Léo Panitch, professeur, Sciences politiques, York University, Toronto

Léo Panitch
professeur, Sciences politiques, York University, Toronto

Leo Panitch awarded Canada Research Chair in Comparative Political Economy

By Carol Bishop and Susan Bigelow

Leo Panitch

Source: York University Communications Gazette

York Distinguished Research Professor Leo Panitch, a renowned political economist, Marxist theorist, and editor of the Socialist Register, has been awarded a Canada Research Chair for his study of the role of the United States in leading and managing globalization.

Panitch has been examining the role the US has occupied since the end of the 20th century in creating and managing a new capitalist world order, looking at the rise of finance as the leading authority in global capitalism, and the interdependency of global financial markets with the US Treasury and Federal Reserve. As Canada Research Chair in Comparative Political Economy he will assess the extent to which the traditional distinction between the productive and financial sectors of capital remains valid in capitalist theory. He will look at the auto sector as a case study, and as a paradigm of the global restructuring of manufacturing.

"Canada and Canadians have long been familiar with a type of American imperialism and transformed state sovereignty that is now becoming generalized around the world with globalization," says Panitch. Quoting the Canadian historian Harold Innis, he notes that American imperialism has been made plausible and attractive in Canada and internalized in the Canadian state and society, taking a very different form from the political subordination of colonialism.

Panitch is tracing how the US arrived at a strategy for dealing with the economic crisis of the 1970s, then re-established the vitality of American capital, asserting its international dominance by encouraging the economic restructuring of other states and coordinating the management of global capitalism. He will focus on how finance achieved the authority to be the leading element in global capitalism through its role in increasing liquidity, reallocating capital, and disciplining not only labour and manufacturing capital, but also the behaviour of nation states, including the US. He will investigate how this role has relied on the powerful position of the US in the new global "financial architecture".

Looking at the strategic role of the US Treasury and Federal Reserve, he will examine how these two agencies have come to depend on the working of global financial markets for discipline and coordination, while the markets have become dependent on the agencies to manage global financial instability and guarantee the legitimacy of private money. He will look at the role of these agencies in international financial institutions like the World Bank, the International Monetary Fund and the Group of Seven, and their relations with ministries of finance and central banks in Europe, Canada, Japan and other countries. This will involve studying the strategic coherence that emerged out of the economic crises of the 1970s and 1980s and subsequent patterns of economic policy coordination.

He will try to determine how far the leading role of the US Treasury in managing the 1994 Mexican peso crisis laid the basis for the broader role the Treasury adopted in the management of the 1998 Asian financial crisis, and Japan's acceptance of a backseat role in its own region and its subsequent initiative to found an Asian IMF. He will also examine the implications of the emergence of the European Central Bank for reproducing or altering former modes of coordination.

While much of the literature today on globalization views the microchip revolution as driving global capitalism, Panitch proposes that the new information technology has facilitated, but not caused the changes in global finance, and is part of the broader political and economic restructuring taking place. A second focus of his research will be an examination of the North American auto industry and its relation to finance and the state, looking at the extent to which new technology helped lay the material base for a revitalized American economy at the heart of the new global order.

"The auto industry stands out not only because of its importance to the economies of the core developed countries, but because it has been paradigmatic of the global restructuring of manufacturing," says Panitch. He will look at the mutual penetration of this industry across borders: whether it is becoming truly internationalized or just consolidating into regional blocks; whether a takeover like that by Daimler of Chrysler reflects a challenge to American hegemony or rather reflects German capital's interest in having, not only access to the US market, but access to US methods of production and direct access to the US state. This case study will allow him to assess the extent to which the traditional distinction between the productive and financial sectors of capital remains valid in capitalist theory.

Panitch's research will help clarify the evolution and functioning of today's global capitalism, informed by the Canadian experience of US dominance. He will work with co-investigator Sam Gindin to understand the evolving relationship between finance, production and empire. Gindin is Packer Visiting Professor in Social Justice at York and former research director of the Canadian Auto Workers union. Panitch's project will also contribute a theoretical innovation, since the Marxist "historical materialist" approach on which his analysis is based must be revised for his study to be realized. He says new research on globalization must reach beyond classical theories of imperialism generated in the era before the First World War.

Susan Bigelow is the media coordinator, faculties and research, with York's Department of Media Relations.