No More Confederate Nostalgia in NOLA

Darryl Barthe


For the last few days, armed men in New Orleans have been protesting the removal of monuments to a failed, White Supremacist, republic. The workers tasked with carrying out the removal of Confederate monuments in New Orleans are working in flak jackets and with masks to obscure their identities since threats of violence have surrounded the plan to dismantle statues of Confederate President Jefferson Davis, and Generals Robert E. Lee and Pierre Beauregard. Many of the “protestors” at these monuments are not from New Orleans but have traveled from elsewhere in the South in order to express their disapproval of the City Council of New Orleans’ decision to remove monuments to men who raised armies against their own country in order to defend slavery.

It would be easy to attribute this latest episode of white racial outrage to the rising tide of “populism” surrounding the ascent of Donald Trump to the Presidency. Yet, the monument to the Battle of Liberty Place, in particular, had been the cause of controversy in 1989, 1993, and 2004. White Supremacy and racism wrapped in a veil of “heritage” is not new for Louisiana.

It would be even easier to connect the liberal insistence on removing these monuments to the Charleston Church Massacre. In June of 2015, Dylann Roof murdered nine African Americans at a prayer meeting at Emanuel African Methodist Episcopal Church because he believed black people “rape (white) women and are taking over our country.” Roof wrapped himself in symbols of White Nationalism for pictures he posted of himself online before he went on his rampage and so, of course, liberals concluded that these symbols were problematic and, to be fair, these symbols are problematic. However, what is more problematic is that the United States has existed as a White Nationalist Republic for much longer than it has existed as a, nominally, representative democracy where all citizens enjoy equal protection under the law.

The American South, and specifically the Confederate States, lost a war that they fought in order to preserve slavery. That same war that the Northern States won was a war to preserve the Union, not to abolish slavery in the South. After the Civil War, there was a mad rush to reconciliation that resulted in the reinstitution of “White Rule” in the Southern States through a regime of racial terror. The Battle of Liberty Place was one episode of racial terror and violence, inflicted on New Orleans by White Supremacist terrorists, and was fought between the Metropolitan Police Force and the White League, a White Supremacist paramilitary organization comprised mostly of Confederate veterans that served as a street army for white conservative politicians in New Orleans.

The Monument to the Battle of Liberty Place is a monument to Louisiana’s “redemption” and the reinstitution of the old, antebellum caste order following the period of Reconstruction, when people of color in the South enjoyed the briefest semblance of the rights of citizenship guaranteed by the Constitution. Redemption of the South for White Rule meant the dispossession and disenfranchisement of non-white people. It also entailed a rearticulation of slavery through the criminalization of black life. Indeed, the legacy of that political program persists today in the form of a mass incarceration state that has extended the life of that “peculiar institution” of American slavery into the 21st century. And Louisiana, in particular, stands out as the state with the highest rates of incarceration in a country that incarcerates more people than any other in history. [1]

To be certain, that is the “history” and the “heritage” that is currently being reified and dignified through the demonstrations of armed men flying the Confederate battle flag (“the Stars and Bars”), in New Orleans tonight. They hide their threats behind a fig leaf of free speech, but the very history they are celebrating is a history of treason and lawlessness. They are a modern day White League (replete with token people of color, desperate for white approval) hinting at a willingness to resort to violence should anyone -even the elected government of the city of New Orleans-dare to abandon the trappings of a failed rebellion perpetrated by their ancestors, men who were wicked and ignoble, who betrayed their country and who fought and killed and died to preserve their right to buy, sell, rape and murder black people.

Jefferson Davis, Robert E. Lee and Pierre Beauregard were all men willing to throw in their lot with a slave regime and do not deserve to be commemorated for that decision. To pretend as if these men deserve to be lauded for leading men into the jaws of oblivion, in defense of an evil regime ruled by men whose position was “thoroughly identified with the institution of slavery” is absurd, and it is long past the time that the people of New Orleans recognized the absurdity of it and put an end to it. [2] None of these men deserves to be elevated on a pedestal, and the question of celebrating the history of the Civil War is moot: the South remembers the heroes of the Civil War every 4th of July when they celebrate the birth of the Union.

Mayor Mitch Landrieu will face waves of criticism for his decision to remove these monuments. Those criticisms don’t matter though, and Landrieu should not waste time arguing with his detractors in this matter. The fact that the men tasked with dismantling these memorials must hide their identities and conduct their work wearing Kevlar vests is a testament to the character of the people who oppose Landrieu’s efforts in this. Those people deserve no reasoned consideration at all. Mitch Landrieu, the first white mayor of New Orleans since the Civil Rights era came to an end (the last white mayor was his father), was the person who had to get this done, and he did.

[1] “The peculiar institution” was the way that Kenneth Stampp described the American slave system in his book The Peculiar Institution: Slavery in the Antebellum South (New York: A.P. Knopf, 1969).

[2] See Civil War Trust “A Declaration of the Immediate Causes which Induce and Justify the Secession of the State of Mississippi from the Federal Union,” civilwar.org May 5, 2017)

Anarchism, Paganism, and Resistance: An Interview with Rhyd Wildermuth

Brenan Daniels


Below is a recent interview I had with Rhyd Wildermuth, the editor of the website Gods & Radicals, where we discuss the origins of the organization, paganism, and religion in anarchism.

What led to the creation and found of Gods and Radicals? How did the entire group get together?

Gods & Radicals was started by myself and my friend Alley Valkyrie two years ago. We’re both anarchists, the self-educated ‘street-variety’ as it were, living much of our lives working with homeless and other mostly-invisible victims of capitalism. And we also talked to other mostly-invisible things, like trees and dead people and land spirits and gods. So we were the self-educated street-variety of Pagans, too.

For us, our anti-capitalism and our Paganism seem to flow into each other seamlessly. Our desire to protect the natural world and our desire to protect the vulnerable were both rooted in the same soil. And we knew lots of other Pagans who were also anarchists, and lots of other anarchists who were also Pagans, but noticed that few were ever talking about what seemed pretty self-evident to all us. Because of the overwhelming response we got after a presentation together at a Pagan conference in California, we realized there was massive desire to talk more about this. So we started the site, named it after the presentation we gave, and put out a call for writers, and we got flooded pretty quickly with offers to help. It was pretty amazing.
Tell us about the journal A Beautiful Resistance. What led to its founding and what is the goal of the journal?

Gods & Radicals is both a website and a non-profit publisher, and A Beautiful Resistance is one of our publications. The idea behind the name is pretty simple: we tend to forget what we’re resisting for in the midst of all thing things we’re resisting against. Resistance can be ugly, exhausting, full of sorrow and misery and pain. It can also be beautiful, and should be, because we’re not just struggling against capitalism, against patriarchy, against racism, and against authority. Instead, we’re resisting for something, for ideas and for people and for ways of being that are beautiful.

Also, we wanted to challenge an unchallenged idea in both anarchist and Pagan publishing: we wanted to pay all our writers, to re-establish writing and art as labor that must be compensated. With A Beautiful Resistance and our other publications, we split all the revenue after costs 50% with all the contributors, with the other half going back into the organization to start new publishing projects. We’ve been pretty successful so far on this.
How did you personally come to paganism and what exactly is paganism as it doesn’t seem to be well understood in the general culture?

I can’t and won’t define Paganism for everyone, but I’ll happily tell you how I define it for myself.

Paganism is the moment I lose my words at the sight of wildflowers breaking through sidewalk cracks in the poor areas of a city; the resurgence of the wild into the disciplined misery of the oppressed. It’s the body that doesn’t fit into the machine, the dream of buried rivers and streams under pavement. It’s the tears I shed and the rage I feel when I see a river poisoned by an oil spill or see a mountain blown to bits to get at the coal underneath.

For me, it’s all about relation to not just the human-world but the other-than-human world. The mountain that gets blown apart so industrialized capitalism can grind on, the river that gets poisoned so people can have cars-I’m in relationship with them. Just like when a trans friend is harassed or a Muslim neighbor is terrorized, I cannot stand by and accept that violence, because we are related, we relate to each other, and our existence is all bound up together.

I’ve always been like this, I think, but I didn’t always identify the way I relate with the world as “Pagan.” Animism and witchcraft also describe it just as well. The words matter less to me than the worlds of meaning they attempt to describe.
Many anarchists reject any religion, especially organized religion. How do you square your anarchist political beliefs with your paganism?

I’ve always wanted to answer this question. More often than not, the question I am asked is how I square my pagan beliefs with generally atheistic anarchist political theory.

First off, I-and Gods & Radicals-strongly rejects clericalism. Anyone who sets themselves up as a mediator between humans and the world is trying to control people. In fact, most of our political systems derive from earlier religious-authority forms, evolving from priestly-control of society to king- or politician-control with the advent of monotheism. What both secular Liberal Democracy and theocratic empires have in common is authority: that others (priests, kings, politicians, bosses) can and do have the authority to define the world for you. We reject that in all its forms.

Traditionally, atheist anarchism and Marxism make the mistake of defining non-European, non-white, and indigenous spiritualities as ‘superstitious’ or even primitive. Post-colonialists like Dipesh Chakrabarty have helped unravel that as European exceptionalism, the continued notion that mostly-white leftists are somehow more superior in their atheist views because they’ve progressed past religion. They’re enlightened, the rest of the world is not, and all that.

So I see the insistence that leftists must always be atheists to be little more than that same European exceptionalism that led to colonial suppression of indigenous beliefs in the Americas and Africa. Re-embracing our own spiritual existences-and our ability to create new ways of being outside Capital and the state-is a key to our own liberation and also ongoing anti-colonialist efforts around the world. Otherwise, we’re no different from the French in Haiti who tried to suppress indigenous African beliefs so the Blacks would make better slaves, or the Spanish and English who tried to wipe out First Nation’s beliefs to ‘civilize’ them.

To use an anarchist term, we’re expropriating our meaning back, or in Marxist terms, we’re seizing the means of the “production” of meaning.
In what way does Gods and Radicals create and change the narrative surrounding paganism, as a religious belief, and anarchism as a political belief? What are the unique/new ideas or ways of thinking that G&R brings to the table?

Our primary influence has thus far been within Paganism, and it’s also where we get the majority of our critics. There are racist elements in American Paganism particularly that don’t like us. Also, our anti-clerical stance has made us a few enemies with the plastic-shaman, media-hungry elements that see us as a threat to their greed. And we’ve helped expose a few charlatans and leaders sympathetic to fascism and the alt-right. So, lots of enemies, but even more friends: we get emails weekly from people who thought they were maybe the only Pagan anarchists around. I like those emails a lot.

I think the way we change the anarchist narrative is precisely in what I mentioned earlier: we are undermining the European exceptionalism that crept into anarchism, and reminding people we can all create our own meaning.

One thinks of the way anti-Enclosure resistance movements in England and Wales adopted Pagan language and mysticism in their resistance: the Luddites, for instance, claimed to be led by a ghostly ‘captain’ who lived under a hill in a forest. That’s a land spirit. Likewise, the Whiteboys in Ireland gave eviction notices to landlords in the name of an ancient land-goddess, and the Rebeccas claimed to have gotten their costumes from an ancient crone in the mountains. The narrative of those resistance movements is remarkably similar to the spiritual stories of indigenous and slave resistance in the Americas. Likewise, the ritual to Erzuli Dantor at Bois Cayman which sparked the Haitian Revolution, or the women’s resistance to factory owners in Cambodia through possession by land spirits call the Neak Ta-resistance to oppression has very often been spiritual as well as physical.

By telling those stories, and by telling our own, we open up more space for these kinds of resistances, and also challenge the insistence that European-secular atheism is the natural, final evolution of humanity.

Such a view also helps us navigate away from the appropriative nature of Western spirituality. The capitalist creation of whiteness stripped people of their relationship to land and culture. “Hurt people hurt people,” as they say, and that whiteness manifests now in a voracious theft of the culture and spiritual expressions of others. Dismantling that whiteness and healing the damage that was done (and that it does) will require creating new relationships to land and culture in which everyone engages in their own meaning-making.

Also, we’re trying to provide a bulwark against the alt/new/fascist right. They gain power significantly by playing to that lost sense of meaning; they’ve been able to make so much headway on this precisely because many leftists demean spiritual expression. We’re trying to fix that.
How can people support G&R and are there orgs/groups that G&R is allied with?

A few ways. First, we are always excited to meet new writers and artists. We pay for writing on our site now, and welcome as many diverse voices as want to write with us. Secondly, we are a non-profit and accept donations to help us pay our writers. Buying our books helps a lot as well-that’s how we pay our print writers. And sharing our stuff, of course, is always really helpful, especially now that most social media sites throttle views in order to get their users to buy advertizing.

Other groups that we work with but aren’t affiliated with directly, groups that might be of great interest to others, are Heathens United Against Racism and Appalachian Pagan Ministry, both of which are doing a lot of work to fight fascist organizing within Heathenry. And we have great relationships with quite a few Pagan communities elsewhere in the world fighting these same struggles, particularly against fascists.

The Chasm: On State Socialists and Anarchists (An Interview)

Brenan Daniels


Below is an interview I had with both Tom Wetzel and two members of the Facebook page Anarchist Memes discussing the history between state socialists and anarchists, with the above individuals representing an anarchistic view of the situation. Part 2 will discuss the same idea from the view of state socialists.

It is well known that there was a split between Marxists and anarchists at the First International. However, how were relations between Marxists and anarchists before the split and how did this split affect relations generally speaking?

JA: Despite the first international or the Hague conference a decade later or even Krondstadt, the attack on Makhno’s forces or the ’37 may-fighting in Spain…I think the overall tone and relationship between anarchists and Marxists has been one of comradery and socialist kinship.

That said, I think that anarchists are well aware of the fact that Marxism is not homogeneous – not least because anarchists (in my observation) tend to have been Marxists first before adopting anarchism. The tendency is not to hold all of Marxism responsible for the opinions and actions of “tankies”. We are aware that the POUM fought with the CNT in the aforementioned may-days, we are aware of the Pannekoeks’, Luxemburgs and Lukacs’s within Marxism and hold these people and Marxists like them in high-esteem.

OM: I would generally say, that as soon as these two tendency formed from early Socialism, there were elements of both hostility and cooperation. The problem is that, historically, there has been a tendency by some Marxist currents (Leninism and its Maoist/Stalinist derivatives) to prefer a reactionary victory over the victory of a competing leftist tendency in any given conflict. With other tendencies of Marxism though, like Left or Council Communism, the relationship was much more harmonious and cooperative, as mentioned by [JA]. Today, both of these histories seem to inform Marxist-Anarchist relationships in varying measure, while I see the current resurgence of ultra-authoritarian Marxist tendencies seen among young activists today as a problem.

Wetzel: The label anarchism wasn’t really used by the libertarian socialists in the International Workingmen’s Association. Bakunin referred to his politics as “revolutionary socialism.” The main disagreement was over Marx’s advocacy of building labor political parties “to win the battle of democracy” (as he put it) through gaining government power. This was the beginning of the party-based strategy that has always been central to Marxism.

The libertarian socialists put the emphasis on building mass union organizations, and their potentially revolutionary role. Thus, the libertarian socialists in the first international were in many ways precursors of the type of revolutionary strategy that was called syndicalism in the early 20th century. Marx’s statement “The emancipation of the working class is the work of the workers themselves” was strongly endorsed by the syndicalist militants of the 20 th century. Libertarian socialists have been influenced as well by Marx’s analysis of how capitalism works.
In the US, it is known that anarchists and state socialists supported labor in their fight against capital, but how close was the relationship between the two groups at this time?

JA: The relationship between anarchists and Marxists in the United States has been overwhelming close, intertwined, and copacetic. Marxists and anarchists in the late 19th century and early 20th century shared common-causes and worked closely with one another – often co-mingling in abstractly socialist organizations like the knights of labor or the IWW (which is still welcoming to both anarchists and Marxists alike) and/or coming out to protest/agitate/strike etc. in defense of workers, marginalized, or imprisoned and/or executed Marxist/anarchist comrades.

OM: Not being from the US, I can add little to the situation there. In Germany, many radical leftists ID only as vaguely “radical left” without identifying fully with either Marxism or Anarchism, though.

Wetzel: In the period from early 1900s to World War 1, the growing revolutionary syndicalist movement of that era was influenced by both Marxist and anarchist ideas. There were a number of cases where Marxist and anarchist groups cooperated in building highly democratic worker organizations. In the IWW in the USA Marxists associated with the left wing of the Socialist Party cooperated with anarcho-syndicalists like Jack Walsh and Carlo Tresca. The important factory council movement in Turin Italy in 1919-20 was developed as a joint project of Antonio Gramsci’s Socialist Party group and the Turin Libertarian Group. This was an independent shop stewards council movement based on stop work assemblies in Fiat and other factories. The councils were developed independently of the bureaucracy of the CGL (Socialist Party trade union).

This Marxist-syndicalist alliance was broken with the development of the Communist International in the early ’20s. The Leninist parties insisted on working towards party hegemony in labor movements. Although the American Communist Party continued to adapt and use many syndicalist tactics and ideas in their organizing in the ’20s and early ’30s (such as elected negotiating committees, agitation around the flat incompatibility of working class and employing class interests), they were not opposed to top-down forms of labor organization in their ideology, and this became obvious after the turn of the Communist Parties to the Popular Front approach in 1936.
Talk about the situation between anarchists during World War 1 as it doesn’t seem that that is too much discussed.

JA: WWI for anarchists was marked by controversy, activity, and suppression. Throughout Europe and the US, anti-war anarchists were incarcerated en-mass and hounded endlessly. Pushed further underground, many escalated their militancy (i.e. Galleaninists in the US who actively bombed targets and assassinated officials), while others waged free-speech fights and took part in all manner of anti-war and anti-capitalist activism. The rule that anarchists opposed the war was excepted by notable anarchist luminaries such as Kropotkin – and in turn, this support was denounced by others (and the majority) i.e. Goldman, Berkman, Malatesta.

OM: The rather marginal German Anarchist groups were heavily oppressed by the state, so they devoted relatively little time to internal controversy. Activities in general declined markedly, with military authorities often sending known Anarchists, along with other radical leftists, on suicide missions during WWI. Additionally, Anarchists lacked ideas and strategies for dealing with the war, being driven by events rather than taking on an active role.

Wetzel: Let’s take each country separately. During the Russian revolution there were a variety of anarchist and libertarian socialist groups. Two groups that worked in an alliance during the revolution were the Union of Socialist Revolutionaries-Maximalist and the Russian Anarcho-Syndicalist Confederation. For example at the time of the October revolution the alliance between these two groups controlled the important soviet in Kronstadt and provided armed sailors to overthrow the Provisional Government. The October 1917 revolution occurred when the Soviet Congress took power and overthrew the unelected Provisional Government.

All the anarchist and libertarian socialist groups supported this move. However, the Bolsheviks got the Soviet Congress to let them centralize power in a new state via the Council of People’s Commissars. The syndicalists and maximalists opposed this but continued to give “critical support” to the revolution because they believed they would be able to still organize for their view in the factory committees, soviets and unions. By 1921 however the militants of these groups were in prison and they were completely suppressed. Between 1918 and 1920 the Communist government also eliminated the last elements of worker collective control in industry and converted the soviets into rubber stamps of the party…including the overthrow of soviet elections that went against them.

The syndicalists and libertarian socialists of the ’20s and ’30s came to understand that Bolshevik policies and program had led to the creation of a new ruling class in Russia, based on the party and state bureaucracy…the industrial managers, elite planners, military officers, and the power of the party bureaucracy. The working class, in their view, continued to be an exploited and subordinated class.

In Spain the anarcho-syndicalist labor organization, CNT, was the majority union, especially in the industrialized regions of Catalonia and Valencia which contained 80 percent of Spain’s manufacturing. Because of the long history of anti-labor violence and repression in Spain, both the CNT and the UGT (union shared by the Socialist and Communist parties) had armed groups. CNT had an organized system of clandestine armed cells in Catalonia, used for protecting workers in strikes. When the army attempted to seize power to crush the labor movement in July 1936, this clandestine armed organization smashed the army in Catalonia. CNT then built its own “proletarian army” with about 100,000 members and UGT built an armed militia also. Under cover of this armed power, the workers of Catalonia and other areas proceeded to engage in the most widespread direct worker seizure of capitalist property that has ever occurred…almost the whole of the economy in northeast Spain. Both the CNT and UGT farm labor unions had a revolutionary program and proceeded to collectivize millions of acres of farm land, creating more than two thousand collectivized village communities.

CNT proposed to replace the Republican state with a joint defense council of the UGT and CNT unions and a unified militia. They also proposed that the entire economy should be socialized under worker management. This was veto’d by the state socialists…the Socialist and Communist Parties. This was based on the Communist’s naïve view that somehow they could get the capitalist “democracies” to let the anti-fascist forces buy weapons even though it was clear that a proletarian revolution was underway. So if they “respected government legality” this would protect the “international legitimacy” of the Spanish Republic. This didn’t work.

The Communists in Spain pursued a strategy of trying to get control of the state through control of the police and army. After street fighting between CNT armed defense organizations and police in Barcelona in May 1937, the Communists were able to consolidate power in the national state and in 1938 began to nationalize the worker-managed industries, moving to create a managerialist type of bureaucratic class as they did in Eastern Europe after World War 2.

Various anarchist tendencies in the CNT also contributed to this result. At the outset of the revolution anarchists and syndicalists in the CNT were divided over the question of consolidating political or society-wide power. Some thought the decentralized and uncoordinated system of local committees was enough.

A minority wanted the CNT to take power in the regions where it could. This is what they did, under support of Buenaventura Durruti’s large militia organization, in eastern Aragon in September 1936. The economy was coordinated via a regional congress of delegates and the village assemblies elected a defense council to replace the old state authority. But they failed to do this in Catalonia and Valencia which were the core industrial regions of Spain. Durruti thought they could negotiate with Francisco Largo Caballero (prime minister and head of the UGT and left wing of the Socialist Party) for an acceptable solution if they held their ground and went as far as they could in consolidating working class power.

Some anarchists in the CNT were confused about the concept of “power”. Based on what happened in the Russian revolution, they thought of “taking power” as meaning that some new bureaucratic group would hold top down managerial power in some state. But “taking power” could also be interpreted as collectivizing power, via things like worker delegate congresses and coordinating councils. This would depend upon accountability to the masses via the base assemblies in the workplaces and neighborhoods. By rejecting the solution of building worker political power via workers councils in Catalonia, they found themselves forced into the hopeless situation of participating in the Popular Front government, where they were essentially captive to the socialist parties with their Popular Front strategy.
During World War 2, what was the situation in Spain and Russia, respectively, in which anarchists and state socialists found themselves on the same side or against one another? How did anarchists threaten the cause of state socialists or vice versa? How does this affect present relations?

JA: I don’t think the present is affected by the internecine socialist fighting in Spain or during WWII. These historical episodes and the debates that still take-place about them, are not (as far as I can tell) having any negative impact per Marxist/anarchist coordination. Backing up a bit, I say internecine because Trotskyists and anarchists during this period often shared a similar fate and fought/died together – in Spain and Greece most notably.

Wetzel: I think there are several essential strategic goals that the radical left needs to work at:

First, there needs to be a revival of disruptive, collective strike actions by workers. Strikes are very important because workers have the power to shut down the flow of profits to employers, or shut down operation of government agencies. Doing this helps to change the mindset and outlook within the working class because it changes the situation from one where people confront their employers as powerless individuals to a situation where people can think in terms of “we”. Strikes are learning experiences because people will learn how they confront all the institutions of the society – the media, the courts, the police, the union bureaucrats, the politicians. It develops “class consciousness” because people tend to think more in terms of “us” versus “them”.

Workplace organizing is also important because the workforce has become much more diverse than in an earlier era and thus building mass worker unions with a democratic character means working to build bridges across the various differences in the working class and taking account of the different ways that groups in the working class are oppressed. This is another way in which a revived era of mass worker struggle would change the labor movement.

Rebuilding a real labor movement is not going to be an easy or simple task, partly because the inherited American unions are so intensely bureaucratized and controlled from the top. Back in the ’30s radicals generally understood workers have to control their own unions. I think that rebuilding an effective labor movement is going to require building new unions outside the inherited bureaucratic unions of the AFL-CIO.

It’s also more likely that working people will become more identified with unionism, if they are not so limited as they’ve been in their aims and not so controlled by staff and paid officers from HQ but are more authentically organizations workers form and run themselves. There have been various periods in the past where workers in the USA built organizations from below like this on a large scale, as during 1915-21 and 1933-35.

Secondly, and related to my first point, we need ways for working at training and supporting people who make the commitment to stick at the project of rebuilding worker organization and action. This would mean forms of public education outside academia developed by and for working class people. In rebuilding the “militant minority” in the workplace we’re laying the groundwork for the radical left to once again have an actual presence and influence in the working class.

Third, for a long time there has been a general understanding by many on the left that fragmentation is a serious weakness. This takes various forms, such as single issue movements, or separation into a myriad of different kinds of movements – climate justice, Black Lives Matters, immigrant rights, tenant movement, each union focusing narrowly on its struggles with its employer, and so on,.

From a strategic point of view, I think we need to think in terms of developing a coalescing of forces into a kind of class front or working class social movement alliance. But I tend to think of this as a grassroots, horizontal kind of linkage, not via bureaucracies of unions and non-profits. This would be reflected in movements supporting the aims and struggles of other movements. There is some of this going on, but it will need to develop further.
It seems that due to the right wing onslaught in the 70s and 80s that much of the left has retreated to the academy. What are your thoughts on this and can it be reversed?

JA: I agree with your premise that the left has retreated to the academia and inward after defeats in the 60’s and 70’s. I don’t know that this will be reversed any-time soon, but I am optimistic. I sense the youth of today are more politicized and enlightened than my generation (generation x), and that gives me hope. As well, the uptick in anti-fascist militancy (unfortunately, an uptick in fascism concomitantly) and propaganda-of-the-deed of late also gives me a sense (although, perhaps it’s inflated or a product of my social-bubble) that an episode marked by a more tangible praxis is nigh.

OM: I would agree that there has been a retreat into the academy, but shortly followed by another retreat into subculturalism. With regards to reversal: Where I live, academic Anarchism has largely died out already (except for a few people in deep cover), while the subculture is slowly drying out due to self-isolation and increasing, self-imposed irrelevance. At the same time, I see a lot of discontent with Capitalism and popular demands for alternatives. At least theoretically, we should be able to build on this for a resurgence.
How is anarchism making a comeback today?

JA: Relative to our recent marginalization, I think so. My sense is that more people of know what it is and/or have some sympathy for it.

OM: If us Anarchists can get it together enough to publicly propose viable and attractive alternatives, I consider a comeback not only possible, but actually likely. The demand is there, but we need to deliver. For this, we need to abandon subculturalism and academic obscurantism and actually work in a more strategic and popularly appealing fashion.
How is state socialism making a comeback today?

Wetzel: With the Bernie Sanders campaign the concept of “democratic socialism” was widely popularized. This refers to a social-democratic perspective that doesn’t really aim at replacing capitalism with a new socialist economy, but aims to use elections of people to state office to create laws and programs to restrict the predatory behavior of corporations and provide some benefits that would be of benefit to the masses, such as Medicare for All health insurance.

In Europe the old social democratic or socialist parties have been rotted out by commitment to neo-liberalism and austerity. This has led to either new left parties or things like change of leadership in the UK Labour Party, with an aim to pushing back against austerity and rebuilding support for the stronger social-democratic policies that were characteristic of Europe in the post-World War 2 era.

But this isn’t really a comeback for the concept of socialism as state-management of the economy or centralized state planning. To the extent that “democratic socialists” or electoral socialists think beyond capitalism at all, they tend to think in terms of building worker cooperatives which would still operate in a market economy. So market socialism, in one form of another, has become the dominant vision for many socialists.
Can anarchists and state socialists ever work together? It seems that that would be so since they agree on so much.

JA: We excel in cooperation where specific issues are concerned…police violence or some local outrage etc. – what I think is difficult is getting socialists abstractly, together under a big umbrella that can connect our groupuscules up and harness our collective potential.

OM: In my experience, cooperation with anti-authoritarian Marxists (like leftcoms) is possible and productive, having participated myself in this. With the more authoritarian variants, only partial/punctual cooperation, usually on defensive issues like anti-fascism, seems practical.

Wetzel: They could work together I think in practical organizing projects such as building unions or cooperatives or tenant organizations or climate justice protests, etc. There have been state socialists as members in syndicalist unions like the IWW for example.

However, there may still be disagreements or conflicts in these areas. These disagreements are likely to happen over the question of how mass organizations are to be run. Libertarian socialists want mass organizations to be self-managed, that is, they want them to be controlled in a direct way by the rank-and-file members. They would oppose concentrating power in an executive body. Social-democrats and Leninists are likely to still favor some strategy of “boring from within” – changing leadership – in the inherited unions, rather than building independent worker committees, and grassroots unions apart from the inherited labor bureaucracy.

Dialogue might suggest areas where there can be agreement in relation to some goals or programs. But there is still the fundamental difference in how libertarian socialists and Leninists (and other state socialists) think about what socialism is. Workers self-management – and complete worker mastery of production — is, in the libertarian socialist view, a necessary condition for working class liberation from the class system. It’s not adequate to limit this to simply control of a coop or individual workplace but has to be generalized and coordinated throughout the economy, from a libertarian socialist point of view.

There is the related problem of how we view working class political power or society wide power. Even if libertarian socialists would support particular reforms in the context of the present system (such as Medicare for All in USA), in the end the old state has to be dismantled for the working class to be freed from its subordinate class position. That’s because the state is based on top-down structures of managerial control that have the boss/worker relation of subordination built in. The state represents the concentrated defense of a system of class domination and exploitation, and the forms of inequality tied in with this. So working class political power would have to be based on some form of delegate democracy consistent with worker self-management everywhere and be accountable to the masses at the base, through workplace and neighborhood assemblies.

A form of direct communal power by the masses (via neighborhood and workplace assemblies) is also going to be essential to have a solution to the present worsening environmental crisis. The people need to obtain a very direct control over what gets put into the atmosphere and water through the economic system. So we can think of the socialist goal as having both a worker control and communal control dimension. But both require replacing the present hierarchical institutions – corporations and state – that dominate society.

Historically socialists have often defined socialism as democratic worker and community control over the political economy. Libertarian and state socialists have differed in working out the details.

Colin Kaepernick, Patriotism, and the Owning Class

Colin Jenkins


Colin Kaepernick took a courageous and principled stand this past season by kneeling during the national anthem before NFL games. This was done in response to a society that continues to systematically, culturally, and institutionally devalue non-white lives. This devaluation is played out in many areas, including politics, economics, housing, employment, and perhaps most notably, within the criminal justice system. Non-white lives are routinely extinguished by police in the streets without recourse, in the courts without pause, and in the prisons without hesitation. Entire generations of non-white Americans have essentially been destroyed through the “school-to-prison pipeline” and a system of mass incarceration.

Kaepernick recognized this and felt compelled to bring attention to it. He openly protested the national anthem, donated hundreds of thousands of dollars to community agencies, and started a national youth camp program to teach children from marginalized communities about self-empowerment.

He is now a free agent, in the prime of his career, and without a job. By all “measurables” (and the NFL is big on “measurables”), Kaepernick should have a starting job somewhere. Despite playing for one of the worst teams in the NFL in 2016, he still managed to put up impressive numbers in only 12 games: 2,241 passing yard, 468 rushing yards on a 6.8 yards-per-carry average, a 16/4 TD/INT ratio, and a passer rating of 90.7. His passer rating was higher than that of 13 other starting QBs, including Eli Manning, Cam Newton, Philip Rivers, Carson Palmer, and Joe Flacco.

The only reasonable explanation for Kaepernick’s newfound unemployment status is that he’s being blackballed by billionaire NFL owners. We’ve seen this before. Muhammad Ali, Mahmoud Abdul-Rauf, Craig Hodges, Tommie Smith, and John Carlos all faced similar treatment after using their platforms to take principled stands. Kaepernick has made millions of dollars in the NFL, so he will be fine either way. But there are many lessons to be learned from this situation.

One important lesson is how the capitalist class relies on patriotism to help protect and secure its position in society. The notion of patriotism is one that tells the working class within any given country that they have a deep, common bond with the owning class. This, of course, couldn’t be further from the truth. In reality, the owning-class minority drives the working-class majority into widespread deprivation in order to secure more and more wealth for itself. One way to hide this reality is to create an artificial bond based in geographic nationalism — patriotism.

While globalizing its capital, the owning class calls for “national unity.” While laying off American workers in mass, it airs multi-million dollar ad campaigns celebrating patriotic loyalty. While employing foreign workers for slave wages, it parades its brand name during celebrations of national independence. While driving wages down and forcing American workers into welfare programs, it asks that you celebrate “American values.” While systematically exploiting the majority, it demands that this majority remain loyal to its nationalistic ties.

Patriotism is a crucial tool for the owning class. To them, Kaepernick’s refusal to submit to this nationalistic ritual was not merely “disrespect”; it was a potentially damaging challenge to this incredibly important tool that is wielded in their quest to extract all of society’s wealth. For this reason, it is vitally important that Kaepernick be taught a lesson. The NFL’s billionaire class is in the process of carrying out this lesson.

In solidarity.


The Founding Fathers: “Neoliberals” Avant le Mot

Chris Wright


“Who is to blame for the election of Donald Trump?” It’s a question that has been asked more than a few times since November. We’re all familiar with the answers that have been given: James Comey, the electoral college, the DNC’s leaked -not hacked-emails, the characteristically shameful performance of the mainstream media in its focus on personalities rather than substance, the stupefying incompetence of Hillary Clinton’s campaign, the elitist insularity and corruption of the Democratic Party, etc. Longer-term causes (which are intertwined) include the decline of organized labor, which has always served as a bulwark against fascism or semi-fascism; deindustrialization, which has contributed to the economic insecurity that apparently motivated many of Trump’s supporters; and the almost total capture of the Democratic Party by the corporate sector of the economy. But one group of people has tended to escape blame, even despite widespread disgust with the electoral college: the U.S.’s “Founding Fathers.” While they are distant in time from the political obscenity that was Trump’s election, they are far from innocent.

This is clear from two books that every American should read, published in 2008 and 2009 respectively: Woody Holton’s Unruly Americans and the Origins of the Constitution and Terry Bouton’sTaming Democracy: “The People,” the Founders, and the Troubled Ending of the American Revolution . These books reveal the extent to which nearly all the Founders loathed and feared democracy, at least between the 1780s and the first decade of the nineteenth century. (Their attitudes were more complex in the 1770s, and in their later years such (former) anti-democrats as James Madison and John Adams were repulsed by the excesses of the capitalist aristocracy.) The popular attitude of reverence for the Founders is a product of deep misunderstanding and ignorance, for it is the viciously antidemocratic structure of the political system the Founders created that has helped make possible our new Gilded Age, and thus the political success of someone like Donald Trump.

In fact, I think it’s important to spread the idea that, far from being “liberators,” the Founders were, in essence, the first in America’s long line of usurpers and oppressors. This idea is a simplification, but it contains a large kernel of truth. The hackneyed narrative that history textbooks still teach about the greatness and nobility of Washington, Madison, Adams, Hamilton, and the others is nothing but nationalist propaganda that serves to obscure the malignity of these people’s historical impact and legacy. One might even say that their most potent legacy was the precise opposite of what we’ve been trained to think (and what they thought): rather than having been great figures of anti-authoritarian revolution, heroic fighters against tyranny, in effect they did much to clear the ground for the most rapacious tyranny in history, the national and eventually global tyranny of capital.
The 1780s: the Founders vs. the People

These judgments might seem excessively harsh, but consider the facts. Across the American colonies, the revolutionary 1770s were a time of relative democracy. In the struggle against the British, the gentry and the lower classes to some extent united around the banner of white male popular empowerment. States adopted strikingly democratic constitutions, none more impressive than Pennsylvania’s in 1776, which established a unicameral legislature, annual elections for every representative, a weak governorship that could not veto laws the legislature passed, the election rather than appointment of most offices in the state and county governments, and the enfranchisement of nearly all adult men, even those who owned no property.

But things changed in the 1780s. The gentry had “tired of an excess of democracy,” to quote Alexander Hamilton-others were less restrained, decrying “democratical tyranny,” a “republican frenzy,” a “prevailing rage of excessive democracy”-and tried to take total control of state governments. Given the shortage of gold and silver, during the war with Britain governments had issued paper money, which soon led to high inflation. This was blamed, simplistically, on the democratic character of the governments, the “imbecility” of popularly elected politicians; and most of the elite “gentlemen” came to view all government-issued paper money as an evil to be done away with. They also disliked the social and cultural manifestations of democracy, the leveling spirit that raised commoners in their own eyes and lowered the gentry. The ultra-rich financier Robert Morris represented his class when he resolved to strip power from all these “vulgar Souls whose narrow Optics can see but the little Circle of selfish Concerns.”

The political and economic agenda that Morris and his associates championed bore a remarkable, if hardly surprising, resemblance to neoliberalism. “Morris wanted government to channel money to the wealthy,” Terry Bouton writes, “either through direct payouts or by privatizing the most lucrative parts of the state and turning them over to new for-profit corporations owned and run by the gentry.” One of the most powerful figures in American history, Morris founded in 1781 the first private bank in the United States-the Bank of North America-in part to remove finance from democratic control: not governments, but banks would issue paper money. Private corporations, unlike governments, would be immune to public pressure for a greater supply of money, and would therefore be able to prevent inflation. Actually, the acute shortage of money during the 1780s showed that Morris was too pessimistic: even in states where legislatures did on occasion print money, they certainly did not do so to the extent that “the people” desired.

The 1780s were a time of ferocious class conflict, with most of the eventual framers of the U.S. Constitution facing off, alongside Robert Morris and the majority of the gentry, against the middling and lower classes, overwhelmingly agrarian. On one side were the wealthy speculators in government IOUs, who had bought these bonds for pennies on the dollar from the farmers, artisans, and soldiers to whom they had been given during the war as payment for goods and services. Their original holders, expecting the bonds to depreciate and needing money right away, sold them for whatever they could get. Speculators, on the other hand, could afford to wait years for the government to redeem the bonds, and had the political clout to insist that they be paid at or near the certificates’ full face value even though at the time of issuance the certificates’ market value was far below this. The state and federal war debt most of which speculators thus bought up was enormous, about $27 million.

To pay interest on the war debt, many states tended to impose the same type of fiscal and monetary regime on the populace that more recently the IMF has favored: oppressive taxes, a tight money supply, and the curtailing of public services (such as government-run “loan offices” that gave cheap credit to farmers and artisans). Since both private creditors and bond speculators were averse to paper money, governments compelled debtors and taxpayers to pay with gold and silver. But the war years had drained the country of gold and silver, making it impossible for people to pay. The nationwide tragedy that resulted has been compared to the Great Depression of the 1930s: tsunamis of property foreclosures swept up hundreds of thousands of families, and economic activity plummeted. “Public Trade and Private transactions of Human Life,” petitioners in Pennsylvania protested, “[are] nearly reduced to a total Stagnation.”

On the other side of the economic divide, then, were masses of ordinary people who found that their troubles were much worse in the 1780s than they had been in the last years of British rule, when their hardships had driven them to rebellion and war. “Have we not expended our blood and our treasure to expel from the land a set of invaders who sought to rule over us as taskmasters,” they exclaimed in the mid-1780s, “and shall we now become bondsmen to people of our own country?” The irony was appalling, and the victims fought back.

In fact, they were able to extract significant concessions and relief measures. In some states, by electing legislators sympathetic to their plight, farmers and artisans benefited from temporary suspensions of tax collection. Violent resistance, such as Shays’ Rebellion in Massachusetts in 1786 and ’87, frightened governments into being more lenient in their fiscal and monetary policies. Local and county officials often were sympathetic to the suffering of their neighbors and refused to enforce the law or carry out orders: for example, county tax officers would delay collection; some sheriffs obstructed or prevented property foreclosures; justices of the peace refused to prosecute people for nonpayment of taxes. Nor were state militias always of use in enforcing tax collection, for it was frequently militiamen who were leading the anti-tax protests. All this protest in the mid-1780s substantially mitigated the hardships of “the 99 percent” (so to speak)-which means that it was a tremendous irritant to the elite. For one thing, it prevented bondholders and creditors from being paid as much and as regularly as they wanted. For another, it fostered economic and political uncertainty, which made for a bad investment climate. European investors, in particular, were leery of sending their capital to a land that was so riven by conflict. How could a country develop if it couldn’t attract investment?

Various solutions were possible to the political and economic instabilities of the 1780s, and spokesmen of the aggrieved masses made reasonable proposals that were relatively fair to both sides of the class struggle. They called for a revaluation of war debt certificates, progressive taxation, limits on land speculation, bans on for-profit corporations, and other measures that would alleviate spiraling wealth inequality and strengthen democracy. Such proposals were consistent with the popular understanding of republicanism, an understanding that differed from that of aristocrats like Madison, Washington, Adams, Hamilton, and Edmund Randolph. As Gordon Wood describes in The Radicalism of the American Revolution , these latter men considered it axiomatic that, because only an elite of disinterested, virtuous, propertied gentlemen was capable of pursuing the public good over selfish private ends, the success of a republic required that such men hold power. It was necessary to tame the wildness of democracy-i.e., to effectively disenfranchise the majority-in order for enlightened civic virtue to flourish.

“The people,” on the other hand, tended to have a less naïve view of the world. As yeomen from Pennsylvania said in one of their many petitions to the state government, “No observation is better supported, than this that, a country cannot long preserve its liberty, where a great inequality of property takes place.” Some of their legislators agreed: they declared that for-profit corporations were “totally destructive of that equality which ought to prevail in a republic.” Farmers wrote that “We observe, with great anxiety, wealthy incorporated companies taking possession of public and private property,” and condemned processes that made “a few men…sufficiently powerful by privileges and wealth, to purchase, or to destroy, the property and rights of their fellow citizens.” Evidently these farmers had a more sophisticated political understanding than James Madison and his idealistic colleagues did, at least insofar as they understood that the real danger to republicanism was not democracy but rather a sharp inequality of property.
The Constitution: Triumph of Reaction

Needless to say, it was not the farmers’ democratic vision that ultimately prevailed. Robert Morris and other anti-democrats across the states organized a new Constitutional Convention in 1787 to remedy the defects of the Articles of Confederation, which is to say to write a new Constitution that would more adequately insulate government from democratic control. The convention was not sold this way to the people, of course; its purpose, instead, was supposed to be to find ways to give government more power to protect shipping and to negotiate trade deals with foreign nations. Secretly, though, nearly all the delegates had one goal mainly in mind: to make America more attractive to investment, as Woody Holton argues. “And the linchpin to that endeavor,” he says, “was taking power away from the states and away from the people.”

In other words, the U.S. was founded from the motive, and on the principle, of serving capital. The very structure of its political system was chosen so as, chiefly, to attract investors, i.e., to be a tool of capital accumulation. It is probably the only country in history of which this is the case. But to those who are familiar with U.S. history, so full of subservience to capitalism , such a revelation should not be surprising.

Many of the devices that the Constitution’s framers proposed to limit democracy were not adopted at the convention in Philadelphia. The delegates had to navigate between two contradictory imperatives: on one hand, they wanted to make it forever impossible for states to adopt the kinds of debtor-relief and taxpayer-relief legislation that the 1780s had seen; on the other hand, they could not make the Constitution so antidemocratic that the states and the people would not ratify it. Because of this second consideration, for example, Madison’s proposal that the U.S. Senate be able to veto state legislation “in all cases whatsoever” was rejected. The same fate befell Hamilton’s extreme proposal that the Senate and President be elected for life, as a way to provide the government with maximum protection against democracy. Nearly all the delegates strongly favored Hamilton’s plan, but they knew it would prevent the Constitution from being ratified.

Nevertheless, in its finished form the Constitution was hardly a model of democracy. While senators’ terms were not nine years long, as Madison wanted, six years was long enough to considerably insulate the Senate from the popular will. The Senate’s very existence, of course-as a body explicitly reminiscent of Britain’s House of Lords-was a significant “check and balance” against the people. As was the indirect election of its members, and of the president (by means of the electoral college). The Constitution’s framers even managed to limit democracy in the House of Representatives, by making election districts so large that ordinary people would have a hard time getting elected. Men of wealth would be much more successful than others in making their names and views known in a large district. To say it differently, large districts would “divide the community,” as Madison said, and make it difficult for the non-wealthy to “unite in the pursuit [of a] common interest.”

Furthermore, members of the House and the Senate could not be recalled, and constituents were not given the right to instruct their representatives on how to vote on particular issues (a right that even as British colonists many of them had had).

As for the presidency, it would be a very powerful position that could veto any dangerously democratic law that somehow made it through the gauntlet of the deliberately cumbersome and convoluted machinery for passing legislation in Congress. The president would also be responsible for making most major appointments in the national government, a power that under the Articles of Confederation had resided in the legislative branch.

The Supreme Court-appointed, not directly elected-had its part to play in “check[ing] the imprudence of democracy” (to quote Hamilton): through judicial review it could overturn both federal and state legislation. In this way, Madison’s proposal that the national government have some means of vetoing inconveniently democratic state laws was salvaged.

In case such protections were not enough, language was written into the Constitution that expressly forbade most of the pro-debtor, pro-taxpayer laws states had passed in the 1780s. Article I deprived states of control over the war debt, thus preventing them from paying war debt speculators the market worth rather than the much higher face value of the certificates they held. (As Secretary of the Treasury, Hamilton, who had been mentored by the ultra-conservative Robert Morris, gave these speculators a tremendous windfall, to the outrage of farmers.) Congress was granted the power to directly tax citizens instead of relying on states to do so, and it could break mass resistance to tax policies by bringing in militias from surrounding states. Section 10 of Article I was especially momentous: it reads, in part, “No State shall…emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts [nor] pass any…Law impairing the Obligation of Contracts.” In one swoop, this established a political-economic regime that overwhelmingly favored creditors. It prohibited states from issuing their own paper currency-“effectively destroying state-run land banks [i.e., loan offices],” as Bouton notes, “and the system of public, long-term, low-cost credit” that had been very effective and enormously popular with farmers. Debt arbitration was outlawed. In general, states were prohibited from rescuing debtors.

(It is worth noting, parenthetically, that the recent fashions of “originalism,” “original intent,” “strict constructionism,” and such tendencies in legal interpretation of the Constitution are predictable in a neoliberal context, given that the framers and their contemporaries thought of the now-revered document as thoroughly antidemocratic. Originalism can be a useful tool of hyper-capitalism.)

The majority of ordinary citizens were none too fond of this radically elitist Constitution. But they were so scattered and had so few resources compared to the “Federalists” who supported it that it was difficult for them to mount an effective opposition. Federalists, moreover, did not play nice. They were prepared to go to almost any length to get the Constitution ratified. In some states, such as Pennsylvania, they organized a ratification convention before the opposition had a chance to mobilize, and they gave districts that favored ratification a disproportionately large number of delegates. Their ownership of most newspapers allowed them to conduct a major propaganda campaign that suppressed the voices of Anti-Federalists. Violent threats were made against Anti-Federalist printers; offending pamphlets and newspapers were “stopped & destroyed”; Federalist postmasters intercepted and suppressed Anti-Federalist mail; writers resorted to lies about the provisions that the Constitution contained and the process that had brought it into being.

On the other hand, many people were reconciled to it on the basis of legitimate considerations. For one thing, since the national government would have the power to impose tariffs on imports, most people’s taxes would likely be reduced. The government could rely primarily on tariffs for its revenue, not direct taxation of citizens (as had been the case in the 1780s). Even more importantly, Federalists committed to adding a Bill of Rights to the Constitution after it was ratified. This was something that middling citizens from across the country insisted on. Woody Holton makes an apt observation on this point: “It is a remarkable but rarely noted irony,” he says, “that Americans owe their most cherished rights-among them freedom of speech and religion, the right to trial by jury, and protection against self-incrimination and illegal search and seizure-not to the authors of the Constitution but to its inveterate enemies.” The Bill of Rights was a concession to the rabble.

If the farmers of the 1780s were alive today, however, they might feel vindicated. This isn’t the place to review the entire history of the U.S.’s capitalism-on-steroids, but it should hardly be controversial to say that the antidemocratic, anti-“working class” political framework the Founders put in place has been perfectly adapted to the ambitions of a predatory economic system. It is almost as if capitalism had reached back from the future to move its pawns like chess pieces against capital’s early opponents, who were finally checkmated when the Constitution was, through fair means and foul, ratified. After that, it could be smoother sailing for a developing American capitalism-although even then its development had to continually confront mass resistance . Eventually, and always with the decisive aidof the peculiar structure of the American polity, a point was reached wh ere wealth could be so concentrated, the political system could be so captured by the corporate oligarchy, and ordinary people could be so desperate for change that they would elect a monstrosity like Donald Trump.

So here we are in 2017 still burdened with political leaders who, like the Constitution’s framers, are concerned above all to protect creditors, financiers, and investors; who have the same “wisdom” as most of the Founders in their desire to undermine democracy, whether through gerrymandering, major propaganda campaigns, arcane Congressional tricks of obstructing popular legislation, or simply the appointment of wealthy friends to important government posts. The growing democratic resistance is in the tradition not of the “great men” who wrote the Constitution but of their enemies.

Chris Wright is a doctoral candidate in U.S. history at the University of Illinois at Chicago, and the author of Worker Cooperatives and Revolution: History and Possibilities in the United States and Notes of an Underground Humanist. His website is

Misoprostol, Coat Hangers, and Trump: Foreign Objects in Our Wombs

Assata Baxter


In the United States, one in three of us has had one. We don’t share this. In the midst of making hard decisions, we bear the vitriolic harassment of those who have never and will never carry children, or those who chose to project the insecurities of their own decisions on others, before we can get to the door. We are blamed and shamed in clinic parking lots with pictures of 56 week old dead fetuses. We enter clinics alone without our partners’ knowledge, weighted with surprises in pink lines when it’s not yet our time. Or our partners hold our hands and say that whatever we choose they are beside us. Or depending where we are in a low-income country, there may be no clinics. So, we ask our friends if anyone has a doctor in the family who can write a prescription; anyone who knows someone who knows someone who works at a pharmacy. We look up which combination of pills it requires, and pray that it works. We go to sangomas in another village. We put our lives in the hands of “surgeons” and hope that we wake up with use of our reproductive organs… or that we wake up period. There are no certain answers. No “do-it-yourself” manuals. And every 8 minutes in low-income countries, one of us will die of complications arising from it.

We don’t announce our decisions on Facebook, or post pictures to Instagram of the sonogram, of the fetus we have chosen not to keep. We may tell some close to us, but often we don’t tell our best friends, our parents, our siblings, sometimes our partners. We are afraid their religion or recently recognized righteousness will get in the way of them hearing us…that they will guilt us into thinking otherwise, or it may change forever how they see us. We fear scarlet letter branding. We talk in hushed whispers if at all. Sometimes we find support groups. Sometimes we continue life as usual. Sometimes we are forever changed. While our experiences are different, what remains consistent is that abortion sits squarely at the juncture of ethics, religion, morals, science, gender and politics. And yet the discussion of the experience remains taboo.

I have had two abortions; one in Kenya, one in Djibouti, both “back alley” in the sense that they lacked medical supervision or prescription. I was not raped. My health was not in danger. Simply, neither the birth control, nor the morning after pill worked. I give you these moderating factors for two reasons. One, because the myth often goes that underserved populations use abortion as birth control. This was not the case. Further these very factors had both an impact on my conscience and impacted accessibility to any legal type of procedure.

My period was a week late. But, my period was always a little bit hard to calculate. It didn’t cross my mind that I could be pregnant until week two. We always used protection, and our one accident, I had taken the morning after pill. I bought a take-home pregnancy test at the nearby market. I remember crouching on the floor of my apartment in south B, Nairobi watching the Test line appear. The test was supposed to take three minutes, but positives appear faster… and even the few seconds it took, seemed like a lifetime. I rocked back and forth, hugging my knees to my chest, crying… I called my boyfriend, shaking, inconsolable, tears pouring down my face. He rushed over and held me as I cried myself to sleep. I wished it happened like in the movies. The girl who finds herself pregnant always magically miscarriages. She never actually has to make a decision. She can share her story freely, with whoever chooses to listen, because miscarriages are not of our choosing. They are not our fault or our choice. They are met with sorrow or pity or empathy, because they are God’s will or the will of the Universe or whomever we believe in. We hold no “fault”.

But it did not happen like the movies. I bought three more pregnancy tests the next week. I convinced myself I had ovarian cysts, that I kept contaminating the urine sample, or that the pharmacy by my house was selling expired tests. By the end of the week, I started having dizzy spells. I was beginning to feel nauseous quite often, but I had three days off work before heading to rural Uganda for work, and so the race against the clock started. The next day I woke up I felt awful, and depressed. I wanted to see a doctor. That would be the only way to know for sure. We made an appointment at a nearby hospital. I explained the situation and they too thought that pregnancy was unlikely, particularly given the dates of my last period and encouraged me to do an ultrasound. I agreed. For once and for all, I would know.

My memories of the next few moments that day are very blurred. I remember hearing a heartbeat. I remember crying and heaving in some corner in the hospital. I remember I went home with a sonogram as a parting gift, that I have never brought myself to discard. But I did not want to have a baby, even after heartbeats and sonograms. I was 24, living and working in Kenya on 2000 USD a month, with an ocean separating me from my family, and financially supporting a sick mother back at home. I was six weeks pregnant, and I did not want to be a mother, then… the same way I am unsure if I want to be a mother now. I knew immediately what I wanted to do, but had no idea how to do it, and having chosen to abort, there was nothing more that I wanted than to stop being pregnant. In my mind, I kept thinking the longer I waited, the closer the fetus came to viability, or to what in my mind was personhood. However, figuring out what to do was not easy. There is no “Planned Parenthood” in Kenya. I could not make an appointment to discuss my options. Abortion is and was illegal in Kenya, and only viable to save a woman’s life or preserve her physical health.

I was not willing to wait any amount of weeks to try and fly to another country and come back. I also was not willing to literally have a back alley surgical abortion. I had one or two friends I confided in, who might have known someone who had “the surgery”. I was not willing to risk my future reproductive health or a return to consciousness being unsure of what had been cut, or poked or inserted inside of my body. Here there was no RU-486. We had to find a doctor who would be willing to write a prescription for the pills I would need to give myself a medical abortion. We could not get it in the pharmacy without a prescription. We found a doctor who was willing to write a prescription however the dosage was not enough. It was for only 200mcg. We made copies of the prescription. We bribed pharmacists to give us more until we had 800mcg. There were multiple websites with multiple directions. I chose one and stuck with it. I put a pill under my tongue, wrote a letter to my unborn child, and asked for her forgiveness and to come back when it was her time. I wore a pad for the rest of the night. And in the morning, it was just as if I started my period. And that was it. I no longer felt nauseous. I just had what felt like period cramps… At least I thought that was it. I headed to Uganda for work. The secret safe between my boyfriend and I.

For the next two days life, continued as somewhat normal. However the third day, I had cramps far worse than any period I had ever had. They were so painful that I had to bite on a towel to keep from screaming out, every time I used the bathroom. I struggled through my work day, taking multiple breaks per hour. I was dizzy, sweating, and nauseous. Day four, I had what I realize now was probably Class Two hemorrhaging. I woke up to blood everywhere in the sheets. I wouldn’t stop bleeding. In a town in far West Uganda, coming from the bathroom, too weak to walk, I tried to crawl back to bed, but could not make it. So, I lay on the cold floor of a hotel room, entering and exiting consciousness until morning; bleeding uncontrollably, until a friend found me in the morning. I never did see a doctor, but the process of healing from both the physical and psychological wounds was a long one. The psychological wounds remained because the physical damage to my body, the anticipated lack of support, my suffering in physical and emotional pain in silence, the battle of my conscience, and the feeling of utter loneliness did not leave immediately. But I survived… which makes me a lucky one.
International Access to Abortion

Imagine that approximately 310,000 women undergo abortions in secrecy each year in Kenya alone, according to the East Africa Centre for Law and Justice[1]. 21,000 women are admitted each year as a result of complications related to unsafe abortions, which are usually undertaken in back alley clinics. 2,600 of these women eventually die. Research from the Center for Reproductive Rights has found that unsafe abortions account for 40% of the maternal mortality rate[2]. I was fortunate enough to have a supportive boyfriend, and enough financial capital to be able to afford both seeing private doctors, and paying the costs of both prescriptions and bribes. I know that is a privilege not all women have in Kenya. Due to restricted abortion legislation, even with the new constitution, women, less than having access to a medically safe procedure, do not even have access to the human contact that would provide them with the support and empathy they seek, and the tools they would need to make an informed decision.

In sub-Saharan Africa, 98% of countries allow abortions to save the mother’s life, however only 33% permit abortion in cases of rape or incest and only two allow elective abortions for any reason. But, I will point fingers neither at Kenya, nor the continent of Africa. Kenya is not the only country with restrictive abortion legislation. In fact the countries with the most restrictive abortion legislation are found in Europe, Central and South America. The Holy See (Vatican City), Malta, Dominican Republic, El Salvador, Nicaragua and Chile do not allow abortion under any circumstances, even if the mother will die from complications prior to or giving birth[3].

According to Pew Research Centre, although in Europe about 73% of countries allow abortions for any reason, Ireland, Andorra (between France and Spain) and San Marino (Italy) only allow abortions in order to save the life of the mother. In Ireland, illegal abortion carries a sentence of up to 14 years in prison. And therefore, more than 5000 women each year are forced to leave the country to have abortions outside of Ireland [4]. These same studies have revealed that 26% of countries in the world only allow abortion to save a mother’s life; and 42% allow abortions only when the mother’s life is at risk in combination with “at least one other specific reason, such as to preserve a woman’s physical or mental health, in cases of rape or incest, because of fetal impairment or for social or economic reasons” [5]. According to the World Health Organization 21.6 million women undergo unsafe abortions every year [6]. Of those, 6.9 million women were treated for complications from unsafe abortions. I form part of the 40% of women who experienced complications but never received treatment. Unsurprisingly, almost all abortion-related deaths occur in low-income countries, with the highest number occurring in Africa. The Guttmacher Institute, according to recent studies have found that 8-18% of maternal deaths worldwide are due to unsafe abortion, and the number of abortion-related deaths in 2014 ranged from 22,500 to 44,000 [7].

What these numbers and percentages mean, is that beyond any discussion about population control in low-income countries, at what specific age human life becomes viable, if abortion is morally right or wrong, the after-life consequences of our actions, is that women are literally dying trying to get abortions, often of the surgical kind.
Trump in Our Wombs

The 1973 Helms Amendment , created in the wake of the Roe v. Wade decision, prevents the use of American foreign aid for abortions. The caveat being that the money could still be used to fund family planning, or educate women about abortions, but could not be allocated to the procedure itself. On January 23 rd 2017, beneath our noses, President Trump signed an executive order which reinstated the “global gag rule”. Effectively this rule bans federal funding for international non-governmental organizations that offer abortions, advocate for the right to an abortion, or even discuss abortion as an option to mothers. In the past this order known as the “Mexico-City Policy”, has been instituted by Republicans and struck down by Democrats multiple times. Yet the massive degree of funding that will be affected by this gag order is absolutely unprecedented. The gag rule will apply to about $9.5 billion dollars in global health funding which will effect organizations mostly in low and middle income countries. These cuts may even effect HIV prevention and treatment, and maternal health care. Conservative estimates by the Guttmacher Institute project that the result will be 38,000 more abortions. Marie Stopes International estimates that the global gag rule will lead to an additional 2.2 million abortions worldwide, and given the restrictive abortion policies in 68% of countries, a vast majority of these will be unsafe abortions.
Basta de Rosarios en Nuestros Ovarios (No More Rosaries in Our Ovaries)

While it is impossible to project definitively, I wonder how many more women will die this way, unaccounted for, afraid, hemorrhaging to death on the floor of a hotel room, or during surgery in the room of a back office with no windows, where her body may simply be disposed of, to ensure the continued financial gain of the “clinic”. This unnecessary maternal mortality is a direct byproduct of desperation in environments that stigmatize and demonize women for unintentionally becoming pregnant, for whatever reason, and then punish them by restricting access to services. On top of this, with funding basically drained to international and national NGOs who specialize in family planning, pregnancy prevention, and pre- and post-counseling, women, especially in low-income countries are left very alone. I took years to heal from my psychological wounds. I never once regretted my decision. But I almost lost my life in the process. Reproductive rights belong to those who are doing the reproducing. Trump’s new policies are invading our wombs, reaching into our bodies to yank away reproductive rights with fetal heartbeat bills and global gag rules. As has happened historically, when autonomy over our own bodies is taken away, we as women find a way to take it back. Banning abortion, or cutting funding to organizations that even discuss abortion will not make abortion disappear, it will only result in the unnecessary death of tens of thousands of women a year, by knitting needle, Misoprostol and coat hangers.


A Brief Inquiry into the History, Logic, and Spatiality of Financial Derivatives

Jacob Ertel


Capitalism, at its most elemental, is a system of inherent volatility. The character of this volatility is contingent on how a state’s political-economic institutions are able to mitigate risk by facilitating the movement of capital. How and where this capital moves is paramount in crisis obviation. Capitalism tends towards a range of interrelated crises-democratic, economic, political, social-but central to them all is the ongoing accumulation of surplus-value. The central risk here is that competition will result in an excess of capital relative to available opportunities to reinvest it. This excess can take a range of forms, from commodities, to money, to labor power (i.e., unemployment). States may attempt to resolve crises of overaccumulation in two ways. The first involves devaluating capital through inflation, commodity gluts on the market and falling prices, diminished productive capacity, and/or falling real standards of living for workers. The second method, known as the ‘spatial fix’, entails developing new markets in which to invest excess capital.[1] These terrains are often conceived as untapped geographical markets that may be turned into new centers of production, thus allowing for a temporary displacement of overaccumulation. Though productive forces remain indispensible to any mode of accumulation, advanced capitalism today may be characterized above all by an ongoing 40 year shift towards the primacy of the financial sector and the predominance of circulation over production.

Whereas the motive of the production process is the extraction of surplus-value through the exploitation of labor, the circulation process itself does not create value; instead, its profits generally derive from the redistribution of surplus-value. [2] This fundamental shift (the specifics of which will be discussed below) exposes more individuals and firms to financial risk than ever before. While capital seeks out new productive markets for reinvestment in all modes of capitalist accumulation, with financialization have come new kinds of spatial fixes that cohere with the unproductive, fictitious, and redistributive logic of circulation. As both social and historical constructions, the structures that facilitate the displacement of risk undergo periods of relative strength and weakness according to the dynamic between an economy’s productive capacity and its exposure to risk. [3] When productive capacity is diminished, speculative capital flows increase as investment shifts from productive to financial capital in the attempt to ensure stability against currency devaluation. With the advent of derivatives, however, risk is not only circulated faster and further, but commodified itself. Building on financialization and derivatives literature, this essay suggests that we may understand derivatives as a spatial fix in their own right, which paradoxically both displaces and amplifies risk. Despite important qualitative differences from older, more established strategies of crisis displacement, however, derivative-based spatial fixes exemplify a core dynamic central to all forms of capitalist accumulation. It will be argued here that while on one hand financial derivatives constitute the separation of the sphere of circulation from the sphere of production and thus from physical localities, they are simultaneously inextricable from them. This tension between production and circulation may in part account for the unique form of contemporary capitalist accumulation.

This essay is divided into four sections. The first section addresses the technical aspects of derivatives: what they are, how they work, and some of the different forms they may take. The second section will present an abridged history of derivatives spanning from their agricultural origins to their current use in financial markets. The third section explains how derivatives are unique from other financial instruments, and asks what these differences indicate for the state of the global economy more generally. The final section analyzes derivatives with regard to two critical concepts in geographical political economy: spatio-temporal fixes and time-space compression.
What Are Derivatives?

At the most general level, a derivative may be understood as a kind of financial contract used to expose counterparties to fluctuations in the market price of an underlying commodity, asset, or event.[4] They may also be thought of as “bilateral contract[s] that [stipulate] future payment and whose [values are] tied to the value of another asset, index, or rate or, in some cases, depends on the occurrence of an event.” [5] Whereas other financial instruments may involve an exchange of principal or title, derivatives exist in order transfer value between parties based on an underlying price change or event. In so doing, derivatives exist “to bind and blend different sorts of ‘particular’ capital together” [6]through securitization and risk commodification. A derivative contract entails that the claim on the underlying asset or the cash value of that asset must be executed at a definite time in the future. Capital is moved until the contract is settled. As opposed to insurance instruments, which protect individuals from risk by requiring policyholders to buy in with some sort of collateral (an ‘insured interest’) that they could lose in the context of the issuance of the policy, derivatives do not require this kind of collateral; anyone can trade in derivatives regardless of their relation to the underlying asset.[7]As such, derivatives operate solely according to these bilateral contracts between parties with differing perspectives on or vulnerabilities to risk. [8] This is the core feature of derivatives: that a plethora of risk may be traded independent the underlying asset. This development now often comes in form of cash settlement, which frees counterparties from delivering the underlying asset.[9] Cash settlement allows various characteristics of a commodity, asset or security to be separated and traded. In financial derivatives contracts, transactions are purely monetary and do not entail any change in ownership of the underlying assets. [10] Derivatives are assigned a notional value according to the multiplication of its spot price by the number of units of the underlying asset stated on the contract.[11] Pricing derivatives is determined by a rate of interest, specifically the London Interbank Offered Rate (LIBOR). LIBOR is set by an amalgam of banks in the derivatives markets, and is made through the evaluating the average of interest rates submitted by each of these banks daily. [12]

Derivative contracts are supposed to offset volatility in financial markets by separating assets themselves from their price’s volatility. [13] This separation constitutes a way to hedge the risks endemic to financial speculation, as speculators believe they can diminish their exposure to volatile asset prices. Because any potential failure to execute a contract at full notional value may be hedged through another derivative contract (valued according to perceived chance of execution of the initial derivative contract), the aggregate value circulating through derivatives contracts is grossly disproportionate to the price of all the underlying assets being traded for. [14] Despite this risk-exacerbating practice, derivatives are generally considered relatively inconsequential to capitalist economies. Because they are not a “real input in the production process nor a means of conveying wealth,” and since they “fixate on short-term capital flows rather than longer-term investment,” traditionally liberal economic views do not take derivatives seriously as a global threat to the banking system, even with their ability to concentrate a large amount of leverage on a single instrument. [15]Yet whereas they are often considered economically marginal and unrelated to the real economy, in fact derivatives have become the largest industry in the world, such that they themselves are becoming key sites of asset price determination rather than the other way around. [16] What these more traditional views miss, then, is that derivatives are in fact related to the real economy, despite their relative degree of separation from the production process.

Derivatives can be traded either in regulated exchanges or ‘over-the-counter’ (OTC). Exchanges include institutions such as the London International Financial Futures Exchange and the Chicago Mercantile Exchange. Whereas derivatives traded on exchanges require money as collateral and for extra margin payments to be made against adverse fluctuations in the market, OTC derivatives are entirely unregulated. [17] Unlike exchange-traded derivatives, which entail a finite transfer of payment between parties, OTC derivatives contracts are kept open through clearing houses that continuously circulate debt instruments. The market for OTC derivatives has expanded drastically in recent decades, bringing with it new forms of risk and volatility. OTC derivatives are cheaper and more flexible than exchange-traded derivatives, but also they carry a higher degree of risk and are not easily sold to third parties due to their relative lack of liquidity.[18] This means that during volatile periods OTC derivatives are more likely to adversely impact the entire financial system. Yet OTC trading has been on the rise despite this predicament, with nearly one third of trading taking place in dealer-to-dealer transactions, and with each transaction tied to at least one dealer bank as a counter party. [19] Dealer banks are highly concentrated, with fifteen to twenty dealers controlling bulk of OTC trading globally.[20] The boom in OTC trading may be exemplified best by the growth of hedge funds, the participation of financial wings of major corporations, and the involvement of commercial and investment banks. [21] All of this signals an increasing predominance of the financial sector of the economy over the productive sector. It also points towards greater susceptibility to economic instability, as the “default by a major institution, a shift in the prices of derivatives in financial markets sufficient to undermine the viability of a major institution, or the inability to net out obligations and receipts” could all trigger a system-wide crisis. [22]With less productive capital overall in the era of financialization, greater exposures to risk likewise threaten the longevity of the productive sector itself, which is now thoroughly integrated into the financial sphere. Taking on greater risks through trading in derivatives raises the likelihood that the investor will profit or lose money. Large losses can result in bankruptcy, engulfing the various individuals, banks, and institutions that lent money to them and exacerbating systemic risk. [23] In this sense, we may begin to better understand the paradoxical connectedness between the ‘real’ economy and financial markets.
Different Types of Derivatives

Most derivatives traded today take the form of forwards, futures, options, and swaps. The oldest and most intuitive type of derivative is a forward. Briefly, a forward is a contract between two parties codifying the obligation to buy or sell a particular quantity of an item at a fixed price or rate and a definite future point in time. Foreign exchange forwards, for example, obligate both parties to exchange agreed upon amounts of foreign currencies at a specified rate at a future date. These rates are generally traded ‘at par’ or ‘at market,’ meaning the value of the contract at the time it is traded is zero and no money need be traded at the contract’s initiation. This means that the market value of the contract is zero, but parties can decide to post collateral as a means of insuring the terms of the contract.[24] Because they are specialized according to specific needs, forwards are relatively limited derivatives contracts, and may involve high search costs to find parties with opposite needs (i.e., exposures to risk). [25] Forwards’ binding of parties to exchange may also lead to inconveniences for one or both parties after the contract is actually entered into. If one party defaults, significant legal fees may be required to secure the forward price, and this risk prompts both parties to monitor one another’s respective viability.[26] Contract terms are often standardized in order to avoid some of these potential issues. Forward contracts that are standardized, publicly traded, and cleared through a clearing house are referred to as futures. As opposed to forwards, futures are traded on organized exchanges and are largely substitutable for one another, which allows for greater trading volume and contributes to higher market liquidity. This new liquidity may improve the price discovery process, or how reflective market prices are of key information.[27]

As opposed to forwards and futures, option contracts allow the buyer or holder (also called the long options position) to buy or sell the underlying asset in the future. More specifically, buyers are purchasing the right to buy or sell the asset at a particular price (known as the strike price) either at a particular date (known as a European option) or at any time between the option’s initiation until its expiration date (known as an American option), and can be traded on individual stocks, stock indexes, and even through futures contracts themselves. [28] Options to buy and sell are known as calls and puts, respectively. Buying and selling on options is somewhat trickier than with forwards and futures; if the spot market price of a stock exceeds the strike price during the window in which the option could be exercised, then the holder may buy at a lower strike price by exercising the option. In this case, the option’s value would be the higher market price. If the market price remained below the strike price during the period in which the call option could be exercised, however, then the option would expire worthless. [29] An option’s price is often a reflection of market interest rates, the time to its maturity, the historical price volatility of the underlying asset, and the proximity of the underlying asset to its strike price. [30] As with other types of derivatives such as foreign exchange forwards, options can concern financial rather than real commodities. For example, interest rate options provide insurance against increases and deceases (caps and floors) and hikes and drops (collars) in interest rates. Cap options create a ceiling to protect against hikes in interest rates, while floor options create a minimum rate to protect against a potential fall in rates. [31] Options are predicated on the tension between selling short and going long. If someone who does not own the underlying asset sells it through a derivative contract in anticipation of buying it back at a lower price or in the open market at whatever price prevails, they are selling it ‘short’. Short-selling produces tremendous exposure to risk. As Henwood notes, “short-selling exposes the practitioner to enormous risks: when you buy something-go long, in the jargon-your loss is limited to what you paid for it; when you go short, however, your losses are potentially without limit.” [32] Brokers hypothetically are expected to evaluate clients’ credit rating in order to justify short-selling, but this practice is not highly regulated.

More recently, derivatives markets have turned towards the proliferation of swap contracts, which differ somewhat from forwards, futures, and options. A swap contract is perhaps most reflective of the contemporary usage of derivatives, constituting an agreement between counterparties to ‘swap’ two different kinds of payments, each calculated by applying an interest rate, exchange rate, index, or the price of an underlying commodity or asset to a notional principal.[33] Swaps usually do not require the transfer or exchange of the principal. Uniquely, payments based on swaps are done at regular intervals throughout the duration of the contract. In other words, whereas exchange-traded derivatives involve actual claims on an underlying assets, swaps do not; instead, the swap is between two sets of cash flows, which are usually destabilized by positions in other securities such as bonds or stock dividends.[34] Swaps can take several forms. A ‘vanilla’ interest rate swap, for example, involves one series of payments based on a fixed interest rate and another based on a floating interest rate. A foreign exchange swap entails an opening payment to purchase a foreign currency at a specified exchange rate, and a closing payment selling the currency at a specified exchange rate. A foreign currency swap consists of one set of payments derived from either a long or short position in a stock or index, and another set derived from an interest rate or other equity position,

amounting to a combination of a spot and forward transaction. [35] Currency and interest rate swaps have become especially important in recent decades. The former allows investors to hedge principle and interest payments in one currency against a preferred currency, while the latter allows borrowers to arbitrate between component markets of the international bond market. In this respect, swaps have played an instrumental role in controlling for short-term risk and thus making international bond markets particularly attractive for global investment. [36]

While each type of derivative contract is uniquely structured, they all share important commonalities. Derivative contracts can be settled either through the physical delivery of the underlying asset or through cash settlement with adjustments of margins on financial differences. Cash settlements allow for agents uninvolved in either production or the use of the underlying assets to speculate. Today cash settlement is more common, as most derivatives no longer involve the transfer of a title or a principle; instead, they create price exposure by conjoining their value and a notional amount or principal of the item form which the contract derives.[37] Taking a price position in the market while only putting up a small amount of capital used allows the investor to leverage, making it cheaper to hedge and speculate. Here derivatives are able to cover hedgers’ risks on the spot market covering losses or compensating gains. [38] In speculative transactions with derivatives, however, an agents’ position does not correspond to the spot market, and is thus exposed to greater risks in price variation.[39] A similar dynamic applies to arbitrage transactions, which occur simultaneously on the spot market and in the derivatives market. Arbitrage transactions, however, involve parties attempting to profit by exploiting price differentials, thus creating the opportunity for gains without risks. [40] All of this shows us that derivatives are used by a wide range of actors (investors, corporations, banks, etc.) to protect themselves against forms of risk. International agencies and banks use derivatives to hedge their loan portfolio positions, and transnational corporations use them to reduce their exposure to risk, with many creating financial divisions to actively speculate in derivatives markets. [41] Investment banks may also trade in derivatives for corporate clients, with the aim of boosting their liquidity by hedging positions in an inter-bank market.
An Abridged History of Derivatives

Some accounts of derivatives date their origins to biblical times in the form of agricultural consignment transactions. While derivatives trading can also be traced to 12th century Venice (exchanges on agriculture), late 16th century Amsterdam (forwards and options on commodities and securities), and 18th century Japan (futures on warehouse receipts and rice), modern derivatives trading began officially in 1849 when a group of grain merchants created the Chicago Board of Trade (CBOT).[42] The Chicago Board of Trade was originally designed to coordinate “geographically dispersed agricultural markets.”[43] Through its legal framework for standardizing the classification of grain trading, it became the central hub in the United States for pricing grains. The CBOT’s centrality during this period was facilitated by the development of new networks of railways and telegraphs in the US, which consequently enabled the CBOT to become first institution with a highly liquid futures market for grain contracts.[44] In so doing, the CBOT set the stage for a new kind of financial system in the late twentieth century, with the first formal set of rules governing futures contracts in forged in 1865. [45]Many farmers initially objected to the CBOT because they believed their products were priced too far away from the point of production. Such prices soon became essential for farmers, processors, and traders, however. As Muellerleile explains, “as grain commerce became more integrated with circuits of credit and capital, and more dependent upon risk-management tools such as futures contracts, the flow of price information became a prerequisite for cash crop farming.”[46] This integration into growingly expansive flows of capital allowed the consistency of the price mechanism to become a measurement of the strength of the grain industry, which the US Congress declared in the national interest in 1922.[47]

With the onset of the Great Depression, however, the government adopted a more stringent role towards financial speculation (though the agricultural sector was excluded from this approach). The financial legislation put in place by the New Deal would form the bedrock for these new regulatory efforts, most particularly the Banking Act of 1933, which comprised of Regulation Q (the imposition of ceilings on savings deposits and interest rates that could be paid on time), the Glass-Steagall Act, and the creation of a national deposit insurance system facilitated by the Federal Deposit Insurance Corporation.[48] By the 1970s, however, the Chicago exchanges began to apply their methods for pricing agricultural futures to urban financial instruments. State institutions began to more heavily regulate speculation, marking its first serious effort to do so since 1936. [49] The Chicago Mercantile Exchange created the International Money Market in 1972, which allowed for trading in currency futures and paved the way for more abstract contracts. [50] This development in part signified the dissolution of the boundary between agricultural futures and finance, aided by the expansion of the Chicago Mercantile Exchange’s (the second largest exchange in Chicago) entrance into new products. [51]Chicago exchanges influenced the passage of the 1974 Commodities Exchange Act that expanded the definition of a commodity from several agricultural products (in the 1936 Commodities Exchange Act) to all goods, articles, services, rights, and interests that can be dealt in futures contracts. [52] At the same time, Congress granted the Chicago Futures Trading Commission (CFTC) sole jurisdiction over futures trading, disallowing any other federal agency or state government entity or law from interfering with the development of futures markets.[53] The CFTC and its related state financial agencies saw it as their duty to promote the spread and hedging of risk, including by the range of non-financial corporations that had traded in derivatives to shield themselves from fluctuating commodity prices, interest rates, and floating exchange rates with the demise of the Bretton Woods Agreement in 1971.[54] These developments were also aided by technological and conceptual innovations during the 1960s, as more economists began to claim that the US stock market was fully efficient in responding to all publicly available information and could be modeled with reasonable accuracy. [55] The popularization of the Black-Scholes pricing formula, for example, changed the character of speculation from advising on option prices to calculating mispriced options or assets, empowering traders to invest on market mispricings with large amounts of borrowed money. [56] Today hedge funds carry out these activities, pooling wealthy clients’ investment contributions to arbitrate and trade in derivatives. [57] By the late 1970s in the midst of a crisis of stagnant economic growth and inflation, the Treasury decided it could stabilize currency by raising interest rates to encourage foreign holdings in US Treasury bonds and allowing for the exchange of derivatives on US debt brought to bond markets by the New York Federal Reserve.[58] This move provided the foundation for an unprecedented internationalization of derivatives markets.
Derivatives and Financialization

Derivatives trading has expanded to global proportions since the 1980s. The industry’s growth may be attributed most centrally to the development over-the-counter trading for financial derivatives, which corporations utilize to protect themselves from volatility in interest and exchange rates, and which speculators use in their efforts to predict trends in financial markets.[59] The proliferation of financial derivatives during this period is a less frequently discussed but critical component of broader patterns of neoliberal financialization beginning with the gradual dissolution of the Fordist-Keynesian accumulation regime beginning in the late 1960s and taking off in the early 1970s. Keynesianism had provided a unique way of managing risks through stimulating consumer demand with demand-side policy. Its decline gave way to a flexibilization of price relations and the growing importance of market processes in managing financial matters, leading to an influx in derivatives trading. [60] With the deregulation of capital flows, Nixon’s move to decouple the US dollar from the gold standard, and the 1973 OPEC oil shocks, price volatility increased in the early 1970s and paved the way for the internationalization of trade investment, exposing firms to greater degrees of risk. With the end of the fixed exchange rate system of Bretton Woods, Panitch and Gindin explain, “the derivatives revolution was crucial to the stabilization of currency markets…and was also immediately linked to the internationalization of the US bond market, which was occurring at the same time as the development of the separate Eurodollar market.” [61] More simply, the growth of financial derivatives markets was a requisite for avoiding capital devaluation in a period of economic tumult. The growth of the multinational firm during this period demonstrates the attempts made to mitigate the new volatility endemic to a globalizing derivatives market. [62]As the US bond market opened up, foreign investors began maintain greater holdings in US Treasury securities, above 21 percent by the 1980s. Paradoxically, this uncertainty, “amid the volatility of commodity prices and rising short-term interest rates, actually enhanced the attractiveness of Treasury bills for international investors, who recognized the depth and liquidity of the US bond market despite all the hand-wringing about declining US economic power and strength.”[63] Here we can begin to trace a theme of global integration into the financial derivatives market, underpinned by the US dollar-trading on international bonds implicates investors in the volatile movements of currency and interest rates. With investors able to swap various floating and fixed exchange rate obligations in order to better fit their perception of the market direction, the changes in currency levels and interest rates that had traditionally slowed markets down (investment in bonds denominated in suboptimal currencies were deemed too big a risk) began to play a different role in the global economy. [64]

Like the Fordist-Keynesian accumulation regime before it, financialization is a stage of capitalism fraught with contradictions. The term ‘financialization’ itself is heavily debated, with disagreements over its periodicity, its coherence with or distinctiveness from neoliberalism, and its most essential characteristics. For our purposes here, Kippner’s definition is useful. For her, financialization refers to “a broad-based transformation in which financial activities (rather than services generally) have become increasingly dominant in the US economy over the last several decades.”[65] The ‘financial’ here “references the provision (or transfer) of capital in expectation of future interest, dividends, or capital gains,” as opposed to productive capital that arises from the production and trade of commodities.[66]This shift towards finance, beginning in the 1970s and expanding in the 1980s and 1990s, provided the state with a means for displacing the rigidities of the Fordist-Keynesian accumulation regime. This displacement occurred first and foremost in the deregulation of domestic financial markets throughout the 1970s, which gradually reduced restraints on the flow of credit. [67] Concurrent spikes in interest rates (most notably Federal Reserve Chair Paul Volcker’s 1981 hike, more notoriously known as the “Volcker Shock”) in order to restrain the economy in the absence of regulation on the supply of credit also emerged as a response to deregulation. These higher interest rates attracted remarkably high levels of foreign capital into the US economy, thus allowing for a drastic expansion of domestic financial markets and helping to tie the global economy to the floating US dollar. As strict monetary policy became the preferred tactic for stabilizing US currency during this time (resulting in rising unemployment), the Federal Reserve turned to a greater extent to the market, expanding credit at the same time as it increased interest rate volatility. [68] Above all, however, it was the deregulatory moves of the 1980s-removing controls that had restricted interest rates payable on savings deposits-that shaped the course of financialization. [69]
Financialization with Derivatives

Deregulation increased the price of credit while extending it to a broader constituency.[70] The incorporation of US multinational commercial banks into derivatives trading-in addition to Wall Street-based investment banks-should not be overlooked here. (Whereas investment banks create liquidity by dictating the terms of trading of securities, commercial banks do so by transforming deposits into longer-term assets.) [71] With the first significant derivative bond swap in the early 1980s between IBM and the World Bank, banks such as J.P. Morgan used overseas operations in London to bypass the regulations previously put in place by the Glass-Steagall Act and take advantage of growing derivatives markets. After executing the first credit default swap in the early 1990s, derivative contracts accounted for over half of Morgan’s trading revenue. [72] Because derivatives are able to conjoin a variety of forms of capital and convert fixed and floating rate loans and currencies, Panitch and Gindin note, these markets were “able to meet the hedging needs not only of financial institutions (which exchanged 40 percent of all swaps among themselves), but also of the many corporations seeking protection from the rapidly evolving vulnerabilities associated with global trade and investment.” [73] By the time the Clinton administration took power in 1993, Streeck explains, financial deregulation had “made it possible to plug the gaps resulting from deficit reduction, by means of a rapid extension of loan facilities for private households at a time when falling or stagnant wages and transfer incomes, combined with rising costs of ‘responsible self-provision’, might otherwise have jeopardized support for the policy of economic liberalization.” [74] This shift may be understood as a kind of ‘privatized Keynesianism,’ [75] in which the public debt taken on by the state during the Fordist-Keynesian accumulation regime is transferred onto consumers in the form of individualized debt relations in tandem with a dissolving social safety net. This extension of credit to compensate for slipping wages and benefits effectively redistributes capital upwards.[76] With the state shifting debt-driven consumption from public financing to private, credit-based consumption, government debt comes instead from low receipts, or limits to taxation, while corporate interests are empowered to make increasing demands on the state. [77]

Arguably the central paradox of financialization is that while financial institutions, markets, and assets “can secure the return of value in particular instances,” they “cannot guarantee the systematic augmentation and return of value in the aggregate.” [78] As opposed to a wage labor relation, in which a fixed amount of capital is guaranteed to a capitalist according to the rate of surplus-value extracted from a worker and marks a contribution to the overall amount of real capital in circulation, financial markets operate in the sphere of circulation and can only either redistribute capital or create fictitious value. Financial markets begin to malfunction when the expansion of monetary value across an economy can no longer be guaranteed by participants in financial transactions. Here we can better understand a central contradiction of derivatives: they exist to offset or control this risk but ultimately increase it. Despite this paradox, it is not difficult to understand why derivatives have grown over the past nearly-four decades. They provide investors, corporate treasury departments, and bank risk management departments with the advantage of being able to hedge risk as a measure of insurance against adverse fluctuations in the market. [79] Moreover, they can provide signals to larger financial markets, which could ostensibly reduce uncertainty and unequal access to information. Derivatives also allow investors to more cheaply diversify their portfolios, as managers are able to expose themselves to derivatives according to a larger number of shares. Furthermore, derivatives operate on leverage and are thus cheap to trade in.[80] A liberal economic perspective might claim that derivatives are incapable of affecting the price of underlying assets in conditions of perfect market competition, and that they simply provide greater economic stability by spreading risk between different agents in the market; in reality, however, asymmetric access to information and imperfections in the instruments themselves open markets up to greater degrees of systemic risk. [81] In bypassing the sphere of production, surplus-value in production is replaced by essentially zero-sum casino bets, manufacturing risk through a social logic of mutual indebtedness.[82]
What’s New About Derivatives?

As the field of financialized economic activity incorporates greater numbers of people through the financialization of risk, capital circulation becomes decoupled from the labor process. [83] Whereas the labor process relies on the extraction of surplus-value in the sphere of production, financialization means that the appreciation of fictitious capital becomes autonomous relative to productive appreciation, as tradable financial instruments are valued according to expected income flows and discounted by an interest rate. [84] On the other hand, however, this process should be understood as a means of integrating the workforce into financial channels and is thus actually semi-dependent on productive capital. Carneiro et al. assert that the advent of derivatives constitutes a new form of accumulation entirely, which they call the ‘fourth dimension’.[85] While historically this fourth dimension of capital has developed in tandem with capital in its monetary form, it also “progressively constitutes an autonomous force in the process of capital appreciation when deep and liquid markets freely negotiate stocks of wealth.” [86] In other words, this fourth dimension is linked to the changing role of derivatives in the 1970s, along with fundamental changes in the international financial and monetary systems allowing for more rapid accumulation over greater distances.[87]

At this point it is necessary to clarify two related yet distinct issues. One is the process of financialization, the other the growth of derivatives trading. Carneiro et al. assert that derivatives markets constitute a unique form of accumulation because capital appreciation occurs independent of initial investment. This is markedly different from credit-based capital appreciation. Since the 1970s financial relations have dominated economic policy-making, pushed more individuals into debt, and formed a new mode of accumulation characterized by falling profit rates and real wages, persistent unemployment, and mediocre growth in productive sectors. Yet within financialization, derivatives signify an even greater abstraction of capital from the process of accumulation. [88] Carneiro et al. explain this as “a difference in the nature of the gain from the operation,” jettisoning the “need for money as a means of appreciation, or its advance in the beginning of the process.” [89] This means that though “money is still an end to the process of valorization,” it “loses its relevance as a vehicle of valorization, as well as the credit system.” [90] This form of accumulation is intrinsically speculative-gains from derivatives transactions come simply from a bet on a price movement by an asset that is not owned by the speculator. Despite this fundamentally unique character of derivatives, however, it would be unfair to claim that derivatives are actually entirely independent of the production process. When changes in risk perception generate price-adjustments in the market in the form of the inversion of bets and settlements of contracts, “social relations of property and credit are again essential to ensure liquidity and solvency of agents involved in these markets, revealing the real social relations of power, property, and money that appeared previously only in a veiled manner.”[91] The remainder of this report will detail the relation between the spheres of production and circulation vis-à-vis derivative-based accumulation.
Derivatives, Time-Space Compression, and Spatio-Temporal Fixes

Though the derivatives market is the most liquid in the world, it is also highly vulnerable to systemic crisis. Of particular concern is that derivatives may be based on practically any asset, including worker debt. As Lapavitsas explains, “these derivatives could be thought of as synthetic bonds,” or “securities promising to pay the holder a return (interest) out of a variety of payments made by the workers which are pooled and then divided.”[92] Workers’ payments on, for example, housing and consumer debts, would entail a payoff for the holder of a given derivative security who has a claim on that personal debt. Despite their separation from the sphere of production, derivatives are in the final instance contingent on it. Labor thus becomes an extension of financial services themselves, vulnerable to risks entailed by the circulation and realization of capital, which it simultaneously empowers through deferred wages and relies upon in order to access necessities such as education and retirement costs. [93] Those that make up the productive sector are both incorporated into and dependent upon these circuits of realization.

Understanding derivatives’ functionality helps us evaluate the specificities of contemporary capitalism’s tendency towards crisis. As derivatives markets are predicated on the mitigation of risk, it is crucial here to consider how derivatives fit with established theories of capitalist crisis. One of the most notorious theories on this count is David Harvey’s ‘spatial fix.’ Harvey explains that competition between capitalists leads to an uneven accumulation of capital, which threatens the reproduction of both capitalist and working classes. To recall from earlier, this threat takes the form of an excess of capital relative to available opportunities for profitable reinvestment (also known as overaccumulation). Overaccumulation manifests through a surplus of commodities, money-capital, and/or labor power. [94]There are two solutions to this problem. The first involves the devaluation of capital through inflation, gluts of commodities on the market and falling prices, productive capacity culminating in bankruptcy, and falling real wages and standards of living. This solution is not optimal for capitalists. The second solution, however, involves lending surplus capital abroad to create productive powers in new regions. This latter option is the crux of the ‘spatial fix’. Crises are temporarily resolved because rates of profit in these new regions incentivize a flow of capital and raise the rate of profit in the system as a whole. The problem here is that higher profits entail an increase in the tendency towards overaccumulation; moreover, this now takes place on an expanding geographical scale. As Harvey writes, “the only escape lies in a continuous acceleration in the creation of fresh productive powers. From this we can derive an impulsion within capitalism to create the world market, to intensify the volume of exchange, to produce new needs and new kinds of products.” [95] While capital is ultimately limited through productive capacity (only so many goods can be produced and circulated), derivatives-as instruments whose value is only derived from the asset underlying them-may represent a way of circumventing real barriers to accumulation.

According to Harvey, an irresolvable tension emerges between the devaluation of domestic capital due to international competition (apropos the development of new export-driven regions), and the internal devaluation of capital in these regions (as constrained development also limits international competition and blocks opportunities for profitable export). Productive forces in new regions constitute a competitive threat to the country that introduced the spatial fix, whereas limited development in new productive centers hinders international competition and reduces profitable opportunities for capital export, thus leading to an internal devaluation of capital with immobile overaccumulated capital. [96]Geographical expansion allows overaccumulated capital to be invested into labor surpluses and for the development of primitive accumulation processes in these exterior regions as an alternative to devaluation. Though the spatial fix applies mostly to overaccumulation resulting from competition in the sphere of production, overaccumulation itself is not limited to this dimension of capitalist relations. Beginning in the 1970s, for example, overaccumulated manufacturing capital in cities-in tandem with the influx of capital due to higher petroleum prices-garnered an excess of speculative capital that could not be used to boost industrial production. [97] This speaks to a crucial tension between speculative and productive capital, as this juncture required the freeing of speculative capital from the production process by creating a separation between new derivative instruments and their underlying assets. It is thus argued here, then, that derivatives markets constitute their own paradoxical form of a spatial fix, especially as the underlying assets become currency-related.

Crucial to the spatial fix embodied by derivatives markets is the time-space compression endemic to capitalist accumulation and financialization more dramatically. During the 1970s this dynamic took the form of organizational shifts in production that undid the managerial tendencies of Fordism, generating a more fluid and decentralized mode of production.[98] At the same time, technological innovation during this period allowed for a faster and more geographically distantiated financial sector. With an expanded reach, however, comes an increased tendency towards volatility; the shortened length of time capital takes to move across space facilitates more short-term gratification, but compromises states’ ability to engage in long-term planning. This limitation means that financial institutions must either adapt quickly to rapid market shifts, or find ways to control volatility themselves.[99] The rapid and expansive movement of capital under financialization represents a paradox for Harvey, as “the less important the spatial barriers, the greater the sensitivity of capital to the variations of place within space, and the greater the incentive for places to be differentiated in ways attractive to capital,” all of which leads to increasingly uneven development “within a highly unified global space economy of capital flows.”[100] Though Harvey’s “globalized space economy” still primarily refers to the sphere of production, the flexibilization of the financialized accumulation regime entails a fundamental shift in how value is represented as money: “the de-linking of the financial system from active production and from any material monetary base calls into question the reliability of the basic mechanism whereby value is supposed to be represented.” [101] In other words, the productive sphere loses power relative to the financial.

Here it is necessary to question more precisely how the migration of capital from the sphere of production to the sphere of circulation may constitute a spatial fix. Bob Jessop, a critic of Harvey, argues that for however important the spatial fix, Harvey’s focus on “the production of localized geographical landscapes of long-term infrastructural investments that facilitate the turnover time of industrial capital and the circulation of commercial and financial capital” [102] cannot adequately account for the movements and contours of capital under financialization. By examining spatial fixes solely in terms of the contradiction between the unstable movement of productive capital in the form of profits for reinvestment and the fixity of concrete assets with particular times and places, Jessop explains, Harvey elides a discussion of “the different forms of spatio-temporal fix in relation to the different stages or forms of capital accumulation, nor their articulation to institutionalized class compromise or modes of regulation.” [103] While production entails a profit motive (the creation of surplus-value through relations of exploitation), the profits resulting from circulation derive not from any value it creates, but rather from its capacity to redistribute surplus-value. Jessop writes of the importance of ‘time-space distantiation’-not just compression-in a globalizing world economy, or the expansion of political-economic relations across time and space such that they may be coordinated over greater distances and scales of activity. [104] For him, the twin dynamics of compression and distantiation indicate that “the power of hypermobile forms of finance capital depends on their unique capacity to compress their own decision-making time…whilst continuing to extend and consolidate their global reach.” [105] This tension is present within any individual or interconnected circuit of capital, depending as they do on the relationship between “a physical marketplace and a conceptual marketspace.” [106] Despite the altered character of these spatial barriers to accumulation, however, physical territory remains essential to the circulation of capital, as it is contingent on static ensembles in which the means of production and organization necessitate the extraction of surplus-value. [107]

Derivatives markets exhibit a unique spatio-temporal in relation to contemporary capitalist accumulation. As Bryan and Rafferty write, “derivatives, through options and futures, establish pricing relationships that ‘bind’ the future to the present.” [108] Like Harvey’s spatial fix centered on productive capital, derivatives markets may be viewed as a spatial fix in and of themselves in their attempt to hedge risk and stave off devaluation as more individuals and institutions become exposed to financial risk. Corporations trade in derivatives markets in order to handle their exposure to risks in a sea of variable rates and prices. Ensuring the value of money is key, and the spatial displacement constituted by derivatives (into cyberspace or digital space, as it were). It purports to facilitate this process in several respects. First, derivatives constitute a unique form of money by providing a universal measure for asset value across space, despite their dependence on nationally-based unequal levels of contestability. [109] In other words, derivatives are ultimately based on US norms of risk value and conceptions of secure financial claims. Second, derivatives markets aim to allow for the limiting of exchange- and interest-rate risks for corporations and for comparing various risk management strategies across time and space, though this may increase systemic volatility even these new strategies do not immediately drain productive capacity. [110] Finally, banks or other financial institutions might engage in securitization and over-the-counter trading in order to mitigate the uncertainties of profiting from credit money. As Soederberg explains, over-the-counter trading on securitized derivatives, particularly credit default swaps, “facilitates temporal and spatial displacements that allow banks to shift loans off the balance sheet by selling them to outside institutional investors, such as pension and mutual funds.” [111] By spreading risk and shifting risks on to others, these institutions are able to at least temporarily protect themselves.

Here we encounter some problems, however. In particular, the dominance of credit makes it especially difficult to ensure the quality of money. This is especially true when it is less profitable to expand value production than to provide credit and profit through interest rates. [112] This is what Jessop means when he writes of “a fundamental contradiction between the economy considered as a pure space of flows and the economy as a territorially and/or socially embedded system of extra-economic as well as economic resources and competencies.” [113] When capital is able to quickly exploit resources in one area without contributing to their reproduction and then move elsewhere to replicate this kind of circulation, it is compromising the sphere of production and thus the strength of the dollar. The sphere of circulation is particularly vulnerable when debt enmeshed in the web of speculation becomes irredeemable or the gap between the value of credit and that of real money becomes too wide. [114]However, the increasing use of securitization and derivatives markets as a risk management strategy has made regulating banks for capital adequacy unable to guarantee seriously limiting risk exposure. This is why in 2008 the key US financial institutions (the Fed and Treasury, as well as the Bank for International Settlements) all shifted to the same models for assessing risk as the largest banks, in the hope of accessing regulators’ “fire codes.”[115] Competitive pressures between big banks in derivatives and securities markets can lead to an indifference to these regulative warnings, thus further widening the gap between fictitious and real value. [116] When this occurs, the glut of fictitious values (in the form of privately created credit money) contributes to inflation and devalues currency. This problem was most severe in the crisis of 2008, when the American International Group (AIG)-a financial institution that provided insurance for other financial institutions on the creditworthiness of their derivative holdings-was ultimately unable to honor its insurance contracts and protect against loss.[117] Banks extending mortgages to borrowers turned to commercial banks in order to fund the loan, which would then sell the loan to government-sponsored enterprises such as Fannie Mae. These institutions consolidate a range of mortgages and sell the resultant mortgage-backed security (MBS) to an investment bank, which repackages the MBS according to its needs and issues other derivatives such as collateralized debt obligations (CDOs) to be bought by other lenders, banks, or hedge funds.

The link to the sphere of production is again crucial here. As Wolfson explains, “at the base of this complicated pyramid of derivatives might be a subprime borrower whose lenders did not explain an adjustable-rate loan, or another borrower whose ability to meet mortgage payments depended on a continued escalation of home prices. As the subprime borrowers’ rates reset, and especially as housing price speculation collapsed, the whole house of cards came crashing down.” [118] Derivatives do not require ownership of the underlying asset, so it is possible to speculate-via credit default swaps with an insurer-on the chance of default on a security without owning it. This property of derivatives means that the volume of insured securities can increase quickly and significantly, such that a relatively small quantity of securities can be insured at a much higher amount.[119] Since consumer credit can circulate only as a claim over a share of future profit, or surplus-value and depends on the stability of creditors to pay their loans, asset-backed securitzation has developed in order to ultimately ensure the quality of real money for speculative interests. [120] The time-space compression that occurs through derivatives trading “entails new actors, new strategies and the continual inversion of time and the expansion of virtual space to continue to fund claims on the fictitious value of credit.”[121] It is clear, then, that derivatives are ultimately reliant upon productive capital. And while price fluctuations might trigger financial crises, the fear of devaluation due to an overaccumulation of capital is still at the crux. Because of the global scale of derivatives, it is not just the American state that must ensure the stability of the dollar, but any marginal economy, as a means of guarding against a downturn in their own currency value.[122]
Conclusion: Towards a Typology of Spatial Fixes

This paper has attempted to explain derivatives’ instrumental properties, their historical development, and their distinct role in both mitigating and exacerbating crises. The basic premise argued that derivatives markets act as a kind of spatial fix in and of themselves, one that maintains several properties of Harvey’s spatial fix of productive capital but that also differs in important ways. In summing up, then, this paper will provide a brief typology of spatial fixes in order to provide some clarity to the question of how these spatial fixes differ analytically.

We can think here of three kinds of spatial fixes. First is Harvey’s spatial fix, which pertains to productive capital only. Second are financialized spatio-temporal fixes. These fixes are unique in their supplying of fictitious capital. Last are derivative spatio-temporal fixes which, like financialized spatio-temporal fixes, ultimately are dependent upon the sphere of production (in the sense of its effect on interest rates and exchange rates), but operate abstractly in digital OTC markets and move at an unprecedentedly rapid speed. While maintaining many of the properties of financialized spatio-temporal fixes, derivative spatio-temporal fixes constitute their own category because of their separation from an underlying asset. What unites these three forms of spatial fixes is that they are used in order to solve the problem of overaccumulation, yet ultimately contribute to greater systemic risk. What differentiate them are their respective degrees of separation from the sphere of production and, equally important, how they modify the circulation of capital according to spatial parameters. Each type of spatial fix also affects those linked to them in unique ways. For example, a spatial fix of productive capital mitigates a crisis of overaccumulation by opening up productive markets in new regions, or expanding the means of production. This affects capital by increasing the rate of profit in the system as a whole by incentivizing the flow of capital to these regions and trading on the world market, which ultimately tends again towards overaccumulation. A financialized spatio-temporal fix, in contrast, works by extending fictitious capital to individuals and institutions in exchange for later interest payments. Finance capital may be deployed in tandem with productive capital in order to build industry, procure assets, or pay for goods and services. At the same time, fictitious capital is by nature unproductive and thus its extension can be characterized as a mode of debt-driven accumulation. We can understand this process as a spatio-temporal rather than simply a temporal one because finance concurrently reshapes the landscape for productive capital while maintaining speculative interest due to stable currency. Of course, when expectations are too optimistic and a speculative bubble pops, debts are not repayable and financial institutions experience severe losses. [123]

Derivative spatio-temporal fixes are unique in their ability to commodify risk itself, thus “transform[ing] the temporal horizon of circulation-centered capitalism.” [124] Derivatives constitute a fundamental shift in the operations of speculative capital and the internationalization of risk. [125] Whereas financial spatio-temporal fixes constitute a debt-driven accumulation tactic, derivative spatio-temporal fixes commodify the inherent relationship structured by that debt, and may be used for hedging, speculation, and leveraging across infinite space. This movement entails particular political consequences that are unlikely to recede on their own. As risks to capital are speculated on rather than altered and the globalization of risk is further insulated from political pressures, [126] crises such as that of 2008 will continue. Understanding the proliferation of these fixes to capitalist crisis is crucial if we are to consider viable alternatives.

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[1] David Harvey, “The Spatial Fix – Hegel, Von Thunen, and Marx,” Antipode, Volume 13, Issue 3 (1981): 7.

[2] Costas Lapavitsas, Profiting Without Producing: How Finance Exploits Us All (New York: Verso, 2013), 4.

[3] Scott Aquanno, “US Power and the International Bond Market: Financial Flows and the Construction of Risk Value,” in American Empire and the Political Economy of Global Finance , ed. Leo Panitch and Martijn Konings (New York: Palgrave Macmillan, 2009), 121.

[4] Randall Dodd, “Derivatives Markets: Sources of Vulnerability in US Financial Markets,” Financial Policy Forum, Derivative Study Center (May 2004), 1.

[5] Ibid, 643.

[6] Dick Bryan and Michael Rafferty, Capitalism with Derivatives: A Political Economy of Financial Derivatives, Capital, and Class (New York: Palgrave Macmillan, 2006), 13.

[7] Sarah Breger Bush, “Risk Markets and the Landscape of Social Change: Notes on Derivatives, Insurance, and Global Neoliberalism,” International Journal of Political Economy, Volume 45 (2016), 127.

[8] Bryan and Rafferty, Capitalism with Derivatives, 2.

[9] Lapavitsas, Profiting Without Producing, 6.

[10] Ricardo de Medeiros Carneiro, Pedro Rossi, Guilherme Santos Mello, and Marcos Vinicius Chiliatto-Leite, “The Fourth Dimension: Derivatives and Financial Dominance,” Review of Radical Political Economics, Volume 47 (2015), 642.

[11] Lapavitsas, 5.

[12] Ibid, 9.

[13] Carneiro et al., “The Fourth Dimension: Derivatives and Financial Dominance,” 644.

[14] Randy Martin, “What Differences do Derivatives Make? From the Technical to the Political Conjuncture,” Culture Unbound, Volume 6 (2014), 193.

[15] LiPuma and Lee, 87.

[16] Bryan and Rafferty, 63.

[17] Adam Tickell, “Dangerous Derivatives: Controlling and Creating Risks in International Money,” Geoforum, Volume 31 (2000), 90.

[18] Tickell, “Dangerous Derivatives,” 90.

[19] Lapavitsas, 8.

[20] Ibid.

[21] LiPuma and Lee, 91-92.

[22] Tickell, 90.

[23] Dodd, 6.

[24] Dodd, 20.

[25] Bryan and Rafferty, 42.

[26] Ibid.

[27] Dodd, 20.

[28] Doug Henwood, Wall Street: How It Works and for Whom (New York: Verso, 1997), 29.

[29] Dodd, 21.

[30] Henwood, Wall Street, 30.

[31] Dodd, 22.

[32] Henwood, 29.

[33] Dodd, 23.

[34] Henwood, 34.

[35] Dodd, 23.

[36] Aquanno, “US Power and the International Bond Market,” 131.

[37] Ibid, 19.

[38] Carneiro et al., 643.

[39] Ibid.

[40] Ibid, 644.

[41] LiPuma and Lee, 43.

[42] Tickell, 88.

[43] Chris Muellerleile, “Speculative Boundaries: Chicago and the Regulatory History of US Financial Derivative Markets” Environment and Planning A, Volume 47 (2015), 2.

[44] Ibid, 4.

[45] Tickell, 88.

[46] Muellerleile, 5.

[47] Ibid.

[48] Greta Krippner, Capitalizing on Crisis: The Political Origins of the Rise of Finance (Cambridge: Harvard University Press, 2012), 60.

[49] Muellerleile, 8.

[50] Tickell, 88.

[51] Muellerleile, 9.

[52] Ibid, 12.

[53] Ibid, 13.

[54] Leo Panitch and Sam Gindin, The Making of Global Capitalism: The Political Economy of American Empire (New York: Verso, 2013), 150.

[55] Donald Mackenzie and Yuval Millo, “Constructing a Market, Performing Theory: The Historical Sociology of a Financial Derivatives Exchange,” American Journal of Sociology, Volume 19, Number 1 (July 2003), 114.

[56] Ibid, 44.

[57] Bryan and Rafferty, 4.

[58] Panitch and Gindin, The Making of Global Capitalism, 150.

[59] Bryan and Rafferty, 7.

[60] Ibid, 8.

[61] Panitch and Gindin, 150.

[62] Ibid, 50-51.

[63] Ibid, 151.

[64] Aquanno, 131.

[65] Krippner, Capitalizing on Crisis, 2.

[66] Ibid, 4.

[67] Ibid, 52.

[68] Ibid.

[69] Ibid.

[70] Ibid, 58-59.

[71] Lapavitsas, 134.

[72] Panitch and Gindin, 176.

[73] Ibid.

[74] Wolfgang Streeck, Buying Time: The Delayed Crisis of Democratic Capitalism (New York: Verso, 2014), 51.

[75] Colin Crouch, “Privatized Keynesianism: An Unacknowledged Policy Regime,” The British Journal of Politics and International Relations , Volume 11, Issue 3 (August 2009), 382.

[76] Martin, 195.

[77] Streeck, Buying Time, 66.

[78] Lapavitsas, 108.

[79] Tickell, 89.

[80] Ibid.

[81] Ibid.

[82] Martin, 191.

[83] Ibid, 199.

[84] Carneiro et al., 647.

[85] Ibid, 648.

[86] Ibid.

[87] Ibid.

[88] Lapavitsas, 3.

[89] Carneiro et al., 649.

[90] Ibid.

[91] Ibid, 650.

[92] Lapavitsas, 167.

[93] Martin, 196.

[94] Harvey, “The Spatial Fix,” 7.

[95] Ibid.

[96] Ibid, 8.

[97] LiPuma and Lee, 98.

[98] David Harvey, The Condition of Postmodernity: An Enquiry into the Origins of Cultural Change(Oxford: Wiley-Blackwell, 1991): 284.

[99] Ibid, 287.

[100] Ibid, 295-96.

[101] Ibid, 296.

[102] Bob Jessop, “The Crisis of the National Spatio-Temporal Fix and the Tendential Ecological Dominance of Globalizing Capitalism,” International Journal of Urban and Regional Research, Volume 24.2 (June 2000), 337.

[103] Ibid, 340.

[104] Ibid.

[105] Ibid.

[106] Ibid, 346.

[107] Ibid.

[108] Bryan and Rafferty, 12.

[109] Aquanno, 130.

[110] Panitch and Gindin, 188.

[111] Susanne Soederberg, Debtfare States and the Poverty Industry: Money, Discipline and the Surplus Population (New York: Routledge, 2014), 91.

[112] Ibid, 54.

[113] Jessop, 347.

[114] Soederberg, Debtfare States and the Poverty Industry, 54.

[115] Panitch and Gindin, 266.

[116] Ibid.

[117] Marty Wolfson, “Derivatives and Deregulation,” in Real World Banking and Finance, 6th Edition, ed. Doug Orr, Marty Wolfson, Chris Sturr (Boston: Dollars and Sense, 2010), 152.

[118] Ibid.

[119] Ibid, 153.

[120] Soederberg, 43.

[121] Ibid, 91.

[122] LiPuma and Lee, 52.

[123] Wolfson, 151.

[124] LiPuma and Lee, 127.

[125] Ibid, 37.

[126] Bush, 134.