[Marxism] Forwarded message on South Africa conference
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Thu Nov 12 08:01:59 MST 2009
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Short version in today's Durban newspaper, The Mercury:
Eye on Civil Society column
Where to after capitalism?
November 12, 2009 Edition 1
FIRST, how did we get to where we are today? Let's retrace our
steps several decades backwards.
The period 1945 to 1970 saw the height of US power in the world
system and also the moment of the most expansive economic upturn
that the capitalist world economy had known.
Any time the world economy is expanding significantly, leading
products that are relatively monopolised offer great profits.
The problem is that all monopolies are self-liquidating, because
there exists a world market into which new producers enter. When
competition increases, prices and profits go down.
A necessary precondition for capitalist profit is world order.
Wars offer the possibilities for some entrepreneurs to do very
well, but also occasion enormous destruction of fixed capital and
considerable interference with trade.
But to maintain order, the world's leading political power must
make use on occasion of its military power. And that is costly in
money and lives.
The home citizens' initial pride in victory can turn to distress
as they pay the increasing costs of military action, and begin to
The period 1965-1970 witnessed both the end of the historically
most expansive economic upturn, and the beginning of decline of
the historically most powerful hegemonic power, the US.
At the same time, social protests during 1966-1970 marked a third
downturn: the decline of the traditional movements of the world
system, the so-called old Left.
The old Left - essentially the communists and the social
democrats, plus the national liberation movements - had risen
slowly across the world system, primarily throughout the last
third of the 19th century and the first half of the 20th century.
By the 1960s, the old Left movements had achieved their historic
goal of state power almost everywhere - at least on paper.
Communist parties ruled one third of the world - the so-called
Social democratic parties were in power, at least alternating
power, in most of another third of the world - the pan-European world.
In the former colonial world, national liberation movements had
come to power, and various versions of populist movements were
rising in Latin America.
Today, to be sure, most analysts and militants are very critical
of the performance of all these old Left movements, and doubt that
their coming to power made much difference.
Old Left movements had built their strategy on the so-called
two-step strategy - first take state power, then change the world.
Critics charged that they had taken state power but had not at all
changed the world.
From the 1980s, the world right-wing movements took advantage of
the world economic stagnation and collapse of old Left movements
and governments to launch a counter-offensive, which we call
neo-liberal globalisation. The prime objectives were to reverse
all the gains of the lower strata during the earlier period.
The world Right sought to reduce all the major costs of
production, to destroy the welfare state in all its versions, and
to slow down the decline of US power in the world system.
The onward march of the world Right seemed to culminate in 1989.
The ending of Soviet control over its east-central European
satellite states, and the dismantling of the USSR itself led to a
sudden new triumphalism of the world Right. One more illusion!
What, in fact, sustained the accumulation of capital since the
1970s was a turn from seeking profits via productive efficiency to
seeking profits via financial manipulations, more correctly called
speculation. The key mechanism of speculation is encouraging
consumption via indebtedness.
After the biggest expansion in the history of the capitalist world
economy, there followed the biggest speculative mania. The bubbles
moved through the whole world system - from the national debts of
the Third World countries and the socialist bloc in the 1970s, to
the junk bonds of large corporations in the 1980s, to the consumer
indebtedness of the 1990s to the US government indebtedness of the
The system has gone from bubble to bubble. The world is now trying
one last bubble - the bailouts of the banks and the printing of
The depression into which the world has fallen will continue now
for a while and go quite deep. It will destroy the last small
pillar of relative economic stability, the role of the US dollar
as a reserve currency of safeguarding wealth.
As this happens, the main concern of every government in the world
will be to avert the uprising of the unemployed workers and the
middle strata whose savings and pensions disappear. Governments
are turning to protectionism and printing money as their first
line of defence, as ways of dealing with popular anger.
Such measures may assuage momentarily the pain of ordinary people.
But they will eventually probably make the situation even worse.
We are entering a gridlock of the system, from which the world
will find it extremely difficult to extract itself.
Some claim that the greatly improved relative economic position of
Asian nations will allow a resurgence of capitalist enterprise,
with a simple geographical shift of location. One more illusion!
The relative rise of Asia is a reality, but one that undermines
further the capitalist system, by overloading the numbers of
persons to whom surplus-value is distributed.
The underlying problem is that the three different kinds of costs
of production - personnel, inputs and taxation - have been going
up over time as a percentage of the actual prices for which
products are sold.
This forces a new question - not how will the capitalist system
mend itself, and renew its forward thrust. The new question is,
what will replace this system? What order will be chosen out of
We don't know.
So what are practical steps that we can and should take? I would
put at the head of the list actions that can minimise the pain
that arises from the breakdown of the existing system.
The second thing that we can do is engage in serious debate about
the kind of world system we want, and the strategy of transition.
The third thing we can do is to construct alternative
decommodified modes of production.
Through this all, we must put at the forefront of our
consciousness and our action the struggle against the three
fundamental inequalities of the world: gender, class, and
race/ethnicity/religion. This is the hardest of all - none of us
are guiltless and pure.
Wallerstein is research professor at Yale University, author of 40
books, and former president of the International Sociological
Association. He presented a longer version of this article last
week as the UKZN Centre for Civil Society's Wolpe lecturer.
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