[Marxism] Panitch-Gindin interview

Louis Proyect lnp3 at panix.com
Sat Oct 20 07:57:05 MDT 2012

The nature of the beast: Leo Panitch and Sam Gindin on 'The Making of 
Global Capitalism'
By Aaron Leonard [2]
October 19, 2012

Leo Panitch and Sam Gindin have just released their latest book, The 
Making of Global Capitalism [8]. Gindin is the former Research Director 
of the Canadian Autoworkers Union and Packer Visiting Chair in Social 
Justice at York University, and Panitch is Canada Research Chair in 
Comparative Political Economy and Distinguished Research Professor of 
Political Science at York University. The two have worked together on 
many books and publications. Aaron Leonard recently sat down with them 
in New York City to discuss their work. The interview will be presented 
here in three parts over the coming days.

Part I: "An American Proposal"

Aaron Leonard: Let's start by dialing back, before this global 
capitalism was in place. Your book recounts something called, "An 
American Proposal," a joint statement from the editors of Fortune, Time 
and Life published in the midst of World War II (1942). In it they lay 
out the aims of a post World War II world, "to organize the economic 
resources of the world so as to make possible a return to the system of 
free enterprise in every country." This is rather shocking in its brazen 
capitalist class-consciousness -- what did it portend?

  Sam Gindin: You have to understand that in the context of a developing 
awareness within the American state -- and the development of 
corresponding capacities -- that to preserve and strengthen American 
capital it was essential to keep the world more open to capitalism more 
generally. If that wasn't achieved and other parts of the globe closed 
themselves off to capitalism, the threat was reviving the kind of 
problems faced with Germany in the interwar period -- countries that 
can't get access to resources and markets turn to o autarky, with 
profound implications for the U.S. itself.

Leo Panitch: I think the historical context is important as well. 
Roosevelt's second New Deal ended in 1937-38 and there was a truce with 
business in which it was made clear that a very soft and weak Keynesian 
would be adopted and there would be no more major reforms for trade 
unions and for labor. Indeed some of what looked like the more radical 
elements of the Wagner Act had already been constrained by the Supreme 
Court and by the Labor Relations Board. A deal was done with capital. 
Then as the war approached the State Department was encouraging the 
Council on Foreign Relations and businessmen on Wall Street to form a 
roundtable, which they did in 1939 under the auspices of Fortune. They 
were working very closely and though it sounds like capitalists coming 
together and then telling the American state what to do, it was as much 
an interaction between corporate lawyers and officials inside the 
American state who were doing this thinking together.

Dean Acheson, who went on to be Secretary of State and wrote the great 
book Present at the Creation, gives a speech to the International Ladies 
Garment Workers Union in 1939 that says pretty much the same thing: that 
it's going to be up the U.S., if the war is won, to remake the postwar 
world using the capacities that were developed with the New Deal -- in a 
sense internationalize those capacities -- so as to construct a world 
which is open to free enterprise. They do what wasn't done after World 
War I, including forgiving loans, the refusal of which was one of the 
things that generated the economic crisis of the thirties.

AL: While the business of the U.S. building this global empire was going 
on, there were two major states, the Soviet Union and the People's 
Republic of China that stood outside that paradigm. What impact on 
global capitalism did the absence of such a significant amount of the 
productive forces -- people, technology, machines, raw materials etc. -- 

LP: At one level, you can say that these were arenas closed to capital 
accumulation. The American state was extremely worried about that in 
terms of the Soviet Union and they were very surprised to have lost 
China by 1949. But it wasn't only a matter of these being places that 
American capital could not enter, though it has of course always been 
very important to the American state to be able to open markets for 
American multinationals and banks. And yes, important portions of the 
world's resources, especially in the case of the Soviet Union, were not 
available to American capital.

But beyond this those resources were critical to Europe and Japan as 
they were remade as capitalist societies. The United States guarantees 
access, above all in the Middle East, to oil as part of rebuilding of 
Japan and Germany and Britain and France. A lot of people tend to think 
of American military interventions, or CIA interventions, in terms of 
'what they're trying to do is secure oil for the United States.' No. On 
the contrary they're playing the role of the global state in the absence 
of an international global state. They are guaranteeing, to those 
countries they are rebuilding as capitalist states, access to resources 
that they otherwise would have had from Eastern Europe and that portion 
of Soviet Asia that is now closed to them.

SG: The other dimension is that the Soviet Union and China were examples 
of staying out of capitalism that spurred on liberation movements 
abroad. They also were supportive of economic nationalism on the part of 
Third World states, which by the late 1960s undertook a growing number 
of expropriations of foreign capital, but these numbers faded through 
the later 70s as the liberation movements were defeated and as Third 
World countries got more integrated into capitalism.

LP: What was attractive to many Third World countries was that aspect of 
the Soviet Union which was motivated by 'socialism in one country' which 
was essentially Russian nationalist. Of course the national bourgeoisies 
in Third World countries were very much holding onto private property, 
but nevertheless they, to some extent, emulated the space that communist 
governments had ostensibly carved out for themselves.

AL: The period in the wake of the U.S. defeat in Vietnam was a troubled 
and critical one. The depths of the crisis were such that, as you note, 
there was a TIME magazine cover of 1975, asking, "Can capitalism 
survive?" For all the complex mix of things going on, your conclusion is 
that it was indicative of "neither decline nor moderation but 
restructuring." What do you mean by that?

  LP: I do think the context for that was not so much Vietnam. It was 
rather these increased expropriations from nationalist regimes. In 1974 
the UN General Assembly overwhelmingly voted for a charter of economic 
rights of states, which included the provision that they could 
expropriate foreign capital, even without compensation. To some extent, 
Wall Street discounted this as rhetoric because they knew that while 
Saudis had taken over the operations of foreign oil companies they paid 
them for this, and they were investing their surpluses on Wall Street. 
But the wording of the UN economic rights charter still did sound very 
shocking. And this rather militant sounding economic nationalism abroad 
came was all the more frightening in that it coincided with a lot of 
labour militancy at home.

The inflation of the 1970s stemmed from the inability to quell that 
militancy in the advanced capitalist countries. To top it all off, the 
breakdown of Bretton Woods, itself a product of such inflationary 
tendencies, had created consequent uncertainty about the impact on 
trade, just as Japan and Germany had become major exporters to the U.S., 
and as the United States was by this point starting to import a lot of 
capital from these countries as well. In other words, there were a whole 
number of things coming together at the time TIME magazine asked whether 
capitalism could survive. Things looked quite frightening -- but if the 
U.S. initially responded shock and horror, it soon took more practical 
steps that Sam calls restructuring.

SG: The restructuring was mainly about coping with the profit squeeze of 
the 1970s that was produced by many of the above factors. Mainstream 
economists, describing the period from the 1980s through the 1990s refer 
to it as a period of moderation. Basically after '83, apart from the 
brief recession at the turn of the 1990s was the longest period of 
uninterrupted U.S. growth in the postwar era. Yet at the time both the 
left and the right saw this period as one of U.S. decline, arguing first 
that Japan and then that Europe were going to replace the U.S. as the 
dominant capitalist force in the face of was a 'hollowing out' of 
American economic strength. We've argued that it wasn't hollowing out, 
it was restructuring.

In fact American capital came through that period very successfully. 
That doesn't mean working people did well. It was obviously a period of 
great inequality and insecurity, with stagnating wages, etc. But for the 
corporations, the period included a major restructuring of workplaces, 
new technologies, changes in the relative importance of specific 
industries, and dramatic shifts between manufacturing and services, 
consumer services like retail, and business services like engineering, 
consulting, accountancy, legal become very important at home and 
internationally. There were also regional shifts in economic activity 
(Detroit vs. the American South) and major geographic shifts such as the 
integration of Eastern Europe and then China. This has to be seen as a 
major period in which American capital, having defeated labour, was left 
with more autonomy to do what it felt needed to be done to revive 
capital and restructured, establishing the material base for the revival 
of the American empire.

AL: How did the collapse of the Soviet Union fit into all that?

LP: Even before that, it seemed in the seventies, as the crisis was 
accelerating, a political left was emerging inside the major working 
class-affiliated political parties that had a chance of getting elected, 
and when TIME said, “Can capitalism survive?” they were also thinking 
about the bubbling up of radicalism inside those government parties. 
What was being argued by the left in these parties was that the welfare 
state reforms that had previously been won were now coming under 
enormous pressure and would be lost unless workers could go beyond them, 
to take the decisions about what is invested and where it is invested 
away from capital. You were hearing this from the forces behind Tony 
Benn in Britain, Rudolph Meidner in Sweden, from the German unions 
calling for investment planning, from those forces on the left in France 
that eventually got Mitterrand's Socialist Party elected in France in 
conjunction with the Communists on the most left-wing program in the 
postwar period. And even in the U.S., the left in the Democratic Party 
was very strong in the mid-1970s.

Yet all this was turned around. By the late 1970s, the Democrats under 
Carter eviscerated the left wing of the Democratic Party. The 
Humphrey-Hawkins full employment bill, which was calling for economic 
planning to secure full employment again, was turned into an empty piece 
of legislation. The unions by the late seventies either were giving 
concessions to the auto companies like Chrysler in exchange for a 
bailout, or they were more explicitly aligning themselves with a need 
for competitiveness. The union militancy was broken in Britain even 
before Thatcher by the Labour government, and the German Socials 
Democrats eviscerated the left in the unions, as did their Swedish 
counterparts. And once Mitterrand had to choose between either imposing 
capital controls and interrupting the capitalist process of European 
integration, or giving up his radical program -- he famously did the 

Moreover, if you look at what happened to Third World economic 
nationalism Wall Street was right, the rhetoric of these nationalist 
bourgeoisies needed to be very heavily discounted. Even in the face of 
the debt crisis of the 1980s they came on board with the IMF and 
American Treasury in introducing the kind of structural adjustment 
program that would invigorate their markets, make them competitive, 
restrain their internal balance of class forces. As Larry Summers said, 
the main affect of NAFTA was to insure that Mexico would follow market 
oriented policies and be favourable to the United States instead of 
following socialist policies and be unfavourable to the United States, 
very explicitly. That was a process begun in the 1980s carried through 
in the 1990s.

This was much more important than the collapse of the Soviet Union. 
That's not to say that the Soviet collapse didn't have an effect in 
terms of a sphere becoming open to capital accumulation and demoralizing 
those portions of the left which thought a different world was all tied 
up with this very disappointing and undemocratic authoritarian example. 
I think one tends to enormously over-blow the significance of that 
collapse in fact, given that the important things inside the capitalist 
world had already largely taken place by then.

SG: The main periodization isn't before the Berlin Wall falls and after. 
Even going back to 1948 and the common understanding of the Marshall 
Plan as revolving around the external Soviet threat, we argue rather 
that you have to understand it more in terms of what was happening 
inside European countries and the internal threat from the left and the 
American concern, apart from the Soviet Union, of how to keep a world 
open to the making of global capitalism. One of the things that does 
happen with the collapse of the Soviet Union is that Third World 
countries trying to find some space vis-à-vis the American state have 
lost the leverage coming from the kind of support they would have from 
the Soviet Union. But a lot of that had been broken already.

AL: It puts the whole concept of containment into a whole different light...

SG: Yes, in a very different light. Its much more of a political economy 
explanation than one based on the cold war explanations.

Part II and III of this interview will be published next week.

Aaron Leonard is a writer and freelance journalist. He is a contributor 
to truthout.org, History News Network, rabble.ca and other publications. 
He is based in New York City. His writings can be found by clicking here 

[1] http://rabble.ca/taxonomy/term/15
[2] http://rabble.ca/taxonomy/term/8268
[3] http://rabble.ca/
[4] http://rabble.ca/contact/editor/[letter to editor for 
[5] http://rabble.ca/supportrabble
[6] http://rabble.ca/contact/corrections/[correction for article 
[8] http://www.versobooks.com/books/1145-the-making-of-global-capitalism
[9] http://www.aaronleonard.net/
[10] http://rabble.ca/taxonomy/term/166
[11] http://rabble.ca/category/tags-issues/leo-panitch
[12] http://rabble.ca/category/tags-issues/sam-gindin
[13] http://rabble.ca/news/2012/08/history-financial-vandalism
[15] http://rabble.ca/books/reviews/2012/05/rebel-cities

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