Why we need global change (1999)

Book Review from the October 1999 issue of the Socialist Standard

To solve the many problems confronting humanity what is needed is a change in the basis of world society from existing class ownership to a world in which the Earth’s resources have become the common heritage of all.

Think globally, act locally, say the Greens. Anyone who follows the news cannot help but think globally. World hunger, financial crises, currency fluctuations, global warming, the hole in the ozone layer, world poverty, trade disputes, war and the threat of war—all these are global problems. But act locally to deal with them?

Local action may be appropriate to protect some local tree or stop rubbish being dumped in some local back yard, but LETS schemes as the answer to world financial turmoil, buying Third World honey as the answer to world poverty, cycle lanes as the answer to global warming? That’s either a joke or a cop-out. Clearly, all these problems can only be solved by global action. We are up against a global system which can only be effectively and lastingly dealt with at that level.

Global capitalism

Globalisation is not just a recent phenomenon; it has been going on since the beginning of capitalism. Historian Immanuel Wallerstein has argued that capitalism has always been a “world-system” in the sense of being a network of many countries producing for a single world market, none of them powerful enough to dominate it and all of them having to submit to its pressures. In this sense capitalism is the world market and the history of capitalism is the history of the development and spread of the world market since it came into being in the 1500s.

What subordination to the world market means for capitalist producers in individual countries is that they are under non-stop pressure to produce ever more cheaply by introducing ever more efficient machinery and techniques of production. The result has been continuous technical and technological advance, a continuous development of the world’s capacity to produce wealth such that by the turn of the century it could be said that a sufficient plenty for all people on Earth could have been produced had global capitalism then been replaced by a society of common ownership and production to meet human needs not profit. But it wasn’t.

Capitalism continued. So did the growth of the world’s wealth producing capacity but in the century that is now coming to an end global capitalism also engendered two world wars and several world slumps, and still today millions of people on the planet go to sleep hungry or lack access to clean water or medical care or decent housing or education. All of which is a damning indictment of global capitalism.

As the American journalist William Greider has put it in a recent book:

For several decades the world’s capacity to produce food, for instance, has far exceeded the entire human population’s need for nourishment. Yet the stockpiles of unused foodstuffs pile up unsold each year in producing nations while somewhere else in the world hundreds of millions of others are malnourished, if not actually starving to death. The paradox is explained away easily enough in market terms. Indeed, the market insists that feeding impoverished people would be harmful to them, indulging their backwardness and postponing their eventual self-sufficiency. That answer may satisfy the marketplace, but for humanity it constitutes another great, unanswered question. Capitalism, for all its wondrous creativity and wealth, has not yet found a way to clothe the poor and feed the hungry unless they can pay for it (p. 468).

The title of his book—One World, Ready or Not: The Manic Logic of Global Capitalism—neatly sums up the socialist case against capitalism. Capitalism has brought into being “one world” as far as the production and distribution of wealth is concerned, but humanity is not ready to cope with this since it has not yet created the appropriate social arrangements and institutions; instead, the one world that has come into being is governed by the manic logic of production for profit rather than the human logic of production to meet people’s needs, with disastrous results.

Greider does not write as a socialist but he does employ, perhaps unknowingly, a quasi-Marxist approach. Here is how he presents the effects of what defenders of capitalism see as its most positive side—the non-stop technological development it brings about:

There is another dimension to the technological revolution, however, that is seldom discussed in the business books: the gathering vulnerability of an industrial system that is ruled by persistent excess supply. The same technological imperative that continuously reduces costs and improves quality has also generated a seemingly permanent and expanding surplus in the productive capacity of the world. Crudely stated, the technology competition leads companies to invest in more output of goods than the global marketplace of consumers can possibly absorb. New factories, designed to produce more from less, naturally increase the capacity for production, but the output potential expands faster than older less efficient factories are being closed. This underlying imbalance is compounded by the accelerating drive for globalization, as firms both modernize and rush to build new production in the developing markets. A perverse syllogism is thus at work, company by company, sector by sector: the burdensome presence of overcapacity quickens the price competition and threatens market shares, but the only obvious response is to create more new capacity—that is, to build new factories that will be more cost-efficient than one’s rivals . . . From a managers’ point of view, the challenge is to make sure that the market’s overcapacity becomes the other guy’s problem, that some other firm will be compelled to swallow losses in sales and close down its factories (pp. 103-4).

Marx, too, noted capitalism’s tendency to develop productive capacity without regard for the fact that consumption under it was limited by what people could afford to pay for; that, under the competitive pressures of the world market, capitalist firms were obliged to develop productive capacity irrespective of whether or not market demand was growing at the same pace, with the inevitable result that sooner or later one industry would overproduce in relation to its market triggering off a slump during which the least efficient firms were eliminated, so bringing market demand and productive capacity back into line.

But what sort of system is it where potential plenty represents a problem? And where there can be talk of “excess supply” when so many humans’ basic needs, let alone proper facilities for a decent life for all, remain unmet? Answer: a system which has solved the technical problem of how to produce plenty for all but which is incapable of delivering it because production is tied not to people’s needs but only to what they can afford to pay for.

Financial mania

Capitalism is not just industrial capitalism. In fact capital is not interested in producing things as such; it is only interested in profit expressed in money terms. Investing in the production of goods and services is an inconvenience which it has to go through in order to achieve its aim of ending up with a greater financial worth than it started with. Thus the purest form of capital is finance capital and, from the capitalist point of view, the most convenient way to make more money is to do so by financial dealings of one sort or another. It’s an illusion of course. It’s production, not finance, that makes the world go round. The financial world cannot go on feeding off rising paper asset values for ever. Reality must intrude at some point. But capitalism without finance capital is inconceivable; so too, therefore, is capitalism without financial crashes.

As Greider describes it:

Across many centuries, this story of finance capital’s capacity to become deranged in pursuit of higher returns has played out again and again in different forms of manias and crashes. Eventually, as history informs us, the disorders may be corrected in a grim, violent manner—a great war or a great depression. These events will destroy financial capital on a massive scale and thereby restore a balance between the demands of old wealth and the needs of new productive enterprises. This sort of resolution produces vast human suffering and political upheavals, of course, but also clears the way for capitalism’s next expansive era (p. 227).

Greider thinks that the world is now heading for another such financial crash but he is not writing as an opponent of capitalism. He quotes the British Labour MP Denis MacShane (“For years, socialists used to argue among ourselves about what kind of socialism we wanted. The choice of the left is no longer what kind of socialism it wants, but what kind of capitalism it can support”) and seems to agree with him. In any event, he describes himself as a “global Keynesian”; in other words, as someone who wants to employ failed Keynesian techniques of “market demand management” on a global scale so as to try to avoid global capitalism plunging the world into another global depression or war or both.

If you haven’t considered properly the socialist alternative of abolishing the world market and its manic logic, and setting up non-market institutions, at world, regional and local levels, to co-ordinate the production and distribution of what people all over the world want, this might well appear to be the only solution. After all, if global capitalism ignores the hungry, the homeless and the needy because, not having any money, they don’t constitute a market and so don’t count, why not just to pump more money into the system so that such people can come to count for capitalism? The winner of the 1998 Nobel Prize for Economics, Amartya Sen, who has written very clearly on the cause of famines (collapse of purchasing power not of production), also describes himself as a global Keynesian.

Global Keynesians are more advanced than those Greens who advocate local action in the face of global problems. They at least realise that the solution requires action at world level. Their mistake is that the global action they propose is not up to it. The global inflation that would result would probably make matters worse; certainly the financial speculators would love it.

The answer to the problems that global capitalism has engendered is not a policy, even if pursued at global level, that would still leave intact the basic structures and mechanisms of capitalism. It is something much more far-reaching: a rapid and radical change in the basis of world society that will make the Earth’s resources the common heritage of all humanity so that they can be used to further the common human interest.

Adam Buick

Cooking the Books: When did capitalism start? (2018)

The Cooking the Books column from the September 2018 issue of the Socialist Standard

 In an interview in In These Times (10 May) about his latest book Bullshit Jobs, celebrity anarchist David Graeber raised an interesting point. After digressing to say that he was currently working with people campaigning for a basic income and wondering whether asking the state to pay people money was compatible with anarchism, he suggested that we might be living in a long period when capitalism was transforming into some other form of society (but ‘which might be just as bad’); but how would we know? He went on:

  ‘I remember having this argument with conventional Marxists about the transition from feudalism to capitalism. Okay, say that capitalism started around 1500. And the Marxists insist that capitalism is organized around wage labor. But wage labor was marginal until the industrial revolution, around 1750. How can you say that wage labor is central to capitalism if, for 250 years, it was a tiny element?’ (Link. ).

He said he got the reply:

  ‘Well, you’re not thinking dialectically. From 1500 to 1750, people were in a process that was going to lead to wage labor, they just didn’t realize yet.’

 We were one of the ‘conventional Marxists’ he discussed this with, in the October 2012 Socialist Standard. But this can’t have been us, as our reply was that capitalism is a market society in which all the elements of production, including human labour power, are bought and sold, but that this would not complete until the actual producers had been separated from the means of production, whether land or tools; which was a gradual process.

 On the question of whether the elites in control of political power up to 1750 understood where society was going, we replied that a section of them were indeed consciously seeking to spread market relations and the concept of the individual free to enter market relations with other individuals; which did include the right to sell their ability to work.

 Another reply (again, not ours), would be that of Immanuel Wallerstein and the world-system theorists that the essence of capitalism was not wage-labour but production for sale on the world market with a view to profit, whether carried out by serfs (as in Eastern Europe) or chattel slaves (as in the Americas) and not just by wage-workers. However, while capital investment in production of cash crops by serfs or slaves was viable, this was not the case for manufactured products; here wage-labour was more efficient from a capitalist point of view (which of course is why the slave trade and then slavery were abolished in favour of wage-slavery).

 Capitalism is a system where money-capital is invested in production for sale with a view to a monetary profit. ‘Merchant capitalism’, which in previous discussions Graeber said some Marxists had suggested was what existed from 1500 to 1750, was where merchants invested money-capital with a view to profit, not in production, but in buying (or looting) products from one part of the world and selling them in another part at a higher price. It might have been a transition to capitalist production but it wasn’t what Marx meant by ‘the capitalist mode of production’. 

 In any event, to say that capitalist production first appeared in the 16th century is not the same as saying that capitalism as a socio-economic system started then. The capitalist ‘mode of production’ gradually spread, with the aid of the state, until it became the dominant one. That would be the point at which it could be said that capitalism as a society had come into being. 1750 seems about right for this. Adam Smith, writing in 1776, was already using a three-class model, even for agricultural production, of landowners, tenant farmers and wage-workers.

Cooking the Books: Yes, Read Marx (2018)

The Cooking the Books column from the May 2018 issue of the Socialist Standard

In an interview with the online magazine 'Truthout' (24 March) the historian Immanuel Wallerstein urged young people to ‘Read Karl Marx!’ He is one of the leading advocates of the theory that capitalism is a single ‘world-system’. His books describe the history of capitalism, as in effect the world market, from its origins in the sixteenth century to today. This theory has an important implication: that capitalism is not a collection of separate, national capitalist economies but a single world system and that there is therefore no national way out of it:

‘The capitalist system is composed of owners who sell for profit. The fact that an owner is a group of individuals rather than a single person makes no essential difference. This has long been recognized for joint-stock companies. It must now be recognized for sovereign states. A state which collectively owns all the means of production is merely a collective capitalist firm as long as it remains—as all such states are, in fact, presently compelled to remain—a participant in the market of the capitalist world-economy’ (The Capitalist World-Economy, pages 68-69).

Good point. When, however, it comes to explaining basic Marxian economics Wallerstein is not so sound. In an interview with the Belgian newspaper Le Soir in 1998 (20 March) he argued:

‘You easily imagine that if one respected the presuppositions of economic textbooks -- an infinity of sellers and an infinity of buyers, all perfectly informed -- capitalists would be incapable of making the least profit: consumers would immediately find the lowest price which would not be a centime above the cost of production!’

The main feature of the textbooks’ ‘perfect competition’ is that, because there are so many of each, buyers and sellers cannot influence the price at which goods sell. This is fixed by the market. But at what level?

Adam Smith called the price that the market would establish in the long run a good’s ‘natural price’. This would be the cost of producing it in terms of the labour expended on it from start to finish. He accepted that this would include an element of profit. Marx developed this theory and explained profit as ‘unpaid labour’, i.e., the labour expended by workers above what they received as their wages.

Wallerstein’s statement implies that profit could only arise if there is not ‘perfect competition,’ if capitalist firms are in a position to influence the price of what they sell due to having a partial monopoly. In other words, profit would be a form of rent. True, some firms are in this position and so do command a higher than normal profit. But this explains only the extra, monopoly profit, not normal profit. It fails as a theory of profit because it does not, and cannot, explain why firms not in this position still make a profit, as under capitalism they must otherwise nobody would invest in them.

The impasse Wallerstein’s statement leads to shows that the origin of profit cannot be explained as arising from the circulation (the buying and selling) of goods. It has to be sought elsewhere. Marx set out to explain it on the basis of goods selling at the price established under competitive conditions and showed that profits originated in the process of production where workers produced goods worth more than what they were paid as wages.

So, to understand profits, read Karl Marx, especially the section of his 1865 talk to English trade unionists, Value, Price and Profit, entitled 'Profit is Made by Selling a Commodity at its Value'.

World-economy (1981)

Book Review from the March 1981 issue of the Socialist Standard

The Capitalist World-economy by I. Wallerstein, Cambridge University Press, £4.95

This book, first published in 1979, brings out well an essential feature of capitalism: it is a single world system, a single world economy. There is no such thing as the "British economy", the "American economy" or the "Russian economy"; there is only one economy, world capitalism. What is more, capitalism has been a world-economy—embracing a number of states with varying divisions of labour—ever since its origin in Western Europe in the 16th century, even though it did not dominate the whole globe until the end of the 19th.

This view—which is one we ourselves hold—has various important implications. First, that there are no national solutions to today's social problems. The various states into which the world is divided are political, but not social units. The state does not define the boundaries of the present social system, which is worldwide and capitalist. Since capitalism is the cause of today's social problems and is a single world-wide social system, it clearly follows that the solution to these problems can only be a world-wide social change (from world capitalism to world socialism).

States do, however, have an important economic role to play in the capitalist world-economy: to try to distort the market for the benefit of the group of capitalists they represent. As Wallerstein puts it:

Within a world economy, the state structures function as ways for particular groups to affect and distort the functioning of the market. The stronger the state machinery, the more its ability to distort the world market in favour of the interests it represents (p.61).

It is this that explains the militarisation of the world (and, by implication, the futility of expecting disarmament while world capitalism lasts):

State machineries have interfered with the workings of the world market from the inception of capitalism. Moreover, the states have formed, developed and militarised themselves each in relation to the others, seeking thus to channel the division of surplus value. In consequence, all state structures have grown progressively stronger over time absolutely, although the relative differences between core and peripheral areas have probably remained the same or even increased (p. 274).

It also explains why all states, not just certain of them, are "imperialist" in the sense of being potentially expansionist and being prepared to use violence as a last resort. War is in fact just one of the ways states use to seek to distort the world market (others being mercantilism, protectionism, colonialism, tariffs, subsidies). War is a political means of pursuing economic ends.

Second, that there are not, nor could there be, any "socialist" states or countries in the world today. Wallerstein, despite his own personal sympathy (which we don't share) for some of the states calling themselves "socialist", is clear enough on this point:

The fact that all enterprises are nationalised in these countries does not make the participation of these enterprises in the world-economy one that does not conform to the mode of operation of a capitalist market system: seeking increased efficiency of production in order to realise a maximum price on sales, thus achieving a more favourable allocation of the surplus of the world-economy.
There are today no socialist systems in the world-economy any more than there are feudal systems because there is only one world system. It is a world-economy and it is by definition capitalist in form (pp.34-5).
The capitalist system is composed of owner who sell for profit. The fact that an owner is a group of individuals rather than a single person makes no essential difference. This has long been recognised for joint-stock companies. It must now also be recognised for sovereign states. A state which collectively owns all the means of production is merely a collective capitalist firm as long as it remains—as all such states are, in fact, presently compelled to remain—a participant in the market of the capitalist world-economy. No doubt such a "firm" may have different modalities of internal division of profit, but this does not change its essential role vis-a-vis others operating in the world-market (pp. 68-9).

Third, that virtually the whole of the world's population, whether or not they are yet propertyless wage earners, are victims of capitalism in one way or another. (Wallerstein would add a fourth point, namely, that there is a world-wide division of labour between developed ("core") and underdeveloped ("periphery") countries such that the latter are condemned to permanent underdevelopment for as long as capitalism lasts. Whatever may be the validity of this proposition—which is not discussed here—it is not a necessary implication of the "world-system perspective".

The logical conclusion to be drawn from all this is that it is all or nothing—world socialism or the continuation of capitalism in one form or another—in the sense that no single state or country on its own, no matter what policy it adopts, can escape from the logic of the world capitalist system. This is why we say that the only solution to the problems of all the population of the world, those in the underdeveloped countries as well as those in the advanced capitalist countries, is the replacement of the capitalist world-economy by world socialism.

Wallerstein, however, is not logical and does not draw this conclusion. As a Maoist fellow-traveller (even if he has now, rather belatedly, come to recognise that China is just as state capitalist as Russia—which was obvious to us even when Mao was in power) he supports Third World "national liberation" movements as a supposed aspect of the world's population's struggle against world capitalism, whereas his own analysis shows that they are in fact just part of the struggle among the various states of the world for a share of the surplus value produced by the workers and peasants of the world.

Adam Buick 

Free is cheaper (1988)

Book Review from the December 1988 issue of the Socialist Standard

Free Is Cheaper by Ken Smith (John Ball Press, £12.95)

Books which present a lively and contentious critique of capitalism and advocate socialism are unfortunately rare. But here is such a one — a book to learn from and be enthused by, a source of information and argument for all socialists.

Ken Smith usually refers to capitalism as the Market Economy. His book opens by putting the blame for economic and social malaise on the market system, which introduced scarcity and poverty in place of the plenty and comfort of previous social arrangements (a point we take up below). In Britain, he claims, so much effort is expended on buying, selling and policing that only one in ten of the working population is actually producing wealth. This is interesting in that it is a far lower figure than socialists commonly cite for the proportion of workers doing useful work, which is usually reckoned as around one half. I suspect that both figures are really the result of intelligent guesswork, though the important point is of course not at issue.

Most of the book is devoted to exposing the effects of the market economy on various "industries", from food to shelter and disease and crime. The author claims, for instance, that dental caries is an entirely artificial disease, caused by defective diets and unknown among "primitive" peoples. The absurd priorities engendered by the profit system are illustrated by the fact that more people work in house financing than in house building. While the numbers of homeless increases, the quality of new homes deteriorates, with obsolescence being built-in like the wardrobes. Clothes, too, are deliberately made shoddily so as to encourage increased purchasing and fashion-following. The money industry, which produces nothing of any use whatever, is one of the most profitable of all. All the chapters in this section are full of good material. 

The final part of the book proposes that all goods and services are provided free. It is pointed out that many are already provided free to those who want them - police and blood, for instance. People already do lots of things for each other, for friends and neighbours, without expecting any monetary reward, so nobody can argue that such a way of proceeding is impossible or against human nature. A system where people control their own lives is needed to replace the market economy. But people can only free themselves — they cannot be forced to co-operate voluntarily. The need to capture political power is stressed, but, although there are references to the world-wide nature of capitalism, there is no mention that socialism will also need to be a world society. Indeed, an unfortunate reference to "the return of the land of Britain to the people of Britain" suggests a rather insular outlook. But of course a nationally-based socialism is impossible. 

Mention was made earlier of the claim that in pre-capitalist systems, ordinary people were comfortably off and there was a potential for plenty. On this account, the development of capitalism was a gigantic historical "mistake" which impoverished people, rather than creating the possibility of abundance which socialism will finally realise. Some evidence is adduced in support of this view, but it really does seem terribly one-sided. For one thing, it ignores the non-material aspects, the ignorance and superstition of feudal times, which capitalism has fundamentally overturned. The cosy image of peasants contentedly tilling their own land has to be viewed against the backdrop of enormous disparities of wealth and power, the privileges enjoyed by the rulers of church and state. To the extent that feudal agriculture was able to support the population, this was largely due to the very low population density. It is hard to see merit in implied claims that socialism was possible on the basis of the pre-market situation. 

If one wants to make a case that capitalism has been less progressive and "beneficial" than often assured, the best perspective to adopt is to consider its global impact: 

"It is . . . by no means self-evident that there is more liberty, equality and fraternity in the world today than there was one thousand years ago. One might arguably suggest that the opposite is true. The overwhelming proportion of the world's work-forces, who live in rural zones or move between them and urban slums, are worse off than their ancestors five hundred years ago, They eat less well, and certainly have a less balanced diet . . . They unquestionably work harder — more hours per day, per year, per lifetime. And since they do this for less total reward, the rate of exploitation has escalated very sharply." (Immanuel Wallerstein: Historical Capitalism) 

But these criticisms are fairly minor, and do not detract from the book's worth. Despite the range of sources cited, it is not a dry-as-dust academic work, but a vigorous and always readable polemic. Let us hope it is read as widely as possible and so helps to increase the number of socialists. 

Paul Bennett

Capitalism as a world system (1986)

From the Summer 1986 issue of the World Socialist

Capitalism is basically an economic system, one in which production is oriented towards the accumulation of capital out of monetary profits realised on the market, the source of these profits being the unpaid labour of those who produce the goods that are sold. Production for a market, the accumulation of wealth having a monetary value, and even the exploitation of wage-labour had existed since ancient times but as more or less isolated practices rather than as a complete economic system. It was only in the 16th century that what Marx called "the capitalist era" began with the emergence of the world market, i. e., a pattern of trade and a division of labour involving a number of different countries and geographical areas.

The effect on the countries involved of producing for this market, or for export, was to subordinate the production of wealth within their frontiers to a new logic, that of re-investing profits so as to continually improve the methods of production as a way to remain competitive in the struggle to realise further profits. As a result profound changes were brought about in the economic, and therefore also in the social and political, structures of these countries amounting to the introduction of a new economic system.

Right from the start capitalism has been an international system, not only as a matter of historical fact but also because if it had not been so it would never have developed. The countries concerned would not have been subject to an external pressure—which they were ultimately unable to resist—to apply the new economic logic of capital accumulation and production for monetary profit and the new economic system would not have come into being.

Capitalism is the economic mechanism which comes into operation as a coercive external force acting on economic decision-makers when wealth is produced for sale, not simply on any market, but on the world market. Its history is the history of the development of the world market economy from its origins in Europe in the 16th century to its present situation, achieved by the end of the 19th century, of a truly world system embracing not only a number of different countries and geographical areas but all countries and all geographical areas.

This means there is not, and never has been, such a thing as a "national economy". That this latter exists is an illusion arising out of the fact that, politically, the countries and areas involved in producing for the world market have been divided into states which have always sought to interfere with the operation of that market. Capitalism is not a collection of national capitalist economies existing side by side but a single world economy functioning as such of which the "economies" of the separate states are merely integral parts, even to the extent of playing different functional roles (industrial producers, raw material producers, agricultural producers, etc.) within the system.

Collection of armed States

It should not be thought that capitalism is a purely economic system, just an economic mechanism of the accumulation of capital out of monetary profits. It is also a collection of armed states with clashing economic interests. These states use their coercive powers to interfere in the operation of the world market with a view to distorting it in favour of profit-seeking enterprises operating from within their frontiers. Although no state has ever been strong enough to completely control the world market, there have always been some sufficiently strong to distort it, at least temporarily, in their favour. Even though purely economic considerations—cost of production in relation to price, etc.—are in the end the determining factor, the intervention of states, both by economic means such as tariffs, customs duties, bounties and monopolies, and by the threat and the use of physical force, has thus always been a subsidiary factor in the distribution of world profits.

Since coercive intervention can to a certain extent affect the world division of profits, all states have an interest in being as strong as possible both internally and vis-à-vis the exterior. This is why there has been a historical trend under capitalism for strong centralised states to emerge and assert themselves internationally and for all states to arm themselves with the most up-to-date and destructive weapons they can afford:

"Within a world-economy, the state structures function as ways for particular groups to affect and distort the functioning of the market. The stronger the state machinery, the more its ability to distort the world market in favour of the interests it represents" (I. Wallerstein, The Capitalist World-Economy, p.  61).

"State machineries have interfered with the workings of the world market from the inception of capitalism. Moreover, the states have formed, developed, and militarized themselves each in relation to the others, seeking thus to channel the division of surplus value. In consequence, all state structures have grown progressively stronger over time absolutely, although the relative differences between core and peripheral areas have probably remained the same or even increased" (p. 274).

States do not accumulate these arms just to strengthen their bargaining position in the continual struggle with other states for a share of world profits. The arms are there to be used in the last resort, so that war too is built-in to the economic mechanism of capitalism. In fact all the wars that have taken place since the 16th century have been "trade wars" in the sense that they have been about the control of markets, raw material sources, trade routes, investment outlets, and strategic points to protect or acquire these.

Imperialism, inherent feature of capitalism

The final phase of capitalism's coming to embrace the whole world geographically in the second half of the 19th century took the form of a scramble for colonies in Africa and the Pacific Ocean. By the time this was over virtually the whole land surface of the planet was occupied by one or other of the stronger capitalist states. This led to a recognition that capitalism was a world system and was not just a collection of nationally-existing capitalisms, a recognition expressed, for all their errors, in such works as Rosa Luxemburg's The Accumulation of Capital, Bukharin's World Economy and Imperialism, and Lenin's Imperialism, the Highest Stage of Capitalism. The term that came into use to describe this new development was "imperialism".

Lenin argued that imperialism was "the highest stage of capitalism". But if imperialism is defined as being the tendency for capitalist states to use force for economic ends (to acquire or protect markets, raw material sources, trade routes, or investment outlets) then, as just seen, this has been a feature of the capitalist system since its beginning in the 16th century. In fact  all states are imperialist in this sense, even weak ones that are themselves the victims of other, stronger states.

Any state, given the chance, will use force to try to help profit-seeking enterprises operating from within its frontiers acquire as large a share of world profits as possible. Indeed, to help home enterprises (whether private or state) in this way is precisely the specific role that states have to play in the capitalist world economy. Under capitalism strong states have always tended to dominate weaker states and weak states will always try to dominate states that are weaker still. In this sense, then, imperialism of the type seen in the second half of the 19th century when the United States and the strongest states of Europe used force to acquire protected markets, sources of raw materials and investment outlets was nothing new. It did not merit the description of "highest stage of capitalism" since this sort of behaviour by states had been a feature of capitalism in all its stages.

Having said this, there is a sense in which the scramble that took place in the last part of the 19th century did lead to a new "stage" of capitalism. It led, as noted, to the final subordination of the whole planet to one or other capitalist power; in other words, to capitalism's coming to completely dominate the globe.

This meant that, from then on, there were no new raw material sources or investment outlets to be conquered. From this time on, all that could happen was that these areas could be re-allocated amongst the various competing states. Despite his error about imperialism being the highest stage of capitalism, Lenin expressed this point rather well in his pamphlet. Writing in 1916 about the period 1876-1900, he noted:

" . . . the characteristic feature of the period under review is the final partition of the globe—final, not in the sense that a repartition is impossible; on the contrary, repartitions are possible and inevitable—but in the sense that the colonial policy of the capitalist countries has completed the seizure of the unoccupied territories of our planet. For the first time the world is completely divided up, so that in the future only redivision is possible, i. e., territories can only pass from one 'owner' to another, instead of passing as ownerless territory to an 'owner'" (chapter VI).

Hence Lenin's more or less acceptable conclusion, in the preface he wrote to his pamphlet in 1920 that "the war of 1914-18 was imperialistic (that is, an annexationist, predatory, plunderous war) on the part of both sides; it was a war for the division of the world, for the partition and repartition of colonies, 'spheres of influence' of finance capital, etc".

The era of world wars

Wars in this new era of complete capitalist domination of the world—at least those between the major capitalist states—could only be wars over the redivision of colonial territories and spheres of influences, or rather of the markets, raw material sources, trade routes, investment  outlets and strategic points to protect these that colonies and spheres of influence represent.

In fact, the two world wars that took place in the 20th century while being, like all other wars that have occurred since capitalism came into existence, trade or business wars over markets were also wars to change or preserve an existing carve-up of the world between the leading capitalist states. Thus, an important aspect of the first world war was the attempt by Imperial Germany to upset, by force of arms, the then existing imperialist division of the world which benefited in particular Britain and France. Similarly, the second world war was an attempt by Germany and Japan to re-divide the world in their interest at the expense of the United States, Britain and France.

Naturally, in such wars, it is the challenging powers that have to take the initiative and so appear as the "aggressors", but only those completely taken in by the propaganda of the victorious powers (and of course the winners also win the right to impose their version of history) will believe that it was just Germany that was responsible for the first and second world wars. An objective examination of the situation will show that, apart from their "trade" aspects, these two wars were wars (on the one side) to try to change the existing imperialist carve-up of the world and (on the other side) to preserve it. What was responsible for these wars was the whole world system of capitalism with its competitive struggle for profits and its collection of competing armed states. No one state, or politician, or people can be blamed for these wars; they were the result of the "normal" functioning of the capitalist world system.

Ironically these wars did change the existing world carve-up even though, on both occasions, the challengers were beaten off. The first world war resulted in the US emerging as the leading world capitalist power at the expense of Britain and France. The second world war confirmed this and saw the emergence of state capitalist Russia as the No 2 capitalist world power (in military, though not in economic, terms) with its own huge sphere of influence, with Britain and France being definitively relegated to second rank status.

Between 1945 (as agreed that year at Yalta by Roosevelt, Stalin and Churchill) and 1990 the world was divided into two imperialist spheres of influence, the US sphere and the Russian sphere. In the end the US beat off the Russian challenge without a world war; there were only a continuous series of localised wars on the margins of the two spheres of influence. Given the dominant and dominating position of the US in the world, it was Russia that as the challenger played the role of "aggressor", but world tension and the threat of nuclear war could not be laid at the door of one state, its leaders or its people; they resulted, and still result, from the very nature of capitalism as an economic system involving a competitive struggle for profits in which armed states as well as profit-seeking enterprises (whether private or state) participate.

Anti-imperialism as ideology

When Lenin wrote his pamphlet on imperialism in 1916 he was then merely a leader of one of the factions of the Russian Social Democratic movement and the views he expressed in it, including the errors, were those that were held by many other critics of imperialism at the time. When, however, he wrote the preface to the French and German editions in 1920 his personal position had changed: he was now writing as the Prime Minister of a state (state capitalist Russia) whose economic interest it was to upset the imperialist re-division of the world that had resulted from the first world war. This change is reflected in the content of the preface as when he wrote

"Capitalism has grown into a world system of colonial oppression and of the financial strangulation of the overwhelming majority of the population of the world by a handful of 'advanced' countries. And this 'booty' is shared between two or three powerful marauders armed to the teeth (America, Great Britain and Japan), who involve the whole world in their war over the sharing of their booty".

"Capitalism has now singled out a handful (less than one-tenth of the inhabitants of the globe; less than one-fifth at a most 'generous' and liberal calculation) of exceptionally rich and powerful states which plunder the whole world simply by 'clipping coupons'".

While it is true that "the overwhelming majority of the population of the world" are exploited, it is not true to say that their exploiters are "a handful of exceptionally rich and powerful states". If this were the case, then the conclusion to be drawn would be that the people of the world should unite against this handful of states and their ruling classes (rather than against all states and all ruling classes), and this of course was the conclusion Lenin wanted drawn.

As a leading member of the government of a state not included in the "handful" he was appealing to all other excluded states, and their subjects—"proletarian states" as Mussolini, whose state was in a similar position, once called them—to rise up and in effect re-divide the world into new spheres of influence. But this would not have ended the exploitation of the world's population; it would merely have changed the way in which the proceeds of that exploitation—the booty, as Lenin aptly called it—were shared out amongst the states into which the world was divided, i. e., amongst their respective capitalist classes. In other words, "anti-imperialism" was being used by the ruling group in an up-and-coming but still excluded state to try to assert its right to a place in the sun. State capitalist Russia was eventually to achieve this, under Lenin's successor, Stalin, after the second world war.

The same theory that the whole population of the world is exploited by a handful of imperialist states was propagated by state capitalist China in the Mao era, and for the same reason. The rulers of China have since dropped this theory, having adopted the alternative strategy of "if you can't beat them, join them" to try to enter the club of world dominating powers, but the cynical use of this theory by the Maoist regime did have an interesting side-effect.

Since it bears a certain resemblance to reality—the vast majority of the world's population is exploited, the world is dominated by a handful of rich and powerful states, the solution does lie in a world revolution leading to the establishment of a new world society—this theory did provide a basis for a re-statement of the theory of capitalism as a single world system rather than as a collection of national capitalisms existing side by side. This "world-system" approach was adopted by a whole school of writers such as Immanuel Wallerstein, André Gunder Frank and Samir Amin even if they didn't completely free themselves from the Third Word v Handful of Imperialist Powers illusion. Wallerstein in particular had some very pertinent things to say. 

The world system approach leads to a recognition of the theoretical and practical impossibility of establishing "socialism in one country", indeed of any one country in any way escaping from capitalism on its own. As Wallerstein has written of past and existing so-called socialist (in reality state capitalist) countries:

"The fact that all enterprises are nationalized in these countries does not make the participation of these enterprises in the world-economy one that does not conform to the mode of operation of a capitalist market system: seeking increased efficiency of production in order to realize a maximum price on sales, thus achieving a more favorable allocation of the surplus of the world-economy" (The Capitalist World-Economy, p. 34).

"The capitalist system is composed of owners who sell for profit. The fact that an owner is a group of individuals rather than a single person makes no essential difference. This has long been recognized for joint-stock companies. It must now be recognized for sovereign states. A state which collectively owns all the means of production is merely a collective capitalist firm as long as it remains—as all such states are, in fact, presently compelled to remain—a participant in the market of the capitalist world-economy. No doubt such a 'firm'  may have different modalities of internal division of profit, but this does not change its essential role  vis-à-vis others operating in the world market" (pp. 68-69).

"The nationalization or socialization of all productive enterprises within the bounds of a nation-state is not and theoretically cannot be a sufficient defining condition of a socialist system, even if the whole nation thinks of socialism as its objective. As long as these nations remain part of a capitalist world-economy, they continue to produce for this world market on the basis of the same principles as any other producer. Even if  every nation in the world were to permit only state ownership of the means of production, the world-system would still be a capitalist system, although doubtless the political parameters would be very different from what they presently are" (pp. 73-74).

If Wallerstein had been consistent he would have dropped his support for Third World movements seeking to establish what he admitted could only have been state capitalism (Vietnam, Cuba, Nicaragua, PLO, etc) and have urged the exploited and oppressed people of all countries to strive for world socialism as, quite literally and without exaggeration, the only way out.

World socialism, the only alternative

The existence of capitalism as a world economic system means that there are no national solutions to the problems it causes. States, or rather the more powerful ones among them, can indeed distort the world market in their favour and so acquire, at the expense of other states, a greater share of world profits for their enterprises (whether private or state) than would otherwise occur. But, as no one state is strong enough to control the whole world market economy, such distortions can never be permanent, and the governments of all states are in the end compelled to submit to world market forces and give priority to capital accumulation, competitiveness and profitability over fully meeting people's needs in such fields as housing, health, education and the environment.

The solution to the problem of war and the threat of a nuclear holocaust that would kill millions and millions of human beings can, even more obviously, only be found on a world scale. Because of capitalism's nature as a world system involving a competitive struggle for profits in which the armed might of a state, whether or not it is actually used, can be a subsidiary factor for success, disarmament is impossible within the framework of capitalism and "disarmament conferences" are just a cruel joke. But not only is disarmament, even partial or step by step, impossible under capitalism, the tendency is in the opposite direction: towards increasing armament not just by super-powers but by all states. This will go on as long as capitalism lasts, involving a greater and greater waste of resources while over half the world's population are not even properly fed, let alone having their other needs met. This is the only future the capitalist world system has to offer humanity.

The lesson is clear. If the problems currently facing humanity are to be solved, the capitalist world economy must go. The only alternative to it is another world system, one geared to serving human interests in which the resources of the Earth would become the common heritage of all the people of the planet, so that they could be used to fully satisfy the material and cultural requirements of the whole population of the world. Such a socialist society would be, like capitalism, a world system functioning as such and not a collection of separate socialist societies existing on a national scale. Similarly, the action to establish such a world socialist society can only be a world-wide social revolution and not a series of "national" socialist revolutions.

Adam Buick (Britain)