Below is the first of a series of articles based upon the introductions and conclusions to the main political discussions at the CWI's 1996 European School by members of the CWI Secretariat, and reproduced in "The Future for Socialism" as a contribution to discussion within the workers movement.
The working class faces an entirely new international situation since the collapse of the former Stalinist regimes. It has posed many challenges for Marxists concerning the nature of capitalism and the new tasks which the working class has to confront.
By Tony Saunols, International Secretariat of the CWI
One of the most important questions is: "Is capitalism entering
a new and higher stage of its development?" The extreme proponents
of the ideas of globalisation answer this question in the affirmative.
They defend the idea that through the development of massive transnational
companies the limitations of the nation state have been overcome.
This, they argue, will open a new historical period of capitalist
development.
The CWl must answer these arguments if we are to be able to offer
a correct analysis of the nature of the present epoch. Such ideas
have their origin on the one hand in the excess of confidence
which gripped the ruling class internationally after the collapse
of the old Stalinist regimes in 1989-90, and on the other in important
changes in the world economy.
In 1993, the World Congress of the CWI characterised the economic
phase of capitalism since the mitd-1970's as one of depression
within which there has/will be particular conjunctures of growth
There have been clear trends which vindicate this analysis There
are four important economic features which have clearly emerged
in the recent period.
Th. Core' of the arguments concerning globalisation can be summed
up as follows Firstly the recent period has seen the development
of a globalised economy which is now dominated by the emergence
of major transnational corporations which have broken free from
national boundaries and developed a kind of "super-imperialism".
Secondly with the development of a more open and integrated market
the perspective is now raised for the former colonial countries
to be integrated into the industrialised capitalist economies
Thirdly the general idea is put forward that the freedom of the
labour market will prove to be the great "equaliser"
between rich and poor Fourthly, all this is made possible because
of the alleged death of the socialist alternative and the collapse
of the majority of the planned economies after 1989. To sum it
up as Business Week commented in one of its editorials
a few months ago "A new and brutally competitive world economic
order is emerging with the demise of the Cold War. The fundamental
force behind this New Order is the transnational corporations
and the integration into the global economy of the new capitalist
nations and much of the developing world representing some 3000
million people.
It is the acceptance of these ideas which provides the justification
for the swing to the right and the acceptance of the market by
the leaders of the former workers' parties These ideas have been
used in the recent period as an ideological weapon against the
working class There has been an attempt to try to sap the confidence
of the working class as it has moved into struggle to protect
itself against the economic offensive which has been launched
on an international scale by capitalism.
Supporters of globalisation theories present the 1990s as a decade
of the global market place where job relocation is an unstoppable
process, rendering futile any resistance by the working class.
The CWI has two central tasks before it: the first is to answer
these ideas and to clarify exactly what changes have taken place
over the recent period. Secondly, the CWI and its sections has
a decisive role to play in propagating the ideas of socialism
among the most advanced workers and youth. The credibility of
socialism as an alternative to the domination of the market needs
reconquering internationally.
If these tasks are to be achieved Marxists must take account of
important changes which have taken place in the world economy.
There can be no doubt that it has become more internationalised.
The flows of capital and development of world trade have reached
new levels. With the development and greater monopolisation of
the multinational corporations there has been a clear tendency
to internationalise production. Products can be designed in one
continent, assembled in another and sold around the globe. This
process has taken place not only amongst the multinationals of
the industrialised capitalist countries. It has also affected
some of the secondary imperialist powers and some of the emerging
capitalist powers as well. South Korean car companies now import
and assemble cars in Botswana to sell them in South Africa at
70 per cent of the price of other cars assembled there.
The most striking feature of the world today is the increased
pressure and the dominance of the world market. This means that
it is even less possible for one country to opt out from the world
market and the broader political processes which are taking place.
It is reflected in a growing uniformity of bourgeois policy and
programme on a world scale. This has gone side by side with a
substantial fragmentation of the political institutions and parties
of capitalism. This domination of the world economy has decisive
political implications. The influence of the world market currently
determines the policies pursued in each country. No country has
been able to escape its influence. It has been one factor which
has prevented the implementation of reformist policies. This is
likely to be the case in the short to medium term.
In recognising the internationalisation of the world economy we
must also distinguish between what is fact and what is myth, but
presented as fact by the proponents of globalisation. There are
37,000 multinational companies (MNC s) at present. They have
170,000 subsidiaries in different countries, controlling just
over one-third of the world's private assets. This marked tendency
towards monopolisation and internationalisation of the world economy,
together with the massive development of foreign trade and the
expansion of international capital flows, is not a basis from
which a new and distinct period of capitalist development can
take place. The main features which have recently developed have
been manifested at different times in the history of capitalism.
Whilst the world economy has undoubtedly developed and internationalised
recently it is not any more open today than it was between 1870
and 1914. This then gave way luring the 1930 s to a period of
protectionism The introduction of new techniques of production
and communication is a quantitative development, rather than a
qualitative new stage in the development of capitalism. In some
industries it has gone further than in others, particularly in
chemicals, communications and car production But one of the myths
that must he shattered is the idea that the world economy is currently
dominated by transnational corporations which no longer have a
national basis, and that consequently all the limitations of the
national state have been overcome. This must be demonstrated by
the fact that of the 37,000 MNCs, 70 per cent were home based
in 14 OECD countries.
It is true that some companies have been able to establish genuine
transnational enterprises which span the globe. There has been
a certain tendency in this direction. This has been mainly concentrated
among European firms, especially Dutch companies. However, genuine
transnational corporations at this stage are generally the exception
rather than the rule. Most have a definite national or at most
a regional base. In the USA, the parent organisations of the multinational
corporations based there have 78 per cent of total assets, 70
per cent of total sales and 70 per cent of their total employment
force at home. Of the top 5000 multinational companies internationally,
two-thirds of their sales are either based in the country of origin
or in the region where they operate. This clearly points to the
fact that the vast majority of the multinational companies, despite
the internationalisation of production techniques still tend to
be nationally based.
It is more accurate to say that the most dominant tendency has
been the development of regionalisation, rather than real globalisation.
This development of regionalisation is one factor which is reflected
in the emergence of regional trading blocks such as the EU, NAFTA
MERCOSUR, ASEAN, etc.
The one aspect of the economy where it is possible to say that
a real process of globalisation has taken place is in the financial
markets.
However, the decisive feature is the dominance of the world market.
This has rendered the application of distinct and separate policies
within national boundaries impossible for any length of time.
This is especially the case for policies of a reformist or left
reformist character. Take, for example, the position of Mitterrand
s government in the 1980s in France. It initially tried to move
against the general international trend, adopting a more clearly
reformist, or Keynesian based policy, but was forced in a matter
of months to abandon it. As the chairman of CitiCorp pointed
out: "There are 200,000 monetarists in trading rooms all
over the world. They conduct a kind of global plebiscite on monetary
and fiscal policies of government. There is no way one nation
can opt out.- And referring to Mitterrand, he commented: The market
took one look at his policies and within six months, the flight
of capital forced him to reverse course."
This was dramatically seen in Venezuela which has experienced
two attempted coups, mass rioting against the IMF austerity package
which left hundreds dead, and the election in 1994 of a populist
left wing coalition led by Caldera. This government has on two
occasions attempted to move in the direction of more state intervention,
control of oil prices, and other measures based on reformist policies.
On both occasions, Caldera was forced to abandon these measures
and adopt the neoliberal measures demanded by the IMF and the
World Bank. As the World Bank stated in relation to Caldera's
change in policy, "He does not believe in it, he does not
want it, but he has no choice but to implement it."
These examples illustrate the domination of the world economy
and show that the material basis which allowed capitalism to implement
lasting reforms in the post Second World War decades no longer
exists. Temporary concessions may be given by a government threatened
with massive social explosions. However, they will rapidly be
taken away again because of the limitations of the resources of
capitalism.
In recent years there has been much greater social inequality
on a global scale. This can be seen both geographically and socially.
The gap between rich and poor nations has widened. The same process
has occurred between the wealthy and the downtrodden within countries.
The strangulation of the former colonial world by the imperialist
powers has tightened. Any limited development which has resulted
from investment due to internationalised production techniques
and the introduction of new technology has been concentrated in
relatively few areas. As a result it has only benefited a tiny
minority of the population. This has taken place in the former
colonial world at the same time as greater social polarisation,
between the rich and poor. in the advanced capitalist world and
even the major imperialist powers.
The increase in exploitation in the former colonial countries
is one of the most important aspects of the economic processes
which have occurred. This is graphically illustrated if we look
at world trade. Trade between the industrialised countries was
$2044 billion a year in 1994. Among the other countries of the
world it was a mere $195 billion during the same period. The expansion
of world trade was the main driving force in the boom in the world
economy which took place in the post-Second World War period.
Today the increase in Foreign Direct Investment (FDI) is pointed
to as the new motor force which will open up a new historical
period of capitalist development. It is heralded by right-wing
economists as the salvation which will allow the former colonial
world (or at least sections of it) to develop. FDI did expand
dramatically, especially between 1983 -1990. (During this period
FDI grew by 34 per cent per annum compared with global merchandise
trade which grew by 9 per cent.). This prospect is wholly false.
The increase in FDI which has taken place is extremely uneven
and not comparable with the massive expansion in world trade which
took place during the post war decades. 75 per cent of FDI is
concentrated into what is called the triad of the US, Europe and
Japan. This accounts for a mere 14 per cent of the world s population.
A closer study of FDI reveals an even more devastating situation.
If the quantity of investment into the ten most important developing
countries is added together it means that 43 per cent of the world
population is in receipt of 91.5 per cent of FDI flows.
Even this does not reveal the full picture. Included in these
figures are FDI flows into China. Most investment there is concentrated
into the coastal provinces, particularly in the south. If these
eight provinces plus Beijing are separated out and China is divided
into two ( between recipients of FDI and non-recipients) a recalculation
shows that 91 per cent of total FDI goes into countries and regions
which only make up 28 per enl of the world s population! The vast
majority of humanity is gaining absolutely nothing from this process.
The nature of FDI also gives an indication of how it will affect
long term economic development. It is largely made up of short/
medium-term loans and speculation, and buying up privatised companies.
This has particularly been the nature of FDI going into the former
colonial world.
The Asian Tigers are used as an example to be followed in the
rest of the former colonial world. The impressive growth rates
in Singapore, Hong Kong, South Korea and Taiwan have been presented
as an illustration of what is possible. Developments in these
countries have been quite exceptional and impressive economic
growth has been achieved. In general this has taken place over
quite a prolonged period. These countries have been transformed
becoming overwhelmingly urbanised and industrialised. There are
two features which stand out. On the one side, the growth and
development of these economies has been based on the adoption
of precisely the opposite economic policies which are now being
applied globally. It has largely been the consequence of state
intervention, particularly the use of joint private and public
funds together. This was the case in South Korea, where special
arrangements were arrived at in relation to trade with the US.
Growth has been on the basis of these policies and not the adoption
of the open, free market, noninterventionist policies which are
currently demanded by the World Bank and the IMF.
However, the very development of these economies has brought its
own contradictions. It is one thing to be able to sustain this
growth as the economies have been developing. It is an entirely
different question to sustain that growth after the economies
have passed through a period of development. There has been a
lot of publicity referring to wage levels in these countries reaching
the lower levels of wages earned by workers in the main imperialist
countries. This recent development will mean a loss of the advantage
that these countries had in offering cheap labour! The recent
upheavals and strikes in South Korea are an indication of how
the very development of these countries has also created a much
stronger industrial working class. Over the next few years the
struggles of workers in these countries will be an important feature
of events in that region.
The increased development (economically and socially) of each
of these countries together with the emergence of capitalist China
will also result in heightened conflicts in this area because
of the increased strength of the national bourgeoisie in these
countries and the inevitable struggle for markets which is developing.
The economic trends within the Tigers have been the exception
rather than the rule when compared with the processes which have
taken place in the former colonial world. It is worth noting that
in the 60's, Brazil was pointed to as the new model to be followed.
There are many differences between the situation in Brazil and
South Korea. However, despite any differences both have seen new
conflicts and upheavals. The very developments that have taken
place will result in heightened regional conflicts and also pose
the necessity for the ruling lasses in these countries to increase
the exploitation of the very young and new working class which
is being created.
The emergence of regional trading blocs has demonstrated the two
contradictory features present at the moment. On the one side,
there has been a clear tendency for the economies within trading
blocs to be pulled together. This reflects the internationalisation
of the economy which has taken place. At the same time as they
have been pulled together, new conflicts have developed within
them which have served to pull in the opposite direction. This
process has unfolded at differing rhythms and varying degrees
in each trading bloc. The European Union has seen the most powerful
tendency towards integration. In others such as MERCOSUR or ASEAN
it has been much less developed.
In Europe the process has gone a long way but it has thrown up
contradictory tendencies and conflicts between different European
countries. However, one important feature is that the very steps
required to fulfil the Maastricht criteria for EMU (reducing the
state deficit to 3 per cent of GDP) threaten to create new problems.
In order to fulfil the criteria, Germany threatens to pull the
whole of Europe into recession.
In some of the other trading blocs the same contradictory tendencies
are at work as well. NAFTA, at the time when Canada and Mexico
joined, was projected as a great success. The perspective originally
put forward by the US ruling class was that it would evolve into
a trading bloc which covered both North and South America. The
developments of NAFTA were paralleled in South America with the
formation of MERCOSUR. However, with the establishment of these
regional blocs new contradictions rapidly began to emerge and
the limitations of these agreements were exposed.
Most dramatically, the crisis in Mexico compelled US imperialism
to intervene in 1994 and bail out the Mexican ruling class to
the tune of billions of dollars. This has had repercussions throughout
the rest of the continent, beyond the immediate shock waves which
swept the financial markets. Chile is viewed as the Latin American
Tiger, and the next entrant into NAFTA. The Chilean ruling class
looked towards NAFTA and the East and spurned MERCOSUR. After
the crisis in Mexico, the US has been far more cautious about
rapidly expanding NAFTA south of the .Mexican border. Whilst Chile
continues to negotiate with NAFTA, its membership has been constantly
delayed by the USA. Chile itself has become less enthusiastic
about immediate entry to NAFTA and has now opted to join MERCOSUR
as an associate member.
Problems within NAFTA have been mirrored by heightened frictions
within MERCOSUR, which is dominated by the powerful Brazilian
economy A conflict of economic interest has clearly emerged between
Argentina and Brazil. The former is threatened with a flood of
imports from the latter. At the same time Argentina has a different
agenda for MERCOSUR than Brazil. Argentina has viewed it as a
step towards eventual entry into NAFTA and a unified trading bloc
being established throughout the Americas. Brazil looks to consolidating
a South American trading bloc which it would dominate, existing
alongside NAFTA.
The developments in these trading blocs illustrate the tendencies
towards internationalisation in the world economy and also the
new contradictions and conflicts of interest which are arising.
Whilst the dominant trend has been in the direction of internationalisation
of the world economy and the dropping of trade barriers wilt this
continue indefinitely? Can these recent trends prevent a return
to any form of protectionism and state intervention?
Elements of protectionism have continued during this period on
a small scale, and in a disguised form. This has usually been
done either through currency devaluation or subsidies. A change
in the economic situation could force a change in policy and a
return to .some protectionist measures. This could arise especially
in the context of mass social upheavals and explosions and with
the onset of a slump in the world economy. It is true that any
return to protectionist measures may be more likely to be implemented
on a regional basis rather than a national one because of the
process of internationalisation of the economy which has already
taken place.
The regional frictions which have developed have coincided with
imperialism having to confront the new world situation which has
developed post-1989. In the recent period there have been two
main aspects to the policy adopted.
Firstly, despite its relative economic decline over recent years
the USA has still tried to assert its international role. It has
been extremely cautious in terms of moving towards direct military
intervention and where this has been done, it has been done under
the auspices of the United Nations.
Secondly, the main offensive by US imperialism has been political
or diplomatic rather than military. In this respect it has been
quite hesitant. In the Middle East Clinton conducted an open campaign
to try and secure the re-election of Peres in order to try and
keep the peace process on track. This policy was then repeated
in an even more strident fashion in the Russian Presidential elections.
The intervention by all the Western powers to try and secure Yeltsin's
re-election was almost unprecedented in its brazenness.
Since the last international meeting of the CWI all the much-heralded
"peace processes" have run into increasing difficulties
and problems. This shows the limits of imperialism's ability to
resolve such conflicts. The defeat of Peres in the Israeli elections
(in May 1996) is certain to place increased strains on the peace
agreement and result in further instability in the region.
Recent US policy has been linked to the forth-coming elections
in the US. This has certainly been demonstrated in relation to
Cuba, through the introduction of the Helms/Burton Bill. (This
enables the USA to take sanctions against any company - including
non-US firms which invest in Cuba). This has been directed at
trying to bring the regime down and humiliate Castro. It is done
with an eye to securing the Cuban exile vote for Clinton in the
forthcoming elections. This policy could be reversed and the blockade
lifted after the presidential elections have taken place. The
policy of the European imperialist powers of investing with a
view to carrying through the restoration of capitalism in Cuba
is undoubtedly more farsighted.
Another important feature in world relations has been the tendency
towards heightened frictions between the USA and some of the secondary
imperialist powers. This was reflected in the opposition by French
capitalism to the Israeli bombardment of the Lebanon. Reflected
in this clash were the aspirations of French imperialism to try
to rebuild its influence in the Lebanon and throughout the region.
The strengthened economic grip of imperialism over the former
colonial countries has been reinforced as a direct consequence
of the privatisations which have taken place. This is a vital
aspect of developments in Asia, Africa and Latin America. The
consequences have been horrific for the masses. There has been
no trickle down effect . Inequality has become greater and poverty
more widespread.
The policy of privatisation began earlier in Latin America than
in other areas of the former colonial world. Together with other
aspects of the neo-liberal agenda it has been a catastrophe for
the masses. In 1980, 41 per cent of the Latin American population
(136 million people) were living below the official poverty line.
By 1990, the figure had risen to just under 62 per cent of the
continent s population 270 million people. There has been a similar
trend in relation to the Indian Sub-Continent and, most horrifically,
in Africa. In Africa the trickle down effects has produced a "melt
down" as whole countries are threatened with barbarism and
even disintegration.
Four countries in Africa have already in effect ceased to exist
Liberia, Ruanda, Somalia and Burundi. The turmoil which is taking
place throughout the former colonial world is almost unprecedented.
The United Nations estimated that the number of refugees was increasing
in 1992 by 10,000 per day as a result of the economic situation
and also as a result of wars, policies of ethnic cleansing, etc.
Internationally, the UN calculated in 1987 that there were 2.5
million refugees; by 1995, the figure was 45 million. This is
a measure of the depth of the crisis confronting humanity.
The character of the period is also reflected in the developments
within the advanced capitalist countries. Capitalism is in a historical
epoch of economic depression which is interspersed with periods
of growth. Over 30 per cent of the labour force internationally
is now either unemployed or underemployed. Mass unemployment is
now a structural part of capitalism in the industrialised world.
This does not represent a period of capitalist expansion.
These events have taken place against a background of a certain
conjunctural economic growth, which has taken place in the economies
of the advanced capitalist countries: limited growth in the USA,
recently some growth in the Japanese economy, following four years
of stagnation, and a slowdown in the European economy. In Japan
growth is based on an increase in government spending and the
money supply. At one point annualised GDP growth figures for Japan
touched 13% this year, but such a rate of growth is unlikely to
be sustained and will probably peter out .
It is necessary to be conditional about short-term economic perspectives.
The recent sluggish growth which has occurred could continue for
a further couple of years, although this is not certain. In Europe,
there is the serious possibility that a recession could take hold
of the continent. The attempts of the German ruling class to meet
the criteria for the Maastricht agreement can drag the rest of
the EU into recession.
Moreover, there also exists the prospect of another crash on the
financial markets, where there is a marked tendency towards the
overvaluing of share prices. The consequences of another crash
would not he the same as 1987. Imperialism does not have the same
resources it did then to intervene. Another important difference
is that prior to 1987 the world economy was in an expanding phase
of growth rather than the sluggish state it finds itself in during
1996. Should another financial crash occur the prospect of a slump
in the world economy could be posed as a serious or even likely
perspective.
The issue of structural mass unemployment is a decisive question
for the workers movement. The question of job relocation is a
central part of the debate on globalisation. It particularly raises
the threat of the relocation of jobs from the industrialised capitalist
nations to the cheap labour economies of Asia, Africa and Latin
America. This process also takes place within the trading blocs
established in the former colonial world where wage levels can
also be quite varied.
There are some very concrete examples, like the experiences at
Swiss Air and Lufthansa. They have moved all their
accounting operations to India, where labour is much cheaper.
Another example is that a software computer programming centre
in Bangalore services over 30 multinational companies. Some countries
such as Germany and Austria have also begun to relocate jobs to
Eastern European countries such as the Czech Republic.
The CWI needs to develop more concrete demands and slogans to
be fought for in the workers movement on this question. From the
general process of the internationalisation of production the
need for the international organisation of workers assumes a more
concrete and practical necessity. The CWI should raise the idea
of the establishment of international organisations linking workers
together, workplace to workplace. This proposal is especially
relevant for workers within the same multi-national company. The
failure of the international trade union bureaucracy to act means
it is necessary to also propose that workers by-pass officialdom.
Linked to this proposal, the CWI should also explore the possibility
of an international struggle to establish maximum differentials
within the wage structures of the multi-nationals.
This question of job relocation poses a very real threat and it
would be wrong to underestimate it. At the same time, it is also
necessary to have a sense of proportion. This issue is being used
by the employers as a means of intimidating workers against taking
action and to force down wage levels.
However, this threat has also been exaggerated by some economists
and employers who have used the ideas of the extreme globalisationists
to justify it. Job relocation to the former colonial world has
not been the primary reason for lay-offs in any of the industrialised
countries. It is not a realistic perspective that capitalism is
going to undertake a mass transfer of employment in the industrialised
capitalist world to the former colonial countries.
Firstly, the immediate social consequences of such a step prevent
them from doing this. Secondly, there are also economic factors
which mitigate against such a drastic step. Wages and labour costs
actually only account for 20 per cent of costs for the average
multinational company. There are other factors, such as technique
and training and securing the easiest possible access to the market
itself which need also to be taken into account.
In some industries the issue of job relocation has been more of
a threat than in others, partly because of the nature of production.
( e.g. textiles) These economic processes are not abstract questions.
They have a direct bearing on the struggle between the classes
internationally.
In a number of important European countries there has been an
important revival of the movement of the proletariat. The huge
events in France in December of 1995 had international repercussions.
At the world congress of the CWI in 1993 we stated: In this period,
it will be precisely the emergence into the arena of struggle
of the working class in Germany, the US and Japan which will be
a key element. In Germany that has been graphically borne out
by the recent massive protests of the public sector workers. In
Japan, in outline, we can see the beginnings of that process.
Even in the US, there are important new features such as the possible
development of a new Labour Party. We
will have to see how that development progresses. Nevertheless,
it reflects the first, tentative steps being taken by the more
class conscious workers in the USA.
Outside of Europe there have been massive struggles by workers
and other exploited classes in society. In Sri Lanka in 1996 there
was an important strike of electrical workers against privatisation.
There were also the massive movements of bus workers in both India
and Mexico in 1995/6 against privatisation.
As a consequence of the neo-liberal policies which have been implemented,
Latin America has seen a massive revival of the mass movement.
This has taken the form of strikes, general strikes, land occupations,
rioting and other protests. These events have occurred from Mexico
in the north to the south of Argentina. The Mexican workers and
peasants mobilised in their thousands in a battle against privatisation
of the oil industry. At one stage of the struggle the oil refineries
were occupied by workers and peasants. There have been two general
strikes in Bolivia over the past 18 months. In Paraguay where
there has not been a general strike in 40 years, two one-day general
strikes have been organised in the last year. In Brazil, 12 million
workers participated in a 24-hour general strike in June 1996.
In a similar way, the process of integration has provoked protests
in Europe. In Latin America, Paraguayan peasants have marched
against MERCOSUR, as their very livelihood has been threatened
by cheap imports from Brazil. The uprising in Chiapas in Mexico
in 1994 was against NAFTA.
However, there are also important complications in the turmoil
unleashed in this period of capitalism. The numerous national
conflicts which have erupted are a measure of the impasse of capitalism.
This is particularly pronounced in the Middle East. The economic
collapse which taken place in Nigeria is a further measure of
the devastation which the market offers the masses of Africa.
Despite these social and economic disasters there have been mass
movements in important countries and continents in opposition
to the neo-liberal policies which have been implemented during
recent years.
The increasing tendency of imperialism to economically strangle
and tighten its grip over the former colonial world can provoke
a powerful backlash. It will inevitably provoke the rise of powerful
anti-imperialist moods and movements. The recent policy by the
national bourgeoisie in the former colonial world has leant firmly
in the direction of prostrating itself before imperialism. The
lowering of trade barriers and the process of internationalisation
of the world economy resulted for a period, in some areas of the
former colonial world, in a lowering of anti-imperialist sentiment
and anti-imperialist policies. This was partly because sectors
of these societies hoped such measures would offer a rapid solution
to the problems they faced.
This trend can also be reversed as the consequences of these policies
are increasingly felt. In many of the emerging struggles the anti-imperialist
content is likely to be the dominant feature. Imperialism will
pay a price for the policies that have been inflicted on the masses
in the former colonial world.
The outlines of such a development have already been seen in some
countries. The elections in Ecuador, and also in Benin, are an
indication of this. In July, Ecuador elected a new populist administration.
In Benin, a former Stalinist ruler was elected President on a
radical populist and anti-imperialist platform. This will be an
important feature of the upheavals and struggles which are pending
throughout the former colonial world.
This perspective could develop particularly in the context of
a new slump or major recession in the world economy. Under the
pressure of mass revolts and upheavals by workers and peasants,
sections of the national bourgeoisie in some of these countries
could be pushed to adopt more populist measures. They could adopt
some protectionist measures and even renationalise some privatised
sectors of the economy, in part to defend their own interests.
A further aspect in relation to the colonial world, is the methods
of rule which are being deployed by the bourgeoisie. There has
been a phase of massive illusions in democracy, particularly after
1989 90. That was reflected in important upheavals that took place
in a number of continents of the former colonial world. They frequently
resulted in the collapses and disintegration of the military regimes
which existed, particularly in Africa. These military regimes
gave way to regimes of bourgeois democracy in a series of African
countries, throughout Latin America, and in some important countries
in South-East Asia. However, they often have powerful features
of parliamentary bonapartism.
The old state machine, in the form of the military, is still in
place, and in many countries only a fig leaf of parliamentary
democracy has been established. The failure to alleviate the plight
of the masses, when combined with corruption and frequent waves
of repression can lead to a sceptical and even hostile attitude
developing towards the bourgeois institutions which are established.
The programme of the CWI in these countries must also reflect
the aspirations for s real democracy which can develop under such
conditions. These processes have in some respects also begun to
affect the industrialised countries.
The first stirrings of the masses lave been against the effects
of the market and against the effects of privatisation/ neo-liberalism.
During these movements the consciousness of the masses has centred
on opposition to the effects of privatisation, or opposition to
the idea of privatisation. In Europe it has also centred on the
idea of defending services, the welfare state etc. The consciousness
of these movements will reflect these issues, before moving into
a phase where socialism will be accepted as a viable alternative
by the mass of workers involved.
It is the absence of socialism being offered or seen as a real
alternative which is the main complication at the moment on an
international scale. It will re-emerge in the consciousness of
workers and youth. This will come about as a result of their experiences
in struggle, and through the intervention of Marxists in these
events.
One of the features which has clearly emerged in the consciousness
of the working class is internationalism. It partly flows from
the economic processes, being reflected very practically in the
struggle of the Liverpool dockers and some other struggles. It
IS a by-product of NAFTA that the car workers in the USA tried
to establish direct links with the car workers in Mexico and other
Latin American countries.
The internationalisation of the struggle of the working class
offers great scope for the work of the CWI. In this discussion
on globalisation we have two tasks. Firstly, to recognise the
very important changes which have taken place. he same time we
must also see heir limitations and explain the real nature of
the epoch through which we are passing. That is not me of new
or further capitalist development but a period of economic depression.
Secondly, there is the role of the SWI in intervening in these
processes. In particular, we have a central role to play in reconquering
the idea of socialism as an alternative to capitalist society.
Within this process of internationalisation of the economy are
also the germs of the possibilities that socialism would mean.
The technical capacity to plan the economy, to organise the distribution
of resources, is present in today s society. It is reflected precisely
in the new technology which is utilised in the planning and marketing
techniques of some of the multinationals. What is evident is the
inability of capitalism to utilise and to harness the potential
which exists. It certainly cannot do this from the point of view
of the benefiting the mass of humanity. The CWI must demonstrate
what socialism is and that it offers the only viable alternative
to capitalism.
By David Cameron, International Secretariat of the CWI
As comrade Tony pointed out in his lead-off, and as other comrades
have pointed out in the discussion, globalisation is not just
an economic phenomenon. It is also an ideological and political
weapon in an offensive against the international workers movement.
The point of this offensive is to try to demonstrate that the
market is all-powerful and that it is not possible for either
national governments or the working class to do anything to resist
it.
We have to reply to this offensive. But the worst thing would
be to have a conservative reaction and say: Nothing has changed:
globalisation is just a myth. That, of course, is not what we
are saying. What we are trying to do is to clarify what has changed
and what has not changed, and what are the tendencies and the
countertendencies in world capitalism today, in order to arrive
at an understanding of the present stage of capitalist development,
the perspectives and the political consequences. This is not just
a discussion about economics but also how the working class will
react, how consciousness will develop and how the CWI can intervene
in the situation.
In fact, when we talk about globalisation and its political consequences,
it is not as simple as that: because globalisation has political
causes as well as political consequences. Is it the case that
globalisation represents a new and higher stage of capitalist
development and that it opens up the possibility of a new period
of expansion?
In the first place, as has been pointed out, there are many aspects
of globalisation which are not new. In fact, the essential characteristics
of imperialism as defined by Lenin in 1916 are still valid in
their broad outlines. In some cases they are even more valid today
than they were eighty years ago. For example, the concentration
of production and capital leading to the creation of monopolies,
the formation of what Lenin called international unions which
we would now call multinationals or transnationals, and particularly
the fusion of banking and industrial capital to form finance capital,
all of which has developed incalculably further from when Lenin
was writing. Of course certain things have changed, like the existence
of colonial empires and the way in which the world was divided
up among the imperialist powers.
However, simply to underline those points and say, Well, really,
it s just the same system as in 1916, would be rather like saying:
Trotsky said in 1938 that the Soviet Union would either go forward
to socialism or back to capitalism. Fifty years later it went
back to capitalism. So that s that! This does not explain what
happened in between and what processes led to the present situation.
The point has been made that today the world economy is no more
open and foreign investment direct(the export of capital) is not
any more important than it was before 1914. That is true, of course,
in a certain sense. However, the process was interrupted for nearly
half a century, from 1914 to 1945, during which the world economy
became in fact less open, where there were trade blocs, protectionism,
trade wars, wars and in fact a reversal of the trends which dominated
up until 1914. During this period foreign direct investment receded.
That was followed by the post-war boom, which was based on an
enormous expansion of world trade rather than on an expansion
of foreign direct investment. The elements of what we call today
globalisation - that is the word that is used, although it is
not necessarily the hest word - began to emerge with the end of
the postwar boom and the beginning of the period of stagnation
and depression. These were not automatic, economic processes.
There were political causes. What is called the post-war consensus
began to break down with the beginning of the crisis in 1973-74.
All the things the working class had won or thought it had won
the welfare state, full employment, rising living standards, public
services began to come under attack. And because in each country,
this consensus and these gains were guaranteed by the state, the
neoliberal offensive took the form of an attack on the state.
That is, an attack on the role of the state as an economic regulator
setting limits on the power of capital, not an attack on the state
as a repressive apparatus.
In practical terms this took the form of the attack on the welfare
state, the offensive on wages and
employment, privatisation, which is the opening up of sectors
which were previously closed off to private capital, along with
the lifting of restrictions on the freedom of movement of capital,
both within national boundaries and more importantly on a world
scale. In fact, globalisation involves the liberation of capital
from the constraints which were placed on it in the post-war period,
in the period of the post-war consensus. And this process, although
it accelerated with the collapse of Stalinism, began in the late
1970s.
What were the main issues raised in the discussion?
First of all, are the multinationals in the process of becoming
transnationals, are they becoming what some writers call stateless,
that is, free from their national bases?
That is not the case. If you look at, for example, the list of
the top five hundred companies published by the Financial Times
in January 1996, there are only a very tiny number which are not
nationally-based. Each of those multinational companies has the
name of a country beside it and that is the country where the
ownership of that multinational is concentrated.
In fact, only three major exceptions come to mind: Unilever
and Shell, which both date from the beginning of the century
and which are both Anglo-Dutch, and Asea Brown Bovery,
created in the 1980s by a fusion of Swiss and Swedish capital.
But if the multinationals have not become truly transnational
from the point of view of ownership,
they have certainly become more and more transnational from the
point of view of their operations. And globalisation has also
seen a move away from the extremely centralised multinationals
that existed in the 50s and 60s. If capital is highly centralised
in its essence, it is becoming more and more decentralised from
the point of view of production. What the Irish comrade said about
General Motors breaking up into autonomous units is perfectly
typical.
Not only that, but more and more multinationals are in the process
of becoming what the French Marxist writer, Francois Chesnais
has called "network firms". That is to say, firms which
operate not simply by having subsidiaries in other countries but
through a network of relations with other companies to which they
subcontract work. Between these multinationals, there is competition,
but there is also collaboration. We are seeing an increasing number
of what are called "tri-polar alliances". For example,
in the last few weeks, an alliance has been established in the
airline industry between British Airways in Europe, United
Airlines in the US and China Airlines. And in telecommunications,
an alliance has been established between ATT in the US
Unisource in Europe and NTT in Japan. These alliances
are established in order to compete with other multinationals
which have established similar alliances with other multinationals
in Japan Europe and North America.
So there is an internationalisation of production and also, more
and more, of services.
The second question concerns the growth of foreign direct investment,
that is, export of capital. We have to ask why is there this growth,
where it is going and what exactly it is?
Why, in an overall context of stagnation is it more and more necessary
for firms to engage in competition on the world market and not
simply within the limits of the national economy? Because in the
period following the recession of 1974-75, faced with the fall
in the rate of profit at home, big companies were seeking ways
to get a better return on their investments and to find new markets
abroad for consumer durables.
Where the investment goes is also perfectly clear: 80 per cent
of foreign direct investment takes place within the triad of Europe,
North America and Japan, with the difference that the export of
capital from Japan to Europe and North America is much more important
than the volume of investment of European and North American capital
in Japan.
When we examine what foreign direct investment actually consists
of we see the parasitic nature of contemporary capitalism, not
only in the financial but also in the industrial sphere. Marx
clearly distinguished between two processes concentration and
centralisation of capital. Concentration of capital means the
accumulation of capital by the creation of new means of production.
This is productive investment. Centralisation means simply the
fusion of existing capitals, of existing firms, which is not at
all synonymous with the development of the means of production.
In fact the two processes are quite opposite.
In the 1980s 75 per cent of foreign direct investment consisted
not of productive investment but of fusions and acquisitions of
companies in other countries. What is the difference in practice?
In July, the Korean multinational, LGS, established an electronics
plant in Wales, Britain. That is productive investment in the
sense that a plant is going to be built, machines installed, workers
hired, surplus value extracted and realised through the sale of
commodities on the market. And that leads to the accumulation
of capital. Non-productive investment in the sense of take-overs,
acquisitions, fusions leads, in fact, to the destruction of capital.
What happens when one company takes over another? It does not
lead to a bigger company to more workers: it leads to less. the
aim is to eliminate the competitor. Factories are closed and workers
are laid off. In general only perhaps a few specialised workers,
some high-technology, research and development, are kept in the
new company. And it is this kind of operation that represents
three-quarters of foreign direct investment.
The third question concerns regional trade blocs, which actually
should be called regional trade and investment blocks. If you
look at the flow of both investment and trade for the multinationals,
it takes place essentially within the country and region of the
multinational's origin. For example, for North American multinationals
based in the US and Canada, over 70 per cent of the sales of those
multinationals take place in the US and Canada and over 70 per
cent of the assets of those multinationals are located in the
US and Canada. And similar figures can be cited for Japanese and
European multinationals: over 60 per cent in all cases. So while
the multinationals are reaching out for new markets, their feet
are still quite firmly planted in their own backyard.
The fourth question: can the less developed countries, the Third
World countries, the countries under imperialist domination, be
drawn further into the world market and can they undergo a process
of economic growth? The answer to that question is such a resounding
no that in fact it seems ridiculous to be talking about globalisation,
to call "globalisation" a process which essentially
excludes three-quarters of the world's population. Because outside
the Triad, apart from a small number of newly-industrialising
countries in Asia and parts of China, large areas of the world
economy are excluded. And the proportion of investment which takes
place within the imperialist countries and within these few Asian
countries, is rising to the disadvantage of the rest of the world.
If we ask, "Is it possible for other East Asian countries
to follow the road of the Asian Tigers, that is, Hong Kong, Taiwan,
Singapore and South Korea?", again the answer is no. In fact,
simply to look at the reasons that Tony gave for the development
of the Asian Tigers and particularly of South Korea, gives you
the reasons why the others won't be able to develop in a similar
fashion. The elements that existed before 1980 state intervention,
privileged access to the US market - do not exist any more. Under
particularly favourable conditions and through consistent state
intervention, South Korea was able to build up what is
extremely rare in the Third World that is, a real, internal market.
South Korean products are not simply exported to the advanced
capitalist world, they are also sold in South Korea. If you look
at countries like Thailand, Malaysia and the Philippines, they
are low-wage, exporting economies which are continually in competition
with each other to receive foreign investment. And therefore a
domestic market will not develop in the same way that was possible
in South Korea and Taiwan.
Most of the countries of the Third World are crippled by debt
repayments, by "structural adjustment programmes", and
by the opening up of their economies more and more to imperialist
penetration notably through the GATT agreements. Any idea that
those countries are in the process of catching up with the advanced
capitalist countries is contrary to the truth. In fact the gap
is constantly widening between the advanced capitalist countries
and most of the rest of the world.
In 1900, the ratio of the richest country in the world to the
poorest country in the world was one to eight, that is, the richest
country in the world was eight times richer than the poorest country
in the world. In 1987 the richest country in the world was 130
times richer than the poorest country. This also illustrates that
what was historically progressive under capitalism, that is, the
creation of a world market and the incorporation of all the countries
of the world into this market, is going into reverse and that
there are more and more countries whose relation to the world
market is extremely marginal.
As Tony said in his introduction, this is leading to growing development
of an anti-imperialist sentiment. What Peter said about Pakistan
and about the peasants in the South Punjab was very interesting.
And these peasants weren't just saying in a general way: "down
with imperialism" or even "down with US imperialism"
or something like that. They were saying "down with the IMF,
down with the World Bank". And they were absolutely right,
because the IMF, the World Bank and the World Trade Organisations
are increasingly the instruments through which the imperialist
countries maintain their domination over the countries of the
Third World.
What the Swedish comrade said in his intervention is true. The
situation in the Third World is such that there is no end to the
perspective of continual conflict, wars and repressive regimes.
And therefore, whatever repressive legislation is adopted, whatever
racist immigration laws there are, however high the wall they
attempt to build, for example, around Europe, that will not stop
immigrants from those countries trying to come into the advanced
capitalist countries. And the CNVI has to fight for the right
of those immigrants to have work and residence permits, to have
civic rights and social security, not to be used as a source of
cheap labour with no rights and in constant danger of deportation.
It is no accident that most of our sections in Europe are involved,
or have been involved, in campaigns against racist immigration
laws and particularly in defence of the right of asylum which
has systematically come under attack in the whole of Europe.
The fifth question that needs to be taken up is the question of
relocation. This is a phenomenon which exists but which has been
enormously exaggerated from an ideological/political point of
view by the ruling class and by the reformists. To say to workers
in Europe that their jobs are under threat because of workers
in low-wage economies in South East Asia is not only a way of
seeking to divide the working class: it is also to a very large
extent untrue.
As the German comrade pointed out, jobs in the advanced capitalist
countries are not being transferred, they are being lost, they
are being suppressed. They are being suppressed through the destruction
of traditional industries and their replacement by new hi-tech
industries which employ less workers, and they are being suppressed
by gains in productivity. The fundamental reasons for unemployment
in the advanced capitalist countries are internal to those countries
and not due to any threat from, for example, South East Asia.
Only 20 per cent of the costs of production are labour costs.
For example: when a product leaves a factory in South East Asia,
it costs $1. When it arrives on the American market, it costs
$4. At least three-quarters of the cost of that product comes not
from wages but from costs of distribution and services between
the point of production and the point of sale. And as the Financial
Times pointed out recently, some Asian
companies are beginning to realise it is easier, rather than trying
to shave five cents off the dollar paid m wages, to try to get
20-30 cents off the costs of distribution and services. And when
capitalists decide to invest, to build a factory, they are not
just looking at labour costs. They are looking at having a skilled
workforce; they are looking at having a good communications infrastructure,
financial infrastructure, and they are looking for political and
economic stability in the country. They are also looking for proximity
to the markets where they are going to sell their products. The
director in Britain of Samsung Electronics, explaining
why Samsung has decided to build a new factory in Britain, didn't
say that lower wage costs were the main reason, although they
are a secondary reason. He said: "The most important attraction
is access to the European marketplace."
This is further demonstrated by the example that Tony cited, of
Korean capital establishing a car plant in Botswana, Southern
Africa It is establishing that plant there not only because of
the low wages but because of easy access to the South African
market. And investment is taking place, for example, in some of
the Eastern European countries, particularly in Poland and in
the Czech Republic, for the same reasons. There are lower wage
costs compared to Western Europe but the other conditions are
also present, and in particular easy access to the markets for
those products.
In fact, if all the factors are taken into account - infrastructure,
political stability, attitude of the working class, a skilled
workforce - there are actually more reasons for establishing and
investing in new plants in the lower wage areas of the European
Union than outside it. And Britain, to take just that example,
is attracting more and more foreign investment, not just because
it is a relatively low-wage economy within Europe, but because
of all the other factors, and particularly because of access to
the European market.
There are of course exceptions. rake, for example the producer
of sports equipment, Nike. This company employs less than
500 workers in the US, who simply design the products. The designs
are then transmitted electronically to a factory in Taiwan which
makes the prototypes. And the actual production takes place in
South East Asia or in China: production is shifted around to find
the lowest wage costs possible. That is possible with labour-intensive
industries rather than with capital-intensive industries. But
the increasing introduction of new technology, even within such
labour-intensive industries as textiles, actually makes it less
likely that production will be relocated in countries whose main
advantage, from a capitalist point of view, is the availability
of cheap labour.
The sixth question: it is obviously the case today that there
exists a global financial market. There are large sums of money
capital available for all kinds of speculative investment. But
it would be wrong to imagine that there is on the one hand good
industrial capital which is productive and which creates jobs
and which creates value and bad speculative financial capital.
It is the same capital. For example, since 1980, 18 of the biggest
industrial groups in France have either established or acquired
banks. And the money capital does not come from nowhere - money
does not produce money. In the beginning, it comes from the production
of surplus-value and lives parasitically on this surplus value.
But the fact that more and more money capital is used in a speculative
way, for example by investing in futures and derivatives, creates
a very fragile international financial system. This is a source
of concern to serious bourgeois observers.
A year ago the Economist ran an article entitled: "Where
a slump could start". The place was Japan and the reason
was the fragility of the Japanese financial system. Twelve months
later, there has not been a slump and it did not start in Japan.
But last week, the same magazine ran an article about the possibility
of a Wall Street Crash and this is reinforced by the present heavy
fluctuations on Wall Street. Of course we shouldn't be like the
different sects who are constantly predicting the imminent collapse
of capitalism and using it as a means of motivating people. Nevertheless,
when serious bourgeois observers are constantly analysing the
possibility of a major financial slump then the CWI should be
prepared for that kind of development.
The last point to take up is the one made by the Austrian comrade,
when he raised the possibilities of a new period of capitalist
expansion in the former Stalinist states of Eastern Europe and
the former Soviet Union. Today, not even many capitalists think
that is possible. At various times they have tried to convince
themselves that a new period of expansion was possible through
the opening of the Chinese market or through the development of
the East Asian economies. as for the countries of Eastern Europe,
they are now in the process of being absorbed into the world capitalist
economy, but absorbed into a world capitalist economy which is
in crisis and stagnation. There is not the possibility of a real
period of expansion arising on that basis, but simply the kind
of development we have indicated in relation to Eastern Europe
and the European Union.
It is very difficult to imagine any kind of stable integration
of Russia into the world economy. In a general sense, for capitalist
expansion, for the accumulation of capital to take place, more
than capital and workers are needed - so are markets. Goods need
to be produced cheaply and they have to be sold afterwards. This
is the Achilles heel of the idea that China offers a way forward
for world capitalism.
Is it possible for one country to resist the pressures of the
world market and the political pressures of imperialism and the
imperialist institutions? In a general sense the answer is no.
The tendency is for countries and governments to knuckle under
to the pressure of the world market and imperialism. But there
are exceptions. For example, South Korea is not yet a member of
the OECD, although economically it is much more powerful than
several of the existing members. And it is not yet a member because
it is refusing, up to now, to give in to the dictates of the OECD
in terms of opening up and liberalising the Korean market and
particularly the agricultural sector. It is doing that to defend
Korean firms, but also quite explicitly for fear of the social
and political consequences of allowing that kind of liberalisation.
China is now starting to say: "We want foreign investment,
but we don't want any old foreign investment. We don't just want
foreign investment in labour-intensive industries, we want foreign
investment in hi-tech industries. And we don't just want investment
in the coastal zones, we want investment in the interior as well
because we
are afraid of the social consequences of this dual economy that
is developing."
There is a conflict between the Indonesian government on the one
hand and General Motors and Toyota on the other. The Indonesian
government is talking about subsidising a "national car"
which will be built in Indonesia with the participation of Korean
capital. This is completely counter to free market liberal policies.
It is also obvious that there are strong protectionist tendencies
in Russia.
The overwhelming tendency is for all those resistances to the
neo-liberal order to be broken down due to the pressure of the
world market and the political pressure of imperialism. But those
counter-tendencies exist, just as the germs of protectionism which
exist in the regional trade blocs. And under conditions of an
economic downturn, a return to protectionism, not exactly national
autarchy, but at least regional self-sufficiency, is quite possible.
And although renationalisation in the Third World is not exactly
excluded, what is much more possible is what the Austria comrade
talked about, which is state intervention to support industries
by means of subsidies and government contracts.
Finally, it needs to be underlined that although we can identify
and analyse the process of globalisation, we shouldn't imagine
that it will go on forever and that it is irreversible. The history
of the 20th Century goes against such a view. In the same way,
although there is no stable prospect of Keynesian policies or
left reformism, that does not mean there will be no attempts at
reformist strategies in the medium term. In a situation of crisis
and with mass pressure from below there will be a development
of reformism. In the meantime, as the French comrade said, it
would be a big mistake to think that because there is a process
of bourgeoisification of the workers' parties, and because of
the sharp shift to the right of the trade union leaders, reformism
is going to disappear. On the contrary, reformism is still there
and is still the major obstacle to a working-class fightback against
the capitalist offensive. 
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