NB: This post is part of the “Piercing the Monetary Veil” symposium. Other contributions can be found here.
Even amongst critical scholars, there is a tendency to treat international regulation of money and finance as “strictly economic”, distinct from the “social” domains of labor, the environment, and socio-economic rights. This conceptual separation cedes the realm of finance to the “neutral” neoliberal technocracy while occluding interrelationships between finance, production, and social reproduction. Placing social reproduction at the center of our analysis forces us to overcome these false dichotomies and confront finance’s role in the shaping of the “social”.
Social Reproduction Theory (SRT) grows out of the anti-capitalist feminist tradition, especially the work of Federici, Dalla Costa, Fortunati and Picchio. With Rai, Hoskins and Thomas we can understand social reproduction as encompassing biological reproduction, including sexual, affective and emotional services; unpaid production of goods and services in the home and within the community; and the reproduction of culture and ideology. SRT highlights that capitalist forms of production necessarily rely on devaluing reproductive activities through the ideology of gender in order to extract value. Without the unpaid labor of those who guarantee the daily reproduction of the labor-force (i.e birthing, childrearing, education, feeding, cleaning, tending to the ill, providing sex work) there would be no production or accumulation at all, let alone financing of profit-oriented production. This argument extends beyond domestic labor, pointing to the large reservoir of unwaged labor and ‘cheap natures’ (i.e. low-cost food, energy and raw-material) that sustains the life process, whilst also generating value for capital.
Moreover, by engaging with the critique of post-colonial scholars like Carby, Mohanty and Davis, SRT has been able to conceptualize how, in addition to gender, race, geography, and social status have been used to devalue certain types of labor in order to extract value from it in a way that is productive for capital. On this blog, Harris has reminded us how, even in the ‘golden age’ of US Fordism, the omission of agriculture and domestic workers from the Fair Labor Standards Act reinforced gendered and racialized divisions in the US workforce to maintain the profitability of heavy industry. In today’s globalized supply chain, we can trace the close relationship between ‘high-tech’ industries in some places and labor-intensive and low-waged production–often relying on the reduction of social spending and the weakening of socioeconomic rights–in others.
How does finance fit in? Finance is intrinsic to capitalist forms of production: the separation of a domain of capital-intensive productivity oriented towards profit and its concomitant devaluation of social reproduction is not imaginable without the inherently financial activities of investment and surplus extraction. During the more recent era of “financialization”, finance has become the main locus of revenue and profitability for US firms (as Krippner has argued) while also finding ways to extract profits from social reproduction (often coded as “consumption” by mainstream economists). In the global North, as the state is no longer mediating the relationship between production and reproduction according to the old pact between capital and labour, we find ourselves ever more dependent on finance for current and future needs (i.e. we have to pay for private healthcare, insurance, pensions etc, often by taking on debt). In the global South, the connections between reproduction and accumulation have been re-shaped through structural adjustment policies, micro-credit and other mechanisms.
This may seem abstract, but the responses to the crisis which started in 2007 illustrate the value of an SRT approach. In mainstream analyses, the crisis of the financial system was cabined off from the production system. The latter was presented as the otherwise functional victim of finance run rampant and the former as the realm where excessive speculation could distort valuation in the ‘real’ economy. Consequently, highly technical regulation was seen as sufficient to eliminate financial excesses and return us to a ‘healthy’ productive system.
But the financial speculation that led to the crisis grew out of financialization processes that have been re-shaping the nexus between reproduction and accumulation for the past half century. The hopelessly complex “structured products” that populated (and still populate) the shadow banking system were ultimately built on new ways of profiting off of social reproduction: securitized home loans, credit card loans (used to pay for food, healthcare, diapers, etc. by the most profitable cardholders), auto loans, student debt. All of these forms of financialization were themselves dependent on the finance-driven shift (through shareholder revolts, private equity takeovers, etc.) to “leaner” forms of production that decimated unions and detached wages from the cost of “living” (i.e. of social reproduction).
By not acknowledging the important ways in which social reproductive activities contribute to production and finance, regulation responses did nothing to conceptualize, let alone change, the ways in which finance-driven productivity exploits and divides the working class, destroying the environment in the process. The resulting immiseration is pushed into the domain of “social” regulation, something for those who specialize in human rights, environmental policy, or social welfare to sort out, so long as they do not challenge the process of capitalist production.
When finance is treated as a separate domain for technocrats, there is no space for thinking about the productive system itself as deeply unhealthy, one in which activities in the sphere of production and reproduction are squeezed to produce value. While austerity is squeezing them further through cuts to social spending and real wages (whilst banks have been bailed out), and we see more land enclosure, extraction and environmental degradation around the world; any claim as to the unsustainability and undesirability of this model is dismissed on the basis of inescapable ‘laws’, such as that of deficit reduction. Understanding finance as part of the process of capitalist production and reproduction forces it into the broader debate about how we should reshape society for the benefit of all.