs that these resources could theoretically be put to work to meet. But there are few profitable investment opportunities in any of that. Furthermore, unless a key source of our current miserable condition is renewed and protected (the financial system) there will not even be enough profit in the system to maintain below-par growth rates. One way out of this is what Harvey has termed 'accumulation by dispossession' (see The New Imperialism, Oxford University Press, 2003, pp 152-169 for detail). This is an elaboration on Marx's account of the 'primitive accumulation of capital', which referred to a violent process of expropriation and enclosure that was necessary to establish capitalist property relations between a new capitalist owning class, and a new propertyless (largely rural) proletariat. Harvey maintains, following Luxemburg, that such a manner of accumulation continues to be central today. Capitalism must always "have something 'outside of itself'", as Harvey says (p 140), in order to stabilise itself. This exterior can take the form of the public sector, the commons, the hitherto uncommodified, wherever it exists.

The enclosure of certain public assets is obviously on the agenda, and a transfer of public wealth is already occurring de facto, as indicated above. Social Security is certainly a prized item for finance capital, and Obama might have more success in delivering that to private capital than in delivering meaningful healthcare reform. However, the real opportunities for such divestment may lie overseas. The lack of domestic investment opportunity is fuels authoritarian imperialism and is arguably what - more than anything else - drove the adventurism and extremism of the Bush era. If US capitalism cannot be successfully reproduced and expanded on the basis of current relations, then a new wave of violent expansionism - perhaps smarter under Obama, but still very brutal - is a realistic scenario.