In the second part of his consideration of the reality and theories of globalisation, Martin Thomas analyses the changes in the global economy and the practical conclusions for Marxists.
1. There is a real increase in the global interconnectedness of capitalism, but much that is called “globalisation” has dimensions and causes outside that increase.
Postal deliveries in London cannot be “outsourced” to workers in China. Hospital cleaning in Britain is in no market competition with hospital cleaning in Mexico. House-building, dock labour, bus and train driving, teaching, all have to be done on the spot and cannot be “out-sourced” globally.
Very often, when bosses and governments cite “the demands of global competition” or “the needs of the new global economy” as cause for attacks on workers’ jobs, conditions and wages, the “global economy” is only a buzzword used to shift blame to the conveniently distant and intangible.
Even in terms of the most conventional economics, the idea that a nation where some economic sectors operate at higher cost than “world best practice” will plummet into misery is nonsense. Japanese capitalism made its amazing industrial advance with retail trade and agriculture much more costly than in other leading capitalist countries, and sumo-wrestling must be the world’s most economically-inefficient national sport. Even assuming a national economy entirely open to bustling global trade, “inefficiency” generally just means slightly lower income per head. Whether that cost outweighs those of stress, unemployment, greater inequality, and so on is an open question. Or it would be, if the arguments about adapting to “globalisation” were really debates about the overall balance of gains and losses to a united community. They are not. Bosses squeeze workers in the name or in the cause of meeting levels of exploitation achieved elsewhere because they are profit-greedy capitalists, not because the economy is global.
Capitalism has become markedly more “global” in many ways since the early 1980s1. According to a crisp summary by Martin Wolf in the Financial Times (1 October 1997), “Between 1930 and 1990 average revenue per mile in air transport fell from 68 US cents to 11 cents, in 1990 dollars. The cost of a three-minute telephone call between New York and London fell from $244.65 to $3.32... The unit cost of sea freight... fell 70 per cent in real terms between the beginning of the 1980s and 1996... Under the agreement reached at the end of the Uruguay round of multilateral trade negotiations, average advanced country tariffs on imports of manufactures will be reduced to under 4 per cent. Tariffs of developing countries are set to fall from 34 per cent between 1984 and 1987 to 14 per cent... Ratios of exports to global output were 9 per cent in 1913, 7 per cent in 1950, 11 per cent in 1973 and 14 per cent in the early 1990s2. Where once integration tended to take the form of trade and capital movements at arm’s length, it now occurs increasingly within companies. In 1996, the global stock of foreign direct investment was valued at $3,200bn. Foreign direct investment flows grew at 12 per cent a year between 1991 and 1996, while global exports grew at 7 per cent. By 1995, 280,000 foreign affiliates generated $7,000bn in global sales, which exceeded global exports of goods and services by 20 per cent. According to the World Bank, the share in world output of multi-national affiliates jumped from 4.5 per cent in 1970 to 7.5 per cent in 1995. Their share in manufacturing output was 18 per cent in 1992, up from 12 per cent in 1977.”
The long-term trend for trade, investment, and even the organisation of production to cross national borders has accelerated markedly in the 1990s. However, the world is far from being one uniform global marketplace. For each of the USA, Japan, and the European Union, external trade is only about 12% of economic activity; and much of the USA’s trade is with neighbouring Mexico and Canada, much of Japan’s with neighbouring Asia. A great deal of foreign investment is also regional rather than global – Europe to Europe, USA to Mexico or Canada, Japan to China, and the like. A big chunk of the recent splurge of foreign direct investment, especially in the Third World, has been in finance, insurance, and real estate rather than manufacturing: in 1990, 40% of the stock of US foreign direct investment in underdeveloped countries was in banking, finance and insurance3. There are still only between a dozen and twenty true global companies, organising complex production processes on a global chessboard of production sites, with the whole world market in view, as distinct from companies firmly centred in one national base with offshoots in other countries4.
Since the long trend of capitalist trade and enterprise towards a world arena – depicted by Marx as early as 1848, in the Communist Manifesto – was thrown dramatically into reverse between 1914 and 1945, in many ways capitalism is no more “globalised” now than it was in 1913. In some ways it is less so: there was much freer international movement of labour then, and British capitalists before 1914 put a far bigger proportion of their investment abroad, and in remote parts of the world, than US, Japanese and German capitalists do now. We should therefore be warned against rushing to the conclusion that today’s political patterns are an automatic, or necessary, “reflection” of the economic processes of globalisation. The world capitalism of 1913, also characterised by masses of footloose finance capital splashing round the globe, had very different patterns, with the rise of “organised capitalism”, widespread cartels, the beginnings of welfare states, and colonial empires.
Before 1914, Eduard Bernstein, the prime theorist of the non-revolutionary wing of the socialist movement, argued that the increasing interconnections of trade and investment between the leading capitalist countries must make capitalism more and more peaceful. The figures he cited to show those interconnections were true and impressive. In the mid-1970s, the French Marxist Michel Aglietta, in a pioneering analysis of how the leading capitalist economies were shifting to a new pattern of development after the long boom of 1945-70, described that incipient pattern as a move into state capitalism, “a new progress in the unification of the wage-earning class”, “reinforced financial centralisation with tighter controls”, and state wage controls. The new phase, he suggested, would “destroy free enterprise as the pillar of liberal ideology”5. Aglietta, too, based himself on real and important facts of the time. In short, capitalism is a complex, multifarious, and contradictory system, and we will usually go wrong if we deduce the future by extrapolating the consequences of one strand of development – however central, well established, and even unstoppable it may seem. And “globalisation” (so I will argue in this article) is not a single solid trend, but a composite of many processes with different dynamics and effects.
2. Casino-globalisation is an important fact, but a phenomenon of chaos and interregnum, separable from other globalist trends, and not all-powerful.
Qualitatively new since the early 1980s, in a way that “globalised” trade, investment, and production are not, is the huge and rapid flow of short-term finance round the world – currency trading ($1.5 trillion a day), international trading in shares and bonds ($832 billion raised through international bond sales and bank loans in 1995), and the big and unmapped trade in “derivatives” (essentially, gambling on future price movements of bonds, shares and currencies without actually buying them in advance). Despite what they say to scare trade unionists, even global companies generally cannot easily switch production sites from one place to another. Machinery and buildings; transport, communication, supply, service and distribution networks; and stocks of skilled labour, cannot be moved or reconstructed easily. Multinational corporations mostly invest not where wages are lowest but in advanced capitalist countries and those Third World countries which have relatively high wages and rich markets and infrastructure. Huge amounts of cash are, however, footloose. They can drain out of Thai or Japanese shares into US government paper or German company bonds or French bank deposits within a few hours. Financial capital really is hyper-mobile, and its owners can use that hyper-mobility as a tremendous source of power. This “casino capitalism” uses new communication technologies, but those technologies could flourish without it. So could globalised trade, investment, and production. States can take part in global capitalism while keeping controls on capital movements, and some do (Chile, China).
The dramatic rise of the world financial markets has been generated not by improved communications, expanded trade, or a new organisation of production, but by three other developments. One is the great rise in holdings of dollars (and other currencies) outside their home countries which started with the USA’s heavy spending on the Vietnam war in the 1960s and accelerated with the big rise in oil prices in 1973-4. Second is the immense volatility of the prices of paper assets (currencies, bonds, shares) since the breakdown of the dollar-based international finance system of 1945-71. A corporation, a pension fund, an insurance company, or a wealthy individual, keeping their stash in the wrong (or right) form — British government bonds, Mexican company shares, whatever — can lose (or gain) billions within weeks or days. Whether they want to play safe or to take risks, they have to be constantly on watch to switch money from one form to another. Third is the abolition of governments’ currency-exchange controls between 1970 and 1992. “Casino” globalisation is thus not a phenomenon of a new, solid, dynamic, well-integrated regime of global capitalism, but of chaos, makeshift, and interregnum6. And it developed, not by deep-seated economic trends creeping up on governments and overwhelming them, but through specific government decisions.
Having developed, it acquires a huge momentum of vested interest. Many thousands of very rich and well-connected people make their profits from the international financial markets. IMF chief Michel Camdessus says, “the world is in the hands of these guys”, and the left-wing German authors Hans-Peter Martin and Harald Schumann assert: “Currency and security dealers... decide on the weal and woe of entire nations”7. Experiences like the Swedish social democrats’ dramatic abandonment of full employment and embrace of welfare cuts in late 1990, under pressure from the financial markets, give these views weight. The Financial Times commented (27 October 1990) that “the international money markets have become the arbiters of Sweden’s future, not the Social Democratic ideologues”. Casino-globalisation applies a powerful torque to all capitalist policies, in the direction of sharpening the race for short-term profits, keeping interest rates (i.e. the share of capitalist loot allotted to “pure” finance) high8, and rating currency stability (low inflation) above such national economic indicators as employment and growth (witness many newspaper headlines on the theme: “Bad News for Markets: Unemployment Drops”). But both logic and facts indicate limits to the power of the managers of international finance. First, they are despite everything only a small section of the capitalist class9. Second, European Monetary Union. EMU is a move for greater international interconnectedness of capital, but it is also a blow against casino-globalisation. It wipes out speculation on exchange-rates between the European currencies involved. One dealer told Martin and Schumann: “It [EMU] would take away our work and our chances of making a profit, so naturally we are against it”10. In 1992, currency speculators wrecked the European Monetary System, a scheme of loose linkages between currencies designed to be a lead-in to full European Monetary Union. The European Union states had to choose between the prudent fallback option of letting currencies float more freely and a drastic forced-march to monetary union despite the risk of further speculative catastrophes.
Many analysts, including me, thought that they would surely choose caution. But they chose to go the hard way. The states’ clout, self-confidence, and energy in pursuit of their strand of “globalisation” were sufficient to do that even though there was much serious bourgeois opinion, quite separable from the vested interests of the speculators, warning that the detailed scheme for monetary union was botched and foolhardy. Casino-globalisation is separable from other “globalist” trends, and it is not all-powerful or unstoppable. When governments go with casino-globalist pressures for priority to currency stability, and company bosses go with pressures for maximum short-term profit, they are not “submitting” to alien pressure, but embracing priorities that suit their own class interests, despite the reluctance of some social-democratic ministers or “slow-but-steady” managers.
3. The trend is not to “giant firms and dwarf states”. Much of the increased international connectedness of capitalism is engineered by states, not imposed on them.
For some writers, however, not only casino-globalisation but also the more “organic” globalist tendencies of our times (such as growth of global and multinational companies) are annihilating the state and society. It is “becoming increasingly difficult for corporate managers to manage in the public interest, no matter how strong their moral values and commitment”, and globalisation is destroying governance based on the theme that “rich and poor alike shared a sense of national and community interest”11. States are “withdrawing from their main responsibility, the regulation of the violence of social relations to ensure the common good”12. “The bourgeoisie of the Third World is no longer a national bourgeoisie working in the interests of its people but an international bourgeoisie working in the interests of international capital”13. “The right balance... a social market economy... is being lost... the engineers of the new global economy throw overboard the insights gained by those who first made it a success”14. “Faced with the powerful rise of global firms, the traditional countervailing powers (State, parties, unions) seem more and more powerless... Can citizens tolerate this new-type global coup d’etat?”15. According to Martin and Schumann, our task is “to restore the State”16.
But whose state? Restored by whom? The capitalist state restored by the working class? Trotsky described the “Popular Front” enforced by the Stalinists on the Republican side of the Spanish civil war as an alliance with “the shadow of the bourgeoisie”; the programme of “restoring the State” would commit the left to a Popular Front with a ghostly ideal of a bourgeois state. People complain that globalisation has brought the domination of economics over politics; but the domination of economics (profit-making) over human life is not an aberration in capitalist development. It is the essence of it. “This is capitalism”17 — not capitalism traduced, but capitalism in full flight.
And “the global economy — the transnationalisation of markets and capital — not only presupposes the nation-state but relies on the state as its principal instrument”18. “‘Globalisation’ must be seen as a politically rather than a technologically induced phenomenon... A number of states are seeking directly to facilitate rather than to contain the internationalisation of corporate activity in trade, investment, and production”19.
Despite Margaret Thatcher’s talk about “rolling back the state”, the capitalist states, as economic forces, are very far from becoming “dwarfs”. In leading capitalist countries, some 30 or 40 per cent of national income, or even more, still passes through the hands of the state20. Although Britain is not a very big state, and yet is home to several large multinationals, the assets and the turnover of the state far exceed those of any of those corporations. The state is no dwarf.
4. Economic and social structures are shaped not just by technology, but by class battles and class interests defined in those battles.
Marxist theory proposes that social development is governed by the logic of change in the modes of production of the material conditions of life, rather than by a diverse assembly of factors (ideologies, political factors, personalities of leading figures) any of which may have equal weight. Marxists have long disputed any crude “economic determinism”, and even more so any idea that all social phenomena are automatically determined by technology. In the debate on globalisation, however, we find some Marxists, and many ex-Marxists and ordinary bourgeois writers, claiming that the whole development — including the weakening of working-class reform politics, the rise of identity politics and other particularisms, and the erosion of trade unions — is the inevitable result of technology. “If ‘the handmill gives you society with the feudal lord and the steam-mill gives you society with the industrial capitalist’, the microchip gives you society with the global capitalist”21. Marx wrote the aphorism about the handmill and the steam-mill. But it was a studied exaggeration, a flourish in passing. In the main line of his argument, Marx was clear about the fallacy of a view that sees the evolution of social and economic structures as a smooth reflection of technological advance. “The historical movement which changes the producers into wage-workers, appears, on the one hand, as their emancipation from serfdom and from the fetters of the guilds, and this side alone exists for our bourgeois historians. But, on the other hand, these new freedmen became sellers of themselves only after they had been robbed of all their own means of production, and of all the guarantees of existence afforded by the old feudal arrangements. And the history of this, their expropriation, is written in the annals of mankind in letters of blood and fire”22. If the microchip has given us the imperious domination of the global capitalist, that result too comes from battles with “blood and fire”. In those battles the capitalist states have played a large role (on the side of globalisation, not against it) and they have redefined their basic priorities of capitalist class interest.
5. Capitalism and the state.
The picture painted by some writers on globalisation of where we are heading — a world where states become shrivelled, powerless husks, and global market competition decides everything — is impossible. In Capital Marx mentions the state only in passing. But it is a fact, and Marx knew it well (he planned to write a further volume on the question), that the state must play a central role in capitalism. A primitive, “wild” capitalism can develop to some extent without an effective state, but fully-fledged capitalism needs a big state. It needs law to regulate commerce and the labour market. It needs public services, run or regulated by the state — education, health, water, hygiene, electricity, post, telephone, roads, railways, airports. It needs the state to regulate money, banking, and credit. That these things do not go without saying is shown by Russia today.
There is no world state, despite all the efforts of the IMF, the G8 and the WTO. The truly global part of today’s capitalism is thus limited to primitive, “wild” development, with only the USA’s role as world-superpower to provide a very skimpy quasi-state framework. No-one, not even the most ardent free-market ideologue, expects the economic crisis underway now in Asia and Russia to be resolved through the automatic free play of the global markets. Everyone expects New York and Washington (the IMF, the Federal Reserve, the US government) to act.
No-one disputes they have only very slight resources for control. The testimony of the famous speculator George Soros to the US House of Representatives Banking Committee in September 1998 is eloquent: “The global capitalist system... is coming apart at the seams... Financial markets are inherently unstable. The global capitalist system is based on the belief that financial markets, left to their own devices, tend towards equilibrium. They are supposed to move like a pendulum: they may be dislocated by external forces, so-called exogenous shocks, but they will seek to return to the equilibrium position. This belief is false.
Financial markets are given to excesses and if a boom/bust sequence progresses beyond a certain point it will never revert to where it came from. Instead of acting like a pendulum financial markets have recently acted more like a wrecking ball, knocking over one economy after another. There is much talk about imposing market discipline, but imposing market discipline means imposing instability, and how much instability can society take?... Regulators do make mistakes... But that does not mean that financial markets can look after themselves. Everybody looking out for his or her self-interest does not lead to equilibrium but to what [Federal Reserve boss] Alan Greenspan called irrational exuberance and afterwards panic.”
Since there is no world state, the nation-state remains central to capitalism. In fact, different nation-states “globalise” in different ways. “The same corporate strategists who in American or Germany brusquely reject any government interference in their investment decisions are quite willing in Asia to subject billion-dollar investments to the conditions imposed by state bureaucrats who quite shamelessly describe their work as central economic planning”23. Savings and investment rates remain very different from country to country (high in Japan, for example, low in the USA). So do interest rates (high in Britain, low in Japan). Just as wages still vary as widely as ever despite universal pressure downwards, so there is no clear tendency for welfare provision, or trade-union rights, to “converge” to a common level somehow decided by an impersonal global-economic logic. All these matters are decided by struggle within the national, or European-Union, framework.
There is a “globalist” bias, towards wooing foreign investment, opening up to international casino-finance, reducing tariffs and trade barriers, etc., in almost all capitalist states today. Why? The state, so Marxist theory proposes, is the organ by which the ruling class seeks to secure its rule by managing irresoluble social conflicts. How it manages those conflicts depends on the condition of class forces at the particular time. How, under the impulse of what conflicts, have the world’s states been shaping globalisation? Because the conflicts within capitalism are irresoluble, and the contradictions irrepressible, there is never an indisputable “right answer” for capitalist state policy. Historically, and still today despite some writers’ claims of a trend to global sameness, capitalist states have varied widely in the way they run things. Policy is always a makeshift. It can aim effectively for only a small number of “targets” at any given time, and only at the cost of assuming that the outcome in other respects is secure or can be bad without excessive cost. The priorities will be defined by capitalist class interests; but what defines those interests?
Hunger is a gut instinct. However, whether we are hungry for dog-flesh or pizza is determined not by the basics of human biology but by a complex social process. The same is true of class interests, but more so. Capitalists cannot be capitalists without a drive to exploit workers more and more. But capitalist class sense is not just an involuntary process like our bodies digesting food24. Not just conscious capitalist controversies over strategy, but also priorities which become as instinctive a part of capitalist class routine as desire for familiar food is part of our bodily routine, are formed by millions of interactions and experiences, in bourgeois political parties, in government offices, in universities, in newspapers, in boardrooms, and so on.
Capitalist company bosses must seek profits. That abstract fact, however, leaves open a variety of definitions of their capitalist class interest. Is immediate cash-in-the-hand profit, even at the cost of asset-stripping, to be valued above company growth, or research and development efforts, or consolidation of a stable and cooperative workforce, which may deliver greater profits in the long run? Is a course with a chance of high profits, but also a risk of ruin, to be preferred to one offering moderate but steady profits? On all accounts, bosses in different leading capitalist countries have differed on these matters, US bosses valuing big short-term profits, even if risky, more than German or Japanese, and in the 1990s there has been some convergence towards the US norm. In capitalist state policy, too, as in company-management policy, definitions of class interest evolve — and, perhaps, some patterns, some rules of “must-do” and “can’t-do”, can become so deeply embedded in social and economic structures and routines that they can be shaken loose and become “ideological”, “intellectual” questions of dispute only in great crisis. In between times, the pattern, or paradigm, is not just an “ideological reflex” of capitalist class interest, or of economic structures, but is rather a formative element of that class interest and those structures, which, beyond some abstract rudiments, do not exist prior to it.
After 1945, the Western capitalist classes — and, one by one, as they gained independence, the ex-colonial bourgeoisies too — set about reconstruction with several grave dangers in mind from recent experience: industrial slump through insufficient effective demand; instability in international exchanges; working-class revolution as after World War 125. Each major state believed that it must develop its own more-or-less integrated national industrial base — the reopening and revival of world trade came only bit by bit, and could not be taken for granted — and sought to sustain industry by state demand management. As for the working class, it might be repressed, or held in a more flexible frame with democratic safety-valves, but it must in any case be fed and not pushed to the point of revolt from sheer hunger and poverty. Because a long boom developed, those ideas became set into a paradigm which broke up only in the crises of 1973-5 and 1979-82. From those crises has emerged a new paradigm defining the essential capitalist state targets as keeping the currency stable (an especially exigent target in a world of floating exchange rates), attracting foreign investment, and avoiding protectionism (despite the strong bourgeois pressures for it from the early 1970s on, which most Marxists, including me, thought would probably prevail). The imperative of a more-or-less integrated national industrial base has been dropped — the UK, which has let coal-mining, steel, machine-tools, shipbuilding, computer manufacture and cars dwindle almost to nothing, become 100% foreign-owned, or both, shows this most dramatically — and the assumption has been made that mass unemployment and poverty, and mass bankruptcies of smaller or slower businesses, are manageable costs.
The new paradigm was shaped by reaction among the capitalists against the chaos of the 1970s, and by class struggle. From 1968 and through the 1970s, workers rose up unexpectedly in many countries, but, essentially because of lack of commonly-understood clear political purpose — the problem of defining class interest again, this time on the workers’ side — the offensive petered out. An offensive which peters out with your forces dispersed, disoriented, and disappointed can be more destructive for an army than a well-fought and well-understood outright defeat in battle. From the early 1980s, the main capitalist classes felt confident about driving for cuts, tightening trade-union laws, and accepting mass unemployment26. As after 1945, the paradigm has become “locked in” by a period of capitalist success (in defeating workers in class battles of the early 1980s, and in profit growth in the 1990s), though the success may soon prove short-lived. The capitalist states have not been abolished or dwarfed. They have become more able, and more urgently impelled, to define an aggressive vision of “the economic” and chop away at the elements of the “political economy of the working class”, or of mere bourgeois paternalism, which were conceded after 1945 as a sort of belated payment for the heroic but bloodily-defeated workers’ battles of 1917-39 and then became entrenched in bourgeois “common sense” as things that must and could be reluctantly accepted.
States have dropped the target of an integrated national industrial base because with the more complex structure of modern industry, firstly, it is not tenable to sustain a whole integrated industrial complex in one nation except on a stunted and primitive scale, and, secondly, short of immense cataclysm, they can feel secure about being able to obtain all industrial inputs, or passable substitutes, from somewhere. The decisive blow in blasting that target out of its niche in bourgeois common sense was the drive to destroy threatening bastions of working-class strength in industries like British coal-mining. Part of the reason for states wanting to attract foreign capital is the desire to import technical know-how, especially important in this era of rapid industrial restructuring. That is by no means all, though, for much of the foreign investment — in land deals or building hotels — brings no special science. The fiscal crisis of the state, and the danger of reviving inflation if state spending if budgets blow out, encourage states to want to scoop a bit of the vast worldwide flows of footloose capital for their own arenas, even if it is only to construct shopping malls. They have become attuned to casino-globalisation, but the states have not been disabled or gutted by it any more than corporate managements have been.
6. Other dimensions of globalisation: increasing world inequality and pauperisation, rise of more solid capitalist states in some Third World countries, a changed structure of world trade.
John Pilger has argued that globalisation is really an euphemism for US reconquest of the ex-colonial world27. IMF-imposed starvation plans in debt-strangled Third World countries have indeed brought terrible suffering. But the capitalist classes of those countries impose the plans primarily because they are capitalists, not because they lack national independence. In Latin America, for example, the same capitalist class which imposes huge wage, job and welfare cuts on the workers to pay interest to US banks will retain its own sizeable property holdings and bank deposits in the USA — uncut. The bourgeoisies of debt-strangled Third World states reject full-scale default on their debts not because they fear invasion, but because they want to carry on doing capitalist business with the big banks and multinationals. The states are not re-colonised any more than workers crippled by their banks’ demands that they pay down their overdrafts are the same as serfs or debt-peons.
The apologists of capitalist globalisation are wrong to claim that it will level up economic conditions. But strengthened Third World capitalist states are part of the picture. As well as increasing relative to output, world trade has also changed in composition. The old pattern of industrial centres exporting manufactured goods and the colonial or ex-colonial “periphery” exporting raw materials has broken down. Manufacturing as a percentage of Third World exports has increased from 20% in 1960 to 60% in 1990. Within the reduced share of world trade due to agriculture, a new pattern has emerged “where the South specialises in exports of labour-intensive luxury crops... and the North [especially the USA] specialises in exports of capital-intensive ‘low-value’ raw foods”28. This generally means more capitalist agriculture in the South. Several results follow. First, advanced capitalist economies become, probably, more rather than less diverse.
Britain, for example, is now a big centre for the chemical and pharmaceutical industries and for finance, but no sort of centre at all in other industries which every big state saw as essential thirty years ago. Some important industries tend to “cluster” on a global scale, rather than just (as they have always done) “clustering” within nations. Second, peasants pushed out of subsistence farming by the drive towards higher-priced world-market cash-crops, and whole peoples in those Third World countries still dependent on bulk raw material exports, suffer hideously. World inequality increases. Since 1960, the gap between the richest and the poorest fifth of nations has more than doubled29. Third, those Third World states able to provide platforms for enterprises competitive in world manufacturing and services — and they include some with vast hinterlands of medieval poverty, like India and Indonesia — are entering globalisation not because their states have been weakened, but because they have been strengthened, because they are now established capitalist states rather than proto-capitalist states run by a thin middle class anxious to use all the levers of state protectionism to ward off big outside capital. “Transnational capital may be more effective than was the old-style military imperialism in penetrating every corner of the world, but it tends to accomplish this through the medium of local capital and national states.... it depends on many local political jurisdictions — on, say, the Indian or Chinese state — to maintain the conditions of economic stability and labour discipline which are the conditions of profitable investment.”30. That a successful embrace of globalisation requires a solid national capitalist state is shown by the counter-example of Russia31.
Ellen Meiksins Wood argues that the major “epochal shift since the 1970s” is the “universalisation” of capitalism. “This is not just a phase of capitalism. This is capitalism... The only concept we need to deal with this new reality is capitalism”32. It can be objected that this argument seems to assume an “ideal” model of capitalism, defined by the pure logic of its basic relations, towards which history has been tending, whereas in fact much in today’s capitalism — the condition of the workers’ movement, the impetus of the triumphalist backlash against collapsed Stalinism, the patterns of inequality between the world’s regions, the state borders — can in no way be directly deduced from the general concepts of wage-labour and capital. It can also be objected that hundreds of millions of people still live in pre-capitalist subsistence agriculture. True and important, however, remain the facts that globalisation does signal the development of solid capitalist states and classes over a much wider spread of the world than before, and that the capitalist classes and states pursue their present drive against workers’ conditions, trade-union rights, and the welfare state not because of some globalist fever, but because they are capitalist.
7. Globalisation and working-class politics.
The drastic weakening of working-class reformist politics since the early 1980s is not caused by the nation-state becoming powerless. Nor is it due, as another theory has it, to the working class becoming hopelessly fragmented and strategically enfeebled by the new nimble-footedness, and ability to subdivide and contract-out, of global capital33. Reformist politics has never been able to move beyond the left margin of the bourgeois consensus. Social democracy has moved right because the bourgeois consensus has moved right. That in turn happened only because the working class scared the bosses but failed to grasp the initiative in the 1970s; the capitalist class won the decisive battles around the early 1980s; and in the process the dominant routines of capitalist class interest were redefined. The rule of profit has become more crushing because workers were defeated, rather than workers being defeated because the rule of profit acquired some extra “globalist” strength.
Here, however, effect also becomes cause. With casino-globalisation, a new phalanx of capitalist operators is well-placed to be a strong obstacle to any pro-worker reform: “In the stock exchanges and the dealing rooms of banks and insurance companies, in the investment and pension funds, a new political class has appeared on the world scene... Professional fund managers are only carrying out instructions by seeking the highest possible return on capital... but their superior power now allows them to challenge every step forward in social equality that has been painfully achieved in a hundred years of class struggle and political reform.”34 Social-democratic party machines have increased their bureaucratic autonomy and weight by turning their politics more and more into an affair conducted between professional political careerists and the bourgeois mass media, with workers as fed-up or reluctantly semi-bamboozled spectators. Blair’s New Labour is the extreme example, but the pattern is wider.
It will thus take very large crises and struggles, maybe of revolutionary dimensions, to reimpose reform. Is the working class capable of developing those struggles? Capitalist governments and employers have trashed or drastically re-organised whole swathes of industry which used to be trade-union bastions. For the trade union movement as for much else, the 1980s and ’90s have been a story of “all that is solid melts into air”. To recover their strength, the trade unions need to organise new areas, and old areas on a new basis. Like the organisation of the old bastions in their time, this task is not easy; but it can be done. France’s workers in November-December 1995, and South Korea’s workers in recent years, have shown the continued potency of the working class. Some groups of workers have less strategic power than in previous times, but telecom, transport, post, and finance workers still have their fingers on capitalist nerve-centres.
Can workers make the international links increasingly necessary in a more interconnected world economy? Cheaper phone calls, fax machines, the Internet, and cheaper air travel, are available to workers as well as to capitalists. So far Third World workers have used them more than those in the leading capitalist countries who have the advantage of higher wages and richer unions. The Korean Confederation of Trade Unions has distributed across the world, via the Internet, frequent instantaneous updates on its battles against the Korean government’s efforts to make Korean workers pay the costs of the crisis35. Within the USA, too, the National Science Foundation found that “When the poor gain access to technology, they... are the most enthusiastic... using it for employment, educational classes, and access to government reports” (rather than the masses of dreck also available on the Internet). There are now 130 million Internet users world-wide; 65% of teenagers in the USA have access, 65% of schools and 45% of public libraries are connected; and traffic doubles every 100 days36.
Both apologists for and denouncers of globalisation often argue, simultaneously and contradictorily, that the 1990s have made vastly more information available to everyone — “never before have so many people heard and known so much about the rest of the world” — and that genuine culture is being wiped out by the global assault of “the easy, fast and simple... Disney, McDonald’s and MTV”37. In so far as it is possible to test these claims against hard facts, it seems that both trends exist, but neither sweeps all before it. Everywhere more people get further up the educational scale, but, in Britain and the USA anyway, there is some evidence of standards worsening at each given point in the scale. There is a growing fringe of illiteracy or semi-literacy among youth in those countries, but book sales and library usage flourish. In the USA, in 1992-7, book sales grew at 4.7 per cent per year. Sales of books from university presses — that is, generally, more serious and scholarly books — are growing faster than sales overall. A 1995 survey found that more people in the USA were using public libraries than in 1978: about 44% of households had used a public library in the last month38. In Britain, a quick day-trip across the Channel can confirm the fact that an interaction far closer and longer-spanned than that now operating between more remote nations under globalised capitalism has neither reduced British and French cultures to a single homogeneous blur — nor demolished walls of ignorance and nationalist self-satisfaction between the two cultures. The possibilities remain open. The outcome will depend on what working-class activists do now.
It would be wrong to conclude gloomily that “internationalism has
changed sides”39, with the implied conclusion that the only option
remaining for us is to find and use left-wing forms of nationalism. It
is true that the bourgeoisies have many more men and women than us who
are familiar with the Hilton Hotels in a dozen capitals. They have
people who can explain, with self-satisfied ingenuity, the nuances of
the very different advertising pitches needed to sell yoghurt in
different European countries. They have people who will fly from the USA
to China to instruct the Chinese on privatising their industries without
ever having so much as heard of Mao Zedong40. They know the global
marketing strategy for everything, and a way to organise a true world
community for nothing. Their greatest real internationalist achievement
to date, European Monetary Union, is botched and fragile. Their G8 and
their IMF are plainly incapable of dealing with the latest crisis their
global economy has generated. An important element in their
globalisation — the casino-globalisation of financial markets — is a
product of chaos and unresolved dilemmas rather than a measured step
forward. To introduce conscious, planned, human co-operation across
national borders is more urgent than ever, and only the working class
will do it.
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