Preface to the 1996 Reprint of Global Capital, National State and the Politics of Money - Werner Bonefeld and John Holloway

Preface to the 1996 Reprint

The publication of the first edition of this book in early 1995 coincided with events which dramatically illustrated the politics of money.

In the context of the negotiations between the Mexican and the US governments over support for the Mexican peso, the Chase Bank of New York called for the military elimination of the Zapatista rebels in the Mexican state of Chiapas. A 'softer' approach of undermining the Zapatista uprising through social reform was rejected by the bank report as being insufficient to satisfy investors. The Mexican government took military action on 9 February, breaking all the promises it had made about seeking a peaceful solution to the conflict. However, overt military intervention in Chiapas was abandoned after a week, despite, or rather because of, the government's failure to achieve its objectives. While financial markets made clear that bail-out and attack on the Zapatistas went hand-in-hand, a prolonged war in Chiapas would have provoked uproar in Mexico, reinforcing political uncertainty and financial instability. The financial instability would have had worldwide consequences: the plunge of the Mexican peso in December 1994 had rocked financial markets around the world and caused serious instability in countries as far apart as Thailand, Hong Kong, Sweden, Hungary and Spain. The politics of money appears to demand both the use of military force and its avoidance. For Mexico to be 'rescued', that is to be kept 'in play' to secure global financial stability, force had to be administered in a covert fashion. This volume shows that the politics of money is intrinsically oppressive. The subterranean use of force like covert military operations in Mexico is not an exception but, rather, lies at the heart of the politics of money. Apparently extreme measures, such as those adopted by the Mexican government, supply the most direct understanding of the supposedly 'normal': the normality of the seemingly democratic and equal character of monetary exchange relations reveals itself as coercion.

The 'Mexican crisis' is not just Mexican. It is just one illustration of the global power of money and of the global reverberations of the refusal to accept that power. The relationship between the global economy and the national state, the relationship between the 'rule of money' and 'political power' has changed considerably over the last decades. This does not mean that old-style foreign policy crises with aggression between states, movement of troops and the threat of nuclear war, have been replaced by potential national bankruptcy and the threat of global financial collapse. The former still exists in deadly form, while the potential of global financial collapse has been part of the history of capitalism since its inception. Nevertheless, there are very significant changes in the relation between the political and the economic, that is, in the way that struggles are fought. This book does not supply a direct analysis of the Mexican conflict and its repercussions in financial markets (that will be treated by a later book). And yet, it does. It does so by analysing the politics of money, by conceptualising the development of the global economy and the national state, and by examining the political economy of Keynesianism and monetarism.

The 'Mexican crisis' has given this book an undesirable topicality. It is undesirable because of the immense suffering and pain caused by the politics of money. Only a fool feels happy when events such as those witnessed in Mexico appear to vindicate one's theoretical understanding. And yet, the Mexican crisis shows the fragility of the 'rule of money' by revealing its other side: the courageous refusal to submit to the demands of austerity, misery and suffering. As Subcommandante Marcos puts it in a recent communique (29 September 1995): 'We have made the Power of Money tremble. It has realised that there is something that it cannot buy or sell, that dignity is starting to unite. The Power of Money is afraid because the uniting of dignities signifies Its downfall. Its rapid transition to being part of a nightmare that is coming to an end, the conclusion of a historical phase ruled by arrogance and stupidity.'

This edition of the book is dedicated to the Zapatistas in Mexico and beyond.

Werner Bonefeld and John Holloway