Audacity, not hoping for reforms, the route to a humane world

Working people in the core capitalist countries have received benefits from imperialism (even if only crumbs) that workers in the rest of the world don’t receive. That dichotomy is a barrier that has hindered the building of global alliances necessary to reverse neoliberalism.

Or, going beyond, to create an international social movement strong enough steer the world from its present course of economic and ecological suicide to a sustainable system oriented toward human need. A further division among the world’s working peoples between the diminishing numbers with reasonably secure, regular employment and the vast numbers of those without available regular work — the “reserve army of labor” or, to use the increasingly popular term, the “precariat” — and divisions within these broad categories also, on the surface, seems to imply that the world’s workers don’t have any unifying interests.

On the contrary, an international movement that brings together the peoples of the global North and the global South, with a common goal of nationalizing the monopolies that currently have a stranglehold on the world’s economy and a commitment to “de-financialization” (a “world without Wall Street”) is not only possible but indispensable, argues Samir Amin in his latest book, The Implosion of Contemporary Capitalism.* These would not be ends unto themselves, but rather the first necessary steps on a long road toward a sustainable and equitable future.

The Implosion of Contemporary CapitalismCritical to developing strategies to transcend an “imploding” capitalist system is developing an understanding of the world’s current organization. In the current stage of “generalized monopoly capitalism,” as Dr. Amin defines today’s world, monopolies tightly control all systems of production and thereby extract extraordinarily large profits. These surpluses are so large they can’t be invested rationally and therefore can only be deployed in speculation, fueling financialization. The process of financialization in turn enables banks to amass vast power and create debt that they profit from.

Increases in productivity outstripping growth in wages further fuels this process. But these monopolies are not located just anywhere — they are located in the capitalist core of the United States, Europe and Japan. Thus the power amassed by these monopolies is inflated by the extraction of capital from peripheries to these centers. Dr. Amin writes:

“In its globalized setup capitalism is inseparable from imperialist exploitation of its dominated peripheries by its dominant centers. Under monopoly capitalism this exploitation takes the form of monopoly rents (in ordinary language, the superprofits of multinational corporations) that are by and large imperialist rents. … [T]he material benefits drawn from this rent, accruing not only to the profit of capital ruling on a world scale but equally to the centers’ opulent societies, are more than considerable.” [pages 20-21]

(The term “monopoly” here is not meant in the “pure” sense of one single corporation dominating an industry, but rather refers to a handful of corporations that, as a group, act in a monopolistic manner. “Rent” is a macroeconomic term meaning the extraction of profits above the ordinary level derived from an advantage.)

The ability of monopoly capital to exploit the global South is aided by the collaboration of local elites, a class of “corruptionists,” to use Dr. Amin’s pungent phrase, who are “highly compensated intermediaries” allowed to take a slice of the extracted superprofits. The whole is partially masked by the fragmentation of production, which nonetheless remains tightly controlled by monopoly capitalists.

This creates the illusion of a divergence in the interests of working people, both within and among countries, but differences in skill levels and ability to earn higher wages has always existed. All working people have in common that they are exploited; the challenge then becomes to effect the unity of workers (including those in informal sectors), peasants and the middle classes in a united front crossing borders.

Smaller enterprises and farmers subordinate to dominant firms

The latest stage of capitalism, starting with the late 20th century, is the era of “generalized monopolies” in which monopolies command the heights of the economy and directly control entire production systems, reducing small, medium and all peripheral enterprises to subordinate roles. Those subordinate enterprises, as well as farmers, have become subcontractors whose operations are subject to rigid control by the monopolies. From this, Dr. Amin concludes:

“There is no other possible answer to the challenge: the monopolies must be nationalized. This is a first, unavoidable step toward a possible socialization of their management by workers and citizens. Only this will make it possible to make progress along the long road to socialism. At the same time it will be the only way to develop a new macro economy that restores genuine space for the operations of small and medium enterprises. If that is not done, the logic of domination by abstract capital can produce nothing but the decline of democracy and civilization, and a ‘generalized apartheid’ at the world level.” [page 113]

The “imperial rent” that accrues to the capitalist core’s monopolies mainly flows to the capitalists, but the workers of the North also benefit from it, and this creates a barrier to North-South alliance building. Workers of the South can’t help but be acutely aware of global imbalances that impoverish them, in contrast to many workers of the North tacitly embracing the relative crumbs they receive at the expense of their Southern brothers and sisters through uncritical acceptance of nationalist ideologies extolling the supposed superiority of imperial countries; this acceptance is reflected, for example, in the U.S. labor federation AFL-CIO’s decades-long uncritical embrace of Washington’s imperialist foreign policy.

Creating a better world — a world in which economic decisions are reached through democratic processes in which all affected parties have a voice and in which the economy is run for the benefit and development of all humanity rather than the private profit of capitalists — is therefore inextricably linked with providing solutions and better living conditions to the majority of the world who live in the peripheral countries.

Change must be in three “dimensions,” Dr. Amin writes — peoples, nations and states. The liberation of a nation and achievements by a state are complements to the advancements of the people; the idea that people can transform the world without taking power is “simply naïve,” the author writes. But it is the people who must be at the forefront:

“[T]he notion of national liberation ‘at all costs,’ in other words being independent of the social content of the hegemonic coalition, leads to the cultural illusion of attachment to the past (political Islam, Hinduism, and Buddhism are examples) [that] is in fact powerless. The notion of power, conceived as being capable of ‘achievements’ for the people, but carried out without them, leads to the drift to authoritarianism and crystallization of a new bourgeoisie. The deviation of Sovietism, evolving from ‘capitalism without capitalists’ (state capitalism) to ‘capitalism with capitalists,’ is the most tragic example of this.” [pages 116-117]

The impossibility of reforming away concentrated power

Additional illusions are that the South can “catch up” with the core capitalist countries or that the maldevelopment of capitalism can be wished away through reforms. The imperialist system blocks the development of new industrial contenders; moreover, the rise of European capitalism required the “safety valve” of emigration to the New World as peasants were forced off the land. There are no new worlds that can absorb the many millions of peasants displaced and to be displaced as capitalism washes over all parts of the globe.

And, although this was not discussed in The Implosion of Contemporary Capitalism, anarchist and Proudhonist ideas that employees can gradually take control of their workplaces while ignoring the state are also illusions. You may wish to ignore the state, but that does not mean the state will ignore you, nor will capitalists, with the powerful coercive apparatus of the state at their disposal, idly sit by and allow their property and prerogatives to be gradually taken away. Similarly, reformist ideas such as more regulation or a return to the post-World War II model are illusions — reforms can and are taken back and there is no going back to the past because the conditions of today are not the conditions of yesterday.

What Dr. Amin does advocate is “audacity, more audacity.” The proposed audacity centers on three programs: socializing the ownership of monopolies, “de-financialization,” and “de-linking” at the international level. Reversing the current social order is impossible without expropriating the power of monopolies.

Economic activity should be organized by public institutions representing groups up and down production supply chains, consumers, local authorities and citizens self-organized democratically. Management of monopolies should include workers in the enterprise as well as representatives of consumers, citizens, (democratically controlled) banks, research institutions and upstream industries. Large-scale production would continue to exist because it is unrealistic to believe that artisans and small local collectives could replace the production of large enterprises, the author writes, but production must be done on the basis of being answerable to society’s collective choices.

“De-financialization” is conceptualized as not simply the abolishment of “shareholder value” as the supreme force animating production but going beyond nationalization/socialization to establish direct participation in management by relevant social partners. Ecological impact, minimization of risk and client participation would be the foundation of banking. The focus on community control and international “de-linking,” however, does not mean a retreat into isolationism; rather it would be a reconstruction of global relations through negotiation rather than the current system of submission to the imperial powers.

These programs can’t be implemented on a global or regional basis, Dr. Amin argues, but only within countries committed to socialization and democratization of the economy. Thus the South must de-link from international institutions controlled by the imperial powers and Europeans must dismantle their undemocratic institutions responsive only to “market” reactions. There are no alternatives, the author writes:

“Capitalism is now an obsolete system, its continuation leading only to barbarism. No other capitalism is possible. … Either the radical left will succeed through the audacity of its initiatives to make revolutionary advances, or the counterrevolution will win. There is no effective compromise between these two responses to the challenge.” [page 146]

There is no guarantee as to what will succeed capitalism. We can sit back and let history unfold, continuing to cede the initiative to elites who have imposed austerity on the world and can only offer ever more harsh and repressive policies while consuming the Earth’s resources until nothing is left. Or we can collectively work together to create a humane, democratic future by overturning capitalism. If we don’t accomplish the latter, we will surely find ourselves in the hell of the former.

* Samir Amin, The Implosion of Contemporary Capitalism [Monthly Review Press, New York, 2013]

6 comments on “Audacity, not hoping for reforms, the route to a humane world

  1. Vassilis says:

    Bravo! A great article and it seems a great book! I don’t know if there are mentions and assumptions about what could happen after an overturn. Let’s make a reasonable assumption . If all people were simultaneously shareholders and employees of their company , and they wanted to prosper , to grow their profits , then they would have to work harder, be more creative than their competitors , to offer better quality products . But by doing so , the less able in the field they have randomly chosen or failed to understand what they would be up against , will be left without work, without food and home .
    On the other hand, the notion that social justice and equality begins and ends in the equal distribution of wealth will always stumble in other logical constructions.
    I think some other criteria , with roots deeper than economy, must apply for building a healthy society . I believe that the humanity that sprung from the ashes of the Second World War was buried as quickly from the dictatorship of the proletariat in the Iron Curtain and was painted the colors of consumerism in the western world. In a peculiarly honest remark, Galmbraith notes that one of the most important reasons for the failure of the communist regime , was the widespread lack of goods like in the western world. Of course , we do not know how it would have evolved if we had a society of abundance , but on the other hand we do know now that the artificial overabundance of the West , was merely a mousetrap , a Trojan horse to conquest society and its wealth.

    • Thank you for your kind comments, Vassilis. The outcome you postulate as a possibility — some successful cooperatives and others left without work — is indeed a possibility (or even probable) if capitalist market relations are left intact. I’ve come to believe that cooperatives must relate to each other in a cooperative manner, rather than through a competitive market.

      The Implosion of Contemporary Capitalism doesn’t explicitly address this, but the author does make a point of stressing the need for wide community involvement, not only consumers but those up and down the supply chain, among others. I would agree with that assessment — cooperative ventures must be embedded within their community and have some accountability to it. Because the cooperative would be made up of local people, that would seem to be a natural occurrence. Who would want to foul their own drinking water? This would be a strong change from the present system of extracting a maximum profit for shareholders regardless of environmental or human cost.

      One problem with Soviet-style systems was that leaders overly stressed producer goods at the expense of consumer goods, a mania born in the need for rapid development in the Soviet Union in the 1930s but never allowed to evolve into a more rational production scheme due to the lack of democracy. Those societies were dictatorships of a party, not the proletariat, even though the proletariat had much more opportunity to advance into management than in capitalist economies.

  2. Corruptionists is an extremely apt term to describe the National Party that currently controls the NZ government. They have totally abandoned any pretense of supporting a clean energy industry here. Instead they are welcoming in US oil companies to sink fracking wells in our farmlands and deep sea oil rigs on our coasts. The economic benefit to ordinary Kiwis from exploiting our pitiful oil and gas resources is negligible – while the risks are enormous.

    A blowout comparable to the Deep Horizon oil spill would utterly destroy a tourism industry that is vital to our fragile economy. We have no way of cleaning up an oil spill here – the nearest resources are three days away. Meanwhile dairying, our major export industry, is already being undermined by increasing problems with ground water contamination from fracking.

    Meanwhile our prime minister (a former investment banker who sat on the NY Federal Reserve board) and his cronies are laughing all the way to the bank.

    • New Zealand as a vassal state: That demonstrates what capitalism has to offer. All that is necessary is a comprador class, and the human material needed to fill that role will be, and has been, found. When there is no more clean water and clean air, you’ll find you can’t eat money, although most of us won’t have any money, either.

  3. Steve says:

    Dear Mr Dolack,

    Your piece on CounterPunch, “Law unto Themselves”, took me to your blog and your Feb 5 piece, “Audacity … “. Great stuff. I agree with many other comments that you do a great job of decoding economic esoterica.

    Having spent a fair amount of my working life overseas, I have witnessed Mr Amin’s “corruptionists” at work, along with the general degradation of the social contract briefly glimpsed in post war Europe. And recent books that come to mind supporting your arguments would be the following: Circus Politicus (Deloire and Dubois), L’Arnaque (Jean de Maillard), Born to Steal (Gary Weiss), Confessions of an Economic Hit Man (John Perkins), Time for Outrage! (Stephane Hessel, and French political activist Alain Soral.

    Delinking the South from the North, as favorable as it might be, has been difficult, to say the least. Look what happened to Iraq and Libya (to name only two) when they tried to delink. Latin America comes to mind as well, though having been able to turn the tide a bit, still faces enormous difficulties.

    And, while I rarely go to the cinema for political inspiration, I just saw a great italian film, “Viva la Libertà”, a fictional commentary on Beppe Grillo’s Five Star Movement.

    I’ve bookmarked your site.

    All the best,

    Steve Church

    • Dear Mr. Church.

      Thank you for your generous comments, and for the reading tips. We exchange reading ideas quite a bit on this blog, so tips are always appreciated. I’ve not yet read Confessions of an Economic Hit Man despite long intending to do so. So much to read, so little time, alas.

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