Globalisation and the current structural crisis.
To understand the current conjuncture we need to go back to the 1970s. The globalisation stage of world capitalism we are now in itself evolved out the response of distinct agents to these previous episodes of crisis, in particular, to the 1970s crisis of social democracy, or more technically stated, of Fordism-Keynesianism, or of redistributive capitalism. In the wake of that crisis capital went global as a strategy of the emergent Transnational Capitalist Class and its political representatives to reconstitute its class power by breaking free of nation-state constraints to accumulation. These constraints – the so-called “class compromise” – had been imposed on capital through decades of mass struggles around the world by nationally-contained popular and working classes. During the 1980s and 1990s, however, globally-oriented elites captured state power in most countries around the world and utilised that power to push capitalist globalisation through the neo-liberal model.
- Skyline of New York
Globalisation and neo-liberal policies opened up vast new opportunities for transnational accumulation in the 1980s and 1990s. The revolution in computer and information technology and other technological advances helped emergent transnational capital to achieve major gains in productivity and to restructure, “flexibilise,” and shed labour worldwide. This, in turn, undercut wages and the social wage and facilitated a transfer of income to capital and to high consumption sectors around the world that provided new market segments fuelling growth. In sum, globalisation made possible a major extensive and intensive expansion of the system and unleashed a frenzied new round of accumulation worldwide that offset the 1970s crisis of declining profits and investment opportunities.
However, the neo-liberal model has also resulted in an unprecedented worldwide social polarisation. Fierce social and class struggles worldwide were able in the 20th century to impose a measure of social control over capital. Popular classes, to varying degrees, were able to force the system to link what we call social reproduction to capital accumulation. What has taken place through globalisation is the severing of the logic of accumulation from that of social reproduction, resulting in an unprecedented growth of social inequality and intensified crises of survival for billions of people around the world.
The pauperising effects unleashed by globalisation have generated social conflicts and political crises that the system is now finding it more and more difficult to contain. The slogan “we are the 99 per cent” grows out of the reality that global inequalities and pauperisation have intensified enormously since capitalist globalisation took off in the 1980s. Broad swaths of humanity have experienced absolute downward mobility in recent decades. Even the IMF was forced to admit in a 2000 report that “in recent decades, nearly one-fifth of the world’s population has regressed. This is arguably one of the greatest economic failures of the 20th century”.
Global social polarisation intensifies the chronic problem of over-accumulation. This refers to the concentration of wealth in fewer and fewer hands, so that the global market is unable to absorb world output and the system stagnates. Transnational capitalists find it more and more difficult to unload their bloated and expanding mass of surplus – they can’t find outlets to invest their money in order to generate new profits; hence the system enters into recession or worse. In recent years, the Transnational Capitalist Class has turned to militarised accumulation, to wild financial speculation, and to the raiding of sacking of public finance to sustain profit-making in the face of over-accumulation.
While transnational capital’s offensive against the global working and popular classes dates back to the crisis of the 1970s and has grown in intensity ever since, the Great Recession of 2008 was in several respects a major turning point. In particular, as the crisis spread it generated the conditions for new rounds of brutal austerity worldwide, greater flexibilisation of labour, steeply rising under and unemployment, and so on. Transnational finance capital and its political agents utilised the global crisis to impose brutal austerity and attempting to dismantle what is left of welfare systems and social states in Europe, North America, and elsewhere, to squeeze more value out of labour, directly through more intensified exploitation and indirectly through state finances. Social and political conflict has escalated around the world in the wake of 2008.
Nonetheless, the system has been unable to recover; it is sinking deeper into chaos. Global elites cannot manage the explosive contradictions. Is the neo-liberal model of capitalism entering a terminal stage? It is crucial to understand that neo-liberalism is but one model of global capitalism; to say that neo-liberalism may be in terminal crisis is not to say that global capitalism is in terminal crisis. Is it possible that the system will respond to crisis and mass rebellion through a new restructuring that leads to some different model of world capitalism – perhaps a global Keynesianism involving transnational redistribution and transnational regulation of finance capital? Will rebellious forces from below be co-opted into some new reformed capitalist order?
Or are we headed towards a systemic crisis? A systemic crisis is one in which the solution involves the end of the system itself, either through its super-session and the creation of an entirely new system, or more ominously the collapse of the system. Whether or not a structural crisis becomes systemic depends on how distinct social and class forces respond – to the political projects they put forward and as well as to factors of contingency that cannot be predicted in advance, and to objective conditions. It is impossible at this time to predict the outcome of the crisis. However, a few things are clear in the current world conjuncture.
Divya
Source: World News
