On the terrorism of money and national policy-making in emerging capitalist economies

Abstract

Is national state policy-making more constrained by capitalist value-disciplines in emerging capitalist economies (ECEs) than it is in advanced capitalist countries? In order to explore this question, this article offers a spatialised form-analysis of the imperative that the capital relation imposes upon the form of the state in ECEs. The approach, grounded in the Marxian critique of political economy, integrates crucial insights from radical economic geography and Post-Keynesian/Minskian economics. I show that despite growing integration into the financial world market, ECEs have retained a subordinate positionality in what I call the relational geographies of money-power, and which are constituted by two overlapping sets of geographies: the geographies of the global monetary system, and the geographies of the global financial system. As a result, the contradiction between capital, money and the state takes a more acute form of realisation in ECEs than in advanced capitalist countries, making the management of monetary and financial affairs more difficult for the capitalist state. This, I argue, constitutes an additional layer of social determination on national policy-making in ECEs. More concretely, this manifests itself as a systematic volatility of exchange rates and a tendency to high real interest rates, enhanced scrutiny of national policy-making by international investors, rapidly shifting financial reputation and high pro-cyclicality of money-capital inflows, the build-up of specific forms of external vulnerability, brutal money-capital flight during financial distress, and heavy dependence on monetary policy in advanced capitalist countries. I conclude by discussing theoretical and political-strategic implications for labour-centred development.