Monday, June 22, 2009

Bang Goes 'Globalisation Theory'

[Related to previous post 'Before the Economic Crisis began in 2007']
What cannot be sustained is any hegemonic claim that globalisation theory is either adequate as it stands, capable of integrated development into an adequate theory, or superior to the theories which it has displaced.

.. we face a choice between a body of theory which, no matter how analytically coherent, unfortunately fails to explain the basi facts, and another group of theories that do offer an account of the most basic trends we can actually observe, the scientific choice seems clear to me; to make progress we have first to return to the abandoned theories that do in fact explain the facts, and ask ourselves how and why they achieve it, and whether their explanations and concepts can form an element of a new, and superior theory.

[Alan Freeman, 'The new world order and the failure of globalisation'. See full reference details below.]

Unfortunately F William Engdahl's description of 'Full Spectrum Dominance' is a much tighter fit of today's frightening reality.

[*] Alan Freeman (2002): The new world order and the failure of globalisation. Unpublished.
The new political geography of poverty. University of Greenwich
[This is a fuller but earlier prepublication version of an analysis of stagnation and divergence in the world economy which appeared in Pettifor, A (2003) Real World Economic Outlook, pp152-159. Basingstoke: Palgrave MacMillan, pp152-164.]


Shag from Brookline said...

Can we expect the zero sum game challenge to globalization?

Anonymous said...

There is a simpler and more elegant explanation for this process: In the most recent decades material production has shifted to the least productive economies in the global market.

This shift has been the result of the policies of permanent economic expansion pursued in the advanced economies, which has the effect of inflating costs of production in those nations.

The solution has been identified by Sandwichman in his posts: reduce hours of work.

What economists do not seem to understand - since they are mostly apologists for the existing order - is that a too long work week not only robs the worker of her hard won freedom from labor, but also robs an economy of its competitive advantage.

Productive work is replaced by non-productive service employment and the expansion of government.

This, of course, goes back not to Volume III, but to Volume I, since, as Sandwichman points out, the heart of Marx's analysis is the progressive replacement of necessary labor time with superfluous labor time.

Ultimately, the gradual accumulation of non-productive labor has to lead to the crisis we are now seeing - economic collapse - since the sheer weight of this non-productive labor, expressed in a growing dependence on debt, is both economically unsustainable (cannot be serviced given the necessity that it constantly grow) and fragile (is always threatened by periodic rise in unemployment produced by the business cycle).

When this happens - as it is happening now - the results are catastrophic deflation and depression, as a decades long inflation trade begins to unravel.

Irving Fisher's debt deflation begins to take over as millions of individuals and business are unable to service their current stock of debt under conditions where prices are falling and unemployment is rising - leading to bankruptcies and failures.

Once begun, this process cannot be stopped since the mass of non-productive employment rests on the further accumulation of debt, public and private, foreign and domestic, yet both individuals, businesses, and government lack the means to incur further accumulation of debt.


Unknown said...

Shag asked:

" Can we expect the zero sum game challenge to globalization?"

Yes, it'll take a two forms: A) Resource depletion and B) the global warming/ecological crisis.

These appear nearly inevitable. The issue is whether humanity can summon the socio-political resources to manage the crisis well.

Daro said...

As a hard critic of globalization, seeing it from the get-go as a race to the bottom in exploiting under-protected workers, it's always annoyed me how no-one ever called out Paul Krugman for his Pom-Pom-waving support for it. He's fallen silent in the last year or so on the issue after it turned out that America doesn't make anything anymore and he's gotten a lot right in other respects but criticism where it's due, man. Globalization is where his academic dreamery ended up kicking millions in the face.

Anonymous said...

He can add his embarrassment over that call to his embarrassment of his call for the housing bubble:

"The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."


juan said...

the heart of Marx's analysis is the progressive replacement of necessary labor time with superfluous labor time.

Do you mean to say capital's drive to shorten necessary labor time and increase surplus labor time [which has to do with increasing the rate of exploitation and is not identical to either unproductive or superfluous and is relate to accumulation, changing composition of capital and creation/expansion of the 'reserve army', semi-workers and petty commodity producers -- a globally expansive informal sector]?

Or do you mean the growth of often necessary though also unproductive labor?

Or both.

Anonymous said...

I am not sure I completely understand it, but I will give it a try:

Capital's basic drive is the production of surplus value.

However, as Moishe Postone and Sandwichman explain, in addition to the antagonism between necessary and surplus labor time, there is also the further antagonism between both necessary and surplus labor time, on the one hand - which, in Postone's words, constitutes, "a condition of all historical forms of social life" (and which can be considered "socially necessary") - and, what is, for both the worker and capital(?) together, entirely superfluous.

It is, therefore, not simply non-productive, but also unnecessary - like your congressman.

Specifically, we see following the depression of the 1930s, with the debasement of money from the gold standard, and the pursuit of permanent economic expansion, the subsequent blossoming of a massive and completely non-productive service sector in all advanced countries, and with it, the expansion of the government sector of the economy based on principle of dirigisme (state directed economic activity).

In particular, in the United States, from 1950 on, employment growth after this period consists almost entirely of employment in those sectors of the economy where nothing is produced - save instruments of war.

Postone says of superfluous labor: "The category can be understood both quantitatively and qualitatively, as referring to both the duration of labor as well as to the structure of production and the very existence of much labor in capitalist society. As applied to social production in general, it is a new historical category, one generated by the trajectory of capitalist production...the productive potential developed becomes so enormous that a new category of "extra" time for many emerges, allowing for a drastic reduction in both aspects of socially necessary labor time (i.e. in reference to both necessary labor time and surplus labor time.)"

(See Postone, 1993, p.374)

Sandwichman, of course, has been making just such an argument on these pages and elsewhere for some time now.

Unfortunately, from what I can gather, the realization of this "extra" time, as individual free time only becomes possible when it is no longer possible for it to continue as superfluous labor time, i.e., only on condition of a massive and catastrophic failure of economic activity following which wage labor is no longer possible.

Even the so-called Stalinist states could not wean themselves of this unnecessary labor time, and, in the end, it brought them down as it will bring down the "democracies."

juan said...

If 'your congressman' is taken as a representation of the legal-political structure, then yes, unproductive but I'd disagree about that structure being unnecessary to the capital system's (increasingly desperate) struggle to REproduce itself.

So sure there's a contradiction here and one which, by facilitating/being driven by transcyclic overaccumulation, began to undermine more than support and, same time, should help make more evident what is possible such as what Postone, S-man, others, have mentioned.

It becomes a matter of actually, not ideally, realizing the possible.

Anonymous said...

"If 'your congressman' is taken as a representation of the legal-political structure, then yes, unproductive but I'd disagree about that structure being unnecessary to the capital system's (increasingly desperate) struggle to REproduce itself."

Yes, I agree. From what I understand this structure itself becomes a means of extending reproduction, as does debt, and, what we refer to here as globalization. This is why I put a question mark (?) after the term capital - I was not sure how to state it and used term as shorthand for what Postone refers to as that portion directly appropriated by capital.

Thus both the value of labor power and surplus value together constitute "socially" necessary labor time, and stand in contradiction to superfluous labor time. This latter category compels the reduction of both necessary labor time and surplus labor time.

It is expressed, in our economy, I believe, in the secular rise of prices - inflation - and the secular accumulation of debt.

I do believe it can be shown that this secular inflation compels capital to move its productive capacity offshore, and ends with the bizarre situation of lower productivity countries subsidizing the consumption of the United States.


Myrtle Blackwood said...

How is superfluous labor time translated into inflation, charlie?

Myrtle Blackwood said...

I know it sounds like a stupid question, but my mind demands things to be spelt out. Sigh