By Martin Thomas
In many ways capital has been global since the 16th century. Four developments are relatively new since the 1980s.
The first is that we have a world made up almost entirely of capitalist states integrated into the world market. In the whole of the previous history of capitalism there have been many countries which have been dominated by pre-capitalist ruling classes and pre-capitalist modes of production, and tied into the capitalist world market in very limited and specialised ways. For much of the 20th century there was the Stalinist bloc. But now, in almost all countries, there are true-blue capitalist states well integrated into the world market.
Secondly, almost all countries are integrated into the world market in complex ways. They include substantial sectors integrated into complex production networks stretching over several countries.
For a large part of the history of capitalism, the pattern of world trade was one of raw materials being exported from less capitalistically developed countries to the metropolis in Western Europe or the USA, most of manufacturing industry being based in the metropolis, and manufactured goods being exported back to the less capitalistically developed countries.
That pattern has pretty much broken down. Manufactured goods predominate in world trade, and in the exports of less capitalistically developed countries. The biggest exporter of bulk raw materials is the USA, the most developed country.
Thirdly, there has been an enormous cheapening and speeding-up of transport and communications. Almost anything that can be traded, can be traded internationally. This is also the era of mass international air travel, mass international telephone communication, and the Internet.
Fourthly, the wage-working class, defined as those who sell their labour-power to capital and are exploited by capital, together with the children and retired people of that class, is for the first time ever probably the biggest class in the world’s population.
It is difficult to say precisely; but Indonesia, which is one of the less capitalistically-developed countries in the world, has probably a higher proportion of wage-labour than Germany did in 1918, when the Bolsheviks would cite it as the epitome of a highly-developed capitalist country.
Capital did not suddenly flip over into new forms in 1990, or at any other particular date. All the developments I’ve listed are culminations of tendencies which go back a very long time. But in the 1990s the four developments I’ve mentioned reached a sort of “critical mass”. That happened mainly through two processes.
Firstly, the economic crises of the 1970s and 80s. The period from the Second World War to the early 1970s was one of the gradual knitting-together of world trade, the gradual development of autonomous capitalist centres in many of the ex-colonial countries, and the gradual rise of transnational corporations.
From the early 1970s there opened up an era in which the relations of capitalist states to the world market became a cause of tremendous economic crises for them.
The ruling classes were faced with options. They chose the option of reorganising their affairs so as to help their states compete as perches for global capital within a gradually-more-powerful world market, instead of the one of raising economic barriers and erecting siege economies on the model followed by capitalist states in the 1930s.
The interests within the ruling classes who looked towards the world market turned out to have hegemony, and to be prepared to pay a high price, not only in working-class suffering but also in the ruination of large sections of capital. In Britain, about one quarter of manufacturing industry was trashed in a few years, in the early 1980s. “Globalist” interests were able to establish their outlook as the new “common sense” of capital.
Another was the response of governments in poorer countries to the Third World debt crisis after 1982. Instead of defaulting on the debt and turning to a self-centred course of economic development, instead of emulating the economic nationalism of the 1930s, they responded by privatisations, anti-inflation policies, welfare cuts, deregulation, export drives — whatever was necessary to restore their credit with the international banks.
In capitalistic terms, and at great human cost, they were successful: witness the “rise of the BRICs” and the “emerging markets”.
Alongside the response to economic crises of governments in West and South, the other essential process was the collapse of the Stalinist bloc and of the Stalinist model for industrial development. That in turn was tied up with the involvement of the East European states in the world market from the 1970s onwards.
Through those processes we had the speeding-up, and the achievement of a “critical mass”, by the four developments I have listed.
All this happened in a period of working-class setbacks. It happened when the ruling classes had regained the initiative after the big working-class struggles of the late 1960s and the early 1970s.
In some countries there were big set-piece defeats for the working class — in Britain, the miners’ strike of 1984-5 — and, in other countries, simply a petering-out of the struggles of the 1970s in disarray and disillusionment. The capitalist classes were eager and able to take their revenge. And that has shaped forms in which “globalisation” proceeded from the 1980s to now.
A push towards inequality, destruction of social provision, ecological damage and mass pauperisation is endemic to capital, but the working-class setbacks allowed the capitalist classes to add extra bite and sharpness. Although almost all capitalist countries are now complexly integrated into the world market, that is not true of all the world’s population. From the point of view of global capital, vast millions of people are simply disposable surplus.
Capitalist globalisation is capital writ large. It is not a number of other things which it is said to be.
It is not capitalism turned stateless. It is not a capitalism where the nation-state is withering away and markets, or transnational corporations, decide everything. Although it is a capitalism much more attuned to the world market, that attuning is carried out by the nation states. Capitalist globalisation is a process largely carried out by capitalist states. A precondition for its development is the emergence in less capitalistically-developed countries of capitalist states of a weight that they did not have previously, which have the power and confidence to carry through the policies of globalisation.
It is not capitalism turned American. It is not a world where instead of the old European empires we have semi-colonial rule by the United States. The USA is the biggest capitalist power. Between the 1970s and 2003 it was able to refute repeated declarations that it was in relative decline, riding high as a financial and “software” centre even though it came to import more factory goods than it produced. Since the fiasco of its invasion of Iraq, and the opening of the current economic crisis, its hegemony is in retreat.
Capitalist globalisation is not capitalism turned financial, or not just capitalism turned financial.
All the essential developments I have talked about were well in train before the recent huge expansion of financial markets. They have proceeded in the last 30 years in close intertwining with the expansion of financial markets, but it was not that the swirling-round of loot in financial markets had taken over from the extraction of surplus value in production as the driving force.
Evidence here is the European Union’s push — reckless as it was from many capitalist points of view — towards a single currency. The single currency eliminates many financial markets, and reduces the disciplinary effect of world financial markets on individual countries in the European Union. Nevertheless the capitalist classes of Europe thought it worthwhile in the higher interests of international capitalist integration.
A vast expansion of global financial markets is, however, built in to the current era. The big corporations have incomes, stashes, debts in a variety of currencies; and the relative values of those assets change frequently and often dramatically.
A standard textbook, for example, lists rates of return over 1999, not a period of turmoil, from international bonds in the richest countries held by dollar investors over 1999: they ranged from minus 14.4% to plus 14.3%.
Where, in what form, to hold their stashes? Where to raise loans? Big corporations have to consider these questions every day, and wrong decisions have big consequences.
The corporations or the investors go to financial firms. The financial firms seek more and more ingenious ways of laying off, balancing, or calculating risks. They say that “deep” financial markets — that is, ones with a big volume of buying and selling, where you can you find a buyer for almost any proposition at a suitable price — enable the risk to be dispersed and balanced better. Computer technology and telecommunications have facilitated the development of ever “deeper” and more global markets.
In normal times, those financiers are right, in capitalist terms. “Deep” and complex financial markets do serve capital better. The vast, vastly complicated, and always-becoming-more-complicated structure of international credit has been an inseparable aide and accompaniment to the expansion of globalised capitalist production and trade. Its crises are inevitable crises, and more opaque and slippery than ever before.
Capitalist globalisation is capital writ large, capital raging across the world. The challenge for us, in response, is to rewrite working-class struggle on an equally large scale — to rewrite it on a scale which matches the new outreach of capitalism.
We have difficulties, in that we face now a broader and in some ways more “abstract” enemy.
How do we go beyond demonstrations against one after another symbolic world capitalist organisation — WTO, IMF, World Bank and so on, as happened in the years after the famous Seattle demonstration of 1999 — or symbolic “occupations” near Wall Street or the London Stock Exchange, to grapple with the substance of global capital?
We have advantages in the expanded size and scope of the world working class, and in the fact that almost everywhere in the world workers are now face-to-face with capital in a sense they were not even 20 years ago. We have advantages in our expanded ability and facility of communication between different sectors of the world labour movement.
Our problem is to try to recompose an organised movement of global working-class solidarity out of moods and the one-off actions across the world. To that we have to rediscover the ideas of internationalism, of consistent democracy, and of the political independence of the working class. Like every rediscovery of old ideas in a new context, our redevelopment of those principles will in part be a development of new ideas.
• Adapted and revised from articles in Workers’ Liberty 63 and Workers’ Liberty 50/51.