Assault on Paradise: Perspectives on Globalization and Class Struggles 9956727350, 9789956727353, 9789956728350, 9956728632

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Assault on Paradise: Perspectives on Globalization and Class Struggles
 9956727350, 9789956727353, 9789956728350, 9956728632

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Langaa Research & Publishing Common Initiative Group P.O. Box 902 Mankon Bamenda North West Region Cameroon

TATAH MENTAN

PROFESSOR TATAH MENTAN has taught Political Science as well as journalism and mass communication in African, American, and Canadian universities. His research interests are in the areas of globalization and security issues, contemporary African politics and the political economy of international relations. Dr Tatah Mentan has authored over ten books and scores of journal articles.

ASSAULT ON PARADISE

***

PERSPECTIVES ON GLOBALIZATION AND CLASS STRUGGLES

Globalization is a term that describes the contradictory economic, political, and cultural processes of world capitalist integration. Although capitalism has been of a global character since the 1400s, the current phase of globalization is manifest by emergent transnational institutions, changing relations between multinational corporations and assaulted paradise of sovereign nation-states and the development of a global monoculture of consumption among feuding class divides. This book examines the relationship between globalization and nation states, the dynamics, contradictions, and crisis of global capitalism, and the developing and maturing class struggles and the prospects for social change and transformation of global capitalism. It examines these class struggles within the context of the globalization of capital and draws out the political implications of this process for the future course of capitalist development on a world scale. In this book Tatah Mentan drives home the point that contemporary neoliberal globalization is in fact an advanced stage of capitalist hegemonism and that the contradictions of 21st century globalization are thus a projection of the contradictions of capitalism on a global scale, with all its inherent exploitative characteristics and militarized class conflicts that will lead to the revolutionary transformation of vulture capitalist society. He argues that dominant global processes are not an immutable feature of capitalism, but are contested by social class actors across these three dimensions.

Assault on Paradise: Perspectives on Globalization and Class Struggles

Tatah Mentan

Langaa Research & Publishing CIG Mankon, Bamenda

Publisher: Langaa RPCIG Langaa Research & Publishing Common Initiative Group P.O. Box 902 Mankon Bamenda North West Region Cameroon [email protected] www.langaa-rpcig.net

Distributed in and outside N. America by African Books Collective [email protected] www.africanbookcollective.com

ISBN: 9956-728-63-2 © Tatah Mentan 2012

DISCLAIMER All views expressed in this publication are those of the author and do not necessarily reflect the views of Langaa RPCIG.

Table of Contents

Preface…………………………………………………………………. v Introduction......................................................................................................... xiii Chapter One Historical Overview………………………………………………….……... 1 Chapter Two Contra ‘Post-Marxist’ Critique of Marxist Class Analysis…………..…………. 23 Chapter Three The Class Struggle Is Here to Stay………………………..…………………..61 Chapter Four The Retreat from Race and Class……………………………………………. 89 Chapter Five Capital, Labour, State & Class Struggle………………...……………………107 Chapter Six Understanding Class Analysis: A Marxist Approach…………..………………157 Chapter Seven Marxist Theory and Capitalist Class Structures…………….………………….185 Chapter Eight Marxism and Contemporary Capitalism…………………..………………….. 231 Chapter Nine Class Struggles against Capitalist Imperialism………………...……………….. 265 Chapter Ten Class Struggles in the Era of Imaginary Capitalism and Imaginary Democracy….… 287 iii

Chapter Eleven Imperialist World Order: Protests against Misery for Profits……..……………… 351 Chapter Twelve Theoretical Reprise, Conclusion and Music of the Future………..………………. 399 Bibliography…………………………………………….……………... 425

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Preface

“The militant working class struggles of 2011 - from the strikes and occupation in Wisconsin, to the countless demonstrations against Wall Street Banks, the direct action and broad resistance to the Keystone Pipeline, to housing occupations throughout the country, to the defeat of regressive anti-Union legislation in Ohio and Wisconsin, to the (inter)national explosion of the Occupy Movement—demonstrated the critical fact that the multi-national working class contained in the United States can stop the ‘shock doctrine’ measures being imposed upon it by transnational capital and the neo-liberal state.” Kali Akuno, Pambazuka News, 2012-03-08, Issue 574 http://pambazuka.org/en/category/features/80590 February 2011 went down as a turning point in world history. At the beginning of the month, the Middle East and North Africa were gripped by mass protests of workers and youth that culminated, on February 11, in the forced resignation of the long-time US backed dictator of Egypt, Hosni Mubarak. Since then, the entire region has been torn and convulsed by social upheavals—including Bahrain, Libya, Algeria, Yemen, Iraq and Tunisia. Before the month was over, the US state of Wisconsin saw the eruption of mass protests of workers the likes of which have not been seen in the USA in a quarter century. Workers throughout the United States confront a coordinated attack on social programs and jobs, under both the Democrats and Republicans, overseen by the Obama administration. These struggles unavoidably expanded and, as one can conclude, portend colossal changes in the coming years, if not decades. History—as written in the Communist Manifesto: “The history of all hitherto existing society is the history of class struggle”—has returned. In every country—above all in the United States—workers face massive social inequality and a political system that is impervious to their interests. What program and perspective is needed to lead these struggles of workers to victory? This is the question looming very loudly in people’s minds in this era of globalization. Some scholars see this globalization as inevitable and irreversible, whereas others point out that even open and highly integrated international communities have dissolved in the past. The last great age of globalism was v

destroyed by the Great Depression and political upheaval in the 1930s as seen in historical perspective. There is evidence for the two most common explanations for economic collapse of the contemporary global system: rising volume and volatility of capital flows has triggered unsustainable booms and busts, and widespread fear of globalization provoked a social and political backlash. People and institutions are overwhelmed by a globalized world's pressures and consequences–an assault on national sovereignty to the extent that the institutions that handle economic integration not only are burdened by crises but have become the channels through which long-standing political resentment is flowing. There is widespread anti-globalization sentiment. But, an essential ingredient for 1930s-style economic nationalism is missing today: a respectable intellectual package of anti-globalist policy ideas and a successful national model, such as the Soviet Union or Hitler's Germany. Time and the current global assault is challenging scholars to ensure that such a package reemerges from the crucible of resented and overbearing globalization. The processes of globalization nowadays can be seen within and across technological, economic, political and cultural dimensions. It can also be seen between and within state and global institutions. An emergent international class drives these processes. But, this emergent international class is constrained by conflicts with national classes, and by struggles with non-class actors throughout the global political economy. Consequently, globalization is not an inevitable process. Rather, it is negotiated and contested in the form of conflicts which at times may be bloody. As with all social conflicts, however, these struggles are not between equals. The power of state and global institutional class forces to set the parameters of the negotiations for and against globalization tends to favour the interests of an emergent international class that is primarily located in OECD countries of the industrialized North. Some may call it the G-7. The struggles against these global processes are often led by national classes whose domestic positions of power are threatened by global capitalism, but can also be influenced by grassroots organizations that seek a new vision for social justice. This alternative vision for globalization requires counterhegemonic struggles to connect across national boundaries in order to transcend the struggles of globalization between competing factions as well as fractions of national classes. vi

Our view of globalization is intended to serve as a critical searchlight or framework for analysing and understanding the contradictory processes of the global political economy. The technological, economic, political and cultural (or ideological) dynamics of globalization reflect a dialectical relationship between and within suprastatal, statal, and intrastatal sectors. The suprastatal sector is the emergent “superstructure” of the global capitalist system, and is manifest by the power of capital over the nation-state and by the increasing power of global regulatory institutions like the World Trade Organization, World Bank and International Monetary Fund(The Holy Trinity). This sector is contested among members of the international class forces that are struggling for hegemony. The state sector represents the current hegemonic order, which reflects a hierarchy of nation-states and thus a hierarchy of national class forces. The suprastatal institutions need the nation-state to confer legitimacy, but not all national class forces benefit from the suprastatal framework of globalization. Consequently, national class forces from weaker nation-states tend to use state power to shore up domestic support for their regimes, but also to negotiate more favourable positions within the international class forces. The intrastatal sector is the most volatile location for the struggle over globalization. National inequalities that are based on race, gender, and class characteristics are increasingly the focal points of struggles for state power. However, these struggles are not necessarily counter-hegemonic. On the contrary, statal and suprastatal processes of globalization often shape the social movements of the intrastatal sector. That is to say, the demands for equality by subaltern groups within nations can be appropriated by divisions within national classes who either benefit or suffer from the emergence of the suprastatal sector. The counter-hegemonic potential of intrastatal struggles requires an alternative vision of social justice that does not differentiate between non-class forces of different nations or between nonclass forces within nations. The struggles over globalization within nations are increasing. But, one inadvertently observes, they need to be understood within the larger framework of globalization presented above. In this way, the contradictory processes of globalization can be consistently articulated throughout the global capitalist system. Although globalization has been established as one of the organizing terms of contemporary political economic inquiry the term indicates, to some scholars, that the idea of a cohesive and sequestrated national economy and vii

domestic society no longer holds and that we witness the creation of a truly global economy and society and that everyday life is dependent on global market forces. Thus, the claim is made that 'globalization' constitutes a qualitative transformation of capitalism in that there has developed a new relationship of interdependence beyond the national states. Marx's view of the world market and his notion that the need for a constantly expanding market for its products chases the bourgeosie over the whole surface of the globe, appears to be emphasized by the 'theory' of globalization. Yet, it is not. For such globalizationists, there is no such thing as the bourgeoisie. Instead, contemporary capitalism is viewed as some sort of economic system endowed with functional mechanisms that pertain over and above the social individual rendering both the working class and the bourgeoisie helpless. Both are seen to be subjected to the risk that globalization appears to present (Beck, 1992). This is why some contemporary defining planks of 'globalization' can be briefly summarized as follows: 1) The increasing importance and significance of the financial structure and the global creation of credit, leading to the dominance of finance over production: Harvey (1989) has argued that finance capital has become an independent force in the world and Strange (1988; 1991) has emphasized the increased structural power exercised by the financial superstructure; 2) The increasing importance of the 'knowledge structure' (Strange 1988; Giddens 1990): Knowledge is said to have become an important factor of production; 3) The increase in the rapidity of redundancy of given technologies and the increase in the transnationalization of technology: Here the emphasis is on knowledge-based industries, increasing reliance on technological innovation, and increased risk of technological backwardness (Giddens, 1991); 4) The rise of global oligopolies in the form of multinational corporations: Corporations are said to have no choice but to go global and multinational corporations, together with, and importantly, transnational banks, have become most influential powers beyond the national states and their national economies (Strange, 1991); 5) The globalization of production, knowledge, and finance. This development is to have led to, on the one hand, the retreat of the national state as a regulative power (Strange, 1996), and the globalization of political power in the form of a plural authority structure associated with the UN, G7 viii

(now G8), on the other (Held, 1995). The erosion of the national state is seen to lead to (a) greater global institutional and regulatory uncertainty and (b) to the hollowing out of national democratic systems of accountability and regulative power. The national state is seen to have transformed into a 'competition state' (Cerny, 1990). The so-called new freedom of capital from national regulative control and democratic accountability is said to lead to increased ecological destruction, social fragmentation, and poverty. In fact, this trend is an assault on national sovereignty and its constituent elements such as classes, ethnic groups, and so on. For Hirsch (1995), globalization is based on a class society without classes. Globalization thus means that workers are virtually powerless to withstand economic dictates (Anderson, 1992, p. 366). In short, globalization is viewed as the realization of capital's impossible dream: to accumulate uncontested. This brand of globalization theory, then, depicts 'labour’s purposeful activity' (cf. Marx) as no more than a human factor of production. What is noteworthy here is that capitalist accumulation is unfolding in a very uneven pattern with important consequences for the nature and intensity of the class struggle nowadays. Moreover, the particular responses by workers and especially the capitalist state to the general condition of the economy has shaped the degree to which class struggle intensifies and which of the two major “poles' (capital or labour) has taken the offensive. This is why the class struggle continues to play a central role in the process of capitalist accumulation, albeit it takes different forms depending on the socio-economic context. The main aim of this book is to map out the unfolding of the class struggle as necessitated by specific key concepts related to the (a) varied conditions and dominant sectors of capital in the global economy, (b) nature of the class struggle, (c) the principle protagonists of class struggles, (d) character of the demands as well as (e) mass struggles. In sum, to understand contemporary world capitalism, or imperialism sanitized as globalization, it is above all necessary to grasp the dynamism of the capitalist mode of production itself. This dynamism is manifested in a two-fold tendency of capitalist expansion. First, there is the tendency to reproduce capitalist production relations and productive forces on a national scale. I say “national scale” because nations or national entities are the best geographical framework of the capitalist mode of production. Lenin noted this when he remarked that the rise of capitalism and the rise of nations were ix

parallel processes. This tendency, also called the tendency to create a national market, acts to break down or absorb all obstacles to capitalist expansion and capital accumulation. The second tendency is the tendency of the capitalist mode of production to become worldwide, to transcend national boundaries. This tendency internationalizes capital; it acts to produce and reproduce capitalist production relations and productive forces on a world scale. Contemporary capitalism as an international phenomenon means, for example, the unfavourable flow of capital to nations with more developed productive forces from the “under-developed” nations, thereby drawing the latter into the world market, into the unequal exchange between “raw materials” and “finished products” which works to the disadvantage of those nations whose productive forces are “underdeveloped”. What are the effects of these two contradictory but inter-related tendencies of the capitalist mode of production? Looking at contemporary capitalism, we can say that the first tendency acts to create in each national entity which is part of the world capitalist system a complex social formation dominated by the capitalist mode of production. In this social formation each of the levels which constitute it, the economic, the political and the ideological, becomes a site of class struggle in which contradictions between the classes, increasingly the proletariat and the bourgeoisie and their respective allies, are fought out. The second tendency, the reproduction of capitalist production relations and productive forces on a world scale, also therefore reproduces class struggle on a world scale. At the time it gives rise to an inter-related international hierarchy of national entities. This is because capitalism develops unevenly—in some countries productive forces are developing, in others the development of the productive forces is blocked. These developments are determined by the character of the production relations and the differing places and roles assigned to the various national entities by the structure of the hierarchy. This international hierarchy is dominated by a hegemonic power, whose economic, political and ideological strength and influence are decisive for the maintenance and control of the world system. The structure of world imperialism means that the system as a whole assigns a definite role to each nation included in it, in accordance with its economic, political and ideological characteristics. Some countries function primarily as providers of minerals and other raw materials for the world x

market, basic foodstuffs, etc. Others, Brazil for example, or, until recently, Iran, performed a role as political gendarmes, maintaining imperialist relations in South America and the Middle East respectively. The hierarchy of global capitalism acts to accelerate the development of productive forces in the “developed” imperialist countries while retarding the development (reinforcing the dependency) of nations whose productive forces are less developed. This is how unequal development operates: to reproduce capitalist inequality on a world scale to the advantage of the bourgeoisie in the “developed” imperialist nations who benefit not only from the exploitation of their own workers, but also from the exploitation of the workers of the world. The history of the twentieth century has been shaped by two processes: proletarian revolution and national liberation struggle on the one hand, and the struggle for hegemony within world imperialism on the other. The hegemonic power, the apex of the imperialist hierarchy, is occupied by that social formation which, by its economic power, its political-military strength, and its advantageous relations with other elements of the world imperialist system, is vital for the maintenance and reproduction of the system. Today the majority of the world’s peoples live in an imperialist system in which the hegemonic social formation is the USA. Among the elements which enable the USA to exercise hegemony are the size and extent of its capital export, the role of the dollar and US capital on the world market, and US military strength and technical superiority in military matters. The two tendencies we have described, taken together, give rise to world imperialism. Each social formation within it is thus necessarily involved in a complex series of inter-relationships and class and national struggles. The character of any social formation can only be judged then, not just by the balance of class forces within it, but also by its place in the hierarchy of world imperialism, its role in world national and class struggles. These two criteria: the balance of internal class forces and the role and place in class and national struggles on a world scale, taken together, provide the basis for communists to evaluate and characterize nations from a scientific perspective. An important consequence of this analysis is a recognition of the fact that a country cannot break with global capitalism merely by changing its foreign policy or its attitude toward one or the other major capitalist powers. It is evident that the 21st century has so far seen US-led military interventions, global financial crises, identity conflicts, terrorism on a grand xi

scale, environmental disasters and fraught industrial/labour relations. These dramatic events have challenged the notion of an ‘end to history’ and the widespread belief that the collapse of the Soviet Union has made Marx and Marxism irrelevant. With growing instability in the social, political and economic functioning of human societies, we wish to examine the relevance of Marx to contemporary global society. The aims of this book are therefore partially: 1. to examine the relevance and application of Marxian, Marxist, NeoMarxist and Post-Marxist thought to contemporary issues; 2. to reassess scriptural and doctrinal commitments within various ‘Marxisms’; and, 3. to facilitate interdisciplinary, inter-paradigmatic discourse on a range of contemporary issues.

I remain highly indebted to millions of scholars working on issues of globalization. Since naming these scholars individually will toll enormously on space, I offer them my gratitude anonymously. However, all the ideas expressed in this book as well as any errors identified in it are solely my responsibility.

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Introduction

This book offers an introduction to a class approach to the assault of contemporary capitalism and the resentment it has engendered among its victims. Global capitalism, characterized by “unfettered” markets in labour and natural resources, commodity production, and the reinvestment of profit, has been the dominant economic system in the West since the nineteenth century and has increasingly spread across the globe. This book thus challenges the ‘death of class’ thesis and argues for the continued relevance of the category of ‘class’ in the era of global capitalism. Among other things, the contention is that the category of ‘class’ subsumes without erasing the gender and race divides. Noting the emergence of a global social formations the book claims that a transnational capitalist class is shaping international laws and institutions in the era of globalization. It calls for the linking of the class critique of contemporary capitalism, laws and institutions with the idea and practices of resistance, and considers in this setting the meaning of internationalism and class struggle today for an emerging transnational oppressed class. The book concludes by schematically outlining the advantages of a class approach to contemporary capitalism. This book is written on the premise that a class approach to contemporary capitalism offers critical insights into the structure and process of the new phase of imperialism, whatever the theoretical frame used: be it that of Marx, Weber, or Bourdieu. While the class approach has to take cognizance of the complex intra- and inter-class relationships, as also their interface with gender and race, and further their complex constitution at the global level, the exercise is likely to yield a richer understanding of capitalism today and exploitative and oppressive institutions it engenders. Since even a rudimentary class approach to contemporary capitalism, law and institutions has yet to be fully articulated, one does not even have to reach closure (if that is desirable at all) on complicated debates on the category of ‘class’ or transnational capitalist class ‘TCC’ to produce fresh insights. A class approach to capitalism rooted in materialist epistemology and sociology is most helpful once the need to enrich it through borrowing from other intellectual traditions, in particular feminism and critical race theorists, is recognized. But there is no denying the need for rigorous empirical work which would delineate the global class map and back the classification with xiv

substantial evidence, including that of lopsided distributional outcomes resulting from extant international legal regimes. Meanwhile, schematically speaking, the following are the overlapping advantages that a class approach to contemporary capitalism yields. First, it enables the writing of a history of rapacious capitalism, its laws of motion and institutions which examines the role of social forces, groups, and classes which influenced their evolution and development in different periods of history. Secondly, a class approach helps to identify the dominant social groups and class factions and fractions which are the principal beneficiaries of individual global regimes. Thirdly, a class approach helps one focus sharply on the existential condition and concerns of the transnational oppressed class in a way which clarifies the limits of human rights law; it thereby helps to etch and draw attention to the alienation of international law from the fate of that class. Fourthly, a class approach links theory with practice, paying due attention to the resistance of the transnational oppressed class to different international regimes. The narratives of resistance thus become an integral part of the story of contemporary capitalism. Fifthly, a class approach assists in a nuanced understanding of the world of civil society organizations and social movements and their approach to different international legal regimes. It helps to distinguish organizations and movements which espouse the causes of the transnational oppressed class from those which express solidarity with the interests of transnational capitalist class. Sixthly, a class approach allows the rethinking of the liberal conception of contemporary capitalism and its complex and contradictory relationship with the idea of global injustice. Seventhly, a class approach helps to locate the community of social analysts within the global class structure. The location is multiple and complex, given the north–south and gender divides. But the notion of ‘cultural capital’ helps to explain the general ideological and interest complex which determines the thinking and role of the invisible college of social scientists. Inasmuch as the process and content of contemporary capitalism, in contrast to domestic national conditions, is much influenced by international lawyers, the class location of the invisible college has significant implications for realizing a peaceful and just world order. xv

In sum, this book introduces the idea of a class approach to understanding contemporary capitalism by examining: (1) the concept of class in Marxist theory and the “death of class” thesis; (2) the possibility of “global classes” within the global society; (3) the emergence of a transnational capitalist class as a driver of globalization in both the developed and developing world, and its impact on the global society; and (4) the concept of the transnational oppressed class and the nature of its global class struggle. Globalization is both a fact of life, principally in economics, technology and communication, and an international view of the world. It needs to be considered in terms of its inherent ambivalence and contradictions: it can, for instance, promote cultural and scientific exchange, but it also facilitates coordination between criminal organizations; through the dissemination of human rights it may help to give greater freedom, but may also destroy cultures or inflict damage on traditional economies. In fact, the deepening economic crises in Europe and the United States are provoking contrasting socio-political responses from the working and middle classes. In Europe, especially among the Mediterranean countries (Greece, Spain, Portugal and Italy) unemployed youth, workers and lower middle class public employees have organized a series of general strikes, occupations of public plazas and other forms of direct action. At the same time, the middle class, private-sector employees and small business people have turned to the “hard right” and elected, or are on the verge of electing, reactionary prime ministers in Portugal, Spain, Greece and perhaps even in Italy. In other words, the deepening crises has polarized Southern Europe: strengthening the institutional power of the hard right while increasing the strength of the extra-parliamentary left in mobilizing ‘street power’. In contrast, in Northern and Central Europe the hard right and neofascist movements have made significant inroads among workers and the lower middle class at the expense of the traditional centre-left and centreright parties. According to a study of workers support for far right wing parties in Western Europe, “workers have become their core clientele”. See Daniel Oesch “Explaining Workers’ Support for Right-wing Populist Parties in Western Europe: Evidence from Austria, Belgium, France, Norway, and Switzerland” International Political Science Review 2008: 29; pp. 350 -373. The relative stability, affluence and stable employment of the Nordic working class has been accompanied by increasing support for racist, anti-immigrant, xvi

Islamophobic parties. That is, while some of the motivations of the workers vary, the far-right wing parties are the beneficiaries. In the case of the United States, with a few notable exceptions, the working class has remained a passive spectator in the face of the right turn of the Democratic Party and the hard right’s capture of the Republican Party. There are no left wing street politics in the US, unlike Southern Europe, and only a passive rejection and repudiation of the hard right policies of Congress and the White House. Rather than solidarity, the economic crisis highlights working class fragmentation, disunity and internal polarization. One of the key reasons for the growth of right wing appeals to Northern European workers is the demise of working class-based ideology, parties and leaders. The Labour and Social Democratic Parties have initiated and administered neoliberal programs while promoting multi-national corporation-led export strategies. They have embraced regressive tax ‘breaks’ for big business; they have participated in imperialist wars of aggression (Afghanistan, Iraq and Libya); they have embraced the so-called “war on terror” mostly against Moslem countries while tolerating the growth of the neo-fascist, far-right Islamophobes who practice “direct action” to expel immigrants in Europe. The European governing parties of the centre-left (social democratic and labour) and the centre-right(Sarkozy, Cameron and Merkle) have been outspoken in their assault on “multiculturalism” code-word for Muslim immigrant rights. Their tolerance and exploitation of Islamophobia serves as a cheap vote getter among their xenophobic electorate and as a justification for their involvement in US-Israeli wars of aggression in the Middle East and South Asia. As a result the “mainstream” regimes have weakened working class solidarity with immigrant workers and undermined any concerted effort by the state and civil society to actively counteract the neo-fascist racists who ply a more virulent version of Islamophobia embracing the Zionist ideologues’ vision of ethnic cleansing. The trade unions have lost membership due especially to the growth of ‘contingent or temporary workers’ who are especially susceptible to far-right appeals. Equally important, trade unions no longer engage in political education aimed at strengthening class solidarity among all workers. While in Northern Europe wages may increase, the trade unions’ collaboration with the corporate elite has left workers vulnerable to anti-immigrant and Islamophobic propaganda. xvii

In this context, a perverse “class struggle” pits the unorganized workers against those “below”, the immigrants. The neo-fascists gain by promoting and exploiting cultural and chauvinist beliefs which trade unions and social democratic parties no longer actively combat through worker education and class struggle. In other words, the neo-liberal practice and ideology of the “centre-left” parties and unions undermine class political identities and open the door for right wing penetration and influence. This is especially evident when centre-left and trade union leaders no longer bother to consult or debate policies with their members: They impose policies from above, providing the ‘far right’ with a formidable weapon to attack the ‘elitist nature’ of the centre-left political system. In contrast, in Southern Europe the profound economic crisis, due in large part to the harsh conditions imposed by Northern and Western European bankers and their local centre-left and right-wing politicians, has strengthened and sharpened class consciousness and politics. Right-wing appeals to anti-immigrant and anti-Moslem politics has little resonance among Southern European workers in the face of skyrocketing unemployment and brutal wage and pension cuts. Northern European workers have allied with the right, and their own politicians and bankers, in demanding the imposition of greater austerity measures against Southern European countries, buying into the racist ideology that Mediterranean workers are lazy, irresponsible and on permanent vacation. In fact, Greek, Portuguese and Spanish workers work a more days per year, enjoy less vacation time and much less secure pensions. The same racist sentiments pitting Northern workers against immigrants also promote chauvinist stereotypes against militant Southern European workers and fuel right-wing sympathies. Creditor Northern European bankers and political leaders squeeze their own working and middle class taxpayers in order to bail-out their counterparts among the Southern European debtor elites, who, in turn, agree to squeeze their workers and public employees to meet the debt payment demands of the North. The Northern workers in the imperial countries have been convinced that their living standards are threatened by the irresponsible and indebted South, and not by the speculative activity and irresponsible lending of their own bankers. In the South, the workers have to shoulder the double exploitation of the Northern European creditors as well as their own xviii

local elites; hence they have greater class awareness of the injustice of the imperial and local capitalist system. To the degree that Northern workers make common cause with their own creditor ruling class and shift their resentments toward workers abroad and immigrants below, they become vulnerable to right wing appeals. They openly express resentment against striking Greek, Spanish or Portuguese workers’, whose militant struggles might disrupt their planned vacations to the Mediterranean islands and seashore resorts. The ideological battle which should pit the workers of Northern Europe against their own state creditors and speculator financial elite is transformed into hostility toward Southern European workers and immigrants. Overseas bailouts, imperial wars and cuts in social programs lead to greater competition over shrinking social expenditures and conflict between employed and unemployed, ‘native’ and ‘immigrant’ workers’. International workers’ solidarity has been severely weakened and replaced, in some cases, by the proliferation of international far-right networks propagating virulent anti- immigrant (and anti-socialist) propaganda and, as in the case of the massacre of almost 70 left-wing youth, mostly teenage, activists of the Norwegian Labour Party, poses a direct murderous threat to progressive supporters of immigrant rights. The extreme-right began its assault on immigrants and Moslems and has now moved against the local left and progressive movements which support them. This has taken on an even more complex dimension with the marriage of rabid pro-Israel, Zionist ideologues (mostly based in the US) and the neofascist Islamophobes attacking supporters of Palestinian rights, an issue repeatedly stressed by the Norwegian fascist mass murderer, Anders Behring Breivik. The problem is that the ‘respectable’ liberal, social democratic and conservative parties, in their electioneering, have pandered to the antiimmigrant, anti-Muslim appeals of the far-right in order to attract workers rather than embarking on far-reaching class reforms which would lessen inequalities, financing them via increases in progressive taxes and greater public investments to unify all workers (local and immigrant) against capital. Lacking working class solidarity, the sons and daughters of immigrants, especially the disproportionately unemployed young workers, engage in forms of direct action such as the pillage of local business, confrontations with the police and general mayhem, as was evident in the nationwide riots in England in the “hot August” of 2011. The demise of working class politics xix

thus has produced violent right-wing extremism, racial-immigrant riots and pillage. The labour elite are spectators, confined to condemning extremism and violence, calling for investigations, but without any semblance of selfcriticism or any programs for changing the socio-economic structures that produce the right turn and violence among workers and the unemployed. In the United States of America, the rise of the Right is obvious. Unlike Europe, the extreme right is at home within the US established order. Brutal anti-immigration policies have led to the expulsion of nearly 1 million undocumented workers or family members in the first three years of the Obama regime (a three-fold increase over the George W. Bush years). The Tea Party has elected Congress members in the Republican Party who promote massive cuts in the social safety net with the collaboration of the White House. The mass media, Congress, the White House, mass- based Christian fundamentalist politicians and leading Zionist personalities and organizations actively promote Islamophobia and lead virulent campaigns against Moslems by fanning public insecurity. The US ‘establishment’ has pre-empted the racist agenda of the far-right in Europe. The far-right has turned its guns directly on the social programs of the poor, the working class and public employees (especially school teachers). Moreover, their assault on debt financing and public expenditures has led to conflicts with sectors of the capitalist class, who are dependent on the State. In the course of the recent Congressional ‘debate’ over raising the debt ceiling, Wall Street joined in a selective struggle against the far-right: calling for “compromise” involving social cuts and tax reforms while supporting their anti-public union offensive. Unlike in Europe, the mass of the US working class and poor are passive. They have been neutered: neither engaging in the street riots of England, nor taking the sharp right turn of their Northern European counterparts, nor participating in militant workers’ strikes of Southern Europe. The US trade unions, with the exception of the public employees union in Wisconsin, have been totally absent from any of the big confrontations. The American trade union bosses concentrate on lobbying the corporate Democratic Party and are incapable of mobilizing their shrinking membership. The Tea Party, unlike its Northern European counterparts, does not attract many workers because of their virulent attacks on popular public programs, like Medicare, Medicaid, unemployment insurance and especially xx

Social Security all of programs most likely to benefit American workers and their families. On the other hand, the economic crisis in the US has not led to Mediterranean-style mass action because American trade unions either don’t exist (93% of the private sector is not unionized) or are compromised to the point of paralysis. So far, the US working class is a spectator to the rise of the extreme right, because its organized leaders have tied their fortunes to the Democratic Party, which, in turn, has adopted significant parts of the far right’s agenda. In sum, the US, in contrast to Europe, is experiencing a peaceful transition from neo-liberalism to far-right politics, where the working and middle class are passive victims rather than active combatants for either the left or the right. In Europe, the current crisis reveals a deep polarization between the radical left turn of workers in the South and the growing shift to the far right among workers in Northern Europe. The ideal of international worker solidarity is being replaced, at best, by regional solidarity among the workers of Southern Europe and, at worst, by a network of rightist parties in the Northern European countries. With the decline of international solidarity, chauvinist and racist tendencies are rampant in the North, while in the South workers’ movements are joining with a broad range of social movements, including the unemployed, students, small business people and pensioners. While the electoral right is capitalizing on the disenchantment with the centre-left in Southern Europe, they still face formidable resistance from the extra-parliamentary workers and social movements. In contrast, in Northern Europe and the US, the far-right faces no such conscious opposition – in the streets or in the workplace. In these regions only the breakdown of the economic system or a prolonged severe economic recession combined with devastating cuts of basic social programs and protections may set in motion a revival of working class movements and hopefully, it will be from the classconscious left and not from the far right. While it is difficult to determine to what extent globalization is directly responsible for starting or prolonging certain conflicts, the economic aspect is probably an increasingly important factor in many contemporary conflicts. Resistance against globalization and the struggle, which may sometimes be violent, to preserve a cultural identity are other factors to be mentioned. The globalization process is serving as a template for terrorism and international endeavours to combat that particular form of violence, with the risk also of xxi

oversimplifying the causes of the phenomenon and the challenges it presents. This risk is due to a misunderstanding of the contending forces in contemporary capitalism. Class Struggle, Commodification and Modernized Society Is class struggle still relevant? The relics of decaying leftist movements would still like us to hold onto this bit of his-story long past its due. Class struggle undoubtedly has its specific origins within the rise of industrial society. The stages of society permeating the social turn in emphasis on production from food rearing to specialization within the varying fields of material goods that accent the idealistic wealth of the times. Agrarian societies certainly had their rich, but most class warriors will focus their attention towards the industrial age that will follow (a detail that will always cause a major problem of historical analysis in the class struggle perspective). Has there been a rise and fall of class struggle? The rise of class struggle, in the industrial sense that it is most commonly referred to as, comes along during the ages of increasing mechanization and automation. A steady increase from human based power sources to machine based. The technological “advancements” made during this progression made a huge impact on the degrees of severity felt by the working class (the producers). Needless to say, this was accompanied by increasing profits for the upper class (the owners). It seems extremely important to recognize the differences between the societies of that time and now. The consumer society we live in now is a world apart from the industrial period of yester years (Granted that the same situation still exists, but has just changed on scale considering that the industrial process has not yet been fully automated, but relocated into the extending ‘labour pools’ of second and third world peoples thanks to our globalizing economy.). The vast amounts of labour required by industrial production, and the little amounts of wealth left off to the working class, made such nuances as general stores and vast shopping areas close to nonexistent. The service sector was therefore a mere percentage of the workers, compared to our current society in which this makes up the majority of work being done. This constant force of dividing labour into more mundane and meaningless positions has completely altered the face of the work force. The worker in our modern stratified society has become even further alienated xxii

than the pre-Ford assembly line factory models that Marx spoke of. The effect, in turn, has caused an even greater loss of individual ‘meaning’ in a society flooded with workerist ethics. The industrial factory worker slaving away on an hourly wage is a commodity. This is indisputable. The economy turns us all into prostitutes for the capitalists, merely renting our bodies and abilities for the designated economic value (always in light of the capitalist demands or those they have cleverly crafted for the yearning workers [which of course, is all we really are within the religion of economics]). In the period spawned by the times of heavy industrial maturity, we still become further alienated as commodity value. The intrinsic capitalist interests in having producers are of a different nature than the capitalist interests in consumers, a tender breed. While the latter requires more attention and gratification (the effects of synthetic and virtual e-gratification are huge issues in themselves), the industrial worker requires a strict reinforcement of social position as dominated in the physical sense. This is central to an understanding of our current dilemma. The industrial worker has a clear function within the realm of production. The workerist ethics of our society are born of this situation, and therefore, the industrial worker will be prone to a larger sentiment of solidarity within that context. Doing something so inherent to our way of ‘life’ creates a profound sense of worth for a large portion of the vanishing industrial worker class (that of which is idealized by the roots of class struggle), despite the blows made to this by the increasing roles of specialization and automation. The Ford model assembly line of production has in itself been one of the more severe forms of modernization within the factories, and serves as an example for the sentiments within the overall post-industrial society (highlighted by an increasingly economically stratified society, with a constantly raising ‘standard of living’ accompanied by further stretches towards ultra-rich and its bastard child, ultra-poor). This has only been aided by the atmosphere of corporate assimilated unions, which carries forth a greater blow towards notions of worker solidarity and nurtures the disillusionments of capitalist fantasies. The industrial worker was well aware of their role in industrial society as their most recognized value was as a producer. This creates a contingency within the working class, which was easily identified, and even more easily aligned with. It is clear to see that such a context will only bring rise to xxiii

worker solidarity, of a oneness through the community of exploited. The industrial worker of this era was definitely a commodity to the capitalist system, but within that system, there existed a community, which produced its own value system (while we will clearly recognize the notions that were carried over from their other selves). There was a definition and multifaceted existence of a working class; it was clear and apparent to everyone. Such notions as class-consciousness were hardly radical or economic fringe notions, but a daily reality that could be seen everywhere. It should be no surprise that socialist, communist and syndicalist ideologies would find a place within that era. Yet, contemporary class strugglers aren’t willing to let this go. For some the ‘working class’ remains a constant infallible section of society that no matter what happens, they have their working class solidarity. It is likely such never existed, but any radical theory is going to have to be realistic about the situation they are in and just whom they are dealing with. The Death of Class-Consciousness? The ideals of class struggle (the movement that a conscious, working class could take over the means of production and base a society ‘each to their own needs, from their own abilities’) are of course contextual (not to mention faulty, as we can see from a plentitude of perspectives in hindsight. This includes the environmental effects of industrial society as a whole on the planet. The general mood of the industrial era was going with the flow of the capitalist vision of constant progression and of worth in the industrial system (with obvious exceptions as the Luddites). The permeating notions of ‘Progress’ and emphasis on the level of production and standard of living were taken as a norm. The working class was usually a bit more optimistic about the distribution of wealth accumulated, but taking into account the areas of immersion with capitalist conceptualizations, it seems that the outcomes of such a society would still hold to be as lethal as our own (an issue to be dealt with in coming sections). The most conflicting aspect of Class Struggle and our current society lies here. The times have drastically changed and the attitudes of classconsciousness that were once flagrant in industrial society have been lost into the pages of his-story. Where there was at one point a position in society that a mass of people could relate to, there now exists a field of competition and xxiv

the lines have all been blurred. There is no solid working class that can identify with the mass collectivized movements that characterize class struggle. Even if such a group did exist, there are few means of productions remaining for them to take over. There is undoubtedly a large portion of the population, just within the belly of the beast, who would definitely constitute a poor ‘class’. The entire notion of work has been completely revamped to fit with the new economy, the almost fully automated workplace, and the ever-expanding realm of the service sector. It is very unlikely to find a solid mass of working class enthusiasts working in supermarkets and super outlet stores. Are there some remnants of organizing labour and class-consciousness? Yes, but the large portion of Marxists and Class Warriors are not out in the mainstream, but in academic pockets of universities or the downsizing remains of factories. There is a reason behind this, that simply is that the exploitation is all still there, but there no longer remains a massive community of consistency that those workers can relate too. The entire face of work has been forever changed. The Effects of Commodification It is clear that capitalism is not only a formation “conditioned by religion,” but it is an “essentially religious phenomenon,” albeit one that no longer seeks to connect humans with the mysterious forces of life. Capitalism calls on human societies to embark on a ceaseless and futile quest for money and goods. The means by which the money and goods is obtained is rarely subjected to moral scrutiny. Only the quest is important, not the means. This untiring quest perpetuates a culture dominated by guilt, a sense of inadequacy and self-loathing. It enslaves nearly all its adherents through wages, subservience to the commodity culture and debt peonage. The new forms of wage slavery have had profound effects on the contemporary worker. Long gone are working situations in which one can expect to be in the same place in 10, 20, or more years (although who really wants to be?). The centuries of being valued in terms of productivity, output, and all the other economic equations of degradation, have scared the mind to think in no other terms. The bounty of being the ‘affluent society’ has left us with a whole new set of institutions to further alienate and mediate our existence. The backlashes have been unforeseeable. xxv

Just with the solution to eliminating child labour (forced schooling) has been another depravation of childhood; the most important time for personal development and laying out the limitations of one’s own future (see Paul Shepards’ Nature and Madness.). Not that work should ever be considered the alternative; the ‘civilized’ solution to the original problem has hardly helped the image of the word ‘humane’. The child is now forced to spend the majority of their days until the age of 16-18 (at least within the United States) within the confines of one of the more efficient socializing devices available, the school system. It is in this institution that the children are soaked with the glorious, selfgratifying his-stories of “their” own trials and tribulations. From the beginning of the day, when they are subjected to the ‘Pledge of Allegiance’, through mind numbing hours of conditioning to the scientific state of mind. The world is laid out, flat on paper, as the map of Empire, subjected to the simplistic equations of mathematicians, the proper dialect of language, the etiquette of proper domestication, and the Pride of being part of the greatest nation to ever grace the face of the flat planet depicted by graphs. Any way you look at it, you come out the product of the capitalist system. The wellrounded consumer: the tuned, efficient worker to further the cause of progress. In this we will find that we end up in distinguishable social classes. However, the subjective classes of today are very much different from the set social standings of industrial society. The citizen of post-industrial society is not the conscious industrial worker by any stretch of the imagination. The end product of the early socializing pattern is eager and ambitious. No longer going to be content with a set social standing, but constantly looking up and forward into a dreamy future of becoming wealthy (more of a disease than ghetto anymore). To be a part of the economy of today is far from that of the inclusive workers of industrialism, and anyone who has been subjected to this degradation knows it. The current working class is hardly any concrete orientation or job category. If we attempt to draw lines as to who is where, we will find more people belong to the middle class than anything, the truth of the matter is that the structure of our society does actually have loopholes that make it possible for the poorest of poor to become superrich. In fact, such occurrences are highlighted excessively to keep such a loophole as being seen as a possibility for all (the reality being that capitalism will always require xxvi

its’ ‘shit pool’ to rob at will, generally consisting of the natural environment, but always inclusive of the poor [poverty itself being the creation of such an intrinsic capitalist need]). In modernized society, there are no setlines, and that is the selling point of the ‘free market’. Essentially anything is possible (most definitely including its’ own destruction), but the reality, as class strugglers have constantly kept in light, is that the whole society is ‘unjust’. The capitalist system is dependent upon its mainframe of exploitation. This should come as little surprise to most readers here, which in itself could be seen as a kind of monument to the past ‘fellow workers’ dedicated to the class revolt (not that this was any great feat, in ever emerging trend there are always the whistleblowers). The notion of set social classes in modernized society has less base in reality as all lines are being blurred in the upsurge of capitalist-utopia delusions flood the ‘common’ vision, better sold as ‘OUR future’. In almost every aspect within our current condition, commodification has succeeded with the influx of misguided notions that we can all be rich. Whatever forms that notion reappears; the individual in consumer society sees the world in terms of capitalist value. The notion that food grows on trees is not seen as much of a truth, but a pipe dream, and generally a not very preferable one. The new domestication (preferred enslavement to technological industrial society) has taught us that food is not something that exists freely, but can be purchased freely at the many convenient supermarkets that have become a sick satire of the simplicity of finding food in pre-agrarian society. There are, and always will be, exceptions to this. The many ‘revolutionaries’ that live off the fringes of our urban lifestyles are as much dependent on this way of ‘life’ as those who sell their life away at an hourly wage. While the individual sickness of existing in such a world is surely clearly different, one cannot realistically recommend a large-scale revolutionary current of dumpstering and/or stealing food. The simple truth of the matter is that our society is not any kind of strict class society, regardless of how academics and social theorists map it out. Such a notion is not merely coming from a refusal to confront one’s own ‘privileges’, but from taking in the obvious observation that our society is structured in a completely unique manner, although as with all capitalist systems, the rich are becoming richer, and the poor are becoming poorer. This alone, however, is by no means any indication that class will be, or should be, the determining xxvii

factor for insurrection or revolution. People know that they’re being fucked, the poor know who is rich, but there is no comfort in being a part of a social class. This is why class struggle has continually lost its large-scale devotion and is only met by more cynicism. The passive nihilism of consumption has absorbed and resold us as many packages of helplessness as can be imagined. It is always possible to break through that domesticated mentality, but the attempts to do so through a dated movement as class struggle has hardly proven to be much of a solution to the problems intrinsic to this way of ‘life’. One need only spend at least a little time with the working class of our society (the extreme poor being another ‘class’) to realize that there is little interest with re-arising as a massive class determined to take the means of production and distribution into their own hands. The drive to find avenues to venture further into the patently optimistic self-reflection of our society (pounded with the required capitalist reminder that ‘we have never had it so good’) the downtrodden of our society will be more prone to taking this to heart. Ones’ social situation is taken less as a way of life, but as an indication of the effort one has put into ‘bettering’ their own situation. The scenario has succeeded in drawing many further into the beast than making radicals or class-conscious individuals. The stratification of social standing has only furthered alienation from collective efforts in exchange for a bloodthirsty lust for competition. The Dangers of Industrial Society There is no sanctuary in an idealized world of industrialism. The mode of thinking at the time (although still ever stronger in our own time) was on a collision course with the disasters that accompany any society that places such excesses on the environment and the peoples in the culture. This way of living, as best exemplified as our current society that has kept on the path laid out well before the industrial era, has an internalized mechanism that will always cause its own downfall. That is the aspect of continual growth that has remained a constant in civilized society. An industrial system is based upon a readily available and determinable system of agriculture to provide for the new centralized mode that has been developing alongside the whole. With industrialism, we have a situation in which the common necessary resources pertaining to food rearing and distribution have moved from being the base of all occurrences within society, to becoming a support network for xxviii

the newly emerging base, production. Capitalism (a symptom of the civilization which sprouts it) has always been dependent on a centralized system of distribution, thus granting power to those in the centre, the government. The power in this sense has no longer been left in those who merely produce the foods (the increasing development of new technologies and methods involving and based upon automation have built upon the now century old systems of rearing and brought about a climate of greater manipulation to enhance production). In a sense, the age-old problem of providing adequate food is being dealt with (the overall ecological impacts still out of sight, to only later reappear to give a good kick in the ass, this however, was not something that would necessarily cause immediate problems for said society). The problem with overcoming this hurdle is that, as human history has shown, the excesses of food have come hand in hand with expansion in population. The system is faulty in that there is no means to essentially enact bounds upon the population. The span of human life within mass society, especially pertaining to fixed living situations, primarily the vastly growing industrial cities (made possible by increasing abilities to move food), has been marked by the common occurrences of outbreaks of diseases. In any other society, this would in essence be one method of keeping the population in check. The civilized response in turn has been to consistently ignore the warnings, find a quick solution and carry on full speed (the problem of increasing immunity to super antibiotics should come as no surprise, our modern medicine is meant to ‘heal’ in the most superficial immediate sense of the word, we are constantly finding the downfalls of such an approach). What this means is that industrialized living, without any kind of massively implemented program of limitation, will always be bound to the situation of constant growth (these programs, as even failures in historical senses, will lead towards fascist tendencies, and the likelihood of their success should be considered as ridiculous as past attempts to ‘weed out’.). The costly effects of which have been dealt with in great deals elsewhere. There simply cannot be (and we are seeing increasingly that there should not be) a sustainable or suitable industrial society, which is the only ideal society for the outcomes of class struggle.

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The Revolt Against Work It is becoming increasingly clear that the problem is not whom is the boss (be it an individual, a corporation, or the majority of the ‘working class’), but that we have to work at all. We are always looking for the ‘path of least resistance’. Communal work is still work, especially when it feeds the production/consumer dichotomy. Every bit of work we do, especially any that would be available should the class struggle wish to attempt to maintain cities, feeds the alienation that accompanies life within a synthetic reality. There is hardly anything that can be done anymore that a person can see a process all the way through. There is very little sowing and reaping of harvests in cities (overlooking the fact that there is little glory in this tediously mechanistic labour, despite what the peasant idealizers would suggest), or any kind of sustaining project. The larger the society, the less ‘meaningful’ work there is to be done, but there will always be those ‘little things’ which become necessary in order to provide for the whole. It will therefore always be someone’s’ job to produce and maintain such things. Any way you look at this, it will always be work. It is not much of a stretch to see the possible joy of communal food gathering or production (most especially by the endless possibilities of doing this on an individual basis), but it really stretches to think that there will be that same feeling of enthusiasm and joy for building tractors and all the mundane shit work that would have to make such an event possible. This is a realistic feat that class strugglers have downplayed. Granted post-capitalist/civilized situation is going to be filled with obstacles, but it seems clear that some are easier to just skip entirely, the industrial system being one of the more obvious of choices. The Transitory Dilemma It is not at all uncommon to hear of class struggle as a means to an end. As has been shown in the previous pages, however, that seems very debatable outside of certain industrialist areas. This brings light to the whole notion of possible transitions from a capitalist/civilized order, a constant sore spot in revolutionary theory. It seems that to merely have a vision of what is likely or possible must be accompanied by a play-by-play scenario with how to jump from here to there. That aspect of revolutionary theory xxx

seems, at most, to be almost completely useless as any kind of praxis. Revolutions failing have hardly been due to a lack of guidelines, but exceedingly more common is the failure of oversight. This aspect of theory is where we will most likely find the traces of civilized thought that refuse to let go. For some reason or another, the possibility of revolution occurring spontaneously is always upheld, but moving beyond is hardly given much credit. Transitory theories are laid out from every angle, but why is it that we think that those theories will work? In most cases, it seems that those ‘stages’ are a progression of letting go of certain vices of capitalism. For class struggle, that vice would be the notion of a ruling class, bosses. For others, those vices could be centralized governing structures, some could be schools, some could be work, but what could really be more utopian than the thought that there will be some massive, voluntary downgrading of civilized vices? Why do we think we could get so far, but still ‘need’ this and that, or that something will spark in people and put them in the position to be ‘enlightened’ into groupthink? I would never claim to possess any special or original knowledge on the subject, but it seems that if we are serious about taking out this way of life, that it would do us much better to work at dismantling all this as many ways as we can. I don’t think making up possible scenarios for what may happen will be as successful as attempting to take this whole thing out of commission. Not that anyone one can do that, but if there is going to be anything, why not that? We live in a very fucked up society, and there is arguably more depression and alienation now than ever, but people aren’t going to always just give up on it. And no matter what anyone thinks, those grips they have on capitalist society aren’t going to stop the inevitable collapse from happening. It seems apparent that any realistic revolutionary praxis would lie in welcoming the inevitable and working to make the crash not so harsh as it would be. I will be the last to say that many transitory actions are worthless. Certain acts, especially permaculture and other attempts to help ‘rewild’ our lives and our bioregions, are absolutely vital to the permanence of this planet and life on it. Movements that attempt to stop civilization from destroying all wildness play an extremely important role. Actions that seek to help people overcome the alienation and depravation of our mediated life are some of the most important ones. These are all important things, but we should always xxxi

take them just as what they are, things that lessen the blow and make life more meaningful again. Colonization and its Discontents The problem that has commonly been overlooked (or in even worse scenarios, assimilated) by class strugglers is that the new nations that are being brought into the global economy are intrinsically different from our own situation. For class struggle to have any real meaning to those who are in the processes of being colonized (despite the mass media conceptions, this is most definitely non-voluntary for the most part) they would have to further move into the capitalist economy and continue the process of industrialization (which Marx and Engel’s had been known to suggest they ought to do). So the destined path of humans, as pushed by the colonizers, remains that progress and development are the reason for our existence. Even from the supposed ‘resistance’ movements within the ‘first world nations’, the colonized are given no chance to remain autonomous. (This debate has been pursued for some time now, and a bit of it has been well chronicled in Marxism and Native Americans, edited by Ward Churchill.) Is the above situation a per se aspect of class struggle? Not necessarily, but none-the-less, it is an aspect of the greater indication of the limits that class struggle offers, and highlights the minute contextual basis that it currently holds. This is what globalizing capitalism is working off of, and further evidence of the need for a total revolution. There are no more means of production that exist to be taken over, or at least any that would provide any kind of sustenance for societies, unless they remain within the globalized economy. It simply is not going to provide any good for the sweatshops to be seized by the workers, the clerks to seize control of the convenience stores, the relocated farm hands to seize the control of the harvest, the rig workers to seize control of an offshore oil rig. The examples could go on, but they all point to one thing, that is the inevitable fatality of this way of life. If we are going to move beyond this, it is going to have to be something intrinsically different from the direction we are heading.

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Contemporary Revolt To conclude, we come back to the initial question of, “is class struggle still relevant?” It seems, that based on a more broad based analysis of our current situation that class struggle is relevant, but that its’ relevance is becoming increasingly less important to the end of our current exploitative framework. The role of class struggle, as a historical and cumulative effort, will forever be a part of revolt against civilization. The State is best maintained by a fluid changing of situation, as a form of progression, but also serves a greater function of severing the movements of revolt from their earlier forms. With this understanding, we must always consider the changing times require new perspectives against the common delusions of things being forever ‘better than before.’ Such is the way that the totality of civilized thought seeks to eradicated and neutralize any radical currents into a state of passive nihilism and further assimilation into the faceless masses of existence. The present, in its current standings and the resistance to it, has been shaped by the history of class struggle (on top of all those who throughout the past of civilized existence have fought to keep the Megamachine from expanding). I’m personally reminded of these things on a daily basis, as is everyone within our society so prone to building monuments to itself. Here in western Pennsylvania, within range of Pittsburgh, one can everywhere see the his-storical jabs that the capitalists have made. Not far from here is Carnegie-Mellon University, across the city is Carnegie Science Center, throughout the city and surrounding areas you will find the many Henry Clay Frick parks and hospitals. One who is aware of the social past of these industrialists and their deadly social endeavours (the community contributions of Frick and his Pinkertons lay great example), can only feel a greater feeling of solidarity for such class warriors as Alexander Berkman for making their stand and (literally) taking a shot at the capitalist system. Revolt against this system will always require critical analysis with stress on historical resistance, but we can never dwell upon anyone more than others can. We are people with a plentitude of origins that create our subjective reality. It seems apparent that revolt aimed at dismantling the giant beast of civilization will require constant adaptation to the current situation. So perhaps the initial question should not be of the relevance of class struggle, but the role in which class society has played in the creation of our current society and how that may help us dismantle it. xxxiii

Political protests or class struggles against neoliberal globalization, corporate power and the inequities of contemporary capitalism are increasing all the time. Demonstrations in Seattle, Prague, Genoa Tahir Square, and elsewhere have fuelled the debate on the possibility of a radically different future. This book is on the problems of globalization and the evolution of class struggle in contemporary capitalism. It provides a cohesive critique of the weaknesses of the existing system and puts forward a new agenda for anti-capitalist thought and action. Covering key issues such as globalization, the nation state, money and finance, conflict and war, change, the environment, class struggle, economic crisis, capitalism in the Third World, the collapse of the USSR, and the transcendence of capitalism, this book promises to be an ideal introduction to some of the most pressing problems of our time.

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Chapter One Historical Overview Overview Historically, social class and class inequality constitute a core area of study in sociology, and the social sciences in general, and are the basis of the study of class relations and class conflict on a global scale, especially under conditions of contemporary neoliberal globalization. Societies have been divided along class lines ever since the development of social classes several thousands of years ago. Based mainly on property ownership, but also income, wealth, and a number of other dimensions, social classes have developed and become a familiar feature of societies across the globe–from early despotic empires through slavery, feudalism, and modern capitalism. Introduction Social classes and class conflict have defined social relations ever since the division of society into hostile classes based on the exploitation and oppression of one class by another. This has become especially important in modern capitalist society through the globalization process, where class divisions have solidified with enormous inequalities in wealth and income that are the most glaring in the history of humanity. Class and Class Conflict in the Age of Globalization present a macro-sociological analysis of class and class conflict through a comparative-historical perspective. Focusing on class as the motive force of social transformation, let us explore class relations and class conflict in a variety of social settings, stressing the centrality of this phenomenon in defining social relations across societies in the age of neoliberal globalization. Historical Flashback Let us start by reminding our readers that globalization is not a novelty. Capitalism has been of a global character since the time Europeans began setting up colonies in the 1400s. Colonial economies were organized to suit 1

the needs of the core countries of the capitalist world system (Chase-Dunn, 1989; Frank, 1978; Wallerstein, 1974). Although the principles of globalization have been around for the “longue durée,” there are nonetheless several elements of globalization that are widely accepted as representing the current phase of global capitalist development. The increasing interconnectedness of markets, finances, goods and services, and the growing stature of transnational corporate networks heavily influence the economic, political, and cultural processes of globalization today (Chase-Dunn, 1999). Cvetkovich, et. al. (1997) notes that this influence involves creating a new world market, new transnational political organizations and a new global culture. This process of globalization is not linear, but rather involves a dialectical relationship between its economic, political, and cultural dimensions that often appears contradictory and chaotic. Economics The economics of globalization represents the contemporary process of capitalist accumulation. This process is manifest through global commodity chains and a global division of labour, the global mobility of capital, the increasing concentration of industries into a small number of transnational corporations, the development of global regulatory institutions, and a shift in world trade from goods and services to financial instruments. At the centre of this process are international elites who have been able to bring the world economy under the domain of multinational corporations without losing the national economic priorities of the leading core states (Arrighi, 1994). Although the relationship between governments in the core states and elements of the international elite (the majority of the latter are citizens of core states) has been mainly harmonious, at times it is prone to tension and overt disagreement. Economic globalization can be demonstrated empirically by looking at the increasing percentage of world trade as a percentage of world production (Chase-Dunn, 1999). The Human Development Report (HDR) notes this increase in international trade: “world exports, now $7 trillion, average 21 per cent of GDP in the 1990s compared to 17 per cent of a much smaller GDP in the 1970s” (UNDP, 2000:25). This growth in international trade is necessarily accompanied by increasing transnational linkages in production, which is further facilitated by technological improvements undertaken by transnational corporations in core capitalist states. Economic globalization has accelerated because of the post 1960s “electronics revolution,” which “transformed the quantitative possibilities of transferring cash and money 2

capital into qualitatively new forms of corporate and personal financing, entrepreneurship, and, crucially, the system of credit on which the global culture and ideology of consumerism largely rests” (Sklair,1995; 1999: 150). In 1980 average daily foreign exchange trading totalled $80 billion, “today it is estimated that more than $1,500 billion changes hands daily on the global currency markets” (Ellwood, 2002:72). Politics The politics of globalization is represented by the emergence of global governance and the increasing contradictions between and within nation states. The central political tension of globalization rests between increasingly powerful transnational institutions (like the World Trade Organization, United Nations, World Bank, International Monetary Fund, as well as multinational corporations) and sovereign nation-states over the regulatory landscape of global capitalism. Globalization involves a shift in organization from a nation-state level to intra-regional and transcontinental levels of political organization. This means that the relationships between nation-states are increasingly mediated through institutions of global governance. Areas of national sovereignty are being redefined, in part because global financial markets require global governance to insure reliability and security. Even so, the control over global finance remains firmly embedded within the core financial capitals of Tokyo, London, New York, Frankfurt, and Paris (Mittelman, 1996). Core countries have a disproportionate amount of control over the institutions of global governance and thus are expanding their control over the global capitalist process despite the threats to their own sovereignty. Consequently, this tension affects political processes within nation-states as groups jockey to favourably influence state action within the context of global governance. This process is evident in bioagriculture, for example, where European and African nation-states are attempting to keep out genetically engineered grains produced by American agro-multinationals on the one hand, while the agromultinationals based in the US are influencing their government’s action to take their case to the WTO on the other. Culture. The culture of globalization is about the increasingly interconnected social world, which both weakens the uniqueness of national ways of living, local cultures and non-capitalist values, but also encourages a convergence of communication and style among diverse people throughout the world. The process of cultural globalization preferred by the international elite is one that incorporates the world community as consumers of goods 3

and services produced, developed, and distributed by transnational corporations – that is, consumerism of the western model is the dominant process of cultural globalization. Since the late 1970’s, multinational corporations have been targeting distinct social groupings via ethnicity, gender, class, race, and sexual orientation (Turow, 1997) in order to satisfy consumer needs and wants through the production, promotion, and delivery of goods and services (Oropesa, 1995: 215-244). This strategy of constantly dividing and sub-dividing the world is enhanced by “split-second” technology, that not only allows for the accumulation of detailed patterns of purchases by consumers, but also provides for the transmission of that knowledge in compact forms (like CD-ROMs) to any marketer with the money and the desire to buy such information. In this sense, global corporations have embraced multiculturalism in so far as it provides a vehicle to reduce active citizenship to patterns of consumption. That is, cultural differences are used to equate happiness and the realization of dreams to that of purchasing commodities. At the core of this ideology of consumerism is individualism; however, the internalization of this force for cultural homogenization is experienced in culturally specific ways. Although powerful, the cultural process of globalization can be interpreted using class lenses and thus provide opportunities for resistance. Today, globalization is both a fact of life, principally in economics, technology and communication, and an international view of the world. It needs to be considered in terms of its inherent ambivalence and contradictions: it can, for instance, promote cultural and scientific exchange, but it also facilitates coordination between criminal organizations; through the dissemination of human rights it may help to give greater freedom, but may also destroy cultures or inflict damage on traditional economies. While it is difficult to determine to what extent globalization is directly responsible for starting or prolonging certain conflicts, the economic aspect is probably an increasingly important factor in many contemporary conflicts. Resistance against globalization and the struggle, which may sometimes be violent, to preserve a cultural identity are other factors to be mentioned. The globalization process is serving as a template for terrorism and international endeavours to combat that particular form of violence, with the risk also of oversimplifying the causes of the phenomenon and the challenges it presents. 4

Post-Soviet World The collapse of the Soviet Union and its empire in Eastern Europe paved the way for a rapid expansion of liberal democracy into new territories. In Africa, Latin America, and Southeast Asia too, authoritarian regimes were replaced with elected ones, often because of popular uprisings. Scholars, politicians, and international bureaucrats now routinely speak of the right to liberal democratic governance as an emergent global norm (e.g., Franck 1992). At the same time, however, a growing number of people—in both new and not-so-new democratic states—have challenged the global celebration of liberal democracy. Nowhere are these challenges more strongly voiced than in criticisms of the dominant discourse of contemporary globalization, that of neoliberalism. The worldwide expansion of liberal democracy is integral to neoliberal narratives of economic globalization; free trade, free markets, and free elections, it is regularly asserted, go together to produce “market democracies.” The desirability and necessity of liberal democracy is promoted and enforced through global institutions such as the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO), as well as international and regional organizations such as the G-8, the World Economic Forum, the European Union (EU), and the Free Trade Area of the Americas (FTAA). The global expansion of liberal democratic polities is thus linked directly to the continuing extension of capitalism to new spaces and the growth of world markets and multinational or transnational corporations to service them. The dominant discourse of globalization is overwhelmingly corporate or neoliberal globalization and the celebration of liberal democracy is part of it. In the past, massive protests against neoliberalism have occurred at many “ritual celebrations of economic globalization” (Ericson and Doyle 1999, 589), including the WTO meeting in Seattle (1999), the IMF–World Bank meetings in Washington and Prague (2000), and the EU summit in Gothenburg and the G-8 summit in Genoa (2001) (Giuffo 2001). Defence of democracy, and calls for its deepening and enrichment, lies at the heart of the struggle against neoliberalism. As Stephanie Ross points out, “A central element of the movement’s critique of contemporary capitalism is that corporate power organized on a global scale undermines the capacity of citizens and national communities to make independent decisions about 5

social, economic and political priorities” (2002, 281). Neoliberal globalization, in other words, “eats democracy for breakfast” (Kingsnorth 2003, 122). Protests against corporate globalization are almost invariably protests in favour of democracy. In this book, we explore the relations between globalization and democracy as they emerge in the class struggles against neoliberalism. Let us note in passing here that neoliberalism is the ideological expression of the return to hegemony of the financial fraction of ruling classes. The meaning of this movement can only be understood from a historical perspective. Modern finance, linked to the real economy, appeared in the wake of the structural crisis of the late 19th century. It lost its unrivalled domination, when the Keynesian compromise was ushered in by the succession of the great depression and World War II. Its return to power followed the crisis which began in the 1970s. The class character of neoliberalism is evident from an examination of the available figures. It prolonged the deficient profit rates of nonfinancial corporations and, thus, slow growth and unemployment. It was responsible for the deficits and the growing indebtedness of the states, as well as for the crisis of the debt of third-world countries, etc. But not enough attention has been paid to the benefits that finance gleaned from its return to hegemony during the crisis: the stunning rise of the profits and growth of the financial sector, only delayed in the US by the banking and thrift crises of the 1980s. It is not that finance organized to minimize its own costs during the crisis. It actually benefited from the crisis in amazing proportions, already during the crisis as in France, or after as in the US financial sector. One should not underestimate the sufferings of the unemployed and homeless, or of third-world countries. But perhaps the biggest cost stemming from the rise of finance is the increase in the domestic and international instability. The emergence of neoliberalism in the early 1980s must be interpreted as a political move of the ruling class of capitalist owners, whose dominance had been subjected to significant limitation since World War II, and whose income had been considerably diminished by the rise of inflation during the structural crisis of the 1970s. This new social order was implemented in the US and Europe, under the conditions created by the structural crisis, following the decline of the profit rate. The first shock was the rise of interest rates in 1979; the second, the transformation of the patterns of financing of corporations and corporate governance, and the liberalization of 6

the international mobility of capital. The institutional framework prevailing in Europe (state intervention, role of credits in the financing of accumulation...) was already different from that characteristic of the US, and the costs of neoliberalism were larger in Europe. Neoliberalism was imposed to economies like Japan and Korea, where the conditions of the Atlantic structural crisis did not prevail, and whose institutional frameworks were quite specific (even larger state intervention, roles of bank loans and specific bank-enterprise relations). They faced rather successfully the interest rate shock of the early 1980s, but were considerably upset and hurt by the transformations of financial structures. Still, Japan and Korea were affected in circumstances largely distinct, notably with respect to the underlying tendencies of technical change and distribution. Japan stagnates in a lasting crisis, whereas Korea recovered rapidly. Dispute over the meaning of globalization and democracy is a large part of what the class struggles against this domineering neoliberalism are all about. The international institutions promoting neoliberalism are dominated by the world’s most powerful states, almost all of which have democratically elected governments, according to Western definitions. These governments have responded to what they term “antiglobalization” protests by trumpeting their democratic credentials and reasserting the necessity and desirability of globalization as a remedy for problems of poverty, underdevelopment, and democracy—in their view, globalization is good for democracy. In contrast, critics of neoliberalism have questioned the empirical evidence and the theoretical models underpinning neoliberal policies and practices. Opponents of neoliberal globalization stress the ways in which democracy is undermined both in how policy is generated and implemented and in the effects of neoliberalism. Evidently, globalization and democracy are contested issues. What democracy? Whose democracy? People may ask! What our collective future will look like, and the place of democracy in it, will “depend upon the outcomes of current social class struggles, struggles in which the meanings assigned to ‘globalization’ and democracy are central” (Rupert 2000, 42). Analysis of the class struggle against neoliberalism also throws light on the future of democracy. State responses to protests against neoliberalism—typically articulated as “antiglobalization protests—have had significantly antidemocratic consequences and implications, through the “criminalization of dissent” (e.g., Klein 2002, part 3). An oft-overlooked feature of the political dynamics highlighted in the class struggle against 7

neoliberalism is the continuing centrality of the state’s coercive functions in the context of economic globalization. Reinforcing this dynamic, protests against neoliberal globalization are also increasingly seen as a threat to state security. In the wake of the attacks on the World Trade Center and the Pentagon on September 11, 2001, protests against corporate globalization are increasingly defined in legislation as forms of terrorism, opening the way to the securitization of protest or the discursive practices through which a potential threat comes to be performed as a security issue (Waever 1996). Because of such measures, the scope for democratic freedom of expression, even in those states most often held up to the rest of the world as the best models of a modern liberal democracy, is dramatically narrowed. This book is organized as follows. In the next chapter, we locate the socalled antiglobalization movement in the long-term and worldwide critique of neoliberal or corporate globalization. We note that this “movement” is not new, is not against globalization, and is not a single movement, and that central concepts at issue in the debate over neoliberalism—notably globalization and democracy—are highly contested. In the second chapter, we then compare and contrast the competing conceptions of globalization and democracy put forward by advocates and critics of neoliberal globalization. We highlight the political salience of these contradictory conceptions and their centrality to contemporary political struggles. In the third chapter, we examine the practical implications for the future of democracy and globalization as manifested in the coercive policing of “antiglobalization protest.” In particular, we examine the criminalization of dissent and the securitization of protests through brief analyses of the policing of the Asia Pacific Economic Cooperation (APEC) summit in Vancouver in 1997 and post–September 11 antiterrorist legislation, respectively. In essence, we are wont to argue that the widening impact of neoliberalism, the coercive policing of political protest, and the growing limitations on civil rights and liberties cast severe doubts on the future of liberal democracy. Death of Class? Social and political analysts in the English-speaking world began to toll the knell of class as early as the late 1950s. Nisbet, for example, observed that while the term ‘social class’ had been useful in historical sociology, in 8

comparative or folk sociology, it was nearly valueless for the clarification of data on wealth, power and social status in the contemporary United States and much of Western society in general (1959: 11). The reason was that in the past classes were more tangible entities that crystallized in the economic, social, cultural and political realms; but in modern industrial societies, national democracy, economic and social pluralism, ethical individualism and an ever-widening educational front had joined to create new patterns of social power and status that made class obsolete (1959: 14-15). There were numerous attempts to reintroduce class in the 1960s through the 1980s, including some that were influenced by the Chinese revolution and other revolutions. But these attempts represented no more than a minor current and did little to arrest the move away from class in the social sciences. Sceptics of the utility of the class concept certainly had gained the upper hand in the debate starting from the late 1980s. Hindess (1987), for example, challenged class theories by denying the objectivity of class interests that were pursued by diverse actors in various sites of struggle and the unity between social structure, class interests and class action. Classes, he argued, were simply not collective actors or social forces as they had often been made out to be. Pahl (1989) took exception to class theory and class analysis too, concurring with Hindess that the major weakness of class theory lay in its assumption of correspondence between social structure, group consciousness and group action as well as the lack of empirical support for the class model. Other analysts who questioned the utility of class focused on class as a social reality while denying class roles in social transformation or methodologies of class analysis. One conclusion was that class is an increasingly redundant issue (Holton and Turner 1989: 194). Others argued that the importance of class cleavages and the ability of class to explain social and especially political processes had declined (Clark and Lipset 1991; Clark et al.1993). This is because stratification in the industrialized West had become increasingly pluralistic, multidimensional and shaped by factors located outside the workplace, while the old hierarchies and class divisions based on them are decomposing under the impact of the welfare state, occupational differentiation, rising affluence and consumption, changing political dynamics, market fragmentation, and the rise of institution-based divisions. 9

The wholesale rejection of class in academia culminated in The Death of Class (Pakulski and Waters 1996). This book asserts that classes are dissolving and most advanced societies are no longer class societies today, in contrast to the early and mature forms of industrial capitalism. It attributes the ‘death of class’ to three recent developments. First, with the decline of Marxism, the collapse of Soviet communism and the waning appeal of socialist ideologies in the West, the class concept is losing ideological significance and its political centrality. Second, both the right and the left are abandoning their preoccupation with class issues. The former is turning its attention to morality and ethnicity, and the latter to issues of gender, ecology, citizenship and human rights. Third, class divisions are losing their selfevident and pervasive character; class identities are challenged by new associations and new social movements; and class radicalism is no longer attractive to political activists. Does Class Still Count? The past years have witnessed an unprecedented level of class struggles in the form of worldwide riots, never before have the various mechanisms for mobilizing class interests been so perfectly enacted. Sadly, I am not referring to the recent TUC demonstration or coordinated strikes. Unfortunately, no matter how positive, these acts are no more than flashes in the pan when compared to the real and relentless class struggle which is at play in contemporary society. This class struggle requires no fanfare of air horns; ringing out in parliament square to assert its power, in fact its silence is both a facet of its potency and evidence of its near all-encompassing power. Sociologist Michael Mann terms the class relations of contemporary society as that of asymmetrical struggle. This is due to the near total dominance of the capitalist class over subordinate classes in terms of ability and willingness to further their interests at the expense of others. Previously the increasing misery and inequality resultant for the current austerity program would have fed into what Polanyi referred to as the ‘double movement’, whereby the assertion of capitalists’ interests by increasing the level of suffering amongst working people lead to a reigning in of the capitalist class through trade union and electoral action. This resulted in various equilibriums throughout history in which class compromises were reached, the most recent being the post war years of regulated capitalism. 10

Since the 1980s any pretence of attempting to maintain or return to the Fordist class compromise has been jettisoned by both the Tories and, more shockingly, Labour. What is at first glance surprising is that the global financial meltdown and the recession which followed it did nothing to hamper the furthering of the interests of the rich; acting instead to intensify them. As evidenced most obviously by the current grab to accumulate public wealth, through the dismantling of the welfare state and public services. Other examples, such as a political willingness to allow 12 million people to linger involuntarily without a job , while forcing those lucky enough to have a job to work longer for a smaller pension and cutting services of those desperately in need of them while transferring the burden for their cost from the state to the individual, all highlight aptly the asymmetrical class struggle being waged on working people. Such a reaction is not surprising, when we recognize that the economic crisis did not, as many on the left had hoped it would, act as catalyst for change to a more just system by highlighting the need for an alternative to the unstable and inefficient status quo. Rather the crisis acted only to exemplify the total weakness of subordinate classes, through both their ideological and organizational ability to put forward any meaningful resistance. It may seem that to classify the coalition’s austerity program as an act of class struggle, is simply a rhetorical device lacking objective utility. In fact many people may cringe at terms such as ‘capitalist class’ and ‘class struggle’ thinking them outdated and alienating. Such a view is another example of the capitalist class’ ‘hegemony‘, which is so overwhelming that it seems that even to suggest that the furthering of class interests may be motives for coalitions actions is to move beyond ‘common-sense’. However, we should also recognise that such misconceptions are also in part a result of the fact that people often lack conceptual clarity of what class actually means in concrete terms. By outlining definitional issues of class, the explanatory value of such an approach becomes much clearer. Erik Olin Wright powerfully and analytically lays out the explanatory power of a Marxist-inspired conceptualisation of class. The kernel of such an approach is the view that within society there exists interdependent but fundamentally antagonistic relations between different sets of actors. These antagonisms are driven by the exploitation generated at the core of capitalism. Exploitation, Wright argues, is based upon three core concepts 11

1. ”The inverse interdependent welfare principle: the material welfare of exploiters causally depends on the material deprivations of the exploited. The welfare of the exploiter is at the expense of the exploited 2. The exclusion principle: the causal relation that generates principle (i) involves the asymmetrical exclusion of the exploited from access to control over certain important productive resources. Typically this exclusion is backed by force in the form of property rights, but in special cases it may not be. 3. The appropriation principle: The causal mechanism which translates (ii) exclusion into (i) differential welfare involves the appropriation of the fruits of labour off the exploited by those who control the relevant productive resources. This appropriation is also often referred to as the appropriation of the ‘surplus product’”. Such an elucidation of class is based upon a view of exploitation as being the determinate characteristic of class position. This is conceptually appealing for two interconnected reasons. Firstly, it conforms to a fundamental understanding of capitalism as being exploitative. Capitalism is founded upon the extraction of profit from labour by capital. Obviously, to term such extraction of profit ‘exploitation’ rather than simply a ‘transfer’ of wealth from the A to B is to apply a normative judgment to a social process i.e. that whereas certain ‘transfers’ are morally neutral or just (such as taxation), others constitute ‘exploitation’ as they are unjust. Exploitation then rests upon a theory of justice. It is not the purpose of this blog to discuss the fine details of justice but one particularly enlightening treatment of the subject is that of Gerry Cohen’s socialist reconstruction of Rawls‘ ‘Theory of Justice’ in which he essentially jettisons the ‘difference principle’ suggesting that in regards to wealth distribution strict equality is the only just outcome as it is the only outcome which all participants would agree to if they did not know the outcome of the distribution beforehand. Secondly, exploitation is clearly a conflictual social process and being so creates a rational for action amongst individuals i.e. it is the interests of capitalists to exploit workers as much as possible and it is in the interests of workers to resist their exploitation as much as possible. This creates a ‘political subject’ engendered with a rational need to expend agency in resisting and potentially overthrowing capitalism. However, the growth of the ‘middle class’ has led to the suggestion that such antagonistic class relations are no-longer a useful way of understanding contemporary capitalism. Yet Wright argues, that a ‘middle class’ is not 12

contradictory to such a model. Rather traditional Marxists have incorrectly considered capitalist exploitation of workers as the principle generator of antagonistic relations. These two ‘classes’ are in fact best understood as polarized class locations albeit “the fundamental locations within capitalistclass structure”. Seeing the capitalist/worker distinction as a location enables the class structure to be elaborated to an additional 10 class locations based upon: relation to the means of production, through ownership, authority and skill. Relation to means of production Employees Relation to Number of Owner employees authority Many Capitalists Expert Skilled Nonskilled Managers (10+) managers managers managers Few (2-9) Small Expert Skilled Nonskilled Supervisors employers supervisors supervisors supervisors None (0-1) Petty Experts Skilled Nonskilled Nomanagment bourgeoisie workers workers

Such an analysis assumes that exploitation is not only grounded in the ownership of the means of production by capitalists but also the domination workers within production, and therefore class position should be determined by the relations of production rather than just relations of ownership. Thus it is possible to differentiate employees based upon position within hierarchy i.e. managers and supervisors exercise delegated capitalistclass powers through practicing domination within production. Furthermore, the privileged position of managers within organizations enables them to gain higher wages. However, they also contribute to the surplus through their own labour and thus their higher wages may simply reflect a capacity to appropriate a larger part of the profit to which their labour contributes. So they might not be ‘exploiters’ (as capitalist are) but just less exploited than other employees. Therefore, Wright asserts it is more logical to see managers as occupying a privileged position within the process of exploitation. Secondly, employees who possess high levels of skills / expertise are also potentially in a privileged location within the exploitation relations.

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Class structure is also further complicated as the petty bourgeoisie or self-employed have not faded away as Marx envisioned. The self-employed own their means of production and therefore have a clear stake in private property; but at the same time, they are often threatened and dominated by capitalist firms. This results in a far more complex class structure than simply the capitalist / worker distinction. But nevertheless contemporary capitalism retains an objective class structure based upon antagonism between those aliened to the interest of capital and those aligned to the interests of labour. In the mid-1990s this class scheme suggested a class composition for UK in which the traditional working-class (unskilled workers) accounted for 43 per cent of the UK’s population, while the extended working-class (unskilled workers + skilled workers + unskilled supervisors) equalled 64 per cent. Yet such objective classifications are only of real value if they reproduce subjective values insomuch that they shape individuals’ understanding of the world and its processes. Wright’s large scale quantitative comparative analysis shows that these grouping also displayed conscious antagonism towards each other’s interests. With the extended working class holding views which were sharply differentiated to the views of capitalists and their closely located counter parts (expert managers, skilled managers and expert supervisors). For example, in the US the extended working-class had values which were 22 per cent more anti-capitalist than those of capitalists and their closely located counter parts. This suggests that progressives must resist the hegemonic view that class no longer exists. We must highlight the daily class warfare which is being waged by the rich against the poor. We equally must resist the self-censorship which manifests itself through ‘middle class guilt’ and turns class struggle into a taboo subject. Working people feel disenfranchised because they are very much aware their interests and equally aware that no one is fighting for them. It is only by harnessing the powerful antagonisms and conflicts which capitalism generates that real social change is possible. It was such conflict which created previous ‘double movements’ and ended past capitalist extravagance. A new ‘double movement’ is well over due.

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Why Class Struggle? This conflict is not going to disappear overnight. It calls into question difficult issues of justice, identity and equity. In many ways, globalization has made the world smaller by allowing people around the world to interact faster and at lower cost than ever before. However, in other ways, globalization has made the world bigger. In the past, when people had disputes they could appeal to their government or community for a solution. However, because of globalization, disputes now transcend the boundaries of towns, cities, even countries. Now, when people complain, nobody is listening. When someone has a dispute with the WTO or a multinational company, it can be almost impossible to get these institutions to listen. This gives those who feel victimized by globalization an intense sense of frustration, anger, and powerlessness. History has shown that those who feel they have no recourse often turn to violence. Twentieth century economist Kenneth Boulding recognized the crucial role played by Smith’s “invisible hand,” but he also argued that the story was more complex than that. He described an “invisible fist” consisting of the perverse dynamics of market interactions, which have to be controlled if capitalism is to benefit average citizens. It is this invisible fist that defines the anti-globalization side of the conflict. This globalization side of conflict demonstrates that regardless of how anarchists orient themselves to it, class struggle exists. The division of society into antagonistic social classes remains the main fact of modern capitalism; class is defined, above all, as a social relationship to capital, whichever form capital may take. The politics of class struggle attributed to anarchism are not based on a historical-materialist “science”, but rather on a strategy of identifying a social base that is, by its very nature, antagonistic to the ruling (capitalist) class, and prioritizing areas of struggle within this social base that can develop into revolutionary challenges to ruling class interests. Class struggles are by no means confined to the workplace, and there is no definitive “revolutionary subject” to be found in the industrial proletariat (at least in the classical Marxian sense). There are certainly sectors within the working class who hold strategic positions in their relation to capital (i.e. the industrial proletariat), but this does necessarily mean that the first points of rupture within the system will find expression here. Anarchists must take an active role in all of the struggles of the working class: around housing and 15

community, against poverty, struggles in the workplace, of the unemployed, against the prison industrial complex, around immigration, and in all areas where direct action and self-management can be applied and revolutionary dual power can be developed. Beyond this, it should be understood that the majority of the working class is made up of women and other ordinary workers, which means scholars need to reconceptualise their notion of class struggle to include, at the absolute base-level, a radical analysis of patriarchy as well as supremacists in all of their activity. Does class matter? The study of class has one overwhelmingly powerful motivation—the belief that people of similar economic status should share political views. This was the official position of the Political Science, Sociology, and Economics departments at the University of Minnesota from 1967-74, so that is what I was taught. However, to say I learned class analysis at UM would be misleading. This was the era of USA assault on Vietnam. Supposedly, the Vietnamese were to be killed with high explosives because they were Marxists. This message was not lost on my professors who either claimed their interest in class analysis had absolutely nothing to do with Marx, or in rare cases, taught party-line Marxism to demonstrate their opposition to the Vietnam War. Neither true believers nor weenies tend to be effective teachers. I left the school of journalism and mass communication in Yaounde, Cameroon, still fascinated with the idea of class analysis, a working understanding of the tools that could be used like the SPSS software, and a vague idea that this was something of an outlaw subject because of its historic roots in Marxism. This is somewhat less than the definition of learning a subject. If someone like me, who was actually interested in class analysis to the point where I took graduate-level courses in the subject, could be so indifferent to my educational outcome, one can only imagine the level of interest in the general public. By the time I left school, class analysis had truly become the tiniest of niche subjects in France and North America where I spent twelve months in 1974-75 with my colleagues from other African countries to get acquainted with the modern instruments of communication. And maybe any class analysis rooted in Marx deserved to die. If the late 20th century taught anything it was that there were many 16

interest areas that crossed economic class lines. In one especially telling example, billionaire Malcolm Forbes took up the very proletarian sport of riding Harley motorcycles because he thought it was “cool.” Ronald Reagan opens fire in the latest Class War But just because Marx proposed a class analysis that never much fit the American experience did not mean that class had lost importance, no matter how irrelevant it had become in academe--as the American worker discovered when the Republicans opened naked class warfare during the Reagan administration. The first shot was the firing of the air traffic controllers. The destruction of PATCO was the USA part of a world-wide effort to roll back the gains workers had made since 1932. In England, Margaret Thatcher accomplished the same sort of demonstration of naked class interest by destroying the coal miners’ union. Since the Brits can talk about virtually nothing without discussing class, the Thatcherite assault on bluecollar living standards was routinely described in terms of class warfare. But while the Brits discussed class warfare, the Americans rarely did. Interestingly, the outcome for the people who live off their paycheques was nearly identical on both sides of the Atlantic. Class Analysis—American style The open class warfare in the 1980s reawakened my interest in class analysis. Because I soon found Marx as irrelevant as when I had dropped the subject in the first place, I started looking for alternatives. Eventually, I discovered the writings of Thorstein Veblen. Unlike Marx, Veblen thought that the differences in income levels were not nearly as interesting economically as human habits. And the most interesting habits were those associated with making a living. On one hand, you had the Leisure Class who lived off the efforts of others, and the Industrial Classes who performed the community’s necessary tasks. Since these habits were independent of income, it was possible to have BOTH rich and poor members of the Leisure AND Industrial Classes. This wasn’t merely an improvement on Marx: this was a wholly new train of thought, a new ball game, that was seemingly unrelated to any intellectual 17

traditions I had heard of. Veblen’s biographer seemed equally confused comparing Veblen’s detached perspective to someone from Mars. Not surprisingly, Veblen’s ideas had NOT come from Mars. In fact, as I carried my research deeper into the roots of the Western progressive academic traditions while pursuing my M.Sc./Ph.D at the University of Nigeria, Nsukka, in the 1980s, I discovered that Veblen’s most interesting economic idea was actually common among the scholars who came from the university of Dar-es Salaam in Tanzania and helped to supervise my thesis. And where Veblen saw differences between the Industrial and Leisure Classes, the Pops saw Producers and Predators, or Makers and Takers. The best way to determine whether Producer / Predator class analysis is valid is to try it out on some recent examples of human economic behaviour and see if it describes reality better than competing methods. Example #1 Energy When it comes to the big topics like the end of the age of petroleum, it is obvious that there are essentially two real responses. 1) There is a business-as-usual response which says we are not actually running out of crude, that higher prices will cause more drilling and exploration, so eventually the markets will work as usually described. 2) There is the “crude is finite on a finite planet” response which says that it matters little how many holes are drilled into an oil field; it doesn’t change how much crude is available. Therefore, if crude is running out, it makes sense to design and build a new infrastructure that will run on something else (the something else is usually described as hydrogen). Let’s call number (1) the Mad Max strategy because it is highly irresponsible gibberish. Let us call (2) the Invent, Design, and Build strategy (IDB). Further, let us assume that ethical humans with large frontal lobes are likely to flock to this second strategy. It is obvious that an IDB strategy relies on the successful work of highly skilled producers. The question is, how can such a strategy be implemented if the society’s super-producers are lacking training, resources, and political / cultural support? The answer is: it cannot! For example, any industrialized countries decided that they wanted to clean up toxic waste sites before the toxins polluted drinking water. They passed a law called Superfund. Scores of years later, they discovered that virtually none of the Superfund sites had been fixed. Looking closely, we can 18

see why. Significantly, less than half of the money actually went to those who do remedial work—the majority went to lawyers, bureaucrats, and other assorted pencil pushers. Whatever social value lawyers and bureaucrats may have, it is obvious they cannot solve IDB problems and even worse, they get in the way by diverting money that MUST go to IDB types into their own pockets. Is it false that we live in a society where lawyers have more status than engineers—to the point where lawyers actually get the money that should go to engineers? Why this is so is an interesting question. But it is clear that lawyers, financiers, or real estate developers will not produce the nuts and bolts necessary to convert to a hydrogen economy. Only producers can do that! Example #2 Business vs. Industry It all starts with the question—how does the community organize its necessary work? The basic social struggle is between those who do this work, and those who live off those who do the work. The key indicator of any society’s success is how good the working conditions of those who do the productive work are. Do the producers have power to control their workspaces? Do they have enough pay so they can basically stop worrying about the problem of simple existence? The nearly-perfect example of the ideal producer workspace would probably have been Intel when Robert Noyce ran things. But there were many other such places in, say, the USA and Western Europe post WWII. And because there were such ideal workspaces, they produced nearly miraculous products. What is most interesting is that the producer super-achievers from the dawn of the industrial age broke almost every economic “law” taught in our more backward schools these days. They paid the help more than the minimums (Ford) they lobbied for protectionism (everyone) they lobbied for currency reform (Abraham Darby and almost everyone else) they organized cartels (German chemical industry) they mocked highly stratified organizations (Noyce, Nokia) etc. In many societies, however, all the respectable jobs are non-productive jobs--law, finance, military, religion, sport, etc. What this means is that it makes almost no difference to those whose jobs are cursed with the “unfortunate” description of necessary, whether those respectable types call 19

themselves leftists or libertarians. So producers are threatened from all directions. From the left they get political correctness, social scorn, and other forms of conformism. From the right, they are threatened by the vultures of finance capitalism (hostile takeovers, usury, etc.) The trouble with this nearly universal outbreak of attacks on productive behaviour is that important elements of society are starting to show catastrophic strain. After a generation of glorifying destructive pirates like Jack Welch, the American society is no longer technologically able to maintain itself. The condition of vital infrastructure is ghastly. Even worse, the major threats to human existence--climate change, desertification, depletion of freshwater aquifers, etc.--are problems of the uncompleted agendas of the Fords and Noyces of history. Just at a time when we need nothing less than the Second Industrial Revolution, we have destroyed our Producer genius. Just remember, deregulation of the energy industry (a core belief of the Predators) did not produce better ways to dispose of nuclear waste, or a better way to negotiate the end of the age of petroleum. It gave us Enron, rolling blackouts, and price gouging. There are thousands of equally good examples out there that are easy to see and describe. The fair and logical conclusion is that the Pops invented a form a class analysis that works even better now than when it was first discussed in the 1870s. Public Policy Implications Needless to say, Producer / Predator class analysis appeals most strongly to the producers. And of course, that is what it was created to do—instil notions of class solidarity and pride in the economically exploited and scorned. The Populists never advocated an armed revolution--most of them were small rural landowners (with an oversized mortgage) and were as unlikely a band of revolutionaries as that description suggests. Nevertheless what they wanted was a highly regulated civil infrastructure including publicly owned banks. (And they call Clinton a liberal—this is what mostly Republican farmers wanted by the 1880s). No matter how angry they were or how their demands justified would have been, the Populists never called for the guillotine or re-education camps. Instead they sought power through voting and reform. The reason the Populists are often described as the most successful political party never 20

to have won the presidency is because they understood the value of setting the agenda. And informing their agenda was Producer / Predator class analysis. The populists who represented millions of economically devastated people, would settle on an awfully lofty strategy when they determined that good ideas should be able to triumph over the savage habits of the Predators. But it was internally logical. If you do not advocate killing people for economic reasons, you have figure out how to allow them to live. The key was to understand how Predators could be allowed to operate in society without letting them wreck things. 1) Regulation. Example: the Pops didn’t think much of bankers. Instead of putting them out of business, which would have been foolish, they surrounded them with a host of new rules and alternative lending institutions. Instead of outlawing usury, they set interest rate ceilings. 2) Funding Producers first. In a normally operating society, the Predators usually wind up with most of the money anyway. The Pops claimed (correctly) that when economic stimulation went FIRST to the Producers, everyone would become prosperous (a rising tide lifts all boats-JFK) and the necessary work was done well. Under the theories of “trickle-down” money goes first to the Predators. This is like claiming that “rising yachts lift all tides.” Not only does such a plan leave most Producers in poverty, it means that much of the community’s necessary work goes undone. The populist economic prescriptions not only produce just and prosperous societies, they enable the technological miracles that happen when the Producers are encouraged to think freely. With oil running out and the atmosphere overheating, we are going to need more than a few technological miracles to replace the producers in the era of globalization. Putting together these essential elements of capitalism described in both examples (the corporation and the surplus value commons), it is clear that the commons is not logically antagonistic to capitalism. On the contrary, certain kinds of commons are necessary conditions for the existence of capitalism, local or global. Indeed, without the capacity of capitalists to call upon the mutual aid and class solidarity of other capitalists and to use the communal character of workers to their advantage (cooperation), capitalism would not have been able to survive the shock of class struggle over the centuries. Indeed, if capitalism was not a common-pool resource system 21

organized on some levels as common property, then it would never have been able to have become a self-reproducing system, even in the short run. Marx’s discovery of a “surplus value commons” is termed the “transformation problem” by critics, of course, to trivialize the issue into one emphasizing the consistency of mathematical constraints. But the key question is whether capitalist class consciousness is a “material” matter or not? If the bond between capitalists was merely a matter of self-interested beliefs, then it is not clear why capitalism can support such a grave inequality within its own ranks, especially in a crisis which will lead to the annihilation of many small capitals (and only some big ones). But if the commonism of capital rules, it appears just that the flow of value will not proportionally reward the originators of value, but will only reward proportionally capital itself. This rule is just, since the survival of the system of capitalist accumulation is the ultimate value and not the preservation of equal exchange. This relation of inequality and the unity of capital and labour only by their eventual mutual collision compels the study of global capitalism in relation to class struggle of labour to free itself from capital’s stranglehold. In sum, globalization is perhaps the central concept of our age. Yet, a single definition of globalization does not—exist either among academics or in everyday conversation. There is also a lack of consensus as to whether or not globalization is a useful concept to portray current events. While most conceptions focus on different aspects of growing interdependence be it economic, cultural, technological, and the like, at a basic level globalization refers to growing interconnectedness. There is some disagreement on where this is all going and whether globalization could come to an end. Clearly the openness and interconnectedness that emerged in the late 1800s was not permanent. The 1930s saw the major powers carving out spheres of influence and blocking out others. From a broader historical perspective, however, that may have been a hiccup. Whereas before the end of the American Civil War it took months to go by ship from one coast of the US to the other, the transcontinental railroad cut the trip to a week by 1870 and today it is a matter of a few hours by plane. Overall, the flow of goods, people, and messages of peace and war continue unabated some four years later. In many respects, therefore, globalization is not going away. The challenge for humanity, then, is to direct these forces in peaceful and beneficial ways. 22

Chapter Two Contra ‘Post-Marxist’ Critique of Marxist Class Analysis Overview Marx developed a theory which is both scientific and critical. However, in most interpretations and further developments of his thought either one or the other of these two essential characteristics has invariably been overlooked. Among those who speak in the name of Marx or consider themselves his intellectual followers some accept only his radical criticism of the society of his time, some lay emphasis only on his contribution to positive scientific knowledge about contemporary social structures and processes. To the former group belong, on the one hand, various apologists of post-capitalist society who develop Marxism as an ideology, and, on the other hand, those romantic humanists who consider positive knowledge a form of intellectual subordination to the given social framework, and who are ready to accept only the anthropological ideas of the young Marx. To the latter group belong all those scientists who appreciate Marx’s enormous contribution to modern social science, but who fail to realize that what fundamentally distinguishes Marx’s views from those of Comte, Mill, Ricardo and other classical social scientists, as well as from those of modern positivists, is his constant radical criticism of both existing theory and existing forms of social reality. The failure of most contemporary interpreters of Marx to grasp one of the basic novelties of his doctrine has very deep roots in the intellectual climate of our time and can be explained only by taking into account some of the fundamental divisions and polarizations in contemporary theoretical thinking. Introduction Marx disdained ethical discourse and consistently opposed moralistic interventions in the social and political issues of his day, once proclaiming that ‘communists do not preach morality at all’. He showed no interest in abstract discussions about how and why individuals ought to act towards each other in a morally defensible way, and he argued that capitalism had 23

either destroyed morality or turned it into a palpable lie since it contains a “mélange of truths, half-truths, quarter-truths, falsehoods, non-sequiturs, and syntactically correct sentences that have no meaning whatsoever.” Yet socalled post Marxists attempt to build support for socialist ideas on moral precepts. These are mere distractions from the priority of confronting the underlying causes of social misery in the processes of material production. We may point out in passing that although globalization conflicts will probably never be neatly resolved and forgotten, there are incremental improvements that are being made. Like a flash flood, globalization cannot be prevented, but it can be controlled and directed. The most important way to address globalization conflicts and to prevent further deaths is to continue to develop, refine, improve and promote international dispute management systems. These could take many forms. One possibility would be international laws and courts, which would protect people’s basic human rights. For relatively powerless groups such as the South Korean farmers, effective conflict resolution systems could give them leverage against their more powerful opponents. I hope that if powerless groups had an outlet for their frustration, they would not feel the need to resort to violence to get their message across. Whatever methods are used, it is clear that this “new world order” is going to require new institutions to smooth interactions between people around the world. Furthermore, groups who feel frustrated by globalization, such as the South Korean farmers, can learn to empower themselves to meet their needs. They can empower themselves by using techniques like non-violent protest and by building coalitions. These methods may ease some of the power inequities caused by globalization. The mass media will become more important than ever before. While the media is capable of exacerbating conflict, it can also help to humanize people and draw attention to injustice. Because globalization conflicts operate on such a large scale, mass media will be vital to help different groups communicate effectively with each other. Fact-finding is also extremely important for globalization conflicts because they often concern highly technical information. In Lee’s case, it is vital to know whether the WTO’s recommendations were actually benefiting South Koreans more than they were hurting them. It will be necessary for experts to collect trusted, thorough research on the effects of globalization in order to avoid misunderstandings and poor decision-making that will further escalate conflict. Whatever we can do to divide the world’s resources more 24

equitably will help to reduce intractable globalization conflicts. Humanitarian aid and development activities, such as building roads, schools, medical centres and other infrastructure could possibly help developing nations struggling to keep up in a newly globalized world. Also, some economists argue that the World Bank, WTO and IMF have the power to make policy changes that could ease the economic burden for poor countries. Finally, globalization is closely tied to identity. Because people around the world are interacting more, they are being forced to consider foreign lifestyles and worldviews. In many places, people feel their traditions and culture are being eroded. This mixing and clashing of culture can be deeply threatening to people if they feel they are losing their identity. Thus, threats to culture and identity tend to create particularly intractable conflicts. Improving cross-cultural communication between different groups can help clear up misunderstandings and avoid conflict, as long as one culture doesn’t try to impose its views and values on another. When dealing with cultural conflicts, it can also help to understand that different cultures frame the world differently. For example, whereas Americans value self-confidence, non-Westerners see it as arrogance. Understanding that people from different cultures have fundamentally different understandings of the world can prevent conflict and help people around the world work together more effectively. Politics and Economics of Globalization Globalization is an ideological term. It encompasses the frenetic international expansion of capital - an expansion which has had devastating consequences for the majority of humanity. The debate around it, however, has tended to obscure rather than clarify our understanding of the forces at work. In his second article on this subject David Yaffe (1996) looks at the politics and economics of globalization. Among those whose primary concern is for a more competitive and efficiently functioning national capitalist economy, there are diametrically opposite positions concerning the reality of globalization. The neo-liberal right strongly approves of globalization and the limited effectiveness of national government intervention. ‘A more globalized economy is in many ways a more efficient one’ forcing governments to be more careful in handling their economies (The Economist 23 December 1995 - 5 January 1996). The removal of market 25

constraints - free trade and deregulated labour and capital markets - is seen as the only way to increased growth, balanced trade and lower unemployment. At the other pole, with the old social democratic Keynesian strategy no longer viable, former social democrats, concerned to retain some progressive role for a reforming capitalist government, have argued that much talk about globalisation is exaggerated. The notion that there is ‘one global, borderless, stateless market’ is a myth. ‘This global economy needs superintending and policing. Governments can and should co-ordinate their policies to manage it’ (Will Hutton The Guardian 17 June 1995). This polarization is mirrored on the socialist left. On the one side, we are told that there has been an epochal shift in capitalism in which new technology has substantially (irreversibly?) increased the power of capital over labour, fragmenting and even destroying working class organizations, and creating global market forces beyond national government control. Not to recognise these developments ‘freezes us in modes and forms of struggle which are effete and ineffectual’. On the other side, globalization is seen as ‘an ideological mystification’ which ‘serves as an excuse for the most complete defeatism and for the abandonment of any kind of anti-capitalist project.’ And that, while not denying the impact of new technologies and the destructive effects of deregulation, mass unemployment and growing poverty, we need to look elsewhere for an explanation of the long-term structural crisis of capitalism than in simplistic formulas about ‘globalisation’ (Ellen Meiksins Wood, Monthly Review Vol 48 No 9 pp19-32). Critique of Marxist Class Analysis One of the most taken-for-granted features of contemporary social theory is the ritual and increasingly generic critique of Marxism in terms of its alleged failure to address forms of oppression other than that of ‘class.’ In this vein, Marxism is considered to be theoretically bankrupt and intellectually passé, and class analysis is often savagely lampooned as a rusty weapon wielded clumsily by those mind-locked in the jejune factories of the nineteenth and twentieth centuries. When Marxist class analysis has not been distorted or equated with some crude version of ‘economic determinism,’ it has been attacked for diverting attention away from the categories of ‘difference’—including ‘race’ (Gimenez 2001: 23–33 ). To overcome the 26

presumed inadequacies of Marxism, an entire discursive apparatus, sometimes called ‘post-Marxism’, has arisen to fill the void. Serving as academic pallbearers at the funeral of the old bearded devil, post-Marxists (who often go by other names such as postmodernists, radical multiculturalists, etc.) have tried to entomb Marx’s legacy while simultaneously benefiting from it. Yet, the crypt designed for Marx, reverential in its grand austerity, has never quite been able to contain his impact on history. For someone presumably dead, Marx has a way of escaping from his final resting place and reappearing with an uncanny regularity in the world of ideas. His ghost, as Greider (1998) notes, ‘hovers over the global landscape’ as he continues to shape our understandings of current crises of capitalism that haunt the living present. Regardless of Marx’s enduring relevance and even though much of postMarxism is actually an outlandish ‘caricature’ of Marx and the entire Marxist tradition, it has eaten through the Left ‘like a cancer’ and has ‘established itself as the new common sense’ (Johnson 2002: 129). What has been produced is a discourse eminently more digestible to the academic ‘Left’ whose steady embourgeoisement appears to be altering the political palate of career social theorists. Eager to take a wide detour around political economy, post-Marxists tend to assume that the principal political points of departure in the current ‘postmodern’ world must necessarily be ‘cultural.’ Genesis of ‘post-Marxism’ The relevance of Marxism has been claimed by many scholars to have died with the end of the Cold War. For most international relations analysts Marxism, as a theory, stands on the periphery of the discipline. That is why, unfortunately, few, in particular the realists, accredit it for any theoretical or practical relevance for the study of international affairs. However, theorists need not feel threatened by Marx’s attempt to wither away with their theories. On the contrary, taking Marx more seriously as an international relations analyst will render decent theories for still prevalent problems of our international society. With the contemporary domestic and external environments, the inequality of distribution and the process of globalization, Marx addresses issues at the heart of today’s international relations debate. With the triumph of neo-liberalism and the retreat of the working class, post-Marxism has become a fashionable intellectual posture. James Petras 27

has critiqued this trend in the case of Latin America. According to him, the space vacated by the reformist left in Latin America has in part been occupied by capitalist politicians and ideologues, technocrats and the traditional and fundamentalist churches (Pentecostals and the Vatican). In the past, this space was occupied by socialist, nationalist and populist politicians and church activists associated with the “theology of liberation”. The centre-left was very influential within the political regimes (at the top) or the less politicized popular classes (at the bottom). The vacant space of the radical left refers to the political intellectuals and politicized sectors of the trade unions and urban and rural social movements. It is among these groups that the conflict between Marxism and “post-Marxism” is most intense today. This trend is not a preserve of Latin America. It has perverted the entire Third World as well as the West. Nurtured and, in many cases, subsidized by the principal financial institutions and governmental agencies promoting neo-liberalism, a massive number of “social” organizations have emerged whose ideology, linkages and practices are in direct competition and conflict with Marxist theory and practice. These organizations, in most cases describing themselves as “nongovernmental” or as “independent research centres”, have been active in propounding ideologies and political practices that are compatible with and complementary to the neo-liberal agenda of their financial patrons. Thus, they tend to reject class analysis completely. Indeed, perhaps one of the most taken-for-granted features of contemporary social theory is the ritual and increasingly generic critique of Marxism in terms of its alleged failure to address forms of oppression other than that of ‘class.’ Marxism is considered to be theoretically bankrupt and intellectually passé, and class analysis is often savagely lampooned as a rusty weapon wielded clumsily by those mind-locked in the jejune factories of the nineteenth and twentieth centuries. When Marxist class analysis has not been distorted or equated with some crude version of ‘economic determinism,’ it has been attacked for diverting attention away from the categories of ‘difference’—including ‘race’ (Gimenez, 2001). To overcome the presumed inadequacies of Marxism, an entire discursive apparatus, sometimes called ‘post-Marxism’, has been presented as a substitute or what will adequately fill the void. Serving as academic pallbearers at the funeral of the old bearded devil, post-Marxists (who often go by other names such as postmodernists, radical multiculturalists, etc.) have tried to entomb Marx’s legacy while 28

simultaneously benefiting from it. Yet, the crypt designed for Marx, reverential in its grand austerity, has never quite been able to contain his impact on history. For someone presumably dead, Marx has a way of escaping from his final resting place and reappearing with an uncanny regularity in the world of ideas. His ghost, as Greider (1998) notes, ‘hovers over the global landscape’ as he continues to shape our understandings of the current crises of capitalism that haunt the living present. Regardless of Marx’s enduring relevance and even though much of post-Marxism is actually an outlandish ‘caricature’ of Marx and the entire Marxist tradition, it has eaten through the Left ‘like a cancer’ and has ‘established itself as the new common sense’ (Johnson, 2002, p. 129). What has been produced is a discourse eminently more digestible to the academic ‘Left’ whose steady embourgeoisement appears to be altering the political palate of career social theorists. Eager to take a wide detour around political economy, post-Marxists tend to assume that the principal political points of departure in the current ‘postmodern’ world must necessarily be ‘cultural.’ As such, most, but not all post-Marxists have gravitated towards a politics of ‘difference’ which is largely premised on uncovering relations of power that reside in the arrangement and deployment of subjectivity in cultural and ideological practices (cf. Jordan & Weedon, 1995). Advocates of ‘difference’ politics therefore posit their ideas as bold steps forward in advancing the interests of those historically marginalized by ‘dominant’ social and cultural narratives. There is no doubt that post-Marxism has advanced our knowledge of the hidden trajectories of power within the processes of representation and that it remains useful in adumbrating the formation of subjectivity and its expressive dimensions as well as complementing our understandings of the relationships between ‘difference,’ language, and cultural configurations. However, post-Marxists have been woefully remiss in addressing the constitution of class formations and the machinations of capitalist social organization. In some instances, capitalism and class relations have been thoroughly ‘theotherized;’ in others, class is summoned only as part of the triumvirate of ‘race, class, and gender’ in which class is reduced to merely another form of ‘difference.’ Enamoured with the ‘cultural’ and seemingly blind to the ‘economic,’ the rhetorical excesses of post-Marxists have also pre vented them from considering the stark reality of contemporary class conditions 29

under global capitalism. As we hope to show, the radical displacement of class analysis in contemporary theoretical narratives and the concomitant decentring of capitalism, the anointing of ‘difference’ as a primary explanatory construct, and the ‘culturalization’ of politics, have had detrimental effects on ‘left’ theory and practice. Consequently, we will proceed by describing and criticizing the components of their ideology and then turn to describe their activities and non-activities, contrasting them with the class-based movements and approaches. This will be followed by a discussion of the origins of “postMarxism” and its evolution and future in relation to the decline and possible return of Marxism. Components of ‘post-Marxism’ The intellectual proponents of post-Marxism in most instances are “exMarxists” whose point of departure is a “critique” of Marxism and the elaboration of counterpoints to each basic proposition as the basis for attempting to provide an alternative theory or at least a plausible line of analysis. It is possible to more or less synthesize ten basic arguments that are usually found in the post-Marxist discourse: 1. Socialism was a failure and all “general theories” of societies are condemned to repeat this process. Ideologies are false (except postMarxism!) because they reflect a world of thought dominated by a single gender/race culture system. 2. The Marxist emphasis on social class is “reductionist” because classes are dissolving; the principle political points of departure are cultural and rooted in diverse identities (race, gender, ethnicity, sexual preference). 3. The state is the enemy of democracy and freedom and a corrupt and inefficient deliverer of social welfare. In its place, “civil society” is the protagonist of democracy and social improvement. 4. Central planning leads to and is a product of bureaucracy which hinders the exchange of goods between producers. Markets and market exchanges, perhaps with limited regulations, allow for greater consumption and more efficient distribution. 5. The traditional left’s struggle for state power is corrupting and leads to authoritarian regimes which then subordinate civil society to its control. Local struggles over local issues by local organizations are the only 30

democratic means of change, along with petition/pressure on national and international authorities. 6. Revolutions always end badly or are impossible: social transformations threaten to provoke authoritarian reactions. The alternative is to struggle for and consolidate democratic transitions to safeguard electoral processes. 7. Class solidarity is part of past ideologies, reflecting earlier politics and realities. Classes no longer exist. There are fragmented “locales” where specific groups (identities) and localities engage in self-help and reciprocal relations for “survival” based on cooperation with external supporters. Solidarity is a cross-class phenomena, a humanitarian gesture. 8. Class struggle and confrontation does not produce tangible results; it provokes defeats and fails to solve immediate problems. Government and international cooperation around specific projects does result in increases in production and development. 9. Anti-imperialism is another expression of the past that has outlived its time. In today’s globalised economy, there is no possibility of confronting the economic centres. The world is increasingly interdependent and in this world there is a need for greater international cooperation in transferring capital, technology and know-how from the “rich” to the “poor” countries. 10. Leaders of popular organizations should not be exclusively oriented toward organizing the poor and sharing their conditions. Internal mobilization should be based on external funding. Professionals should design programs and secure external financing to organize local groups. Without outside aid, local groups and professional careers would collapse. Critique of ‘post-Marxist’ Ideology The post-Marxists thus have an analysis, a critique and a strategy of development, in a word, the very general ideology that they supposedly condemn when discussing Marxism. Moreover, it is an ideology that fails to identify the crises of capitalism (prolonged stagnation and periodic financial panics) and the social contradictions (inequalities and social polarisation) at the national and international level that impinge on the specific local social problems they focus on. For example, the origins of neo-liberalism (the socio-political and economic milieu in which the post-Marxists function) is a product of class conflict. Specific sectors of capital allied with the state and 31

the empire defeated the popular classes and imposed the model. A non-class perspective cannot explain the origins of the social world in which the postMarxists operate. Moreover, the same problem surfaces in discussion of the origins of the post-Marxists their own biography reflects the abrupt and radical shift in power at the national and international levels, in the economic and cultural spheres, limiting the space and resources in which Marxism operated while increasing the opportunities and funds for post-Marxists. Sociological origins of post-Marxism are embedded in the shift in political power away from the working class towards export capital. Let us shift now from sociology of knowledge critique of post-Marxist ideology and its generally inconsistent view of general theorizing to discuss its specific propositions. Let us start with its notion of the “failure of socialism” and the “end of ideologies”. What is meant by the “failure of socialism”? The collapse of the USSR and Eastern European Communist regimes? First, that is only a single concept of socialism. Secondly, even here it is not clear what failed—the political system, the socio-economic system? Recent election returns in Russia, Poland, Hungary and many of the ex-Soviet republics suggest that a majority of voters prefer a return of aspects of past social welfare policies and economic practices. If popular opinion in the ex-Communist countries is an indicator of “failure&148;, the results are not definitive. Secondly, if by the “failure of socialism” the post-Marxists mean the decline in power of the left we must insist on a distinction between “failure” due to internal inadequacies of socialist practices and politico-military defeats by external aggressors. No one would say that Hitler’s destruction of Western European democracies was a “failure of democracy”. Terrorist capitalist regimes and/or US intervention in Chile, Argentina, Bolivia, Uruguay, Dominican Republic, Guatemala, Nicaragua, El Salvador, Angola, Mozambique and Afghanistan played a major role in the “decline” of the revolutionary left. Military defeats are not failures of the economic system and do not reflect on the effectiveness of socialist experiences. Moreover, when we analyse the internal performances during the period of relatively stable socialist or popular governance, by many social indicators the results are far more favourable than that which came afterwards: popular participation, health, education and equitable growth under Allende compared very favourably to what came afterward with Pinochet. The same indicators under the Sandinistas compared favourably to Chamorro’s regime 32

in Nicaragua. The Arbenz government’s agrarian reform and human rights policies compared favourably to the installed government’s policy of land concentration and 150,000 assassinations. Today, while it is true that neo-liberals govern and Marxists are out of power, there is hardly a country in the Western hemisphere where Marxistor socialist-influenced mass movements are not leading major demonstrations and challenging neo-liberal policies and regimes. In Paraguay, Uruguay and Bolivia, successful general strikes; in Mexico, major peasant movements and Indian guerrillas; in Brazil, the landless workers’ movements all reflect Marxist influence. In fact, the world does not belong to humanity. It belongs to thieving capitalists who are protected by biased legal systems. And because the legal systems embody thousands of these little seemingly obvious injustices, changing it is virtually impossible. Underhanded capitalism picks the pockets of common people during every economic transaction. Socialism outside of the Communist bloc was an essentially democratic, popular force that secured major support because it represented popular interests freely decided. The post-Marxists confuse Soviet Communism with grassroots revolutionary democratic socialist movements. They confuse military defeats with leftists’ political failures, accepting the neo-liberal amalgamation of the two opposing concepts. Finally, even in the case of Eastern Communism, they fail to see the changing and dynamic nature of communism. The growing popularity of a new socialist synthesis of social ownership, welfare programs, agrarian reform and council democracy is based on the new socio-political movements. In this sense, the post-Marxist view of the “end of ideologies” is not only inconsistent with their own ideological pronouncements but with the continuing ideological debate between past and present Marxists and present debates and confrontations with neo-liberalism and its post-Marxist offspring. Conceptual Clarification Twentieth- and Twenty-First Century globalization has left the world economically polarized between countries that enjoy heretoforeunimaginable wealth and countries that are crippled by poverty. Globalization—as a tool of capitalism—necessitates these inequalities and the institutions of globalization perpetuate them. In addition to creating a 33

massive gulf between the richest and poorest nations on earth, globalization serves to limit the dominance of any single nation-state. Moreover, although poor states are exploited in this globalized society, this exploitative capacity is limited by factors that reside largely outside the control of the rich nations. These factors are controlled by the international ruling class or the corporatocracy. In analysing contemporary capitalism, the most striking distinction is between three radically different conditions facing the global capitalist system. These include countries experiencing (a) high growth, (b) stagnation, (c) deep crises. High growth capitalist countries are sharply divided between those which are (a) commodity boomers, largely exporters of agro-mineralenergy products, mostly found in Africa and Latin America, (b) manufacturing exporters largely found in Asia (China, India, South Korea),and (c)knowledge based such as America and Europe . Crises economies can be sub-divided into three groups. Fast recovery economies include Germany and the Nordic countries, which, after dipping into negative growth have expanded their industrial exports and are growing rapidly since 2010. Slow recovery or stagnant economies, include USA, Great Britain, France and Italy which have touched bottom, recovered profits especially in the financial sector, but have made little or no progress in reducing unemployment, expanding manufacturing and overall growth. Prolonged and deep crises economies, includes Portugal, Spain, Greece, the Baltic and Balkan countries, which are bankrupt, with rising double digit unemployment (between 15% - 20%) and negative growth. They carry a heavy debt burden and are implementing severe austerity programs designed to prolong their economic depression for years to come. Just as there are uneven patterns of capitalist development, the same is true with regard to the class struggle. There are several key concepts that need to be taken into account in the analysis of class struggle. First, there is the distinction between ‘class’ and ‘mass’ struggle. In Latin America there are many instances of multi-sectorial worker, peasant or public sector struggles led by class anchored organizations. At times these class based movements become ‘mass struggles’ incorporating heterogeneous groups (street vendors, self-employed, etc.). The contemporary Arab revolts are mostly mass struggles generally without class leaderships or organizations, or in some cases led by ‘youth’ or ‘religious organizations’. Secondly, there is the distinction between ‘offensive’ and ‘defensive’ class struggles where class 34

organizations either fight to extend their social rights and increase wages or struggle to preserve or limit the loss of wages and living standards. The class struggle is a two way proposition: while workers and other exploited classes struggle from below, ruling classes and their states engage in class struggle from above to increase their profits, productivity and power. The class struggle takes various forms. The majority of class struggles today are over ‘economic issues’, including an increasing share of national income. A half decade ago throughout Latin America, as is the case today in the Arab countries, the class or mass struggle was/is primarily political, a struggle to overthrow oppressive neo-liberal and repressive regimes. With these concepts in hand, we cannot proceed to analyse the relationship between countries and regions in varying degrees of crises or growth and their relationship to the varying degrees and types of class struggle. Uneven Development and Class Struggle The countries experiencing high growth, whether in Asia based on manufacturing or in Latin America based on the agro-mineral export boom, are facing a growing offensive economic class struggle over a greater share of the growing economic pie. In China under pressures from below, wages and salaries have exceeded 10% growth, and in some regions 20%, over the past decade, while in Latin America, workers in Bolivia and elsewhere demand over 10%. In large part high growth is accompanied by inflation which erodes nominal increases offered by the state and employers. Especially provocative are sharp increases in the prices of basic foodstuffs, energy and transport which directly impinges on the everyday life of workers. Among the most promising signs of the advance of the class struggle are the real and substantial socio-economic gains achieved by workers over the past decade in Latin America. In Argentina unemployment has declined from over 20%to less than 7%,real wages have risen by over 15% ,the minimum wage, pensions and medical coverage have increased substantially and trade union membership has expanded. Similar processes on a lesser scale have taken place in Brazil: unemployment has fallen from 10% to 6.5%(March2011),the minimum wage has increased over 50% over the past 8 years and several hundred landed estates have been occupied and expropriated because of the direct action of the Rural Landed Workers Movement. In Latin America, while social revolutionary politics have 35

declined since the mid, 2000’s the economic class struggle has been successful in extracting substantial reforms that improve the livelihood of the working class and impose some constraints on neo-liberalism’s rapacious exploitation of labour, in sharp contrast to what is occurring in AngloAmerica and Southern Europe. In the stagnant ‘developed’ imperial countries, the state has proceeded to impose the entire cost of the ‘recovery’ on the backs of workers and public employees, reducing employment, wages and social services, while enriching bankers and the corporate elite. The US, England and France have witnessed a sharp class offensive from above which in the face of feeble opposition from a shrinking bureaucratized trade union apparatus has largely reversed many previous social gains by labour. Essentially the struggles of labour are defensive, attempts to limit the roll back but lacking the class political organization to counter-attack reactionary budgetary measures which cut social programs and reduce taxes for the rich, widening class inequalities. The most intense class struggles have taken place in the countries with the deepest economic crises, namely, Greece, Spain, Ireland and Portugal. In these countries the ruling class has reversed a half century of social and wage gains in the course of 3 years in order to meet the criteria of the Western bankers and the IMF. The class offensive from above led by the State has been met with a number of general strikes, numerous marches and scores of protests but to no avail. The corporate-state elite, led in most cases by Social Democratic politicians, have privatized public firms, slashed millions of public employees, raised unemployment levels to historic heights (Spain 20%, Greece 14%, Portugal and Ireland 13%) and channelled tens of billions into debt payments. The crises has been seized by the ruling class as a weapon in reducing labour costs, transferring income to the top 5% of the class hierarchy and increasing productivity , without reactivating the economy as a whole. GNP continues ‘negative’ for the foreseeable future, while austerity undermines domestic demand, and debt payments undermine local investment to reactivate the economy. The political crises of the rentier-autocratic-corrupt Arab client regimes is manifested in the mass popular democratic movements on the offensive toppling regimes in Egypt and Tunisia, etc., to begin with, and challenging the pro-imperial state apparatus. In Egypt and Tunisia, pro-imperial autocracies were overthrown but new popular democratic regimes reflecting 36

the new mass protagonists of political change have yet to take power. In the rest of the Arab world, mass revolts in Yemen, Bahrain, Algeria, Jordan, Syria and elsewhere have pressed forward against imperial armed autocracies, raising the spectre of democratic as well as socio-economic changes. The US and EU imperial powers initially caught off guard have proceeded to launch a counter-attack, intervening in Libya, backing the military junta in Egypt and attempting to impose ‘new’ collaborator regimes to block a democratic transition. The mass struggle, influenced by Islamic and secular forces, have a clear program of rejection of the political status quo, but, lacking a class leadership, have not been able to pose an alternative political economic structure beyond vague notions of “democracy”. In summary, growth accompanied by a rapid increase in national income and resurgent inflation has been much more conducive to offensive class struggle from below than ‘crises’ or ‘stagnation’, which at best, has been accompanied by ‘defensive’ or rear guard struggles. In part the theory of ‘relative deprivation’ seems to fit the idea of rising class struggle, except that the kind of struggle is mainly ‘economistic’ and less aimed at the state per se. Moreover, the methods of struggle are normally strikes for higher wages. This is most evident in Argentina, Brazil, Chile and Peru where intense struggles have taken place over narrow economistic demands. The exception is the community based Indian struggles in Peru and Ecuador against the state and foreign mining companies exploiting and contaminating their land, air and water. Nevertheless, several caveats are in order. The working class in Bolivia, experiencing a dynamic growing agro-mineral export, boom, launched a ten day general strike (April 6 -16, 2011) over wages. The prolonged strike over time, turned ‘political’ raising questions about the legitimacy of the Morales regime among some sectors.. In part this is due to the fact that wage increases are fixed by the government. According to the principle workers organization (COB) the raises dictated by the regime were below the rise in the prices of the basic family food basket. Hence, what began as an economic struggle became politicized. Likewise, in the case of Peru, with a dynamic mineral export economy, the neo-liberal Garcia regime experienced sharp economic and ecological confrontations with mine workers and Indian communities. In the run-up to the Presidential elections of 2011, the struggle became highly political, with a plurality of working and peasant class voters 37

supporting Humala the centre- leftist candidate. In high growth countries depending on big foreign owned mining companies. Dissolution of Classes and Rise of Identities The post-Marxists attack the Marxist notion of class analysis from various perspectives. On the one hand, they claim that it obscures the equal or more significant importance of cultural identities (gender, ethnicity). They accuse class analysts of being “economic reductionists” and failing to explain gender and ethnic differences within classes. They then proceed further to argue that these “differences” define the nature of contemporary politics. The second line of attack on class analysis stems from a view that class is merely an intellectual construction; that it is essentially a subjective phenomenon that is culturally determined. Hence, there are no “objective class interests” that divide society since “interests” are purely subjective and each culture defines individual preferences. The third line of attack argues that there have been vast transformations in the economy and society that have obliterated the old class distinctions. In “post-industrial” society, some post-Marxists argue, the source of power is in the new information systems, the new technologies and those who manage and control them. Society, according to this view, is evolving toward a new society in which industrial workers are disappearing in two directions: upward into the “new middle class” of high technology and downward into the marginal “underclass”. Marxists have never denied the importance of racial, gender and ethnic divisions within classes. What they have emphasized, however, is the wider social system which generates these differences and the need to join class forces to eliminate these inequalities at every point: work, neighbourhood, family. What most Marxists object to is the idea that gender and race inequalities can and should be analysed and solved outside of the class framework: that landowner women with servants and wealth have an essential “identity” with the peasant women who are employed at starvation wages; that Indian bureaucrats of neo-liberal governments have a common “identity” with peasant Indians who are displaced from their land by the free market economic policies. For example, Bolivia has an Indian vice-president presiding over the mass arrest of cocoa-growing Indian farmers. Identity politics in the sense of consciousness of a particular form of oppression by an immediate group can be an appropriate point of departure. 38

This understanding, however, will become an “identity&148; prison (race or gender) isolated from other exploited social groups unless it transcends the immediate points of oppression and confronts the social system in which it is embedded. And that requires a broader class analysis of the structure of social power which presides over and defines the conditions of general and specific inequalities. The essentialism of identity politics isolates groups into competing groups unable to transcend the politico-economic universe that defines and confines the poor, workers, peasants, employees. Class politics is the terrain within which to confront “identity politics” and to transform the institutions that sustain class and other inequalities. Classes do not come into being by subjective fiat: they are organized by the capitalist class to appropriate value. Hence, the notion that class is a subjective notion, dependent on time, place and perception confuses class and class consciousness. While the former has objective status, the latter is conditioned by social and cultural factors. Class consciousness is a social construct which, however, does not make it less “real” and important in history. While the social forms and expressions of class consciousness vary, it is a recurring phenomenon throughout history and most of the world, even as it is overshadowed by other forms of consciousness at different moments, that is to say race, gender, nation or combined with them to depict nationalism and class consciousness. It is obvious that there are major changes in the class structure, but not in the direction that the post-Marxists point to. The major changes have reinforced class differences and class exploitation, even as the nature and conditions of the exploited and exploiter classes has changed. There are more temporary wage workers today than in the past. There are many more workers employed in unregulated labour markets (the so-called informal sector today) than in the past. The issue of unregulated exploitation does not describe a system that “transcends” past capitalism: it is the return to nineteenth century forms of labour exploitation. What requires new analysis is capitalism after the welfare populist state has been demolished. This means that the complex roles of states and parties which mediated between capital and labour have been replaced by state institutions more clearly and directly linked to the dominant capitalist class. Neo-liberalism is unmediated ruling class state power(Mentan2010). Whatever the “multiple determinants” of state and regime behaviour in the recent past, today the neo-liberal model of accumulation depends most directly on centralized state control horizontally 39

linked to the international banks to implement debt payments and to export sectors to earn foreign exchange. Its vertical ties to the citizen as subject and the primary link is through a repressive state apparatus and para-statal “NGOs” that defuse social explosions. The dismantling of the welfare state means that the social structure is more polarised: between low-paid or unemployed public employees in health, education, social security on the one hand and on the other hand, well-paid professionals linked to multinational corporations, NGOs and other externally financed institutions linked to the world market and centres of political power. The struggle today is not only between classes in factories but between the state and uprooted classes in the streets and markets displaced from fixed employment and forced to produce and sell and bear the costs of their social reproduction. Integration into the world market by elite exporters and medium and small compradores (importers of electronic goods, tourist functionaries of multinational hotels and resorts) has its counterpart in the disintegration of the economy of the interior: local industry, small farms with the concomitant displacement of producers to the city and overseas. The import of luxury goods for the upper middle class is based on the earnings remitted by “exported” labour of the poor. The nexus of exploitation begins in the impoverishment of the interior, the uprooting of the peasants and their immigration to the cities and overseas. The income remitted by “exported labour” provides hard currency to finance imports and neo-liberal infrastructure projects to promote the reign of domestic export and tourist businesses. The chain of exploitation is more circuitous, but it still is located ultimately in the capital-labour relation. In the age of neo-liberalism, the struggle to recreate the “nation”, the national market, national production and exchange is once again a basic historic demand just as the growth of deregulated employment (informality) requires a powerful public investment and regulatory centre to generate formal employment with liveable social conditions. In a word, class analysis needs to be adapted to the rule of unmediated capital in an unregulated labour market with international linkages in which the reformist redistributive politics of the past have been replaced by neo-liberal policies reconcentrating income and power at the top. The homogenization and downward mobility of vast sectors of workers and peasants formerly in the regulated labour market creates a great objective potential for unified 40

revolutionary action. In a word, there is a common class identity which forms the terrain for organizing the struggles of the poor. In sum, contrary to what the post-Marxists argue, the transformations of capitalism have made class analysis more relevant than ever. The growth of technology has exacerbated class differences, not abolished them. The workers in micro-chip industries and those industries in which the new chips have been incorporated have not eliminated the working class. Rather, it has shifted the sites of activity and the mode of producing within the continuing process of exploitation. The new class structure insofar as it is visible combines the new technologies to more controlling forms of exploitation. Automation of some sectors increases the tempo of work down the line; television cameras increase worker surveillance while decreasing administrative staff; “quality work circles”, in which workers pressure workers, increase self-exploitation without increases in pay or power. The “technological revolution” is ultimately shaped by the class structure of the neo-liberal counter-revolution. Computers allow for agribusiness to control the costs and volume of pesticides, but it is the low-paid temporary workers who spray and are poisoned. Information networks are linked to putting out work to the sweatshop or household (the informal economy) for production of textiles, shoes and such like. The key to understanding this process of combined and uneven development of technology and labour is class analysis and within that gender and race. State and civil society The post-Marxists paint a one-sided picture of the state. The state is described as a huge inefficient bureaucracy that plundered the public treasury and left the people poor and the economy bankrupt. In the political sphere, the state was the source of authoritarian rule and arbitrary rulings, hindering the exercise of citizenship (democracy) and the free exchange of commodities (“the market”). On the other hand, the post-Marxists argue, “civil society” was the source of freedom, social movements, citizenship. Out of an active civil society would emerge an equitable and dynamic economy. What is strange about this ideology is its peculiar capacity to overlook 50 years of Third World, be it Latin American, Asian or African history. The public sector was of necessity instrumental in stimulating industrialization in the absence of private investment and because of economic crisis, that is, 41

world crisis of the 1930s and war in the 1940s. Secondly, the growth of literacy and basic public health was largely a public initiative. In the century and a half of free enterprise, whether under direct colonial or neo-colonial rule, roughly from the eighteenth century to the 1930s in Latin America and 1960s in Africa, the Third World suffered the seven scourges of the Holy Bible, while the invisible hand of the market looked on: genocide, famine, disease, tyranny, dependency, uprootedness and exploitation. The public sector grew in response to these problems and deviated from its public functions to the degree that it was privately appropriated by business and political elites. The “inefficiency of the state” is a result of it being directed toward private gain either in subsidizing business interests (through low costs of energy) or providing employment to political followers. The inefficiency of the state is directly related to its subordination to private interests. The state’s comprehensive health and educational programs have never been adequately replaced by the private economy, the church or the NGOs. Both the private sector and the church-funded private clinics and education cater to a wealthy minority. The NGOs, at best, provide short-term care and education for limited groups in local circumstances dependent on the whims and interests of foreign donors(Tandon1991). As a systematic comparison indicates, the post-Marxists have read the historical record wrong: they have let their anti-statist rhetoric blind them to the positive comparative accomplishments of the public over the private. For example, the argument that “the state” is the source of authoritarianism is both true and untrue. Dictatorial states have and will exist, but most have little or nothing to do with public ownership, especially if it means expropriating foreign business. Most dictatorships have been anti-statist and pro-free market, today and in the past and probably in the future. Moreover, the state has been an important supporter of citizenship, promoting the incorporation of exploited sectors of the population into the polity, recognizing legitimate rights of workers, blacks, women and others. States have provided the basis for social justice by redistributing land, income and budgets to favour the poor. In a word, we need to go beyond the statist/anti-statist rhetoric to define the class nature of the state and its basis of political representation and legitimacy. The generalized ahistorical, asocial attacks on the state are unwarranted and only serve as a polemical instrument to disarm citizens of 42

the free market from forging an effective and rational alternative anchored in the creative potentialities of public action. The counter-position of “civil society” to the state is also a false dichotomy. Much of the discussion of civil society overlooks the basic social contradictions that divide “civil society”. Civil society or, more accurately, the leading classes of civil society, while attacking the “statism” of the poor have always made a major point of strengthening their ties to the treasury and military to promote and protect their dominant position in “civil society”. Likewise, the popular classes in civil society when aroused have sought to break the ruling classes’ monopoly of the state. The poor have always looked to state resources to strengthen their socio-economic position in relation to the rich. The issue is and always has been the relation of different classes to the state. The post-Marxist ideologues who are marginalized from the state by the neo-liberals have made a virtue of their impotence. Uncritically imbuing the stateless rhetoric from above, they transmit it below. The post- Marxists try to justify their organizational vehicles (NGOs) for upward mobility by arguing that they operate outside of the state and in “civil society” when in fact they are funded by foreign governments to work with domestic governments. “Civil society” is an abstraction from the deep social cleavages engendered by capitalist society; social divisions which have deepened under neo-liberalism. There is as much conflict within civil society, between classes, as there is between “civil society” and the state. Only in exceptionally rare moments do we find it otherwise. Under fascist or totalitarian states which torture, abuse and pillage the totality of social classes do we find instances of a dichotomy between the state and civil society. To speak or write of “civil society” is to attempt to convert a legalistic distinction into major political categories to organize politics. In doing so, the differences between classes are obscured and ruling class domination is not challenged. To counterpose the “citizen” to the “state” is to overlook the profound links of certain citizens (the export elites, upper middle class) to the state and the alienation and exclusion of the majority of citizens (workers, unemployed, peasants) from effective exercise of their elementary social rights. Elite citizens using the state, tend to empty citizenship of any practical content for the majority, converting citizens into subjects. Discussion of civil society, like the state, needs to specify the social contours of social classes 43

and the boundaries imposed by the privileged class. The way the postMarxists use the term as an uncritical, undifferentiated concept serves to obscure more than reveal the dynamics of societal change. Planning, Bureaucracy and Market There is no question that central planning in the former Communist countries was “bureaucratic”, authoritarian in conception and centralized in execution. From this empirical observation, the post-Marxists argue that “planning” (central or not) is by its nature antithetical to the needs of a modern complex economy with its multiple demands, millions of consumers, massive flows of information. Only the market can do the trick. Democracy and the market go together another point of convergence between the “postMarxists” and the neo-liberals. The problem with this notion is that most of the major institutions in a capitalist economy engage in central planning. General Motors, Wal-Mart, Microsoft all centrally program and plan direct investments and expenditures toward further production and marketing. Few, if any, post-Marxists focus their critical attention on these enterprises. The post-Marxists do not call into question the efficiency of central planning by the multinational corporations or their compatibility with the competitive electoral systems characteristic of capitalist democracies. The theoretical problem is the post-Marxists’ confusion of central planning with one particular historic-political variant of it. If we accept that planning systems can be embedded in a variety of political systems (authoritarian or democratic), then it is logical that the accountability and responsiveness of the planning system will vary. Today in capitalist societies, the military budget is part of state planning and expenditures based on “commands” to the producers and owners of capital who respond in their own inefficient way, producing and profiting for over scores of years. While making any distinction about the “model” of planning, the point that needs to be made is that central state planning is not a phenomenon confined to “Communist systems”. The defects are generalized and found also in capitalist economies. The problem in both instances (Pentagon and Communism) is the lack of democratic accountability: the military-industrial complex elite fix production, costs, demand and supply. 44

The central allocation of state resources is essential in most countries because of regional inequalities in resource endowment, immigration, productivity, and demand for products or for a wealth of historical reasons. Only a decision made at the centre can redistribute resources to compensate less developed regions, classes, gender and racial groups adversely affected by the above factors. Otherwise, the “market” tends to favour those with historic advantages and favourable endowments creating polar patterns of development or even fostering inter-regional/class exploitation and ethnic conflicts. The fundamental problem of planning, therefore, is the political structure which informs the planning process. Planning officials elected and subject to organized communities and social groups (producers, consumers, youth, women, racial minorities) will allocate resources between production, consumption and reinvestment different from those who are beholden to elites embedded in industrial-military complexes. Secondly, planning does not mean detailed specification. The size of social budgets can be decided nationally by elected representatives and allocated according to public assemblies where citizens can vote on their local priorities. This practice has been successful in Porto Alegré in Brazil for the past several years under a municipal government led by the Workers’ Party. The relations between general and local planning are not written in stone, nor are the levels of specification of expenditures and investments to be determined at the “higher levels”. General allocations to promote strategic targets that benefit the whole country, such as infrastructure, high technology and education, are complemented by local decisions on subsidizing schools, clinics, cultural centres. Planning is a key instrument in today’s capitalist economy. To dismiss socialist planning is to reject an important tool in organizing social change. To reverse the vast inequalities, concentration of property, unjust budget allocations, requires an overall plan with a democratic authority empowered to implement it. Together with public enterprises and self-management councils of producers and consumers, central planning is the third pillar to a democratic transformation. Finally, central planning is not incompatible with locally owned productive and service activities, such as restaurants, cafes, repair shops and family farms. Clearly, public authorities will have their hands full managing the macro-structures of society. The complex decisions and information flows are much easier to manage today with the mega-information processing 45

computers. The formula is: democratic representation plus computers plus central planning equals efficient and socially equitable production and distribution. ‘State power corrupts’: local politics submits One of the principal critiques of Marxism among the post-Marxists is the notion that state power corrupts and that the struggle for it is the original sin. They argue that this is so because the state is so distant from the citizens, that the authorities become autonomous and arbitrary, forgetting the original goals and pursuing their own self-interest. There is no doubt that throughout history people seizing power have become tyrants. But it is also the case that the rises to power of individuals leading social movements have had an emancipating effect. The abolition of slavery and the overthrow of absolutist monarchies are two examples. So “power” in the state has a double meaning depending on the historic context. Likewise, local movements have had successes in mobilizing communities and improving immediate conditions, in some cases significantly. But it is also the case that macro-political economic decisions have undermined local efforts. Today, structural adjustment policies at the national and international level have generated poverty and unemployment, depleting local resources, forcing local people to migrate or to engage in crime. The dialectics between state and local power operates to undermine or reinforce local initiatives and changes depending on the class power manifested at both levels. There are numerous cases of progressive municipal governments that have been undermined because reactionary national regimes cut off their funding. On the other hand, progressive municipal governments have been a very positive force helping neighbourhood-local organizations, as has been the case with the socialist mayor of Montevideo in Uruguay or the leftist mayor in Porto Alegre in Brazil. The post-Marxists who counterpose “local” to “state power” are not basing their discussion on historical experience, at least not of Latin America. The antinomy is a result of the attempt to justify the role of NGOs as mediators between local organizations and neo liberal foreign donors (World Bank, Europe or the USA) and the local free market regimes. In order to “legitimate” their role, the post-Marxist NGO professionals, as “agents of the democratic grassroots”, have to disparage the left at the level of state 46

power. In the process, they complement the activity of the neo-liberals by severing the link between local struggles and organization and national/international political movements. The emphasis on “local activity” serves the neo-liberal regimes just right, as it allows its foreign and domestic backers to dominate macro-socio-economic policy and to channel most of the state’s resources on behalf of export capitalists and financial interests. The post-Marxists, as managers of NGOs, have become skilled in designing projects and transmitting the new “identity” and “globalist” jargon into the popular movements. Their talk and writing about international cooperation and self-help micro-enterprises creates ideological bonds with the neo-liberals while forging dependency on external donors and their neoliberal socio-economic agenda. It is no surprise that after a decade of NGO activity that the post-Marxist professionals have “depoliticized” and deradicalized whole areas of social life: women, neighbourhood and youth organizations. The case of Peru and Chile is classic: where the NGOs have become firmly established, the radical social movements have retreated(Tandon1991). Local struggles over immediate issues are the food and substance that nurture emerging movements. The crucial question is over their direction and dynamic: whether they raise the larger issues of the social system and link up with other local forces to confront the state and its imperial backers or whether it turns inward, looking to foreign donors and fragmenting into a series of competing supplicants for external subsidies. The ideology of postMarxism promotes the latter; the Marxists the former. Revolutions always end badly: the ‘possibilism’ of post-Marxism There is a pessimistic variant to post-Marxism which speaks less of the failures of revolution as the impossibility of socialism. They cite the decline of the revolutionary left, the triumph of capitalism in the East, the “crisis of Marxism”, the loss of alternatives, the strength of the us, the coups and repression by the military—all these arguments are mobilised to urge the left to support “possibilism”: the need to work within the niches of the free market imposed by the World Bank and its structural adjustment agenda, and to confine politics to the electoral parameters imposed by the military. This is called “pragmatism” or incrementalism. Post-Marxists played a major ideological role in promoting and defending the so-called electoral transition 47

from military rule in which social changes were subordinated to the reintroduction of an electoral system. Most of the arguments of the post-Marxists are based on static and selective observations of contemporary reality and are tied to predetermined conclusions. Having decided that revolutions are out of date, they focus on neo-liberal electoral victories and not on the post-electoral mass protests and general strikes that mobilise large numbers of people in extra-parliamentary activity. They look at the demise of communism in the late 1980s and not to its revival in the mid-1990s. They describe the constraints of the military on electoral politicians without looking at the challenges to the military by the Zapatista guerrillas, the urban rebellions in Caracas, the general strikes in Bolivia. In a word, the possibilists overlook the dynamics of struggles that begin at the sectorial or local level within the electoral parameters of the military and then are propelled upward and beyond those limits by the failures and impotence of the electoral possibilists to satisfy the elementary demands and needs of the people. The possibilists have failed to end the impunity of the military, to pay the back salaries of public employees (the provinces of Argentina) or to end crop destruction of the cocoa farmers (in Bolivia). The post-Marxist possibilists become part of the problem instead of part of the solution. It is a decade and a half since the negotiated transitions began and in each instance the post-Marxists have adapted to neo-liberalism and deepened its free market policies. The possibilists are unable to effectively oppose the negative social effects of the free market on the people, but are pressured by the neo-liberals to impose new and more austere measures in order to continue to hold office. The post-Marxists have gradually moved from being pragmatic critics of the neo-liberals to promoting themselves as efficient and honest managers of neo-liberalism, capable of securing investor confidence and pacifying social unrest. In the meantime, the pragmatism of the post-Marxists is matched by the extremism of the neo-liberals: the decade of the 1990s has witnessed a radicalization of neo-liberal policies, designed to forestall crisis by handing over even more lucrative investment and speculative opportunities to overseas banks and multinationals. The neo-liberals are creating a polarised class structure, much closer to the Marxist paradigm of society than the postMarxist vision. Contemporary Latin American class structure is more rigid, more deterministic, more linked to class politics or the state, than in the past. 48

In these circumstances revolutionary politics are far more relevant than the pragmatic proposals of the post-Marxists. Class Solidarity and ‘Solidarity’ of Foreign Donors The word “solidarity” has been abused to the point that in many contexts it has lost meaning. The term “solidarity” for the post-Marxists includes foreign aid channelled to any designated “impoverished” group. Mere “research” or “popular education” of the poor by professionals is designated as “solidarity”. In many ways the hierarchical structures and the forms of transmission of “aid” and “training” resemble nineteenth century charity and the promoters are not very different from Christian missionaries. The post-Marxists emphasize “self-help” in attacking the “paternalism and dependence” on the state. In this competition among NGOs to capture the victims of neo-liberalism, the post-Marxists receive important subsidies from their counterparts in Europe and the USA. The self-help ideology emphasizes the replacement of public employees for volunteers and upwardly mobile professionals contracted on a temporary basis. The basic philosophy of the post-Marxist view is to transform “solidarity” into collaboration and subordination to the macro-economy of neo-liberalism by focusing attention away from state resources of the wealthy classes toward self-exploitation of the poor. The poor do not need to be made virtuous by the post-Marxists for what the state obligates them to do. The Marxist concept of solidarity in contrast emphasizes class solidarity and within the class, solidarity of oppressed groups (women and people of colour) against their foreign and domestic exploiters. The major focus is not on the donations that divide classes and pacify small groups for a limited time period. The focus of the Marxist concept of solidarity is on the common action of the same members of the class sharing their common economic predicament and struggling for collective improvement. It involves intellectuals who write and speak for the social movements in struggle, committed to sharing the same political consequences. The concept of solidarity is linked to “organic” intellectuals who are basically part of the movement the resource people providing analysis and education for class struggle. In contrast, the post-Marxists are embedded in the world of institutions, academic seminars, foreign foundations, international conferences and bureaucratic reports. They write in esoteric postmodern 49

jargon understood only by those “initiated” into the subjectivist cult of essentialist identities. Marxists view solidarity as sharing the risks of the movements, not being outside commentators who question everything and defend nothing. For the post-Marxists, the main object is “getting” the foreign funding for the “project”. The main issue for the Marxist is the process of political struggle and education in securing social improvement. The objective is raising consciousness for societal change; constructing political power to transform the general condition of the great majority. “Solidarity” for the post-Marxists is divorced from the general object of liberation; it is merely a way of bringing people together to attend a job retraining seminar, to build a latrine. For the Marxists, the solidarity of a collective struggle contains the seeds of the future democratic collectivist society. The larger vision or its absence is what gives the different conceptions of solidarity their distinct meaning. Class Struggle and Cooperation The post-Marxists frequently write of the “cooperation” of everyone, near and far, without delving too profoundly into the price and conditions for securing the cooperation of neo-liberal regimes and overseas funding agencies. Class struggle is viewed as an atavism to a past that no longer exists. So we are told “the poor” are intent on building a new life. They are fed up with traditional politics, ideologies and politicians. So far, so good! The problem is that the post-Marxists are not so forthcoming in describing their role as mediators and brokers, hustling funds overseas and matching the funds to projects acceptable to donors and local recipients. The foundation entrepreneurs are engaged in a new type of politics similar to the “labour contractors” (enganchadores) of the not-too-distant past: herding together women to be “trained”; setting up micro-firms subcontracted to larger producers of exports. The new politics of the post-Marxists is essentially the politics of compradores: they produce no national products, rather they link foreign funders with local labour (self-help micro-enterprises) to facilitate the continuation of the neo-liberal regime. In that sense the post-Marxists in their role of managers of NGOs are fundamentally political actors whose projects, training and workshops do not make any significant economic impact either on the gnp or in terms of lessening poverty. But their activities do 50

make an impact in diverting people from the class struggle into harmless and ineffective forms of collaboration with their oppressors. The Marxist perspective of class struggle and confrontation is built upon the real social divisions of society: between those who extract profits, interest, rent and regressive taxes and those who struggle to maximize wages, social expenditures and productive investments. The results of post-Marxist perspectives are today evident everywhere: the concentration of income and the growth of inequalities are greater than ever, after a decade of preaching cooperation, micro-enterprises and self-help. Today banks like the InterAmerican Development Bank (IDB) fund the export agribusinesses that exploit and poison millions of farm labourers while providing funds to finance small micro-projects. The role of the post-Marxists in the micro projects is to neutralize political opposition at the bottom while neoliberalism is promoted at the top. The ideology of “cooperation” links the poor through the post-Marxists to the neo-liberals at the top. Intellectually, the post-Marxists are the intellectual policemen who define acceptable research, distribute research funds and filter out topics and perspectives that project class analysis and struggle perspectives. Marxists are excluded from the conferences and stigmatized as “ideologists” , while post-Marxists present themselves as “social scientists”. The control of intellectual fashion, publications, conferences and research funds provide the post-Marxists with an important power base but one ultimately dependent on avoiding conflict with their external funding patrons. The critical Marxist intellectuals have their strength in the fact that their ideas resonate with the evolving social realities. The polarization of classes and the violent confrontations are growing, as their theories predict. It is in this sense that the Marxists are tactically weak and strategically strong vis-a-vis the post-Marxists. Is anti-imperialism dead? In recent years anti-imperialism has disappeared from the political lexicon of the post-Marxists. The ex-guerrillas of Central American turned electoral politicians, and the professionals who run the NGOs speak of international cooperation and interdependence. Yet debt repayments continue to transfer huge sums from the poor in Latin America to the European, us and Japanese banks. Public properties, banks, and above all 51

natural resources are being taken over at very cheap prices by us and European multinationals. There are more Latin American billionaires with the bulk of their funds in us and European banks than ever before. Meanwhile, entire provinces have become industrial cemeteries and the countryside is depopulated. The US has more military advisers, drug officials and federal police directing Latin American “policing” than ever before in history. Yet we are told by some former Sandinistas and ex-Farabundistas that anti-imperialism/imperialism disappeared with the end of the Cold War. The problem, we are told, is not foreign investments or foreign aid but their absence and they ask for more imperial aid. The political and economic myopia that accompanies this perspective fails to understand that the political conditions for the loans and investment is the cheapening of labour, the elimination of social legislation and the transformation of Latin America into one big plantation, one big mining camp, one big free trade zone stripped of rights, sovereignty and wealth. The Marxist emphasis on the deepening of imperial exploitation is rooted in the social relations of production and state relations between imperial and dependent capitalism. The collapse of the USSR has intensified imperial exploitation. The post-Marxists (ex-Marxists) who believe that the unipolar world will result in greater “cooperation” have misread US intervention in Panama, Iraq, Somalia and elsewhere. More fundamentally, the dynamic of imperialism is embedded in the internal dynamic of capital not in external competition with the Soviet Union. The loss of the domestic market and external sector of Latin America is a return to a “pre-national” phase: the Latin economies begin to resemble their “colonial” past. The struggle against imperialism today involves the reconstruction of the nation, the domestic market, the productive economy and a working class linked to social production and consumption to upset the inequalities brought about by globalization. According to Damien Cave, “The New Gilded Age and its Discontents,” Salon.com, July 3, 2002. http://archive.salon.com/tech/feature/2002/07/03/stiglitz/, the definition of globalization is essentially that because of technology, people around the world can now interact faster and less expensively than ever before. It is not the actual phenomenon of globalization that causes conflict; rather, it is the organizations and treaties set up to regulate and promote it. In the late 1980s, South Korea got its first taste of globalization. The country accepted recommendations from the Uruguay Round (which later became the WTO) 52

to open their economy to free trade. These recommendations required South Korea to gradually reduce subsidies to its rice farmers. In return, the Uruguay Round promised South Korea aid and, even more importantly, entrance to the new world economy. The South Korean government believed it had put its country on the fast track towards development and prosperity and, in many ways, it had. But, the reforms were devastating to South Korea’s rice farmers. Other countries, such as the United States, had continued to subsidize their farmers and the Korean farmers could not compete. In twelve years, the number of farmers in South Korea dropped from 6.6 million to 3.6 million. In 2003, U.S. subsidized rice exports to Korea were four times cheaper than the rice produced by Korean farmers. Many analysts would argue that South Korea’s rice industry is inefficient and that it should be replaced with more profitable ventures. This may be true, but rice also has deep roots in South Korean culture. Mexican journalist Luis Hernandez Navarro writes: Korean culture is based on rice. In Mesoamerica we say we are the “people of maize” - thus we can say that Koreans are the “people of rice.” Rice is much more than a commodity for the rural people of Korea: it is an ancestral way of life. The Korean word “bap” is used both for cooked rice as well as for food in general. If you ask a Korean child what they see on the Moon, they will tell you they see rabbits milling rice in a giant mortar. A large proportion of the total labour force in Korea is dedicated to the cultivation of rice. Because of rice, rural villages are located in the midst of the very rice paddies where villagers work. Rice represents 52% of agricultural production(Cave, Ibid). For many Koreans, rice is part of their identity and thus, very difficult to give up. Class Organizations and NGOs To advance the struggle against imperialism and its domestic neocomprador collaborators passes through an ideological and cultural debate with the post-Marxists inside and on the periphery of the popular movements. Neo-liberalism operates today on two fronts: the economic and the culturalpolitical, and at two levels, the regime and the popular classes. At the top, neo-liberal policies are formulated and implemented by the usual characters: the World Bank, the IMF working with Washington, Bonn and Tokyo in 53

association with neo-liberal regimes and domestic exporters, big business conglomerates and bankers. By the early 1980s the more perceptive sectors of the neo-liberal ruling classes realized that their policies were polarizing the society and provoking large-scale social discontent. Neo-liberal politicians began to finance and promote a parallel strategy of “from below”, the promotion of “grassroots” organization with an “anti-statist” ideology to intervene among potentially conflicting classes, to create a “social cushion”. These organizations were financially dependent on neo-liberal sources and were directly involved in competing with socio-political movements for the allegiance of local leaders and activist communities. By the 1990s these organizations, described as “non-governmental”, numbered in the thousands and were receiving close to US$4 billion world-wide. The confusion concerning the political character of the NGOs stems from their earlier history in the 1970s during the days of the dictatorships. In this period they were active in providing humanitarian support to the victims of the military dictatorships and denouncing human rights violations. The NGOs supported “soup kitchens” which allowed victimised families to survive the first wave of shock treatments administered by the neo-liberal dictatorships. This period created a favourable image of NGOs even among the left. They were considered part of the “progressive camp”. Even then, however, the limits of the NGOs were evident. While they attacked the human rights violations of local dictatorships, they rarely denounced their and European patrons who financed and advised them. Nor was there a serious effort to link the neo-liberal economic policies and human rights violations to the new turn in the imperialist system. Obviously the external sources of funding limited the sphere of criticism and human rights action. As opposition to neo-liberalism grew in the early 1980s, the and European governments and the World Bank increased funding of NGOs. There is a direct relation between the growth of movements challenging the neo-liberal model and the effort to subvert them by creating alternative forms of social action through the NGOs. The basic point of convergence between the NGOs and the World Bank was their common opposition to “statism”. On the surface the NGOs criticized the state from a “left” perspective defending civil society, while the right did so in the name of the market. In reality, however, the World Bank, the neo-liberal regimes and Western foundations co-opted and encouraged the NGOs to undermine the 54

national welfare state by providing social services to compensate the victims of the MNCs. In other words, as the neo-liberal regimes at the top devastated communities by inundating the country with cheap imports, external debt payments and abolishing labour legislation, creating a growing mass of low-paid and unemployed workers, the NGOs were funded to provide “self-help” projects, “popular education” and job training, to absorb temporarily, small groups of poor, to co-opt local leaders and to undermine anti-system struggles. The NGOs became the “community face” of neo-liberalism, intimately related to those at the top and complementing their destructive work with local projects. In effect, the neo-liberals organized a “pincer” operation or dual strategy. Unfortunately, many on the left focused only on “neoliberalism” from above and the outside (IMF, World Bank) and not on neoliberalism from below (NGOs, micro-enterprises). A major reason for this oversight was the conversion of many ex-Marxists to the NGO formula and practice. Post-Marxism was the ideological transit ticket from class politics to “community development”, from Marxism to the NGOs. While the neo-liberals were transferring lucrative state properties to the private rich, the NGOs were not part of the trade union resistance. On the contrary, they were active in local private projects, promoting the private enterprise discourse (self-help) in the local community by focusing on microenterprises. The NGOs built ideological bridges between the small-scale capitalists and the monopolies benefitting from privatization all in the name of “anti-statism”, and building civil societies. While the rich accumulated vast financial empires from the privatization, the NGO middle-class professionals got small sums of funds to finance offices, transportation and small-scale economic activity. The important political point is that the NGOs depoliticized sectors of the population, undermined their commitment to public employment and co-opted potential leaders in small projects. NGOs abstain from public school teacher struggles as the neo-liberal regimes attack public education and public educators. Rarely if ever do NGOs support the strikes and protests against low wages and budget cuts. Since their education funding comes from the neo-liberal governments they avoid solidarity with public educators in struggle. In practice, “non-governmental” translates into anti-public spending activities, freeing the bulk of funds for neo-liberals to subsidize export capitalists while small sums trickle from the government to NGOs. 55

In reality, non-governmental organizations are not non-governmental. They receive funds from overseas governments or work as private subcontractors of local governments. Frequently they openly collaborate with governmental agencies at home or overseas. This “sub-contracting” undermines professionals with fixed contracts, replacing them with contingent professionals. The NGOs cannot provide the long term comprehensive programs that the welfare state can furnish. Instead they provide limited services to narrow groups of communities. More importantly, their programs are not accountable to the local people but to overseas donors. In this sense NGOs undermine democracy by taking social programs out of the hands of the local people and their elected officials and creating dependence on non-elected, overseas officials and their locally anointed officials. NGOs shift people’s attention and struggles away from the national budget toward self-exploitation to secure local social services. This allows the neo-liberals to cut social budgets and transfer state funds to subsidise bad debts of private banks and loans to exporters. Self-exploitation (self-help) means that, in addition to paying taxes to the state and not getting anything in return, working people have to work extra hours with marginal resources, expending scarce energies to obtain services that the bourgeoisie receives free from the state. More fundamentally, the NGO ideology of “private voluntary activity” undermines the idea that the government has an obligation to look after its citizens and provide them with life, liberty and the pursuit of happiness; that political responsibility of the state is essential for the wellbeing of citizens. Against this notion of public responsibility, the NGOs foster the neo-liberal idea of private responsibility for social problems and the importance of private resources to solve these problem. In effect, they impose a double burden on the poor: paying taxes to finance the neo-liberal state to serve the rich and private self-exploitation to take care of their own needs. NGOs and socio-political movements NGOs emphasize projects not movements. They “mobilize” people to produce at the margins not to struggle to control the basic means of production and wealth. They focus on technical financial assistance of projects not on structural conditions that shape the everyday lives of people. The NGOs co-opt the language of the left: “popular power”, 56

“empowerment”, “gender equality”, “sustainable development” and “bottom up leadership”. The problem is that this language is linked to a framework of collaboration with donors and government agencies that subordinate practical activity to non-confrontational politics. The local nature of NGO activity means “empowerment” which never goes beyond influencing small areas of social life with limited resources within the conditions permitted by the neo-liberal state and macro-economy. The NGOs and their post-Marxist professional staff directly compete with the socio-political movements for influence among the poor, women, racially excluded and such like. Their ideology and practice diverts attention from the sources and solutions of poverty (looking downward and inward instead of upward and outward). To speak of micro-enterprises as solutions, instead of the exploitation by the overseas banks, is based on the notion that the problem is one of individual initiative rather than the transference of income overseas. The NGOs’ aid affects small sectors of the population, setting up competition between communities for scarce resources, generating insidious distinction and inter- and intra-community rivalries thus undermining class solidarity. The same is true among the professionals: each sets up their NGO to solicit overseas funds. They compete by presenting proposals closer to the liking of the overseas donors for lower prices, while claiming to speak for more followers. The net effect is a proliferation of NGOs that fragment poor communities into sectorial and sub-sectorial groupings unable to see the larger social picture that afflicts them and even less able to unite in struggle against the system. Recent experience also demonstrates that foreign donors finance projects during “crises”—political and social challenges to the status quo. Once the movements have ebbed, they shift funding to NGO-regime “collaboration”, fitting the NGO projects into the neo-liberal agenda. Economic development compatible with the “free market” rather than social organization for social change becomes the dominant item on the funding agenda. The structure and nature of NGOs with their “apolitical” posture and their focus on self-help depoliticizes and demobilises the poor. They reinforce the electoral processes encouraged by the neo-liberal parties and mass media. Political education about the nature of imperialism, the class basis of neo-liberalism, like class struggle between exporters and temporary workers are avoided. Instead the NGOs discuss “the excluded”, the “powerless”, “extreme poverty”, “gender or racial discrimination” without 57

moving beyond the superficial symptom, to engaging the social system that produces these conditions. Incorporating the poor into the neo-liberal economy through purely “private voluntary action”, the NGOs create a political world where the appearance of solidarity and social action cloaks a conservative conformity with the international and national structure of power. It is no coincidence that as NGOs have become dominant in certain regions, independent class political action has declined, and neo-liberalism goes uncontested. The bottom line is that the growth of NGOs coincides with increased funding from neo-liberalism and the deepening of poverty everywhere. Despite its claims of many local successes, the overall power of neo-liberalism stands unchallenged and the NGOs increasingly search for niches in the interstices of power. The problem of formulating alternatives has been hindered in another way. Many of the former leaders of guerrilla and social movements, trade union and popular women’s organisations have been co-opted by the NGOs. The offer is tempting: higher pay (occasionally in hard currency), prestige and recognition by overseas donors, overseas conferences and networks, office staff and relative security from repression. In contrast, the socio-political movements offer few material benefits but greater respect and independence and, more importantly, the freedom to challenge the political and economic system. The NGOs and their overseas banking supporters (Inter-American Bank, the World Bank) publish newsletters featuring success stories of micro-enterprises and other self-help projects—without mentioning the high rates of failure as popular consumption declines, low price imports flood the market and as interest rates spiral as is the case in Mexico or Kenya today. Even the “successes” affect only a small fraction of the total poor and succeed only to the degree that others cannot enter into the same market. However, the propaganda value of individual micro-enterprise success is important in fostering the illusion that neo-liberalism is a popular phenomenon. The frequent violent mass outbursts that take place in regions of micro-enterprise promotion suggests that the ideology is not hegemonic and the NGOs have not yet displaced independent class movements. Finally, NGOs foster a new type of cultural and economic colonialism and dependency. Projects are designed, or at least approved, according to “guidelines” and priorities of the imperial centres or their institutions. They are administered and “sold” to communities. Evaluations are done by and for 58

the imperial institutions. Shifts in funding priorities or bad evaluations result in the dumping of groups, communities, farms and cooperatives. Everything and everybody is increasingly disciplined to comply with the donors’ demands and their project evaluators. The new viceroys supervise and ensure conformity with the goals, values and ideologies of the donor as well as the proper use of funds. Where “successes” occur they are heavily dependent on continued outside support, otherwise they could collapse. While the mass of NGOs are increasingly instruments of neo-liberalism there is a small minority which attempt to develop an alternative strategy that is supportive of class and anti-imperialist politics. None of them receive funds from the World Bank or European and governmental agencies. They support efforts to link local power to struggles for state power. They link local projects to national socio-political movements occupying large landed estates, defending public property and national ownership against multinationals. They provide political solidarity to social movements involved in struggles to expropriate land. They support women’s struggles linked to class perspectives. They recognize the importance of putting politics in command in defining local and immediate struggles. They believe that local organizations should fight at the national level and that national leaders must be accountable to local activists. In a word, they are not post-Marxists. In sum, the development of science and philosophy in the twentieth century has been decisively influenced by the following three factors: (1) the accelerated growth of scientific knowledge, which gave rise to a new technological revolution characterized by automation, use of huge new sources of energy and new exact methods of management; (2) the discovery of the dark irrational side of human nature through psychoanalysis, anthropological investigations of primitive cultures, surrealism and other trends of modern arts, and, above all, through unheard of mass eruptions of brutality from the beginning of World War I up to the present day; (3) the beginning of a process whereby existing forms of class society are destructuralized, and the rapidly increasing role of ideology and politics. Marx developed a theory which is both scientific and critical. However, in most interpretations and further developments of his thought either one or the other of these two essential characteristics has invariably been overlooked. Among those who speak in the name of Marx or consider themselves his intellectual followers some accept only his radical criticism of the society of his time, some lay emphasis only on his contribution to 59

positive scientific knowledge about contemporary social structures and processes. To the former group belong, on the one hand, various apologists of post-capitalist society who develop Marxism as an ideology, and, on the other hand, those romantic humanists who consider positive knowledge a form of intellectual subordination to the given social framework, and who are ready to accept only the anthropological ideas of the young Marx. To the latter group belong all those scientists who appreciate Marx’s enormous contribution to modern social science, but who fail to realize that what fundamentally distinguishes Marx’s views from those of Comte, Mill, Ricardo and other classical social scientists, as well as from those of modern positivists, is his constant radical criticism of both existing theory and existing forms of social reality. The failure of most contemporary interpreters of Marx to grasp one of the basic novelties of his doctrine has very deep roots in the intellectual climate of our time and can be explained only by taking into account some of the fundamental divisions and polarizations in contemporary theoretical thinking.

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Chapter Three The Class Struggle Is Here to Stay Overview This chapter aims to rethink the contributions of historical materialism to understanding global capitalism in terms of transnational restructuring and the centrality of class struggle in constituting and contesting the contemporary corporatocratic world order. In more detail, it will focus on: 1. core meta-theoretical issues such as the conceptualization of structure and agency and the structural power of discourse in international relations; 2. the reorganization of states through conditions of uneven development and global restructuring; 3. a periodization of different historical and contemporary trajectories of imperialism; and 4. concrete varieties of anti-capitalism in relation to the organization and further development of resistance against neo-liberal globalization. Introduction Marx used the term mode of production to refer to the specific organization of economic production in a given society. A mode of production includes the means of production used by a given society, such as factories and other facilities, machines, and raw materials. It also includes labour and the organization of the labour force. The term relations of production refers to the relationship between those who own the means of production (the capitalists or bourgeoisie) and those who do not (the workers or the proletariat). According to Marx, history evolves through the interaction between the mode of production and the relations of production. The mode of production constantly evolves toward a realization of its fullest productive capacity, but this evolution creates antagonisms between the classes of people defined by the relations of production—owners and workers. Capitalism is a mode of production based on private ownership of the means of production. Capitalists produce commodities for the exchange 61

market and to stay competitive must extract as much labour from the workers as possible at the lowest possible cost. The economic interest of the capitalist is to pay the worker as little as possible, in fact just enough to keep him alive and productive. The workers, in turn, come to understand that their economic interest lies in preventing the capitalist from exploiting them in this way. As this example shows, the social relations of production are inherently antagonistic, giving rise to class struggles. Global Inequality: The Return of Class The last recent decades have been good for poor nations of the world. Since the late 1980s, what the international economic organizations call “developing Asia”, mainly China, India and the ASEAN countries, has been growing at a pace about double the world as a whole. Since 2001, subSaharan Africa, the tragic laggard of development in the last third of the last century, has been outgrowing the world, including the ‘advanced economies’. Latin America has been growing faster than the rich world since 2003, and the Middle East since 2000. Except for post-Communist Europe, ‘emerging and developing economies’ also weathered the Anglo-Saxon bankers’ crisis much better than the rich world. Nations and Classes We are experiencing a historical turn, not only in geopolitics but also in terms of inequality. The 19th and 20th century international development of underdevelopment meant, among other things, that inequality among humans became increasingly shaped by where they lived, in developed or underdeveloped areas, territories, nations. By 2000, it has been estimated that 80 per cent of the income inequality among households depended on the country you live in (Milanovic 2011: 112). This is currently changing. International inequality is declining overall, although the gap between the rich and the poorest has not stopped growing. But intra-national inequality is, on the whole, increasing, albeit unevenly, denying any pseudo-universal determinism of ‘globalization’ or of technological change. This amounts to a return of class, as an increasingly powerful global determinant of inequality. Class has always been important, but in the 20th century context of mainly national class organizations and class struggles – 62

albeit including some networks of ‘proletarian internationalism’ – national class inequality was overshadowed by global inter-national gaps. Now, nations are growing closer, and classes are growing apart. The class side of the new global distribution pattern grew to prominence in the 1990s. That was the time when Chinese inequality soared, even more than along the capitalist road in the former Soviet Union, when the modest tendency to (rural) equalization in India was reversed into increasing rural as well as urban inequality. In Latin America, Mexico and Argentina had their neoliberal inequality shocks. An IMF (2007: 37) study has shown, if not properly reflected upon, that on a global scale the only group which increased its income share in the 1990s was the richest national quintile, in high as well as in low income countries. All the other quintiles were losers, although not dramatically. The most important changes have taken place at the very top of the income distribution, between the richest 1%and the rest – and between the 0.1% or 0.01% and the rest. The US Nobel economist Joseph Stieglitz has recently (Vanity Fair May 2011) pointed to the capture of his country by the richest one per cent, who own 40% of the nation’s wealth, who appropriate nearly a quarter of the annual national income, and who make up virtually the whole US Congress. Around the turn of the last century the richest 1% accounted for 15% of US income, as against 9-11% in India (Banerjee and Piketty 2003). The inegalitarian trends of China and India, and of developing Asia generally, have continued in the new millennium, as in USA (Luo and Zhu 2008; Kochanowicz et al. 2008; Datt and Ravaillon 2009). Accelerated economic growth in India, for instance, has hardly had any positive effect on the poorest fifth of Indian children, two thirds of whom were underweight – a life-long weakening condition – in 2009, as in 1995 (UN 2011: 14). The vigorous economic growth in the 2000s of what used to be the Third World has had no effect on hunger in the world. The number of undernourished has risen from 618 to 637 million people, 16% of humankind between 2000 and 2007 (UN 2011: 11). Food prices continue to rise. At the other end, in March 2011 Forbes magazine gleefully announced two records of its listed billionaires in 2010, namely, their record number, 1,210, and their total wealth, $4.5 trillion, larger than the GDP of the world’s third largest national economy, Germany. 413 are Americans, 115 (mainland) are Chinese, and 101 are Russians. 63

However, there is no inevitability, technical or economic, about increasing inequality. From its admittedly vulnerable position as the world’s economically most unequal region, Latin America is currently the only region of the planet where inequality is decreasing (CEPAL 2010; UNDP 2010). As this is largely a political effect (Cornia and Marorano 2010), of revulsion against the neoliberalism of the military dictators of the 1970s and 1980s, and of their more or less democratically elected civilian successors, the on-going redistribution policies of Argentina, Brazil, Venezuela and others also reflect the importance of class, in this case the money-grabbing of the rich oligarchs. Another way of comparing (income) classes across nations is to calculate their Human Development Index, which includes income, life expectancy, and education, a heroic, very complicated operation with considerable margins of error. Nevertheless, it offers a noteworthy picture of world inequality. The poorest American quintile has a lower level of human development than, e.g., the richest quintile of Bolivia, Indonesia, and Nicaragua, below the most lucky 40% of Brazil and Peru, and has a level about equal to the fourth quintile of Colombia, Guatemala, and Paraguay. (Grimm et al. 2009, Table 1.) Class, at least as a reference of distributive justice, is also likely to grow for other reasons than national economic convergence. Existential inequalities of racism and sexism, even if still potent here and there, are clearly being eroded. An important recent example is the fall of apartheid in South Africa. Democratic South Africa is also giving us one of the most dramatic examples of class inequality after institutionalized racism. Daring World Bank economists, Branko Milanovic (2008: Table 3) and others, have estimated the Gini coefficient of income inequality among the households of the planet at about 65-70 in the 1990s-2000s. But in 2005 the city of Johannesburg has one of 75! And this was measured in terms of consumer expenditure, which always gives a lower inequality figure than income measures (UN Habitat 2008: 72). Even allowing for margins of error, it does not seem presumptuous to say that the post-apartheid city of Johannesburg harbours at least as much economic inequality among its (mainly citizen) inhabitants as all the humans on the planet.

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Inevitability of Class Struggle in Capitalist Society I wish to begin with a thought-provoking note. In fact, I will begin with a story that enables us to decide whether the class struggle is alive or waning. The USSR, stretching from the Pacific coast in the East all the way to central Europe, looked to be in a strong position in 1980. In 1985, Mikhail Gorbachev, an energetic man in his fifties, took over leadership of the Soviet Union. Gorbachev was clearly different from his predecessors and he had decided that the Soviet Union needed to change in many aspects. The two slogans, now so well known, perestroika (restructuring) and glasnost (openness) were coined under Gorbachev’s leadership, who wanted to achieve both. The Soviet Union was facing a number of pressing problems towards the end of the 20th century. Living standards as well as technological advance were two aspects in which the Soviet Union were falling behind in the Western world. Also, the new arms race, which had been initiated by American President Ronald Reagan with his Strategic Defence Initiative, was quickly draining vital resources which were desperately needed in other areas, such as the development of the economy and agriculture. The planned economy in place in the Soviet Union had proven to be unable to compete with the free markets of the west, and, by the 1980’s, the Soviet Union relied increasingly on Western aid, such as grain imports from the USA. The Soviet economy was experiencing a crisis, with aging (and polluting) heavy industry and inability to compete with the West in new industries, such as telecommunications and computers. Agricultural output in the Soviet Union was abysmal compared to that of the West; one American farmer was seven times more productive than his/her Soviet counterpart. The Soviet military had also become bogged down in their own version of Vietnam, a war of attrition against Muslim fundamentalists (armed, trained and supplied to some extent by the Americans) in Afghanistan. This was a war which angered the Muslim world, and was a problem for the Soviet Union as there were large Muslim populations living within its borders. The people of Eastern Europe were ruled by despots and lived in totalitarian states with little access to the outside. Yet, awareness of the disparities in living standards and such grew, with West German television (illegally) available in parts of the DDR and the Finish television in Estonia, for example. 65

As we can see, Gorbachev was faced with the very difficult task of restructuring the economically and politically stagnated Soviet system. He had a dream of transforming the Soviet system to what it had claimed to be and what it, in his opinion, was supposed to be. Gorbachev began to allow open discussion of national problems, openness in the arts and literature, he restored religious freedom in 1988, he wanted to introduce democracy into the Soviet Union as well as a market economy, as opposed to a planned economy. He also wanted to integrate the Soviet Union, until now a rival of the ‘Free World’, into modern international politics. Foreign policy was revised, anti-Western attitudes dropped and this was noticed by the West as well. Contacts and relations with the West improved, and Gorbachev was seen by many as a reliable man, clearly deviating from the traditional Soviet line. Gorbachev wanted to encourage civic activity and responsibility, in other words, for the ordinary citizens to take part in the perestroika. Even though the reforms were accepted enthusiastically by the populace, it also allowed for dissent, of which there was to be plenty. Because of the vast layers of bureaucracy and the corruption that invested them, the economic reforms led to further deterioration of the Soviet economy. As the economy plummeted, so did living standards and satisfaction of the population with them. However, unlike in earlier periods of difficulty, dissent and freedom of speech was now allowed. The bitterness harboured by eastern Europeans was now allowed to flow free, and this led to revolution. The revolution began in Poland during the early 1980’s with the Solidarity movement, and, with Gorbachev’s reforms, it erupted with renewed vigour in the late 1980’s. Free elections were held in Poland in 1989, and the Solidarity movement gained 99 out of 100 seats in the Polish Senate. The Iron Curtain was being lifted. As it was noticed that the Soviet Union was not prepared to intervene militarily to put a stop to the civic unrest, the revolution spread quickly. Demands of independence were being voiced by all of the people that had suffered oppression at the hands of the Soviets and ethnic disunity and conflict erupted all over the Union. Gorbachev had become stuck between the more hard-lined communists, who complained that he had taken his reforms too far, and the more radical, such as Boris Yeltsin, who thought that Gorbachev hadn’t gone far enough. In 1990, Gorbachev attempted to halt the rapid disintegration of the Soviet Union by using force against Baltic nationalists and by appointing hard-lined communists into key positions in 66

the government. However, it was too late. Gorbachev still attempted to compromise between the interests of the various factions and parties within the Soviet Union by granting a degree of autonomy to the republics, but still keeping them within the Union. Boris Yeltsin became president of the Russian Republic, which had declared itself independent from the Soviet Union in 1990. When the Soviet Union finally ceased to exist in 1991, Gorbachev became a private citizen and Yeltsin continued as President of the Russian Republic. In hindsight, it is quite clear that the Soviet Union was already doomed in the early 1980’s. It could not keep up with the West militarily nor economically, and it was increasingly unable to keep its populace blind from the outside world. The key factor holding the Empire together was the Red Army, and the threat of force. Gorbachev must have realized this and understood the need for major reforms. However, there was simply too much bitterness from years of oppression and brutality conducted by the regime. There were still generations which remembered those years, and the reforms, although probably in the right direction, came too fast and went too far. Had Gorbachev done nothing but simply towed the traditional party line, the USSR would have eventually collapsed because of its own impossibility. It can be argued that had he been more cautious with his reforms and introduced them more gradually, the Soviet Union could have survived intact, but that would have required a major reform of the bureaucracy and a crackdown of the rampant corruption, which the Soviet system had created and was infested with. The economic reforms failed and played into the hands of those who could best utilize them towards their own goals, and the situation of the ordinary people worsened even further. Gorbachev was responsible for the fact that the Soviet Empire disintegrated when it did. However, had he done nothing, the result might have been the same, except with more bloodshed and more chaos. With the collapse of the Soviet Empire, many people started claiming that studying Marx may sound like a total waste of time. Has history not proven his ideas to be fatally wrong, if not plainly lethal? At the same time, I profess to be a libertarian, so what can I possibly gain by reading an apology of “collective ownership of the means of production” and “dictatorship of the proletariat”? It will be naïve to dismiss these questions with a wave of the hand. They are pertinent in this historical conjuncture of globalization. 67

It is not difficult to realize that we are living in the era of imperialist globalization and proletarian revolutions. The expressions of globalization, neo-liberalism, the re-colonization of the world, in no way mean a new stage in the development of society; on the contrary, they reaffirm the fundamental elements by which Lenin characterized this phase as decadent and the final one in capitalist development. Imperialism has not changed its rapacious and aggressive nature; it persists in and increases the export of capital, the predominance of finance and monopoly capital, the super-exploitation of the labour power of the proletariat and the looting of the wealth of our countries, the contention over markets and spheres of influence, the unequal development of the capitalist countries, etc. Globalization itself demands a new international division of labour, a new division of the world and of markets, it tries to confront the crisis of capitalism with the imposition of a series of measures which would consolidate a single international market, in which there is full freedom for the investment and export of monopoly capital, seeking to eliminate national barriers, and attacking the sovereignty and independence of nations and peoples, affirming the domination of the large monopolies. The national economies are, now, more dependent than ever, science and technology are used by the great powers and serve to accentuate their domination over other countries. Together with this process, the mechanisms of political domination are being strengthened. These are the imperialist, particularly the international organs, the WTO [World Trade Organization], the World Bank, the International Monetary Fund, the great powers such as the United States, Japan, England, Germany, France, Italy, Canada and Russia, who openly command the policies which are applied docilely by the ruling classes of our countries. Globalization, as the expression of imperialism, has not eliminated interimperialist contention; on the contrary, it has deepened it; the struggle for world hegemony, the contention over markets and spheres of influence, continues; new regional and local conflicts are taking place. The threat of war still exists; it is more and more clear that finance capital is concentrated in imperialist blocs which collude with one another against the peoples and contend with each other for their own interests. Neo-liberalism and its politics of privatizations, the so-called modernization of the State, restructuring and the reconversion of the productive apparatus, the flexibilization of labour, form part of this process, they have been applied at 68

different levels and seek to resolve the capitalist crisis to the benefit of finance capital, its allies and its local lackeys. The crises of imperialism are more and more frequent and deeper; they have a structural character and they manifest themselves in financial or stockmarket crises; in production, they reverberate immediately on all the economies. They cannot be resolved as long as their cause is not eliminated, that is, the increasingly social character of production and the private appropriation of wealth. Imperialism has not resolved the problems of humanity. The majority of the world’s population does not benefit from the wealth that they themselves create; nor from the results of the very rapid development of the productive forces, the scientific and technical revolution has served to accumulate a greater quantity of wealth in the imperialist countries, the difference between developed and dependent capitalist countries has deepened. Today there are more exploited people. The peoples of Asia, Africa and Latin America are plunged into misery; even in the developed capitalist countries, important segments of the population are deprived of social benefits, at the same time as unemployment increases. Confronted with this situation, the response of the peoples is also showing a new momentum. For us, the ebb in the social struggle, in the actions of the masses, in the revolutionary struggle, has been overcome; we are beginning to see a development of the struggle of the masses, a new upsurge of popular struggle, the blows of the crisis of capitalism are opposed by the mobilization of millions of workers, peasants, youths, women and other popular sectors. In different parts of the world, various governments have been overthrown by popular uprisings, this situation of the peoples has its own dimension, its own characteristics in each country. The facts compel us to foresee a new revolutionary wave in the class struggle. Globalization Today At the turn of the millennium an emerging consensus on at least some features of globalization holds that globalization itself, as a mode of production with its attendant relations of production, is being shaped by technological changes and major corporations, is uneven, involves the reconfiguration of states and goes together with regionalization. Information and communications technologies are part of the infrastructure of 69

globalization in finance, capital mobility and transnational business. Major changes in the international economic landscape are intertwined and contemporary accelerated globalization is in effect a package deal that includes informatization (applications of information technology), flexibilization (changes in production and labour associated with postFordism), financialization (the growing importance of financial instruments and services) and deregulation or liberalization (unleashing market forces). This package effect contributes to the dramatic character of the changes associated with globalization, which serves as their shorthand description. Since “globalization” per se refers to a spatial process, i.e. world scale effects (precisely of what is not determined), the term is inadequate but serves as a flag word signalling wider changes. From the nineteenth century the form of globalization was the growing predominance of nation states (Robertson 1992). While between 1840 and 1960, nation states were the leading format of political organization worldwide, since the 1960s regional integration has entered into the picture as an increasingly significant dynamic. From the mid-twentieth century state authority has been leaking upwards, in international and supranational forms of pooling sovereignty, and downwards. If the latter happens in a controlled fashion it is referred to as decentralization; if it occurs in an uncontrolled fashion it is termed ethnic or regional conflict, resulting in fragmentation and possibly state disintegration. A familiar account of the implications of globalization is the erosion of boundaries and the growth of cross border activities, economic and otherwise. For instance, “A critical issue raised by globalization is the lack of meaning of geographically rooted jurisdiction when markets are constructed in electronic space” (Kobrin 1998: 361-86). The “internationalization of the state,” another common notion, refers to the blunting of boundaries between international and domestic politics (producing “intermestic” politics). While earlier analyses argued the retreat of states (Strange, 1996), the onset of a borderless world (Ohmae, 1992), the end of the nation state and formation of the region state (Ohmae, 1995), these arguments have been superseded by more nuanced views (e.g. Boyer and Drache, 1996; Mann 1997: 472-96), according to which states may now be leaner but also more active and in some areas assume greater responsibilities (Griffin and Khan, 1992). Perhaps what consensus exists may be formulated in the twin processes of a general trend towards the pooling of sovereignty at different levels (regional, international, supranational) in combination with an 70

incomplete shift from government to multi-scalar governance, from local to municipal, national and regional, all the way to supranational levels. Presently the leading political form of globalization is regionalization, ranging from customs unions, free market zones and regional security alliances to the deep institutionalization of the European Union (EU). For example, a spatial-political perspective is to view regional formations as anchors around which peripheries align-with Japan and China as centres in East and Southeast Asia; North America and Latin America; and the EU and Eastern Europe, the Southern Mediterranean and Africa. A temporal perspective is to view regional integration as a stepping stone towards growing multilateralism and eventually global governance. Contemporary globalization is largely concentrated in the Triad of North America, Europe and East Asia. Income and wealth are extremely and increasingly unequal in distribution: 14 per cent of the world’s population accounted for 80 per cent of investment flows in the period 1980-91 and for 70 per cent of world trade in 1992 (Hirst and Thompson, 1996). The ratio of income of the top 20 per cent of the world population to the income of the bottom 20 per cent has jumped from 30:1 in 1960 to 78:1 in 1994. The personal assets of 385 billionaires in the world now exceed the annual income of countries representing 45 per cent of the world population (Castells, 1999). This is captured under such headings such as “Triadization”, “selective globalization”, or “truncated globalization”, confined to the “interlinked economies”. While this prompts the idea that the “Third World” is being left out or excluded from globalization, this would overlook the many ways in which countries in the South are being affected by global dynamics. Rather than describing these relations as exclusion they are more accurately described as asymmetric inclusion or hierarchical integration (Nederveen Pieterse, 1997:79-92 and 2000: 385-98). While during the past decades the development gap between advanced economies and newly industrialized countries has narrowed, the gap between these and the least developed countries has been widening. Paraphrasing the terminology of uneven development, the present situation may be referred to as combined and uneven globalization. Another common understanding, that globalization means time-space compression, refers to more intensive interaction across wider space and in shorter time than before, in other words, the experience 71

of a shrinking world. There is plenty of controversy as to what some of these features mean, so it’s not easy to draw a line between the consensus and the controversies over globalization. Overall, globalization invites more controversy than consensus and areas of consensus are narrow by comparison to the controversies. While it is widely assumed that globalization is fundamentally multidimensional (as in its cultural implications), economics is usually presented as the driving force. Another dispute concerns globalization and capitalism: does globalization coincide with neoliberalism or is neoliberalism merely the current form of globalization? How one answers this follows from one’s assessment of the timing of globalization and whether it is a recent or long-term historical process. Globalization crosses boundaries of general, government, business, cultural and academic interest; it is politically and theoretically challenging. Politically, it crosses the ideological spectrum and challenges class struggles, social movements and local, national and international politics. Theoretically, it involves a paradigm shift from the era of nation states and international politics to global politics. These challenges to class struggles demonstrate that the class struggle is here to stay and thus compels its study. And, I believe Marx’s analysis of history is fundamentally correct, except for one point — a fairly crucial one, of course, which I will explain — and why Marxism is a tool which libertarians can find extremely useful in making people understand the domination they are subjected to in our contemporary societies plagued by the cancers of the rampaging capitalist accumulation or globalization by both expansion and encroachment. In other words, capitalist accumulation is unfolding in a very uneven pattern with important consequences for the nature and intensity of the class struggle nowadays. Moreover, the particular responses by workers and especially the capitalist state to the general condition of the economy has shaped the degree to which class struggle intensifies and which of the two major “poles’ (capital or labour) has taken the offensive. This is why the class struggle continues to play a central role in the process of capitalist accumulation, albeit it takes different forms depending on the socioeconomic context. In order to map out the unfolding of the class struggle it is necessary to specify key concepts related to the (a) varied conditions and dominant sectors of capital in the global economy (b) nature of the class 72

struggle (c) the principle protagonists of class struggles (d) character of the demands as well as (e) mass struggles. Contemporary Conjuncture of Global Capitalism Contemporary capitalism now called euphemistically globalization is a favourite catchphrase of journalists and politicians alike. It has also become a key idea for business theory and practice, and entered academic debates. But what people mean by ‘globalization’ is often confused and confusing. Here we examine some key themes in the theory and experience of globalization. ‘Globalization’ is commonly used as a shorthand way of describing the spread and connectedness of production, communication and technologies across the world. That spread has involved the interlacing of economic and cultural activity. Rather confusingly, ‘globalization’ is also used by some to refer to the efforts of the International Monetary Fund (IMF), the World Bank and others to create a global free market for goods and services. This political project, while being significant - and potentially damaging for a lot of poorer nations - is really a means to exploit the larger process. Globalization in the sense of connectivity in economic and cultural life across the world, has been growing for centuries. However, many believe the current situation is of a fundamentally different order to what has gone before. The speed of communication and exchange, the complexity and size of the networks involved, and the sheer volume of trade, interaction and risk give what we now label as ‘globalization’ a peculiar force. With increased economic interconnection has come deep-seated political changes - poorer, ‘peripheral’, countries have become even more dependent on activities in ‘central’ economies such as the USA where capital and technical expertise tend to be located. There has also been a shift in power away from the nation state and toward, some argue, multinational corporations. We have also witnessed the rise and globalization of the ‘brand’. It isn’t just that large corporations operate across many different countries - they have also developed and marketed products that could be just as well sold in Peking as in Washington. Brands like Coca Cola, Nike, Sony, and a host of others have become part of the fabric of vast numbers of people’s lives. 73

Globalization involves the diffusion of ideas, practices and technologies. It is something more than internationalization and universalization. It isn’t simply modernization or westernization. It is certainly isn’t just the liberalization of markets. Anthony Giddens (1990: 64) has described globalization as ‘the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa’. This involves a change in the way we understand geography and experience localness. As well as offering opportunity it brings with considerable risks linked, for example, to technological change. Globalization, thus, has powerful economic, political, cultural and social dimensions. Let us focus on four themes that appear with some regularity in the literature: x de-localization and supraterritoriality; x the speed and power of technological innovation and the associated growth of risk; x the rise of multinational corporations; and, x the extent to which the moves towards the creation of (global) free markets to leads to instability and division. Globalization: delocalization and supraterritoriality Manuel Castells (1996) has argued persuasively that in the last twenty years or so of the twentieth century, a new economy emerged around the world. He characterizes it as a new brand of capitalism that has three fundamental features: Productivity and competitiveness are, by and large, a function of knowledge generation and information processing; firms and territories are organized in networks of production, management and distribution; the core economic activities are global - that is, they have the capacity to work as a unit in real time, or chosen time, on a planetary scale. (Castells 2001: 52) This last idea runs through a lot of the discussion of globalization. Globalization and de-localization Many of the activities that previously involved face-to-face interaction, or that were local, are now conducted across great distances. There has been a significant de-localization in social and economic exchanges. Activities and 74

relationships have been uprooted from local origins and cultures (Gray 1999: 57). One important element in this has been the separation of work from the home (and the classic move to the suburbs - see Putnam’s discussion of the impact on this on local social relations). But de-localization goes well beyond this. Increasingly people have to deal with distant systems in order that they may live their lives. Banking and retailing, for example, have adopted new technologies that involve people in less face-to-face interaction. Your contact at the bank is in a call centre many miles away; when you buy goods on the internet the only person you might speak to is the delivery driver. In this last example we move beyond simple notions of distance and territory into a new realm (and this is what Scholte is especially concerned with when he talks of globalization). When we buy books from an internet supplier like Amazon our communications pass through a large number of computers and routers and may well travel thousands of miles; the computers taking our orders can be on a different continent; and the books can be located anywhere in the world. The ‘spaces’ we inhabit when using the internet to buy things or to communicate (via things like chat rooms and bulletin boards) can allow us to develop a rather different sense of place and of the community to which we belong. Not everything is global, of course. Most employment, for example, is local or regional - but ‘strategically crucial activities and economic factors are networked around a globalized system of inputs and outputs’ (Castells 2001: 52). What happens in local neighbourhoods is increasingly influenced by the activities of people and systems operating many miles away. For example, movements in the world commodity and money markets can have a very significant impact upon people’s lives across the globe. People and systems are increasingly interdependent. [T]he starting point for understanding the world today is not the size of its GDP or the destructive power of its weapons systems, but the fact that it is so much more joined together than before. It may look like it is made up of separate and sovereign individuals, firms, nations or cities, but the deeper reality is one of multiple connections(Mulgan 1998: 3). Businesses are classic example of this. As Castells (2001) noted they are organized around networks of production, management and distribution. Those that are successful have to be able to respond quickly to change - both in the market and in production. Sophisticated information systems are essential in such globalization. 75

Globalization and decline in power of national governments It isn’t just individuals and neighbourhood institutions that have felt the impact of de-localization. A major causality of this process has been a decline in the power of national governments to direct and influence their economies (especially with regard to macroeconomic management). Shifts in economic activity in say, Japan or the United States, are felt in countries all over the globe. The internationalization of financial markets, of technology and of some manufacturing and services bring with them a new set of limitations upon the freedom of action of nation states. In addition, the emergence of institutions such as the World Bank, the European Union and the European Central Bank, involve new constraints and imperatives. Yet while the influence of nation states may have shrunk as part of the process of globalization it has not disappeared. Indeed, they remain, in Hirst and Thompson’s (1996: 170) words, ‘pivotal’ institutions, ‘especially in terms of creating the conditions for effective international governance’. However, we need to examine the way in which national governments frame their thinking about policy. There is a strong argument that the impact of globalization is most felt through the extent to which politics everywhere are now essentially market-driven. ‘It is not just that governments can no longer “manage” their national economies’, Colin Leys (2001: 1) comments, ‘to survive in office they must increasingly “manage” national politics in such a ways as to adapt them to the pressures of trans-national market forces’. The initiation, or acceleration, of the commodification of public services was... a logical result of government’s increasingly deferential attitude towards market forces in the era of the globalized economy... A good deal of what was needed [for the conversion of non-market spheres into profitable fields for investment] was accomplished by market forces themselves, with only periodic interventions by the state, which then appeared as rational responses to previous changes (Leys 2001: 214). In other words, the impact of globalization is less about the direct way in which specific policy choices are made, as the shaping and reshaping of social relations within all countries.

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Risk, technological innovation and globalization As we have already noted, a particular feature of ‘globalization’ is the momentum and power of the change involved. ‘It is the interaction of extraordinary technological innovation combined with world-wide reach that gives today’s change its particular complexion’ (Hutton and Giddens 2001: vii). Developments in the life sciences, and in digital technology and the like, have opened up vast, new possibilities for production and exchange. Innovations like the internet have made it possible to access information and resources across the world - and to coordinate activities in real time. Globalization and the knowledge economy Earlier we saw Castells making the point that productivity and competitiveness are, by and large, a function of knowledge generation and information processing. This has involved a major shift - and entails a different way of thinking about economies. For countries in the vanguard of the world economy, the balance between knowledge and resources has shifted so far towards the former that knowledge has become perhaps the most important factor determining the standard of living - more than land, than tools, than labour. Today’s most technologically advanced economies are truly knowledge-based (World Bank 1998). The rise of the so-called ‘knowledge economy’ has meant that economists have been challenged to look beyond labour and capital as the central factors of production. Paul Romer and others have argued that technology (and the knowledge on which it is based) has to be viewed as a third factor in leading economies (Romer, 1986; 1990). Global finance, thus, becomes just one force driving economies. Knowledge capitalism: ‘the drive to generate new ideas and turn them into commercial products and services which consumers want’ is now just as pervasive and powerful (Leadbeater 2000: 8). Inevitably this leads onto questions around the generation and exploitation of knowledge. There is already a gaping divide between rich and poor nations - and this appears to be accelerating under ‘knowledge capitalism’. There is also a growing gap within societies (and this is one of the driving forces behind the English government’s Connexions strategy). Commentators like Charles Leadbeater have argued for the need to ‘innovate and include’ and for a recognition that successful knowledge 77

economies have to take a democratic approach to the spread of knowledge: ‘We must breed an open, inquisitive, challenging and ambitious society’ (Leadbeater 2000: 235, 237). However, there are powerful counter-forces to this ideal. In recent years we have witnessed a significant growth in attempts by large corporations to claim intellectual rights over new discoveries, for example in relation to genetic research, and to reap large profits from licensing use of this ‘knowledge’ to others. There are also significant doubts as to whether ‘modern economies’ are, indeed, ‘knowledge economies’. It doesn’t follow, for example, that only those nations committed to lifelong learning and to creating a learning society will thrive (Wolf 2002: 13-55). Globalization and Risk As well as opening up considerable possibility, the employment of new technologies, when combined with the desire for profit and this ‘world-wide’ reach, brings with it particular risks. Indeed, writers like Ulrich Beck (1992: 13) have argued that the gain in power from the ‘techno-economic progress’ is quickly being overshadowed by the production of risks. (Risks in this sense can be viewed as the probability of harm arising from technological and economic change). Hazards linked to industrial production, for example, can quickly spread beyond the immediate context in which they are generated. In other words, risks become globalized. [Modernization risks] possess an inherent tendency towards globalization. A universalization of hazards accompanies industrial production, independent of the place where they are produced: food chains connect practically everyone on earth to everyone else. They dip under borders (Beck 1992: 39). As Beck (1992: 37) has argued there is a boomerang effect in globalization of this kind. Risks can catch up with those who profit or produce from them. The basic insight lying behind all this is as simple as possible: everything which threatens life on this Earth also threatens the property and commercial interests of those who live from the commodification of life and its requisites. In this way a genuine and systematically intensifying contradiction arises between the profit and property interests that advance the industrialization process and its frequently threatening consequences, which endanger and expropriate possessions and profits (not to mention the possession and profit of life) (Beck 1992: 39). Here one has one of the central paradoxes of what Beck has termed ‘the risk society’. As knowledge has grown, so has risk. 78

Indeed, it could be argued that the social relationships, institutions and dynamics within which knowledge is produced have accentuated the risks involved. Risk has been globalized. Globalization, Multinational Corporations and Branding A further, crucial aspect of globalization is the nature and power of multinational corporations. Such companies now account for over 33 per cent of world output, and 66 per cent of world trade (Gray 1999: 62). Significantly, something like a quarter of world trade occurs within multinational corporations (op. cit). This last point is well illustrated by the operations of car manufacturers who typically source their components from plants situated in different countries. However, it is important not to run away with the idea that the sort of globalization we have been discussing involves multinationals turning, on any large scale, to transnationals: International businesses are still largely confined to their home territory in terms of their overall business activity; they remain heavily ‘nationally embedded’ and continue to be multinational, rather than transnational, corporations (Hirst and Thompson 1996: 98). While full globalization in this organizational sense may not have occurred on a large scale, these large multinational corporations still have considerable economic and cultural power. Globalization and Impact of Multinationals on Local Communities Multinationals can impact upon communities in very diverse places. First, they look to establish or contract operations (production, service and sales) in countries and regions where they can exploit cheaper labour and resources. While this can mean additional wealth flowing into those communities, this form of ‘globalization’ entails significant inequalities. It can also mean large scale unemployment in those communities where those industries were previously located. The wages paid in the new settings can be minimal, and worker’s rights and conditions poor. For example, a 1998 survey of special economic zones in China showed that manufacturers for companies like Ralph Lauren, Adidas and Nike were paying as little as 13 cents per hour (a ‘living wage’ in that area is around 87 cents per hour). In 79

the United States workers doing similar jobs might expect US$10 per hour (Klein 2001: 212). Second, multinationals constantly seek out new or under-exploited markets. They look to increase sales - often by trying to create new needs among different target groups. One example here has been the activities of tobacco companies in southern countries. Another has been the development of the markets predominantly populated by children and young people. In fact the child and youth market has grown into one the most profitable and influential sectors. ‘The young are not only prized not only for the influence they have over adult spending, but also for their own burgeoning spending power’ (Kenway and Bullen 2001: 90). There is increasing evidence that this is having a deep effect; that our view of childhood (especially in northern and ‘developed’ countries) is increasingly the product of ‘consumer-media’ culture. Furthermore, that culture: ... is underpinned in the sweated work of the ‘othered’ children of the socalled ‘Third World’. [W]ith the aid of various media, the commodity form has increasingly become central to the life of the young of the West, constructing their identities and relationships, their emotional and social worlds... [A]dults and schools have been negatively positioned in this matrix to the extent that youthful power and pleasure are constructed as that which happens elsewhere - away from adults and schools and mainly with the aid of commodities (Kenway and Bullen 2001: 187). Of course, such commodification of everyday life is hardly new. Writers like Erich Fromm were commenting on the phenomenon in the early 1950s. However, there has been a significant acceleration and intensification (and globalization) with the rise of the brand (see below) and a heavier focus on seeking to condition children and young people to construct their identities around brands. Third, and linked to the above, we have seen the erosion of public space by corporate activities. Significant areas of leisure, for example, have moved from more associational forms like clubs to privatized, commercialized activity. Giroux (2000: 10), for example, charts this with respect to young people [Y]oung people are increasingly excluded from public spaces outside of schools that once offered them the opportunity to hang out with relative security, work with mentors, and develop their own talents and sense of selfworth. Like the concept of citizenship itself, recreational space is now privatized as commercial profit-making venture. Gone are the youth centres, 80

city public parks, outdoor basketball courts or empty lots where kids call play stick ball. Play areas are now rented out to the highest bidder... This movement has been well documented in the USA (particularly by Robert Putnam with respect to a decline in social capital and civic community - but did not examine in any depth the role corporations have taken). It has profound implications for the quality of life within communities and the sense of well-being that people experience. Fourth, multinational companies can also have significant influence with regard to policy formation in many national governments and in transnational bodies such as the European Union and the World Bank (key actors within the globalization process). They have also profited from privatization and the opening up of services. As George Monbiot has argued with respect to Britain, for example: the provision of hospitals, roads and prisons... has been deliberately tailored to meet corporate demands rather than public need’ (2001: 4). He continues: ... biotechnology companies have sought to turn the food chain into a controllable commodity and [there is an] extraordinary web of influence linking them to government ministers and government agencies.... [C]orporations have come to govern key decision-making processes within the European Union and, with the British government’s blessing, begun to develop a transatlantic single market, controlled and run by corporate chief executives (Monbiot 2001: 5). While with globalization the power of national governments over macroeconomic forces may have been limited in recent years, the services and support they provide for their citizens have been seen as a considerable opportunity for corporations. In addition, national governments still have considerable influence in international organizations - and have therefore become the target of multinationals for action in this arena. Branding and Globalization The growth of multinationals and the globalization of their impact is wrapped up with the rise of the brand. The astronomical growth in the wealth and cultural influence of multi-national corporations over the last fifteen years can arguably be traced back to a single, seemingly innocuous idea developed by management theorists in the mid-1980s: that successful corporations must primarily produce brands, as opposed to products (Klein 81

2001: 3). As Naomi Klein (2001: 196) has suggested, ‘brand builders are the new primary producers in our so-called knowledge economy’. One of the key elements that keeps companies as multinationals rather than transnationals is the extent to which they look to ‘outsource’ products, components and services. The logic underlying this runs something like the following: .... corporations should not expend their finite resources on factories that will demand physical upkeep, on machines that will corrode or on employees who will certainly age and die. Instead, they should concentrate those resources in the virtual brick and mortar used to build their brands Such as Nike, Levi, Coca Cola and other major companies spend huge sums of money in promoting and sustaining their brands. One strategy is to try and establish particular brands as an integral part of the way people understand, or would like to see, themselves. As we have already seen with respect the operation of multinationals this has had a particular impact on children and young people (and education). There is an attempt ‘to get them young’. Significantly, the focus on brand rather than the inherent qualities of the product as well as advantaging multinationals in terms of market development also has an Achilles heel. Damage to the brand can do disproportionate harm to sales and profitability. If a brand becomes associated with failure or disgrace (for example where a sports star they use to advertise their brand is exposed as a drug-taker; or where the brand becomes associated in the public’s mind with the exploitation of children - as for example has happened with some of the main trainer makers) then it can face major problems in the marketplace. Globalization and multinationals While there is no doubting the growth in scale and scope of multinational corporations - the degree of control they have over the central dynamics of globalization remains limited. In reality, they are often weak and amorphous organizations. They display the loss of authority and erosion of common values that afflicts practically all late modern social institutions. The global market is not spawning corporations which assume the past functions of sovereign states. Rather, it has weakened and hollowed out both institutions (Gray 1999: 63). 82

While multinationals have played a very significant role in the growth of globalization, it is important not to overplay the degree of control they have had over the central dynamics. Capitalism, free markets, instability and division Amartya Sen (2002) has argued that ‘the market economy does not work by itself in global relations-indeed, it cannot operate alone even within a given country’. Yet, for some proponents of globalization the aim is to expand market relations, push back state and interstate interference, and create a global free market. This political project can be seen at work in the activities of transnational organizations like the World Trade Organization (WTO), the International Monetary Fund (IMF), and the Organization for Economic Cooperation and Development (OECD), and has been a significant objective of United States intervention. Part of the impetus for this project was the limited success of corporate/state structures in planning and organizing economies. However, even more significant was the growth in influence of neo-liberal ideologies and their promotion by powerful politicians like Reagan in the USA and Thatcher in the UK. A new orthodoxy became ascendant. In the USA a Democrat President renounced ‘big government’; in Britain, the Labour Party abandoned its commitment to social ownership. The ‘markets were in command’ (Frank 2002: xv). The basic formula ran something like the following: Privatization + Deregulation + Globalization = Turbo-capitalism = Prosperity (Luttwak quoted by Frank 2002: 17). As various commentators have pointed out, the push toward deregulation and ‘setting markets free’ that so dominated political rhetoric in many northern countries during the 1980s and 1990s was deeply flawed. For example, the central tenet of free market economics - that unregulated markets ‘will of their own accord find unimprovable results for all participants’ has, according to Will Hutton (1995: 237), ‘now proved to be a nonsense. It does not hold in theory. It is not true’. Historically, free markets have been dependent upon state power. For markets to function over time they require a reasonable degree of political stability, a solid legal framework and a significant amount of social capital. The push to engineer free markets has contained within it the seeds of its own destruction. The central paradox of our time can be stated thus: economic globalization does not strengthen the current regime of global laissez-faire. It works to undermine it. There is nothing in today’s global market that buffers 83

it against the social strains arising from high uneven economic development within and between the world’s diverse societies. The swift waxing and waning of industries and livelihoods, the sudden shifts of production and capital, the casino of currency speculation - these conditions trigger political counter-movements that challenge the very ground rules of the global free market. (Gray 1999: 7). Capitalism is essentially disruptive and ever-changing - and takes very different forms across the world. While it produces wealth for significant numbers of people, many others have suffered. The gap between rich and poor has widened as global capitalism has expanded. For example, David Landes (1999: xx) has calculated that the difference in income per head between the richest nation (he cited Switzerland) and the poorest nonindustrial country, Mozambique, is now about 400 to 1. ‘Two hundred and fifty years ago, the gap between richest and poorest was perhaps 5 to 1, and the difference between Europe and, say, East or South Asia (China or India) was around 1.5 or 2 to 1’ (op. cit.). The development of markets, the expansion of economic activity, and the extent to which growing prosperity is experienced by populations as a whole has been, and remains, deeply influenced by public policies around, for example, education, land reform and the legal framework for activity. Economists like Amartya Sen have argued that ‘public action that can radically alter the outcome of local and global economic relations’. For him the: ... central issue of contention is not globalization itself, nor is it the use of the market as an institution, but the inequity in the overall balance of institutional arrangements--which produces very unequal sharing of the benefits of globalization. The question is not just whether the poor, too, gain something from globalization, but whether they get a fair share and a fair opportunity (Sen 2002). Strong markets require significant state and transnational intervention. To be sustained across time they also require stable social relationships and an environment of trust. Moreover, they can be organized and framed so that people throughout different societies can benefit. In sum, as one commentator has argued that there is a very serious case not against ‘globalization’,... but against the particular version of it imposed by the world’s financial elites. The brand currently ascendant needlessly widens gaps of wealth and poverty, erodes democracy, seeds instability, and 84

fails even its own test of maximizing sustainable economic growth (Kuttner 2002). The gap between rich and poor countries has widened considerably. However, as Sen (2002) has commented, to ‘see globalization as merely Western imperialism of ideas and beliefs (as the rhetoric often suggests) would be a serious and costly error’. He continues: Of course, there are issues related to globalization that do connect with imperialism (the history of conquests, colonialism, and alien rule remains relevant today in many ways), and a postcolonial understanding of the world has its merits. But it would be a great mistake to see globalization primarily as a feature of imperialism. It is much bigger--much greater--than that. For example, while the reach and power of multinationals appears to have grown significantly, neither they, nor individual national governments, have the control over macro-economic forces that they would like. Ecological and technological risks have multiplied. Globalization in the sense of connectivity in economic and cultural life across the world, is of a different order to what has gone before. As we said at the start, the speed of communication and exchange, the complexity and size of the networks involved, and the sheer volume of trade, interaction and risk give what we now label as ‘globalization’ a peculiar force. All this raises particular questions for analysts. Has the process of globalization eroded the autonomy of national class systems and struggles? How has it impacted on the forms that class struggles now take? What is the effect of an increased corporate presence and branding in class struggles? What response should analysts make? We examine these and other issues in globalization and the incorporation of classes and class struggles. In sum, the class struggle is here to stay. The reasons are: 1. The number of unemployed person worldwide stood at 205 million in 2010, according to the International Labour Organization (ILO). In addition to this, at least 1.53 billion workers fall under the category of ‘vulnerable employment’ (the sum of own-account and unpaid family workers) representing 50.1% of the total labour force in 2009. Combine the number of unemployed and the ‘vulnerable’ and we have close to two billion workers living in extreme conditions worldwide. 2. In Asia, more than 50% of the total workforce are ‘informal economy workers’. In countries like Indonesia, Korea and Philippines, more than 50 % of the total workforce is engage with the informal economy. While in 85

Cambodia and India, more than 80% of the total workforce is informal economy workers. In China, informalization has grown rapidly since market reform policy came into force. While in Hong Kong, Taiwan and Japan the rapid growth of the service industry has created informal employment. 3. In the Philippines, out of the 39 million labour force, 3 million are unemployed while 45% or 16.6 million of the 36.8 million employed persons are own-account and unpaid family workers. 4. Now what do these numbers entail in our discussion? Evidently they show the picture of how the crisis of capitalism created this vast army of reserve labour described by Marx before. 5. In the language of the ILO, the own-account and unpaid family workers are those people working in the ‘informal sector’ and therefore are ‘exposed to a high risk of poverty, ‘ dangerous working conditions and a lack of security’. Sometimes they are also referred to as the ‘poorest of the poor’ as majority of them live on less than USS 2 a day. The ILO also acknowledged the fact that the situation exists ‘despite an economic boom in many countries.’ 6. Truly, the situation exists and will continue to persist as global capitalism sinks deeper into crisis. But even without the crisis, it is in fact, according to Marx, the basic law of capitalist accumulation that creates this phenomenon because the means of production and the · productivity of labour increase more rapidly than the productive population, thus creating a redundant or surplus population bigger than what is practically required in production. And this problem intensifies further with capitalism’s shift from real commodity production to financialization. 7. Accordingly, unemployed workers who are actively looking for jobs, those who are living in unpaid labour and those who have decided ‘not to sell’ their labour but rather use them for own account ~ are no different from what Marx described then as surplus population of ‘floating’, ‘latent’, ‘stagnant’ and ‘pauperized’ workers. In other words, capitalist accumulation in the process also creates different ‘classes’ of labour largely due to the uneven development and inherent crisis of capitalism. 8. This interrelations of processes under capitalism is the reason why I always use the term ‘informal sector’ in allusion (for lack of better term) since l do not subscribe to the idea that “dualism” exists in the modern world today — capitalism having the ‘formal’ and ‘informal’ part? .. the former being regulated and the latter not in their simplest definitions. 86

What we have now is a global capitalist system expressed in many forms due to its uneven development. It is in fact this uneven development which created a North-South world divide as well as the economic differentiation between cities and counties. The ‘dualists’ believed that the ‘formal’ and ‘informal’ economies exists independently of each other with more and more people removed from dependence to wage labour. ‘Entrepreneurship’ is their new catchword. Marx, however, was very clear on the kind of structures and linkages that capitalism creates to ensure accumulation. He observes That kind of Industry has now been converted into an external department of the factory...Besides the factory worker, the workers engaged in manufacture, and the handicraftsmen, whom it concentrates in large masses at one spot, and directly commands, capital also sets another army in motion, by means of invisible threads: the outworkers in the domestic industries, who live in the large towns as well as being scattered over the countryside (Marx 1992: 590-91) 9. Furthermore, abundance of surplus labour creates the condition for cheap labour since the law of supply and demand operates in the same intensity even in the field of commodified labour. Second, the availability of surplus labour provided a condition for capitalist restructuring now being done in both the local and international level through the introduction of outsourcing or sub-contracting with the main objective of maximizing profit through surplus extraction from surplus labour. Third, it is these layers upon layers of structures in the supply chain which created the interrelated/interconnected ‘informal economy’. Davis suggests that the informal sector ‘generates jobs not by elaborating new divisions of labour, but by fragmenting existing work, and thus subdividing incomes’. And this is similar to what Marx called then as “domestic industry” which, in essence, is production. (and reproduction) done outside of the centralized industry, indicating the “unevenness” of capitalist development. Note that ‘informality’ is prevalent in less developed economies where the pace of industrialization is too slow to absorb the proletarianizing population. 10. Hence, it cannot be argued that a petty commodity producer and the lowly sidewalk vendor reproduce their life outside of the structures of the capitalist economy. The “self-employed” concept is somehow problematic since many self-employed persons also enter into wage employment from time to time especially in the countryside. Or a seasonal’ skilled or semiskilled labourer in the city who may also operate as owner of small business 87

that utilizes family labour. This simply implies that a member of the working population participates in multiple production relations. 11. Yet we have to recognize the fact that due to this differentiation of “classes” within the class there shall exist different levels of class consciousness among workers owing to the different modes of survival (reproduction) he/she has to adapt under the uneven development of capitalism in the world scale. For instance, class unity may easily take higher form for industrial proletariats owing to how they are organized and exploited in the process of production compared to an unemployed, demoralized and chronically pauperized section of the working class, or to the own-account workers who are in constant competition with each other. Yet it cannot be denied that in many instances, the none-industrial section of the working class have become more radicalized compared to industrial workers. The Piqueteros of Argentina is a good example. So are the poor neighbourhood-based Bolivarian circles in Venezuela; the movement of unemployed people in India, and the MST movement in Brazil. 12. I have to deal with this lengthily because I believe that failure to understand these dynamics may lead many to a conclusion that having no single interest to pursue because of such differentiations, the trade union movement or the working class movement ‘would lead to extinction due to the problem of ‘informalization’. 13. The problem of ‘informalization’ posed upon us is quite obvious. The number of organized trade unions shrank significantly during the last two or three decades, while more than a billion reserve army of labour, though chronically exploited, remain largely unorganized, particularly in South or developing countries. The consequence of this North and South divide is the non-homogeneity of the world’s working class condition. And this nonhomogeneity in condition creates uneven development in class consciousness, divides its attention and therefore fragmentation.

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Chapter Four The Retreat from Race and Class Overview The economic tumultuousness of contemporary capitalism requires a constant turnover of ideological concepts which, on the one hand, displace the fundamental inequality of private property while, on the other hand, replacing the possibilities of true economic equality with the illusion of the empty equality of the market. While the advancing productivity of human labour means that we are able to foresee a time when the needs of all are met, global capitalism restricts these developments to the profit motive. An economic system that divides the working class against itself by forcing workers around the world to compete with one another for the wage, capitalism cannot but foster new vicious social divisions and contestations within the working class while at the same time reducing working class unity to the reified homogeneity of exploitation. It is on these terms that we must understand the way in which it disconnects the relation between race and class. Introduction The concept of race as applied to humans has long been discredited by anthropologists. And yet, it is not possible to discuss issues like the high rates of incarceration of black men, or the better medical treatment received by whites, purely in class terms. At the same time, immigration, DNA testing, intermarriage and other phenomena have made the lived experience of racial categories more complex for many people. Changing attitudes have also made racial categories less useful as a basis for political action. One particular element over looked is the mental work to recognize other people. One can interview someone with face blindness to get how much ‘recognizing’ a face has to do with social connection. In such situations, perhaps, face blindness points at how central the face is to racism. Hence the race is primarily the recognition of the face. 89

Secondly, racism accompanies language distinctions as well. There is a strong connection between language and the face as well. What happens with language is how social ties are shaped. So, for example, a racist cuts off and refuses to listen to say an African American then excludes him from goods and services. Then, both language and the face recognition are central tools in the building of the structure. At the dawn of the twenty-first century, the idea of a colourless struggle for human progress is unfortunately back with a vengeance. The retreat from race and class will thus get us closer to addressing neither. The ‘Colour Line’ as Blinker? As the twentieth century started, indeed at almost exactly the same moment that W. E. B. Du Bois predicted that the “colour line” would be its great divide, Eugene Victor Debs (1908) announced that the socialist movement that he led in the United States could and should offer “nothing special” to African Americans. “The class struggle,” Debs added, “is colourless.” As the century unfolded, the white Marxist left, schooled by struggles for colonial freedom and by the self-activity of people of colour in the centres of empire, increasingly saw the wisdom of Du Bois’s insight and tried hard to consider how knowledge of the colour line could illuminate, energize, and express class struggles. We would increasingly turn to other passages from Debs, including one expressing a historical insight that he could already articulate in the early twentieth century but that his colourblindness kept him from acting upon: “That the white heel is still on the black neck is simply proof that the world is not yet civilized. The history of the Negro in the United States is a history of crime without a parallel.” As the twenty-first century started, the idea of a colourless struggle for human progress came back with a vengeance. Such is of course the case on the right in the United States, where what the legal scholar Neil Gotanda and others have called “colour-blind racism” has underpinned attacks on affirmative action and even on the collection of the race-based statistics necessary to show patterns of discrimination. The high-sounding, ostensibly freedom-loving names given to such well-funded campaigns—”civil rights initiatives” to undermine affirmative action and “racial privacy acts” to do in the amassing of basic knowledge regarding the impact of race—have contributed mightily to attempts to recapture the moral high ground by those 90

contending that a society in which white family wealth is about ten times that of black family wealth is nonetheless a colour-blind one. Nor are such instances confined to the United States. With the blood scarcely dry from white Australian riots against Arab beachgoers, that country’s neoliberal leader John Howard reacted to press headlines screaming “Race Hate” and “Race War” by loudly proclaiming that he heads a colourblind society. When the French interior minister Nicolas Sarkozy, leader of the ruling party there and leading candidate to replace Jacques Chirac as president, suffered criticism on race issues, he quickly planned a trip to Martinique to emphasize how little race allegedly mattered in the French colonial world. Sarkozy stood out as especially harsh in his response to the rebellions of Islamic youth in France against police violence. He failed to join the president and prime minister in belatedly distancing themselves from a law requiring that French textbooks “recognize in particular the positive role of the French presence overseas, notably in North Africa.” But an escape to colour-blindness still seemed possible. Yet, Sarkozy was so thoroughly not welcomed by Martinique’s great politician, poet, and theorist of liberation, Aimé Césaire, and others that the publicity stunt had to be cancelled. Nonetheless, within France the pernicious role of long-established “colour-blindness” operated so strongly that Sarkozy can remained a top presidential contender. The legislative left did not originally raise any serious protest against passage of the procolonialist textbook legislation, and the nation adhered to the same basic nocounting-by-race policies that racial privacy acts sought to establish in the United States. Ironically, Sarkozy himself later called for limited “discrimination positive,” (affirmative action), as a carrot operating in tandem with deportations and immigration restriction to quell rebellions in France. But to put any “positive” measures into practice remained a problem. As The Economist put it, the French minister for equality remained practically alone at the top of the government in advocating finding a way even to “measure the presence of the children of immigration” in political structures, the bureaucracy, and the labour force. Against Race But Not for Class What is distressingly new is the extent to which indictments of antiracism, and even attacks on the use of race as a concept, come now from 91

liberalism and from the left. Electorally, of course, one hallmark of efforts by the Democratic Leadership Council to move the Democratic Party still further to the right has been an attempt to distance the party from concrete appeals to, and identification with, people of colour. Thus the constituencies most aware of both race and class inequities are marginalized in the name of appeals for “universal” programs. Meanwhile actually existing universal social programs, such as “welfare-as-we-know-it,” have been subjected to withering (and anything but colour-blind) bipartisan attacks. The left was capable a decade ago of dissecting such a shell game, most trenchantly in Stephen Steinberg’s 1994 New Politics article on the “liberal retreat from race,” and in what will presumably be Christopher Hitchens’s last serious book, his 1999 dismantling of Clintonism, No One Left to Lie To. At a time when no real political alternatives are offered by Democratic candidates who confine their tepid appeals for racial justice to the King holiday and to talks in black churches, the intellectual left also seems to be abandoning race. Thus the brilliance of Paul Gilroy is turned to writing Against Race, and Antonia Darder joins Rodolfo D. Torres in producing the triumphal After Race. Orlando Patterson holds forth under the title “Race Over,” while Loïc Wacquant and the late activist/sociologist Pierre Bourdieu brand analysis of race as an axis of inequality in Brazil as a pernicious export from a United States social science establishment that is as “cunning” as it is “imperialist.” These works are much more, and in some ways much less, than a return to Debs’s “colourless” ideas. They lack the same focus on, and confidence in, socialist transformation and are often in dialogue less with class struggle than with cultural studies ideas about the importance of “hybridity” and the pitfalls of “essentialism.” In the best known cases they do not specifically try to recentre class by removing a fixation on race. When they do make such an attempt at class analysis, as in the work of Adolph Reed Jr., they cannot yet deliver results. On the whole they reflect the ways that increases in immigration, intermarriage, and cross-racial adoptions have destabilized discussions of race-as-usual. Ironically the very success, largely under United Nations and nongovernmental organization auspices, of organizing around race globally has also laid bare the stark differences in national patterns of racialized inequality and the blurred borders between racial, religious, language, and national oppressions. 92

But while retreats from race are at least understandable in part in view of the difficult and changing political tasks that we face, they are in their most sweeping forms no more an answer when they come from the left than when they come from the right and centre. The context in which they emerge, the stature of voices contributing to them, and the ways that they fit into various tempting electoral shortcuts informing left strategies, nonetheless demand that they be taken seriously. To do so requires us to look at the varieties of left critiques of race thinking, with the goal being not so much to show their incompatibility with each other than to identify various changes and threats to which they inadequately respond. The most celebrated advocates of “race is over” and “against race” positions—Gilroy, Patterson, and Bourdieu and Wacquant—do not directly raise the issues of race and class central to this article, but their influence and arguments must be at least briefly discussed if we are to situate and critique the more explicitly class conscious writings of Darder, Torres and Reed. Gilroy’s Against Race begins with an extraordinarily dense and challenging discussion of the connections between the very idea of “race” and what Gilroy terms “raciology,” the nexus of murderous practice, policy, and science born out of seeing race. Race, Gilroy holds, is a “relatively recent and absolutely modern invention” and its scientific credentialing cannot be considered apart from its bloody implication in “evil, brutality and terror.” In a new world ostensibly beyond white supremacist science, and one in which black bodies are marketed as desirable and even superhuman rather than only as degraded, Gilroy sees both new dangers and the possibility for a “novel and ambitious abolitionist project,” this time doing away with race itself. “Renouncing ‘race’” becomes not only the key to “bring[ing] political culture back to life” but also the only proper “ethical” response for confronting the wrongs done under the banners of raciology. Acknowledging that for “many racialized populations, ‘race’ and the hard-won, oppositional identities it supports are not to be lightly or prematurely given up,” Gilroy proposes a long campaign designed to show that “action against racial hierarchies can proceed more effectively when it has been purged of any lingering respect for the idea of ‘race.’” In the book’s early stages, a critique of racist science and a recognition of the need to add up the costs of ignoring gender and class divisions by some black nationalist movements seem to have Gilroy rejecting race but endorsing a more mature antiracism. 93

But by the book’s end, despite asides suggesting that he will not too harshly judge those who hesitate to abandon the politics of antiracist solidarity in favour of a “heterocultural, post anthropological, and cosmopolitan yet-to-come,” Gilroy has undercut much of the grounds of antiracism. Declaring the very “mood” of projects attacking white supremacy to be hopelessly passé as we leave Du Bois’s “century of the colour line behind,” he also strongly dissents from any firm connection of racism to power or to white supremacy. Against Race poses the choice in approaches as one between an outmoded concern for “Africa’s antiquity” and an appropriate commitment to “our planet’s future.” Gilroy writes, “To be against racism, against white supremacism, was once to be bonded to the future. This no longer seems to be the case.” The monumental but incomplete and fragile achievements of black internationalism, so searchingly explored in their contradictions in Gerald Horne’s recent Race War, are reduced to scattered instances of precocious appreciation for the “planetary.” The utopian dimensions that Robin D. G. Kelley shows to be essential to struggles against white supremacy and capitalism become for Gilroy moments to be captured by reading history against the grain, and through a lens that can reduce Frantz Fanon to “that prototypical black-European” noteworthy in large measure for his “indiscreetly anti-Marxist spirit.” Like Gilroy, the sometimes-on-the-left Harvard sociologist Orlando Patterson explicitly pronounces Du Bois’s remarks on the colour line to be well past their sell-by date. “Race Over,” was the headline for Patterson’s projections in The New Republic in 2000. The article begins from the premise that Du Bois may have been “half-right” regarding the colour line in the twentieth century, but Patterson insists that any attempt to continue to apply Du Bois’s formulation would be “altogether wrong.” For Patterson the problems with twenty-first-century race thinking are less political and ethical than they are simply demographic, a view scarcely different from the endless accounts in the mainstream press predicting that the United States will become a white-minority nation in the not-too-distant future. By 2050, the United States “will have problems aplenty [but] no racial problem whatsoever,” Patterson tells his readers. By then, “the social virus of race will have gone the way of smallpox.” This retreat from race will allegedly fall into regional patterns, the details of which call the predictions of racelessness somewhat into question. On the West Coast, “cultural and somatic mixing” will produce a population mainly “Eurasian but with a growing Latin 94

element.” In the Northeast and Midwest, deindustrialized zones of misery will contain the white, African American, and Latino poor, bound together by “social resentment” and a “lumpen-proletarian hip-hop culture,” and isolated from the gated communities of the prosperous. In the Southeast, the “Old Confederacy” race divisions will continue—”race over” does not in fact apply there—but somehow this will make no difference in the national picture. At almost every turn the raceless predictions coexist for Patterson with appeals to old-style raciology. “Murderous racial gang fights” remain a fact of 2050 life, and new technologies to change race are deployed. But an even more glaring contradiction obtrudes when Patterson adds other set of prognostications in a New York Times article, now distancing himself from the view of demographers that whites will become a minority in the United States in the twenty-first century. Arguing that “nearly half of the Hispanic population is white in every social sense,” Patterson forecasts that “the nonHispanic white population will…possibly even grow as a portion of the population.” Patterson may be right that children of marriages between a non-Hispanic white and a Hispanic will identify as (and be identified as) “white,” but the jarring contrast between the two articles suggests just how slapdash the race-is-over position remains. Race disappears and whiteness reigns. Wacquant and Bourdieu’s “On the Cunning of Imperialist Reason,” published in Theory, Culture and Society in 1999, best shows how appreciation for the ways in which racial oppression differs across national boundaries can fuel an argument for jettisoning, or at least quarantining, the use of race in social theory and political strategy. The article foregrounds with surprising stridency Karl Marx’s argument that the ruling ideas of an age are produced by those who dominate. However, the authors put Marx’s insight into the service of an attack on the discussions of racial inequality that have recently led to adoption of forms of affirmative action in Brazil. They argue that new attention to race in that country is a result of elite ideas shipped south from the United States. Wacquant and Bourdieu pinpoint the “cultural imperialism” of U.S. scholars as the source of attempts to flatten varied regimes of race and class oppression, flattening they see as producing a misreading both of history and of current political possibilities. Focusing on the case of Brazil, Bourdieu and Wacquant contend that U.S.-inspired, U.S.funded, and U.S.-produced research works to impose a “rigid black/white 95

social division,” offering the rest of the world a “poisonous” export. Such imperialism insinuates itself, in Bourdieu and Wacquant’s view, despite the fact that its arguments are “contrary to the image Brazilians have of their own nation.” It does so by trading on a perverse and unspecified combination of antiracist rhetoric and neoliberal financing for scholarship. However, a number of acute responses, especially from the Brazilianists Michael Hanchard and John French, have criticized Bourdieu and Wacquant’s contention that race is somehow a peculiarly U.S. concept, one that would have to be exported because it could not be home-grown in Brazil. The critical responses show that in neither the United States nor Brazil is race regularly deployed, as Bourdieu and Wacquant charge, for purposes of accusation rather than analysis, and that what they call the “neutralization of historical context” is a charge that might be turned back on their own reductive understanding of Brazil. Most importantly, the critics show that the scholars accused of spreading “imperialist reason” and rigid caricatures of the Brazilian social system actually continue a long line of argument within Brazil which recognizes that the historical context of displacement of indigenous people, empires, slave-trading, and slavery produced very different, but not incomparable, racial systems in Brazil and in the United States. When Hanchard draws on the work of cultural theorists Robert Stam and Ella Shohat to show that the analysis produced by Wacquant and Bourdieu is not without its own universalistic views of race (and presumed colour-blindness), founded in French imperialism, the argument that we need a fuller and more complex discussion of race and empire rather than an end to debate is squarely put on the table. Does Moving Away from Race A Move Toward Class? The very first words in Darder and Torres’s After Race attempt to improve on Du Bois’s “dictum” regarding the colour line: “We echo his statement but with a radical twist. The problem of the twenty-first century is the problem of ‘race’—an ideology that has served well to obscure and disguise class interests behind the smokescreens of multiculturalism, diversity, difference, and more recently, whiteness.” After Race centrally holds that race is a biological myth at long last invalidated by science, but now dangerously recreated because scholars persist in using the term. Such scholars thereby decisively aid the rise of culturally-based neoracisms and 96

even the recrudescence of biological racism. On this view, the “idea of race” itself, not capitalism, is somehow the “lynchpin of racism.” Like the early sections of Gilroy’s Against Race, the work of Darder and Torres holds out the hope that retreating from the invocation of race will actually empower a more effective struggle against racialized hierarchies. Indeed they approve of Barbara Fields’s uncharitable contention that “liberal, leftist, or progressive” writers dwell on the “homier and more tractable notion” of race to avoid being “unsettled” by talking about racism. However, as in Gilroy’s case, the emphasis on racism is not sustained, and neither race nor racism function as what he calls “categories of analysis”—that is, they cannot be the reasons for people acting as they do, but must themselves be explained. Insofar as Fields, Darder, Torres, and others contend that inattention to class distorts inquiry into all inequalities in the United States, they are exactly right. However, the strategy of banking on the retreat from race to solve that problem is a highly dubious one. It leads to an extremely embattled tone and to ignoring the most exciting work building on materialist insights. From Cheryl Harris’s brilliant studies of whiteness as property, to Eduardo BonillaSilva’s research on racial systems, to somewhat older South African scholarship on racial capitalism, to Lisa Lowe’s important observations on race, universality, and labour at the start of Immigrant Acts, much work seeks to revive the class question by bringing racism and class together more systematically. But you would not know it from After Race. Indeed at critical junctures, the book is so eager to be against race that it departs dramatically from historical materialism and thus cannot be effective for understanding class. Darder and Torres praise the liberal sociologist William Julius Wilson, for example, for supposedly demonstrating that “the significance of class has increased and is now far more salient than ‘race’ in determining the life chances of African Americans.” This either/or, classnot-race, position leads After Race to ignore the devastating counterarguments that Melvin Oliver, Thomas Shapiro, and others have made to Wilson’s work and to subordinate to an endnote their own appreciation of the fact that Wilson’s work is about as distant from Marxism as is possible. That endnote promises a different approach, focusing “with specificity [on] the dialectic between the means of production and the process of racialization,” but so far Darder and Torres have not produced anything like such an analysis. Indeed After Race emphasizes theological matters, not slavery, settler colonialism, and 97

the primitive accumulation of capital, in accounting for the origins of racialized groups. Such a view is very much consonant with the book’s emphasis on plural “racisms”—including the tendency to “inferiorize” whites—and its marginalization of any systematic discussion of white supremacy. This same inattention to white supremacy makes it almost impossible for After Race to contribute to pressing discussions of how to build Latino-black working-class unity. The book’s puzzling title—clearly race was no more “real” in 1670 than in 2004—makes sense in terms of the book’s structure, one that culminates in chapters on Asian American and Latino experiences and emphasizes that the “browning of America” will shake old certainties regarding racism. The danger here lies in making the possibility of abandoning race contingent on the fact that the Latino population has exceeded that of African Americans. This would leave us passing out of a period of a relatively unproductive period of political mobilization based on race, during which blacks predominated, and into a promising raceless one in which Latinos do. But there is then no sustained analysis of African Americans, of African American studies, or of the tradition of black Marxism, as would seem to be necessary to calibrate such an argument. Moreover, that African Americans can practice “racism” is a consistent refrain of the study, which persistently lays all manner of mischief at the door of the civil rights and the Black Power movements. The former movement, we learn, emphasized a “liberal, rightscentred political agenda [that] undermined the development of a coherent working class movement in the United States.” Here the reflexive move away from seeing racism as having critical explanatory weight lets white supremacist trade unionism off the hook and leads to the missing of the centrality of jobs, union organizing, welfare rights, poor people’s campaigns, and point-of-production organizing—of class—to the civil rights and Black Power movements. Missing class, it becomes possible to charge that Black Power narrowly “seiz[ed] the moment in the name of antiracism and ‘black autonomy,’” and that it somehow shut off debate over the consequences of using “the language of ‘race’ to do battle with racism.” At its worst this line of argument allows Darder and Torres to loosely link a Black Power movement animated by anticolonialism and anticapitalism to the Nation of Islam’s extravagant pronouncements on “white devils.” 98

While Darder and Torres allow that “racism” is still a problem worth addressing, the recent writings of the radical political scientist Adolph Reed Jr. are done even with that. Sounding more like the “colourless” Debs than any major left commentator on race and class in recent memory, he argues, “Exposing racism [is] the political equivalent of an appendix: a useless vestige of an earlier evolutionary moment that’s usually innocuous but can flare up and become harmful.” Reed’s two late-2005 articles, “Class-ifying the Hurricane” and “The Real Divide,” are the signature pieces of the left retreat from race. They appear in relatively popular left/liberal venues, The Nation and The Progressive respectively, and represent attempts by a prominent activist in the movement to build a labour party in the United States to speak broadly and frankly. Moreover, Reed’s scholarship had offered significant opposition to liberalism’s retreat from race during the Clinton era, especially in his collection Without Justice for All. “Class-ifying the Hurricane” appeared while the horrific impact of Katrina in Reed’s former hometown of New Orleans was fresh in readers’ minds, just after many had noted the racist reporting that contrasted black “looters” with white survivors shown doing precisely the same foraging. It noted “manifest racial disparities in vulnerability, treatment, and outcome” of the experience of natural disaster. And then it turned on a dime to excoriate the “abstract, moralizing patter about how and whether race matters.” Even so, in this first of his two paired essays Reed’s retreat from race could be read as simply a strategic one. “For roughly a generation it seemed responsible to expect that defining inequalities in racial terms would provide some remedial response from the federal government,” he wrote. “But for some time race’s force in national politics has been as a vehicle for reassuring whites that that ‘public’ equals some combination of ‘black,’ ‘poor,’ and ‘loser.’” Katrina lay bare both race and class injustices, but in part because of the growing strength of racism, an effective response to it would have to be strictly “class-ified,” according to Reed. “The Real Divide” repeated, expanded, and made more bitter the arguments in The Nation article. Reed did continue to mention, in a laboured construction, that he was “not claiming that systemic inequalities in the United States are not significantly racialized.” Indeed “any sane or honest person” would have to acknowledge the overwhelming evidence of “racial disparities [that] largely emerge from a history of discrimination and racial injustice.” Nonetheless, Reed followed up these generalizations by 99

categorically declaring that “as a political strategy exposing racism is wrongheaded and at best an utter waste of time.” The focus on racism is for Reed a dodge designed to make “upper status liberals” feel morally superior as they vote for the deeply compromised Democratic Party and ignore the “real divide” of class. In one of the few bits of the article offering ostensible, if incredibly narrow and misguided, class analysis, exposing racism is said to serve “the material interests of those who would be race relations technicians.” As in “Classi-fying the Hurricane” the arguments are partly that racism, being “too imprecise” and too abstract, lacks power as an analytical tool. However, the point Reed develops more is that among whites the very “discussion of race” reinforces “the idea that cutting public spending is justifiably aimed at weaning a lazy black underclass off the dole.” The “racism charge,” on this view, is easily defeated by Republican appeals to “scurrilous racial stereotypes” and therefore should be jettisoned. Gilroy’s Against Race at least acknowledges that a call for giving up on race-based traditions of struggle asks a lot of social movements rooted in communities of colour. In law, for example, exposing racism is often the sole strategy available to protect, after a fashion, the rights of many of the poorest workers in the United States. Reed’s view that elite liberalism is the source of movements to expose and combat racism—a view much facilitated by his outspoken dismissal of the reparations movement—forestalls consideration of the dynamics of concrete struggles around race and class, leaving the call for a retreat from race itself as something of an abstraction. Fortunately there is no reason to decide whether to organize and to analyse around either racism or class oppression, one to the exclusion of the other. The case of New Orleans, which moved Reed to present us with such a choice, offers good examples of why we should reject it. Compare, for example, Reed’s thumbs up/thumbs down approach to race and class with the left activist and writer Mike Davis’s accounts of post-Katrina New Orleans. Davis raised a series of questions three months into the rebuilding process in New Orleans and perfectly captured the continuing colour line and more: Why is there so much high-level talk about abandoning the Ninth Ward as uninhabitable when no one is proposing to turn equally inundated Lakeview back into a swamp? Is it because Lakeview is a wealthy white community? And/or is it because the 30,000 reliably Democratic Black votes in the Ninth Ward hold the balance of power in Louisiana politics? To what 100

extent, Davis wondered, did “ethnic cleansing” and rebuilding coincide? Davis’s accounts have also been especially acute on the ways in which elites, including the black political elite in New Orleans, have played on, and indeed created, black-Latino tensions during the rebuilding process. How are we to conceptualize these tensions, and to struggle to overcome them, without discussing both race and class, as well as white supremacy? In recent anti-war demonstrations the most fascinating sign has read: “No Iraqi has ever left me to die on a roof.” Its words recall haunting postKatrina images and also bring to mind the celebrated anti-war dictum attributed to Muhammad Ali: “No Vietnamese ever called me ‘nigger.’” The latter line was perhaps the quintessential late twentieth-century example of Du Bois’s insight, ignored by U.S.-centred readings of his words in The Souls of Black Folk, regarding how the colour line in the United States existed in systems of racialized global inequality. We should allow that the twenty-firstcentury “No Iraqi” sign’s variant of the earlier slogan is considerably more complex and expansive. Poor whites, and indeed the large numbers of Vietnamese resettled in the gulf region and abandoned in Katrina’s considerable wake, could conceivably march under the “No Iraqi” sign. In that sense the sign, and the reality of New Orleans, speak powerfully to the most profound insight in Reed’s recent work, namely that poor, mostly black, New Orleanians suffer from a plight that is “a more extreme version of the precarious position of millions of Americans today, as more and more lose health care, bankruptcy protection, secure employment, affordable housing, civil liberties, and access to education.” To combat such misery will require race and class analysis, as well as antiracist and anticapitalist organization. As Reed’s articles appeared, the New York Times ran an article titled “For Blacks, A Dream in Decline.” It revealed that after a 1980s peak in which one black worker in four was a union member, the figure today approaches one in seven. In the last year, African American workers accounted for a whopping 55 per cent of the drop in union membership by 304,000 nationally, although they represent just one unionized worker in six. The Times article quoted William Julius Wilson himself as urgently calling on the unions to address the issue. “They haven’t done so yet,” he lamented. Union leaders, according to the article, “resist viewing what is happening in racial terms.” One prominent labour leader quoted on the decline of black membership sounded for all of the world like Eugene V. Debs: “We see it as a class issue rather than a race issue.” It is both, and the retreat from race and 101

class will get mankind closer to addressing neither. The massive class struggle, its new momentum, requires from a visionary leadership that it form the conscious element, the Party. This struggle must make use of every effort to educate and organize the peoples for the perspective of power, of socialism; it is necessary for progressive forces of liberation from rampaging contemporary capitalism to place the workers at the head of these struggles. Racial distinctions have absolutely no place in this struggle. Globalization and National Governments The policies of national governments in capitalist countries are mainly determined by two important dynamics: the first is the state of the national process of capital accumulation and its relative international strength; the second is the balance of class forces both nationally and internationally. It is of little surprise that the concept of ‘globalization’ is being discussed; (1) during a period of stagnating national capital accumulation as excess capital is aggressively exported or deployed speculatively on the stock markets of the world to stave off a profits collapse and (2) following a dramatic shift in the balance of class forces nationally and internationally in favour of capital after the successful counterattack against labour in the 1980s, an attack which highlighted the weakness of working class and socialist forces world-wide. Tony Blair, the new British Labour Prime Minister, was simply giving expression to these realities when he told a conference of Rupert Murdoch’s News Corporation in 1995: ‘What is called globalisation is changing the nature of the nation state as power becomes more diffuse and borders more porous. Technological change is reducing the power and capacity of government to control its domestic economy free from external influence’ (Financial Times 20 March 1996). In effect he is reassuring the dominant sections of British capital with a very strong international presence, that, with domestic capital accumulation stagnating, he will not stand in the way of British capital even if this is at the expense of millions of people in Britain confronting drastic cuts in state welfare and growing impoverishment. On no other basis, given the balance of class forces, could he lead a capitalist government in present day Britain. 102

The neo-liberal Financial Times journalist Martin Wolf reaches similar conclusions about the limited role of national governments in a global economy but plays down the impact of ‘globalization’: ‘When people write off the end of national economic sovereignty, it is an historically brief era that they lament. It ended not so much under the assault of an external force, the global market, but of an internal one, perceived failure. Governments were bad at much of what they were doing...Globalisation reinforced the limits already imposed by domestic constraints’ (Financial Times 18 September 1995). Wolf’s attack on the economic role of government again gives ideological expression to the changed needs of capital in today’s circumstances. His explanation differs from Blair - they speak to a different constituency - but inevitably they reach the same class standpoint. The ‘historically brief era’ of state intervention in the capitalist economy after 1945 was the product of unique historical circumstances. First, inter-imperialist rivalry between the major capitalist powers since the beginning of the century had ended, temporarily, with the dominance of US imperialism over the capitalist world economy. This allowed the US economy, facing limited competition, to develop at the expense of other national capitals. Through Marshall Aid and export of capital, the US laid the basis for increasing control of world markets for US capital and a faster rate of capital accumulation at high rates of profit. Britain, with its access to the markets and resources of the British Empire and with little competition from its European rivals, followed in its wake. Second, a change in the balance of class forces in favour of the working class had occurred internationally after the devastation of depression, fascism and two world wars, a change reinforced by the standing of the Soviet Union and the spread of socialist revolutions and independence movements after the war. The restoration of capital accumulation after the war was achieved, therefore, at a political cost to capital. The balance of class forces necessitated this. But it was a cost that, initially in the victorious nations and, later, in the rebuilt European economies, capital could afford. State intervention in the capitalist economy, state welfare and military spending, in these unique circumstances, underpinned the most rapid accumulation of capital ever. But the fundamental contradictions within the capital 103

accumulation process remained. When the rate of profit began to fall and inter-imperialist rivalries re-emerged at beginning of the 1970s, capital accumulation began to stagnate in most capitalist countries. The rising consumption institutionalized in state welfare became a barrier to the further accumulation of capital as high inflation accompanied stagnation in the major capitalist nations. State spending and state welfare had to be cut back. In Britain the first steps were taken by a Labour government a few years before Thatcher came into power. Capital went on the offensive and succeeded in changing the balance of class forces nationally and internationally but the problems within the capital accumulation process remained. State intervention was neither responsible for the post war boom nor the cause of the later stagnation. It was the particular circumstances of the capital accumulation process nationally and internationally which underlay both. Keynesianism and neo-liberalism are no more than ideological reflections of the changing requirements of capital in the two periods. The growing stagnation in the capital accumulation process and the reemergence of inter-imperialist rivalries were the result of an over accumulation of capital - insufficient surplus value to secure both the normal profitable expansion of productive capital and to finance the growing state sector together with a rapidly expanding unproductive private sector. The huge increase in the export of capital, the growing monopolisation of capital through mergers, acquisitions and privatizations, the unprecedented autonomy of the financial system from real production alongside the cuts in state welfare, downsizing and outsourcing, mass unemployment and rapidly growing inequality, in short, globalization, was capital’s response. Globalization, therefore only reinforces the limits imposed by domestic constraints on national government intervention because both result from a stagnating capital accumulation. This is the context in which we can examine the differing class positions on globalization. In sum, condemnations of “victim politics” are a familiar feature of American public life. Politicians and journalists across the ideological spectrum eagerly denounce “victimism.” Here lies the biggest challenge for the working class movement today. The critical question now is: what is to be done? 1. Remove the ‘class divide’ by reviewing or re-evaluating the party or movement’s orientation, realigning it to the present realities of globalization yet upholding and the Marxist theory of class struggle and enriching the 104

methods of scientific socialism. ‘Informality’ or ‘formality’ of labour should unify rather than divide the working class. 2. Defend the gains of the working class Trade unions, whatever position they occupy now in society, must be defended at all cost at all times. Trade unions embody the basic gains of the working class, specifically unions being the most elementary form of class organization in its day to day struggle for better working condition. Thus, building and strengthening the capabilities of the trade union movement is the duty of all the worker’s movement around the world. 3. Create ‘unity structures’ Build structures that represent both ‘formal’ and ‘informal’ labour (an example is a worker’s association in the community or a national coalition of formal and informal labour, removing in effect the trade union-urban poor divide in the working class movement. 4. Formulate ‘homogenous demands’, organize common actions Demands should not be differentiated between ‘formal’ or ‘informal’ categories. Trade unions must include in its platform demand for employment and other forms of social protection for the unemployed such as housing, healthcare, education, etc. Likewise, the army of unemployed or self-employed (historically organized into urban poor or neighbourhood associations) raise their demand beyond opposition to planned demolitions such as jobs and different forms of social security. 5. Create bases for building political power The working class must have its own political party independent of other class parties. The party struggles for the immediate demands of the working class; prepares itself politically by bringing into its fold the most dedicated and advanced section of the working class especially the young; builds organs of political power from the local to national level, the ultimate aim of which would be· the establishment of a workers state and as socialist society.

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Chapter Five Capital, Labour, State & Class Struggle Overview The transformations or attempted ‘counter-reforms’ of the neoliberal global ruling classes clash with the cumulative social benefits of the working class, and create objective conditions for a new wave of class struggles. The challenge is to unify the intentionally nursed sectorial struggles of the unemployed workers, the underpaid women workers, the precarious workers, the pensioners, the immigrants, the traditional factory workers and the new machine operatives in the public sector into a new working class power against the new authoritarian state and its national and international rulers. Back to the Future Historical hindsight is instructive here. When colonialist forces created states in their own images, they re-founded institutions that organize social structures in line with their strategies. When, after decolonization, many of these states in Africa and the Middle East weakened under military or neoliberal assaults; they were dubbed ill-governed or ‘overdeveloped.’ The ‘or’ between military and neoliberal is inclusive. The neoliberal bent is imposed by shifting national class structures to accept the imperialist terms of surrender via neoliberal policies by power structures, foremost in which, is actual or potential military power. As for overdeveloped, it is said that excolonies borrowed over-fitted systems of government and administration from their Western patrons. More recently, many of these ex-colonies have failed and many others teeter on the brink of failure. Libya, Yemen and Syria can now be added to Lebanon, Afghanistan, Somalia and Iraq. However, these failures are not a onetime occurrence after which states resurrect in better shape or form. They have become states that exist in a continual condition of violence and collapse. After the destruction of their indigenous industry and national means for the reproduction of life, they are relegated to a condition of insecurity, dependency and the export of raw materials. Global capitalist forces ensure 107

that rent from resources are devolved in ways that entrench divisions across social groups that, in turn, vie for raw material or geopolitical rents. In this new breed of states, the state is neither an institution of all institutions nor an institution in itself. It just administers rent redistribution and protects vital raw material sources for uncaring capitalist charks. Iraq recently, for instance, bought drones to protect its pipelines when more than one million of its orphaned children are stranded in the streets of Baghdad and daily car bombs wreak havoc and destruction across its landscape. This new breed of state is neither sovereign, in the sense it cannot provide national, communal or individual security, nor does it exercise autonomy over policy. It is simply there to ensure continued divisions so as not to facilitate the aspirations of working people irrespective of sex, colour, gender, sect etc., in a more resistant stance to contemporary global capitalism. As models engineered in response to the crisis of capital, they are instruments of working class differentiation and control. And, the possibility exists that there could be more of these states now. What occurred in Iraq and Libya can engulf all of Africa. In the post-Soviet era, the old form of the sovereign and nationally industrializing state no longer tallies with presentday global capitalist ambitions. In an organically set mode of capital accumulation, when some states break the mould of underdevelopment, others will pay a heavy price of underdevelopment. At its peak in the eighteenth century, the state was ideally conceptualized. The nation state was ‘the realization of the spirit’ or ‘the actuality of the ethical idea (Hegel).’ It was also ‘[a]n autonomous state, one in which the authority of its laws is in the will of the people in that state (Kant).’ By the time class divisions deepened in the nineteenth century, the state became ‘the institution of organized violence which is used by the ruling class to maintain the conditions of its rule (Marx) or, putatively, ‘the organization that monopolises legitimate violence over a given territory (Weber).’ In our age of colonialist intervention couched under humanitarianism, the state became a social club modelled upon the fagging system of English public schools. Late in the twentieth century, the concept of the state had to annul the concept of class altogether from the definition of state. The state became an association of persons, living in a determinate part of the earth’s surface, legally organized and personified, and associated for their own government. This new breed of state, however, fits none of the above definitions. It is a differentiated and degenerative form of even the nation state defined as a 108

social club. Individuals in these on-the-brink states have no one government that they can call their own. Ideally, for Hegel to have reached his definition of the state as the actualization of ethics, he followed the contradictory path of the development of the spirit over time as it oscillated between the in-itself mode to the for-itself mode embracing larger and more inclusive forms of social organizations. In the despotic Orient, he thought one was not free but all are free. In the slave age, some were free. In the Prussian state, one and all were free. In this modern form of ‘on-the-brink state’, however, neither one nor all can be said to be free. Why is it so? Materially, from its very birth, the nation state was a constituent of capital and armed with a welfare task, principally, the function of reproducing, by more or less coercive and ideological means, a malleable and acquiescent working class. The state became the mediation of the dominant class in the political process. But in this new breed of state, social disarticulation is profound on the material level, resulting from wealth discrepancies and the fragmentation of the social order. On the level of consciousness manifest in the schism separating social consciousness from social being, it is even more profound. What I mean by the latter is that although workers would stand to benefit from collaboration and unionism, they adopt reconstructed identities bolstered by tainted rents that would drive them apart. Thus, as ballot box elections bereft of social and economic rights are organized, the citizen would not be voting in a state encompassing the whole of the national territory, for that state does not exist. What exists is the social group, the sect and/or ethnicity for which the personal vote is quasi mandatory because it handles the disbursement of rents and, hence, livelihood. In no minor measure, the crisis of alternative social ideology contributes to this fragmentation. This new breed of state, furthermore, is no longer the institution by which the comprador class organizes and maintains a dependent mode of integration with global capital; for a comprador class to exist, it must be set against the ‘other’ or the national bourgeoisie. Here, there is no national bourgeoisie to speak of. In Iraq, for example, two opposing militias guarding two different pipelines are said to shoot at each other when luring tankers to their delivery points. This is a stage in development where militias pitted against each other with the premeditated support of various US military bases come to represent a large part of the form of social organization that make up the state. 109

On the development side, it goes without saying that this new breed of state not only engenders reverse development, it also debilitates man. Shorter life expectancy, higher infant mortality and illiteracy abound. Equally important, fragmented, insecure and de-developing states fall prey to drone politics and diplomacy. Their de-development drastically shifts the balance of forces in favour of corporate powers. There will of course be the isolated anti-imperialist violent incident, but it is no more than The growth process in middle income countries achieved so far as a concession related to shifting balance of forces with the global corporatocracy or contemporary imperialism, will imply more dislocation wrought upon the poorer class countries. Many more countries are poised to undergo this metamorphosis to a state, which is the form of social organization of militias plus American drones/military bases. Iran is one possible target, which would expand the car bomb corridors from the Fertile Crescent to Afghanistan. Capital successfully tested these new forms of social organization in the periphery. At the expense of the working class, it has been nicely drawing the rewards of Afghanistan, Somalia and Iraq for more than three decades. However, much like it tested other disasters before in the colonies and then applied them at home, in the defunctness of present-day social ideology replete with Eurocentricity, capital might just as well bring these experiments closer to home. Some Simple Historical Facts As always, the repressive apparatus of the capitalist state (the police and the courts) came down with great brutality against the heroic strikers of 1886, just as they are coming down brutally against the Occupy movement of today. In the intervening 126 years, the country has experienced two world wars, the great depression, and the New Deal. But the rising class consciousness of today belongs not only to the exploited. The exploiters have always keenly felt it. A few years after May Day was declared, many big American businesses formed the National Association of Manufacturers (NAM) with the express purpose of representing the interests of the capitalist elite and controlling the revolutionary ideas of the working class. NAM used the immense resources at its disposal for more than a century to propagandize the American people to the ideas that big government (capable of regulating business) was bad for them, that “free enterprise” was 110

absolutely essential to democracy, and to establish a firm emotional link between the ideas of “God, economic freedom, and America” in the hearts and minds of most citizens. They succeeded, and even though big business could not prevent a New Deal in which U.S. workers shared a portion of the wealth in the form of corporate supported health benefits, a 40 hour work week, social security, and decent wages, these compromises made American workers absolutely loyal to their country and its system, irrespective of the horrific conditions in which people lived in much of the world, and irrespective of the genocidal imperial wars conducted by their government on behalf of its ruling class and the global system of exploitation and brutal repression. By the mid-1970s, the huge multi-national corporations had accumulated such immense wealth and power that they no longer felt any need to compromise with American workers in a New Deal style arrangement. If these corporations could pay workers in El Salvador or Indonesia 15 cents an hour, why should they have to pay their workers at home a legally mandated minimum wage? If corporations operating in Bangladesh or Columbia had no obligation to limit working hours or provide health insurance benefits, why should such “luxuries” be afforded to American workers? These “privileges” for American workers did not represent a “free market” but one interfered with by “big government.” The New Deal had to go, and the corporate propaganda machine got Ronald Reagan elected. The process of roll-back began, followed by one corporate sponsored, neo-liberal president after another until today. The New Deal now lies in shambles. Much of the Occupy movement in the U.S. today, with great energy and creativity, is struggling for a new New Deal. Even the Obama campaign for re-election has appropriated the central theme of Occupy, chronicled in a recent article (by Douglas Schoen in the Daily Beast) that cites recent polls as well as themes of the campaign “emphasizing unfairness in American society, income inequality, and the need to redistribute wealth.” The Occupy movement is today inspiring corporate shareholders to challenge executive compensation packages; Occupy activists are blocking repossession by banks of foreclosed homes; business as usual is being challenged across the country. However, the depravity of the capitalist ruling class far exceeds the drive to repeal the New Deal. In a recent Truth dig article, journalist Chris Hedges correctly declares the rulers of the system have finally gone insane: “when civilizations start to die they go insane. Let the ice sheets in the Arctic melt. 111

Let the temperatures rise. Let the air, soil and water be poisoned…. Let one useless war after another be waged. Let the masses be thrust into extreme poverty and left without jobs while the elites, drunk on hedonism, accumulate vast fortunes through exploitation, speculation, fraud and theft. Reality, at the end, gets unplugged.” This insanity is real, and it is a significant part of a global economic system predicated not on human or environmental welfare but on exploitation and domination, turning all values into monetary values and destroy the moral foundations of human existence. But it is precisely here where the Occupy movement, for all its immense potential for generating a new New Deal within the U.S., reveals in its premises some of the same insanity that characterizes the global ruling class. The Occupy movement is not primarily about ending global capitalism, global wars, and protecting our planetary environment. It mainly just wants its fair share of the capitalist pie, it wants a new New Deal within the U.S. while the rest of the world continues to rot in hell, while the planetary environment continues to collapse, and while the threat of nuclear holocaust continues indefinitely. The original founders of May Day in the late 19th century understood that the revolution must be worldwide, that capitalism and its nefarious alignment with the system of militarized nation-states was a form of insanity that could only destroy our world, and with which it would be just as insane to compromise. They understood that their struggles for an eight hour working day were only a tactical skirmish in the greater struggle to create a decent and just world system. Well over a century later, in the face of the collapse of our planetary ecosystem and the ever-present possibility of nuclear holocaust, most Americans have not even yet understood what the founders of May Day understood. The purpose of this chapter is therefore to seek and suggest an approach to both understanding the nightmare which is global capitalism today and perceiving and understanding the nascent force which is capable of awakening us from that nightmare and making a truly human life possible. By “capitalism” I mean the whole system of social relations associated with the separation of “bourgeois society” from the family and the state, wherein the relation of buying and selling dominates all other social relations.

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Globalization and Class Interests Martin Wolf quite brazenly represents the dominant ruling class interests. As a spokesperson for large capital, he is an unashamed apologist for neoliberalism. In a recent glowing tribute to globalization, dismissing all evidence to the contrary, he maintains it has been a force for prosperity in much of the world. ‘Globalization is the great economic event of our era. It defines what governments can - and should do... Technology makes globalization feasible. Liberalization is responsible for it happening.’ He celebrates its success. From 1970 to 1997 the number of countries removing exchange controls on goods and services increased from 35 to 137. A year ago, more constrained, in an article ‘The global economy myth’ (Financial Times 13 February 1996), he argued that much of the talk about globalization was exaggerated and governments on their own or together could do a great deal. Today he has no such reservations. In his latest article ‘Global opportunities’ he tells us that governments have learned the lessons of experience and have chosen or been forced to open their economies. Running with the tide, he now argues that, on balance, globalization has gone further than ever before (Financial Times 6 May 1997). New Labour stands for the same ruling class interests. In the run up to the General Election Blair was forever stressing how Labour would accommodate multinational business. Immediately after the election he appointed Sir David Simon, chairman of British Petroleum, as a Minister of Trade and European Competitiveness. BP is accused of collaborating with military death squads in Columbia. Simon will be made a life peer. Almost the first act of the new government was to hand over control of interest rate policy to that bastion of neo-liberalism, the Bank of England. Nevertheless Blair cannot, as Wolf is able to do, conflate the ‘can’ and ‘should’ of government policy in relation to a global economy. For Blair is reliant to some degree on the middle class constituency which elected him to power. He will have to reassure the middle classes, as real economic developments threaten their security, that he will do what he can within the constraints imposed by the global economy (‘external influence’). He is acceptable to the ruling class because, unlike the discredited and divided Tories, Labour is in a better position, as economic conditions deteriorate, to prevent an alliance against capitalism developing between the poor working class and sections of the middle classes threatened with proletarianization. 113

Hutton, generally regarded as ideologue for the New Labour Party, deals with the question of globalization from a different class standpoint. He articulates the fear of the middle classes at what might occur if the New Right (neo-liberal) agenda succeeds. ‘If there are no real economic and political choices... the way is open for the return of totalitarian parties of the right and left.’ He fears the consequences of social breakdown. Hence his concern to play down the impact of globalization, arguing that governments can co-ordinate their policies to manage it, to prevent the extreme consequences of an unrestrained market and to create a less degenerate capitalism. The relative prosperity in Britain during the post-war boom gave rise to new privileged sections of the working class - a new middle class. This layer of predominantly educated, salaried, white collar workers grew with the expansion of the state and services sector and, in the more recent period, with the information technology revolution. Sustaining its privileges is the key to social stability in all the major capitalist nations and playing to its prejudices is the necessary condition for political parties to be elected to power. As long as there were sufficient profits from production at home and trade and investment abroad, both to give an adequate return to capital, and to finance state welfare and the growing unproductive private sector, then the social democratic consensus of the post war years could be maintained. It was possible to guarantee the relatively privileged conditions of higher paid workers and the middle classes while sustaining adequate living standards for the mass of the working class. In the new conditions of capital stagnation and growing inter-imperialist rivalries in the middle of the 1970s, this consensus began to break down. The 1974-79 Labour government set monetary targets and cut state spending. The low-paid state sector workers fought back and the ‘winter of discontent’, 1978/9, drove the higher paid skilled workers and the middle classes into the arms of the Tory Party. Thatcher embraced this new constituency and, as Hutton says, ‘the liberal professions, affluent council house tenants, homeowners, all benefited from her tax cuts, credit boom and privatization programme.’ The price was growing inequality as state welfare was cut and millions of working class people were driven into poverty to pay for Thatcher’s program. The privileges of the middle classes could only be preserved at the expense of ever-increasing numbers of impoverished working class people. In spite of the revenues from North Sea Oil, 114

productive investment stagnated in Britain, and record amounts of capital were invested abroad. Britain was rapidly becoming a rentier state. With the failure of Thatcher’s economic policies at the end of the 1980s and with poverty and inequality rapidly accelerating, inroads began to be made into the standard of living of sections of the middle classes. It is the potentially explosive consequences of this development that drives Hutton. He offers his alternative to ‘globalization’, to an unrestrained and deregulated capitalism. First, he says, we must alter the way the British financial system works - essentially from seeking high, liquid, short-term gains, irrespective of location, to giving a long-term commitment to regenerating the productive base of the British economy - a process which, he says, requires a political revolution to take power away from the entrenched ‘conservative hegemony’. Britain has to be transformed into a high investment, high growth economy. Second, a coalition supporting social welfare has to be rebuilt. For this to happen the middle classes must opt in, rather than opt out into the privatised provision of the neo-liberal agenda. The middle classes, he argues, can be given ‘a vested interest in the entire system’ by ‘incorporating inequality into the public domain’. A core system for the mass of the working class with the middle classes able to buy in the extra quality services they require - in short ‘nationalising inequality’ within the state system. However, if the degeneration of capitalism into a parasitic and rentier form is now a necessary trend emerging in all the mature capitalist nations, Hutton’s response to globalisation - what I have called the political economy of the new middle class - is both idealist and reactionary (1995). We can now understand the significance of Sivanandan’s standpoint. Living in a country where knowledge, culture and politics are dominated by the concerns and prejudices of middle class people; in which the poor and oppressed working class are outside the political process and ignored by the official labour movement; and where social relations seem frozen, repetitive and unchanging, it could appear that an epochal shift has occurred in capitalism and that the socialist project, at least as it is traditionally understood, has to be buried. We note Sivanandan’s warning not to underestimate the dangers posed by the so-called ‘culture of postmodernism’, in a society where ‘“knowledge workers” who run the Information Society, who are in the engine room of power, have become collaborators in power’. But we respond as materialists. History has not ended. And globalization, if it is anything, is a sign of the crisis of capitalism, of increasing instability, of 115

rapidly changing circumstances in a world of obscene and growing inequality. Social relations are not fixed. The conditions which spawned a new middle class and turned it into a bedrock of social stability in the imperialist nations after the war have ended. Today it is those privileged conditions which are being threatened. Hutton, at least, recognises this - hence his terrible fear of a return to the extremes of class conflict that dominated the 1930s. Sivanandan is far too preoccupied with the ideological posturing of a small elite of academics and opinion formers caught up with globalization and beneficiaries of it. Ellen Meiksins Wood develops a number of crucial points in her reply to Sivanandan. Firstly, more giant corporations with a global reach, and more international organisations serving the interests of capital, in no way imply a unified international capitalist class. The ‘global’ market ensures the ‘internationalization of competition’ - a contradictory process. On the one hand it does mean new forms of capitalist integration and co-operation across national boundaries but on the other hand, it also means active competition between national and regional capitalists. ‘So the “global” economy if anything may mean less and not more capitalist unity.’ The overall consequence of ‘globalization’ far from integrating capital is at least as likely to produce disintegration. Secondly, the proposition that there is an inverse relation between the internationalization of the economy and the power of the state fails to acknowledge that ‘globalization’ presupposes the state. ‘The nation-state is the main conduit through which national (or indeed multinational) capital is inserted into the global market.’ Transnational capital may be more effective than the old-style military imperialism in penetrating every corner of the world but it accomplishes this, in the main, through the medium of local capital and local states. It may well, ultimately, rely on the military power of the last remaining ‘super-power’ to sustain the sovereignty of the market. Further, it depends on such local political jurisdictions to maintain the conditions of economic stability and labour discipline which are the conditions for profitable investment. And finally, new kinds of interimperialist rivalry will emerge in which the nation state is still the principal agent. From this she advances her most important political point: the nation state is still the terrain of (class) struggle. ‘If the state is the channel through 116

which capital moves in the “globalised” economy, then it is equally the means by which an anti-capitalist force could sever capital’s lifeline.’ These arguments go a great deal of the way to undermining Sivanandan’s position. But there is something lacking. It is perhaps best highlighted in the undue weight Wood gives to the ideological impact of the concept of globalization as it is commonly understood. ‘It is the heaviest albatross around the neck of the left today’. ‘In the current conception of globalization, left joins right in accepting that “There Is No Alternative” not just to capitalism, but... to a more or less (the right goes for more, the left somewhat less) ruthlessly “flexible” capitalism.’ She goes on to say that if their conception of globalization were an accurate reflection of what was happening in the world today her ideological objections wouldn’t count for much and we would have to accept that the socialist project is dead. This is all very true but something more is surely needed. Ideas only become a material force when taken up by the masses. The ideological struggle is of political importance when it falls on fertile ground. In periods when the poor and impoverished working class are outside the political process, the politics of the left, in the main, reflect their class position in capitalist society - as part of the privileged working class or educated white collar and professional workers who form the backbone of the new middle class. The recomposition of the working class as a fighting force against capitalism has to be the product of developments within capitalism itself, it will not be the result of ideological combat alone. This process is already taking place as capitalist governments deregulate labour, attack state welfare, undermine the democratic right to protest and workers’ rights to organize, attempt to divide the working class through racism and sexism, and destroy the environment. The ideological struggle has to be combined with the political organization and defence of those sections of the working class under attack and fighting back. We need to show how developments within capitalism are making this possible. That is why a great deal more is required from the analysis of the latest stage of capitalism to finally lay to rest the ghost of globalization. On Capital, Labour and Class Struggle In approaching an understanding of the dominant social relations and thought-forms of bourgeois society or the whole system of relations based 117

on buying and selling, including production relations properly so called and the various juridical, cultural and ethical relationships which both support these relations and rest upon them as it is today I intend to emulate Marx’s critique of the political economy of his day. The word “worker” is in the same sense as I use the word “labourer”, to refer to a person who works for a living as and when conditions allow it, rather than someone who lives off property. However, I do not use the word as an abstract general category. “Worker” indicates both an individual human being and a social class, and the notion of social class relies upon the social process of production and by no means on the attributes of individuals. The actual way in which the person earns a living at any given time may be at odds with any definition. Those earning their living solely in maintenance of the social relations of production (the secret police., military, etc.) and the upper layer of supposed employees in firms who draw an extraordinary wage in effect as a share in the proceeds of property may in no sense be encompassed within the concept of “worker” despite the fact that they work for a living and draw a wage. There is no sense in my use of the word of any particular type of labour, so-called “blue-collar” work or manual work, and nor do I intend that the form of employment, i.e. contract, self-employment, piece-work or wage labour, is relevant to the consideration of someone as “worker”, though the word carries the implication that the dominant social relations of production are those of bourgeois society. However, we are a long way from the political economy of the mid-19th century which Marx criticized. The dominant form of labour in the world which Marx knew was wage-labour and the archetypal commodity was a tangible thing, and it was with some justice that Marx regarded the service industries as being inessential and generally not productive of surplus value, and firmly rejected the idea of workers as independent proprietors, like their employers, selling a “service”. Consequently, the centre of the mystification of bourgeois society was seen as the alienation of workers’ labour in things which, as “dead labour”, were the property of others and dominated the lives of the living. It is noteworthy here that Marx was quite clear that whether a commodity was a service or a tangible thing was both irrelevant to both its status as a commodity and a carrier of value and of surplus value. The example of the teacher in a private school who “is a productive labourer when, in addition to belabouring the heads of his scholars, he works like a 118

horse to enrich the school proprietor” (Capital Chapter 16) makes this quite clear if the first chapter had not made this clear enough. However, there are frequent references in Capital to services (such as the wandering tailor, the wood-cutter or the station porter) where Marx emphasizes that the purchaser of the service realises no surplus value, simply because the purchase of the service is a simple act of exchange of commodities not one of production, so that in this sense the workers concerned are not “productive labourers”. In addition to this, references to the large class of servants whose labour constituted an expenditure from the surplus appropriated by the capitalist and used for her own gratification my the enjoyment of the services of this class reinforce the mistaken impression that Marx attached some kind of stigma to service-workers. A mistaken impression can be gained from a reading of Capital that Marx believed that services were not productive of surplus value. The conception of an act of labour as service or manufacture is in any case an attribute of the social relations within which exchange takes place, not of the labour process itself. Likewise, whether a particular act of labour generates surplus value can have nothing at all to do with the quality of the labour activity itself, but only the social relations within which the labour is exercised. Whether a worker’s labour produces surplus depends on what the purchaser does with it. If the purchaser consumes it as a personal service then there is no reason to suppose that the labour should produce a surplus. For the sake of clarification “The exchange between capital and labour at first presents itself to the mind in the same guise as the buying and selling of all other commodities”, [Capital Chapter 19] a conception which remains central to political economy to this day. But for Marx, the distinction between the sale of labour-power and the sale of labour was vital. Consequently, Marx vigorously opposed the conception of the wage-worker as an independent proprietor selling a service (labour) like any other commodity, and maintained the distinction between wage-labour and servicedelivery even when piece-work disguised the phenomenal form of the sale of labour-power as the sale of labour. That is why combining Marx’s references in the 18th Brumaire and in The Grundrisse: “Men make their own history, but they do not make it just as they please; they do not make it under circumstances of their own choosing, but under circumstances directly encountered, given and transmitted from the past. The 119

tradition of all the dead generations weighs like a nightmare on the, brain of the living”. [18th Brumaire, Part I] “.. value having become capital, and living labour confronting it as mere use value, so that living labour appears as a mere means to realise objectified, dead labour, to penetrate it with an animating soul while losing its own soul to it - and having produced, as the end-product, alien wealth on one side and , on the other, the penury which is living labour capacity’s sole possession ... The objective conditions of living labour appear as separated, independent values opposite living labour capacity as subjective being, which therefore appears to them only as a value of another kind (not as value, but different from them, as use value).” (Grundrisse, The Chapter on Capital). The essential and dominating fact about capitalism today is that capital accumulation is being furthered precisely by denying workers the status of wage-labourers and converting workers into supposed independent contractors. My understanding of Capital is that Marx was concerned to make a critique of political economy, that is to say, to expose political economy as a mystification of social relations between people which takes the form of presenting these relations as if they were determined by objective laws which can be the subject of a science akin to the natural sciences, in much the same manner in which materialist criticism of religion had shown that the “holy family” was a heavenly reflection of the Earthly family. In this way, Marx sought to establish how people could choose to live differently, while the political economists sought to understand how they lived as they actually did. Consequently, my view is quite different from the view of Capital as a work of political economy. The “contractor” may be a young person selling Telecom accounts door-to-door on piece-rates, a brick-layer engaged by a sub-contractor on a building site or a systems engineer called-in to revamp a company’s database or, it may encompass people who contract to deliver the labour of others, such as a cleaning contractor or software consultancy. This category is marked only by the fact that the contract is made in advance of the production of the product and that the product is for supply of a product rather than for supply of labour power, the use of which in production is the responsibility of the buyer. Further, the dominant form of labour is not production of things but of services. By “service” I mean a product whose production is realized in the act of consumption. This could be serving a hamburger or investing some money 120

or programming a computer. The selling of the hamburger may take place in the same act of labour as the production of the hamburger from its ingredients; the production of software for sale in the usual way on floppy disks through a retail outlet is simple production, not a service, but the production of software to order for a client is a service. Clearly, the distinction between service and production is dependent less on the nature of the act of labour than on the relation between the producer and consumer. Thus, instead of the worker being dominated by the “here and then”, it is the “now and there” which dominates our lives. This change is reflected in quite specific ideological forms, which, if not properly understood lead to considerable confusion, but actually open the door to freeing ourselves from the “muck of ages”. Referring to Marx’s German Ideology: “Both for the production on a mass scale of this communist consciousness, and for the success of the cause itself, the alteration of men on a mass scale is necessary, an alteration which can only take place in a practical movement, a revolution; this revolution is necessary, therefore, not only because the ruling class cannot be overthrown in any other way, but also because the class overthrowing it can only in a revolution succeed in ridding itself of all the muck of ages and become fitted to found society anew.” [German Ideology, Part D] One of the other most significant changes, which the past 150 years have brought about, is that the new society can be seen in its embryonic form before our eyes. Marx could only speculate about how free associations of workers could build a world in which people live cooperatively free from the domination of their own products. Today, the welfare-regulator state is on the decline] as is the family, but as the commodity relation dissolves every human relation into that of the cash-nexus, voluntary association is actually on the increase, not decline. At the same time, within capitalist enterprises, rather than being directed like puppets, workers are being obliged, in the interests of capital, to organize their own labour. Empirical evidence is needed to establish this thesis, that the welfareregulator state is on the decline, but it would be widely accepted that since the Reagan-Thatcher years all capitalist governments have been cutting public services, out-sourcing and de-regulating. Speaking from Victoria, where this policy is pursued with even greater enthusiasm by Jeff Kennett than by his Labour predecessors, it seems very clear. The point of controversy that remains though is the extent to which this trend is ideologically driven, or is 121

driven by economic crisis. The post-war period saw the growth of public enterprise and welfare services and this was a reaction both to the Great Depression and the War, now we see the pendulum swinging the other way. Many people believe that a more enlightened government could and would turn back the clock of economic rationalist “reform”. This is an issue which remains to be explored, but this paper assumes that the current tendency is one which is essential to the development of capitalism rather than being an arbitrary policy decision by right-wing ideologues. That the family is on the decline also requires empirical verification, though this should not be difficult. We have in mind the relatively small proportion of total social effort that is conducted within the relations of domestic and kinship obligation. The proportion of children raised by their mothers may have increased over this century due to some decline in the removal of children from their parents, but beyond the immediate motherchild relation the family is in tatters and a very high proportion of a child’s up-bringing is now managed socially with everything from child-care to takeaway food. “Voluntary association” encompasses everything from friendships that develop outside or work and family, to self-help groups that assist people affected by one or another problem when the medical system and the family fail, to trade union, professional associations, Parent-Teacher Associations, Municipal Councils, sports clubs, Friends of this or that, to voluntary staffing in community and charity organizations. By “workers directing own labour” I have in mind the current fashion among management experts to use techniques like TQM (Total Quality Management) to foster collective selfmanagement by work-groups as well as phenomena like contracting-out, compulsory tendering and conversion of employees to contractors where the employer-employee relationship is severed altogether. Thus, the first part of our study is concerned with voluntary organization, and is based on the proposition that the essence of human (personal) development is mass mobilization, and the essence of mass mobilization is personal development. But mass mobilization and individual (human) development do not rest immediately one upon the other, but are mediated by the development of small groups and organizations. Consensus decision-making is the essence of group development. The essence of consensus decision-making is group development. Our study of the development of voluntary labour focuses on 122

the logic of working class organization. When I speak of the “logic of voluntary association” it is important to recognize that I do not understand logic to be some kind of extra-mundane “law of nature” to which human activity must conform, and which can be studied as an object separately from the way people cooperate with one another. Logic is an obligatory relation between thought-forms, but it has its origin in the social cooperation of people, and enters subjective consciousness by the internalization of the forms of cooperation active in society. Thus when we use logical terms in talking about forms of cooperation, the point is to understand how this cooperation gives rise to fixed forms of thought which appear to us to have the force of “laws of logic”. In bourgeois society, the mass of people who must work in order to live, in producing the means of satisfying their needs and those of the community, also produce their needs and thereby produce themselves. Thus, the development of people and the relations between them are overwhelmingly conditioned and formed by the labour process. It was Hegel who first understood that human needs and consequently human sensuousness and conception were as much products as instruments of human activity. As Marx put it: “Man is directly a natural being. As a natural being and as a living natural being he is on the one hand endowed with natural powers, vital powers ... [and] the objects of his instincts exist outside him, as objects independent of him; yet these objects are objects that he needs - essential objects, indispensable to the manifestation and confirmation of his essential powers. ... He can only express his life in real, sensuous objects. ... Hunger is a natural need; it therefore needs a nature outside itself,... “But man is not merely a natural being: he is a human natural being. That is to say, he is a being for himself. Therefore he is a species-being, and has to confirm and manifest himself as such both in his being and in his knowing. Therefore, human objects are not natural objects as they immediately present themselves, and neither is human sense as it immediately is - as it is objectively - human sensibility, human objectivity is directly given in a form adequate to the human being. “And as everything natural has to come into being, man too has his act of origin - history - which, however, is for him a known history, and hence as an act of origin it is a conscious self-transcending act of origin. History is the 123

true natural history of man”. [Critique of Hegel’s Dialectic and General Philosophy, Marx 1844]. The essence of the labour process is the accumulation of capital; the essence of capital accumulation is the labour process. But capital accumulation and the labour process (or the division of labour) do not rest immediately one upon the other but are mediated through the value or exchange relation. By saying that the production of surplus value is the essence of capital, I mean that it is the development of the value relation, through its successive crises and transformations, its rise and fall, which constitutes the meaningful thread in the development of capital, and it is surplus value which is the sine qua non of the realization of capital; the exchange relation is the social basis of value and the appearance of capital. Further, at all times, people labour but do not expand capital, either because they are labouring within pre-capitalist relations of domestic servitude or because they labour voluntarily as free human beings. But such labour is outside the labour process of bourgeois society, and only labour which produces surplus value belongs to the essence of capital. Consequently, an analysis of the development of the value relation in contemporary bourgeois society is central to our task, and forms the second part of our study. Voluntary organization and the mobilization of people by capital stand in mutual hostile relation to one another, mutually conditioning and interpenetrating but opposing one another. Why do something for someone else? Aside from force, human history has given us a small number of such systems of needs and their satisfaction; the first is based on kinship, the second is bourgeois society, and the third is voluntary labour, be it in the form of community service or simple friendship. The fact that everything we do in this world is determined and understood only within the social relations and consciousness of bourgeois society, does not alter the fact that every act of friendship, every act of community service done for its own sake and not for money is a free human act and belongs to a human world yet to be realized. As legal and judicial regulation withers away, the only means available to workers to defend themselves is collective organization and bargaining. Workers can bargain and struggle for a better deal within bourgeois society or they can struggle to overthrow it, and the whole tension between these two constitutes the class struggle. At the same time, the flow of money and economic imperatives dominate the structure, activity and consciousness of 124

voluntary organizations. The third part of our study aims to explore the various modes of interaction between workers’ self-organization and the “economy”. “Economy” encompasses all those aspects of social life in which the community allocates people’s time to meet community needs be it through the agency of money or the state. However, insofar as people spend their time and energy according to traditional or kinship requirements, voluntary labour and association or to meet their own needs, this activity is outside the economy. Consequently, in a world where people act according to traditional or kinship obligations or according their own volition but not in pursuit of money, even though it be part of the social effort and meets community needs, there is no economy. The inclusion of “command economy” under the concept of “economy” is open to question, but in fact does not bear on the issues taken up in this paper. Capital and Labour I: Capital - a social relation which takes on the appearance of a ‘substance’ which circulates from the “top” of an organization “down” directing the activity of those on the pay roll, reinforcing the authority of managers over supervisors over workers, or purchasing the services of contractors and suppliers and directing the activity of their subcontractors and employees, and creating an income stream from the sale of the labour of the employees, and consequently the expansion of capital and the movement of capital from one industry to another. Each successive dispersal of capital disperses authority downwards and outwards. The foundation of this appearance, in which the labour of the whole community takes on the appearance of a mythical substance which is the private property of a few, will be explored. Marx made this point particularly succinctly in his Wage Labour & Capital: “Capital consists of raw materials, instruments of labour, and means of subsistence of all kinds, which are employed in producing new raw materials, new instruments, and new means of subsistence. All these components of capital are created by labour, products of labour, accumulated labour. Accumulated labour that serves as a means to new production is capital. So says the economists. What is a Negro slave? A man of the black race. The one explanation is worthy of the other.” [1849]. 125

The points of ownership of income mark the nodal points in the series of relationships which manifest the social relations of capital. The first condition of life for people who do not own capital is that they must sell their labour power in order to live. Even if they decide to set up a small business or become a sub-contractor or work as a self-employed worker, the relationship is the same. They must labour for the needs of the purchaser of their labour in order to secure the income stream for capital. II: Labour - Despite the diktat of capital, people organize to act independently of capital. In this case, they do not labour in order to live, but live in order to labour. People put their energies towards a common purpose in voluntary organization. Here it is the mass of labourers which constitute the force which makes things happen, and the mass projects its will from the “bottom up”. We can conceive of a world in which all the needs of human beings across the world are met by voluntary labour, organized by the workers themselves. As Marx and Engels envisaged in the famous words of the Communist Manifesto: When, in the course of development, class distinctions have disappeared, and all production has been concentrated in the hands of a vast association of the whole nation, the public power will lose its political character. Political power, properly so called, is merely the organized power of one class for oppressing another. If the proletariat during its contest with the bourgeoisie is compelled, by the force of circumstances, to organize itself as a class; if, by means of a revolution, it makes itself the ruling class, and, as such, sweeps away by force the old conditions of production, then it will, along with these conditions, have swept away the conditions for the existence of class antagonisms and of classes generally, and will thereby have abolished its own supremacy as a class. In place of the old bourgeois society, with its classes and class antagonisms, we shall have an association in which the free development of each is the condition for the free development of all. And yet such a vision faces the difficulty that even a million workers cannot live freely, meeting each other’s needs without money. So long as the voluntary association of free individuals does not cover the whole world, then money is indispensable. III: Class struggle—labour and capital both condition and mediate one another and constitute the foundation of the class struggle. The burden of 126

capital, which weighs “like a nightmare” on the backs of the living, and voluntary self-organization, manifesting itself in mass mobilization and expressing the aspirations of the masses, constitute two opposite mutually interpenetrating but irreconcilable logics which are the essence of social life today. The designation of “logics” allows us to understand how human beings internalize participation in social activity in consciousness and open up an approach to criticism of this consciousness and the class struggle which lies behind it. I cannot emphasize too strongly that the only subject of this paper is human beings and how they produce themselves, each other and their consciousness in the course of their practical struggle to live. “All social life is essentially practical. All mysteries which lead theory to mysticism find their rational solution in human practice and in the comprehension of this practice.” (Thesis VIII, Theses on Feuerbach). I pay considerable attention to how this practical activity embeds itself in logical thought-forms because it is in this form that our social relations most deeply and firmly implant themselves in our consciousness. All the technical means for a truly human life in a global community of free human beings are already at hand. It is only necessary that we think differently. Thesis IV tells us, “Feuerbach starts out from the fact of religious self-alienation, of the duplication of the world into a religious world and a secular one. His work consists in resolving the religious world into its secular basis. “But that the secular basis detaches itself from itself and establishes itself as an independent realm in the clouds can only be explained by the cleavages and self-contradictions within this secular basis. The latter must, therefore, in itself be both understood in its contradiction and revolutionised in practice. Thus, for instance, after the earthly family is discovered to be the secret of the holy family, the former must then itself be destroyed in theory and in practice.” The Struggle of Irreconcilable Social Forces While positivistic science has always favoured the conception of a whole as the collection of its parts, following Hegel, Marxists have always sought to conceive of the parts as determinations of the whole. For example, Lenin, Summary of Dialectics in his Philosophical Notebooks: 127

“The identity of opposites (it would be more correct, perhaps, to say their “unity”, - although the difference between the terms identity and unity is not particularly important here. In a certain sense both are correct) is the recognition (discovery) of the contradictory, mutually exclusive, opposite tendencies in all phenomena and processes of nature (including mind and society). The condition for the knowledge of all processes of the world in their “self-movement”, in their spontaneous development, in their real life, is the knowledge of them as a unity of opposites. Development is the “struggle” of opposites.” Alternatively, Frederick Engels’ Socialism, Utopian & Scientific, Part II – Dialectics states: “The analysis of Nature into its individual parts, the grouping of the different processes and objects in definite classes, the study of the internal anatomy of organic bodies in their manifold forms - these were the fundamental conditions of the gigantic strides in our knowledge of Nature that have been made during the last four hundred years. However, this method of work has also left us as legacy the habit of observing natural objects and processes in isolation, apart from their connection with the vast whole; of observing them in repose, not in motion; as constants, not as essentially variables; in their death, not in their life. And when this way of looking at things was transferred by Bacon and Locke from natural science to philosophy, it begot the narrow, metaphysical mode of thought peculiar to the last century.” To the metaphysician, things and their mental reflexes, ideas, are isolated, are to be considered one after the other and apart from each other ... In the contemplation of individual things, it forgets the connection between them; in the contemplation of their existence, it forgets the beginning and end of that existence; of their repose, it forgets their motion. It cannot see the wood for the trees. So for example, the bourgeoisie and the proletariat are the two main classes of bourgeois society and the dynamic of bourgeois society must be conceived before it is possible to understand what is the bourgeoisie and what is the proletariat; likewise, without the proletariat, there can be no bourgeoisie and vice versa. However, this latter approach assumes that there is always a “third” (wage-labour or bourgeois society in our example) in which the two 128

opposites are “reconciled”. In his Critique of Hegel’s Philosophy of Right written as early as 1843, Marx wrote: “Now the complete absurdity of these extremes, which interchangeably play now the part of the extreme and now the part of the mean, becomes apparent. They are like Janus with two-faced heads, which now show themselves from the front and now from the back, with a diverse character at either side. What was first intended to be the mean between two extremes now itself occurs as an extreme; and the other of the two extremes, which had just been mediated by it, now intervenes as an extreme (because of its distinction from the other extreme) between its extreme and its mean. “This is a kind of mutual reconciliation society. It is as if a man stepped between two opponents, only to have one of them immediately step between the mediator and the other opponent. It is like the story of the man and wife who quarrelled and the doctor who wished to mediate between them, whereupon the wife soon had to step between the doctor and her husband, and then the husband between his wife and the doctor. It is like the lion in A Midsummer Night’s Dream who exclaims: ‘I am the lion, and I am not the lion, but Snug.’ So here each extreme is sometimes the lion of opposition and sometimes the Snug of mediation. When the one extreme cries: ‘Now I am the mean’, then the other two may not touch it, but rather only swing at the one that was just the extreme. As one can see, this is a society pugnacious at heart but too afraid of bruises to ever really fight. The two who want to fight arrange it so that the third who steps between them will get the beating, but immediately one of the two appears as the third, and because of all this caution they never arrive at a decision. We find this system of mediation in effect also where the very man who wishes to beat an opponent has at the same time to protect him from a beating at the hands of other opponents, and because of this double pursuit never manages to execute his own business. “It is remarkable that Hegel, who reduces this absurdity of mediation to its abstract logical, and hence pure and irreducible, expression, calls it at the same time the speculative mystery of logic, the rational relationship, the rational syllogism. Actual extremes cannot be mediated with each other precisely because they are actual extremes. But neither are they in need of mediation, because they are opposed in essence. They have nothing in common with one another; they neither need nor complement one another. The one does not carry in its 129

womb the yearning, the need, the anticipation of the other. (When Hegel treats universality and singularity, the abstract moments of the syllogism, as actual opposites, this is precisely the fundamental dualism of his logic. Anything further regarding this belongs in the critique of Hegelian logic.) “This appears to be in opposition to the principle: Les extrêmes se touchent. The North and South Poles attract each other; the female and male sexes also attract each other, and only through the union of their extreme differences does man result. “On the other hand, each extreme is its other extreme. Abstract spiritualism is abstract materialism; abstract materialism is the abstract spiritualism of matter. “In regard to the former, both North and South Poles are poles; their essence is identical. In the same way both female and male gender are of one species, one nature, i.e., human nature. North and South Poles are opposed determinations of one essence, the variation of one essence brought to its highest degree of development. They are the differentiated essence. They are what they are only as differentiated determinations; that is, each is this differentiated determination of the one same essence. “Truly real extremes would be Pole and non-Pole, human and nonhuman gender. Difference here is one of existence, whereas there [i.e., in the case of Pole and non-Pole, etc.,] difference is one of essence, i.e., the difference between two essences. in regard to the second [i.e. where each extreme is its other extreme], the chief characteristic lies in the fact that a concept (existence, etc.) is taken abstractly, and that it does not have significance as independent but rather as an abstraction from another, and only as this abstraction. Thus, for example, spirit is only the abstraction from matter. It is evident that precisely because this form is to be the content of the concept, its real essence is rather the abstract opposite, i.e., the object from which it abstracts taken in its abstraction - in this case, abstract materialism. “Had the difference within the existence of one essence not been confused, in part, with the abstraction given independence (an abstraction not from another, of course, but from itself) and, in part, with the actual opposition of mutually exclusive essences, then a three-fold error could have been avoided, namely:

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1. that because only the extreme is true, every abstraction and onesidedness takes itself to be the truth, whereby a principle appears to be only an abstraction from another instead of a totality in itself; 2. that the decisiveness of actual opposites, their formation into extremes, which is nothing other than their self-knowledge as well as their inflammation to the decision to fight, is thought to be something which should be prevented if possible, in other words, something harmful; 3. that their mediation is attempted. For no matter how firmly both extremes appear, in their existence, to be actual and to be extremes, it still lies only in the essence of the one to be an extreme, and it does not have for the other the meaning of true actuality. “The one infringes upon the other, but they do not occupy a common position. For example, Christianity, or religion in general, and philosophy are extremes. But in fact religion is not a true opposite to philosophy, for philosophy comprehends religion in its illusory actuality. Thus, for philosophy - in so far as it seeks to be an actuality - religion is dissolved in itself. There is no actual duality of essence. More on this later.” [Marx, Critique of Hegel’s Philosophy of Right, 1843] Taking these comments as my point of departure, I want to look upon the principles of voluntary organization (or labour) and capitalist organization (capital accumulation) as irreconcilable opposites. What follows therefore is: 1. a chapter on voluntary organization which draws upon work done, mainly in the US, on the dynamics of voluntary organization, and on Hegel’s Logic and Philosophy of Right which makes it possible to set the bourgeois empirical-positivist theory in a more developed theoretical framework, 2. a chapter on capital which recasts Marx’s Capital on the basis of a new concept of exploitation of labour more in line with the labour process as it manifests itself in postmodern capitalist society, and 3. a chapter on the class struggle which attempts to comprehend the struggle between labour and capital without presuming labour to be an aspect of bourgeois society.

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Contemporary Capitalism, the State and Crises In order to adequately analyse the changes, which are occurring in contemporary world politics today, we need a clear and concrete conception of the nature and functioning of the State in the present period of advanced capitalism-neoliberal globalization. The capitalist state has its historical trajectory. Abstract platitudes about the State in general will not help us to analyse its concrete forms. What we need is a theoretical framework, which will enable us to grasp concretely the ways in which the class struggle has produced the historical transformation that the capitalist State has undergone, and the precise forms, which it has taken in the course of these changes. The first form of the capitalist state was the Absolutist State, which dominated Europe from the middle of the 15th to the middle of the 17th centuries. The Absolute Monarchies in Britain, France and Spain were essential for the victory of the capitalist mode of production because of their strongly centralist and interventionist character. Their centralizing function subordinated all other power in the emerging territory-nation to their control. By directly controlling all major financial undertakings, through Royal charters and grants, they shaped the direction of development of capitalism. At the same time they aided capital in its struggle against the vestiges of the feudal mode of production. Once capitalism’s victory was assured, the Absolute State with its interventionist role became a fetter on the free development of capitalist production and interfered with capitalist competition. The great bourgeois revolutions of the 17th and 18th centuries gave rise to a new kind of state: the “weak” classical liberal state of laissez faire competitive capitalism. By “weak” we do not mean that the State was lacking the force with which to protect capitalism. Rather we mean that the role of the State in the economy and society was strictly limited. The State was to leave business to the businessmen and any legislative efforts to the contrary were generally viewed as an intolerable interference with the “freedom of contract.” At this point capitalist society was characterized by the relative separation of public and private spheres of activity (the State and civil society). The economy was allowed to operate relatively freely, on the basis of its own laws of production and exchange. The State intervened only where the interests of capital as a whole could not be adequately served by the outcome of the 132

competition between individual capitalists. A good example of this is the Factory Acts in England in the 19th century discussed by Marx in Capital. The most effective form of the classical liberal state was parliamentary democracy that developed in the advanced capitalist countries, Britain, France and the United States in the 19th century. In fact we can say that parliamentary democracy is the basic State form of the capitalist mode of production. It provides the most open and flexible means with which to politically organize the various fractions of capital, disorganize and integrate the masses, and insure the overall reproduction of relations of exploitation and domination. Only in circumstances of acute class struggle did this State form prove inadequate for the maintenance of bourgeois hegemony. Out of such conditions a form of the exceptional State arose—Bonapartism—whose character Marx sketched in The 18th Brumaire of Louis Bonaparte. This State form is termed exceptional because it is an exception to the general form of the State under capitalism: parliamentary democracy. Capitalism is a mode of production which never remains static. At the turn of the century competitive capitalism began to be transformed into monopoly capitalism (imperialism). This development was accompanied by the increasing internationalization of capital and the intensification of interimperialist rivalry, economic crises and the class struggle. It would be a mistake, however, to assume that these economic changes were automatically translated into changes in politics and the State. The effects of the economic transformations of capitalism had a definite effect, but it was an effect that was mediated through the State’s own processes of evolution and the class struggle, which cannot be reduced to simple “reflections” of the economy. The concentration and centralization of capital that is an important feature of imperialism found its echo in the State in a process of political centralization. But centralization at the State level was also a response to the unfolding class struggle and the explosiveness of economic crises. The State was increasingly compelled to intervene in the economy by means of social and labour legislation, and to find extra-economic means to moderate the effects of the economic laws of capitalism. Politically, the gradual acquisition of universal suffrage led to the growth of the political influence of the working-class. Under imperialism Europe experienced the rise of mass social democratic, and later, communist parties. As socialist and communist deputies began to take their seats in European parliaments the centre of power within the States was shifted away from 133

parliament to the upper levels of the State administration. Because the Social Democrats never understood this ability of the State to shift the centre of power out of the democratically elected parliament to the authoritarian State apparatus, the mistaken view continued to persist that the simple election of a majority of socialist deputies would put State power in the hands of the working-class. A similar error was made in Chile where illusions were widespread upon Allende’s election, that somehow control over the Executive branch of the government could be equated with State Power. These processes of State transformation were enormously accelerated by the onset of the long wave of capitalist contraction and economic and political crisis, which followed the First World War, particularly the period known as the Great Depression. This new period in the history of world capitalism put an end once and for all to the classical liberal state form and ushered in a new era: that of the Interventionist State. Locating the State Our first problem is to locate or situate the state in relation to the rest of capitalist society. We begin, as always, with the primacy of class struggle. While the class struggle is international in scope, it also unfolds within definite spatial limits: most frequently, the modern nation. In fact the creation and evolution of the nation form is pre-eminently the product of class struggle. As Poulantzas (1978:115) explains: “the modern nation is not the creation of the bourgeoisie, but the outcome of a relationship of forces between the ‘modern’ social classes–one in which the nation is a stake for the various classes.” Within a nation, class struggle goes on at all levels: economic, political and ideological. Power in such a class-divided society is primarily class power. Class power is founded on the objective position which various classes occupy in the social division of labour; “it designates the capacity of each class to realize its specific interests” in relation to the capacity of other classes (Ibid.:36). Class power is materialized in certain definite apparatuses and practices. The class power of the workers is materialized, for example, in the apparatus of the trade unions and exists in the various class practices such as strikes and ultimately, revolution. Class power is considerably broader than political power, although politics is never absent from it. For example, capitalist relations of 134

production give to capital the capacity to set into motion the means of production and to dispose of the resultant products for its own ends. Of course this capacity is ultimately backed up by capitalist political power, law and the courts, but it cannot be reduced to this political power alone. This capacity can also be traced to the definite relations of domination and subordination which are reproduced in the educational system, the mass media and most religious groups. Having discussed class power it is now necessary to look at political power. Politics can be defined as the strategic field of class struggle in which the overall social relations between classes are either preserved and reproduced (as when one class holds political power) or transformed (when another class seizes political power). “The political power of a class, its capacity to realize its political interests, depends not only on its class place... with regard to other classes, but also on the position and strategy it displays in relation to them . . .”( Ibid.: 147). Although political power is broader than the State, nonetheless it is primarily concentrated and materialized in the State which is the primary site of the organization and exercise of power by the dominant class in its relationship to the dominated classes. This is why Lenin said: “The key question of every revolution is undoubtedly the question of state power. Which class holds power decides everything.” However, what is the state itself? Above we have argued that the state, like capital, is not a thing, an instrument, wielded at will by the ruling class, as in the instrumentalist model. Instead the state is a relationship among forces, or more precisely, the specific material condensation, at the political level, of the relationship among the classes and class fractions which constitute a given society at a given moment in time. The state is the material condensation of this relationship, by which we mean that it exists in a complex system of state apparatuses and state practices. Let us draw out several of the more important implications of this definition. (1) Since the state is founded on the relationship (struggle) of classes and class powers, the capitalist state represents the interests of the dominant capitalist class. But the fact that the state is the result of a relationship of forces also means that these class contradictions express themselves within the state itself; the state is not above class struggle or immune from its effects. As Poulantzas explains the state is “through and through” constituted and divided by class contradictions. How this process occurs we shall see in a moment. 135

(2) The state cannot be reduced to “repression plus ideology.” This is not to say that these two elements, also called force and consent, are unimportant. “State-monopolized physical violence,” Poulantzas reminds us, “permanently underlies the techniques of power and mechanisms of consent: it is inscribed in the web of disciplinary and ideological devices; and even when not directly exercised, it shapes the materiality of the social body upon which domination is brought to bear”( Ibid.: 81). This does mean, however, that the couplet “repression plus ideology” all too often can mystify complex reality, particularly if one tries to mechanically divide all the state apparatuses into one or the other of these categories. The state repressive apparatuses (police, courts, etc.), for example, do more than simply proscribe and prohibit forms of conduct (repression). They also play a prominent ideological role as well. More importantly, it should be seen that the state does more than proscribe conduct and organize consent. It also performs an active role in shaping and transforming material reality. This can be seen in the interventionist role which the state plays in the economy. It can also be seen in the material measures which the state has historically taken which are of positive significance for the masses: legalization of the trade unions, social security, unemployment insurance, school desegregation, affirmative action programs, etc. Of course, these measures were taken as a result of social struggles and were relatively minor concessions granted to forestall basic changes. They are nonetheless very real and demonstrate that the scope of state activity goes far beyond repression plus ideology. With this definition we can go on to examine the role and function of the state under contemporary capitalism. The Functioning of the State In general we can say that the decisive place of the state in class-divided societies is expressed through its function of helping to constitute and reproduce class power and class struggle to the benefit of the dominant class. In the process it codifies property relations and the social division of labour, it secures political domination and it reproduces ideological hegemony. The modern capitalist state is a case in point. Let us first examine its political function. With regard to the dominant class or classes the state’s principal role is one of organization. The bourgeoisie, by its very nature, is divided into different fractions with different and often conflicting interests: monopoly 136

capital (banking and industrial); non-monopoly capital in its commercial, banking and industrial fractions; the internationalized fractions of capital, etc. The contradictions among these fractions at the economic level must be overcome at the political level if the capitalist class is to maintain its domination and develop a united strategy with regard to the dominated classes. The state constitutes the political unity of the dominant class by providing a set of state apparatuses and practices within which these contradictions can be struggled out. The organizational form which this struggle takes and through which state power is actually exercised is termed the power bloc which unites the various fractions of capital under the hegemony of one dominant fraction– currently, monopoly capital. The concept of the power bloc enables us to break not only with the notion of a monolithic capitalist class which uses the state as its passive instrument, but also with the notion of a monolithic state immune to internal class contradictions. At the same time the concept of the power bloc enables us to understand the way in which the dominant class can rise above its own internal contradictions to arrive at a unified policy. For although the state has to represent the long term interests of the entire bourgeoisie, each fraction participating in the power bloc (and the state bureaucracy which is a force in itself) seeks to shape the state and state policy to its own agenda. Since no one group entirely gets its own way, the final policy is different from what each of the originally contending forces desired. State policy, while primarily reflecting the interests of the hegemonic fraction in the power bloc, nonetheless corresponds in some measure to the specific interests of each fraction and to the general interests of the class as a whole. This is the true meaning of the relative autonomy of the state: ultimate policy is relatively autonomous of any given fraction in the power bloc because it is the product of the collision and compromise of conflicting interests. This is also what Poulantzas meant when he said that the state was constituted and divided by class contradictions. The state provides the means by which the unity of the dominant class can be constituted, but at the same time, the objective contradictions within the dominant class and between it and the dominated classes which are present in the state constantly, work to divide it. The existence of these real contradictions shows that it is a serious error to see in the US national elections only a charade to dupe the masses. The election process, from the choice of candidates through the primary elections, the selection of delegates to conventions, up to the conventions 137

and the general election itself, does more than shape and reflect popular consciousness. It also provides one structure, among others, within which national, state and local power blocs can organize the resolution of their own contradictions and produce a unified political strategy. The State and the Dominated Classes The state regulates not only the relationship of forces between fractions of the power bloc, but also the relationship between the power bloc and the dominated classes. Moreover these two processes are closely related since the formulation of power bloc policy is as much shaped by its relationship to the masses as by its own internal contradictions. This relationship to the dominated classes, this domination or hegemony, is not simply imposed on the masses from above. Rather hegemony is a complex two-fold process of integration and disorganization. On the one hand, the state draws the masses into forms of participation in the state system through a series of policy compromises and concessions. On the other hand, the state helps further organize and unify the power bloc by permanently disorganizing and dividing the dominated classes, co-opting their leaders, and physically and ideologically disrupting their forms of political organization. This process of integration/disorganization can take many forms in addition to the more obvious ones of co-optation and disruption. In many instances, particularly at the local or city level, the power bloc can allow the participation within it of sections of the petty bourgeoisie. In Europe this is important to the dislocation of their alliance with the working-class. On the other hand, as a result of mass struggle, the state can impose certain short term sacrifices on the dominant classes in order that their long term domination may be perpetuated. As Poulantzas elaborates: “In the long run, the State can serve class hegemony by itself granting certain material demands of the popular masses–demands which, at the moment of their imposition, may assume a quite radical significance (free and universal public education, social security, unemployment benefits, etc.). Once the relationship of forces has changed, these ‘popular gains’ can be progressively stripped of their initial content and character in a covert . . . [or overt] fashion” (Ibid.;185). A good example of this is the history of labour legislation in the United States. The passage of the Wagner Act during the height of industrial unionist activity in the 1930s was a radical step, but as 138

soon as the wave of struggle began to ebb the gains were progressively withdrawn by court action, culminating in the Congressional passage of the Taft-Hartley Act. Finally, as we all know even concessions such as unemployment benefits, food stamps and welfare have their negative side: an entire administrative apparatus in which “legal-police control” is exercised over the masses accompanies them. As noted above, the state is the condensation of the relationship between classes. As such the state does not totally exclude the dominated classes from its system, but includes them within it precisely as dominated classes, constantly reproducing this relationship of domination/subordination. The masses are present throughout the state system which “serves” them, in all the mechanisms of the social welfare apparatuses, those pertaining specifically to the working-class (unemployment compensation, workers compensation, National Labour Relations Act, etc.), and education. In Europe communists and social democrats occupy many positions in different national and local state apparatuses (parliament, city councils, etc.). The masses are also present in the state because of the many members of the petty bourgeoisie and the working-class who are state employees. Even where the masses are not physically present in the state their presence is felt by the effects of their struggles: the precise shape and direction of state apparatuses and policy is directed as much by the role that they must fulfil with regard to the masses as by the struggles within the power bloc itself. It is important to recognize the fact of the existence of the masses within the state, but it is more important to draw the correct conclusions from it. As Poulantzas argues: “the popular classes have always been present in the State, without that ever having changed anything of its hard core.” The dominated classes exist in the state not by means of apparatuses concentrating a power of their own, but essentially in the form of centres of opposition to the power of the dominant class” (Ibid.: 142). And he warns, no doubt recalling the Chilean tragedy: “The action of the popular masses within the State is a necessary condition of its transformation, but is not itself a sufficient condition .... It would be an error fraught with serious political consequences to conclude from the presence of the popular classes in the State that they can ever lastingly hold power without a radical transformation of the State” (Ibid.:142143,italics in the original). The lessons of this line of analysis for the 139

development of a revolutionary strategy in the United States require the most serious attention. The State’s General Functions In addition to its specific functions with regard to the dominant and dominated classes, the State also performs general functions vital to the maintenance and production of capital as a whole. These general functions, both technical and social in nature, are chiefly determined by the class struggle. They are shaped by the requirements of capital itself, and as a response to the struggle of the masses. The capitalist State assures the general-technical preconditions of the production process through its supervision and regulation of many aspects of this process: means of communication and transportation, energy, activity abroad to insure the continued flow of raw materials to the United States, labour laws, etc. It also assures the general-social preconditions of capitalist production through the maintenance of an integral territorial state, a national market, stable “law and order,” and the requisite force to back it up, the reproduction and regulation of the mass media and other ideological apparatuses, the school system, etc. Given the determination in the last instance of the economy under capitalism, the State’s economic functions are of special significance, particularly in the modern period. In fact, the contemporary State’s economic functions are directly related to the specific rhythm of accumulation and reproduction of capital. In this sense the role of the State is not merely of economic importance, assisting capital accumulation and exploitation, but also of political importance, corresponding to a political strategy of the power bloc. In terms of this economic function under capitalism, the maintenance of a “sufficient” rate of profit is vital to capital’s expansion. The rate of profit is therefore a key site of the class struggle; the struggle of the popular masses against exploitation leads to the well-known tendency of the falling rate of profit. By way of response, “state intervention in the economy should be essentially understood as the introduction of counter-tendencies to this tendency” (Ibid.: 173). The debate within the bourgeoisie over the most effective strategy to respond to the present economic crisis is essentially a debate over the nature and extent of the structural changes required to ensure the conditions (economic, political and ideological) which will increase the rate of profit. 140

Instrumentalism and Other Errors Since the 1930s a number of erroneous approaches to State analysis that have both retarded the development of its theory and negated its political effectiveness has dominated the world communist movement. To correctly understand the problems of the capitalist State it is first of all necessary to demarcate ourselves from these erroneous views: (1) The most common error is the abandonment of the concrete analysis of historically specific capitalist states for the endless repetition of abstract phrases about the state in general: every state is a class state, all political domination is a form of class dictatorship, the capitalist state is a dictatorship of the bourgeoisie, etc., Not only does the simple repetition of these generalities not help us to understand why a historically specific state–the US capitalist state in 1981–has taken the specific forms which it has, but it also functions to block the development of the many new concepts which such a concrete analysis requires. Effective political practice can only be the product of concrete theoretical analysis, based on advanced theoretical concepts and methodology. (2) Another common error is instrumentalism, which conceives of the state as a simple, or complex, machine or tool, the instrument wielded by the dominant class against the others. As one would infer from a practical perspective, the modern bourgeois state is nothing but an instrument of class rule. Instrumentalism fails to see the State and the bourgeoisie as social processes, which are constantly united and divided by class struggle. Therefore it cannot grasp the complexity of the contradictions within the State itself, nor those between the State and the dominant class. Inevitably it also involves a form of voluntarism: the State, like the bourgeoisie does not develop as a result of the class struggle, rather a pre-existing bourgeoisie “creates” the State and manipulates it as an expression of its own “will.” As indicated earlier, the bourgeoisie brought into being the modern nation state. (3) Yet another common error is frequently linked to instrumentalism. Since the State is nothing but an instrument used by the ruling class, the State is not a site of class struggle, rent with contradictions, but a thing above class struggle, a monolithic weapon in the hands of the ruling class. According to this view, the struggle for state power, the class struggle, can only go on outside the State and against the State. Needless to say, the existence in class 141

society of a powerful and expansive social structure which is immune to internal class struggle is a unique discovery of our instrumentalists. (4) A final consequence of instrumentalism must also be mentioned. It defines the state as the instrument employed by the ruling class to implement some pre-established political decision. Thus it is a theory of the state which is unable to explain how the political decision making process within the ruling class is conducted or how the political unity of capital is produced and maintained, before it is implemented by the State, two questions which are decisive for any study of the workings of capitalism and its state. Against this sterile and dogmatic conception of Marxism and the state it is necessary to pose a revolutionary theoretical and political alternative which is founded not only on advanced concepts and methodology, but also on the concrete investigation of the actual states of contemporary capitalism. It is necessary to pose this alternative because of inequalities engendered by globalization itself. While the benefits of globalization are significant and many lives are better off because of the proclaimed benefits, the global capitalist society is wrought with inequalities. The United States—consisting of four per cent of the world’s population—dominates all aspects of global free markets. Furthermore, the richest one per cent of the world’s population controls as much wealth as much as the poorest fifty-seven per cent (Chua, 2003). As the United States experienced rapid economic growth over the past two decades, many poor countries, including some that were already counted among the world’s poorest, experienced declining living standards. Per capita private consumption within the United States increased by 1.9 per cent per year from 1980 to 1998, while during the same period, sub-Saharan Africa experienced a 1.2 per cent annual decline (Sachs, 2001). The expansion of the global marketplace has left half the world’s population living on less than two dollars a day and more than a billion people are currently living on less than one dollar a day (Chua, 2003). Some would suggest that the declining economic position of poor countries is caused by poor governance, the failure to modernize, or cultural depravity. However, the necessity of economic differentials is deeply rooted in US ideology. When viewed in light of the advice of Adam Smith—who is widely hailed as the father of free markets—the exploitative nature of USconceived globalization is brought into sharp focus. In Wealth of Nations Smith (1991) asserts that the mercantile system ‘…discourages the 142

exportation of the materials of manufacture, and of the instruments of trade, in order to give our own workmen an advantage, and to enable them to undersell those of other nations in all foreign markets…’ and ‘It encourages the importation of the materials of manufacture in order that our own people may be enabled to work them up more cheaply, and thereby prevent a greater and more valuable importation of the manufactured commodities (p. 577)’. Poor states, operating in the periphery of the global economy, are essential to the capitalist mode of production (Chase-Dunn, 1998). Historically, these states have served a very important function in terms of the shifting of raw material to the core and the division of labour. Developed countries benefited by selling cheap, capital-intensive consumable products for high prices. Peripheral countries, on the other hand, sold the tools of production to the core at low prices and imported finished products from the core. The thought was that since there would always be a demand for consumables, richer countries would be assured a continued market for their higher-priced goods. Also, the exportation of labour-intensive, higher priced finished products to poorer states caused these poorer states to have less circulation of money in their own economies (Smith, 1994). However, the age of post-industrial globalization has brought significant changes to the relationship between rich and poor states. The emergence of post-industrial information society leaders—particularly the United States— has created a marketplace that is significantly different from that advised by Adam Smith. In this new age, where the transfer of information to and from remote parts of the world is nearly instantaneous, US corporations outsource significant portions of their manufacturing base to poorer countries around the globe. US dominance of information technology serves as a tool with which it may exploit poor countries’ low-wages workers, weaker environmental laws, and other factors to perpetuate its dominance of global markets. No longer are states in the periphery merely viewed as potential consumers of high priced US goods. They now serve as the inexpensive labour for the production of goods to be sole by US manufacturers at higher prices in global markets. The maintenance of this relationship between rich and poor states is largely achieved through the manipulation of the institutions of globalization. Using institutions such as the World Bank and the International Monetary Fund (IMF), the U.S. and other Western nations press smaller, less economically secure nations to open their markets to free trade while 143

protecting the weaker segments of their own economies (Stieglitz, 2002). This double standard has been demonstrated in the U.S. timber and steel industries and more recently in its sugar industry. Even as it worked to create a free trade zone with Central America, the United States acted aggressively to protect its sugar industry by seeking to exempt it from the agreement. Some scholars argue that no country is actually forced to submit to agreements advocated by the West. Such an argument flies in the face of historical evidence. In fact, for poor countries that require economic aid from the West and from global institutions in the form of loans and closer alliances with the stronger nations, submitting often appears to be the only option. The policies of global economic institutions are often closely aligned with the interests of the wealthier nations and loans are often contingent upon those poorer countries submitting to the neo-liberal capitalist policies of the West. These policies often cause countries with underdeveloped markets to liberalize prematurely (Stieglitz, 2002). The neo-liberal policies of the IMF require poorer states to minimize the role of government and remove or reduce regulations in order to become more attractive to foreign investors. Furthermore, IMF rules often require that they pay off their debt in a timely manner. In order to pay off their debts timely, these poorer states must increase their exports. Because of the large number of countries that are forced into the market place, the prices of their commodities are forced downward. The end result is often poor nations remaining poor or getting poorer (Stieglitz, 2002). Moreover, many of the rules imposed by the World Trade Organization (WTO) prevent developing countries from adopting measures that have long been used by richer countries. For example, the China-World Trade Organization agreement that limited China from subsidizing its agriculture sector stripped that country of a measure that the U.S., Japan, South Korea, and European countries have long used to protect segments of their economies (Wade and Wolf, 2002). Indeed, globalization is heavily weighted in favour of the more economically stable states of the West. It also limits the ability of any single state to exercise absolute dominance. One characteristic of globalization is economic and political interdependence, which allows countries to influence policies and economic decisions made by other countries. In a recent situation, Microsoft was found to be operating within the boundaries set by U.S. antitrust laws and allowed to continue doing business as usual. However, the British government weighed in and levied heavy penalties 144

against the U.S.-based technology giant for violating antitrust laws in that country. This inability for any one state to set the parameters within which these firms operate has transformed sovereignty into the shared exercise of power, thus weakening individual states’ power (Held and McGrew, 2000). This enfeeblement is very visible in the non-Western world-states that are torn and convulsed by the rapacious forces of globalization. Global Capitalist Crisis Marx’s analysis of capitalist production grows out of the broader theory of historical materialism, which explains class society as a system of exploitation based on a minority’s control of the surplus product created by producing majority. Capital is value in a process of expansion (valorisation) and circulation. The theories of the commodity, value, money, price, and capital provide the concepts necessary to understand the source of surplusvalue in the exploitation of workers by capitalists when labour-power becomes a commodity and the wage falls short of the value labour produces. The labour theory of value distinguishes the means of production bought by capitalists as constant capital from the labour-power they hire as variable capital which produces surplus-value (profit). Abstracting from the capitalist character of production, commodities would normally exchange in proportion to the abstract labour contained in them, but competition among capitals equalizes profit rates on invested capital by redistributing surplusvalue in the form of profit at prices of production. Surplus-value can be increased by lengthening the working day (absolute surplus-value) or reducing the cost of labour-power (relative surplus-value). The circulation of capital shows the relation between flows of value in capitalist production and stocks built up in the process, and elucidates the conditions for balanced simple and expanded reproduction. Surplus-value is distributed as profits of commercial and banking capital, the rent of landowners, interest on loans, dividends and profit of enterprise. Capital accumulation leads to the centralization and concentration of capital, technical change and the expansion and contraction of reserve armies of labour. Technical change motivated by the pursuit of profit can lead to a falling rate of profit with a constant rate of surplus-value. Periodic falls of the profit rate (wage- or interest rate-driven) lead to business cycle and capitalist crisis. 145

In sum, few, if any, countries remain unaffected by globalization. While some countries have reaped the benefit of wealth, the likes of which the world has never seen, others have grown poorer (Chua, 2003). Globalization has created an economically polarized world that is unsustainable over the long term. While protests from poor countries are not new, those protests have been largely ignored by countries with the wherewithal to create change. Inequality has not only been accepted as a by-product of the current form of globalization, it has served as a necessary component of the global order. However, the gulf that exists today between the richest nations and the poorest ones have begun to reveal the limits of the exploitative capacity of In sum, theoretically and actually, that there is a class struggle in the world today. The quarrel over the division of the joint product is irreconcilable. The working class is no longer losing its strongest and most capable members. These men, denied room for their ambition in the capitalist ranks, remain to be the leaders of the workers, to spur them to discontent, to make them conscious of their class, to lead them to revolt. For a class struggle to exist in society there must be, first, a class inequality, a superior class and an inferior class (as measured by power); and, second, the outlets must be closed whereby the strength and ferment of the inferior class have been permitted to escape. That there are even classes in the world today is vigorously denied by many; but it is incontrovertible, when a group of individuals is formed, wherein the members are bound together by common interests, which are peculiarly their interests and not the interests of individuals outside the group, that such a group is a class. The owners of capital, with their dependents, form a class of this nature in the United States; the working people form a similar class. The interest of the capitalist class, say, in the matter of income tax, is quite contrary to the interest of the labouring class; and, vice versa, in the matter of poll tax. If between these two classes there be a clear and vital conflict of interest, all the factors are present which make a class struggle; but this struggle will lie dormant if the strong and capable members of the inferior class be permitted to leave that class and join the ranks of the superior class. The capitalist class and the working class have existed side by side and for a long time globally; but, hitherto, all the strong, energetic members of the working class have been able to rise out of their class and become owners of capital. They were enabled to do this because an undeveloped country with an expanding frontier gave equality of opportunity to all. In the almost lottery-like scramble for the ownership of the vast 146

unowned natural resources, and in the exploitation of which there was little or no competition of capital (the capital itself arising out of the exploitation), the capable, intelligent member of the working class found a field in which to use his brains to his own advancement. Instead of being discontented in direct ratio with his intelligence and ambitions, and of radiating among his fellows a spirit of revolt as capable as he was capable, he left them to their fate and carved his own way to a place in the superior class.globalization. Moreover, these limits are largely imposed by states residing in the periphery. In sum, theoretically and actually, that there is a class struggle in the world today. The quarrel over the division of the joint product is irreconcilable. The working class is no longer losing its strongest and most capable members. These men, denied room for their ambition in the capitalist ranks, remain to be the leaders of the workers, to spur them to discontent, to make them conscious of their class, to lead them to revolt. For a class struggle to exist in society there must be, first, a class inequality, a superior class and an inferior class (as measured by power); and, second, the outlets must be closed whereby the strength and ferment of the inferior class have been permitted to escape. That there are even classes in the world today is vigorously denied by many; but it is incontrovertible, when a group of individuals is formed, wherein the members are bound together by common interests, which are peculiarly their interests and not the interests of individuals outside the group, that such a group is a class. The owners of capital, with their dependents, form a class of this nature in the United States; the working people form a similar class. The interest of the capitalist class, say, in the matter of income tax, is quite contrary to the interest of the labouring class; and, vice versa, in the matter of poll tax. If between these two classes there be a clear and vital conflict of interest, all the factors are present which make a class struggle; but this struggle will lie dormant if the strong and capable members of the inferior class be permitted to leave that class and join the ranks of the superior class. The capitalist class and the working class have existed side by side and for a long time globally; but, hitherto, all the strong, energetic members of the working class have been able to rise out of their class and become owners of capital. They were enabled to do this because an undeveloped country with an expanding frontier gave equality of opportunity to all. In the almost lottery-like scramble for the ownership of the vast unowned natural resources, and in the exploitation of which there was little or no competition 147

of capital (the capital itself arising out of the exploitation), the capable, intelligent member of the working class found a field in which to use his brains to his own advancement. Instead of being discontented in direct ratio with his intelligence and ambitions, and of radiating among his fellows a spirit of revolt as capable as he was capable, he left them to their fate and carved his own way to a place in the superior class. Land Grabs: A Dispossessed Class? Driven by high food prices, increasing demand for agrofuels, raw materials and grain fed livestock, and low returns from beleaguered financial markets, the number of corporations, governments, public and private financial institutions engaging in large-scale acquisitions of land in the global South is soaring, threatening the livelihoods and food sovereignty of countless local communities. Millions of hectares of land have been leased or bought up in recent years, mainly to produce food or fuel for the international market. As a result, peasants, herders, fishers and other rural households are being dispossessed of their means to feed themselves and their communities, sometimes through promises of jobs, sometimes at gunpoint. Land grabs are also resulting in land and water use changes, causing ecological destruction and climate change related emissions. Investment funds, agribusiness and sovereign wealth funds are “investing” more and more in land, intending to make their investment portfolios more diverse in the face of global economic risks and to profit from the rise in land and commodity prices. The notion that their financial stakes in agricultural land amount to “investment” must be questioned. The World Bank estimates that up to 80% of large scale global land acquisitions announced in recent years are not under production (http://go.worldbank.org/OAV3EK4F00). Academic reports demonstrate rent-seeking behaviour in numerous cases (http://www.futureagricultures.org/papers-and-presentations/doc_download/1324-hubertcochet-and-michel-merlet-). Private equity groups and many specialised farmland funds operate frequently on the basis of a high return five-year exit strategy. Civil society groups in a range of African countries have reported in the last few years that numerous deals turn out to be purely speculative. And land investors themselves point out that they can easily make their profits on simply renting or selling (“flipping”) the land 148

(http://farmlandgrab.org/post/view/20165). How, where and by whom these investments are directed is key, as many of them can be harmful. There is increasing evidence that the most vital and largest share of investments in agriculture are made by family farmers themselves, and this is the type of investment to be supported (http://www.ukfg.org.uk/pics/Yaounde_Agricultural_Investment_Farmers_ Workshop_Synthesis_Report-EN_1.pdf). Land grabs are also being financed indirectly, when banks provide credit facilities to land grabbing companies, or when hedge funds and private equity firms buy stakes in overseas companies that control land as published in Merian Research and CRBM: The Vultures of Land Grabbing, 2010 (http://www.pambazuka.org/en/category/land/68535). Even governments are involved, through the for-profit development finance institutions that they run. Pension funds are, at present, reported to be the largest institutional “investors” in farmland worldwide. It should be noted that of the estimated U.S. $100 billion that pension funds invest in commodities, some $5-15 billion reportedly goes into farmland acquisitions. These commodity and farmland investments are expected to double by 2015. GRAIN: Pension Funds: Key Players in the Global Farmland Grab, June 2011(http://www.grain.org/article/entries/4287-pension-funds-key-playersin-the-global-farmland-grab). Yet the money used here is workers’ retirement savings. This means that wage earners and citizens may be implicated in massive violations of the human rights of local farming communities, including their rights to food, land, water, an adequate standard of living, their cultural rights and their right to self-determination – in breach of international law. The human rights mentioned in this context imply the extraterritorial obligation of these States to urgently ensure that these funds and institutions: x Stop speculation on land and other damaging investments in the global food chain, including land deals and financial participation in agribusinesses, where land grabbing cannot be excluded ex ante, and investing in complex financial products based on food commodity derivatives or agricultural land. x Publicly disclose complete information about any direct or indirect financing of land acquisitions and other deals that might involve land grabbing. Such disclosure should be based upon diligent analysis of the entire 149

investment chain, irrespective of whether or not the financial services provided are earmarked for land acquisition. This is required to break the culture of secrecy surrounding many of these deals, and to allow stakeholders and public interest groups to take action. x Be subject to mandatory, prior and independent assessment of the potential impacts of investments and products on tenure rights, livelihoods, the environment and the progressive realisation of the right to adequate food. These assessments must enable fund managers and other financial institutions to prove at all times that they have no stakes in firms or in operations that are involved in land grabs. Are peasants, herders, fishers or the dispossessed by Corporate Investors becoming a class in itself and a class for itself? A coalition of environmental, development and farming groups criticized the Agricultural Investment summit in London for spearheading a global land grab. The protestors said that City investors and pension funds were taking land from countries and vulnerable communities who need it to grow food. The protestors demonstrated against the summit and released a statement, signed by over 60 European and international organisations, calling for pension funds and other financial institutions to stop land grabbing. “Africa, Asia and Latin America are seeing an acceleration of land grabbing at a rate not seen since colonial times,” says Nyikaw Ochalla, of the Anuak people from Ethiopia, whose livelihoods are threatened by the land grabs of foreign companies. “Land is the lifeline of hunter-gatherers, pastoralists, fishing and farming communities in the Ethiopian lands targeted by land grabbing policy. It is a myth that our lands are ‘wastelands’, only suitable for commercial agricultural development.” Millions of hectares have been grabbed by this kind of investment in countries such as Ethiopia, Tanzania,Sudan, Mali, Kenya, India, Indonesia, the Philippines, Cambodia, Laos, Myanmar, Brazil, and many more. British companies alone have acquired the rights to more than three million hectares in poor countries – equivalent to almost two thirds of the UK’s total cropland – according to the Land Matrix project of the International Land Coalition. “The summit organisers cheerily call this devastating trend an ‘emerging and expanding asset class’, and bill the summit as an opportunity to ‘overcome the perceived obstacles to investment’,” adds Tim Rice, biofuels policy advisor at ActionAid. “But they are glossing over the true impact on the ground. They are displacing farmers, 150

uprooting communities and food production, and destroying ecosystems on a massive scale. They are increasing hunger and poverty globally. In a world where one billion people already go hungry, land must stay in the hands of local communities so that they can feed themselves.” “Pension fund investors in London’s square mile are key players in this global industry,” points out Kenneth Richter, of Friends of the Earth. “Many people do not realise that the lack of transparency and accountability means that anyone with a pension fund might be implicated in violations of farming communities’ human rights around the world. We are here to tell the pension investment industry that their shady actions are now in the public spotlight.” Friends of the Earth is calling on pension funds to stop speculation on land grabbing. The groups’ statement declares: “Land grabbing by pension funds and other financial institutions must be stopped.” It says: “Pension funds are reported to be the largest institutional ‘investors’ in farmland worldwide. Millions of hectares have been leased or bought up in recent years. As a result, peasants, herders, fishers and other rural households are being dispossessed of their means to feed themselves and their communities, sometimes through promises of jobs, sometimes at gunpoint.” Historically, one of the central insights of Marxism is that it demonstrated the incompatibility of interests between those who own property like land and those who are property-less. The former are called Bourgeois while the latter are the Proletariat. The former is numerically small but controls large amounts of capital and property, while the large mass of property-less workers have no means of survival, other than to sell their labour power to the propertied. The workers, typically, own nothing of productive use but work on the machines owned by the capitalist and are paid a wage at the end of their labour. Without wage employment the workers would not survive. This necessity of selling their labour power to survive enslaves them to the capitalists, which explains the universal resonance of Marx’s famous exhortation, “Workers of the world unite; you have nothing to lose but your chains”. But feudal society was not like this. Most direct producers owned either land or their tools of production. Through there were landless agricultural workers and workers in artisan manufacture who did not own their own tools and workspace, these were a minority within the working population. The typical direct producer of feudalism was the peasant who worked his own small plot of land and was forced to pay high amounts of tribute to his 151

lord(s). Other direct producers too, like weavers, carpenters, potters, fishermen, ironsmiths, etc., owned their own tools of work as well as their workspace and merely provided the goods they produced to their rulers and lords. They were property holders, albeit small and politically vulnerable, and this ownership of private property gave them material interests in the feudal system. In the 18th and 19th centuries, the emergent capitalist class dispossessed the peasants from their land and the artisans and craftspeople of their tools in their general assault on feudal property relations. This dispossession pushed them into the new industrial towns without any means of survival other than to sell their ability to work, their labour power. A class of small property owners continued to exist under capitalism, as it developed in Europe. This class comprises a diverse set of occupations like the small shop owner and self-employed professional, white collar workers and managers, bureaucrats and teachers, journalists and artists, etc. While they all need to work to survive, they are not destitute like the proletariat. In fact, they often manage to earn well and live a life similar to the capitalists, but unlike the capitalists they need to daily work their skills to sustain their lifestyles. The moment they stop working, or lose their petty property, they risk falling into the ranks of the property-less proletariat. This condition – of needing to work like the proletariat to survive, but with an ability to sustain a lifestyle similar to the capitalists – marks out this class, whom Marx termed the petit bourgeoisie (small capitalists) and we commonly refer to as the middle class(es). They constantly feel exploited (and sometimes oppressed) by the rule of capital, a condition which pushes them towards left-wing politics, but are not willing to destroy the system which ensures the sanctity of private property and economic inequality, which brings them back to right-wing politics. In the great social churning which invariably accompanies the advent of capitalism in any society, many of those who owned property in the feudal society are dispossessed and join the ranks of the property-less proletariat, while a few individuals manage to accumulate large wealth and become capitalists. Some manage to retain their unstable “middle class” status through a combination of hard work, luck and political dexterity. Unlike in Europe, the development of capitalism in India or Africa, for instance, is not a story of its epochal triumph over feudalism, but rather, to establish itself, capitalism made protracted compromises with feudal property relations like caste. The new classes which emerged under capitalist relations 152

of production mirrored the caste divisions of society. Capitalists were almost all drawn from upper castes (or other trading communities like the Parsis), while workers were overwhelmingly from the Shudra and outcaste Jatis, comprising the direct producers of feudalism. While many upper caste individuals have become workers and, recently, significant numbers from within the lower castes have risen into professions and bureaucracy (the middle class), modern class division still continue to mirror the caste divisions of feudal India to a large extent. While caste identity was helpful to the capitalists by splintering the working class, it was also an asset for the peasants and rural artisans in their encounter with capitalism. Caste provided a social security net for its members, as well as a ready mass of individuals, linked by ties of kinship and trade, to jointly voice grievances and demands. In this sense, caste was amenable to easy modification into a political community to articulate the material interests of its members, a role which in Europe had been the forte of trade unions and political parties. This ability of caste to provide succour to the exploited and oppressed provided crucial legitimacy to the institution of caste from within the groups of direct producers, who discovered that caste solidarity was often the only weapon they had to protect themselves from both the colonial (and post-colonial) State and the ruling classes. This historical compromise of capitalism with feudal property relations and caste also resulted in the incomplete destruction of small property owned by peasants and artisans, who may have been pauperised but were rarely proletarianised (made property-less), like their European counterparts. The general trend has not been of eviction of peasants from land despite partition into tiny plots and falling agricultural productivity. The typical response of the small and middle peasantry to economic pressures in the village has been to export one (and sometimes more) able bodied male from its family to the city for work, who then sends a chunk of his income back for the sustenance of the family economy in the village. In that sense, much of the urban, industrial working class remains attached to petty private property in the form of land and other resources in the village. This persistence of property ownership among the poor along with the felt utility of their caste identity in providing social security and political voice provided the material basis for the continuation of caste and with its caste consciousness among the direct producers. This caste consciousness brought with it notions of hierarchy and inequality as the basis of life while injecting a 153

sense of fatalism in the worldview of the toiling people. This combination of ideological and material forces has been fatal for the growth of Marxist politics as the link with property has invariably fractured the working class movement whenever they have grown. The class interests and demands of the toiling people, the poor and the oppressed, has largely been expressed in the form of caste or vassal politics. In sum, political power is the result of the concentration of land, but is also the easiest tool for seizing lands. Does that not mean, then, that displacement is the tragic thing that defines the dispossessed? If we look at things clearly, we see that at the root of colonization is the expulsion of the population, normally forced, which obliges people to find a new region where they can start their lives and social activities over. The tragedy is that in the new circumstances – a kind of promised land–the phenomenon is repeated and violence reappears. The key to the process is the role of land– its possession and exploitation, as well as the resources that it exhibits or hides. The distribution of property implies a great imbalance in the country and, necessarily, the exclusion of a sector of peasant farmers from the enjoyment or control of the land, a mechanism without which the exploitation of work itself would be impossible. Between the large and the small land owners and, of course, the dispossessed, conflictive relationships are established. The concentration and, therefore, the exclusion are not curbed by simple economic mechanisms. On the contrary, they tend to become graver every day. The intervention of the state is necessary to regulate the process. In Colombia, political power, to a large extent a product of the concentration of land, rarely takes measures to reform the problem. Large landholding has been the basis of politics and in the provinces continues to be so. To the violence born of unequal distribution is added the repression which maintains this order. The excluded, exploited or oppressed are obliged to flee and abandon their property, fruit of their labour and scene of their dreams. Therefore, the state, or the armed landlords, tend to be, from a historic point of view, responsible for displacement. An exodus occurs and people move to another region, where the colonizer cuts down the jungle, sets up his farm, and usually, burdened with debt, is forced to sell again what he has built. The buyer, who is almost always the creditor, adds the lands of the bankrupt peasant farmer to his own. And in that way, landholdings are further concentrated and the cycle is repeated. 154

Indeed, global capitalism has always been dependent on dispossessing peasants of their lands, livelihoods and lives in order to facilitate capital accumulation. It began with the genocide of the indigenous peoples of the Americas and continued through the dispossession of African blacks in the slave trade. It manifested itself in the Enclosure Acts in Britain during the 1800s that dispossessed farmers of their commonly-held lands in order to force them to become wage labourers in the factories established during the Industrial Revolution. And accumulation by dispossession continues today throughout the global South under neoliberalism in what amounts to nothing less than structural genocide.

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Chapter Six Understanding Class Analysis: A Marxist Approach Overview The approach to class analysis that focuses on mechanisms of exploitation and domination is most closely associated with the Marxist tradition, although some sociologists more influenced by Weber also include these mechanisms in their conceptions of class. Most sociologists, however, ignore them; some explicitly deny their relevance. ‘Domination’ and, especially, ‘exploitation’ are contentious terms because they tend to imply a moral judgment, rather than a neutral description. Many sociologists try to avoid such terms because of this normative content. I feel, however, that they are important and accurately identify certain key issues in understanding class. ‘Domination’ refers to the ability to control the activities of others; ‘exploitation’ refers to the acquisition of economic benefits from the labour of those who are dominated. All exploitation therefore involves some kind of domination, but not all domination is exploitation. Introduction Analysis of class divisions and struggles is especially important in developing an understanding of the nature of capitalism. The reason is that classes are defined and structured by the relations concerning (i) work and labour and (ii) ownership or possession of property and the means of production. These economic factors more fully govern social relationships in capitalism than they did in earlier societies. While earlier societies contained various strata or groupings which might be considered classes, these may have been strata or elites that were not based solely on economic factors, e. g. priesthood, knights, or military elite. The Reality of Globalization It is important not to underestimate the significance of globalization. It might well be an ‘ideological mystification’ in the hands of a Martin Wolf or 157

some intellectuals and academics on the political left, but its impact on the economic and political lives of the vast majority of humanity is of great political consequence. To say, as I have argued in my earlier article on globalization, that ‘far from it being new it is a return to those unstable features of capitalism which characterised imperialism before the First World War’ is not to dismiss its importance but, on the contrary, to highlight it. It is beginning to create the very conditions which produced those dramatic shocks to the international capitalist economy and which led to the revolutionary developments in the first decades of the twentieth century. So what then are the crucial components of globalisation which suggest these developments? Multinational companies (MNCs)are the principle vehicle of imperialism’s drive to redivide the world according to economic power. In 1995 Foreign Direct Investment (FDI) outflows increased by a massive 38 per cent to $317bn, with a record $100bn going to Third World countries. That investment is concentrated in three competing power blocs, the ‘Triad’ of the European Union, Japan and the United States and their regional cluster of countries. 76 per cent of the investment in Third World countries (1993-5) went to only 10 countries. Five imperialist countries, United States, UK, Germany, Japan and France were responsible for almost two-thirds of the total outflows in 1995. The United States ($96bn), UK ($38bn) and Germany ($35bn) all exported record amounts (UN-WIR1996). Most MNCs are nationally based, controlled by national shareholders, and trade and invest multinationally with a large majority of sales and assets in their home country. A recent study showed 70 - 75 per cent value added by multinational companies was produced in the home country. They are highly concentrated. Only 100 MNCs, 0.3 per cent of the total, all from imperialist countries, own one-third ($1.4 trillion) of the total FDI investment stock. The process of concentration continues internationally through mergers and acquisitions. Cross border mergers and acquisitions doubled between 1988 and 1995 to $225bn. Globalization is devastating the lives of millions of people. Even the World Bank admits that in the case of the ex-Soviet bloc ‘transition has relegated an entire generation to economic idleness.’ Output in Russia fell by 40 per cent between 1990 -1995 and between 16 and 30 per cent in the other countries. Growth has been falling over the last 15 years in about 100 countries, with almost a third of the world’s people, dramatically reducing the 158

incomes of 1.6bn people. The declines are unprecedented, exceeding in duration and sometimes in depth the Great Depression of the 1930s. One billion people, 30 per cent of the world’s workforce, are either jobless or unemployed. Even in the imperialist countries 100m people live below the poverty line, 30m are unemployed and more than 5m are homeless (UNWDR 1996). The world is becoming more unstable. $1,230bn a day flows through the foreign exchange markets. Third World Debt, at a record $1,940bn, continues to increase despite massive debt repayment. A formidable $55 trillion is gambled on the world’s derivatives market. All the major banks are large players. Barclays, for example, has liabilities of £922bn, more than 80 times its capital base. A crash in the stock market will leave them facing huge losses. Growth in world trade halved last year because of a sharp deterioration in the performance of the so-called Asian ‘tigers’. The conflict in Zaire has started a new scramble for Africa as inter-imperialist rivalry intensifies. Finally, inequality between rich and poor countries and between rich and poor in all countries has reached unprecedented levels and is still growing. These are not the conditions of an unchanging world. They are ones where the socialist message can once again take root. Throughout the world, from workers in Korea to guerrillas in Mexico, from public sector workers in France to landless peasants in Brazil, people are fighting for change. In Britain new alliances are being built with environmental campaigners taking to the streets to defend dockers in Liverpool. Globalisation is a long-term structural crisis of capitalism. It is laying the ground for turning what Ellen Meiksins Wood calls various fragments of the opposition to capitalism into conscious class struggle. Class and Social Relations Is “class” the answer or the question to analysing societal relations? This question may look rather strange. But, it is critical in that the word class is deployed in a wide range of explanatory contexts in sociology. And, of course, depending upon that explanatory context, different concepts of class may be needed. Three broad kinds of questions are particularly common for which the word “class” figures centrally in the answer: First of all, the word 159

“class” sometimes figures in the answer to questions such as: “How do people locate themselves within a social structure of inequality?” Class is one of the possible answers to this question. In this case the concept would be defined something like: “a social category sharing a common set of subjectively-salient attributes within a system of stratification”. Secondly, class is offered as part of the answer to the question: “What explains inequalities in economically-defined life chances and standards of living?” Here, typically, the concept of class would not be defined by subjectively salient attributes of a social location, but rather by the relationship of people to income-generating resources or assets of various sorts. Thirdly, and finally, class plays a central role in answering the question, “What sorts of struggles have the potential to transform capitalist economic oppressions in an emancipatory direction?” This is the distinctively Marxist question. Marxists may share with Weberians the second question concerning the explanation of economic inequalities, that the Marxist concept of class shares much with the Weberian concept in terms of its role in explaining such inequality. And Marxists may also use the concept of class in the account of people’s subjective understandings of their location in systems of stratification, as in the first question. But it is the third question which imparts to the Marxist concept of class a distinctive explanatory and normative agenda. It suggests a concept of class which is not simply defined in terms of relations to economic resources, but which elaborates these relations in terms of mechanisms of economic oppression. The problem of specifying the theoretical foundations of the concept of class, therefore, crucially depends upon what explanatory work the concept is called upon to do. In these terms, the concept of class has greater explanatory ambitions within the Marxist tradition than in any other tradition of social theory and this, in turn, places greater burdens on its theoretical foundations. In its most ambitious form, classical historical materialism argued that class—or very closely linked concepts like “mode of production” or “the economic base”— constituted the primary explanation of the epochal trajectory of social change as well as social conflicts located within concrete time and place, of the macro-level institutional form of the state along with the micro-level subjective beliefs of individuals. Expressions like “class struggle is the motor of history” and “the executive of the modern state is but a committee of the 160

bourgeoisie “captured this ambitious claim of explanatory primacy for the concept of class. Most Marxist scholars, as we shall see, today have pulled back significantly from the grandiose explanatory claims of historical materialism (if not necessarily from its explanatory aspirations). Few today defend stark versions of “class primacy.” Nevertheless, it remains the case that class retains a distinctive centrality within the Marxist tradition and is called upon to do much more arduous explanatory work than in other theoretical traditions. Indeed, a good argument can be made that this, along with a specific orientation to radically egalitarian normative principles, is a large part of what defines the remaining distinctiveness and vitality of the Marxist tradition as a body of thought, particularly within sociology. It is for this reason that this book argues that “Marxism as class analysis” defines the core agenda of Marxist understanding of contemporary capitalism, now sanitized by the buzzword globalization or neoliberalism. Marxism and Class In light of the global capitalist crisis, there is renewed interest in Karl Marx’s works and in concepts like class, exploitation and surplus value. Slavoj                   of the ecological crisis, the massive expansion of intellectual property, biogenetics, new forms of apartheid and growing world poverty show that we still need the Marxian notion of class. He concludes that there is an urgent need to renew Marxism and to defend its lost causes in order to           "#  new forms of a soft capitalism that promise, in its rhetoric makes use of, ideals like participation, self-organization and co-operation, without realizing

*  #                 demonstrates the need to return to the critique of political economy. Göran Therborn suggests that the “new constellations of power and new possibilities of resistance” in the 21st century require retaining the “Marxian idea that human emancipation from exploitation, oppression, discrimination and the inevitable linkage between privilege and misery can only come from struggle by the exploited and disadvantaged themselves” (Therborn 2008, 61). Eric Hobsbawm (2011, 12f) insists that for understanding the global dimension of contemporary capitalism, its contradictions and crises, and the 161

persistence of socio-economic inequality, we get back to Marx’s analysis of capitalism. For Marx, the analysis of social class, class structures and changes in those structures are key to understanding capitalism and other social systems or modes of production. In the Communist Manifesto Marx and Engels comment that “the history of all hitherto existing society is the history of class struggles” (Bottomore1983: 75). Analysis of class divisions and struggles is especially important in developing an understanding of the nature of capitalism. For Marx, classes are defined and structured by the relations concerning (i) work and labour and (ii) ownership or possession of property and the means of production. These economic factors more fully govern social relationships in capitalism than they did in earlier societies. While earlier societies contained various strata or groupings which might be considered classes, these may have been strata or elites that were not based solely on economic factors – e.g. priesthood, knights, or military elite. Marx did not complete the manuscript that would have presented his overall view of social class. Many of his writings concern the class structures of capitalism, the relationship among classes the dynamics of class struggle, political power and classes, and the development of a classless society, and from these a Marxian approach to class can be developed. However, in order to advance a class approach to contemporary capitalism it is necessary at first to clarify the concept of ‘class’. Social classes have been defined in classical Marxist literature (Lenin1975:172) as follows: Classes are large groups of people differing from each other by the place they occupy in a historically determined system of social production, by their relation (in most cases fixed and formulated in law) to the means of production, by their role in the social organization of labour, and, consequently, by the dimensions of the share of social wealth of which they dispose and the mode of acquiring it. Classes are groups of people one of which can appropriate the labour of another owing to the different places they occupy in a definite system of social economy. The task of clarifying the concept of ‘class’ may be accomplished through a critical review of the principal arguments advanced to support the ‘death of class’ thesis. It is today contended that the category of ‘class’ is no longer useful for at least five reasons. First, despite its centrality to Marxist sociology, the category of ‘class’ has not been adequately developed. Marxist scholars (Resnick and Wolff 2006:91) themselves admit that the ‘traditional Marxist notions of class are generally vague and inadequate’. The general 162

tendency is to work with a two-class model of capitalist societies: the capitalist and the working class, offering an impoverished view of complex multi-class social structures. Secondly, the determination of classes is based on economic relations occluding the identification of classes in the ideological and political spheres. Conversely, the ideological and political role of classes is simply derived from their economic locations without taking into account the multifaceted mediations and interactions which determine these roles. Thirdly, it is increasingly recognized that the gender and race divides in society are as salient as the ‘class’ divide. The non-recognition of these other social divides renders the category of ‘class’ less than useful. On the other hand, attempting to accommodate and incorporate these other categories dilutes the category of ‘class’ to a point where it loses its distinctiveness and analytical usefulness. Fourthly, the fact of diffusion of capital through the dispersion of stock ownership and the accompanying separation between formal legal ownership and real economic ownership renders the category of class an anachronism. Fifthly, there is neglect of the fact that in the second stage of modernity the advanced capitalist world manifests what Beck (2007: 349-354) terms as ‘capitalism without classes’. While it is perhaps true that ‘the collective success with class struggle’ is responsible for the irrelevance of the idea and reality of social classes, the fact remains that ‘class’ is replaced by the category of ‘individualization’, albeit accompanied by post-class and post-national forms of radical inequality (Ibid. 679-682). In sum, as Beck puts it, ‘for the first time in history, the individual rather than the class is becoming the basic unit of social reproduction’(Beck and Willms 2004: 101). These criticisms of the use of the category of ‘class’ have a degree of validity. However, they are not as debilitating as they are claimed to be. These can be adequately addressed from within a Marxist approach. Marxist Conception of Class 1. Classes in Capitalism Neoliberalism is the contemporary form of global capitalism. The neoliberal transition in the world economy is closely associated with ‘globalization’ and with the onset of new modalities of imperialism. At the domestic level, neoliberal transitions have transformed significantly the material basis of countries as diverse as Britain, the United States, Poland, 163

South Korea, Brazil, South Africa, India and Zambia. These transitions include, but they are not limited to, shifts in economic and social policy. They encompass the transformation of the modalities of economic and social reproduction in different countries and regions, and significant changes in the modes of exploitation and social domination. Broadly speaking, neoliberalism is based on the systematic use of state power to impose, under the ideological veil of non-intervention, a hegemonic project of recomposition of the rule of capital in each area of economic and social life. The exercise of global power is guided by the current imperatives of the international reproduction of capital, with the financial markets and the interests of US capital to the fore. The neoliberal project has, however, reconstituted economic and social relations differently in the context of different countries rather than globally homogenizing as has often been claimed by globalization’s critics and supporters alike. The political counterpart of these processes is growing limitation on domestic politics by insulating markets and transnational investors from popular demands, and the imperative of labour control to secure international competitiveness. This has reduced the scope for ‘autonomous’ social policies, and led to higher levels of unemployment and job insecurity in most countries than was the case previously. It has also created an incomeconcentrating dynamics of accumulation that has proven immune to Keynesian and reformist interventions if seriously attempted. The inability of the neoliberal reforms to support higher levels of investment, growth rates and welfare is proven. The primary purpose of the neoliberal reforms, although presented otherwise, is not to promote faster growth, reduce inflation or even to increase the portfolio choices of the financial institutions. It is to subordinate local working classes and domestic accumulation to international imperatives, promote the microeconomic integration between competing capitals, mediated by finance, and expand the scope for financial system intermediation of the three key sources of capital in the economy: state finance, the financing of domestic accumulation, and the balance of payments. The transfer of the main levers of accumulation to international capital, mediated by US-led financial institutions, and regulated by US-controlled international organizations, has consolidated the material basis of neoliberalism. Transcending neoliberalism will involve both economic and political transformations that can be addressed only through the construction of an 164

alternative system of accumulation. This project will require systematically dismantling the material basis of neoliberalism through a series of political initiatives, which will support a shift to less unequal distributions of income, wealth and power, as a fundamental condition for democracy. Nevertheless, these policy measures need to be supported by a re-articulated working class, as one of the main levers for its own economic and social recomposition. This virtuous circle cannot be wished into being. Its elements cannot be addressed purely academically, or through the organization of another vanguard party, or simply through political alliances between existing forces. Development of new forms of political expression and representation by the working class are required in the face of a hostile domestic and international environment will need to be confronted. The main classes or existing forces in contemporary capitalism that have conflicting interests are the bourgeoisie and the proletariat. However, other classes such as landlords, petty bourgeoisie, peasants, and lumpen proletariat also exist, but are not primary in terms of the dynamics of capitalism. a. Bourgeoisie. The bourgeoisie or capitalists are the owners of capital, purchasing and exploiting labour power, using the surplus value from employment of this labour power to accumulate or expand their capital. It is the ownership of capital and its use to exploit labour and expand capital are key here. Being wealthy is, in itself, not sufficient to make one a capitalist (e.g. managers in the state sector or landlords). What is necessary is the active role of using this wealth to make it self-expansive through employment and exploitation of labour. Historically, the bourgeoisie began cities of medieval Europe, with the development of traders, merchants, craftspersons, industrialists, manufacturers and others whose economic survival and ability to increase wealth came from trade, commerce, or industry. In order for each of these to expand their operations, they needed greater freedom to market products and expand economic activities. In the struggle against the feudal authorities (church and secular political authorities) this class formed and took on a progressive role. That is, they helped undermine the old hierarchical and feudal order and create historical progress. For a segment of this class, wealth came by employing labour (industrial capital), for others it came through trade (merchant capital), banking and finance (finance capital), or using land in a capitalist manner (landed capital). It was the industrial capitalists who employed labour to create capital that became the leading sector of the 165

bourgeoisie, whose economic activities ultimately changed society. In Britain, this class became dominant politically and ideologically by the midnineteenth century. By employing workers, industrial capital created the surplus value that could take on the various forms such as profit, interest and rent. b. Proletariat. The proletariat are owners of labour power (the ability to work), and mere owners of labour power, with no other resources than the ability to work with their hands, bodies, and minds. Since these workers have no property, in order to survive and obtain an income for themselves and their families, they must find employment work for an employer. This means working for a capitalist-employer in an exploitative social relationship. This exploitative work relationship recreates or reproduces itself continually. If the capitalist-employer is to make profits and accumulate capital, wages must be kept low. This means that the proletariat is exploited, with the surplus time (above that required for creating subsistence) worked by the worker creating surplus products. While the worker produces, the products created by this labour are taken by the capitalist and sold – thus producing surplus value or profit for the capitalist but poverty for workers. This occurs each day of labour process, preventing workers from gaining ownership of property and recreating the conditions for further exploitation. The antagonistic and contradictory nature of this system is evident as capitalists attempting to reduce wages and make workers work more intensively, while workers have exactly the opposite set of interests. Work and the labour process in the capitalist mode of production are organized so that workers remain propertyless members of the proletariat. The surplus products and value created by workers turns into capital, which is accumulated. Historically, the proletariat emerged as the aristocracy began to suffer financial difficulties in the later middle ages. Many of those who were supported by working for the aristocracy lost their livelihood – the “disbanding of the feudal retainers and the dissolution of the monasteries.” Using enclosures, changing the conditions of production in agriculture, and denying peasants access to common lands and resources, landowners transformed land into pasture land for raising sheep, or sold land to farmers who began to develop grain and livestock production. People who had subsisted on the land were denied the possibility of making a living on the land, and they become propertyless. Population growth was also 166

considerable, and in some areas forced labour (slavery, indentured servants, poor, prison) was used. While some people subsisted in rural industry and craft production, factory production began to undermine these as well in the eighteenth and nineteenth centuries. Together these changes created a large class of landless and propertyless people who had no choice but to become members of the proletariat—many working in factories. These people became free wage labourers, free from feudal ties and free from a source of livelihood. Today we still talk of free labour markets and the dual meaning is much the same. While the relationship between workers and capitalists or between labour and capital may appear to be no more than an economic relationship of equals meeting equals in the labour market, Marx shows how it is an exploitative social relationship. Not only is it exploitative, it is contradictory, with the interests of the two partners in the relationship being directly opposed to each other. Although at the same time, the two opposed interests are also partners in the sense that both capital and labour are required in production and an exploitative relationship means an exploiter and someone being exploited. This relationship is further contradictory in that it is not just two sets of interests, but there is no resolution of the capital-labour contradiction within the organization of capitalism as a system. The contradictory relationship has class conflict built into it, and leads to periodic bursts of strikes, crises, political struggles, and ultimately to the overthrow of bourgeois rule by the proletariat. Class conflict of this sort results in historical change and is the motive force in the history of capitalism. c. Landlords. In addition to the bourgeoisie and the proletariat, Marx discussed a number of other classes. First, Marx mentions landowners or landlords as a class in Britain. While these were historically important, and many still retain their wealth even today (e.g. the Royal Family), they were considered by Marx to be a marginal class, once powerful and dominant but having lost their central role in production and the organization of society. In order to retain their wealth, some of these landowners were able to transform their wealth in land into landed capital. While this constituted a somewhat different form than industrial capital, this meant that the land was also used as capital, to accumulate. Labour may not be directly employed by landowners, but the land is used as a means by which capital can be expanded. 167

d. Petty Bourgeoisie and Middle Class. The lower middle class or the petty (petite) bourgeoisie (the bourgeoisie was sometimes called the middle class in this era), constitutes “the small manufacturer, the shopkeeper, the artisan, the peasant” (Giddens and Held 1982: 24). The characteristic of this class is that it does own some property, but not sufficient to have all work done by employees or workers. Members of this class must also work in order to survive, so they have a dual existence – as (small scale) property owners and as workers. Because of this dual role, members of this class have divided interests, usually wishing to preserve private property and property rights, but with interests often opposed to those of the capitalist class. This class is split internally as well, being geographically, industrially, and politically dispersed, so that it is difficult for it to act as a class. Marx expected that this class would disappear as capitalism developed, with members moving into the bourgeoisie or into the working class, depending on whether or not they were successful. Many in this class have done this, but at the same time, this class seems to keep recreating itself in different forms. Marx considers the petite bourgeoisie to be politically conservative or reactionary, preferring to return to an older order. This class has been considered by some Marxists to have been the base of fascism in the 1920s and 1930s. At other times, when it is acting in opposition to the interests of large capital, it may have a more radical or reformist bent to it (antimonopoly). The issue of the middle class or classes appears to be a major issue within Marxian theory, one often addressed by later Marxists. Many Marxists attempt to show that the middle class is declining, and polarization of society into two classes is a strong tendency within capitalism. Marx’s view was that the successful members of the middle class would become members of the bourgeoisie, while the unsuccessful would be forced into the proletariat. In the last few years, many have argued that in North America, and perhaps on a world scale, there is an increasing gap between rich and poor and there is a declining middle. While there have been tendencies in this direction, especially among the farmers and peasantry, there has been no clear long run trend toward decline of the middle class. At the same time as there has been polarization of classes, there have been new middle groupings created. Some of these are small business people, shopkeepers, and small producers while others are professional and managerial personnel, and some intellectual personnel. Well 168

paid working class members and independent trades people might consider themselves to be members of the middle class. Some segments of this grouping have expanded in number in recent years. While it is not clear that these groups hold together and constitute a class in any Marxian sense of being combined in opposition to other classes, they do form a middle grouping. Since Marx’s prediction has not come true, sociologists and other writers have devoted much attention to explaining this middle grouping – what is its basis, what are the causes of its stability or growth, how it fits into the class structure, and what are the effects of its existence on proletariat and bourgeoisie. e. Lumpen proletariat. Marx also mentions the “dangerous class” or the social scum. Among the members of this group are “ruined and adventurous offshoots of the bourgeoisie, vagabonds, discharged soldiers, discharged jailbirds .. pickpockets, brothel keepers, rag-pickers, beggars” etc. (Bottomore 1983: 292). This is the lumpen proletariat. He does not consider this group to be of any importance in terms of potential for creating socialism, if anything they may be considered to have a conservative influence. Other writers and analysts have considered them to have some revolutionary potential. One of the main reasons for mentioning them is to emphasize how capitalism uses, misuses and discards people, not treating them as humans. Today’s representative of this class of lumpen proletariat are the homeless and the underclass. f. Peasantry and Farmers. Marx considered the peasantry to be disorganized, dispersed, and incapable of carrying out change. Marx also expected that this class would tend to disappear, with most becoming displaced from the land and joining the proletariat. The more successful might become landowners or capitalist farmers. With respect to family farmers as a group, much the same could be said. However, Marx was not really very familiar with these as a group, and had little to say about these. The various analyses of the role of farmers in the Prairies constitute a more adequate view of what may be expected from this group. They could be considered to form a class when they act together as a group. In the early days of Prairie settlement, farms were of similar size, farmers had generally similar interests, and the farm population acted together to create the cooperative movement and the Wheat Board. More recently, Prairie farmers are often considered to be split into different groups or strata, dependent on type of farming, size of farm, and whether or not they employ labour. 169

Farmers have not been able to act together as a class in political and economic actions in recent years. Lobbying by some farm groups have been successful, but these do not usually represent farmers as a whole. 2. Features of Marx’s Class Analysis a. Group Basis. For Marx, classes cannot be defined by beginning observation and analysis from individuals, and building a definition of a social class as an aggregate of individuals with particular characteristics. For example, to say that the upper class is all families with incomes of $500,000 or more is not an adequate manner of understanding social class. The latter is a stratification approach that begins by examining the characteristics of individuals, and from this amassing a view of social class structure as a whole. This stratification approach often combines income, education, and social prestige or status into an index of socioeconomic status, creating a graduation from upper class to lower class. The stratification approach is essentially a classification, and for Marx classes have meaning only as they are real groups in the social structure. Groups mean interaction among members, common consciousness, and similar types of behaviour that are connected in some way with group behaviour. Categories such as upper class, middle class and lower class, where those in each category may be similar only in the view of the researcher are not fully Marxian in nature. Classes are groups, and Marx discusses the bourgeoisie and the proletariat, not individual capitalists and individual workers. As individuals, these people may be considered members of a class, but class only acquires real meaning when it the class as a whole and the social relationships defining them that are considered. For example, “The bourgeoisie ... has put an end to all feudal, patriarchal, idyllic relations. ...” (Giddens and Held 1982: 21). Here the bourgeoisie is historically created and is an actor in politics, economics and history. In terms of individuals as members of classes, they are members of a class as they act as members of that class. For example, Marx notes that burghers or members of the bourgeoisie in early capitalist Europe: the class in its turn achieves an independent existence over against the individuals, so that the latter find their conditions of existence predestined, and hence have their position in life and their personal development assigned to them by their class, become subsumed under it (Giddens and Held 1982: 20). 170

To the extent that individuals are considered in the social system, they are defined by their class. For Marxists, class structures exist as objective facts, and a researcher could examine class and membership of a class, but would have to understand the nature of the whole social and economic structure in order to do so. To the extent that these members act in society, they act as representatives of their class, although Marx would leave some room for individual freedom of action. b. Property and Class. Classes are formed by the forces that define the mode of production, and classes are an aspect of the relations of production. That is, classes do not result from distribution of products (income differences, lender and borrower), social evaluation (status honour), or political or military power, but emerge right from relationship to the process of production. Classes are an essential aspect of production, the division of labour and the labour process. Giddens notes: Classes are constituted by the relationship of groupings of individuals to the ownership of private property in the means of production. This yields a model of class relations which is basically dichotomous [since some own and others do not, some work and others live off the fruits of those who labour]: all class societies are built around a primary line of division between two antagonistic classes, one dominant and the other subordinate (Giddens 1971: 37). In describing various societies, Marx lists a number of classes and (antagonistic) social relationship such as “freeman and slave, ... lord and serf, ... oppressor and oppressed” that characterize different historical stages or modes of production. While Marx also mentions various ranks and orders of society, such as vassals and knights, the forms of struggle between classes are primarily viewed as occurring around control and use of property, the means of production, and production as a whole, and the manner in which these are used. The basic struggle concerns who performs the labour, and who obtains the benefits from this labour. An elite is not necessarily a class for Marx. Examples of elites are military elites, priests or religious leaders, and political elites – these may very powerful and oppressive, and may exercise formal rule at a certain time or place. An elite could form a class, but a political or military elite is not necessarily a class – an elite may be based on recruitment (rather than ownership) and may not have much ultimate say in determining the direction of society. Or the elite may be based on religious, military, political or other 171

structures. This would especially be the case in pre-capitalist or non-capitalist societies. For Marx, and especially in capitalism, domination came from control of the economy or material factors, although it was not confined to this. Thus, the dominant class was the class which was able to own, or at least control, the means of production or property which formed the basis for wealth. This class also had the capability of appropriating much of the social surplus created by workers or producers. An elite may have such power, but might only be able to administer or manage, with real control of the means of production in the hands of owners. c. Class as Social Relationship—Conflict and Struggle. At several points, Marx notes how the class defines itself, or is a class only as it acts in opposition to other classes. Referring to the emergence of the burghers or bourgeoisie as a class in early capitalist Europe, Marx notes how: The separate individuals form a class only insofar as they have to carry on a common battle against another class; otherwise they are on hostile terms with each other as competitors (Giddens and Held 1982: 20). Both competition and unity can thus characterize a class; there can be very cut-throat competition among capitalists, but when the property relations and existence of the bourgeois class is threatened, the bourgeoisie acts together to protect itself. This becomes apparent when rights of private property or the ability of capital to operate freely comes under attack. The reaction of the bourgeoisie may involve common political action and ideological unity, and it is when these come together that the bourgeoisie as a class exists in its fullest form. In commenting on France, Marx notes that the French peasantry may be dispersed and lacking in unity, but, In so far as millions of families live under economic conditions of existence that separate their mode of life, their interests and their culture from those of the other classes, and put them in hostile opposition to the latter, they form a class. (Giddens, Ibid.: 37) It is when the peasantry as a group is in opposition to other classes that the peasantry form a class. These quotes do not provide an example of the same with respect to the proletariat, but in his other writings Marx noted that the proletariat is a true class when organized in opposition to the bourgeoisie, and creating a new society. Class, for Marx, is defined as a (social) relationship rather than a position or rank in society. In Marx’s analysis, the capitalist class could not exist without the proletariat, or vice-versa. The relationship between classes is a 172

contradictory or antagonistic relationship, one that has struggle, conflict, and contradictory interests associated with it. The structure and basis of a social class may be defined in objective terms, as groups with a common position with respect to property or the means of production. However, Marx may not be primarily interested in this definition of class. Rather, these classes have meaning in society and are historical actors only to the extent that they do act in their own interests, and in opposition to other classes. Unlike much other sociology, Marx’s classes are defined by class conflict. By way of a simple summary of the Marxist understanding of class, it is rooted in social relations of production, and cannot therefore be referred in the first place to relations of distribution and consumption or their ideological reflections. In considering the class consciousness of the proletariat, Marxists are therefore not concerned with the ideas of individual workers about their position in society (no matter how many examples are collected and classified) so much as with the following series of categories: relations of production (sale of labour-power, exploitation); conflict of workers and employers on this basis (economic struggles, trade unions, elementary political battles for economic ends); conflict at the level of class (economic struggles which merge into the conflict between classes, which is organized through the political parties and the struggle for state power); the theoretical and practical struggle to build revolutionary parties of the working class, in conflict with non-revolutionary and counter-revolutionary tendencies in the class and their reflection inside the revolutionary party. Thus, for example, a worker in the motor car industry will move through his elemental experience to an understanding of the gap between his own standard of life, income and conditions of work, on the one hand, and the mass of wealth to whose production he contributes, on the other. He will recognize an identity of interest, on this basis, with other wage-workers. ‘Combinations’ or trade unions are the adequate expression of this level of consciousness. To this ‘trade union consciousness’ may correspond to other ideological, critical views on various aspects of capitalist society: for example, such consciousness can easily co-exist with that view which lays all the stress on differences or similarities in patterns of consumption; thus, elementary socialistic propaganda of the moralizing type, and modern pessimistic speculation about the workers’ consciousness being dulled by the abundance of consumer goods, are types of consciousness which do not penetrate to the 173

basis of class differences and class struggle and therefore cannot facilitate the development of political consciousness. More ‘sophisticated’ socialist views of class-consciousness often refer to a process of more or less spontaneous political maturing through a series of economic struggles which take on greater and greater magnitude, finally posing demands which the system cannot meet. Here again the same basic error, from the Marxist standpoint, is made. In all such approaches, the class and its consciousness are seen in terms of a pre-Marxist theory of knowledge and of history. Those who put forward these ideas are unable to escape from a conception in which the separate individuals in the class move from their own working and other everyday experience to a higher level of consciousness, in this case political consciousness. In point of fact an individual worker does not arrive through his own experience at a scientific consciousness of the actual relationships at work, let alone the political relationships. It is only when a worker comes into contact with the products, in a political program and action, of Marxist theory in politics – i.e., with the outcome of theoretical works produced in the first place by non-proletarian - that he can conceive of even his own working experience in terms which go beyond those of the prevailing bourgeois ideology. These works take the essence of the experience of the proletariat as well as all developments in the economy, politics, science, the arts, etc. Only a historical view of the working class and of the theory of Marxism, in their mutual interrelations, can produce a theory of class consciousness. In the middle of the nineteenth century, Marx and Engels, working on various fields of learning, as well as analysing the experience of the struggle of the working class to that date, elaborated their theory of socialism. The theory is henceforth the essential component of the process by which the working class becomes a class ‘for itself’. As a theory, it had first to penetrate beneath the day-to-day phenomenal form of capitalist society to the social relations of production. It demonstrated that production under capitalism continues, and society develops, not through any conscious plan, but through the drive to produce surplus value, consequent upon the reduction of labour-power to a commodity, to units of ‘abstract labour’. This is the essence of the worker’s exploitation, rather than the fact, say that he does not own the cars he produces. What he produces is essentially surplus value, the augmentation of that same capital which oppresses him. 174

From these basic relationships, Marx demonstrated the reality of the history of capitalism, the way in which private ownership came to a revolutionary clash with the further development of the forces of production. For a political or socialist consciousness of the struggle against the capitalist class, there is necessary the understanding of this historical tendency of the capitalist system. This means not just an abstract knowledge of the theory of historical materialism, but the concrete analysis of, and active engagement in, the development of the class struggle in all its forms and at all levels, in the period of capitalism’s historical decline. It was” Lenin’s major special contribution to Marxism to elaborate this theory of leadership and the revolutionary party, first of all in What is to be Done? and One Step Forward, Two Steps Back. But the whole of Lenin’s work is an expression of this central concern. Later, Trotsky devoted a series of books and articles to the defence and development of the ideas worked out by Lenin (cf. particularly his In Defence of Marxism and Lessons of October). Gramsci also worked on important aspects of the relationship between Marxist theory and class consciousness, and developed further the critique of notions of spontaneity. We have seen that even though the mass of workers experience capitalist exploitation, it is necessary for a struggle to take place between their existing consciousness, on the one hand, and Marxism on the other. This struggle is conducted, as part of the struggle of material forces, by the revolutionary Marxist party. The socialist revolution, like every social revolution, occupies an entire epoch. Its outcome is decided by a series of battles in every country, requiring the developed strategy and tactics of revolutionary parties and a revolutionary international whose whole outlook and experience is guided by the theoretical foundations laid by Marx. Through the socialist revolution, men will enter ‘the realm of freedom’, says Marx. Consciousness will then not be the distorted ideology of oppressive social relations, resulting from the product’s domination over the producer, but will be the expression of the scientifically-orientated will of the collective producers, of ‘socialized humanity’. ‘The free development of each will be the condition of the free development of all.’ Already the struggle of the working class against capitalism raises this fundamental question of the relation between subject and object, thus bringing Marx to say that philosophy can realize itself only through the proletariat. Capitalism poses the question in generalized form for the whole class in its relation to the rest 175

of society, and thus demands nothing less than a revolutionary solution: ‘... the labour employed on the products appears here as the value of those products, as a material quality possessed by them.’ (Marx, ‘Critique of the Gotha Programme’) This ‘reification’, the value-form, in which a social relation between men in their most fundamental activity is transformed into a ‘thing’ standing outside and against men, is specific to the way in which the capitalist system continues the enslavement of man by man. This ‘topsy-turvy world’ becomes in sociology a world of ‘social facts’, of ‘roles’, faithfully recorded as the necessary framework of experience. Just as the working class in its struggle must reject this split between subject and object as a threat to its very humanity, so must Marxist theory penetrate beneath it and point the way to its internal contradictions and historical fate. The real relation between the working class and its product is obscured in the first place by the fact that the labour appears to have been paid for in wages, and that there the matter ends. Marx says that this illusion of wages as the proper reward for labour is the key to all the ideology of capitalism (Capital, Vol . I, p. 550). Marx exploded this illusion in theory, and thus opened the path for its being exploded in practice. That path leads from trade union consciousness (a fair day’s pay for a fair day’s work!) to socialist consciousness. Working-class consciousness is then, for Marxists, the comprehending in struggle of the process through which the proletariat develops from its identity as formed by capitalism (the mass of exploited wage-labourers, the class ‘in itself’) to the working class organized as a revolutionary force for the taking of power and the building of socialism (the class ‘for itself’). This process must be grasped dialectically, i. e., as a conflict of opposites, a real conflict between the class as it is and as the Marxist movement fights for it to be, on the basis of analysing the objective developments in society. The battle is well under way to frame discursively the current capitalist economic crisis. Is it a mere downturn, a discrete effect with identifiable causes—hapless borrowers, predatory lenders, lax overseers, greedy financiers, incompetent bureaucrats—strangely enough all already familiar to us as stock melodramatic figures? (These principals, it is true, all seem happy enough to play themselves on TV). Alternatively, is it rather the symptom of a systemic imbalance—of what the readers of this journal might prefer to call an inherent contradiction? For the moment it is nothing more or less than a rift in the smooth reproduction of society. What it will mean in the fullness 176

of time— that is, in the retrospective gaze of historical narrative—is not something we can know; but nor is it something we can dispense with knowing. What the current crisis means (in other words, what it provisionally is for us—and therefore what it effectively is, what kind of openings and closings it represents, what kind of event it might then turn out to have been) is, at the moment, up for grabs. It seems likely that Keynesianism (or what the media call the “Left,” by which they mean competent neoliberalism combined with nostalgia for social-democratic ideals) will walk away with a victory in the short term. Beyond that things get murkier. The struggle to name the crisis takes place not just between the Left and liberalism, but within the Left itself, and it is not our place here to attempt to decide among the various accounts of it, each of which carries with it its own prognosis and its own program. Nonetheless, it seems likely that the crisis is to be a long one — not in the customary sense of the prolonged downturn predicted by virtually everybody, but a crisis that will turn out to have extended into our past as well as our future; that is, a chronic imbalance that irrupts into historical time with increasing insistence. Whatever dire possibilities this entails, and these are profound, it also opens up a space in which to insist on the question of the sustainability of the system itself—a question which lurks as an anxiety beneath even the most officially confident rescue operations. From there, we turn to the failed state and the “long space” of imperialism, colonialism, and uneven development. In “The Failed State and the State of Failure,” Peter Hitchcock examines the proliferation of state collapse within the developing world following the dissolution of “actually existing socialism” in the 1990s. No doubt Marxism offers a means to comprehend the political conjunctures that culminated in the devastation of states like Somalia and Sudan; yet, Hitchcock reminds us that Marxist thought has long been marked by an inability to reconcile its critique of political economy with an analysis of state formations (or deformations). The State in Capital is not an attempt to square empirical phenomena (state failure) with theoretical abstraction (political economy), but a demonstration that the productive tension between these moments is ultimately capable of yielding a more complete understanding of each. The chiasmus invoked by the title, therefore, is in no way merely rhetorical, and instead points to impasses both within thought and in politics that are equally symptomatic of material transformations within the 177

economic world system. For Hitchcock, then, the conceptual link that underwrites this chiasmus is provided by the rise in the organic composition of capital and the concomitant falling rate of profit that ultimately leads to those economic crises described in the first volume of Capital. There Marx observes that the general rate of profit falls as the organic composition of capital—a measure of changes in its technical composition and, therefore, productivity—rises. For this reason, Marx contends, crises are intrinsic to capitalism, which requires the development of those technologies that bring about increases in the levels of productivity but drive the rate of profit down. Hitchcock subsequently offers a critique of the concept of the “failed state” as an ideology, which, eliding those structures and histories that have consigned the global south to the periphery of capitalist production, functions as a convenient justification for interventions of all stripes. At the same time, however, demystifying the notion of sovereignty alone is not enough, since, as he explains, sovereignty corresponds to objective circumstances within the world economy as well. Read in this way, the failed state is revealed to be an extension of the crisis in contemporary capitalism that renders whole populations and states superfluous within the worldwide system of commodity production. Superfluous, but for all that not nonexistent, and without, as his final sentence makes quite clear, romanticizing state failure, the failed state too being a zone of creativity. In sum, class analysis predates economics. Long before modern economics emerged, ancient Greek thinkers, for example, analysed their society by classifying people into groups by wealth. They viewed understanding the relationships between classes as crucial to improving their society and debated whether wealth should be distributed equally. While class analysis has a long history, no single definition of class has prevailed. Alongside property definitions (rich and poor), social theorists have used definitions based on the power that various groups wielded and have debated whether power is or should be distributed unequally (to elites, to kings, and so on) or equally (in various versions of democracy). For Adam Smith and David Ricardo, originators of modern economics, class analysis was central. Here is how Ricardo opened his Principles of Political Economy and Taxation (1817): “The produce of the earth ... is divided among three classes of the community ...”. He defined these classes as owners of the land, owners of capital (machines, tools, etc.), and owners of labour power who do the work. He continued, “To determine the laws 178

which regulate this distribution is the principal problem in Political Economy.” Like many thinkers before and since, Ricardo believed that understanding a society required identifying its main classes and recognizing the nature of their interdependence and conflicts. Class and class differences were the core concerns of economics at the discipline’s founding. Why then do today’s dominant economic theories—the neoclassical and Keynesian economics traditions—ignore class analysis? They do that in reaction to what Marx did with class analysis after Ricardo. Building on but also differing from Smith and Ricardo, Marx took class analysis in new directions. He also linked his new class analysis to a fundamental critique of capitalism; Smith and Ricardo had used their class analyses to celebrate capitalism. Marx was a radical who criticized his society’s unequal distributions of property and power. Like other social critics, he favoured collective ownership of property, egalitarian income distribution, and democracy as basic component of social justice. Marx inherited the ancient concept of classes based on property. He made use of Smith’s and Ricardo’s economics because he valued their class analyses. He also appreciated the power definition of class. But Marx believed that the received definitions of class were inadequate. He developed a new class analysis to equip mass movements for social justice with new insights and strategies for constructing just, egalitarian and democratic societies. In his new class analysis, Marx defined class not in terms of wealth, income, or power, but rather in terms of the surplus. He argued that in all societies, a portion of the people applied brain and muscle to produce a quantity of goods that exceeded what they themselves consumed plus what went to replenish the raw materials and equipment used up in the production process. That excess he called a surplus. Societies differed in how they organized this surplus: who produced it, who got it, and what they did with it. By focusing on the surplus, Marx had changed the very meaning of class. In his work, it referred less and less to groups of people (the rich, the poor, labour, management, the rulers, the powerless, and so on). Instead, it increasingly referred to the economic processes of producing, appropriating, and distributing the surplus that occur in every society. A “class structure” came to mean a particular set of these processes. Because the dominant class structure in Marx’s time was capitalist, it was the particular capitalist 179

processes of surplus production, appropriation, and distribution that he analysed. Capitalism is still dominant, and Marx’s analysis still applies. Here is a capsule summary. Capitalists promise workers’ wages in return for producing an output which the capitalists own, immediately and entirely. The capitalists sell the output in markets and pocket the revenues. One portion of capitalists’ revenues provides workers their promised wages, which workers then use to buy back from the capitalists a portion of what they had produced for the capitalists. After paying wages and replenishing materials used up in production, the remaining revenues comprise the capitalists’ surplus. The workers produce the surplus; the capitalists appropriate it. As Marx stressed, capitalism resembles feudalism and slavery in this organization of the surplus. Slaves produced more than they got back from their slave masters; feudal serfs kept part of their product for themselves and delivered the rest—the surplus—as rents to feudal lords. Whenever workers produce a surplus that other people get, Marx labelled that “exploitation.” Thus, in his scheme, the transitions from slavery and feudalism that established capitalism had not freed workers from exploitation. Marx’s surplus-based concept of class turned out to be a powerful analytical tool that those in the Marxist tradition have used to make sense of a wide range of political and economic questions. One fruitful area of research has focused on how changes in economic, political, and cultural conditions affect the size of the surplus pumped out of the workers, how workers and capitalists struggle over that size, and how the supplies, demands, and prices of goods and services in the market reflect and affect those class struggles. For example, falling food and clothing prices make it easier for capitalists to lower the money wages they pay and thereby extract more surplus from workers. To take another example, if political and cultural developments encourage workers’ class consciousness to grow—if they come to understand surplus and exploitation—they may reduce the surplus they deliver to capitalists or even demand the right to appropriate the surplus themselves. Marxian analysis also follows the surplus after the capitalists appropriate it. Competition among capitalists and their struggles with workers impose demands on the surplus. Thus, for example, capitalists distribute some of the surplus to pay supervisors to squeeze more surplus from workers. Capitalists distribute another portion of the surplus to attorneys to fend off lawsuits, 180

another portion to pay managers who buy new machines to overcome competitors, and so on. Class-analytical economics distinguishes workers who produce the surplus (“productive workers”) from those who provide the conditions that capitalists need to keep appropriating it (“unproductive workers” such as supervisors, lawyers, and managers). Since productive workers create the surplus that capitalists then distribute to unproductive workers, these two groups relate differently to class processes even though members of both are wage-earners. Thus, Marxian economists can ask and answer questions about class differences among different groups of workers that other economists, lacking an analysis of class in surplus terms, cannot ask let alone answer. Marxian economics also explores interactions among class processes. How surpluses get produced and appropriated shapes how those surpluses are then distributed and vice versa. For example, intensified exploitation (e.g., speed-ups, closer supervision, or cuts in paid time off) produces stress that often requires capitalists to devote more of the surplus for programs like counselling that help workers cope with alcoholism, absenteeism, and so on. Similarly, when capitalists distribute more of the surplus to buy new machines, that usually changes the number of workers hired, the intensity of their labour, and the resulting rate of their exploitation. Class analysis further shows how commodity prices, enterprise profits, and individual incomes depend on and influence class processes. For example, when workers succeed in raising their wages at the expense of capitalists’ surpluses, capitalists often respond by automation, outsourcing to cheaper workers abroad, layoffs, or still other strategies that change individual incomes, corporate profits, prices, and government tax revenues both at home and abroad. Those in the Marxist tradition also study the interactions among politics, culture, and capitalist class processes. For example, capitalists spend part of their surpluses on campaign contributions and lobbyists to shape government policies in the interests of exploiting more surplus from their workers, of beating out their capitalist competitors, and so on. Needless to say, such distributions out of the surplus have a heavy impact on politics in capitalist societies. Another example: When Wal-Mart recently found its surpluses hurt by employees’ class action suits over discrimination and unfair labour practices, it decided to distribute more of its huge surpluses to “media expenditures.” In plain English, this money aims to influence what TV 181

programs we see, how newspapers shape stories, what messages films emphasize, and so forth. Beyond Wal-Mart’s image, these distributions of the surplus help to shape the larger culture and thereby the development of the societies whose media Wal-Mart intends to “engage.” Marxian economists recognize that capitalism often yields rising output and consumption levels. But their analyses typically underscore the contradictions and injustices of capitalism’s uneven distributions of its costs and benefits and demonstrate how the economic problems of capitalism, including unemployment, waste of natural and human resources, and cyclical instability, emerge in part from the system’s particular class structure. An analysis of class in terms of surplus has also allowed thinkers in the Marxian tradition to develop an economics of post-capitalism. A postcapitalist economy begins when revolutionary economic change brings about an end to exploitation, not merely changes in its form. Then, the workers who produce the surplus will also be the people who appropriate and distribute that surplus. In a sense, productive workers become their own board of directors; they collectively appropriate their own surpluses within enterprises. Imagine that Monday through Thursday, the workers produce output. Fridays they perform three very different activities collectively: return a portion of their output to themselves as individual wages, replenish the used-up means of production, and devote what remains—the surplus—to maintain this new class structure. Such a nonexploitative class structure is what Marxian class analysis means by communism. Of course, a nonexploitative class structure is no automatic utopia; it will have its distinctive economic, political, and cultural problems, but they will differ from those of capitalism. Marxian economists argue about how class processes interact with other economic, political, and cultural processes to shape the evolution of capitalist societies. They differ as well in their analyses of nonexploitative class structures—past, present, and future. Generations of these debates have yielded a complex, sophisticated, and diverse Marxian class analytical economics that offers distinctive understandings of capitalism and the communist alternative. Yet Marxian class analysis is now largely excluded from books, newspapers, classrooms, and most people’s consciousness by the neoclassical and Keynesian economics orthodoxies. Instead of welcoming debate among alternative kinds of economics, most orthodox economists endorse the 182

silencing of alternatives generally and Marxian class analysis in particular. Neither neoclassical nor Keynesian economics argues about the production, appropriation, and distribution of surpluses. They simply deny that surpluses or class processes exist. Students mostly study neoclassical or Keynesian models of how economies work. Practical economists apply the models to statistics and statistics to the models. The public hears their conclusions not as results of one kind of (class-blind) economics but rather as the truth of economic science, applicable always and everywhere. Nonetheless, Marxian class analyses thrive despite their exclusion from the mainstream. Capitalism’s problems plus the struggles and oppositions they provoke continue to generate critics. Many find capitalism’s inequalities of wealth, income, and power unacceptable. Some find their way to Marxian class analyses focused on the social organization of the surplus as a key to the insights and strategies needed to take societies beyond capitalism.

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Chapter Seven Marxist Theory and Capitalist Class Structures Overview A taken-for-granted feature of most social science publications today, especially those about inequality, is the ritual critique of Marx and Marxism in the process of introducing theoretical alternatives intended to remedy its alleged “failures.” This practice became popular in early feminist literature: Marx and Marxists were criticized for not developing an in-depth analysis of the oppression of women, their “economism,” “class reductionism,” and “sex blind” categories of analysis. Soon after it became commonplace to assert that Marxism was also at fault for neglecting race, demography, ethnicity, the environment and practically everything that mattered to the “new social movements” in the West. As the movements died, scholarship informed by those political concerns flourished; the energy that might have been spent in the public arena found expression in academic programs (e.g., women’s studies, racial/ethnic studies) and efforts to increase “diversity” in the curriculum and the population of educational institutions. Structural causality and relative autonomy are not concepts of continuity across a homogeneous theoretical space because, while the theoretical spaces coexist, they do not ever meet. The true complexity of the Structural Marxist dialectic does not exist simply as a category of concrete history; it also exists as a category of our knowledge of that history. Within the domain of its own theoretical practice, Structural Marxism functions as the effect or outcome of an open-ended interrelationship between coherent, meaningful, yet distinct levels of explanation whose necessary reciprocity is, paradoxically, guaranteed by the ultimate impossibility of their convergence. Introduction Marxism is not ‘sociology’. It only appears to be so, because, from the point of view of every other particular section of the intellectual division of labour-philosophy, economics, history, history of ideas, etc.-Marxism goes beyond their defined subject-matter, insisting that the real content of each of 185

them is to be found in the contradictory totality of social economic relations from which flow the forms of activity and thought to which the separate disciplines address themselves. Marxist theory therefore develops by proving the ‘concreteness’ of its abstractions against the apparent concreteness (really abstractness, because abstracted from the changing forces which produce them) of uncritically accepted empirical reality. It does this through a struggle to change that reality, capitalism, by placing itself politically in a relation of political consciousness, leadership, with the working class. That means the struggle to build revolutionary parties able to lead the working class to power. Indeed, Marxism is this struggle: it is not sociology or an abstract theoretical system of any kind. The focus of this chapter is on the role of the transnational capitalist class architecture (TCC) in and around the architecture involved in the production and marketing of iconic buildings and spaces, in global or world cities. The TCC is conceptualized in terms of four fractions: (1) Those who own and/or and control the major transnational corporations and their local affiliates (corporate fraction). In architecture these are the major architectural, architecture-engineering and architecture-developer-real estate firms. In comparison with the major global consumer goods, energy and financial corporations, the revenues of the biggest firms in the architecture industry are quite small. However, their importance for the built environment and their cultural importance, especially in cities, far outweighs their relative lack of financial and corporate muscle. (2) Globalizing politicians and bureaucrats (state fraction). These are the politicians and bureaucrats at all levels of administrative power and responsibility who actually decide what gets built where, and how changes to the built environment are regulated. (3) Globalizing professionals (technical fraction). The members of this fraction range from the leading technicians centrally involved in the structural features of new building to those responsible for the education of students and the public in architecture. (4) Merchants and media (consumerist fraction). These are the people who are responsible for the marketing of the capitalist class architecture in all its manifestations. Obviously, there is some overlap between the membership of these fractions. In sum, many global and aspiring global cities have looked to iconic architecture as a prime strategy of urban intervention, often in the context of rehabilitation of depressed areas, especially the Third World. The attempt to identify the agents most responsible for this transformation, namely the TCC, and to explain how 186

they operate, suggests that deliberately iconic architecture is becoming a global phenomenon, specifically a central urban manifestation of the cultureideology of consumerism. Historical Hindsight After the Second World War, corporate enterprises helped to create a wealthy class in society which enjoyed excessive political influence on their government in the US and Europe. Neoliberalism surfaced as a reaction by these wealthy elites to counteract post-war policies that favoured the working class and strengthened the welfare state. Neoliberal policies advocate market forces and commercial activity as the most efficient methods for producing and supplying goods and services. At the same time they shun the role of the state and discourage government intervention into economic, financial and even social affairs. The process of economic globalization is driven by this ideology; removing borders and barriers between nations so that market forces can drive the global economy. The policies were readily taken up by governments and still continue to pervade classical economic thought, allowing corporations and affluent countries to secure their financial advantage within the world economy. The policies were most ardently enforced in the US and Europe in the1980s during the Regan–Thatcher–Kohl era. These leaders believed that expanding the free-market and private ownership would create greater economic efficiency and social well-being. The resulting deregulation, privatization and the removal of border restrictions provided fertile ground for corporate activity, and over the next 25 years corporations grew rapidly in size and influence. Corporations are now the most productive economic units in the world, more so than most countries. With their huge financial, economic and political leverage, they continue to further their neoliberal objectives. There is a consensus between the financial elite, neoclassical economists and the political classes in most countries that neoliberal policies will create global prosperity. So entrenched is their position that this view determines the policies of the international agencies (IMF, World Bank and WTO), and through them dictates the functioning of the global economy. Despite reservations from within many UN agencies, neoliberal policies are accepted by most development agencies as the most likely means of reducing poverty and inequality in the poorest regions. 187

There is a huge discrepancy between the measurable result of economic globalization and its proposed benefits. Neoliberal policies have unarguably generated massive wealth for some people, but most crucially, they have been unable to benefit those living in extreme poverty who are most in need of financial aid. Excluding China, annual economic growth in developing countries between 1960 and 1980 was 3.2%. This dropped drastically between 1980 and 2000 to a mere 0.7 %. This second period is when neoliberalism was most prevalent in global economic policy. (Interestingly, China was not following the neoliberal model during these periods, and its economic growth per capita grew to over 8% between 1980 and 2000. Neoliberalism has also been unable to address growing levels of global inequality. Over the last 25 years, the income inequalities have increased dramatically, both within and between countries. Between 1980 and 1998, the income of richest 10% as share of poorest 10% became 19% more unequal; and the income of richest 1% as share of poorest 1% became 77% more unequal (again, not including China). The shortcomings of neoliberal policy are also apparent in the welldocumented economic disasters suffered by countries in Latin America and South Asia in the 1990s. These countries were left with no choice but to follow the neoliberal model of privatization and deregulation, due to their financial problems and pressure from the IMF. Countries such as Venezuela, Cuba, Argentina and Bolivia have since rejected foreign corporate control and the advice of the IMF and World Bank. Instead they have favoured a redistribution of wealth, the re-nationalization of industry and have prioritized the provision of healthcare and education. They are also sharing resources such as oil and medical expertise throughout the region and with other countries around the world. The dramatic economic and social improvement seen in these countries has not stopped them from being demonized by the US. Cuba is a well-known example of this propaganda. Deemed to be a danger to ‘freedom and the American way of life’, Cuba has been subject to intense US political, economic and military pressure in order to tow the neoliberal line. Washington and the mainstream media in the US have recently embarked on a similar propaganda exercise aimed at Venezuela’s president Chavez. This over-reaction by Washington to ‘economic nationalism’ is consistent with their foreign policy objectives which have not changed significantly for the past 150 years. Securing 188

resources and economic dominance has been and continues to be the USA’s main economic objective neatly executed by corporate interests. As a result of corporate and US influence, the key international bodies that developing countries are forced to turn to for assistance, such as the World Bank and IMF, are major exponents of the neoliberal agenda. The WTO openly asserts its intention to improve global business opportunities; the IMF is heavily influenced by the Wall Street and private financiers, and the World Bank ensures corporations benefit from development project contracts. They all gain considerably from the neo-liberal model. So influential are corporations at this time that many of the worst violators of human rights have even entered a Global Compact with the United Nations, the world’s foremost humanitarian body. Due to this international convergence of economic ideology, it is no coincidence that the assumptions that are key to increasing corporate welfare and growth are the same assumptions that form the thrust of mainstream global economic policy. However, there are huge differences between the neoliberal dogma that the US and EU dictate to the world and the policies that they themselves adopt. Whilst fiercely advocating the removal of barriers to trade, investment and employment, The US economy remains one of the most protected in the world. Industrialized nations only reached their state of economic development by fiercely protecting their industries from foreign markets and investment. For economic growth to benefit developing countries, the international community must be allowed to nurture their infant industries. Instead economically dominant countries are ‘kicking away the ladder’ to achieving development by imposing an ideology that suits their own economic needs. The US and EU also provide huge subsidies to many sectors of industry. These devastate small industries in developing countries, particularly farmers who cannot compete with the price of subsidized goods in international markets. Despite their neoliberal rhetoric, most ‘capitalist’ countries have increased their levels of state intervention over the past 25 years, and the size of their government has increased. The requirement is to ‘do as I say, not as I do’. Given the tiny proportion of individuals that benefit from neoliberal policies, the chasm between what is good for the economy and what serves the public good is growing fast. Decisions to follow these policies are out of the hands of the public, and the national sovereignty of many developing 189

countries continues to be violated, preventing them from prioritizing urgent national needs. Below we examine the false assumptions of neoliberal policies and their effect on the global economy. Economic Growth? Economic growth, as measured in GDP, is the yardstick of economic globalization which is fiercely pursued by multinationals and countries alike. It is the commercial activity of the tiny portion of multinational corporations that drives economic growth in industrialized nations. Two hundred corporations account for a third of global economic growth. Corporate trade currently accounts for over 50% of global economic growth and as much as 75% of GDP in the EU. The proportion of trade to GDP continues to grow, highlighting the belief that economic growth is the only way to prosper a country and reduce poverty. Logically, however, a model for continual financial growth is unsustainable. Corporations have to go to extraordinary lengths in order to reflect endless growth in their accounting books. As a result, finite resources are wasted and the environment is dangerously neglected. The equivalent of two football fields of natural forest is cleared each second by profit-hungry corporations. Economic growth is also used by the World Bank and government economists to measure progress in developing countries. But, whilst economic growth clearly does have benefits, the evidence strongly suggests that these benefits do not trickle down to the 986 million people living in extreme poverty, representing 18 per cent of the world population (World Bank, 2007). Nor has economic growth addressed inequality and income distribution. In addition, accurate assessments of both poverty levels and the overall benefits of economic growth have proved impossible due to the inadequacy of the statistical measures employed. The mandate for economic growth is the perfect platform for corporations which, as a result, have grown rapidly in their economic activity, profitability and political influence. Yet this very model is also the cause of the growing inequalities seen across the globe. The privatization of resources and profits by the few at the expense of the many, and the inability of the poorest people to afford market prices, are both likely causes. 190

Free Trade Free trade is the foremost demand of neoliberal globalization. In its current form, it simply translates as greater access to emerging markets for corporations and their host nations. These demands are contrary to the original assumptions of free trade as affluent countries adopt and maintain protectionist measures. Protectionism allows a nation to strengthen its industries by levying taxes and quotas on imports, thus increasing their own industrial capacity, output and revenue. Subsidies in the US and EU allow corporations to keep their prices low, effectively pushing smaller producers in developing countries out of the market and impeding development. With this self-interest driving globalization, economically powerful nations have created a global trading regime with which they can determine the terms of trade. The North American Free Trade Agreement (NAFTA) between the US, Canada, and Mexico is an example of free-market fundamentalism that gives corporations legal rights at the expense of national sovereignty. Since its implementation it has caused job loss, undermined labour rights, privatized essential services, increased inequality and caused environmental destruction. In Europe only 5% of EU citizens work in agriculture, generating just 1.6% of EU GDP compared to more than 50% of citizens in developing countries. However, the European Common Agricultural Policy (CAP) provides subsidies to EU farmers to the tune of £30 billion, 80% of which goes to only 20% of farmers to guarantee their viability, however inefficient this may be. The General Agreement on Trade and Services (GATS) was agreed at the World Trade Organization (WTO) in 1994. Its aim is to remove any restrictions and internal government regulations that are considered to be “barriers to trade”. The agreement effectively abolishes a government’s sovereign right to regulate subsidies and provide essential national services on behalf of its citizens. The Trade Related agreement on International Property Rights (TRIPS) forces developing countries to extend property rights to seeds and plant varieties. Control over these resources and services are instead granted to corporate interests through the GATS and TRIPS framework. These examples represent modern free trade which is clearly biased in its approach. It fosters corporate globalization at the expense of local economies, the environment, democracy and human rights. The 191

primary beneficiaries of international trade are large, multinational corporations who fiercely lobby at all levels of national and global governance to further the free trade agenda. Liberalization The World Bank, IMF and WTO have been the main portals for implementing the neoliberal agenda on a global scale. Unlike the United Nations, these institutions are over-funded, continuously lobbied by corporations, and are politically and financially dominated by Washington, Wall Street, corporations and their agencies. As a result, the key governance structures of the global economy have been primed to serve the interests of this group, and market liberalization has been another of their key policies. According to neoliberal ideology, in order for international trade to be ‘free’ all markets should be open to competition, and market forces should determine economic relationships. But the overall result of a completely open and free market is of course market dominance by corporate heavyweights. The playing field is not even; all developing countries are at a great financial and economic disadvantage and simply cannot compete. Liberalization, through Structural Adjustment Programs, forces poorer countries to open their markets to foreign products which largely destroys local industries. It creates dependency upon commodities which have artificially low prices as they are heavily subsidized by economically dominant nations. Financial liberalization removes barriers to currency speculation from abroad. The resulting rapid inflow and outflow of currencies is often responsible for acute financial and economic crisis in many developing countries. At the same time, foreign speculators and large financial firms make huge gains. Market liberalization poses a clear economic risk; hence the EU and US heavily protect their own markets. A liberalized global market provides corporations with new resources to capitalize and new markets to exploit. Neoliberal dominance over global governance structures has enforced access to these markets. Under WTO agreements, a sovereign country cannot interfere with a corporation’s intentions to trade even if their operations go against domestic environmental and employment guidelines. Those governments that do stand up for their sovereign rights are frequently sued by corporations for loss of profit, and even loss of potential profit. Without this pressure they would 192

have been able to stimulate domestic industry and self-sufficiency, thereby reducing poverty. They would then be in a better position to compete in international markets. Deregulation Access to new markets and foreign resources is not enough. To fulfil the corporate agenda of increasing profits, a corporation must seek out favourable regulatory conditions that reduce costs and increase productive capacity. Regulations restrict profitability. Thus, the corporate call for liberalization is accompanied by a demand for deregulation in all sectors of commerce nationally and globally. Removing these restrictions allows corporations to have greater access to and use of resources and labour, and to move freely across borders. Whilst countries such as many in South America and Asia offer just such conditions, corporations actively engage in the influencing and changing of domestic and international law that can potentially create these favourable conditions universally. In order to achieve this, corporations have, over the past 150 years, secured their political influence in local, national and international governance structures and regulatory bodies. Regulations and regulatory agencies exist to monitor corporate activities, protect human rights and safeguard the environment. In recent years corporate lobbying has seen governments cut budgets for regulatory agencies and regulatory laws have been repealed, allowing corporations free reign to operate with fewer public safeguards. Overall, regulatory bodies have shifted their focus from protecting the consumer to protecting the industry, as the neoliberal model is progressively assimilated at all levels of government and economic policy in developed countries. Enron lobbied very effectively to deregulate the electricity market, then to deregulate the trading of energy futures, then to prevent the disclosure of futures contracts, then to repeal the regulated-auction requirement. This enabled it to trade without revealing any trade or financial details to regulators or the public. It proceeded to make record profits through illicit activities which soon lead to its collapse. The economic collapse in Argentine in 2001 is also widely attributed to extensive deregulation, enforced by the IMF and World Bank’s neoliberal development policies, which destroyed industry and caused mass unemployment. Regulating corporate activity 193

protects the public. Removing these regulations protects corporate profits. This battle for legal protection is rigged in favour of corporations, even though they represent a fraction of the global population. Corporations are able to have their own way on these matters as they have almost limitless financial resources to rally to their cause and close relationships with the political elite. Global deregulation has created the transnational corporation, as business operations are increasingly moved abroad in the search of cheaper labour, tax incentives and less red tape. In effect, unemployment rises in the affluent countries that lose jobs, while corporations outsource these same jobs to sweatshops in developing countries where wages are relatively insignificant, employment standards are often irrelevant and there are very low environmental standards. Thus corporations increase their profits. In order to win back these corporations and create more jobs, the US and other countries also lower their standards and cut regulation. Thus the logical conclusion of liberalization and deregulation is a race to the bottom, where the lowest possible standards are sought after and legislated for globally, with little regard for individual workers, employment conditions, the community or the environment. Deregulation, therefore, also encourages monopolization. Corporations, whilst falsely quoting the free market and open competition that Adam Smith envisaged, form virtual monopolies through acquisitions and mergers. This allows them to manage competition through strategic alliances that exist between all major players. As such, an estimated 60% of US GDP is provided by the largest 1000 corporations, and the remaining 11 million companies account for the other 40% of GDP. Privatization Privatization is the transfer of ownership or control over the production and distribution of state-owned resources or services to private companies. This process is essential to increasing corporate profit and opportunity, and is currently the focus of much attention. The progressive privatization of the global commons has been the primary focus of neoliberal or free market policy since the 1980s. Until this very recent period in history, public resources were largely in the hands of local communities and nations who would distribute their benefits throughout society without an overriding profit imperative. With key commodity, agricultural and manufacturing 194

markets already dominated by a handful of corporations, privatization has opened up a seemingly endless array of profitable opportunities. Agricultural land, airwaves, water sources, energy sources, healthcare, banking, indigenous knowledge, plants, seeds and even ideas are now increasingly controlled and supplied by corporations for profit. Of great concern is the recent privatization of education. The US education system is valued at around £800 billion, and it is estimated that 10% of this will be in corporate hands within the next 8 years. In the UK, 59 learning academies are replacing existing schools, most under direct sponsorship from the corporate community who provide substantial donations to the government. All these academies “give sponsors and governors broader scope and responsibility for ethos, strategic direction and challenge”. As a result, they have a substantial emphasis on business, enterprise and commerce, and are not accountable to the public in the same manner as ordinary schools. This is just one example of the corporate takeover of public services in the UK as part of the Private Finance Initiative (PFI). Government spin has ensured that the PFI is never referred to as privatization, although it plainly hands over substantial control of public services and resources in exchange for corporate financial aid. Neoliberals claim that privatized services are more efficient than those run by the state. They believe that market competition and corporate efficiency can drive prices down for consumers. These arguments are used as a sales tool to convince the public and their governments, and privatization is rapidly advancing throughout the developed and developing world. However, these assumptions are basically incorrect and often irrelevant when considering the functions and purposes of public utilities. Essential services are provided to citizens by their governments to meet basic public welfare needs such as the provision of energy, water and healthcare. The provision of these services is a human right, and whether they are profitable is not a concern for the vast majority of people around the world. There are many relevant arguments against privatization, and little empirical evidence that privately run services are either more efficient or better value to their customers. For example, privatization usually creates a natural monopoly, removing the possibility of competition that can benefit the consumer. In many sectors, such as energy, multinational corporations hold the reigns to the market, and through their strategic alliances they control critical aspects of the market such as price – again removing any 195

theoretical market benefits. And when consumer prices are reduced or a corporation tries to increase profit levels, it often comes at the expense of decent wages, labour standards and the environment. The resulting economies of scale and efficiency gains come at too high a cost to society. The main issues are those relating to human rights, democracy, ownership, control and accountability. The provision of essential services is a human right, although many in the developing world go without basic services. Where services are available, it is in the community’s interest that an accountable government body manages the utility. However, corporations are not accountable to the public, only to shareholders – whose priority is profit, not service. The profit motive does not influence government facilities; it can run services at a loss if the social need demanded it. If a government cannot provide a service efficiently, they may be voted out of office by the public. The issue of water privatization remains one of the most controversial, affecting even the most affluent countries. The UK, for example, is currently experiencing legal restrictions on public water usage, whilst the operators, Thames Water, waste 894 million litres a day through unfixed leaks alone. The company avoided regulatory penalties whilst announcing a 31% rise in pre-tax profits which totalled £346.5m. Water bills are expected to increase on average by 24% by 2010. This case highlights another point – corporations will not reinvest their profits in order to address a crisis. State owned suppliers on the other hand can reinvest profits to quickly improve standards. Developing Countries At the global level, the coercive influences of the WTO, IMF and World Bank have left little option for many developing countries other than to allow progressive privatization of their public goods and services. Through trade agreements and structural adjustment programs, the international financial institutions have secured a steady income for their corporate counterparts. Indeed, these ‘emerging markets’ are currently the prime targets for corporations who increasingly operate on a transnational scale, whilst maintaining strategic relationships with influential governments. Foreign investment in this way results in the foreign repatriation of profit – taking money out of a local system. This reduces industry in the country and 196

undermines local social and economic development. In this situation, citizens are forced into dependency upon foreign companies and their goods and services, completing the vicious cycle. Understandably, the privatization of basic services has mobilized widespread public protest - most famously in Bolivia in 2004/2005, which eventually led to the government rejecting the private water contract. Water privatization in Bolivia was enforced in 1997 as a condition to a loan by the World Bank, in partnership with private interests such as the French multinational Suez. Mass protest was sparked by a serious failure to extend water and sewage services to tens of thousands of impoverished families, and connection costs that exceeded more than half a year’s income for the average Bolivian. This raises the question: ‘how can corporations profit from those who have little or no money to spend?’ Impoverished communities all over the world cannot afford to pay for water services; many live on less that 1 dollar a day. Almost one-fifth of the planet’s population lacks access to safe drinking water and 40 per cent lack access to basic sanitation. It is not profitable for a corporation to control water distribution in areas of deprivation; they have little incentive to supply to those most in need if they cannot pay for the service. Publicly owned and managed water facilities, with their primary focus on meeting welfare needs and not profit, is best placed to undertake this service. The lobby for privatization often cites the presence of ‘corrupt’ governments as a major reason for the lack of global access to essential resources such as water, suggesting that in such cases government efforts must be superseded by private provision. However, it stands to reason that these ‘corrupt’ governments are not best placed to negotiate massive private contracts with transnational corporations, many of which command much larger economies than the developing country. These government failures must also be viewed in historical perspective and in terms of a country’s current level of impoverishment. Further analysis often reveals more complex causes to this impoverishment. These range from unique environmental conditions, such as the lack of proximity to water in sub-Saharan Africa, to the cumulative effect of colonization, political interference and unfair trade structures imposed by dominant countries. In such countries, corporations can often reinforce corrupt practices. Commenting on a Transparency International survey, IPS 197

reported in 2002 that “International conventions have not stopped multinational corporations from trying to secure valuable contracts by bribing government officials in the world’s emerging economies— especially in the arms and defence, and public works and construction industries” and that such bribery was on the increase. In such cases international attention must focus on providing foreign assistance to create more efficient state controlled public services. When essential services are privatized, a two-tier system is often created. Prices are set by the market and those who cannot afford to pay, go without. This is simply unacceptable when 45% of the global public struggle to survive on $2 a day. Poverty reduction and development can only occur when these basic services, which are often unavailable in poverty stricken areas, are guaranteed to all. Government commitment to provide basic human needs was affirmed in the UN Universal Declaration of Human rights, and as such governments must uphold their commitment and not succumb to neoliberal pressure to relinquish essential services to market forces and private interests. In addition, neoliberal ideology embodies an outdated, selfish model of economy. It has been formulated by the old imperial powers and adopted by economically dominant nations. Given the state of the global trade and finance structures, wealthy countries can maintain their economic advantage by pressurizing developing countries to adopt neo-liberal policies—even though they themselves do not. Understandably, many commentators have described this process as economic colonialism. The ultimate goal of neoliberal economic globalization is the removal of all barriers to commerce, and the privatization of all available resources and services. In this scenario, public life will be at the mercy of volatile market forces, and the extracted profits will benefit the few. The major failures of these policies are now common knowledge. Many countries, particularly in Latin America and Africa, are now openly defying the foreign corporate rule that was forced upon them by the international financial institutions. In these countries, economic ideologies based on competition and self-interest are gradually being replaced by policies based on cooperation and the sharing of resources. Changing well-established political and economic structures is a difficult challenge, but pressure for justice is bubbling upward from the public. Change is crucial if the global 198

public is to manage the essentials for life and ensure that all people have access to them as their human right. As a trap, foreign indebtedness and foreign capital were proclaimed as crucial resources to launch durable growth and thus overcome poverty, surely? In the 1960s and 1970s, the policies at the root of foreign indebtedness embodied no special concern for the poor. That was a time when the trickle-down ideology prevailed among governments and corporations in both the North and the South, and also among multilateral organizations. The belief that capital accumulation and economic growth should first entail income concentration until the economy reached a point where the benefits of that accumulation and growth would “naturally” trickle down to the majority, was widely publicized. The priority was to create an attractive environment for foreign investment, which was proclaimed as one of the main engines of economic development. Countries were also urged to take private loans from Northern commercial banks, instead of resorting to bilateral agencies. The unpopular nature of these policies and the resulting inequality generated widespread social unrest. In order to control this social unrest, the Northern governments, particularly the US, showed no hesitation in promoting military regimes. In Latin America in the 1970s all but four countries had military governments, abiding by the gospel of the free market and the need for foreign investment and loans to fulfil the “development dream”. These were precisely the governments which, lured by the claims of international bankers and the grandiose rhetoric of multilateral agencies, decided to rely on foreign loans to promote huge infrastructure and industrial enclave projects. The terms of those loans included flexible interest rates, which in fact meant that a growing proportion of the country’s financial equilibrium now depended on the monetary policy of those with strong “currencies. The explosion of interest rates as a result of a unilateral decision of the US Federal Reserve Bank to multiply its prime rate by three in the late 1970s, hastened the foreign debt crisis, since the largest part of the debt of most developing countries was in US dollars. Such moves raised the amount to be paid so steeply that most of the Southern economies faced the choice of either declaring themselves insolvent or renegotiating their debts generally on very disadvantageous conditions.

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The International Monetary Fund (IMF) recipe The IMF was mobilized to negotiate agreements with the insolvent countries which included the re-scheduling of debt payments in exchange for certain reforms. The reforms were baptized “adjustment policies”. Adjust to what? To the need to keep on paying the interests on their debt in time - this was the priority of the official, private and multilateral creditors. Adjustment to the dominant interests of foreign creditors was the policy to be followed. And nearly all indebted countries of the Southern hemisphere accepted this condition. Those who sought alternative terms of negotiation were ostracized. Adjustment was identified with two phenomena: price stabilization and re-orienting investments toward the development of the export sector. Based on a neo-classical and monetarist approach, the IMF attributed high inflation rates to excessive money supply chasing too few goods. Central to its stabilization strategy was, therefore, to reduce the level of money circulating in the domestic economy by making credit expensive and by reducing wages. Adjustment implied the contraction of the domestic economy, not only to free up investment for the external sector, but also to force imports downwards, thus increasing the chances of trade surpluses. Governments were forced to cut their spending, with serious impacts on wages, employment and the services they provided. In turn, they would provide incentives, subsidized credit and tax exemptions to the export sector. Each country’s economy was taken abstractly as an isolated unit, in order to be stimulated to rush forth onto international markets with its exports, thus capturing growing amounts of foreign exchange which would then be used to service its foreign debt. Over the years, this economic path wrecked national economies, increased their vulnerability to international imbalances and generated high social costs. It also created explicit resistance against the IMF, seen by the public as an undesirable intruder which weakened national governments. In many Southern capitals, public demonstrations against the IMF and its conditionalities shook the certainties of bilateral and multilateral economic advisers. Behind them was the evidence that adjustment policies were hurting the majority and the sacrifices they imposed did not seem to lead to growth in their domestic economies in the short or medium run, as promised. This type of adjustment ignored the urgent need to find a durable solution to the 200

debt burden of the most highly indebted countries. Its designers refused to face the fact that a crisis of indebtedness involving too many debtors has no sustainable solution that does not engage the creditors in paying part of the costs. As a result, a vicious cycle of indebtedness was established, whereby the more the debtor countries pay, the more they owe. Total debt-related transfers (debt service minus disbursements) between 1987-94 were equivalent to US$224 billion. The debtor countries’ trade deficit in this period reached US$547 billion, while total payments were US$1,445 billion. This meant that the debtor countries largely depleted their foreign exchange reserves and took new loans not for development purposes, but to pay old debts. By 1995 total debt had reached, or put more appropriately, was allowed to reach almost US$2 trillion. How sensitive have adjustment policymakers and implementers been to this reality? Is it not fair to ask why UNICEPs estimate that half a million children die every year as a direct result of the debt crisis does not seem to be taken seriously by creditors and multilateral agencies? It took government and multilateral policymakers a long time to realize that economic stabilization and adjustment generated unbearable social costs, which had to be addressed simultaneously. By the early 1990s however, the World Bank had already adopted overtones of neo-keynesianism in its approach to adjustment. While maintaining its stance on the virtues of “free market” economics, it publicly acknowledged that the market was powerless to deal with various aspects of human and social needs; it adopted poverty alleviation as its “overarching goal”; and it brought back the idea that the state had a role to play in compensating for the shortcomings markets. Economic and social impacts As a result of the debt crisis the South became a net exporter of capital to the North. This dynamic led to massive decapitalization of Southern economies and a growing impoverishment of their societies. The conceptual division between the domestic and the external sectors of their economies materialized in policies which stimulated the external sector while stifling production for the domestic market and effective demand. Debtor countries scrambled to compete with one another in international markets. The result was a massive collapse of the prices of their exports and a profound 201

deterioration of their terms of trade. Export-oriented growth obliges the economy to adjust to global demand, which is led primarily by the industrial countries’ demand. It makes the economy vulnerable to the ups-and-downs of international markets and imposes a production pattern which responds inadequately to the needs of the country’s majority. This process has also contributed to the acceleration of income concentration on a global scale as never before. According to UNDP (1993; 1994: 70), control over the global income by the /richest 20% increased from 70.2% to 76.3% (6.1 percentage points) between 1960 and 1980, to 82.7% in 1989, and 84.7% in 1991. The most recent UNDP (1995) report is adamant in its diagnosis: “Widening disparities in economic performance are creating two worlds - ever more polarized.” This extreme concern with correcting balance of payment imbalances without looking at the structure and the dynamics of the whole economy/society relationship resulted in a shortsighted one-size- fits-all policy that failed to identify the range of factors which determine the problems to be overcome in each country. All this has been aggravated by the lack of transparency and participation in the process whereby SAPs are designed. Looking at the evolution of Latin America and the Caribbean, a region where most countries are undergoing SAP-related reforms, explicitly or implicitly, we find that between 1991 and 1995 inflation collapsed from 418.9% in 1992 to an estimated 25% in 1995; yet, between 1991 and 1995 economic growth remained below an average of 3% per year. Per capita GDP grew by an average of only 1% per year. The debt stock grew by a total of 27.7%, exports grew 63.3%, imports 78.3%. This meant that the debt was serviced at the expense of international reserves and loans to pay loans, rather than from a favourable trade balance (the balance on current account was systematically negative, having reached US$50 billion in 1994). The trend toward higher wages based on steep rises in productivity, which were prevalent in the region in the early 1990s, came to a halt, while the region’s open unemployment rate rose to 7.4% in 1995. The latter pushed a growing number of workers onto the informal economy. In Brazil, workers employed in urban informal activities in 1993 totalled 11.6 million, or 18% of those employed; up from 9.7 million two years earlier. Other international agents are also involved in shaping structural reforms in the South and integrating developing countries into the global market economy. One of the most influential is the World Trade Organization 202

(WTO). A major issue being promoted by Northern governments and WTO officials is the liberalization of trade and investment as an effective means of promoting faster integration into the global economy. Myths are passed to the public as if they were eternal truths. Many points should be made about those issues, among them: x Liberalization of trade cannot be imposed at any cost; protectionism has been a useful tool for Northern countries both to industrialise and to shield their own industries and markets from external vulnerability; free trade is beneficial to developing countries only in certain circumstances. x Trade liberalization needs to take into account each country’s ecosocial development goals, and not only short term goals related to balance of payment problems and the need to attract foreign capital. Whenever such investment is judged beneficial over time, it should be carefully planned and implemented in a timely way so as to maximize gains for the nation and the people, and to minimize social and environmental costs. x The multilateral investment agreement being pushed so strongly by Northern governments and transnational corporations aims at protecting foreign investment from regulation and controls, something like setting up a global soccer cup with no rules and regulations. x Neither trade nor investment liberalization seem to address the central problems of development, namely poverty eradication, social and human development and safeguarding the environment. x There are at least two different ways of integrating the global economy: one is a subordinate way, whereby the determining factors of the country’s development are external to the country’s economy. The other is a self-reliant way, in which the country’s human and material resources are the determining factor, its self-development as a nation is the priority and the development of external ties is related to complementarity, cooperation and genuine mutual benefits. Presenting the first way as the only option implies the quiet but effective abolition of the nation’s and the people’s sovereignty and its replacement with the sovereignty of global corporations. Neo-liberal challenges

adjustment

and

globalization:

opportunities

and

The world is undergoing its most pronounced phase of economic liberalism. It has brought enormous technical progress and greater control of 203

the productive process and no longer has any major countervailing adversaries on the horizon. This situation provides a historic opportunity for world capitalism to prove that it is capable of generating sustainable development, in addition to promoting the well-being of humankind and the earth. Globalization has a global and not only a local or national, reach, and encompasses all dimensions of human existence, not just in the economic and financial spheres. In fact, the challenge is to accomplish a cultural, psychological and spiritual transformation as much as socio-economic, political and institutional change, involving each and every human person and community in working for another globalization, centred on the human being and her/his communities, on cooperation and on solidarity. Let us set out what is viewed as the main contradictions of competitive globalization and the main challenges they raise for humanity today and in the future. These could be seen as goals and targets to inspire different stabilisation and adjustment policies. Because they shift the development reference from global agents and markets to people, communities and collectives locally, nationally and regionally, they also serve as alternative frameworks for adjustment projects that point towards another globalization. 1. Development centred on transnational corporations with their headquarters in industrial countries, and on the illusion of the free market, when in reality competition is more often than not restricted to the large and the powerful, now has the opportunity to prove its worth. It tends, however, to prove incapable of meeting the superior yearnings of the human person and society for the development of their potential. Competitive globalization has taken the conflict between capital and labour to all parts of the world and to the limits of its elasticity. At the same time, it is providing the material basis for workers of the world finally to unite, instead of fighting each other, around the ideal of a responsible humankind in solidarity. The challenges here consist of: x initiating, within oligopolized global capitalism, a process of development centred on human communities, based on associative, cooperative and self-managed initiatives; a process that will reduce as much as possible the dependence of its subjects with regard to the macro-markets and their agents; a process that will, ultimately, reconstruct globalization on the basis of the diversity of human communities and cultures spread all over the planet; 204

x integrating this local development and empowerment horizontally so that each community becomes interconnected in a complementary and creative manner, and in solidarity, with other communities that form the county/commune, municipality, state or province, nation, regions and ultimately our common international community, without having to renounce its own identity and its own path to development. 2. Systems of smaller-scale and more flexible production are nourishing. Labour time and human energy are in decreasing demand in tasks related to mere survival. At the shop floor, such progress demands workers who are better informed and educated, operating in more flexible and less monotonous ways, with greater control over the work and less hierarchy. A trend towards systems of co-management and even co- property is gathering momentum. The potential for the emancipation of labour with regard to waged employment is becoming visible; the recognition of human labour as communicative and creative praxis - rather than just as a means of survival and as the very core of truly human development, is spreading. On the other hand, the private appropriation of the mounting gains in productivity is leading to a sharp increase in the rate of worker exploitation. Many enterprises invest all their surpluses in technical and organizational innovation in order to face increasingly stiff competition. The accelerated elimination of jobs and the very slow creation of new job opportunities for an expanding labour force is generating grave tensions. Workers’ power to organize is being reduced, as well as the capacity of the state to impose rules and regulations protecting the worker and the environment, to create and manage taxes, to invest and to finance welfare programs. In developing countries these trends are aggravated by regressive stabilization policies and neo-liberal adjustment programs. The challenges include: x establishing a global process of democratization wherein the benefits of technical and organizational progress and increases in productivity are shared, by means of micro as well as macro level measures, such as the sharing of labour time, the recognition, for the purpose of remuneration of various forms of non-paid work, such as the domestic labour of women, the establishment of a citizen’s pay independent of waged labour, and others; x democratizing and strengthening local, national, regional and global institutions, capable of guaranteeing the implementation of codes of conduct, regulation and sanctions on individual economic agents, in particular TNCs,

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so that they respect a global social contract, of a level above them, centred on the well-being and the sustainable development of society and the human person. 3. The spectacular growth of global finance and the increasingly important role of institutional investors are the main forces behind the globalization of markets. In consequence, states have lost their power to regulate financial capital and can no longer effectively stimulate productive investment, control speculation-related inflation, durably stabilize exchange rates and favour the growth of savings. The logic of responding first to the corporate interests of their stockholders has led some financial institutions to justify all forms of speculation, tax and capital evasion, including illegal transfers of profits, laundering of money earned through drug trafficking, arms deals and other immoral activities. The globalization of financial flows is one of the most prominent features of neo-liberal competitive globalization, because it steals from states and societies their power to finance their own development. It shifts to speculation and unproductive uses resources that are indispensable for human and social development, and deepens the social trough between those who possess capital and those who live by the sale of their labour power. In short it can often substitute speculation for enterprise. The challenges here include: x generating participatory and self-managed savings and investment schemes, centred on communities and municipalities, that can be geared to finance their own development initiatives; x preserving and democratizing the capacity of the central government, states and municipalities to finance the development of their respective ecosystems and converting finance once more into a function of productive investment, instead of an end in itself; x establishing an international agency empowered to regulate the global financial system and to place controls on massive speculation and on illegal and corrupt activity; x establishing a regulatory global system as well as global juridical institutions empowered to impose morals on the financial system and respect for the priorities of people’s development. 4. Technical progress in telecommunications has enhanced the potential for the democratization of communications and for the establishment of relations among persons, communities, peoples and nations that go beyond 206

commercial relations. Such progress facilitates an exchange of experiences, of potentials and resources, as well as solidarity in aspirations and struggles. It also provides for the expansion of the species consciousness which aggregates and unifies its diversity without sacrificing it. On the other hand, progress has expanded the consumerist culture, eroding national cultures and traditional values. The increasingly global and concentrated ownership of much of the means of communication not only inform about events, but also contribute to determine their course. In its trail the very culture of capital is becoming global, centralizing and homogenizing, thus reducing the meaning of human life to the acts of consuming and accumulating material wealth. The challenges include: x developing an eco-social praxis based on a paradigm alternative to that of unlimited economic growth and consumption. This should promote a willingness to limit accumulation and material consumption to the level of ENOUGH—both through respect of the limits of nature, and through awareness that the more excessive the material possessions of individuals and nations, the lesser their capacity to develop ethically and spiritually; x using advances in telecommunications to create new means of enhancing interconnections between indivuduals and peoples, the aim being to use these tools to create two-way communications between citizens, communities, cooperatives and workers groups. 5. Global power is now restricted to some hundreds of TNCs, a small number of Northern governments and multilateral institutions. TNCs have a global power beyond that of any other institution. They lead technical progress and are broadening their market access to the world’s population, be it as consumers or as producers. However, they have persistently ignored the social implications of their actions. They have a non-democratic nature, they are not accountable for their decisions and actions to global society. Moreover, they continually press for the cancelation of regulations in national and global markets, so they can freely damage the means of survival and the environment of large parcels of the world’s population. Their lobbying has been so powerful as to influence state policy and weaken or eliminate useful state institutions, such as regulatory agencies in developing countries. Locally, the globalization imperatives of TNCs are undermining communities and families. 207

The multilateral institutions have a dualistic nature. They have an indispensable supranational role to facilitate dialogue, negotiation and regulation. On the other hand, they are dominated by the industrial countries, who have stronger voting power, and are vulnerable to the influence of TNCs. Together, they act as the informal quasi-global economic government. They have their own way of promoting a strategy of competitive globalization, in particular the Bretton Woods institutions, i.e. the World Bank (1988;1993) and IMF whose neo-liberal stabilization and adjustment programs, are more influential on Southern than on Northern countries. Among these challenges are: x reconstituting society—defined as the totality of citizens, whose majority consists of persons living off their own labour—gradually and persistently, as the new subjective agent of history and of its own development subordinating private agents to the resulting socially identified priorities and giving the state and multilateral agencies a truly public and democratic content; x promoting self-organisation and self-management of communities and societies around their own development plans; linking them with other communities and societies in a complementary and cooperative manner, along with assisting them in negotiating their plans with public authorities and private enterprises without losing control of their project; x redefining the role of the state, gradually removing it from being the dominant political agent, and promoting it to a mere orchestrator of the development of the economy- society as a whole; a similar role should be attributed to the multilateral agencies in their respective geopolitical spheres; x establishing codes of conduct for transnational enterprises at national and international level, binding them to rules that guarantee fair production and trading practices and avoid restrictive market practices, tax evasion, illegal financial outflows, corruption and other common practices. 6. Political liberalism offers greater freedom of expression for a larger sector of the population than other systems have done. But its foundations— the right to disagree and alternate representation—are insufficient to fulfil the people power project that affirms that all power emanates from the people in all spheres. And even these rights are jeopardized by the compulsion of consensus and political stability at any cost. The result is the strengthening of the approach which equates the raison d’être of the market 208

with that of the state, thus producing new social divisions, feeding ethnic or territorial conflicts and amplifying corruption at state and enterprise levels. The challenges include: x making globalization a process that democratizes not only the right of opinion, but also the rights and duties of full citizenship for all members of national as well as the global society; x generating processes of participation that, on the one hand, reestablish each human person and community as the subject of her/his own development and, on the other, cultivate and integrate the diversity of capacities, expectations and aspirations into a movement for redirecting markets, instilling a democratic content in the state, and rebuilding global society from the diversity of its local and the national components. In fact, it is worth noting that the growth in complex emergencies in the 1990s while often diagnosed as rooted in local/national ethnic and other conflicts should instead also be assessed in terms of the impact of global economic and other policies on the societies affected. Unless the external forces of globalization which contribute to domestic divisions are simultaneously tackled the chances are that conflict situations may re-emerge with regularity and all to tragic consequences. The negative effects of globalization, as well as the structural problems within nations need to be tackled together to overcome the poverty of countries and the polarisation of the world. Marx and Capitalist Class Architecture Karl Marx (1818-1883) spent his entire adult life constructing theories of historical change based around the notion of historical materialism which he developed in response to the historical idealism associated with the German philosopher G.W.F. Hegel. In the Marxist theory the central aspects of human behaviour involved the need to produce goods and services in order to survive and so Marx looked for the motor of historical change in the process of production. This led him to argue that all societies could be described in terms of their mode of production and that changes in their mode of production brought about by contradictions between the so-called forces of production and the social relations of production. Thus Marx claimed in some of his early work that historical change involved the transformation of modes of production from primitive 209

communism to ancient society to feudalism to capitalism and that the final future transformation from capitalism to socialism and subsequently communism was historically inevitable based as it was on scientific laws of historical development which Marx claimed to have discovered. However in later life he argued that the transition from capitalism to socialism might well vary according to the different circumstances operating in different countries suggesting that he no longer saw his theories as uncovering general processes of transition which were identical and scientifically inevitable in all capitalist countries. Marx noted also that in Asia a different sequence was possible in that Primitive communism had been transformed into the Asiatic mode of production. In this study we shall concentrate on the original Marxist analysis of the c19th capitalist class structure, on more recent developments of Marxist class theories and on the evaluation of these theories. In so doing we shall refer also to Marxist theories of the state and briefly to non-Marxist approaches to the analysis of class structure. Concerning our globalization and class battles the global class architecture was engineered by the neoliberal ideologues. Under neoliberalism, the beginnings of police-state tactics and a police-state mentality began to emerge. With general prosperity abandoned, and society rapidly deteriorating, a strong nation state—in terms of police power—was important to the success of neoliberalism. Part of the police-state mentality was the belief that constitutional civil liberties were a “bureaucratic nuisance” that hampered police investigations and contributed to crime. Popular opinion began to revile the very protections that had been so greatly valued by the earlier citizens who had fought and died to achieve them. The denigration of politicians and government—a central theme of neoliberal propaganda—further eroded public support for democratic institutions. Citizens were applauding the weakening of the only institutions which could possibly represent their interests effectively. Let us now take a look at some of the elite thinking that went into the formulation of this bold neoliberal architecture. Recall that the Council on Foreign Relations was the elite think tank which had been responsible for designing the post-war architecture. CFR has continued to be highly influential in planning circles. One of the most prominent spokesmen for the CFR is Harvard history Professor Samuel P. Huntington. Huntington has published several pivotal articles and books which serve to promote elite 210

regime changes in terms which appeal to wider leadership circles in government and industry. In May 1975, a remarkable report was made public—the Report of the Trilateral Task Force on Governability of Democracies. In the book Trilateralism, Alan Wolfe discusses this report. He focuses especially on the analysis presented by Huntington in a section of the report entitled the Crisis of Democracy. Permit me to paraphrase from Wolfe’s discussion, which begins on p. 295. Huntington tells us that democratic societies “cannot work” unless the citizenry is “passive”. The “democratic surge of the 1960s” represented an “excess of democracy”, which must be reduced if governments are to carry out their “traditional policies”, both domestic and foreign. Huntington’s notion of “traditional policies” is expressed in the following passage from the report: To the extent that the United States was governed by anyone during the decades after World War II, it was governed by the President acting with the support and cooperation of key individuals and groups in the executive office, the federal bureaucracy, Congress, and the more important businesses, banks, law firms, foundations, and media, which constitute the private sector’s “Establishment.” As you can see, Huntington’s analysis was in complete agreement with the one which has been developed in this article. He concurs that citizen docility (“passivity”) is central to the success of the elite regime - if “traditional policies” are to be carried out. In other words, docility is necessary if the interests of elite capital (“important businesses, banks” and the rest of the “Establishment”) are to be served. His words also re-confirm that policy making is indeed an elite process, centred at the top echelons of U.S. government. Even the title “Crisis of Democracy” was unusually candid - as the “crisis” was one being faced by the elite, not by the public or by government - democracy itself was the crisis. Huntington was accurately describing the fact that the democratic process was becoming a hindrance to elite objectives, and he was recommending that the “excess of democracy” be “reduced”. Huntington’s remarks were surprisingly candid—he was giving us a rare glance into innercircle thinking. Huntington takes it for granted that the purpose of government is to support capitalist growth - democracy is only useful if it serves that purpose. As Wolfe expressed it: 211

The warning that comes across clearly from a reading of The Crisis of Democracy is that some people with access to the centre of power now understand that the change in popular attitudes toward government will necessitate a rapid dismantling of the whole structure of liberal democracy. As we have seen, neoliberalism indeed did lead to “a rapid dismantling of the whole structure of liberal democracy”. Five years before Reagan & Thatcher unleashed the neoliberal assault the clear signals about the agenda were already visible - if you knew where to look. As it turns out, Huntington has published subsequent material, which forecasts in some detail later dramatic regime changes. His book The Clash of Civilizations will prove to very useful in section 3 when we investigate the meaning of President George Bush’s “New World Order”. The changes caused by neoliberalism were extensive and all-pervasive. They were revolutionary changes and they transformed not only British and American society but they also exerted pressure on other nations to adopt similar policies in order to remain competitive. But as dramatic as it was, the neoliberal revolution did not result in modern globalization. Under neoliberalism, trade barriers remained as an acceptable tool for governments to use to protect local industry. The core of the globalization agenda is about radical free trade - the elimination of all restrictions on international trade and investment. Under globalization, transnational corporations are the centre of power and national boundaries are irrelevant to corporations and investors. Marx and C19th Capitalism Marx and his colleague Engels believed that the transition from feudalism to capitalism and the associated rise to economic and political dominance of the Bourgeoisie would result in the decline of conservative traditions and to increasing economic efficiency as capitalist principles were increasingly applied on a national and international scale. Marx and Engels believed that capitalism should be allowed to develop because it would create the scientific, technological and economic potential necessary for higher living standards for all but capitalism also contained the seeds of its own destruction because it was also a grossly unfair, unjust system in which the poor were exploited at every turn by the rich and whose organisation actually prevented the full development and effective use of tits massive economic 212

resources in the interests of all of the members of capitalist societies. Marxist criticisms of capitalism and his ideas provided much of the theoretical backing for the revolutionary movements which seized power in Russia, China, Cuba and elsewhere. The main elements of the Marxist analysis of 19th Century capitalism may be summarized as follows. Bourgeoisie and Proletariat Capitalist societies can be divided into two major social classes : the Bourgeoisie and the Proletariat. The Bourgeoisie own the means of production [ the land, factories, machinery, raw materials and commercial organizations which are used to produce goods and services] whereas the Proletariat own little or no property and work for wages . In Marx’ best known class theory intermediate classes did exist but they were either fragments of the two main classes or remnants of feudalism which would disappear in a process of class polarisation which would see their members either rise into the Bourgeoisie or fall into the Proletariat. However, in his later work Marx recognized that the growth of joint stock companies would increase the number of white collar jobs which could be seen as middle class although he still did not analyse this grouping in any detail. The Bourgeoisie and the Proletariat are dependent upon each other in that the Bourgeoisie need the Proletariat to produce the gods and services from which the Bourgeoisie derive their profits while the Proletariat are dependent on the Bourgeoisie for the provision of work and income without which they cannot survive. Alternatively, the relationship between the two classes is based also upon exploitation and conflict. The Proletariat (the working class) are poorly paid, work long hours in dangerous conditions doing repetitive mind-numbing work causing what Marx described as Alienation; they are poorly housed, poorly educated and in bad health. They are exploited in the sense that they are paid in wages less than the value of the goods and services which they produce which enables the Bourgeoisie to derive large profits from the production process at the expense of the proletariat who earn low wages exactly because the Bourgeoisie are exploiting them in order to secure large profits. It follows according to Marx that class conflict between the Bourgeoisie and the Proletariat is endemic in the capitalist system because it is in the interests of the Bourgeoisie to restrict wages and increase the intensity of 213

work in order to increase profits while the Proletariat wish to increase wages and reduce the intensity of work in order to improve their working and living standards. This fundamental conflict between the Bourgeoisie would sometimes erupt into large scale strikes and demonstrations but at other times remain relatively muted but Marxists believe that ultimately the Bourgeoisie and the Proletariat are set on a collision course destined to result in the abolition of the capitalist system. Diagrammatically we can summarize the relationships between the Bourgeoisie and the Proletariat as follows:

The Bourgeoisie [the capitalist class] own the means of production and hire the Proletariat for low wages

The relationship between the Bourgeoisie and the Proletariat is based upon mutual dependence yet the Bourgeoisie exploit the Proletariat paying them less than the value of what they produce. The diametrically opposed aims of the Bourgeoisie and the Proletariat result inevitably in class conflict.

The Proletariat [the working class] are property less and must work for the Bourgeoisie in order to earn a meagre living.

The property-owning Bourgeoisie are the economically dominant class, and, also, since they are said to exercise direct and indirect influence over the state (which may, however, act with some relative autonomy) they are also a politically dominant ruling class. Their dominance rest partly on their capacity to use force, but more significantly, because they can engineer the consent of the Proletariat partly by granting political and economic concession to them, and partly by the operation of a socialization process 214

which disseminates a powerful ruling class ideology. Ultimately however, the Proletariat will develop their own class consciousness, rise up overthrow the Bourgeoisie and the Capitalist State and usher in a classless, socialist utopia. x

Economic Base and Superstructure Marx also distinguishes between the Economic Base and the Superstructure of capitalist society. In capitalist society the Economic Base is such that production is increasingly organized in large companies with the aim of securing profits which in turn result in the exploitation of the Proletariat in the interest of the Bourgeoisie. By the Superstructure Marx means the political, legal, religion and education systems, the mass media and the organization of family life and Marx then argues that the Economic Base of society will heavily influence the organization and operation of its Superstructure and that the institutions of the Superstructure will operate so as to maintain the dominance of the capitalist class within the economic base. Thus in some AS Sociology Modules we have already seen how in Marxist theories of the Family, the Mass Media and the Education Systems these institutions help to sustain the capitalist economy, and the State also is assumed to operate in the interests of the Bourgeoisie, although perhaps with some relative autonomy. The Marxist theory of the relationship between Economic Base (or Infrastructure) and Superstructure may be outlined diagrammatically as follows:

Superstructure of Society The economic base of society determines or heavily influences the nature of the superstructure although for some theorists the superstructure has considerable autonomy vis a vis the economic base and in some cases may help to determine it. There is great theoretical controversy here regarding the extent to which the Economic Base determines/influences the organisation of the Superstructure!

E conomic Base This aspect of Marxism has aroused considerable theoretical controversy in that the extent to which the economic base determines the organization 215

and operation of the superstructure in Marxist theories is a little uncertain. The theories may be taken to imply that the economic base determines the nature of the superstructure or that the economic base heavily influences the superstructure and critics have argued that the former version of the theory exposes Marxism to the criticism that it is excessively economic determinist and understates the extent to which institutions of the superstructure may operate independently of the economic base . Later neo-Marxist theorist such as the Italian Marxist Antonio Gramsci have emphasized the extent to which that influences may well flow from the superstructure to the economic base as well from the economic base to the superstructure. Disregarding for the time being the controversies surrounding the issue of economic determinism it is argued in the Marxist view that under the conditions of 19th Century Capitalism the institutions of the superstructure helped to sustain the Bourgeoisie’s ownership and control within the Economic base via the following processes: x The Bourgeoisie were the economically dominant class as a result of their ownership and control of the means of production but they were also a politically dominant Ruling Class because virtually all of the political leaders were drawn from the Bourgeoisie and espoused the ideologies of conservatism or liberalism which ensured that they would pass legislation sympathetic to the continued economic domination of the capitalist class to which they themselves belonged. x Although some limited reforms were introduced in the course of the 19th century which gradually improved working class working and living conditions. none of these reforms challenged the dominance of the capitalist class and Marxists [and others] argued that such reforms as were enacted were designed primarily to reduce the likelihood of more radical challenges to the capitalist system as a whole.. x Thus, for example laws were passed which strongly protected private property and very heavy penalties were imposed for minor thefts, with little account taken of mitigating circumstances of possibly extreme poverty. x Meanwhile the Proletariat were inadequately unrepresented within the political system. Some working class males were granted the vote as a result of the Third Reform Act of 1884 but even after gaining the vote they had to hope that their interests would be represented fairly and adequately by the Conservative or Liberal parties since MPs of the Independent Labour Party 216

and the Labour Representation Committee [a precursor of the Labour Party] were not elected to Parliament until 1893 and 1900 respectively and the Labour Party itself was not founded until 1918. Universal male suffrage was granted in 1918 and universal female suffrage was granted in 1928. x Trade unions for most of the c19th remained relatively weak partly because of legislation which reduced their abilities to organize and defend their members. x The economic and political dominance of the Bourgeoisie was sustained further because powerful processes of political socialization involving family, school, church and mass media spread a ruling class ideology which indoctrinated the Proletariat to accept that despite the class inequalities generated by capitalism it nevertheless offered the best hope of material progress for the Proletariat and that it was both inevitable and desirable that economic and political power should be monopolized by the Bourgeoisie and its political representatives who alone possessed the wisdom to organise the system in the interests of all, including the poor. x The poor, therefore should “know their place” and accept it with good grace. Marx, however, believed that the ruling class ideology created a false class consciousness among the proletariat which prevented them from recognizing the source in the capitalist system itself of their exploitation. x However Marx also believed that the Proletariat would eventually see through the lies of the ruling class ideology, be transformed from a “class in itself to a class for itself ,throw of their false class consciousness and overthrow the Bourgeoisie through revolutionary means and initiate the transition from capitalism to a future classless socialist [and subsequently communist ]utopia in which the class exploitation and human alienation associated with the capitalist system would be ended and all citizens would have the opportunities to develop their human capacities to the full. x

Economic Base and Superstructure: An Example from the Marxist Analysis of Formal Education Systems Marxist analyses of 20th Century formal education systems have drawn on the general Economic Base- Superstructure model to suggest that the organization of formal education systems [=part of the superstructure ] helps to sustain the dominance of the capitalist class within the economic base. The Marxist Althusser distinguishes between Ideological State Apparatuses (ISAs) and Repressive State Apparatuses (RPAs). Repressive State 217

Apparatuses such as the police, courts , penal system and the military will be called upon to sustain the powers of the capitalist class by force if the ISAs fail to do so by means of persuasion. ISAs include the family, the church , the mass media and the formal education system and these are institutions which act to communicate to us not a set of norms and values which are based upon consensus because they are beneficial to the individual members of society but to communicate a ruling class ideology which benefits the rich powerful Bourgeoisie at the expense of the poorer less powerful Proletariat. Althusser argues that along with other institutions of the superstructure schools as ideological state apparatuses operate in ways designed to sustain ideological support for the capitalist system, the capitalist state and the capitalist class structure. With regard to formal education it is claimed that the Hidden Curriculum operates to restrict criticism of the capitalist system and to prepare upper, middle and working class pupils for their future employment roles in mainly upper, middle and working class jobs respectively thereby helping to ensure the reproduction of capitalist class structures. Very similar arguments are used by Marxists Bowles and Gintis (1976) in their study in Schooling in Capitalist America where they produced a socalled correspondence theory in which the organization of the education system corresponds in several ways to the organization of the capitalist industrial system and helps to prepare students for entry into that system. Acceptance of school authority and rules encourages uncritical acceptance in adult life of authority, laws and pro-capitalist norms and values in later life; and the schools’ emphasis on hard work, ambition, individual competitiveness, punctuality, and the necessity to perform uninteresting tasks and even the undesirability of critical thinking helps to create exactly the type of worker demanded by the capitalist system. Furthermore, Bowles and Gintis argued that the often heard claims that pupils are evaluated and graded meritocratically and therefore fairly via the use of tests and examinations is simply a gigantic myth designed to mislead pupils into a belief that when individuals are allocated to poorly paid and well-paid jobs respectively this too is fair and meritocratic so that any criticism of either the school system or differences in employment incomes is unjustified. Also, ironically, the fact that a minority of working class pupils are educationally successful and upwardly socially mobile creates a false impression of fairness yet for Marxists, the capitalist system is grossly unfair 218

and the education system helps to prevent people from realizing this and trying to change it. Once again the formal education system helps to ensure that the capitalist class structure is reproduced. Bowles and Gintis have provided a powerful Marxist critique of formal education systems but their work also attracted important criticisms. Thus it was claimed that many individual teachers aim to treat their pupils fairly and equally and to provide opportunities for them to develop their capacities to the full; that teachers are not necessarily strong supporters of the capitalist system so that the Hidden Curriculum could in principle be designed to support critical thinking; and that even if the Hidden Curriculum was organized to create unthinking submissiveness there was absolutely no guarantee that pupils would internalize submissive attitudes as indicated in studies by Paul Willis (1977) and others that the absolute opposite was more likely. However the Marxist analysis can also be extended by applying the concept of “relative autonomy” to the analysis of formal education systems leading to the conclusions that that formal education systems are more independent of the capitalist economic system than Marxists such as Bowles and Gintis suppose but that they are nevertheless constrained by the overall structures of capitalism. For example, teachers may have some relative autonomy to encourage critical thinking and collaborative rather than competitive attitudes among their students but these same teachers at the same time are constrained by examination syllabi and the pressures to ensure examination success to limit their discussions of crucial social issues and to emphasize individualistic and competitive approaches to learning so that their autonomy is only “relative” in the sense that it must operate within the constraints of an education system which is itself heavily geared to the requirements of capitalism. The period 1989-1990 brought more revolutionary shifts in the post-war global architecture of capitalist class relations. Two very significant historical events occurred during that period - the collapse of the Soviet Union and the Desert Storm. Even before the dust had settled from these events, President George Bush announced on global television that a new world order had been established. What he meant by that was not immediately obvious, but the meaning became clear as subsequent events unfolded - under U.S. leadership and with the support of massive propaganda. Desert Storm represented a revolutionary shift in international relations. 219

It set a precedent which was to pave the way for later interventions in Albania, Bosnia, and eventually Yugoslavia and East Timor. The kind of “order restoring” interventions which the U.S. had formerly carried out unilaterally - and which were often opposed by global public opinion - were now being carried out on behalf of global public opinion. In addition, other Western powers and NATO started playing a bigger role. Pax Americana continued to provide the framework of world order, but within that framework other Western powers were assuming a partnership role in maintaining by force the system of collective imperialism. Meanwhile, the collapse of the Soviet Union offered major new opportunities to the West. The Soviet realms were abandoning socialism, and looking to the West for a vision of their new future. Big Western investors and transnational corporations stood to realize immense profits out of development projects in that vast region. A world-class investment vehicle was in the process of being launched. And the Soviet deterrent to U.S. aggression was to be no more—the New World Order was to have a free hand on the world scene. The build-up to Desert Storm witnessed an unprecedented global propaganda campaign aimed at building widespread support for intervention. Lies were spread about babies in Kuwait being taken from their incubators and left to die. Saddam Hussein—who had been favoured by the West during the decade-long war with Iran—was rapidly transformed by a demonization campaign into a reincarnation of Hitler himself. The U.S. government blocked all attempts at effective negotiation before the war, and the invasion was launched at the earliest moment permitted by the UN authorization—despite (or because of) the fact that a Sovietbrokered deal seemed about to bear fruit. The evidence was clear that the U.S. government wanted this intervention very badly, although the motivation was not apparent at the time. The only thing that was clear was that some hidden agenda was being pursued. The public agenda was all about freeing Kuwait, but the actual execution of Desert Storm went far, far beyond that limited objective. As the Storm progressed - utterly destroying Iraq as a modern nation - the public objective of the campaign gradually shifted from freeing Kuwait to ousting Saddam from power. The way was being prepared for Bush to make historic new-world-order announcement. Once again, by means of dual-agenda propaganda, top U.S. leadership had accomplished their own hidden agenda - in this case the establishment of a 220

new global regime of international “order”. The sanctity of national sovereignty - which had been taken very seriously by the UN’s general membership ever since the UN was formed was to be rapidly abandoned by this new world order. Sovereignty was becoming conditional. If a nation met with the disapproval of the “international community” then it was now to be subject to forceful disciplining by means of Western military power. And what the “international community” approved or disapproved of - it turned out - was whatever the corporate-owned international media said it approved or disapproved of. Since the 1970s the West had funded and supported genocide in East Timor. But only when the mass media started covering events there did “international opinion” take note. The basic outline of Bush’s new world order became eventually obvious from events. However a much more comprehensive perspective was provided for us, once again, by Samuel P. Huntington. In the summer of 1993 he published an article in Foreign Affairs entitled The Clash Of Civilizations. In 1997, he elaborated his vision further in the book, The Clash Of Civilizations And The Remaking Of World Order. In this book he divides the world into eight “civilizations,” and provides a detailed description of the dynamics planned for the new global regime. On-going kultur-kampf (culture clash) is to be expected. When Huntington’s Crisis Of Democracy was published, little public note was taken. Its prophetic significance only became apparent five years later with the launch of the neoliberal revolution. In the case of Clash Of Civilizations there was again a delay of four years from the time the initial article was published before its full importance was noted. Soon after the publication of the book version, the significance of Huntington’s vision was duly noted in the mainstream press: The Clash of Civilizations, the book by Harvard professor Sam Huntington, may not have hit the bestseller lists, but its dire warning of a 21st century rivalry between the liberal white folk and the Yellow Peril— sorry, the Confucian cultures—is underpinning the formation of a new political environment. To adapt one of Mao’s subtler metaphors, Huntington’s Kultur-kampf is becoming, with stunning speed, the conceptual sea in which Washington’s policy-making fish now swim. ( Guardian Weekly, April 6, 1997). Within regions, according to the kultur221

kampf paradigm, there are to be “core states,” which are to have a special role in maintaining order within “their” regions. As the US “authorizes” Turkish incursions into Iraq - and as Turkish attempts to join the EU are regularly rebuffed - we can see Turkey being excluded from the Western “civilization” and being guided into a core-state role in the Islamic “civilization.” Between regions, says Huntington, we are to expect perpetual “fault-line conflicts,” which are to be resolved through the auspices of “non primary level participants.” This is what has been happening in Yugoslavia, where allegedly neutral NATO is “resolving” the fault-line conflict between the Muslim and Christian “civilizations.” The media reported on Serbian “ethnic cleansing,” but in the larger picture it was the West that has engaged in ethnic cleansing. By destabilizing and fragmenting Yugoslavia, the West could then assign the various pieces to their appropriate “civilizations.” Huntington’s core states are nothing really new, but are simply a renaming of what have been traditionally called Western “client states.” Managing “fault line conflicts”, for supposedly humanitarian reasons, becomes the excuse for intervention, in place of “defending strategic interests” or “resisting communism,” - but maintaining collective Western domination continues to be the underlying agenda. Under this regional regime there is little danger of Armageddon, nor is there any hope of a final peace. On-going managed conflict is to be the order of things, providing dynamic stability, with the price in suffering to be paid by the people of the non-Western “civilizations.” George Orwell’s 1984 becomes especially prophetic at this point in history, not only because of its kultur-kampf-like warfare scenarios, but also because of the rapid “Orwellian” shifts in public rhetoric that have accompanied globalization and the onset of its new world order. The latest propaganda cloak—masking the regime of kultur-kampf imperialism—is called humanitarian intervention. Clinton made it all quite clear, when he spoke to NATO troops in Macedonia in July 1999. In this momentous announcement, amounting to a global Monroe Doctrine, the US—along with its faithful assistant, NATO—declares its right and its intention to forcefully intervene in the affairs of any nation, whenever and wherever it chooses: “We must win the peace. If we can do this here...we can then say to the people of the world, ‘Whether you live in Africa or Central Europe or any 222

other place, if somebody comes after innocent civilians and tries to kill them en masse because of their race, their ethnic background or their religion and it is within our power stop it, we will stop it.’” - “The Clinton Doctrine”, from the Washington Post, reprinted in The Guardian Weekly, July 1-7 1999, p. 31. Who can resist the idea of taking action to prevent genocide? The problem with the tidy little formula is that the same folks who decide where to intervene are the ones who run the global system that intentionally creates the conditions which are destabilizing societies globally and making pretexts for intervention plentiful. It is the USA which installed or supported Noriega, Marcos, Pinochet, the Shah, the Ayatollah, and Saddam Hussein. It is the West that sold Saddam weapons of mass destruction. It is the West that supported Suharto and profited from his crony-capitalist regime and East Timor repression. It is the US and Germany who intentionally promoted the destabilization of Yugoslavia over the past decade and repeatedly encouraged Milosevic, giving him enough rope so they could later hang him with it. A band of arsonists has successfully usurped the role of global fire crew. They start fires all over the world on a routine basis, and whenever they want to intervene militarily, all they have to do is turn the media spotlight on the results of their own diabolical handiwork. Not only that, but when they do intervene, as we’ve seen in Iraq and Yugoslavia, they don’t put out the fire: they simply burn down the rest of the house. Ethnic repression is going on all over the world, including within staunch American allies such as Turkey and Israel, and Most Favoured Nations such as China. But only when the corporate mass media gets around to ‘revealing’ such a circumstance does it become a ‘humanitarian crisis’. Huntington’s civilizational paradigm gives Western nations a plausible justification for pursuing their self-interest on the world stage, as they play their “natural role” as one of the contending “civilizations.” It gives Western forces a “right” to intervene, as “disinterested parties” adjudicating “faultline” conflicts or protecting “humanitarian” interests. The kultur-kampf mythology reeks of Western hypocrisy, and its implicit imperialism is disastrous for most of the world in terms of human rights abuses, disease and starvation, and lack of self-determination. Nonetheless, the doctrine appears to offer an effective propaganda strategy for maintaining Western hegemony under globalization into the new millennium. 223

Marx and the Transition from Capitalism to Socialism In Marxist theory all transitions from one mode of production occur because of the development of fundamental contradictions between the forces of production and the social relations of production so that in order to analyse the transition from the Capitalist mode of production to the Socialist mode of production we have to analyse the possible conflicts between the forces of production and the social relations of production in some detail. According to Marx the conflict between the forces of production and the relations of production involves the following elements: 1. The capitalist system is owned and controlled by the Bourgeoisie whose main aim is production for profit rather than production for need. This means that the social relations of production (ownership and control) prevent the full utilisation of the highly developed forces of production. which could be used to meet the real needs humanity but are instead used to increase the profits of the Bourgeoisie at the expense of the Proletariat. 2. Since the Proletariat are inevitably exploited under capitalism they do not receive a fair share of the goods and services produced via the forces of production. 3. Capitalism results inevitably in periodic unemployment meaning that the factories and workers are often idle despite the obvious need for increased production so that, again the full potential of the forces of production is not being realised under capitalism because of the social relations of production which exist under capitalism. 4. Capitalism results in alienation which means that the full potential of the workers cannot be realised under capitalism. Thus, in summary, according to Marx, the social relations of production under capitalism prevent the full development of the forces of production under capitalism and the contradictions between the forces of production and the social relations of production will result ultimately in the abolition of the capitalist mode of production. The following factors lead to the acceleration of the revolutionary process. 1. The development of capitalism results in increasing urbanisation and the concentration of workers in large factories means that the political organisation of the Proletariat becomes easier. 2. Marx suggested in his Immiseration theory that capitalism would result in increasing poverty which would accelerate the decline of false class 224

consciousness and the development of revolutionary class consciousness among the Proletariat. 3. Marx suggested that under capitalism production would be increasingly concentrated among large companies and smaller companies and individual traders would be forced out of business meaning that intermediate social classes would contract and the overall class structure would increasingly be simplified into two great classes--- the Bourgeoisie and the Proletariat. This was Marx’ so-called Polarization thesis which implied that even former members of the Bourgeoisie might develop revolutionary class consciousness. However in his later theories Marx noted that the growth of joint stock companies would lead to the growth of managerial positions, implying the growth of a middle class, and it has been suggested that Marx did not sufficiently analyse the implications of the growth of the middle class for his theory of revolution. We shall return to neo-Marxist analyses of the middle class later in this document. 4. The revolution was to be followed by a series of stages leading to the eventual achievement of the classless, communist society. First would come the revolutionary dictatorship of the proletariat in which the capitalist state would be taken over by the leaders of the proletariat in order to restrict the powers of the opponents of revolution to organise counter-revolution. Private property would be abolished and the revolution would then enter its socialist phase in which resources would be distributed from each according to his/her ability to each according to his/her work which implied that economic equality would still be necessary to provide economic incentives. This would be followed by the gradual transition from socialism to communism in which resources would be allocated from each according to his/her ability to each according to his/her need implying a very high level of economic equality of outcome. 5. The abolition of private property meant that in the Marxist scheme social classes had been abolished and this would mean that the state [which under capitalism was an instrument of class rule] could wither away although there would still be a need for some form of administrative apparatus to organise society at a national level. Thus according to the Marxists the revolution would eventually lead to the creation of a classless, very equal, free, prosperous and cooperative society. However Marx also suggested that that in countries such as America and England where liberal democracy seemed likely to flourish a parliamentary 225

road to socialism might be possible , a view supported by Marx’ colleague Engels who outlived Marx by many years and witnessed what he believed to be the increasingly significant developments of liberal democracy in the late C19th and early C20th. Further important theoretical and practical issues arose in the case of the Russian revolution where important modifications to the Marxist theory were suggested by Lenin who argued that in the case of Russia it would be necessary to create a small vanguard party of revolutionaries to advance the revolution rather than to wait for the further development of capitalism to create the conditions for revolution as suggested in orthodox Marxist theory. Lenin and others did create such a party [the Russian Social Democratic party] and Lenin’s faction of this party [the Bolsheviks] did play a central crucial role in advancing revolution in Russia. In practice, however, the actual outcome of the Russian Revolution was not as hoped for in the Marxist schema. Far from withering away the USSR state quickly came to be a One Party state dominated by the Bolshevik Party and subsequently by its leader Stalin, who replaced Lenin as leader of the Bolsheviks in 1924, who soon came to believe that it would be necessary to purge thousands of his opponents from the Bolshevik Party via imprisonment or execution .The USSR economy was at this time extremely underdeveloped and Stalin embarked upon the collectivization of agriculture and rapid industrialization programs in an attempt to modernize the economy all of which resulted in severe hardship for the Russian people as collectivization led to reduced food output and industrialization resulted in the allocation of resources to the construction of factories and machinery rather than consumer goods. The erosion of liberal democratic civil liberties and millions of deaths under the autocratic leadership of Stalin dealt a severe blow to the credibility of Marxist ideology but Marxists argued that Stalinism in practice bore no relationship to how Socialism was supposed to operate in theory. It is clear, that the USSR did industrialize very rapidly but at the cost of great hardship to its people in the short and medium term whose political rights were very limited and living standards poor although party leaders and officials continued to enjoy a privileged life style as a result of their political power. In such situations, some theorists argued that the abolition of capitalism in the USSR had in fact resulted in the creation of a “New Class” of senior Communist Party officials who ruled at the expense of the still very 226

disadvantaged USSR working class. The Stalinist political system was reformed to some extent after Stalin’s death but it was clear that by the 1980s further reforms were still necessary. However when leader Gorbachev began to introduce more significant reforms in the late 1980s rising expectations in the USSR resulted in the so-called “End of Communism “ and the disintegration of the USSR in the 1990s. Furthermore the apparent failure of the Soviet system and the implementation by the nominally Communist Chinese leadership of capitalist- style economic reforms were seized upon especially by opponents of Marxism as evidence that socialism and communism had become discredited impractical ideologies and that the capacities of liberal capitalism to generate higher living standards and to guarantee civil liberties absent in former Communist regimes demonstrated the fundamental superiority of liberal capitalism relative to Communism. By the late 1980s the prospects of socialist revolution in Western capitalist countries appeared virtually nonexistent , a situation which continues in 2009 as, for example, the UK electorate awaits its opportunity to choose three main political parties none of which offers a remotely socialist program. As a matter of consistency, I have omitted any consideration of the implications of Marxist theory for the development of “Third World” socialism although it is very clear that modifications to Marxist theory in which the rural peasantry rather than the urban proletariat would play an important revolutionary role had very important implications for example in China, Cuba and Vietnam. It is clear also that insofar as the more affluent sections of the working classes in advanced capitalist countries enjoy relatively high living standards they do so partly as a result of the gross exploitation of workers in “Third World” countries again suggesting the ongoing relevance of the Marxist analysis of international capitalism. Of course, neo-liberal supporters of globalization would continue to deny the validity of Marxist analyses of the globalization process arguing instead that the benefits of neo-liberal economic organization will eventually trickle down to the poor. In sum, to understand class and class struggles, it is important to recognize that Marx (Rummel 1977: Chapter 5) viewed the structure of society in relation to its major classes, and the struggle between them as the engine of change in this structure. His was no equilibrium or consensus theory. Conflict was not deviational within society’s structure, nor were classes functional elements maintaining the system. The structure itself was a 227

derivative of an ingredient in the struggle of classes. His was a conflict view of modem (nineteenth century) society. The key to understanding Marx is his class definition.1 A class is defined by the ownership of property. Such ownership vests a person with the power to exclude others from the property and to use it for personal purposes. In relation to property there are three great classes of society: the bourgeoisie (who own the means of production such as machinery and factory buildings, and whose source of income is profit), landowners (whose income is rent), and the proletariat (who own their labour and sell it for a wage). Class thus is determined by property, not by income or status. These are determined by distribution and consumption, which itself ultimately reflects the production and power relations of classes. The social conditions of bourgeoisie production are defined by bourgeois property. Class is therefore a theoretical and formal relationship among individuals. The force transforming latent class membership into a struggle of classes is class interest. Out of similar class situations, individuals come to act similarly. They develop a mutual dependence, a community, a shared interest interrelated with a common income of profit or of wages. From this common interest classes are formed, and for Marx, individuals form classes to the extent that their interests engage them in a struggle with the opposite class. At first, the interests associated with land ownership and rent are different from those of the bourgeoisie. But as society matures, capital (i.e., the property of production) and land ownership merge, as do the interests of landowners and bourgeoisie. Finally the relation of production, the natural opposition between proletariat and bourgeoisie, determines all other activities. As Marx saw the development of class conflict, the struggle between classes was initially confined to individual factories. Eventually, given the maturing of capitalism, the growing disparity between life conditions of bourgeoisie and proletariat, and the increasing homogenization within each class, individual struggles become generalized to coalitions across factories. Increasingly class conflict is manifested at the societal level. Class consciousness is increased, common interests and policies are organized, and the use of and struggle for political power occurs. Classes become political forces. The distribution of political power is determined by power over production (i.e., capital). Capital confers political power, which the bourgeois class uses to legitimatize and protect their property and consequent social 228

relations. Class relations are political, and in the mature capitalist society, the state’s business is that of the bourgeoisie. Moreover, the intellectual basis of state rule, the ideas justifying the use of state power and its distribution, are those of the ruling class. The intellectual-social culture is merely a superstructure resting on the relation of production, on ownership of the means of production. Finally, the division between classes will widen and the condition of the exploited worker will deteriorate so badly that social structure collapses: the class struggle is transformed into a proletarian revolution. The workers’ triumph will eliminate the basis of class division in property through public ownership of the means of production. With the basis of classes thus wiped away, a classless society will ensue (by definition), and since political power to protect the bourgeoisie against the workers is unnecessary, political authority and the state will wither away. Overall, there are six elements in Marx’s view of class conflict: x Classes are authority relationships based on property ownership. x A class defines groupings of individuals with shared life situations, thus interests. x Classes are naturally antagonistic by virtue of their interests. x Imminent within modern society is the growth of two antagonistic classes and their struggle, which eventually absorbs all social relations. x Political organization and Power is an instrumentality of class struggle, and reigning ideas are its reflection. x Structural change is a consequence of the class struggle. Marx’s emphasis on class conflict as constituting the dynamics of social change, his awareness that change was not random but the outcome of a conflict of interests, and his view of social relations as based on power were contributions of the first magnitude. However, time and history have invalidated many of his assumptions and predictions. Capitalist ownership and control of production have been separated. Joint stock companies forming most of the industrial sector are now almost wholly operated by non-capital-owning managers. Workers have not grown homogeneous but are divided and subdivided into different skill groups. Class stability has been undercut by the development of a large middle class and considerable social mobility. Rather than increasing extremes of wealth and poverty, there has been a social levelling and an increasing emphasis on social justice. And finally, bourgeois political power has progressively weakened with growth in 229

worker oriented legislation and of labour-oriented parties, and with a narrowing of the rights and privileges of capital ownership. Most important, the severest manifestation of conflict between workers and capitalist--the strike--has been institutionalized through collective bargaining legislation and the legalization of strikes. These historical events and trends notwithstanding, the sociological outlines of Marx’s approach have much value. His emphasis on conflict, on classes, on their relations to the state, and on social change was a powerful perspective that should not be discarded. The spirit, if not the substance, of his theory is worth developing.

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Chapter Eight Marxism and Contemporary Capitalism Overview The revival of radicalism in the world today has brought with it a search for a theoretical explanation of what is wrong with the global society. Inevitably, many radicals have turned back to Marxist models of capitalist development. But these older models, derived from the Victorian capitalism of Marx’s time, have little relevance to contemporary capitalism. An updated Marxist model, with a direct bearing on contemporary global capitalism, and offering suggestive theoretical explanations of our social ills, would be a major intellectual achievement. Introduction The task of applying the science of Marxism to the analysis of contemporary capitalist society is indeed an important one. It is also a difficult one, as the authors well know. Hence, we are under no illusion that we will have succeeded in exhausting the subject. We have no such ambitious goal. Here, we hope to help people to see things differently and more realistically, to highlight some of the central problems which need to be solved, and to indicate the direction which further study and thought should take. The reason for being very cautious is that when capitalism experiences growth, new products and new investments present less risk. Competition is minimized. More rational calculations are possible and all appears to be sweetness and light among the powers that be. But as Marx pointed out long ago, this is merely the appearance. Any capitalist or corporation that doesn’t know its fleeting character will not survive the crisis that inevitably will follow. But the capitalists, big and small, do know, most of them, and under this surface of security and amiability is the struggle for supremacy. Even in periods of prosperity it never ceases.

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Marxism and Contemporary Capitalism Supporters of Marxism certainly believed that it provided a powerful and accurate analysis of 19th Century capitalism which was characterised by mass economic inequality and dreadful working and living conditions for members of the proletariat. Modern Marxists would argue that in the UK as in other advanced capitalist societies a dominant economic class continues to exist deriving its income mainly from its investments. However there are disputes s to the size and characteristics of this dominant economic class in that, for example writers as J. Westergaard and H. Ressler [Class in a Capitalist Society 1976]argue that this class represents perhaps 5%-10% of the UK population whereas J. Scott (who acknowledges the influences of both Marx and Weber on his work) emphasises the importance of a much smaller capitalist class of perhaps 0.1% of the population which exercises strategic control over major decisions within the economic and financial systems. Despite these disputes within Marxism all modern Marxists would agree that a dominant economic class exists citing trend data on the distribution of wealth and income. indicating only limited egalitarian redistribution in the course of the twentieth and early 21st centuries. However Marxist ideas have obviously attracted criticism from both conservatives and liberals and also from more moderate socialists and social democrats. In the late 19th and early 20th centuries the German Social Democrat “ revisionist” politician Eduard Bernstein called for a revision of social democratic political strategies to take account of social and political developments such as the growth of the middle classes and his ideas were later extended and elaborated by so-called post- capitalist theorists of the 1950s and 1960s who argued that even if the Marxist theory outlined above appeared relevant to the analysis of 19th Century capitalism it was nevertheless largely irrelevant to the analysis of mid-20th Century capitalism which had evolved in directions not predicted by Marx into a post-capitalist system fundamentally different form the C19th capitalism analysed in Marxist theories. Post-Capitalist Theories According to the post -capitalist theorists of the 1950s and 1960s there were important trends toward greater economic equality between the social 232

classes and also that the economic and political powers of the capitalist class had been significantly reduced. Thus in the post-capitalist view the economic powers of the capitalist class had declined, as major industries were taken over by the State in the1940s and 5Os (although the privatization programme of the 1980s and 90s reversed this trend) and because control over private industry was passing from shareholders to specialist managers and technicians who, it was argued, would run industry not only in the interests of the owners but also in the interests of themselves, their workers and the consumer. This was the so-called “managerial revolution” or the “divorce of ownership from control”. Further, the post-capitalist theorists argued, although a politically dominant ruling class might well have existed in Marx’ own time, by the 1950s theories of democratic pluralism suggested that political power was increasingly evenly distributed and that as a result the rise of trade unions and Socialist/Social Democratic political parties, it could certainly not be monopolised by one rich economically dominant class. In the theory of Democratic Pluralism, it is argued that power is widely distributed among several political parties, many pressure groups and among citizens who have votes in regular general elections and within the overall political s system, the State is seen as neutral rather than systematically favouring one particular interest (e.g. the capitalist class) at the expense of all other interests. as is suggested in Marxist theory. There are important studies by Dahl, Hewitt and Grant and Marsh which give some support to the Democratic Pluralist theory but it has also attracted several criticisms. The post capitalist theorists claimed that the overall class structures of capitalist societies was changing with the relative growth of the middle class and the skilled sections of the working class and the relative decline of the unskilled sections of the working class Some theorists suggested that the skilled sections of the working class were becoming increasingly affluent and experiencing a process of embourgeoisement : i.e. they were becoming increasingly able to adopt middle class life styles and as a result were increasingly likely also to adopt middle class attitudes and values, including ,perhaps an increased tendency to vote Conservative rather than Labour. In addition maintenance of full employment and the expanded scope of the Welfare State meant that economic inequality as measured by the distribution of income and wealth was declining, that absolute poverty had virtually disappeared and that equality of educational opportunity was now 233

likely to increase as a result of the expansion and reform of state education. Thus whereas Marx had predicted the polarisation of the class structure and the immiseration of the proletariat, post capitalist theorists argued that class divisions were declining and overall working class living standards were improving significantly all of which undermined the Marxist theory that the state is controlled indirectly by the property owning Bourgeoisie and made Marxist theories of revolution appear increasingly unrealistic. Modern Marxism , the Rejection of Post-Capitalist Theories and the Dominant Economic Class Modern Marxists have however rejected all of these post-capitalist arguments and argued that a modernised form of Marxist theory still offers the best theoretical framework for the analysis of contemporary capitalist societies. One of the best known reassertions of the continued relevance of Marxist theory was provided by Ralph Miliband in his study “The State in Capitalist Society” [ 1969]. [Here I shall draw on Miliband’s theory but I shall not consider the MilibandPoulantzas debate over the nature of the capitalist state nor the strengths and weaknesses of alternative theories of the state such as democratic pluralist, elite pluralist , elitist and New Right theories all of which will be considered later in Politics and Power Module documents] Miliband makes the following arguments most of which would be accepted by most contemporary Marxists. x The conclusions of the Managerial Revolution were inaccurate because even if large companies were increasingly controlled by their senior managers rather than their owners there would be no significant change in business practices because of the similarities of class background (and, by implication) of attitudes and values of managers and owners, because managers often own large amounts of shares and because other company survival and growth depends ultimately on high profitability. x Nationalisation had not reduced the power of the capitalist class because generous compensation had been given, because the profitable sector of private industry had not been nationalised and because nationalised industries recruited managers from private industry who followed broadly 234

similar business objectives. Nationalised industries might even subsidise private profit from time to time. x Changes in the UK capitalist class structure had been far less significant than suggested by post-capitalist theorists: o it was claimed by Marxists and others that any redistribution of income and wealth which had occurred during the first half of the 20th Century was mainly between the rich and the comfortably off (and often members of the same families), with little improvement in the relative position of the poor; o even if the skilled sections of the working class had become more affluent they remained significantly worse off than most members of the middle class and had not by the mid-1960s at least significantly changed their attitudes and values; o Abel-Smith and Townsend had demonstrated that poverty at least in a relative sense, had not been eliminated by the Welfare State which, in any case, according to Marxists and others operated as an important agency of social control; o social class differences in educational achievement remained significant and the chances that working class people might be upwardly socially mobile into the upper class were far smaller than the chances that people born into the upper class would remain there; members of the dominant economic class could relatively easily pass on wealth, power and privilege to their children therefore facilitating the social reproduction of the capitalist class structure from generation to generation. Thus, Miliband concluded, a dominant economic class continued to exist and to exercise economic power in the private sector and he then argued also that this dominant economic class was also a politically dominant ruling class which exercised decisive power over the State such that the capitalist state served the interests of the dominant class usually at the expense of the rest of the population. Miliband argued that the theory of democratic pluralism provided a grossly inaccurate explanation of the distribution of political power although , at the same time, he did not argue that the power of capital is the only factor determining the direction of State activity but that it is by far the dominant factor and that working class organizations (the Labour Party and the Trade Unions) are engaged in “Imperfect Competition” with it .They may in certain circumstances gain important victories for the working class but these victories do not challenge the overall dominance of capital 235

and may in fact, ultimately help to sustain it by sustaining what Marxists consider to be the myth of pluralist democracy. [These arguments are of course completely at odds with the reverse opinions articulated by both Conservative and Labour politicians and widely believed in UK society as a whole that especially in the 1970s and early 1980s the UK economy was being held to ransom by excessively powerful trade unions.] Miliband follows conventional definitions of the State, seeing it as consisting of the institutions of central government, the administration or bureaucracy or Civil Service, parliamentary assemblies, the judiciary, the police, the military and local government. These institutions are, in turn, controlled by a number of State Elites, which, for a variety of reasons according to Miliband, will govern the State according to the interests of the dominant economic class i.e. the Bourgeoisie. The political dominance of the Bourgeoisie or the dominant economic class is seen as operating through the following mechanisms. (Before continuing, we may note that John Scott, while broadly sympathetic to Miliband’s analysis, has also criticised Miliband for his failure to distinguish adequately between the dominant economic class [5%- 10% of the population ] and the capitalist class [0 .1% of the population] . According to Scott, it is this 0 .1% who are the real Ruling Class. Miliband did address this issue to some extent in a later book -”Divided Societies” but I shall not pursue this issue here.) 1 The continuing direct role of businessmen in State institutions: a large proportion of Cabinet Ministers have been involved in business and business people have also played an important role in central banking, nationalised industries and such state planning agencies as have existed from time to time and they could be expected to bring a capitalistic bias to government decision-making. However, it is admitted that businessmen fill only a small minority of all state elite positions. 2 However, secondly, political, administrative and military elites continue to be drawn from the higher reaches of the middle and upper classes The path to these positions will often be via prestigious public schools and universities and it is assumed by Miliband that this pattern of recruitment results in a powerful value consensus as between different state elites and between them and the dominant economic class. Many members of state elites are part of the dominant economic class or at least, on the fringes of it. There will therefore be a strong tendency for state elites to define the 236

“national interest” in terms of the interests of the dominant economic class and to support policies favouring maintenance or at most marginal change to the capitalist status quo. Differences of opinion may exist on matters of detail but not on fundamentals. Also, where talented working class people are recruited to elite positions, they will recognise that success demands the rejection of any radical views they might have held and, in any case, this evidence of upward social mobility into elite positions, if it is not studied too carefully can be used to sustain the-myth of equal opportunity. In fact , social mobility studies in the UK point to the ability of the upper class to retain its privileged existence across generations. D.V Glass pointed to the high levels of social self-recruitment into classes 1 and 7 and the Goldthorpe social mobility study, although it shows considerable absolute long range social mobility into the service class, also shows that the relative chances of entering the service class are much higher for the children of service class parents than for children of lower class backgrounds and agrees with the studies of elite occupations (those in the higher reaches of the service class) which point to very high levels of social self-recruitment, usually via attendance at prestigious public schools and/or Oxbridge Universities. This situation has been analysed in terms of the concepts of social closure and reproduction across generations. Upward social mobility into the upper class is limited because members of the upper class tend to marry within their class and because they have the benefits of an exclusive private education which combined with the strength of upper class social networks ensures that recruits to upper class occupations are themselves drawn primarily from the upper class. These factors combine to generate a high level of social closure around the upper class. Meanwhile, the upper class is likely to be reproduced across generations because of the inheritance of property and the purchase of private education although some talented and /or lucky[?!] working class people do gain entry to it. (In the analysis of social mobility it is necessary to distinguish different types of social mobility: male and female; upward and downward; long range and short range; intergenerational and intragenerational and absolute and relative. Discuss these different types of social mobility with your teachers and consult your textbooks.] 3 Miliband also refers to the wealth of the Bourgeoisie as a factor influencing its political power. For example, business pressure groups are 237

well-funded and, therefore, more likely to be effective; business contributions bolster the election campaigns of right wing [i.e. Conservative] political parties. 4.Also although pluralist studies appear to call into question the dominance of business pressure groups, critics of pluralism have argued that the power of capital should be seen more in structural and ideological terms which cannot be picked up by pluralist studies and Miliband accepts this line of argument. 5. Developing the Marxist idea that “The ideas of the Ruling Class are, in every age, the ruling ideas - the class which has the means of material production at its disposal has control at the same time over the means of mental production”, Miliband points to the dissemination of a dominant class ideology via capitalist socialisation processes which is accepted by most members of the State Elites and by much of the leadership of the Labour Party [especially, perhaps it might be added , most recently in the era of socalled “New Labour.”] 6.Meanwhile, Miliband also accepts that because of their political socialisation/indoctrination many working class people either accept the dominant class ideology or accommodate fairly passively to it and so they are not susceptible to persuasion by radical left ideologies. 7. Miliband makes the theoretical point that political power is visible through its consequences. Data on the distribution of income and wealth show that the UK is a highly economically unequal society: for Miliband these levels of economic inequality are maintained only because the dominant economic class has the indirect political power to ensure that they are maintained. In summary according to modern Marxists an economically dominant class continues to exist and to exercise considerable power over the institutions of the State. Capitalism is still recognisably capitalism and it is the theories of post-capitalism which are inaccurate. However such theories do play the useful role for the dominant economic class of legitimising the capitalist system which benefits the dominant economic class disproportionately.

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Modern Marxism and the Analysis of the Middle Class Marxist theories have sometimes been criticised on the grounds that his theory of class polarisation predicted the relative decline of the middle class whereas in practice from the mid c19th onwards it is very clear that for a variety of reasons non-manual employment has increased relatively to manual employment in capitalist societies suggesting that the relative size of the middle class has actually increased rather than decreased. However in his later work Marx did in fact predict the growth of the middle class and modern Marxists have also suggested that one should not equate the growth of non-manual employment with the growth of the middle class because routine non-manual clerical work has to a considerable extent been proletarianised such that many clerical workers can more accurately be described as members of the working class rather than as members of the middle class. [However many non-Marxist sociologists have rejected the theory of the proletarianisation of the clerical worker. Perhaps the best known neo-Marxist analyses of the middle class or intermediate groups within the class structure are those of by E.O. Wright. In his first theory Wright distinguishes between the capitalist mode of production and “simple commodity production” and between social classes and contradictory class locations. Thus the Bourgeoisie are a social class because they both own the means of production and exercise strategic control over the production process. The Proletariat are also a social class because they are non-owners of the means of production and have zero or negligible control over the production process. The Petty bourgeoisie are small scale owners of the means of production but do not hire labour. They are seen as a capitalist class but operating outside of the capitalist mode of production. Other social groups are in contradictory class locations: managers and supervisors do not own the means of production but do exercise some control over other workers and over the production process; small employers own and control their means of production but employ very few workers; and semi-autonomous workers do not own the means of production but do have some control over their own labour. Diagrammatically E.O Wright’ first theory is illustrated below.

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[Copied from Carl Cuneo’s website at the University of McMaster: Hamilton: Ontario: Canada] In E.O Wright’s second model , class membership depends upon ownership or non-ownership of the means of production, credentials (i.e. qualifications) and degree of control in the work place. This leads to a 12 class model of the class structure with several intermediate groups but no single middle class. There are some similarities with Weber given the high degree of fragmentation and Wright also admits that the working class may not be a revolutionary class. As a result some sociologists have concluded therefore that his work is barely recognisable as Marxist.

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Production assets: Owners of the means of production

Non -owners [wage labourers]

Owns sufficie nt capital Bourgeois to hire ie workers and not work

SemiExpert credential Uncredentiall manager + ed ed managers s managers

Owns sufficie nt capital Small to hire employers workers but must work

SemiExpert credential Uncredential superviso ed ed 0 rs supervisor supervisors s

Owns sufficie nt capital Petty to work Bourgeois for self ie but not to hire workers

Expert non manager s

Skill/credent ial Assets +

Semicredential Proletariat ed workers

0

241

_

Organisatio nal Assets

_

Modern Marxism and the Modern Working Class Critics of Marxism have argued that the Marxist analysis of the working class was always flawed and that 20th Century developments have rendered the Marxist theory increasingly irrelevant for the analysis of the contemporary working class. Thus critics have argued that long term changes in overall class structures have resulted in the relative numerical decline of the working class and the relative numerical growth of the middle class and in the decline of unskilled and semi-skilled manual work and growth of skilled manual work within the working class itself all of which suggests that the working class is unlikely to play the revolutionary role predicted in Marxist theory. These critics have suggested several further possible limitations to the Marxist analysis of the working class. 1. They have argued [to some extent following the theories of Max Weber] that Marx had underestimated the importance of status differences within the working class which would inhibit the growth of class solidarity. 2. They have argued that Marx understated the importance of gender, ethnic and religious differences within the working class. 3. They have claimed that 20th Century developments have resulted in the redistribution of income and wealth toward the working class and this ,combined with high and sustainable rates of economic growth, has resulted not in the immiserisation of the working class but in their rising affluence; that affluent working class people have experienced a process of embourgeoisement and that the increased availability of affordable consumer durables increased their contentment with the capitalist system as a whole. 4. They have claimed that Keynesian methods of demand management reduced the likelihood of mass unemployment [from the 1950s to the early 1980s at least]; that the expansion of the welfare state has protected the working class from poverty and increased opportunities for upward social mobility; and that especially in the 1983 General Election they deserted the Labour Party in droves ; and that even though working class support for Labour increased again in the Blairite era very few members of the working class have shown any signs of the revolutionary class consciousness predicted by Marx. 5. Another class- related issue is the existence or otherwise of a socalled underclass. This matter has generated great controversy in Sociology 242

with some theorists supporting a cultural version of the theory, others supporting a structural version and yet others arguing that the concept of an underclass is not sociologically useful. Because the most disadvantaged members of society should be seen as belonging to the lower sections of the working class rather than to a separate underclass . Once again I hope to provide further information on theories of the underclass in a later document. Marxist Analytical Interpretation What defines the Marxist analytical tradition is more a loose commitment to the importance of class analysis for understanding the conditions for challenging capitalist oppressions and the language within which debates are waged—what Alvin Gouldner aptly called a “speech community”—than a precise set of definitions and propositions. Any claims about the analytical foundations of Marxist class analysis can, therefore, reflect only a specific stance within that tradition rather than an authoritative account of “Marxism” in general or of the work of Karl Marx in particular. First, it is necessary to lay out a series of conceptual elements which underlie the kind of Marxist class analysis which stand out. Many of these elements apply, perhaps with some rhetorical modification, to Weberianinspired class analysis as well as Marxist, although as a package they reflect the background assumptions characteristic of the Marxist agenda. Some of the points may be quite obvious, but nevertheless it can be useful to lay these out step by step. Second, it is essential to specify what is the core common explanatory claim of class analysis in both the Marxist and Weberian traditions. Third, it is also compelling to identify what is believed to be the distinctive hallmark of the Marxist concept, which differentiates from its Weberian cousins and which anchors the broader theoretical claims and agenda of Marxist class analysis. This will involve, above all, elaborating the specific causal mechanisms through which Marxists claim that class relations generate social effects. Finally, it is important to briefly lay out the advantages of the Marxian-inspired form of class analysis. I. Conceptual Elements Five conceptual elements need to be clarified in order to give specificity to the Marxist approach to class analysis: 1. the concept of social relations of 243

production; 2. the idea of class as a specific form of such relations; 3. the problem of the forms of variation of class relations; 4. the meaning of a “location” within class relations; 5. the distinction between micro- and macro-levels of class analysis. 1. Relations of production Any system of production requires the deployment of a range of assets or resources or factors of production: tools, machines, land, raw materials, labour power, skills, information, and so forth. This deployment can be described in technical terms as a production function -- so many inputs of different kinds are combined in a specific process to produce an output of a specific kind. The deployment can also be described in social relational terms: the individual actors that participate in production have different kinds of rights and powers over the use of the inputs and over the results of their use. Rights and powers over resources, of course, are attributes of social relations, not descriptions of the relationship of people to things as such: to have rights and powers with respect to land defines one’s social relationship to other people with respect to the use of the land and the appropriation of the fruits of using the land productively. The sum total of these rights and powers constitute the “social relations of production”. 2. Class relations as a form of relations of production When the rights and powers of people over productive resources are unequally distributed -- when some people have greater rights/powers with respect to specific kinds of productive resources than do others—these relations can be described as class relations. The classic contrast in capitalist societies is between owners of means of production and owners of labour power, since “owning” is a description of rights and powers with respect to a resource deployed in production. Let us be quite precise here: The rights and powers in question are not defined with respect to the ownership or control of things in general, but only of resources or assets insofar as they are deployed in production. A capitalist is not someone who owns machines, but someone who owns machines, deploys those machines in a production process, hires owners of labour power to use them and appropriates the profits from the use of those machines. A collector of machines is not, by virtue owning those machines, a capitalist. To count as a class relation it is therefore not sufficient that there be unequal rights and powers over the sheer physical use of a resource. There 244

must also be unequal rights and powers over the appropriation of the results of that use. In general this implies appropriating income generated by the deployment of the resource in question. 3. Variations in class relations Different kinds of class relations are defined by the kinds of rights and powers that are embodied in the relations of production. For example, in some systems of production people are allowed to own the labour power of other people. When the rights accompanying such ownership are absolute, the class relation is called “slavery”. When the rights and powers over labour power are jointly owned by the labourer and someone else, the class relation is called “feudalism.” This may not seem to be the standard definition of feudalism as a class structure. But, typically feudalism is defined as a class system within which extra-economic coercion is used to force serfs to perform labour for lords, either in the form of direct labour dues or in the form of rents. Here, “direct economic coercion” is treated as an expression of a property right of the lord in the labour power of the serf. This is reflected in the fact that the serf is not free to leave the land of the lord. This is equivalent to the claim that the flight of a serf from the land is a form of theft – stealing labour power partially owned by the lord. In capitalist societies, in contrast, such absolute or shared ownership of other people is prohibited. Because of the specific role that class analysis played in historical materialism, Marxists have traditionally limited the range of variation of types of class relations to a very few abstract forms: slavery, feudalism, and capitalism being the main types. Once the restrictions of historical materialism are relaxed, the basic concept of class relations allows for a much richer array of variations. The rights and powers that constitute “ownership” can be decomposed, with different rights and powers going to different actors. Just as feudalism is characterized by a decomposition of rights and powers over labour power – some belonging to feudal lords, others to serfs – so too can there be a decomposition of the rights and powers over means of production. Government restrictions on workplace practices, union representation on boards of directors, co-determination schemes, employee stock-options, delegations of power to managerial hierarchies, etc. all constitute various ways in which the property rights and powers embodied in the idea of “owning the means of production” are decomposed and redistributed. Such redistribution of rights and powers constitutes a form of variation in class 245

relations. To be sure, such systems of redistributed rights and powers are complex and move class relations away from the simple, abstract form of perfectly polarized relations. One of the objectives of class analysis is to understand the consequences of these forms of variation of class relations. Such complexity, however, is still complexity in the form of class relations, not some other sort of social relation, since the social relations still govern the unequal rights and powers of people over economically relevant assets. The sum total of the class relations in a given unit of analysis can be called the “class structure” of that unit of analysis. One can thus speak of the class structure of a firm, of a city, of a country, perhaps of the world. A class structure generally does not consist of a single type of class relation. Typically a variety of forms of class relations are combined in various ways which further adds to the complexity of class structures. Class structures are thus complex for two reasons: the rights and powers within given forms of class relations can be redistributed in various ways; and a given class structure may combine a variety of different kinds of class relations. 4. Class locations within class relations “Class locations” can be understood as the social positions occupied by individuals – and in some contexts, families – within class relations. Again, these class locations need not be polarized – locations in which there is an absolute disjuncture between the rights and powers of the different locations-within-relations. A characteristic feature of many class structures is the existence of what I have termed “contradictory locations within class relations”. The claim of a class analysis of such social locations is that the specific pattern of rights and powers over productive resources that are combined in a given location define a set of real and significant causal processes. Contradictory locations are like a chemical compound in which its properties can best be explained by uncovering the specific way in which different elements—different rights and powers with respect to the various assets used in production—are combined rather than treating such locations as unitary, one dimensional categories. Step 5. Micro- and Macro-class analysis The micro-level of class analysis attempts to understand the ways in which class impacts on individuals. At its core is the analysis of the effects of class locations on various aspects of individual lives. Analyses of labour market strategies of unskilled workers or political contributions of corporate executives would be examples of micro-level class analysis so long as the 246

rights and powers of these actors over economic resources figured in the analysis. The macro-level of analysis centres on the effects of class structures on the unit of analysis in which they are defined. The analysis of how the international mobility of capital constrains the policy options of states, for example, constitutes a macro-level investigation of the effects of a particular kind of class structure on states. II. The Explanatory Claims: T he fundamental metathesis of class

analysis The fundamental metathesis of class analysis is that class, understood in the above way, has systematic and significant consequences both for the lives of individuals and the dynamics of institutions. One might say “class counts” as a slogan. At the micro-level, whether or not one sells one’s labour power on a labour market, whether or not one has the power to tell other people what to do in the labour process, whether or not one owns large amounts of capital, whether or not one possesses a legally-certified valuable credential, etc. have real consequences in the lives of people. At the macro-level it is consequential for the functioning of a variety of institutions whether or not the rights over the allocation and use of means of production are highly concentrated in the hands of a few people, whether or not certain of these rights have been appropriated by public authority or remain privately controlled, whether or not there are significant barriers to the acquisition of different kinds of assets by people who lack them, and so on. To say that “class counts,” then, is to claim that the distribution of rights and powers over the basic productive resources of the society have significant, systematic consequences. What, then, are the specific mechanisms through which these effects are generated? By virtue of what are class relations as here defined explanatory? At the most general and abstract level, the causal processes embedded in class relations help to explain two kinds of proximate effects: what people get, and what they have to do to get what they get. The first of these concerns, above all, the distribution of income. The class analysis claim is, therefore, that the rights and powers people have over productive assets is a systematic and significant determinant of their standards of living: what you have determines what you get. The second of these causal processes concerns, above all, the distribution of economic activities. Again, the class analysis thesis is that the rights and powers over productive assets is a systematic and significant 247

determinant of the strategies and practices in which people engage to acquire their income: whether they have to pound the pavement looking for a job; whether they make decisions about the allocation of investments around the world; whether they have to worry about making payments on bank loans to keep a farm afloat. What you have determines what you have to do to get what you get. Other kinds of consequences that are linked to class—voting patterns, attitudes, friendship formation, health, etc.—are second-order effects of these two primary processes. These are not trivial claims. It could be the case, for example, that the distribution of the rights and powers of individuals over productive resources has relatively little to do with their income or economic activities. Suppose that the welfare state provided a universal basic income to everyone sufficient to sustain a decent standard of living. In such a society what people get would be significantly, although not entirely, decoupled from what they own. Similarly, if the world became like a continual lottery in which there was virtually no stability either within or across generations to the distribution of assets, then even if it were still the case that relations to such assets statically mattered for income, it might make sense to say that class didn’t matter very much. Or, suppose that the central determinant of what you have to do to get what you get was race or sex or religion and that ownership of economically-relevant assets was of marginal significance in explaining anyone’s economic activities or conditions. Again, in such a society, class might not be very explanatory (unless, of course, the main way in which gender or race affect these outcomes was by allocating people to class positions on the basis of their race and gender). The sheer fact of inequalities of income or of domination and subordination within work is not proof that class counts; what has to be shown is that the rights and powers of people over productive assets has a systematic bearing on these phenomena. III. Marxist class analysis As formulated above, there is nothing uniquely Marxist about the explanatory claims of class analysis. “What people get” and “what people have to do to get what they get” sounds very much like “life chances.” Weberian class analysts would say very much the same thing. It is for this reason that there is a close affinity between Marxist and Weberian concepts of class (although less affinity in the broader theoretical frameworks within 248

which these concepts figure or in the explanatory reach class is thought to have). What makes class analysis distinctively Marxist is the account of specific mechanisms which are seen as generating these two kinds of consequences. Here the pivotal concepts are three. For a more extensive discussion of these three principles, see Wright (1997:9-19). exploitation and domination. These are the conceptual elements which anchor the Marxist concept of class in the distinctive Marxist question of class analysis. Exploitation is a complex and challenging concept. It is meant to designate a particular form of interdependence of the material interests of people, namely a situation which satisfies three criteria: (1) The inverse interdependent welfare principle: the material welfare of exploiters causally depends upon the material deprivations of the exploited. (2) The exclusion principle: this inverse interdependence of welfares of exploiters and exploited depends upon the exclusion of the exploited from access to certain productive resources. (3) The appropriation principle: Exclusion generates material advantage to exploiters because it enables them to appropriate the labour effort of the exploited. Exploitation is thus a diagnosis of the process through which the inequalities in incomes are generated by inequalities in rights and powers over productive resources: the inequalities occur, in part at least, through the ways in which exploiters, by virtue of their exclusionary rights and powers over resources, are able to appropriate surplus generated by the effort of the exploited. If the first two of these principles are present, but not the third, economic oppression may exist, but not exploitation. The crucial difference is that in nonexploitative economic oppression, the privileged social category does not itself need the excluded category. While their welfare does depend upon the exclusion, there is no on-going interdependence of their activities. In the case of exploitation, the exploiters actively need the exploited: exploiters depend upon the effort of the exploited for their own welfare. This deep interdependence makes exploitation a particularly explosive form of social relation for two reasons: First, exploitation constitutes a social relation which simultaneously pits the interests of one group against another and which requires their on-going interactions; and second, it confers upon the disadvantaged group a real form of power with which to challenge the interests of exploiters. This is an important point. Exploitation depends upon 249

the appropriation of labour effort. Because human beings are conscious agents, not robots, they always retain significant levels of real control over their expenditure of effort. The extraction of effort within exploitative relations is thus always to a greater or lesser extent problematic and precarious, requiring active institutional devices for its reproduction. Such devices can become quite costly to exploiters in the form of the costs supervision, surveillance, sanctions, etc.. The ability to impose such costs constitutes a form of power among the exploited. Domination is a simpler idea. It identifies one dimension of the interdependence of the activities within production itself rather than simply the interdependence of material interests generated by those activities. Here the issue is that, by virtue of the relations into which people enter as a result of their rights and powers they have over productive resources, some people are in a position to control the activities of others, to direct them, to boss them, to monitor their activities, to hire and fire them, to advance or deny them credit.4 The Marxist class analysis thesis, therefore, is not simply that “what you have determines what you have to do to get what you get”, but “what you have determines the extent to which you are dominated or dominating when you do what you have to do to get what you get.” In Weberian class analysis, just as much as in Marxist class analysis, the rights and powers individuals have over productive assets defines the material basis of class relations. But for Weberian-inspired class analysis, these rights and powers are consequential primarily because of the ways they shape life chances, most notably life chances within market exchanges, rather than the ways they structure patterns of exploitation and domination. Control over resources affects bargaining capacity within processes of exchange and this in turn affects the results of such exchanges, especially income. Exploitation and domination are not centrepieces of this argument. This suggests the contrast between Marxist and Weberian frameworks of class analysis illustrated in figure 1. Both Marxist and Weberian class analysis differ sharply from simple gradational accounts of class in which class is itself directly identified within inequalities in income since both begin with the problem of the social relations that determine the access of people to economic resources. In a sense, therefore, Marxist and Weberian definitions of class in capitalist society share the same definitional criteria. Where they differ is in the theoretical elaboration and specification of the implications of this common set of criteria: the Marxist model sees two causal paths being 250

systematically generated by these relations – one operating through market exchanges and the other through the process of production itself – whereas the Weberian model traces only one causal path, and the Marxist model elaborates the mechanisms of these causal paths in terms of exploitation and domination as well as bargaining capacity within exchange whereas the Weberian model only deals with the last of these. In a sense, then, the Weberian strategy of class analysis is contained within the Marxist model. Of course, any Weberian can include an analysis of class-based domination and exploitation within any specific sociological inquiry. One of the charms of the Weberian analytical framework is that it is entirely permissive about the inclusion of additional causal processes. Such an inclusion, however, represents the importation of Marxist themes into the Weberian model; the model itself does not imply any particular importance to these issues. Frank Parkin once made a well-known quip in a book about class theory that “Inside every neo-Marxist is a Weberian struggling to get out”. The argument presented here suggests a complementary proposition, that “Inside every leftist neo-Weberian is a Marxist struggling to stay hidden.” IV. The pay-off: advantages of the Marxist strategy of class analysis Elaborating the concept of class in terms of exploitation and domination clearly facilitates its analytical relevance to the agenda embedded in the distinctive Marxist question: “What sorts of struggles have the potential to challenge and transform capitalist economic oppressions in an emancipatory direction?” Class struggles have this potential because of the way class relations shape the interests and capacities of actors with respect to those oppressions. Saying this, of course, does not define the conclusion of the Marxist agenda, but only its starting point. It does not prejudge the problem of what social conditions enable or impede such struggles or determine their effectiveness, of how class struggles are linked to other kinds of social conflicts, or whether or not class compromises are possible within such struggles, or even of the historically possible extent to which capitalist economic oppressions can be eliminated. But I am claiming that the answer to these questions is facilitated when class is understood in terms of exploitation and domination. But what if one is not particularly interested in the foundational Marxist question? What if one believes that emancipatory transformations of 251

capitalism, however morally attractive, are utopian fantasies? Or even more critically, what if one believes that capitalism isn’t especially oppressive? If one rejects the relevance of the Marxist question, does this necessarily imply a complete rejection of the Marxist conceptualization of class as well? I think not. There are a number of reasons that elaborating the concept of class in terms of exploitation and domination has theoretical pay-offs beyond the specific normative agenda of Marxist class analysis itself: 1. Linking exchange and production. The Marxist logic of class analysis affirms the intimate link between the way in which social relations are organized within exchange and within production. This is a substantive, not definitional, point: the social relations which organize the rights and powers of individuals with respect to productive resources systematically shapes their location both within exchange relations and within the process of production itself. This does not mean, of course, that there is no independent variation of exchange and production, but it does imply that this variation is structured by class relations. 2. Conflict. One of the standard claims about Marxist class analysis that it foregrounds conflict within class relations. Indeed, a conventional way of describing Marxism in sociological textbooks is to see it as a variety of “conflict theory.” This characterization, however, is not quite precise enough, for conflict is certainly a prominent feature of Weberian views of class as well. The distinctive feature of the Marxist account of class relations in these terms is not simply that it gives prominence to class conflict, but that it understands conflict as generated by inherent properties of those relations rather than simply contingent factors. Exploitation defines a structure of inter-dependent interests in which advancing the interests of exploiters depends upon their capacity to impose deprivations on the exploited. This is a stronger antagonism of interests than simple competition, and it underwrites a strong prediction within Marxist class analysis that class systems will be conflict ridden. 3. Power. At the very core of the Marxist construction of class analysis is not simply the claim that class relations generate deeply antagonistic interests, but that they also give people in subordinate class locations forms of power with which to struggle for their interests. As already noted, since exploitation rests on the extraction of labour effort, and since people always retain some measure of control over their own effort, they always confront their exploiters with capacities to resist exploitation. 252

It is important to note that one need not accept the normative implications of the concept of “exploitation” to recognize the problem of the “extraction of labour effort”. This is one of the central themes in discussions of principal/agent problems in transaction costs approaches to organization. For an discussion of class and exploitation specifically in terms of p/a issues, see Bowles and Gintis (1976). This is a crucial form of power reflected in the complex counterstrategies exploiting classes are forced to adopt through the elaboration of instruments of supervision, surveillance, monitoring, and sanctioning. It is only by virtue of this inherent capacity for resistance—a form of social power rooted in the interdependencies of exploitation—that exploiting capacities are forced to devote some of their resources to insure their ability to appropriate labour effort. 4. Coercion and consent. Marxist class analysis contains the rudiments of what might be termed an endogenous theory of the formation of consent. The argument is basically this: The extraction of labour effort in systems of exploitation is costly for exploiting classes because of the inherent capacity of people to resist their own exploitation. Purely coercively backed systems of exploitation will often tend to be suboptimal since under many conditions it is too easy for workers to withhold diligent performance of labour effort. Exploiting classes will therefore have a tendency to seek ways of reducing those costs. One of the ways of reducing the overhead costs of extracting labour effort is to do things which elicit the active consent of the exploited. These range from the development of internal labour markets which strengthen the identification and loyalty of workers to the firms in which they work to the support for ideological positions which proclaim the practical and moral desirability of capitalist institutions. Such consent-producing practices, however, also have costs attached to them, and thus systems of exploitation can be seen as always involving trade-offs between coercion and consent as mechanisms for extracting labour effort. This argument points to a crucial difference between systems of nonexploitative oppression and exploitative class relations. In nonexploitative oppression, there is no dependency of the oppressing group on the extraction of labour effort of the oppressed and thus much less need to elicit their active consent. Purely repressive reactions to resistance – including genocidal repression—are therefore feasible. This is embodied in the abhorrent 19th century American folk expression “the only good Indian is a dead Indian”, an expression which reflects the fact that native Americans 253

were generally not exploited, although they were certainly oppressed. The comparable, if less catchy, expression for workers would be “the only good worker is an obedient worker”; it would make no sense to say “the only good worker is a dead worker”. This contrast points to the ways in which an exploitation-centred class analysis suggests an endogenous understanding of the construction of consent. 5. Historical/comparative analysis. As originally conceived, Marxist class analysis was an integral part of a sweeping theory of the epochal structure and historical trajectory of social change. But even if one rejects historical materialism, the Marxist exploitation-centred strategy of class analysis still provides a rich menu of concepts for historical and comparative analysis. Different kinds of class relations are defined by the specific mechanisms through which exploitation is accomplished, and these differences in turn imply different problems faced by exploiting classes for the reproduction of their class advantage and different opportunities for exploited classes to resist. Variations in these mechanisms and in the specific ways in which they are combined in concrete societies provide an analytically powerful road map for comparative research. These are all reasons why a concept of class rooted in the linkage between social relations of production on the one hand and exploitation and domination on the other should be of sociological interest. Still, the most fundamental pay-off of these conceptual foundations is that way it infuses class analysis with moral critique. The characterization of the mechanisms underlying class relations in terms of exploitation and domination focuses attention on the moral implications of class analysis. Exploitation and domination identify ways in which these relations are oppressive and create harms, not simply inequalities. Class analysis can thus function not simply as part of a scientific theory of interests and conflicts, but of an emancipatory theory of alternatives and social justice. Even if socialism is off of the historical agenda, the idea of countering the exploitative logic of capitalism is not. Global Economic Crisis Impoverishing Europe According to Thomas Sablowski in his article “The Global Economic Crisis: Impoverishing Europe”, from early 2010 the crisis in Europe has emerged as being one of state refinancing. In every crisis fiscal revenues take 254

a hit while unemployment, and with it, social expenditures increase. To this is added the gigantic bank rescue packages and – in comparison to these the admittedly less substantial – stimulus packages. All this has resulted in large increases in budget deficits and state debt. A number of countries, starting with Greece, have reached the limits of their borrowing capacity. Because international investors have lost confidence that these countries can any longer service their debt, they are not able to obtain any new credit from the capital markets, or if so only at an intolerably high rate of interest. Some investors are also betting with credit default swaps on the bankruptcy of individual countries—a self-fulfilling prophecy. The Neoliberal European ‘Competition State’ Before the current crisis, and when considered separately from debt service, countries such as Spain, Italy and Ireland exhibited a positive primary balance in their public budgets. That is to say, state revenues exceeded expenditures. In these cases the particular problems regarding finances clearly developed only with the onset of the latest crisis. In other countries such as Greece and Portugal the primary balances of state budgets were indeed negative before the current crisis, which indicates structural problems with state financing. That the state, as for example in Greece, tolerated large-scale tax evasion must be understood as an element of a specific mode of capitalist development and a particular constellation of class interests. Phenomena such as high inflation, clientelism, corruption and tax evasion are characteristics of states that occupy a more peripheral position in the international division of labour. These states exhibit a high degree of internal structural heterogeneity in forms of production and class relations in which the distribution of the value of the social product is fiercely contested between different classes and class fractions. Furthermore, neoliberal fiscal policies have repeatedly created budget shortfalls, even before the current crisis. This is also the case for Germany. Due to the reduction in the top tax rate on high incomes and in the inheritance tax, the elimination of the wealth tax and the stock transfer tax, a tax exemption on the sale of subsidiaries of joint stock companies, and other measures, reductions in tax receipts have come to be accepted. The capitalist state has developed into a ‘competition state.’ Competing internationally for investment, it seeks to attract and bind businesses to locations within its 255

jurisdiction, by means of selective reductions in taxes for firms and investors, as well as with subsidies. The wide mass of wage earners in contrast, had to endure increases in taxation and simultaneous reductions in social welfare benefits. The state has thus contributed to a redistribution of wealth from wage earners to the owners of capital. Alongside the crisis of state indebtedness the banking crisis has also returned. Since government bonds are an important source of profits for banks and other owners of capital, the financial crisis also strikes back at financial institutions. Because state bankruptcies in Greece and elsewhere threaten European banks with collapse, financial houses hesitate to extend credit to one another. Already in 2007/08, as a result of the collapse of the subprime mortgage market in the United States, the so-called interbank loan market dried out. Banks now prefer to park their money with the European Central Bank (ECB) rather than to make it available to their peers. As in the autumn of 2008, this credit crunch also impacts upon the circuit of industrial capital. Uneven Development The global dynamics of the crisis are superimposed on the contradictions of European integration, which in turn further intensify them. The unequal development of capital accumulation in the Eurozone became starkly evident in the crisis. Germany and a few other countries achieved large current account surpluses and are simultaneously capital exporters (creditors). In contrast most Eurozone countries are capital importers (debtors) and have current account deficits. The balance of payments imbalances in Europe increased substantially in recent years. In the critical discussions taking place regarding this relationship several explanations are on offer. First, increasing international indebtedness is linked to the hierarchical structures of the international division of labour and the uneven development of productive capacities. Germany, for example, is equipped with a greatly diversified industrial structure, particularly in the production of means of production (machine tools, chemicals, etc.). Countries such as Greece in contrast have much less to offer to the world market. This unequal development has always been an immanent characteristic of the capitalist world economy. The further the productive force of labour progresses, that is, the more commodities that can be produced with the same deployment of 256

labour, the more the concentration and centralization of capital develops, and the more the tendential geographic concentration of production also takes place. Secondly, uneven development is related to diverging unit labour costs. The relation between wages and productivity that is expressed in unit labour costs is crucial for the price competitiveness and profitability of capital. It should be noted that in no other EU country have unit labour costs increased as little in the past ten years as in Germany. German companies have procured competitive advantages for themselves through wage restraint. The actuality of German export surpluses means of course that Germany must also play the part of international creditor in order to be able to sell its commodities abroad. Conversely, countries with current account deficits such as Greece, Portugal, Spain, Italy, France etc., must logically take on debt to be able to pay for their excess imports. The third explanation for uneven development in the EU seems to contradict the second, and is based on the observation that rates of growth in the peripheral EU nations were previously higher than in Germany. The higher rates of growth and the capital imports of the peripheral nations are not indications of an absent competitiveness. On the contrary, from a Marxist perspective, capital flows as a rule to where profit rates are higher. It may indeed be the case that in the last decade unit labour costs increased much more in Greece than in Germany. But the question to pose is: based on what level? Wage levels in any case are much lower in Greece than in Germany. The differing rates of growth are also correlated to the diverging real rates of interest in the Eurozone, which result from the difference in the nominal interest rate and the inflation rate. Through the ECB a uniform nominal base rate is prescribed, yet in light of different rates of price increases from country to country, this leads to divergent real interest rates. Because the rate of inflation is higher in Greece than in Germany, the corresponding real rates of interest are lower there. This being the case, it is thus attractive for investors to take on debt there. From this perspective the causality in the balance of payments is exactly the reverse of that in the first explanation: It is not the surplus commodity exports of Germany that have led to the accumulation of debt in the periphery, rather the export of capital from the imperialist centres has led to the higher rate of growth and the increase in commodity imports in the peripheral countries. In the first case 257

the trade balance (current account) determines the capital account; in the second case this is reversed. Does merchandise trade dominate over capital movements, or vice versa, do capital flows dominate the trade in goods? In my view the question of causality in the balance of payments cannot be answered in general but only through more concrete analysis on a case-by-case basis. Regardless of how one interprets the causality in the relationship between commodity and capital flows, there is agreement that the problems in the Eurozone cannot be reduced to the financial crises of states. Not only has the indebtedness of the respective states in the Eurozone greatly increased, but so too has private debt. It would be mistaken in each case to comprehend the financial crisis of the state in isolation from developments in the economy as a whole. Intensified Competition The common currency is in any case intensifying competition and the problem of uneven development within the Eurozone. Countries with slipping competitiveness in the Eurozone cannot use their own monetary policy, the devaluation of their own currency for example, to defend their competitiveness. Pressure to adjust bears down above all on countries in the position of net debtors, that is, countries with a current account deficit and a capital import surplus. This pressure to adapt leads ultimately to wage reductions as is currently being implemented in an intensified form in Greece and Portugal by the austerity policies of the troika of the European Commission, the ECB and the International Monetary Fund (IMF). The rigidity of the German government with regard to the management of the European crisis appears at first sight to contradict certain material interests of capital. It is not only Anglo-American investors who have long demanded that the ECB should purchase government bonds without limit in order to reduce interest rates for the EU countries affected by the refinancing crisis and restore confidence in their state securities. There has also been a demand in other European states for a more flexible position on the part of the ECB, and for the introduction of euro bonds. At the same time it is obvious that the brutal austerity policies that have been forced on Greece and other states in response to the economic turbulence by the German government only push these countries even deeper into crisis. 258

Hence it needs to be asked whether the prevailing crisis policies are themselves irrational from the perspective of the reproduction of capital. The austerity measures and the demands for monetary state financing or the supranational socialization of debt appear at first to contradict each other. While austerity policies appear to have the reduction of state indebtedness as their aim, an expansion of the role of the ECB as lender of last resort for the states of the Eurozone or a socialization of their debt by means of euro bonds would create the preconditions for an even greater expansion of state debt. However, there exists only a superficial contradiction between these measures. In the end, policies of cutbacks will also not lead to a reduction of state indebtedness, but at best will create the preconditions for the reestablishment of confidence for investors in European government bonds. Even the IMF expects that average indebtedness in the Eurozone, which in 2010 was at 85.8 per cent of GDP, will be at 86.6 per cent in 2016. Austerity policies, as well as the muchdiscussed socialization of debt, serve to prevent an even greater devaluation of fictitious capital, which is what government bonds embody. What is of concern here is not the reduction of state debt but rather its sustainability. As a sphere of investment, government debt, which has been growing faster globally in recent years than the global social product, is indispensable for global financial firms. Intensification of Exploitation Yet, if austerity policies and the socialization of debt, and monetary state financing by the ECB, respectively, are just different ways to restore confidence in European government bonds and guarantee a ‘sustainable’ debt, why then are the governments of the Eurozone states not taking the more comfortable path and relaxing austerity measures and concentrating on the socialization of debt? Certainly, without austerity policies state indebtedness would grow even quicker. But why would that be so problematic? Italy maintained levels of state indebtedness for decades in excess of 100 per cent of GDP. Why did it suddenly become a problem? Even the USA could afford a debt-to-GDP ratio of more than 100 per cent, and Japan of even more than 200 per cent. What explains the rigidity of German and European austerity policies? 259

Their goal is not only to reduce state expenditures or to increase tax revenue. It is also a matter of reducing wage levels in the private sector and of increasing working hours, in short, of increasing the overall exploitation of labour. Austerity policies don’t resolve the crisis but they help to realise traditional demands of capitalists that up to now had not been achievable due to the relation of forces. Austerity measures serve not only the bank rescues (which could also be carried out by the ECB buying out the banks’ government bonds), but serve above all industrial capital, in particular export-oriented industrial capital, whose profitability can be increased in this way. To add to this: It is not just about defending the euro but, above all, its international role. The common currency functions not only as a means of circulation and payment within the Eurozone, but also has a global function, even if as an international reserve currency it takes second place behind the American dollar. The importance and prominence of the euro would be endangered if international investors lost confidence in the government bonds of Eurozone countries and withdrew their capital. The euro would hence lose value against the currencies of other capitalist centres. It is precisely in the competition between currencies that the stability of the euro, as a measure of value, and as a means of circulation and payment, as well as a medium of accumulation, is of importance. Internationally active banks and transnational corporations, which are based in the Eurozone, profit in particular when they can offer credit in their own currency and when their business partners can pay in euros. This reduces their currency risks. In this regard it is of interest to these banks and corporations the extent to which actors outside of the Eurozone are prepared to use the euro as a currency. This becomes of even greater importance the more financial linkages with actors outside of the Eurozone increase. For Germany, exports to nations outside of the Eurozone in recent years increased faster than exports to those within the Eurozone. The defence of the euro through policies of austerity is not simply the result of the European strategies of German capital but above all of its globalization strategies. Nevertheless, the German government does not play the role of Europe’s disciplinarian solely in the interests of German capital but also in the interests of dominant fractions of capital in other Eurozone countries. Only this convergence of interests can explain why Sarkozy largely swung into line behind Merkel and why the Greek governments under no circumstances considered exiting the 260

Eurozone although austerity policies were and are wrecking the internal market, and are damaging the fraction of capital dependent on this market. Resistance Several countries are refinancing huge portions of their state debts that are due. That is, they are forcibly replacing them with new loans. It remains to be seen to what extent this will be possible with sustainable interest rates. Currently under discussion is whether the ‘rescue packages’ which have covered the EU countries with the temporary European Financial Stability Facility (EFSF) and more permanently with the European Stability Mechanism (ESM) are sufficient, if the refinancing of larger countries like Italy and Spain through capital markets will no longer be possible. A further expansion of the mutual liability for the public debt of individual nations will confront yet greater political resistance than we have until now experienced. When this happens the forces demanding the exit of individual countries from the Eurozone, or the Eurozone’s bifurcation, will further gain in prominence. In this situation the Left must mount a two-front struggle. One the one front, it must organize the defence of the working and popular classes against the ruling classes’ policies of immizeration, and fight against the fiscal pact which is leading to a further intensification of the neoliberal orientation of European financial and economic policies and a further hollowing out of democracy. One the other, it must combat the nationalist, racist, and fascist forces opposing European integration. The Left must make clear that a different, democratic and solidaristic Europe is possible and necessary. The protest actions involving a broad section of participants and allies, set to take place in Frankfurt on 16 to 19th of May, offer the opportunity to articulate just such a position. (See: Bullet No. 634 and blockupy.frankfurt.org.). In sum, contrary to the image it projects of itself, contemporary imperialism is characterized by the increasing concentration of property, production and political power to a qualitatively higher level: in other words, by the escalation to a level of transnational concentration of property, production and political power, whose nucleus is composed of the transnational monopolies that are fused with the states of the main imperialist powers, which also take on transnational functions. This process, which constitutes the present stage of the development toward the 261

universalization of human relations analysed by Karl Marx and Frederick Engels, is what is alluded to more and more often by the term “globalization”. Globalization is the historical continuation of capitalism’s tendency toward universalization, initiated with the formation of the world market. It is based on political and economic conditions created in the course of the twentieth century and, in particular, during the post-second world war period. It began to unfold in the 1970s, that is, beginning with the end of two decades of expansive growth of the world capitalist economy opened by the destruction of productive forces caused by the second world war, and it received a decisive political and ideological impulse with the sharpening of the Soviet Union’s crisis and its collapse, reaching its maximum intensity and violence. Also contrary to the postulates of the apologists of capitalism, the socalled scientific-technical revolution in no way resolves or allows indefinite postponement of the capitalist system of production’s antagonistic contradictions. The term scientific-technical revolution is the one most used to refer to the development achieved by the productive forces of capital during the post-war period, which among other things was due to the stimulation of productive processes caused by European reconstruction and the arms race. But the notion of an exorcism of the contradictions is false because, precisely, it was this development which, at the end of the 1960s, once the productive capacity of Western Europe and Japan had been reconstructed, caused the return of the crisis of overproduction of commodities, capital and population. The reign of the transnational monopolies did not come about, as claimed by those imposing the unilateral opening and deregulation of the underdeveloped countries, under the signboard of universal expansion of productive investment, the “transfer” of the advances of science and technology, access to the markets of the “First World”, or the “trickle down” of wealth. On the contrary, in a world economy saturated with commodities, capital and labour power, in which the law of the most powerful rules, the transnational monopoly corporations use, with an unprecedented intensity, all their economic power and their control over the scientific-technical innovations, together with the political and military power of the imperialist states of their nations of origin, in order to penetrate the areas of greater relative development of the so-called Third World, with the aim of absorbing 262

or destroying local bodies of capital, whose markets they need to capture in order to guarantee their own subsistence. In the underdeveloped world, the empire of the transnational monopolies has enthroned a vicious cycle of unrestricted opening to the import of commodities and capital, bankruptcy of national industry, dollarization or monetary overvaluation guaranteeing maximum value in the export of profits, growing unemployment and informalisation of work, decline in the living standards of the people and, consequently, decrease of the capacity for solvency of the national market they have appropriated. The equilibrium of the balance of payments is maintained in a temporary and precarious manner by means of increasing interest rates to attract the flows of speculative capital that constitute imperialism’s main instrument of expropriation. How has this been demonstrated by the Argentine crisis, amongst other examples? Once all the blood had been sucked out, once all possibilities of capturing the income and reducing the spending of the dependent national state so as to maintain the spiral of external indebtedness had been exhausted, once the cadaver of the national market that had been so diligently “restructured” and “reformed” according to the neo-liberal recipes was abandoned by the vampires, only the fear of a chain reaction of the economic and financial crisis solicits a “rescue” package which then in turn only further compromises the future of the nation. The obsolescent nature of capitalism today is evident because a society which by definition is based on wage labour and the sale of commodities increasingly depends on the reduction of labour and wages and, as such, is forced to limit the horizon of the market that constitutes its source of subsistence. The political, economic, social, moral and environmental degradation of the present is the greatest indication that the world has already entered the phase of barbarism. The fable about the “trickledown effect” did not last long. According to this fable, the whole world was supposed to reach the levels of economic development now monopolized by the United States, the European Union and Japan. Fewer and fewer are those who refuse to recognize that the program of unilateral opening and deregulation imposed by neo-liberalism is not the stairway to the “First World” but is a wide-open door to political, economic, social and moral crisis. Those who think the big imperialist powers can take refuge in a “Noah’s Ark” that will save them from the “universal flood”, are deluding themselves. 263

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Chapter Nine Class Struggles against Capitalist Imperialism Overview The global working class is the motor force of social development and that its historic mission is the abolition of private ownership of the means of production, the exploitation of man by man in the direction for the full eradication of the classes. There is no other social force which can fulfil this role. The reality today of the capitalist economic crisis, which has manifested itself in a synchronized way in many capitalist countries, demonstrates that capitalism finds itself in the highest imperialist stage of its development, tortures millions of workers all across the world, gives birth to poverty and unemployment, suffers from incurable contradictions which are manifested in the cyclical crises as well as the in the wars for the expansion of the business activity of the monopolies, the division of the markets, the control of the sources of wealth. The crisis of capitalism demonstrates the historical limits of the system while the working class, which does not have the means of production at its disposal, is the “grave-digger” of the capitalist mode of production. This historic revolutionary role of the working class has its precondition that it will be organized as a class for itself. The formation and strengthening of the revolutionary party is necessary for the working class to become conscious of its mission, to shape a revolutionary strategic lead for the implacable class struggle against capital. The working class cannot have success with line of “social consensus”, and social “peace”, as is claimed by reformist and opportunist forces. The many years of negative experience demonstrate that this line led to the assimilation of the trade union movement, with social democracy and opportunist forces having the main responsibility for this. Today, it is a necessity for capitalism to overturn even the most basic gains that were won in previous decades as a result of the class struggle at a national and international level. Nor can the working class struggle for the prevention of the anti-people measures, for economic and social demands and gains in conditions of capitalism can be separated with a “Chinese wall” from the struggle for the socialist-communist society. The 265

struggle for economic, social and political demands, based on the contemporary needs of the people and working class, with the goal of rallying, concentrating and preparing working class forces for tough confrontations with the exploitative system, is not limited to the acquisition of some gains, but is linked to the goal for the overthrow of capitalist barbarity. Introduction Given the oppressive and criminal role of capitalist imperialism in the world today, it is no compliment to call Western ‘democracies’ the cradles of civilization. It is true that they are the cradles of the infectious class struggles against those same imperialist ruling classes. To understand the heroism shown by the workers, one has to know that they are combating not only the national bankers and capitalists but their more powerful co-criminals around the world. The banks in these imperialist powers—along with the big capitalists and bankers in the West itself—are using ruling classes to squeeze money out of the workers that their governments owe these banks as interest payments on loans. Hence, the raging struggles against this system of mindless graft and oppression by territorial expansion and encroachment. The Stage Set By The New World Order A global economic system and a supranational ruling class need institutions of global rule. New institutions are being created such as the World Trade Organization (WTO) and existing ones such as the U.N., the Organization of Economic Cooperation and Development (OECD) and the World Bank are being reformed to facilitate the dismantling of national barriers to trade and investment. These new structures and their various multilateral agreements are eroding the traditional prerogatives and power of the nation-state. This has, predictably, provoked widespread reaction across the political spectrum. There are still many forces, in both the public and private sector, tied to national organization and they are struggling to maintain the rights of sovereignty. For instance, at the First Ministerial Conference of the WTO in Singapore last year, a variety of ‘developing’ nations protested the Multilateral Agreement on Investment being pushed by 266

the WTO because it abrogates the nation’s decision making powers concerning its own economic life. The solutions proposed by this array of forces range from fighting to retain national prerogatives to the hope that the capitalists can be persuaded to agree to some new form of governance which institutes mechanisms to restrain global capitalism and its consequences. Neither of these is possible. Nation-states are creatures of a particular stage in history. Centuries in the making, they arose and developed as capitalism arose and developed and reordered the world. They not only defined a national market, but also served to develop and protect that market, and the interests of nationally based capital. From this home base each national bourgeoisie could launch its campaign for its country to rule the world. With the development of imperialism, capital has become only steadily more internationalized and now global in its nature. The stage of nation-states is over. Globalization is shifting decision making ‘upward’ to arenas outside of the nation-state’s historically evolved political mechanisms, causing a loss of rights in general. But there is nothing inherently democratic or virtuous in the nation-state for the world’s proletariat. In fact, its demise will remove a powerful obstacle to class unity among them. The period of reform is over. Capital no longer has the luxury to bestow privileges on nor allow the participation of any of the peoples of the world in the political decision making process. Under imperialism, capital ruled in the imperialist countries through bribery - the provision of economic, social and political privileges to a section of the workers in the home country. The bribe guaranteed that these workers would see the resolution of conflict within the confines of capitalist social relations, would support their own bourgeoisie in times of crisis and war and would exert influence on the rest of their class to pull them behind the policies and interests of the rulers. The super profits to bankroll the bribe came from colonial exploitation, guaranteed by the fascist rule of the colonial and neo-colonial regimes installed by the imperialist countries. Bourgeois democracy has been a key element of the bribe. It is important to remember that bourgeois democracy is not true democracy. True democracy is impossible as long as one class owns the means of survival of the other. Bourgeois democracy is simply a political form - although a ‘freer, wider, and clearer form of class oppression and class struggle’ (Lenin, Socialist Revolution and Self-Determination, Collected Works, vol. 22, p. 267

145) - which has been used by the bourgeoisie to help facilitate the development of capitalism. It is more characterized by fraud and deceit than any notion of real freedom, except, of course, for the ruling class. Within the context of an expanding economy the effects of capitalism could be muted by the constant co-optation through bribery of a section of each ‘national’ working class and the suppression of the bottom by force. Today, labour replacing technology is allowing capital to free itself from its dependency on human labour and therefore its need to compromise with or make concessions to any workers. It is forcing labour to compete with the robot, driving wages down below the level of survival. Society is polarizing around those who have and those who don’t. Those who don’t are the billions of people of the world, including millions of formerly bribed workers in the imperialist countries. Those who have are the handful of millionaires and billionaires in whose interest the new international order is being run. This is the new world order: the growing polarization of wealth and poverty, the deterioration of traditional structures of rule and the unrelenting pressure to drive, not only wages, but the full range of human culture to its lowest level. The ruling class cannot allow the propertyless mass to determine the direction of the world, which would mean where their profits, privileges and well-being are going. Fascism provides the wherewithal to maintain control. This control has become all the more urgent for the ruling class since the very process which they have set in motion daily tears down the objective barriers to unity among the world’s proletariat - national identity and bribery - that developed under imperialism. Fascism emerging with global economy The fascism of today will not simply be a repression of political life in the imperialist countries to the level of the politically repressive states of many ‘developing’ nations. It will mean the transformation of political rule everywhere, although the process of its implementation and its form will undoubtedly vary around the world. The common denominator cannot help but be a state, global in nature, which guarantees the unrestrained rule of private property on a global scale and the protection of the interests of a supranational ruling class. This process is being played out in different ways. In part, it is emerging de facto from the steps being taken to facilitate the development of the 268

global economy. Multilateral trading and investment agreements are proposed, debated and implemented with little, if any, public participation or with any public oversight or recourse. The Multilateral Agreement on Investments, for example, would abolish the ability of people to regulate in any way the ‘behaviour, entry, conditions and operations of transnational corporations in their country.’(A Treaty for Corporate Rights And Privileges, International Forum on Globalization, January 13, 1997) To the degree to which the proletariat has had an influence on restraining the rights of private property, such agreements would clearly deny it the ability to do so altogether. Renato Ruggiero, the Director of the WTO, is clear about the intentions of such agreements when he commented: ‘We are writing the constitution of a single global order...’ (Scott Nova and Michelle SforzaRoderick, ‘Worse than NAFTA’, Preamble for Public Policy, April 1997). The implementation of fascism is also, in part, evolving through the full range of existing institutions within the various nation-states. As nation-states are serving as the shell for the emergence of the global order so too are they serving as the shell for the emergence of a global system of control. The advance of fascism in the US Study after study confirms that the inequality between wealth and poverty is more pronounced in the U.S. than any other industrialized nation. The Labour Department reports that one quarter of all workers in the US are living in poverty, either unemployed, underemployed or involuntarily working part-time. The phenomenal growth of prison labour and the provisions of ‘welfare reform’ are creating a growing pool of slave labour comparable to that in the lowest wage countries. With the elimination of entitlements has come the repudiation of governmental responsibility on any level for the individual, leaving in the words of the economist Lester Thurow, ‘no social contract but fear.’ These conditions are the foundation for the challenge to capitalist rule. The struggle for reforms, for protection from the ravages of unrestrained private property, is the only arena in which this fight can take place. The capitalists must inevitably attempt to deprive the emerging proletariat of ‘democracy’, and more importantly of its constitutional rights. A blizzard of court rulings, Supreme Court decisions, new laws and various governmental policies are literally transforming the legal system in 269

this country and thereby, the foundation of American political rights. Among the countless examples are the gutting of the Fourth Amendment, the chipping away of basic rights of privacy, and the serious inroads made into a variety of constitutional protections including the freedom of speech, freedom of assembly and due process. As a result, the coercive power of the state has been greatly increased. Police at all levels operate virtually unchallenged, prison budgets exceed those of education in many states, over 5 million Americans are either in prison or under some form of legal sanction. In some cities, entire neighbourhoods are under electronic surveillance. The campaign to eliminate these rights was built on the backs of the jobless and propertyless section of society and directed first against them. By painting crime and poverty black, the ruling class effectively manipulated the colour divisions of the country to their advantage. In this way, they have sought to establish a base for their fascist agenda by uniting primarily whites of all classes on the basis of skin colour. Although white workers are the majority of the jobless and propertyless, the isolation of the minorities established the basis to attack the rights of all workers. There is no more proof of this than the so-called ‘welfare reform’. Passed after more than fifteen years of anti-black propaganda, the true intention of changing ‘welfare as we know it’ is now clear: the destruction of the wages floor and the creation of a pool of labour competitive on the global market. The American people’s political voice has been reduced to a whisper. Free of the need to make concessions overall, the capitalists have little need for the posturing of the past. ‘Bipartisanship’ rules at all levels of government, shamelessly advancing the interests of private property over the rights of the people in every instance. Faced with politicians who ‘fiddle while Rome burns’ the American people are growing increasingly restive and dissatisfied. So, far the apologists of the ruling class have been able to turn even this to their advantage as they cultivate these impulses into support for increased restrictions and outright repression. Ruling class propagandists are dutifully providing the theoretical and philosophical justification for this new American order. In their book, The Bell Curve, Charles Murray and his collaborator Richard Herrnstein advocate concentration camps for the so-called genetically unintelligent poor, both black and white. Newt Gingrich writes in his book To Renew America that ‘if you are not prepared to shoulder personal responsibility then you are not 270

prepared to participate in American civilization.’ Alvin and Heidi Toffler claim that majority rule is an outdated concept and should be replaced by the ‘minority rule’ of those who have the access to society’s resources, regardless of colour. (Creating a New Civilization, 1994). Deepak Lal, an influential UCLA economist writes in a paper presented before the world bank that ‘an efficient market economy does not require a democratic form of government for its maintenance’ (Deepak Lal, ‘Participation, Markets and Democracy’, January 1994), a finding echoed by an increasing number of studies bankrolled by foreign policy institutes and universities. For those squeamish at the thought of such a future, foreign policy specialist Thomas Carrothers advises in a recent issue of Foreign Affairs, ‘The shedding of illusions is painful, but beneficial.’ Presumably, this pain will be as unevenly distributed as the wealth of the world. The tasks of revolutionaries For revolutionaries, the lessons are clear. The forces of production have outstripped the relations of production and have to be changed. The conditions of today provide no reason for the capitalists to ally with any section of the proletariat. The great struggles of the 1930s represented a fight between warring sections of capital. The various ‘united fronts’ or ‘popular fronts’ represented a broad array of forces tied together through their fight against fascism. The section of capital that could still advance its interests through bourgeois democracy pulled these forces behind them. Today, no section of the ruling class needs the workers, except perhaps as slaves. As our class forces continue to attempt to fight in the old ways we find that our efforts are turned against us and used to tighten the noose of a police state. Laws to protect reproductive rights clinics from violence lay the foundation for attacks on free speech and assembly. Our impulse to protect our children is turned into laws allowing extensive surveillance of individuals and encouraging vigilante behaviour. Fears about crime are used to legitimate surveillance of various forms of private communication and even entire neighbourhoods. We must learn to fight in such a way that reflects the changed reality. This can only be done by separating from the ideas, interests and solutions of the ruling class. It is in this context that the formation of the Labour Party 271

with its class program takes on such significance. Made up of the employed and unemployed, the Labour Party is an expression of the growing polarization of wealth and poverty in this country. Its program represents a conscious recognition of the workers’ independent political interests. In its potential to become a centre for organizing the social struggle and educating the proletariat to that independent outlook, the Labour Party represents a crucial weapon against the further advance of fascism in this country. Ultimately, the only path to true democracy is for the proletariat to take political power and reorganize society around its own interests. Electronics— the technology of abundance—makes this possible. It is only when class exploitation is ended and with it the inequality that stems from it, will it be possible for true democracy to flourish. Capitalist Imperialism and Class Struggles Capitalist imperialism is not a foreign policy of one or another country. It is rather a particular stage in the history of the capitalist mode of production. The idea that capitalist imperialism, whether it be sanitized as globalization, neoliberalism or whatever its appellation, is a world system though it is often treated as a fact so obvious that it requires no further comment. Unfortunately, the misuse of the concept of imperialism in much current debate is strong evidence to the contrary. To understand capitalist imperialism or contemporary world capitalism, it is above all necessary to grasp the dynamism of the capitalist mode of production itself. This dynamism is manifested in a two-fold tendency of capitalist expansion. First, there is the tendency to reproduce capitalist production relations and productive forces on a national scale. I say “national scale” because nations or national entities are the best geographical framework of the capitalist mode of production. Lenin noted this when he remarked that the rise of capitalism and the rise of nations were parallel processes. This tendency, also called the tendency to create a national market, acts to break down or absorb all obstacles to capitalist expansion and capital accumulation. The second tendency is the tendency of the capitalist mode of production to become worldwide, to transcend national boundaries. This tendency internationalizes capital; it acts to produce and reproduce capitalist production relations and productive forces on a world scale. Capitalist 272

imperialism as an international phenomenon means, for example, the unfavourable flow of capital to nations with more developed productive forces from the “under-developed” nations, thereby drawing the latter into the world market, into the unequal exchange between “raw materials” and “finished products” which works to the disadvantage of those nations whose productive forces are “underdeveloped”. What are the effects of these two contradictory but inter-related tendencies of the capitalist mode of production? We may ask! Looking at contemporary world imperialism, we can say that the first tendency acts to create in each national entity which is part of the world imperialist system a complex social formation dominated by the capitalist mode of production. In this social formation each of the levels which constitute it, the economic, the political and the ideological, becomes a site of class struggle in which contradictions between the classes, increasingly the proletariat and the bourgeoisie and their respective allies, are fought out. The second tendency, the reproduction of capitalist production relations and productive forces on a world scale, also therefore reproduces class struggle on a world scale. At the time it gives rise to an inter-related international hierarchy of national entities. This is because capitalism develops unevenly—in some countries productive forces are developing, in others the development of the productive forces is blocked. These developments are determined by the character of the production relations and the differing places and roles assigned to the various national entities by the structure of the hierarchy. This international hierarchy is dominated by a hegemonic power, whose economic, political and ideological strength and influence are decisive for the maintenance and control of the world system. The structure of world imperialism means that the system as a whole assigns a definite role to each nation included in it, in accordance with its economic, political and ideological characteristics. Some countries function primarily as providers of minerals and other raw materials for the world market, basic foodstuffs, etc. Others, Brazil for example, or, until recently, Iran, performed a role as political gendarmes, maintaining imperialist relations in South America and the Middle East respectively. The hierarchy of world imperialism acts to accelerate the development of productive forces in the “developed” imperialist countries while retarding the development (reinforcing the dependency) of nations whose productive forces are less developed. This is how unequal development operates: to 273

reproduce capitalist inequality on a world scale to the advantage of the bourgeoisie in the “developed” imperialist nations who benefit not only from the exploitation of their own workers, but also from the exploitation of the workers of the world. The history of the twentieth century has been shaped by two processes: proletarian revolution and national liberation struggle on the one hand, and the struggle for hegemony within world imperialism on the other. The hegemonic power, the apex of the imperialist hierarchy, is occupied by that social formation which, by its economic power, its political-military strength, and its advantageous relations with other elements of the world imperialist system, is vital for the maintenance and reproduction of the system. Today the majority of the world’s peoples live in a capitalist imperialist system in which the hegemonic social formation is the USA. Among the elements which enable the USA to exercise hegemony are the size and extent of its capital export, the role of the dollar and US capital on the world market, and US military strength and technical superiority in military matters. The two tendencies we have described, taken together, give rise to world imperialism. Each social formation within it is thus necessarily involved in a complex series of inter-relationships and class and national struggles. The character of any social formation can only be judged then, not just by the balance of class forces within it, but also by its place in the hierarchy of world imperialism, its role in world national and class struggles. These two criteria: the balance of internal class forces and the role and place in class and national struggles on a world scale, taken together, provide the basis for communists to evaluate and characterize nations from a scientific perspective. An important consequence of this analysis is a recognition of the fact that a country cannot break with capitalist imperialism merely by changing its foreign policy or its attitude toward one or the other major “powers.” As Charles Bettelheim (1972:296) explains: A dominated country, or a previously dominated one that does not alter its situation in the international capitalist division of labour, merely reproduces its unfavourable situation: the more it increases the production of the products that its “place” assigns it, the more does it participate in the worsening of its own unfavourable situation... And, he adds, “a country cannot escape the effects of imperialist domination and exploitation except through a long and complex struggle.” It 274

is this struggle that cannot be prosecuted effectively without the liberating force of class. Why Class Struggles against capitalist Imperialism? First, capitalism is an inherently exploitative system. The bosses own the factories, banks, mines, shops, etc. Workers don’t. Workers are compelled to sell their labour to the boss for a wage. Peasants are forced to grow cash crops to make ends meet. The boss is interested in squeezing as much work out of the worker for as little wages as possible so that he/she can maintain high profits. Thus the more wages workers get the less profits the bosses make. The lower prices the bosses and state marketing boards can pay the peasant for the crops, the more profits they make. Capitalism is based on paying workers and peasants less than the full value of their labour (“exploitation” in the technical sense of the word) and using the surplus for the purpose of enriching the bosses and making more profits. Overall, we would argue that the workers and working peasants produce all wealth. The only exceptions to this general rule are some sections of the middle class who do useful productive work (e.g. doctors, teachers). All other classes are parasitic and depend for their existence on exploitation. Clearly, the interests of the ruling class, on the one hand, and the working class and working peasantry, on the other, are in total opposition to each other: capitalism systematically produces, and is based on, inequalities in wealth, power and opportunity. It is almost impossible for an ordinary person to make enough money to set up in business. Second, capitalism is authoritarian. At both the level of the workplace and at the level of society as a whole capitalism is an authoritarian system. At the workplace level, capitalist enterprises are run by managers and owners who make all key decisions. The vast majority of people in a workplace -the workers- have no real say at all. Decision-making revolve around the maximisation of profits; any company which worries about human costs unrepresented in costs and revenues will not be able to compete effectively in the capitalist system. Similarly, concern about long-term issues like the environmental crisis is undermined by competition in capitalism, which makes it irrational to do anything other than devote oneself to short-term goals. At the social level, the inequalities associated with class systematically exclude most people from active and equal involvement in political activity 275

e.g. lack time, education. In addition, the very existence of these inequalities gives rise to the State which perpetuates the system where the few rule over the many. This is reinforced by the tendency of capitalism to move to a monopoly situation where a few giant companies dominate the entire economy. In other words, capitalism embodies unfair power relations. Third, capitalism prioritizes profit-making over human needs. Production under capitalism is not based on the needs of ordinary people. Production is for profit. Therefore although there is enough food in the world to feed everyone, people starve because profits come first. Food is not given out on the basis of hunger, but on the basis of ready cash. Useless goods are promoted because they are profitable, not because they are needed. Poverty, bad working conditions etc. all take a back seat to the goal of making money. Four, capitalism is inefficient. Market systems are inherently wasteful, because supply is only matched to demand after the fact of production. There may be more goods produced than people can buy; in this case goods go to waste (they are not used at all as this is better from the point of view of the capitalists than giving them to those who need them). There is no correlation between what is produced and what is actually needed inside society. Instead, different companies produce a number of almost identical products resulting in unnecessary waste. The profit motive means that markets systematically fail to meet basic needs in favour of the needs of those with the money i.e. the ruling and middle classes. Contrary to the ideology that capitalism is to the benefit of all, there is a constant contradiction between the private interests of capitalists and the general needs of the majority of people. Five, and finally, capitalism undermines social solidarity. The market forces people to compete for jobs, wages etc. It also promotes greed and similar negative social values. In this way markets undermine positive values like solidarity, etc. Ideological Hegemony Ideological hegemony is the process by which the exploited come to view the world through a conceptual framework provided to them by their exploiters. It acts first of all to conceal class conflict and exploitation behind a smokescreen of “national unity” or “general welfare.” Those who point to the role of the state as guarantor of class privilege are denounced, in theatrical tones of moral outrage, for “class warfare.” If anyone is so 276

unpardonably “extremist” as to describe the massive foundation of state intervention and subsidy upon which corporate capitalism rests, he is sure to be rebuked for “Marxist class war rhetoric” (Bob Novak), or “robber baron rhetoric” (Treasury Secretary O’Neill). The ideological framework of “national unity” is taken to the point that “this country,” “society,” or “our system of government” is set up as an object of gratitude for “the freedoms we enjoy.” Only the most unpatriotic notice that our liberties, far from being granted to us by a generous and benevolent government, were won by past resistance against the state. Charters and bills of rights were not grants from the state, but were forced on the state from below. If our liberties belong to us by right of birth, as a moral fact of nature, it follows that we owe the state no debt of gratitude for not violating them, any more than we owe our thanks to another individual for refraining from robbing or killing us. Simple logic implies that, rather than being grateful to “the freest country on earth,” we should raise hell every time it infringes on our liberty. After all, that’s how we got our liberty in the first place. When another individual puts his hand in our pocket to enrich himself at our expense, our natural instinct is to resist. But thanks to patriotism, the ruling class is able to transform their hand in our pocket into “society” or “our country.” The religion of national unity is most pathological in regard to “defence” and foreign policy. The manufacture of foreign crisis and war hysteria has been used since the beginning of history to suppress threats to class rule. The crooked politicians may work for the “special interests” domestically, but when those same politicians engineer a war it is a matter of loyalty to “our country.” The Chairman of the JCS, in discussing the “defence” posture, will refer with a straight face to “national security threats” faced by the U. S., and describe the armed forces of some official enemy like China as far beyond “legitimate defensive requirements.” The quickest way to put oneself beyond the pale is to point out that all these “threats” involve what some country on the other side of the world is doing within a hundred miles of its own border. Another offense against fatherland worship is to judge the actions of the United States, in its global operations to keep the Third World safe for ITT and United Fruit Company, by the same standard of “legitimate defensive requirements” applied to China. 277

In the official ideology, America’s wars by definition are always fought “for our liberties,” to “defend our country,” or in the smarmy world of Maudlin Albright, a selfless desire to promote “peace and freedom” in the world. To suggest that the real defenders of our liberties took up arms against the government, or that the national security state is a greater threat to our liberties than any foreign enemy we have ever faced, is unforgiveable. Above all, good Americans don’t notice all those military advisers teaching death squads how to hack off the faces of union organizers and leave them in ditches, or to properly use pliers on a dissident’s testicles. War crimes are only committed by defeated powers. (But as the Nazis learned in 1945, unemployed war criminals can usually find work with the new hegemonic power.) After a century and a half of patriotic indoctrination by the statist education system, Americans have thoroughly internalized the “little red schoolhouse” version of American history. This authoritarian piety is so diametrically opposed to the beliefs of those who took up arms in the Revolution that the citizenry has largely forgotten what it means to be American. In fact, the authentic principles of Americanism have been stood on their head. Two hundred years ago, standing armies were feared as a threat to liberty and a breeding ground for authoritarian personalities; conscription was associated with the tyranny of Cromwell; wage labour was thought to be inconsistent with the independent spirit of a free citizen. Today, two hundred years later, Americans have been so Prussianized by sixty years of a garrison state and “wars” against one internal enemy or another, that they are conditioned to genuflect at the sight of a uniform. Draft dodgers are equivalent to child molesters. Most people work for some centralized corporate or state bureaucracy, where as a matter of course they are expected to obey orders from superiors, work under constant surveillance, and even piss in a cup on command. During wartime, it becomes unpatriotic to criticize or question the government and dissent is identified with disloyalty. Absolute faith and obedience to authority is a litmus test of “Americanism.” Foreign war is a very useful tool for manipulating the popular mind and keeping the domestic population under control. War is the easiest way to shift vast, unaccountable new powers to the State. People are most uncritically obedient at the very time they need to be most vigilant. 278

The greatest irony is that, in a country founded by revolution, “Americanism” is defined as respecting authority and resisting “subversion.” The Revolution was a revolution indeed, in which the domestic political institutions of the colonies were forcibly overthrown. It was, in many times and places, a civil war between classes. But as Voltairine de Cleyre wrote a century ago in “Anarchism and American Traditions,” the version in the history books is a patriotic conflict between our “Founding Fathers” and a foreign enemy. Those who can still quote Jefferson on the right of revolution are relegated to the “extremist” fringe, to be rounded up in the next war hysteria or red scare. This ideological construct of a unified “national interest” includes the fiction of a “neutral” set of laws, which conceals the exploitative nature of the system of power we live under. Under corporate capitalism the relationships of exploitation are mediated by the political system to an extent unknown under previous class systems. Under chattel slavery and feudalism, exploitation was concrete and personalized in the producer’s relationship with his master. The slave and peasant knew exactly who was screwing them. The modern worker, on the other hand, feels a painful pounding sensation, but has only a vague idea where it is coming from. Besides its function of masking the ruling class interests behind a facade of “general welfare,” ideological hegemony also manufactures divisions between the ruled. Through campaigns against “welfare cheats” and “deadbeats,” and demands to “get tough on crime,” the ruling class is able to channel the hostility of the middle and working classes against the underclass. Especially nauseating is the phenomenon of “billionaire populism.” Calls for bankruptcy and welfare “reform,” and for wars on crime, are dressed up in pseudo-populist rhetoric, identifying the underclass as the chief parasites who feed off the producers’ labour. In their “aw, shucks” symbolic universe, you’d think America was a Readers Digest/Norman Rockwell world with nothing but hard-working small businessmen and family farmers, on the one hand, and welfare cheats, deadbeats, union bosses and bureaucrats on the other. From listening to them, you’d never suspect that multi- billionaires or global corporations even exist, let alone that they might stand to benefit from such “populism.” In the real world, corporations are the biggest clients of the welfare state, the biggest bankruptcies are corporate chapter eleven filings, and the worst 279

crimes are committed in corporate suites rather than on the streets. The real robbery of the average producer consists of profit and usury, extorted only with the help of the state--the real “big government” on our backs. But as long as the working class and the underclass are busy fighting each other, they won’t notice who is really robbing them. As Stephen Biko said, “The oppressors most powerful weapon is the mind of the oppressed.” Waiting for Copernicus According to John Feffer’s article “Waiting for Cpernicus” published in Vol. 7, No. 19 May 8, 2012, Institute for Policy Studies (IPS) in Washington. www.fpif.org, it is happening in Buenos Aires. It’s happening in Paris and in Athens. It’s even happening at the World Bank headquarters. The global economy is finally shifting away from the model that prevailed for the last three decades. Europeans are rejecting austerity. Latin Americans are nationalizing enterprises. The next head of the World Bank has actually done effective development work. Maybe that long-heralded “end of the Washington consensus” is finally upon us. After the near-collapse of the global financial system four years ago, obituary writers rushed to proclaim the death of the prevailing economic philosophy known as neo-liberalism. “Wall Street’s financial meltdown marks the end of an era,” wrote Michael Hudson and Jeffrey Sommers in Counterpunch at the end of 2008. “What has ended is the credibility of the Washington Consensus – open markets to foreign investors and tight money austerity programs (high interest rates and credit cutbacks) to ‘cure’ balanceof-payments deficits, domestic budget deficits and price inflation.” It was a tempting conclusion. Putting Wall Street and financial speculators at the centre of the universe had generated an economic supernova, and everyone seemed to get the message. Everyone except Big Money, which never received the obituary notice. After some minor tweaking of Wall Street practices, some bailouts of enterprises deemed too big to fail, and the injection of some stimulus spending to arrest the free fall, Washington continued with business as usual. The Obama administration, like the Clinton administration before it, discovered the immense power of the bond market. The IMF and the World Bank, meanwhile, didn’t fundamentally change their policies. And the European Union, led by tightfisted Germany, continued to back austerity. All the major economic actors 280

held to the old orthodoxy even though it flew in the face of common sense and common decency (though not in the face of the bottom line). Wall Street’s continued irrational exuberance, its lavishing of bonuses on its elite, and its pushback against even the most modest of regulations all suggest that the old Ptolemaic system – with Wall Street and the Washington Consensus still at the centre of the universe – had not yet given way to a Copernican revolution that displaces these powerful institutions from their privileged position. Such revolutions, of course, are not made in a day. Remember: Ptolemy’s system, with the earth at the centre of all things, reigned for 1,300 years even as it grew inordinately complex to explain new astronomical observations. A century after the publication of the great Pole’s theory of heliocentrism, Galileo still ran afoul of church authorities for his Copernican leanings. Orthodoxy dies hard. As a first sally against the prevailing orthodoxy of neo-liberalism, today’s economic Copernicans have taken aim at austerity. It’s a fat target: belttightening, after all, is not only unpopular but unsound. Paul Krugman marshals the economic evidence in the latest New York Review of Books, concluding that the “chances of a real turn in policy, away from the austerity mania of the last few years and toward a renewed focus on job creation, are much better than conventional wisdom would have you believe.” Nowhere is that clearer than in Europe. There, the case for austerity, explains Washington Post columnist Harold Meyerson, “was that once governments began slashing their spending and deficits, markets would reward them by investing in their presumably more productive economies. But the reverse has happened. As Greece, Ireland, Portugal and Spain have cut their budgets, investors have grown less willing to buy their bonds. By plunging themselves deeper into recession, these nations have convinced investors not that they’re fiscally virtuous but that they won’t become economically viable for many more years.” French and Greek voters rejected austerity in their Presidential elections on the weekend of May5-6 not because, as the U.S. media coverage implies, they are unruly children who refuse to swallow their medicine. Rather, they realize that austerity economics at this delicate moment could very well precipitate a double-dip recession (i.e.: a lot more pain). Moreover, they want the pain – and everyone knows that there will be pain—to be fairly shouldered. Francois Hollande, the new Socialist president in France, has 281

called for a 75-percent tax rate on all earnings over $1.3 million. Now that’s a Buffet tax! The left has woken from its collective stupor just in time, for Europe at the moment is very much up for grabs. The far right has also rejected austerity, and it has a much simpler platform: blame the immigrants. The National Front in France has injected its xenophobic virus into the very heart of France’s centre-right Union for a Popular Movement; the street thugs of Golden Dawn in Greece will enter parliament for the first time; Geert Wilders and his anti-Islamic chest-thumpers brought down the government in the Netherlands last month. Where the left has failed to provide a convincing alternative to austerity, the right has prospered. Much rests on the shoulders of Hollande and the French Socialists. To them falls the responsibility of rebuilding a European left that returns the EU to its roots–a socialist market economy that grows together and preserves unity in diversity. To pull France out of its own doldrums, Hollande can’t think small. He must go big and, through persuasion and arm-twisting, rewrite the rules of European economic revival. Rejecting austerity is only a first step. The Europeans could learn something here from Latin America, particularly Argentina. In the late 1990s, having racked up a huge debt, Argentina faced the typical recommendations from the international financial institutions: cut the budget, privatize government firms, remove barriers to outside investment. But Buenos Aires said no. It defaulted on $100 billionplus in loans. According to the rules of the game, Argentina should have been thrown out on its ear and forever banned from playing in the global casino. But that didn’t happen. Most creditors – 93 per cent – eventually accepted the 35 cents on the dollar haircut that the government offered. Foreign investors, particularly from Brazil, continued to supply capital. Bargain-hungry tourists flocked to the country. Workers banded together to take over enterprises that owners had given up on (such as the Bauen Hotel in downtown Buenos Aires). With a bit of luck–particularly the rise in price of soybeans, a key Argentine export -- the country clawed its way back to economic health. Unemployment dropped from 25 per cent in 2001 to below 8 per cent in 2010. Social programs reduced the percentage of the population living beneath the poverty line from 51 to 13 per cent (though it went up again in 2010). The recovery, like all recoveries, is tenuous, for it depends a good deal 282

on the price of the commodities Argentina exports. Which is why Argentina is going one step further to exert some control over the process. The government of Cristina Kirchner has nationalized Argentina Airlines as well as pension funds, and it has also instituted measures to slow capital flight from the country. Most recently, it nationalized a key oil company, YPL, taking back control of the firm from a Spanish company that had a majority stake. “A poll conducted by Poliarguia Consultores published in the Argentine newspaper La Nacion,” writes FPIF contributor Melissa Moskowitz in Annotate This: EU Response to Argentina’s Nationalization, “indicated that 62 per cent of Argentines support President Cristina Kirchner’s plans to nationalize YPF. President Kirchner’s decision to promote and defend nationalization reflects growing opinion that the company has ‘not invested enough’ in Argentina to cope with growing international demand.’” Argentina is by no means the only country in the region to roll back the privatization mania. The Brazilian government increased its control over the oil company Petrobras a couple years ago. In Bolivia, the government of Evo Morales recently renationalized the electricity grid, which had also been in Spanish hands. This move comes after the nationalization of hydroelectric facilities and telecommunications. Venezuela, under Hugo Chavez, has made enlarging the state sector a populist rallying cry. And Ecuador has followed suit with laws to allow the government to seize oil and gas companies that don’t comply with national regulations. Despite this new trend in Latin America, foreign investors have been flocking to the region. In 2011, the region saw a 31-percent increase in foreign capital. But here’s the underlying reason for the nationalizations. According to a UN report, “FDI revenue transferred back to the countries of origin has increased from US$20 billion per year between 1998 and 2003 to US$84 billion between 2008 and 2010 per year.” Sound familiar? Back in 1973, Uruguayan writer Eduardo Galeano wrote, “Latin America is the region of open veins. Everything, from the discovery until our times, has always been transmuted into European – or later United States – capital, and as such has accumulated in distant centres of power.” Latin American leaders are, with these nationalizations, attempting to stem the blood loss. In sum, Marxist theories have sometimes been criticized on the grounds that his theory of class polarization predicted the relative decline of the middle class whereas in practice from the mid c19th onwards it is very clear 283

that for a variety of reasons non-manual employment has increased relatively to manual employment in capitalist societies suggesting that the relative size of the middle class has actually increased rather than decreased. However in his later work Marx did in fact predict the growth of the middle class and modern Marxists have also suggested that one should not equate the growth of non-manual employment with the growth of the middle class because routine non-manual clerical work has to a considerable extent been proletarianized such that many clerical workers can more accurately be described as members of the working class rather than as members of the middle class. However many non-Marxist sociologists have rejected the theory of the proletarianization of the clerical worker. The Bourgeoisie are a social class because they both own the means of production and exercise strategic control over the production process. The Proletariat are also a social class because they are non-owners of the means of production and have zero or negligible control over the production process. The Petty bourgeoisie are small scale owners of the means of production but do not hire labour. They are seen as a capitalist class but operating outside of the capitalist mode of production. Other social groups are in contradictory class locations: managers and supervisors do not own the means of production but do exercise some control over other workers and over the production process; small employers own and control their means of production but employ very few workers; and semi-autonomous workers do not own the means of production but do have some exploitative control over their own labour. The failure of capitalist methods of production and distribution is clearly illustrated by the way the collapse of the financial and industrial centres in Western Europe and the United States has devastated former colonial countries. Since late 2007 tens of millions of workers and farmers in several regions of the African continent have been severely affected by unemployment, rising commodities prices, food deficits and the decline in material aid from the industrialized states. Meanwhile, the dominant imperialist power in the world, the United States, has continued to interfere in the internal affairs of developing states. Under the guise of fighting “terrorism,” “Islamic extremism” and “piracy,” the Pentagon has formed the Africa Command (AFRICOM), which is seeking to develop and strengthen “partnerships” with various governments on the continent. None of these military programs has improved the economic conditions in Africa. 284

In the Western imperialist states, the ruling class is telling the workers and oppressed to wait for the capitalist system to rebound for the economic conditions of the masses to improve. In the developing states, the governments and peoples are offered failed models of “development,” which only serve to increase their dependence on the industrialized states. Only socialism offers a solution to both the imperialist countries and the former colonial and neo-colonial states. The wealth within society, which is created by the workers and farmers, must be distributed for the benefit of the majority. In order for there to be genuine economic growth and development during this period, the masses must be at the centre of the decision-making process and the implementation of economic policy.

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Chapter Ten Class Struggles in the Era of Imaginary Capitalism and Imaginary Democracy Overview The recent victories of workers in Argentina, Venezuela and Peru, Tunisia, Egypt and Libya in rising up against the neoliberal state—behind which is the multinational coalition of financiers, businessmen and trade unions that are forcibly imposing free market policies in the hemisphere under the banner of democracy—have shown the world that the only alternative to the extreme social inequality and instability of global capitalism is revolutionary class struggle. The battle for workers’ democracy in Latin America directly contradicts the mantra of neoliberalism that has been endlessly repeated across the political spectrum over the past 20 years from the left as much as the right, in the academy as much as in the mainstream media: the claim that the world has entered a “post-class” moment in which class struggle is over because of the new “knowledge” economy and all that is left is to make do with capitalism. Introduction For the first time in human history almost all of humanity is politically activated, politically conscious and politically interactive... The resulting global political activism is generating a surge in the quest for personal dignity, cultural respect and economic opportunity in a world painfully scarred by memories of centuries-long alien colonial or imperial domination... The worldwide yearning for human dignity is the central challenge inherent in the phenomenon of global political awakening... That awakening is socially massive and politically radicalizing... The nearly universal access to radio, television and increasingly the Internet is creating a community of shared perceptions and envy that can be galvanized and channelled by demagogic political or religious passions. These energies transcend sovereign borders and pose a challenge both to existing states as well as to the existing global hierarchy, on top of which America still perches... 287

The youth of the Third World are particularly restless and resentful. The demographic revolution they embody is thus a political time-bomb, as well... Their potential revolutionary spearhead is likely to emerge from among the scores of millions of students concentrated in the often intellectually dubious “tertiary level” educational institutions of developing countries. Depending on the definition of the tertiary educational level, there are currently worldwide between 80 and 130 million “college” students. Typically originating from the socially insecure lower middle class and inflamed by a sense of social outrage, these millions of students are revolutionaries-inwaiting, already semi-mobilized in large congregations, connected by the Internet and pre-positioned for a replay on a larger scale of what transpired years earlier in Mexico City or in Tiananmen Square. Their physical energy and emotional frustration is just waiting to be triggered by a cause, or a faith, or a hatred... [The] major world powers, new and old, also face a novel reality: while the lethality of their military might is greater than ever, their capacity to impose control over the politically awakened masses of the world is at a historic low. To put it bluntly: in earlier times, it was easier to control one million people than to physically kill one million people; today, it is infinitely easier to kill one million people than to control one million people.[1] - Zbigniew Brzezinski Former U.S. National Security Advisor Co-Founder of the Trilateral Commission Member, Board of Trustees, Center for Strategic and International Studies An uprising in Tunisia led to the overthrow of the country’s 23-year long dictatorship of President Ben Ali. A new ‘transitional’ government was formed, but the protests continued demanding a totally new government without the relics of the previous tyranny. Protests in Algeria have continued for weeks, as rage mounts against rising food prices, corruption and state oppression. Protests in Jordan forced the King to call on the military to surround cities with tanks and set up checkpoints. Tens of thousands of protesters marched on Cairo demanding an end to the 30-year dictatorship of Hosni Mubarak. Thousands of activists, opposition leaders and students 288

rallied in the capitol of Yemen against the corrupt dictatorship of President Saleh, in power since 1978. Saleh has been, with U.S. military assistance, attempting to crush a rebel movement in the north and a massive secessionist movement growing in the south, called the “Southern Movement.” Protests in Bolivia against rising food prices forced the populist government of Evo Morales to backtrack on plans to cut subsidies. Chile erupted in protests as demonstrators railed against rising fuel prices. Anti-government demonstrations broke out in Albania, resulting in the deaths of several protesters. It seems as if the world is entering the beginnings of a new revolutionary era: the era of the ‘Global Political Awakening.’ While this ‘awakening’ is materializing in different regions, different nations and under different circumstances, it is being largely influenced by global conditions. The global domination by the major Western powers, principally the United States, over the past 65 years, and more broadly, centuries, is reaching a turning point. The people of the world are restless, resentful, and enraged. Change, it seems, is in the air. As the above quotes from Brzezinski indicate, this development on the world scene is the most radical and potentially dangerous threat to global power structures and empire. It is not a threat simply to the nations in which the protests arise or seek change, but perhaps to a greater degree, it is a threat to the imperial Western powers, international institutions, multinational corporations and banks that prop up, arm, support and profit from these oppressive regimes around the world. Thus, America and the West are faced with a monumental strategic challenge: what can be done to stem the Global Political Awakening? Zbigniew Brzezinski is one of the chief architects of American foreign policy, and arguably one of the intellectual pioneers of the system of globalization. Thus, his warnings about the ‘Global Political Awakening’ are directly in reference to its nature as a threat to the prevailing global hierarchy. As such, we must view the ‘Awakening’ as the greatest hope for humanity. Certainly, there will be mainly failures, problems, and regressions; but the ‘Awakening’ has begun, it is underway, and it cannot be so easily co-opted or controlled as many might assume.

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Contradictions of Capitalism Capitalism is a bundle of contradictions in terms of what it promises and what it delivers. Empirically, the global capitalist system is essentially logicdriven by the requirements of capitalism and by the contradictions which exist. Capitalism cannot generate an adequate number of jobs nor create social welfare for all. In fact, there is an imaginary economics of an imaginary capitalism and an imaginary democracy of imaginary democratic systems, which do not work at all as they are proclaimed by the ideologues. Rather, we have what Samir Amin (2004:42) refers to as “a low-intensity democracy.” When economic crises are discussed, these are seen as exceptions rather than the normal operational state of the system. Therefore this serves the function that one has to be an intellectual dissident to view the system from without and get an insight into what is going on. In other words, neoliberal economic propaganda and “democratic” political propaganda continue on a global scale and the future guardians and functionaries of the systems must be steeped in this ideology. This is a global process as a part of the historical process. There is nothing to indicate that the conceptualization and analysis made by Marx and Engels about the operation of capitalism in the nineteenth century was mistaken. In the twentieth century, World Wars I and II were part of the same conflict among the imperialist powers. There was massive barbarity in the 20th century, in order to settle this question in Europe (Meszaros 2001). Thorstein Veblen (1994:11) noted that capitalism was a modern form of the “barbarian culture” in which exploitation and war, embracing feudal and violent values, are “worthy employments,” whereas earning an honest living is “unworthy.” “Under this common-sense barbarian appreciation of worth or honour, the taking of life-the killing of formidable competitors, whether brute or human-is honourable to the highest degree. And this high office of slaughter, as an expression of the slayer’s potency, casts a glamour of worth over every act of slaughter and over all tools and accessories of the act.” We can see from the modern age of warfare, since the book appeared in l899, that this barbarian culture has indeed made admirable strides. Even after World War II, tensions remained even after this. The United States could not dominate the whole world or even the whole continent of Europe until today. There was no actual communist threat but the ideological construct of a communist threat helped the US to dominate Europe.[27] 290

Today, some countries are still not completely dominated by transnational capital, and the US seeks to bring these countries into the global system. This global class struggle took the form of imperialist wars after WW II, in Korea, Vietnam, Cuba, Iraq, Libya, and so on. Today Iran and Syria are seen as obstacles as they threaten US-Israeli domination of Middle East energy resources and the opportunity for capitalist profits if the region can be “democratized” and integrated into the neoliberal order. Eric Hobsbawm has noted some salient features of the contemporary global world disorder in his “War, Peace and Hegemony at the Beginning of the Twenty-first Century,” Mainstream 43 (13),of March 19, 2005. The establishing world order is more problematical than in the 19th century for two reasons. The first and most important of these is the growing inequalities due to free-market globalization, which are bringing “grievance and instability.” The second is that there is no longer a “great power system” that could prevent a collapse into a war such as happened between l915 and l945. He observes that “historically empires have not created peace and stability in the world around them.” There is not likely to be a “Pax Americana.” Samir Amin has summarized the malady plaguing the global economy today. The prevailing ideas for describing how the global capitalist economic system works, are based upon an eighteenth century idea or “imaginary capitalism.” Actually existing capitalism is something altogether different. He shows that actually existing capitalism is leading to pauperization on a global scale and a truly untenable system which cannot be sustained. Hobsbawm’s conclusions about the control of the world by a single superpower are similar. Such a system must break down and the only real question is how long it can be sustained at enormous cost. The system which has produced the contemporary global economic and political contradictions has deep roots, going back to the beginnings of the American empire at the end of the l9th century. The essential framework of Bretton Woods was set up after WWII, which has now matured into a globegirdling neoliberalism with the end of the systems of state “socialism.” There is a vast literature today which documents in great detail the contradictions of the neoliberal capitalist order. Some of the gurus of structural adjustment, such as Joseph Stieglitz (2002) has become a sharp critic of the neoliberal agenda. Today, this reality is glossed over by the imaginary economics that is taught in universities and embodied in the prevailing global capitalist media such as CNN, Wall Street Journal, Fox News, and name them. 291

The world is witnessing a fundamentally different kind of capitalism from that established immediately after World War II. This was an era of “rational capitalism,” an ideology provided by two of the most prominent economists of the twentieth century, John Meynard Keynes and Joseph Schumpeter, in response to the Great Depression. They understood that there were insoluble contradictions within the capitalist system, but believed that these could be “managed rationally”. Departing from Say’s law, Keynes argued that supply did not create its own demand, but that the state must guarantee effective demand. An important point was that this system could not be based upon the domination of financial capital, or speculation, but rather capital directed into productive enterprise. Of course, as explained by John Bellamy Foster in “The End of Rational Capitalism,” Monthly Review 56 (10), of March 2005, today, we see the absolute domination of financial capital on a world-wide basis. Safeguards were built into the Bretton Woods system that would ensure the comparative health of the global economic system, in spite of the contradictions of capitalism. Among these were the “euthanasia of the rentier,” “the tempering of free trade,” “a degree of national self-sufficiency,” “creation of the General Agreement on Tariffs and Trade, the International Monetary Fund, and the World Bank”, and a degree of social democracy in the welfare state. This system of “greed and exploitation” might eventually develop a “new moral code” to lead society “out of the tunnel of economic necessity.” It should be noted here that both Keynes and Schumpeter rejected the philosophy of Friedrich Hayek of the “self-regulating market.” While Schumpeter did not believe that capitalism led to imperialism, he saw that capitalism, left to its own logic, would destroy itself and “undermine the sociological-cultural elements” necessary for capitalism. Under Bretton Woods, the third world was to be brought into the development process through the state management of the capitalist process, rather than the mechanisms of the market. Together these constituted the “myth of rational capitalism”(Foster 2005:3). Of course, this system was sabotaged from the right by the financial community, the bankers, after the l980s, and today financial capital has come to reign supreme. The necessary left critique of the “rational capital” paradigm was launched in the l960s, by Paul Baran and Paul Sweezy in Monopoly Capitalism (New York: Monthly Review, 1966), argued that the 292

prosperity experienced in the United States and Western Europe, following World War II, was a “special condition.” Under capitalism, the normal condition was “economic stagnation.” In other words, it was the special conditions which existed after World War II, which accounted for prosperity in the developed world. The specific factors included, the consumer liquidity in the US built up during the war, automobilization, rise of suburbs and highway building, the rebuilding of the Japanese and European economies, US hegemony and the global dominance of the dollar, military spending, advertising and consumption, and the new financial superstructure (growth based upon increasing household debt). But, for Baran and Sweezy, the system was an irrational one for a number of reasons. This irrational system included militarism and imperialism as integral parts; US hegemony must be maintained through wars; Keynesian demand creation could not offset the tendency toward stagnation; vested interests blocked the welfare state in the US; sales and advertising took the place of productive investment; monopolies replaced the rational entrepreneur; monopoly prices were used to maintain profits; and wage exploitation increased, allowing less leisure time for individuals. The crisis of stagnation, which Baran and Sweezy predicted, set in after the l970s. After the Vietnam War, the steam had run out of the post WWII recovery. Decades of deepening stagnation have followed. Since this time, the per capita growth rate of world output has kept slowing (.Foster, “The End of Rational Capitalism,” p. 5). Not surprisingly, the response of those at the helm of the global economy was the establishment of a system that would make the situation inordinately worse, that of neoliberalism. The era of Thatcher and Reagan and supply side economics began. It meant the end of Keynesianism, no more redistribution of income; no expansion of the welfare state; no more promotion of full employment and economic security; and no more aid to the Third World. Structural adjustment programs were brought in with restructuring, deregulation, privatization, a “free-market” system, globalization and neoliberalism. This was, in fact, a classic class struggle from above, as a response to the general crisis. The attack from the ruling classes from above, led by Reagan and Thatcher, continues today and has been promulgated into a full-blown ideology of imperialism, and the disregard for international law. One can say that international law has become a fetter on capitalist profits today for the one global superpower. Preventive war is a 293

new global grab of resources and markets, but has encountered resistance. The transparently false pretext is the “war on terrorism.” The war on terrorism is directed both outward toward nations that would escape the tyranny of US transnational capital and the international financial institutions and inward at the working class, which would wage class struggle for a decent wage and social welfare. Domestically, it is directed toward worker organizations and resistance. It is to make sure that neoliberal elites are in place all around the world in order to roll back working class movements, such as in India, in the new movements of Hugo Chavez in Venezuela and wherever else they emerge. This is a class struggle from above on a truly global scale. Under neoliberalism, financial capital has come to dominate the entire world with power shifting to “financial markets.” There is a sustained and ruthless attack on the global ecology. Neoliberalism has led to increasing barbarism. Other elements of the emerging global economy today have been noted by Ismail Shariff in his “The Role of Foreign Direct Investment And Multinationals In Developing Countries,” (World Affairs 9 (1), Spring 2005, p. 46). Since the early l990s, with the end of the Cold War, there have been rapid changes in the global economy. Greater economic integration has occurred in the triad, the US, EU, and East Asia and market reforms have been forced in almost all developing countries. The major countries have instituted more protection from competition from emerging countries, while on the periphery, there has been growing impoverishment and growing foreign debt. While the world pool of foreign direct investment (FDI) rose three-fold since l990, from $105 billion to $326 billion in 2003, the US share rose 8.7 times while US and foreign multinational corporations had an “explosive expansion.” Clearly, changes in global business has benefited the developed countries the most. Shariff (Ibid.:47-57) noted four types of changes in the global economy. First there was a restructuring of the business enterprise, with lean production, which essentially amounted to speedup of the work. A second significant change was seen in technology driven factors, such as cost performance, email and cheaper technology. A third change was in the large capital and development investments producing economies of scale and reducing costs. Fourth has been the role of governments, in terms of favourable trade policies, with most of these benefits again going to the developed countries. Multinational corporations may be defined as those 294

companies which have at least six foreign affiliates, operate in oligopolistic markets, and usually originate in developed countries. This means the centre dictates economic development. Something further can be seen from the statistics on FDI flows. While developing countries are compelled to open to attract FDI, the actual net flow of capital over the long haul is actually negative. Clearly, FDI has increased on a global scale, but this needs to be seen in the context of what it actually means. Looking at FDI stocks, the combined inward and outward FDI stocks as a percentage of GDP, between l985 and 2003, for the whole world, for l985, FDI stocks were 14.2 per cent of GDP in l985 and rose to 41 per cent in 2003. For developed countries, FDI was 13.6 per cent of GDP in l985 and 43.1 per cent in 2003. For developing countries, FDI was 15.7 per cent of GDP in l985 and 35.9 per cent in 2003. For Central and Eastern European countries, FDI was negligible in l985, 1.8 per cent of GDP in 1990 and 17.4 per cent in 2003. Of course, to attract FDI, many countries gave tax exemptions and provided subsidies to MNC’s, favouring them over domestic companies. While the figures show a redirection in FDI to the developed world, the triad, this is somewhat misleading in that 70 per cent of all new FDI in the triad was accounted for by mergers and acquisitions. Some fourfifths of these were in transport, communications, finance, and business services. This story goes along with the dominance of finance and the fact that all of these countries saw a slow-down in growth over these decades. In developing countries, studies show that multinational corporations have a negative effect on at least 60 per cent of the world’s population. This is seen in three aspects. They have a negative effect on democracy, undermining the ability of the government to maintain employment, protect the money supply, prevent erosion of the tax base, and meet essential basic human welfare needs of citizens. Secondly, MNC’s increase inequality around the world. Thirdly, MNC’s misallocate resources by “following a narrow balance-sheet definition of efficiency.” Further MNC’s inhibit local competition or take over markets altogether. FDI from the developing world often is just a case of capital changing hands, buying local firms. All this does is lead to a net outflow of capital abroad. Such investments accounted for one-third of investments in American firms in Peru and Columbia between l980 and l997. In Latin America, only 17 per cent of FDI was actual transfer of capital, since 87 per cent of investments were locally financed. Moreover, foreign firms have an advantage over local firms since the financing is seen as 295

more stable and funds available to local businesses decreases. In terms of jobs and profits, in Latin America between l980-87, US owned firms mostly provided unskilled jobs while 79 per cent of their profits were taken out of the country. At the same time, new technology destroyed local jobs. A myriad of other devices can be used by companies to increase the amount of profits taken out of the country. These include transfer pricing to conceal the real rate of profit. This means that the net flow of capital over time is actually negative.i[44] Case studies by UNCTAD for Columbia, India, Iran, Jamaica, Kenya, and Malaysia, show that only 21 per cent of foreign owned firms showed a clear positive effect on the local country. Anthuvan has argued that “an economic and social earthquake of unheard of dimensions is now looming on the horizon.” World unemployment or underemployment reached some 700 million by 2006. This figure increased by at least another 100 million due to the global economic crisis which began in 2008. The state of the global capitalist economy is becoming more problematical and miserable for at least half the global population. These are familiar statistics, but bear repeating. By 2006, of the 100 largest economies of the world, 52 were corporations, and 47 were US corporations. According to John Perkins, “American Empire: Slaver or Saviour,” World Affairs 9 (1), of Spring 2005 (pp. 18-19), twenty-five per cent of the world’s resources were consumed by 5 per cent of the world’s population in the United States. The income ratio of the one-fifth of the world’s population in the wealthiest countries to the lowest one-fifth in the poorest countries continued to increase. In l960, it was 1 to 30. By l995, it was 1 to 74. Frequently noted also is that a couple of hundred years ago, the richest country was only 2 or 3 times as rich as the poorest. Today the gap is something like one to 300. On average, some 24,000 die every day in the poorest countries from lack of nutrition. John Perkins, who is a consultant to the World Bank, noted that more than 25 years ago, he was trained by an American covert operative to be an “economic hit man” These individuals recruit world leaders to promote US commercial interests. They are induced to get the country into a world of debt which insures future loyalty. He called this a new form of slave trading. Economic hit men are “mercenaries employed by the US-led corporate empire to coerce developing countries to submit to its economical and political control.” They cheat countries around the globe out of trillions of 296

dollars.” They “funnel money from the World Bank and other organizations... to large corporations and ... a few wealthy families who control the ... natural resources.” Anyone or any groups, such as trade unions, that pose a threat to the “corporatocracy” are “disfranchised.” How countries succumbed to the debt trap after the l970s was analysed by Bienefield in his “Structural Adjustment: Debt Collection Device or Development Policy,” Review, 23 (4), 2000, (pp. 533-82). When commercial loans from banks dried up, the IMF stepped in, imposing structural adjustment requirements on countries all around the world. To correct balance of payments problems, countries were required to shift their economies to promote exports. If countries refused, they were isolated from development capital. As bank profits grew steadily, countries sank deeper into debt. Increasing numbers of economists have argued that the era of neoliberalism has failed. Clearly, the most successful countries have been those which resisted, such as China, India and Malaysia, to some extent. Samir Amin has pointed out the effects of continued enclosure by capitalist agriculture. The peasant question cannot be resolved by capitalism. Five billion peasants are to be replaced by 20 million efficient producers, the peasants destined for shanty towns, as outlined at the Doha World Trade Round. He calls this a “call for genocide.” Those in a “precarious position” in the periphery are some 70 per cent of the popular classes. This number has gone from less than 250 million to 1.5 billion in some 50 years. This is the “modernization of poverty.” Among other neoliberal trends, as laid out by Janet T. Knoedler and Geoffrey E. Schneider in “Class, Political Economy, and Institutionalism: Toward a Rapprochement?” (Journal of Economic Issues, 36 (4), December 2002, pp. 1112-15), Fred Mosely pointed out that managerial ranks have expanded at the expense of workers. Chris Tilly pointed out that “no other country has experienced the kind of collapse in job quality and surge in inequality that the United States has undergone.” This has been brought about by “globalization, technological change and capitalist strategies.” Robert Pollin pointed out that since there has been a dramatic decline in worker power in the United States, unemployment can fall without bringing on any higher wages and inflation. This situation was made much worse by the collapse of the US economy after 2007. In the l990s, US economic “prosperity” was “founded on a low-wage strategy” with the US Government assisting the “aggressive capitalist assault” 297

on labour. In fact, the “net social wage,” social benefit to workers minus the taxes they pay, was zero. Workers paid a net tax, even in so-called tax cutting times, without “even a bare bones safety net for millions of Americans.” On the other hand, incomes had exploded at the top for CEOs. Europeans were better off, with a higher consumption tax, but this too became badly eroded by the march of neo-liberal practices. What is called for is a genuine democracy, not an imaginary democracy as now exists to serve actually existing capitalism. “There is no socialism without democracy, no democratic progress without the socialist perspective”(Amin, Op.cit.49). The absence of such a possibility at the present time is pushing humanity on the periphery into religious, cultural, and ethnic cul-de-sac which results in alienating conflict. This appears to be a “civilizational conflict,” and serves the purpose of the dictatorship of capital on a global scale. This can only be broken by a clear class struggle which confronts the actually-existing contradictions of capitalism. Whether the great global economic crisis beginning in 2008 would result in a major movement of working classes around the globe could not be predicted, although labour unrest was clearly on the rise in Western Europe in 2008. Four Roads of Class Politics The likely resurgence of class may take at least two, very different directions, a middle-class and a working-class direction, each with two major sub-variants. One, ideologically predominant, middle-class variant looks forward to an emerging global middle class taking possession of the earth, buying cars, one-family houses, and an endless amount of electronics and consumer durables, and spending on international tourism. While this globalized and upgraded consumerism may cause nightmares for ecologically conscious people, it makes businessmen, the business press, and business institutions salivate. Middle-class consumerism has the great advantages, on top of business profits, of both accommodating the privileges of the rich and of providing a quiescent horizon of aspiration for the popular classes. These business dreams are not beyond the possible, but they tend to underestimate the social explosiveness of the current trajectory of economic distanciation and exclusion. In the second alternative, the widening gap between the middle class and the rich carries the former into politics before consumption. In recent years 298

we have seen something which Europeans, at least, have not experienced since 1848 – middle classes mobilizing in the streets, even making middleclass revolutions. Many of these middle-class mobilizations have been socially and economically reactionary, like those against Allende in Chile and against Chavez in Venezuela, or, more recently, the US Tea Party. Contrary to liberal mythology, there is nothing inherently democratic in middle-class mobilizations, the Thai “Yellow Shirts” of 2008, or the drivers of the putsches in Chile and Venezuela bear witness to that. Other middle-class protests, however, have been hostile to oligarchic, ‘crony’ capitalism as well as oligarchic politics. The so-called Orange revolution in the Ukraine may come closest to the ideal type. But the ‘Arab Spring’ of 2011 also included a significant, probably crucial middle-class component. The exclusive capitalism of high finance or of high politics, the political economy of, by, and for the richest one per cent, might bring an angry middle class onto the political stage with unpredictable outcome. The other class direction focuses on the working class. The era of a historically vanguard industrial capitalism has now gone, together with the opponent it empowered , namely, the working-class movement, predicted by Marx in mid-19th century, which did materialize in Europe, in the Nordic countries above all. Europe and North America are now de-industrializing, private financial capitalism is outgrowing public sectors, the working classes are being divided, defeated, and demoralized. The resulting economic polarization and soaring intra-nation inequality is the North Atlantic contribution to the global resurgence of class (as a structural mechanism of distribution). The relay of an industrial working class has been passed on to China, the emerging centre of world manufacturing. Today’s Chinese industrial workers are largely immigrants in their own country, given the still lingering hukou system of different urban and rural birth rights. But the growth of Chinese industrial capitalism is strengthening the workers’ hand as currently manifested in localized protests and rising wages (Cf. Pun Ngai in Global Dialogue 1.5). The political regime of China is still formally committed to socialism, in some sense. What the future holds is anybody’s guess. But a new round of distributive conflict, driven by industrial labour, largely displaced from Europe to East Asia, is not to be excluded. A fourth class scenario would derive its primary dynamic from the heterogeneous popular classes of Africa, Asia, Latin America, and their, 299

perhaps, less forceful counterparts in the rich world. Empowered by a rise of literacy and by new means of communication, the popular class movements face great hurdles of division – ethnicity, religion, and particularly the divide between formal and informal employment – as well as the dispersion of activities, for example in street hawking and small sweatshops. But the barriers to organization, mobilization and rallying are not insurmountable. India has spawned strong organizations of self-employed, the Red Shirts movement of the Thai popular classes returned as the country’s prime political force in the July 2011 elections, and popular class coalitions have produced left-of-centre governments in Brazil and in a number of Latin American countries. Each of these four class approaches to world inequality has a sociological plausibility, globalized middle-class consumerism, middle-class political rebelliousness, industrial class struggle – including the possibility of class compromises – decamped from Europe to China and East Asia, and, fourthly, heterogeneous popular class mobilizations, headed by Latin American and Southeast Asian movements, but possibly involving Arab countries and Sub-Saharan Africa (Cf. Enrique de la Garza and Edward Webster in Global Dialogue 1.5). The most likely scenario for the future are strides along all four roads. Their relative significance is not only impossible to predict, but weighing the evidence as well as assessing its meaning and value are also likely to be controversial. Indeed, while nation-states remain formidable organizations and class conflicts will remain mainly statebounded, the new turn of global inequality means that classes will rise and nations decline in determining human life-courses. Global Class Dynamics and Struggles Eric Olin Wright (2005) has drawn attention to the “distinctively Marxist question”: “What sorts of struggles have the potential to transform capitalist economic oppression in an emancipatory direction?” The concept of class can be understood in terms “exploitation and domination.” For Wright, Marxist class analysis is a powerful tool for understanding economic and political dynamics. It also “infuses class analysis with moral critique” (Ibid.). The Marxist analysis can explore the link between exchange and production, conflict, power, coercion and consent, and a “historical comparative analysis” of class exploitation. The first is simply the 300

relationship of the individual to productive resources, we can say in terms of access to capital. This question shapes the relationship of the individual to production and exchange. The location within this nexus determines whether a person is able to exploit labour or have his or her own labour exploited (Ibid.). Second, in terms of conflict, class conflict can be seen in terms of “antagonism of interests.” This approach is useful to cut through the obfuscating rhetoric of neoliberalism and analyse how workers and owners are exploited or benefit from processes going on in the real global economy. Power can be used to understand the existing situation and the potential for change. Power belongs to capital in actually existing neoliberal capitalism, but the working class have the potential to exert counter power, since capitalist accumulation is dependent upon the global exploitation of labour. This dialectic is useful for analysis and presents a fluid dynamic, in which labour has been on the losing end of power for some three decades, but which could potentially be reversed (Ibid.). In terms of coercion and consent, workers are typically coerced, but since workers have the potential to resist, it is necessary to secure their consent. This is a “dependency relationship.” Finally, a historical and comparative analysis of class exploitation is useful. It is possible that resistance in the periphery and inside even developed societies, such as the European Union and the United States, can swing the leverage against capital, given the potential for organization and struggle. This sort of analysis clearly helps us see that neoliberalism “harms” society, and that class struggle can move toward an alternative society that embraces “social justice”(Wright Ibid.) Recent work by political economists can help in adapting Marxian analysis to contemporary neoliberal capitalism. For example, Michael Zweig defined social class by arguing that “class is about the power some people have over the lives of others, and the powerlessness most people experience as a result.” In the United States, 62 per cent are working class, and 38 per cent are capitalist or middle class. Of these, only two per cent are capitalists and 36 per cent are middle class. Using this concept (Knoedler 2002:112), the working class is made up of “those who do the direct work of production and who typically have little control over their jobs and no supervisory authority over others.” A capitalist, on the other hand, includes “anyone who makes a living by owning a business.” But to qualify to be a capitalist one must be an owner who “no 301

longer works directly with the workers,” an “owner or manager of a business with twenty or more employees,” one who “exercises control over the work force through at least one layer of middle management,” one who “becomes occupied full time with running the business as a senior strategist” and a “source of authority.” The “national economic elite,” those with real power, include the directors and high officers of the top 16,000 private corporations and can be considered to be part of the “ruling class.” That “class still matters” is driven home by Zweig, pointing out that within the middle class of doctors, lawyers, professors, engineers, and so on, those closer to capitalists enjoy greater power than those closer to the working class. While not exactly orthodox in the Marxian sense, it seems that this approach is not a large-scale departure as it can be argued that it is still the “ownership of property and relationship to the means of production” which largely accounts for the power relationships described by Zweig above. Political economists have made other useful observations about class in contemporary capitalism. For Howard Sherman, there are “multiple levels of class conflict” such as on the shop floor, political class conflict, and ideological class conflict. Bill Dugger defined class in relation to four different social relationships: “relationship to income, relationship to work, relationship to wealth, and relationship to technology.” He noted that workers were worse off than a generation ago and tend to “emulate the ruling class” going for more money, rather than principles of justice or equality (Knoedler and Schneider 2002: 1112-15). The New Global Class Structure The question we need to ask, then, is this: What is the result of a world that is essentially neoliberal on a global scale? To hide the reality, new mantras have been forwarded: “there is no Alternative,” “the End of History,” “the New World Order;” “the War on Terrorism,” “Pre-emptive War,” “Weapons of Mass Destruction,” and “democratization.” These mantras are essentially Orwellian. They enable the US and Western powers to control Iraqi oil and other global resources and help ensure that genuine democracy will not and cannot emerge. In other words, “democratization” to be forged through tools under the control of the US CIA, is a campaign to ensure that democracy cannot and will not emerge. We see this clearly in the 302

recent rigging of the Iraqi elections, an action which has not actually succeeded in its goals as demonstrated by the command by Seymour Hersh, “Get Out The Vote,” in The New Yorker of July 18, 2005. These are all propaganda “weapons of mass deception,” launched on a global scale. Struggles with the ruling classes come when propaganda begins to break down. The Europeans reject the European Constitution and the Lisbon Treaty. But these are just bumps in the road. The juggernaut rolls on. However, one can argue that the result of this dynamic, this dialectical process, is that a new class cleavage is emerging all across the world that cuts through all societies and countries, whether rich or poor, right across the globe. This is bringing new forms of class struggle. There is a new global structure of class cleavage that runs not between states and regions, but right through existing societies and states. As Istvan Meszaros (2001:92) puts it “…The question is how the overwhelming majority of individuals fall into a condition whereby they lose all possibilities of control of their lives, and in that sense they become proletarianized.” This new configuration of class cleavage may today be producing the “essential product,” which Marx and Engels wrote about in the Communist Manifesto. This is, of course, a long historical development. What is emerging is the global proletariat or class in opposition to capital, and the current historical form of capital, neoliberalism, which has generally been misnamed globalization. This illustrates the local and global dynamics of pauperization that is taking place. The forces behind US Imperialism in the 20th century have now been revamped to provide a new altered ideology of imperialism for the first decade of the twenty-first century. Twentieth century US imperialism was underpinned by Wilsonian millenarianism, a zealous crusading mixture of religious Calvinism, brutality and capitalism. This was a basis for global empire. With Bush II, this matured into a new “revolutionary movement,” led by the neocons on the Potomac. A sort of crusading zeal has driven the neoconservative campaign. The neoconservative ideologues, such as Victor Davis Hanson (2002) at the US Naval Academy, were full-fledged imperialists and unilateralists. They promulgated the Bush Doctrine of preemptive war and elevated it to official policy. It was actually preventive war, which is illegal under international law. This was the new element in the Bush Administration, along with the provision that the United States was seen as the only state which was allowed to use pre-emptive war. This doctrine 303

“scared the hell” out of the rest of the world. The elites of the world, with a few exceptions, largely went along with this dictatorship, however. One can argue that this, along with the fallout from the first application of the doctrine in Iraq, a tragedy and crime of world historical proportions, was a boon to the political consciousness of populations around the world (Girdner 2004-2005:5-30). The US was no longer seen as a benign superpower. A public opinion poll in Turkey in 2005 in “Middle East Not Swayed by Bush’s Democracy Pledge,” Angus-reid.com, Dec. 7, showed that Turkish people saw the US as the number one threat to Turkey. It can be argued that renewed US economic imperialism has contributed to an emerging class consciousness. To some extent, we can thank the George W. Bush Administration and the neoconservatives for this contribution to global political consciousness. At the same time, there is deepening of capitalist exploitation under the logic of neoliberal capitalism. This process is global in scale. As neoliberalism settles into developed societies, as in America and Europe, the rate of economic growth slows down. This is seen in the figures of Monthly Review on the US economy, 2003-2006. Today as India is being hailed in global capitalist quarters as yet another “new economic miracle” Istvan Meszaros (2001:94) notes that “… there are three hundred and thirty-six million people on the unemployment registers; and you can imagine how many more millions are not registered at all.” Then exploitation must be accelerated in the periphery, to make up for the loss and maintain rates of capital accumulation. This process is happening in the rapidly developing countries such as China, India, Turkey, and Vietnam. This “solution” to the crises only serves to intensify the crises, as Marx and Engels observed in the Communist Manifesto. The effort would not be halted with the retrenchment made necessary by the global economic crises of 2008-2009. Class formation is accelerated as extraction of surplus labour is stepped up and as social welfare benefits and guarantees from the state are lost. Privatization cuts the possibilities of employment and urbanization creates greater pauperization. The extraction of surplus value on the periphery is rife with contradictions so that the extraction of surplus value is not a self-sustaining process. In addition, the global economy is unstable. If there is capital flight from any one country, an economic crises occurs, which collapses the wages for a large portion of the society. On the other hand, the crises may be global. 304

Further, the contradictions are deeper and sharper in the neoliberal version of capitalism than in the previous, old fashioned version of Keynesianism, which was softened by Bretton Woods safeguards. The Keynesian pseudo-welfare state provided some cushion, which today is removed, under threat of IMF sanctions. Today the crises is deepening. As Noam Chomsky (2003) has suggested, at this juncture of history, the drive for global hegemony and capitalist totalitarian control begins to threaten the very human species itself. All of these questions can be explored within a mass of extant empirical data that helps us to understand what is happening in the global economy (Soros 1997). Socialist Alternative? Georg Lukacs (1971:69) has pointed out that “bourgeois thought” always begins with the idea that the existing order of things is “immutable,” “there is no such thing as historical development.” It can be argued that it is only at this time that the world has reached the historical stage that makes socialism possible, as well as necessary; perhaps only at this historical juncture have the productive forces been sufficiently developed. However, the question of the transition to socialism is extremely problematic. The seminal thinkers of this question clearly underestimated the difficulties. Marx, in his famous Critique of the Gotha Programme, suggested that the transition to socialism would be a two-stage process. The first would be defective, a society “just as it emerges from capitalist society, which is thus in every respect, economically, morally and intellectually, still stamped with the birth marks of the old society from whose womb it emerges.” Here “equal right” is still “bourgeois right,” and this sort of equality still results in inequality since individuals are not equal in their situations and capacities. In the “higher phase of communist society,” “only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: from each according to his ability, to each according to his needs!” Lenin in The State and Revolution (Peking: Foreign Languages Press, 1973, p. 119) saw in future “the withering away of the state.” “By what stages, by means of what practical measures humanity will proceed to this supreme aim-we do not and cannot know,” but he believed it would be a “rapid, genuine, really mass forward movement.” In the 1960s, the American socialist, Michael Harrington(1972:431-449) suggested there were “three 305

forces” in the U.S. “which could converge in the fight for a socialist society.” These were the old blue-collar working class, a new working class based on the emerging new technology, and university-educated young people who had a critical view of contemporary American capitalist society. Nevertheless, Herbert Marcuse in An Essay on Liberation (Boston: Beacon Press, l969), pp. 53-57) was surely correct when he pointed out that “such a revolution is not on the agenda.” At best, there was a “pre-revolutionary situation.” The industrial working class had become a “stabilizing, conservative” force in the western industrialized countries. This means that “…its radicalization will depend on catalysts outside its ranks.” This will happen “…only if and when the economic stability and the social cohesion of the system begins to weaken.” As for the “new working class” of technicians, engineers, and so on, while they are in a position to “disrupt, reorganize, and redirect the mode and relations of production,” they are not interested in doing so because they are “well rewarded.” Technology at present tends to strengthen domination. “This fatal link can be cut only by a revolution which makes technique subservient to the needs and goals of free men: in this sense and in this sense only, it would be a revolution against technology.” When the “gigantic broom” of history will finally usher in a radically different future economic era, it is, of course, not possible to know. But the bare indisputable facts about the global condition today are surely a forceful condemnation of the abysmal tragedy and failure of actually existing capitalism and neoliberalism for the overwhelming majority of humankind. As Istvan Meszaros (Op.Cit.:101) has pointed out, capitalism “has the upper hand everywhere,” but cannot solve the problems it is generating. “Instead, it continues to generate them on an ever increasing scale.” Can humanity be proud that: half of humanity is malnourished; one billion people live in slums; half of humanity lives on less than what two dollars a day can buy in the United States; one billion have no access to clean water; two billion have no electricity; two and a half billion have no sanitary facilities; one billion children (half of all children) suffer extreme deprivation because of poverty, war and disease (Harry Magdoff and Fred Magdoff 2005: 27). It is possible that all previously existing societies and economic systems have been preparations for a future rational society. Today capitalism seeks a solution to its contradictions in neoliberal utopianism. But in doing this, it only creates the conditions for its demise. The bourgeois solution to the 306

crises is seen as that which deepens the crises. It can be argued that all forms of political economy, from the 18th century to the present time, have essentially been various mixed forms of actually existing “capitalist” society. None were actually “capitalist,” because that is an ideal which does not exist in the real world, but they were various types of exploitative economic systems which functioned for the purpose of accumulating capital, sometimes faster, sometimes slower, depending upon the forces driving the system. Social welfare, or even the means of survival, is withheld from nations under the fear that plentiful social welfare and leisure would result in slowing the rate of capitalist accumulation. The Euro served this function in the European Union. But while the technical means of production exist, on a global scale, which make socialism possible today, the political means or possibility do not currently exist. The enforced global agenda of neoliberalism makes the possibility of socialism in small countries like Vietnam very difficult. This is because attempts at socialism can be successfully subverted or destroyed by the actually existing global capitalist economy under the neoliberal dispensation. Also in the existing “socialist countries,” such as Vietnam these countries lack the necessary technical means and capital for socialism. As a result, seeing the need for high economic growth, they may through a policy such as Doi Moi open up their country to outside capital. The argument is then made that this is a way to “build socialism through capitalism.” The argument is that this is so, because within the dialectic of globalism, socialism will ultimately emerge. China and Vietnam have shifted to essentially state-led mixed economies, under the rubric of socialism. One dialectical argument is that bringing in elements of neoliberal capitalism will prepare the way for socialism in these societies. However, the question of the historical transition to socialism is meant to refer to a long historical process on a macro or global scale. Such logic should not be applied to individual countries over a short time period. Such a policy as Doi Moi in Vietnam, it is argued here, is at best a way to develop the technical means of production in the country, which is currently at a relatively low level. Meanwhile, the country will suffer many of the negative effects of capitalist “modernization” as seen in other developing countries. But alternative strategies, which may take into account the needs of the people, not merely economic growth, must be sought. Small countries cannot go it 307

alone. They must form coalitions with other like countries if they really do wish to raise the social welfare of their people. Venezuela, Cuba and other such countries can cooperate and not accept capital unless the capital is on terms favourable to the country. Contemporary Directions of Class Struggles It is no exaggeration to say that we have entered the most dangerous phase of imperialism in all history.” Current global tensions seem to be reaching something of a critical stage that calls for action. If the remedy is not progressive, toward socialism and greater equality, then it is likely that resistance will take perverted or alienated forms, which we see happening to some extent today. Osama bin Ladin was successful in pushing the world in a destructive direction, toward the violent disruption of society through sporadic violent acts of the repressed classes. This direction may possibly lead to the destruction of the human species itself, as noted by. On the other hand, we can observe developments led by President Hugo Chavez and others in Latin America, which are challenging global capitalism in Latin America and involve a wider sphere of influence throughout the continent. This Bolivarian Revolution movement is linked to the long and successful struggles in Cuba and Vietnam. In a similar vein, Samir Amin has suggested possibilities for a more effective class struggle from countries from below in order to reverse the gains made by neoliberalism in the last decades. For instance, the European Project needs to be redefined to depart from the agenda of US imperialism which could lead to a democratic and nonimperialist social Europe. The “solidarity of the peoples of the south” needs to be re-established. This must involve the rejection of preventive war and the demand that the US dismantle its military bases in Africa, Asia and Latin America. The “reconstruction of a people’s internationalism” is necessary, to prevent capital flight. Regional organizations need to be established to stabilize currencies and economies on a regional basis and to regulate foreign investment in order to protect people’s interests. This can be positive globalization that works for the people. Traditional countries need to develop programs to protect the peasantry and free themselves from the global market in food. Debt collection by the IMF is a form of pillage which drains countries of their productive capital. Countries must challenge this system. The possibility that the above agenda will not be stillborn is seen in the 308

fact that the United States is more and more becoming a hollowed out power, economically, politically and morally. It can no longer command and control the entire world, since it has become dependent upon the entire world, particularly China, to finance its growing deficits. The world cannot be expected to go on financing the imperialist wars which rob their own people of the fruits of their labour. The time is crucial to demand real human rights, real human dignity and social justice. The only alternative is more bombs, more imperialist wars and the imminent end of the human species. In sum, the essential product today is the working class, broadly speaking, a class of society that will reengage in struggle for a rational society which works for a sustainable society for all. The tenets of the imaginary economics of capitalism must be exposed. If there is a political consciousness in society as to where neoliberal capitalism is leading the society, then there can be struggles to arrest and roll back capitalist gains. In the classical formulation of Marx and Engels, “Life is not determined by consciousness, but consciousness by life.” The imaginary “natural economy” of the classical political economists, formulated into an abstract model, was rejected. “We set out from real, active men, and on the basis of their real life-process we demonstrate the development of the ideological reflexes and echoes of this life-process” as pointed out in Karl Marx and Frederick Engels, The German Ideology (New York: International Publishers, 1970, p. 47). This was seen in the votes in France and Holland against the neoliberal European constitution and the vote in Ireland against the Lisbon Treaty. This process must take place in the periphery but it must take place in the centre also. The potential may be greater outside the United States, but even there, there are surely limits to the degradation of the working class. Global processes will likely force upon the emerging generation a greater degree of class consciousness. The emergence of a strong class-conscious movement all across the world is surely the best hope for the human species. As Istvan Meszaros has written, “the unfortunate truth of the matter is that if there is no future for a radical mass movement in our time, there can be no future for humanity itself.” In sum, capitalism contains the seed of its own destruction within a given society. To survive, Capitalism must accumulate more and more profit to invest in ever larger scale production, the reason being to bring in more profit. But the greater the accumulation of capital, the more profit is required to finance investment in capital expansion. Also, the more profit the 309

Capitalists extract from the labour of the workers, the less money they, the workers, have left, relatively, to buy the goods on which the profits have to be made. The drive for more and more profits leads to the formation of monopolies to ever-increasing rivalry between monopolies, groups of monopolies and their governments, for new labour to exploit, new sources of raw materials, new markets and new ventures for capital investment. Such rivalries tend to cause wars and it was such rivalries which caused two world wars and many minor conflicts during the course of human society since the birth of Capitalism. Of course the Capitalist-financed and -subsidized history books present different causes for armed conflicts but an objective study will reveal the true causal factors. The struggle against imperialism and the system of capitalism is a life and death issue for many millions of people. Political, social and economic shocks are having a profound effect on the outlook of working people and youth everywhere. A new generation of youthful workers, particularly school students, are being ‘blooded’ in struggle against wars and capitalism. Socialists must therefore, with renewed energy, commit themselves to the task of resisting imperialism and fighting for system change—the overthrow of capitalism. Only the creation of a socialist society—a society based on the needs of people not profits—can see the end of wars and poverty.

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Chapter Ten The Myth of Passivity: Occupy Movement and Riots Overview In the enchanted world of capital, the working class itself can be the only force to win the emancipation of the working class. To say this, however, is to make assumptions and raise questions about the relations between consciousness and ideology, theory and practice, class and party, and about the nature of the transition to communism itself. These questions have often been approached through the theory of fetishism and, at its most extreme, this theory has been appropriated in such a way as to be posited as an absolute barrier to consciousness and so, by implication, to selfemancipation. This form of its appropriation is however erroneous. There is, in fact, no inconsistency between the theory of fetishism and the principles of proletarian self-emancipation. Introduction The mass protest at the Seattle summit of the World Trade Organization (WTO) in November 1999 and the subsequent anti-globalization protests around the world signify new forms of global movement against transnational capitalism (Deluca and Peeples 2002). Much has been written on global social movements, their mobilization strategies and interesting and innovative use of new media spaces (Bove and Dufour 1999; Bircham and Charlton 2000; McMichael 2000; O’Brien et al. 2000; Kellner 2001). As Koopmans (2004:367-369) points out in ‘the age of globalization direct engagement between protestors, authorities and publics have certainly not disappeared completely but they occur where the targets of claims are located; in national capitals, in seats of supranational institutions such as Brussels and Geneva or New York or where state leaders gather for international summits such as Seattle, Davos or Genoa. The convening of global summits in global cities has often set the stage for the activists to use the media as a global spectre for performance, connectivity, interactivity and 311

mobilization. In this sense, it is no longer the by-standing or co-present public that matter but people who watch at home.’ Imperialism sanitized as globalization itself by destroying protected markets, overthrowing the degenerate workers’ states and liberalizing trade has been a powerful counter-veiling tendency to stagnation. The combined effect of these processes over the last decades has been to offset the effects of the over accumulation of capital by raising the rate of exploitation, lowering the organic composition of capital and enlarging the markets for capital goods and investments. The effect has been to ensure that the upward phases of the business cycles since 1993 have been strong while the down phases relatively shallow and unsynchronized. This phenomenon has sparked into an era of riots. The Many Faces of Global Capitalism How has it been possible after decades of governmental guarantees of subsistence to its population that the very notion of such a guarantee has been put into doubt in the highest levels of world planning? Why are so many people starving, fleeing genocidal slaughters, dying of quite curable diseases, anxious about their literal survival even though they are “fully employed,” or even finding themselves enslaved a century and a half after the end of slavery? What and/or who is responsible? The answer is obvious: the development of capitalism. But this is not the capitalism of past, it is a new animal. The during the last decade the anticapitalist movement has increasingly proliferated the names of the beast, from “globalization,” to “neoliberalism,” to “structural adjustment,” to “the new enclosures,” to “recolonization,” and to “a new international division of labour.” These terms have all been used recently to describe the planetary political economic developments since the beginning of the world capitalist “crisis” in 1971-73 (with the end of the Bretton Woods system and the oil price boom). It is worthwhile to note some of the differences between these names, so that we can get a clearer sense of the relation between cause and effect, for, as chaos theory has taught us, even a slight perturbation in a cause can bring about major instabilities in the effect. Indeed, until the movement has a better consensus as the meaning of its “One No,” we will be hampered.

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Let us take each name in turn. (A) Globalization. Madonna images in Botswana, computers produced in Bangladesh, Burger King in Beijing, exchanging yen in Chile have now become standard experiences. Those who try to explain these recent developments look to a change in the production, consumption and exchange of commodities and money since the early 1970s (Barnet and Cavanagh 1994). Though the world market for commodities, capital and money existed for centuries before, the “globalization” theorists argue that until recently most production, consumption and exchange took place within national (or at least national-imperial) frameworks. This has now changed. Transnational corporations and banks and supranational agencies like the World Bank (WB), the International Monetary Fund (IMF) and the World Trade Organization (WTO) are “delinking” themselves from political attachments to nation-state “homes.” They have “deterritorialized” and “globalized” themselves and as a consequence have the capacity to move capital, money and expertise at will to the places of highest return. They can produce, market, borrow on a global level while the legal and financial framework for this global capacity for movement and integration has been slowly but definitively put into place. Consequently, nation states, provincial governments, municipalities, local officials, and labour unions are now increasingly helpless in controlling the movement of capital, money, and jobs. “Corporations rule the world,” in David Korten’s phrase, along with their allies in the supranational level (the IMF, WB, WTO, UN) (Korten 1995). The main consequence of this globalization of corporations has been a widening gap between “North” and “South,” which are the operative conflictual terms for this perspective. The globalizing corporations are “integrating only about one-third of humanity (most of those in the rich countries plus the elite of the poor countries) into complex chains of production, shopping, culture, and finance” (Broad and Cavanagh 1995-96). (B) Neoliberalism. This term has been widely used in South and Meso America and in Europe to describe the contemporary character of the relation of the state to capitalist development. It has not been very popular in the US because of the peculiar US development of the term “liberal.” Sometime in the twentieth century it came to signify exactly the opposite of what it implied in Europe and the Americas south of the Rio Grande. (Although now, with the Clinton Administration, there might be a historical 313

rapprochement of the two senses of the term!) “Liberal” outside the US refers to the market ideology and politics which had its paradigm moment in Britain during the 1840s. The liberals of that time demanded (and got) from the British state free trade (the repeal of the protectionist Corn Laws), strict adherence to the gold standard (especially by other nations), the completion of the enclosures (end of common lands) and the repeal of the Poor Laws (and other forms of wage protection). Let us not forget, however, as Polanyi pointed out long ago, classical liberalism did not mean laissez faire or governmental non-intervention in economic affairs (Polanyi 1944). On the contrary, for example, if workers combined to force employers to increase their wages, the police and army were expected to break their combinations and strikes; or if South American governments could not pay back their loans to London banks, British gun boats were expected to turn up in their principal ports. Neoliberalism is a late twentieth century reprise of classical liberalism (after almost a half a century of the dominance of anti-liberal Keynesian, social democratic, fascist or socialist state political economic policies), but with appropriate changes. Thus, the gold standard is now replaced by the rule of “hard” currencies and anti-inflationary monetary policy as defined by the IMF; free trade is replaced by the GATT rules overseen by the WTO; the enclosures are replaced by the privatization of the remaining communal lands and of most socialized property and income; the repeal of the Poor laws is replaced by a much larger legislative “social reform” agenda, since the wage and “welfare” legislation of this century produced a giant system to regulate the reproduction of proletariat in most countries. The critics of neoliberalism see, through these shifts, an ideological identity between the “market reformers” of the WB, the Clinton Democrats, the Thatcherites and the Salinistas and the nineteenth century Liberals, but the neolibs present a new global boldness in application. The two themes of this ideology (past and present) has been the liberation of capital from the official constraint of reproducing the proletariat (on either the national or global level) and the apotheosis of market relations to the ideal of human sociality. But the level of “liberation” and “apotheosis” has been given an anti-Eurocentric twist, affirming the possibility of any state (regardless of race, colour or creed) to achieve capitalistic bliss. (C) Structural Adjustment. This term originally described a bankers’ program devised by the WB and IMF to be imposed on any third world or 314

socialist government that needed to reschedule their loan payments. This program included: (a) liberalization of trade, (b) the end of capital controls and promotion of “free enterprise zones” o “export processing zones,” (c) the free convertibility of national currency, (d) an anti-inflationary monetary policy, (d) the reduction of government budgets, (e) the cutting of governmental employment, (f) the end of subsidies for education, health, and subsistence goods, (g) the privatization of government parastatals, (h) the individuation and free exchange of land titles. Almost every government in the Americas, Africa, Eastern Europe and Asia has agreed to impose a structural adjustment program (with more or less rapidity and rigor) in the wake of the Debt Crisis. The WB and IMF claimed that structural adjustment programs would reduce inflation, lead to a favourable balance of payments, reduce government internal and external debt, make national industries more efficient, and force workers to become more productive. All these changes would inevitably, the world bankers claimed, lead to a reduction of a nation’s international debt, and so they were justified in requiring these programs as conditionalities for any future loans or payment rescheduling. At first these programs were largely seen as immediate responses to emergency financial situations in a wide variety of different settings during the 1980s. But soon the cumulative effect of these programs on national capitalists, on the national proletariats, and on the total international debt itself was assessed. Inevitably: the national enterprises were swamped by transnational corporations entering into local markets they were previously barred from, while wages plummeted due to the rise in unemployment, the devaluation of national currencies, and the inability of workers to organize against transnational corporations operating in free export zones where protection of workers was systematically and legally banned. The result has been, on the one side, an actual increase in international debt and, on the other, a recolonization of the economic life of regions that had in the 1950s experienced decolonization (Danaher 1994). Hence, the critics of structural adjustment have seen in the WB’s and IMF’s strategy an attempt to “roll back” the economic gains of “Southern” societies that were achieved in the period between decolonization and the Debt Crisis. These gains were supposedly leading to the development of an autonomous capitalist development which was increasingly challenging the dominance of Northern states. This trend had to be stopped if the old hierarchies were to remain intact and the Debt Crisis provided a perfect 315

opportunity for the WB and IMF, as representatives of the North, to sabotage this Southern autonomy and recolonize, in a more subtle and therefore more irresistible way. the nation states of Africa, Asia, South and Meso America (Bello 1994). (D) Recolonization. This view takes the period between the Berlin Conference of 1885 and the First World War as the point of reference for understanding the present conjuncture. The Berlin Conference laid down the rules for a new period of capitalist colonization (or “imperialism” a la Lenin and Hobson) of Africa, but it also set the stage for the colonization efforts of the U.S. in the Caribbean, of the U.S. and Japan in the Pacific, and of all the imperial powers in China and South East Asia. As analysed by the original theorists of late-nineteenth century colonialism, the “imperialism” game involved militarily conquering large sections of Africa, Asia and Oceania to create guaranteed markets for the home countries’ cartels and monopolies, to spur the ascendancy of financial capital, to provide migratory outlets for rebellious workers from the European cities, and to force new masses of workers in the colonies to labour in almost slave-like conditions, all without entering into direct military confrontation with each other! This regime collapsed after the Second World for a number of reasons, not least of which was the recognition by imperialist governments that official colonization had many of the disadvantages of slavery for the masters. It put the costs of reproducing the colony in bad times on the colonizing country, just as the slave had to be reproduced at cost to the master even when there was little demand for the slave-produced commodity. The contemporary projection of this scenario by recolonization theorists replaces the imperialist countries with the G-7 dominated supra-national organizations like the UN, the IMF, the World Bank, and the WTO that impose their conditions on previously decolonized countries through a combination of military and economic action. Attempts at direct military conquest ended with the U.S. failure in Vietnam. Consequently a more subtle approach was developed in the 1980s. On the one side, the techniques of low-intensity warfare and “humanitarian intervention” and, on the other, threats to isolate the countries from credit markets and to restrict their commodities from markets in Europe and North America, have created the conditions for a total subjection of Third World economies to the needs of international banks and transnational corporations (the modern equivalent of the late-19th century cartels and monopolies). The processes unleashed by 316

recolonization also expanded the global labour market enormously through the use of “free enterprise zones” and “maquiladoras,” while they created a new stratum of “global” managers whose primary loyalty is to the transnational corporations or supra-national agencies that employ them and not to their “own” country. Thus recolonization realizes many of the advantages of colonization without the troubling obligations to reproduce the colony. (E) New International Division of Labour. This view takes as primary neither the behaviour of global corporations and banks (A), nor the behaviour of states and national ruling classes (B), nor the behaviour of the supranational financial agencies like the WB, IMF and WTO (C). Rather, it starts from the basic problem in any period of capitalist development: production, and hence the integration of capital and labour. Labour and capital are never homogeneous. Labour, for example, is always divided into hierarchies of skills, wages, organic compositions (i.e., mixtures of labour power of varying skills with machines of different value) and these hierarchies are associated geographically across a city, a national territory and, most crucially, the planet. In this view, capitalist production has always been “global,” it is simply that the international division of labour has undergone major transformations. The post-1968 transformation has been the latest and perhaps the most consequential for the geographical distribution of production (Carnoy et al. 1993). The older division of labour that put manufacturing industries in the core and agricultural and extraction industries in the periphery has ended. On the one side, the core countries (U.S.,, Western Europe and Japan) have de-industrialized and have focused on the production of services and information, while on the other side, the periphery has become increasingly the centre of manufacturing. This has created a new division within the periphery between the Newly Industrializing Countries (NICs) and those which, for a variety of reasons, have been left out (Amin et al. 1982). (F) The NewCapital Enclosures. It takes as its root historical metaphor for the present neither mid-19th century “Liberalism” nor late-19th century imperial colonialism, but the dawn of capitalism in the sixteenth (or “Iron”) century which saw the original (or primitive) creation of a proletariat (both slave and waged). For no one is born a slave or a waged labourer, s/he must be made one by stripping from him/her any alternative but to be a slave (waged or not). The claim is that in every period of capitalist accumulation, 317

the capitalist class must recreate a proletariat by “liberating” it from autonomous access to the means of subsistence. The Old Atlantic Enclosures of the sixteenth century in Europe, the Americas and Africa which involved the driving of European peasants from the commons; the genocide of native Americans who refused to abandon their lands in the face of colonialist demands; and the origin of the African slave trade are the model of this “liberation” (which often ended in slavery!). This analysis puts to the centre of the discussion a fact that the other approaches seem to have forgotten: labour is not only necessary for production, it is antagonistic to capital. The reason why “a great transformation” began during the trigger years (1968-1973) can be provided neither by the logic of capitalist development (from local to global production), nor by the autonomous ideological preferences of the national capitalist classes (from Keynesian to neoliberal ideologies), nor by the “antiSouthern” machinations of the IMF/WB/GATT/WTO or the imperialist G-7 nations, nor by the autonomous creation of a new division of labour. This transformation was a response to the increasingly aggressive proletarian rejection of the three “deals” (or “constitutions” in European parlance) that had been negotiated at the end of WWII: the Keynesian in Western Europe and the US, the socialist in Eastern Europe, the Soviet Union and China, and the third world nationalist. This world revolution was not capable of achieving a homogenization on a planetary level, however, and the counterrevolution of the New Enclosures inevitably followed, beginning with Chile in September 1973. The post-1973 task of capital was to create a new planetary proletariat that would generate profits and continue accumulation. This required many changes in production (Fordism to Neo-fordism), in ideology (from welfarism to neoliberalism), in economic strategy (Keynesianism or socialism to monetarism), in technology (internal combustion engines to computerization and genetic engineering), in management (from nation state to supranational agency), as well as much invention, murder and mayhem (often called “risk taking” and “entrepreneurship”). These symptomatic developments have been commented upon by those who have developed the previous approaches. But most crucially this task logically required the elimination of access to means of subsistence, either through communal or non-alienable land tenure, or through pensions, doles, guaranteed employment and other instruments of the social commons that the previous 318

period of class struggles had achieved). The methods used to extirpate this access were and are multifarious and devious, leaving their tangled trail in the field of class struggle for the last quarter century. But, in the process, the selfconsciousness and self-certainty of capital as a class has definitely increased, from the hesitations of a Carter, Wilson, Gorbachev and Mitterrand to the increasing clarity of a Reagan, Thatcher, Yeltsin and Chirac. The same cannot, unfortunately, be said of the vanguards that stormed the heavens in the late 1960s and early 1970s; for the process of the offensive against capital inevitably undermined and delegitimated the defensive organs of the working class (party, union and neighbourhood). Though the key feature of the new enclosures is the cutting off of any access to subsistence independent of capital (hence the cutting off from the past, the tearing out of the roots, the cult of the artificial seen in postmodern ideology), the problem of the creation of a working class and its reproduction is still with capital. It is one thing is to relentlessly drive people from access to subsistence, but it is quite another thing to transform these rootless ones to profit-making workers (be it slave or “free.”) This is not an automatic process. The NIDL conception, the one which at least focuses on work, does not problematicize these most problematic of social preconditions for capitalist development. This failure explains why capitalist imperialism has ignited riots and growing class struggles worldwide. The Era of Riots or the New Class Struggle Globalization is therefore not an inevitable process since it is rather negotiated and contested. As with all social conflict, however, these struggles are not between equals. The power of state and global institutions to set the parameters of the negotiations for and against globalization tends to favour the interests of an emergent international class that is primarily located in OECD countries of the G-7. The class struggles against these global processes are often led by national classes whose domestic positions of power are threatened by global capitalism, but can also be influenced by grassroots organizations that seek a new vision for social justice. This alternative vision for globalization requires counter-hegemonic struggles to connect across national boundaries in order to transcend the struggles of globalization between competing factions of national elites. 319

The riots in England confirm the analysis regarding the ‘era of riots’ and they signify a historical milestone for the overcoming of the current cycle of struggles. It is very difficult to ignore the sequence of November 2005 (France) – December 2008 (Greece) – August 2011 (England) even if until now one tried not to notice. Specific practices that appear in this historical sequence (looting, arsons of companies’ buildings, arsons of police stations) construct the subject of the excluded, of the structurally produced surplus population within the current cycle of accumulation. These practices confirm the ‘end of activism’, as a particular form of the current class-struggle limits. In France, the urban ghettoization of the excluded proletarians (engineered by the state) left no room for the coexistence of the ‘autonomous (in relation to capital)’ activists and the insurgents. In Greece the encounter of the activists with immigrants and high school students produced a particular coexistence: those days some activists overcame through their own practices their activism and alternativism. In England urban planning was not an obstacle to such an encounter but the particular alternativism of the milieu was absolutely irrelevant with the practices of the looters (the activist’s critique regarding looting practices was so intense that in some cases it became a practice in its own respect, and even some of them participated in the riot clean-ups). The ‘indignant’ movements confirm the ‘end of radical democratism’, they are simply put an explosion of the contradictions of the latter. The crisis of 2008, as a crisis of globalization, made it possible for radical democratism to recover after a long absence (from 2003) and to be destroyed through its own triumph. These movements are very broad in terms of composition (ranging from young proletarians ready – only in theory – to join the labour market to rapidly proletarianized petty bourgeois and business executives) and in terms of demands (ranging from a new regulation of capitalism to an alternative management of capitalism, which is described with the word democracy and some adjectives before this word). The triumph of radical democratism is that this broad composition is expressed in its massiveness and in the fact that the words used by the activist avant-garde fractions of the past now dominate. What seemed to be ‘radical’ in the end of the 1990s – beginning of 2000s (self-organization, working-class control of state structures, full depreciation of political parties, ‘direct’ democracy) is now the very banality of these movements (as a result these words have no longer the old ‘radical’ content). 320

But both sides of this triumph are in fact the destruction, or more precisely termed, the internal subversion, the collapse of radical democratism. The massiveness, as expected, failed to make the movement visible to the state, let alone to ‘legitimize’ its demands. The ‘radical’ words were not able to hide that they were void of content: nobody thinks that these words can mean something by themselves anymore, nobody believes in ‘another world which is possible’ (that is without a destruction of this world). Within the second phase of restructuring (see the text “The transitional period of crisis: the era of riots”) the response of the State to this impressive invasion of the movements of ‘indignant’ in the public sphere is not a ‘new’ regulation of the capital relationship; it is somehow straight and tactless: the police. What is most important about the future developments of the crisis and class struggle is the evolution of the relation between the practices in England and the practices of the ‘indignant’. This relationship becomes of prime importance because of the liquidity between these two produced subjects (unemployment and precarity are at the heart of the wage relation). The form of the new limit (the police, class belonging as an external constraint) produces, as a transitional stage, a particular form of struggles that we try to approach with the use of the term ‘riot’. ‘Riots’ surround the movements of ‘indignant’ and eventually they penetrate them and produce rifts (écarts) between the practices of these movements. The rift dialectics work feverishly according to the dictates of the capital relation. The capital relation cannot be overcome by its reproduction crisis. This crisis is not merely a financial one. It is increasingly taking the form of a generalized social crisis. Capital would have a chance to overcome the crisis, only if the destructive process produced by the crisis was to function in a full scale. A new cycle of accumulation could only start through a devaluation or an immediate destruction of productive capital of significant value (more importantly, through the devaluation /renewal of fixed capital), followed by a restructuring of the mode of production. A massive devaluation of capital today has as a precondition the massive devaluation of financial quasi-capital (fqc, i.e., potential capital locked into the financial system and under the constant threat of a massive devaluation during the current crisis). This step is necessary because of the current structure of social capital and of the special importance of its financial form for the reproduction of capital. The importance of financial capital has marked the current historical period of restructured capitalism. The 321

restructuring, which followed the crisis of the 1970s, resulted in the financialization of capitalism as a whole, it did not just strengthen the financial system as a component of capital. The role of financial capital in the process of raising and allocating profit in the period between 1982 and the outbreak of the crisis in 2008 was decisive for the evolution of the profit rate. Financial capital was the ‘architect’ of the equalization mechanism of the rate of profit in the process of globalization. In the expansion phase of the cycle, financial globalization has encouraged investment by increasing the population available for exploitation and by the enforcement of competition among the labour powers worldwide (competition for the lowest price of labour power has led to the so-called descending spiral of the labour power value globally). At the same time, the mobility of capital and the success of financial capital in organizing the increase of profitability were so effective that they led to the reversal of the relationship between interest and business profit. The gradual rise of financial quasi-capital during this phase of the cycle was absolutely necessary for the expansion of production, and simultaneously the expansion of production brought about the rise of fqc as its consequence. This increase of the financial quasi-capital established the low (compared to the previous cycle) rate of accumulation that characterized the entire period. The low accumulation rate is connected to the fact that part of the profits should be ‘recycled’ in the financial system, so that the latter might continue to monitor and ‘engineer’ the rise of profitability. Thus, the growth in the rate of profit was based on a relatively low rate of accumulation. As the cycle went on, financialization contributed to the reduction of variable relative to fixed capital and finally to the maturation of capital overproduction crisis. Financial globalization has been the par excellence mechanism for restructuring and then for operating restructured capitalism, on the basis of low accumulation in the productive sectors. Financialization (and the globalization connected with it) is a mechanism that produced both the expansion and the crisis of this cycle of accumulation. This very close relationship between financial capital and the production process in the context of restructured capitalism, on the one hand, renders the devaluation of financial quasi-capital necessary for the initiation of a chain reaction of devaluation / renewal of fixed capital. But, on the other hand, it also causes it to be a very dangerous process as – given the absolute freedom of capital circulation – this process would be a huge shock to the 322

banking systems and consequently to the economies of every capitalist country. This is a significant difference between our period of restructured capitalism and the period of Keynesianism/Fordism. The internationalization of capitalism in the period of Keynsianism/Fordism was based on a national delimitation for the reproduction of capitalist social relations and on control by financial capital; it was possible to stop (or at least to control effectively) the circulation of capital amidst crisis. The precondition for the commencement of a new accumulation cycle is that the devaluation of fixed capital during the crisis has to be larger and faster than the variable capital devaluation. It is this phase of the crisis mechanism which allows the rate of profit to recover and the process of the expansion of production for each accumulation cycle to begin. The capitalist class has made until now anxious efforts to delay the inevitable unfolding of a destructive phase of the crisis. These efforts conceal their fear for the possible revolts of the proletariat in some countries, but also exacerbate inter-capitalist contradictions and conflicts. The second phase of restructuring The new measures are imposed by capital almost on a global level and they constitute the second phase of restructuring (see appendix). These measures are an attempt to maintain the current structure of accumulation. This effort consists in two processes, which are linked to one another: The first process is the partial valorisation of financial quasi-capital in those sectors and industries that are mainly linked to the reproduction of labour power and the distribution of the surplus-value produced (‘efficient privatization’ or ‘selling off’ of state-owned assets, restructuring of socialsecurity systems, etc.). This process actually evolves throughout the accumulation cycle, and it is directed from the periphery to the centres of accumulation. It is also a significant component of all regional wars from 1980 onwards. But today this process is on the rise, especially regarding privatization of fixed capital assets which until now belong to the state or whose major stockholder is the State. The attempt to valorise fqc includes the passage of several productive capitals under the absolute control of the financial circuit; this is the current form of the centralization of capital. The second process is the effort to further devalue labour power through police constraint. This attempted devaluation is a result and precondition of 323

the attempted partial valorisation of fqc (Greece is a typical example in this respect). These two processes define the second phase of restructuring (we are still in the accumulation cycle which began after the crisis of Keynesianism / Fordism) and aim to increase the rate of surplus value, partly through the extraction of absolute surplus value. The devaluation of labour power, which was initially responsible for the expansion of production in the current accumulation cycle, is now used again as a means to overcome (or bypass) the crisis, and is resulting in a deepening of the crisis. Two points are important here: the first is that the attempted valorisation of a part of fqc is only possible by creating new fqc (in the U.S. after QE1 came the QE2, the Eurozone constantly discusses the refinancing of loans contracted by member states in exchange of tougher measures, etc.). This parameter tends to transform the financial crisis that is currently underway to an acute monetary crisis and next to a crisis of value. The second point is that the privatization of state assets – which is the result (but also a cause) of state insolvencies that happen all over the world – means that the financial policies of each state become absolutely controlled by the international circuit of financial capital. This development has resulted in the deepening of the existential crisis of the capitalist (nation-) state as a politically autonomous entity and has led to the crisis of the very globalization of capital (at least as we know it today). This seemingly paradoxical reality has been produced by the contradictory relationship between capitalist states and freely moving capital, especially from 1990 onwards. The obedience of each state (of the second and the third zone of capital) to the dictates of an international and rapidly circulating capital was very important for the reproduction of capitalist social relations in the current period. In many cases a war was required in order to discipline the proletariat and/or fractions of the national capital of each state. On the one hand, the subjection to the imperatives of the Capitalist International enabled these states to be incorporated in the international circuit of accumulation during the expansion period of the accumulation cycle (often through the participation in some type of regional union). On the other hand, it gradually undermined the ability of the states to manage their internal social issues and made them increasingly vulnerable to the emerging crisis. The controversial relationship between the accelerating globalization and the administrative role of the nation state in the imposition of this process reached its limits at the beginning of the crisis back in 2008. 324

The (financial at first) crisis imposed a (temporary) ‘rescue of the financial system’, i.e. an effort to maintain the current structure of accumulation. This ‘rescue’ was achieved by means of new liquidity which either came from ‘state property’ or was created from scratch. Both methods quickly led to state bankruptcies. Most of the states were already heavily indebted, as in recent decades they had substantially reduced taxation of capital and had thus voluntarily assisted to the undermining of their budget. These defaults make the privatization of social reproduction mechanisms (except from repression) compulsory and restrict the role of the state to the regulation of capitalist competition. Repression as the prime mechanism for labour power management is reconfigured and adapted to the modern needs (they are oriented towards riot control in urban environments and the guarding of the borders). The other side of fqc partial valorisation is the expulsion of labour power value from the cycle of capital reproduction. The restructuring of (not only) state-owned companies and services does not involve a renewal in fixed capital that could lead to the creation of an overall new demand. Instead, it solely involves layoffs, cuts and downsizing. The ‘unemployed recovery’ (every economic index shows recovery except for employment) is simply an expression of the fact that the mechanism of crisis has not worked to the extent required in order to overcome the over accumulation crisis. The continuous expulsion of labour power value creates explosive social conditions in all capitalist states, regardless of the zone they belong to. One important result of capital’s (and proletariat’s) efforts to deal with the crisis is the explosive impasse of the migration issue. The flow of migrant workers from the third zone of the capital to the first two reaches a critical threshold and gets blocked. Here we find the paradox of a simultaneous crisis of globalization and of the nation-state. The downward spiral of the depreciation of labour, upon which the accumulation of the current period (until the outbreak of the crisis in 2008) was based, was so successful that its own continuation is now questioned. The walls that are raised on the border lines and the continuous flow of immigrants, the immigration police set up at national and supranational level, the receptiondetention centres or labour camps and the riots that burst there, the cries about the end of multiculturalism in Britain (!), the leftist discourse about a possible return to some ‘national development’, these are all signs of the first phase (or one side) of the crisis of globalization. But when the labour power 325

flow starts to get blocked, sooner or later the free circulation of capital will be also questioned. In any case, the first signs of the crisis of globalization are the ‘currency war’, the ‘beggar thy neighbour’ strategies of the states, and some major mergers and acquisitions, which show that the so-called foreign direct investments begin to gather closer to their initial centre of accumulation (states of first zone). This does not mean that there will be a new round of investments in the second and third zone, something that would require an increase of accumulation in these areas. For nearly two decades, the net balance of capital flows is strongly positive in favour of the first zone. A return to the previous model of capitalist organization, in which the nation state had a central role, is practically impossible. This structure of capitalist relations belongs to the past. Intercapitalist conflicts and the intensification of class struggle will probably produce a regionalization of accumulation. This product of the crisis, which includes a lot of conflicts, does not appear currently to be able to lead a new cycle of accumulation even if it implies a de facto devaluation of financial quasi-capital. The relations between the regions of the new regionalization of capital will of course be hostile. These regions originate from the historical evolution of the previous cycles of capital accumulation. Some areas, especially in the third zone, which do not belong to any of the regions of accumulation, but also some areas of the second zone for which it is difficult to remain included in the model currently applied by financial capital are already, or will be, the first fields of intensified class struggle and intercapitalist conflict. Centres of accumulation of the first zone intend to plunder resources and manage the reproduction of the proletariat that lives in these regions. This does not mean that the bourgeoisie of these states is going to ‘resist’ this onslaught. Instead, the most powerful factions are facing this crisis as an opportunity to be placed higher in the internal hierarchy and devour the weaker factions. The weaker factions of capital and the petty bourgeoisie strata get compressed, and in times of crisis they will lean towards the nationalist tendencies in order to get protected. The social contradictions in these areas are exploding, as it becomes more and more clear to the proletarians who live there that the continuation of capitalism does not include (a large part of) them as labour power. On the other hand, it should not be considered certain at all that the objective trend toward regionalization of accumulation will be implemented. Serious frictions are created between key players of the 326

Eurozone around the immigration issue. New forces appear in the wider Middle East and the Persian Gulf, such as Iran, Turkey and even the group of states constituting the ‘Gulf Cooperation Council’, and they are trying to become as much autonomous accumulation regions as they can be. The reproduction crisis of the proletariat, on the one hand, is pushing for regionalization and, on the other hand, tends to completely dissolve the global system. The imperialist attack against Libya takes place in the context of the

X     * \            ^   International to take advantage of the chaos created by African and Arab uprisings. Additionally, it is a warning for the proletariat (and the middle strata) in the other countries of this area about what will happen if they continue the uprising. Arab and African uprisings, which are a catalyst in the development of the crisis, also belong to this context. While the political form of dictatorship is questioned by the proletariat (and not only), rebellion has an ‘anti-state’ (but not anti-national) character and this is the way in which it expresses the crisis of globalization. This dimension of the insurgency is essentially an attempt to rescue capitalism itself, by saving the status of ‘free’ worker from the standpoint both of the proletariat and of fractions of capital which were suffocating under this political form and demanded ‘free’ competition. On top of that, this questioning is happening precisely at the moment that the political form of capital (a New Totalitarianism) tends to be applied to Greece and possibly to other countries of the second zone of capital. This creates a contradictory double movement. On the one hand, the Greek state is faced with the difficulty to impose the new measures as it fears unrest and, on the other hand, it is possible that the Arab and African revolts, as they contribute to the deepening crisis of restructured capitalism (which also results in increased migration flows), will make more immediate the need to accelerate the second phase of restructuring in Greece and Europe in general. The other pole of the contradiction, the proletariat, tends to appear more and more on the other side of the barricades of the conflict produced. Undervalued as labour power, fragmented, highly redundant and without worker’s identity and pride, the proletariat in most countries of the world is in turmoil. In the text ‘The historical production of the revolution of the current period’ we dealt with some important aspects of this activity: bosses’ kidnappings in order to claim redundancy payments in Europe, wild strikes 327

in the centres of accumulation of East Asia, continuous localized riots in China, riots that rocked Greece and France but did not reach production sites and the ‘rebellion with demands’ of the Caribbean in 2009. We may summarize the highlights of the last year as follows: in October 2010, the ‘stable’ part of the proletariat in France made an unsuccessful attempt to delay the imposition of the second phase of restructuring (in the form intended for the countries of the first zone). In autumn the students rebelled against cuts in Britain and Italy. Public workers rebelled in their own way in Wisconsin (prefiguring a conflict similar to which has not happened during the last decades in the U.S.). In Mozambique, in a foretaste of what would follow in early 2011, food riots burst in September 2010. Wild strikes continued in East Asia, unrest against the repressive form of social reproduction across the African continent intensified. In December 2010-January 2011 the Arab-African revolt burst, and it turns out that it is going to be the historical catalyst for entering the ‘era of riots’, the transitional stage of this crisis. The activity of the proletariat in the current crisis produces (through its various manifestations) class belonging as an external constraint. This reality is expressed as a lack of class vision, as a lack of class organization, as a lack of a vision for the transformation of the capitalist society to a ‘worker’s society’, to a society that is supposed to consist of a single class. The production of class belonging as an external constraint is emerging in different ways in each zone of global capital, but also in every state of each zone of capital. These different aspects are moments of a totality that arises from the fact that the second phase of restructuring taking place now, produces a rapidly growing surplus population. Simultaneously it does not increase the proportion of variable capital in total social capital, i.e., it intensifies qualitatively and quantitatively the impasse of the crisis and does not produce an exit from it. France: Radical or not, it is still trade-unionism If however the limit of present-day class struggles is not any more this “other world that was possible”, what is the new form and content defining class struggle? Maybe better than anywhere else, the seriousness of the present situation was made apparent in France with the revindicative movement of past autumn. The State suddenly lodged a bill to increase the age of retirement, posing an implacable dilemma to the proletariat: either we 328

will slow down the increase of debt at your own expense or the country’s creditworthiness is going to suffer, as Sarkozy said pointing threateningly his finger at Greece. This plan was connected to the crisis of the Eurozone and the need for the French State to accelerate the restructuring. But the result was the breakout of a movement which, from the very start, was clearly confronted with the objectivity of capital : the economy. An important element this time was the coexistence, within the French movement, of young and older proletarians (who were developing parallel activities). Most of the older participants in the movement belonged to the salaried middle strata, while most of the younger ones were not University but high-school students. The relation between these two segments of the movement was particularly complex. There was undoubtedly a common starting point: pensions. But this was a common preoccupation, not a common perspective. The older participants belonged to the pool giving rise to the imaginary figure of the average consumer: they could almost appear as a faded advertisement dating from the Fordist period. Undermining their chance to survive their working life was just another step in the breach of the social contract of Fordism. The younger participants are not only confronted to the additional two years of the retirement age, but they should work for forty years in order to qualify for retirement, whereas they know that they are unemployed persons in waiting. The trap of a life containing solely precarious work or unemployment and death was becoming common to all. The placards stressing that immediate practical interests of the youth living in France are under attack, as the raised retirement age makes their entry in the labour market even more difficult, constituted one aspect of practices that marked this coexistence. The other aspect was their total absence of demands as well as their stance towards repression. The young demanded nothing; the State was immediately sending police against them from the moment they were in the streets, although they blocked just their devalued schools, not production. Both these elements show that neither of the sides admitted the other as an interlocutor for arranging the future. The youth saw the State as a tyrant, and the State saw the youth as the surplus workforce of the future which it should repress at any cost. The police intervention in schools was clearly aiming at teaching discipline, the only useful lesson for the youth. As objective situation and as activity, the youth embodies in condensed form the absence of future. 329

The movement in France largely took, however, the form of a tradeunionism in a process of radicalization. It was a purely defensive revindicative movement, with its strategy and its tactics, and also with the unavoidable confrontational coexistence of self-organization and official trade-unionism. The weakening of official trade-unionism is so clear that it has practically been transformed from a mechanism for negotiating the price of labour power to a mechanism for the management and allocation of individuals, mostly of the middle strata of the working class, at various hierarchical levels – a mechanism that is undoubtedly fully identified with capital, but also one for which there is no substitute. Just like parties, trade unions are institutions without members, the remains of the defunct worker’s identity. It is in this vacuum that activism emerges. Activism, a tendency characterized by intense mobility, aims at becoming a catalyst of developments through the objective consequences of this mobility on the economy. The attempts at internal policing of the movement by the tradeunionists of CGT and their inability to propose a solution, a decent end for the movement, combine with the pressure of militants on trade-unionists for the continuation of the struggle. The inevitable cooperation with them, this sort of permanent osmosis, reminds us that trade-unionism is not just a form, but it is also content. The content of radical trade-unionism, or activism, or “movementism” as it has been called in France, was expressed more markedly in blockages. Its most dynamic manifestation was the blockage of oil refineries – its strength and also its limit. Blockages were the result of a contradiction: the pressure of the rank and file for action on the one hand, the inability to strike and lose revenue on the other hand. But they constituted a more appropriate substitute for strikes as compared to demonstrations, and they reached the menacing limit of their becoming real blockages. The fact that demonstrators have persisted in demonstrating for so long was connected to blockages. The strategy of the trade-unions, namely weakening the movement through duration, failed, and it led to an overcoming of the practice of demonstrating. Blockages were considered by militants as a means for blocking the economy. This objective shows, on the one hand, the importance of distribution as an integral part of the cycle of capital. On the other hand, however, it expresses an ideology declaring that the question does not lie in production of value but in its circulation. Whatever the case, in the end the economy was not blocked. But the sheer fact that, 330

from the beginning of the movement, blocking the economy was an acceptable objective, or at least wishes, shows an overcoming relatively to the anti-CPE movement. The practice of blockages aggravated contradictions and confrontations within the revindicative movement. The question was posed whether, and to what extent, blockages should be symbolic or real, and trade unions had a hard time controlling the people who flocked to Grandpuits. The priority set by trade unions was the protection of the refineries’ installations, and in this way it became even more obvious that the protection of labour is above all the protection of capital. As an activity, blockages did not put demands into question, but they constituted the limit of the activity produced by the delegitimation of demands. What is more generally the product of an unstable and circumstantial trade-unionism? In France the State waited for the strikers of the refineries to get tired and stop the blockings. It treated them as a bothersome but inevitable stage in the evolution of the situation. In fact, the militants blocking the refineries were begging the State to negotiate with them in search of a solution. But the State could only let them “dance around” for some days and then send in the police. The internal contradictory dynamics of the movement was however not so confrontational as to lead to a calling of its revindicative character into question to a significant extent. The limit of the French movement expresses the limit of today’s class struggle. It is a dipole corresponding directly to the concrete reality of two opposing classes. On one side, the class character of the proletariat’s action, expressed in all its demands which could be condensed to the demand of a perpetuation of its class existence, and thus also of capital. On the other side, “the police”, that is the enemy class ready for battle. The conclusion that can be drawn from the French movement is that the delegitimation of demands is so advanced as not to permit any stable establishment of radical trade-unionism in the place of the anti-globalization movement’s alternativism. The absence of a political program should not however entail a mechanistic perception of reality. “Programmatism” is an inherent element of class struggle and will continue to manifest itself, at least during the first stages of most struggles. As long as the proletariat remains the proletariat, it will produce the same thing as every living organism: the demand for a perpetuation of its existence. Through the contradictory development of this demand, the proletariat’s activity against capital, exploitation as a contradiction between classes, historically produces 331

revolution. The fact that the demand of a perpetuation of its existence, and revolution as its self-abolition, are embodied in the same class is not only apparently but also really tautological: it defines the “necessary and impossible tautology”, it defines the capitalist relation as a “moving contradiction”. The French movement never believed that it could win. The point was not there. The point was to express that enough is enough. While in France the situation was getting serious with the consolidation of a total delegitimization of wage demands that is currently underway (and which may appear even more intensely in the US in the near future), in the Arab and African countries it is clearer than ever that the marginalization of the vast majority of the youth taking part in rebellions is the very definition of a new phase of the crisis. No doubt the situation is not identical in every state. Each state has its own class structure and may differ from others in important respects, like the influence of religion, the gender issue, and the position in the global hierarchy of capitalist states. Yet we cannot overlook certain common aspects that stem from the objective situation, and from the activity of the proletariat and of the local middle strata (the petty bourgeoisie and the upper layers of waged workers) that are being rapidly proletarianized. On a first level, it is important to look at those elements that are common between these states and not at their differences. Besides the structural common aspects of these states (language, and to a large extent religions and the subjection to Western centres of accumulation guaranteed by the authoritarian regimes) there are also important common elements relating to the conjuncture. The economic situation in Tunisia and Egypt right before the uprising was similar, mutatis mutandis. Growth rates were about 5% and structural unemployment and precariousness were very high, especially for the young generation, whose social significance is huge because of the particular demographic structure. In Egypt, the great majority of the proletariat is very poor, with an ‘average per capita income’ of approximately $2,000 per year, as over one fifth of the population’s ‘average income’ is $2 per day. The impoverishment of the middle classes has been intensified in recent years, especially since 2008, thanks to the increase in food prices. The evolution of each state from Nasserism to neoliberalism, although different in intensity and speed, also has certain common elements: the overwhelming and ever-evolving repression promoted and protected the ‘breach of the social contract’ until the burst of the revolt, but also gave the uprising its anti-repression characteristics. Repression in these states was 332

devastating even for the middle class. A typical example was the assassination of Khaled Said in the summer of 2010 in Alexandria. His assassination caused protests that prefigured the current revolts. His murder was important enough to mobilize the youth of the middle class. It was the straw that broke the camel’s back! The devaluation, the absolute dependence on the state and the lack of future ceased to be tolerated by the young generation. The importance of the demographic issue is illustrated by the fact that in all political factions (from the left to the Islamists) there is a horizontal division between the older and the younger generation. Repression as social reproduction, as devaluation of labour power, was simultaneously the motive force for the economic development in these states and the limit of this form of political rule: on December 17, 2010 Mohamed Bouazizi lit the match which, together with the fire that killed him, also lit the fire of revolt. His self-immolation was the negative side of the current impasse of capitalism. The expulsion of labourpower value from the reproduction cycle of capital, the continuous devaluation, and the destruction of variable capital that dominates the crisis so far, defined the context of the suicide of a young Tunisian with no future. At the same time, the effectiveness that this suicide had on class struggle confirmed that we are now in a transitional period of this crisis – in the era of riots. Apart from the dependence of the middle and petty bourgeois strata on the state, the repressive neoliberal management of social relations had as its main objective the devaluation of labour power. The attack against the working class did not remain unanswered; we could say that there was symmetry between the intensity of this attack and the reinforcement of strikes in recent years. The most important strikes took place in Egypt in 2006, and in Tunisia in 2008 at Mahalla and Gafsa respectively. At least 2 million workers participated in the strikes in Egypt over the last decade. These strikes involved wage demands. The important characteristic was that they occurred locally, as the workers only trusted their interpersonal relationships. This was due to the former Stalinist left being integrated by Mubarak and unions becoming instruments of the state mafia. The link between the exploitation of the working class and the absence of future for the new generation of the middle class was materialized in the youth ‘movement of April 6’, that would later play a role in the events of the Tahrir Square. 333

State and/or religious repression and over-exploitation resonate in the issue of gender. The temporary installation of an Islamist prime minister (Ganoutsi) in Tunisia and the jeering of women from male bystanders in Tahrir Square on March 8 were facts that justified an ominous expression of concern from an old militant of the feminist movement: “History has taught us how popular revolutions are aborted by remnants of the ousted regime, and the first thing to be abandoned is the rights of women”, (Al-Ahram Weekly, 26 February 2011). In Tunisia, several women marched on January 29, in order to make clear that they would not accept any devaluation of women neither by the Islamists nor by ‘anyone else’. Sana Ben Achour said that they did not overthrow a dictatorship only to enter into a new one ‘of another type’. Women are the most oppressed subjects in these (more or less) Islamist and at the same time neo-liberal authoritarian regimes. Their activity is clearly a qualitative indicator of social unrest, whether it is the women of the April 6 movement in Tahrir Square, or the women in Benghazi whose relationships grew deeper during the protest movement against the slaughter at the Abou Salim prison. All these said, the conclusion is that the rebels appear to be aware of the fact that this region is intended for predatory exploitation and repressive management of the overabundant proletariat. This situation produces a whole range of practices and ideologies among rebels according to class origins, sex, age, the State they live in, and the complicated dynamics of the interactions between these factors. Bread, water and oust Ben-Ali For sure the participation in the rebellion is itself a dissolving process. The previously important social ties and institutions that define the capitalist social relations are questioned in the process of revolt. Revolt entails the selftransformation of each person into a struggling proletarian, it entails a sudden and violent proletarianization of every social category, since the everyday life of rebellion is merely action, solidarity, direct relations (even personal conflicts tend to be unmediated) and confrontations with the forces of repression. If this observation is important for answering once and for all the state propaganda that speaks of a purely “political movement”, at the level of analysis it is important to see the differences between the practices of the rebels. It is important to reconstitute dialectically the fragmented reality 334

of these revolts to understand what is both its power and its limit, that is, how they define and how they are defined by this transitional phase of the crisis. The most important differentiation within the practices of the rebels was the one between the riots, the pillages, sabotage, attacks on prisons and police stations on the one hand, and on the other hand the rhetoric of democracy, civil liberties, elections, and so on. The second pole of this contradiction represents the schizophrenia of the rapidly proletarianized petty bourgeois and of the middle strata. This contradiction also stems from the violent elimination of the future for nearly the whole of the new generation (official unemployment rate of the youth is near 60%). Personal accounts of the insurgents in Egypt express this schizophrenia to the utmost. One can see that the educated unemployed, or the almost starving underpaid young public workers, do not realize that their situation is a picture of the future of their European and American counterparts. While they understand capital as something totally alien to them (they constantly refer to corruption and cleptocracy), they don’t understand (at least not yet) that this period of capitalism, and its crisis, produces them as ‘estranged’. The thirst of the middle strata for democracy is in fact a thirst for justice, i.e. meritocracy. They require to be used for what they were educated to do, that is for the continuation of capitalism and its effective management. They require from the capital, that produced them as such, to find a way to incorporate them in the production process, they require the period of prosperity that neoliberalism reserved for Europeans and Americans of the same class. This section will not be happy with anything less than that. This is illustrated by the fact that part of them is rapidly radicalized, but also by the fact that the questioning of neoliberalism is expressed with a discourse on the nation (and not on religion), i.e. the discourse over the practical questioning of globalization, the challenge of the international circuit of capital whose functionaries are not considered credible interlocutors any more. But this part of the insurgents is caught in a double trap: on the one hand, the capitalist class pushes them all the more violently in the hell of surplus population and, on the other hand, part of this surplus population, instead of asking for democracy and justice, just riots, pillages, destroys, meaning that it does not demand anything, or it doesn’t participate at all in the revolt. 335

The petty bourgeoisie and the middle strata participating in the riots are disintegrating into the proletariat, but this does not mean that their ideology is vanishing. Instead, this dissolution produces even more intensively the democratization of the movement (which is inherent in a class movement): a communique distributed by the steel-industry workers included among other demands the ‘immediate resignation of the President and all the symbols of the regime, the dissolution of the union federation that was ‘Mubarak’s minion’ and the immediate creation through general assemblies of their own independent union, without any permission or agreement of a regime that has fallen and has lost all legitimacy, the confiscation of all state companies that were privatized and their re-nationalization, the creation of a new management of these companies which will consist of workers and technicians and will be accountable only to the people, the creation of workers’ committees for production management, pricing and wages, the creation of a general assembly of all political trends of “the people” that would realise the constitutional convention and would elect truly popular committees regardless of what the regime wants.’ Fortunately, this menacing human mass (the proletariat from ashwa’iyyat) was entirely absent from the revolt. Note that ashwa’iyyat is the Egyptian word for the slums in the outskirts of Cairo. The fragmented and precarious or unemployed proletariat had its own distinct presence (as in December 2008 in Greece) expressed by the complete absence of demands and the unmediated organization of the rebels (except for Libya). Ultimately, however, their practices were synthesized with the demand-formulating democratic practices that dominated the movement. This synthesis was based on the proletarian, class, ‘programmatic’ reality and ideology of the proletariat. The dialectic between the fractions of the movement did not lead to a rupture; it did not result in the overcoming of this dipole. Instead, it resulted in a provisional and precarious foundation, namely the coexistence of these practices, which marks a transitional phase of this crisis. As long as the proletariat is struggling as a proletariat it will always be faced with the issue of the continuation of its reproduction, i.e. the continuation of proletarian existence. The most controversial and important turn of events in Egypt was the appearance of the working class as a unified subject, through the trade unions. Only when the working class turned to a supposedly neutral State, the one represented by the army, only then did the 336

scales tip in favour of Mubarak’s fall. Only then did the revolt meet its demands, and simultaneously its counter-revolution came to triumph. In Egypt and in Tunisia ‘democracy’ triumphed right before the great massacre. No surprise that democracy took the form of military dictatorship in Egypt, and of a new government with members of the old Ben Ali government in Tunisia. The massiveness and therefore the multi-class composition defined the uprisings that swamped all these states. The coexistence of different classes should not be perceived as ‘the struggling working class’ with the external addition of the middle strata. In contrast, the participation of these social categories and their dismantling into the movement has been crucial for its evolution. This development opens up an important theoretical question about the dialectic generated between the surplus population and the rest of the proletariat and the petty bourgeois strata that are rapidly proletarianized. The coexistence of different social classes has not been so much confrontational because no question about communist measures could be posed, since that would practically challenge any vision of the middle strata for the continuation of capitalism. The multi-class composition of the movement was simultaneously its power and its limit. Due to this composition the movement managed to complete a titanic task, to challenge harsh dictatorships which were in power for decades. But the practices produced from the dynamics of this composition also gave the State the right to raise itself above its concrete form, even to denounce it, to change camp, to go with the insurgents and to implement the counter-revolution entailed by the revolt itself. The State must be preserved outside class struggle in order to continue to be the State of the capitalist class. The activity of the rebels made it possible for the State to play this role. The necessary internal distance between the practices of the rebels which would undermine the ability of the State to play a mediating role was not created. Democratic dictatorships and referenda do nothing other than to underline that we are in a transitional phase. Reuters points out aptly: ‘Egypt presents a new dynamic. It could become a magnet for investors as the labour power and land are cheap’. In other words, although the political manoeuvre was necessary for the restoration of order, what really matters for capital is the continued devaluation of labour power. But the class struggle has the specificity to function as a chain reaction, therefore is itself a cause 337

for its own reproduction. The energy emitted by the riots and protests against these regimes was so strong that it let all hell loose. We should not underestimate the fact that the call for democracy is above all a claim to the right to strike. In less than two months, the network of independent unions was strengthened in Egypt. These unions are now active and cause blockages in the production process. Also, violent incidents in everyday life reveal that social relations have undergone significant disruption, social roles have been challenged. On March 23, 2011 the new (blessed by the rebellion) Egyptian junta passed a law that criminalizes strikes, demonstrations, and rallies, and on April 9, on the two-month anniversary of the fall of Mubarak, they applied this law: they killed 6 protesters and injured hundreds more on Tahrir Square. The Ministry of Justice of the junta issued a statement with which it reassured the proletariat that it has every right to complain but it should be careful ‘not to impede the production process and not to cause chaos.’ The counter-revolution carried within the revolt in the Arab and African countries has not been promoted only by the State. We read in an article by K. Anderson about developments in Tunisia: ‘Youth from all over the country have continued to gather from time to time in Kasbah Square in Tunis to pressure the interim government. In early March, they succeeded – after a new round of confrontations with the police – in getting more old guard politicians to resign. As part of these efforts, a High Commission to Safeguard the Revolution has been created, which includes among its members trade unionists and Marxists.’ In the article by P. Anderson in the New Left Review one finds the condensation of this counterrevolution expressed in a language more familiar to the proletariat than the harsh language of state repression: ‘The strategic priority for a re-emergent left in the Arab world must be to close the rift in the revolts by fighting for the forms of political freedom that will allow these social pressures to find optimal collective expression. That means, on one side: calling for the complete abolition of all emergency laws; dissolution of the ruling party or dethronement of the ruling family; cleansing the state apparatus of the vultures of the old regime; and bringing to justice its leaders. On the other side, it means careful, creative attention to the detail of the constitutions to be written once the remnants of the previous system are swept away. Here the key requirements are: unrestricted civic and tradeunion liberties of expression and organization; undistorted—that is, 338

proportional, not first-past-the-post—electoral systems; avoidance of plenipotentiary presidencies; blocking of monopolies – state or private – in the means of communication; and statutory rights of the least advantaged to public welfare. It is only in an open framework of this kind that the demands for social justice with which the revolt began can unfold in the collective freedom they need to find any realization.’ Taking into account the issue of regionalization and the related intercapitalist conflicts, one can see that the “victory of the revolutions” in Egypt and Tunisia produces a new impasse. Libya and Syria – two States in the class structure of which racial and religious conflict plays a key role – could be only the beginning of the bloody future of class struggle and intercapitalist conflicts. Recent struggles reflect the two basic aspects of the process that produces the revolution of the current period: first, the delegitimization of demands, i.e. demanding is converted into a component of the reproduction of classes, which tends to be marginalized and suppressed, and second, the internal distance produced between proletarian practices in the evolution of class struggle. These two aspects of class struggle are produced in every zone of capital despite all their differences, and are imposed by the objectivity of capital, the economy. We may risk the prediction that we are entering into an era of riots, which will be transitional and extremely violent. It will define the reproduction crisis of the proletariat, and thus of capitalism, as an important structural element of the following period. By ‘riots’ we mean struggles for demands or struggles without demands that will take violent forms and will transform the urban environments into areas of unrest; the riots are not revolution, even the insurgency is not revolution, although it may be the beginning of a revolution. The internal distance between proletarian practices aggravates all social contradictions and creates a self-reinforcing process of growing conflicts that includes more and more categories of the working class and the intensification of State repression. The particularity of this ‘era’ is that the dynamics of the struggle cannot produce stable results. In any case, the struggles of the proletarians will inevitably reproduce the opponent class and their own class existence as a class of proletarians. The limit of these struggles, now, is the fact that they are class struggles. The only guarantee to overcome this limit is a practical attack against capital, which is identical with the attack on the very existence of the proletarian class. 339

Even if the crisis will not soon occur as globally as it appeared in 2008, the intense regional crises like the ones emerging in the States of rebellion, in Japan or in the debt ridden Eurozone, will define in a different way the universality of the crisis as a composition of chaotic local situations. Whether we are referring to France or to the insurgent Middle East and Africa, to the U.S. or China, we see that the inherent tendencies of this phase of restructured capitalism are developing rapidly and with tremendous momentum. All these tendencies converge towards the devaluation of labour power as a common component and the conversion of an ever larger part of the workforce into a structurally surplus population. The possible success of this phase of restructuring, i.e. the partial restoration of the rate of profit, whatever form it takes, will not lead to a new cycle of accumulation. This will only happen insofar as the structure of class relations is changed. The representatives of fqc, who enjoy the benefits of a delay of its devaluation (through repression). or those who appear as opponents of the fqc fraction – in some cases they really are – and who defend another Keynesian form of capital, will ultimately be in the same camp even if the conflict between them intensifies today during this transitional phase. Capital is in every sense a moving contradiction: while in the second phase of restructuring it completely fragments the proletariat, at the same time it creates a strong unity on the basis of its objectivity. It pushes each proletarian category from its own perspective to a common ascertainment: that such a profound lack of future entails a relentless gnawing of the present. This awareness creates the ideology of our time, the one of a struggling subject that does not use the old ideological signs of class unity; it has no existence outside capital and also has no future inside capital. The development of this contradiction in the form of the internal distance between practices in the class struggle, which will inevitably become confrontational, will show whether and how this lack of future will be produced, not as an objective movement of capital, but as an activity of the proletariat against capital, i.e. against itself as proletariat, i.e. as a continuous self-transformation through the communist measures that will be taken as the revolution will eventually abolish the proletariat. To understand the situation in the countries at the periphery of the European Union, four countries within the Eurozone, Portugal, Ireland, Greece and Spain, we have to understand the political context they have in common. All of them were governed by fascist or fascist-like dictatorships 340

(Spain, Portugal, and Greece) or by authoritarian right-wing regimes (Ireland) for most of the period from the late 1930s or early 1940s until the late 1970s. This history is usually ignored in analyses of these countries. This shared history, however, has determined the nature of their states, a critical variable for understanding countries’ economic behaviour. Their states have been very repressive. Even today, these countries have the largest number of policemen per 10,000 individuals in the EU-15. Another shared characteristic is their very low level of state revenues and their highly regressive fiscal policies. The revenues to the state are much lower than the EU-15 average: approximately 34% of GNP in Spain, 37% in Greece, 39% in Portugal, and 34% in Ireland, compared with the EU-15 average of 44%, and compared with 54% in Sweden – the EU-15 country where the left has governed for the longest period. The low state revenues result from extremely regressive policies. The super-rich, rich, and high-income upper middle classes do not pay taxes at the same level and intensity as those in most of the central and northern EU-15 countries – a consequence of a history of government by ultra-right-wing parties. Of course, progress has been made since the dictatorships ended. But the dominance of conservative forces in the political and civil lives of these countries explains why their state revenues are still so low. As a result, the public sectors in Portugal, Ireland, Greece, and Spain are extremely underdeveloped. And their welfare states are poorly funded and very limited, including their public transfers (pensions) and public services (medical care, education, childcare services, homecare services, social services, and others). Indicators of this are many. One example is public social spending as percentage of GNP, which is lower in these countries than the EU-15 average (27%): Spain, 22.1%; Greece, 25.9%; Portugal, 24.3%; and Ireland, 22.1% (compared with Sweden, 29.3%). Another example is the percentage of the adult population working in public services of the welfare state – again, lower than the EU-15 average (15%): Spain, 9%; Greece, 11%; Portugal, 7%; and Ireland, 12% (compared with Sweden, 25%). In fact, Greece’s percentage is three points higher, 14%, because it includes services for the military, (which represents approximately 30% of public employees).

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Occupy Wall Street and Class Struggle on the Waterfront Occupy Wall Street in America is taking different dimension. On December 12th, 2011, the entire “Occupy” movement on the West Coast proceeded to blockade their respective ports to shut down “Wall Street on the Waterfront.” This is both an effort to build a mass social struggle in the US against the 1% and a coordinated response to the coordinated attacks against the “occupy”. This historic action is being taken on independent of existing authorities – from the mayor and police to the unions themselves, who are unable to legally support such actions even if they wanted to. The 1% has been pulling every lever at their command to delegitimate and criminalize the movement. On the 12th we will demonstrate our growing social power, attacking the 1% at their point of profit while expanding and deepening the movement in the workplace, communities, schools and the social imaginary. The 1% is not simply an abstract slogan. They are the corporations that pay no taxes. They are the financial institutions that drove the economy into the ground. They are the bailed-out bank that won’t re-write your underwater mortgage with the taxpayer funds your grandkids will still be paying for decades from now. The 1% are embodied in the politicians that send your kids or spouses off to fight wars that defend nothing but the profits of the 1%, leaving hundreds of thousands dead all over the world, as veterans with PTSD and Gulf War Syndrome return home to shoddy services and no jobs. When these veterans have stood up for the people of this country on the streets of Oakland, they have been beaten and shot in the head with police projectiles, from a police force freshly trained by the Israeli and Bahrainian military to repress popular protest. The same bosses that have paid you less in exchange for longer hours and higher productivity for decades; the same politicians who have made you pay more taxes in exchange for de-funded or closed public schools, rising state college tuitions and gutted social services; this political and economic coalition that has brought about the highest degrees of inequality in US history; these are the 1%, and all of them must go.

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The Class Struggle Pendulum Swinging Back The last two major pivot-points in US class struggle were the 30s and the 70s/80s. Workers gained the upper hand in the 30s, Capital gained it back completely in the 80s. Both of these pivots came out of upsurges that transcended existing class struggle in the workplace, that were rooted in historic economic, political and social crises. In the 30s, social unionism, community solidarity and agitation from the unemployed forced Capital’s hand into making concessions to stave off more radical potentials. In the 1970s and 80s foreign competition, technological change and the beginnings of globalization gave Capital the upper hand, leading to deindustrialization and steadily declining real wages and union density. These two pivot points took place during major economic crises and were driven by forces that were bigger than the unions and the bosses in any one place, whether a generalized workers’ struggle much more threatening than the unions alone, or the forces of technology and competition in the global market. The Occupy movement is building a socialized class struggle similar to the 30s, but even more threatening to those in power. The movement is trying to build a generalized opposition to the 1% that also seeks the abolition of white supremacy and patriarchy – not just on the job, but in communities and in the home. This is a major threat to the existing order and is being responded to as such – federally coordinated police attacks, media smear campaigns, and attempts to drive a wedge between unions and the movement. Our enemies will do what they need to do. But so will we. The 1% has never had a problem understanding their best interests, organizing themselves, having influence over politics, or acting in the collective interests of their class. Their strength has been our weakness, and our subsequent weakness has reinforced their strength. The 99% is trying to create itself as a viable force, directly confronting the 1%, to take back what is rightfully ours – the wealth we create and the control over our lives and our children’s future – while fighting alongside people around the world struggling to do the same. The 99% needs to overcome its own divisions, internal hierarchies, and lack of action, transforming ourselves in the process.

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Occupy Strikes Back! Oakland, and the entire West Coast Occupy movement from Alaska to San Diego, are taking the fight back to the 1% on December 12th with a coordinated West Coast Port Blockade, with solidarity actions taking place all over the country. This is a community action in solidarity with port truck drivers and Longshore workers who have been under direct attack by the 1%. The 1% have been steadily busting unions or preventing workers from joining one. For decades corporations have waged a one-sided class war against workers with assistance from politicians in both parties. The Occupy movement is attempting to make this not only a struggle that has two sides, but one that puts workers (and the unemployed) on the offensive. Together we can not only push back against the 1%, but wage a protracted fight to democratize production and our economy. The formation of a broader mass movement that seeks to break the monopoly that the rich have over resources and power is a formidable task, but one that finds an increasing social base as the majority of the population loses not only what they have, but hope for the future, while the 1% reap record profits. Polls show that a large and growing portion of the population is sympathetic to the anti-capitalist message of the Occupy movement, despite media distortions. This is a sentiment that comes out of the material conditions of this historical moment. The need to alleviate inequality and give people more control over their daily lives and their communities has gone from the desire of a few to the need of the many. The West Coast Port Blockade, on-going home reclamations led by those who have been evicted with support from the community, and steady work against police brutality are some of the ways of taking our power back from the 1%. In Oakland, we are standing in solidarity with non-union port truck drivers who work for as little as $30 a day, have no benefits, constantly breathe toxins from polluting trucks and face racism on the job at every turn. As the government facilitates the formation of massive oligopolies from banking to telecommunications, workers who make less than minimum wage cannot organize for a fair wage, let alone a union, due to “anti-trust” laws being applied to them, due to their misclassification as “independent contractors.” The law makers and bosses that constructed these laws aren’t going to help these workers. Union lawyers haven’t been able to doing anything. Union organizers can’t legally organize them. The National Labour 344

Relations Board isn’t taking this up. The media isn’t covering this story. Occupy Oakland has been working with, and is standing in solidarity with, these multiply exploited truckers, while looking at the rest of the 89% of workers who face the boss as isolated individuals and not as a collective. What we are doing goes beyond ordinary protest and transcends the norms of the labour movement which has been haemorrhaging membership and granting concessions for decades. The lack of concrete demands should not be read as “no goals,” but as “no compromise.” The December 12th Port Shutdown is bringing the fight back to the 1% and expanding a movement that is seeking objectives that are unapologetically radical, but at the same time logical and simple. People should have control over their own lives. People should receive the things they, their families and communities need. They should fight back against anyone who tries to exploit them and take away the fruits of the wealth they create. That is what the “occupy” movement is doing and this is what it will continue to do. In sum, most commentators thought neoliberalism was a devastatingly successful assault by the capitalist class. Most believed that people were helpless to oppose it, giving neoliberalism a fatalistic inevitability: even if people had tried to oppose it, apparently it still would have gone ahead. They contended that capital cleverly used blitzkrieg tactics to nullify dissent, and assert the working class was allegedly docile and fragmented in the face. This is already a proven myth. Resistance to the institutions, projects and policies of neo-liberalism is nothing new. As the 1970s drew to a close and the repercussions of the Washington Consensus began to be felt across the world, resistance became the logical response. Riots broke out in Ecuador in 1987 and Algeria in 1988. Since the end of the Cold War and the supposed triumph of the “global economy,” spectres of anti-capitalist struggle have swirled into life around the planet. For example, the Zapatista uprising in January 1994 revived the great anti-liberal Revolution of 1910 and helped throw the economic planning of the Mexican state, and the Mexican economy, into crisis. The general strike in France in December 1995 resurrected the Commune, blocked the social welfare cuts the French government had planned, and led to the electoral victory of the Socialists, who are at least offered a shorter work week and an end to “austerity.” Finally, the South Korean workers’ season of general strikes from December of 1996 to March 1997 ignited the 345

Asian crisis and ended the dreams of endless profit booms for investors and speculators in “emerging markets.” In response to the implementation of IMF (International Monetary Fund) and World Bank Structural Adjustment Policies (SAPs), strikes swept across Benin in 1989. Tens of thousands of people took to the streets of West Berlin against the 1988 IMF and World Bank Summit, and throughout the 1990s, tens of thousands resisted the construction of the Sardar Sarovar dam in India - a World Bank sponsored mega-project. These are but a few examples. Indeed, resistance to neo-liberalism is as old as this most recent strategy of capital is new. However, over the last decade we have seen the emergence of a qualitatively different form of resistance to neo-liberalism, a form of ‘network resistance’ to capitalism which, in many ways, is unprecedented. The chances for further resistance to capitalism today are mixed since we live in a fairly contradictory and complex time. On the one hand, there is much anger, a general resentment about shit wages, overwork, low benefits and so on. There is a general scepticism about all political parties and a general resentment towards wealth being concentrated in fewer and fewer hands. The decline of Leninism and social democracy has produced an unprecedented opportunity for a praxis that cannot be recuperated and straightjacketed into some form of bureaucratic state capitalism. There has been a rise in extra-parliamentary protest with the emergence of antiglobalization, anti-war, anti-genetic engineering movements in the last few years. Yet on the other hand, many people are demoralized, more alienated, beaten down, and struggling to survive with huge debt and inadequate income. The anger against modern capitalism is mostly translated into largely individualistic rather than co-operative forms of resistance. We are living through a period of one of the lowest amounts of formal strike activity in world history. Most people are too scared to lose their jobs to risk “illegal” strike activity, although there has been an encouraging sign of a number of wildcat strikes. Yet this does not mean the exploited class should be too pessimistic, and place its main hopes in movements elsewhere. Capitalism is fundamentally contradictory and unstable. On the one side, these and other struggles have not yet blocked the continued rule of capital and the extension of more direct capitalist relations of production and consumption to a vastly larger area of the earth. On the other side, they preview the crisis of the neoliberal phase of capitalism itself. 346

Does planetary capitalist expansion and reorganization set the stage for capital’s defeat or its successful colonization of greater areas of human life? Has capital bitten off more than it can swallow in its more recent leap forward? Will it choke on an indigestible humanity resisting both reduction of life solely to existence as labour power and the incessant imposition of austerity in all its guises? These and other working class struggles have forced some of capital’s thinkers and planners to respond, as witnessed by George Soros’ famous Atlantic Monthly piece, warning capital that “the uninhibited pursuit of selfinterest” which is not “tempered by the recognition of common interest” will spell disaster for the system (Soros 1997: 48), and also as witnessed more concretely by the willingness of the World Bank to engage in negotiations and planning with the non-governmental organizations (NGOs). Does this, for capital, signal the start of something new, the first halting steps toward a new phase of capitalist development after the neoliberal processes of clearing away the deals and powers of the working class accumulated during most of this century? On the other side, is the planet’s complex and contradictory working class itself edging closer to a new phase of offensive against capitalism after a period of micro-social resistance? Amidst many struggles and efforts at developing new circuits of discussion and action, some key moments of the past several years have been the Zapatista uprising in Chiapas, Mexico and the Intercontinental Encuentros Against Neoliberalism and for Humanity initiated by the Zapatistas and held first in Chiapas in 1996 and then in the Spanish state in 1997. We see these efforts as an important part of a slow and still uncertain beginning of new possibilities for the world anti-capitalist struggle. Overall, the world is living through a transitional period, one that could swing towards a retrenchment of neoliberal capitalism or develop into a more radical opposition to it. It could swing either way. With encampments being closed across the USA it is important to remember the end goal was not to occupy public space; rather, it was to end corporate rule. The aim was to replace the rule of money with the rule of people. Occupying is a tactic but the grand strategy of the Occupy Movement has been to weaken the pillars that hold the corporategovernment in place by educating, organizing and mobilizing people into an independent political force. The occupations of public space have already done a great deal to lift the veil of lies. Americans are now more aware than 347

ever that the wealth divide is caused by a rigged economic system of crony capitalism and that they can create a fair economy that works for all Americans. Americans are also aware that many of their fellow citizens are ready to take action – extreme action of sleeping outside in the cold in a public park. And, they also now know that they have the power to shift the debate and force the economic and political elites to listen to us. In sum, capitalism is considered democratic because it is the freedom to make voluntary exchanges in the market without regard to differences of “rank” or “merit” but on pure voluntary self-interest. As Marx explained, however, the dream of capitalism that free exchanges between legally equal persons ensures the social good of all, has always to be related to the actuality of capitalism as a social system of production. In actuality, capitalism is not simply a political system that ensures civil rights in a free market but an economic system of production in which individuals basically stand in a relation of class inequality. They are either working class, and thus free to work or starve because they own nothing but their ability to labour for others, or, capitalists who, owning the means of production, are free to force the majority to engage in surplus-labour over and above that which is required for meeting workers needs so as to realize a profit for themselves. Private property in production is what makes the social inequality of class in capitalism; class is the division between those who employ and consume labour (the exploiters) and those who do not and produce the social wealth (the exploited). The monopoly media uses all its power to hide this classconsciousness from the people to make capitalism appear as the limit of freedom and democracy. But freedom and democracy under capitalism is only for the few who can afford it because they live off the labour of the many. As capitalism develops on a global scale, the many cannot even meet their basic needs and are compelled to enter into struggle against the bosses—as Argentina, after only 10 years of neoliberal deregulation, and Venezuela, whose workers must arm themselves simply to defend the minor redistributions of wealth of the Chavez government, once again show. The emergent revolutionary struggles in Latin America once again prove the basic truth of Marxism: that the global development of capitalism leads to its own downfall by producing a revolutionary working class with nothing left to lose and a world to win by taking power from the owners and running the economy for the social good. This truth is, however, covered up by a thick layer of mystification by the corporate media through a variety of relays 348

and mediations. This mystification serves to naturalize the social inequality at the basis of capitalism and maintain the status quo. Take the lie that the North, led by the US, has a moral destiny to bring freedom and democracy to the South crushed by poverty and corruption. The poverty and corruption of course are the result of freedom and democracy—the freedom of the capitalist to exploit human labour power for profit which is what in actuality “chases the bourgeoisie over the whole surface of the globe” and “compels all nations, on pain of extinction, to […] introduce what it calls civilization into their midst”, as The Communist Manifesto says (Marx 477). The “moral” story about protecting human rights is told to cover up the material truth about democracy being the freedom to exploit others for profit. The story is needed to alibi the regime of wage-labour and capital as a fact of nature. In other words, it portrays the normal daily exploitation of labour under capitalism as the free expression of human nature in comparison with which its everyday brutality is made to appear “extreme” and “irrational” rather than a socially necessary consequence of private property. The representation of capitalism as natural is of course not natural at all but historical: it is needed now to manufacture consensus that capitalism cannot be changed at a time when it is obvious that the material conditions already exist to abolish class inequality.

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Chapter Eleven Imperialist World Order: Protests against Misery for Profit Overview When government officials from more than one hundred countries arrived in Seattle for a World Trade Organization conference in late November 1999, they found more than luxury hotel rooms, gourmet meals, and Courvoisier cognac waiting for them. In the streets of Seattle, more than fifty-thousand people gathered to protest against the loss of decent-paying jobs, proliferation of sweatshop labour, growing poverty and social inequality, mounting environmental devastation, and diminution of national sovereignty resulting from the W.T.O.’s “free trade” policies. Activists from labour, environmental, human rights, and radical organizations joined together for several days of demonstrations that frightened local corporate moguls and politicians more than any event since the Seattle general strike and workers’ uprising of 1919. The massive turnout and militancy of the demonstrators overwhelmed W.T.O. officials and the Seattle police. Many conference delegates found it physically impossible to attend their scheduled meetings. Why such massive protests? Globalization may not be a household word, but it has become a prominent term in the lexicon of transnational corporations, government officials, international financial institutions, academics, and activists during the past two decades. The International Monetary Fund defines globalization as “a historical process” involving “the increasing integration of economies around the world, particularly through trade and financial flows” with attendant exploitation and repression. Introduction The imperialist capitalist system is attacking the working class and the oppressed peoples with the values of neo-liberalism, for the hegemony of the monopolies and the unrestricted circulation of capital. Regulations, under the name of structural adjustment programmes and more often than not accompanied by such concepts as the progress of democracy, the protection of liberties and global justice are being brought into force, as fitting the needs 351

of capital, in developed capitalist countries as well as dependent underdeveloped countries. The imperialist system is imposing these programs of aggression on the people of the world in many ways and using different methods; whether these are military-political, economic-social, ideological-cultural. No methods are abstained from against those countries that refuse to accept this encirclement and imposition or those regions that are regarded as necessary for the establishment of hegemony over the world’s resources including military attacks and occupation, hatching military coups, building puppet governments, creating civil conflicts, etc. The imperialist forces, primarily the US, are seeking to create legitimate grounds for their aggressive conduct by putting forward ‘justifications’ such as human rights, the international community, United Nations (UN) regulations etc. The reappropriation experienced only recently in the Balkans and Kosovo, the occupation and the establishment of a puppet government in Afghanistan on the grounds of national security and struggle with terrorism; the murder of Gadhafi in Libya; the occupation of Iraq now on the pretext of preventing weapons of mass destruction, concocting coups d’état in some of the Latin American countries – such as Venezuela – against ‘unwanted’ presidents and the overthrow of the Georgian president are all examples of the assaults of the imperialists spearheaded by the US. These assaults have not gone unchallenged. What is the argument against globalization? The philosophical debate about the relative merits of central political control of the market versus market forces in the allocation of society’s resources is an old one, and one that will probably never be finally resolved. The new primacy of “market capitalism” as the economic model and the technological ease of sharing the information needed to operate global markets are rapidly changing many people’s lives. Great fortunes have been amassed as world stock markets boom in expectation of new opportunities and falling production costs and as a result many parts of the world have experienced rapid economic growth and the consequent improvements in living standards. Growth has not, however, been uniform: Russia, Brazil and the Southeast Asian states experienced economic contractions in the late 1990s along with reversals in international 352

capital flows and the resulting steep declines in currency values. Some observers think that the benefits of globalization accrue mainly to investors, multinationals and the elites in developing countries, while the working classes suffer relative impoverishment. Further, they feel that the massive inflows of foreign investment in developing countries cannot be effectively absorbed, especially in regard to environmental protection and workers’ rights. This is because developing countries standards and enforcement mechanisms are not as well established. The open-door aspects of global production and marketing have tended to “homogenize” economic and even cultural lives around the world as dominant entertainment and media; consumer products; and, commercial practices fall into place. Additionally, the consumer goods produced by a globalized economy are not necessarily those that the world’s poor are most in need of. For these reasons, and others, the opposition to globalization has grown amongst a diverse, but surprisingly cohesive, group of nongovernmental organizations and other interest groups. The primary targets of the antiglobalization movement have been the United States, the World Trade Organization (WTO), the International Monetary Fund (IMF) and the World Bank. These organizations are seen as the enforcers of the globalization and the rights of multinationals to the detriment of ordinary people. This loosely coordinated group of protesters has taken on a high profile by disrupting various WTO and IMF/World Bank meetings over the years. Ironically, the same information technology that facilitates global commerce makes it easy for the forces against globalization to mobilize. Information technology has the ability to amplify both individual and NGO voices making the case for limits on global changes. In “The Lexus and the Olive Tree,” Thomas Friedman suggests that, in looking at countries in a global context today, a “six dimensional” framework is needed. To the traditional economic, political and national security analyses of international relationships, we must add technology, the environment and culture as critical dimensions in which globalization is affecting nations. Interestingly, these dimensions can be looked at in the light of the eight core principles espoused by anti-globalization forces (“Beyond the WTO: Alternatives to Economic Globalization,” International Forum on Globalization, Nov. ‘99): 353

Popular sovereignty over resource allocation decisions through political institutions rather than the consumer sovereignty of the market (although globalization opponents normally express consumer sovereignty as “corporate control” as they see consumers as unable to resist the multinational’s efforts to introduce and sell their products in world markets - the French reportedly loathe McDonald’s but many still eat there). Localization vs. globalization: Production for sale to local, not global, markets and keeping political decisions at as local a level as possible. Environmental sustainability: Global market capitalism is seen as intrinsically harmful to the environment as it is characterized by everexpanding consumption of unneeded homogeneous products; overexploitation of natural resources; and, waste-disposal problems. Accordingly, local political institutions need to have primacy over environmental policy. Economic human rights: Workers are seen as having their traditional lives irreversibly disrupted by globalization and/or being treated less favourably than the same multinationals would treat those in developed countries. In this instance, it is often recognized that local political sovereignty may not be enough; global rules are needed to ensure that multinationals can’t exploit workers. Certain goods should not be traded as economic commodities or be subject to trade agreements: Food; water; seeds; the genetic basics of life (and some culturally sensitive products, e.g., entertainment) as well as toxic waste; arms; and drugs, should not be classified as “economic goods.” The knowledge embodied in genetic structures should not enjoy intellectual protection, but should be “collective property.” Local authority over food and agriculture should not be restricted by international trade agreements. Equity: Globalization should be restrained as a force that tends to widen the gap in living standards both between and within states. Cultural, biological, economic and social diversity: Local politicians should be able to prevent economic activities which tend to homogenize life in the various regions of the world. The main theme running through the core principles of anti-globalization is local political control versus market sovereignty. This is the subject of Yergin and Stanislaw’s “The Commanding Heights,” which traces the ascendancy of the centralized control of economies in the 1930s and 1940s. It also looks at the more recent ascendancy of market forces in determining the allocation of resources, which we now know as the phenomenon of globalization. 354

As Yergin and Stanislaw point out, whether the capitalist market model maintains its current ascendant position depends on whether it in fact delivers enough benefits to enough people and at acceptable cost. At this time, anti-globalization activism is a well-developed world issue and the peoples of the developing world will probably not support any policies that limit the access their countries have to Western products, entertainment, capital and jobs in multinational factories. For example, in Robert Wright’s “Will Globalization Make You Happy” (Foreign Policy, September 2000), the author argues that: “The economic efficiency effects of globalization are in fact raising living standards worldwide, even if in relative terms, the gap between rich and poor nations is growing.” Pillars of Contemporary World Order The main planks of contemporary global capitalism or neo-liberalism include: 1. The Rule Of The Market. Liberating “free” enterprise or private enterprise from any bonds imposed by the government (the state) no matter how much social damage this causes. Greater openness to international trade and investment, as in NAFTA. Reduce wages by de-unionizing workers and eliminating workers’ rights that had been won over many years of struggle. No more price controls. All in all, total freedom of movement for capital, goods and services. To convince us this is good for us, they say “an unregulated market is the best way to increase economic growth, which will ultimately benefit everyone.” It’s like Reagan’s “supply-side” and “trickledown” economics -- but somehow the wealth didn’t trickle down very much. 2. Cutting Public Expenditure For Social Services like education and health care. REDUCING THE SAFETY-NET FOR THE POOR, and even maintenance of roads, bridges, water supply—again in the name of reducing government’s role. Of course, they don’t oppose government subsidies and tax benefits for business. 3. Deregulation. Reduce government regulation of everything that could diminish profits, including protecting the environment and safety on the job. 355

4. Privatization. Sell state-owned enterprises, goods and services to private investors. This includes banks, key industries, railroads, toll highways, electricity, schools, hospitals and even fresh water. Although usually done in the name of greater efficiency, which is often needed, privatization has mainly had the effect of concentrating wealth even more in a few hands and making the public pay even more for its needs. 5. Eliminating The Concept Of “The Public Good” Or “Community” and replacing it with “individual responsibility.” Pressuring the poorest people in a society to find solutions to their lack of health care, education and social security all by themselves—then blaming them, if they fail, as “lazy.” Around the world, global capitalism or neo-liberalism has been imposed by powerful financial institutions like the International Monetary Fund (IMF), the World Bank and the World Trade Organization. This ideology is raging all over the world, in general. The recent wave of international protest against the institutions of global capitalism is a manifestation of growing dissatisfaction among broad layers of the world’s population with the operation of the imperialist world order called neoliberalism. Despite confused, mutually contradictory and sometimes overtly reactionary politics, these protests signal the end of a decade of capitalist triumphalism which followed the fall of the Berlin Wall. Our comrades at the 26 September 2000 protest in Prague carried placards (in Czech, German and English) which called for: “Down with the IMF/World Bank!,” “Neither Free Trade Nor Protectionism,” and “For Workers’ Revolution to Smash International Capitalism!” There is something profoundly wrong with a world in which the income of the three billion people at the bottom is less than the 500 at the top. The World Bank’s Annual Report 2000 admits that half of humanity subsists on less than two dollars a day, although it cynically insists on drawing the global “poverty” line at one dollar. In November 1998, Le Monde Diplomatique reported: “Thirty million people a year die of hunger. And 800 million suffer from chronic malnutrition.” The author, Ignacio Ramonet, asked: “Is this the way it has to be? The answer is no. The UN calculates that the whole of the world population’s basic needs for food, drinking water, education and medical care could be covered by a levy of less than 4% on the accumulated wealth of the 225 largest fortunes.” 356

Obscene inequality is a fundamental and unalterable feature of capitalism. Under a “free market” system, social priorities are always arranged to benefit the privileged few at the expense of the many. This is not accidental, and it is not something that the World Bank, the International Monetary Fund (IMF), the Group of Eight (G-8) or any other representatives of global capitalism could change, even if they wanted to. How the IMF ‘Fights’ Poverty For public relations purposes, the World Bank and IMF are now talking about making the eradication of poverty their top priority. At a press conference on “The IMF’s Role in Poverty Reduction,” held on the eve of the Prague demonstrations last September, fund official, Masood Ahmed, observed: “[T]here has been I think over the last few years a coming together around the central challenge of poverty reduction as being the most important issue that faces the world today.” The IMF’s plans for “fighting” poverty were outlined in a “Global Poverty Report” to the July 2000 G-8 Summit in Okinawa. The report, cosigned by the World Bank and four other development banks, praised earlier “anti-poverty policies”: “Some of the policy measures adopted include, stabilizing the macroeconomic framework, trade and price liberalization (especially of agricultural prices), and privatization and promotion of efficient management of the public sector, including anti-corruption measures.” This is simply a description of the IMF’s standard “structural adjustment” program which has routinely increased poverty levels, as well as imperialist leverage, in those neo-colonies where it has been applied. In most cases, its implementation has resulted in reduced social services through privatization of healthcare, education, power generation and transportation. These measures are chiefly designed to create opportunities for profitable investment for foreign capitalists and their domestic partners, while also reducing the domain of the national state. The hundreds of millions of working people in Mexico, Brazil, South Korea, Thailand, etc. who have first-hand experience with IMF efforts to “stabilize the macro-economic framework” have no illusions in its “anti-poverty programs.” “Trade and price liberalization” means getting rid of tariffs and subsidies 357

for domestic manufacturers, thus forcing them to compete directly with massive international monopolies. The result is that many small and medium concerns in the neo-colonies are forced out of business, which increases unemployment and lowers wages. The technical advances of the “Green Revolution” have made it profitable for agribusiness multi-nationals, or their surrogates, to drive subsistence farmers off their traditional lands so that these can be used to produce cash crops for export. Consequently many “underdeveloped” countries have experienced a massive expansion of agricultural output, while simultaneously recording dramatic declines in per capita food consumption as millions of former peasants are pushed into the disease-ridden shantytowns that ring the cities of the “Third World.” The growth of social inequality is a problem that cannot be “fixed” within the framework of the existing social order. Like its earlier “development” plans, the IMF’s “Anti-Poverty Policies” will accelerate the extraction of wealth from the poor for the benefit of the finance capitalists of the imperial metropolis. This is not due to accident or oversight. It is quite deliberate and entirely rational within the logic of capitalism. Under the “free market,” social priorities will always favour those at the top of the pyramid at the expense of everyone else. Backlash against Globalization When the Trilateral Commission was set up in 1973, my memory is that it was primarily aimed at addressing two issues. One was the integration of a great new Asian power into the world economy and world scene-Japan. The second was to deal with a perceived breakdown of the world economic order of the day: the collapse of the Bretton Woods system of fixed exchange rates and the outbreak of protectionist actions and protectionist legislative pressures in the United States. In addition, the oil shocks were just around the corner. In short, the world economic order was in doubt. I believe that the Trilateral world faces very similar challenges today. There is clearly the entry into the world economy and broader scene of a great new Asian power-China. That is not my topic today, but it is crucial and the Commission will have to deal with it. But my topic is the second set of issues, what I believe is another set of threats to prosperity and stability of the world economy, namely, the backlash against globalization. 358

Fundamental Challenge The pressures in the 1970s were very substantial but they were mainly technical and they had technical fixes. We could move from fixed to flexible exchange rates; we could initiate a new round of global trade negotiations to get the liberalizing momentum going again. Even in response to the oil crises, which took longer, market responses plus new institutional initiativesfor instance, the International Energy Agency and the Strategic Petroleum Reserve in the U.S.-of essentially a technical nature were taken. The world economy today faces a more fundamental set of challenges because the backlash against globalization is much more than economic. As Henry Kissinger frequently reminds us, there is a huge political dimension and the politics and the economics are often out of synch. As Mario Vargas Llosa reminds us, there is also a huge cultural dimension which raises a mass of contentious and difficult issues of their own. Now the backlash has been manifest in the demonstrations in Seattle, Davos, Bangkok, and in Washington this coming weekend. Demonstrations highlight the importance of the NGOs, which is an important part of the issue. But, in my view, the demonstrations themselves are only superficial signs of the real issue. The real backlash, the real challenge to globalization, is much more substantive; we have seen it arising not just in the last few months but over a series of years. I believe it is the critical issue of multilateral management for the future with which this Commission ought to concern itself. Multilateral Finance and Trade Regimes at Risk The backlash obviously takes different forms in different regions and different countries. But there are several patterns within the international finance and trade regimes that one can tick off. First, it is clear that we have an international monetary system that is crisis-prone. We have had at least three major sets of crises in the last decade alone: the European crisis of the early 90s; the Latin American crisis emanating from Mexico in the mid-90s; the East Asian crisis spilling over into Russia and Brazil in the last two or three years. Private capital flows can de-stabilize-being too big at one time and too little at another-and there has been a failure to put in place any substantial reforms to improve the prospect for stabilizing the system in the future. Indeed, we have serious proposals in 359

the United States from a Congressional commission recently, on which I happen to have led the dissent, which essentially wants to abolish the International Monetary Fund and the World Bank, and there are significant pockets of support for that approach in our Congress. Second, the trading system has essentially been stalemated for several years. There are no new multilateral negotiations of any serious nature being conducted anywhere. The situation is very serious if, like me, believe in the bicycle theory, which says you either move forward or you fall over. But even if you don’t believe in the bicycle theory, you have to be impressed by the series of failures over the last few years. The U.S. administration has been unable to get any new negotiating authority from the Congress for five years; U.S. trade policy is stalemated domestically. Efforts to negotiate a new international investment agreement failed miserably at the OECD in Paris. The effort to launch a new multilateral trade negotiating round in Seattle failed miserably. All the momentum is with the anti-globalization forces. Hopefully, our Congress will vote to grant permanent normal trade relations to China in the next few weeks. But even that outcome is uncertain. And even if it passes, the fact that it’s at all close is amazing. It’s a no-brainer. The U.S. negotiated opening of the Chinese market but, if the U.S. doesn’t give permanent normal trade relations to China, the U.S. will not benefit from that opening and will turn the competitive advantage over to its trading competitors. There should be a vote of 535 to 0 in our Congress but, it’s a cliff-hanger and, when I talked to the White House just before leaving for this meeting, they were still 20 votes short of being able to say they would win it. The point is that there is a big backlash against globalization. We see it in the financial world. We certainly see it in the trading world as well. It’s much more fundamental than pure economics. We know that globalization does increase income and social disparities within countries. We know that globalization does leave some countries and certainly some groups of people behind. We do know that a lot of Europeans don’t want to eat genetically modified American foods and that adds to their resistance to globalization. We know that a lot Americans worry about races to the bottom--labour standards, environmental standards, and other perceived doubts about dealing with the rest of the world. We know that a lot of developing countries are raising doubts about the entire system, and such specifics as whether having agreed to the enshrinement of intellectual property rights is 360

really in their national interest. (They would like to pull it back out of the WTO, having agreed to put it in five or six years ago.) So the list is long of the perceived intrusions of globalization into national sovereignties. There is therefore a backlash against it, which I think we have to take as an extremely serious economic, political, and social matter. Backlash Could Become Much Stronger All this seems paradoxical in a very fundamental sense. The world economy is in good shape. Indeed, almost all of the crisis countriesparticularly in Asia and Latin America-have experienced rapid V-shaped recoveries from the crises of the last few years. The ultimate paradox is that this backlash against globalization is so severe in the United States even with the excellent economic situation that we are experiencing, as Marty Feldstein laid out yesterday. But, I repeat, U.S. trade policy has been stalemated for five years; there is no authority to take any new initiatives. All this occurs after two decades when a market-oriented philosophy, the so-called “Washington consensus,” seemed to gain near-universal approval and provided a guiding ideology and underlying intellectual consensus for the world economy, which was quite new in modern history. It seems to me that all these things make the backlash all that more worrisome. If we have the manifestations I’ve indicated in a period of economic progress and success, what could be the outcome when the U.S. economy inevitably slows down, unemployment begins to rise and a $400 billion trade deficit becomes a huge target of attack and criticism? What if a similar downturn and more difficult economic times occur in the rest of the world? It would be easier to dismiss all these concerns except for one troublesome fact: We’ve seen it happen before. As Joe Nye pointed out earlier, we had a similar period of globalization a hundred years ago. The standard understanding, of course, is that this earlier world of globalizationwhich by many measures was more extensive than today-came crashing down with the advent of World War I followed by the Great Depression. But careful students of that history have informed us that the contemporary backlash a century ago was already significantly rolling back globalization well before the onset of war and depression. Protectionist trade measuresincluding in the United States but other countries as well-resisted the 361

increasing intrusion of foreign competition. Immigration, which was a huge factor in globalization during that period, began to be resisted, including by earlier generations of immigrants, and began to shut down that element of globalization even before the more traumatic outbreaks in the early part of the 20th century. New challengers to the system-Germany, Japan, and to some extent the United States-were accommodated to some degree, but not wholly, and that too raised instabilities and doubts that spilled over into the political as well as the economic side of the system. In truth, we had a backlash in the early 20th century that contributed to the end of that period of globalization and may have helped bring on the subsequent cataclysms that ended it for half a century. I dwell on this background at length because I believe that the Trilateral regions face an enormous challenge, perhaps as great as the one we faced when the initial post-War system seemed to be breaking down at the time this Commission was set up in the early 1970s. But, to repeat, I think it’s more difficult in certain respects, particularly in its breadth. It deals with political, social, and cultural issues, as well as economic ones. It also extends far beyond the Trilateral regions. It is not just our countries that are now involved in this but rather the entire world, including notably the emerging markets. Yesterday we discussed how the countries of the Asian region-primarily emerging market economies but, of course, including Japan-are looking for a way to find an independent regional identity and break out of total reliance on the multilateral system. This search is due at least in part to the breakdown or failures of that multilateral system. It is another clear indication of how the backlash against the current form of globalization may manifest itself and raise huge new issues in the security, as well as the economic, domain. Before I close by saying a few words about potential remedies, let me clearly suggest that I do not believe everything is gloom and doom. Mexico and most of the East Asian countries, as noted, have experienced rapid Vshaped recoveries from their crises, that eases some of the anxiety about the monetary system. There has been some modest monetary reform; I don’t want to suggest there has been none. As Marty Feldstein said, there has not really been much trade protectionism yet-a bit in the United States but not too much in the developing countries, even those subjected to financial crisis. So, at least at this point, there is not too much to reverse. There is still time to head off the incipient difficulties. The whole IT sector has not yet 362

been caught up in all this in any negative way; its growth is proceeding without too much by way of impediments from the things I mentioned. The White House Conference on the New Economy last Wednesday discussed this issue relatively briefly; such impediments are not yet perceived to be a serious concern to the economies and the sectors that are so important now to the rapid growth in the United States and elsewhere. But I would suggest that this backlash, both now and potentially, is very strong. Indeed, it could get much stronger, especially when our economies begin to turn down and especially if political changes in our own countries make globalization and opposition to it even more difficult to manage in light of the role of particular pressure groups and political interests. Four Elements of a Response With this as background, let me suggest briefly and in sketchy form what I think are the four elements of a response to the problem that we will, I hope, concern ourselves with in the coming years. First and foremost is education, to clarify and analyse much more extensively what is in fact the reality of the impact of globalization: the fact that, on balance, it is clearly beneficial for all countries and for most groups and therefore, on the whole, is certainly desirable. Much of the criticism of globalization either reflects ignorance of the facts; or is sheer nonsense, such as the argument that multinational firms promote races to the bottom rather than races to the top; or sheer disingenuousness, a cover for traditional trade protection; or, as Mario Vargas Llosa has said, a cover for traditional nationalism in many of its forms. We must, however, carry out a much more elaborate and extensive analysis of the impact of globalization, not just on whole countries but on groups within them. At my Institute for International Economics we have half a dozen projects analysing this impact, including transatlantic projects with Thierry de Montbria’s French Institute for International Relations and Karl Kaiser’s Research Institute of the German Society for Foreign Affairs. I think we are all going to have to do much more elaborate analyses and projections of the real effects, to cope with this combination of ignorance and deliberate disingenuousness and move in a positive direction. As I say, the momentum is clearly now with the anti-globalization forces and the beginning of the answer starts with education and an understanding of the 363

true impact and meaning of globalization, including all its benefits. A second part of the response has to be an honest recognition and admission that there are costs and losers. For too long, those of us on the pro-globalization side tried to ignore and deny this fact-but it clearly must be accepted and admitted. It follows from standard economic theory, and it follows from looking out the window and seeing the impact within many of our countries. This, in turn, means that something needs to be done to help deal with the costs and those who are losers. In broad terms, it requires better social safety nets in many of our countries and programs that will help the adjustment to dislocation, whether caused by globalization or other interrelated forces. The lack of transitional safety nets in the United Stateseffective unemployment insurance, portable health care, portable pensions-in the face of shocks generated by globalization causes enormous anxiety and unsettlement. This situation leads to the shocking fact that, in the United States, polls show that our labour force has greater levels of anxiety today with the strong economy than at the depth of the recession in 1991. Another and more fundamental element of this response, of course, is the creation of education and training programs to empower all components of our population to take advantage of globalization rather than feel victimized by it. Such programs-which are better conducted, incidentally, by the private sector rather than by governments-should enable people to take advantage of the phenomenon and roll with it rather than oppose it. One American company, for instance, United Technologies, now gives not only full financing for as much education, job- or non-job-related, as its workers want, but has just announced it will finance four years of additional schooling for any worker it lays off because of a move of production abroad. If American industry as a whole would do that we would have both much more and much more effective adjustment, and an ability to deal with the problem at the fundamental level. This second set of issues-transition dislocation cushions, and empowerment to take advantage of opportunities over the long run-is the essential domestic element of any effective response to the backlash. Third, we will have to renew our efforts to reform the international financial architecture to help prevent crises. These crises are particularly debilitating to smaller countries, which then are enormously tempted to try to find ways to opt out of the system or, at a minimum, to reduce the impact on them of unfettered globalization. We need much more openness and 364

transparency of the financial system, though some progress has been made; we need much greater flexibility of exchange rates in order to avoid fixed peg targets; we need to bless capital controls in some instances to avoid the excessive sloshing of hot money in and out; and we need more effective early warning systems to try to anticipate and prevent crises rather than wait and then react after they occur. We need much more effective means to coordinate exchange rates among the big countries-the Trilateral G-3-where the enormous fluctuations still lead to tremendous problems, not just for ourselves but for other countries around the world who peg their currencies to our countries’ currencies either individually or in groups. And we need to engage the private sector much more systematically in rescue operations, bailing-in rather than bailing-out on a much more systematic basis than the ad-hoc case-by-case approach that is followed today. Finally, the fourth element is to restart true multilateral liberalization of the global trading system, partly for momentum and bicycle reasons but partly to head off potentially destabilizing regional steps-some of which we’ve heard about here in Asia and others which we see occurring in other parts of the world. I hasten to say that I do not regard regionalism as necessarily undermining or inconsistent with globalization. Indeed the two can frequently reinforce each other. But if we have a failure to move forward on the global front, if the opponents of globalization are permitted to continue to block any forward movement at the global level, then regionalism will not only fill the vacuum where countries can do it but it will take place in the absence of any effective multilateral framework and that could lead to the fears that many have expressed over the years that regionalism will drive the world apart rather than move it together. Even more importantly, however, new multilateral trade negotiations are essential to deal with many of the real issues that are being raised by the critics-new standards to deal with food trade, new standards to deal with labour arrangements and environmental concerns. These issues have now been forced onto the agenda in a way which cannot be ignored without literally playing into the hands of the opponents of further globalization and those who would wreck the system, rather than try to reform it.

365

Backlash against Globalization When the Trilateral Commission was set up in 1973, my memory is that it was primarily aimed at addressing two issues. One was the integration of a great new Asian power into the world economy and world scene-Japan. The second was to deal with a perceived breakdown of the world economic order of the day: the collapse of the Bretton Woods system of fixed exchange rates and the outbreak of protectionist actions and protectionist legislative pressures in the United States. In addition, the oil shocks were just around the corner. In short, the world economic order was in doubt. I believe that the Trilateral world faces very similar challenges today. There is clearly the entry into the world economy and broader scene of a great new Asian power-China. That is not my topic today, but it is crucial and the Commission will have to deal with it. But my topic is the second set of issues, what I believe is another set of threats to prosperity and stability of the world economy, namely, the backlash against globalization. Fundamental Challenge The pressures in the 1970s were very substantial but they were mainly technical and they had technical fixes. We could move from fixed to flexible exchange rates; we could initiate a new round of global trade negotiations to get the liberalizing momentum going again. Even in response to the oil crises, which took longer, market responses plus new institutional initiativesfor instance, the International Energy Agency and the Strategic Petroleum Reserve in the U.S.-of essentially a technical nature were taken. The world economy today faces a more fundamental set of challenges because the backlash against globalization is much more than economic. As Henry Kissinger frequently reminds us, there is a huge political dimension and the politics and the economics are often out of synch. As Mario Vargas Llosa reminds us, there is also a huge cultural dimension which raises a mass of contentious and difficult issues of their own. Now the backlash has been manifest in the demonstrations in Seattle, Davos, Bangkok, and in Washington this coming weekend. Demonstrations highlight the importance of the NGOs, which is an important part of the issue. But, in my view, the demonstrations themselves are only superficial signs of the real issue. The real backlash, the real challenge to globalization, is much more substantive; 366

we have seen it arising not just in the last few months but over a series of years. I believe it is the critical issue of multilateral management for the future with which this Commission ought to concern itself. Multilateral Finance and Trade Regimes at Risk The backlash obviously takes different forms in different regions and different countries. But there are several patterns within the international finance and trade regimes that one can tick off. First, it is clear that we have an international monetary system that is crisis-prone. We have had at least three major sets of crises in the last decade alone: the European crisis of the early 90s; the Latin American crisis emanating from Mexico in the mid-90s; the East Asian crisis spilling over into Russia and Brazil in the last two or three years. Private capital flows can de-stabilize-being too big at one time and too little at another-and there has been a failure to put in place any substantial reforms to improve the prospect for stabilizing the system in the future. Indeed, we have serious proposals in the United States from a Congressional commission recently, on which I happen to have led the dissent, which essentially wants to abolish the International Monetary Fund and the World Bank, and there are significant pockets of support for that approach in our Congress. Second, the trading system has essentially been stalemated for several years. There are no new multilateral negotiations of any serious nature being conducted anywhere. The situation is very serious if, like me, believe in the bicycle theory, which says you either move forward or you fall over. But even if you don’t believe in the bicycle theory, you have to be impressed by the series of failures over the last few years. The U.S. administration has been unable to get any new negotiating authority from the Congress for five years; U.S. trade policy is stalemated domestically. Efforts to negotiate a new international investment agreement failed miserably at the OECD in Paris. The effort to launch a new multilateral trade negotiating round in Seattle failed miserably. All the momentum is with the anti-globalization forces. Hopefully, our Congress will vote to grant permanent normal trade relations to China in the next few weeks. But even that outcome is uncertain. And even if it passes, the fact that it’s at all close is amazing. It’s a no-brainer. The U.S. negotiated opening of the Chinese market but, if the U.S. doesn’t give permanent normal trade relations to China, the U.S. will not benefit 367

from that opening and will turn the competitive advantage over to its trading competitors. There should be a vote of 535 to 0 in our Congress but, it’s a cliff-hanger and, when I talked to the White House just before leaving for this meeting, they were still 20 votes short of being able to say they would win it. The point is that there is a big backlash against globalization. We see it in the financial world. We certainly see it in the trading world as well. It’s much more fundamental than pure economics. We know that globalization does increase income and social disparities within countries. We know that globalization does leave some countries and certainly some groups of people behind. We do know that a lot of Europeans don’t want to eat genetically modified American foods and that adds to their resistance to globalization. We know that a lot Americans worry about races to the bottom--labour standards, environmental standards, and other perceived doubts about dealing with the rest of the world. We know that a lot of developing countries are raising doubts about the entire system, and such specifics as whether having agreed to the enshrinement of intellectual property rights is really in their national interest. (They would like to pull it back out of the WTO, having agreed to put it in five or six years ago.) So the list is long of the perceived intrusions of globalization into national sovereignties. There is therefore a backlash against it, which I think we have to take as an extremely serious economic, political, and social matter. Backlash Could Become Much Stronger All this seems paradoxical in a very fundamental sense. The world economy is in good shape. Indeed, almost all of the crisis countriesparticularly in Asia and Latin America-have experienced rapid V-shaped recoveries from the crises of the last few years. The ultimate paradox is that this backlash against globalization is so severe in the United States even with the excellent economic situation that we are experiencing, as Marty Feldstein laid out yesterday. But, I repeat, U.S. trade policy has been stalemated for five years; there is no authority to take any new initiatives. All this occurs after two decades when a market-oriented philosophy, the so-called “Washington consensus,” seemed to gain near-universal approval and provided a guiding ideology and underlying intellectual consensus for the world economy, which was quite new in modern history. 368

It seems to me that all these things make the backlash all that more worrisome. If we have the manifestations I’ve indicated in a period of economic progress and success, what could be the outcome when the U.S. economy inevitably slows down, unemployment begins to rise and a $400 billion trade deficit becomes a huge target of attack and criticism? What if a similar downturn and more difficult economic times occur in the rest of the world? It would be easier to dismiss all these concerns except for one troublesome fact: We’ve seen it happen before. As Joe Nye pointed out earlier, we had a similar period of globalization a hundred years ago. The standard understanding, of course, is that this earlier world of globalizationwhich by many measures was more extensive than today-came crashing down with the advent of World War I followed by the Great Depression. But careful students of that history have informed us that the contemporary backlash a century ago was already significantly rolling back globalization well before the onset of war and depression. Protectionist trade measuresincluding in the United States but other countries as well-resisted the increasing intrusion of foreign competition. Immigration, which was a huge factor in globalization during that period, began to be resisted, including by earlier generations of immigrants, and began to shut down that element of globalization even before the more traumatic outbreaks in the early part of the 20th century. New challengers to the system-Germany, Japan, and to some extent the United States-were accommodated to some degree, but not wholly, and that too raised instabilities and doubts that spilled over into the political as well as the economic side of the system. In truth, we had a backlash in the early 20th century that contributed to the end of that period of globalization and may have helped bring on the subsequent cataclysms that ended it for half a century. I dwell on this background at length because I believe that the Trilateral regions face an enormous challenge, perhaps as great as the one we faced when the initial post-War system seemed to be breaking down at the time this Commission was set up in the early 1970s. But, to repeat, I think it’s more difficult in certain respects, particularly in its breadth. It deals with political, social, and cultural issues, as well as economic ones. It also extends far beyond the Trilateral regions. It is not just our countries that are now involved in this but rather the entire world, including notably the emerging markets. Yesterday we discussed how the countries of 369

the Asian region-primarily emerging market economies but, of course, including Japan-are looking for a way to find an independent regional identity and break out of total reliance on the multilateral system. This search is due at least in part to the breakdown or failures of that multilateral system. It is another clear indication of how the backlash against the current form of globalization may manifest itself and raise huge new issues in the security, as well as the economic, domain. Before I close by saying a few words about potential remedies, let me clearly suggest that I do not believe everything is gloom and doom. Mexico and most of the East Asian countries, as noted, have experienced rapid Vshaped recoveries from their crises, that eases some of the anxiety about the monetary system. There has been some modest monetary reform; I don’t want to suggest there has been none. As Marty Feldstein said, there has not really been much trade protectionism yet-a bit in the United States but not too much in the developing countries, even those subjected to financial crisis. So, at least at this point, there is not too much to reverse. There is still time to head off the incipient difficulties. The whole IT sector has not yet been caught up in all this in any negative way; its growth is proceeding without too much by way of impediments from the things I mentioned. The White House Conference on the New Economy last Wednesday discussed this issue relatively briefly; such impediments are not yet perceived to be a serious concern to the economies and the sectors that are so important now to the rapid growth in the United States and elsewhere. But I would suggest that this backlash, both now and potentially, is very strong. Indeed, it could get much stronger, especially when our economies begin to turn down and especially if political changes in our own countries make globalization and opposition to it even more difficult to manage in light of the role of particular pressure groups and political interests. Four Elements of a Response With this as background, let me suggest briefly and in sketchy form what I think are the four elements of a response to the problem that we will, I hope, concern ourselves with in the coming years. First and foremost is education, to clarify and analyse much more extensively what is in fact the reality of the impact of globalization: the fact that, on balance, it is clearly beneficial for all countries and for most groups and therefore, on the whole, 370

is certainly desirable. Much of the criticism of globalization either reflects ignorance of the facts; or is sheer nonsense, such as the argument that multinational firms promote races to the bottom rather than races to the top; or sheer disingenuousness, a cover for traditional trade protection; or, as Mario Vargas Llosa has said, a cover for traditional nationalism in many of its forms. We must, however, carry out a much more elaborate and extensive analysis of the impact of globalization, not just on whole countries but on groups within them. At my Institute for International Economics we have half a dozen projects analysing this impact, including transatlantic projects with Thierry de Montbria’s French Institute for International Relations and Karl Kaiser’s Research Institute of the German Society for Foreign Affairs. I think we are all going to have to do much more elaborate analyses and projections of the real effects, to cope with this combination of ignorance and deliberate disingenuousness and move in a positive direction. As I say, the momentum is clearly now with the anti-globalization forces and the beginning of the answer starts with education and an understanding of the true impact and meaning of globalization, including all its benefits. A second part of the response has to be an honest recognition and admission that there are costs and losers. For too long, those of us on the pro-globalization side tried to ignore and deny this fact-but it clearly must be accepted and admitted. It follows from standard economic theory, and it follows from looking out the window and seeing the impact within many of our countries. This, in turn, means that something needs to be done to help deal with the costs and those who are losers. In broad terms, it requires better social safety nets in many of our countries and programs that will help the adjustment to dislocation, whether caused by globalization or other interrelated forces. The lack of transitional safety nets in the United Stateseffective unemployment insurance, portable health care, portable pensions-in the face of shocks generated by globalization causes enormous anxiety and unsettlement. This situation leads to the shocking fact that, in the United States, polls show that our labour force has greater levels of anxiety today with the strong economy than at the depth of the recession in 1991. Another and more fundamental element of this response, of course, is the creation of education and training programs to empower all components of our population to take advantage of globalization rather than feel victimized by it. Such programs-which are better conducted, incidentally, by 371

the private sector rather than by governments-should enable people to take advantage of the phenomenon and roll with it rather than oppose it. One American company, for instance, United Technologies, now gives not only full financing for as much education, job- or non-job-related, as its workers want, but has just announced it will finance four years of additional schooling for any worker it lays off because of a move of production abroad. If American industry as a whole would do that we would have both much more and much more effective adjustment, and an ability to deal with the problem at the fundamental level. This second set of issues-transition dislocation cushions, and empowerment to take advantage of opportunities over the long run-is the essential domestic element of any effective response to the backlash. Third, we will have to renew our efforts to reform the international financial architecture to help prevent crises. These crises are particularly debilitating to smaller countries, which then are enormously tempted to try to find ways to opt out of the system or, at a minimum, to reduce the impact on them of unfettered globalization. We need much more openness and transparency of the financial system, though some progress has been made; we need much greater flexibility of exchange rates in order to avoid fixed peg targets; we need to bless capital controls in some instances to avoid the excessive sloshing of hot money in and out; and we need more effective early warning systems to try to anticipate and prevent crises rather than wait and then react after they occur. We need much more effective means to coordinate exchange rates among the big countries-the Trilateral G-3-where the enormous fluctuations still lead to tremendous problems, not just for ourselves but for other countries around the world who peg their currencies to our countries’ currencies either individually or in groups. And we need to engage the private sector much more systematically in rescue operations, bailing-in rather than bailing-out on a much more systematic basis than the ad-hoc case-by-case approach that is followed today. Finally, the fourth element is to restart true multilateral liberalization of the global trading system, partly for momentum and bicycle reasons but partly to head off potentially destabilizing regional steps-some of which we’ve heard about here in Asia and others which we see occurring in other parts of the world. I hasten to say that I do not regard regionalism as necessarily undermining or inconsistent with globalization. Indeed the two can frequently reinforce each other. But if we have a failure to move forward 372

on the global front, if the opponents of globalization are permitted to continue to block any forward movement at the global level, then regionalism will not only fill the vacuum where countries can do it but it will take place in the absence of any effective multilateral framework and that could lead to the fears that many have expressed over the years that regionalism will drive the world apart rather than move it together. Even more importantly, however, new multilateral trade negotiations are essential to deal with many of the real issues that are being raised by the critics-new standards to deal with food trade, new standards to deal with labour arrangements and environmental concerns. These issues have now been forced onto the agenda in a way which cannot be ignored without literally playing into the hands of the opponents of further globalization and those who would wreck the system, rather than try to reform it. ‘Does Protest Need a Vision?’ The so-called “anti-globalization movement” cannot really be considered a movement at all because it is so extremely politically heterogeneous: “What’s the opposite of globalization? Socialism? Isolationism? Vegetarianism? The answer is all three things, and many more. The radicalchic outfit of the season is a coat of many colours.” —Time, 24 April 2000. Some make a virtue of this. Pop-journalist Naomi Klein, the capitalist media’s appointee as official spokesperson for “anti-globalization” youth, argues: “The decentralised nature of these [anti-corporate] campaigns is not a source of incoherence and fragmentation but a reasonable, even ingenious adaptation to changes in the broader culture....Once involved, no one has to give up their individuality to the larger structure; as with all things online, we are free to dip in and out, take what we want and delete what we don’t. It is a surfer’s approach to activism, reflecting the internet’s paradoxical culture of extreme narcissism coupled with an intense desire for external connection.” —”Does Protest Need a Vision?” New Statesman, 3 July 2000. 373

Individualists, narcissists and others who enjoy “dipping in and out” of the struggle are of little concern to the operators of global capitalism. But serious people have to make some fundamental choices. Should the objective be to win a “seat at the table” in negotiating ground rules for operating the imperialist world economy? Can the undesirable features of a profit-driven economy be eliminated, or is it necessary to overturn the rule of capital itself? These questions have to be answered. History of ‘Globalization’ Liberals, social democrats and nationalists tend to view the “globalization of production” as a sinister new development in which friendly, civicminded, local, capitalist firms are gobbled up by heartless transnationals. But capitalism has always been a ruthless, “globalizing” system. The European arrival in the Americas in 1492 touched off an orgy of genocide and plunder, which along with the development of the slave trade, provided the pioneers of capitalism with their original “primitive accumulation.” Over 130 years ago, Karl Marx identified the essential features of “globalization” in his description of capitalist development: “One capitalist always strikes down many others. Hand in hand with this centralization, or this expropriation of many capitalists by a few, other developments take place on an ever-increasing scale, such as the growth of the co-operative form of the labour process, the conscious technical application of science, the planned exploitation of the soil, the transformation of the means of labour into forms in which they can only be used in common, the economizing of all means of production by their use as the means of production of combined, socialized labour, the entanglement of all peoples in the net of the world market, and, with this, the growth of the international character of the capitalist regime.” —Capital, Vol. 1. A century ago, the vast majority of humanity was involved, one way or another, in production for the market. The British Empire, at that time the world’s dominant economic and military power, also pursued a “free-trade” policy. The competition for markets and colonies touched off by “free trade” under the Union Jack led directly to the First World War. Many capitalist 374

economists, however, regard this period as the golden age of the “free market.” In a recent speech denouncing protests against “globalization” Alan Greenspan, chair of the U.S. Federal Reserve Board, observed: “the progress made since the Second World War in lowering trade barriers between nations really represented an effort by countries to get back to the open borders that had existed at the beginning of the 20th century.” —Globe and Mail (Toronto), 15 November 2000. Greenspan mused that a downturn in the world economy could produce a resurgence of protectionism: “Clearly, the risk is that support for restrictions on trade is not dead, only quiescent.” During the inter-war period, this is exactly what happened. “Free trade” was abandoned as each imperialist power attempted to simultaneously blast its way into foreign markets, while sheltering its own national industries behind tariff walls. This resulted in the Great Depression of the 1930s and World War II. October 1917: Workers’ Revolution Against Global Capitalism The October Revolution of 1917 presented the most serious challenge that international capitalism has ever faced. The successful expropriation of the Russian capitalists (and their international partners), and the organization of an entirely new form of state—a workers’ state—sparked a powerful wave of revolt that shook the foundations of the bourgeois order. The Bolshevik leadership of the Russian workers, headed by Vladimir Lenin and Leon Trotsky, considered the creation of the Soviet Union to be merely the first step in a global social revolution. In 1919 they launched the Communist International (Comintern) which set as its task the organization of a disciplined network of revolutionary socialist parties in every country on the planet. The Comintern declared war on the whole system of capitalist thievery and plunder, and made common cause with the workers and oppressed everywhere. In a speech to the Second Congress of the International, Lenin declared: “World imperialism shall fall when the revolutionary onslaught of the exploited and oppressed workers in each country, overcoming resistance from petty-bourgeois elements and the influence of the small upper crust of 375

labour aristocrats, merges with the revolutionary onslaught of hundreds of millions of people who have hitherto stood beyond the pale of history, and have been regarded merely as the object of history.” —Report on the International Situation and the Fundamental Tasks of the Communist International, 19 July 1920 International capital was acutely sensitive to the threat posed by Bolshevism. Fourteen capitalist countries immediately dispatched troops in a failed attempt to help the Russian counterrevolutionaries strangle the Soviet Republic in its infancy. Despite the subsequent bureaucratic degeneration of the revolution under Stalin, the early years of the revolution stand as a beacon for all who seek to struggle for a world without exploitation, racism, poverty or oppression—in short, a world without capitalism. The undisputed economic and military hegemony of the U.S. after World War II allowed it to reorganize the world according to the requirements of the “American Century.” The IMF and World Bank (along with NATO, the UN and various other bodies) were all set up as American-dominated institutions. Yet U.S. power was constrained by the existence of the Soviet Union, which provided a global military and economic counterweight to imperialism. The existence of this “Communist” other compelled the ruling elites of Western Europe, Japan and North America to divert a portion of the social surplus into funding education, healthcare, pensions, benefits and other social services. It also forced them to make occasional diplomatic and economic concessions to the “non-aligned” neo-colonial states. Fruits of Counterrevolution The destruction of the Soviet Union represented an immense historic setback for working people around the globe. Capitalist victory in the Cold War has translated into attacks on many of the social gains won by previous generations. For ordinary people in the former Soviet bloc, capitalist restoration has been a catastrophe. According to one of the World Bank’s own publications, between 1988 and 1993, incomes declined by 25 per cent in Eastern Europe, and 54 per cent in the Slavic and Central Asian regions of the former Soviet Union (Branko Milanovic, Income, Inequality, and Poverty During the Transition from Planned to Market Economy). In a 6 November 2000 speech in Vienna, Horst Köhler, the IMF’s managing director, expressed “praise and admiration” for the forces of capitalist restoration, but admitted: 376

“the number of people living on less than $2 a day has risen fivefold since the transition began (from 16 million in 1987 to 93 million in 1998).” The triumph of counterrevolution in the USSR sharpened competition between the major imperialist blocs. Each advocates free trade within its own sphere of influence, but jealously guards its turf from the others. A recent example was the spat between the U.S. and the European Union (EU) over rules governing banana imports. The U.S. threatened to slap 100 per cent surcharges on EU imports over the latter’s policy of allowing banana producers from former Dutch, British and French colonies in the Caribbean preferential access to a small percentage of the EU’s banana market. The U.S. claimed that this policy was “unfair” to Latin American banana producers (whose products just happen to be retailed by U.S. food companies including Chiquita, Del Monte and Dole Foods). The post-Soviet New World Order is also characterized by brutal attacks on the civilian population of “rogue states” like Iraq and Yugoslavia whose rulers have offended their imperial godfathers. Just as the international “rule of law” is discarded whenever it seems inconvenient, so too the pretence of commitment to “free trade” and “level playing fields” is routinely shelved for neo-colonial producers thought capable of offering serious competition. A “background paper” produced by Oxfam International for the Prague meeting of the IMF/World Bank entitled “‘Multilateralism’ and world trade—or how to rig the rules against the poor,” pointed out: “Politicians in the industrialised world preach the doctrine of free trade, and they use their control over the IMF and the World Bank to impose it on developing countries, but they practise protectionism. And in many areas they use the WTO [World Trade Organization] as a battering ram to open up Third World markets in the interests of the powerful transnational companies that dictate their trade policies. “Much has been made by creditors of their generosity both in financing debt relief...and in providing development assistance. However, when measured against the wider losses associated with protectionism, the generosity is more apparent than real. For every $1 provided through aid and debt relief, developing countries lose another $14 as a consequence of protectionist barriers in the rich world. These barriers deprive poor countries of $700bn a year in markets for labour-intensive manufactured goods, and another $65bn in agricultural markets.” 377

‘Globalization’ and Class Struggle During the last several decades, the world’s major corporations have made considerable progress in the international integration of manufacturing through new industrial technologies, improvements in transport and, particularly, communications and information technology. These same factors have also made it easier to relocate production from the metropolitan centres to low wage areas. This process, driven by a thirst for higher profits, has shattered the lives of millions of working people, particularly in the former industrial regions of the imperialist centres. But the problems commonly blamed on “globalization” are not an inevitable by-product of international economic integration or new technologies. The impoverishment and social dislocation that accompany them are direct results of the drive to maximize private profit. A socialist economy would harness advances in production to eliminate unemployment, poverty and inequality. The effects of “globalization” on working conditions are often exaggerated. Plant relocations and outsourcing are estimated to have accounted for less than a quarter of the decline in real wages in the U.S. between 1974 and 1994. The majority of workers in North America are employed in sectors such as education, government and finance that have been largely immune to international competition. The chief reason for the decline of real wages in America in this period was the string of capitalist victories in the class war during the past two decades. This began with Ronald Reagan’s firing of the PATCO air traffic controllers in 1981 and continued through to the shredding of welfare and other entitlements in the name of a “balanced budget.” None of this was inevitable. All of it can be traced to the cowardice and treachery of the tradeunion leadership. Unwilling or unable to initiate the sharp class battles necessary to protect their base, the official leaders of the workers’ movement throughout the “developed world” have resorted to flag-waving and protectionism. The result has been a divided and weakened workers’ movement and the growth of poisonous nationalism and ultra-rightist movements like Jean Marie Le Pen’s National Front in France. Most of the young participants in the recent wave of international protests are opposed to the injustice of the capitalist world economy. But the 378

remedies offered by prominent “anti-globalizers” amount to cosmetic modifications and leave the fundamental problem—a profit-driven economic system—intact. This is because the trade-union bureaucrats and professional leaders of the various ecological, religious and social-justice NGOs, who have provided the organizational backbone for most of the recent protests, operate within the framework of what is feasible under capitalism. Their ultimate objective is to pressure the IMF, corporate monopolies and imperialist governments into behaving more humanely. The ‘Impotent’ Nation State One of the themes pushed by liberal critics of “globalization” is that national states have become impotent, as power has shifted to multinational corporations, and unaccountable international bureaucracies like the World Trade Organization. In fact, each corporation depends on the political and military clout of its own national state to safeguard its foreign holdings. Far from shrinking, the role of the national state in protecting property rights and enforcing legal agreements has expanded, along with the international integration of the world economy. Within the WTO, each government manoeuvres to try to write the rules of international trade to benefit their own capitalists. The WTO, the IMF and the World Bank stand under, rather than above, the major imperialist powers which alone possess the armed might to enforce their will. The American state, for example, is not showing signs of withering away just yet. The lavishly funded U.S. military (which proved so handy to the oil monopolies in the 1991 Gulf War) has an annual budget of $275 billion. While pleading poverty as an excuse for gutting social services, the American ruling class has vastly expanded the capacity of its repressive apparatus: putting more cops on the street; enlarging police paramilitary units; and increasing video surveillance and electronic eavesdropping. There has been a huge expansion of the prison system (now increasingly run on a “for profit” basis). The prison population in the U.S., which has always been disproportionately black and Hispanic, recently topped two million. It is growing seven times as fast as the population at large. The massive coordinated police response to the international protests against the WTO, IMF, etc., do not lend credence to theories about the “disappearance” of the state. Protesters are now “pre-emptively” arrested, as 379

the various national police agencies combine their efforts to squash dissent. Prior to the Prague demonstration, the U.S. Federal Bureau of Investigation dispatched dozens of agents to help the Czech police with their preparations. Hundreds of people suspected of having participated in earlier protests were stopped at the border. Anarchism & Socialism Many of the more militant demonstrators identify themselves as anarchists. Their views span a considerable political spectrum. Some advocate a return to a mythical past when everyone was a petty proprietor in a self-sufficient village economy. More left-wing anarchists, or “anarchocommunists,” espouse a revolutionary overturn of capitalist rule, and the creation of an egalitarian society on the basis of the socialization of the means of production. Both anarcho-communists and Marxists recognize that a workers’ revolution must destroy the capitalist state machine (i.e., disband the police, officer corps, judiciary and the rest of the repressive apparatus). But while socialists propose that working people replace the organs of capitalist rule with their own state apparatus, anarchists, who oppose any and every kind of state on principle, are vague about how exactly a victorious revolutionary movement should exercise its power. The history of every revolt against capitalist rule shows that the exploiters will stop at nothing to cling to power. In the 1980s, Ronald Reagan armed and paid the contra mercenaries in Nicaragua; in Spain in the 1930s, Hitler and Mussolini backed Franco’s legions; in the early years of the Russian Revolution, the imperialists supported the Whites against the Reds. If they are to successfully expropriate the exploiters, and reconstruct society on an egalitarian basis, the working class and oppressed must possess the political and military organization necessary to crush the counterrevolution. As Frederick Engels once remarked, a revolution is an “act whereby one part of the population imposes its will upon the other part by means of rifles, bayonets and cannon—authoritarian means.”

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Revolutionary Strategy & Working Class Struggle The problem of how to effect revolutionary change is of critical importance for intelligent people who are serious about challenging the rule of global capital. Many subjectively revolutionary anarchist militants, outraged by the system of global piracy, act out their anger in skirmishes with the police. It is necessary to organize effective self-defence for demonstrations against police violence, but trashing a few Starbucks or McDonald’s is a diversion that poses no serious threat to capitalism. The only layer of the population with both an objective interest and the social power to overturn capitalist rule is the working class. Those who produce the commodities, run the transportation and communication systems, and provide all the supporting services that capital depends on, can run society without their masters. Many leftist youth today view trade unions as cumbersome, bureaucratized and conservative. The unions however, are also potential organizations of militant class struggle. The privileged labour aristocrats who run the labour movement in every imperialist country today are fundamentally loyal to capitalism. In many cases, they are actively involved in poisoning their ranks with bourgeois nationalism, and even outright racism. In the “developed” world, these “labour lieutenants of capital” have provided a vital prop for bourgeois rule for over a century. But workers’ struggles periodically break through the grip of the bureaucrats—even in the imperialist centres—and at these moments, it is possible to catch a glimpse of a very different future for humanity. The central strategic task in the imper