Global
capitalist imperialism today
Rashed Rahman
Global
capitalist imperialism has transformed its production structures/systems in
such radical ways today that much of the earlier analyses relying on an
examination of the aggregation of separate national economies and the trade and
capital flows between them no longer serves to adequately explain 21st
century reality. Of course this does not mean all the laws of motion and
tendencies described in 19th and 20th century analyses
are completely redundant. Only that those laws and tendencies have taken on new
forms, transforming the world into an interconnected global economy
(globalisation) that needs fresh perspectives in order to be adequately
understood.
First, the
forerunner view of capitalism in the late 19th and 20th
centuries. Karl Marx had already pointed to the tendency towards increasing
concentration of wealth (oligopoly if not monopoly) and the growing role of
finance capital (banks, etc). These tendencies by the close of the 19th
and beginning of the 20th century had emerged as the dominant trend
in the development of capitalism. However, the increasing concentration of
production and capital into monopolies and the domination of finance capital were
still seen from the lens of national boundaries. These boundaries were destined
to burst under the pressure (or higher priority) to export capital rather than
commodities per se, fuelled by, on the one hand, the tendency of the rate of
profit to fall for investment within the confines of national boundaries, and
on the other, the superprofits to be gleaned by the export of production and
capital to foreign shores. Colonialism helped lubricate this two-way flow, with
India, for example, being compelled to transfer huge wealth to Britain in the
shape of profits and commodities during the 18th-20th
centuries.
Cartels soon
emerged to divide the global market amongst themselves. A territorial division
of the world amongst the capitalist powers was evident. The challenge to the
older developed and dominant powers by new emerging capitalism-developing
countries led to two world wars in the 20th century, wars
essentially for a redivision of the world. This terrible mutual bloodletting
that took the lives of millions sobered the capitalist world to the necessity
of ‘managing’ their conflicts and differences without resort to war (especially
after the emergence and demonstration of the terrible effects of nuclear
weapons in the mid-20th century and the division of the world being
redrawn along the lines of the First – capitalist – and Second – socialist –
Worlds). The mutual devastation of the capitalist contenders in WWII induced
them to seek cooperation – economic, political and military – amongst
themselves and as a united front against the socialist bloc (the Cold War).
This mutual exhaustion also hastened decolonisation and the emergence on the
world stage of former colonies as independent states that came to be labelled
the Third World.
With the success
of the Chinese (1949) and Cuban (1959) revolutions and the heroic and
awe-inspiring resistance of the Vietnamese people to the aggression of the most
powerful superpower on Earth, the US (1954-75), hopes for liberation from
capitalism’s clutches began to be invested in anti-colonial, anti-imperialist,
anti-capitalist armed guerrilla struggles in the Asian, African and Latin
American continents, lumped together in the appellation ‘Third World’. This
approach was even elevated to the status of a global strategy by Marxists such
as Lin Piao (later disgraced after being killed in an air crash while trying to
flee China after a failed coup attempt), in which the Third World would
‘encircle’ the developed capitalist First World and with the help of
revolutionary socialist countries (a category that excluded the now ‘revisionist’
and ‘social imperialist’ Soviet Union and its Eastern European allies), would
overthrow the rule of capitalism globally. This linear and oversimplified view
came to grief and collapsed during the 1970s and 1980s when, despite the
successful decolonisation and revolutionary national liberation of many
colonies and semi-colonies, the capitalist First World not only survived, but
was soon able to subsume even the most radical revolutionary regimes within the
structures of global capitalism.
Post-liberation
Third World countries soon ran up against the limitations of independent
economic development at the hands of global capitalist structures and the
inadequate capacity of the socialist countries as a whole to provide sufficient
assistance for this project. Dependence on the developed capitalist world and
the international financial institutions created by them after WWII (the
Bretton Woods ‘twins’ of the IMF and World Bank) emerged as the mechanism for
denying these post-colonial societies the space for forging an independent
path. ‘Aid’ from the west and these institutions soon began to reveal itself as
the modern means for extracting surplus value from these dependent countries in
the form of debt traps and their concomitant wealth and capital flows to the
developed metropolitan world.
A parallel
movement could be discerned from the 1970s in the shape of superprofits gleaned
from low-wage workers in the Third World South, primarily through
Multi-National Corporations’ (MNCs’) supremacy over international production
networks. This did not necessarily follow the pattern of capital investment in
such countries, although that remained (and still remains) one of the pathways
to profit and wealth flows from the South to the North. The new means for
extraction of wealth involved the development of global supply chains, in which
without any (or at least minimal) investment, MNCs in the developed world were
able to develop manufacturers and suppliers in the low wage South for their
global domination of market access. This ‘internationalisation’ of production (globalisation),
spurred on immeasurably by the collapse of socialism in the Soviet bloc in the
1990s (leading to a huge ‘horizontal’ expansion of capitalism), created a new
(from the old to a large extent) global capitalist class that relies on low
wage but higher surplus value supply chains for products it does not
manufacture, only markets globally.
This development
has led to the trumping of the nation-state by 15-20 MNCs that control the fate
of the global economy through global supply chains fastened at the centre of
the global economy through control of production located primarily in the South
to final consumption (market access and domination). Currently, more than 80
percent of world trade is controlled by the MNCs, whose annual sales represent
half of global GDP. This ‘offshoring’ of production by the MNCs represents a
vast shift in the predominant location of industrial employment from the North
to the South between the 1970s and the 21st century. In the
developed capitalist countries this has had the effect of industries closing
(producing the ‘rust belts’ in the west, particularly the US, where the factory
town has virtually disappeared in a contemporary version of decline and fall),
manufacturing jobs shrinking, and the working class being ‘left behind’. It is
this disgruntled stratum that has become the political and electoral base for
right wing, far right and populist nationalist forces in developed countries,
Trump and Brexit being easily recognisable as the ‘beneficiaries’ of such
trends.
Meanwhile in the
low wage South, workers have few rights (or practised in the breach), suffer
repression, and their solidarity is weakened through devices and structures
such as outsourcing, labour contractors, and home-based workers. It is observable
that the lower the per capita income of a country, the higher the share of
western MNCs, leading to the undeniable conclusion that this is all about low
wages. This phenomenon is by no means new. There are undeniable historical
precedents but the scale and sophistication of commodity supply chains today
represent a qualitative change that has, and is, transforming the global
political economy.
What low cost
(wages in particular) country sourcing yields is the capture by global
monopolies of higher surplus value generated by labour in the periphery within
a process of unequal exchange. The ‘success’ of China, India (and other
‘Tigers’) lies in their largest share of total employment in global commodity
chains, with the US as the primary export destination. This is an area where
Pakistan is still marginal. Hence the recent invitation by Prime Minister Imran
Khan to Chinese investors to take advantage of low wages on offer in Pakistan
as part of the China Pakistan Economic Corridor (CPEC) project.
Production and
consumption in the world economy are increasingly severed from each other. It
has yielded resource transfers from the developing economies to rich countries
of an estimated $ 2 trillion in 2012 alone. To hide their extraordinary wealth,
the rich are offered ‘treasure islands’ in the Caribbean and elsewhere for
parking their money beyond the reach of snoopy tax collectors (cf. the Panama
Papers). As for the commodity supply chains that underpin this reaping of
riches, the number of jobs worldwide in these rose from 296 million in 1995 to
453 million in 2013. The global division of labour shows the trend of the
world’s industrial workers in the South as follows: 1950, 34 percent; 1980, 53
percent; 2010, 79 percent.
The present-day
global capitalist construct offers unrestricted mobility of capital, not of
labour. This has elevated the concept of a ‘reserve army of labour’ to a
‘global reserve army of labour’. The gap between wages in the developing and
developed world is in the range of 40-60 percent over the last three decades. Value
capture and extraction, as opposed to direct value generation, is what
determines the profits of the MNCs today. Holding wages down in the periphery
makes possible the enormous siphoning off of economic surplus from the South
without any quid pro quo. Those parts of the developing world that are lauded
for their economic dynamism (unfortunately Pakistan is not amongst them) in
production and exports have manufacturing at the heart of this process.
Concomitantly, we see the emergence of MNCs that do not manufacture. These
phenomena are central to the new trends of offshoring.
The
internationalisation of monopoly capitalism and global commodity production
through the replacement of high-wage workers in the developed world with
like-quality, low-wage workers abroad has increased competition amongst the
expanded (by addition of the South) reserve army of labour. Insecurity of
employment and the ever-present threat of unemployment keep wages down (and
profits up). The MNCs indulge at best in oligopolist rivalry. The freely
competitive model is obsolete. The exploitation of workers in the South is not
simply confined to low wages, but the fact that the difference in wages between
the North and the South is greater than the difference in their productivity.
Here too the monopoly capitalists are rubbing their hands in glee as
productivity (and therefore profits) in the South is improving (e.g. China,
India).
The
overaccumulation and concentration of wealth has reached an extreme. The 26
wealthiest individuals in the world (most of them Americans) own as much wealth
as the bottom half of the world’s population, i.e. 3.8 billion people. The
world capitalist economy is more centralised (monopolistic), hierarchical and
unequal in and between the richest and poorest classes and countries.
This is the
world globalised capitalism has bequeathed us. It is obvious that limiting
oneself to the confines of the nation-state in conducting the struggles of
millions of workers, peasants, the poor and other marginalised sections of the
community offers limited returns. In the absence of a current-day International
of the Left (not necessarily a bad thing given the sorry history in this
regard), should not the internationalisation of capitalism and its effects call
forth an internationalisation, or at least solidarity, of the forces opposed to
this unjust construct in the shape of Left movements coming together across the
globe?
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