Marxists diagnosed today’s disease. We capitalists must cure it – or else
Free movement of global capital and labour has transferred power from governments to companies
History will have its little jokes. It is roughly a generation since the collapse of the Soviet Union – the ideological empire that was built on fear of domination by global capitalism. Only now, a quarter of a century later, is its analysis apparently being borne out. Somewhere in Marxist heaven, there must be wry laughter.
Needless to say, I am not recommending the traditional communist solution to this problem – the abolition of free markets in favour of a command economy. I simply point out the irony that even Russia – which now appears to be bumping off its enemies in the name of revanchist nationalism, rather than socialist piety – is deep in the game of global capital machinations. As is China, which is patenting a devastatingly ruthless form of totalitarian capitalism. And since, unlike the West, these new players are not hampered by regard for legal niceties or international agreements, they can exploit the possibilities for all they are worth, relying on corruption among the newly rich elite, and the incitement of national pride among the rest, to sustain their power.
What is the nature of this game, and who makes whatever rules there are? The world-beating success of market economies was certainly at its root. It had become clear by the end of the last century that mass prosperity could be delivered most effectively by free, competitive markets in goods and services. National governing systems that did not enable such markets were less likely to survive than those that did.
It was a short logical step from this observation to the conclusion that cooperative trade deals that effectively dissolved the boundaries between market economies would encourage even greater possibilities for wealth production. So nation states were eager to form pacts (or blocs) to facilitate bigger markets in which capital could move and multiply without hindrance. (To be left out of these advantageous arrangements was thought to be a form of economic death.) Add to this the technological advances which made international transactions easy and fast, and the stage was set for a phase of capitalist development more gargantuan in its effects than could have been predicted in any Bolshevik fantasy.
This was globalisation: the freeing of capital (and, supposedly, people) from national boundaries and local limitations. It would become the most transformative economic phenomenon of modern times, not purely on account of its financial consequences – which delivered profits and consumer choice on a previously unimaginable scale – but also because it allowed the interests of corporate capital to supersede the power of governments. Economic muscle on the world stage was now liberated from the parochial concerns of nations: it could dwarf the influence of democratically elected political authority, which quickly became dependent on the profits it generated. Not that those profits could be counted on to produce instant government revenue: the mobility of wealth also meant that taxing global interests was increasingly problematic. It was much easier for corporations to move their assets and earnings out of the reach of any particular government’s taxcollecting jurisdiction, or to disguise their profits by playing off differing national requirements.
This, in turn, created a demand for international harmonisation and “transparency” in tax collection, which amounts to nothing less than the abolition of privacy rights of any kind in monetary transactions. In the hopeless pursuit of massive corporate tax avoidance, transferring even modest amounts of money for personal purposes across international borders has become a publicly monitored (and inherently suspect) process. But this is a relatively trivial example of the disruption of old assumptions that globalisation has produced.
Far more serious is the effect that it has had on the electorates of those countries whose governments believed they had to join the dance, and are now seen by their own people as either complicit or powerless in the great world conspiracy against working people. This is what generates those eruptions of inchoate rage against “establishment” politicians that are threatening to disrupt the stability and democratic integrity of the West.
The populist movements that
at telegraph.co.uk/ opinion have swept the board in Italy and made traumatic inroads in Germany and Sweden use the conceptual vocabulary of both the Left and Right, and are on to pretty much the same theme. The globalisation of labour (sometimes called the “free movement of people”) is seen not as some beneficent liberation, but as a cynical tool of corporate interests, which are making a fortune out of exploiting cheap labour that can now be shunted around the world to wherever it suits those interests best.
Unfortunately, the coercive pooling of economic policy in trade blocs creates complications. Young migrant workers imported from poor, backward countries are shipped, literally, into regions with ageing populations, like Germany, to fill existing labour shortages, but EU member states with staggeringly high youth unemployment, like Italy, end up taking the consequences. Of course, the corporate interests, represented by Germany, win the power struggle. What follows is an electoral primal scream in Italy.
This is what a Leninist might call the abandonment of the postindustrial proletariat: working people whose local industries have been destroyed or absorbed by international conglomerates and whose communities have been lost. They are demanding that their own politicians lead them out of this despair. The protectionism and trade war that Trump threatens is his attempt at this, but it would only accelerate the apocalypse by raising the cost of living. In truth, economics is no longer under the control of governments. Somebody, somewhere had better come up with a way out of this, before it becomes irreversible.
These new players are not hampered by regard for legal niceties or agreements