Globalisation and Imperialism

The theses Crisis and Imperialism which were presented and approved by our last Congress (1983) outline the possible outcomes of the economic crisis which had broken out in the early 1970's.

The tendency is clear: we are not witnessing a conjunctural crisis which can be resolved in a more or less greater period of time, but a permanent economic crisis the epilogue to which can only be a new world conflict.

If we take the breakdown of the Bretton Woods Agreement as the signal for the end of the upswing in the accumulation cycle which opened after the 2nd World War, the crisis has now lasted a full 26 years without the third world conflict having exploded. Obviously, having identified the crisis as a cyclical one and not a specific short-lived storm, the prospect of war remains valid throughout the duration of the crisis. However, this does not exclude the possibility of some discepancy between the expected and actual turn of events. Neither should it be used as an excuse for us to bury our heads in the sand while we await the predicted outcome almost as if it were a prophecy. That would mean abandoning dialectical materialism only to produce the most banal and formal dialectic: a method which is not ours and which we freely leave to the crowd of mechanical marxists, unfortunately of whom there are all too many amongst the communist left.

All the evidence suggests that the destruction of excess capital - which stems from the crisis of over-accumulation - remains the only solution to the crisis open to the bourgeoisie, the only way that would allow capital to pass from this accumulation cycle to another. There can be no doubt about this. As we have demonstrated many times, the entire marxist theory of crisis has been amply confirmed by events in recent years. There is thus nothing new to invent or discover, but rather it is necessary to pause and reflect on all those processes which up to now have allowed the crisis to follow a course which in many respects has been unexpected. In one sense this is a question of aspects of capitalism which have already been dealt with by the marxist critique, aspects, however, which have never before manifested themselves so clearly or had the central importance of today.

From this standpoint let's leave aside the implosion of the Soviet Empire which, even if it constitutes one of the essential reasons for the absence of the third world conflict, is something our party has subjected to a detailed marxist analysis in recent years. Here we will concentrate on powerful forces which have emerged recently and which are more strictly linked to the economic and financial management of the crisis since they are a prelude to changes in the whole relationship between capital and labour and affect prospects for the revival of the class struggle.

In his examination of the law of the falling rate of profit Marx had already shown how this tendency leads to the internationalisation of capital. However, only the modern technological revolution has allowed this tendency to be fully realised by pushing forward the process of globalisation of the economy, a process bourgeois propaganda presents as the cure for all the world's ills, the new Eldorado for which no sacrifice is too much.

Industrial Globalisation

By contrast with previous technology, the introduction of microelectronics has not resulted in the birth of new sectors of production although it has brought both an absolute and a relative destruction of a great many jobs. For the first time in the history of modern capitalism a new technological stage - even after a fairly long crisis - has not brought a corresponding widening of the productive base which, as well as increasing the productivity of labour power, would also allow a quantitative growth in the productive labour force. In fact the new technologies based on microelectronics have essentially replaced manpower but, contrary to expectations, have not given rise to new sectors of production. The result is that the mechanism for compensating the fall in the rate of profit no longer functions properly Instead it has given way to an absolute and relative increase in surplus value extracted from a permanently contracting labour force. This, in turn, has triggered a powerful drive towards an absolute increase in surplus value via an extension of the working day as well as a relative increase by upping exploitation to a level unprecedented for this century. The result is a permanent pressure towards the devaluation of labour power and a profound change in the labour market with a new division of labour on a planetary level.

The telecommunications revolution and the subsequent simplification of the work process which accompanies automation have made it possible to transfer important segments of production to areas with extremely low labour costs whilst using increasingly less qualified and less costly manpower in what is an overall more complex production process. Apart from the devaluation of labour power the result is a generalised wage structure which is extremely flexible and which allows companies to regulate manpower and the price they pay for it according to the fluctuations of the market. The collective wage agreement, valued by the international bourgeoisie after the 2nd World War - particularly in the USA - because it guaranteed the stability needed for monopoly planning has now been superseded. In its place a sort of system of individual contracts is daily becoming the norm. The aim is to remove any obstacle which might prevent the lowering of the price of labour power in a situation where demand is far weaker than supply. The tendency is so powerful that now even indirect wages - what were commonly regarded as rights acquired for ever - are under attack: e.g. the dismantling of social insurance schemes against old age (pensions).

In one sense a permanent lowering of the value of labour power is an excellent substitute for the lack of compensation for the falling rate of profit from increased numbers of workers being employed in production. However, this also means an accentuation of the very same contradiction because it encourages investment in substitutes for manpower. Thus capitalist restructuring and reorganisation takes on an increasingly wide dimension. In many sectors the relative and absolute decline in manpower has led to a fall in global demand and poses an enormous marketing problem for all the biggest producers. As individual national markets become more and more restricted the international market becomes more important and bitter, implacable struggles ensue. Finding the competitive edge thus becomes the imperative which defines the strategic goals of all the major indusrialised countries. But greater competitiveness means even more automation, more automation means a further increase in constant capital and an absolute and relative decline in variable capital, by which means the contradictions that lead to the fall in the rate of profit tend to reaffirm themselves on an even broader level and the tendency towards globalisation is further accelerated. There is also, however, an even more important consequence: the amount of capital which no longer finds an adequate return through the normal productive process and shifts over to financial speculation.

Financial Globalisation

Every day $1,300 bn move at the speed of light from one part of the world to another in search of profit. To get an idea of the scale of this mass of capital it's enough to know that the central banks of all the OECD countries put together have no more than $350bn at their disposal. Out of the world's top ten companies the first five are now finance companies with the largest US and Japanese pension funds holding special place. Only ten years ago the great industrial giants were safely in this top position.

Ever since the abandonment of Bretton Woods the financial market has been extended until now there are more innovations in financial “services” than in the industrial sphere. In particular the creation of the currency options market in the US in 1982 - as a result of an apposite law (the Future Trading Act) - brought a sudden disruption to the currency market. The creation of these new products means that the great financial groups can now determine the amount of currency in circulation and thus exercise the kind of control hitherto the exclusive preserve of states and their corresponding central banks. Thanks to the hold they have over the volume of money the whole process of international price formation is in their hands, or rather in the hands of a limited number of investment houses, banks and pension funds. As a result the so-called “real economy” is overwhelmed by the sort of returns made by finance capital and the share of surplus value destined for speculation is continually increasing.

Until the Eighties financial speculation was primarily directed at oscillations in the price of commodities. Now it is directed at currency fluctuations. Contrary to the boast of governments who are claiming the credit, the fall in the rate of inflation over recent years in the main industrial countries is the result of speculation moving away from commodity markets to the currency markets.

Currencies are symbolic units and can therefore be moved around extremely swiftly from one part of the world to another, in the process determining the collapse or vertiginous rise in the quoted price of a particular coinage in a matter of seconds. It is easy for those who control finance capital to intervene in the exchange quotations and gain a consistent extra-profit. This, however, is increasingly a matter of shifting surplus value from one capital to another and not the creation of additional value. Thus the discrepancy between the value of money and the real value of goods produced is permanent and is expressed in inflation which - even though it is reduced - has been transferred from the price of commodities to currency prices and specifically from strong currencies to the weakest. In fact this is a problem-free way for the strongest currencies - or rather the biggest capitals - to appropriate a share of surplus value without dirtying their hands with the production of commodities. More generally, the whole process of wealth distribution is gradually dictated by this movement so that an ever greater share of surplus value is absorbed by financial receipts. Meanwhile the international proletariat is daily called on to tighten its belt in order to save the “national economy” from the attacks of the speculators and calm down the so-called markets - whose workings now have the same authority as the decisions of the Pope: infallible and final.

In reality parasitic appropriation has become the predominant mode of appropriation of surplus value and the domination of the rentier, described by Lenin, has never been so total and articulate as in our time.

The Single Ruling Idea

Apart from rare exceptions, bourgeois economists, intellectuals and politicians view globalisation as the definitive triumph of free competition over the world market. With deafening insistence they maintain that the power of globalisation to bring about a single market on a planetary scale will mean that free competition knows no limits and will finally have reached the state of perfect competition described in the textbooks - where economic equilibrium is determined “naturally” by the free play of supply and demand. And because the struggle to reach such equilibrium excludes the least competitive firms, globalisation of the economy will also mean the triumph of rationality and efficiency, of democracy and prosperity.

With this will come the best allocation of resources and the best distribution of wealth, obviously also including wages. The ideology of laissez faire enjoys unquestioned domination. It is invoked continually to suport the liberalisation of this or that sector, the privatisation of this or that enterprise, the abolition of any obstacle that could possibly limit the movement of capital, of every kind of social protection (Welfare Reform) and of any rule which might limit the exploitation of the labour force. This has been defined by Ignacio Ramonet, editor of Le Monde Diplomatique, as the single dominant idea and he is not wrong. It is impossible to voice any objection. You don't have to be a marxist to be considered beyond the pale or treated as a has-been from a now buried past: it's enough to mention Keynes for the fury of neo-liberalism to be unleashed. However it is only in appearance that neo-liberalism upholds the ideology of laissez-faire. The world has changed too much for anyone to seriously compare Silicon Valley with Manchester [of the early 19th century, trans.] and a steam-powered loom with one controlled digitally. In reality the dominant ideology today is the ideology of a monopoly capitalism which has reached its highest phase.

Liberalisation of markets by, for example, abolishing existing rules and regulations and removing any obstacle which impedes the movement of capital, has become a vital necessity for the survival of the system because without it the gigantic processes of concentration and centralisation of capital that globalisation implies would not be possible. A firm needs to span at least a continent in order to exist on the global market; otherwise it is not competitive. For example a firm such as Stet or a single Telecom cannot survive on a Telecommunications market which includes transcontinental US giants and at least three Stets or Telecoms have to combine together. Hence the necessity for their privatisation - so that they can join together with other firms and create at least a continent-wide group. Likewise for the banks, for industries and for States themselves.

The Two Dimensional State

Together with the liberalisation of the market the dominant ideology also demands the slimming-down of the national state. There is talk of a “lean state” to depict a state with little power and few functions; which watches over free competition and guarantees that there is equal opportunity for everyone. But here too, just as with the process of concentration of companies, the dominant ideology demands the disengagement of the national state not because - as some theoreticians of localism imagine - it is necessary to have a world of free states on a free market, but because the concentration and centralisation of capital has reached such a level that national states are no longer capable of coherently carrying out their basic tasks. If the great monopoly groupings are to remain competitive on the world market they have to be able to participate in the division of financial revenues. This in turn means that the State these monopolies take as their reference point must have the capacity to manage the main macro-economic variables efficiently and sensibly, in particular the money supply. A state with low currency reserves is incapable of confronting the shock waves of international speculation to which the whole economy is exposed. In 1987 a US financier, Andy Krieger, made huge gains at the expense of the New Zealand Central Bank when he openly sold the country's entire currency on the currency options market. Now, if you consider that Krieger could move only 700 million dollars of the $1.3 bn which are daily moved on the international financial markets it is easy to appreciate that in a globalised economy, dominated by large-scale finance capital, it is not the state as such which no longer has reason to exist but the smaller states which can no longer survive. Thus, the process of disengagement of national states that we are currently witnessing is not the prelude to a weakening of the state, but rather signals a different kind of construct by virtue of the existence of currency zones of at least continental dimensions.

The outcome is a lightweight and decentralised state at national level but one which is powerful and highly centralised at continental level: it is the state of the great transnational monopoly groups.

New Imperialist Balance of Power

After the collapse of the Berlin Wall, which heralded that of the entire Soviet Empire, bourgeois propaganda was full of hymns of praise announcing the dawn of a new era. There was to be no more war because the last war had been won; no more misery because, liberated from the evil world of communism, the flower of prosperity would bloom everywhere; neither would there be dictatorship because capitalism is synonymous with freedom. Someone in the USA actually talked about “the end of history”. (1) Predictably, these expectations ended in disappointment. Wars continued; as always freedom and prosperity remained the exclusive preserve of the bourgeoisie and most important of all, inter-imperialist conflicts did not cease.

Despite being a bare-faced lie, bourgeois propaganda has not let up. Today the eulogists maintain that economic globalisation will bring the end of warfare and of the state; someone thinks that if there are still wars in the near future then these will be clashes between different civilisations and cultures but no longer a struggle over material interests. (2) According to this new orthodoxy once the transformation of the big monopoly groupings into transnational configurations is complete the big multinationals will no longer have an identifiable national basis. Business interests will stretch far and wide, forming part of a single tapestry where every thread is interwoven and which it will be in everyone's interests to keep intact.

This fascinating idea is in sharp contrast with reality. As we have seen, in reality the success of a monopoly group demands some basic prerequisites - that it has:

  1. at least a continental scope;
  2. the capacity to organise in various parts of the world to achieve the best combination of productivity/labour costs;
  3. the capacity to compensate for a low rate of profit with the realisation of a corresponding extra-profit;
  4. a secure area under its hegemony capable of absorbing a given quota of production.

Now, if we reflect carefully here it is clear that every one of these conditions implies the existence of a solid basis of reference. In particular, the realisation of an extra-profit necessitates a currency which is able to battle on the international market for the division of the financial returns, especially as the constant decline in the average rate of profit - as we have already seen - will continue to increase the number and size of capitals which are unable to find adequate returns from direct investment in production. Thus the struggle for the parasitic appropriation of surplus value will become increasingly fierce and the global village is destined to become smaller and smaller for the growing number of vampires who inhabit it. Already, even though only a single superpower remains on the scene, the struggle to conquer positions of hegemony is disseminating terror and death in every corner of the world. From the Caucasus to Afghanistan; from the Urals to the Balkans; in the Middle East; throughout the continent of Africa, in Latin America, there is not a single strip of ground which is not tormented by war generated by the conflict of interests between the various factions of imperialism. Certainly we are a long way from the formation of imperialist blocs equivalent to that of the United States - or, more precisely, heading a currency area equivalent to the dollar - but what else is the formation of a single European currency aimed at? Or the huge German investments in Russia? Or Japanese expansion in South-east Asia? On the one hand Europe, particularly Germany, and on the other hand Japan, are at a cross roads: either they combine with others to face up to the dollar bloc, which by now includes practically the whole of continental America, or they are condemned to submit to American supremacy which in the last instance means ceding a growing proportion of surplus value to the dollar zone and running the risk of seeing first the decline and eventually the economic and financial collapse of their own area.

In fact Germany has already set out down this road. The influence of the D-mark is now extended throughout Eastern Europe and, even if in juxtaposition with the dollar, throughout much of the Balkans as well. In addition Holland, Belgium, Denmark, Austria and Sweden are effectually in the area of the mark. Its influence has also increased in Iran and in some areas of Africa but all this is not enough. It is up against a market, an army and a state which for up to a century has alone had all of this. It would need the entire European community to constitute a single currency area before there could be an equal balance of forces and even then the situation might not change. The destiny of the world also depends on the development of the crisis in Russia: whether the outcome will be something capable of playing its own role or whether the Russian state will have been so reduced that it will be able to do nothing else but align with someone stronger - Japan or China. In fact only the inaccurate general statistics of the IMF can pass off what is happening in China as a massive process of economic development in contrast with the rest of the world. In reality China can be seen as an Asian equivalent of Russia: a confused mess of contradictions ready to explode at the first whisper of rebellion.

It is difficult to predict whether this complicated puzzle will work itself out. However, there are powerful economic impulses towards the formation of at least another two big currency zones beyond that of the dollar. Around these there are signs of at least as many again state-continent alliances, even transcontinental, struggling for control over the instruments used to extort financial returns. Whoever remains small or doesn't grow large enough is destined to be crushed. Only by leaving aside these impulses, or rather by completely hypothetically setting aside the inherent contradictions of capitalism's accumulation process, can a world without conflict be imagined. The very tendency towards the formation of new currency zones is also propelling the strongest economic areas to separate from the weakest. This impulse cuts across national states and in some cases fosters tensions which can even lead to their break up (as in ex-Yugoslavia) and/or to interimperialist wars so divisive and devastating that the impulse towards continental integration is thwarted.

From this examination it is sufficently clear that the facts themselves do not show that the prediction of war as the only bourgeois solution to the crisis is either mistaken or has been superseded. On the one hand the current process of capitalist restructuring has led to a gigantic devaluation of labour power, reducing the fall in the rate of profit at the same time as promoting the growth of financial income. On the other hand, although the original contradictions still remain the crisis has become more uniform on a planetary level and has now reached such a depth that it is increasingly difficult for it to be managed by the usual financial and economic instruments: capital has no alternative but to have more and more recourse to destructive violence.

Thus not even the absence of comparable power blocs struggling against each other removes the prospect of war. The prospect now is of so-called low intensity wars, of local conflicts whether tribal or religious, but always inter-imperialist. A sort of permanent war, an immense black hole of self-destruction in which a growing number of people, things and bits of civilisation are sucked up until there is total barbarism.


A proletariat imprisoned by the trade union logic of the possibility of reconciling the interests of capital and the working class, corrupted by Stalinism and permeated - via the existence of a solid workers' aristocracy - by petty bourgeois life-styles, is consequently incapable of even minimally opposing capitalist restructuring. Yet the signs of a profound change in the relationship between classes are daily becoming clearer.

During the upswing in the current cycle of accumulation the elevated rate of profit favoured the formation of a workers' aristocracy in the capitalist metropoles. At the same time the middle class grew along with a petty bourgeois life-style which - at least in the metropolitan countries - was also adopted by the vast majority of the proletariat and ensured the stability of the system. Now, however, the same motive force which is forcing the permanent devaluation of labour power and leading to increased parasitic appropriation is imposing a constant reduction in the portion of surplus value destined for the petty bourgeoisie and the workers' aristocracy. Further, information technology has also pervaded office work and the professions and made numerous activities linked to distribution redundant. In the field of commerce it is the small and medium sized enterprise which is being made obsolete, part of the process of break-up and reconstitution of social classes which prevails world-wide and which is leading to the proletarianisation of society. Thus we see large sections of the petty bourgeoisie following radical calls from conservative quarters who are vainly trying to halt this process (regionalism, secessionism, Leaguism (3. The possibility of their playing a key role in an openly reactionary movement, especially if the crisis suddenly gets worse, cannot be ruled out. Nevertheless, the process of proletarianisation together with the standardisation of methods of exploitation also provide the most favourable objective conditions for the formation of a strong internationalist communist force which can act as a secure reference point for the working class and a political base for at least a part of the proletariat.

The problem we are faced with is to understand how a dispersed vanguard such as ours can contribute to the rebuilding of the international revolutionary party out of the shifting sands which surround it. Sooner or later the growing weight of exploitation is going to move the proletariat.

(1) Francis Fukayama, who soon changed his mind..

(2) Samuel P. Huntington.

(3) The term is from the Northern League - led by Umberto Bossi - who is demanding the secession of relatively rich northern Italy from the south.