Gods outside the Market: Central Banks, China and the Emergence of Neoliberal State Capitalism

Abstract

Capitalism has always had to make use of contrivances from outside the realm of the market to compensate for structural problems of valorization. These “gods outside the market” have included the forced labour and slavery characteristic of the mercantilist era, as well as the scramble for colonies in the period leading up to World War I. With the anti-colonial movement and the closing off of external avenues to assist valorization, there have been moves to discover new “gods outside the market,” but internal rather than external to national states. The nationalizations of Fannie Mae and Freddie Mac are relatively “familiar” forms of such state intervention. Less familiar, but more important, has been the newly important role of central banks, using the expansion of their asset base (most familiarly but not exclusively through Quantitative Easing) to supply the liquidity which the market cannot. Together, these developments suggest two things: first, that neoliberalism in saving itself from the effects of the Great Recession has simultaneously transformed itself. I am suggesting the term “neoliberal state capitalism,” and second, that central to this process have been actions centred in China, actions too often seen as derivative and not constitutive of developments in the world economy.