The Brutal Logic of Capital: Chile, China, adn the State’s Role
the image of a 1983 presentation in Santiago, chile, marking the tenth anniversary of Pinochet‘s coup, serves as a stark reminder of the violent foundations upon which neoliberal economic policies were built. The junta, notorious for its suppression of the left and dismantling of unions, faced little resistance from the US embassy, where officials even contemplated a “trade-off” between democracy and economic stability. Guided by economists steeped in the theories of Milton Friedman and Friedrich Hayek – the so-called “Chicago boys” – Pinochet’s regime systematically weakened labor, driving down wages and dramatically increasing unemployment. As one American official observed, the Chilean middle and upper classes suddenly experienced a period of unprecedented prosperity. The US embassy itself acknowledged the effectiveness of crippling the labor movement and suspending the right too strike, noting that “major means which those who might oppose those income policies can use to protest have been eliminated.” The ability to rule by decree, they added, was a notable advantage.As Sven Beckert argues, “Pinochet was the Lenin of neoliberalism,” a figure who ruthlessly implemented a radical economic restructuring through authoritarian force.
This Chilean experience exemplifies a broader ancient pattern: the state’s crucial, often violent, role in facilitating new phases of capitalist development. The creation of cheap labor wasn’t confined to the aftermath of a military coup. The collapse of the Soviet bloc introduced millions of workers into the global market under conditions highly favorable to capital. However,the most significant shift came with China’s emergence as a manufacturing powerhouse,offering a vast labor pool – one that,despite appearances,was far from “free.”
The deindustrialization of nations bordering the North Atlantic has been offset by the explosive industrial growth in East Asia, representing the most rapid period of industrialization in history.China’s mass proletarianization is unprecedented in scale. Cities like Shenzhen, in the Pearl River Delta, have become the modern equivalents of 19th-century Manchester and 20th-century Detroit, driven by a resurgence of merchant capitalism. Retail giants like Walmart and Amazon, and brands like Apple and Nike, now wield more power than individual manufacturing enterprises. Echoing historical patterns, young women form the core of this new industrial workforce, comprising over 90% of the migrant workers in Shenzhen’s light manufacturing sector.
Beckert posits that capitalism, like all social systems, has a finite lifespan. He doesn’t foresee a revolutionary overthrow, but rather a fragmentation, exemplified by figures like Peter Thiel seeking to create isolated enclaves for their wealth.He expresses a cautious hope for the emergence of post-neoliberal polities grounded in ecologically sustainable, non-market relationships. While this vision may seem optimistic given the historical brutality that has consistently accompanied capitalist transitions, Beckert’s thorough work offers a crucial historical framework for both proponents and critics of capitalism as they contemplate the future.
