Issue 190 of SOCIALIST REVIEW Published October 1995 Copyright Socialist Review

Who will control the 21st century?

War and revolution, famine and disaster have been a feature of the global capitalist system this century. In a speech at Marxism 95 John Rees examined the limits of the free market and argued there is a socialist alternative
Who will control the 21st century?

There is a great fear about the social and economic forces that are shaping human society as we reach the year 2000--the fear that human beings are less in control of their destiny than ever before.

I want to try to focus on four issues around which that mood is expressed: the globalisation of the world economy, the population explosion, nationalism and the 'disappearance' of the working class.

The question of globalisation has created a myth whose believers are found right across the political spectrum. It is argued that the world has developed a borderless economy, in which the huge multinationals have such great power to move capital, jobs and money around the world that no state and certainly no working class has the possibility of successfully standing up to them. The chairman of Dow Chemicals has said that he has 'long dreamed of buying an island owned by no nation and of establishing the world headquarters of the Dow company on truly neutral ground--beholden to no nation or society.' Now he wouldn't actually like to be beholden to no nation or society. Nations and societies provide the markets for companies like Dow Chemicals. But such myths have two very powerful vested interests arguing their case. For every conceivable shade of conservative opinion, it makes enormous ideological sense to appeal to a global market in the face of which no state and no working class can possibly resist. If 'they' try to impose the minimum wage or decent trade union organisation this will simply increase the costs of production in 'their' particular patch of the global market and force jobs and firms to go elsewhere, 'It's not me, guv, it's the global economy that's to blame.'

The right are not the only people attracted by this argument. Gordon Brown, Tony Blair and every stripe of social democrat around the world is equally attracted. They argue that in a borderless economy we can't afford to impose costs on 'our' capitalist class which won't also be borne by every other capitalist class as well. So the argument provides an alibi for everyone from the hard right through to the reformist left.

There is a grain of truth in this argument. It is undoubtedly true that world trade, world finance and the international production of commodities have grown enormously in the postwar period. Foreign direct investment--the international investment by global companies in countries other than their country of origin--has risen sharply and the rate at which it has grown has increased in the last 20 or 30 years.

World trade, international financial transactions and foreign direct investment have grown both between the advanced industrialised countries and, much less but still to some extent, between the advanced industrialised countries and poor developing countries. But there are very strict limits. Multinational companies are not bodies inhabiting somewhere like the Cayman Islands and which owe no allegiance to any nation state. They are not institutions which are based on no particular patch of ground but who exploit with almost magical ease their ability to move capital around the globe. That picture is completely and utterly mistaken.

The vast majority of multinationals have most of their assets in a single country. The top multinationals in the United States have total assets of $1,300 billion. Of that, $1,000 billion is invested in the United States itself. So quite a small proportion of US multinationals' total assets lie outside their home country. Of top Japanese multinationals, with total assets of $750 billion, fully $500 billion lie within Japan itself. Germany's top multinationals, with total assets of $250 billion, have fully 60 percent in domestic assets.

When you begin to look behind the mythical picture of the global international company, you can see why this is necessarily the case. When it comes to dealing with a workforce, with relations between nation states, with the enormous disproportion of wealth and power between the poor and the rich countries, between the different classes, it's not the case that any capitalist corporation wants to take these costs on its own shoulders. Hanson Trust does not want to run its own police force. BP doesn't want its own army or prison system, much less its own education or welfare system or to build its own roads between different factories. All capitalists necessarily rely on a state to do this. When Frederick Engels said that 'the state is an executive committee for the management of the common affairs of the bourgeoisie', he meant quite simply that the capitalist class cannot get by in a world inhabited simply by competing firms. The capitalists need an institution which deals collectively with the working class enemy and with the preconditions of capitalist production in terms of railways, social services and educating the workforce.

The nation state is still very important to all this. Large chunks of American capitalism would be bankrupt now if it weren't for the federal rescue of the savings and loans banks. But competition between capitalist rivals on the international market is not simply a question of economic strength, lower wage rates or cheaper costs of production. It's a question of military power as well. When it comes to protecting oilfields, it is not good enough simply to have a board of directors in Shell or Exxon, you need the American marines as well. These are common functions needed by the whole of the capitalist class without which no capitalist corporation would dream of attempting to get by.

Take the example of the Ford Motor Corporation and the American and German states in the 1930s and 1940s. Multinational capital may primarily depend on one state, but it also depends on developing relations with other states. Before the war Ford got considerable subsidies from the Nazi state for building plants in Germany. There was an unfortunate upset in business relations in the early 1940s and the Allies bombed Ford factories in Germany. After the war Ford demanded reparations from the American government for the damage done to its factories. Of course a multinational corporation will have relations with more than one state, of course it will attempt to exploit divisions between the states, but it ultimately relies upon one state or another--and characteristically on one state in particular--for its well being.

Indeed, it's not even true that there are global markets for everything. You can talk about a world market for airlines but it's more difficult when you come to talk of some other things. It isn't that easy to sell a global product. They tried selling 7 Up in Shanghai but couldn't figure out why it wasn't shifting until they found out that in the local dialect 7 Up means 'Death through drinking'--there are limits to the global market.

We are not seeing, as Newsweek's front cover recently predicted, 'the withering away of the state because of the development of capitalism'. On the contrary the state is with us and is more powerful economically than it has been at any point in the 20th century. The state will remain the inevitable partner of private capital, they need each other, depend on each other and will continue to do so into the 21st century.

But there is something that the growth in the world market begins to change--it raises the stakes of international competition between states and firms. When huge corporations are locked in a global battle for supremacy, if one of them goes bankrupt huge chunks of the system slide into bankruptcy with it. Millions of lives are affected, which is exactly why there are the state funded rescues like the savings and loan rescue in the United States. When the Economist predicts that 30 percent of the big European firms will close or merge by the turn of the century you can begin to understand the cost to ordinary people. Having a society organised on the basis of competition for profit means the jobs, the wages and conditions, the trade union rights of those people are under constant attack. So the growth of the global market intensifies the rivalries between firms and states, both within and between national economies.

Fear about the population explosion is best summed up in a book by Paul Kennedy, Preparing for the Twenty First Century. In a typical description, he says:

There you have the argument in a nutshell, given a new ecological twist for the late 20th century.

It is, however, not a new argument but has a very long pedigree. The idea that the population explosion was going to overwhelm human society was put by its most famous exponent, Thomas Malthus, in 1798. He argued that it was inevitable that the population would grow faster than the means to feed it. In such circumstances wars, death and malnutrition would cut the population back to a level at which it could be sustained by the available agricultural and industrial production.

Actually, Malthus was completely wrong in his prediction. In the century after he wrote, the population grew by four times but the national product grew by 14 times as a result of the industrial and agricultural revolutions. There was also massive migration. Around 20 million people left Britain between 1815 and 1914. The British population in 1900 was 41 million rather than the 71 million it would have been without this migration. So there was quite different social development than the one which Malthus outlined.

A natural disaster?

Is it possible today, even with much greater numbers, to conceive of human beings developing their capacity to produce to the point where they could actually feed a much bigger population in the next century? When you begin to examine the huge productive capacity that human beings have at their disposal, it becomes quite clear that such possibilities do exist. The United Nations recorded in 1976 that there would be no difficulty whatsoever with the existing knowledge and resources in doubling world food production. More recently, the United States Agency for International Development predicted, 'If the arable land of our planet was cultivated as efficiently as farms in Holland the planet would feed 67 billion people, 17 times as many people as are now alive.' It's obvious therefore that even with much more marginal increases in agricultural productivity the population of today's world, and any conceivable population in the first quarter of the next century, could be fed with the resources human beings have at their disposal.

Indeed, any further agricultural or industrial development would also begin to slow down the birth rate. All the projections of a massive increase in population rest on the idea that the birth rate will continue to expand in precisely the way that it is at the moment in the poorest countries. Actually, with industrialisation, agricultural development, literacy, education--the advance of society--the average size of families falls. The world contains the possibility, both materially, technologically and in terms of its potential development, to have a completely different pattern of population growth from that outlined by the more gloomy of the neo-Malthusians.

Eric Hobsbawm in his book Age of Extremes makes the point that during the postwar boom:

Even under capitalism, at least in times of economic expansion, food production grew more rapidly than the population. In the rich industrialised countries there is not any crisis of population growth. In fact, there is going to be a declining workforce capable of sustaining the level of industry we have at the moment. Population growth tends to be outside the centres of developed industrial capitalism. There will therefore be--as there was in the 19th century--migration.

And so what is important is the expected change in population growth between the advanced countries and their nearest poor neighbours. Paul Kennedy says:

The terrible tragedy is that the racist immigration policies being enforced by both social democratic and conservative governments across the world are stopping precisely those migration flows which could ease 'overpopulation'.

The difficulty for the capitalist governments of Europe is summed up brilliantly by a phrase from Henry Ford, who said, 'How come every time I want a pair of hands I get a human being?' It's not that they don't need Labour, what they don't need is the human being. Immigration controls are inevitably tied up with whether or not the freedom to move around the world is profitable for Henry Ford's successors.

That is a social problem, not an ecological problem, a problem of class relations, not an absolute problem of overpopulation. The Malthusians want to make what is a social, political and economic problem into a natural and therefore a problem.

The prospect before us involves a choice. There can be a famine, starvation, death on an absolutely enormous scale--but not because there is some natural problem of overpopulation--or working people can take control of that enormous proportion of the world's capital which lies in private hands, putting to work the productive capacity that now lies idle. The alternatives are a man made catastrophe like the 19th century Irish Famine--but on a global scale--or socialism.

The same the whole world over--Greek workers on general strike

The third question, that of nationalism, reflects a society which is unequal, divided and incapable of providing the most elementary means for the survival of many of its inhabitants at the same time it has enormous competition organised, policed and enforced by the most powerful state machines that the world has ever seen. Such a situation cannot help but breed nationalism. It's not very surprising that the disproportion between the available means of subsistence for the mass of the population and the enormous growth of the state machine at the head of society produces conflict: an expression of the incapacity of society to make use of its resources in national and ethnic terms.

When resources are 'scarce'--when scarcity is artificially produced by the system--then sometimes people look for the one force which seems capable of snatching from the people next to them the resources that will enable them to survive. The competition between states is a way of enforcing, bolstering, fighting for a share in the global market place. It can begin to seem to people deprived of the most elementary means to life as the only way of surviving in a conflict ridden and hostile world.

The desperate desire to create your 'own' state, to be loyal to your own state, to use it to try and carve a niche in the world market to defend whatever scraps you have managed to gain can become one of the prime motivating forces in society, as we can see in the former Yugoslavia, in the former USSR, in the African states. Time and time again the same pattern: the need, the misery, the unemployment, the starvation, the famine finds an expression in terms of national or ethnic identification. In sub-Saharan Africa up to the borders of South Africa there are 450 million people surviving on the same Gross Domestic Product as that produced by 11 million Belgians. It is all too easy to see what forces push people towards ethnic and national conflict.

But at the same time, there can be other expressions of that same conflict. In Yugoslavia the situation is now a horrible nationalistic war, but it emerged first of all as a general strike. Only after the strike was defeated was there a nationalistic war. Eric Hobsbawm, for instance, has reproduced diaries of soldiers in the First World War as they start out in a huge national conflict, riven by chauvinism and nationalism. But as hardship and the desperation of war eat away at that patriotism they become radicalised--they become revolutionary. They begin to see that there is not just one national alternative to a world in crisis, but that there is a second, class, alternative.

The more the dynamism of the system rips apart the old stability, enforces the bankruptcy of huge multinational firms, the more old loyalties to state and government, begin to break down. Politics can polarise violently to the right in national terms, but it can equally quickly change when that same nationalism fails to deliver the hoped for change. Politics can equally polarise to the left. That was the experience in a similar period of world crisis in the run up to the First World War and in the revolutionary wave which followed it because national divisions can never obliterate the class divisions within the nation. In Brazil 67 percent of total income is owned by the richest fifth, and just 2 percent by the poorest fifth. In the US 59 percent of total income is owned by the richest fifth and just 5 percent by the poorest fifth--which makes the US a more unequal society than Egypt where 48 percent of the total income is owned by the richest fifth and just 6 percent by the poorest fifth. Class divisions periodically break out and begin to develop a whole different logic, a different possibility of how the world can change.

That brings us to the final question--the existence of a class which can provide an alternative to all the misery of capitalism. It has been fashionable, at least since Eric Hobsbawm's essay, 'The Forward March of Labour Halted', written some years ago, to argue that, certainly in industrialised countries, the working class has become a minority of the population, a shrinking force. It is said that this is reflected in working class defeats and in the decline of trade union and social democratic party membership. It is fitting therefore that the rebuttal to that argument comes from Hobsbawm's new book. In Age of Extremes this is what he says:

And here he is simply talking about the industrial working class--not even about the white collar working class, which expanded massively in the industrialised countries over the same period.

Although globalisation obsesses the establishment economists, they fail to see that the same process inevitably brings with it the growth of the working class. On the Mexican border in 1965 there were just 12 textile and electronics factories--now there are 516. In Egypt the numbers of workers in agriculture rose from 38 percent in 1960 to 50 percent in 1970. There have been massive bursts of unionisation in South Africa, Brazil and Korea, for example. Those countries which had between 30 percent and 50 percent of their working populations in unions in 1980 included Algeria, Tanzania, Argentina, Chile, Barbados, Ethiopia, Fiji, Guyana, Singapore, Sri Lanka, Venezuela, Columbia, Egypt, Gabon, Jamaica, Mexico, Trinidad and Tobago. We are not facing a world where workers are becoming less numerous but a world in which workers have never been as numerous as they are today, and in many cases are stronger than they have ever been. Hobsbawm's mistake was to see a fundamental change in the class structure--the disappearance of the working class--where in fact there were only setbacks.

And of course there have been defeats, of course unemployment and 20 years of stagnation and slump have taken their toll. But those are not the inevitable product of the way in which the world works, those are products of argument, of discussion, of organisation, of debate, of political strategy. Different organisation and tactics can reverse these defeats and turn the potential power of workers into a real power that can reorganise society.

When we look at the prospects for the world in the 21st century, we see a world rich enough to meet the needs of its population and a working class powerful enough to defeat its enemies, a world where workers have everything to win and a great deal to lose if we don't fight. And that is the point of all the right wing arguments: to demobilise, to deactivate, to force us into passivity, to force us to believe that the existing order is the natural and inevitable order. We have a world which, if we allow it to continue to work in the way it works now, is capable of barbarism on a scale that previous centuries would have found unimaginable. But at the same time, at its heart, it has a working class bigger and better organised than the working class which Karl Marx wrote about and which has every possibility of seizing the unprecedented wealth that the world produces and putting it to work for the good of humankind.


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