In recent years a new shibboleth has entered into the vocabulary – globalisation. Leaders of all political parties, whether conservative or reformist, accept this term as God-given. The same applies to the press, television, company reports, union leaders. In a nutshell it boils down to the statement that the world market and the multinationals are so powerful that the workers in every country, or in any part of the multinational, are completely powerless. And so also is the national state.
Edward Mortimer, writing in the Financial Times, a right wing conservative paper, cited the Communist Manifesto to support the theory of globalisation. He quoted the following words from the Communist Manifesto:
The need for a constantly expanding market chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle every where, establish connections everywhere.
The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country. All old established national industries have been destroyed or daily are being destroyed. They are dislodged by new industries ... that no longer work up indigenous raw materials, but raw materials drawn from the remotest zones, industries whose products are consumed not at home, but in every quarter in the globe... In place of the old local and national seclusion we have intercourse in every direction, universal interdependence of nations.
Edward Mortimer, in claiming that Marx was the progenitor of the theory of globalisation, intended to pay him homage, but actually it is an insult. I shall make a few comments comparing Marxist economics with bourgeois economics.
Marx made it clear that he owed a great intellectual debt to the classical economist Adam Smith, and even more to David Ricardo.
But he also made it clear that his theory was not simply a continuation of classical economic theory, but also its breaking, its negation. The subtitle of Marx’s Capital is A Critique of Political Economy.
Adam Smith, in his Wealth of Nations (published in 1772), describes very well the impact of the division of labour. He describes a pin-making factory in which each worker does a different repetitive job. This division of labour increases productivity. Marx accepted this but added that the division of labour makes the worker half-human. In this is rooted his concept of alienation. There is a round hole fitting a round peg; there is a square hole fitting a square peg. Alas, there is not a hole in the image of a human being. Workers, there fore, are not simply shaped by the system. They are not clay being modelled by big objective factors, but active subjects who resent the pressure from outside, and fight it.
For Adam Smith and Ricardo the search for profit is a natural activity. For Marx it is historically conditioned. The market, the competition between different capitalists, or at present capitalist companies, or capitalist countries, forces each of them to accumulate capital. If they fail they are doomed. The anarchy of capitalism, the competition between units of capital and the tyranny in each capitalist enterprise are two sides of the same coin. The capitalists fighting one another impose the cost of the fight on the workers, and the workers react by fighting back. They are not simply the objects of history. They are the subjects of history. The theory of globalisation pushes the idea of power at the top and powerlessness at the bottom of society to its extremes.
The globalisation theory thinks this is justified. It is part of the free market ideology.
When immigrants try to get into a country, especially if they have the wrong skin colour, they are simply economic migrants, to be condemned. When Volkswagen decided to spend over £430 million on buying Rolls Royce from Britain, that’s alright. If the employer imposes a speed-up, that’s alright. If the workers resist it, that’s criminal sabotage. The movement of capital is not motivated by economics. Again, the radio gives news items like: “Good news; ICI profits rose last year by 20 percent.” A few minutes later: “Bad news; workers are greedy; they are demanding a 5 percent wage rise.”
On the face of it, it is obvious that the workers in one factory that is part of a multinational company are powerless. If a quarter of a million workers are employed by Ford, how can a factory of a few thousand in Britain stand up to Ford management?
But the reality is the very opposite. When 3,000 General Motors brake parts workers went on strike in Dayton, Ohio, in 1996, they shut down General Motors operations across the United States, Canada and Mexico. Over 125,000 General Motors workers were laid off within days. The strike cost the company around $45 million a day, and the Clinton government screamed at both sides to settle.
When an almost general strike took place in Denmark, Saab was forced to stop car production in Sweden because it ran out of essential components from Danish suppliers. The assembly of Saab’s convertible motors in Finland was also forced to stop. Volvo also announced that its production lines in Sweden and the Netherlands had been very badly affected.
In 1988, when Ford workers in Britain struck, they brought the whole of Ford Europe to a halt within three or four days.
Because of the multinationals, the impact of an individual group of workers can be much greater than ever before. One need only compare the above examples with the first general strike in history that took place in England in 1832. Then workers had to move from one factory to another to “turn over” the workers.
Behind the theory of globalisation there is complete mechanical formal logic. The dialectic is completely foreign to it. The logic of the globalisation theory is similar to that which motivated the Pentagon when it launched its war on Vietnam. They were convinced that the United States military machine was omnipotent and that the Vietnamese were relatively powerless. And the argument went like this. In the 19th century Britain beat India into submission. The military machine of the United States in the 1960s was incomparably stronger than the military machine of Britain in the 19th century. At the same time Vietnam is a much smaller country with a much smaller population than India. If Britain could win in the 19th century, the United States could certainly have a walkover in the 20th century.
Looked at dialectically the picture is exactly the opposite. In the Indian uprising of 1857, when a British soldier was killed, how much damage did it do to Britain? How much is a British soldier, a worker in uniform, worth? Let us say £100. The American military machine is in comparably greater. A US aeroplane is worth, let us say, $1 million. What a temptation for a Vietnamese to throw a hand grenade at it.
Another argument of the proponents of the globalisation theory is that now the national state can do nothing about the level of employment, that globalisation killed Keynesianism.
From the beginning of the Second World War until 1973 the world witnessed the longest economic boom in the history of capitalism. This was attributed by the prevailing orthodoxy at the time to Keynesianism. The policy of cutting taxation, keeping interest rates low, increasing state expenditure, managing demand so that the economy could expand-this was what Keynesianism was all about. Probably the most enthusiastic expression of support for Keynesianism was in Anthony Crosland’s book, The Future of Socialism, published in 1956. According to Crosland the anarchy of capitalism was withering away and with it class conflict. The system was becoming more and more rational and democratic. Capitalism itself would peacefully dissolve. All the talk about production being dedicated to making profit rather than meeting human need, was, according to Crosland, sheer nonsense. “Private industry is at last becoming humanised.”
A “peaceful revolution” had begun in which class conflict would be unthinkable: “One cannot imagine today a deliberate offensive alliance between government and employers against the unions,” wrote Crosland. “We stand in Britain on the threshold of mass abundance.” Socialists should divert their attention away from economic issues. To what?
... we shall turn our attention increasingly to other, and in the long run more important, spheres – of personal freedom, happiness, and excitement ... more open-air cafes, brighter and gayer streets at night, better and more hospitable hoteliers and restaurateurs ... more murals and pictures in public places, better designs for furniture and pottery and women’s clothes, statues in the centre of new housing estates, better designed street lamps and telephone kiosks, and so on ad infinitum.
The description of capitalism in its old age as being humane and rational looked to me at the time preposterous, and now even more so. Capitalism that was, to use Marx’s words, born “covered in blood and mud”, could not change qualitatively. As a matter of fact the barbarity of capitalism today is much worse than it was 100 years ago. Think about the gas chambers, about Hiroshima and Nagasaki, about the estimated 20 million children dying in the Third World every year because the banks are squeezing those countries dry.
Unemployment, which reached 8 million in Germany in 1933, disappeared a couple of years later, not because Hitler read Keynes, but because of the rearmament programme. The explanation of the long boom was given by the theory of the permanent arms economy. In March 1957, in an article called Perspectives for the Permanent War Economy, I tried to explain the impact of rearmament on the stability of capitalism, and how also the contradictions in this process were bound to undermine the boom, In a nutshell I explained that if all the key capitalist countries spent significant resources on armaments it would open markets, and slow the decline of the rate of profit. But if a couple of important players did not participate, and spent much less on armaments, they would benefit from the boom more than those that did, and they would have more resources to spend on modernising their industries, instead of spending them on tanks and aeroplanes. And these countries would win in the competition. And this is exactly what happened. While the United States, Russia and Britain spent massively on defence, West Germany and Japan spent peanuts. The mark and the yen became far stronger relative to the dollar and the pound. In 1973, following the Vietnam War, the dollar collapsed, the price of oil pushed through the roof, and Keynesianism was declared dead.
At the 1976 Labour Party conference, the Labour prime minister, James Callaghan, declared:
We used to think you could spend your way out of a recession, and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists ...
Keynesianism gave way to monetarism. Thatcher’s policies took shape before she was elected, for, in the words of Peter Riddell, political editor of the Financial Times, “If there has been a Thatcher experiment, it was launched by Denis Healey (the Labour Chancellor of the Exchequer).”
In the face of the storm, reformism is completely bankrupt. It is like having an umbrella made of paper. It is quite useful so long as there is no rain.
To challenge the attack of capitalism, to defend reforms, one must go beyond reformism. Only revolutionaries can fight at present consistently for reforms.
If the capitalist decides to close the factory, workers have to challenge his right of ownership. If to solve unemployment the working week has to be cut radically, without loss of pay, and the capitalist says it does not pay him to keep the factory open, workers have again to challenge his ownership of the factory.
Between capitalism and socialism there is an abyss – you cannot, as the reformists believe, move from one system to the other gradually. One cannot cross an abyss by a number of small steps. If anyone is in doubt about this, you can put it to the test. Find a tall building in your town, go to the top, look into the distance for another tall building. If you can cross from the one to the other by a number of small steps, reformism has proved its viability.
Last updated on 11.12.2002