Political Economy and Globalization

Richard Westra

• Publisher: Routledge
• Year: 2009
• ISBN:
  9781135197063
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Based upon distinguishing capitalism from other economic systems, as well as analysis of capitalist change across its stages of development, Richard Westra argues that the economic tendencies we refer to as globalization constitute a world historic transition away from capitalism. Westra forcefully rejects claims from both Right and Left sides of economic debate that globalization embodies the ultimate world diffusion of capitalism. He concludes that the choice facing humanity is no longer between capitalism and socialism but between socialism and global barbarism.

The argument is meticulously interwoven through four key foci of political economy -

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• The role of Marx's Capital in producing knowledge of capitalism,

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• The periodizing of capitalism and study of its historical models,

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• The altering trajectories of production and finance under current globalization,

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• The place of socialism in a progressive future.

A central point of the book is that determinations over the capitalist substance of existing economies demand precise understanding of how in its basic operation capitalism manages to secure the economic reproducibility of human society in the first place. To make the case for the passing of capitalism from history the volume draws upon the novel Japanese Uno approach to Marxian political economy.

From the pages of Political Economy and Globalization emerges a grim picture of our human future should current economic trends persist. It also offers a positive vision for socio-material betterment in redistributive, eco-sensitive socialist societies of tomorrow. This is a must read book for scholars, students, progressive policy makers and activists.

1
Introduction

Political economy and globalization

“What a difference a day makes”, as the saying goes, for it really seems like just yesterday that doyens of both otherwise highly polarized Left and Right sides of international political debate had been united in their views of recent world economic trends as the paragon of ongoing capital accumulation. “We must dispense with a notion of ‘crisis’ as something that leads capitalism to unravel on its own”, Marxian analysts Panitch and Gindin (2005, 74) loudly proclaimed to take one example on the Left.

Such blind complacencies were bound to another signal point of agreement between Left and Right; this being the position that the economic tendencies which in common parlance are referred to as “globalization” embody the ultimate suzerainty of capitalism, the world over. Of course, Left and Right have vastly different interpretations and assessments of the fundamental processes of globalization. The Right perspective, in ideological thrall to neoliberalism, tends to be more homogeneous. It views globalization as the triumphal world economic un-fettering of “the market” with its purported “rational” allocation of global resources and tendency toward the realization of so-called “perfect competition” among business enterprises in the international arena. Neoliberals gleefully celebrate processes of globalization that strain to roll back the hypertrophied presence governments assumed in managing human economic affairs in the post-World War II (WWII) period. For neoliberals, globalization confirms former British Prime Minister Margaret Thatcher’s assumptive dictum that “there is no alternative” (TINA) to the market as the telos of human history. What the unfolding of analysis in this volume will make crisply clear, however, is that beyond neoclassical economics textbooks, in the really existing world economy of globalization, there is little in the way of substantive evidence to support neoliberal claims.

Left debate on globalization is, to be sure, highly heterogeneous in its assessments across the panoply of salient issues including: the extent to which more areas of everyday life are being colonized by capitalism and commodified, the role of the state, the transformations in patterns of global governance, the world economic impact of particular hegemonic states’ policies, and what the actual numbers on trade flows and foreign investment in fact demonstrate. Left empirical analysis also offers a searing indictment of globalization’s asymmetric distributive, politically conflictual, environmentally ravaging and so forth, mark on the world. Among the more exoteric Left writings on globalization, notions of it as “cancer capitalism” (McMurtry, 1999) or “disaster capitalism” (Klein, 2007) have recently been advanced to much acclaim. Across the specialized political economy literature ominous phrases such as “exclusion from wage relations” (Dierckxsens, 2000) or “accumulation by dispossession” (Harvey, 2003) have been deployed to capture the overarching tendencies of globalization. But, while the varying currents of Left or critical political-economic writing (see Box 1.1) have genuinely engaged the complex processes and deleterious impacts of globalization on human existence, elided in such a studied fashion by neoclassical economics inspired work on the subject, critical writings blench from drawing the conclusion to which, from the viewpoint of this volume, its analysis in fact points. That conclusion being, contra the position critical scholarship holds in common with neoliberalism, that the burgeoning “cancers”, “disasters”, “exclusions”, “dispossessions” of globalization reflect the unraveling of capitalism and a world historic transition away from capitalism to forms of society the material reproductive and political contours of which are not yet completely clear (though as we shall see, much of the writing is already on the wall!).

Box 1.1

Of all the modern traditions of political and economic thinking it is work based on the writings of Karl Marx that has most resounded across history as the conscience and critical tormentor of capitalism. While it is true today that not all scholarship considered “critical” is expressly Marxist, and even the term “Left” as it is applied to the Democratic Party of the United States (US), for example, does not always denote criticism of capitalism, the three terms will be used interchangeably throughout this book to reflect the fundamental perspective of this volume, that it is from Marx’s writing that the most profound insights into understanding our world, so as to change it in a progressive fashion, emanate.

In defending the position that globalization constitutes a world historic movement away from capitalism this volume opens up for an international readership an immensely significant theoretical and empirical avenue of debate within the existing globalization literatures. For the fact is, as a plethora of books on globalization, such as the above noted, continue to make their way onto library and bookstore shelves, the question – but is it capitalism? – is simply never asked. And this is not just an academic question. For if we ask the follow-up question: Will vital new policy implications for the realization of a progressive future for humanity, divergent from those represented by Left analysis beholden to the view of globalization as the spread of capitalism, flow from the alternative view advanced in this volume? The answer is an unequivocal yes! When Karl Marx famously proclaimed that human beings do make their own world, though not entirely as they please, but rather under conditions inherited from the past, what he was adverting to is the fact that projects for social change must be cognizant of the concrete socio-material circumstances in which they hope to bear fruit. Marx applied this point to the work of his “utopian socialist” contemporaries who had blithely commenced drawing up schemes of future societies without a clear understanding of a powerful material force then enveloping their lives – capitalism. Marx, instead, set about decades of intellectual labor to apprehend the deep structural modus operandi of this peculiar force in his three-volume work Capital. The life enterprise of Marx is still important today. On the one hand, as we shall see below, it is no accident that economics as a field of social scientific study arises in the age of capitalism for capitalism constitutes the very ontological condition of possibility for economic theory. And in this regard, the knowledge of human economic life gained through Marx’s work in Capital remains timeless. On the other hand, Capital acts as a touchstone for analysis of the shifts and transmutations of capitalism across the centuries of its existence. Capital, in other words, as will also be treated at length below, “defines” what capitalism is in its most fundamental incarnation. It is argued here, in the spirit of Marx’s research agenda, and with the intellectual toolkit bequeathed by him, that those desirous of progressive social change are remiss in continuing to spin visions of possible futures without countenancing the fact that the physiognomy of socio-material life upon which the changes are to be based has irrefragably altered from that falling within the economic parameters of capitalism. And further, that many of the staid analytical categories currently in play in critical future-directed thinking, as well as institutional options for the social struggles intervening in the process toward the progressive future, all predicated upon the perduring of capitalism, have lost a considerable measure of their transformatory efficacy. The impotence of the Left in the face of the current economic malaise starkly confirms this prognosis.

There is also a further strategic question here: The devil you know, it is often noted in popular parlance, tends to offer more comfort than the devil you do not know. With critical scholars hanging on as tenaciously as neoliberals to the view of globalization as the world economic diffusion of capitalism it would seem cedes the high ground of debate to neoliberals. After all, not only did neoliberals unabashedly advance the TINA premise, but their neoclassical economics backers have long held that markets reflect a trans-historical human propensity to “truck and barter” and optimize individual self-aggrandizement. For mainstream economic theory, in other words, capitalism is forever. True, Marxism, foremost among critical traditions, has always vehemently disparaged such views, pointing to the crises-ridden, asymmetric distributive, and so forth, characteristics of capitalism, as well as arguing for its fundamental historicity. But global mass publics, particularly those in the wealthier industrialized and newly industrialized economies of the world, though they have certainly experienced the downs of capitalism as articulated in critical writings, hold some solace in the possibility, reinforced through the broad intellectual consensus on the persistence of capitalism, that they might once again experience its “ups” as per the claims of neoliberals. Recent events do not appear to have shaken this view. And with the unceremonious crumbling of the Soviet style models of socialism, as well as their often brutal authoritarian social outcomes vividly inscribed in recent memory, it is not clear how the Left can animate a substantial collectivity for change through its acceptance, against the thrust of its own evidentialization, it may be added once again, of the continued reign of capital as the devil we know.

Marx, as can be ascertained from his scattered writings on the subject, believed that capitalism would be readily dismounted by socialist revolution. But Marx’s work certainly does not suggest that capitalism will be forever until its revolutionary overthrow. After all, Marx’s very notion of successive historical modes of production captures the fact that, as a historically constituted social order, capitalism comes into being at a given level of development of human material wants and productive technique and, like other modes of economy, passes from history as its ability to manage human material reproductive affairs is exhausted. What this volume demonstrates is the fact that the historical limitations of capitalism have already been reached. And, despite the shrill chant of neoliberal ideology over globalization as the market’s epiphany, the present work will make it abundantly evident that the possibilities for the centrality of market organization in human economic life, even with a myriad of extra-market supports, are exhausted. In other words, the choice for mass publics of the more affluent, industrialized economies of the globe, as well as those in the increasingly impoverished Third World, is no longer between capitalism and socialism. Recall Marx’s intimation that while capitalism nurtured within it material conditions germane to the building of socialism, capitalism also portends a global future inscribed by new forms of barbarism. And it is the choice between barbarisms as the devil we do not know and the configuring of a genuine socialism, if this is the name to be given the progressive society of the future, which humanity now faces.

To make the most robust case for the world historic trajectory of current globalization as the final loosening of capitalism’s grip on human material affairs demands clarity over precisely what capitalism is. Put differently, despite the historical variability of capitalism, for a society to be called capitalist, irrespective of its heterogeneous features, it must be marked by some economic constant which it holds in common with all existing capitalisms and differentiates it from all other historical modes of economy. In Marx’s day, and as will be illustrated below in our own day, strewn across the globalization literature, claims are made about the existence of capitalism based upon brief checklists of purportedly identifying features such as the existence of prices, wages, profit making, private property and private appropriation, and so forth. It was the great acumen of Marx, as well as the careful study of economic history that he engaged in, which led to his dissatisfaction with such empirical indices alone, given how their existence was discernable in economies antedating capitalism. In fact, simply approaching this question logically, if all that is required to identify the existence of capitalism in history is evidence of the above features, the decades of labor required to write a three-volume economic treatise like Capital would seem redundant.

Let us however examine the issue from but another angle: those readers acquainted with Marxist writings from one source or another should be familiar with Marxist critique of the exploitative, anarchic and so forth, ills of capitalism. What is largely left untreated across the broad sweep of Marxist work though is the question of how a society, manifesting such a litany of ills, has endured to ensure human economic existence over the past several centuries. The elaboration upon the constant of capital as this has been set out above is an exercise demonstrating precisely the core principles of capital which, notwithstanding all its ills, guarantee the material economic reproducibility of capitalism as an historical society. The opening chapter of the present volume offers an elucidation of why Marx’s project in Capital constitutes the necessary foundation for the foregoing knowledge of capitalism. However, this task is not accomplished by engaging in “quotology” or upholding Capital as a sacred text of a secular religion. Rather, this book introduces to a broad English language readership a compelling, modern reconstruction, refinement and completion of Marx’s project emanating from Japan. Through our engagement with this novel Japanese approach it will be displayed how, in the elaboration of the immanence and logical inner connections amongst all the categories of capital, there exists a timeless definition of capitalism and analysis of capital’s constant; one upon which we can base our analysis of the transfigurations of capitalism and our judgments on the limits of its transformability and passing from history.

I should interject here that as an author the hope is that this book is widely read by a non-specialized audience. Every effort will be made to make this indispensable chapter as accessible as possible to a readership not versed in debates in economic theory generally and in Marxian economics in particular. However, as I stated in the Preface and acknowledgments to pass over the questions in the theories of knowledge and existence that this chapter treats will be to prevent us from truly gaining the knowledge about the world we live in that is so necessary to our remaking it from the nadir of wretchedness it is in today.

While theorizing of what this volume expounds as the constant of capitalism constitutes the ultimate touchstone for determinations over both the emergence and passing of capital in history, to bolster the argument for globalization as a movement away from capitalism, an analytical framework for assessing the aforementioned transmutations of capitalism through the centuries of its march in human history is also required. Such a research agenda, captured under the rubric periodizing of capitalism, constitutes the subject focus of Chapter 3 of this book. The genesis of periodizing capitalism or the studying of capitalism’s world historic phases of development does not reside with Marx himself. Its origins, rather, synchronize with the momentous changes besetting capitalism at the turn of the century following Marx’s passing. And it received its earliest intellectual impetus in the formative theorizing of imperialism as a new epoch or “stage” of accumulation. However, it was not until the aftermath of WWII that the periodizing of capitalism would experience its most fecund expansion as a broad-based research agenda. Not only treating questions of the inter-temporal transmutation of capitalism, the study terrain of periodizing capitalism came to include analysis of the intra-temporal divergence among post-WWII “varieties” of capitalism.

Periodizing capitalism, of course, must be viewed not only as an effort, however sophisticated, to capture the differentia specifica of varied historical modalities of capital accumulation. To be effective in helping us make sense of the world we live in it must also follow up on our understanding of the fundamental principles of capitalism to explain how, notwithstanding accumulatory variations, the material economic reproducibility of capitalist society nevertheless continues to be ensured. Yet, at this tumultuous juncture of historical change, where precision of analysis is what is most needed, the promise of this blossoming of research on stages of capitalism is marred by the disconnect phases literature manifests from the theorizing of the constant of capitalism from which, as will be vividly illustrated below, the required precision necessarily flows. Thus, through critical review of a) early theorizing of imperialism, b) prominent Marxian positions on post-WWII capitalism and c) current debate over varieties of capitalism, Chapter 3 recapitulates the main contours of a century of scholarship on the periodizing of capitalism and pinpoints the problematic areas of analysis in that work. Then, in collating the insights from this engagement, and combining these with path-breaking work on periodizing capitalism of the Japanese approach to Marxian political economy, the chapter hones the periodization research agenda into a robust conceptual vehicle for making the all-important determinations on the reproducibility of capitalism in history and on the world historic trajectory of globalization.

With the first two bases covered – the defining of capital in its most fundamental incarnation and expounding on its constant; and analysis of the world historic transfigurations of capitalism which establish how through significantly different types of accumulation capital is nevertheless able to continue reproducing human economic life (an endeavor which contributes to our ability to clearly specify the historical limits of capital) – it is possible to demonstrate conclusively that current world economic tendencies euphemized as globalization constitute a movement away from capitalism. Chapter 4 sets up this demonstration with an initial outline and brief analysis of the three major positions on the world economy that have emerged across the sprawling globalization literature. The first line of our demonstration then cuts in to the globalization literature at the juncture of its neoliberal ideology dominated discourse heralding globalization as the epiphany of the market. The debate here swirls furiously around two cross-cutting issues: O...

Table of contents

• Routledge frontiers of political economy
• Contents
• Figures
• Tables
• Preface and acknowledgments
• 1 Introduction
• 2 Specifying the constant of capitalism in the theory of a bourgeois utopia
• 3 Periodizing capitalism and the world historic transmutability of capital
• 4 Globalization as the retreat of capital to the interstices of the world
• 5 Barbarism or socialism in the world beyond capital
• 6 Conclusion
• Notes
• References
• Index