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The new capitalist globalisation: Problems and perspectives

by Samir Amin


No social or perhaps even natural phenomenon evolves in a regular, constant and indeterminate way. The same also holds for capitalist growth, whose phases of rapid expansion are necessarily followed by periods of difficult readjustment. From this is point of view the post-war years (1945–90) formed an exceptional period of strong generalised growth, entering into crisis in the 1970s and 1980s. This evolution has inspired a revival of long cycle, or Kondratieff, theories, whose merits I won’t discuss here, having done so elsewhere.

However it’s best to state from the outset that I share with Paul Baran, Paul Sweezy and Harry Magdoff a basic thesis which is widely rejected, even by dominant trends in Marxist political economy: namely that the capitalist mode of production is a system which constantly generates a tendency to overproduction, which is a new phenomenon, unknown in human history before the industrial revolution.

It is easy to illustrate this fact in a model of expanded reproduction reduced to Marx’s two departments, production of the means of production (Department I) and production of consumer goods (Department II). The realisation of surplus value requires that the real wage must increase from one period to the next in calculable proportions, in line with the growth of labour productivity. But the social relationship between bourgeoisie and proletariat counteracts this necessary adjustment: wages tend to be lower than what they should be according to productivity The system therefore generates a spontaneous and permanent tendency to overproduction, or underconsumption, these two terms being synonymous, two sides of the same phenomenon, namely the discrepancy between the wage and the need to absorb expanding output.

So, contrary to the self-congratulatory ideological pronouncements of capitalism, it is not stagnation which causes the problem, but the reverse, the prodigious growth created by the system in spite of this inherent tendency to stagnation. Which is why I’ve put forward an argument which goes against mainstream ideas on the subject, one in which successive phases of growth correspond precisely both to the introduction of major innovations and to political developments that result in expanded markets. These are, in order:

  • the first industrial revolution, and the wars of the French Revolution and the Napoleonic Empire;

  • the railway, and German and Italian unification;

  • electricity, and colonial imperialism;

  • the reconstruction and modernisation of Europe and Japan after 1945, the society of the automobile, and the Cold War; and tomorrow

  • a new conquest of the East and the computer and space revolutions?
Within this framework, the post-war cycle is to be defined as a long growth phase sustained by three pillars which were partially in conflict but also complementary: (a) social-democratic regulation of Fordist accumulation, of course by means of openly Keynesian national policies but nonetheless reconciling, within the context of the nation-state, the expansion of capital with the historic compromise between capital and labour, with reinforcement coming from the military spending of the Cold War; (b) increasing modernisation and industrialisation in countries on the periphery which had rewon their independence, driven by what I have called the “Bandung Project” (1955–75), a national-bourgeois plan to catch up via managed economic interdependence; (c) continuation of the Soviet project: catching up by means of a model of accumulation similar to that of historical capitalism, but totally disconnected from the constraints of the global system, and carried out at the level of the nationstate, or of several nation-states, by means of state ownership and the centralisation of economic and political power, concentrated in the hands of the emerging new bourgeoisie (the nomenklatura of the Communist parties).

Military bipolarity completed the architecture of the model. It was the roofing on the building which rested on these three pillars, protecting it from “bad weather”. This tripolar system formed the basis for generally powerful economic growth in each of the three regions making up the post-war world. Because of this, added influence was given to those (centripetal) forces that guaranteed a certain coherence in the behaviour of the social actors, even when they were in conflict, by defining the boundaries of these conflicts.

This being the case, the implementation of these plans and their very success are at the origin of ideological illusions, which have powerfully influenced public opinion. In the West, people believed that endless growth was from then on a definitive gain. In the Third World, it was believed that national construction would eventually solve the problems of underdevelopment. In Eastern Europe, people believed in “socialism”.

The turning point in the situation, which put an end to this growth phase, is the combined product of the exhaustion of the three models making up the world system in the post-war cycle. This turnaround is plunging every region of the planet into a deep, lasting structural crisis. Today, no indicator suggests light at the end of the tunnel, not in the West, East or South.

The talk of those in power—even the most powerful—is that of managing the crisis, not of solving it. For example, it is no longer a question of doing away with unemployment in the West, but of “living with it”. They speak of a “two-speed economy” etc.

Now because of this, periods of structural crisis in the system are always stages in which centrifugal forces come to the fore. The confusion created both in everyday life (by the stagnation and even decline in economic and social conditions) and on the level of the ideology (by the collapse of the old illusions without the preparation of new ones) feeds these centrifugal forces.

At the end of the Second World War, capitalism as it actually existed as a world system still displayed two basic characteristics inherited from its historical formation.

National bourgeois states which were historically formed as such set the political and social framework for the management of national capitalist economies (national systems of production that were largely controlled and directed by national capital), and were in aggressive competition with one another. Together these states formed the centres of the world system.

The polarisation between these centres and the peripheries, since the centres had had their industrial revolution one after the other during the nineteenth century, had taken the form of an almost complete contrast between industrialisation of the centres and lack of industry in the peripheries.

However, in the course of the post-war cycle, these two features were gradually eroded. The peripheries, after winning back their political independence, came into the industrial age, albeit in an uneven manner, such that the apparent homogeneity created up till then by their shared lack of industry, gave way to a growing differentiation between a semi-industrialised Third World and a Fourth World which had not yet begun its industrial revolution.

The interpenetration of capital throughout the centres as a whole burst asunder the national systems of production, and began their restructuring as segments of a globalised system of production.

Can we then envisage a new stage in world capitalist expansion on the basis of a restructuring of the system, given the qualitative transformations noted here, and others such as the collapse of the Soviet system and its reintegration into the world market, as well as the beginnings of new technological revolutions?

If so, the post-war era could now be considered as the time of transition between the old system and the new one. The question now arises of how to define this new system, how to identify its main features and contradictions, how these are to be regulated, and what are to be the forces driving the dynamics of its development.

The answers to these questions necessarily involve an analysis of the laws which govern the accumulation of capital and an analysis of the political and ideological responses of the component parts of societies to the challenges with which the logic of capitalist expansion confronts them. It flows from this that the future is always uncertain, as the growth path of actually existing capitalism also gets conditioned in its turn according to the political outcomes of struggles brought about by the conflict of social interests.

The crisis of the Fordist model

It is useful to begin this analysis with a critical reflection on the famous “Fordist model”, which is now obsolete and which linked growth in productivity to increases in wages and consumption.

Capitalism, like any living system, is based on a certain number of contradictions which it continues to overcome throughout its existence, without of course doing away with them. The shaping of social forces, mechanisms and institutions which enables it to overcome some of its contradictions, forms—in a specific time and place—what may be called its concrete model of regulation.

From this perspective, we need first of all to identify the real contradictions of actually existing capitalism and how they interrelate, without coming to premature conclusions on the grounds that the system’s contradictions have had the same basic organisational structure throughout its history. Identifying the qualitatively different phases this structure has gone through—and hence implicitly its systems of regulation is important from this point of view. Regulation theories, in pointing to the uniqueness of “Fordist” capitalism, have certainly made a positive contribution to this task.

However, this contribution is limited and inadequate, given that these theories have, as it were, looked at Fordist capitalism through a magnifying glass and left the areas beyond that glass hazy and undefined. In other words, they have focussed their attention on the advanced centres of capitalism, forgetting that actually existing capitalism forms a world system and that the advanced centres at issue don’t give us a picture of what the rest will be like in the future. Nor can they themselves be understood apart from their relation to the world system taken as a whole.

Now any model of regulation which understates the intensity of some of the contradictions in the system must emphasise the sharpness of others. Thus 1 would like to connect the “crisis of Fordisrn” to other aspects of the global crisis of the post-war system.

Post-war economic development

The first long phase of capitalism, from the Industrial Revolution to the post-World War I period (1800–1920), is that of “heavy machine industry”, as studied by Marx in Capital.

This period saw the setting up of industry-based, self-contained national capitalist systems of production, built within the framework of the “new” bourgeois national state and enjoying its positive and active intervention.

The main way the regulation system works is national and political in nature. For capital it was a question of isolating the new working class, made restless and dangerous by its concentration in cities (given the technology of military control at that time, the barricade was still effective). To that end, the bourgeoisie made compromises, depending on historical conditions, either with the peasantry as a whole (as in France), or with the aristocracy (England and Germany). Different economic policies were put in place to shore up the bourgeoisie’s anti-worker alliance-protection of domestic agricultural markets, action to protect small and medium-sized land holdings, and manipulation of the tax base.

This system eased some internal social contradictions, but only by sharpening others, notably the contradiction between colonial states and their colonies and conflict among imperialist powers. This latter almost led to the collapse of capitalism at the time of the First World War, which led to the Russian Revolution.

The United States benefitted from World War II, which for it was an unexpected opportunity to simultaneously come out of the great crisis of the 1930s, speed up modernisation of production systems by generalising the Fordist model started in the 1930s, and to gain a position of leadership in all spheres, sadly symbolised by the use of its nuclear monopoly in the bombing of Hiroshima and Nagasaki in August 1945. By contrast, Europe and Japan’s lagging behind which was apparent after World War I (a lag marked by the weak penetration of the Fordist model), was aggravated by ongoing debilitating struggles between the victors and vanquished of 1914–18 and the Great Crash, and took on tragic aspects due to the massive destruction caused by war.

However, European and Japanese social fabrics were sufficiently strong to avoid a repetition of the revolutionary radicalisation of 1919. On the contrary, Europe in 1947–48 (Marshall Plan) and Japan in 1951 (San Francisco Treaty) launched into accelerated development along US Fordist lines.

In 1919, the historic compromise between capital and labour on which ideological regulation would rest was still in its infancy, even though the ideological preparation for it had been achieved by the massive rallying of the working classes to their imperialist bourgeoisies from the end of the nineteenth century. By 1945, all the conditions existed for its rapid implementation. The accelerated modernisation—Americanisation was carried out under US hegemony, which was accepted unreservedly (creation of NATO in 1949).

Theories of regulation of the system

Theories of regulation were formulated to advance the analysis of capitalism in this new phase. Labour and Monopoly Capital (1974), the remarkable work of Harry Braverman, broke new ground in dealing with the change to the labour process brought about by the production line.

Braverman put his finger on the essential point: the massive deskilling of labour that the new system implied, the substitution of “working masses” for the former skilled working class, the loss of control over the labour process by this new working class, all to the benefit of supervisors and managers fenced off from the production workers by leading hands become slave-drivers.

This new organisation of capital and labour simultaneously created the conditions for the appearance of a new system of regulation. This had become objectively necessary because the inherent tendency of capitalism to overproduce was getting more extreme. Labour productivity, greatly boosted by Taylorist rationalisation, would have generated surplus production which could not have been absorbed if real wages had remained relatively fixed.

But this new worker-mass, more homogeneous than that of the earlier stage, created a favourable climate for the spread of unionism. In the face of this, capital concentration and oligopoly formation took the place of former types of competition based exclusively on price (and in this type of competition the pressure on wages always remains strong). New kinds of competition also emerged which emphasised productivity improvements (which implies some sort of consent from workers) as well as product multiplication and differentiation. The scene was set for bosses and unions to negotiate a common wages policy, accepted by both partners (it’s from this time that the term “social partners” has been used to denote antagonistic classes!).

The state in turn came on the scene to ensure that policies negotiated by the most powerful and best organised partners would flow on to labour relations across the nation as a whole. The main contents of this new wages policy was simply to link wage increases to increases in productivity.

This new form of regulation dampened the average seven-year cycle that had been so typical of the earlier phase, because it introduced an element of investment planning. But it did not eliminate the system’s tendency to overproduce. The state again intervened to systematically promote a Department III (adding, with regard to the Marxist model of expanded reproduction, to Department I (production of the means of production) and Department II (production of consumption goods). Its job was to absorb the surplus.

Here we meet the decisive role played by US military spending in the period of post-war prosperity. Almost without interruption from 1940 to the present, that is for half a century, capitalism has found no solution to its deep tendency to stagnate apart from an enormous growth in arms expenditure. (This directly or indirectly accounts for a third of us Gross National Product, a percentage that the USSR only caught up with recently—in Brezhnev’s time—exhausting itself moreover trying to maintain.) Post-war regulation relied more on this enormous growth in military expenditure than on the accord between labour and capital. That’s why it’s unlikely that the system can adapt itself to a dramatic cut in this spending, which would plunge the US into a gigantic crisis.

Further, the “massification” of the labour process and the rise of mass production have had social and ideological effects without which regulation in all its aspects can’t be understood. The social compromise involved a shift in the underlying attitudes of the working class, giving up its socialist project and replacing it with the new ideology of mass consumption.

From that time the working class ceased to be what Marx expected of it: the liberator of society from economic alienation. For the first time bourgeois ideology truly became the dominant ideology in society. This bourgeois ideology was based on a separation between the political sphere, which it saw as being managed by bourgeois democracy (freedom, the multiparty system, and elections as a way of designating powers etc.), and the economic sphere, whose management (undemocratic) would be based on private property, competition and the rule of the market.

The new regulation carried through the erosion of democracy: the double consensus (political democracy, rule of the market) on which it rested reduced the impact of the former distinction between right and left, which was based on the counterpositions conservative spirit/spirit of change and possessing classes/popular classes. By the same token it opened the way for the expansion of the middle class and its leading role in the ideological shaping of society, by setting up a model “average citizen”, who would set an example of modes of consumption, social aspirations, etc.

The regulation at issue remained strictly national. It was built within the framework of self-contained systems of production which were still largely independent of one other, in spite of the interdependence associated with the global market. It was therefore only functional as long as the nation state effectively mastered not only the means at its disposal for managing the national economy, but also all types of relationships with other countries (commercial competitiveness, capital flows, technology transfers).

Such a state of affairs could only obtain in the central capitalist states. One should add that this regulation is only fully effective in those countries which are the best placed in the world hierarchy. In the less developed and relatively more fragile central capitalist societies the difficulty of marrying domestic social compromise with the requirements of international competitiveness leads to continuing severe crises in which reform efforts often fail.

At the level of the global system, regulation at the centre leads to the reproduction of unequal relationships between the centres and the periphery.

The most dynamic central capitalist powers benefit from all sorts of monopolies operating at a global level, attracting technological progress (the brain drain) and capital to themselves (contrary to the prevailing talk about “development” the norm is for the peripheries to export their capital to the centres). Because of this, privileged access to the peripheries is an important element in competition between the centres. The Fordist period (1920–70) coincided with the rise of the national liberation movements which achieved, from 1945, independence in Asia and Africa. This in itself modified the conditions of international competition, in particular by raising the importance of geopolitical stakes. All of this operated in favour of the us, which mobilised the anti-communism of the Cold War era to its advantage.

Seen from within the advanced capitalist societies, Fordist regulation may be described by the pleasant term “social-democratic”; from a world point of view (in a world in which three quarters of the people are in the peripheries), it would perhaps more deserve the less flattering term “social-imperialist”.

The decline of Fordist regulation

In any case the system of regulation of the Fordist period has no future. While this fact is acknowledged by all, most regulation theorists attribute it to the development of class struggles in the centre, in conjunction with the technological revolution: the working-class mass has developed forms of passive resistance which cancel out organisational measures aimed at improving labour productivity. The rate of profit has shrunk and capitalism has lost the flexibility needed for smooth functioning.

In addition, technological revolution is speeding up the development of new kinds of production. The productivity gains to be realised in the sectors of Fordist production are henceforth limited in the extreme (and moreover the needs satisfied by the kinds of goods produced under these conditions are close to saturation in the centre). By contrast, new technologies provide an extensive field for productivity gains, among other things through computerisation and robotisation.

This trend weakens the position of the Fordist working class (the unskilled but unionised worker-mass), which forms the social base of social democracy and is in relative or even absolute numerical decline. People often like to say that this trend is leading to a new skilling of the work force. That’s true, as long as one adds that this reskilling is taking place in a society dominated by the middle classes, whose importance is reinforced in qualitative and quantitative terms, that is, through the continuing erosion of previous forms of democratic political control of society.

This fact alone introduces considerable scope for uncertainty in political behaviour and, as a result, in the outcome of national and international conflicts. This uncertainty shows up in that apparent “incoherence”, not to say “irrationality”, which seems to rule the actions and reactions of today’s political actors to a degree that would have been difficult to imagine only a few years ago. This is the framework for understanding the (often working-class) “swing to the right”, which has to be taken seriously.

At the same time, the nature of the new technological revolution, more “capital saving” than “capital using”, which was the case in the previous great technological revolutions (railways, electrification, the automobile and urbanisation), aggravates immediate imbalances between the supply of available savings (product of a given national and world structure of income distribution) and the demand for productive investment (determined by the growth of productivity through the expansion of the technological revolution). As a result the trend to overproduction is further exacerbated.

This exacerbation is reinforced still further by financial globalisation which shows up as a mass transfer of capital from the peripheries towards the centres (the debt is one means among others for effecting this transfer). Sweezy and Magdoff (1966) have stressed, rightly in my view, the reactions of the system to this state of affairs, namely its headlong rush into speculation.

However, I would stress other reasons why Fordist regulation has been struck down by a fatal decline: the growing interpenetration of national systems of production at the centre of the system, and the shift presently taking place in the international economy towards, for the first time in history, a truly global economy.

This interpenetration cancels out the effectiveness of traditional national pollcles and delivers the system as a whole up to the command—and transgressions—of world market pressures alone. These cannot effectively be controlled in the absence of real supranational political institutions, not to mention a political and social consciousness really accepting of this new requirement of capitalism. And yet, this contradiction, which is new, in my opinion isnt open to “regulation”. It can only give rise to chaos and, keeping in mind what I’ve previously said about the degeneration of democratic political systems, a dangerous chaos.

It’s useful to stress these serious problems, and the uncertainty that they entail for the future of the European Union itself (in contrast with the de rigeur optimism displayed in this field), for the imbalances between the us, Japan and Europe which mark the new situation, and for the further, equally serious, unknowns introduced by the evolution of Eastern Europe and Russia. My conclusion is that the “national factor” is far from having been neutralised by the trends which globalisation will force on the economic system, and that it is, on the contrary, on the road to trying to prevail once more over the very logic of economic development. 

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