Crisis of war and limits of capitalism - Wildcat

Wildcat Special Issue on the War against Iraq - March 2003

The World Gets Out of Joint

As the rejection of war by the German government was more radical than it was originally meant to be, as the Paris-Berlin-Moscow axis stepped out in front of the headlights..., there it dawned on us that we are living through an epochal break--the end of a world order as we know it. That was also the talk in 1989-90 when, with the decline of "really existing socialism", the cold war was acknowledged to be at an end. But now it becomes obvious that it wasn't only the United States' competitor that had dissolved into thin air. The whole framework broke away, in which--against all expectations!--capitalism, after the first horrifying half of the twentieth century, had been able to bloom again.

In order to explain the course of war of the United States, the first, trusty frameworks the left debate reaches for are: the struggle for oil, the competition of economic blocs, euro against dollar, the imperialistic circle of states seeking world power, the flight of a government out of "domestic" crisis into warlike "foreign policy". Or it attempts a comparison with the decline of the British empire in the beginning of the last century, to which the current decline of the USA seems doomed. None of this is false, and it captures particular moments of the contemporary changes. They are the jigsaw pieces out of which the odd mixture of recklessness and hesitation in the bombardment of Baghdad is composed. But does it reach down into an understanding of what's new in the situation, out of which new possibilities for action might also arise?

End or Beginning of an "American Century"

In their opposition to the war many share an image of the United States as a superpower against whose decisions only moral or symbolic protest is possible. Ironically, it's precisely the hawks, the military agitators, who are not so certain about that. In 1997 the project "The New American Century" was founded to support Bush's election campaign against Clinton. Already the name expresses the problem: There was an American century, but it's highly doubtful whether there will be another one. The basic idea of the project is "full-spectrum dominance" of the United States in all areas worldwide. One of the primary enemies of the realization of a "new American century" is China, which they intend to surround with military bases and keep weak--or, like one of its enthusaists said in all seriousness: "After Baghdad, Peking." The project is no group of screwballs, but the core of the present government belongs to its founders: Dick Cheney, Donald Rumsfeld, Paul Wolfowitz, Jeb Bush, Richard Perle, and Zalmay Khalilzad, who Bush made special envoy first to Afghanistan and now to Iraq.

These people have indeed understood that a further "American century" is extremely questionable. But they think in the trusted categories of state hegemony and a given organization of the global economy, trade system, and interstate power relations. Like in the left debate, these relations are taken for solid ground, on which then political changes like the supersession of one superpower by another can take place. Could it not be that this ground gets shaky over time? That the oh-so-natural-seeming forms of social coexistence on this planet--like states, money, or enterprises and wage labor--can find themselves in crisis?

The Twentieth Century--Capitalism Rescued

In the first half of the twentieth century, things weren't going so good for capitalism. Not only left critics but also conservative thinkers foresaw its end and the transition to another form of society--which was then most often called "socialism." After a bloody thirty-year phase of horror, however, this social form once more embarked upon an unprecedented upswing, and could shake up and dominate life across the whole planet. Politically and militarily, this upswing stood under the leadership of a new power, the USA. It replaced the British Empire that in the nineteenth century--on the basis of its special mode of production, its military dominance, and its control of international trade routes and the international currency had put the conflict-ridden and contradictory development of capitalism into a global straitjacket.

From a New Mode of Production...

England had reached the apex of its industrial superiority over the rest of the world by 1880. Then its industrial production accounted for about 23 percent on a world scale, followed by the USA with scarcely 15, China with 12.5, and Germany with 8.5 percent. Twenty years later, these proportions had been inverted: The USA led with about 24 percent above England's 18.5, and increased its share up until the outbreak of WWI to 32 percent. By 1913, Germany had easily overtaken the stagnating motherland of the industrial revolution (at 14 percent) with 15 percent, which, however, also represented the absolute highest value in its history--China's share had fallen back to barely 4 percent. In the first half of the twentieth century, the USA increased its share to its absolutely highest point, about 45 percent in 1953 (double what England had ever reached), only to to about 30 percent in the 80s. The primary reason for this lay not in Europe's growing share of world production, which stagnated at about 25 percent, but in the growth of industrial production in Japan and the "Third World" (according to Bairoch, 1982). From the 80s on, the US fell ever further behind global development industrially--which meant an actual deindustrialization for some of the former industrial centers in the USA.

Behind the government numbers hides the imposition and following crisis of a new mode of production in the USA, which was superior to the English system, above all in the organization of the labor process and the control of social labor. Under the shortened labels "Taylorism" and "Fordism," this American production system attained worldwide fame and spread beyond the USA, but its origin lies earlier.

In the 1860s and '70s, the textile industry in the USA expanded. It adopted the technologically most highly developed machinery from England, but not, however, English labor organization, which set limits to the control of the employer over the labor process. In the American factories, an expanded power of management was imposed on labor power, which came in large part from immigrants from Europe and Asia, and, after the Civil War, from former slaves from the Southern states. Through this expansion of management's authority in the factories, the collective labor power of thousands of workers could be organized in a production process of much greater dimensions, in distinction to England, which created an significant leap in productivity.

... to Social Stability ...

The imposition of this mode of production is a bloody history of class struggle, proletarian uprisings and their repression. It was decisive for the industrial primacy of the USA that through WWII and its aftermath, this mode of production could be made into the foundation of a "worker-friendly" check against class conflict, which, next to the domestic political repression (McCarthy, etc.), offered the workers a perspective of social integration and increasing consumption. This social model shined forth abroad as the "American way of life" and became a beacon for other countries. The Marshall Plan aid and capital export of the 50s was taken as proof that the USA was ready to take other countries, especially the defeated countries Germany and Japan, under its wing so that they could participate in this "progressive" social model.

A mode of production is itself a process, an historical development--in which changes in social reproduction (of wealth as well as of class relations) fulfill themselves according to a determinate pattern. The fundamental pattern of all capitalist development is the expansion of urban wage labor as the proletarian mode of reproduction. Mode of production means a phase of this expansion, in which capital succeeds in combining a certain type of machinery, labor organization and labor power, so that capital valorizes itself and the class antagonism is under control.

The American system of mass industry was based on tieing immigrant and agricultural labor power to a thoroughly organized and planned production process. Social stability arises out of the dynamic whereby capital can tie the proletarians to itself, by means of the hope that things will go better for their children. The "golden age" after WWII consisted of the expansion of labor's consumption, refrigerators, washing machines and, above all, the car, as much as of the ability to bring new migrating proletarians from the South or from other countries into the factory. The phenomenon that large parts of the working class think of themselves as "middle class" and act accordingly is based on this dynamic.

...and International Hegemony...

Industrial production is based on raw materials being worked up into new production and consumer goods. Its success is also based on how and at what cost one can get raw materials, which are central to this mode of production. In the center of the English industrial revolution, there were three raw materials: cotton, coal, and iron. They still remain important, but the superiority of US industry was bound up with new materials--in which the replacement of coal by petroleum played a special role. Oil would become the foundation of the production on which the internal combustion engine was based, and a whole century would be stamped by it: It revolutionized transportation and thus also the waging of war, and created, with automobilism in the second half of the century, a new model of workers' consumption.

To insure the raw materials for their industrial expansion, the great European powers had appropriated and subordinated overseas areas as colonies. The USA developed similar imperial relations in its backyard, Latin America--but already after WWI with the Wilson doctrine ("self-determination of peoples"), a new form of rule over the raw-materials countries was introduced, which was intended to undermine the old European form of colonialism. With the concept of state "sovereignty" and a copycat economic "development," it could hold off and neutralize the class struggle in these countries in the process of decolonization. The "American way of life," however, wasn't in the cards--they were charged with another function in the international division of labor. Through decolonization the British empire and others lost their exclusive hold on the raw-materials resources--for example, in the oilfields of the Middle East. The Suez Canal Crisis of 1956 was the rearguard action of this power struggle, which was decided by the military superiority of the USA in WWII: When England, France and Israel attempted to roll back the Nasser-led nationalization of the Suez Canal, they were called out of bounds by the USA (and the Soviet Union). In the "Third World" this created a reasonable success, and the image of a civilized hegemon over against the mean brutality of the old colonial rulers--and it finally made clear to the European powers that their proceedings in every part of the world were dependent on the USA. This politics was successful and accepted because the USA did not simply impose its national special interests against other special interests, but with its power and strength insured the general conditions of capitalist development--in this region above all, it insured unhindered access to oil, and worldwide the insurance of state power against unrest and proletarian revolt (e.g., the Korean War).

In other words: Not because it stepped out as the special state USA was it hegemonic, but because it was, for the worldwide capitalist class, the embodiment of the new successful boom of the capitalist mode of production in the 50s and 60s. It was the renewed material expansion of the capitalist mode of production and its class relations on which the political supremacy of the USA was based--and on which it was therefore also dependent.

...Through Military Superiority and Secure World Money

This shows itself most obviously in the two pillars of its power, which remain today but are increasingly shaky (see the contribution of André Gunder Frank in this issue): their military superiority and their control of the international means of payment, world money. In both world wars the USA brought to bear a military strength based in the first place on the superiority of its industrial production and its gigantic production reserves (in the final phase of the war, in 1944, the USA alone produced 90,000 airplanes, more than the German Wehrmacht would have even been able to shoot down). The role of industrial production for the waging of war under capitalism was first demonstrated in the American Civil War of 1861-65, in which half a million people were killed. In this, history's first-ever industrial bloodbath, industrial weapons production in the North had become the decisive factor. By the end of WWII the new modern industrial technology represented a new dimension of automatized bloodbath, instantaneous atomic annihilation.

Modern war not only lives on industrial production; both world wars also gave it an enormous boost. Between 1941 and 1945 the gross domestic product of the USA increased by 50 percent--stronger than ever before--, which, above all, was based on the armaments industry, whose share of the total economy jumped from 2 to 40 percent between 1939 and 1943. After the war the USA had disposal over an immense industrial potential, which was lacking demand. The Marshall Plan aid and capital export created for this potential a demand for producer goods in the war-devastated economies of Europe and Japan.

The second pillar of US strength is also based on industrial production: control of the international currency flows. The export surplus of the United States flowed as tons of gold into the treasury of their banking system. Their control of great quantities of the recognized international means of payment formed the basis of their initiative toward a new regulation of the global financial system for the postwar period. The establishment of the tightly gold-linked US dollar (Bretton Woods 1944) was intended to prevent crises like that of 1929-32 and make a stable international monetary system possible. In the space of this money and credit framework the international division of labor could further expand itself again, while in wartime, 1914-45, it had stagnated or regressed. This framework was not, like it is claimed today by the advocates of capital market regulation (Tobin, attac etc.), the basis for the unique upswing of the prosperity phase of 1947-63--on the contrary, its stability was itself the result of production and of the stability of exploitation, like the beginning of the 70s should show.

Bombs and Money--Synonyms for deadly annihilation and abstract wealth--are the undeniable linchpins of this social order, which can only develop itself by way of contradiction: between poor and rich, between starvation and surplus, between the loss of life through labor and the satisfaction of the products of labor. The "golden age" of postwar capitalism did not supersede these contradictions--it merely offered the perspective that the conditions of the proletarians across the world could be bettered through wage labor, industrialization and development. It was however, simultaneously stamped by a fiercely waged war. With the atomic bombing of Hiroshima and Nagasaki, which played no military role in the course of the war in the Pacific, the USA demonstrated its military superiority. With the division into West and East arose a war situation between the two blocs, for each of which the other served for stabilization of social and government order in their sphere of influence. Only on the basis of the cold war could military strength be practiced and held out as the general interest and common protection of the western industrial countries. NATO served to insure the USA's hegemonic position over Western Europe, but it was intended by agreement to be a defense against the East. For its worldwide military bases the "communist enemy" and its "containment" was the most important legitimation. Since after 1990 this linchpin, which had allowed US dominance to present itself as the legitimate leadership of the "free world," fell out, the USA has an acute need for an "enemy of freedom."

The "Enemy of Freedom" in Your Own Country

The opposition of power blocs and the rivalry between nation-states has always masked throughout the whole history of capitalism the fact that the content of interstate competition was the ruling class's collective control of class conflict. It was decisive for the imposition of the USA as the hegemonic power that the new mode of production also functioned as a superior model of preventing class conflict. The oppositional movements, which arose out of the struggles of the proletarians, also participated in this prevention, because their perspectives of change were always, over and over again, linked to the state--as the workers' movement in the form of unions and parties or as the national-liberation movements in the so-called "Third World." The revolutionary meaning of the worldwide cycle of struggles and the global economic crisis in the 70s lies in the fact that they simultaneously contained a profit crisis and a turn of "anti-system movements" away from the state (see Wallerstein, Utopistics). Global capitalism has not yet lifted itself out of this crisis--it has only been able to draw out its acute outbreak, ever longer, ever further, and ever bloodier.

The "New Rome"--Empire or "Failing State"?

After 9/11, the world's remaining superpower has been described by right-wing historians and politicians in the USA as the "new Rome," and as the answer to the breakdown of the international system of nation-states, a new imperialism and colonialism has openly been proposed, like the wheel of time could be turned back one hundred years just like that. The Gulf War of 1991, the bombing of Yugoslavia in 1999 and Afghanistan in 2001 were all attempts to maintain the position of the United States and thus the state order of international capitalism with military means. In these debates and wars however, the crisis and the decline of this order in the 1980s and 1990s are revealed.

All those proposals--protectorate, colonial status, the good side of imperialism ("the rich man's burden") or even the "nation-building" still mindful of "sovereignty"--contain no perspective at all for development, prosperity or for preventing class conflict through a new push for industrialization, as one can see in Kosovo or Afghanistan. The concept of "failing states", introduced at the beginning of the 90s, serves on the one hand to justify strengthened military power for the control of the proletariat in the "South"--it is however simultaneously the attempt to hold a fundamental truth at bay by means of projection: the global failure of statism that both the USA and the remaining industrial countries confront.

The contemporary situation of change isn't about the fact that in an intact system of nation-states particular marginal ones are failing, or that a hegemon has to be replaced by another--it's about that fact that the form of states themselves, the powerful vise around a class-conflict-ridden society, finds itself in crisis. The crisis of the USA as the hegemonic power of the state system is simultaneously the crisis of the system and statism generally.

Phase-Out Model Capitalism

With the crisis of the mode of production, which had created a new boom time for capitalism and a hegemonic position for the USA, the material basis for the stability of this world order fell apart. The 80s and 90s were therefore marked by compensating for this absent productive basis with bombs and money. With the supression of the dollar's link to gold in 1971 and the free float of the currency exchanges in 1973, the USA created the precondition for replacing its long-past industrial predominance with control of the international financial markets. Material production expanded further, above all in Asia, but this did not lead to any improvement in the rates of profit. The economic yardstick for the success of capitalistic valorization, profit, stagnated even further in the 80s and 90s. Into its place stepped an explosion of the international credit supply, i.e., money whose value is a speculation on successful future exploitation.

But this future has not materialized. In the 90s, the beginning of a new mode of production was twice loudly proclaimed: in the crisis at the beginning of the 90s the model of "lean production", of "teamwork" and of flexible supplier chains. After this hype about "Toyotism" came the second half of the 90s with the hype of the Internet and the "New Economy." But both models led to no improvement in the profit rates of the nonfinancial-enterprise sectors. First of all, the attractiveness of the Japanese production model had been based on the fortunate position of the yen compared to the dollar and the cheapness of transportation because of uniquely low oil prices. The Internet made no profit, but rather turned out to be a technological vision, which was driven by the stock market fever.

Over against the working class, these models functioned as a defensive answer for capital. They destroyed old structures and created a new ideology of "creative labor" and "performance," with which the old collective assurances of wage labor were beaten back. Through the inversion of the international currency flows, the international divison between rich and poor deepened, between booming regions in Asia and the immiseration of Africa and parts of Latin America. They were destructive strategies that didn't help capitalism to any new upswing and further damaged its legitimacy.

The historical novelty of the crisis of the 70s was based on the active role of the worldwide proletariat in it. In the cycle of struggle from 1968-73, the worldwide youth revolt, the struggle of the factory workers in the North and the uprising of the proletariat in the South blocked capitalist valorization. The flow of capital into fictitious valorization on the financial markets was also a retreat from renewed threatening revolution. With the expansion of the money supply and the volume of credit, governments avoided letting the crisis hit the working class in its full force. The increased crisis of the state debt and the always-larger share of the gross social product going to social spending were results of this evasion of class conflict.

Crosspoint Baghdad

This dilemma of world capitalism cannot be solved militarily, but bombs are the only means of counterrevolution left for them. And for the USA they are the last means of holding together a world of states, in which there is no unity about how this dilemma could be solved. Since the beginning of the 1990s, Iraq has been in the center of a militarily-waged struggle for a "new world order," because the different moments of the crisis are concentrated there. After the revolution in Iran, Iraq was heavily armed in order to suppress the revolutionary strivings in the region by war. Next to Saudi Arabia, to which the USA would like to be able to extend the war in case the regime collapses, Iraq serves as the best possibility of controlling the international oil market, on which, again, the value of the dollar depends. Geopolitically the US hopes that from Iraq it will win back its influence in the Middle East and thereby be able to proclaim itself guarantor of the worldwide energy supply.

And the announcements thus far on the course of an attack on Iraq make it obvious that it's also about showing off their newest high-tech weapons without danger of loss. Like the inventor of the strategy of "shock and awe," which is intended to be tested in Iraq, signifies, the destructive potential of these new weapons is supposed to be so large and so precisely effective that the line between conventional and nuclear weapons will disappear. It's clear why this is so important. The military superiority of the USA has the unfortunate defect that it is based in large part on technology that has not been able to be used since 1945: atom bombs. The development of so called "tactical nuclear weapons," the scrapping of the ABM treaty last June, and the always-reiterated possibility of the use of nuclear weapons in Iraq--all these are dubious attempts to play the last card of a system that finds itself in decline. And here's another problem: Since its defeat in the Vietnam war, the USA is no longer in a position to wage a "real war." With the overhasty retreat from Lebanon in 1982 and the debacle in Somalia they have continued to disgrace themselves in the role of world policeman. The quick victory in Afghanistan is turning into a similar long-term defeat right before the eyes of world public opinion. Fatally, it is precisely these defeats, in the power logic of a declining superpower, that require ever newer "victories."

While we write this, both sides prepare themselves for war, and one knows that on both sides it's a war against the proletariat. While the US troops together with the NGOs secure the borders against the flood of refugees that the war and the poverty will bring about, the Iraqi Baath regime digs ditches around the edges of the large slums of Baghdad--Saddam City with more than 2 million inhabitants (but many more in reality)--in order to stop the proletarians from plundering the rich districts of the city or engaging in social upheaval. Saddam Hussein knows all too well that in 1991 his power was less endangered by American bombs than by social uprisings after the war.

A New Superpower?

After the large demonstrations on the worldwide day of action in the middle of February, the New York Times [February 17, 2003, p. A1, column 5, Patrick E. Tyler] commented that "the fracturing of the Western alliance over Iraq and the huge antiwar demonstrations around the world this weekend are reminders that there may still be two superpowers on the planet: the United States and world public opinion." We shouldn't give too much to "public opinion," but in the broad turn of governments around the world against this war a social opposition against war and power comes to expression. Wars are not only unwinnable on military grounds, but also if they no longer function to the legitimation of power, nationalism and chauvinism. If it's becoming obvious that it's only about the defense of a world order that has nothing more to offer and to which no one connects the perspective of a better life anymore.

It is quite apparent that in the next weeks some governments with their backs against the the wall will order their soldiers to bomb Baghdad. But with that they will undermine the legitimacy of this world order and have the real second superpower, the global proletariat, on whom all their wealth and power is dependent, against them.

A Couple of Tips for Further Reading

Robert Brenner: Towards the Precipice (London Review of Books); and his book The Boom and the Bubble, Verso 2002.

Immanuel Wallerstein: The Eagle Has Crash Landed; and his book Utopistics: Or Historical Choices of the Twenty-First Century, The New Press 1998.

Giovanni Arrighi, The Global Market, in Journal of World-Systems Research, Vol. V, 2, 1999, pp. 217-251.

André Gunder Frank: Paper Tiger, Fiery Dragon (German translation in this issue).

Fred Moseley: The United States Economy at the Turn of the Century: Entering a New Era of Prosperity, Capital & Class No. 67 (German translation in Wildcat-Zirkular Nr. 55), and an update to this article by Fred Moseley: Goldilocks Meets a Bear: How Bad Will the U.S. Recession Be?, in Monthly Review April 2002