Global Civil War

Capitalism Post-Pandemic

William I. Robinson

• Publisher: PM Press
• Year: 2022
• ISBN:
  9781629639536
• Topic: Ciencias sociales
• Subtopic: Sociología

Following up on his earlier best-seller, The Global Police State, this exciting new study by critically-acclaimed scholar and activist William I. Robinson offers a big-picture contribution to understanding contemporary global society in the aftermath of the coronavirus pandemic. It puts forth an original and cutting-edge exposé of the radical transformation of global capitalism now underway, driven by new digital technologies and turbo-charged by the pandemic. It provides shocking data and analysis on the concentration of power and control in the hands of corporate conglomerates, tech giants, mega-banks, and the military-industrial complex. The book documents the extent of unprecedented global inequalities as the mass of humanity faces violent dispossession and uncertain survival. Enabled by digital applications, the ruling groups, unless they are pushed to change course by mass pressure from below, will turn to ratcheting up the global police state to contain the global revolt. If the book issues a dire warning against the emergence of a dystopic digitalized dictatorship it also finds great hope and inspiration in the burgeoning social movements of the poor and the dispossessed as humanity descends into global civil war. While deeply analytical and theoretically sophisticated, the study is written in such a style that it is eminently accessible to a wider public beyond the academy. While the work will satisfy scholars, it is destined to become a companion text to those struggling on the frontlines for global social justice and a more hopeful future.

CHAPTER ONE THE CRISIS OF CAPITALIST RULE

Covid-19 is not just a temporary crisis. [It is] a permanent disruptor. Historic global crises like wars, revolutions, pandemics, etc. often feel like they put history on fast-forward. Processes that normally take decades or longer to play out unfold in a couple of weeks. Coronavirus is the political, economic, and psychological event of our lifetimes that will drive disruption and transformation for years to come. It will bring a radical transformation of the kind that occurs only once in a generation.

—Bank of America, internal report, May 2020¹

The Covid-19 virus that spread around the world in 2020 triggered an economic meltdown and social catastrophe unmatched since the Great Depression of the 1930s. Millions of people became unemployed overnight, went hungry, lost their homes, fell ill, and faced harsh state repression. The extent of the meltdown was simply staggering. More than 90 percent of the world’s countries fell into deep recession in 2020, compared to only 60 percent in the 2008 Great Recession, making it a truly global crisis.² “Beyond the staggering economic impacts, the pandemic will also have severe and long-lasting socio-economic impacts that may well weaken long-term growth prospects” warned the World Bank several months into the pandemic. There would be no quick recovery, it cautioned, given “the plunge in investment because of elevated uncertainty, the erosion of human capital from the legions of unemployed, and the potential for ruptures of trade and supply linkages.”³ Economies did bounce back from the depths of the implosion, yet it was clear that economic turbulence and political conflict around the world would only escalate as the world emerged from the pandemic.

The contagion was but the spark that ignited the combustibles of a global economy that never fully recovered from the 2008 financial collapse and had been teetering on the brink of renewed crisis ever since. The political agents of global capitalism in states and the corporate media were quick to blame the meltdown on the virus, as stock markets and international commerce went into free fall. The pundits had deluded themselves into believing that all was well, but the underlying structural causes of the 2008 debacle, far from being resolved, had been steadily aggravated. On the eve of the pandemic, growth in the EU countries had already shrunk to zero, much of Latin America and sub-Saharan Africa was in recession, growth rates in Asia were steadily declining, and North America faced a slowdown. The writing was on the wall. With or without Covid-19, as we will see, the world economy has been mired in a structural crisis that is too entrenched to be considered a mere recession or even a depression.

The crisis of global capitalism, however, is more than just economic, or structural. It is also political, one of state legitimacy, even capitalist hegemony. Millions, perhaps billions, of people around the world are questioning a system they no longer see as legitimate. Some have taken a renewed interest in socialism, while others are being mobilized by far-right demagogues into neofascist projects. Capitalist states face spiraling crises of legitimacy after decades of hardship and social decay wrought by neoliberalism, aggravated by these states’ inability to manage the health emergency and the economic collapse. Crises, let us recall, are times of intense social and class conflict. There has been a rapid political polarization in global society since 2008 between an insurgent far right and an insurgent left. The ongoing crisis has animated far-right and neofascist forces that have surged in many countries around the world and that sought to capitalize politically on the health calamity, but it has also roused popular struggles from below, as workers and the poor engaged in a wave of strikes and protests on every continent that shows no signs of letting up. Political systems are cracking, social orders crumbling. We have entered into a period of mounting chaos in the world capitalist system.

The global revolt has been underway for some years now and is escalating as we move into the brave new world of post-pandemic capitalism. Prior to the health emergency, the system was already headed toward what we call an organic crisis: a general crisis of capitalist rule. The Bolshevik leader Vladimir Lenin described the symptoms of such a situation: 1) when there is a crisis in the prevailing system, and it is impossible for the ruling classes to rule in the old way; 2) when the want and suffering of the oppressed classes have grown more acute than usual; 3) when as a consequence the masses increase their historical action. Whether or not we are headed for a revolutionary rupture with capitalism, a worldwide fascist dictatorship, or a collapse of global civilization is a matter I will discuss in chapter three. Here we can note that the health emergency, above all, served to bring into stark relief the profundity of this crisis and the extent of malaise in the global social order. The worst of the contagion eventually passed, but not before taking a heavy toll. But the crisis of global capitalism is here to stay and has become considerably more acute in the wake of the pandemic. Before I launch into a discussion of the pandemic itself we must make a brief analytical and theoretical incursion into the nature of capitalist crises. Let us start with the economic dimension.

OVERACCUMULATION AND CHRONIC STAGNATION

Despite claims to the contrary by neoclassical economists, crisis is endemic to capitalism, and instability rather than equilibrium is the natural state of the system. The history of capitalism is one of periodic crises of two types. One is cyclical, sometimes called the business cycle, and shows up as recessions. They typically occur about every ten years. There were recessions in the early 1980s, the early 1990s, and the early 2000s. The other is more serious, a structural crisis, or what I call a restructuring crisis, because its resolution requires a major restructuring of the system. Cyclical crises may affect only certain countries or regions, whereas structural crises generally affect the entire world economy. In the course of the twentieth century the system experienced two restructuring crises, the Great Depression of the 1930s and the crisis of stagnation and inflation (known as “stagflation”) of the 1970s. Both these crises had their origin in what political economists call overaccumulation. This refers to a situation in which enormous amounts of capital (profits) are built up, but this capital cannot find productive outlets for reinvestment. This capital then becomes stagnant, as capitalists hold on to their accumulated profits rather than reinvesting them, throwing the system into crisis.

Overaccumulation originates in the circuit of capitalist production. In simplified terms, capitalists seek to maximize profit by constantly lowering the overall cost of labor, that is, the wage portion of the costs of production. One way to lower these costs is to lower the absolute amount paid to workers. In recent years, for instance, capitalist globalization has involved the relocation of factories and services to low-wage zones, epitomized by the spread around the world of sweatshops employing super-exploited young women. Another way is to raise productivity, that is, to raise output per worker per unit of time worked, so that fewer workers are needed for the same output. Typically, this has involved the introduction of new technologies that either replace workers entirely or that increase the productivity of each worker. Yet labor is the source of all surplus value, that is, of profits. Internal to the dynamic of capital accumulation is a tendency for the rate of profit to fall, even as the overall volume of profits may increase, because as capitalists compete with one another and strive to control labor and to reduce labor costs, they raise productivity through the ongoing introduction of new labor-saving and productivity-enhancing technologies and organizational forms. Ever less labor is required to produce ever more wealth as output per unit of labor increases. Anticipating what we will explore in the next chapter, new digital technologies that are now at the very core of the global economy have greatly increased productivity and corporate profits, even as the worldwide economic restructuring made possible by these technologies has resulted in an expanding army of the unemployed and the marginalized, or surplus humanity.

Analyzing these tendencies in the nineteenth century, Karl Marx noted that “a fall in the profit rate, and accelerated accumulation, are simply different expressions of the same process, in so far as both express the development of productivity.” He continued: “In view of the fact that the rate at which the total capital is valorized, i.e. the rate of profit, is the spur to capitalist production, a fall in this rate … appears as a threat to the development of the capitalist process; it promotes overproduction, speculation and crises.”⁴ To reiterate, overaccumulation thus refers to how enormous amounts of capital are accumulated, yet this capital cannot be reinvested profitably and becomes stagnant, or, in Marx’s words, “the capitalist would have won nothing by his own exertions but the obligation to supply more in the same labor time, in a word, more difficult conditions for the augmentation of the value of his capital.”⁵ In fact, while the absolute volume of transnational corporate profits has snowballed in recent years, the rate of profit has steadily declined. The average rate stood in the brief post–World War II “golden age” of world capitalism at about 15 percent. By the end of the 1980s it had dropped to 10 percent and continued to decline, to 6 percent in 2017.⁶

Although overaccumulation originates in the sphere of production, it becomes manifest in the sphere of circulation, that is, it shows up in the market as a crisis of overproduction or underconsumption. This refers to a situation in which the economy has produced—or has the capacity to produce—great quantities of wealth (defined as things that people need and want), but the market cannot absorb this wealth, because more and more people have been made surplus as technology advances and productivity increases, and/or because the wages of those that are employed are not sufficient for them to consume all that their labor produces. In other words, capitalism by its very nature will produce abundant wealth yet polarize that wealth and generate ever greater levels of social inequality. Overaccumulation appears first as a glut in the market, and then as stagnation. In fact, in the years leading up to the pandemic there was a steady rise in underutilized capacity and a slowdown in industrial production around the world.⁷ The surplus of accumulated capital with nowhere to go expanded rapidly. Transnational corporations recorded record profits during the 2010s at the same time that corporate investment declined.⁸ The total cash held in reserves of the world’s two thousand biggest nonfinancial corporations increased from $6.6 trillion in 2010 to $14.2 trillion in 2020—considerably more than the foreign exchange reserves of the world’s central governments—as the global economy stagnated.⁹

Well before the pandemic hit in 2020, all the telltale signs of an overaccumulation crisis were present. Before further analysis of this new crisis, let us return to the two early restructuring crises of the twentieth century. In the actual course of capitalist history, ongoing class and social struggles shape and constantly reshape how capitalism develops and how crises play themselves out. Mass popular and working-class struggles spread early in the twentieth century and reached a peak in the 1930s. These struggles forced capitalists into what became known as a “class compromise.” Capitalists and states were forced to back down from the unrestrained free market capitalism of the nineteenth and early twentieth centuries, with its stark inequalities and deprivation of the masses. What some called the “gilded age” and the “age of the robber barons” gave way through the pressure of these mass struggles to a new form of capitalism. This new form involved state intervention in the economy to regulate the market and redistribute wealth downward through social welfare and other state policies.

The new form has been referred to variously as New Deal capitalism, welfare capitalism, social democracy, or, in more technical terms, Fordism-Keynesianism. Regardless of what we name it, this state regulation of the market, redistributive policies, and working-class power acted as what we call “countervailing tendencies” to the tendency toward overaccumulation, that is, they helped offset overaccumulation. State intervention in the capitalist market and a component of redistribution came to define economic policy in the mid–twentieth century in the then First World, as well as in the then Third World in the wake of decolonization. This redistributive nation-state capitalism evolved, therefore, from capital’s accommodation to mass upheavals from below in the wake of the crisis of the two world wars and the Great Depression. Capitalist classes had little choice but to accept these arrangements in the face of mass struggles, including socialist and communist movements, militant trade unionism, and anti-colonial and Third World liberation movements. In any event, capital was able to sustain a high rate of profit for several decades as the world economy experienced an unprecedented boom in the aftermath of World War II and the devastation that it left in its wake.

As world capitalism entered its next structural crisis in the 1970s, capitalists and bureaucratic elites from around the world strove to beat back the power of organized labor, radical social movements, and Third World liberation struggles. These emerging transnationally oriented elites sought to win government during the 1980s and 1990s, typically through elections that took place on the heels of financial turmoil,¹⁰ and to utilize state power to open up the world in new ways to transnational capital. In this way, reorganizing the system on a global scale became a strategy to reconstitute the power of capital over the working and popular classes, whose struggles remained at the level of the nation-state. As they went global, these capitalist groups integrated with one another across borders in pursuit of their collective class interests in a process of transnational class formation. A transnational capitalist class (TCC) emerged in this way as the manifest agent of global capitalism, about which much has been written by myself and others in recent years.¹¹ While there is intense competition within its own ranks, the members of this TCC share an interest in promoting global rather than national markets and circuits of accumulation, in competition with local and national capitalist groups and elites whose fate is more closely bound up with their particular nation-states and regions. By the end of the twentieth century, this TCC became the hegemonic fraction of capital on a world scale. It is made up of the owners and managers of the giant transnational corporations (TNCs) and financial institutions that drive the global economy. As the hegemonic fraction of capital, transnational capital increasingly integrates local circuits into its own; it imposes the general direction and character on production worldwide and conditions the social, political, and cultural character of capitalist society worldwide.

The unprecedented concentration of capita...