Economics is full of wonderful concepts. One of my favorites is “effective demand.” Like a magic wand, it can make billions of people disappear.
Suppose a farm can produce 100 pounds of food and there are 100 very hungry people who’d like to eat it but have no money. You might think that there’s a demand for 100 pounds of food. Silly you! There’s a need for the food, of course. But this is civilization: you can’t demand something just because you need it. If food costs a dollar a pound and each person has ten cents, then there’s ten dollars of effective demand. If each person has 25 cents, there’s $25 of effective demand. In that case, any sensible farmer-capitalist would produce only ten or twenty-five pounds of food. Supply has to equal demand, and demand equals need plus money.
But what about those 100 people and their needs? Well, they exist, I suppose, in some world or other, but not in the market economy. In the market economy, if you’re not a cost or a revenue source, you don’t exist. Some of those people may have once lived on the land now owned by the farmer-capitalist and have been been physically expelled. Others may have been expelled from their jobs by factory-capitalists, often at the behest of finance-capitalists. In any case, all of them have been expelled from the Promised Land of the Market and condemned to wander in the outer darkness, invisible.
According to Columbia University sociologist Saskia Sassen in her new book Expulsions: Brutality and Complexity in the Global Economy (Harvard University Press, 286 pages, $29.95), the above is not a just-so story. There has been a shift in the logic of global capitalism. Until the 1980s, the fundamental dynamic was inclusion: bringing ever more people and resources into the economy and society, for example, by incorporating subsistence producers and self-governing communities into market relations and citizenship. For the last several decades, the logic has been one of exclusion: excluding vast numbers from their livelihoods, their land, or their homes; excluding vast areas of land and ocean from the biosphere; and excluding vast quantities of resources (above all, water) from the global commons. Sassen writes:
Economic actors once crucial to the development of capitalism, such as petty bourgeoisies and traditional national bourgeoisies, are ceasing to be of value to the larger system. . . . People as consumers and workers play a diminished role in the profits of a range of economic sectors. From the perspective of today’s capitalism, the natural resources of much of Africa, Latin America, and central Asia are more important than the people on those lands as workers or consumers. This tells us that our period is not quite like earlier forms of capitalism that thrived on the accelerated expansion of prosperous working and middle classes. Maximizing consumption by households was a critical dynamic in that earlier period, as it is today in the so-called emergent economies of the world. But overall it is no longer the strategic systemic driver that it was in most of the twentieth century.
The bulk of Expulsions consists of case studies. Sassen details how, in the last decade, foreign governments have bought up a half-billion acres of land in other countries and evicted millions of small farmers. Millions of Southern European workers have exited the workforce, perhaps for good. Millions of mortgages in Europe and the United States have been foreclosed. The imprisoned population in the United States has grown by 600 percent since the mid-1970s, an increasing number of them profit sources for the burgeoning private corrections sector.
A combination of resource extraction, pesticide runoff, extreme weather, and waste dumping have created 400 vast “dead zones” in the oceans and ruined millions of acres of agricultural land and many local fisheries—impoverishing and often dislocating untold numbers. Even governments that want to help their populations are prevented by foreign indebtedness and “free trade” agreements. Increasingly, the victims sink below the horizon of civic or economic visibility. That’s what happens when you have no effective demand.
Mass expulsions from jobs, houses, farms, pensions, health care, citizenship, the welfare state, large-scale disappearances of species, arable land, clean water, open ocean—it’s a shrinking world. On the brighter side, as Sassen also documents, corporate profits in the last few decades have soared.