I am most grateful to the editor of this journal for allowing me to comment on Phil Marfleet’s review of my recent book in International Socialism 101 (Winter 2003). It is bad taste to comment on a review of one of one’s works, but since Phil is – like a few other SWP members – an old friend, it would be discourteous not to note his hard work and his stout defence of the faith. It is also an unexpected pleasure, as a former editor of this journal’s immediate ancestor, to contribute to your discussions. Phil has misconstrued some things, but has got much of my case right. I list some points:
The context: a little history
In the spring of 1960, when Tony Cliff and Michael Kidron with a small group of us started the first series of International Socialism, it had a subtitle, Journal of Socialist Theory. By implication, what passed for socialist theory – after the ravages of Stalinism and the successive dilutions of social democracy – was quite inadequate for an understanding of the modern world, let alone for undertaking action that connected aims and strategy. Without constant reconnection between aims and a rapidly changing world, theory easily became a set of quasi-religious mantras, esoteric marks of group identity rather than guides to action – and the history of Trotskyist sects is sadly replete with too many examples.
Tony Cliff began this reconstruction of theory in his application of the concept of state capitalism to Russia, Eastern Europe and China, and his rejection of Trotsky’s absurd idea of a ‘degenerated workers’ state’. Mike Kidron set out to understand why world capitalism, characterised before the Second World War as apparently in permanent stagnation (in Trotsky’s 1938 Transitional Programme, the epoch was one of war and mass unemployment) was in the 1950s expanding with unprecedented speed (and far from mass unemployment, was sucking workers in from the rest of the world). His answer turned upon unprecedented levels of peacetime arms spending, lowering the organic composition of capital and thus offsetting the tendency of the rate of profit to fall, a thesis later absorbed into his idea of permanent waste in the system.
However, more important in my view was his analysis of foreign investment in India and the transition from the old order of capitalism, imperialism (identified in his last unpublished manuscript as ‘middle capitalism’, between the primitive accumulation phase and the present order), with a built-in competitive drive to the expropriation and incorporation of territory. By 1960 that drive had largely gone into reverse and decolonisation was all the rage. In his work on India he identified – in my view, with remarkable prescience – the transition to a post-imperial order, ‘world capitalism’. He showed that much of what we identified as essentially capitalist – for example, the size of firm and its relationship to the state – was in fact only a feature of the old order. In the new order that was emerging, he found what we were to describe a decade or more later as ‘multinational corporations’ which did not depend on any one state but related to many states.
In the second half of the 1960s, with a radical transformation of the political scene, IS turned to building a party, to intervene in events rather than analyse them. Mike Kidron, already identifying the green movement as the most appropriate spearhead of radical social change in the current phase of the system (a commitment most fully worked out in his final manuscript in the 1990s), reacted to the proposal to transform IS into a revolutionary party as characteristic of the old order of capitalism, imperialism and the centralised fusion of state and capital. He left IS to service the new radical movement through publishing. However, he continued some work and seems to have remained fascinated as late as 1977 by the dominant role of the state in modern capitalism, the onward march of state capitalism,2 a view in my opinion justly reproved by Chris Harman for omitting the phenomenon of globalisation. By contrast, I had gone in the opposite direction, believing that globalisation would wash away the foundations of state capitalism and privatise the state, a thesis explored in my current book. But in the end Mike completed his project, in the 1990s, in his unpublished manuscript.3
However, the purpose of this little excursus is not to indulge an old man’s sentimental reminiscing, but to indicate that the founders of this journal saw the bold critical rethinking of theory, with the overall objective of the self-liberation of the working class and of humanity, as crucial for action. Much of Phil’s self-righteous indignation seems to be directed at any such enterprise. Like those Muslims who believe that the whole of useful human knowledge is already incorporated in the Koran, Phil seems to imply that everything we need to know is already known.
I started my work from the accelerating globalisation of the 1980s and 1990s, propelled initially by trade, then by capital movements, and now by services and the migration of labour. The work Phil reviews is the fifth book4 trying to understand the implications of globalisation for our theoretical inheritance. In many of these earlier works I dodged what was apparently the inadequacy of the traditional Marxist view of the relationship between private capital, business and the state, merged in the single concept, capitalism.
Globalisation, however, glaringly exposes this inadequacy, and reveals just how narrowly national the analysis of Marx and the Marxists has been – with the ‘international’ (relationships between states) grafted on as an afterthought. Of course, we could not have seen this in the heyday of a system then dominated by states and national capitals, nor perhaps could we have seen that, historically, those who wield the forces of physical coercion, states, always dominate all other social forces, including capital (not the other way round).
So what is ‘globalisation’?
It is, in my book, the tendency for the emergence of a single world economy out of the national components of the old system. Economic networks, political boundaries and citizenry come apart. It is a blind process, driven by markets, not the intentions of the participants. Governments, out of short term interests, sometimes facilitate the process or are forced to do so; sometimes they fight it, but even when they facilitate it, they do so with great reluctance since they recognise that it undermines the forms of their old domination over a clearly defined territory, a share of the world’s population and of the world’s capital stock. Above all, globalisation allows capital to escape the state, to go offshore – the old national economy becomes a fragment of a global whole which is ultimately outside the control of the state. There are a host of ramifications which are the substance of my book.
If my formulation is correct, it transforms what we suppose is the historic relationship between capital and the state. I was obliged to re-examine the historical record. That was the point of my historical introduction. I was not concerned with history in general, only a narrow slice related to my theme. Phil does spend a lot of time on the history and obviously feels more comfortable here, away from the two thirds of the book which concerns the modern period.5 He is full of suggestions as to what I have left out, but it is all irrelevant to my theme.6 What Phil does not say is what, if anything, globalisation means; perhaps he thinks it is a fashionable falsehood got up by the chattering classes, and the real world is as it was in 1960 or 1930 or whenever—capitalism is, as in some religious doctrine, always the same and ever will be. He says, as my book does, the relationship between capital and the state is complicated, changing at different times, but on what it is now, where history doesn’t help, he dodges the issue. But he gets cross when I suggest that business has in general no more power over governments than populations (though electorates can be pretty decisive); that is the point of the Nazi example – German business had nearly as little influence over the Nazis as the mass of ordinary Germans but, again, he dodges the point.
Phil says I allege that the state is ‘an incubus, an alien force’ (I do not – this is his invention), and in Phil’s Manichean world, ‘a struggle between good and evil’ (p135), business is ‘innocent’. And then again (p137), I am supposed to say that ‘commercial capital has an unblemished record’ (I don’t). In the middle of a Parmalat crisis, and just after Enron, what can he be talking about? It seems that – like President Bush—unable to argue, he must resort to moralising.7 It allows him, like an old lady faced with a flasher, to whip himself into a lather of shock, horror and dismay. Yet we all know the business class is full of crooks, thieves and rip-off artists, none of them with an interest in globalisation or free trade if they can get their noses in the trough of state contracts and monopolies or can rig the market.
What business does not generally do is direct the forces of physical coercion, the terrifying remorseless brutality and destruction that is normally the exclusive monopoly of the state. These are Lenin’s ‘bodies of armed men’. Perhaps Phil thinks otherwise and really it is Israeli businessmen who are killing Palestinians, Yukos which is bombing Chechnya, Esso which is strafing Afghans and Iraqis? By confusing the undoubted horrors of some forms of exploitation with those of sheer physical slaughter and destruction he is hiding the enemy—without saying why.
Later he lapses into invention again – I am supposed to believe that if ‘only governments would understand’ (p141), they would embrace globalisation. This is a staggering distortion—the book is all about states fighting globalisation because it undermines their power. He has completely missed the point. But I suppose if you see the world in moral categories, a more complex case is difficult to follow (witness George Bush again).
Reform and revolution
I am surprised Phil did not attack my argument that reformism works. The millions of NGOs which, in every tiny detail of the system, police, campaign, attack, sue, have had remarkable successes even against the mightiest corporations. Phil is just grumpy – and ungrateful—about this amazing affirmation of popular power, the most spectacular political transformation of a globalising world.
More important, however, is the fact that capitalism has worked and for the foreseeable future will continue to work, far more spectacularly than anything expected in 1938 or lauded in The Communist Manifesto. There is no space to lay out the evidence here (and Phil dislikes facts). Suffice it to say that in 1870 the average British person had an expectation of life of 41 (and the average hours worked, 2,984 per year); in 2001, 78 (and 1,653 hours). In developing countries, the change was very much more dramatic – average expectation of life in India, 32 (1870 and 1950), now 66. And the quality of life behind these figures, despite all the failures, has improved at breathtaking speed over the past two decades. Furthermore, poverty has decreased—the population said to be living on less than $1 per day has fallen from 37 percent in 1970 to 29 percent in 1980 and 22 percent now. True, not enough, full of hideous distortions and failures, but still fairly impressive. If you can’t see a victory when it appears, how will you know when you’ve been defeated? Did Phil not notice or is he wedded to the ancient religious proposition that the end of the world is always nigh? In the 1950s Tony Cliff had much fun mocking those Trotskyists who said, because of what Trotsky said in 1938, that there was, contrary to all appearances, mass unemployment and the Second World War had not ended.
However, there is also a conceptual argument as to why revolution has become outdated. If globalisation has allowed capital to escape the national state, then revolution in any one national component will no longer capture the material foundations of that society. And indeed, any post-revolutionary order will be bent to fit the prevailing world material foundations. The whole revolutionary project was national and has now fallen apart. More – and I am surprised at Phil’s lack of rage at this account – classes were not fashioned, I argue, in the relations of production, but in the class struggle to conquer the central focus of national power, the state. Thus, at the world level, there can be no class ‘for itself’ because there is no world state. Of course, there is a world ruling class in itself, fractured between different states, corporations, international agencies, but it cannot be a class for itself without a state. Globalisation does not mean just scaling up to a world level.
Of course, many countries can only make progress if the local state can be overthrown, and it will resist by force, making revolution the only option. But this is no general case, and I prefer to accept Marx’s 1872 observation that workers could gain their ends in the advanced world without revolution.8 If there’s anyone left who remembers the origins of IS, Henry Collins was right.9
Phil has again got it so wrong, the reverse of what I said. He writes: ‘Harris believes that the state has always been dysfunctional’ (p134). No, I don’t. The core argument of the historical introduction, following Marx, is that the state played an absolutely decisive role in forcing the accelerated accumulation of capital. By implication, without the state, this process would either not have occurred or have been immensely delayed. How could Phil have missed this? It must be my opaque style. However, by the 20th century, in a different age, the competition of states threatened, in two world wars, the very dissolution of the system and of all capital.
The Third World
Phil thinks I believe that ‘if only such growth [of the 1950s and 1960s] could be resumed, all would be well’. No, I don’t, and there is no such suggestion in my book since it would be absurd. What happened in this little corner of the Atlantic economy in those two decades was tiny in comparison to the gigantic boom – far, far bigger in terms of the numbers of people involved – that occurred in the 1980s and 1990s. Was Phil asleep and missed it? Did he not notice the spectacular growth of what we used to call the four little tigers (Korea, Taiwan, etc), the no less spectacular growth in South East Asia (now resumed after the blip of 1997), followed by the quite stupendous growth of China, making it now the third largest trading power in the world. And now it seems, at long last, that India has begun to grow. And yet just like Africa – well described by Phil – these were all colonised (and China was wrecked). How do we explain the extraordinary difference in recent history? But more important, how could Phil have missed it? Or perhaps he thinks all those vast square miles of factories in Guangdong or the Yangtze delta are a bubble that will be pricked, that the mirage will disappear leaving his archaic assumptions comfortably intact: in the beginning was the faith and reality must never penetrate it.
And how does this change square with Phil’s amazingly archaic picture of the Third World as the Congo writ large: ‘the multinationals have made merry while hundreds of millions have been pushed to the margins of survival’. It’s a fine picture, dated I guess about 1966 in the heyday of dependency theory—the Third World as a prostrate victim, savaged by predatory multinationals—but a fantasy. Famine, savage perpetual civil war, crippling corruption are all there – the only absentees are the multinationals, off in Asia making profits (there are precious few of those in Africa). Furthermore, as Mike Kidron argued so well in the 1960s, ‘Third Worldism’ – blaming everything on the foreigner, imperialism, etc -has the result of exonerating the local rulers. If I may be allowed to emulate Phil’s style, he is quite shameless in his defence of the Idi Amins, the Charles Taylors, the Kabilas, the Mugabes who have so catastrophically wrecked Africa, with barely any help from outside (apart from the provision of banking facilities for the loot).
The Asian example suggests that the economic stagnation of the Third World was more exclusion than exploitation, being locked out during the interwar economic crisis (and in the 1950s, making a virtue of this exclusion with import substitution programmes). For short term tactical advantages the leading powers opened the door a little (while all the time trying to cheat), leading to this quite unanticipated but momentous change, perhaps the most momentous since the industrial revolution. It is set to continue and grow stronger due to the conjuncture of a unique set of circumstances:
- some 90 percent of the addition to the world’s labour force will occur in developing countries over the next 20 to 30 years, at the same time as they will already have, for demographic reasons, a great bunching of the population in the working age groups;
- in the developed world, the labour force, particularly the younger workforce, again for demographic reasons, is set for radical reduction, and the response will, in the medium term, mean major worker migration flows;
- the continuing massive investments in education in developing countries will mean that the overwhelming bulk of the world’s literate workers will be concentrated in developing countries;10
- technology will continue to facilitate the unbundling of manufacturing and services, locating interdependent activities worldwide wherever profits can be maximised;
- with the almost complete mobility of capital, this would suggest the relocation of most of the world economy to the developing countries over the next half century—already we can see what has happened in manufacturing in China, and now, in outsourcing services to India (and these two alone account for nearly a third of the world’s population).
But this transformation is only possible if the dominant powers do not try to block the process. Poverty in the Third World is sustained not by the multinationals, but by things like the EU Common Agricultural Policy (which simultaneously robs European consumers, especially the poor, and Third World exporters) or US subsidies to its handful of cotton farmers, screwing two of the poorest—but cotton-exporting – countries in the world, Mali and Mauritania.
In this enormous transition, between, say, 1970 and 2050, it is markets which are reorganising the world’s economic geography, not governments, much less those tiny international organisations which arouse such ire (and so let governments off the hook). The WTO is an arena for states to bargain dominated by the biggest states, not a force in its own right, and even then there’s a strong argument that it has had little effect on trade.11 The IMF, for short term external crises, has a greater role for some countries, but in serious crises (Mexico, 1994; Argentina, 2001) only the US Treasury has the muscle to intervene; again, the IMF is very small in the sum of things, and there is evidence that it is fairly ineffective – governments flout its conditions with impunity. In the end it is governments which decide what to inflict on their citizens, but they love to dodge responsibility by blaming the IMF (as Callaghan did in Britain in the 1960s). As to the World Bank,12 the funds it mobilises are tiny- $12 billion to $15 billion net per year, or roughly equal to the cumulative debt of Parmalat (and compared to, say, the $400 billion defence budget of the US or $200 billion daily foreign exchange dealings in London); it is institutionally if not financially corrupt (it is bent to suit the politics of the dominant powers who run it, and to the interests of the borrowers). It is an official body, ie non profit making public sector, and essentially social democratic in stance, focusing its low interest loans officially on reducing poverty and cutting defence spending (in favour of health and education). Above all, it is ineffective, a secret it tries to conceal at all costs. It is – compared to Chase Manhattan, Citibank, Barclays and the rest – a pretty implausible symbol of modern capitalism. Unlike them, the World Bank is surrounded by an excellent army of NGO piranha fish, waiting to pounce on its vitals with every error. Many people have argued, because of its ineffectiveness, it should be abolished, and maybe it will be – without anyone noticing.
If I am right about globalisation, it means the anti-globalisation movement has its guns pointing in the wrong direction (although with the second Gulf War the real enemies became clearer). The real obstacles to progress are in the governments of the developed countries who are not at all averse to turning people’s rage onto the three international agencies, hiding their own decisive role (with Clinton identifying with the Seattle anti-WTO demonstration, Chirac with the anti-OECD demos). In this context Phil makes a very important criticism of my book – that I failed to incorporate the wars in Afghanistan and Iraq. In fact, the manuscript was in the press during these events, but a more general point is absolutely correct. The dominant states may not continue to allow, as they have so far, the peaceful redistribution of the world economy (with the dismantling of their old national economies). In a system dependent on popular voting, stimulating increased popular nationalism – with a real anti-globalisation movement, focused on hitting immigrants and asylum-seekers – may be the dominant states’ response to declining economic leverage. Then politicians may seek by all means, real and invented, to instil perpetual fear and insecurity in their citizens, and a hatred of foreigners, spliced with periodic war panics to rouse and cement support. In particular, the US, with its unprecedented lead in military power, its terrified population and new doctrines of unilateralism, has the capacity to seek to substitute military and financial muscle for its declining economic hold. If the newly emergent powers, China and India, do not concede, then the next half century may see, not the development of the world, but a determined stand to protect the old war-making state – with, to rephrase Marx, ‘the common ruin of the contending states’.
The greatest impudence of the modern state was to insert in each citizen’s mind a national identity that anchors loyalty to the state in the psyche. Hitherto Marxists and others have barely had significant success in weakening this, even though it is now increasingly dysfunctional. The loyalty of Americans to Washington could, in the coming period, spell disaster for us all.
At the end, I have my gravest doubts about Phil’s politics, which seem to combine archaic theory, a kind of populist Marxism now turned into faith, an absence of any connection with the current system, and a bundle of moral postures (as a substitute for theory and a way of indicating action), a position normally associated with reformists.13 Not that I expect to persuade readers of this journal of my central theses and, after Phil’s comprehensive rubbishing, no one is going to lash out on buying the book. But I am grateful to him for giving me this opportunity to make some of my points less opaque.
1. The title of Phil’s review, ‘All Praise the Market!’, omits the obverse in the book, war. The entire account is about the tension between markets and war, so to exclude one is a major misrepresentation.
2. See M Kidron, ‘World Capitalism: Two Insights Don’t Make a Theory’, and C Harman, ‘Better a Valid Insight Than a Wrong Theory’, International Socialism 1:100 (July 1977), pp1-13.
3. Here nature and the human psyche become pivotal in an identification of a system set upon auto-destruct.
4. Of Bread and Guns: The World Economy in Crisis (London, 1983); The End of the Third World (London, 1986); National Liberation (London, 1990); The New Untouchables: Immigration and the New World Worker (London, 1995); The Return of Cosmopolitan Capital: Globalisation, the State and War (London, 2003).
5. I noted the same tendency in my review of C Harman’s A People’s History of the World (London, 1999): ‘Consolations from the Past’, Economic and Political Weekly (Mumbai), 3 June 2000, pp1911-1913.
6. The same goes for his odd reproach that I did not quote my book on Mao’s China. Of what possible relevance would it be?
7. Which is appropriate when theory becomes mere faith. Phil reproaches me for chiding Marx-when, I suppose, we should restrict ourselves to genuflection and hosannas-without realising that my entire book is an argument with Marx. And then, plaintively, he laments, ‘Nowhere does he suggest an alternative to Marxism’ (p136). Now, as a lifelong freethinker, I don’t feel at all confident to advise on matters of faith-I could say Buddhism or Catholicism or whatever, but it would be unreasonably frivolous. But why does Phil not copy Marx, escape faith and start thinking?
8. ‘On the Hague Conference’ (a correspondent’s report of a speech made at a meeting in Amsterdam, 8 September 1872), K Marx and F Engels, Collected Works, vol 23 (London, 1972), pp254-255.
9. ‘The Case for Left Reformism’, International Socialism 1:6 (Autumn 1961), and rejoinder, International Socialism 1:9 (Summer 1962).
10. I am reminded of an offhand remark by Michael Kidron in the 1960s that we could never move on to socialism until all the world’s peasants had become workers. At the time, it seemed absurd, but half a century later, it seems almost within our grasp.
11. See A Rose, ‘Do We Really Know that the WTO Increases Trade?’, CEPR Discussion Paper.
12. I am hurt that Phil doesn’t think I’m up to being corrupted under my own steam, only through association with-to use his language-an evil organisation like the bank. I’ve also worked for the British government, which, unlike the bank, strafes Iraqi women and children, which in my view is far more morally objectionable. On a more humorous note, with my first temporary consultancy with the bank in the 1970s, I mentioned it to Tony Cliff who replied as I expected, with a grin, that he didn’t care a hoot who I worked for-’After all, Engels was a capitalist and we didn’t expel him’. Of course, Tony would never play the childish politics of moral posturing, but perhaps Phil expects different moral standards of non SWP members.
13. If I’m right, it adds another twist to Tony Cliff’s paradox, ‘The only good reformists are revolutionaries’-but they also become reformists.