THE MAKING OF GLOBAL
CAPITALISM: THE POLITICAL
ECONOMY OF AMERICAN EMPIRE
Book by
Leo Panitch and Sam Gindin
Interviewed by
Peter Brogan and David Hugill
Introduction
Canadian political economists Leo Panitch and
Sam Gindin have long held that states are not the
unwitting stewards of capitalism but key actors in its
maintenance and reproduction. With he Making
of Global Capitalism: he Political Economy of
American Empire (Verso 2012) they make this case
more explicitly than ever by forensically tracing the
decisive role that the American state has played in es-
tablishing the foundations of the contemporary global
capitalist space economy. heir weighty tome – which
was more than a decade in the making – is a com-
prehensive account of the rise of American empire. It
details the proximity between prescriptions devised
and favored in Washington and the shape of con-
temporary capitalism. Panitch and Gindin’s crucial
contribution, however, is not simply that they record
the emergence of a Pax Americana but rather their
revelation of the historical uniqueness of this new
form of imperial rule. he authors demonstrate that
the post-war American state was uniquely placed to
“relaunch” global capitalism after the mid-century
bloodletting, but through strategies that were far more
“informal” than those of its predecessors. hey show
that in promoting the interests of American capital
and attempting to maintain an accumulation-friendly
102
Department of Geography,
York University
generalized rule of law the American state took the
lead in “creating the political and juridical conditions
for the general extension and reproduction of capi-
talism internationally” (Panitch and Gindin 2012: 6).
Much of the book’s twelve chapters are committed to
telling this story, chronicling the convoluted process
by which the American state became the central force
in the emergence of a truly global post-war capitalism.
Peter Brogan and David Hugill sat down with
Leo Paniich and Sam Gindin in late November 2012
to discuss he Making of Global Capitalism and its
reception. What follows are excerpts from that con-
versation.
Peter Brogan and David Hugill (PB/DH): In
the Making of Global Capitalism you describe
the emergence of a new imperial form, an unprec-
edented post-war “American Empire.” Would you
say something about the territorial politics of this
new constellation of power?
Leo Panitch (LP): One of the results of thinking
about these questions in terms of states is that the
notion of territoriality we have is of the territory of
nation states, the territory that nation-states are ruling
within. So when we deine empire as extended political

rule we mean extended beyond the territory of a par-
ticular nation-state. hat can be done through direct
territorial rule - through colonies, conquest, etc. - or
it can be done informally, which we see being repre-
sented by the American state, more than any other in
history. Our book charts out the path by which the
American state has developed a set of responsibilities
for superintending global capitalism and the remaking
of other states so that they are functional to the repro-
duction of global capitalism. We are very much con-
ceiving of territoriality in terms of nation-states and
globalization as the spread of capitalism to penetrate
an increasing number of nation-states.
Sam Gindin (SG): he notion of a contradic-
tion between a capitalism that is global, in terms of
its space, and nation-states that are national in terms
of their territory is, in our understanding, addressed
through the internationalization of nation-states that
take responsibility for global accumulation within
their own territory.
LP: hat is how we deine the internationaliza-
tion of the state. Which in terms of state theory is
the main conceptual development we are making. We
are deining the internationalization of the state, not
as the creation of international states, but in terms of
states developing responsibilities for managing global
capitalism. his includes the concern of aligning
domestic policies with the reproduction of a global
capitalism.
PB/DH: Yet in spite of the fact that states have
taken on these responsibilities you continue to
insist on their relative autonomy from capitalist ac-
cumulation and this is really crucial to your theo-
rization of the making of global capitalism. Can
you tell us why? Additionally we’d like to ask you to
diferentiate between your own work and the work
of others that have conceptualized the new impe-
rialism as constituted by the dialectic of a “terri-
torial logic of capitalism” and an “economic logic
of capitalism” (Harvey 2003). You are trying to say
something pretty diferent, aren’t you?
SG: here are two separate issues here. In terms
of the territorial logic of empire, it seems to be a very
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PETER BROGAN AND DAVID HUGILL
loose notion to point to two separate logics that aren’t
connected to each other. So when you ask why does
the US go into Vietnam and you suggest that this is
somehow about a diferent logic – i.e. about territory
– it misses the point. he logic of empire is that you
are trying to keep spaces open for global capitalism. So
the two aren’t unrelated. In trying to keep the world
open to global capitalism you are keeping the world
open for accumulation. hey are not two separate
logics.
LP: I think [David] Harvey got this notion from
[Giovanni] Arrighi and then Arrighi took it back from
Harvey. A lot has to do with World Systems theory
never quite iguring out what capitalism was and where
it began. So they are dealing with very old empires that
expand territorially through military conquest. hat
eventually overlaps with a capitalist logic but then it
is as though the territorial drive is always present in
history including the way in which the British Empire
operated, which we (along with Ellen Wood) argue
was the irst capitalist empire. he United States goes
much further in this respect but it is very diicult to
disentangle American military interventions from
their role within a speciically capitalist empire. hat
is not to say that we should reduce everything that
the United States does directly to promoting the ac-
cumulation of capital by its own capitalists and capi-
talists everywhere. Our argument about the American
invasion of Iraq or its role in Afghanistan is geostra-
tegic but it relates to capitalism in the sense that it
is keeping waterways open for the delivery of certain
resources, above all oil; it is taking responsibility for
other capitalist states to be able to get Middle Eastern
oil. So its not that they are concerned with the ability
of certain American corporations to accumulate over
and above corporations from elsewhere, which is what
a lot of the left supericially thinks.
And then there is another dimension that goes
with being a state but isn’t understood in terms of a
logic of territorial expansion. he main responsibility
of a capitalist state, like any other, is to keep order, and
this does relate to relative autonomy. It is to promul-
gate laws, make sure that they are obeyed, etc. and that
involves a big policing role. You need to look at what
the American state does internationally, militarily, as
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MAKING OF GLOBAL CAPITALISM
the equivalent to what the American state does do-
mestically through its police forces. When the LAPD
polices South Central Los Angeles nobody speaks
of it as territorial expansion. Yet given its military
dominance, the American state gets landed with the
burden of trying to keep order in a chaotic world full
of morbid symptoms and in the instances where they
don’t, they get blamed by human rights international-
ists, as in the case of Rwanda, for example. So such
interventions don’t have to have any immediate capi-
talist meaning for the US to get pulled into playing
this role; but they are not about territorial expansion
like the empires of old that expanded to increase their
resources, etc.
SG: One of the problems with World Systems
theory, to elaborate on what Leo is saying, is that such
a large sweep of history ends up to be ahistorical. It
ends up missing what is actually speciic about this
kind of empire and the extent to which it actually
operates through states and through markets, as
opposed to territorial expansion. he thing about the
relative autonomy of the state is that once you stop
seeing the state as merely relecting capitalist interests,
as if capitalists know what their interests are all the
time, you have to start thinking about how the state
has some autonomy. You have to think in terms of
the reproduction of the system, although the state is
always limited because of its dependence on capital ac-
cumulation and proit. his leads to a lot of interesting
questions about how the capacities of the American
state developed so that it could take on these respon-
sibilities of maintaining global capitalism. How did it
develop through, and learn from, the present crisis?
he Federal Reserve’s radical turn from trying to set
interest rates to a vast expansion of the money supply
(quantitative easing), for example, was a role that it
hadn’t played before.
LP: Gindin turned the question of relative
autonomy on its head because he hasn’t read that
much state theory. He would often write some really
penetrating stuf in the middle of the night. He wrote
a paragraph that is in the intro that is in one sense
totally of the wall, but totally right. Normally we use
relative autonomy in terms of how autonomous the
state is from the capitalist class, or the bourgeoisie.
104 Human Geography
But he turned this on its head and said that the state is
dependent on capital accumulation and in that sense
it is not autonomous at all. But insofar as it is not
dictated to by capitalists, that autonomy is relative.
PB/DH: We want to bring the conversation
back to something that I think you share with a lot
of radical economic geographers who draw heavily
on the French Regulation School of political
economy. hey also tend to focus on historical and
geographical variation and contingency, seeing it as
imperative to look at how the messy reality of neo-
liberalism and contemporary capitalism is playing
itself out on the ground. What distinguishes your
theorization of global capitalism and empire from
such work as that rooted in the Regulation theory
or World Systems theory?
LP: It is very similar in terms of our argument
that for the American state to have played such an
extensive role in the world, it had to create appropri-
ate conditions at home – above all by integrating the
working class in such a way as to support establishing
the material base for empire. And that is very similar,
obviously, to Regulation theory. he trouble with
Regulation theory, however, is that it operates as a
template that gets laid on diferent places and periods,
I think, in a really formulaic way. he very special role
of the American state – which we are trying to trace
and understand – gets lost in Regulation theory. With
it, you get this template laid on any state in the world
that a researcher wants to lay it on. As Robert Brenner
pointed out in reaction to Regulation theory, you
could say Fordism was operating in 1900, certainly
1905 in the United States, whereas Aglietta and others
introduce it in 1945. Perhaps Brenner is putting too
much emphasis on this but Regulation theory does
tend to have this kind of ixation on the post-1945
period, its breakdown, and then post-Fordism.
History is too luid to be captured by this kind of a
template.
here is also the big problem, which I wouldn’t
apply to all of them, of a tendency in Regulation
theory to look for what is the next way that capitalism
could stabilize itself, and almost to be advising for that
– which isn’t our business. Of course, we all wonder

about how it is going to stabilize itself, but it seems
to incline certain people to become very reformist in
terms of searching for a lexible post-Fordism that will
keep capitalism going.
PB/DH: he post-war transformation of capital-
ist inance and the integration of the working class
into that process is central to the story you tell. Yet
you locate the postwar period as the moment where
these contradictions start to intensify, where com-
modiication intensiies, rather than in the 1970s
or 1980s. At one point you quote Badiou saying
that inance is the blood and the “real economy”
is the heart of contemporary capitalism to show
that we shouldn’t conceptualize the real productive
economy and inance as disconnected. You suggest
that we need to understand the centrality of inance
within the making of global capitalism, especially
in how it served to discipline the working class and
integrate them into the circuits of consumption,
commodiication and so on.
SG: his is why our analysis ends up to be a very
diferent historical explanation of the postwar period.
We see the makings of what becomes neoliberalism
emerging in the earlier period in the sense that you see
the roots of it in the earlier period and that there are
also contradictions in that period leading towards a
neoliberal response. In terms of inance, for example,
there is a common notion that inance was controlled
in the early years after World War II. But this was
actually a period that included an incredible inancial
boom. Finance was involved in the development of
private workers’ pensions and the rising mortgages of
workers into the 1950s and 1960s, as well as the in-
ternational expansion of multinational corporations
and the related development of the Euro market in
the 1960s. here is also the breaking of the working
class after 1945 in the sense that the thrust of the
working class is channeled away from more radical
possibilities and into making gains within the system.
Workers came to emphasize selling their labour for the
wages to access individual consumption as opposed to
challenging capital. he left is defeated in that earlier
period with implications for later struggles. And
though Bretton Woods is seen as regulating the global
economy in a particular way, Bretton Woods is also
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PETER BROGAN AND DAVID HUGILL
contributing to the development of the international
trade and capital lows that eventually contribute to
undermining ixed exchange rates in the early 1970s.
So all of these developments are setting the stage for
the globalized capitalism that emerges later and for
a weaker working class to accommodate that. And
then, in the context of the full employment of the
1960s, workers remained strong enough – even after
the defeat of the earlier left – to efect productivity,
corporate proit rates, and inlation, which in turn
afected the dollar. With such contradictions emerging
in that “pre-neoliberal” period, Regulation theory’s
stress on a virtuous circle was clearly overdone.
Again, in contrast to Regulation heory, we think
you have to start theorizing the American state in par-
ticular, and not just as another state. here is something
diferent about this state and how it developed histori-
cally, its capacities and the role it plays.
LP: Both at the level of intent and at the level
of class forces, what is going on in 1945 is that the
people who construct Bretton Woods are aiming at
getting back to the 19th century world of free trade
and free capital movements. Not getting back to the
gold standard, with the American dollar back and
ixed exchange rates, but getting back to that world.
And one of the reasons they are looking forward to
getting to that world is because of the strength of
Wall Street and inancial capital, already in 1944 in
the United States. he New Deal does save American
inance in a way. And inance was not an inconse-
quential force in 1944. he US Treasury has to really
engage in a lot of pressure, propaganda and bargaining
with Wall Street to get Bretton Woods through. One
of the outcomes of that bargaining is that the British
will engage in convertibility of sterling by 1946.
Because Wall Street wants whatever capital there is in
Europe to low there. And those who want to rebuild
Europe know that that is a disaster. But these greedy
Wall Street bankers are looking for more money to
play with. So they get the British to agree to convert
sterling in 1946 – which is a disaster and they have
to pull back. Why I am stressing this is because both
in terms of a long-term vision and in terms of class
forces, the people who made the post-war order - and
it wasn’t some model that suddenly gets plunked on
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MAKING OF GLOBAL CAPITALISM
the world – were a group of human agents who were
making something in the face of the disaster that was
World War II, with large parts of the world being
closed to capital accumulation by communist revolu-
tions, etcetera. hey are looking to a world that will
later get labeled as deregulation. hey know it is going
to take a while to get there and I think the fact that
this was there at the beginning is missing in Regu-
lation heory. Its immediate implementation is held
back by the balance of class forces and by the need to
rebuild capitalist states in Europe and Japan, but with
that earlier history absent, you have this static model
and as history goes on, a search for the next model.
PB/DH: You resist the narrative that locates the
birth of neoliberalism in the 1970s and the view
that it was at that point that inance was dramati-
cally deregulated and allowed to run wild. Why
might that telling of the history of contemporary
capitalism have dangerous political implications?
LP: We are socialists and we are looking for an
analysis of capitalism that demonstrates to people that
there is no way to regulate capitalism in a way that
removes its inequities and contradictions. We need an
analysis of capitalism that doesn’t give the impression
that you can regulate it in such a way that you won’t
have crises, that you won’t have greed, you won’t have
asymmetries between classes. So I think we are very
much concerned to show that the role inance plays
in an integrated global capitalism is one that requires
a lot of speculation. And that the introduction of
certain regulations will inevitably be modiied so that
inance can continues to play that role.
SG: So the contradiction is that inance is actually
essential to the system but also has all this volatility
and craziness. If they try to regulate it completely, they
might strangle it and lose the potential beneits. heir
dilemma is that capitalism needs this kind of crazy
inance.
LP: We wouldn’t deny that, just as deposit
insurance has saved the savings and banks of a fair
number of people, there are certain types of regula-
tions that could, certainly, restrict certain types of
inancial speculation.
106 Human Geography
SG: We just don’t think you can get rid of the
volatility.
PB/DH: One of the most important elements
of your book, and your theorization of capitalism
more generally, is the central role that you accord
to working class struggles in shaping/resisting cap-
italism. Can you elaborate on some of the ways that
working class agency, struggles and institutions (or
the lack thereof ) have been fundamental in the
production of global capitalism?
SG: he role of the American state in the making
of global capitalism was conditional on containing
the American working class as a social force. his was
clear after the Second World War when the militancy
of American labour was channeled into support-
ing economic growth and individual consumption
as opposed to class conlict over democratizing the
workplace and investment. It was also central to the
crisis of the 1970s, which was about the negative
impact of working class militancy in the context of
relatively full employment on both proits and, by way
of inlation, conidence in the dollar (i.e. the material
and inancial base of the empire). In the present
crisis, it has, ironically, been the very weakness of the
working class – its inancial fragility – that has played
a role in the inancial collapse. Looking ahead, we have
argued that the collapse of capitalism will not come
from a mechanical law of falling proit rates, inter-
imperial rivalry, splits between inancial and industrial
fractions of capital, but from contradictions and social
conlicts within states. And that takes us back to the
creative invention of new forms of working class or-
ganization and struggles that address the transforma-
tion of national states to the end of democratizing all
aspects of society, above all property relations.
PB/DH: In contrast to many other theorists
of the global economy who understand a renewed
American imperialism as accompanied by a
decline in the strength of US economic power and
dynamism you argue that it has actually been the
immense power of both the American state and
American capitalism that has made global capi-
talism possible. Why is this argument analyti-
cally important for understanding contemporary

capitalism and politically relevant for developing a
renewed socialist politics?
SG: Diferences in the meaning of statistics are
common among researchers but the more fundamen-
tal issue here is that it is mistaken to focus on national
statistics absent a framework that include their inter-
national, and in the case of the US, their imperial,
context. Consider for example the fact that the US
share of capitalist industrial production fell from
close to 50% in the post-war period to under 25%
by the early 1970s. To argue that this is an indicator
of decline misses the fact that the spread of capital-
ism was central to the American project; the spread of
capitalism was a condition for expanding opportuni-
ties for American capital. his dispersion of industrial
capital is therefore a measure of American success, not
failure. Similarly, to focus on US trade imbalances
(a constant over the past three decades) as a sign of
competitive weakness ignores the fact that the sales
of American MNCs abroad – which don’t show up
in such statistics – are four times as high as exports
from the US. Moreover, US exports have themselves
generally done very well (lagging only Germany and
China) and the fact that the US can continue to import
more than it exports over a long period of time relects
the role of the US dollar and the ability of the US to
access and consume a disproportionate share of the
value produced by global labour. A inal point relates
to the “hollowing out” of the American economy. As
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PETER BROGAN AND DAVID HUGILL
much as workers experience the reality of lost indus-
trial jobs, from the perspective of capital this is better
understood as restructuring: the restructuring of the
workplace, introduction of radical new tecnologies,
shifting relations to suppliers, the geographical disper-
sion and relocation of industry, the move to higher
tech production and new services above all business
services like engineering, accounting, legal, consul-
tancy and of course inance. hat is, such restructur-
ing has placed American capital at the forefront of the
“commanding heights” of the international economy.
he political signiicance of all this is a matter of
soberly facing up to what we confront: a long-term
process of building new capacities that can match
a powerful and dynamic, if also destructive, social
system.
References
Aglietti, M (2000) heory of Capitalist Regula-
tion: he US Experience. London and New York:
Verso.
Harvey, D (2003) he New Imperialism. New
York: Oxford University Press.
Panitch, L and Gindin S (2012) he Making
of Global Capitalism: he Political Economy of
American Empire. London and New York: Verso.
107