Death By Globalism – Economists Haven’t Got a Clue
Posted by Jeff on September 2nd, 2010
Neither side in “The Great Stimulus Debate” has a clue that the problem for the U.S. is that a large chunk of U.S. GDP and the jobs, incomes, and careers associated with it, have been moved offshore and given to Chinese, Indians, and others with low wage rates. Profits have soared on Wall Street, while job prospects for the middle class have been eliminated. | Paul Craig Roberts | CounterPunch
September 2nd, 2010 at 4:16 pm
Politically, I think that this type of one-sided analysis lends itself to reformism. So, I would like to suggest some simple (and unelaborated) theoretical alternatives to some of the points raised in the article.
Job loss
I think a better analysis of the current situation would link the job loss in America from the 1990s to present primarily to investment in capital equipment and a concomitant increase in the productivity of labour; or, in Marx’s more technical language, to a rising organic composition of capital. As work becomes more mechanised, fewer workers are required. In not so few words, Kim Moody, in his US Labor in Trouble and Transition (pp. 15-26), makes a strong empirical case for just this. Of course it goes without saying that the dynamics of this crisis have added to the job loss in more complicated ways. I also agree that off-shoring has created job loss for Americans, but I think the effects of off-shoring are greatly exaggerated.
Globalization
According to Marx, the rising organic composition of capital generally expresses itself in a falling rate of profit. Workers are the basis of profits. As machines are introduced and workers are laid off, the profit rate declines. I believe that the falling rate of profit is the fundamental factor driving the current phase of globalization. In the face of falling profits, competition increases, and capitalists are driven harder to secure cheap sources of labour and inputs. Of course, in accounting for this phase of globalization, we must also take into account the secondary effects of the technological advances made in transportation and telecommunications throughout the 1980s, the structure of the world economy (supply chains, forms of world money), etc.
Crisis
I also think that we must understand the severity of the current crisis as a result of the falling rate of profit. In the rising organic composition of capital interpretation of the crisis, we won’t come out of it without immense suffering.
It’s time to stop putting off socialist solutions. Here, I repost the IMT Manifesto.
September 2nd, 2010 at 9:49 pm
Paul Craig Roberts is no socialist; he describes himself as a classical conservative. His writing is eloquent, and I agree with much of his analysis, though perhaps from a different standpoint. A lot of the value of his critique is that it shows that meaningful reforms cannot instituted without challenging capitalism.
PCR suggests taxing corporations based on the value added in their offshore production. In reality, it is a sophisticated tariff. I am all for expropriating more of the profits of capital, but in a context of widespread systemic transformation. The point that weighs on me is the question of what strategy and tactics a worker’s state would use to take over the means of production. The point is not to coerce capital into exploiting people in North American rather than abroad, but rather to interfere in the expanded reproduction of capital and produce “socialist accumulation”.
We struggle for reforms without being reformist, but when the working class is not radicalized, there is a limit to what can be achieved. So we take the reforms, and organize for future struggle.
September 4th, 2010 at 9:09 am
BLT, I would like to raise a couple of questions from your comment: One regarding tariffs, when you support them, and how they allegedly cut into profits; the other on reform and revolution.
I’m unclear of what you mean by, “In reality, it is a sophisticated tariff. I am all for expropriating more of the profits of capital, but in a context of widespread systemic change.” Does that mean that you would support raising tariffs as a way of cutting into the profits of capital generally, but you would explain your support within the context of widespread systematic transformation? Or do you mean that you would only support the introduction of tariffs by a country that is undergoing a socialist revolution?
Regardless, I do not think that tariffs provide any means of cutting into the profits of capital. The experience of imperialism leading up to the first world war shows that tariffs provided protection for producers in their own nation, allowing them to drive up prices on the national market, to facilitate dumping on the international market. Tariffs did not reduce profitability, they were only a means to protect established industries and boost their international competitiveness. This leads to the sharpening of differences between capitalist states and this is what led to WWI.
Raising tariffs is not a transitional demand. It does nothing to create a dual power between workers and capital and it does not challenge the system itself. And since it would lead to a general tariff war, it isn’t even a very good reformist demand.
Regarding the struggle for reforms without being reformist, I think that it is clear that we should offer support for the demands of workers movements and organizations, but it should be principled support. I think that Rosa Luxembourg in Reform or Revolution correctly explains the pitfalls of reformist struggle without principled positions:
“What will be the immediate result should our party change its general procedure to suit a viewpoint that wants to emphasize the practical results of our struggle, that is social reforms? As soon as “immediate results” become the principal aim of our activity, the clear-cut, irreconcilable point of view, which has meaning only in so far as it proposes to win power, will be found more and more inconvenient. The direct consequence of this will be the adoption by the party of a “policy of compensation,” a policy of political trading, and an attitude of diffident, diplomatic conciliation. But this attitude cannot be continued for a long time. Since the social reforms can only offer an empty promise, the logical consequence of such a program must necessarily be disillusionment.”
The disillusionment that we see today it the result of the failure of the leadership of the proletariat and their organizations that cynically abandoned revolutionary aims for immediate political aims. In our support of struggles for reforms we must always put forward the principled transitional revolutionary demands.
September 4th, 2010 at 9:16 am
*I raised points, not questions.
September 4th, 2010 at 12:12 pm
A country in the midst of a socialist transition will have expropriated the major means of production and distribution, banks, and so forth. Tariffs do protect native industry; the socialist country is not going to allow cheap capitalist commodities to flood its market. It is also going to want to raise revenue at the expense of the capitalists. Domestic measures of expropriation and taxation (the latter simply being the expropriation of money) keep domestic capital from expanded reproduction. Tariffs also raise money. Ultimately, a socialist country would want to set up a socially-owned monopoly of foreign trade. This is a powerful lever of socialist accumulation.
The point is that all strategies of socialization will entail fiscal, commercial, expropriative and even monetary tactics. Naturally, I make the assumption that a mass movement has already brought a worker’s party to power.