A-Infos (en) UK Solidarity Federation - DA #27 - Anti-globalisation ...and the myth of the ‘good' oppressor

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The anti-globalisation movement has spawned a number of
writers’ attempts to articulate its aims and rationale. At the heart
of some of the more popular arguments lurk suspect theories that
mistake the symptom for the cure.

Noreena Hertz argues that under globalisation, "governments are
reduced to playing the role of servile lackey to big business", whilst
George Monbiot, from a more radical perspective, argues that liberal
democracies will be overtaken by a "corporate dictatorship" and they
will have "the money, they will have the power, they will have the
security apparatus and we have very little indeed".

These writers in no way speak for what is, after all, a broad-based
movement, but many agree with these comments. However, such
views have a number of problems attached to them, mainly relating to
the role of the state at global level.

It is argued that technological change has led to the growing
internationalism of production, resulting in the emergence of
all-powerful multinational companies which can no longer be controlled
by the nation state. This argument holds that powerful multinationals
are able to impose their will on governments by threatening to transfer
production to a lower cost location within the global economy. In
opposition to this global economy, an anti-globalisation idea has
emerged which argues that, due to the weakness of governments in
the face of all-powerful multinational companies, electoral politics has
become increasingly irrelevant. Alongside this, the wider
anti-globalisation movement practices direct action on an international
scale, as the only effective means available to fight globalisation. This
latter response is fine, but there is a problem with the globalisation
theory of declining state power.

A key problem with this ‘enfeebled state’ argument is that it
carries the assumption that, before the rise of the global market, the
state acted as a benign force of democratic control in the interest of
people against the power of capitalism. This, in turn, leads to
accepting the idea that the state has checked the power of capitalism
in the past, and can do so again in the future. Before we know it, direct
action is actually a means of re-establishing state control of
capitalism. Thus, we have Hertz arguing that direct action is the only
alternative, until "the Government regains the trust of the electorate,
the people will continue to scorn democracy", while George Monbiot
argues for a democratic world parliament, presumably to police the
world economy from an ‘anarchist’ perspective (a rather
contradictory notion).

In order to put the ‘benign state’ idea in context, it is worth
referring back to the history of the state and its relationship with early
capitalism. We have only to look at the birth of capitalism in England
in order to reveal the nature of that relationship. England only emerged
as the world’s first industrial imperial power because of state
support. The state sheltered England’s manufacturing base from
foreign competition through a whole host of draconian measures,
including wrecking the manufacturing base of the countries it invaded
to make them dependent on British finished goods, and introducing
laws that forbade the newly-colonised countries from exporting raw
materials to anywhere but England. The export of raw materials from
Britain was either taxed heavily or banned outright to ensure virtual
monopoly supply, while the import of finished goods was either heavily
taxed or banned, and the state subsidised the export of manufactured
goods. At a stroke, this ensured a cheap supply of raw materials and
new markets for England’s emerging manufacturing base.

It was the power of the state, too, that ensured the emergence of a
disciplined workforce essential to the factory system. The state
moved against the power of skilled workers by breaking the monopoly
of the guilds, which dominated production in the towns. Peasants were
run off their land, and ruined craftsmen were driven into the horror of
the factory system by laws that persecuted, punished and even
executed the ‘vagrants’ who had been driven out of their
living. State power made sure the maximum wages payable were fixed
and the price of corn, the staple diet of workers, kept high. This was
not only to ensure profit, but to turn the workers into a disciplined
class of wage workers (or early ‘stakeholders’). The early
factory workers dismayed employers by working a couple of days until
they had enough money to live, then devoting the rest of the week to
"carousing and drunkenness." Over two centuries, as working-class
resistance grew, a whole barrage of laws, backed by brutal state
force, were deployed in order to break the working class challenge to
capitalism.

Above all, it was the coercive powers of the state that overcame
competitors and maintained rule of the colonies - without which the
English capitalist class would not have emerged as a world power. In
the 16 th century, the English State waged war against the Spanish,
defeating them and driving them out of their colonial acquisitions. The
17th century was taken up with defeating the Dutch, another colonial
power, while in the 18th, the French were routed. By 1797, Britain had
been at war for 66 years - the outcome being that England emerged as
the foremost seafaring and colonial commercial power in the world.

two key questions

This quick delve into history raises two important questions
concerning the globalisation thesis. Firstly, given the bloody history of
the state, how exactly has it been transformed into a force for good?
Secondly, as the state has played such a supportive role to capitalism
in the past, why has it suddenly dispensed with its services? Sadly,
the answer to both these riddles lies more in the flaws of the
globalisation argument than in what is taking place in the world.
Whilst demonising the more rampant elements of corporate
globalisation, the more moderate wing of the anti-globalisation
movement has also tended to accept as given some of the key
elements of free market thinking.

The whole global market idea started out as a free market construct
which envisaged a conglomerate of powerful companies, strong
enough to undermine government intervention and organised
workers’ struggle. In response, some anti-globalisation arguments
took on board the idea of the state as a positive force, citing the loss
of state control as the cause of rampant free market capitalism. Given
the rise of state welfare, the notion of state intervention in the
economy coupled to the whole social democratic notion of the
democratic state, it is not hard to understand the attractiveness of the
idea of the elected government seeking to control capitalism in the
interest of society. However, to accept this is to ignore the mutually
supportive relationship in which both state and capitalism exist.

nanny state nonsense

The notion of the ‘benign’ and ‘protective’ state acting
as a check and a balance against rampant capitalism is rooted in the
1930s, when governments allegedly stepped in to manage the
economy, not in the interest of profit, but as a means of boosting the
economy in order to alleviate mass poverty. This is a touching picture,
but one based more on social democratic myth than on reality. In the
late 1920s, there were socialist governments in England, France and
Germany, all determined to tame capitalism through state control.
They all came to nothing. The limited attempt at boosting production to
alleviate poverty, both before and after the war, ended in relative
failure and was quickly dropped.

It was the state acting in its more traditional role of providing military
hardware for the benefit of capitalism that dragged the capitalist
economies out of recession. It was not until the arms race began in
earnest in the run up to the Second World War that recession lifted
and living standards improved. After the war, military Keynesianism
proved most effective in boosting economic activity. The war in Korea
gave powerful stimulus to European and Japanese economies. Later,
the war in Vietnam further enriched Europe, while helping to raise
Japan to a major industrial power and sparking the rise of what were to
become the ‘Asian Tiger’ economies.

These wars also formed part of the general capitalist fight against the
threat of communism. The aim of the state was not to boost military
production as a means of raising living standards; far from it. Rather, it
was to support the US in the fight against communism while boosting
the profits of the arms and related industries within its borders. In
short, the state was pursuing its familiar historical role in support of
capitalism.

The fight against communism was not the only thing occupying the US
state in the mid-20th century. America emerged from the war as the
world’s dominant military power, and the US government set about
ensuring that the US capitalism was able to take full advantage of its
dominant position.

war state profits

Awash with profits from the war, the US lent Europe the dollars with
which it could purchase US manufactured goods. The US government
also attempted to reconstruct Europe specifically to suit US interests.
The European industrial nations were to be rebuilt as a check on the
Soviet empire, but in a way that did not challenge US dominance. Part
of the deal was based on relieving the European countries of their
colonies - most notably in the Middle East, where Britain was forced
to relinquish its hold over oil rich countries in return for being allowed
to play the role of a client state, doing the US bidding in the region.
This is a role it still plays today.

Nor was Europe the only area occupying the US government. The
world was carved up in the interest of US capitalism and to meet the
needs of US foreign policy. In the areas of the world deemed essential
to US capitalism, most notably South America, the US state embarked
on a brutal campaign of repression. As early as 1948, a comprehensive
defensive review argued that; "we should cease to talk about vague
and unreal notions such as human rights, the raising of living
standards and democratisation. [We must] deal in straight power if we
are to maintain the position of disparity that separates our enormous
wealth from the poverty of others". Like the British Empire before it,
the US Empire sought to maintain, by the most brutal means, the
whole of South America as an area that "sold raw materials to the US
while absorbing US surplus".

Instead of mourning the loss of state power, as many of those within
the anti-globalisation movement do, it should be a cause for
celebration. At least multinationals are not armed to the teeth; the
branding power of Coca-Cola fades into insignificance when placed
besides the military might of the US. This is precisely why the
multinationals need a powerful state, as one commentator said; "the
hidden hand of the market will never work without the hidden fist of
the state".

home truths

At this point, the whole globalisation argument breaks down. The idea
of the footloose multinational company heading overseas to escape
the civilising clutches of the state is a joke. All the evidence shows
the opposite; the assets of companies remain at home, located within
the country in which they are based. For instance, in the US, 70% of
company assets remain within the US, while in Japan, the figure is
even higher at 90%. In Europe, the situation is more complex due to
the emerging nature of the European economy; for example, 31% of
French manufacturing and 31% of service assets are relocated, but
only within Europe. A survey conducted in the early 1990s confirms
that the European economy acts in similar ways to the US and Japan.
Some 200 of the biggest European companies state that over the next
five years, they expect 93% of production to remain in Europe, to buy
80% of inputs from within Europe, and sell 83% of their output in
Europe.

nanny state reality

So, the evidence points to companies operating within clearly defined
national borders. This is hardly surprising, given the amount of
subsidies, both hidden and direct, that the state provides for the
corporates. Hidden subsidies range from providing the basic
infrastructure through to the provision of an appropriately trained
workforce. Given the technological advances of capitalism and the
need for an ever more skilled group of core workers, there is plenty of
evidence that the multinational is even more dependent than ever on
state education provision. Further, whole industries remain dependent
on government contracts, not only the defence industry, which in
advanced countries is little more than a subsidised arm of the state,
but in sectors such as IT, electronics and aviation, which rely largely
on government and defence contracts to underpin profits.

More direct forms of state subsidy include the government bailout. In
the last 20 years, over 20 companies in the Fortune 100 owe their
prolonged existence to government bailouts. During the same period,
several financial crises which had the world financial system reeling
were all bailed out by the advanced states via the IMF and World
Bank, including the saving and loans scandal in which the US banking
system was bailed out by the US government.

Overall, this is hardly a picture of globe-trotting companies imposing
their will on enfeebled states. Rather, it is that of powerful companies
rooted in defined national borders reliant upon state subsidies at home,
while looking to use the economic and military power of the state to
extend themselves in the growing international markets. Nor is there
much evidence that the power of the state is set to wane in the future.
With the threat of the Soviet Union gone, the old post war alliances
amongst the advanced capitalist states are starting to fry. The US is
attempting to use its massive military power to ensure its dominance
in the Middle East, while Europe is looking to turn economic muscle
into wider political and military power. The fall-out over the Iraqi war
is symptomatic in the changes that are taking place.

the problem, not the cure

For all the welfare benefits post war social democracy brought, the
state’s primary role remains that of a powerful supporter of
capitalism. To argue that current world inequalities are the result of
the ability of multinationals to dictate to governments simply does not
wash. The state has always acted in the interest of capitalism, and
capitalism is dependent on a strong state in order to survive. In other
words, the state is the problem, not the cure.

Not only is the anti-globalisation argument of declining state power
simply wrong, it is dangerous, since it has within it the potential to
rejuvenate the failed ideas of the pro-worker state. Instead, we need
ideas based on the reality of the world we inhabit, and rooted in the
day-to-day struggle. I am not alone in going on demonstrations as part
of a movement that seeks to put much of the world’s ills down to
the loss of state power, only to be attacked on the demonstration by
the forces of the state.


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