Paul Sweezy :
(Monthly Review, September
1997)
More (or Less) on Globalization
by Paul M. Sweezy
Much has been written about "globalization" in the last few years. It
is not my intention to add to this literature but only to put the topic
into the context of my own understanding of the history of capitalism
Globalization is not a condition or a phenomenon: it is a process that
has been going on for a long time, in fact ever since capitalism came
into the world as a viable form of society four or five centuries ago;
(dating the birth of capitalism is an interesting problem but not
relevant for present purposes). What is relevant and important, is to
understand that capitalism is in its innermost essence an expanding
system both internally and externally. Once rooted, it both grows
and spreads. The classic analysis of this double movement is of
course Marx's Capital.
But Marx never raised the question whether a fully globalized
capitalism, i.e., with no more non-capitalist space to move into,
would be viable. The reason, of course, was that he expected
capitalism to be overthrown and replaced by another system long
before its spatial limits had been reached. He did not ask, hence did
not try to answer, whether a fully globalized capitalism would be
able to survive, let alone flourish, by entirely internal expansion.
It was left for Marx's followers to wrestle with this and related
questions. The boldest and in some ways the most interesting
attempt was that of Rosa Luxemburg in her magnum opus The
Accumulation of Capital (1912). She put forward the theory that,
since its earliest days, capitalism had lived, and could only live, by
expanding into surrounding non-capitalist space. Her answer
therefore was that the using up of this space would bring a final crisis
from which there would be no escape.
Lenin, by contrast, focused not on capitalism as a whole but on
capitalism as a collection of units in which the stronger ones
competed among themselves for control of the weaker, including
remaining non-capitalist areas. This was the core of his
Imperialism: The Latest Stage of Capitalism, written during the
First World War and itself providing a wealth of supporting
empirical evidence. This struggle among the leading imperialist
powers tended to weaken the capitalist system as a whole and
opened the way for revolutions from below, especially the Russian
Revolution, which threatened the continued viability of capitalism.
The system, however, did recover, and soon after the war the
imperialist powers resumed their internecine struggles, now
complicated by the existence of a major non-capitalist power. This
renewed struggle climaxed with the Second World War, a new
round of revolutions, especially the Chinese Revolution, the
emergence of the Untied States as the sole superpower, the division
of the world into two parts: the capitalist part under U.S.
dominance, and the non-capitalist consisting mainly of the Soviet
Union and the Peoples Republic of China. The ensuing conflict
between the two parts, known as the Cold War and usually thought
of as being between two groups of states, was actually much more
complicated, including major hot wars, guerrilla wars, attempted
revolutions, and successful counter-revolutions.
Lasting almost all of the second half of the twentieth century, the
Cold War ended with the restoration and triumph of capitalism on a
truly global scale. But this outcome was anything but the result of a
smooth process of capital expansion within or beyond its traditional
limits. Violence of various kinds played an enormous role, and there
are large areas in the formerly non-capitalist countries where
capitalism has been proclaimed, legalized, and deliberately planted,
but where there is absolutely no guarantee that it will take hold and
grow in a "normal" way. Furthermore there have been changes in
capitalism as it matured in its traditional stronghold (the United
States, the European Union, Japan, and the former colonial
countries) that pose serious questions about what the continued
expansion of capitalism implies in the post-Cold War period.
What I have in mind here is the three most important underlying
trends in the recent history of capitalism, the period beginning with
the recession of 1974-75: (1) the slowing down of the overall rate
of growth, (2) the worldwide proliferation of monopolistic (or
oligopolistic) multinational corporations, and (3) what may be called
the financialization of the capital accumulation process. This has of
course been a period of quickening globalization, spurred on by the
improved means of communication and transportation, but the three
trends in question are certainly not caused or generated by
globalization. Rather, all three can be traced to changes internal to
the capital accumulation process, the beginning of which go back
about a hundred years to the concentration and centralization
movements that characterized the late nineteenth and early twentieth
centuries and marked the transition from early (competitive)
capitalism to late (monopoly) capitalism. Interrupted by the First
World War and its aftermath, the impact of this transition hit with full
force in the great Depression of the 1930s, from which there was no
spontaneous recovery and which gave strong evidence of being the
beginning of a period of secular stagnation and decline. Once again,
however, world war came to the rescue and, together with its
ensuring aftermath and the Cold War, produced what has come to
be known as capitalism's "golden age" (1950-70). This came to an
end in the recession of 1974-75 and was followed by the
reassertion and intensification of the trends dating back to the turn of
the century: retarded growth, increasing monopolization, and the
financialization of the accumulation process.
These three trends are intricately interrelated. Monopolization has
contradictory consequences: on the one hand it generates a swelling
flow of profits, on the other it reduces the demand for additional
investment in increasingly controlled markets: more and more
profits, fewer and fewer profitable investment opportunities, a recipe
for slowing down capital accumulation and therefore economic
growth which is powered by capital accumulation.
The foregoing describes what happened during the 1920s, a decade
characterized by a persistent rise of underutilized productive
capacity in industry after industry, culminating in the collapse of
1929-33. Already at that time there was a growing tendency for
profits that could not find profitable outlets in real capital formation
to be diverted into purely financial and mostly speculative channels.
Hence the spectacular stock-market boom and crash of the late
1920s. The same double process of faltering real investment and
burgeoning financialization reappeared in the "golden age" of the
post-Second World War decades and has persisted with increasing
intensity to the present.1
All of this certainly takes place in a context of continuing
globalization which put its imprint on the way the various processes
play themselves out. But globalization is not itself a driving force. It
remains what it has been throughout the period we think of as
modern history: the always expansive and often explosive capital
accumulation process.
NOTES
1.The two forms of investment, real and financial, are of course
related, though not in the simplistic (and mostly wrong) way
mainstream economics takes for granted. For a fuller
discussion of these processes, see Harry Magdoff and Paul
Sweezy, Stagnation and the Financial Explosion (Monthly
Review Press, 1987).