The Chase Across The Globe

International Accumulation And The Contradictions For Nation States

Dick Bryan

• Publisher: Routledge
• Year: 2019
• Topic: Politics & International Relations
• eBook ISBN:
  9781000315332
• Subtopic: International Relations
• Index: Politics & International Relations

Over the last 20 years — and especially over the last decade — the international expansion of money and commodities and the international relocation of production have grown tremendously. As a result, there now exists a real contradiction in accumulation: Although global in orientation, it remains structured by the nation state. Conventional economic literature generally explains the international economy as exogenous to the national economy. Though the former does influence the latter, national economy and policy remain discrete. Conversely, there is a developing literature on globalism that explores the tendency for international capital to eradicate national differences, even to overpower nation states. However, neither interpretation adequately considers the contradictions for national policy that have accompanied the internationalization of capital. In this volume, Dick Bryan examines the influence of the international economy upon domestic accumulation, describing the process as the expression of the contradiction between the international scope of accumulation and the national scope of its regulation. Developing a theoretical framework for understanding the contradiction within Marxist political economy, he addresses the theory of value on an international scale, as well as theories of global restructuring and crisis. These issues are then applied to those domestic policies — such as monetary policy and balance of payments — that interrelate with the international economy. The author argues that the conventional theories informing these approaches have consistently failed to recognize the contradictions in international accumulation. National economic management has, as a result, reverted to explicit class politics, attempting to solve domestic economic problems by targeting the living standards of labor

1
What Is the Internationalisation of Capital?

Internationalisation is an unfortunate term, for its etymology suggests the primacy of nationality in the study of changes in global accumulation. Internationalisation suggests the extension beyond national units, but not in any sense the transcendence of national categories, for it expresses the development of relations between nations.

In its political-economic dimension, it suggests that accumulation was once national and then undertook a process of 'internationalisation' — a 'spilling over' of national accumulation. This, of course, is a false depiction of the history of accumulation. Accumulation has never adhered strictly to national boundaries. Indeed, trade in particular, but also investment were to some degree 'international' before there were 'nations'. This signals to us that accumulation has only a partial relation to the national unit and to the nation state — it is not reducible to the economic relations between nations. Yet most analyses, certainly those pertaining to economic processes, start with the primacy of national units, so that the spatial extension of accumulation is posed as the increasing interaction between national units, and, by some, as the decline in the economic autonomy of national units.

The processes which are characterised as 'internationalisation' can be posed as other than relations between nations. These may be spatiallyextended relations between companies or other institutions, between individuals, or between classes; or the extension of relations within any of these categories. An understanding of these relations may be impeded if the categories are uncritically attributed national characteristics.

With this in mind, it must be recognised that any definition of internationalisation in terms of capital outgrowing the nation has already imputed a whole conceptual agenda onto the role of the nation and the nation state in accumulation, and one which, it will be argued, has constrained a whole generation of analysis, both Marxist and nonMarxist. Here the fundamental theme of this analysis is immediately confronted: what does it mean to understand accumulation in terms of national units, and thus the extension beyond national units, and what does this imply for the role of the nation state in accumulation? More importantly, how is accumulation changing as it 'internationalises', and how are the roles of nation states changing in association with this process?

Yet the term 'mtemationalisation' shall be retained because it signals that the expansion of the space of the process of accumulation is not devoid of a national dimension. There may exist cultural and social factors which make economic relations beyond the nation qualitatively different from domestic relations. But beyond such possible particularities, it is the role of nation states which signals an inherent qualitative difference to the conditions of domestic and international accumulation. This, it must be emphasised, is not based on some notion that the nation state 'intervenes' to 'distort' accumulation, affecting a differentiation of domestic and international conditions. Such a proposition rests on an idealised and trivial notion of (potentially) stateless accumulation.¹ Rather, a national dimension rests on the recognition that the state plays some intrinsic roles in capitalist accumulation, not least of which are securing social stability and the supply of a stable money system. There cannot be capitalism without states and, in the current world, this means predominantly nation states.²

There is, therefore, a distinct role for nation states in international accumulation. Accumulation does not spread like an oil slick across the globe, because the movement of capital, while having a general character, is also to be understood as the aggregation of discrete and differentiated individual processes. Capital moves at different rates in different forms and in different directions at different times, and an analysis of internationalisation must explain this. Moreover, as part of this movement, the role of national states is decisive, both in facilitating some movements, at some times and in some directions, and retarding other movements, at other times, in other directions.

So while one side of the fundamental theme of this analysis relates to national conceptions of international accumulation, the other side relates to a conception of the international role of nation states. Without entering the minefield of specifying the general 'role of the state', a simple point can be proffered. Whether it is contended that the state 'represents' the so-called 'national interest'; or 'national' capital; or even the logic of coordination of capital, these have all been understood as nationally centred agendas. Debates about the state, both theoretical and 'applied' have centred on which of these agendas is 'true', and how it is pursued. But as capital internationalises, it has to be asked: whose interests are the national interest; what part of capital is to be ascribed the label of 'national'; and what is the space within which co-ordination is required?

Central to an alternative analysis, is the contradiction between the internationality of accumulation and the nationality of state regulation of accumulation, and the way this contradiction has been played out since the end of the long, post-war boom in the international economy in the late 1960s, and particularly since the mid 1970s. This contradiction is neither novel nor temporary, but during the post-war boom in the international economy, it could be said to have been 'hidden' in the buoyancy of the international economy.

Internationalisation of capital and the nation state therefore are inseparable as aspects of accumulation. While this relationship is always played out historically in particular circumstances, the general tendency towards the international mobility of capital suggests that the relationship between the state and accumulation is changing.

Since the end of that long boom, there has been two decades of protracted recession, punctuated by brief, and therefore rather superficial 'booms'. It is in this context that the contradiction has been pronounced, for it has been associated with the rapid escalation of the international movement of capital on the one hand, and the imposition of predominantly national strategies to resolve recession on the other. Hence 'the internationalisation of capital' is a term which must be further clarified, particularly as a prevalent dimension of contemporary global changes in accumulation. In this chapter, the changing character of accumulation on an international scale will be explored. The playing out of the contradiction involved in this change is addressed in Chapter 2.

Internationalisation as a Recent Phenomenon

Capital has always been international to some degree. International movement of capital, in the form of commodity trade and usury or credit, pre-dated and indeed was the precondition of the development of capitalism (Polanyi 1957; Dobb 1946; Kay 1975). Moreover, capitalist class relations have been internationalising at least since the beginnings of European colonialism.

Hence when internationalisation is depicted as a distinct, recent development of capitalism, particularly of the period since the 1970s, there is need for clarification, for any perceived transformation should not be overstated. We must be aware that changes which may seem monumental at the time can appear much less decisive in retrospect. Moreover, there is the danger that the proclamation of internationalisation as a 'new era^' for capitalism can use newness (the image of a 'clean slate') as a means to avoid analysing and explaining developments within the 'old'. Indeed, the orientation to put a label on this recent period (for example, the transition from 'early' to 'late monopoly capitalist imperialism' (Szymanski 1981); or from 'national' to 'metanational capitalist accumulation' (Borrego 1982); or from 'monopoly' to 'global capitalism' (Gibson and Horvath 1983; Ross and Trachte 1992); or from an 'old' to a 'new international division of labor (Froebel, et al. 1980)³ creates the impression that the 'new' period is distinct and, in its own terms, stable, thereby warranting its 'own' period classification. The labelling exercise seems both to foreclose debate about the nature of change, and to impose the interpretation that change occurs by quantum leaps.

Thus the 'recent phenomenon' of internationalisation should be read as current transformation in accumulation of modest, though significant, proportions. The significance of recent changes therefore stands as a theoretical issue, which will be identified in Chapters 2 and 3. First, it is necessary to identify the forces which led to what will be hereafter referred to as 'recent internationalisation', being the forms of international mobility of capital which have developed since the end of the long boom in the international economy.

Recent internationalisation involves a process of global integration of accumulation. Economic calculation of all kinds — by governments, corporations, workers, and consumers — are integrated globally due to the global extension of the process of competition. While competition is not always experienced by participants as a global process, developments since the 1970s have been increasing the extent to which competitive processes in any location adhere to international determinants.

The change in the 1970s can be identified with the growing size and importance of transnational corporations; advances in transport and communications which facilitate commodity trade; and developments in computer and telecommunications technology which permit the operation of internationally-integrated capital markets, not to mention the political hegemony of the economic theories of 'international competitiveness'. All these developments have made the scale of recent internationalisation technically possible.

While these developments have been critical, they do not explain why recent internationalisation arose when it did. Each of the abovementioned technological developments has its own long history: they did not suddenly emerge or suddenly and spontaneously combine together to form 'internationalisation' at the beginning of the 1970s. Just as important was the changing nature of production in the advanced capitalist countries during the 1950s and particularly 1960s.

It is therefore important to look briefly at the evidence of a phenomenon of 'recent interna tionalisation', in terms of the historical developments from which they derive. Unfortunately, the phenomenon is difficult to measure in its full dimensions. Some evidence is provided in the rapid growth of cross-national trade, credit, and investment. These processes increased significantly in all countries in the 1970s and accelerated in the 1980s, as will be seen shortly. But these increases in themselves are insufficient to substantiate the impact of recent interna tionalisation, for while cross-border flows of trade, credit and investment have grown rapidly, they remain far less than the total of all domestic flows.

What makes the current period distinctive, is that the impact of 'internationalisation' is more pervasive than cross-border flows. There is a breaking down of the difference between cross-border and domestic flows, for they are all becoming subject to the same calculation. So in addition to cross-national resource flows, and more importantly, recent internationalisation is reflected in the impact of international forces on domestic resource uses. This impact is somewhat more nebulous than resource flows, for it involves an interpretation of the extent to which domestic resource uses are influenced by and subject to international movement of capital.

The global integration of accumulation means that economic calculations of all kinds — from purchases in the supermarket to the determination of the prime interest rate — are subject, quite explicitly, to international calculation. In the supermarket, the increasing availability of imported goods and their price is a reflection of the increasing international mobility of commodities and the international determination of relative currency values. The level of wages with which to purchase these commodities is increasingly being determined with reference to the international cost competitiveness of local industry.

In the money market, the local rate of interest is increasingly driven by the exchange rate of the local currency in international markets, combined with the relative profitability of borrowing locally compared with internationally, and of lending locally compared with internationally. Not only are these international determinants now manifesting in local money markets more quickly then before, but there is now no significant notion of a distinct 'local' money market.

Nonetheless, in identifying evidence of recent internationalisation, it is necessary to start with cross-border resource flows. The less obvious, but more significant, aspects of global integration of calculation are developed throughout the book.

Trade

Table 1.1 shows world average annual rate of growth of exports and imports from 1950 to 1990. As broad figures, not too much reliance should be placed to support detailed stories, even if these figures are broken down into groups of nations, or even specific national data. But the broad pattern is clear. The period after the long boom saw the rate of growth of trade more than double. The annual rate of growth of exports and imports increased from 9% in the 1960s (itself a significant increase over the 1950s) to 20% in the 1970s,⁴ but then fell back to 5% in the 1980s, although the rate of growth on the second half of the 1980s was 12%, Notice, however, that because Table 1.1 shows rates of growth, not absolute levels, the performance of the 1980s is not to be seen as a falling away of commodity flows, but a consolidation of the growth of the 1970s, retaining and indeed increasing the level of international commodity flows achieved in the 1970s.

The explanation for the accelerated increase in trade at a time of international down-turn is a difficult matter; indeed one not widely considered. Some, particularly those advancing the 'profit squeeze' theory of the end of the long boom (for example, Armstrong, Glyn and Harrison 1991) have sought explanation in terms of a fall in domestic demand in the industrialised countries leading to the pursuit of external markets in the 'socialist' and 'less industrialised' countries. But trade expanded predominantly within the industrialised countries. Other observers, such as Mandel (1978), associated these changes with the development of over-production, portending the on-set of a period of crisis for capitalism. This was certainly consistent with historical processes for there did follow a period of sustained crisis of accumulation, beginning in the mid to late 1960s as the rate of profit started to fall in the industrialised countries, and clearly manifesting as global recession by the mid 1970s.

But the explanation of the end of the long boom is not the immediate

TABLE 1.1 Annual Average Rates of Growth of Global Trade^a, 1950-1990 (in percentages)

1950-1960	1960-1970	1970-1980	1980-1990
6.5	9.2	20.3	5.2

^a Figur...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Tables and Figures
• Acknowledgments
• Introduction
• 1 What Is the Internationalisation of Capital?
• 2 National Economies and International Capital: The Economists' Bind
• 3 Internationalisation, Crisis and Restructuring
• 4 The Internationalisation of Capital and Marxian Value Theory
• 5 The Nation State and the Contradictions of International Capital Movement
• 6 Internationalisation and the Contradictions of National Monetary Policy
• 7 Balance of Payments as Nationalist Accounting
• 8 The United States Balance of Payments in the Mid 1980s: The National Burden of Global Change
• 9 Balance of Payments and Nationalist Policy
• 10 What Needs to Be Reclaimed?
• References
• Index
• About the Book and Author