Kim Erich

60210515
INT104

Weekly Assignment
Week 12: The crisis of Western economic power
The eclipse of the West is a logical correlate to the resurgence of Asia and the rise of new regional
economies that seek to achieve economic growth and geopolitical security through insertion into the
global capitalist system.
I. The logic of Western military and financial power
- The west has its origins in the system of accumulation and military violence forged by European
power for centuries.
- During First World War, which saw the expansion of the state form of capital to manage the
contradictory logic of accumulation in corporate.
- It has given new reverence in a liberal internationalist discourse that conceals the continuity and
magnitude of clandestine Western interventions.
- The financial and military power of Western economies was further consolidated by the creation of
new relations of debt and dependency between Western-led international financial institutions and
postcolonial states.
II. Accumulation crisis
- The tendency of capital towards over accumulation also highlights the centrality of the state circuit
of capital in facilitating consumption.
- Over accumulation can also be understood in poststructuralist terms as a political response to the
logic of capitalist excess, by effecting the absorption of overabundant resources.
-Yet the contradictions of over accumulation cannot be resolved indefinitely by blocking collective
action or internationalizing the means of production through a global division of labor.
- This indicates a dramatic shift away from ‘equilibrium’ as corporate-state elites struggle to sustain
the accumulation regime of financial capital
III. From financial instability to monetary collapse
- Instability is endogenously determined, although it does so to forestall an incipient crisis; yet it
does so by creating the conditions.
- The explosion of debt in Western consumer economies has been accompanied by an explosion in
the trade for mortgage-backed securities and financial derivatives.
- These tactics are unsustainable, for once it becomes clear that the Federal Reserve can no longer
guarantee liquidity.
- It becomes clear that monetary expansion and deficit spending are reaching critical thresholds,
leading to unpredictable non-linear consequences.
IV. Conclusion
- Western states have resorted to inflation to conceal distributional conflicts in the absence of robust
economic growth, this has fueled the accumulation of fictitious capital through an intensification of
the debt relation.

END