Understood as essentially limited resources, nature is also an object of competitive appropriation among capitalist organizations and the states on which they depend. The politics and economics of petroleum have been the standout example of this for a hundred years, and especially since the 1970s. But a host of new competitions for scarce resources will shape the near future and pose challenges to capital as well as to states and human societies. Energy is basic. Minerals are needed for modern technologies. Water is in short and unpredictable supply and often polluted. Even agricultural farmland is an object of competition as arid Arabia and crowded China fight to acquire rights to fertile Africa.
Struggles over resources are also important among the potential provocations to geopolitical conflict. They are already basic to a range of mostly small-scale armed conflicts that straddle the boundaries of civil wars, interstate wars, and criminal activity. Meanwhile securing natural resources—both oil and a range of minerals—is centrally important to China as it grows. And securing these resources entangles China in relations with a far-flung range of countries including volatile but significant ones like the newly partitioned two Sudans, which sell most of their oil to China. Selling natural resources is crucial to Russia and some other parts of the former Soviet Union. Europe is a major importer from Russia, and has already been involved in conflicts over supplies on which it depends. Iran is an unpredictable power in the Middle East and in its wider influence on Muslim populations. The Gulf States are major international investors as significant players in the security of the region. If they become increasingly unstable, the repercussions will be major. Nigeria, long a prime example of the “resource curse,” appears to have begun a more successful but still fraught path to development. Several Latin American countries are significant oil exporters and some, like Brazil, are also emerging powers. The United States has reduced its dependence on international energy sources partly by investments during the financial crisis, including new hydraulic fracturing technologies. New capacity to extract oil and gas from shale is perhaps the clearest example of a possible technological fix to one of the major threats to the future of capital accumulation (more so than “greener” technologies that so far have proved harder to scale up proportionately to energy demand). But the technological fix brings new environmental concerns. And capitalism remains deeply entangled in global energy and resource politics. The list of powerful countries so entangled could be extended. Energy joins with ideological commitments to sovereignty in disputes over islands in East Asia as in the politics of central Asia and even Britain’s postcolonial feud with Argentina.
Energy resources are perhaps the most prominent factors making violent conflict more likely but not the only ones. Water and arable land are perhaps as scarce. And beyond resources there are tensions over religion, migration, borders, and quasi-imperial desires to expand territories—not to mention tensions simply over evidence that neighbors are stockpiling weapons or acquiring nuclear capacity. A variety of dictators and nonstate actors are additional sources of instability and potential sparks to ignite conflict. And actual conflicts of the last decade—especially the invasion of Iraq and lingering war in Afghanistan—have both exacerbated tensions and reduced the capacity of the United States to complement its hegemonic power by effective policing. All this makes war more likely in the future, and makes it more likely that small-scale or regional conflicts will become drawn into larger-scale geopolitical conflicts. In many ways the forty-five years of the Cold War appear as an interlude in a longer history of geopolitical conflict and restructuring.
THE INFORMAL SECTOR AND ILLICIT CAPITALISM
Together financialization and neoliberalism weakened a variety of institutions crucial to stabilizing capitalism in the relatively rich Western countries. These included not only state regulatory institutions but also trade unions and even corporations. Business corporations that had seemed to be stable frameworks for individual careers ceased to provide health care, pensions, and long-term job security; in many cases they ceased to exist as their assets were traded in capital markets, stripped of any obligations to employees, communities, or business counterparts. Communities were undermined by disruption of economic bases and population movements. Formal organizations provided less and less of a safety net to ordinary citizens, and indeed fewer opportunities as well. The transition was not as sharp a shock as the crisis of institutions attendant on the fall of the U.S.S.R. but it moved in the same direction. Religious organizations stepped in not just with charity but also with a range of institutional services from employment to counseling. And throughout the OECD countries, local networks emerged to organize partially noncash economies of mutual exchange.
Weak formal institutions are associated with growth in the informal sector. The term derives from the efforts (notably by Arthur Lewis and Keith Hart) to describe Third World settings where formal institutions had not developed on a national scale and as a result the formally recorded, monetary economy contained only a fraction of total economic activity. The rest, crucial to the actual survival of much of the population, involved in varying combinations reliance on “traditional” social relations repurposed to provide support in new circumstances, development of new alternatives for formal market relations such as barter, and networks of face-to-face relationships in which transactions could be conducted without regard to law or taxation. Some of the informal sector activities would be classed as criminal, others not. But though the concept originated in studies of the Third World, it is clear that an informal sector has always accompanied capitalism and the efforts of nation-states to organize legal frameworks to support and cope with it.
The informal sector has expanded dramatically during the last forty years. It is an important dimension of economic life in rich countries as well as poor, an important part of how people have coped with poor performance of public institutions (as in the latter years of communism and formally planned economies), and central to how people have dealt with declining provision of public goods (not least in posttransition formerly communist countries but also in capitalist countries imposing regimes of neoliberalism and austerity). Much of this is organized on a community leveclass="underline" small-scale barter, cooperative associations, cash trade that evades both taxes and the financial industry. The informal sector is not simply a site of social problems. It is also a setting for creativity. The garage-based inventors and entrepreneurs who form something of a Silicon Valley myth often organized their nascent businesses informally (at least in periods when venture capital was hard to come by). So do similar entrepreneurs in India and Nigeria today. And so do filmmakers and artists. The informal sector can appear sometimes as bohemian, sometimes surprisingly middle class. Its dynamic, attractive businesses may or may not pay taxes, however, and their workers may or may not have pensions or health insurance.
The informal sector is not just local community networks and other face-to-face alternatives to formal markets and formal institutions. It also has a large-scale dimension of transnational capitalist structures that operate at least partially outside state institutions and laws. The latter include money-laundering, banking, and investments backed up by force as well as contracts. They include tax-evasion, trafficking, and a range of illicit flows—from minerals (blood diamonds or coltan), to weapons (small arms mostly, but also tanks, aircraft, and missiles), to drugs, to people. This often illicit capitalism is often more formally organized than the name “informal sector” suggests, and it has revenues and investments running into many trillions of dollars (though not surprisingly hard to calculate precisely).