Toward a Theory of Economic Development as a Mode of Flash Capitalism

This article takes up the concept of “flash capitalism” (Agger & Luke, 2015). As the slow, uneven recovery of the Great Financial Crisis continues, the fact that almost a decade later things are not yet back to “normal” has spawned some handwringing texts by mainstream economists who admit that perhaps all is not well in market society. Piketty’s Capital in the Twenty-First Century served as the touchstone of a kind of literature that admitted that widening inequality was a problem in market society, but that some fine-tuning by the federal government could lessen it, restoring some kind of balance between economic growth and the return on capital investment. [1] Agger and Luke argue that Piketty’s text confirms capitalism cannot sustain itself under the weight of its internal contradictions, but relies on a deus ex machina of the visible hand of the state to step in and turn things around (Agger & Luke, 2015, p. 344). They refer to this pivot of diagnosing the ills of capitalism while giving an easily digestible solution that does not transcend capitalism as “blockbuster Marxism. ” Blockbuster Marxism is not a Marxism that seeks to dialectically transcend capitalism through class struggle in order to establish a free association of workers, but an uncritical (and indeed unspoken Marxism since Piketty and his ilk eschew the term) one in which thoughtful economists realize that perhaps there is a need for the state after all, especially in an era of quick turnover in flash capitalism, where financial loci of buying and selling are untethered from sites of material production, and where speeds of trades are measured in nanoseconds. This article is a contribution on just how the state becomes visible, where it intervenes, how it intervenes, and to what end in such a regime of flash capitalism. First, a theoretical treatment of the state shows that from Piketty to Minsky, an immanent analysis of the role of the state establishes the underpinnings for the fast and sustained role of state financial intervention in flash capitalism. As a case to show such a role of the state as catalyst of flash capitalism, the next section is an analysis of the United States’ Economic Development Administration (EDA). This will be used to show how the state, far from wisely intervening as an external agent to alleviate the periodic crises that result from the ebullience in market society, rather accelerates the cycle of crises. It encourages speculative investment of public funds, and establishes its role as persistent infuser of capital as a necessity pillar of what is often referred to as economic development. The first part deals with the role of the state in orthodox market society, then overlaying the notion of flash capitalism to make more sense of why the state is such an active agent in economic development. The second part takes up the structure of the EDA, in particular how it carves up the United States into Economic Development Districts (EDD), and through the use of annual comprehensive economic development strategies (CEDS) documents, intertwine a reliance on state investment, and maintains that investment in a speculative manner, serving mostly business interests. The final section looks at the 2016 CEDS document of the Central Arizona Governments to see how their investment strategies are geared to be speculative toward business interests, especially the financial churn of the financial presence of Maricopa County, and how there is little evidence that EDA investment achieves its goals of building better communities. The final analysis shows Toward a Theory of Economic Development as a Mode of Flash Capitalism