What next on global capital's agenda?

31, July 2000
ADAM Smith's Wealth of Nations had been published in Britain in 1776, and by the 1860s, it had become the bible for the political economy of nation states throughout Europe, the then epicentre of all social activity.

Adam Smith, the father of "laissez-faire" economics, established certain fundamentals important to the discussion. In criticising the old mercantile ideas of the 16th and 17th centuries, that is, the closed-shop, monopolistic, regulatory system, Smith advanced the view, based on his analysis of what was actually happening, that there are "natural laws" of production which must be allowed to generate without any interference.

For example, the law of "supply and demand" settles the prices of commodities, and the law of "diminishing returns" determines who survives, owing to greater levels of re-investment to maintain the competitive edge. Most of all, Smith advocated no tariffs, no protective national barriers, that free trade should be dominant since the economic system (capitalism) is in fact a world-wide system.

What this meant is that there would come to the fore a forever worsening tension and contradiction between the economic demands of nation states to push outward for spheres of influence in which to extend trade, and the demands of capitalist economy as a single, integrated worldwide system, on the other hand.

That tension would eventually lead to the explosions of World Wars I and II, as later developed European States (Germany, Austria, Italy, Japan) jostled with older established ones(Britain, Spain, Holland, France, Russia) over territorial annexation, a re-definition of the balance of power in the European theatre and over supremacy of trade in the colonialised areas throughout.

The end result of these global tensions was the erection of both the Iron Curtain (Russia, after 1920), and the Bamboo Curtain (China, after 1949), and the birth of a Non-Aligned Movement of the ex-colonial, newly independent territories (Bandung, Indonesia, 1955), which served to allow protectionism for nascent capitalism in these said areas.

The point is, this may have appeared as a brake on the globalisation process, but the operative word is "appeared" because beneath all this, what took place objectively was the utilisation of various different political strategies to arrive at the same maturing, and deepening, of the production process. The world did not represent an even playing field.

Rapid nationalism in all its forms, history indicates, is the best and fastest initial framework for the development and maturing of the capitalist market system in any one country or fatherland, despite the artificial appearances and aberrations that may have appeared throughout the so-called underdeveloped or developing world.

National leaders like Julius Nyerere of Tanzania in the days of the Arusha Declaration kept asking, for instance, how are we to compete? He was saying that any African entrepreneur wishing to start manufacturing automobiles could not start as Henry Ford did in the garage of his home, that such an entrepreneur in these times would, by necessity, have to begin with a multi-million dollar outlay to even enter the market.

Therefore, he needed the protection of a nation state and a partnership with, or the conduit of, a global corporation or multinational corporation to gain the required market access to raw material inputs and sales for the final product.

The Iron and Bamboo Curtains, and the Non-Alignment Movement were only different relative political strategies to the economic problem identified by Nyerere. But for many years, these artificial appearances led many to the erroneous believe that there existed more than one international economy.

The multinational corporations were all the while operating behind all the fronts, deepening the markets, and training the critical mass of middle-class professionals needed to manage operations all over, despite the apparent so-called different "ideologies" and different cultures. They found little resistance in the so-called non-aligned countries to what could be deemed as natural development, but the task proved more drawn-out in the other areas.

Dunlop/Parelli, a British-Italian consortium, began manufacturing tyres inside Russia, and training Russian managers many years before the Iron Curtain came down. So too did the Coca-Cola corporation of the US and, vice-versa, the Russian Vodka producers. American "jeans" and jazz and pop music records to go with the Coca-Cola drinks became the hottest items on the Russian "black market".

And Russian State corporations both directly and/or via satellite States, like Poland, and even India, were operating in the western markets, purchasing technology and raw materials, and selling pharmaceuticals and other finished goods.

The multinationals worked assiduously propelling the objective demands of global market-economy, until masses of people themselves began to tear down the symbolic Iron and Bamboo Curtains, literally with their bare hands.

When this happened (Gorbachev, "Perestroika and Glasnost", and Yeltsin in Russia, and the Tiennamen Square revolts in China), many expressed the view that "history", as we knew it, had come to an end, and that "ideology" (nationalism, socialism) was suddenly no longer a social force, nor factor.

So finally, after some 500 years, capital as a social force seemed to have become fully integrated on a global scale, without artificial hindrances. International corporations now feel the confidence, given the existing technologies (IT), to supersede sovereign nation states and manage the world. World wars were fought in an attempt to fully globalise and manage capital, but all to no avail. What the wars failed to accomplish, the corporations now feel they have the capacity to do.

George Bell, an ex-US politician and later an investment banker, is quoted in Global Reach as having said: "Working through great corporations that straddle the earth, men are able for the first time to utilise world resources with an efficiency dictated by the objective logic of profit..."

And what is culture to become, or how is culture to be defined in cyberspace? And what new structures of control shall be devised to deal with this new situation?

We have to ask ourselves these questions, because for 500 years, capital has sought to put together a globalised integrated economy to be better able to overcome its own inherent structural contradictions, and take the world unto even higher levels.

To do this, its vehicle has been the multinational or transnational corporations which have created the technologies and the critical mass of management professionals, now all readily available to accomplish the global mission.