The Debt-Austerity Crutch: African Elite Agency in the Fourth (US) Cycle of Accumulation of Historical Capitalism

Abstract

For decades, African governments have cited debt servicing and international credit ratings as the reasons for continued policies of austerity. It is demonstrated here that though unjust and anti-developmental, as critics of so-called structural adjustment have argued, IMF prescriptions and other capitalist structural reforms have been a success from the perspective of world elites. It is shown how, from the 1970s, rich country elites, as well as African elites, have created the conditions for Africa to become a major locus for the maintenance of liberalized financial and trade flows. Comprador bourgeois capitalism, with a new twist—the amassing of public debt and offshore transactions—is argued to be the African expression of financial expansion in Giovanni Arrighi’s fourth (US) systemic cycle of accumulation. A systemic, class-based explanation is offered for what is commonly understood as the anti-democratic nature of international financial institutions, and corruption of African leaders. The analysis provides an explanation for why, not a single African state has defaulted on external debt, as Argentina did, in 2001.