Imperialist World Order: Misery for Profit

Global Capitalism & Class Struggle

The recent wave of international protest against the institutions of global capitalism is a manifestation of growing dissatisfaction among broad layers of the world’s population with the operation of the imperialist world order. Despite confused, mutually contradictory and sometimes overtly reactionary politics, these protests signal the end of a decade of capitalist triumphalism which followed the fall of the Berlin Wall. Our comrades at the 26 September 2000 protest in Prague carried placards (in Czech, German and English) which called for: “Down with the IMF/World Bank!,” “Neither Free Trade Nor Protectionism,” and “For Workers’ Revolution to Smash International Capitalism!”

There is something profoundly wrong with a world in which the income of the three billion people at the bottom is less than the 500 at the top. The World Bank’s Annual Report 2000 admits that half of humanity subsists on less than two dollars a day, although it cynically insists on drawing the global “poverty” line at one dollar.

In November 1998, Le Monde Diplomatique reported: “Thirty million people a year die of hunger. And 800 million suffer from chronic malnutrition.” The author, Ignacio Ramonet, asked:

“Is this the way it has to be? The answer is no. The UN calculates that the whole of the world population’s basic needs for food, drinking water, education and medical care could be covered by a levy of less than 4% on the accumulated wealth of the 225 largest fortunes.”

Obscene inequality is a fundamental and unalterable feature of capitalism. Under a “free market” system, social priorities are always arranged to benefit the privileged few at the expense of the many. This is not accidental, and it is not something that the World Bank, the International Monetary Fund (IMF), the Group of Eight (G-8) or any other representatives of global capitalism could change, even if they wanted to.

How the IMF ‘Fights’ Poverty

For public relations purposes, the World Bank and IMF are now talking about making the eradication of poverty their top priority. At a press conference on “The IMF’s Role in Poverty Reduction,” held on the eve of the Prague demonstrations last September, fund official, Masood Ahmed, observed:

“[T]here has been I think over the last few years a coming together around the central challenge of poverty reduction as being the most important issue that faces the world today.”

The IMF’s plans for “fighting” poverty were outlined in a “Global Poverty Report” to the July 2000 G-8 Summit in Okinawa. The report, co-signed by the World Bank and four other development banks, praised earlier “anti-poverty policies”:

“Some of the policy measures adopted include, stabilizing the macro-economic framework, trade and price liberalization (especially of agricultural prices), and privatization and promotion of efficient management of the public sector, including anti-corruption measures.”

This is simply a description of the IMF’s standard “structural adjustment” program which has routinely increased poverty levels, as well as imperialist leverage, in those neo-colonies where it has been applied. In most cases, its implementation has resulted in reduced social services through privatization of healthcare, education, power generation and transportation. These measures are chiefly designed to create opportunities for profitable investment for foreign capitalists and their domestic partners, while also reducing the domain of the national state. The hundreds of millions of working people in Mexico, Brazil, South Korea, Thailand, etc. who have first-hand experience with IMF efforts to “stabilize the macro-economic framework” have no illusions in its “anti-poverty programs.”

“Trade and price liberalization” means getting rid of tariffs and subsidies for domestic manufacturers, thus forcing them to compete directly with massive international monopolies. The result is that many small and medium concerns in the neo-colonies are forced out of business, which increases unemployment and lowers wages.

The technical advances of the “Green Revolution” have made it profitable for agribusiness multi-nationals, or their surrogates, to drive subsistence farmers off their traditional lands so that these can be used to produce cash crops for export. Consequently many “underdeveloped” countries have experienced a massive expansion of agricultural output, while simultaneously recording dramatic declines in per capita food consumption as millions of former peasants are pushed into the disease-ridden shantytowns that ring the cities of the “Third World.”

The growth of social inequality is a problem that cannot be “fixed” within the framework of the existing social order. Like its earlier “development” plans, the IMF’s “Anti-Poverty Policies” will accelerate the extraction of wealth from the poor for the benefit of the finance capitalists of the imperial metropolis. This is not due to accident or oversight. It is quite deliberate and entirely rational within the logic of capitalism. Under the “free market,” social priorities will always favor those at the top of the pyramid at the expense of everyone else.

‘Does Protest Need a Vision?’

The so-called “anti-globalization movement” cannot really be considered a movement at all because it is so extremely politically heterogeneous:

“What’s the opposite of globalization? Socialism? Isolationism? Vegetarianism? The answer is all three things, and many more. The radical-chic outfit of the season is a coat of many colors.”
Time, 24 April 2000

Some make a virtue of this. Pop-journalist Naomi Klein, the capitalist media’s appointee as official spokesperson for “anti-globalization” youth, argues:

“The decentralised nature of these [anti-corporate] campaigns is not a source of incoherence and fragmentation but a reasonable, even ingenious adaptation to changes in the broader culture....Once involved, no one has to give up their individuality to the larger structure; as with all things online, we are free to dip in and out, take what we want and delete what we don’t. It is a surfer’s approach to activism, reflecting the internet’s paradoxical culture of extreme narcissism coupled with an intense desire for external connection.”
—“Does Protest Need a Vision?” New Statesman, 3 July 2000

Individualists, narcissists and others who enjoy “dipping in and out” of the struggle are of little concern to the operators of global capitalism. But serious people have to make some fundamental choices. Should the objective be to win a “seat at the table” in negotiating ground rules for operating the imperialist world economy? Can the undesirable features of a profit-driven economy be eliminated, or is it necessary to overturn the rule of capital itself? These questions have to be answered.

History of ‘Globalization’

Liberals, social democrats and nationalists tend to view the “globalization of production” as a sinister new development in which friendly, civic-minded, local, capitalist firms are gobbled up by heartless transnationals. But capitalism has always been a ruthless, “globalizing” system. The European arrival in the Americas in 1492 touched off an orgy of genocide and plunder, which along with the development of the slave trade, provided the pioneers of capitalism with their original “primitive accumulation.” Over 130 years ago, Karl Marx identified the essential features of “globalization” in his description of capitalist development:

“One capitalist always strikes down many others. Hand in hand with this centralization, or this expropriation of many capitalists by a few, other developments take place on an ever-increasing scale, such as the growth of the co-operative form of the labour process, the conscious technical application of science, the planned exploitation of the soil, the transformation of the means of labour into forms in which they can only be used in common, the economizing of all means of production by their use as the means of production of combined, socialized labour, the entanglement of all peoples in the net of the world market, and, with this, the growth of the international character of the capitalist regime.”
Capital, Vol. 1

A century ago, the vast majority of humanity was involved, one way or another, in production for the market. The British Empire, at that time the world’s dominant economic and military power, also pursued a “free-trade” policy. The competition for markets and colonies touched off by “free trade” under the Union Jack led directly to the First World War. Many capitalist economists, however, regard this period as the golden age of the “free market.”

In a recent speech denouncing protests against “globalization” Alan Greenspan, chair of the U.S. Federal Reserve Board, observed:

“the progress made since the Second World War in lowering trade barriers between nations really represented an effort by countries to get back to the open borders that had existed at the beginning of the 20th century.”
Globe and Mail (Toronto), 15 November 2000

Greenspan mused that a downturn in the world economy could produce a resurgence of protectionism: “Clearly, the risk is that support for restrictions on trade is not dead, only quiescent.” During the inter-war period, this is exactly what happened. “Free trade” was abandoned as each imperialist power attempted to simultaneously blast its way into foreign markets, while sheltering its own national industries behind tariff walls. This resulted in the Great Depression of the 1930s and World War II.

October 1917: Workers’ Revolution Against Global Capitalism

The October Revolution of 1917 presented the most serious challenge that international capitalism has ever faced. The successful expropriation of the Russian capitalists (and their international partners), and the organization of an entirely new form of state—a workers’ state—sparked a powerful wave of revolt that shook the foundations of the bourgeois order. The Bolshevik leadership of the Russian workers, headed by Vladimir Lenin and Leon Trotsky, considered the creation of the Soviet Union to be merely the first step in a global social revolution. In 1919 they launched the Communist International (Comintern) which set as its task the organization of a disciplined network of revolutionary socialist parties in every country on the planet. The Comintern declared war on the whole system of capitalist thievery and plunder, and made common cause with the workers and oppressed everywhere. In a speech to the Second Congress of the International, Lenin declared:

“World imperialism shall fall when the revolutionary onslaught of the exploited and oppressed workers in each country, overcoming resistance from petty-bourgeois elements and the influence of the small upper crust of labour aristocrats, merges with the revolutionary onslaught of hundreds of millions of people who have hitherto stood beyond the pale of history, and have been regarded merely as the object of history.”
—Report on the International Situation and the Fundamental Tasks of the Communist International, 19 July 1920

International capital was acutely sensitive to the threat posed by Bolshevism. Fourteen capitalist countries immediately dispatched troops in a failed attempt to help the Russian counterrevolutionaries strangle the Soviet Republic in its infancy. Despite the subsequent bureaucratic degeneration of the revolution under Stalin, the early years of the revolution stand as a beacon for all who seek to struggle for a world without exploitation, racism, poverty or oppression—in short, a world without capitalism.

The undisputed economic and military hegemony of the U.S. after World War II allowed it to reorganize the world according to the requirements of the “American Century.” The IMF and World Bank (along with NATO, the UN and various other bodies) were all set up as American-dominated institutions. Yet U.S. power was constrained by the existence of the Soviet Union, which provided a global military and economic counterweight to imperialism. The existence of this “Communist” other compelled the ruling elites of Western Europe, Japan and North America to divert a portion of the social surplus into funding education, healthcare, pensions, benefits and other social services. It also forced them to make occasional diplomatic and economic concessions to the “non-aligned” neo-colonial states.

Fruits of Counterrevolution

The destruction of the Soviet Union represented an immense historic setback for working people around the globe. Capitalist victory in the Cold War has translated into attacks on many of the social gains won by previous generations. For ordinary people in the former Soviet bloc, capitalist restoration has been a catastrophe. According to one of the World Bank’s own publications, between 1988 and 1993, incomes declined by 25 percent in Eastern Europe, and 54 percent in the Slavic and Central Asian regions of the former Soviet Union (Branko Milanovic, Income, Inequality, and Poverty During the Transition from Planned to Market Economy). In a 6 November 2000 speech in Vienna, Horst Köhler, the IMF’s managing director, expressed “praise and admiration” for the forces of capitalist restoration, but admitted: “the number of people living on less than $2 a day has risen fivefold since the transition began (from 16 million in 1987 to 93 million in 1998).”

The triumph of counterrevolution in the USSR sharpened competition between the major imperialist blocs. Each advocates free trade within its own sphere of influence, but jealously guards its turf from the others. A recent example was the spat between the U.S. and the European Union (EU) over rules governing banana imports. The U.S. threatened to slap 100 percent surcharges on EU imports over the latter’s policy of allowing banana producers from former Dutch, British and French colonies in the Caribbean preferential access to a small percentage of the EU’s banana market. The U.S. claimed that this policy was “unfair” to Latin American banana producers (whose products just happen to be retailed by U.S. food companies including Chiquita, Del Monte and Dole Foods).

The post-Soviet New World Order is also characterized by brutal attacks on the civilian population of “rogue states” like Iraq and Yugoslavia whose rulers have offended their imperial godfathers. Just as the international “rule of law” is discarded whenever it seems inconvenient, so too the pretense of commitment to “free trade” and “level playing fields” is routinely shelved for neo-colonial producers thought capable of offering serious competition. A “background paper” produced by Oxfam International for the Prague meeting of the IMF/World Bank entitled “‘Multilateralism’ and world trade—or how to rig the rules against the poor,” pointed out:

“Politicians in the industrialised world preach the doctrine of free trade, and they use their control over the IMF and the World Bank to impose it on developing countries, but they practise protectionism. And in many areas they use the WTO [World Trade Organization] as a battering ram to open up Third World markets in the interests of the powerful transnational companies that dictate their trade policies.

. . .

“Much has been made by creditors of their generosity both in financing debt relief...and in providing development assistance. However, when measured against the wider losses associated with protectionism, the generosity is more apparent than real. For every $1 provided through aid and debt relief, developing countries lose another $14 as a consequence of protectionist barriers in the rich world. These barriers deprive poor countries of $700bn a year in markets for labour-intensive manufactured goods, and another $65bn in agricultural markets.”

‘Globalization’ and Class Struggle

During the last several decades, the world’s major corporations have made considerable progress in the international integration of manufacturing through new industrial technologies, improvements in transport and, particularly, communications and information technology. These same factors have also made it easier to relocate production from the metropolitan centers to low wage areas. This process, driven by a thirst for higher profits, has shattered the lives of millions of working people, particularly in the former industrial regions of the imperialist centers.

But the problems commonly blamed on “globalization” are not an inevitable byproduct of international economic integration or new technologies. The impoverishment and social dislocation that accompany them are direct results of the drive to maximize private profit. A socialist economy would harness advances in production to eliminate unemployment, poverty and inequality.

The effects of “globalization” on working conditions are often exaggerated. Plant relocations and outsourcing are estimated to have accounted for less than a quarter of the decline in real wages in the U.S. between 1974 and 1994. The majority of workers in North America are employed in sectors such as education, government and finance that have been largely immune to international competition.

The chief reason for the decline of real wages in America in this period was the string of capitalist victories in the class war during the past two decades. This began with Ronald Reagan’s firing of the PATCO air traffic controllers in 1981 and continued through to the shredding of welfare and other entitlements in the name of a “balanced budget.” None of this was inevitable. All of it can be traced to the cowardice and treachery of the trade-union leadership.

Unwilling or unable to initiate the sharp class battles necessary to protect their base, the official leaders of the workers’ movement throughout the “developed world” have resorted to flag-waving and protectionism. The result has been a divided and weakened workers’ movement and the growth of poisonous nationalism and ultra-rightist movements like Jean Marie Le Pen’s National Front in France.

Most of the young participants in the recent wave of international protests are opposed to the injustice of the capitalist world economy. But the remedies offered by prominent “anti-globalizers” amount to cosmetic modifications and leave the fundamental problem—a profit-driven economic system—intact. This is because the trade-union bureaucrats and professional leaders of the various ecological, religious and social-justice NGOs, who have provided the organizational backbone for most of the recent protests, operate within the framework of what is feasible under capitalism. Their ultimate objective is to pressure the IMF, corporate monopolies and imperialist governments into behaving more humanely.

The ‘Impotent’ Nation State

One of the themes pushed by liberal critics of “globalization” is that national states have become impotent, as power has shifted to multinational corporations, and unaccountable international bureaucracies like the World Trade Organization. In fact, each corporation depends on the political and military clout of its own national state to safeguard its foreign holdings. Far from shrinking, the role of the national state in protecting property rights and enforcing legal agreements has expanded, along with the international integration of the world economy. Within the WTO, each government maneuvers to try to write the rules of international trade to benefit their own capitalists. The WTO, the IMF and the World Bank stand under, rather than above, the major imperialist powers which alone possess the armed might to enforce their will.

The American state, for example, is not showing signs of withering away just yet. The lavishly funded U.S. military (which proved so handy to the oil monopolies in the 1991 Gulf War) has an annual budget of $275 billion. While pleading poverty as an excuse for gutting social services, the American ruling class has vastly expanded the capacity of its repressive apparatus: putting more cops on the street; enlarging police paramilitary units; and increasing video surveillance and electronic eavesdropping. There has been a huge expansion of the prison system (now increasingly run on a “for profit” basis). The prison population in the U.S., which has always been disproportionately black and Hispanic, recently topped two million. It is growing seven times as fast as the population at large.

The massive coordinated police response to the international protests against the WTO, IMF, etc., do not lend credence to theories about the “disappearance” of the state. Protesters are now “preemptively” arrested, as the various national police agencies combine their efforts to squash dissent. Prior to the Prague demonstration, the U.S. Federal Bureau of Investigation dispatched dozens of agents to help the Czech police with their preparations. Hundreds of people suspected of having participated in earlier protests were stopped at the border.

Anarchism & Socialism

Many of the more militant demonstrators identify themselves as anarchists. Their views span a considerable political spectrum. Some advocate a return to a mythical past when everyone was a petty proprietor in a self-sufficient village economy. More left-wing anarchists, or “anarcho-communists,” espouse a revolutionary overturn of capitalist rule, and the creation of an egalitarian society on the basis of the socialization of the means of production.

Both anarcho-communists and Marxists recognize that a workers’ revolution must destroy the capitalist state machine (i.e., disband the police, officer corps, judiciary and the rest of the repressive apparatus). But while socialists propose that working people replace the organs of capitalist rule with their own state apparatus, anarchists, who oppose any and every kind of state on principle, are vague about how exactly a victorious revolutionary movement should exercise its power.

The history of every revolt against capitalist rule shows that the exploiters will stop at nothing to cling to power. In the 1980s, Ronald Reagan armed and paid the contra mercenaries in Nicaragua; in Spain in the 1930s, Hitler and Mussolini backed Franco’s legions; in the early years of the Russian Revolution, the imperialists supported the Whites against the Reds. If they are to successfully expropriate the exploiters, and reconstruct society on an egalitarian basis, the working class and oppressed must possess the political and military organization necessary to crush the counterrevolution. As Frederick Engels once remarked, a revolution is an “act whereby one part of the population imposes its will upon the other part by means of rifles, bayonets and cannon—authoritarian means.”

Revolutionary Strategy & Working Class Struggle

The problem of how to effect revolutionary change is of critical importance for intelligent people who are serious about challenging the rule of global capital. Many subjectively revolutionary anarchist militants, outraged by the system of global piracy, act out their anger in skirmishes with the police. It is necessary to organize effective self-defense for demonstrations against police violence, but trashing a few Starbucks or McDonald’s is a diversion that poses no serious threat to capitalism.

The only layer of the population with both an objective interest and the social power to overturn capitalist rule is the working class. Those who produce the commodities, run the transportation and communication systems, and provide all the supporting services that capital depends on, can run society without their masters.

Many leftist youth today view trade unions as cumbersome, bureaucratized and conservative. The unions however, are also potential organizations of militant class struggle. The privileged labor aristocrats who run the labor movement in every imperialist country today are fundamentally loyal to capitalism. In many cases, they are actively involved in poisoning their ranks with bourgeois nationalism, and even outright racism. In the “developed” world, these “labor lieutenants of capital” have provided a vital prop for bourgeois rule for over a century.

But workers’ struggles periodically break through the grip of the bureaucrats—even in the imperialist centers—and at these moments, it is possible to catch a glimpse of a very different future for humanity. The central strategic task in the imperialist countries is to construct an alternative, revolutionary leadership rooted in the rank and file and committed to a program of hard class struggle. Such a leadership would fight to oust the pro-capitalist bureaucrats and turn the unions into effective instruments for class war against the bosses.

Young militants who hate imperialism, but turn their backs on the workers’ organizations, inadvertently help ensure the continued political domination of the pro-capitalist misleaders. Working-class activists who today may only be demanding “corporate responsibility” or “fair trade,” may tomorrow come to realize that nothing essential can be changed unless imperialism is smashed. But such transformations in consciousness require the political intervention of revolutionaries to combat the protectionist, social-democratic illusions pushed by the labor bureaucrats.

The Music of the Future

Socialists can only welcome the mood of popular opposition to the ravages of the market after the retreats of the last decade. The business press naturally takes a different view. The 11 September 2000 issue of Business Week (America’s leading corporate journal) ran a cover story entitled “Too Much Corporate Power?” which reported: “three-quarters of Americans think business has gained too much power over too many aspects of their lives,” and “66% think large profits are more important to big companies than developing safe, reliable, quality products for consumers.” Business Week glumly concluded: “Put simply, it’s becoming fashionable to be anticorporate,” and observed that unlike the 1960s: “Today, those Americans angry at corporations cut across generations, geography, and even income groups.”

It is this sentiment that has fueled the recent demonstrations. What really alarmed the American rulers about the anti-WTO demonstration in Seattle in November 1999 was the widespread popular support for the protesters. But unless this impulse is connected to an understanding of the real dynamics of world capitalism, and the necessity to eliminate, rather than modify it, nothing fundamental will change.

Demands for “Fair Trade, Not Free Trade” and for more “Corporate Responsibility” are designed to contain protest within the framework of the system. If the scope and depth of the protests grew sufficiently, it is possible that a Ralph Nader, Jesse Jackson or Ken Livingstone might one day be appointed to the board of the IMF or WTO. Their presence, however, would only serve to legitimize these institutions.

It is not enough to protest the effects of international capitalism or to demand the reform of its most extreme outrages. The answer is not “fair trade,” and certainly not protectionism, but the uprooting of a system which poisons the earth, starves hundreds of millions of people and condemns billions more to lives of brutal poverty. The pursuit of profit will, sooner or later, inevitably produce yet another (and probably the last) inter-imperialist shooting war—this time with nuclear weapons. It is impossible to have an ecologically rational, non-exploitative, humane society develop peacefully from a system rooted in racism and exploitation.

Developing a mass political movement capable of overturning the global system of organized piracy represented by the IMF and World Bank depends on the creation of a disciplined revolutionary organization (a “combat party”) armed with a program linking the interests of workers and the oppressed in the “developed” world to those in the neo-colonies. There can be no other road.

1917 no.23: February 2001