Characterising the period or caricaturing capitalism? A reply to Nigel Harris

Issue: 138

Adrian Budd

In a recent issue of International Socialism Nigel Harris provided a perspective on “characterising the period”. As one of its former editors and author of important articles and books, Nigel has made a significant contribution to the elaboration of some of the fundamental ideas associated with this journal. In particular, he highlighted earlier than most the emergence of the trend towards economic internationalisation that would later be dubbed “globalisation”.1 There was, however, a suspicion that, as with many trail blazers, the openness to new trends accompanied a tendency to downplay contradictory evidence and continuities with the past. His recent contribution reinforces that suspicion and betrays a tendency towards one-sidedness, which means that the perspective that he presents fails to appreciate fully the contradictory and complex nature of contemporary global capitalism. This is particularly true in two areas of great significance for a Marxist understanding of contemporary capitalism—the relation between global capitalism and the nation-state and, secondly, imperialism.2

Contemporary capitalism and the nation-state

The core of Nigel’s perspective comprises the following interconnected arguments.3

1) In the era of “economic globalisation” of recent decades, national economies have become increasingly integrated into “a single world economy”, a “single economic system”. This is driven by global markets such that the global economy is “organised by global markets, not as hitherto believed (rightly or wrongly), by national states”.4

2) The state has become “an agent” of external forces, “enforcing global imperatives on the domestic population rather than representing it to the world at large (let alone defending it against external threats)”. State powers are weakened or relinquished, including “any ambition to shape the domestic economy”, the state “restricting itself to managing efficiently the accommodation of global forces”.5 Central bank independence of political authorities illustrates this tendency.

3) Under pressure from globalisation there has been an erosion of social solidarity and the social contract between state and society. Nigel argues that “we are now within sight of the reversal of many of the major historical efforts to tame the destructive power of markets—from the New Deal and Great Society legislation in the US (even the right to collective bargaining) to the welfare state and the provision of social and educational services in Europe”.6

4) A global ruling class has emerged alongside, and potentially transcending, national ruling classes, albeit that Nigel notes the movement between the two. For the global ruling class “nationality is a mere contingency, not a matter of overriding loyalty”.7 The ideology of this transnational class, neoliberalism, is ascendant and dominates policy-making globally.

Nigel and similar writers are clearly grappling with developments of real significance. Part of his argument is consistent with the traditions of this journal and in particular its critique of state capitalism in the Soviet Union. Trotsky argued that “Marxism takes its point of departure from world economy, not as a sum of national parts, but as a mighty and independent reality which has been created by the international division of labour and the world market, and which in our epoch imperiously dominates the national markets”.8 But if Trotsky was demonstrating the impossibility of Stalin’s socialism in one country here, elsewhere he emphasised the unevenness of global capitalist transformation and how its impact was shaped by pre-existing social and political relations. National ruling classes and their states have never been passive bearers of global capitalism’s imperative and logic. As that logic unfolded in the late-19th century, capitalism both dismantled and began to re-erect state-built protective barriers around national economies. Capitalism transformed the world’s societies and states, but states now shaped particular national forms of capitalism.9

Rosa Luxemburg captured the emerging statisation of capitalism: “Capitalist development modifies essentially the nature of the state, widening its sphere of action, constantly imposing on it new functions…making more and more necessary its intervention and control in society”.10 Reflecting on the relationship between national and international relations three decades later, Gramsci wrote that they interpenetrate and “intertwine” to produce:

a combination which is “original” and (in a certain sense) unique: these relations must be understood and conceived in their originality and uniqueness if one wishes to dominate them and direct them. To be sure, the line of development is towards internationalism, but the point of departure is “national”—and it is from this point of departure that one must begin. Yet the perspective is international and cannot be otherwise.11

There is no essential contradiction between Trotsky’s “world economy” and Gramsci’s “national” points of departure. Trotsky reminds us that Marxism understands the capitalist world system as a totality that impacts on all its parts, while Gramsci emphasises Marxism’s practical revolutionary side, the differentiation and fragmentation of that totality, and the way that the parts impact on the whole. One powerful attempt to grasp the dialectical relation between the national and the international in the 20th century was Bukharin’s Imperialism and World Economy. Noting capitalism’s tendency towards internationalisation, Bukharin wrote that “there grows an extremely flexible economic structure of world capitalism, all parts of which are mutually interdependent. The slightest change in one part is immediately reflected in all”.12 But, as interdependence deepened so international competition intensified: late developers such as Germany, Russia and Japan faced up to Britain’s global leadership by pursuing state-orchestrated social and economic change to facilitate rapid capital accumulation while, more generally, capitals enlisted the help of their national states to defend their interests, including via geopolitical strategies of power projection. Internationalisation thus provoked “a reverse tendency towards the nationalisation of capitalist interests”.13 There followed an entire epoch of state capitalism and, as economic and military competition dovetailed, militarised inter-imperialism.

Harris’s arguments are similar to those of the Marxist transnationalist theorist William Robinson, for whom the reversal of the trend towards state capitalism has been so powerful that the very idea of a national economy must be questioned. He asks, “What is a ‘national economy’? Is it a country with a closed market? Protected territorially-based production circuits? The predominance of national capitals? An insulated national financial system?” He rightly answers that “no capitalist country in the world fits this description”.14 Werner Bonefeld is also sceptical, regarding “national economy” as “a regressive concept that lends itself, at best, to ideas of national developmental methods…or, at worst, to the reactionary and romantic ideas and practices of nationalism”.15 Robinson and Bonefeld alert us to real dangers, but while its critics should acknowledge the reality of some of the changes that underlie the transnationalisation perspective, so transnationalists themselves should recognise some vital continuities in capitalism’s global political economy.

Emphasising only one part of what the Marxist international relations writer Hannes Lacher calls the national/global dialectic locates transformative powers almost entirely within the global economy, denies the continuing reality of state power and reduces states to the role of mere agents of global forces, operating to adjust national economies to world economy imperatives.16 This is certainly part of what states do, but leaving matters there, as Philip McMichael wrote about Robinson’s approach, “suspends the dialectic”.17 The balance between the two may change over time, and three decades of neoliberal transformation have certainly reversed important aspects of the trend towards state capitalism, including nationalised industry and capital controls, for instance. But we should beware a one-sided focus on transnational economic processes that can produce an unexamined economism, whereby the transnationalisation of capital automatically transnationalises capitalist states and the entire capitalist system. Nation-states have not been fundamentally or irreversibly weakened by globalisation, and global capitalism continues to be shaped by both the major capitals and the most powerful of the world’s states, within whose jurisdictions those capitals are largely based.

Global expansion is, of course, in capital’s DNA, but it cannot be abstracted from capitalism as a contradictory living reality. Gramsci’s argument about the intertwining of national and international social relations captures a geographical dimension of this reality, but he also highlighted capitalism’s historical construction and contradictions:

every real historical phase leaves traces of itself in succeeding phases, which then become in a sense the best document of its existence. The process of historical development is a unity in time through which the present contains the whole of the past and in the present is realised that part of the past which is “essential”.18

Geographical intertwining—producing Gramsci’s unique combinations of social relations—itself intertwines with the historical sedimentation of essentials, with continuities from the past that limit and shape the dynamic of change. In the short-to-medium term at least, all that is solid does not melt into air. Thus even “globalised” capitalism comprises an interweaving of particular local, national and regional patterns of social relations. As Sam Ashman puts it, “local conditions mediate the impact of capitalism’s ‘laws of development’”.19 This allows us to continue to use the concept of national economy, not as the hermetically sealed entity suggested by Robinson but in the more limited sense captured by Alex Callinicos of “capitalist economic networks that remain nationally constituted even if their reach may be global”.20

In a recent issue of this journal Jane Hardy demonstrated empirically that states continue to promote the competitive advantage of nationally-based capitals. Agricultural protectionism by the US and EU has been widely criticised, but Jane shows how these two champions of neoliberal globalisation use a variety of measures across industrial sectors—including films, cars, semiconductors and bio-technology—to enhance capital accumulation of domestic firms and firms based in these territories. Other empirical material (conspicuously absent from Nigel’s article) illustrates the nation-state’s abiding significance. First, economic activity remains heavily concentrated at national and regional levels. Thus, for instance, the average contribution of exports to annual national income remains only around 10 percent for the most advanced countries.21 Secondly, the United Nations Conference on Trade and Development (UNCTAD) calculates a “transnationality index” for firms and countries in some of the issues of its annual World Investment Report. The index for countries is constructed from four sets of data: FDI inflows as a percentage of gross fixed capital formation; FDI inward stocks as a percentage of GDP; value added of foreign affiliates as a percentage of GDP; and employment of foreign affiliates as a percentage of total employment. Small countries, such as Denmark, Sweden and the Netherlands, have a relatively high transnationality index of around 30 percent. With larger countries, however, we see a significant decline: Britain and France have indices of around 20 percent, Germany and Italy around 10 percent, the US 6 percent and Japan only 1 percent.22

Thirdly, UNCTAD also qualified the transnationalisation thesis when its assessment of FDI data for 1990 to 2003 led it to conclude that FDI accounted for only “8 percent of world domestic investment” and “only complements domestic investment”.23 Even with the subsequent deepening of globalisation this conclusion remains valid—UNCTAD’s most recent data shows that inward FDI as a percentage of gross fixed capital formation between 2004 and 2010 averaged 10.6 percent for the developed countries and 11.4 percent for the world as a whole.24 The world is undoubtedly becoming increasingly integrated at the level of production as FDI growth continues to outpace that of global output or trade, but UNCTAD’s data suggest that we should exercise caution about what seem to be rather flat-earth claims of a “single global economy”. As Ellen Wood argues, “the national organisation of capitalist economies has remained stubbornly persistent”.25

Exploring beneath the label of “transnational corporations” reinforces the need for caution. A number of empirical studies have highlighted that even the most internationalised firms concentrate the majority of their high value added and strategically important activities within their home states or regions, with the possible exception of TNCs based in smaller advanced economies.26 Where capitals do restructure internationally it is generally within relatively narrow geographical limits: world FDI and trade are heavily concentrated within a triad of advanced regions—the EU, Japan and its neighbours, and North America. UNCTAD notes that the concentration of FDI within this triad “remained high between 1985 and 2002 (at around 80 percent of the world’s outward stock and 50 to 60 percent for the world’s inward stock”.27 What explains the continued attraction of home bases and advanced, usually high-cost, countries as FDI destinations?

Capitalism’s chase across the globe has never conformed to bourgeois economists’ ideas of free markets and comparative advantage. Political, juridical, military, etc relations are necessarily interwoven with economic relations as permanent features of capitalism and cut from the same cloth as competitive accumulation.28 Capitals are themselves alienable commodities that share the twin aspects of value of all commodities, being both abstract exchange values and concrete use values. Conceived abstractly, capital has no spatial bounds and is driven by the pressure of capital accumulation to search for markets and sources of surplus value wherever they may be found. As one of its executives once famously declared, General Motors is not in the business of making cars but making profits. It can only do so, however, by making and selling cars, or some other use value, which have specific characteristics, are made from particular raw materials, and embody particular labour skills and components. These concrete aspects of capitalist production mean that the “footloose” quality sometimes ascribed to capital by globalisation theorists, and implied by many transnationalists, is quite limited.29 Without in the least negating the fundamental relations of competitive accumulation, the production of use values requires considerable cooperation between capitals, commodities being produced and sold within complex networks of production (including supply networks), finance and distribution. These networks remain densest at the national level and capital remains in a relation of what Harman calls “structural interdependence” with states, producing what David Coates has called distinct national “models of capitalism” and business cultures.30

An important essay by Peter Gowan highlights the significance of nation-states’ efforts to enhance economies of, and returns to, scale on behalf of the capitals based within their jurisdictions. States’ efforts are geared towards:

constructing secure market bases for their companies, training workforces, supplying transport and communication infrastructures—and, of course, the exercise of geopolitical influence to open and protect overseas markets. Much of the huge expansion of state resources in the 20th century has, indeed, been devoted precisely to activities in this area.31

An area of permanent state concern and activity are the relations between capital and labour. Transnationalists are often silent on class struggle and present an image of all-powerful capitalist forces and of transnational restructuring as a relatively automatic process in which post-war class compromises were seamlessly dismantled in conformity with a new consensus on the rules of the global economy. In reality, the defeat of labour movements in major national struggles—the 1984-5 miners’ strike in Britain, the 1980 FIAT strike in Italy, etc—was crucial in establishing the conditions for global neoliberal capitalist restructuring. Marxism understands capital not as a thing but as a social relation with living labour and so the confidence, organisation and combativity of labour movements must be central to the analysis of capital’s powers of agency. In the aftermath of labour’s defeats capital was emboldened to begin to restructure welfare states, attack union rights and increasingly impose market discipline on society, thereby moving the boundary between the public sphere and individual responsibility. But those defeats were not the product of purely economic or industrial relations factors, but were crucially dependent on the mobilisation of state force. Neoliberalism does not straightforwardly weaken states but divests them of some of their existing social obligations and thereby strengthens their capacity to arrive at authoritative decisions in the interests of capital, attracting global financial resources and the political support of the world’s dominant states.32 The class offensive required to achieve this is rendered all but invisible by the idea of an autonomous economic-technical process of economic globalisation that dominates much globalisation theory and which Nigel’s article does little to correct.

Emphasising the capital-labour relation also allows us to correct another one-sided judgement—that neoliberal restructuring entails dismantling the welfare state. Under globally intensified competition, ruling classes in the advanced countries make contradictory demands on their states: they demand both reductions in corporate taxation and in welfare support for subordinate classes and, conversely, that states provide them with healthy, educated and motivated workers and social stability. This contradiction is not unmanageable if, for instance, taxation can be shifted from capital onto workers, as has happened to a considerable extent in the wealthy countries. But recent empirical studies demonstrate that, contrary to conventional wisdom, state spending on welfare grew consistently throughout the neoliberal era, at least until the onset of capitalism’s most recent crisis in 2007-8. In Britain, part of the neoliberal vanguard, state spending on the National Health Service rose in real terms every year between 1980 and 2008.33 The detailed analysis of state spending in the OECD countries between 1980 and 2005 by Francis Castles and his collaborators reinforces the challenge to conventional wisdom: after 1980 social expenditure as a proportion of GDP rose quite markedly on average, including by 21 percent between 1980 and 2001.34 When we look at the evidence, we find strong empirical grounds for, as Gowan put it, contesting “the sweeping claims of the economic globalisation discourse”.35

Contesting globalisation theory’s wilder claims is not to deny the reality of neoliberal restructuring, changes in the capital-labour relation, or welfare state retrenchment. Nor is it to claim that there can be a national solution to capitalist crisis. But it is to recognise the importance of the state in these processes and its role in mediating global pressures and translating them into national policy frameworks. Even in the EU, where six decades of integration have ensured that the transnationalisation of capital is deeper than elsewhere in the world, the interpenetration of the national and the international persists and few issue areas are not subject to intense national disagreement and bargaining. Transnational pressure compels national states to pursue strategies of national economic restructuring, but the pace, scale and shape of restructuring reflect specifically national factors. This is captured in Benno Teschke and Christian Heine’s comments that:

the uneven spread of crisis, non-synchronous national and sectoral business cycles, nationally diverging balances of class forces, and historically different institutional contexts of industrial relations, [have] translated into palpable divergences in political management strategies that do not follow an exclusive economic rationality.36

States remain Janus-faced: as they attempt to manage the national ruling class’s common affairs (which may overlap with those of other ruling classes) they simultaneously project into the world system to advance the interests of nationally-based capitals and introject pressures and processes from it. The balance between states’ internal and external aspects is not fixed, but the relation between the national and the international is a permanent concern of all states. When state capitalism reached its fullest development the major capitals and their states continued to seek ways to transcend national limits, including by expansion or the consolidation of existing overseas possessions. Today, even as internationalisation has again become the dominant trend, states continue to provide the essential framework within which global capitalism operates—what Ellen Wood calls “the extra-economic conditions of capital’s self-reproduction”.37 There is no evidence that capital favours a stateless global neoliberalism over institutionalised interdependence with home states, supplemented by new interdependencies with other, usually neighbouring, states. Rather, as Immanuel Wallerstein has argued, the additional risks involved in the extension of a transnational capital’s operations demand “strong state structures” which are “their guarantee, their lifeblood, and the crucial element in the creation of large profits”.38 That capitals are prepared to take these risks tells us something about the competitive pressures compelling them to seek their share of global streams of value. It also encourages us to reflect on Nigel’s comments on imperialism.


Related to his argument that the global ruling class has no national attachment, Nigel argues that since the global economy is “outside of the control of any one national authority” and dominates all states, the concept of imperialism has become “threadbare” and “theoretically inadequate”.39 It over-states Washington’s power, he argues, and in any case this power is not mobilised in “pursuit of empire” but in “a misguided attempt to fill the vacuum created by the lack of world government in a global economy”, within which corporations have become “free-floating…with little or no reference to Washington”.40

We will see shortly that I believe Nigel’s arguments are, again, over-stated and one-sided, but he does alert us to an important change. A century ago internationalisation produced a counter-trend towards state capitalism, but in recent decades internationalisation has partially eroded state capitalism. What has happened in the intervening period to explain this? As we have seen, Nigel explains it by reference to the decline in national identity and a new cosmopolitanism among sections of capital.41 There is undoubtedly some evidence to support this, particularly as far as finance capital is concerned. But capital’s relative geographical fixity and dependence on political and juridical state power, discussed above, alongside the general condition of anarchic competitive accumulation, place limits on such cosmopolitanism. The imperialist organisation of the capitalist world provides a better place to look for an explanation.

Beyond a broad agreement on its roots in underlying processes of competitive capital accumulation and monopolisation, Marxist theories of imperialism have divided along three main paths. First, the perspective of inter-imperialist rivalry associated with Lenin and with Bukharin’s analysis of the inter-penetration of internationalisation and nationalisation outlined above. This has been the perspective of most contributors on imperialism to this journal. Secondly, Karl Kautsky’s perspective of ‘ultra-imperialism’, which argues that the world’s imperialist powers form “a federation of the strongest, who renounce their arms race” and replace rivalry “by a holy alliance of the imperialists”.42 This argument was sometimes used to explain the West’s cohesion during the Cold War and is today expressed in William Robinson’s transnationalist argument that “the US state has attempted to play a leadership role on behalf of transnational capitalist interests”.43 Nigel’s arguments are closest to this perspective. A third perspective, super-imperialism, emphasises the capacity of a single imperialist power—today the United States—to dominate weaker imperialisms and act as the “organiser of world capitalism”.44 The super-imperialism perspective can be used to imply the transcendence of inter-imperialist rivalry, but an alternative understanding has considerable explanatory power.

Just as monopolisation modifies competition but on the basis of the very competition from which it develops (and may intensify it internationally—think of Airbus versus Boeing), so super-imperialism should be seen as a consequence of inter-imperialist rivalry that then modifies its form without destroying its essence.45 The super-power rivalry of the Cold War, itself a form of inter-imperial conflict, shaped the relations between the US and the older but now weaker imperialisms of Western Europe. US economic and military predominance over its Western allies allowed it to challenge their global influence but also ensured that economic rivalry did not develop into military rivalry. Although the “loss” of Eastern Europe and, after 1949, China placed limits on the geographical extension of US power, the Cold War served to intensify it within what became a global US-led security zone (Rio Pact, NATO, SEATO, CENTO, etc). As a consequence of the establishment of this security zone the economies of its allies became increasingly interdependent: this was particularly true of Western Europe but there is a striking correspondence between Asian post-war development (led by Japan and then the “tigers”) and US security guarantees. Interdependence was reinforced by the long post-war boom, itself a consequence of Cold War military spending. Yet, despite the cementing effect of the “Soviet threat”, transatlantic and wider Western interdependence never fully overcame inter-imperialist rivalries.46 Facing a barrage of West European criticism—concerning its conduct in Vietnam, the international role of the dollar, the power of US multinationals, etc—as well as relative economic decline as a result of its huge arms spending, US Secretary of State Kissinger complained in 1974 that the US’s major overseas problems were with its allies rather than its enemies.47 The US’s aggressive unilateral economic statecraft to arrest relative decline under Nixon and, especially, Reagan demonstrates that competitive accumulation and rivalry continued to structure the capitalist world system even under US hegemony.

In the post Cold War era the world’s ruling classes continue to jockey for position within a system still fundamentally anarchic and conflict ridden. Nevertheless, there is a second way that US super-imperialism conditions inter-imperialist rivalry. While US military power and economic statecraft serve primarily US interests its ruling class is increasingly aware of a wider interest and responsibility. As Doug Stokes puts it, the US is subject to “dual national and transnational logics” and promotes its own interests while simultaneously seeking to secure a world order safe for capitalism as a whole.48 These twin logics ensure that conflict within the advanced core of the world system is, at present, unlikely to assume a military form, but geopolitical competition—defined by Alex Callinicos as “all conflicts among states over security, territory, resources and influence”—persists.49 Indeed, it is not at all clear how Nigel reconciles his belief that the concept of imperialism is threadbare with the fact that the US has been almost permanently at war in one form or another since the end of the Cold War. The contemporary world order is very far from a transnationalised one in which clashes of interest within the advanced core have been transcended but is instead an inter-imperialist order modified by the relative supremacy of a single super-imperialism.


Marxism can only develop realistic perspectives by constantly testing and revising theory in interaction with the novel phenomena and emergent trends of an evolving social reality. It must “historicise theory”.50 This is a perennial strength of this journal and Nigel contributes to this tradition by his willingness to recognise powerful contemporary currents in the global economy. In doing so he dispels any lingering notions that real social change can be built in national isolation. But Nigel’s iconoclasm shares with the wider transnationalist perspective a tendency to overlook the contradictory and many-sided nature of reality to produce a partial, one-sided perspective of limited value.

Although they may be formally separate and occupy distinct institutional spheres under capitalism, there is a necessary and unavoidable interpenetration of politics and economics, of relations of non-exchange with exchange relations. Failure adequately to appreciate the significance of this leads to Nigel’s astonishing conclusion that today, as we contemplate “the final phases of the completion of the bourgeois revolution (now on a world scale)”, capital “is obliged to step into the limelight, unprotected by political power”.51 Nigel qualifies this by recognising that a prolonged and severe crisis may encourage states to attempt to reverse globalisation and recover lost state powers, including by intensifying nationalism and xenophobia, but he nevertheless argues that economic globalisation is “inexorable”.52 Anything that hinders this comes across as a relic of a disappearing past. This includes the Arab Spring which Nigel comments upon with a faintly dismissive tone: although the “revolutions” may spread, unless they succeed in “breaking the global order…this merely reiterates the same order of competing states which is itself at the core of the problem”.53 This may be abstractly true but it lacks any sense of a living perspective, of real engagement with social forces in movement.

The danger of this abstract internationalism was spelled out by Gramsci. He argued that the working class, which he sometimes referred to as “the international class”, must work with less internationalist forces (intellectuals and peasants, for instance) and so “’nationalise’ itself in a certain sense”. Failure to fully engage in concrete national circumstances and struggles produces the absurdity of “passivity and inertia” where:

nobody believed that they ought to make a start—that is to say, they believed that by making a start they would find themselves isolated; they waited for everyone to move together, and nobody in the meantime moved or organised the movement.54

Without an appreciation of the fundamental role of states in capitalism, even in extended periods of internationalisation, this is the unwitting conclusion that can be drawn from Nigel’s perspective. It is one that we should be very careful to avoid.


1: See in particular Harris, 1983 and 1986.

2: For a fuller analysis in these areas see Budd, 2013, part two.

3: I focus here on Nigel’s perspective on structural aspects of the world system. I ignore his rather uncritical view of globalisation and his suggestion that capitalism can solve the problem of world poverty, including the claim that “the reduction in world poverty since 1980 is a staggering record”, poverty perhaps having “halved since 1990…in all regions of the world”-Harris, 2012, p143. UN figures show that the number living in extreme poverty in the developing world has fallen: “the proportion of people living on less than $1.25 a day fell from 47 percent in 1990 to 24 percent in 2008-a reduction from over 2 billion to less than 1.4 billion”-United Nations, 2012, p4. But is the headline attainment of the UN’s Millennium Development Goals sufficient? Is $1.25 a day an adequate threshold for extreme poverty? Isn’t the figure of 1.4 billion in extreme poverty even on the (arbitrary) basis of $1.25 a shocking indictment of capitalism? And, has there not been a colossal widening of inequality in the last two decades as the very poorest have earned a few additional cents a day? Failure to explore behind the UN’s headlines means that we risk becoming trumpeters for neoliberal globalisation.

4: Harris, 2012, p138.

5: Harris, 2012, p142, p140.

6: Harris, 2012, pp139-140.

7: Harris, 2012, p142. For similar arguments see Robinson, 2004, and Sklair, 2001.

8: Trotsky, 1929.

9: Michael Löwy rightly criticised the Communist Manifesto for “a certain economism and a surprising amount of Free Tradist optimism” when it argued that capitalism’s expansionary dynamic “batters down all Chinese Walls”, and that “national differences and antagonisms between peoples are daily more and more vanishing”-Löwy, 1976, p82; Marx and Engels 1942, pp209, 225.

10: Luxemburg, 1989, p43.

11: Gramsci, 1971, p240.

12: Bukharin, 1987, p36.

13: Bukharin, 1987, p62.

14: Robinson, 2009, p69.

15: Bonefeld, 2006, p52.

16: Lacher, 2003. The neo-Gramscian Robert Cox, for instance, argues that the nation-state once provided a “bulwark defending domestic welfare from external disturbances” but is now “a transmission belt from the global to the national economy”-Cox, 1992, p31.

17: McMichael, 2001, p201.

18: Gramsci, 1971, p409.

19: Ashman, 2006, p90. Henk Overbeek make a similar point: “transnational neo-liberalism manifests itself at the national level not as a simple distillate of external determinants, but rather as a set of intricate mediations between the ‘logic’ of global capital and the historical reality of national political and social relations”-Overbeek, 1993, pxi.

20: Callinicos, 2004, p432.

21: Figures for exports as a percentage of national income present problems. The value of exports does not accurately measure their contribution to national income. Because of the re-export of imports we need a measure of value added embodied in exports: the data for a country importing a car wheel for $200, adding a domestically-produced tyre for $50, and then exporting a combined product for $250 shows an export of $250, five times the export’s contribution to national income. Jonathan Anderson of UBS investigated this and distinguished between “headline” export/GDP ratios for Asia-sometimes a statistically accurate but absurd 100 percent-plus figure-and a much lower “true” figure for export shares. “The average share of GDP for larger Asian countries is in the single digits, and for smaller regional economies the figure is more like 20% to 25%.” The figure of 30 to 35 percent for Hong Kong or Singapore makes much more sense than what may be a 200 percent headline figure. By Anderson’s calculations China’s exposure to exports was slightly below 10 percent of GDP, slightly more than Japan or India-Anderson, 2007, p3. These figures broadly agree with those in Hirst and Thompson, 1996, p112.

22: UNCTAD, 2008, p12.

23: UNCTAD, 2004, p3.

24: My calculations based on UnctadStat table “Inward and outward foreign direct investment flows, annual, 1970-2011, as percentage of gross fixed capital formation” at

25: Wood, 2003, p23

26: Ruigrok and van Tulder, 1995, and Rugman and Verbeke, 2004

27: UNCTAD, 2003, p23.

28: Barker, 1990, p6.

29: Productive capital’s relative geographical immobility parallels a frequent immobility between industrial sectors. Car producers have seen average profit rates fall from 20 percent in the 1920s to 10 percent in the 1960s and 5 percent today, yet remain committed to the sector in which their fixed investments are sunk-Economist, 2004, p56.

30: Harman, 1991; Coates, 2000

31: Gowan, 2009, p135

32: Pierre Bourdieu also questioned whether neoliberalism weakens states. The “left hand of the state” (reflecting past social struggles) may have been weakened but its capital-friendly “right hand” (the treasury, etc) remained strong-Bourdieu, 1998, p2.

33: Emmerson and Frayne, 2005, p15.

34: Castles, 2007, p21. Today’s savage austerity cuts change the picture somewhat, but pre-2008 data suggests no simple correlation between globalisation and the retreat of the state. When the cover of the Economist raises the bogey of the revival of state capitalism and suggests that it may be “the emerging world’s new model”, the interpenetration of capitalist politics and economics may again be revealing itself-Economist, 2012.

35: Gowan 2009, p144.

36: Teschke and Heine, 2002, p180.

37: Wood, 2002, p36. Ruling class efforts to secure the identification of subordinate classes with “their own” nation-states may not always be successful and may contradict the immediate interests of capital in securing, for instance, imported supplies of cheap labour in times of skills shortages. But ruling classes see good reasons for continuing to promote nationalism while simultaneously attempting to inhibit the development of other collective identities. Emphasising the abiding importance of nation-states and nationalism, Neil Davidson rightly argues for “putting the nation back in the international”-Davidson, 2009.

38: Wallerstein, 1998, p47.

39: Harris, 2012, p138, p137, p144.

40: Harris, 2012, p145. Cox argues similarly that there is no longer an identifiable “regime of dominance” at the top of the contemporary world order-Cox, 1999, p12.

41: See also Harris, 2003.

42: Kautsky, 1970, p46.

43: Robinson, 2009, p77. Robinson himself rejects the “ultra-imperialism” label, arguing that it suggests collusion between nationally organised capitals whereas he emphasises competition between increasingly transnational capitals. The conclusion Robinson draws, however, that as the transnational capitalist class develops so “competition takes on new forms in the age of globalisation not necessarily expressed as national rivalry” has affinities with the logic of ultra-imperialism-Robinson, 2009, p69.

44: Rowthorn, 1971, p31.

45: The logic of this argument is similar to that of Tony Cliff when he wrote that “monopoly capitalism means a partial negation of the Marxian law of value but on the basis of the law of value itself”-Cliff, 1988, p212.

46: Budd, 1993.

47: See Halliday, 1986, p18.

48: Stokes, 2005, p230. Peter Gowan makes a similar argument: “The US state has not just been pursuing its own interests at the expense of all its rivals, but securing the general conditions for the expansion of capital as a system, in which they have an interest
too”-Gowan, 2002, p65.

49: Callinicos, 2009, p74.

50: McMichael, 2001, p202.

51: Harris, 2012, p145.

52: Harris, 2012, p138.

53: Harris, 2012, p144.

54: Gramsci, 1971, p241.


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