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The State of Capitalism: Economy, Society, and Hegemony
Thinking beyond pandemic capitalism
The health emergency that broke out in 2020 is a landmark event in the development of capitalism, confirming the underlying change signalled by the Great Crisis of 2007-9. The pandemic has catapulted the state to the centre of economic activity. However, a historic impasse is steadily becoming apparent at the core of the world economy
Productive accumulation is flaccid, as both profitability and labour productivity are weak. Financialisation has entered a new phase, as “shadow banking” grew relative to other banks but is entirely dependent on the state. The power of the state derives from command over fiat money and can certainly deliver enormous boosts to aggregate demand, but that is not enough to tackle the weakness of the productive sector.
The rise in inflation for the first time in forty years indicates the impasse. There is a transparent need for intervention on the supply side, directly challenging capitalist property rights. There is no evidence, however, that the ruling blocs in core countries would engage in such policies.
The pandemic crisis also brought to the fore fresh divisions of core and periphery across the world economy. Imperialism has assumed new forms, spurred by globally active financial capital and internationalised productive capital. A renewed contest for hegemony has emerged as US power declined. The economic challenge of China will unfold steadily in the years ahead, intensifying political tensions and military rivalries.
This book is the work of a research collective comprising authors from several parts of the world. It analyses these vital issues from the perspective of Marxist political economy and puts forth alternative anticapitalist proposals.
The health emergency that broke out in 2020 is a landmark event in the development of capitalism, confirming the underlying change signalled by the Great Crisis of 2007-9. The pandemic has catapulted the state to the centre of economic activity. However, a historic impasse is steadily becoming apparent at the core of the world economy
Productive accumulation is flaccid, as both profitability and labour productivity are weak. Financialisation has entered a new phase, as “shadow banking” grew relative to other banks but is entirely dependent on the state. The power of the state derives from command over fiat money and can certainly deliver enormous boosts to aggregate demand, but that is not enough to tackle the weakness of the productive sector.
The rise in inflation for the first time in forty years indicates the impasse. There is a transparent need for intervention on the supply side, directly challenging capitalist property rights. There is no evidence, however, that the ruling blocs in core countries would engage in such policies.
The pandemic crisis also brought to the fore fresh divisions of core and periphery across the world economy. Imperialism has assumed new forms, spurred by globally active financial capital and internationalised productive capital. A renewed contest for hegemony has emerged as US power declined. The economic challenge of China will unfold steadily in the years ahead, intensifying political tensions and military rivalries.
This book is the work of a research collective comprising authors from several parts of the world. It analyses these vital issues from the perspective of Marxist political economy and puts forth alternative anticapitalist proposals.
- GenresEconomics
385 pages, Kindle Edition
Published August 29, 2023
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134 people want to read
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Displaying 1 - 6 of 6 reviews
February 4, 2024
This book's biggest merit is to give a good summary of marxist analyses of the world economy in historical perspective, but up until the pandemic crisis. He has a strong focus on decaying US hegemony and the multipolar world we are finding ourselves in: the industrial rise of China, the military assertiveness of Russia. On the one hand, he keeps analysing the world from US hegemony, for example in monetary matters (MMT is imperialist) and in responses to the pandemic crises (considering the ability to alleviate the health and economic crisis). On the other hand, his vision of an imperialist world is a vision of an always moving core-periphery relation: capitalist competition gives rise to the hegemon, but also constantly threatens its position. The task of the #1 is to stay at the top, and the US is getting tired of fighting. I agree with Lapavitsas that we can make some parallels with the nineteenth century, when British hegemony was challenged by German and US industrial expansion. Let's hope this one doesn't end like the last cycle.
In addition, his chapter on the EU was great, as always. This time, he used a new approach to showcase German hegemony: "TARGET2 red ink". I didn't know about this, but apparently there's an internal system that balances the deficits between the national banks of the eurozone. If someone accumulates deficits from others (Germany), its national bank gets "black ink" on the asset side, and the deficit country gets "red ink" on its liabilities side. There are no political consequences attached to them, but it allows for an analysis of internal movement of money, and what would have happened if there was no common currency. It gives a strong tool to show German hegemony within the Eurozone, who since the 1990s has accumulated lots of "black ink" at the expense of Southern Europe. Great chapter overall.
Still, it's Lapavitsas. His strength is summarizing and overseeing, his weakness is generalizing and at times sloganesque conclusions. He'll always try to show that capitalism fucks people over, and that there's no prospect but utter despair. The only thing we can do is overthrow the monster. If he can make that point with a theoretical/empirical shortcut, he'll do just that. In that sense, the last chapter (the classic "what should the left do?") is also dissapointing: we should come together internationally and democratically and overthrow the damn system.
In addition, his chapter on the EU was great, as always. This time, he used a new approach to showcase German hegemony: "TARGET2 red ink". I didn't know about this, but apparently there's an internal system that balances the deficits between the national banks of the eurozone. If someone accumulates deficits from others (Germany), its national bank gets "black ink" on the asset side, and the deficit country gets "red ink" on its liabilities side. There are no political consequences attached to them, but it allows for an analysis of internal movement of money, and what would have happened if there was no common currency. It gives a strong tool to show German hegemony within the Eurozone, who since the 1990s has accumulated lots of "black ink" at the expense of Southern Europe. Great chapter overall.
Still, it's Lapavitsas. His strength is summarizing and overseeing, his weakness is generalizing and at times sloganesque conclusions. He'll always try to show that capitalism fucks people over, and that there's no prospect but utter despair. The only thing we can do is overthrow the monster. If he can make that point with a theoretical/empirical shortcut, he'll do just that. In that sense, the last chapter (the classic "what should the left do?") is also dissapointing: we should come together internationally and democratically and overthrow the damn system.
January 27, 2024
A supremely useful and up to the moment analysis of contemporary capitalism in the core of the world economy, and international dynamics of financialisation.
December 24, 2023
In the 15 years since the banking crisis hit in the late 2000s we’ve heard all sorts of predictions and lamentations that capitalism has reached its end point, delighted and terrified proclamations of the end of neo-liberalism, others asserting that it’s evidence of the correctness of Keynesianism, and more – and, yet, it persists. And yet it persists through the Pandemic Crisis, when again large scale state intervention, in some countries at least, helped protect the social relations maintained by and sustaining capitalism. This valuable exploration of contemporary capitalism weaves these two crises into a narrative, grounded in Marxist political economics, that helps make sense of the era, the crises’ inter-relation, the global dynamics they expose, and the prospects for change.
After some scene setting – a discussion of the range of state responses to the Covid-19 pandemic, with cross cutting lines that distinguish ‘core’ and ‘peripheral’ states (as the authors admit to the problematic character of those terms given states’ interwoven nature as an effect of imperialism), the range of pandemic responses (Zero-Covid, mitigate and inoculate, and so forth), and the key features of finance industries – there are two principal elements to the analysis. The first is a state-based exploration of the contemporary forms of capitalist accumulation, while the second shifts from this intra-state dynamic to the inter-state question of imperialist and global patterns of power and hegemony.
Throughout, the writing team does three things very well; first, they integrate an enormous set of data from existing analyses (there are extensive footnotes in many places); second, they present and explore their own evidence, analyses, and data interpretations from a similarly wide array of sources; and third, they maintain an impressively internationalist outlook and set of evidence bases. Crucially, however, many of their evidence sources are the voices and institutions of the very organisations they are exploring and critiquing, but they read those data through lenses provided by Marxist political economy: this makes for a powerful analysis.
Even so, it is quite a technical analysis (a polite way of say, it’s rather specialist) but also one that gets its audience – so the integrative components (exploring, analysing, and reporting existing research) fills a gap for those of us who can’t keep up with that literature – while also not assuming we have a working grasp of the political-economic categories they are drawing on. They’re also not afraid the draw out complexity and uncertainty. A significant aspect of the early analysis is to make clear that the current financialization of capitalism is not the same thing as the finance capitalism explored by early 20th century Marxist analysts. They also note that this financialization means that several of the key concepts of Marxist political economy need to be rethought in practice – the rate of profit (and the rate of exploitation) in finance markets for instance is hard to fit to models derived from production of (material or immaterial) goods.
The overall argument turns on their analysis of monetary power, which has two aspects for the case. The first aspect is the ability of states to create money (there is a strong emphasis on the abandonment of the gold standard, and the question of quantitative easing), while the second relationship of power here is that of global influence – that is to say, of the dominance of the US economy being integrally related to the US dollar as the global reserve money. The centrality of money-power seems convincing and compelling, although throughout the discussion of state accumulation, with its focus on the UK, USA, France, Germany, and Japan I couldn’t help but wonder what it might have done to consider even some of the BRICS states to the same extent. While the subsequent discussion of imperialist dynamics in the second half of the case does draw in some of those states (Brazil, India and China as well as Korea and Turkey), the question of the US dollar as global reserve currency seems to do some heavy lifting here. I’m not a specialist so in part feel the need to trust that these specialists have got it right, but at the same time my work as a (cultural) historian of imperialism and colonialism (with a reasonable grasp of Marxist political economy) means it’s not far from my patch, and it would have been good to have seen these questions anticipated. That said, China features very heavily in the analysis of global hegemony in the light of its perceived challenge to the USA, while the EU also features as a weak rival-in-alliance.
My bigger concern is the ‘so what’ factor, as in ‘so, what do we do about this?’. We’re promised some reflections on solutions. This, however, turns out to be eight pages at the end of the conclusion (16 pages in total) after 360 pages of analysis, amounting to little more than a call for an ideologically coherent, political, and politically economic centred, internationalist, intersectionalist alliance directed at structural change in the social relations of power grounded in economic relations. While I accept that it is difficult in such a sweeping, broad, international analysis to be too specific about a programme for struggle – the specificity of each struggle being grounded in the conditions of that struggle – the generality of this call seems like a missed opportunity. For instance, the US & UK have finance industries that place less emphasis on the actions and roles of banks than do France, Germany, and Japan, for instance, yet their economies are intensely interwoven – so what kinds of political programmes should movements in those countries be pursuing to respond to local conditions but provide mutual support? And that’s without considering the wider questions of global hegemony. Surely, this international group of specialist scholars sharing a conceptual struggle-oriented framework addressing these very issues could have begun to sketch some specifics of this work.
Despite this problem, the book is a valuable piece and welcome addition to my ‘political economy’ shelves. It’s a strong case and while clearly deeply grounded in rich data and theoretical complexity, it is also accessible – the authors and I suspect Verso’s editors have done very well in that front. It’s also a powerful case linking the financial crisis of 2008/9 to the pandemic-crisis on the early 2020s, showing not only that they are inter-related but that the character of the present condition is in part a consequence of the former. It is therefore an important analysis of the now, as well as useful primer on the potential for Marxist political economy in the current state of financialized capitalism – making it all the more worthwhile.
After some scene setting – a discussion of the range of state responses to the Covid-19 pandemic, with cross cutting lines that distinguish ‘core’ and ‘peripheral’ states (as the authors admit to the problematic character of those terms given states’ interwoven nature as an effect of imperialism), the range of pandemic responses (Zero-Covid, mitigate and inoculate, and so forth), and the key features of finance industries – there are two principal elements to the analysis. The first is a state-based exploration of the contemporary forms of capitalist accumulation, while the second shifts from this intra-state dynamic to the inter-state question of imperialist and global patterns of power and hegemony.
Throughout, the writing team does three things very well; first, they integrate an enormous set of data from existing analyses (there are extensive footnotes in many places); second, they present and explore their own evidence, analyses, and data interpretations from a similarly wide array of sources; and third, they maintain an impressively internationalist outlook and set of evidence bases. Crucially, however, many of their evidence sources are the voices and institutions of the very organisations they are exploring and critiquing, but they read those data through lenses provided by Marxist political economy: this makes for a powerful analysis.
Even so, it is quite a technical analysis (a polite way of say, it’s rather specialist) but also one that gets its audience – so the integrative components (exploring, analysing, and reporting existing research) fills a gap for those of us who can’t keep up with that literature – while also not assuming we have a working grasp of the political-economic categories they are drawing on. They’re also not afraid the draw out complexity and uncertainty. A significant aspect of the early analysis is to make clear that the current financialization of capitalism is not the same thing as the finance capitalism explored by early 20th century Marxist analysts. They also note that this financialization means that several of the key concepts of Marxist political economy need to be rethought in practice – the rate of profit (and the rate of exploitation) in finance markets for instance is hard to fit to models derived from production of (material or immaterial) goods.
The overall argument turns on their analysis of monetary power, which has two aspects for the case. The first aspect is the ability of states to create money (there is a strong emphasis on the abandonment of the gold standard, and the question of quantitative easing), while the second relationship of power here is that of global influence – that is to say, of the dominance of the US economy being integrally related to the US dollar as the global reserve money. The centrality of money-power seems convincing and compelling, although throughout the discussion of state accumulation, with its focus on the UK, USA, France, Germany, and Japan I couldn’t help but wonder what it might have done to consider even some of the BRICS states to the same extent. While the subsequent discussion of imperialist dynamics in the second half of the case does draw in some of those states (Brazil, India and China as well as Korea and Turkey), the question of the US dollar as global reserve currency seems to do some heavy lifting here. I’m not a specialist so in part feel the need to trust that these specialists have got it right, but at the same time my work as a (cultural) historian of imperialism and colonialism (with a reasonable grasp of Marxist political economy) means it’s not far from my patch, and it would have been good to have seen these questions anticipated. That said, China features very heavily in the analysis of global hegemony in the light of its perceived challenge to the USA, while the EU also features as a weak rival-in-alliance.
My bigger concern is the ‘so what’ factor, as in ‘so, what do we do about this?’. We’re promised some reflections on solutions. This, however, turns out to be eight pages at the end of the conclusion (16 pages in total) after 360 pages of analysis, amounting to little more than a call for an ideologically coherent, political, and politically economic centred, internationalist, intersectionalist alliance directed at structural change in the social relations of power grounded in economic relations. While I accept that it is difficult in such a sweeping, broad, international analysis to be too specific about a programme for struggle – the specificity of each struggle being grounded in the conditions of that struggle – the generality of this call seems like a missed opportunity. For instance, the US & UK have finance industries that place less emphasis on the actions and roles of banks than do France, Germany, and Japan, for instance, yet their economies are intensely interwoven – so what kinds of political programmes should movements in those countries be pursuing to respond to local conditions but provide mutual support? And that’s without considering the wider questions of global hegemony. Surely, this international group of specialist scholars sharing a conceptual struggle-oriented framework addressing these very issues could have begun to sketch some specifics of this work.
Despite this problem, the book is a valuable piece and welcome addition to my ‘political economy’ shelves. It’s a strong case and while clearly deeply grounded in rich data and theoretical complexity, it is also accessible – the authors and I suspect Verso’s editors have done very well in that front. It’s also a powerful case linking the financial crisis of 2008/9 to the pandemic-crisis on the early 2020s, showing not only that they are inter-related but that the character of the present condition is in part a consequence of the former. It is therefore an important analysis of the now, as well as useful primer on the potential for Marxist political economy in the current state of financialized capitalism – making it all the more worthwhile.
May 27, 2025
Could not be more thrilled to be finally marking this book as read. Absolutely do not recommend reading this book without an economics degree or an incredibly solid understanding of Marxist political economy— I read this book in a reading group over three months with five of my smartest friends and there were still parts where my understanding of this book was so bad that I had to remind myself of my other redeeming qualities, like the fact that I’m kind to my friends and can make a good pasta sauce. “The left has lost its way among the downtrodden, speaking in terms that mean little to its erstwhile adherents…above all, the left must leave behind abstruse jargon and talk the everyday language of the great majority of people about issues that concern them”. Brother……the call is coming from inside the house.
September 15, 2023
An oversimplified and overgeneralized mini history-of-sorts of the conquest of Capitalism and its control of the State, and how that has resulted in abject failure for the non-wealthy classes. This was quite dull reading, and the included graphs were pretty useless, or at least unnecessary. Anyone who is anti-capitalist (or anti-fascist, anti-US Republican Party, anti-#45, anti-White Christian Nationalism; they are all linked anyway) already knows most/all of the information in this book, and the authors "call to arms" (my term, not theirs) to upend the reign of the Capitalism-State is awfully weak and almost entirely lacking in specifics.
What this book probably means (or what I wanted it to say?): we need a full-scale, global revolution that topples the wealthy-ruling class and immediately discards Capitalism and Neoliberalism, as they have most assuredly failed nearly every human being alive today, and left the planet as near to uninhabitable for our species as it could be without the actual apocalypse. Capitalism is a scourge that cares not for humans or the planet, and unless we change course rapidly we are doomed. Fuck economic collapse, who cares if the planet is no longer livable for us anyway?!? The USofA is as close to re-electing #45 as #47 as it is to giving Biden (don't even get me started...) a 2nd term. The former will hasten Armageddon (a return to his home base...), the latter will also bring that ultimate end, albeit more slowly and with more empty promises and false hopes.
I can't see any reason to recommend this book, which is sad because I love the Verso imprint. But I am noticing they are running short of new ideas and concepts, and are becoming less radical, just more reactive, or worse, repetitive.
What this book probably means (or what I wanted it to say?): we need a full-scale, global revolution that topples the wealthy-ruling class and immediately discards Capitalism and Neoliberalism, as they have most assuredly failed nearly every human being alive today, and left the planet as near to uninhabitable for our species as it could be without the actual apocalypse. Capitalism is a scourge that cares not for humans or the planet, and unless we change course rapidly we are doomed. Fuck economic collapse, who cares if the planet is no longer livable for us anyway?!? The USofA is as close to re-electing #45 as #47 as it is to giving Biden (don't even get me started...) a 2nd term. The former will hasten Armageddon (a return to his home base...), the latter will also bring that ultimate end, albeit more slowly and with more empty promises and false hopes.
I can't see any reason to recommend this book, which is sad because I love the Verso imprint. But I am noticing they are running short of new ideas and concepts, and are becoming less radical, just more reactive, or worse, repetitive.
September 7, 2025
Absolutely fascinating Marxist analysis of the most contemporary world events (the book was published in 2023), particularly as they pertain to the continuing influence of the financial sector in shaping the malaise of global neo-liberal (neo-colonial) capitalism during and after the covid-19 pandemic. It was incredibly hard going at certain points for a reader who doesn't know finance concepts like the back of their hand (the discussion of EU target2 balances for example was absolutely impenetrable to me no matter how hard I tried to understand it), but it was worth sticking with nonetheless for the quality of insights a close reading gives you. No one I know of does Marxist analysis quite as penetrating as Costas Lapavitsas, it's fantastic.
Displaying 1 - 6 of 6 reviews