Capitalist Globalization: Consequences, Resistance, and Alternatives

192 Pages·2013·1.71 MB·English

by  Martin Hart-Landsberg

Praise for CAPITALIST GLOBALIZATION

“This indispensable guide to the integration of East Asia into the multinational
corporations’ networks of integrated production clearly shows how the ruling
classes of China and South Korea have taken the initiative in sponsoring their
country’s integration into an overall process of capitalist globalization which has
not only been US-led but also dependent on American mass consumption. Its
exposure of the costs to the working classes in each country make this book
essential reading for all those looking beyond the unfortunately very limited
alternatives addressed here to neoliberal free trade in postwar Europe and
contemporary Latin America.”
—LEO PANITCH, editor, Socialist Register; co-author (with Sam Gindin),
The Making of Global Capitalism

“Building upon his excellent in-depth studies of capitalist development in South
Korea, Japan and China, Martin Hart-Landsberg takes his analysis to the next
level by explaining the profound significance of the restructuring of the
international organization of production with the creation of cross-border
production networks and global (surplus) value chains. By focusing upon how
the drive for profits has led transnational corporations to divide production into
multiple components in different locations, Hart-Landsberg convincingly
demonstrates that a nation-state framework is a distorting lens through which to
analyze capitalist globalization. He shows, too, that reliance upon national
accounting data is not only a barrier to a correct analysis of the world of
international capital—it also makes changing that world difficult because it
supports the appearance that workers of other nations are the enemy rather than
the transnational corporations that divide and weaken all workers. Hart-
Landsberg’s stress upon the sphere of production is essential because it gives
him particular insight into economic theory, neoliberalism and state policies
designed to remove all existing barriers to transnational capital and as well to
consider potential alternatives such as those being explored in Latin America.”
—MICHAEL A. LEBOWITZ, professor emeritus, Simon Fraser University;
author, The Contradictions of “Real Socialism”

“What exactly is ‘globalization’? Why does it matter for working people and
how does it relate to neoliberalism and capitalism? Why are Chinese workers not
the rivals of American workers but their potential allies? Why do workers all
over the world suffer from unemployment, declining real wages, disappearing
benefits and many other hardships? How can capitalist globalization be resisted
and how can development be reoriented towards the common good? These are
the questions Martin Hart-Landsberg brilliantly discusses and convincingly
answers.”
—MINQI LI, University of Utah; author, The Rise of China and the Demise
of the Capitalist World Economy
Capitalist Globalization

Consequences, Resistance, and Alternatives

by
MARTIN HART-LANDSBERG
Copyright © 2013 by Martin Hart-Landsberg
All Rights Reserved
Library of Congress Cataloging-in-Publication Data available from the publisher
—
978-1-58367-352-2 pbk
978-1-58367-353-9 cloth
Monthly Review Press
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Contents

Acknowledgments
Introduction
PART I: CAPITALIST GLOBALIZATION

1. The Internationalization of Production and Its Consequences
PART II: THE NEOLIBERAL PROJECT AND RESISTANCE

2. Neoliberalism: Myths and Reality
3. Capitalism, the Korea-U.S. Free Trade Agreement, and Resistance
4. After Seattle: Strategic Thinking about Movement Building
PART III: ALTERNATIVES TO CAPITALIST GLOBALIZATION

5. Learning from ALBA and the Bank of the South: Challenges and
Possibilities
6. ALBA and the Promise of Cooperative Development
Notes
Index
Acknowledgments

I am pleased to publish this book with Monthly Review Press. MR Press has
long served as an important outlet for timely and insightful analyses of capitalist
globalization and efforts to create alternatives to it. In particular I want to thank
Michael Yates, editorial director of the Press, for his suggestions which helped
sharpen my arguments, and Erin Clermont for her copyediting.
I also want to thank Monthly Review and Critical Asian Studies for giving me
permission to include previously published articles in this book.
To sum up, what is free trade, what is free trade under the present condition of
society? It is freedom of capital. When you have overthrown the few national
barriers which still restrict the progress of capital, you will merely have given it
complete freedom of action.
—KARL MARX, On the Question of Free Trade, Speech to the Democratic
Association of Brussels, January 9, 1848
The question of Free Trade or Protection moves entirely within the bounds of the
present system of capitalist production, and has, therefore, no direct interest for
us socialists who want to do away with that system.
Indirectly, however, it interests us inasmuch as we must desire as the present
system of production to develop and expand as freely and as quickly as possible:
because along with it will develop also those economic phenomena which are its
necessary consequences, and which must destroy the whole system: misery of
the great mass of the people, in consequence of overproduction. This
overproduction, engendering either periodical gluts and revulsions, accompanied
by panic, or else a chronic stagnation of trade; division of society into a small
class of large capitalists, and a large one of practically hereditary wage-slaves,
proletarians, who, while their numbers increase constantly, are at the same time
constantly being superseded by new labor-saving machinery; in short, society
brought to a deadlock, out of which there is no escaping but by a complete
remodeling of the economic structure which forms its basis.
—FREDERICK ENGELS, On the Question of Free Trade, Preface to the 1888
English edition
Introduction

Times are tough in the United States. Unemployment is high; those with jobs
suffer real wage declines and ever greater demands to work harder and longer.
Household debt is up and wealth is down. Homelessness is growing. Health care
is becoming a luxury. In sum, people are hurting, scared, and increasingly angry.
Unfortunately, tough times do not automatically produce a clear understanding
of the causes of these problems and the appropriate responses to them.
I wrote this book for three reasons. First, I wanted to show how and why the
capitalist drive for profit has shaped a globalization process that is largely
responsible for both our current problems and the dire future we face if state
policies and corporate patterns of economic activity continue unchanged.
Of course, people talk about globalization all the time, and even economists
admit that it has its costs. Still, the phenomenon is generally presented as both
irreversible and overwhelmingly beneficial. In fact, most economists believe that
the best way to respond to the costs of globalization is to embrace the process
and improve our ability to compete more effectively against our national rivals.
This requires, above all, greater freedom for market forces, which translates into
further liberalization, deregulation, and privatization of economic activity. In
other words, we have no one to blame but ourselves if we suffer from
globalization.
This notion of globalization as a natural web of expanding ties between
nations in which the invisible hand of competition can enhance efficiency and
majority well-being holds powerful sway over people’s thinking. It underpins
the belief of many U.S. workers that our economic problems are primarily due to
the policies of other governments, like that of China, who do not play fair: they
restrict market forces and thus gain for their own citizens an undeserved
advantage over U.S. corporations and workers. This belief, in turn, encourages
working people to demand that the U.S. government compel these other
governments to make their respective national economies operate more like our
own. In short, this notion promotes the view that there is nothing fundamentally
wrong with capitalism—we just need to defend it against problematic state
interventions.
In contrast, as I argue in Part 1 of this book, “Capitalist Globalization,”
transnational corporations have shaped a global system of production and
consumption that has created tremendously harmful international and national
imbalances, instabilities, and inequities. In large measure this system has worked
to boost transnational corporate profits by pitting workers from different
countries against one another. A case in point: Chinese workers are not gaining
at the expense of U.S. workers. Chinese workers are actually suffering from
many of the very same problems as U.S. workers, including high unemployment,
intensification of work processes, declining real wages and employment
opportunities, and disappearing social benefits. They are not our rivals but
potentially our allies in pursuing an alternative to existing patterns of production
and consumption.
The many imbalances and instabilities created by capitalist globalization were
for a time papered over by stock and housing bubbles in the United States and
elsewhere. That time has now passed. As a result, transnational corporations
have left us facing a likely future of stagnation, with growing numbers of people
destined to experience worsening living conditions unless capitalist
accumulation dynamics are confronted and transformed.
This brings me to the second reason I wrote this book: to expose the dominant
theoretical approach used to demonstrate the superiority of market forces as an
organizer of economic activity, neoliberalism, for being both a flawed theory
and an ideological cover for the destructive transnational corporate political
project highlighted above. Regardless of how bad conditions are, most people
are reluctant to hold capitalism responsible. They end up supporting policies,
such as free trade agreements, that actually enhance corporate mobility and
power at their own expense. In large part this is because of the continuing
ideological power of neoliberalism. Any call to restrict or replace corporate
control over economic activity is met with derision by leading economists, as
well as business and government leaders who point to this theory, and in
particular the theory of comparative advantage, as proof that it is impossible to
improve on market outcomes. Few people have the confidence to stand their
ground in the face of this response.
Therefore, in Part 2 of this book, “The Neoliberal Project and Resistance,” I
critically examine the assumptions underlying the theory of comparative
advantage and the numerous studies done by the World Bank, U.S. government,
and mainstream economists that claim to prove the benefits of unrestricted
international trade and investment. I do so to establish that this theory and these
studies function much more as ideology than as social science. I also critically
examine institutions like the World Trade Organization and agreements like the
U.S.-Korea Free Trade Agreement to demonstrate that they wrap themselves in