With the election of Trump and a growing opposition to free movement of labour, many on the left are struggling to develop a coherent critique of recent trends in the global organisation of capitalism, without ceding place to the authoritarian Right, or becoming defenders of capitalism.
In this piece Benjamin Balthaser makes the case for reframing the debate on globalisation around an updated conception of imperialism.
This piece can be read alongside the series on Uneven and Combined Development that Neil Davidson published in revolutionary reflections.
A pdf of Benjamin Balthaser’s article can be found here.
Globalization is the root of the pain
~Blue Scholars, “50,000 Deep”
It is not a surprise that the recent election of Trump and the defeat of the Democratic Party scrambled much progressive common sense on the topic of trade. Clinton, a liberal technocrat with a history of favoring free trade was, after all, defeated by a racist populist who called for the scrapping of the North American Free Trade Association (NAFTA) and cancelled the Trans-Pacific Partnership (TPP) as one of his first administrative acts. Meanwhile, white nationalists such as Steve Bannon advocate a program of “economic nationalism” to rebuild the U.S. economy. For the likes of Tump and Bannon, erecting tariffs on goods and building border walls to stop people are fused into one and the same act. Strangely enough, many progressives share the conflation of trade and people. It seems a sincere desire for left internationalism is now equated with the internationalization of U.S. and Western capital. It is as if Marx’s description of reification, in which the world of things seems to be more alive than the world of people, has come to dominate discussions of globalization: money circulating the world is suddenly seen to be equivalent to the movement of people across borders.
Indeed, it can be disorienting to hear a fascist like Marine Le Pen assailing free-trade in the name of “regulation” and Nigel Farage slam the Eurozone in terms similar to those of the Greek Communist Party. Demonstrating the uncanny ways in which our enemies define our truth, “A Left Vision of Trade” appeared in Dissent Magazine that argued globalization is not only inevitable, it could be beneficial to the global working class, provided it were tamed by way of international courts and arbitration. The Roosevelt Institute, a progressive economic think tank, suggested that globalization, if “democratized,” could usher in a “global New Deal.” An article in In These Times written during the first primary season surges of Trump went so far as to suggest that workers should not protest the offshoring of their own plant, as that would be promote American nationalism — perhaps even white nationalism. As the author of this article insists (and who, in full disclosure, I know personally and otherwise quite like and respect), to stop the outsourcing of U.S.-based factories would “cut the poorest people in the world off from the capital of wealthy countries, and condemn them to perpetual poverty, malnutrition and disease.”
It’s a premise that demands to be taken seriously, as it suggests left-wing critics of globalization are tacitly in league with “white populism,” going so far as to equate Bernie Sanders’ protest against the off-shoring of U.S. manufacturing with the white nationalist murder of Vicent Chin. Indeed, much of the animus behind current suspicion of anti-globalization has a kind of liberal identitarian ring to it: that it is a zero-sum game between the “First World” and the “Third World”; what is good for the citizens of the former must, by definition, be bad for the citizens of the latter. Yet, as I am a writer who came of age during the global justice movement touched off by the “battle of Seattle,” it seems strange to have to remind fellow leftists that the export of U.S. capital might not work to the benefit of the “poorest people” — and indeed, might not work for anyone’s benefit except the owners of capital. To mystify this basic fact is to cede a crucial element of anti-capitalist critique to the far-right.
Challenging Globalization as a spatial term
In part, confusion around globalization owes to the slipperiness of the term itself. As Sarika Chandra reminds us in her book Dislocalism, the connotation of globalization is inherently spatial, making it “appear as though the erasure of the local were itself the meaning of ‘globalization’.” Many critics, from Marxists to free-market liberals have reinforced the idea that spatiality defines the meaning of globalization, including David Harvey’s “spatial fix,” Fredric Jameson’s “cognitive mapping,” Hardt and Negri’s “smooth world,” and Thomas Friedman’s “the world is flat.” In “Jihad vs. McWorld,” Benjamin Barber takes the analysis a step further, suggesting that the local, the traditional, the pre-modern have been the central terms of opposition against these new spatial coordinates of capitalism.
But to imagine the meaning of globalization as inherently spatial is to miss its structural nature: it is a mode for increasing global inequality, both between countries and within countries. The world has not been getting flatter since production and finance “globalized”; rather it is becoming dramatically more unequal. To refer simply to the spatial coordinates of this process lumps many processes together, some of which are positive and others are quite harmful. “Globalization” can refer to the increasingly easy global circulation of culture and ideas, the Eurozone’s free mobility of people, and it can refer to special economic zones in which large transnational corporations are encouraged to dispose of both people and nature in any way they see fit, free from state oversight. Suggesting that one is equivalent to the other is either a form of mystification, or a deliberate attempt to confuse.
In thinking about the way “the spatial” has come to dominate the imagination of globalization, I’m reminded of China Mieville’s dystopian noir, The City & the City. The novel leads us to imagine a kind of colonial border separating the global north and the global south, such as the gleaming skyscrapers of San Diego’s skyline visible from the shantytowns of Tijuana’s Chilpancingo district, or perhaps the slums of Tangier just over the water from British Gibraltar. Rather, the border in Mieville’s fictional city is revealed to be entirely ideological — the deindustrialized slum exists literally on the same streets as the financescape of the other. The two cities are one city, and it is only in our imaginations that the class conflict is understood as a spatial conflict.
De-spatializating the way we understand globalization allows us to see the growing power of capitalism as the common meaning of seemingly disparate phenomenon, including migration, outsourcing, and the rise of finance capital – all of which are markers of “globalization.” And indeed, that is the innovation of Marxian theories of imperialism. Imperialism was long imagined as solely territorial – John Hobson’s 19th century statist theory emphasizes imperialism as a question primarily of sovereignty and territory, one state invading the boundaries of another. While early Marxian theorists of imperialism were indebted to Hobson, Rosa Luxemburg and Vladimir Lenin located the fundamental engine of imperialism in the social relations and internal contradictions of capitalism itself.
For Luxemburg, imperialism arises from Marx’s insight in Volume 2 of Capital that “labor has the capacity to produce more value than the value the worker can [herself] command on the market.” This fundamental imbalance between what the worker is paid and the value s/he produces leads to a crisis of what Robert Brenner refers to as “overcapacity,” industrial capitalism’s ability make far more stuff than can be bought. In order to address this overcapacity, capital employs strategies to even further lower the cost of labor, reduce of cost of raw materials, and enter new global markets — strategies that often require spatial dislocation and acts of racial violence, as new markets are more frequently opened with gunboats than with polite requests for access.
Lenin, on the other hand, felt that Luxemburg’s emphasis on the trade was dated; much like our own moment, capitalism had dramatically changed in previous decades. Focusing less on internal dynamics of production, Lenin emphasized the increased concentration of capital in giant monopolies and finance that lead to both the exclusion of emerging manufacturers, as well as the export of surplus capital into new territories. While this may hasten the development of capitalism in pre-capitalist parts of the world, Lenin is clear that capital export is not a global development strategy. Rather, the extraction of surplus profits from less developed countries relies on “uneven development,” and either keeps the cost of land, wages and natural resources low or moves capital elsewhere when costs increase.
Just over a century after Lenin published his famous work on imperialism, we might ask if his insights still have any relevance, given the formal decolonization of most of the globe and the entrance of South Korea, Taiwan, and China onto the world stage as industrial capitalist countries. In one sense, obviously not — there are no 21st century equivalent to the Opium Wars fought for the express purpose of opening new markets to trade (though some have argued the invasion(s) of Iraq were just that); no “Black Ships” in the Edo Bay; there are no colonial fiefdoms such as the Belgian Congo.
And yet the fundamental social relationship built into the imperial order Lenin described have not changed a great deal. “Arm’s length production” for transnational corporations headquartered in the United States, Japan, and Western Europe rely on what Marxists once referred to as “super-exploitation” – the difference in wages, working conditions, and rates of exploitation between the colony and the metropole. Even the rise of China, an epochal event in geopolitics if not the global economic order, has not altered the flow or capture of profits by Western corporations.
As Fredric Jameson wrote at the dawn of the global justice movement nearly two decades ago, in the “long dynasty of imperial forms” we can trace from settler colonies, to the gunboat boats of the 19th century, from the Cold War to the neoliberal present enter us into an era of “post-modern” imperialism — an order marked less by colonial marines than an alphabet soup of trade agreements and institutions: the political and economic architecture of projects such as NAFTA, GATT, MAI, and the WTO. These agreements and agencies not only provide a seemingly “universal” language of global capital flows, they also hide exploitation under the formal language of the rule of law. The TPP was only the most recent example – an agreement that would not only have expanded the “externalized sovereignty” of investor-state dispute settlements, it would have banned the state-owned enterprises as “unfair competition,” and opened Asian markets to unrestrained financial flows.
As with Lenin and Luxemburg’s original insight, it is the social relationships of capitalism rather than territory that should guide our thinking both about the nature of globalization as well what it might mean to resist. That is, rather than understand globalization through its own language of transnational exchange and smooth multidirectional flows of culture and capital, we need to return to the structures of capitalism that inaugurated its rise to the present.
The Myth of a Common Market
One of the most enduring and difficult myths about globalization is that it lifts the third world from poverty and supplies much needed capital for development. It’s as compelling a construction as it is simplistic, as it speaks to both our sense of fairness as denizens of the first world, and perhaps also our liberal guilt: who are we not to share our wealth? As a Huffpost columnist declares, globalization is a “first world problem,” declaring that the third world is the beneficiary of US capital export, even if it may cost the US jobs. And NPR’s Adam Davidson says something very similar to the left-wing supporters of globalization, comparing free-trade to the movement of capital between U.S. states. And who are New Yorkers to object to jobs for Kentuckians?
A left vision of universal global development has as at least one of its origin points, the dizzying and spectacular pages of Marx and Engels’ 1848 pamphlet, The Communist Manifesto. Capitalism, Marx argued, may be brutal, but its efficiencies, scale, and transformative productive power are necessary to end the rural life of scarcity — disease, famine, illiteracy, and the vicissitudes of nature that arbitrarily decide one’s chances at life or death. The bourgeoisie, working in their own narrow self-interest, outdo themselves, building wonders of production and engineering, while also building a “universal inter-dependence of nations.” The “rapid improvement of all instruments of production” and “communication” draws “even the most barbarian nations into civilization.” The colonial assumptions should not be missed here – and while the young Marx was anti-capitalist and imagined a global revolution to overthrow the bourgeoisie, it’s clear he also imagined pre-capitalist nations as populated by backward peasants waiting be rescued by modernity.
As Kevin Anderson makes clear in his analysis of Marx’s later intellectual journalism and correspondence, Marx abandoned his earlier optimism about both the beneficial nature of global capitalism, as well as the need for capitalist social relations to be imposed before the emergence of socialism. In his later writings on British colonization projects in South Asia, Marx refers to the English colonialists as “dogs,” “asses,” “oxen,” “blockheads,” and expresses a “general hatred of the English government.” Marx does not regard British rule as a form of European civilization that will enlighten the “barbarism” of Asia, but rather sees colonialism as merely a rapacious form of theft by way of land and resource privatization. Marx celebrates the defeat of the British in Afghanistan and also celebrated Sikh and Mughal resistance to the English empire. More importantly perhaps, in India, Ireland, and Russia, he recognized that communal forms of property holding constitute potential sites of resistance. In a series of letters to Russian revolutionaries a few short years before his death, Marx wrote that the Russian obshchina, or rural commons, could be the seedbed of Russian socialism – they need not wait for the development of an urban bourgeoisie and industrial working class.
Marx’s later writings crucially undermine perhaps the most enduring myth about globalization – that capital somehow enters those “white patches on the map” from Joseph Conrad’s Heart of Darkness, empty spaces onto which the bourgeoisie can erect its wonders of engineering and efficiency. As early as 1860, industrial outsourcing to colonial or semi-colonial countries dramatically altered not only British industry but the colonial economies as well. Charting a single commodity, jute, the “golden fiber” native to Bangladesh, historian Anthony Cox traces how British manufacturers wiped out the Indian hand-spinning looms by constructing a mechanized jute-weaving industry in Dundee, Scotland – employing low-wage Irish workers from England’s first colony, Ireland, who themselves were fleeing an English engineered famine. Once the Indian manufacturers were wiped out, English industrialists shipped the jute-weaving industry to Bengal, where the Indian workers were paid only a fraction of the Irish workers in Scotland. The “empty space” of idle third-world workers for whom the British empire so thoughtfully provided jobs was a space hollowed out by colonialism to begin with – no less so for the Indians than for the newly unemployed Irish workers in Scotland whose small farms and rural commons had been destroyed by capitalist English farming.
Fast forward 140 years to NAFTA’s restructuring of the US and Mexican economy, and one can witness a similar process take effect. While the manufacturing job losses in the US that followed NAFTA are well known, less discussed is the way in which NAFTA decimated small holding Mexican farmers, undoing one of the most important legacies of the Mexican Revolution – the indigenous communal land system known as the ejido. Not only did NAFTA allow for the sale of ejido land, NAFTA flooded the Mexican market with US factory farmed corn, wiping out the far less efficient (and far less subsidized) small corn farmers in Mexico. NAFTA also allowed for the export of US agricultural capital into Mexico, remaking Mexico from a country that was nearly self-sufficient in terms of its food production, to a country that both produces for export, and paradoxically, must import its own staples, pork and corn. Since the passage of NAFTA, Mexico lost 4000 pig farms and hundreds of thousands of small corn producers, and over 1,000,000 jobs in the agricultural sector. Unlike British rule in India however, this was accomplished not through the Maxim gun, but through the rule of law, in collaboration with Mexican business elites.
While measurable in terms of poverty – the number of rural families in Mexico who are below the poverty line has nearly doubled since the passage of NAFTA, from 36 percent to 60 percent — the real importance is structural, changing Mexico from a country the food production of which was local, and grown for need, to a country that produces and imports food on the global – US dominated – market. In Latin America, globalization replaced the model of import-substitution led growth (ISI) advocated by economists of the “dependency school,” a program of protected industries and subsidies designed to create self-sufficient, diversified economies in the global south. While ISI has been criticized for being top-down and inefficient, what is often lost in this critique is that ISI programs in Latin America led to some of the highest growth rates the region had seen and a sharp drop in regional inequality. Further underscoring the neo-colonialism of globalization, the end of ISI and the adoption of commodity export regimes owed in large part to the US hike in interest rates in 1979 that forced a balance of payments crisis, both ending the ability of governments to continue subsidy programs, as well as allowing for the political cover needed to enact such radical economic change.
Yet unlike the imperial order of the past century, this “post-modern” imperialism increasingly takes place within the orbit of a global marketplace predicated on equal exchange and capitalist labor relations. Global trade policy, unlike in the 19th and early 20th century, is less carried out at the barrel of gun than between economic leaders of formally independent nations. The new imperialism is no longer a relationship between imperial masters and colonial subjects, but a complex interaction between more or less sovereign states.
As economic historian John Smith charts in his comprehensive new study of globalization, Imperialism in the Twenty-First Century, this formal equality between sovereign nations actually facilitates the neo-imperial order. Tracing three commodities, the t-shirt, the IPhone, and the cup of coffee, Smith notes that despite obvious differences in the manner of production and the industrial complexity required to manufacture the commodity, little of the capital flow is retained either by the workers who produce the commodity or by the state in which the commodity is produced. And yet the “foreign” production of the commodities provides necessary disavowal and distance from the conditions of production or demands of workers.
Smith revives Marxian theories of imperialist “super-exploitation,” to argue that the nominally independent companies such as Foxconn should not be understood as a new form of global development, but rather “global labor arbitrage,” the process by which super-profits are realized through differential wage rates, productivity, and rates of exploitation between and even within countries. Despite the dazzling intricacy of the cell phone, such companies have done little to bring technology or increased complexity to the Chinese economy. Companies such as Foxconn actually lose competitiveness the more they increase the productivity of their plants – their “comparative advantage” is low cost labor, not high-tech production. As firms such as WalMart, Apple, The Gap are able to exert pressure to keep wages low, profits for these companies on each commodity can run from 50 percent for an IPhone assembled in China to a staggering 700 percent for shirts sewn in Bangladesh.
And it must be remembered that while Foxconn and Pegatron are not U.S. companies, they are subordinate to Apple’s control and cost ceilings, and subservient to U.S. market pressure. Rather than see the massacre of rubber workers in the Belgian Congo as the symbol of the violence of imperialism, Smith suggests, in the 21st century, we should see instead the thousands of workers crushed to death in the Rana Plaza disaster — killed while producing for U.S. corporations.
Constrain Finance, not Migrants
Returning to Lenin’s point about the interrelation between the concentration and centralization of capital and imperialism, we have to ask about the relationship between the new imperialism of globalization and the political and economic hegemony of finance capital in the West. According to Robert Brenner, the six-fold increase finance’s share of the US economy is in part a response to a real crisis in global capitalism, as US manufacturing firms faced competition from German and Japanese rivals in the 1970s, followed by South Korea and Taiwan. This “crisis of overcapacity” meant that manufacturers either accept a profit squeeze, or lower the cost of production. And what does a good capitalist do when confronted with a reduction in profits? Lowering the cost of labor, redirecting capital toward short-term financial investments, “asset-stripping” by hedge-fund managers who acquire companies are all means to deflect a decline of profits onto the global working class.
Yet for economists Gérard Duménil and Dominique Lévy, purely economic explanations for the shift to finance capitalism are not sufficient. One of the central insights made by Duménil and Lévy’s The Crisis of Neoliberalism is to recognize the rise of finance as a specific class formation, a new hegemonic bloc within capitalism that wields power for its own interests. Locating the rise of finance as an alliance between upper management and financial managers, Duménil and Lévy see a transition away from capital investment in manufacturing firms and toward higher share value and increased profits. This trend away from industrial to financial management creates additional pressure on manufacturing firms to lower the cost of labor and redirect investment to managers and shareholders and other rentiers. It is what Brenner calls a “re-feudalization” of the economy, and for Duménil and Lévy, this is as much a political project as it is an economic one
But rather than see other countries as the net beneficiaries of Foreign Direct Investment (FDI) and “arms length” production, the financialization of the US economy has neither lead to prosperity in the US, nor abroad – it has laid waste to entire regions in the US, and restructured the global economy in the name of neo-colonial dependency and an upward redistribution of wealth. For the first time in human history, a majority of the world’s population have been proletarianized, living in swelling shantytowns of tens of millions. And yet even as they are dispossessed of their means of production, there are no jobs for them: as Michael Denning describes, the fastest growing sector in the global economy is not the waged worker, but rather the wageless worker – a worker in the informal sector without a labor contract or stable employer, let alone benefits or social insurance. For the first time in human history, the reserve army of industrial labor is truly global. If there is any “meaning” to globalization, it is surely this.
Rather than meet this crisis of grotesque inequality with border walls and the “economic nationalism” of Trump’s right-wing nationalist base, the way forward is through the engine of the crisis of itself. The crisis of overcapacity is also a crisis of investment. The devaluation of production through outsourcing and rent-seeking finance has also meant paradoxically that capital is being hoarded, parked in assets such as treasury bonds and real-estate, rather than invested in production, infrastructure, or the public sector. As economist J.W. Mason recently wrote, one of the answers to crisis provoked by financialization is to “socialize investment” by “repressing” finance, democratizing central banks, using states to finance investment, and yes – closing borders to the outflow of Western capital. As Mason writes, “in a world where capital flows are large and unrestricted, the concrete activity of production and reproduction must constantly adjust itself to the changing whims of foreign investors.”
This is why left-wing pro-globalization proposals to create either a “global minimum wage” or write fairer trade rules into global agreements such as NAFTA, while well intentioned, are doomed to fail. They neither address the economic origins of globalization nor do they address the ways in which the global economy is fundamentally out of balance. Given that the entire point of the global economy is to enforce dependency and global labor arbitrage, one would be asking the WTO to put itself out of business, or enforce rules that run counter to the very nature of the project.
As Walter Benjamin reminds us, revolution may not be a locomotive hurtling into the future – it may rather be an emergency break, stopping our headlong rush into catastrophe. Rather than understand globalization as the inevitable course of progress, we must return to the now dated ideas of “de-linking.” For peripheral states to develop diversified economies and respond to popular political movements such as the “pink tide,” they must isolate themselves from Western capital flows and debt leveraged national balance of payment traps. Whether this involves regional alliances such as Hugo Chavez’s ALBA, or statist models of development, will be for those regions to decide: the best course of action in the US would be to restrict and socialize our own financial markets and finance capital. And for those who might be concerned such constraint on finance would harm China, we should be reminded that much of China’s actual economic development is directed by their own state-run bank and state-owned firms.
From the late 1920s to the onset of the Cold War, the US witnessed a vibrant working class anti-imperialist movement, located in socialist parties, left unions, and movements for racial justice. Clifford Odets, the most famous left-wing playwright of the decade, was arrested as he tried to enter Cuba to support revolutionary movements targeting US sugar companies that owned 80 percent of productive land on the island. African American intellectuals such as W.E.B. Du Bois and Langston Hughes denounced the neo-colonial government of Sténio Vincent in Haiti; even John L. Lewis protested the rising US military budget as the preparation of another “imperialist war.” These acts of protest were often in dialogue with colonial migrants such as the writers Carlos Bulosan and Claudia Jones, or as often, anonymous veterans of the Mexican Revolution in the California central valleys. The first principle of the anti-imperialist movement of the 1930s was self-determination, which by necessity limited, rather than facilitated, US investment. As the #NoDAPL movement reminds us, sovereignty means protection from capital as much as access to it.
Fredric Jameson suggests in his seminal essay on globalization that the idea of de-linking the global economy is not new: it was in many ways one of the cornerstones of the 20th century socialist politics, and has always been at the center of anti-imperialist politics. Nor is it utopian: it relies on the formally democratic modes of political action already available to us as voters and workers, who could impose limits on finance with far greater ease than a new global order that will raise wages from California to Mumbai to Cape Town. And likewise, the idea of constructing economies based on human need rather than the dictates of a global capitalist economy should not be seen as racist or nationalist, but rather a key principle of a de-commodified life. Of course, it should go without saying that people should have the right to freely migrate, yet we may also imagine a more utopian goal, of the right to stay put: to build economies that work for people in the places they live.
Benjamin Balthaser is currently Associate Professor of multi-ethnic US literature at Indiana University, South Bend. His book, Anti-Imperialist Modernism, appeared from University of Michigan Press in December of 2015. Other critical writing of his has appeared in American Quarterly, Jacobin, Boston Review, Criticism, Cultural Logic, The Oxford History of the Novel in English, and other sources.