Easy Money: The Reserve Bank of Australia and the tremors in capital accumulation

NAA- A12111, 1:1967:16:89
NAA: A12111, 1/1967/16/89

On the 2nd of August the Reserve Bank of Australia (RBA) reduced the cash rate to the historic low of 1.5%. The actions of the central bank often seem either arcane or uninteresting to the vast majority of us – except perhaps for those playing the markets and various gold-bugs, currency cranks and other tin-foil hat aficionados. However we should pay attention to the RBA. The RBA’s action was an attempt to intervene on the level of money in a way to forestall a further decline in the prospects for the capitalist mode of production in Australia and thus dampen any intensification in social conflict or malfunctioning such a decline might contribute to. Therefore it also tells us much about the health of capitalism in Australia on a whole and gives us an insight into the terrain on which our efforts for emancipation play out.


It is important to place an understanding of money right in the centre of radical critiques of capitalist society. Money is a coagulant that holds together so much of capitalist society as well as the form in which capital finds its clearest expression. Money dominates our lives. ‘The individual carries his social power, as well as his bonds with society, in his pocket’ (Marx 1993, 157). In our world money is incredibly heavy: ‘the wealth of societies in which the capitalist mode of production prevails appears as an “immense collection of commodities”…’ and it is our access to money which allows us to access this wealth which is the collective product of our vast creative capacities and their metabolism with the world (Marx 1990, 127). There are very few moments of the day when the amount of money in my pocket, in my bank account and the level of debt on my credit card isn’t on my mind. Yet on the other hand money is now incredibly insubstantial: since the end of the direct linkage of the US dollar to gold and all other currencies to the US dollar money no longer has any other references than itself. This has facilitated a vast and dizzying explosion of liquidity. This contradiction was seen so starkly in the response to the crisis when vast sums of money were either willed into existence by states or appeared as state debts as the financial system was bailed out whilst money for many people evaporated and plunged them into poverty.


Anti-capitalists in Australia have not been very good at making sense of money and finance nor popularising this critique. We rely too much on very general arguments about the madness of markets or robotic interpretations of the tendency of the rate of profit to fall. We haven’t been very good at explaining the specifics of this crisis or why crises and malfunctions that appear on the level of money are actually products and expressions of much deeper systemic dynamics. This space has been filled by less savoury types: currency cranks, Larouchites, anti-Semites and other species of reactionaries. Part of our collective self-emancipation is demystifying the operations of capital on all levels.

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On Budget Eve: Deflation & The Limits to Privatised Keynesianism


NAA- M3130, 81
NAA- M3130, 81

Tuesday 3rd May will see the first budget of the Turnbull-Morrison Coalition government. It is also the date of the Reserve Bank’s next monetary policy decision. So it is an important day for fiscal and monetary policy. Like most people (including the well paid opinion-makers of the commentariat) I have no idea what the budget will contain. It is unlikely that the government will be able to break the impasse facing the state: a general tendency of slowing growth , rising state debt and a pool of sullen and largely inchoate opposition amongst the population to various attempts by the state to address both. The picture is complex. On this blog I have written a lot about ‘Capital’s Plan A’– the stimulation of the economy via infrastructure spending to be financed in part by cuts to social reproduction and through the ‘recycling’ (read privatisation or leasing) of state owned assets. This plan, at a Federal level is stalled, due in part to the 2015 defeat of the Qld LNP government on the question of leasing power assets. However the recent Victorian state budget is built around increased infrastructure spending financed by the leasing of a port and a higher level of debt[i]. Preceding the Federal budget there has been a warning from JPMorgan and from Moody’s about the potential for Australia to lose its AAA rating, projections from Deloitte about the size of the increase in both debt and deficit and,what surprised everyone, the release by the Australian Bureau of Statistics of the latest CPI figures showing .2% deflation in the last quarter (Australian Bureau of Statistics 2016d, Greber 2016, Janda 2016, Martin 2016). It is this last point I want to look at. What does this latest news tell us about the both the direction of capital accumulation and the tensions and fault-lines of antagonism that constitute capitalist society in Australia?

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Another Day in The Sun: The National Accounts, Growth and Malfunction

NAA: A434, 1949/3/21685



The work of the critique of political economy is a thankless task: especially when reality comes and fucks up your theorising. Over the last year on this blog I have been trying to address a number of interrelated phenomena: the end of the mining boom as a symptom of the global recession, rising state debt and the difficulties this presents to facilitating social reproduction and the failure of the Government to implement ‘Plan A’ – the stimulation of the economy via infrastructure spending financed by asset sales and cuts to services. Then the Australian Bureau of Statistics comes along and publishes the National Accounts which detail higher than predicted growth rates for the last quarter: 0.7% trend and 0.6% seasonally adjusted. Calendar year growth is then up to 3.0% rather than the forecasted 2.5% (Scutt 2016).

This would indicated healthy growth rather than malfunctioning – and this is despite the continual end of the mining boom which was the engine that drove capital accumulation in Australia for the last two decades. And GDP growth is, I would attest, a mystified indicator of profitability. If the economy is growing it is because firms are investing; and they are investing because of a sufficient level of profit today and expectations of them tomorrow. So much for declining profitability then, so much for over-accumulation too, so much for looming crisis…

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Australia you’re standing in it part 2: Debt & Social Reproduction


In part two of Australia You’re Standing In It I’m going to attempt analyse the relationships between state debt and social reproduction. In particular I want to argue that rising debts and continuing deficits provide a challenge to how social reproduction is carried out by the state. This directly flows on from the previous chapter as the core of my argument is that the rising debt and deficit of the Australian state are at least in part a product of the global stagnation of capital accumulation. This manifests in the drop in revenue caused by the winding down of the mining boom.


I want to emphasise the stakes of my argument. In mainstream debates in Australia debt is most often framed in one of the following two ways. For the Right debt is a cause, if not the cause, of economic stagnation and crisis. For the Left Australia’s debt levels are unproblematic and the panic over debt is a production of the fetid imagination of the neoliberals and/or a cynical manoeuvre to justify the sort of policies the Right always carry in their back pockets. Here I wish to reject both these arguments. Debt is not the cause of crisis but a particular manifestation or expression of it; but it is a manifestation that has its own contradictions. And debt levels whilst overblown by the Right do present a serious challenge to the state’s abilities to finance and carry out social reproduction. Also a new revelation for me, one often ignored in the debates about debt, but one that is obvious when you think about it, is the role that sovereign debt in the form of state bonds plays in the financial markets. The debate over state debt is also always a debate about securing the value and the profits generated by financial assets.


A limitation of my investigation so far is that since my methodology looks at the movements of capital from ‘above’ there is the risk that I can slip into a form of presentation that ignores the class struggle that goes on ‘below’ and throughout capitalism. There is a danger, from Marx on, that our analysis can be too ‘objective’ and not grasp the subjective role struggle plays in the corresponding unfolding of the dynamics of capitalism(Shortall 1994). (Perhaps it is possible to see class struggle as the struggle of humanity against its entrapment in the objective categories of capitalism). My challenge is to express how the ways the state funds social reproduction and the shapes social reproduction take are products and sites of class struggle. Spiralling state debt is an expression of our power – even if it is latent. We need to enlarge our understanding of class struggle beyond a model that sees it primarily happening within the confrontation between labour and capital in the work-place proper, that is move beyond a ‘factory-office-farm’ model (Caffentzis 2013, 242). We need to understand the complex and multifaceted struggles that happen across all of society.

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Not with a bang but a whimper: The End of the Mining Boom and the next Budget


Shape without form, shade without colour,

Paralysed force, gesture without motion

                                                -TS Elliot

On the 12th May Treasurer Joe Hockey will present his second budget. The budget lies at the heart of the state’s efforts to reproduce capitalist society; thus understanding what is in the budget plays some role in interpreting the terrain in which we contest capitalism on. His previous budget was the centrepiece of a clear vision (a Plan A) to address the challenges facing capital accumulation in Australia and it lies pretty much in ruins. Facing the end of the mining boom and thus a drop in growth levels, profits, wages, rises in unemployment and Federal debt, the budget aimed to reduce spending on social reproduction and increase stimulative spending on infrastructure. The latter was to be financed in no small part through asset recycling (privatising state assets and reinvesting the funds). This was sold as a response to a ‘budget emergency’, a narrative that over-emphasised the size of Federal debt for political effect (just as the Left/social democratic narrative denied its existence). Added to this were efforts, coordinated on a state level, to disperse points of social contestation: the construction unions, ecological protests and community opposition.

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Debt in the Banana Republic

( Originally published in, and wonderfully edited by, the good people at Mutiny)
Since their election Queensland’s LNP government has unleashed a wave of attacks on the conditions of workers and communities. These attacks include at least, the planned reduction of 20,000 public servant staff and the capping of wages, defunding of NGOs in the community sector, the intensification of the government’s power to ban strikes and restrict industrial action and notably homophobic policy that targets Queer organisations and has seen the watering down of civil unions and the removal of surrogacy rights for Queer parents (and unmarried heterosexual relationship shorter than two years). This constitutes a profound reorganisation of what we could call social reproduction.

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