Concerns about inflation are epistemically linked to the expansion of American capitalism because confidence in the dollar

PB/DH: One of the most important elements of your book, and your theorization of capitalism more generally, is the central role that you accord to working class struggles in shaping/resisting capitalism. Can you elaborate on some of the ways that working class agency, struggles and institutions (or the lack thereof) have been fundamental in the production of global capitalism? SG: The role of the American state in the making of global capitalism was conditional on containing the American working class as a social force. This was clear after the Second World War when the militancy of American labour was channeled into supporting economic growth and individual consumption as opposed to class conflict over democratizing the workplace and investment. It was also central to the crisis of the 1970s, which was about the negative impact of working class militancy in the context of relatively full employment on both profits and, by way of inflation, confidence in the dollar (i.e. the material and financial base of the empire). In the present crisis, it has, ironically, been the very weakness of the working class – its financial fragility – that has played a role in the financial collapse. Looking ahead, we have argued that the collapse of capitalism will not come from a mechanical law of falling profit rates, interimperial rivalry, splits between financial and industrial fractions of capital, but from contradictions and social conflicts within states. And that takes us back to the creative invention of new forms of working class organization and struggles that address the transformation of national states to the end of democratizing all aspects of society, above all property relations. PB/DH: In contrast to many other theorists of the global economy who understand a renewed American imperialism as accompanied by a decline in the strength of US economic power and dynamism you argue that it has actually been the immense power of both the American state and American capitalism that has made global capitalism possible. Why is this argument analytically important for understanding contemporary capitalism and politically relevant for developing a renewed socialist politics? SG: Differences in the meaning of statistics are common among researchers but the more fundamental issue here is that it is mistaken to focus on national statistics absent a framework that include their international, and in the case of the US, their imperial, context. Consider for example the fact that the US share of capitalist industrial production fell from close to 50% in the post-war period to under 25% by the early 1970s. To argue that this is an indicator of decline misses the fact that the spread of capitalism was central to the American project; the spread of capitalism was a condition for expanding opportunities for American capital. This dispersion of industrial capital is therefore a measure of American success, not failure. Similarly, to focus on US trade imbalances (a constant over the past three decades) as a sign of competitive weakness ignores the fact that the sales of American MNCs abroad – which don’t show up in such statistics – are four times as high as exports from the US. Moreover, US exports have themselves generally done very well (lagging only Germany and China) and the fact that the US can continue to import more than it exports over a long period of time reflects the role of the US dollar and the ability of the US to access and consume a disproportionate share of the value produced by global labour. A final point relates to the “hollowing out” of the American economy. As much as workers experience the reality of lost industrial jobs, from the perspective of capital this is better understood as restructuring: the restructuring of the workplace, introduction of radical new technologies, shifting relations to suppliers, the geographical dispersion and relocation of industry, the move to higher tech production and new services above all business services like engineering, accounting, legal, consultancy and of course finance. That is, such restructuring has placed American capital at the forefront of the “commanding heights” of the international economy. The political significance of all this is a matter of soberly facing up to what we confront: a long-term process of building new capacities that can match a powerful and dynamic, if also destructive, social system.