[Marxism] Re Changing class structure of the US; increased weight of middle class

robert montgomery ilyenkova at gmail.com
Mon Nov 7 15:52:12 MST 2005

Josh writes of Castells:
Cities become a symbiosis
between the university system, engineering firms, firms that manage
capital (banks, financial octopuses like CitiGroup and such),
managerial centers, more than centers of value production (Chicago as
a center of meat processing, Pittsburg a center of steel production,
etc).  The service economy is the proletarian corollary to this,
producing the urban quality of life, not value.  Value production goes
on in the peripheries of these information centers, in smaller towns,
rural areas, and then in the third world.  What do people think of
this analysis?  It's simplistic, but does it get at something, and
what are its implications?

This seems congruent with the "financialization" thesis which is
accepted by many marxists (I think), though with varying conclusions.
David Harvey, G. Arrighi, the late Andre Gunder Frank, and others,
including the liberal populist Kevin Phillips are strong proponents of
this view.  They argue that capital accumulation in places like the US
has ceased being rooted in expanded reproduction (M-C [production of
value:c+v+s]-M1; M1>M) and is now mostly a simplified expansion of
monetary values (M-M1) where actual production and circulation of
materialized value is extremely secondary, if not irrelevant. The
explosion of new speculative instruments like derivatives, options of
all sorts etc. and the concomitant importance of debt and its
continual recycling are seen as evidence that the connection between
profit from production, and the accumulation and circulation of
fictitious capital has been broken. The Harvey/Arrighi school argue
that this mode of capital accumulation leads to "accumulation by
dispossesion" by which they seem to mean the looting of material
values through things like the privatization of water in Africa.
Phillips, especially, sees the expansion of these new "middle class"
strata as typical of decaying empires, and shows interesting parallels
with the decline of Dutch power in the 17th Century and with Britain
in the post-WW1 period (see "Boiling Point" ch 8). For marxists the
implications of this theory are enormous. I don't want to say more on
this other than that I think the financialization thesis needs to be
discussed and debated by marxists. I hope people will argue both with
my rendering of the thesis, and with the thesis itself. How is it
possible to have world capitalism based essentially on the
appropriation of social surplus by fictitious capital, rather than on
the production of surplus value in production? Don't both proceed
together? etc. etc.
Bob M

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