An anonymous and expansive autonomist marxist contribution to Reflections On Mayday 2000.
Excerpts of this were included in the Reflections On Mayday document (see PDF). The full text is reproduced here.
It originally appeared in Do Or Die #8.
An anonymous and expansive autonomist marxist contribution to Reflections On Mayday 2000.
Excerpts of this were included in the Reflections On Mayday document (see PDF). The full text is reproduced here.
It originally appeared in Do Or Die #8.
Thousands of people take to the streets in the City of London in a ‘Carnival against Capital’; 50,000 landless peasants swamp the streets of Brasilia; in Nigeria a 10,000-strong ‘Carnival of the Oppressed’ shuts down Port Harcourt in protest against the oil companies’ exploitation of the Niger delta; 200,000 people take to the streets of Hyderabad in India, and over thirty street parties, involving thousands of people, take place simultaneously across the globe. What links this unprecedented new alliance of activists from East and West, from North and South? They say they are united in opposition to something called ‘globalisation’. Every day we hear more about shadowy bodies with acronyms for titles. The WTO, the IMF, the MAI – we are told their decisions are irrevocable, that markets rule. This accelerating process of enclosure and dispossession is an audacious attempt to assimilate everyone within the global economy and under the direct rule of capital.
WHAT IS GLOBALISATION?
Globalisation has become a bête noire for all sorts of people – activists and academics, reformists and revolutionaries. At a time when nationalism is resurgent, we see an internationalisation of struggle. And yet… confusion reigns – confusion over our objectives, our ideals, our methods and goals. A confusion that could be fatal – if we miss our chance when it is presented to us, we might not get another one. We are living in critical times. Therefore, in the following pages we examine the background to globalisation, the struggle against it and some of the confusions and misunderstandings that surround it.
The current trend for opposing ‘globalisation’ appears to have fallen for an inverted version of the same illusion that those in favour of it suffer from - that what is occurring (and has been for approximately the last 20 years) is something new and radically different to what has gone before. Capitalism is the most adaptable and voracious system in history; free trade, free movement of capital, the growth of international regulatory bodies and institutions, the expansion of multinationals, borderless images and cultural discourses are new in the sense that they are new forms of organisation and structure but in essence are a continuation of what has gone before.
Capital has always been global. From its beginning it has been driven by the need to constantly expand - or die; the changes that have occurred in recent years are an expression of this need. Globalisation is ‘worse’ in the sense that it represents an attempt at extending and intensifying capital’s grip on humanity, but it is not worse in opposition to some mythical idealised past when capitalism was nice and local and the state intervened to protect us against the markets as some seem to imply. The logic is the same now as it always been - to exploit people and nature to the maximum extent possible at the time, the fact that in some previous eras this exploitation may have taken place in a way that appeared to be softer or more ‘democratic’ doesn’t change its essential nature.
In order to understand the process that has become known as 'globalisation', it is essential to understand the trajectory taken by post-war capitalism. Looked at in this context, globalisation can be seen not as a cause or separate phenomenon but rather as the effect of the crisis caused by the resurgence of European and American class struggle in the late 1960s and the 1970s.
1945 - 1968: RESTRUCTURING, INTEGRATION AND GROWTH
In 1945 with the virtual sole exception of America the industrialised and 'developed' world was in a state of massive economic and physical disarray - a condition mirrored in its working class. It was in this period that the world began to be divided between the American and Soviet versions of capitalism.1 . Stalin’s Red Army proceeded to subjugate Eastern Europe to a variant of capitalism which involved most of the worst aspects and brought none of the fringe benefits which help to make life a bit more bearable in advanced capitalist society.
Meanwhile, America adopted Western Europe as its sphere of influence. This came to develop into the ‘cold war’, an era of frosty relations and supposed ideological struggle2 between the two superpowers. Each vied to collect as many ‘satellite’ nations and regions as possible which could become new market places and through which proxy wars could be fought. This was a de facto new form of colonisation which was preferable for powerful nations because it largely avoided the hassle of actually administering territory. Those countries whose populations proved resistant or had unsympathetic regimes were forcibly brought into the fold through engineered and assisted coups or simply invaded (e.g. Brazil, Hungary, Czechoslovakia, South Vietnam, Chile, Afghanistan etc., etc.). The decline of the old colonial powers opened up vast swathes of the world to this process of domination by new masters (both domestic and foreign) who were at least as brutal as the departing imperialists and just as keen to use their populations as cheap labour for capital.
Cold war economics
In the West, aside from actual physical rebuilding, the task of restructuring faced by states and capitalist enterprises was a twofold one, firstly, - economic expansion and growth rested upon the
"...diplomatic reconstruction of international trade and payments systems which would facilitate international exchange and secure the regular import of essential commodities and raw materials."3
and secondly, it would be necessary to contain the class struggle in order to avoid a repeat of the massive social conflict that occurred in the aftermath of the First World War.
The first objective was carried out largely at the behest of the US with Britain acting as its 'junior partner' - an arrangement that has continued ever since.
Having divided up Europe and the rest of the world between itself and the USSR,
"...the US sought to organise western capitalism around new international economic and political structures which would ensure the rapid accumulation of American capital."4
American capital accumulation was however dependent upon the re-establishment of global circuits of accumulation and the restoration of a degree of equilibrium in terms of production and trade, i.e. rebuilding those economies that had been shattered by the war; West Germany and Japan are the most important examples.
In Europe this was accomplished through financial assistance such as the Marshall Plan the purpose of which ‘was the raising of living standards "to resist the lure of communism."’ 5
The initial result of this need to restore industrial economies destroyed by the war was the Bretton Woods agreement; which was a system of currency exchange rates fixed within pre-determined margins which were defined in relation to the value of the dollar which was itself valued in parity to gold (in theory, dollars were exchangeable for gold). The dollar performed the function of both international and national currency and for the system to work its value had to be maintained. Hence the system was dependent upon the US maintaining a large trade surplus (exporting more than it imported) thus allowing the dollar to be supplied as credit to other countries in order to be a means of exchange for US-produced commodities. 6
As with other aspects of the post-war settlement this implied a concrete link between the exploitation of workers (i.e. the amount of value produced) and the amount of money capital in circulation. In recent years this linkage has appeared to become more tenuous as finance capital has grown vastly in proportion to production (for example no individual state has the reserves necessary to compete with currency speculators on the foreign exchange markets - as Britain discovered when the pound was forced to leave the European Exchange Rate Mechanism [ERM] on ‘Black Wednesday’, 16th September 1992) but is in reality no less essential because capitalism is intrinsically based upon wage labour.
The imposition of ‘Bretton Woods’ was shortly followed by the creation of a number of accompanying institutions and agreements which acted to assist and safeguard its terms; these included the now notorious IMF, the World Bank and the General Agreements on Trade and Tariffs (GATT).
The IMF was originally set up to insulate the system from attacks by speculators or from short-term trade imbalances by providing governments with emergency loans to support their currencies on the foreign exchange markets. The World Bank's purpose was to provide governments with longer term loans necessary for the development and reconstruction of their economies so that they had no excuse for not competing in the world market.
The opening up of all national economies to 'free trade' was also a major concern of the US.
The world depression of the 1930s followed by the war had resulted in the growth of trade barriers which, as recovery gathered pace, began to be dismantled through a series of trade agreements under the overall heading of GATT - the present growth of trade integration is the completion of the process of recovering ground previously lost - regaining previous unity but of course on a massively increased scale due to the growth of the global economy relative to its pre-war size.
Social Democracy and Keynesianism
However the re-establishment of global and national capital accumulation and the resultant twenty year period of economic boom could not have been accomplished without the imposition of more fundamental and concrete forms of social and political organisation which were necessary to restore (relative) domestic stability again. These were - in the west at least - social democracy and Keynesian economic management and planning. It is important to note that these existed within the context of the global economy and not just on a separate national basis. These 'social forms' were dominant within advanced capitalist societies until they began to founder in the late 1960s. Their importance in the context of this piece is that their retreat and increasing ineffectiveness as a means of management in the face of massive class struggle and related 'structural' faults, resulting in the major crises of the 1970s, is possibly the main reason for the state that capitalism is in today.
The disorganisation of the European working class post-1945 meant that it was forced to enter into the so-called 'class compromise'. This essentially meant foregoing unity and mass struggle, at least temporarily, in return for representation within individual nation states through the medium of social democracy. Social democracy can be defined as the representation of the working class as labour, within capital and the state - politically through social democratic parties and economically through trades unions.
In practice this meant varying degrees of consultation between trade unions, governments and employers to allow for economic planning and the co-ordination of social policy.
The nation state gained a new significance in the post-war era because it assumed the role of policing, maintaining and organising the new class compromise. Even though according to some it’s now subject to 'corporate rule', the role of the nation state in policing, maintaining and organising labour power remains undiminished; all that has changed are the forms that this takes; for example breaking or 'restructuring' entrenched sectors of the working class instead of accommodating them, imposing and encouraging casualisation etc…
Capitalist development was consolidated around distinct national economies which enjoyed a degree of autonomy in terms of economic cycles and the extent to which the working class was integrated within state planning. It was an example of divide and rule in so far as concessions were made to national working classes as opposed to the working class as a whole. This allowed the 'defence of the national interest' to be invoked where necessary as a partial barrier to more internationalist tendencies amongst some workers; dockers for example have a long tradition of international solidarity and support as was seen recently during the Liverpool dockers dispute.7
However. the relative disunity of the working class was not shared by the capitalists. Although different sectors of the capitalist system have a contradictory relationship at the best of times, their unity in terms of the common pursuit of profit always remains undiminished. In fact, it could be argued that capitalism in this period was more global and united than it has been since, due to the dominant position of the US and the virtual hegemony of the dollar as the world’s currency.
The practical importance of social democracy for the working class was that it provided a framework through which concessions could be demanded and won from capital on a national basis. The price of this set-up was that it meant that instead of existing as an autonomous force against capitalism; "the aspirations and demands of the working class could be harnessed as the motor for capital accumulation."8 i.e. in exchange for improvements in health care, housing provision, education and social security the working class surrendered control over production and accepted the 'Fordist deal'.
This meant that production line type mass work was introduced, removing the need for many highly skilled workers or necessarily any direct connection to what was being produced. Productivity and production were increased by stepping up the exploitation of the workforce allowing both wages and profits to rise, thus creating the demand to absorb the increase in production. Fordism was a system based upon mass production and mass consumption. It was premised on an implicit trade-off between increased alienation and boredom at work and increased consumption during ’leisure’ or ‘free’ time - dissatisfaction turned into demand. The ever increasing rate of exploitation in turn expanded the total amount of capital in circulation and made possible the growth of finance capital and the boom in credit and lending.
The Keynesian state was an integral part of this process. It backed up Fordism through what economists call 'inflationary demand management'; maintaining rising levels of demand through 'deficit financing' - state expenditure based on credit. This was to be repaid by the returns from future exploitation. On the national level this took the form of guaranteed full employment growth and social welfare spending. Globally
"the centre of Keynesian demand management was the regulation of the international flow of capital through the Bretton Woods system of fixed exchange rates; the regulation of international deficit financing of demand on the world market on the basis of an inflationary supply of dollars from the dominant US economy to the rest of the world"9 .
It was basically a global system of ‘book-keeping’ which alternated between inflationary support of domestic economic growth and deflationary pressure on it. Mortgaging the future to pay for the present was the essence of Keynesian demand management, a flaw that was to prove its undoing.
Decolonisation to the ‘Green Revolution’
The situation outside the advanced capitalist countries was very different. The post-war years were primarily characterised by brutal national liberation struggles against the old colonial powers - mainly Britain and France but also Belgium (Belgian Congo) and Portugal (Angola).
Nationalist struggles against France in Algeria and Vietnam were particularly bloody, leading to French withdrawals from both after a series of costly military and political blunders. In Algeria and other countries the general disruption opened up space for more progressive (although mostly not quite revolutionary) social movements and efforts, which existed against both colonial rule and the ‘states in waiting’ of the nationalists. 10 Unfortunately the main and lasting effect of decolonisation was to open up vast new markets and opportunities for increased and more efficient exploitation. Even though exploitation had clearly taken place on a vast scale under colonial rule, the attempt had not been made to integrate people into the capitalist mode of production - to make them into wage workers. Extractive industries such as mining and oil production had operated in the ‘Third World’ for many years previously, but they don’t necessarily require the generalised imposition of a new set of social relations in order to function. The process of turning ‘Third World’ peasants into proletarians is in some ways very similar to the development of the capitalism in Britain and elsewhere but in a highly accelerated form. The capitalisation of agriculture through enclosure of common lands, mechanisation and production of food surpluses to feed workers who were no longer able to produce their own means of subsistence was the necessary first step. Urbanisation and the creation of a "reserve army of labour" out of those who had been forced to leave the land were then necessary for capitalist development which could not have otherwise occurred. Some of the first and most significant capitalist forays into the ‘third world’ were made in the agriculture - the ‘Green Revolution’. In 1965 the first commercially viable High Yielding Variety (HYV) rice was released by a laboratory in the Philippines. The aim was to rapidly increase food production at a time when demand created by population growth appeared to be outstripping supply in some areas of the world such as India and the Philippines (although as is the case with present food shortages the cause is factors other than lack of productive capacity; even at the height of its famine Ethiopia was still exporting tobacco and coffee to the West). The Green Revolution was portrayed simply as a technological fix to the food problem, however in reality it only worked against the very people it purported to help. As with all technology developed by capitalism it didn’t operate merely on a technical level; it actively changed the social relations amongst agricultural producers and opened the way for further ‘development’ and exploitation.
The new varieties (of wheat as well as rice) were not available to all farmers or even all areas. They required firstly intensive irrigation and fertile soil and were only accessible to wealthy and politically connected farmers within those areas. The additional inputs required such as fertilisers, pesticides as well as the seed themselves meant that peasant farmers on traditional small holdings were excluded. This new form of production also favoured mechanisation and economies of scale, thus enabling landowners to reduce their workforces and effectively drive large numbers off the land and away from independent food production into the cities and the newly forming labour markets. The new varieties could not be cultivated using traditional methods and their success was almost completely dependent upon products supplied by Western companies, this was just one instance in a continuing process of exploitation by western capital and domestic rulers. The Green Revolution has added significance at present in the context of the growth of Biotechnology. The arguments and campaigns for and against are very similar and could almost be said to be repeating those which took place thirty years ago; with the difference that a major source of ‘Third World’ opposition to GM crops and products comes from within the ruling classes whose domestic business interests are threatened by prospect of further external controls over production processes.
1968 - 1979: CLASS STRUGGLE, CRISIS AND DEBT
Academics, including those who have recently written on the subject of globalisation such as David Korten or Gerry Mander11 , tend to see the demise of Keynesianism and other institutional arrangements (and the result which they call globalisation) as the result of 'structural faults' (such as exchange rate imbalances) within the capitalist system - a position known as ‘objectivism’ because it discounts or actively ignores the pivotal role that human (subjective) and more specifically class intervention and conflict plays in affecting and changing the course of history. Their analysis undoubtedly contains moments of truth but is at best only a very partial view.
The growth of world trade during the 1960s had brought with it a rapid expansion in the volume of international money capital being traded as well as the development of global capital markets. The development of the Eurodollar markets in particular, signalled that the institutional arrangements such as Bretton Woods which had linked and constrained the international flow of money to the national accumulation of productive (i.e. industry, manufacturing etc.) capital were becoming strained. The recovery of other capitalist economies led to a relative decline in US economic superiority Dollars which had previously been repatriated in exchange for US-produced commodities were increasingly transformed in to reserves in European Banks. These reserves were then used as a source of credit for both public authorities and private capital. By 1969 other capitalist countries held $40 billion - a figure that far exceeded the US gold reserves. The basis of Bretton Woods had been severely undermined. 12 But it was the struggles of the new generation of post-war proletarians that led the strain to become a breach. This new generation which was formed within the context of the post-war settlement and the Fordist production line brought with it new demands and aspirations. These were expressed in two principle ways; on one hand screwing everything they could get out of the bosses and the state in terms of wage concessions and increased public spending - demands that had to be met in order to try to maintain the status quo and stave off more radical demands. On the other hand, the re-emerging class conflict didn't simply limit itself to questions of degrees of control within the workplace; the other (interconnected) side expressed at its most radical the refusal of work and capitalist social relationships. Dissatisfaction with factory and office life brought with it a more generalised contestation which was by no means limited to workers; other proletarians (such as the unemployed and housewives), malcontents and students all seized the opportunity to exploit the relatively weak position that capitalism was in at the time.
The refusal of work
A global wave of strikes, riots and mass social upheaval, some of which openly confronted the state and the trade unions left the capitalist world reeling under the strain - it had taken a body blow but by no means a fatal one as events that followed in the 1970s were to prove. The US was hit by urban insurgencies that burned Watts, Newark, Detroit and other major cities, the student and anti-war movements as well as other disruptions such as the civil rights and black power movements. New insurgencies broke out in south-east Asia and Latin America, often of dubious political content but expressions of the times none the less.
The best known European example, with which most people are familiar to some degree, is the near revolution in France in May 1968 when millions of workers and students and other proletarians joined together in a brief but intense moment of mass struggle. However this represents only a small part of the picture; for example highly significant but lesser known struggles took place into and throughout the 1970s. The Italian ‘Hot Autumn’ of 1969 marked the beginning of 10 years of struggle. Many strikers and other rebels took part in activities which went beyond simply stopping work or occupying the workplace; in 1971 Polish strikers took over gas and transport services, whilst in Italy:
"...squatting, 'social strikes' by bus drivers, hospital staff and supermarket cashiers providing (respectively) transport, healthcare and food free of charge, electricity workers cutting off supplies to bureaucrats or firms and a thousand other instances",13
showed the extent to which the dull compulsion and isolation of capitalist social relations were rejected. Sometimes this took the form of gestures which grasped towards something better, but more often it was refusal and rejection – everything came under attack, but the lack of enough attempts to transform society gave the impetus back to capital when the revolutionary wave began to recede. "Radicals had disrupted a social logic, not shifted into a new one."14
Capital takes flight
For the capitalists, the squeeze on profits from ever increasing wage demands, strikes and random stoppages meant that solutions other than Keynesianism and 'demand management' would have to found. The answer lay in a three-pronged strategy of restructuring. In the old established industries management attempted to limit workers' influence over the production process through forms of re-organisation such as decentralisation and outsourcing and the introduction of automation. This was used to attack the old ‘worker fortresses’ such as Detroit, Renault-Billancourt, Alsace, the Ruhr etc., the landmark in this process being the turn of the balance of power at the Italian car manufacturers Fiat who for years had been plagued by continual stoppages, mass assemblies and absenteeism at their Turin plant. Secondly, new industries such as electronics, information technology and the 'service sector' were developed. New work relations could be established in these industries relatively easily since the most entrenched sectors of the working class had been effectively bypassed.
Thirdly capital 'took flight' to the ‘Third World’ where labour and natural resources were (and still are) plentiful and cheap.
As the crisis and the problems in the industrialised areas gathered pace, this shift was seen as an increasingly attractive option, largely due to the fact that it was a relatively immediate solution as opposed to the others, which required for the most part a long term commitment to progressively wearing down resistance before profitability could be increased.
Throughout the 1970s, capital flooded into certain areas of the ‘Third World’, such as Brazil, Mexico and South Korea, creating what have become known as the Newly Industrialised Countries (NICs). This process was greatly accelerated by the quadrupling of the price of crude oil in 1974 by the world’s main producers, the OPEC 15 countries, which
"...served to liquidate and then divert huge sums of capital away from industry which was committed to various national economies within the Atlantic axis, into the hands of the banks and the international circuits of money capital that owed little or no allegiance to any state."16
This liquidity is the ideal form for capital, but it cannot increase itself without being ‘grounded’ in a concrete form - without having wage labourers producing both material and immaterial things. It can never permanently escape from its own contradictions; wherever it moves to it creates workers who have a tendency to do problematic things like demand higher wages and go on strike.
It was in this period that the NICs and to a lesser degree the ‘Third World’ in general began to accumulate massive debts. The influx of capital was mainly either in the form of loans or production facilities (e.g. factories, mines etc.) owned by corporations based in the northern hemisphere. The loans were mainly used to finance prestige projects which had little material benefit for the majority of the population - or to line the pockets of the ruling classes.
However, this attempt by capital to escape from its enemy and re-engage on more favourable terrain was undermined by the central contradiction that accumulation in the NICs was dependent upon continued economic growth in the West (which remained the most important region). The economies of the West were simultaneously undermined on two fronts; firstly ‘capital flight’ had grown to such an extent that in countries with a ‘poor industrial record’ such as Britain it amounted to a virtual "investment strike" and secondly, capital was still unable to contain wage demands.
Origins of the debt crisis
By the end of the decade the West’s ability to sustain general profitability and economic growth was undermined to the point where all the economies in the Western world were plunged into recession, which was inevitably accompanied by a corresponding slump in world trade.
The "anti-inflationary policies" aimed at wage control which had been pursued had had little obvious effect, with the result that by the end of the 1970s, capitalist planning agencies such as the IMF were calling for urgent globally co-ordinated measures to attack inflation. These would include ‘tight money’ (control over the money supply through high interest rates which lessened the attractiveness of credit and more generally a reduction in the ratio of debt to gross domestic product [GDP - roughly speaking the total sum of ‘economic activities’]) and cuts in social expenditure as well as breaking ‘structural rigidities’ in the labour markets, e.g. trade unions. 17 As is usually the case with economics the banality of the language used bears no relation to the reality that is actually being referred to.
These were the policies that became known as ‘monetarism’ (as well as being loosely described as ‘Thatcherism’ or ‘Reaganomics’) and when adopted by the world’s largest economy, the US, resulted in the global recession and sharp interest rate rises that triggered the debt crisis.
A number of ‘Third World’ economies had borrowed heavily from major banks and other lenders including the World Bank to finance rapid development and industrialisation, leaving them with massive debts and interest payments. Consequently when interest rates rose and the value and volume of the exports which they used to service the debts fell, they found themselves unable to pay. In 1981 the Mexican government threatened to default on its loan repayments and started the Third World debt crisis. This threatened to provoke the complete collapse of the international banking system - an outcome that was only narrowly avoided due to the intervention of the IMF and the World Bank backed up by co-ordinated efforts on the part of the major industrial powers. Although the attempt to out-manoeuvre the working class in industrial countries through capital flight had been forced to a halt by its own contradictions,
"...it did serve to impose the new economic reality of global finance capital and in doing so laid the ground for the further development of capital restructuring against the working class in industrialised economies."18
The nature of the crisis and recession made it increasingly clear that economic policy had to be compatible with the demands of global finance capital.
THE 80S - DEFEAT, MISERY AND MONETARISM
The results of this were twofold. Debtor nations in the Third World were forced by the IMF to adopt Structural Adjustment Programmes (SAPs) as means of ‘saving’ their economies and enabling them to attempt to keep up repayments on their loans. In the industrialised countries, governments began to change their economic policies away from Keynesianism towards monetarism in an attempt to attract international money-capital with increasing interest rates and disinflationary economic policies. In reality the pursuit of disinflationary economic policy meant mounting a concerted attack on the gains won by the working class in the preceding decades - the imposition of austerity. All governments whether conservative or socialist were forced to do this in order to keep wages down and slash public spending on the social wage (e.g. welfare, free healthcare, services etc.). At the same time they exchanged the strategy of ‘tight money’ for an expansion of credit - a socialisation of debt as opposed to its eradication. This "helped to decompose the homogeneity of resistance to austerity on a global scale" by integrating parts of the working class through a credit-sustained boom. The boom acted as a neutralising agent by helping to co-opt parts of the working class into the project of prosperity (for some). 19
The strategy of using the unions to accommodate the working class was swiftly replaced by one of outright confrontation. Thatcher and Reagan were initially the major exponents of this policy because they were in the best position to use it. In both Britain and the US the unions had largely contained and defused working class militancy, but had therefore simultaneously undermined their own raison d’être as mediators of this militancy and been left weakened. In Britain, the relationship between the Labour governments of the 70s and the unions has been caricatured as "beer and sandwiches at No.10" indicating its cosy nature. However, due to their need to maintain their role as mediators (and moderators) the unions didn’t have the foresight to anticipate the loss of political and policy influence that they suffered when James Callaghan was ejected from office in 1979 and the previously friendly ear was replaced by an implacable foe. Though of course it wasn’t the union bureaucracy that bore the brunt of the attempts to impose unemployment and austerity. The attack on the most entrenched sectors of the working class rapidly gathered pace; protracted, bitter, losing battles were fought first by steel workers, then miners and printers. The 1984 miners’ strike was a turning point in the sense that the miners had traditionally been the strongest sector of the working class in the UK - their ‘74 mass strike brought about the downfall of the Conservative government in power at the time. Although governments in other industrialised countries attempted to an extent to follow suit, they didn’t have the same degree of success. This was partly due to a certain lack of vigour because they couldn’t afford to sacrifice industry in the same way as Britain had been able to do due to the strength and significance of its finance capital sector. This can be seen for example in the comparative lack of collective class struggle in this country at present as opposed to France for example.
Monetarist ideology promised to "roll back the frontiers of the state" (in Thatcher’s words) and to bring freedom and prosperity for all. The reality however was very different. De-regulation (the removal of restrictive rules and legislation) in some sectors of the economy was not matched by a generalised retreat in other areas of life controlled by the state - in fact the reverse was true. A ‘free’ economy necessitates a strengthening of the state, as a defence against the unrest provoked by impoverishment and the (re-) imposition of work. In the US, restructuring, massive welfare cuts and the imposition of workfare on a national basis have been accompanied by a huge rise in the prison population, the ‘three strikes’ law 20 and 100,000 new cops. This is an aspect of Globalisation that some of its critics appear to have overlooked when they bemoan an apparent loss of state power to corporations.
Structural adjustment: global chile
Two major perspectives exist on the debt crisis, both of which share the assumption that it is a threat or obstacle to capitalist development. For the Right the crisis has been viewed as potentially threatening the international banking system and "stable growth" of the creditor economies through default by major debtor countries; hence the need for harsh IMF programmes to make them "pay up"; whilst for the Left the crisis (and the Right’s ‘solutions’ to it ) is seen as the main obstacle to the development of ‘Third World’ economies21 . A choice between hard or soft versions of capitalism would be no choice at all even it was possible to choose, the fact that existence in some parts of the world is less harsh than in others does not mean that it is possible to reorient capitalist development in a ‘better’ direction through more ‘democracy’ or well-intentioned liberal proposals or campaigns22 . The debt crisis is the result of what capitalism has been forced to do in response to proletarian resistance in order to sustain its constant need for growth, expansion and accumulation; it has been used as a "key instrument" in "shifting the balance of class forces to its side on both poles of the debt relation"23 .
Although workers in the West have suffered repression and hardship, the fate of the working class in the Third World has been considerably worse. The result of the debt crisis was the (still ongoing) imposition of SAPs, initially in those countries such as Mexico which had threatened to default on their loan repayments and gradually extending to cover almost every country in South and Central America, Africa, Eastern Europe and Asia.
SAPs were devised by the IMF and the World Bank (WB) as a means of reducing inflation, leading to a favourable balance of payments, reducing government debt, and making national industries more efficient and workers more productive. This, it was claimed, would inevitably lead to a reduction in international debt and acceptance of SAPs was required as a prerequisite for future loans or payment rescheduling.
The concrete measures that SAPs consist of are essentially modelled on the monetarist economist Milton Friedman’s formula for post-Allende (1973) Chile. They include: liberalisation of trade, the end of capital controls and the promotion of ‘free enterprise zones’ or ‘export processing zones’ (for example the ‘maquiladoras’ in Northern Mexico), which guarantee favourable financial terms, the use of local infrastructures and large amounts of cheap labour power. As well as the free convertibility of national currency, the reduction of government budgets and employment, the end of subsidies for education, health and subsistence goods and the privatisation of state industries.24
Third World governments are not helpless to resist the demands of global financial capital, rather they depend on its help to be able to resist their own populations. Structural Adjustment (and to a lesser extent economic ‘development’ in general) requires internal repression. In Chile it cost the lives of 30,000 workers. Measures such as banning student organisations, intimidating unions and expanding internal ‘security’ forces have become ubiquitous. In Nigeria the penalty for sabotaging oil production is death.
Of course, this situation has not just been accepted - resistance has been constant and ongoing. Massive uprisings, rioting and insurrections have become endemic but go largely unreported in the West. In May and June 1989 at the same time as Chinese students and army mutineers were being massacred as a result of the Tiananmen Square protests to the ‘horror’ of the Western world, a comparable number of anti-SAP rioters were killed by Nigerian ‘security’ forces during a wave of uprisings in the main southern cities, Lagos, Bendel and Port-Harcourt.
"Crowds of students, women and the unemployed jointly confronted the police and burned many government buildings to the ground. In Bendel the prison was ransacked, hundreds of prisoners were set free and food was confiscated from the prison pantry and later distributed to the hospitals where patients notoriously starve unless they can provide their own food." 25
The general effect of SAPs on proletarians however has been nothing short of devastating, whilst those in positions of power have in general continued to directly or indirectly benefit in a variety of ways. For this reason it is as implausible to talk of ‘India’ or ‘Brazil’ being exploited as countries as it is to consider ‘Britain’ for example as an exploiter, since it is quite clear that in any given nation state the population do not simply exist as equal citizens with common unifying interests. To talk of rich and poor nations obscures the reality that the rich and poor exist within nations. Such formulations implicitly assume that everyone in the industrialised countries is rich and everyone in the ‘Third World’ poor. The ruling classes in the ‘Third World’ obviously don’t bear an equal amount of the burden of debt (if they bear any at all - Mobuto the ex-president of Zaire siphoned off an estimated $8 billion, Suharto $16 billion.) as peasants or workers and are as rich as the rich in the north; conversely proletarians in the north cannot be equated with the bosses and the state.
Although the population of the ‘third world’ had suffered the effects of economic ‘development’ for some time previously, the onslaught precipitated by the imposition of austerity measures in the 1980s was much worse. The need to increase exports and cut spending meant a corresponding decrease in living standards. In countries such as Mexico and Brazil wages have been cut in real terms (wages have stayed the same or risen less than the rate of inflation, so the amount that can be bought with them gets progressively less) by between a third and a half since the debt crisis began, whilst malnutrition has become endemic as food prices have soared. In Africa the situation is far worse with many areas on the verge of mass starvation.
For those reliant on subsistence farming the picture is also bleak - the need to grow cash crops to exchange for hard currency (i.e. dollars), has massively accelerated an ongoing process of forcing peasant farmers off the most fertile lands and either into urban poverty or on to poor quality land that provides increasingly marginal returns. The biggest example of this is the policy of dumping landless peasants in rainforest areas in for example the western provinces of Brazil such as Rondonia or in the Indonesian province of West Papua, where once the trees are cleared the soil quickly becomes infertile. Rapidly increased environmental destruction such as deforestation, soil erosion, pollution, mining and oil extraction is a further consequence of the debt crisis. The drive to maximise exports at all costs has not had the desired effect - the price of primary commodities has plummeted as the world market has been saturated by the produce of ‘Third World’ economies in competition with each other. Even those countries which didn’t accrue massive debts have been badly affected as they are also dependent upon the export of primary products and are then of course subjected to the IMF’s own special remedy.
It has been estimated that between 1982 and 1990 an incredible $1,345 billion has been transferred from the ‘South’ into the coffers of states, banks and financial institutions in the north.
1990- ? GLOBAL FINANCE CAPITAL, CRISIS AND YET MORE STRUGGLES
So despite having both numbers and organisation, workers were unable to win against a constantly mobile opponent from their defensive positions. Not even the most entrenched and militant sectors of the class could hold out indefinitely as they became surplus to requirements. Labour is only as strong as it is necessary –
"...they lost because the economy deprived them of their function which is their social weapon. Nothing will force capital to hire labour which is not useful to it."26
Nothing is immune to the pressures of world trade as the collapse of state capitalism in the former Soviet Union showed. The same market forces that were making thousands redundant in Liverpool or Detroit were busy smashing the ‘Chinese walls’ that blocked the flow of money and commodities into Moscow.
If the eighties showed the power and autonomy of deregulated global finance capital, what new developments have occurred since and how should we understand them? Although in the light of the recent crises it would seem that capitalist triumphalism and proclamations of a New World Order were somewhat premature, it is certainly true that global finance capital and its ideology of Neo-Liberalism are currently growing in self-assurance and audacity, although now with a degree of trepidation. This is reflected in a variety of ways, one of which is the preoccupation in oppositional (and mainstream) politics with ‘Globalisation’, Neo-Liberalism, free trade and an almost bewildering array of acronyms such as the WTO, the (now defunct) Multilateral Agreement on Investment (MAI), GATT, NAFTA (North American Free Trade Agreement) etc., etc. which represent trade agreements or supra-national organisations.
In mainstream politics globalisation is talked of in terms of accepting irreversible new economic realities and constraints and used as a scapegoat to take the blame for unpopular policies. In oppositional and grassroots politics, opposition to globalisation has been adopted as one of the biggest campaigning issues, so it would seem to be quite important to be try to understand the changes and strategies that lie behind the acronyms and capitalist propaganda.
In order to be able resist we have to acknowledge and develop an understanding of new lines of attack being taken against us (and of the ways in which the relationships between states, capital and class have changed) that goes beyond the banalities offered by ‘off the peg’ analyses from left/liberal academics which use the same categories and assumptions as the capitalists just from a negative perspective - they understand the world in the same way but think that it’s wrong or just needs a bit of tinkering with to set right.
The ‘anti-globalisation’ orthodoxy holds that recent changes in the global economy constitute a significant and possibly definitive break with the structures and forms that have until recently characterised capitalist society. They argue that although the world market for commodities, capital and money has been in existence for several centuries; since the early 1970s the framework for the production, consumption and exchange of commodities and money has undergone a fundamental change. Previously this took place on a national or national-imperial basis, but now Transnational corporations, banks and supranational agencies such as the World Bank, the International Monetary Fund (IMF) and the World Trade Organisation (WTO) are 'de-linking themselves from political attachments to nation-state 'homes'. They have 'deterritorialised' and 'globalised' themselves and as a consequence have the capacity to move capital, money and expertise at will to the places which offer the highest returns. In tandem the "legal and financial framework for this global capacity for movement and integration has been slowly but definitively put into place." And "consequently nation states, provincial governments, municipalities, local officials and labour unions are now increasingly helpless in controlling the movement of capital, money and jobs"27 to the extent that workers and citizens can no longer rely on an increasingly powerless ‘democratic government’ to fight their corner. "Corporations Rule the World", as David Korten put it.
Although this interpretation of our present situation is premised on a number of deeply flawed and naive assumptions, which in fact, obscure more than they reveal; we shouldn’t in response be tempted to downplay the significance of what has changed in recent years. To do so would fail to recognise the importance of globalisation as a strategy attempting to (amongst other things) fully integrate as much of the world’s population as possible into the capitalist mode of production. For those already inside, it "naturalises the market and the economy to such an extent that it presents the latter as an autonomous force to which we must bow." It is however only an apparent autonomy because the economy can only be autonomous to the extent that humans give up their autonomy and freedom to create their own conditions of life.28 Globalisation is not an unstoppable objective process but a strategy which could in principle be halted.
Finance capital and the speculators
The exponential growth of monetary and financial markets is undeniable; estimates of the daily value of transactions on the foreign exchange markets in New York, London and Tokyo alone vary from $650 billion (US Federal Reserve) up to a trillion dollars. The transactions are largely composed of currency speculation aimed at making a profit from the movement exchange rates, given the sums involved even small deviations in the rate of interest or other factors can cause huge flows of money which in turn affects exchange rates and causes economic difficulties for the ‘victim’ government. Problems which are passed on in the form of hardship, spending cuts etc... This growth of money being made from trading in money has sometimes been wrongly called a ‘casino economy’ or as in the J18 publicity a ‘game’. Even the most abstract and seemingly savagely pointless capitalist activities exist in a material and social context. It is not sufficient to merely point out the effects of currency speculation, the question of who or what is the target also has to be asked. Speculation is directed at those countries whose domestic policies are in some way incompatible with global competitivity requirements; i.e. those who have not made sufficient attempts to subjugate or co-opt workers or display any weakness by bowing to pressure over controlling public finance and social expenditure. Those countries which have begun a ‘healthy restructuring’ program are rewarded with currency stability and the loyalty of the speculators. Although for proletarians both waged and unwaged, the choice between the two financial regimes is a false one; what is not lost through austerity measures is lost through unemployment and income -eroding inflation. Most people experience the economy (whether global, ‘national’ or local) not as a source of opportunity but of constraint.
The Globalisation of Production
The process of restructuring in the North which led to the movement of production facilities to the South where lower wages and a greater intensity of work can be imposed has already been described. ‘Free-export zones’ created by ‘Third world’ governments continue to increase in size; total employment in Mexico’s Maquiladoras has grown from 110,000 in 1980 to 500, 000 in 1992, in Asia (South Korea, Taiwan, Malaysia etc.) about 700,000 are employed.
Social conflict and struggle also continues to increase (between 1989 and 1993 Malaysia saw a 350% increase in the number of working days lost through official strikes alone), with some enterprises already being forced to relocate within the ‘South’, for example from South Korea to Indonesia. For the Asian textile industries this is particularly easy as "the clothing industry uses little capital and is very mobile. All you need is a shed, some sewing machines, and lots of cheap nimble fingers."29 The strategy for creating an international division of labour, globally subdivided according to comparative costs is ongoing. Labour-intensive production which requires relatively little capital is destined for low wage areas, whilst production which requires sophisticated technologies and services is located in those areas which offer a suitable structure and environment (most often the North). The factory becomes the global factory. Consequentially, to the extent that production is still based in transnational enterprises’ ‘home countries’; the bargaining power of better paid domestic workers becomes threatened and disciplined. Its worth considering in this context the extent to which transnational corporations are actually global. They may have operations in a number of different countries and regions of the world but the vast majority remain firmly based in their countries of origin in terms of the control of operations. Executive boards and management styles remain firmly national as does the control of research and development. It is still completely possible to talk of ‘national capital’ or ‘British capital’ etc…
Capital and Nation States
One of the most common themes running throughout ‘anti-globalisation’ is that the state and the market are two opposed forms of social organisation, with globalisation giving the market, multinationals and supra-national bodies ‘power over’ the state with a resulting loss of ‘sovereignty’ and ‘national autonomy’30 . States and capital are not opposed to each other, if anything, the opposite is true; they exist in a contradictory unity; they are differentiated forms of domination within the relations that constitute the social order, states oppress their populations as much as managements exploit their workers. Capitalism lives and thrives on tensions and antagonisms; the central one being between capital and labour - it constantly tries to escape from insubordinate workers but needs them to be able to expand. Another antagonism is that between the needs of national states and the needs of global capital. The fact that a particular state will sometimes act against some capitalist enterprise or other does nothing to disprove the central point that there is no state or national government which doesn’t "ultimately derive their revenue and power from capital."31 .
As the importance of money capital has grown, the relationship between territorially fixed states and globally mobile capital has changed correspondingly.
It is essential for nation states to be able to attract and retain capital within their borders, hence national policy through a combination of economic and social policy, co-option and enforcement is aimed at increasing their chances. However the success of these policies is dependent upon establishing the conditions for expanded growth on a world scale. However participation in the financial summits and trade agreements that facilitate this growth carries the risk of economic disadvantage for particular nations states. This is where the conflict between ‘global’ and ‘national’ economic interests lies, not in an opposition between finance capital and corporations (or even more dubiously ‘foreign’ capital) and national/local economies.
The increase in the numbers and scope of trade agreements (GATT, NAFTA, Maastricht etc.) and international regulatory bodies (WTO, IMF, WB) is not something that has happened against the will of national states, but in fact is in many ways a "state-led initiative whose primary aim is to restructure capital/labour relations" 32 . The present global re-composition (as opposed to de-composition) of national states tends to enhance state power. Although their room for manoeuvre over monetary and financial policies has been limited, the policing and planning of labour power has become the central strategic pivot. Far from being outmoded or by-passed, in the global order nation states are as important as they ever have been. A central theme of state re-organisation is a generalised shift of responsibility onto international regimes and ‘independent’, ‘politically neutral’ (in the sense of left/right party politics) organisations, which amounts to an apparent de-politicisation of some areas of decision making. The first thing that Gordon Brown did after becoming Chancellor of the Exchequer was to hand over responsibility for monetary policy to the Bank of England. Similarly, membership of the WTO or the ERM (European Exchange Rate Mechanism) allows governments to plead helplessness in the face of ‘external commitments’, and divert the blame for unpopular policies. 33
Trade agreements and supra-national organisations
There are a large number of international agreements and bodies in existence; the best known in terms of globalisation are the WTO, the IMF/World Bank, GATT, NAFTA and the indefinitely postponed MAI.
NAFTA was implemented on January 1st 1994, a date also marked by the start of the Zapatista uprising in Mexico. Its provisions are very similar to those which were to have been contained in the MAI which would have applied globally and included all major economies as few if any would take the risk of being rendered comparatively uncompetitive. It effectively creates a borderless economic zone in North America encompassing Canada, the US and Mexico. As well as being an agreement on the free trade of goods and services it also gives incentives to companies wishing to operate within its geographical area and removes barriers to foreign investment. The Mayan Indians in Chiapas described it as a "death sentence" because it would mean further exploitation and poverty on top of their already dire situation.
The WTO was created at the ‘Uruguay Round’ (1986-94) of GATT negotiations to regulate international trade and settle disputes. One of the main (and most reviled by campaigners) requirements for membership of the WTO (or being a signatory to NAFTA) is that any national laws or regulations (for example banning certain toxic products, or environmental and labour legislation) which obstruct ‘free trade’ are open to legal challenge by the disadvantaged party through the WTO and the possibility of sanctions or fines being imposed as punishment if they are not removed. Whilst this horrifies those who naively cling to the belief that control by national/local governments is preferable because its ‘accountable’ as opposed to control by the faceless unelected (Shock! Horror!) bureaucrats at the WTO, the reactions of those in power are particularly telling and oddly enough don’t seem to share this concern. During the recent banana dispute the US government acting on behalf of US corporations who account for over 80% of banana imports into Europe, requested that WTO force the EU to revoke favourable terms granted to producers in former Caribbean colonies. Simultaneously the US imposed huge tariffs on a range of economically marginal products such as Scottish cashmere whilst waiting for the WTO to carry out its role as adjudicator in trade disputes. The WTO panel decided that the EU’s protectionism was a barrier to competition and imposed a fine. The British government despite being the target of US sanctions seemed generally unconcerned (although it did make a show of ‘defending’ the insignificant parts of British industry that had been affected), pointing out that what was lost in some areas would be gained in others by using the process in reverse. The state will always protect the interests of capitalists, a function it will fulfil either democratically or dictatorially.
Too much of the time anti-globalisation amounts to an appeal to the state to take account of the wishes of some of its ‘citizens’ and return to the good old days of social democracy and national ‘autonomy’ and sovereignty so that it can protect us against the worst excesses of the corporations. Aside from being a grotesque distortion of reality, these sort of calls and complaints are quite simply reactionary and should be challenged at all possible opportunities.34 We should understand that states and governments are complicit in this process and act accordingly.
51 of the 100 largest economies in the world are transnational corporations. The combined sales of Ford and General Motors are bigger than the combined GDP of all Sub-Saharan Africa.35 Statistics such as these are said to ‘prove’ that corporations rule over us, as opposed to capital and the state. (although it should be pointed out that liberals probably would not see the state as being against us but rather corporations being against the state which is supposed to represent us as fee and equal citizens) Corporations and capitalism do not amount to the same thing. Whilst its undoubtedly true that corporations are capitalist; capitalism is not necessarily corporate.
Corporations are the dominant form in which capitalism exists at present, but capitalism is not a thing or a legal entity, it is a social relation between people, whereby the vast majority are forced to sell their labour-power in order to live. Small businesses are as capitalist as the largest transnational corporation. The fact that it would be strategically nonsensical to direct our efforts against small businesses which wield relatively little power and influence shouldn’t mean that that we see them as better or an alternative to ‘corporate power’. Capital always seeks to expand whatever form it’s in. All large enterprises started off as small ones, Sainsbury’s for example started out as a single grocers’ shop.
Capitalist social relations impose themselves across the whole of society; there is no escape to be found in any activity - local or global which reproduces wage labour and exchange value. The sad reality of local businesses is that they’re not progressive ‘alternatives’ and in fact tend to be run by petty-minded shrivelled little tyrants, who think they're free because they're "their own boss", content with their island of illusory dictatorship, where power is reduced to short-changing. Regardless of their longings for some fantasised former simplicity and local autonomy, regardless of the fact that they might call themselves anarchists and certainly moan about central government and big business, they identify with their present means of survival and almost invariably call the cops when their niche within capitalist society is threatened, by looting for example.36
As Dauve pointed out; the law of profit has nothing to with the action of a few big capitalists or multinationals and getting the world we want does not mean ridding ourselves of fat cigar smokers wearing top hats at horse races. What matters is not the individual profits made by capitalists, but the constraint, the orientation imposed upon production and society by this system which dictates how to work and what to consume. The whole about demagogy rich and poor and ‘big’ and ‘small’ merely confuses the issue. The abolition of capitalism does not mean taking money from the rich, nor revolutionaries distributing it to the poor, but the suppression of the totality of monetary relations.37
THE PRESENT SITUATION
The supposed triumph of the ‘global economy’ seems to have turned out to be a very hollow ‘victory’. It seems that struggle is once again resurgent after at least a decade of relative dormancy. Behind the talk of ‘monetary instability’, ‘bad loans and trading practices’ and warnings by financiers such as George Soros about the dangerous fragility of the financial system lies the reality that the ultimate source of the present crisis is not transgressions and mistakes by bankers and speculators but the reduction of profits by class struggle. The Zapatista uprising in 1994 that threw Mexico and NAFTA into crisis, the general strike in France in December 1995 which blocked planned social welfare cuts and ‘austerity’ measures and the South Korean workers’ season of general strikes from December 1996 to March 1997 that sparked off the Asian crisis and ended the myth of the ‘tiger economies’ and the boundless profits to be made in ‘emerging markets’ are just a few examples.
What does this all mean for the future? Has capitalism bitten off more than it can swallow in its attempt to fully subjugate the vast majority of the world’s population to the rule of money?
The virtual collapse of the Russian economy and the financial meltdown in the Far East have shown how rapidly it can plunge into crisis. If the latest resurgence in struggle in various forms turns into a concerted global offensive, then the abandonment and subsequent lack of means to accommodate working class needs may prove to be an error on the part of the ruling class (of course in terms of ‘normal life’ as atomised individuals there are all sorts of palliatives and diversions to try and distract from the misery of daily existence). The contemporary weakness of old social-democratic forms of mediation such as the unions opens the possibility for struggle outside and against their malign influence. In this context it is possible to see both a certain awareness amongst capitalists of a possible future need to re-incorporate elements of ‘social justice’ into the system in order to contain class struggle - a point alluded to by Soros when he warned that "the uninhibited pursuit of self-interest [which is] not tempered by the recognition of common interest"38 will spell disaster for the system.
Set against the background of a rising tide of nationalism and racism (some of which is directed against ‘globalisation’) our struggles have to be international and internationalist, recognising both national states and capital in whatever form as our enemy. After the next stock market crash, it is entirely possible that opportunist politicians will start coming out against globalisation and de-regulated markets, with the effect of co-opting and neutralising movements who also situate themselves against it. What we are struggling for is not a return to some form of global social-democratic consensus, a redistribution of wealth or a "sustainable and participatory civil society without borders,"39 it is questionable whether permanent reforms are any longer possible - let alone desirable. The only option now left available to us is the complete abolition of capitalist social relations.
- Global Capital, National State and the Politics of Money, Werner Bonefeld and John Holloway (Eds), London, 1996. A collection of essays, can be a bit abstract but is well worth reading.
- Common Sense, issues 21 and 22, Good general article in #21 and very useful piece on class struggle in Mexico in #22 also an interesting Italian theoretical piece about the global economy and a pretty abstract article against a particular theory of globalisation
- Midnight Notes, issues 10 and 12, #12 is entirely about globalisation and various different interpretations of it. #10 is mostly about the politics of enclosure and is generally very good.
- Aufheben, issue #7, has good stuff on the retreat of social democracy, class struggle in the US and the Asian crisis. Any issue is generally worth reading.
- The Eclipse and Re-Emergence of the Communist Movement, Jean Barrot, Antagonism Press, 1997. Not specifically about ‘globalisation’ but essential and easy to read.