The apparent aim of “globalization” is to enlarge world markets so that existing capitals can sell more commodities and thereby realize more surplus-value, more profit. This has been an inherent tendency in capitalist development from the beginning, and has been pursued concretely since markets first began to saturate and crises of overproduction (as Marx called them) occurred.
But “free trade” (as the central aspect of
globalization has traditionally been called) has only been taken up in small
increments and only usually bilaterally, until fairly recently. Nation-states
have since the early days of capitalism been protective of the capitals of
their nation by way of quotas, tariffs and duties (and even outright bans)
imposed on foreign imports. All that has ever happened in the course of
developments towards “free trade” is selective incremental reductions of such
quotas and tariffs. Such is the weight of nationalism for even the most
developed, most competitive capitals, historically.
In each national ruling class there are factions,
and one of the key divisions between factions – throughout the 20th
century atleast – is that between “laissez faire”, liberal/neo-liberal “Free
Traders”, and the protectionists, the Keynesians (atleast since the ‘30s), the
defenders of increased state control and regulation. Usually the former are
representative of the interests of big capital, of the major exporters and
those capitals looking to expand their operations beyond the confines of
“their” nation-state; while the latter are more representative of the medium to
smaller capitals, the lesser developed ones, thus espousing a more or less
“petty bourgeois” ideology. The matter is not that simple, however. Since the
onset of the permanent crisis of capital in the early years of the 20th
century, the state bureaucracy has (atleast up until the end of the ‘70s)
increased its control over the national capital as a whole, and has formed the
core of the “Keynesian”, protectionist faction of each nation’s ruling class.
In fact, since the end of WWII, these protectionist,
“petty bourgeois” factions (in most of the most developed countries) have
adopted an essentially Social Democratic ideology, and the major trade
union federations and the political parties they fund and support have been
central to these factions. These are the Keynesians, the defenders of the
“Welfare State” and a seemingly limitless extension of the “state sector”, and
bureaucratic regulation of capital.
These “leftist” factions (composed of the trade
unions, their political parties, the state bureaucracy, as well as the medium
to small capitals of the country) were largely dominant or hegemonic throughout
the “developed”, “Western” world from 1945 to 1980 or so. During those years,
their ideology was essentially capitalist orthodoxy. For the past 20 years or
so, however, the tide has shifted severely “to the right”, that is, towards
“Neo-liberalism (which was previously called “Neo-conservativism” in some quarters);
and thus, we have witnessed significant moves towards the privatization and
de-regulation of capital, and towards “free trade”, globalization, and the
dismantling of the Welfare State. There has been a forceful concrete cause for
these developments on an international scale, and that is: the intense
deepening of the historic crisis of capital on a global scale, which manifested
itself first in “stagflation” (high inflation combined with low growth), and
then in alarming levels of public debt.
The crisis is a crisis of profitability, of course,
but central to the playing out of this crisis is the occurrence of saturated
markets and thus “overproduction” relative to effective “productive demand”.
(See “The Roots of the Capitalist Crisis: Part 3: From decline to collapse”, by
Sander, in Internationalist Perspective #32-33, for the theoretical
foundation of this perspective.) Once markets become saturated, growth is
blocked and profit rates begin to fall significantly. The 1980s was the decade
of major power struggles between the “Keynesian left” and the “Neo-liberal
right”. While the latter factions won those struggles and began the process of
privatization, de-regulation, and the dismantling of the Welfare State, with
the mid to long term aim of reducing the “burden of the state” on the
profitability of capital, in the short term, the need was for economic
stimulation in order to escape from low rates of growth and profit.
Against their own ideological prescriptions,
right-wing regimes throughout the West (Reagan in the US, Thatcher in the UK,
Chirac in France, Kohl in W. Germany, Mulroney in Canada), engaged in an orgy
of public deficit spending, focused largely on the military and the arms race.
On the ideological level, the Cold War against the USSR provided the rationale
for this course, while the economic stimulus for rates of growth and profit was
the real motive. The stimulation worked, stagnation was overcome, but there was
a huge price to pay, as public debt rates reached crushing levels by the end of
the ‘80s. Such was the increasing ideological hegemony of the neo-liberal right
that they were able to shift responsibility for the unprecedented rise in
public debt through the ‘80s (which they largely responsible for) onto the
defenders of the “big state”, that is, the Keynesian left. This only increased
the pressure for further pushing the neo-liberal agenda of privatization,
de-regulation, dismantling the Welfare State, and, most importantly,
globalization.
Since then (1990 or so), neo-liberalism has steadily
risen to become the new orthodoxy everywhere, while Social Democracy has either
virtually collapsed or else accommodated itself to neo-liberalism by adopting
the so-called “Third Way” espoused by the (Tony Blair led) British Labour Party
and others.
What has been referred to above, however, is
inadequate as an explanation of why Globalization has become the new mantra of
the capitalist class nearly everywhere today. To adequately explain this
development, reference must be made to the actual changes in the mode of
operation of capital on a world scale over the past 10-20 years.
The globalization process being undertaken by the
WTO and various regional multi-lateral trade agreements is actually the
response of the strongest nation-states to the emergence of increasingly
autonomous trans-national capitals. This development results in part from new
technologies in communications and transportation, and from whole new fields of
economic activity (the so-called “new economy” based on information as commodity,
and the various services that can be provided with it, the “IT” sector,
software, etc., and the increased usage of computers and other electronic
devices capable of digitally transferring information), which has facilitated
an increased mobility of capital world-wide. It also results in part from the
global competitive struggle to maximize profits and expand markets, and the
willingness of some nation-states to grant tans-national capitals unprecedented
freedom to operate however it sees fit (by reducing or eliminating corporate
taxes, regulations, labour standards, environmental regulations, etc.), not to
mention various subsidies, provision of infrastructure, and other
“inducements”, within their borders. This has given rise to a certain autonomy
of such capital from any nation-state, as it is capable of shifting its
operations and investments from one country to another where conditions are
more beneficial for it. Mention must also be made of the crisis-fuelled
tendency towards bankruptcy and failure of all but the strongest, most
technologically advanced capital units, which through the ‘90s led to a steep
rise in the latter buying up their debt-ridden competitors (at significantly
less than real market value, of course) and the “merger mania” between even the
strongest capitals across national boundaries in a tendency towards
“multi-national monopolies”, especially pronounced in the past five years.
All of these developments within global capital over
the last 15 or so years have facilitated a major increase in global
integration, with protectionist tendencies being scaled back significantly
(primarily focused on agriculture and “cultural industries”). These
developments have accelerated because they have achieved a measure of success.
They have indeed permitted an increase in profitability and an expansion of
world markets. Global public debts, atleast for the strongest, most advanced
countries, have been significantly curtailed, even if they do remain a serious
burden on global profitability.
Thus the neo-liberal/globalization strategy appears to ruling classes everywhere to be working as a “solution” to the global crisis. They see it as worth pursuing, and thus protectionist tendencies have been seriously restrained. As we know, protectionist tendencies helped spur on the push towards the Second World War; and were such tendencies to be pronounced today, there is little doubt that inter-imperialist politico-military antagonism would be far more intensive (and extensive) than it in fact is now. But instead of the development of militarist imperialist blocs (as occurred in the ‘30s), we see the development of continental and hemispheric trade blocs and increasing global economic integration.
Rather than a “course” towards imperialist (world) war – as orthodox dogma would have us expect as the preferred “solution” to the crisis – what we see today is more like a “course” towards globalization and international neo-liberalism as the now preferred “solution” to the crisis.
Globalization is in essence the “new face” of imperialism today. It is the means by which the world’s dominant capitals and dominant countries are increasing their domination over all others. World markets and access to them are indeed expanding, but not for all capitals. It is primarily the markets of the weaker, less developed countries which are being opened up, so that the more advanced capitals can capture them. Even if some markets of the advanced countries are opened up for the relatively backward capitals of the lesser developed countries, the latter have only their low labour costs (and, in some cases, their natural resources) to their advantage, so that the only markets they can capture are those whose products require the most labour-intensive production methods and for which start-up costs and overhead are the lowest. The capitals of the less developed countries are thus forced to find their own particular “niche market” in the global economy, to focus primarily on that, and give up on all else. Overall, this leads to a huge transfer of wealth from the poorer to the richer countries; and all without resorting to open warfare or violent coercion.
Of course, imperialist wars still occur around the globe. But they are mostly a matter of the economic “losers” – the lesser developed countries, and the political factions without “legitimate” power – resorting to militaristic means in order to attain the power, wealth and resources which they cannot acquire in any other way. Beyond that, the military operations of the U.S. and its allies are primarily concerned with disciplining recalcitrant tyrants, and keeping every country “in its place” in the New World Order hierarchy.
While protectionist tendencies may be presently on the wane, there is no reason to think that this will remain the case indefinitely. The initial benefits of the globalization process for all but the most powerful capitals will eventually disappear and opposition to wide open markets will return (or arise). Protectionist tendencies and “anti-imperialist” resistance movements will then strengthen, and globalization will be imperilled. This will result in an intensifying of inter-imperialist politico-military antagonisms, atleast amongst the increasing numbers of “losers” of the globalization process.
GLOBALIZATION
AND CLASS STRUGGLE
Globalization and neo-liberalism are strategies for “solving” the crisis which depend primarily on lowering the costs of production for capital by reducing the value of labour-power; thus permitting an increase in the extraction of surplus-value from the working class, which allows for increased investments in productivity enhancing technology, necessary to remain competitive on world markets. This process is cyclical, involving a continuous expansion of the value of constant capital and a simultaneous reduction in the value of variable capital (i.e. labour-power). While capital accumulates, the living conditions of the working class decline. This is a realization of the fundamental law of motion of capitalism – the law of value – as articulated by Marx nearly a century and a half ago. Globalization and neo-liberalism merely accelerate this process.
It might be asked: how does expanding world markets and global trade involve lowering the value of labour-power? In fact, globalization is more than a mere expansion of “trade”. The globalization process is really about freeing up all restrictions on the movement and functioning of capital on a global scale. And that is not merely a matter of increasing international trade of finished products. It is just as much about easing the mobility, and extending the reach of investment and finance capital; including the opening up all sorts of “public services” and natural resources, previously the exclusive preserve of states (whether at the national, regional or local level), for the benefit of transnational capital. The “free market” is extended to virtually every sphere of economic activity; more and more “things” and services are effectively commodified. Everything is up for bidding, and no buyers are excluded. “Competition on the free market” – the fundamental thesis of neo-liberalism – becomes the operating principle everywhere. It is what is supposed solve global capitalism’s chronic crisis.
It must be remembered that labour-power is a commodity in its own right, and that one of the most important markets being globalized today is the international labour market. “International competitiveness” in this market means workers willing to sell their labour-power for less, willing to engage in more dangerous work with fewer safety measures, willing to be more “flexible”, that is, put up with worse working conditions. Opening international labour markets gives developed capital – used to exploiting “developed”, i.e. relatively “expensive”, labour-power – greater and easier access to cheaper labour in lesser developed countries. We are all familiar with manufacturing plants in developed countries moving their operations to lesser developed countries primarily to take advantage of the much lower price of labour-power there. The result is a never-ending downward pressure on the value of labour-power everywhere, because there is always somewhere else where the price is lower.
In the new context of “global competitiveness”, transnational finance capital is flowing to those places where the prospects for high rates of profit are the greatest. National (domestic) capitals thus find themselves in international bidding wars to attract the investments they require to maintain their own growth rates. In the course of this process, they are – and have been for a number of years now – restructuring their operations, and such restructuring is primarily a matter of reducing labour costs, of reducing labour standards, “downsizing” and “flexibilization” of the workforce (including increased part-time work, which usually eliminates various benefits, more overtime work but at regular rates of pay, fractured shifts, etc.), tying any wage raises to increases in productivity, and implementing work speed-ups through the introduction of new productive technologies. Layoffs resulting from “downsizing” create further downward pressure on wages and further pressure towards work “flexibility”. Further, the jobs “downsized” are almost always significantly better paying and with better benefits than any new ones “created” by capital.
As noted above, part of the neo-liberal offensive involves dismantling the “welfare state”. The elimination of the various benefits which previously constituted the “social safety net” are reductions of the “social wage” of the working class. The result is an overall reduction in the living conditions of the working class as a whole. This is something the working class has a real interest in resisting, even though defending the “welfare state” easily translates into support for social democracy, and illusions in attempting to return to the “golden age” of the ‘60s and ‘70s.
Thus, the neo-liberal/globalization agenda for solving the crisis depends primarily on a continuous lowering of the value of labour-power, that is, an unrelenting assault on the living and working conditions of the working class. And resistance to these attacks is a matter of the class struggle. More and more workers are becoming aware of the connections between these attacks and the neo-liberal push to globalization. They see that the frenzy for global competitiveness can only result in a global “race to the bottom” (as the saying goes) for the conditions of life and work for the working class in all countries involved in this competition. It is the comprehension of this connection which furnishes the basis on which increasing numbers of working class militants are becoming active in the “anti-globalization movement”.
If these tendencies continue, we are likely to see the working class resist the neo-liberal globalization offensive on a massive scale. Whether such resistance develops into widespread proletarian class autonomy is presently an open question. However, we can safely assert that as long as the ruling class pursues this strategy for solving the crisis that the “historic course” – if indeed we really can talk of such a thing today – is not towards global war, but rather towards increased class confrontations.
Wage Slave X
June 2001