Globalization, inequality, and imperialism

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from David Ruccio

We need to fundamentally reject our “free trade” policies and move to fair trade. Americans should not have to compete against workers in low-wage countries who earn pennies an hour. We must defeat the Trans-Pacific Partnership. We must help poor countries develop sustainable economic models.

Sanders’s critique is buttressed by the conclusion of the latest report from the Economic Policy Institute, that the gaps between the richest and poorest families have grown in every state in the country since the late 1970s, as well as Oxfam’s analysis of growing inequality across the globe, summarized in the fact that the richest 1 percent have now accumulated more wealth than the rest of the world put together.

The case against the unequalizing dynamic of capitalist globalization couldn’t be clearer.

Yet, many (Noah Smith is just the most recent example) have attempted to argue exactly the opposite: that globalization is a positive force based on the fact that the global distribution of income has in recent decades become more equal.

The argument in favor of globalization is based on data from Branko Milanovic, illustrated in the so-called “elephant graph” (on the right-hand side of the chart at the top of this post), according to which most of the world’s population (except the very poorest and the working-classes within rich countries) has been gaining.* 

Smith takes Milanovic’s findings to represent a fundamental challenge to “some of the bedrock ideas of both the left and the right.” And, as usual, he gets a little bit right and a lot wrong.

On one hand, the fact that, on a global scale, both the world’s poorest people and the working-classes within rich countries have experienced little if any increase in their real incomes represents a fundamental challenge to the views—of both mainstream economists and neoliberal economic and political elites—that capitalist globalization benefits everyone. It doesn’t, and never has.

But, on the other hand, Smith is simply wrong to claim that the elephant-like changes in the global distribution of income invalidate left-wing claims that the global capitalist game is rigged. It is, and always has been.

What commentators like Smith miss is that global capitalism has changed over its history. At one time (especially in the nineteenth century), it meant industrialization in the global north and deindustrialization in the mostly noncapitalist global south (which were, in turn, transformed into providers of raw materials, which became cheap commodity inputs into northern capitalist production). Later, especially after decolonization (following World War II), we saw the beginnings of capitalist development in the south (under the aegis of the state, with a set of policies we often refer to as import-substitution industrialization), which involved a reindustrialization of the south (producing consumer goods that were previously imported) and a change in the kinds of industry prevalent in the north (which both exported consumer goods to the rest of the world, which after the first Great Depression and world war were once again growing, and often provided inputs into the production of consumer goods elsewhere). Later (especially from the 1980s onward), with the accumulation of capital in India, China, Brazil, and elsewhere, noncapitalist economies were disrupted and millions of peasants and rural workers (and their children) were forced to have the freedom to sell their ability to work in urban factories and offices. As a result, their monetary incomes rose (which is not to say their conditions of life necessarily improved), which is reflected in the growing elephant-body of the global distribution of income.

Does that mean global capitalism is not rigged? Of course not. It continues, as before, to be rigged both within and across countries. The top 1 percent across the globe continues to find itself in the position of capturing the surplus created by the world’s workers, does as they did when capitalist globalization began (because, we often forget, capitalism has been global from the very beginning). The only changes that have taken place are (a) the number of workers who are involved in producing that surplus (which has dramatically increased, especially in the global south), (b) the geographical location of the members of the 1 percent (many more now in India, China, Brazil, and elsewhere), and (c) the way the surplus is captured (either directly, from the production of capitalist commodities within the north and south, or indirectly, especially in the north, through finance, insurance, and other services).

Which brings us, finally, to the issue of imperialism (which, contra Smith, was never just about rich countries gaining at the expense of poor ones). The argument I made back in 2000 is that, while “‘formal empires’ no longer (or, better, hardly) exist—precisely because the thinkers and movements of anti-imperialism and national liberation (from Mariátegui and Gandhi to Fanon and Che, from Peru and India to Cuba and Vietnam) were successful, because imperialism was opposed both by broad alliances of subaltern, colonized peoples and by equally broad alliances within the imperial nations themselves”—what we’ve seen in recent decades is a new kind of imperialism, an attempt not to take over individual nations but to transform the world as a whole, “a project to recolonize the entire world, to remake it, with the zeal of a humanizing mission precisely reminiscent of the ‘Civilization, Christianity, and Commerce’ that, according to the legendary David Livingstone, was the basis of the European colonization of Africa.”

This encourages me, at least, to borrow from Gilles Deleuze and Félix Guattari and to think of imperialism as a machine—as against either a particular stage of capitalism (Lenin’s preference) or merely a political option (the choice of Lenin’s nemesis, Kautsky). Precisely the choices that are repeated today. In contrast, the machinelike quality of imperialism gives a sense of the ways in which it has various parts that (often but not always) work together, a set of energies, available identities and categories, that propels individuals and groups, institutions and structures, to enact designs and to civilize those who attempt to resist its apparent lessons, to make them succumb to the naturalized logic. Not a stage of capitalism but rather a machine that energizes and is energized by capitalism at various points in its history. Not an option, a political choice available to ruling governments and regimes, although it does include various options: military bombardment or invasion, economic carrots and sticks, cultural hegemony and worldwide news reach. . .

. . .And the knowledges produced by economists, especially (but not only) in the United States.

Today, the effects of the complex and changing assemblage of the capitalism and imperialism machines (and the mainstream economic knowledges that have supported them) are being contested by the discontents of capitalist globalization, the growing numbers of citizens on both sides of the Atlantic who have been treated as so much detritus in the opening up of global markets for their corporate employers and financial oligarchs.

The results of this contestation are, of course, messy but the message is clear: we need to imagine and create a new kind of global economy, one that benefits the majority of people both within and across countries.

*There’s nothing inconsistent between the Oxfam and Milanovic results: Oxfam is focusing on the global distribution of wealth, while Milanovic reports on the global distribution of income. Both, however, tell us something important about contemporary trends in global inequality—that, at one and the same time, the world’s top 1 percent has increased its accumulation of wealth (such that it now owns more than everyone else combined, most of whom have very little wealth), precisely because of its own soaring incomes, even as the world’s “middle-class” has seen its real income rise in recent decades.