Endgame. Economic Nationalism and Global Decline. By Jamie Merchant. Reaktion Books. 2004.
Is globalisation coming to an end and capitalism returning to a period like that between the two world wars of the last century when economic nationalism and beggar-thy-neighbour policies were the norm? Merchant makes out a case for this, starting from basically Marxian premises.
He describes how, from the point of view of actual production, the world is one system involving workers everywhere:
‘Pick a typical product of contemporary globalization — say a laptop computer. The laptop is sold for money by the company that owns it only as the end result of a transnational sequence of extraction, processing, manufacturing, assembly, transportation, and distribution, involving thousands of laborers doing different kinds of work for a range of contractors across dozens of countries’ (pp. 125-6).
In the course of such ‘planetary assemblages’ the world working class, as a class, produce a pool of surplus value from which firms and states compete to draw a share as profits. The profits of capitalist firms do not depend on how much surplus value its workers might be said to produce; in fact some firms, as those in the inflated financial sector, don’t produce any but are very successful in capturing some. The profits a firm makes depends on how well it is organised to draw profits from the world pool of surplus. In this, firms are helped by states.
‘National competition,’ Merchant writes, ‘is competition over the global surplus product. Monetary policies, tax laws, corporate subsidies and trade agreements are some of the measures states take to assist their national corporations in raising profitability, that is, in capturing more of this global surplus’ (p. 98).
He defines ‘globalisation’ as the period when global production, and so the pool of global surplus value, was expanding. The governments of the leading capitalist states favoured the liberalisation of world trade by abolishing or lowering tariff barriers as they believed that this would lead to world trade expanding even more.
Merchant’s basic thesis is that this period is coming to an end because the continuing mechanisation imposed by competition has led to a fall in the rate of profit, resulting in ‘the global pool of surplus value available for redistribution as profits shrink[ing] relative to total capital invested worldwide’ (pp. 153-4).
Competition to capture profits has become more intense — more of a zero-sum game — and states are being compelled to intervene more actively to try to steer profits to enterprises within their boundaries. ‘Global productivity growth’, he writes, ‘appears to be over for the foreseeable future. The result is likely to be a kind of stasis state in which national governments must take ever more extreme measures to compensate for the paralysis of private capitalism’ (p.134). Hence the rise of economic nationalism and of parties advocating ‘national sovereignty’.
Slow productivity growth and slower expansion of world production are plausible explanations for the observable move away from globalisation, as so-called ‘neo-liberalism’ on a world scale, and towards economic nationalism (from governments subsidising selected enterprises as supposed engines of growth to the rise of nationalist and nativist political parties). Whether this is the endgame for capitalism is another matter.
In the final chapter Merchant seems to envisage capitalism being overthrown and the wages system abolished by spontaneous mass rioting. That’s another matter too.
Adam Buick
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