“I’m not trying to [tear down the Western economic system and replace it with socialist redistribution of wealth]. You know, I turned 18 when the Berlin wall fell, so I have never had any temptation with communism, I am just trying to see how we can ensure that everyone benefits from globalization.” –Thomas Piketty on The Colbert Report
Despite the various theoretical problems with Piketty’s work (see Harvey’s critique for example), we still have to discuss the significant practical issues, associated with the tactics and strategies of our struggle. Piketty’s overall solution to our problems is nothing but the contemporary social democratic response of trying to better manage capitalism; to humanize capitalism, as the picture bellow illustrates:
For a more detailed discussion on the contemporary debates regarding tactics and strategies between anarchists, revolutionary socialists, and social democrats, see this article; but it is useful to briefly go over something economist Paul Sweezy has been arguing since 1942, which basically foresaw the failure of what was to become the social democratic project.
Sweezy argued in his Theory of Capitalist Development (1942: 349), “the state in capitalist society has always been first and foremost the guarantor of capitalist property relations” and has unmistakably been “the instrument of capitalist class rule.” Sweezy concludes that for it to be possible to use the state to manage capitalism, and/or impose higher, more substantial taxes on capital, as Piketty suggests, a certain combination of requirements must be met. The political actor must be a mass party that 1) is strictly free of capitalist interest, 2) has acquired state power and eliminated capitalists and their representatives from key positions, and 3) establishes a firm position so it would be overwhelmingly plain that any resistance by capitalists would be futile. If experience shows that these are the necessary conditions for such a project to work, “it also indicates no less clearly the impossibility of their fulfillment” (350-1). While it is conceivable in the abstract, in reality “capital holds the strategic positions.” “Money, social prestige, the bureaucracy and the armed forces of the state, the channels of public communications,” are all controlled by capital and “will continue to be used to the utmost to maintain the position of capital.” Sweezy concludes it is a law of capitalist politics that the outcome of these strategies will merely be the bankruptcy of reform (351-2).
In fact, Sweezy (351) also argues that this liberal reform, due to these requirements, is no less a task than a gradual transition into socialism. Thus, we may ask ourselves, if we ever actually have sufficient political power to truly manage capitalism, why not transcend it? If we ever have the political will and power to impose Piketty’s global tax on capital, we will most likely have the will and power to engage on a transition into a new economic system, superior in every way. We will most likely have the means to build a new system, where a return to our current predicament is not as simple as eliminating Piketty’s tax and re-allowing capital free reign.
If/when we finally have the means to slay the beast, why put a smiley face on it?
Afterthoughts on Piketty’s Capital
By David Harvey
Retrieved 05/17/14 from http://davidharvey.org/2014/05/afterthoughts-pikettys-capital/
Thomas Piketty has written a book called Capital that has caused quite a stir. He advocates progressive taxation and a global wealth tax as the only way to counter the trend towards the creation of a “patrimonial” form of capitalism marked by what he dubs “terrifying” inequalities of wealth and income. He also documents in excruciating and hard to rebut detail how social inequality of both wealth and income has evolved over the last two centuries, with particular emphasis on the role of wealth. He demolishes the widely-held view that free market capitalism spreads the wealth around and that it is the great bulwark for the defense of individual liberties and freedoms. Free-market capitalism, in the absence of any major redistributive interventions on the part of the state, Piketty shows, produces anti-democratic oligarchies. This demonstration has given sustenance to liberal outrage as it drives the Wall Street Journal apoplectic.
The book has often been presented as a twenty-first century substitute for Karl Marx’s nineteenth century work of the same title. Piketty actually denies this was his intention, which is just as well since his is not a book about capital at all. It does not tell us why the crash of 2008 occurred and why it is taking so long for so many people to get out from under the dual burdens of prolonged unemployment and millions of houses lost to foreclosure. It does not help us understand why growth is currently so sluggish in the US as opposed to China and why Europe is locked down in a politics of austerity and an economy of stagnation. What Piketty does show statistically (and we should be indebted to him and his colleagues for this) is that capital has tended throughout its history to produce ever-greater levels of inequality. This is, for many of us, hardly news. It was, moreover, exactly Marx’s theoretical conclusion in Volume One of his version of Capital. Piketty fails to note this, which is not surprising since he has since claimed, in the face of accusations in the right wing press that he is a Marxist in disguise, not to have read Marx’s Capital.
Piketty assembles a lot of data to support his arguments. His account of the differences between income and wealth is persuasive and helpful. And he gives a thoughtful defense of inheritance taxes, progressive taxation and a global wealth tax as possible (though almost certainly not politically viable) antidotes to the further concentration of wealth and power.
But why does this trend towards greater inequality over time occur? From his data (spiced up with some neat literary allusions to Jane Austen and Balzac) he derives a mathematical law to explain what happens: the ever-increasing accumulation of wealth on the part of the famous one percent (a term popularized thanks of course to the “Occupy” movement) is due to the simple fact that the rate of return on capital (r) always exceeds the rate of growth of income (g). This, says Piketty, is and always has been “the central contradiction” of capital.
But a statistical regularity of this sort hardly constitutes an adequate explanation let alone a law. So what forces produce and sustain such a contradiction? Piketty does not say. The law is the law and that is that. Marx would obviously have attributed the existence of such a law to the imbalance of power between capital and labor. And that explanation still holds water. The steady decline in labor’s share of national income since the 1970s derived from the declining political and economic power of labor as capital mobilized technologies, unemployment, off-shoring and anti-labor politics (such as those of Margaret Thatcher and Ronald Reagan) to crush all opposition. As Alan Budd, an economic advisor to Margaret Thatcher confessed in an unguarded moment, anti-inflation policies of the 1980s turned out to be “a very good way to raise unemployment, and raising unemployment was an extremely desirable way of reducing the strength of the working classes…what was engineered there in Marxist terms was a crisis of capitalism which recreated a reserve army of labour and has allowed capitalists to make high profits ever since.” The disparity in remuneration between average workers and CEO’s stood at around thirty to one in 1970. It now is well above three hundred to one and in the case of MacDonalds about 1200 to one.
But in Volume 2 of Marx’s Capital (which Piketty also has not read even as he cheerfully dismisses it) Marx pointed out that capital’s penchant for driving wages down would at some point restrict the capacity of the market to absorb capital’s product. Henry Ford recognized this dilemma long ago when he mandated the $5 eight-hour day for his workers in order, he said, to boost consumer demand. Many thought that lack of effective demand underpinned the Great Depression of the 1930s. This inspired Keynesian expansionary policies after World War Two and resulted in some reductions in inequalities of incomes (though not so much of wealth) in the midst of strong demand led growth. But this solution rested on the relative empowerment of labor and the construction of the “social state” (Piketty’s term) funded by progressive taxation. “All told,” he writes, “over the period 1932-1980, nearly half a century, the top federal income tax in the United States averaged 81 percent.” And this did not in any way dampen growth (another piece of Piketty’s evidence that rebuts right wing beliefs).
By the end of the 1960s it became clear to many capitalists that they needed to do something about the excessive power of labor. Hence the demotion of Keynes from the pantheon of respectable economists, the switch to the supply side thinking of Milton Friedman, the crusade to stabilize if not reduce taxation, to deconstruct the social state and to discipline the forces of labor. After 1980 top tax rates came down and capital gains – a major source of income for the ultra-wealthy – were taxed at a much lower rate in the US, hugely boosting the flow of wealth to the top one percent. But the impact on growth, Piketty shows, was negligible. So “trickle down” of benefits from the rich to the rest (another right wing favorite belief) does not work. None of this was dictated by any mathematical law. It was all about politics.
But then the wheel turned full circle and the more pressing question became: where is the demand? Piketty systematically ignores this question. The 1990s fudged the answer by a vast expansion of credit, including the extension of mortgage finance into sub-prime markets. But the resultant asset bubble was bound to go pop as it did in 2007-8 bringing down Lehman Brothers and the credit system with it. However, profit rates and the further concentration of private wealth recovered very quickly after 2009 while everything and everyone else did badly. Profit rates of businesses are now as high as they have ever been in the US. Businesses are sitting on oodles of cash and refuse to spend it because market conditions are not robust.
Piketty’s formulation of the mathematical law disguises more than it reveals about the class politics involved. As Warren Buffett has noted, “sure there is class war, and it is my class, the rich, who are making it and we are winning.” One key measure of their victory is the growing disparities in wealth and income of the top one percent relative to everyone else.
There is, however, a central difficulty with Piketty’s argument. It rests on a mistaken definition of capital. Capital is a process not a thing. It is a process of circulation in which money is used to make more money often, but not exclusively through the exploitation of labor power. Piketty defines capital as the stock of all assets held by private individuals, corporations and governments that can be traded in the market no matter whether these assets are being used or not. This includes land, real estate and intellectual property rights as well as my art and jewelry collection. How to determine the value of all of these things is a difficult technical problem that has no agreed upon solution. In order to calculate a meaningful rate of return, r, we have to have some way of valuing the initial capital. Unfortunately there is no way to value it independently of the value of the goods and services it is used to produce or how much it can be sold for in the market. The whole of neo-classical economic thought (which is the basis of Piketty’s thinking) is founded on a tautology. The rate of return on capital depends crucially on the rate of growth because capital is valued by way of that which it produces and not by what went into its production. Its value is heavily influenced by speculative conditions and can be seriously warped by the famous “irrational exuberance” that Greenspan spotted as characteristic of stock and housing markets. If we subtract housing and real estate – to say nothing of the value of the art collections of the hedge funders – from the definition of capital (and the rationale for their inclusion is rather weak) then Piketty’s explanation for increasing disparities in wealth and income would fall flat on its face, though his descriptions of the state of past and present inequalities would still stand.
Money, land, real estate and plant and equipment that are not being used productively are not capital. If the rate of return on the capital that is being used is high then this is because a part of capital is withdrawn from circulation and in effect goes on strike. Restricting the supply of capital to new investment (a phenomena we are now witnessing) ensures a high rate of return on that capital which is in circulation. The creation of such artificial scarcity is not only what the oil companies do to ensure their high rate of return: it is what all capital does when given the chance. This is what underpins the tendency for the rate of return on capital (no matter how it is defined and measured) to always exceed the rate of growth of income. This is how capital ensures its own reproduction, no matter how uncomfortable the consequences are for the rest of us. And this is how the capitalist class lives.
There is much that is valuable in Piketty’s data sets. But his explanation as to why the inequalities and oligarchic tendencies arise is seriously flawed. His proposals as to the remedies for the inequalities are naïve if not utopian. And he has certainly not produced a working model for capital of the twenty-first century. For that we still need Marx or his modern-day equivalent.
David Harvey is a Distinguished Professor at the Graduate Center of the City University of New York. His most recent book is Seventeen Contradictions and the End of Capitalism, published by Profile Press in London and Oxford University Press in New York.
Dan Brown’s latest book Inferno is definitely a page-turner. You will not drop it until your done. Like all of Robert Langdon’s adventures, there are various recurring themes and elements. However, this does not make the book repetitive or unoriginal respect to Angels & Demons, The Da Vinci Code, or The Lost Symbol. On the contrary, there are sufficient new elements that make the book wonderful in its own right. The recurring elements from his previous books just give it the flare and addictive nature of all of Langdon’s adventures. The only element I found problematic was a certain twist of events at the end of the book. Twist and turns are part of Brown’s style, but in Inferno, two of our characters (Langdon and Dr. Elizabeth Sinskey) develop a strong disdain toward one particular character (Bertrand Zobrist), only for it to be unrealistically switched to understanding and even a bit of admiration at the end. The shift was so sudden that it was borderline plain bad story telling. Other than that, the book is all we have learned to love of Brown’s work. His previous books definitely had implications on current debates (the best example being the complex and ever changing relationship between science and religion), but they were always focused on particular historical elements that captured the reader’s interest, such as the Illuminati or the Holy Grail/Mary Magdalene story. In this case, the historical element isn’t a secret organization or a bible conspiracy theory, it’s Dante Alighieri’s epic poem The Divine Comedy, especially the canticle on Hell: Inferno. Personally, I found Dan Brown’s historical “did you knows” or “fun facts” less mind boggling compared to previous books. To be fair, readers more interested in world literature, instead of secret organizations or conspiracy theories, might enjoy Inferno more than the previous Robert Langdon books. In terms of the implications on the current debates, the issue is overpopulation and sustainability. Here is where Dan Brown really messes up, and becomes an advocate of a Neo-Malthusian, bourgeois, reactionary understanding of a whole array of topics. The novel has implicit views on population growth as the fundamental cause behind economic and environmental sustainability issues. The book’s tone supports conservative arguments that criminalize and attack the “poor and overpopulating masses” as the culprits, while ignoring the role of large corporations with truly unsustainable production techniques. I personally don’t think he intended to do so, but he definitely did, so it is worthwhile discussing this vision.
The upside is that he is nudging readers to reflect and react to the fact that humanity is currently facing a survival threatening sustainability problem. The problem has two elements, fundamentally linked, that of environmental sustainability and that of economic development. Humanity is consuming Earth to its oblivion, while simultaneously goods and resources seem insufficient to satisfy all our needs. The problem with Dan Brown’s rhetoric is that it promotes the idea that the fundamental variable is population growth. Hunger, sickness, pollution, melting ice caps, are all explained with overpopulation. According to this vision, Malthus was right; population grew exponentially while our means of subsistence lagged behind. The vision ignores the fact that science and technology have also been developed exponentially in the last centuries. World population grew more in the last 200 years than it grew in the previous 200,000 years. However, science and technology have also been developed much more in the last 200 years than in the previous 200,000 years. Therefore, we most likely have the technological capacity to satisfy our needs and wants in a sustainable manner even with population growth. This isn’t a novel idea that should have escaped Dan Brown’s preparatory readings. It’s been around as early as merely 10 years after Malthus’ death. In 1844, Engels wrote in his Outline of a Critique of Political Economy:
Yet, so as to deprive the universal fear of overpopulation of any possible basis, let us once more return to the relationship of productive power to population. Malthus establishes a formula on which he bases his entire system: population is said to increase in a geometrical progression – 1+2+4+8+16+32, etc.; the productive power of the land in an arithmetical progression – 1+2+3+4+5+6. The difference is obvious, is terrifying; but is it correct? Where has it been proved that the productivity of the land increases in an arithmetical progression? The extent of land is limited. All right! The labour-power to be employed on this land-surface increases with population. Even if we assume that the increase in yield due to increase in labour does not always rise in proportion to the labour, there still remains a third element which, admittedly, never means anything to the economist – science – whose progress is as unlimited and at least as rapid as that of population. What progress does the agriculture of this century owe to chemistry alone – indeed, to two men alone, Sir Humphry Davy and Justus Liebig! But science increases at least as much as population. The latter increases in proportion to the size of the previous generation, science advances in proportion to the knowledge bequeathed to it by the previous generation, and thus under the most ordinary conditions also in a geometrical progression. And what is impossible to science?
Overpopulation (or lack of technology adequate for our growing numbers) is not the issue behind hunger, sickness, pollution, or melting ice caps. The problem lies within our economic system, our mode of production. How can we say that goods and resources are scarce, when we have, simultaneously, hungry people and surplus food being thrown away, empty houses with no tenants and homeless people, and pharmaceuticals stocked in warehouses while there are sick? In assessing the causes of pollution and global warming, how can we reduce it to population growth, without mentioning the millions of tons of waste and contaminants that come from unsustainable industrial production methods? The roots of our problems lie within the unequal distribution of resources and the unplanned character of our economy. With a more sensible distribution of goods and resources, along with replacing market forces and profit seeking behavior with social planning, we just might escape a Dante-like apocalypse. However, as Dan Brown presents the issue, it’s not only ignoring the actual roots of the problem, it’s a borderline (and for some an openly) racist argument. To say we are overpopulated is to say someone shouldn’t be here. Who? Well, population isn’t actually rising in the First World. Every single country with a population growth rate above 1% is a Third World country. In other words, the world’s problems are a result of the uneducated poor who simply cannot stop having babies (according to this Neo-Malthusian discourse). Dan Brown does right by bringing the sustainability issue to focus. If we do not do something, humanity, sooner than later, might actually face a species-threatening crisis. In fact, evidence points to the fact that we already are in this crisis. Where Dan Brown fails is in pointing the reader into actual solutions. We shouldn’t be focusing on population growth. We should be focusing on the system as a whole; on how, what, and for whom we produce goods and services. In other words, capitalism is the problem! The solution: socialism (or if this is a bad word, then economic democracy, participatory economics, or any other euphemism). In the spirit of Dante’s work, the most treacherous beings on Earth are the members of capitalist class, as their existence actually threatens the survival of our species. Therefore, the deepest corners of Hell are saved for them. Our job is to make their Hell on Earth, by making our Paradise on Earth.
One of the many ideological barriers that undermine efforts to understand the origins of profits, or to understand the nature of the relationship between the capitalist and the worker, is the bourgeois ideal of commodity production and exchange as the universal and natural form of human economic life. The late American economist Paul Sweezy argued this point early on in his discussion of value theory in his classical text The Theory of Capitalist Development. Quoting Smith, he sums it up as the idea that the propensity to exchange is peculiar to humans, and thus is one of the pillars, along with the division of labor, of human civilization. However, the analytical tools of historical materialism shed light to the fact that this not the case. In Sweezy’s words, commodity production “is not the universal and inevitable from of economic life. It is rather one possible form of economic life… a historically conditioned form which can in no sense claim to be a direct manifestation of human nature.” Therefore, continuing with Sweezy’s argument, we must direct our attention to “the character of the social relations which underlie the commodity form.”
For example, the view of commodity production as our universal and natural economic form, would lead many to simply disregard capitalist profits as a result of exchange, and the overpricing of final products above the sum of the prices of its inputs. Marx’s analysis clearly demonstrates that this, once again, is not the case. One of the clearest examples on this issue can be found in his discussion on the contradictions in the circuit of capital, where he explains that if an individual with £40 value worth in wine, exchanges them for £50 value worth in corn, the total amount of value continues being £90. Therefore, “if equivalents are exchanged, no surplus-value results, and if non-equivalents are exchanged, still no surplus value. Circulation, or the exchange of commodities, begets no value.” Another of Marx’s important points on the matter is summarized by Sweezy, arguing that if every capitalist “were to attempt to reap a profit by raising the price, let us say by 10 per cent, what each gained as a seller he would lose as a buyer, and the only result would be higher prices all around from which no one would benefit.” At this point, it is clear to us that labor-power must be the source from which the capitalist is extracting profits, or more precisely, surplus value.
As Marx explains, capitalists “must be so lucky as to find, within the sphere of circulation, in the market, a commodity, whose, use-value possesses the peculiar property of being a source of value, whose actual consumption, therefore, is itself an embodiment of labor, and, consequently, a creation of value.” In order to find this commodity, Marx mentions two prerequisites. The individual who possesses labor-power must be the “untrammeled owner of his capacity of labor,” and also must not be “in the position to sell commodities in which his labor is incorporated,” he should “be obliged to offer for sale as a commodity that very labor-power, which exists only in his living self.” As Michael Lebowitz explains, “Marx proposed, workers first must be free in a double sense. They must be free to sell their labor-power… and they must be “free” of means of production.”
Once these conditions are satisfied, the capitalist can buy labor-power and use it to produce use-values. The value of these use-values would be equal to the socially necessary abstract labor time required to produce them. However, if the capitalist were to sell these commodities at a value equal to the sum of the value of labor-power and the value of the means of production required to produce them, he would make no profits. Nevertheless, if the laborer were to continue working, after having worked the amount of hours equal to the value of his labor-power, he would be adding value that would result in profits for the capitalist. Sweezy summarizes this process explaining, “In a day’s work the laborer produces more than a day’s means of subsistence. Consequently the working day can be divided into two parts, necessary labor and surplus labor…” where “the product of surplus labor is appropriated by the capitalist in the form of surplus value.”
This appropriation, for Marx, meant that the working class is being exploited. This leads us to the question, why would the working class voluntarily participate in a process that results in their exploitation? Is it merely an ideological apparatus that perpetuates a false consciousness, allowing the capitalist to exploit the worker with no need for coercion? Surely ideology has a role, but it is in the particular stage of the development of the forces and relations of production that we find the underlying process that explains this phenomenon. As mentioned above, it is with the tools of historical materialism that we can comprehend how the capitalist can extract surplus value from workers in what appears to be a voluntary agreement. Specifically, it is related to the “double freeing” of the worker.
In the transition from feudalism to capitalism, the two conditions of the free laborer were ensured. First, the decay of the feudal system meant the disintegration of the bonds between the serfs and the lords; setting the conditions for a mass of people that are “untrammeled owners of their capacity of labor.” Meanwhile, the enclosure movement ensured the second condition. As Ernest Mandel summarizes, “The economic changes which, between the sixteenth and eighteenth centuries, created a mass of producers separated from their means of production in the towns, were thus accompanied by changes which in practice deprived part of the peasantry of land as a means of producing their means of life. In this way the modern proletariat appeared… In other words, the separation of the producers from their means of production creates a class of proletarians who cannot live otherwise than by hiring out their strength, that is, by selling their labor-power, to the owners of capital, which enables the latter to secure for themselves the surplus-value produced by these producers.”
This leads to what I consider a fundamental question, is the labor process truly free of coercion toward the worker? Surely, legal processes such as indentured and bonded labor or peonage, which were common practice in late feudalism and early capitalism across different geographical areas, are no longer in place to ensure coercive rights to capitalists. However, the absence of official, state condoned, coercive mechanisms, does not imply there is a total absence of coercion. As Lebowitz argues, the buying and selling of labor-power “looks like a free transaction;” however, the workers are being “compelled to sell their power to produce in order to get the things they need… They can sell it to whomever they choose, but they cannot choose whether or not to sell their power to perform labor (if they are to survive).” I would argue that in addition, most areas in the capitalist world economy in reality offer very limited choices in terms of to whom workers can sell their labor-power, but the main point is this: workers must sell their labor-power or starve to death. This is the fundamental reality of the modern proletariat, and this can hardly be classified as a free and voluntary choice.
Modern capitalism obviously generates exceptions or alterations to this fundamental reality. Most advanced capitalist nations possess welfare systems or safety nets that would prevent the worker from actually starving to death. However, this does not change the main point. In this particular case, workers must sell their labor-power or instead live practically in poverty, in conditions that profoundly hamper the development of the individual’s potential or capabilities. Once again, it is hardly a choice free of coercive elements. Would the average individual willingly desire to live in such conditions? Others would surely argue that the modern proletariat actually has choices. He can choose to become self-employed or to become an employer instead of selling his labor-power. However, these practices are the exception, not the rule. These exceptions no doubt help promote the idea that capitalism is a system of voluntary and free choices. Nonetheless, the fact is that a variety of political, cultural, and economic mechanisms block most of the proletariat from following these alternate paths. As Marx says, “Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past.” In practice, the mass of dispossessed workers, or free workers from the bourgeois perspective, are in fact forced to sell their labor-power by the processes we have so far discussed.
In addition, once these social relations of production are set, ideological elements develop that secure their continuous operation. This particular process exemplifies the relevance of value theory along with historical materialism. The pertinence of these perspectives, among other reasons, stems from the fact that they are profoundly useful analytical tools to debunk the myths that surround the origin of capitalist profits or the overall workings of the capitalist economy.
Sweezy’s closing remarks on the transformation problem coincide with this point: “Under capitalist conditions, a part of this social output is appropriated by that group and community which owns the means of production. This is not an ethical judgment, but a method of describing the really basic economic relation between social groups. It finds its most clear theoretical formulation in the theory of surplus value. As long as we retain value calculation, there can be no obscuring of the origin and nature of profits as a deduction from the product of total social labor… In short, value calculation makes it possible to look beneath the surface phenomena of money and commodities to the underlying relations between people and classes.” For this reason, value theory and historical materialism are not only useful analytical or theoretical tools; they are fundamental and key tools for activists seeking to organize and recruit workers for the struggle toward a socialist society.
Lebowitz, M. A. (2006). Build it now: Socialism for the Twenty-first century. New York: Monthly Review Press.
Mandel, E. (1968). Marxist Economic Theory Volume One. London: Merlin Press.
Marx, K. (1967). Capital, Volume I. New York: International Publishers.
Marx, K., Engels, F., & Tucker, R. C. (1978). The Eighteenth Brumaire of Louis Bonaparte. The Marx-Engels Reader (pp. 594-617). New York: Norton. (Original work published 1972)
Sweezy, P. M. (1942). The Theory of Capitalist Development: Principles of Marxian Political Economy. New York: Oxford University Press.
A discourse on poverty and the necessity of reducing its magnitude, if not eradicating it, has become fashionable today. It is a discourse of charity, in the nineteenth-century-style, which is does not seek to understand the economic and social mechanisms that generate poverty, although the scientific and technological means to eradicate it are now available.
Capitalism and the new agrarian question
All societies before modern (capitalist) time were peasant societies. Their production was ruled by various specific systems and logics—but not those which rule capitalism in a market society such as the maximization of the return on capital.
Modern capitalist agriculture—encompassing both rich, large-scale family farming and agribusiness corporations—is now engaged in a massive attack on third world peasant production. The green light for this was given at the November 2001 session of the World Trade Organization (WTO) in Doha, Qatar. There are many victims of this attack—and most are third world peasants, who still make up half of humankind.
Capitalist agriculture governed by the principle of return on capital, which is localized almost exclusively in North America, Europe, Australia, and in the Southern Cone of Latin America employs only a few tens of millions of farmers who are no longer peasants. Because of the degree of mechanization and the extensive size of the farms managed by one farmer, their productivity generally ranges between 1 to 2 million kilograms (2 and 4.5 million pounds) of cereals per farmer.
In sharp contrast, three billion farmers are engaged in peasant farming. Their farms can be grouped into two distinct sectors, with greatly different scales of production, economic and social characteristics, and levels of efficiency. One sector, able to benefit from the green revolution, obtained fertilizers, pesticides, and improved seeds and has some degree of mechanization. The productivity of these peasants ranges between 10,000 and 50,000 kilograms (20,000 and 110,000 pounds) of cereals per year. However, the annual productivity of peasants excluded from new technologies is estimated to be around 1,000 kilograms (2,000 pounds) of cereals per farmer.
The ratio of the productivity of the most advanced capitalist segment of the world’s agriculture to the poorest, which was around 10 to 1 before 1940, is now approaching 2000 to 1! That means that productivity has progressed much more unequally in the area of agriculture and food production than in any other area. Simultaneously this evolution has led to the reduction of the relative prices of food products (in relation to other industrial and service products) to one fifth of what they were fifty years ago. The new agrarian question is the result of that unequal development.
Modernization has always combined constructive dimensions, namely the accumulation of capital and increasing productivity, with destructive aspects—reducing labor to the state of a commodity sold on the market, often destroying the natural ecological basis needed for the reproduction of life and production, and polarizing the distribution of wealth on a global level. Modernization has always simultaneously integrated some, as expanding markets created employment, and excludedothers, who were not integrated in the new labor force after having lost their positions in the previous systems. In its ascending phase, capitalist global expansion integrated many along with its excluding processes. But now, in the third world peasant societies, it is excluding massive numbers of people while including relatively few.
The question raised here is precisely whether this trend will continue to operate with respect to the three billion human beings still producing and living in peasant societies in Asia, Africa, and Latin America.
Indeed, what would happen if agriculture and food production were treated as any other form of production submitted to the rules of competition in an open and deregulated market, as decided in principle at the November 2001 WTO meeting in Doha. Would such principles foster the acceleration of production?
One can imagine that the food brought to market by today’s three billion peasants, after they ensure their own subsistences, would instead be produced by twenty million new modern farmers. The conditions for the success of such an alternative would include: (1) the transfer of important pieces of good land to the new capitalist farmers (and these lands would have to be taken out of the hands of present peasant populations); (2) capital (to buy supplies and equipment); and (3) access to the consumer markets. Such farmers would indeed compete successfully with the billions of present peasants. But what would happen to those billions of people?
Under the circumstances, agreeing to the general principle of competition for agricultural products and foodstuffs, as imposed by WTO, means accepting the elimination of billions of noncompetitive producers within the short historic time of a few decades. What will become of these billions of humans beings, the majority of whom are already poor among the poor, who feed themselves with great difficulty. In fifty years’ time, industrial development, even in the fanciful hypothesis of a continued growth rate of 7 percent annually, could not absorb even one-third of this reserve.
The major argument presented to legitimate the WTO’s competition doctrine is that such development did happen in nineteenth and twentieth century Europe and the United States where it produced a modern, wealthy, urban-industrial and post-industrial society with modern agriculture able to feed the nation and even export food. Why should not this pattern be repeated in the contemporary third world countries?
The argument fails to consider two major factors that make the reproduction of the pattern in third world countries almost impossible. The first is that the European model developed throughout a century and a half along with labor-intensive industrial technologies. Modern technologies use far less labor and the newcomers of the third world have to adopt them if their industrial exports are to be competitive in global markets. The second is that, during that long transition, Europe benefited from the massive migration of its surplus population to the Americas.
The contention that capitalism has indeed solved the agrarian question in its developed centers has always been accepted by large sections of the left, an example being Karl Kautsky’s famous book, The Agrarian Question, written before the First World War. Soviet ideology inherited that view and on its basis undertook modernization through the Stalinist collectivization, with poor results. What was always overlooked was that capitalism, while it solved the question in its centers, did it through generating a gigantic agrarian question in the peripheries, which it can only solve through the genocide of half of humankind. Within the Marxist tradition only Maoism understood the magnitude of the challenge. Therefore, those who accused Maoism of a “peasant deviation” show by this very criticism that they lack the analytical capacity to understand imperialist capitalism, which they reduce to an abstract discourse on capitalism in general.
Modernization through capitalist market liberalization, as suggested by WTO and its supporters, finally aligns side by side, without even necessarily combining, the two components: the production of food on a global scale by modern competitive farmers mostly based in the North but also possibly in the future in some pockets of the South; and, the marginalization, exclusion, and further impoverishment of the majority of the three billion peasants of the present third world and finally their seclusion in some kinds of reserves. It therefore combines a pro-modernization and efficiency-dominant discourse with an ecological-cultural-reserve set of policies allowing the victims to survive in a state of material (including ecological) impoverishment. These two components might therefore complement, rather than conflict with, one another.
Can we imagine other alternatives and have them widely debated? Ones in which peasant agriculture would be maintained throughout the visible future of the twenty-first century, but, which simultaneously engage in a process of continuous technological and social progress? In this way, changes could happen at a rate that would allow a progressive transfer of the peasants into non-rural and non-agricultural employment.
Such a strategic set of targets involves complex policy mixes at national, regional, and global levels.
At the national level it implies macro policies protecting peasant food production from the unequal competition of modernized farmers and agribusiness corporations—local and international. This will help guarantee acceptable internal food prices—disconnected from international market prices, which are additionally biased by the agricultural subsidies of the wealthy North.
Such policy targets also question the patterns of industrial and urban development, which should be based less on export-oriented priorities (e.g., keeping wages low which implies low prices for food) and more attentive to a socially-balanced expansion of the internal market.
Simultaneously, this involves an overall pattern of policies to ensure national food security—an indispensable condition for a country to be an active member of the global community, enjoying the indispensable margin of autonomy and negotiating capacity.
At regional and global levels it implies international agreements and policies that move away from the doctrinaire liberal principles ruling the WTO—replacing them with imaginative and specific solutions for different areas, taking into consideration the specific issues and concrete historical and social conditions.
The New Labor Question
The planet’s urban population now represents about half of humanity, at least three billion individuals, with peasants making up all but a statistically insignificant percentage of the other half. The data on this population allow us to distinguish between what we can call the middle classes and the popular classes.
In the contemporary stage of capitalist evolution, the dominant classes—formal owners of the principal means of production and senior managers associated with bringing them into play—represent only a very minor fraction of the global population even though the share they draw from their societies’ available income is significant. To this we add the middle classes in the old sense of the term—non-wage-earners, owners of small enterprises, and middle managers, who are not necessarily in decline.
The large mass of workers in the modern segments of production consists of wage-earners who now make up more than four-fifths of the urban population of the developed centers. This mass is divided into at least two categories, the border between which is both visible to the outside observer and truly lived in the consciousness of affected individuals.
There are those who we can label stabilized popular classes in the sense that they are relatively secure in their employment, thanks among other things to professional qualifications which give them negotiating power with employers and, therefore, they are often organized, at least in some countries, into powerful unions. In all cases this mass carries a political weight that reinforces its negotiating capacity.
Others make up the precarious popular classes that include workers weakened by their low capacity for negotiation (as a result of their low skill levels, their status as non-citizens, or their race or gender) as well as non-wage-earners (the formally unemployed and the poor with jobs in the informal sector). We can label this second category of the popular classes “precarious,” rather than “non-integrated” or “marginalized,” because these workers are perfectly integrated into the systemic logic that commands the accumulation of capital.
From the available information for developed countries and certain Southern countries (from which we extrapolate data) we obtain the relative proportions that each of the above-defined categories represent in the planet’s urban population.
Although the centers account for only 18 percent of the planet’s population, since their population is 90 percent urban, they are home to a third of the world’s urban population (see table 1).
The popular classes account for three-quarters of the world’s urban population, while the precarious subcategory represents two-thirds of the popular classes on a world scale. (About 40 percent of the popular classes in the centers and 80 percent in the peripheries are in the precarious subcategory.) In other words, the precarious popular classes represent half (at least) of the world’s urban population and far more than that in the peripheries.
A look at the composition of the urban popular classes a half century ago, following the Second World War, shows that the proportions that characterize the structure of the popular classes were very different from what they have become.
At the time, the third world’s share did not exceed half of the global urban population (then on the order of a billion individuals) versus two-thirds today. Megacities, like those that we know today in practically all countries of the South, did not yet exist. There were only a few large cities, notably in China, India, and Latin America.
In the centers, the popular classes benefited, during the postwar period, from an exceptional situation based on the historic compromise imposed on capital by the working classes. This compromise permitted the stabilization of the majority of workers in forms of a work organization known as the “Fordist” factory system. In the peripheries, the proportion of the precarious—which was, as always, larger than in the centers—did not exceed half of the urban popular classes (versus more than 70 percent today). The other half still consisted, in part, of stabilized wage-earners in the forms of the new colonial economy and of the modernized society and, in part, in old forms of craft industries.
The main social transformation that characterizes the second half of the twentieth century can be summarized in a single statistic: the proportion of the precarious popular classes rose from less than one-quarter to more than one-half of the global urban population, and this phenomenon of pauperization has reappeared on a significant scale in the developed centers themselves. This destabilized urban population has increased in a half-century from less than a quarter of a billion to more than a billion-and-a-half individuals, registering a growth rate which surpasses those that characterize economic expansion, population growth, or the process of urbanization itself.
Pauperization—there is no better term to name the evolutionary trend during the second half of the twentieth century.
Overall, the fact in itself is recognized and reaffirmed in the new dominant language: “reducing poverty” has become a recurring theme of the objectives which government policies claim to achieve. But the poverty in question is only presented as an empirically measured fact, either very crudely by income distribution (poverty lines) or a little less crudely by composite indices (such as the human development indices proposed by the United Nations Development Program), without ever raising the question of the logics and mechanisms which generate this poverty.
Our presentation of these same facts goes further because it allows us precisely to begin explaining the phenomenon and its evolution. Middle strata, stabilized popular strata, and precarious popular strata are all integrated into the same system of social production, but they fulfill distinct functions within it. Some are indeed excluded from the benefits of prosperity. The excluded are very much a part of the system and are not marginalized in the sense of not being integrated—functionally—into the system.
Pauperization is a modern phenomenon which is not at all reducible to a lack of sufficient income for survival. It is really the modernization of poverty and has devastating effects in all dimensions of social life. Emigrants from the countryside were relatively well integrated into the stabilized popular classes during the golden age (1945–1975)—they tended to become factory workers. Now those who have recently arrived and their children are situated on the margins of the main productive systems, creating favorable conditions for the substitution of community solidarities for class consciousness. Meanwhile, women are even more victimized by economic precariousness than are men, resulting in deterioration of their material and social conditions. And if feminist movements have without doubt achieved important advances in the realm of ideas and behavior, the beneficiaries of these gains are almost exclusively middle-class women, certainly not those of the pauperized popular classes. As for democracy, its credibility—and therefore its legitimacy—is sapped by its inability to curb the degradation of conditions of a growing fraction of the popular classes.
Pauperization is a phenomenon inseparable from polarization on a world scale—an inherent product of the expansion of really-existing capitalism, which for this reason we must call imperialist by nature.
Pauperization in the urban popular classes is closely linked to the developments which victimize third world peasant societies. The submission of these societies to the demands of capitalist market expansion supports new forms of social polarization which exclude a growing proportion of farmers from access to use of the land. These peasants who have been impoverished or become landless feed—even more than population growth—the migration to the shantytowns. Yet all these phenomena are destined to get worse as long as liberal dogmas are not challenged, and no corrective policy within this liberal framework can check their spread.
Pauperization calls into question both economic theory and the strategies of social struggles.
Conventional vulgar economic theory avoids the real questions that are posed by the expansion of capitalism. This is because it substitutes for an analysis of really-existing capitalism a theory of an imaginary capitalism, conceived as a simple and continuous extension of exchange relations (the market), whereas the system functions and reproduces itself on the basis of capitalist production and exchange relations (not simple market relations). This substitution is easily coupled with the a priori notion, which neither history nor rational argument confirm, that the market is self-regulating and produces a social optimum. Poverty can then only be explained by causes decreed to be outside of economic logic, such as population growth or policy errors. The relation of poverty to the very process of accumulation is dismissed by conventional economic theory. The resulting liberal virus, which pollutes contemporary social thought and annihilates the capacity to understand the world, let alone transform it, has deeply penetrated the various lefts constituted since the Second World War. The movements currently engaged in social struggles for “another world” and an alternative globalization will only be able to produce significant social advances if they get rid of this virus in order to construct an authentic theoretical debate. As long as they have not gotten rid of this virus, social movements, even the best intentioned, will remain locked in the shackles of conventional thought and therefore prisoners of ineffective corrective propositions—those which are fed by the rhetoric concerning poverty reduction.
The analysis sketched above should contribute to opening this debate. This is because it reestablishes the pertinence of the link between capital accumulation on the one hand and the phenomenon of social pauperization on the other. One hundred and fifty years ago, Marx initiated an analysis of the mechanisms behind this link, which has hardly been pursued since then—and scarcely at all on a global scale.
The principle of endless accumulation that defines capitalism is synonymous with exponential growth, and the latter, like cancer, leads to death. John Stuart Mill, who recognized this, imagined that a “stationary state of affairs” would put an end to this irrational process. John Maynard Keynes shared this optimism of Reason. But neither was equipped to understand how the necessary overcoming of capitalism could prevail. By contrast, Marx, by giving proper importance to the emerging class struggle, could imagine the reversal of power of the capitalist class, concentrated today in the hands of the ruling oligarchy.
Accumulation, which is synonymous with pauperization, provides the objective framework of the struggles against capitalism. But accumulation expresses itself globally mainly by the growing contrast between the affluence of the societies in the center of the world system that benefit from imperialist “rent,” and the misery of the societies in the dominated peripheries. This center-periphery conflict becomes, therefore, the central axis of the alternative between socialism and barbarism.
Historically, “really existing” capitalism is associated with successive forms of accumulation by dispossession, not only at the beginning (primitive accumulation), but also at each stage of the unfolding of the capitalist system. Since the seventeenth century, Atlantic capitalism has sought to conquer the world, which it has remade on the basis of permanent dispossession of the conquered regions, transforming them into the dominated peripheries of the system.
But this victorious globalization has been unable to impose itself in a durable manner. Just about half a century after its triumph, marked by Britain’s Great Exhibition in 1851 (which already seemed to inaugurate the “end of history”), this model was questioned by the revolution of the Russian semi-periphery and the (victorious) liberation struggles in Asia and Africa. These constituted the defining global historical events of the twentieth century — the first wave of struggles in favor of the emancipation of the workers and the peoples.
Accumulation by dispossession continues in front of our eyes in the late modern capitalism of the contemporary oligopolies. In the centers, monopoly rents — the beneficiaries of which are the oligopolistic plutocracies — are synonymous with the dispossession of the entire productive basis of society. In the peripheries, this pauperizing dispossession manifests itself in the expropriation of the peasantry and the plundering of natural resources of the regions in question. These practices constitute essential pillars for the expansion of the late capitalism of the oligopolies.
In this spirit, I situate the “new agrarian question” at the heart of the challenge of the twenty-first century. The dispossession of the peasantry (in Asia, Africa, and Latin America) is the major contemporary form of the tendency towards pauperization (in the sense that Marx ascribed to this “law”) linked to accumulation. Its implementation cannot be separated from the strategies of imperialist rent-seeking and rent-capturing by the oligopolies, with or without agrofuels. I deduce from this that the main historical results will be a product of these struggles over the future of the peasant societies in the South (almost half of humanity). They will largely determine the capacity of the workers and peoples to progress on the road of constructing an authentic civilization, liberated from the domination of capital — for which I see no name other than socialism.
The plundering of the South’s natural resources, required by the pursuit of the model of wasteful consumption that exclusively benefits the North’s affluent societies, destroys any prospect of development worthy of the name for the peoples in question, and therefore constitutes the other face of pauperization on a worldwide scale. In this spirit, the “energy crisis” is neither the product of the absolute scarcity of certain resources necessary for production (oil, obviously) nor the outcome of the destructive effects of energy-devouring forms of production and consumption that are currently in place. Reference to an “energy crisis” — which is not wrong — fails to go beyond banal and immediate evidence. The real “energy crisis” is the product of the will of oligopolies and a collective imperialism to secure a monopoly of access to the planet’s natural resources, whether these be scarce or not, in such a way as to appropriate the imperialist rent. This is true whether the utilization of these resources remains the same as it is now (wasteful and energy-devouring) — or whether it is subject to “environmentally friendly” measures and new correctives. I deduce from this that the pursuit of the expansionist strategy of the late capitalism of oligopolies will inevitably clash with the growing resistance of the nations of the South.
The current crisis is, therefore, neither a financial crisis nor the sum of multiple systemic crises, but the crisis of the imperialist capitalism of oligopolies, whose exclusive and supreme power risks being questioned once more by the struggles of the entire popular classes and the nations in the dominated peripheries, even if they are apparently “emerging markets.” This crisis is, at the same time, a crisis of U.S. hegemony. Taken together, the following phenomena are inextricably linked to one another: the capitalism of oligopolies; the political power of oligarchies; barbarous globalization; financialization; U.S. hegemony; the militarization of the way globalization operates in the service of oligopolies; the decline of democracy; the plundering of the planet’s resources; and the abandoning of development for the South.
The real question, therefore, is as follows: will these struggles manage to converge in order to pave the way — or ways — on the long road to the transition to world socialism? Or will these struggles remain separate from one another, perhaps even clashing with each other, leaving the initiative to the capital of the oligopolies?
From One Long Crisis to Another
The financial meltdown in September 2008 took most conventional economists and advocates of “sweet spot” globalization entirely by surprise, while disconcerting some of the manufacturers of liberal discourse, triumphant since the “fall of the Berlin wall” — as they are accustomed to say. If, however, this event did not surprise me — I expected it (without of course predicting its date, like Mrs. Soleil*) — it is simply because, for me, this event was to be understood as part of the unfolding of the long crisis of an aging capitalism, begun in the 1970s.
It is good to return to the first long crisis of capitalism, which gave shape to the twentieth century, because the parallel between the stages of the unfolding crises is so striking.
Industrial capitalism, triumphant in the nineteenth century, entered a crisis from 1873 onwards. Profit rates dropped, for the reasons highlighted by Marx. Capital reacted by a double movement of concentration and globalized expansion. The new monopolies confiscated, in addition to their profits, a rent levied on the massive value-added generated by the exploitation of labor power. They reinforced the colonial conquests of the planet. These structural transformations allowed a new surge in profits and led to the “belle époque” — from 1890 to 1914 — the first period of global domination by financialized monopoly capital. The dominant discourses of that time praised colonization (“civilizing mission”) and described globalization as synonymous with peace, earning the support of the workers’ social democracy.
However, the “belle époque,” announced as the “end of history” by the ideologues of this period, ended — as only Lenin had foreseen — in the First World War. And the period that followed and lasted until the aftermath of the Second World War was the period of wars and revolutions. In 1920, after the revolution in Russia (the “weak link” of the system) had been isolated following the defeat of revolutionary hopes in Central Europe, financialized monopoly capital managed, against all odds, to restore the system of the belle époque. This restoration, denounced by Keynes at the time, was the origin of the financial collapse of 1929 and the consequent Great Depression that endured until the start of the Second World War.
The “long twentieth century” — 1873-1990 — is therefore both the century of the deployment of the first systemic and profound crisis of aging capitalism (to the point where Lenin thought that this monopoly capitalism constituted the “highest stage of capitalism”) and that of the first triumphant wave of anti-capitalist revolutions (Russia, China) and the anti-imperialist movements of Asia and Africa.
The second systemic crisis of capitalism began in 1971, almost exactly a century after the commencement of the first, with the abandoning of the gold convertibility of the dollar. Profit rates, investment levels, and growth rates all collapsed (and never again reverted to the levels in the period 1945-75). Capital responded to the challenge, not unlike its response in the previous crisis, by a double movement of concentration and globalization. As such, capital established structures that defined the second “belle époque” (1990-2008) of financialized globalization, allowing oligopolistic groups to levy monopoly rent. The same discourse accompanied this process: the “market” guarantees prosperity, democracy, and peace; it’s the “end of history.” The same eager support occurred, this time by European socialists, for the new liberalism. However, this new “belle époque” was, from the onset, accompanied by war: the war of the North versus the South, begun in 1990. Just as the first financialized globalization had led to 1929, so the second produced 2008. Today we have reached a crucial moment, suggesting the probability of a new wave of wars and revolutions. The more so, since the ruling powers do not envisage anything other than the restoration of the system as it was before the financial meltdown.
The analogy between the unfolding of these long, systemic crises of aging capitalism is striking. There are, nonetheless, differences whose political significance is important.
Behind the Financial Crisis: A Systemic Crisis of the Capitalism of Oligopolies
Contemporary capitalism is, first and foremost, a capitalism of oligopolies in the full sense of the term (in previous capitalism, oligopolies were only partial). What I mean by this is that the oligopolies alone command the production of the economic system in its entirety. They are “financialized” in the sense that they alone have access to capital markets. This financialization grants to the monetary and financial market — their market, in which they compete only with each other — the status of dominant market, which, in turn, structures and commands the labor and commodity exchange markets.
This globalized financialization expresses itself by a transformation of the ruling bourgeois class, which has become a rent-capturing plutocracy. The oligarchs are not only Russian, as is too often presumed, but also, and much more often, U.S., European, and Japanese. The decline of democracy — to the exclusive benefit of the oligopolies — is the inevitable product of this concentration of power.
The new form of capitalist globalization that corresponds to this transformation — in contrast with the one that characterized the first “belle époque” — is also important to specify. I have expressed it in a sentence: the passage from imperialisms (that of the imperialist powers in permanent conflict with each other) to the collective imperialism of the triad (the United States, Europe, and Japan).
The monopolies, which emerged in response to the first crisis of profit rates, constituted themselves on a basis that reinforced the violence of competition between the major imperialist powers of the time, and led to the armed conflict begun in 1914, which continued through the “peace” of Versailles and the Second World War until 1945. That is what Giovanni Arrighi, André Gunder Frank, Immanuel Wallerstein, and I described in the 1970s as the “thirty years war,” a notion that has been taken up by others since.
By contrast, the second wave of oligopolistic concentration, begun in the 1970s, constituted itself on totally other bases, within the framework of a system dominated by the “collective imperialism” of the triad. In this new imperialist globalization, the domination of the centers is no longer exercised by a monopoly of industrial production (as had been the case hitherto) but by other means: control of technologies, financial markets, access to the planet’s natural resources, information and communications, weapons of mass destruction. This system, which I have described as “apartheid on a global scale,” implies a permanent war against the states and the people of the recalcitrant peripheries, a war begun already in the 1990s by the deployment of military control over the world by the United States and its subordinate NATO allies.
According to my analysis, the financialization of this system is inextricably linked to its clearly oligopolistic aspect. What pertains between them is a fundamentally organic relation. This point of view is not prevalent, either in the expansive literature of conventional economists or in the majority of critical writings on the current crisis.
It Is the Entire System that Henceforth Is in Difficulty
The facts are clear: the financial collapse is already producing, not a “recession,” but a profound depression. But beyond this, other dimensions of the crisis of the system have surfaced in public consciousness, even before the financial meltdown. We know the main headings — energy crisis, food crisis, environmental crisis, climate change. Numerous analyses of the aspects of these contemporary challenges are produced on a daily basis, some of which are of the highest quality.
Nonetheless, I remain critical of this mode of treating the systemic crisis of capitalism that excessively isolates the different dimensions of the challenge. I would, therefore, redefine the diverse “crises” as facets of the same challenge — that of the system of contemporary capitalist globalization (whether liberal or not), founded upon the principle that the field of operation of imperialist rent is now global — benefitting the oligopolies of the imperialist triad.
The real battle is fought on this decisive ground between the oligopolies that seek to produce and reproduce the conditions that allow them to appropriate the imperialist rent and their intended victims — the workers of all the countries in the North and the South, the peoples of the dominated peripheries, condemned to give up any perspective of development worthy of the name.
Exiting the Crisis of Capitalism or a Capitalism in Crisis?
This formula was suggested by André Gunder Frank and me in 1974.
The analysis we developed about the new great crisis that we thought had begun led us to the major conclusion that capital would respond to the challenge by a new wave of concentration, followed by massive dislocations. Later developments largely confirmed this. The title of our intervention at a conference organized by Il Manifesto in Rome in 1974 (“Let us not wait for 1984,” referring to the work by George Orwell) invited the radical left at that time to renounce any strategy of coming to the aid of capital by looking for “exits from the crisis,” but rather to seek strategies aimed at an “exit from capitalism in crisis.”
I have pursued this line of analysis with a kind of stubbornness that I do not regret. I have suggested a conceptualization of new forms of domination on the part of the imperialist centers, grounded in new modes of control that replaced the old monopoly over exclusively industrial production. This has been confirmed by the rise of “emerging market” countries. I have described the new globalization now being constructed as an “apartheid at the global level,” requiring the militarized management of the planet, and in this way perpetuating, in new conditions, the polarization that always accompanies the expansion of “really existing capitalism.”
There Is No Alternative to a Socialist Perspective
The contemporary world is governed by oligarchies. The financial oligarchies in the United States, Europe, and Japan dominate not only economic life but also politics and daily life. The Russian oligarchy, which the Russian state tries to control, was created in their image. Statocracy in China and autocracies common throughout the periphery (sometimes hidden behind the appearance of an electoral democracy — of “low intensity”) are inscribed into this worldwide system.
The management of contemporary globalization by these oligarchies/autocracies is in crisis. The oligarchies of the North seek to remain in power once the present crisis is over. They do not feel threatened. By contrast, the fragility of the power held by the autocracies of the South is clearly visible. The model of globalization that is currently in place is therefore vulnerable. Will it be called into question by the revolt in the South, as was the case in the previous century? Probably so, but that could prove tragic. For humanity as a whole will only commit itself fully to the socialist road — the only humane alternative to chaos — once the powers of the oligarchies, their allies, and their servants, have been broken, both in the countries of the South and those in the North. Long live the internationalism of the people in the face of the cosmopolitanism of the oligarchies!
Is the Reinstatement of the Global Oligopoly-Finance Capital Possible?
Capitalism is synonymous with “liberalism” if, by this we mean not the beneficent image that the “liberal” label frequently brings to mind, but the plain and total exercise of the domination of capital, not only over work and the economy, but over all aspects of social life. There can be no “market economy” (a vulgar expression for capitalism) without a “market society.” Capital stubbornly pursues this distinct objective — money; accumulation for its own sake. Marx, and after him other critical thinkers like Keynes, understood this perfectly. But not our conventional economists, including many of those ostensibly on the left.
This model of total and exclusive domination by capital was imposed ruthlessly by the ruling classes throughout the previous long crisis until 1945. Only the triple victory of democracy, socialism, and the national liberation of peoples in innumerable struggles made possible the replacement for a time of this capitalist ideal. From 1945 to 1980, it was supplanted by the conflictual coexistence of three socially regulated models: the welfare state of Western social democracy; the “really existing” socialism in the East; and the popular nationalisms in the South. The demise and collapse of these three models made possible the return of the exclusive domination by capital, this time described as the neoliberal phase of capitalism.
I have linked this new liberalism to a series of new aspects that appear to me to merit the description of “senile capitalism.” My book of this title, published in 2001 (Au-delà du capitalisme senile, Presses Universitaires France), is probably one among the very rare writings at the time that, far from viewing globalized and financialized neoliberalism as the “end of history,” analyzed the system of aging capitalism as unstable and condemned to eventual collapse, precisely by reason of its financialization (its “Achilles Heel,” as I wrote then).
Conventional economists have remained persistently deaf to any questioning of their own dogma — so much so that they were unable to foresee the financial collapse of 2008. Those whom the media have portrayed as “critical” hardly deserve this description. Even Joseph Stiglitz remains convinced that the system as it stands — globalized and financialized liberalism — can be fixed by means of some corrections. Amartya Sen preaches morality without daring to see “really existing” capitalism as it is.
The social disasters caused by the deployment of liberalism — “the permanent utopia of capital,” as I wrote — have inspired quite a bit of nostalgia in relation to the recent or distant past. But such nostalgia cannot respond to the present challenge. It is the product of an impoverished theoretical critique that has gradually blocked understanding of the internal contradictions and the limits of the post-1945 systems; their erosions, diversions, and collapses appeared as unforeseen cataclysms.
Nonetheless — in the void created by this retreat of critical, theoretical thinking — a consciousness about the new dimensions of the systemic crisis of civilization managed to chart a path. I am referring here to the ecological movement. But the Greens, who have purported to distinguish themselves radically from both the Blues (the Conservatives and the Liberals) and the Reds (the Socialists), are locked into an impasse, since they have failed to link the ecological dimension to the challenge of a radical critique of capitalism.
Everything was therefore ready to ensure the triumph — in fact, ephemeral but experienced as final — of the alternative of “liberal democracy.” This reflected a poverty of thought — a veritable non-thinking — disregarding Marx’s decisive argument about bourgeois democracy’s failure to acknowledge that those who decide are not those negatively affected by the decisions. Those who decide and benefit from the freedom reinforced by the control over property are nowadays the plutocrats of capitalism’s oligopolies, and states are their debtors. Perforce the workers and the people in question are little more than their victims. This sort of liberal nonsense might, at some point, have been credible, at least for a short while, as a result of the decline of the three post-1945 systems, East, West, and South. But the prevailing dogmas, in their poverty of theory, could no longer understand the origins of the crisis. Under these conditions, liberal democracy might well have appeared to be “the best of all possible systems.” Yet, its hegemony was threatened by a deepening crisis of its own making.
Today the powers that be — those who did not foresee anything — are busy attempting to restore the same system. Their possible success, as in the case of the conservatives in the 1920s — which Keynes had denounced without much of an echo at the time — will only exacerbate the scope of the contradictions that are the root cause of the 2008 financial collapse.
No less serious is the fact that economists on the “left” have long since embraced the essential tenets of vulgar economics and accepted the erroneous idea that markets are rational. The same economists have focused their efforts on defining the conditions for this market rationality, thereby abandoning Marx, who had discovered the irrationality of markets from the point of view of the workers and the peoples — a perspective deemed “obsolete.” According to this “left-wing” perspective, capitalism is flexible, and adjusts itself to the requirements of progress (technological and even social) if it is properly constrained. These “leftist” economists are not prepared to understand that the crisis that has erupted was inevitable. They are even less prepared to confront the challenges that are faced by the peoples as a result. Like other vulgar economists, they will seek to repair the damage without understanding that it is necessary to pursue another route if we are to overcome the fundamental logic of capitalism. Instead of looking for exits from a capitalism in crisis, they think they can simply exit the crisis.
U.S. Hegemony in Crisis
The recent G20 Summit in London in April 2009 in no way marks the beginning of a “reconstruction of the world.” And it is perhaps no coincidence that it was followed by a summit meeting of NATO, the right hand of contemporary imperialism, and by the reinforcement of NATO’s military involvement in Afghanistan. The permanent war of the North against the South must continue.
We already knew that the governments of the triad — the United States, Europe, and Japan — would pursue the singular goal of restoring the system as it existed before September 2008, and one must not take seriously the interventions at the G20 Summit in London by President Obama and Gordon Brown, on the one hand, and those of Sarkozy and Merkel, on the other. Both were aimed at amusing the spectators. The purported differences, identified by the media but without any genuine substance, respond to the exclusive needs of the leaders in question to make the best of themselves in the face of naïve public opinion.
“Recreate capitalism,” “moralizing financial operations”: such similar grand declarations are made in order to avoid the real questions. That is why restoring the system, which is not impossible, will not solve any problem but will, in fact, exacerbate the gravity of the crisis. The “Stiglitz Commission,” convened by the United Nations, is part of this strategy of tricking the public. Obviously, one could not expect otherwise from the oligarchs who control the real power and their political debtors. The point of view that I have developed, and that puts the emphasis on the inextricable links between the domination of the oligopolies and the necessary financialization of managing the world economy, is confirmed by the results of the G20.
More interesting is the fact that the invited leaders of the “emerging markets” chose to remain silent. A single intelligent sentence was said throughout this day of great spectacle, by the Chinese President Hu Jintao, who observed “in passing,” without insisting and with a (mocking?) smile, that it would be necessary to envisage the creation of a global financial system that is not based on the U.S. dollar. Some commentators immediately linked this — correctly — to Keynes’s proposals in 1945.
This remark is a rude awakening to the fact that the crisis of the capitalist system of oligopolies is inextricably linked to the crisis of U.S. hegemony, which is on the ropes. But who will replace it? Certainly not “Europe,” which does not exist apart from or outside Atlanticism and has no ambition to be independent, as the NATO summit meeting once more confirmed. China? This “threat,” which the media repeat ad nauseam (a new “Yellow Peril”?) in order to justify the Atlantic alignment, has no foundation in reality. The Chinese leadership knows that the country does not have either the means or the will. China’s strategy is confined to promoting a new globalization without hegemony — something which neither the United States nor Europe deems acceptable.
The likelihood of a possible evolution in this direction depends once more on the countries of the South. And it is no coincidence that the United Nations Conference on Trade and Development (UNCTAD) is the only institution within the UN umbrella that has taken initiatives that are fundamentally different from those of the Stiglitz Commission. It is also no coincidence that UNCTAD’s Secretary-General Supachai Panitchpakdi, from Thailand, hitherto considered to be a perfect liberal, has dared propose, in a March 2009 report entitled “The Global Economic Crisis,” realistic ideas that are part of a second wave of a Southern awakening.
For its part, China has begun to build — in a gradual and controlled manner — alternative regional financial systems rid of the U.S. dollar. Similar initiatives complement, on the economic level, the promotion of political alliance within the Shanghai Cooperation Organization (SCO), which is a major obstacle to NATO’s belligerence.
The NATO summit meeting, also convened in April 2009, agreed to Washington’s decision not to start a gradual military disengagement but, on the contrary, to reinforce the scope of its military involvement, always under the misguided pretext of the “war against terror.” President Obama deploys his talents to save Clinton’s and Bush’s program of imposing global military control, which is the only way of prolonging the days of U.S. hegemony, now under threat. Obama scored points and obtained a total, unconditional surrender from Sarkozy’s France, which has now rejoined NATO’s military command — the end of Gaullism — something that was difficult to achieve during Bush’s reign when Washington spoke without intelligence but not without arrogance. Moreover, Obama has acted like Bush by giving lessons, with slight concern for Europe’s independence, about how Turkey should be allowed to enter the Union!
Are New Advances in the Struggles for the Emancipation of the Peoples Possible?
The political management of the worldwide domination by oligopoly capital is necessarily marked by extreme violence. For, in order to maintain their status of affluent societies, the countries of the imperialist triad are henceforth obliged to limit access to the planet’s natural resources to their own exclusive benefit. This new requirement is at the origin of the militarization of globalization that I have elsewhere described as the Empire of Chaos(Monthly Review, 1992), an expression others have since taken up.
In line with Washington’s project of military control over the planet and the waging of “pre-emptive wars” under the pretext of the “war against terror,” NATO has portrayed itself as the representative of the international community and has thereby marginalized the United Nations — the only institution entitled to speak in this name.
Of course, these real goals cannot be openly acknowledged. In order to mask them, the powers in question have chosen to instrumentalize the discourse on democracy and have arrogated to themselves the “right to intervene,” so as to impose “respect for human rights”!
At the same time, the absolute power of the new oligarchic plutocracies has hollowed out the substance of bourgeois democratic practice. In former times, political negotiation between different social parties of the hegemonic bloc was necessary for the reproduction of the power of capital. By contrast, the new political management of the capitalism of oligopolies, established by means of a systematic de-politicization, has given rise to a new political culture of “consensus” (modelled on the example of the United States) that substitutes the consumer and the political spectator for the active citizen, necessary for an authentic democracy. The Liberal Virus (the title of another book of mine published by Monthly Review Press, 2004) abolishes the possibility of alternative choices and replaces it with a consensus centered on respect only for a procedural, electoral democracy.
The demise and collapse of the three above-mentioned social models (i.e., “really existing” socialism in the East, social welfarism in the West, and populist nationalism in the South) is at the origin of this drama. The first page of the wave of struggles for emancipation has now been turned; that of the second wave has not yet been opened. In the twilight that separates them, one can discern “monsters,” as Gramsci writes.
In the North, these developments have caused the loss of a real sense of democratic practice. This regression is masked by the pretensions of the so-called “postmodern” discourse, according to which nations and classes have already left the scene and ceded the political space to the “individual,” now the sole active subject of social transformation.
In the South, other illusions dominate the political realm. The illusion of a capitalist, national, and autonomous development that is part of globalization is powerful among the dominant and middle classes in “emerging markets,” fuelled by the swift successes of the last few decades. Or, in the countries excluded from this process, nostalgic (para-ethnic or para-religious) illusions about the past.
What is worse, these developments have strengthened the general embrace of the “ideology of consumption” and the idea that progress is measured by the quantitative growth of consumption. Marx had already shown that it is the mode of production that determines the mode of consumption and not vice-versa, as is claimed by vulgar economics. What is lost sight of in all this is the perspective of a humanist and superior rationality, the basis for the socialist project. The gigantic potential that the application of science and technology offers the whole of humanity, and that would enable the real flourishing of individuals and societies in the North and the South, is wasted by the requirements of its subordination to the logics of the unlimited pursuit of the accumulation of capital. What’s even worse, the continuous growth of the social productivity of labor is linked to the breathtaking use of mechanisms of pauperization (visible at a global scale as the wholesale attack on peasant societies) — as Marx had already understood.
Embracing the ideological alienation caused by capitalism adversely affects not only the affluent societies of the imperialist centers. The peoples of the peripheries, who are, for the most part, deprived of access to acceptable levels of consumption and blinded by aspirations to consume like the opulent North, are losing consciousness of the fact that the logic of historical capitalism makes the extension of this model to the entire globe impossible.
We can, therefore, understand the reasons why the 2008 financial collapse was the result of a sharpening of the internal contradictions peculiar to the accumulation of capital. Only the intervention of forces that embody a positive alternative can offer a way of imagining an exit from the chaos caused by the sharpening of the internal contradictions of the system. (In this spirit, I have contrasted the “revolutionary way” with the model of overcoming the historically obsolete system through “decadence.”) And, in the current state of affairs, the movements of social protest, despite their visible growth, remain, as a whole, unable to question the social order linked to the capitalism of oligopolies — in the absence of a coherent political project that can match the challenges.
From this point of view, the current situation is markedly different from that which prevailed in the 1930s, when the forces of socialism clashed with fascist parties, producing Nazism, the New Deal, and the Popular Fronts.
The deepening of the crisis will not be avoided, even if reinstatement of the system of domination by oligopoly capital were to be potentially successful, which is not impossible. In this situation, the possible radicalization of the struggles is not an improbable hypothesis, even if the obstacles remain formidable.
In the countries of the triad, such a radicalization would imply that the agenda would be to expropriate the oligopolies — a struggle that seems to be off the table for the foreseeable future. In consequence, the hypothesis that — despite the turmoil caused by the crisis — the stability of the societies of the triad will not be questioned cannot be discarded. There is a serious risk of a “remake” of the wave of struggles of emancipation, as happened in the twentieth century, that is to say, a questioning of the system exclusively by some of its peripheries.
A second stage of “the South’s awakening” (the title of yet another book of mine that offers a reading of the period of Bandung as the first stage of awakening [L’Eveil du Sud (Paris: Le Temps des Cerises, 2007)]) is now on the agenda. In the best possible scenario, the advances produced by these conditions could force imperialism to retreat, to renounce its demented and criminal project of controlling the world militarily. And, if this were the case, then the democratic movement of the countries at the center of the system could make a positive contribution to the success of this strategy of neutralization. Moreover, the decline of the imperialist rent, which benefits the societies in question — itself a result of the reorganization of the international equilibria of production to the advantage of the South (especially China) — could help the awakening of a socialist consciousness. Nevertheless, the societies of the South could remain mired in the same challenges as in the past — a situation that would produce some of the same limits on their progress.
A New Internationalism of the Workers and the Peoples Is Necessary and Possible
Historical capitalism is all things to everyone, except being durable. It is but a short parenthesis in history. The fundamental questioning of capitalism — which our contemporary thinkers, in their overwhelming majority, deem neither possible nor desirable — is nonetheless the inescapable condition for the emancipation of the dominated workers and the peoples (those of the peripheries, i.e., 80 percent of humankind). The two dimensions of the challenges are inextricably linked with one another. There will be no exit from capitalism by way of the sole struggle of the people of the North, or by the sole struggle of the dominated people of the South. There will only be an exit from capitalism if and when these two dimensions combine with one other. It is far from certain that this will occur, in which case capitalism will be overcome by the destruction of civilization (rather than the malaise of civilization, to use Freud’s terminology) and perhaps life on the planet. The scenario of a “remake” of the twentieth century falls short of the requirements of a commitment by humankind to the long route of transition to worldwide socialism. The liberal catastrophe requires a renewal of the radical critique of capitalism. The challenge is the permanent construction/reconstruction of the internationalism of the workers and the peoples in the face of the cosmopolitanism of oligarchic capital.
Constructing this internationalism can only be envisaged by successful, new, revolutionary advances (like those begun in Latin America and Nepal) that offer the perspective of an overcoming of capitalism.
In the countries of the South, the battle of the states and the nations for a negotiated globalization without hegemonies — the contemporary form of de-linking — supported by the organization of the demands of the popular classes, can circumscribe and limit the powers of the oligopolies of the imperialist triad. The democratic forces in the countries of the North must support this battle. The pseudo-democratic discourse (the support for low-intensity democracy) proposed, and accepted, by a majority on the left, and the “humanitarian” interventions conducted in its name — just like the miserable practice of giving “aid” — repels real engagement with this challenge.
In the countries of the North, the oligopolies are already clearly forms of the “commons,” whose management cannot be left to sectional private interests alone (the crisis has highlighted the catastrophic results of such an approach). An authentic left must dare envision genuine nationalization as the first inescapable stage of the socialization of the oligopolies, deepening democratic practice. The current crisis makes it possible to conceive the crystallization of a common front of the social and political forces, bringing together all the victims of the exclusive power of the ruling oligarchies.
The first wave of the struggles for socialism, that of the twentieth century, has shown the limits of European social-democracies, of the communisms of the third international, and of the popular nationalisms of the Bandung era — and the demise and collapse of their popular, social-democratic, socialist ambitions. The second wave, that of the twenty-first century, must draw lessons from this. In particular, one lesson is to associate the socialization of economic management and the deepening of the democratization of society. There will be no socialism without democracy, but equally, no democratic advance outside a socialist perspective.
These strategic goals invite us to think about the construction of “convergences in diversity” (referring here to the formula used by the World Forum of Alternatives), of the forms of organization, and the struggles of the dominated and exploited classes. It is emphatically not my intention to condemn from the outset the convergences of the forms that, in their own way, would retrieve the traditions of social-democracy, communism, and popular nationalism, or would diverge from them.
According to this perspective, it seems to me necessary to conceive of the condition for the renewal of a creative Marxism. Marx has never been so useful and necessary in order to understand and transform the world — today even more so than yesterday. Being Marxist in this spirit is to begin with Marx and not to stop with him — or Lenin or Mao — as conceived and practiced by the historical Marxisms of the previous century. It is to render onto Marx that which is owed him: the intelligence to have begun critical thinking, a critique of capitalist reality, and a critique of its political, ideological, and cultural representations. A creative Marxism must pursue the goal of enriching this critical thinking par excellence. It must not fear to integrate all reflection, in all areas, including those that have wrongly been considered “foreign” by the dogmas of past historical Marxisms.
- * French television astrologer, popular in the 1970s.
I would like to focus this interview on three distinct but related questions: your vision of the world and the possibilities of changing it; your conceptual and political proposal on the implosion of capitalism and delinking from it; your analysis of the global context, seen especially from Africa and the Middle East. What is your vision of the world, seen from the South and from the perspective of the South?
To respond to this question, which isn’t a simple one at all, it is necessary to divide the theme in three parts. First of all, let’s examine: What are the important, decisive characteristics of contemporary capitalism — not of capitalism in general, but of contemporary capitalism? What’s really new about it? What characterizes it? Secondly, let’s focus on the nature of the current crisis, which is more than just a crisis — I define it as an implosion of the contemporary capitalist system. Thirdly, in this very framework, let’s analyze: What are the strategies of the dominant reactionary forces, that is, of dominant capital, of the imperialist triad of the United States-Europe-Japan and their reactionary allies in the entire world? Only having understood this can we size up the challenge that the peoples of the South, in the emerging countries as well as the rest of the South, confront.
My thesis on the nature of the contemporary capitalist system — which more modestly I will call “hypothesis” for it’s open to discussion — is that we have entered in a new phase of monopoly capitalism. It’s a qualitatively new stage, given the degree of concentration of capital, now condensed to the point that today monopoly capital controls everything.
To be sure, the concept of “monopoly capital” is not new. It was minted at the end of the 19th century and developed as such, through successive distinct phases, during the 20th century; but, beginning in the 1970s-80s, a qualitatively new stage emerged. Before that, it existed but did not control everything. In reality, there is now no capitalist economic activity that is autonomous or independent of monopoly capitalism — it controls each and every one of the capitalist economic activities, even those that preserve an appearance of autonomy. An example, one among many, is agriculture in developed capitalist countries, where it is controlled by monopolies that provide inputs, selected seeds, pesticides, credits, and marketing chains.
This is decisive — it is a qualitative change which I call “generalized monopoly,” that is, monopoly that is extended over all spheres. This characteristic entails substantive and significant consequences. In the first place, bourgeois democracy has been completely nullified: if it was once based on a left-right opposition — which corresponded to social alliances, more or less proletarian, more or less bourgeois, but differentiated by their conceptions of political economy — now, for example, Republicans and Democrats in the United States, or the Hollande current of socialists and the Sarkozy current of rightists in France, are the same, or just about the same. In other words, all of them are united on a consensus commanded by monopoly capital.
This first consequence constitutes a change in political life. Democracy, thus nullified, has turned into a farce, as is seen in electoral primaries in the United States. Generalized monopoly capital has very serious consequences. It has turned the United States into a nation of “fools.” It’s serious because democracy has no way of expressing itself any longer.
The second consequence is that “generalized capitalism” is the objective basis of the emergence of what I call “collective imperialism” of the US-Europe-Japan triad. It is a point that I strongly emphasize, since, though it is still a hypothesis, I can defend it: there are no major contradictions among the United States, Europe, and Japan. There is a little competition on the economic level, but on the political level the alignment with the policies defined by the United States as what the world’s policy should be is immediate. What we call the “international community” copies the discourse of the United States: in three minutes there appear European ambassadors with some extras, great democrats such as the Emir of Qatar and the King of Saudi Arabia. The United Nations doesn’t exist — its representation of states is a caricature.
It is this fundamental transformation, the transition of monopoly capitalism to “generalized monopoly capitalism,” which explains financialization, for these generalized monopolies are capable — owing to the control that they exercise over all economic activities — of suck up a bigger and bigger part of surplus value produced in the entire world and converting it into the monopolist launching pad, the imperialist launching pad, which is the cause of inequality and growth stagnation in the countries of the North, including the US-Europe-Japan triad.
That leads me to the second point: it is this system that is in crisis. Or rather it is not just a crisis — it is an implosion, in the sense that this system is incapable of reproducing itself from its own foundations, in other words, it is a victim of its own internal contradictions.
This system is imploding, not because it is being attacked by people, but because of its own success. Its success, having managed to impose itself on people, has led it to cause a vertiginous growth of inequalities, which is not only socially scandalous but unacceptable and yet ends up being accepted, accepted without objection. However, that’s not the cause of the implosion, but the fact that it cannot reproduce itself from its own foundations.
That leads me to the third dimension, which has to do with the strategy of the dominant reactionary forces. When I say the dominant reactionary forces, I refer to generalized monopoly capital of the historical imperialist triad of the United States-Europe-Japan, joined by all the reactionaries forces around the world, which are grouped, in one form or another, in local hegemonic blocs that sustain and are part of this reactionary global domination. These reactionary local forces are extremely numerous and enormously different from one country to another.
The political strategy of the dominant forces — that is, generalized, financialized monopoly capital of the historical, traditional collective imperialist triad, the United States-Europe-Japan — is defined by its identification of enemies. For them, the enemies are emerging countries — in other words, China. The rest, like India, Brazil, and others, are for them semi-emerging.
Why China? Because the Chinese ruling class has a project. I am not going to get into details about whether this project is socialist or capitalist. What is important is that it has a project. Its project consists of not accepting the diktats of generalized, financialized monopoly capital of the triad, which imposes itself through its advantages: control of technology; control of access to natural resources of the planet; control of mass media, propaganda, etc.; control of the integrated global monetary and financial system; control of weapons of mass destruction. China has come to challenge this order, without making any noise.
China is no mere subcontractor. There are sectors in China that function as subcontractors, as makers and sellers of cheap toys of poor quality, only because the Chinese need to get their hands on foreign exchange, and subcontracting is an easy means to do so. But that is not what China is all about. What characterizes China is its development and rapid absorption of high technology, its own development and reproduction. China is no mere workshop of the world as is claimed by some. It is not “Made in China” but “Made by China.” This is now possible only because they made a revolution: socialism paradoxically built the path that made it possible to practice a certain kind of capitalism.
I would say that, next to China, the rest of the emerging countries are secondary. If I had to grade them, I’d say that China is 100% emerging, Brazil is 30%, and the rest are 20%. The other emerging countries, in comparison to China, are subcontractors: they do major subcontracting business because there is a margin of negotiation, due to conformity between generalized, financialized monopoly capital of the triad and emerging countries like India, Brazil, and so on. Not so with China.
That is why a war against China has come to be part of the strategy of the triad. 20 years ago there were already crazy Americans who advocated the idea of declaring war on China before it would be too late.
The Chinese have been successful, which is why their foreign policy is so peaceful. Now, here comes Russia to join the Chinese in the category of truly emerging countries. We see Putin proposing the modernization of the Russian armed forces, planning to remake the Soviet-era navy, which once constituted real counterweight to the military power of the United States. This is important. Here I’m not talking about whether or not Putin is a democrat, or whether or not his perspective is socialist; it’s not about that, but about the possibility of countering the power of the triad.
The rest of the world, the rest of the South, all of us — you the Ecuadorans, we the Egyptians, and many others — do not count. Our countries interest collective monopoly capitalism for the one and only one reason, access to our natural resources, because this monopoly capital cannot reproduce itself without controlling, wasting, the natural resources of the entire planet. This is the only thing that interests monopoly capital.
To guarantee exclusive access to natural resources, imperialists must ensure that our countries will not develop. Hence “lumpen-development,” as was defined by Andre Gunder Frank. Frank discussed it in much different circumstances, but I borrow the term here to apply it in new circumstances, to describe how the only project that imperialism has for us is non-development. Development of anomaly — oil-rich pauperization, fake growth fuelled by gas, timber, or whatever, in order to obtain access to natural resources — that is what is about to implode because it has become morally intolerable. People no longer accept it.
Hence the implosions. The first waves of implosions originated in Latin America, and it’s no accident that they happened in marginal countries like Bolivia, Ecuador, and Venezuela. It’s no accident. Then, the Arab Spring. We’ll see other waves in Nepal and other countries for it’s not something that would happen only in a particular region.
For the people who are the protagonists of this, the challenge is enormous. That is to say, the challenge cannot be contained within the framework of this system, within an attempt to transcend neoliberalism to achieve capitalism with a human face, to enter into the logic of good governance, poverty reduction, democratization of political life, etc., because all those are modes of managing pauperization which is the result of this very logic.
My conclusion — from the position mainly focused on the Arab world — is that this is not just a conjuncture but rather a historic moment, a great moment for people. I’m talking about revolution. Though I don’t want to abuse this term, there are objective conditions for building broad alternative, anti-capitalist social blocs. There is a context for audacity, to propose a radical path.