Globalization, its Demise, and its Consequences

There is very, very much to like about the recent (3-24-2025) article in Jacobin by Branko Milanović entitled What Comes After Globalization?

First, Milanović explores historical comparisons between the late-nineteenth-century expansion of global markets and trade (what he calls Globalization I and dates from 1870 to 1914) and the globalization of our time (what he calls Globalization II and dates from 1989 to 2020). The search for and exposure of historical patterns are the first steps in scientific inquiry, what Marxists mean by historical materialist analysis. 

Unfortunately, many writers-- including on the left-- take the more recent participation of new and newly engaged producers and global traders, a revolution in logistics, the success of free-trade politics, and the subsequent explosion of international exchange as signaling the arrival of a new, unique capitalist era, even a new stage in its evolution. 

Recognizing a growing share of trade in global output, but burdened with a limited historical horizon (the end of the Second World War), left theorists drew unwarranted, speculative conclusions about a new stage of capitalism featuring a decline in the power of the nation state, the irreversible domination of “transnational capital,” and even the coming of a borderless “empire” contested by an amorphous “multitude.”

Countering these views, writers like Linda Weiss (The Myth of the Powerless State, 1998) and Charles Emmerson (1913: In Search of the World Before the Great War, 2013) bring some sobriety to the question and remind us that we have seen the explosive growth of world trade before, generated by many of the same or similar historic forces. Weiss tells us that “the ratios of export trade to GDP were consistently higher in 1913 than they were in 1973.” Noting the same historical facts, Emmerson wryly concludes “Plus ça change”.

Milanović’s recognition of this parallel between two historic moments gives his analysis a gravitas missing from many leftists, many self-styled Marxist interpretations of the globalization phenomenon.

Secondly, Milanović-- an acknowledged expert in comparative economic inequality-- makes an important observation regarding the asymmetry between Globalization I and II. While they are alike in many ways, they differ in one important, significant way: while Globalization I benefited the Great Powers at the expense of the colonial world, the workers in the former colonies were actually benefited by Globalization II. In Milanović’s words: 

Replacing domestic labor with cheap foreign labor made the owners of capital and the entrepreneurs of the Global North much richer. It also made it possible for the workers of the Global South to get higher-paying jobs and escape chronic underemployment…  It is therefore not a surprise that the Global North became deindustrialized, not solely as the result of automation and the increasing importance in services in national output overall, but also due to the fact that lots of industrial activity went to places where it could be done more cheaply. It’s no wonder that East Asia became the new workshop of the world.

While he misleadingly uses the expression “coalition of interests,” Milanović elaborates:

This particular coalition of interests was overlooked in the original thinking regarding globalization. In fact, it was believed that globalization would be bad for the large laboring masses of the Global South — that they would be exploited even more than before. Many people perhaps made this mistake based on the developments of Globalization I, which indeed led to the deindustrialization of India and the impoverishment of the populations of China and Africa. During this era, China was all but ruled by foreign merchants, and in Africa farmers lost control over land — toiled in common since time immemorial. Landlessness made them even poorer. So the first globalization indeed had a very negative effect on most of the Global South. But that was not the case in Globalization II, when wages and employment for large parts of the Global South improved.

Milanović makes an important point, though it risks exaggeration by his insistence that because Globalization II brought a higher GDP per worker, the workers are better off and exploited less. 

They may well be better off in many ways, but they are likely exploited more.

Because he forgoes a rigorous class analysis, he assumes that gain in GDP per worker goes automatically to the worker. Most of it surely does not; if it did, capital would not have shifted to the Global South. Instead, most of the GDP per capita goes to the capitalist-- foreign or domestic. Capital would not migrate to the former colonies if it garnered a lower rate of exploitation.

But engagement with manufacturing in Globalization II, rather than resource extraction or handicraft, certainly provides workers in the former colonies with greater employment, better wages, and more opportunity to parlay their labor power into a more advantageous position-- a fact that nearly all development theorists from right to left should concede.

Structural changes in capitalism-- the rapid mobility and ease of mobility of capital, the opening of new lower wage markets, a revolution in the means and costs of transportation-- have shifted manufacturing and its potential benefits for workers from its location in richer countries to a new location in poorer countries, creating a new leveling between workers in the North and South. 

Denying or neglecting this reality has led many leftists-- like John Bellamy Foster-- to support the “labor aristocracy” thesis as a reason to ignore or demean the potentially militant role of workers in the advanced capitalist countries. As one of the strongest voices in support of the revolutionary potential of the colonial workers and peasants, Lenin was scathingly critical of elements of the working class who were indirectly privileged by the wealth accumulated from the exploitation of the colonies. Those “labor aristocrats” constituted an ideological damper on the class politics of Lenin’s time (and even today), but by no means gave a reason to deny the class’s revolutionary potential. Certainly, the ruling classes of the Great Powers employed that relative privilege and many other ploys to further exploit their domestic workers to the fullest extent and discourage their rebellion.

Bellamy and others want to deny the revolutionary potential of the workers in the advanced capitalist countries in order to support the proposition that the principal contradiction today is between the US, Europe, and Japan and the countries of the Global South. Bellamy endorses the Monthly Review position taken as far back as the early 1960s: “Some Marxist theorists in the West took the position, most clearly enunciated by Sweezy, that revolution, and with it, the revolutionary proletariat and the proper focus of Marxist theory, had shifted to the third world or the Global South.” 

While frustration with the lack of working-class militancy (worldwide) is understandable and widespread, it does not change the dynamics of revolutionary change-- the decisive role of workers in replacing the existing socio-economic system. Nor does it dismiss the obligation to stand with the workers, the peasants, the unemployed, and the déclassé wherever they may be-- within either the Great Powers or the former colonies.

Just as revolutionary-pessimism fostered the romance of third-world revolution among Western left-wing intellectuals in the 1960s, today it is the foundation for another romantic notion-- multipolarity as the rebellion of the Global South. Like its Cold War version, it sees a contradiction between former colonies and the Great Powers of our time as superseding the contradiction between powerful monopoly corporations and the people. 

Of course, richer capitalist states and their ruling classes do all they can to protect or expand any advantages they may enjoy over other states-- rich or poor-- including economic advantages. But for the workers of rich or poor states, the decisive question is not a question of sovereignty, not a question of defending their national bourgeoisie, or their elites, but of ending exploitation, of combatting capital. 

The outcome of the global competition between Asian or South American countries and their richer Western counterparts over market share or the division of surplus value has no necessary connection with the well-being of workers in the sweatshops of the various rivals. This is a fact that many Western academics seem to miss.  

Thirdly, Milanović clearly sees the demise of Globalization II-- the globalization of our time:

The international wave of globalization that began over thirty years ago is at its close. Recent years have seen increased tariffs from the United States and the European Union; the creation of trade blocs; strong limits on the transfer of technology to China, Russia, Iran, and other “unfriendly” countries; the use of economic coercion, including import bans and financial sanctions; severe restrictions on immigration; and, finally, industrial policies with the implied subsidization of domestic producers.

Again, he is right, though he fails to acknowledge the economic logic behind the origins of Globalization II, the conditions leading to its demise, and the forces shaping the post-globalization era. For Milanović, globalization's end comes from policy decisions-- not policy decisions forced on political actors-- but simply policy preferences: “Trump fits that mold almost perfectly. He loves mercantilism and sees foreign economic policy as a tool to extract all kinds of concessions…” Thus, Trump’s disposition “explains” the new economic regimen; we need to look no deeper.

But Trump did not end globalization. The 2007-2009 economic crisis did. 

Globalization was propelled by neoliberal restructuring combined with the flood of cheap labor entering the global market from the “opening” of the People’s Republic of China and the collapse of Eastern Europe and the USSR. Cheaper labor power means higher profits, everything else being the same.

With the subsequent orgy of overaccumulation and capital running wildly looking for even the most outlandish investment opportunities, it was almost inevitable that the economy would crash and burn from unfettered speculation.

And when it did in 2007-2009, it took trade growth with it and marked “paid” on globalization.

As I wrote in 2008:

 As with the Great Depression, the economic crisis strikes different economies in different ways. Despite efforts to integrate the world economies, the international division of labor and the differing levels of development foreclose a unified solution to economic distress. The weak efforts at joint action, the conferences, the summits, etc. cannot succeed simply because every nation has different interests and problems, a condition that will only become more acute as the crisis mounts…

“Centrifugal forces” generated by self-preservation were operant, pulling apart existing alliances, blocs, joint institutions, and common solutions. Trade agreements, international organizations, regulatory systems, and trust greased the wheels of global trade; distrust, competition, and a determination to push economic problems on others threw sand on those wheels. 

Anticipating the period after the demise of globalization, I wrote in April of 2009:

To simplify greatly, a healthy, expanding capitalist order tends to promote intervals of global cooperation enforced by a hegemonic power and trade expansion, while a wounded, shrinking capitalist order tends towards autarky and economic nationalism. The Great Depression was a clear example of heightened nationalism and economic self-absorption. 

The aftermath of the 2007-2009 Great Recession was one such example of “a wounded, shrinking capitalist order.”  And predictably, autarky and economic nationalism followed.

The tendency was exacerbated by the European debt crisis that drove a wedge between the European Union’s wealthier North and the poorer South. Similarly, Brexit was an example of the tendency to go it alone, substituting competition for cooperation. Ruling classes replaced “win-win” with zero-sum thinking.

The pace and intensity of international trade has never recovered. 

While Milanović does not attend to it, this cycle of capitalist expansion, economic crisis, followed by economic nationalism (and often, war) recurs periodically. 

In the late-nineteenth century, the global economy saw a vast restructuring of capitalism, with new technologies and rising productivity (and concomitant rises in rates of exploitation).The era also saw what economists cite as “a world-wide price and economic recession” from 1873 to 1879 (the Long Depression). In its wake, protectionism and trade wars broke out as everyone tried to dispose of their cheaper goods in other countries, only to be met with tariff barriers. 

The imperialist “scramble for Africa” -- so powerfully described by John Hobson and V. I. Lenin-- raised the intensity of international competition and rivalry, while generating the foundation for economic growth and global trade with newly acquired colonies. This is the period that Milanović characterizes as Globalization I. A further aspect and stimulus of the rebirth of growth and trade was the massive armament programs mounted by the Great Powers. The unprecedented armament race-- the “Dreadnought race” -- served as an engine of growth, while exponentially increasing the danger of war (from 1880 to 1914 armament spending in Germany increased six-fold, in Russia three-fold, in Britain three-fold, in France double, source: The Bloody Trail of Imperialism, Eddie Glackin, 2015).

One could argue, similarly, that the 1930s were a period of depression and economic nationalism, following a broad, exuberant economic expansion. And as with the pre-World War I Globalization I, the contradictions were resolved with World War.

Is War our Destiny after the Demise of Globalization II? 

Certainly, the historical parallels cited above suggest that wars often follow pronounced economic disruptions and the consequent rise of economic nationalism, though we must remember that events do not follow a mechanical pattern.

Yet if history is a great teacher, it certainly looks like the mounting contradictions of today’s capitalism point to intensifying rivalry and conflict. A March 24 Wall Street Journal headline screams: Trade War Explodes Across World at a Pace Not Seen in Decades!  

The article notes that the infamous Smoot-Hawley (tariff) Act of 1930-- a response to the Great Depression-- was only rescinded after the war.

It also notes-- correctly-- that tariffs are not simply a Trump initiative. As of March 1, the Group of 20 have imposed 4500 import restrictions-- up 75% since 2016 and increased 10-fold since 2008.

The World Trade Organization, responsible for organizing Globalization II has failed its calling. As the WSJ reports:

In February, South Korea and Vietnam imposed stiff new penalties on imports of Chinese steel following complaints from local producers about a surge of cut-price competition. Similarly, Mexico has begun an antidumping probe into Chinese chemicals and plastic sheets, while Indonesia is readying new duties on nylon used in packaging imported from China and other countries. 

Even sanctions-hit Russia is seeking to stem an influx of Chinese cars, despite warm relations between Russian President Vladimir Putin and Chinese leader Xi Jinping. Russia in recent weeks increased a tax on disposing of imported vehicles, effectively jacking up their cost. More than half of newly sold vehicles in Russia are Chinese-made, compared with less than 10% before its 2022 invasion of Ukraine.

As tensions mount on the trade front, rearmament and political tensions are growing. War talk mounts and the means of destruction become more effective and greater in number. The US alone accounts for 43% of military exports worldwide, up from 35% in 2020. France is now the number two arms exporter, surpassing Russia. And, in over a decade, NATO has more than doubled the value of weapons imported. 

European defense spending is expanding at rates unseen since the Cold War, in some cases since World War II. According to the BBC, “On 4 March European Commission President Ursula Von der Leyen announced plans for an €800bn defence fund called The ReArm Europe Fund.”  Germany has eliminated all restraints on military spending in its budget. Likewise, the UK plans to increase military spending to 2.5% of GDP in the next two years, while Denmark is aiming for 3% of GDP in the same period (growth rates consistent with those of the Great Powers before World War I, except for Germany).

Dangerously, centrist politicians in the EU are beginning to see rising military spending as a boost to a stuttering economy. As military Keynesianism takes hold, the possibility of global war increases, especially in light of the shifting alliances in the proxy war in Ukraine.

Even more ominously, Europe’s two nuclear powers-- France and the UK-- are seriously discussing the development of a European nuclear force independent of the US-controlled NATO nuclear capability.

At the same time, the incoming chair of the US Joint Chiefs of Staff announced readiness to supply more NATO powers with a nuclear capacity.

As war cries intensify, the EU Commission has issued a guidance that EU citizens should maintain 72 hours of emergency supplies to meet looming war dangers.

Of course, the continually escalating wave of tariffs, sanctions, and hostile words directed at The People's Republic of China by the US and its allies threatens to break into open conflict and wider war, a war for which the PRC is quite understandably actively preparing. 

As with previous World Wars, it is not so much-- at this moment-- who is right or wrong, but when the momentum toward war will become irreversible. Another imperialist war-- for, in essence, that is what it would be-- will be an unimaginable disaster. No issue is more vital to our survival than stopping this momentum toward global war.

Greg Godels

zzsblogml@gmail.com

Oil, Natural Gas, and Capitalism

The great powers-- the leading players in the imperialist system-- have always required a source for the energy to drive their economic engines. They needed energy resources to build and empower their military might; they needed energy to grow their national economies and power their vessels of trade and transportation. Indeed, their socio-economic systems would have collapsed without ample and available energy sources.

At the dawn of the capitalist industrial era, that source came mainly from coal. Coal powered the machines that grew the productivity of labor to great new heights. It is reasonable to think that only those countries with easy access to coal could then become great capitalist powers.

Beginning at the turn of the last century, oil-- an abundant, efficient, and easily stored and transported energy source-- became essential for the exercise of economic and military might. As modes of transportation became dependent upon petroleum products, an intense rivalry was stoked for access to oil, often found in more remote areas of the world, far removed from the great urban centers of the great capitalist powers.

At the same time, the great capitalist powers accelerated their drive to dominate the entire world. Lenin and others saw this as a higher stage of capitalist development impelled by the dominance of monopoly capitalism, finance capital, and capital export.

Access and control of energy resources played an extremely large role in motivating this development, leading to conflict and colonization over the areas offering abundant oil production.

It could be said that “oil imperialism” was a critical factor in the course of the Second World War: Japan -- a country without adequate oil reserves-- needed to secure resources to pursue its imperialist mission; likewise, Germany’s eastward turn was prodded by its thirst for Soviet oil.

Constituting the leading imperialist power after WWII, the US had its own adequate petroleum resources, but sought to guarantee that global oil supplies would remain available to its clients in the crusade against Communism.

After the end of the Cold War, new technologies unleashed huge reservoirs of oil and natural gas in the US. A once-stable international market was consequently disrupted, allowing US producers to reshape, even dominate, the global distribution of oil and natural gas.

But in the decades to follow the end of the Cold War, those capitalist countries that were the most trusted anti-Communist allies were relying on long-established, existing sources of energy or had turned to convenient, adjacent, transit modes from the energy giant, the now-capitalist Russia.

Europe, for example, had grown increasingly reliant on Soviet oil and gas even before European socialism’s fall. And OPEC’s distribution network and quasi-planned marketing maintained a persistent global stability of price and availability.

From where would the US, undergoing a technological revolution with fracking, take its oil and gas bonanza?

I began to discuss the US shift toward what I called “US oil and gas imperialism” seven years ago (here, here, here, here and here). I wrote in July of 2019:

US oil and gas imperialism is another feature of the new economic nationalism. With US oil production matching or exceeding every other global producer, and with natural gas extraction growing dramatically, the economic nationalists foresee the US now competing successfully for markets. The conventional explanation of the US aggression against oil-producing states must now be retired. The US is no longer solely obsessed with commanding and dominating existing oil producers-- US intervention is not simply about the oil in the way it has been in the past. That is, it is not simply acquiring oil resources that motivates US aggression, but commanding oil markets as well.

Thus, the US is also out to wreck competing oil and gas producers by sanctions, disruptions, and destruction. The US corporations want the markets in order to peddle their own energy resources. The long trail of wrecked, dysfunctional, and economically strangled global oil producers attests to this new motivation and serves US energy corporations well.

I have been writing often of this shift of US imperial design for over two years. Nothing demonstrates the intent of the new energy imperialism as does the Department of Energy’s recent renaming of US natural gas as “Freedom Gas” and the product as “molecules of freedom.” This silly branding is part of the campaign to win Europe and other gas-dependent markets from Russia and Iran/Qatar. Even though US liquified “freedom gas” is 20% more expensive than Russian gas, the Trump administration bullied Germany’s Angela Merkel to agree to two new LNG terminals in Germany. Her admission that LNG from the US would not break even for at least a decade demonstrates the aggressive face of the new US energy imperialism.

US gas producers have stoked anti-Russia sentiment to draw Poland and the Baltic states into their LNG market nexus. US LNG annual exports to Portugal and Spain grew from a tiny base to nearly 20 and 30 billion cubic feet, respectively, between 2016 and 2017.

And US crude oil exports soared after the crisis in the Straits of Hormuz. US oil shipping nearly doubled in the aftermath of the mysterious “attacks” in the Persian Gulf. President Trump underscored the attractiveness of foregoing the Straits and buying from the US. Rather than taking the “dangerous journey,” Japan and PRChina should be reminded that “the US has just become (by far) the largest producer of energy in the world.” (my emphasis)

Writing in 2019, I was anticipating geopolitical events geared to shifting the natural gas market dramatically in favor of the US. I foresaw the “anti-Russia” push as targeting the natural gas market in Europe and “crisis” in the Middle East as disrupting shipments from traditional Middle East suppliers. 

Hostility and conflict would be the thumb-on-the-scales to offset the higher price (lower risk) of US liquified natural gas.

Unlike the Cold War era, where the US postured as a protective shield for safe, durable, and inexpensive energy channels, the post-Cold War US policy places US immediate economic interests above the supposed alliance obligations; without consultation, the US tossed aside its role among its allies as the guarantor of peace and security and is taking on the role of international energy huckster.

In 2022, the US secured a major victory in oil and gas imperialism with the war in Ukraine. As a result of a concerted campaign to destabilize Ukraine, separate it from Russia, and coax it into NATO’s anti-Putin alliance, the US drew Russia into a long, bloody war. The war proved to be a veritable gift for the US and its energy industry. Anti-Russia hysteria provoked the US’s European allies into breaking economic ties with Russia, including the big prize--cutting off Russia’s supplies of natural gas. Seduced by Cold War-like rhetoric and fear-mongering, European countries outdid each other with belligerence, culminating in refusing cheap Russian energy resources. To seal this self-defeating move on the part of US “allies,” the US organized the destruction of crucial Russian pipelines. Left with no alternative to Russian energy, Europe turned to their US “partner.”

US exports of oil to Europe more than doubled between 2021 and today. Likewise, disrupting natural gas distribution has paid off for the US with liquid natural gas (LNG) exports nearly doubling from 2018 to 2022. Quoting The Wall Street Journal:

Russia’s invasion of Ukraine kicked U.S. [LNG] exports into overdrive. Since March 2022, U.S. developers have signed 57 supply agreements representing about 73 million metric tons of LNG annually… more than four times the number of contracts they signed between 2020 and 2021.

Many of these contracts run for 20 years and underpin the construction of terminals that have yet to be built. LNG exports are expected to more than double [again!] from current levels by the end of this decade…

Thus, thanks to the war in Ukraine, US allies had the privilege of incurring the costs of liquefaction, shipping, and building LNG terminals to show their solidarity with the US-instigated war.

Foolishly, European leaders rushed to show their support for the war, even at tremendous cost to their own economies.

Likewise, the unfolding war in the Middle East plays into the hands of the US oil and natural gas imperialists. As the WSJ concedes:

In the longer term, the Red Sea situation could bring more business for U.S. LNG shippers, which are building out export capacity at Gulf Coast facilities and are vying for big contracts with big buyers in Europe, analysts said.

The percentage of LNG tankers set to pass through the Suez Canal has dropped to its lowest point in at least a decade.

But the LNG will be coming from the West, thanks to the beneficence of the US government anticipating the changing energy market!

Paul Hannon and William Boston put it well: “For the second time in three years, a conflict in Europe’s neighborhood is threatening to weaken a struggling economy, while a more robust U.S. is watching from a safe distance.”

It is indeed an odd ally that takes advantage of the sacrifices that it imposes upon its friends to make. While US capitalism has enjoyed strong growth, thanks to two wars in other lands, its European friends have endured inflation and stagnation. 

Germany, led by Social Democrats and Greens, has met the US-led call to war with enthusiasm, militarism, and aggression unseen since the Second World War. Germany has materially supported Ukraine second only to the US and matched the US’s shuttering of economic relations. Where the US has shown healthy growth for 2023, Germany has fallen into recession, its industrial sector racked by high energy costs and supply shortages-- a steep price to pay for following US leadership. “‘The threat of deindustrialization is real,’ said Max Jankowsky, chief executive of GL Giesserei Lossnitz, a 175- year-old foundry in the eastern German state of Saxony.” German Chancellor Olaf Scholz’s popular satisfaction is the lowest for a chancellor since 1997. Germany-- the leading power in the European Union, an industrial giant, the world’s fourth largest economy-- has been brought to its knees by US oil and gas imperialism.

The people, and especially the left, need a constant reminder of the material interests behind global imperialism and the mechanism that powers it. 

Imperialism is not a consequence of bad leadership from Trump, Biden, Johnson, or Modi or their ilk; it is not the product of neoliberalism or any other ideology; it is not the result of a lust for power. In short, imperialism is not a matter of moral choice or competence. Instead, it is an imperative of capitalism in its modern form. It is an expression of the rivalries generated by capitalist competition for markets, resources, and most tellingly, profits. When that competition reaches its greatest intensity, war ensues.

Some would like to believe that we can break the link between capitalism, exploitation, inequality, poverty, environmental degradation, and war. They aver that a benign capitalism, regulated by enlightened governments, can escape the imperialist system. History shows no such eventuality. People are awakening to the impossibility of “fixing the system.”

The left overlooks this at its peril.

Greg Godels
zzsblogml@gmail.com

The Willful Destruction of a People

The US corporate media has maintained a near unanimous support for the Israeli destruction of Gaza-- the home of 2.2 million Palestinians. While pundits engage in parlor games over what degree of violence is “justified” by the Hamas attack upon Israel, while public intellectuals fall in line with the gutless unconditional support of Israeli punitive actions, tens of thousands of Palestinian people-- largely men, women, and children going about their day-to-day lives-- have been killed, maimed, wounded, or terrorized. 

Corruption, racism, and cowardice come together to produce a rare near-total US ruling-class consensus behind the brutal action of the ultra-right, ultra-nationalist, and racist Israeli government. 

The enforcement of this consensus is unprecedented and a truly appalling sight to behold. 

The highly publicized clash over even an embarrassingly tepid pushback by elite administrators at elite universities over free speech-- a normally sacrosanct intellectual fallback-- underscores the complete, unconditional freedom-of-action that Israel enjoys with the rich and powerful in the US. 

While the machinations of donors and administrators at Harvard, Penn, and MIT should be of little more than entertainment value for most of us, the raw, public exercise of the power of wealth in shaping academic institutions should cause many to recoil. Those who naively believed in the independence and integrity of academia should be chastened accordingly. 

Black Harvard President Gay would learn that neither her own elite background nor the thin armor of the faddish liberal DEI mutation of anti-racism would protect her from the vulgar bullying of wild-eyed Zionist billionaires and rightwing witch hunters.

Christopher Rufo, puffed up with his own role in bringing down Harvard’s Gay, concedes that he couldn’t have done it without the collaboration of the center-left that accepted any excuse to enforce support for Israel. 

Despite the crude editorial endorsement of and overwhelming official enthusiasm for the Israeli slaughter of Palestinians, a different message has gotten through to the US populace. Whether it is the heart-rending pictures of death and destruction, the cracks in the carefully hedged and vetted news stories, or the alternative media, a bold, determined movement against Israel’s vicious assault on Gaza has emerged to challenge the ruling-class monolith. Risking economic reprisals, future status, and public shaming, hundreds of thousands-- overwhelmingly youth-- have stood and marched for life and a future for Gaza and Palestine. 

It is truly a remarkable moment of crass opportunism, slavish conformity, and viciousness confronted by high principle, self-sacrifice, and courage. It is this kind of moment that forces people to examine how their words and self-styled image coheres with reality. 

The facts are effective in awakening people to the brutal fate of Palestinians as a people. Because the Israeli government is so blatantly indifferent to international outrage, The Wall Street Journal is embarrassed to report the truth-on-the-ground in Gaza. Whether reluctantly or not, a recent front-page news story-- Gaza’s Destruction Stands Out In Modern History (softened in the online edition to: The Ruined Landscape of Gaza After Nearly Three Months of Bombing) -- describes an almost unimaginable living hell. Its lead is worth quoting in full:

The war in the Gaza Strip is generating destruction comparable in scale to the most devastating urban warfare in the modern record.

By mid-December, Israel had dropped 29,000 bombs, munitions and shells on the strip. Nearly 70% of Gaza’s 439,000 homes and about half of its buildings have been damaged or destroyed. The bombing has damaged Byzantine churches and ancient mosques, factories and apartment buildings, shopping malls and luxury hotels, theaters and schools. Much of the water, electrical, communications and healthcare infrastructure that made Gaza function is beyond repair. 

Most of the strip’s 36 hospitals are shut down, and only eight are accepting patients. Citrus trees, olive groves and greenhouses have been obliterated. More than two-thirds of its schools are damaged.

While most media mention the 22,000 or more deaths or the over 80,000 total Palestinian casualties, they dutifully treat the facts as allegations and with vastly more than warranted skepticism. Nonetheless, the numbers have shocked millions around the world.

But the WSJ article goes further, offering comfortable, secure readers a taste of what life is like for those not physically harmed by Israeli bombs:

In the south, where more than a million displaced residents have fled, Gazans sleep in the street and burn garbage to cook. Some 85% of the strip’s 2.2 million people have fled their homes and are confined by Israeli evacuation orders to less than one-third of the strip, according to the United Nations…

According to analysis of satellite data by remote-sensing experts at the City University of New York and Oregon State University, as many as 80% of the buildings in northern Gaza, where the bombing has been most severe, are damaged or destroyed, a higher percentage than in Dresden [the site of murderous firebombing in WWII].

The WSJ presents a set of facts and expert observations that are nothing if not damning of the Israeli tactics:

・Robert Pape, political scientist at the University of Chicago: “What you are seeing in Gaza is in the top 25% of the most intense punishment campaigns in history.”

・” Some 85% of the strip’s 2.2 million people have fled their homes and are confined by Israeli evacuation orders to less than one-third of the strip, according to the United Nations.”

・” He Yin, an assistant professor of geography at Kent State University in Ohio, estimated that 20% of Gaza’s agricultural land has been damaged or destroyed. Winter wheat that should be sprouting around now isn’t visible, he said, suggesting it wasn’t planted.”

・” A World Bank analysis concluded that by Dec. 12, the war had damaged or destroyed 77% of health facilities, 72% of municipal services such as parks, courts and libraries, 68% of telecommunications infrastructure, and 76% of commercial sites, including the almost complete destruction of the industrial zone in the north. More than half of all roads, the World Bank found, have been damaged or destroyed. Some 342 schools have been damaged, according to the U.N., including 70 of its own schools.”

・Where the US dropped 3,678 munitions on the entire nation of Iraq in seven years, Israel has dropped 29,000 on tiny Gaza in a little over two months.

・On Gaza city: “‘It’s not a livable city anymore,’ said Eyal Weizman, an Israeli-British architect who studies Israel’s approach to the built environment in the Palestinian territories. Any reconstruction, he said, will require ‘a whole system of underground infrastructure, because when you attack the subsoil, everything that runs through the ground—the water, the gas, the sewage—is torn.’”

・” The level of damage in Gaza is almost double what it was during a 2014 conflict, which lasted 50 days, with five times as many completely destroyed buildings, according to the Shelter Cluster. In the current conflict, as of mid-December, more than 800,000 people had no home left to return to, the World Bank found.” 

To those seduced by a gutless media and a bought-and-sold political establishment, this picture constructed by one of the US’s most conservative papers should bring Israel’s crimes against Gaza into sharper relief; It should be painful to even imagine living under such conditions; it should remove the Gaza question from the realm of political debate to the basic issue of human dignity and survival.

Is there any humane answer beyond: Cease Fire Now!?

Greg Godels

zzsblogml@gmail.com

Karl Kautsky, “Ultra-imperialism,” and Multipolarity

The fashionable term “multipolarity” -- popular with a significant section of the international left-- has an historical antecedent. In 1914, Karl Kautsky-- then possibly the most prominent Marxist theoretician in the world-- wrote an essay on the phases of capitalism-- past, current, and future. Like many modern-day multipolaristas who imagine a stable, peaceful imperialism after the taming of the US, Kautsky foresaw a benign phase of capitalist cooperation and peace after the war, after the belligerents were exhausted.  

The capitalist countries would find peace on the international level through a process similar to cartelization-- the formation of monopolies. Kautsky believed that the growth of monopoly concentration on the corporate level-- a process ongoing in the late nineteenth century and acknowledged by nearly everyone-- was parallel with the concentration of countries, their colonies, and spheres of interest on the international level. As monopolies reduce competition among corporations, Kautsky reasoned, ultra-imperialism would reduce competition and rivalry among state powers.

Written a few months before the First World War and published a few months after the war began (with revisions), Ultra-imperialism (September, 1914) sought-- first and foremost-- to explain qualitative changes in capitalism: from its nineteenth-century phase as “free market” capitalism led and dominated by Great Britain, to its imperialist phase or form, existing at the time of Kautsky’s essay, to its ultra-imperialist phase, anticipated by Kautsky after the war would end. 

To today’s reader, Ultra-imperialism may express some unusual, even eccentric ideas, though they reflect the rapidly changing circumstances that engaged Marxists at the turn of the last century. Capitalism was changing; the working-class movement was changing; the socialist parties were changing; and the movement’s leaders were changing. 

Capitalist enterprises were growing larger and larger, absorbing smaller competitors and concentrating significant industries into fewer units. Capital accumulation had grown as well, with the result that financiers were looking farther afield for investment opportunities. And states were encouraging the export of capital, while committing to protection of those investments through acquiring colonies and developing spheres of interest. 

These profound qualitative changes did not go unnoticed; within Marxist circles, not only Kautsky, but others-- Bukharin, Luxemburg, and, of course, Lenin-- were exploring the meaning of these changes. Without question, Lenin’s contribution-- the book, Imperialism-- placed the most indelible stamp on the left’s understanding of imperialism over the next one hundred years.

For Kautsky, changes in the form or phase of capitalism sprang from disproportionalities between industrial and agricultural production. Granting that capitalist industrial production knew no bounds, exchange with the agricultural sector was always limited by the slower growth in the production of foodstuffs and the availability of raw materials, as well as the number of customers for industrial goods. While drawing a distinction between industrial and agricultural sectors may seem artificial to today’s readers, it reflects a difference better expressed as the difference between advanced capitalist countries and pre-industrial regions, countries, and even continents in the early twentieth century.

Kautsky sketches a plausible natural history of the advanced capitalist countries seeking answers to the problem of the “agricultural sector” through exporting capital to other countries for trade and markets. Colonization arises because these new markets lack infrastructure and--frequently-- state structures. The capital exporter finds it easier to impose its state than to create a new state: “Naturally, this is best supplied by the State power of these capitalists themselves… Hence as the drive for increasing capital export from the industrial States to the agrarian zones of the world grows, so too does the tendency to subjugate these zones under their State power.”

This is Kautsky’s theory of the rise of imperialism. Interestingly, Kautsky, unlike Lenin, characterizes this relationship between colonizer and colonized as oppressive, rather than exploitative. 

Not all countries that develop by the importation of capital are locked into a subordinate role by the industrialized countries; Kautsky cites the US and Russia as enjoying exported capital from other countries, but possessing “the strength to protect [their] autonomy… The desire to hinder this [autonomy] is another motive for the capitalist states to subject the agrarian zones, directly-- as colonies-- or indirectly-- as spheres of influence…”

Where Lenin sees imperialism as an imperative of mature monopoly capitalism-- a stage dictated by the very mechanism powering capitalism-- Kautsky understands imperialism as a policy, a choice made somehow by the collective capitalist: “Does [imperialism] represent the last possible phenomenal form of capitalist world policy, or is another still possible?” 

Significantly, Lenin’s Marxism engages laws of motion to explain the imperialist stage, while Kautsky’s Marxism counts imperialism as a path taken, among others available. 

Further, Kautsky separates the arms race, militarism, and war from the logic of capitalism:

But imperialism has another side. The tendency towards the occupation and subjugation of the agrarian zones has produced sharp contradictions between the industrialized capitalist States, with the result that the arms race… and… the long-prophesied World War has now become a fact. Is this side of imperialism, too, a necessity for the continued existence of capitalism, one that can only be overcome with capitalism itself?

There is no economic necessity for continuing the arms race after the World War, even from the standpoint of the capitalist class itself, with the exception of at most certain armaments [sic] interests. On the contrary, the capitalist economy is seriously threatened precisely by the contradictions between its States. Every far-sighted capitalist today must call on his fellows: capitalists of all countries, unite! [my emphasis]

Thus, for Kautsky-- as opposed to Lenin-- war is not a constant, expected outcome of imperialism. Certainly, the call for capitalists to unite behind peace underscores the difference!

Because the economics of imperialism are turning against the capitalist-- returns on capital exports evidenced a decline, according to Kautsky-- “Imperialism is thus digging its own grave… the policy of imperialism therefore cannot be continued much longer.”

So, what comes next, in light of the pitfalls of continuing imperialism?

Kautsky answers:

What Marx said of capitalism can also be applied to imperialism: monopoly creates competition and competition monopoly. The frantic competition of giant firms, giant banks and multi-millionaires obliged the great financial groups, who were absorbing the small ones, to think up the notion of the cartel. In the same way, the result of the World War between the great imperialist powers may be a federation of the strongest, who renounce their arms race.

Hence from the purely economic standpoint it is not impossible that capitalism may still Jive [sic] through another phase, the translation of cartelization into foreign policy: a phase of ultra-imperialism, which of course we must struggle against as energetically as we do against imperialism, but whose perils lie in another direction, not in that of the arms race and the threat to world peace.

So Kautsky effectively bails out capitalism as the source of war and aggression.

With the finished manuscript about to be published in Die Neue Zeit only a few months after the beginning of what was shaping up to be a world war, Kautsky recognized that readers might find the promise of a post-imperialist lasting peace somewhat questionable. Nonetheless, he foresaw “this last solution, however unlikely it may seem at the moment.”

How do we judge this remarkable projection? Is there merit to the theory of ultra-imperialism?

Clearly, Lenin scathingly rejected it. He wrote in a December, 1915 Introduction to N. Bukharin’s Imperialism and World Economy in his characteristically caustic fashion:

Reasoning theoretically and in the abstract, one may arrive at the conclusion reached by Kautsky… that the time is not far off when those magnates of capital will unite into one world trust which would replace the rivalries and the struggle of nationally limited finance capital by an internationally united finance capital…

 

Particularly as regards Kautsky, his open break with Marxism has led him, not to reject or forget politics, nor to skim over the numerous and varied political conflicts, convulsions and transformations that particularly characterise the imperialist epoch; nor to become an apologist of imperialism; but to dream about a "peaceful capitalism." "Peaceful" capitalism has been replaced by unpeaceful, militant, catastrophic imperialism… If it is thus impossible simply, directly, and bluntly to dream of going from imperialism back to "peaceful" capitalism, is it not possible to give those essentially petty-bourgeois dreams the appearance of innocent contemplations regarding "peaceful" ultra-imperialism? If the name of ultra-imperialism is given to an international unification of national (or, more correctly, statebound) imperialisms which "would be able" to eliminate the most unpleasant, the most disturbing and distasteful conflicts such as wars, political convulsions, etc., which the petty bourgeois is so much afraid of, then why not turn away from the present epoch of imperialism that has already arrived -- the epoch that stares one in the face, that is full of all sorts of conflicts and catastrophes? Why not turn to innocent dreams of a comparatively peaceful, comparatively conflictless, comparatively non-catastrophic ultra-imperialism? And why not wave aside the "exacting" tasks that have been posed by the epoch of imperialism now ruling in Europe? Why not turn instead of dreaming that this epoch will perhaps soon be over, that perhaps it will be followed by a comparatively "peaceful" epoch of ultra-imperialism which demands no such "sharp tactics"[?]

In this tendency to evade the imperialism that is here and to pass in dreams to an epoch of "ultra-imperialism," of which we do not even know whether it is realisable, there is not a grain of Marxism… [H]e offers us not Marxism, but a petty-bourgeois and deeply reactionary tendency to soften contradictions… Kautsky again only promises to be a Marxist in the coming epoch of ultra-imperialism, of which he does not know whether it will arrive! …For to-morrow we have Marxism on credit, Marxism as a promise, Marxism deferred. For to-day we have a petty-bourgeois opportunist theory -- and not only a theory -- of softening contradictions.

Lenin was, first and foremost, a political polemicist. While he was a profoundly deep thinker, he worked most often in the heat of political battles, where sarcasm and ridicule struck with the greatest force.

He explains Kautsky’s theory in the context of opportunism. Because Kautsky’s intellectual ship-- and that of other Social Democratic leaders- - had left their Marxist moorings, they were susceptible to the allure of idealized, dream-like illusions of peaceful capitalism and, subsequently, peaceful imperialism.

Against these illusions, Lenin pressed the realities of a growing human catastrophe-- World War I-- which was only beginning to reveal the human misery that lay ahead. It was this imperialist war-- a war with no meaning besides imperialist rivalry-- that shatters Kausky’s dream.

With over a hundred years and the benefit of hindsight, we can better judge whether Kautsky’s “Marxism on credit, Marxism as a promise” can be cashed or redeemed. History is always the laboratory for the science of Marxism.

Clearly, Lenin was correct and Kautsky wildly mistaken-- no period of peaceful capitalism or peaceful imperialism followed the first great war of the twentieth century. To the contrary, the last century was one of constant wars, imperialist aggression, and unprecedented human devastation. Nor could it be otherwise, as Lenin would argue, as long as capitalism continued to generate competition and rivalry.

Movements could and should rise to oppose this tendency. Revolutionaries should stand firmly against these wars and they should attempt to marshal as much broad support to delay, thwart, and stop these wars, but they should not be under the illusion that capitalism and its instrument, imperialism, would not continually express this tendency.

Kautsky’s theoretical argument for ultra-imperialism rests on a common mistake in understanding both Marx and monopoly. On the level of enterprises, Kautsky sees discrete stages where a competitive industrial sector moves inexorably towards a monopolized industry (he concedes that Marx always notes that monopoly always goes to competition, as well-- an inconvenient formulation that he conveniently ignores). His theory of imperialism builds on this model: on the level of countries, he argues that imperialist competition (rivalry) always moves towards a global monopoly, an imperialist combine or cartel.

Hence, the global economy will usher in an era of stability and peace-- ultra-imperialism.

But this is neither true to Marx’s thinking nor consistent with the dialectics of competition. The foundation of the Marxist theory of competition is found in the earliest published Marxist tract on political economy, Frederich Engels’ neglected Outlines of A Critique of Political Economy (1844), which gives considerable attention to competition and monopoly and birthed the proposition: “Monopoly produces free competition, and the latter, in turn, produces monopoly.”

While Engels understands the dialectical relation of competition to monopoly, he insists on the constancy of competition: “We have seen that in the end everything comes down to competition, so long as private property exists.” 

In this, one of the clearest statements of the dialectics of competition, Engels explains this as, not necessarily discrete stages, but as a fundamental interplay:

The opposite of competition is monopoly… It is easy to see that this antithesis is again quite hollow…Competition is based on self-interest, and self interest in turn breeds monopoly. In short, competition passes over into monopoly. On the other hand, monopoly cannot stem the tide of competition-- indeed, it itself breeds competition.

Engels emphasizes that competition is fundamental to what Marxists would call the capitalist mode of production-- it permeates every aspect of capitalist social and economic life. While concentration (monopoly) is an ever-present process, it never supersedes competition, nor does it erase competition. Kautsky’s mechanical Marxism-- like later day theorists of monopoly such as Sweezy and Baran-- misunderstands both the constancy of competition and the process of monopoly or cartelization. Competition (rivalry) is the mainspring of capitalism in all of its forms and remains so as capitalism evolves. 

Is Today’s Multipolarity the same as Kautsky’s Ultra-imperialism?

It has become popular, especially with the left, to hail the weakening of US and NATO imperialism as the singular goal of the anti-imperialist project. Certainly, a weaker, defanged US foreign policy, corporate reach, and military posture is both an urgent task and a fully justified goal for anti-imperialists. But should it be the singular goal? 

After the fall of the Soviet Union and its Eastern European allies, the world might have appeared to be unipolar. The US, the remaining superpower that survived the Cold War, exercised near-absolute control over global institutions, maintained military bases in every region, and met little early resistance to its plans. As the US intervened in more and more countries' internal affairs, the description of a “unipolar world” seemed more and more apt.

Predictably, resistance emerged. Several countries rebelled, especially in the Middle East and Central and South America. Popular movements, in defiance of the US, chose independent policies, insisted on national sovereignty, even waged what Lenin called “national wars” -- direct or proxy national liberation wars (e.g. Iraq, Afghanistan, Syria) -- against the US.

The twenty-first century saw further erosion of the US’s unipolar status and increasing resistance to the US government’s diktats. The growing economic might of People's China, largely untouched by global economic turmoil, challenged the US on that front, as did Russia’s growing military might and energy competitiveness. 

Clearly, only decades after declaring itself the global leader, US hegemony was under stress. Influence, power, and leadership were diversifying. In significant ways, the world was becoming multipolar. And, insofar as this new order restricts the US arena of action, it is a good thing.

But multipolarity as reality is different from multipolarity as a doctrine. To welcome multipolarity because it restrains the US is one thing; to welcome multipolarity because it heralds a new age of peaceful coexistence and world harmony is another-- something far more misleading and dangerous. 

Like Kautsky, some on the left leap to the conclusion that capitalism can be delinked from competition or rivalry, if only the US were contained. As Lenin observed, there is more wishful thinking in this position than a reflection of reality. 

For doctrinaire multipolaristas, a century-old history of imperialist rivalry among the great powers, disrupted only partially by a united anti-Soviet, anti-Communist crusade, counts as little evidence that capitalism invariably stokes imperialist rivalries. They choose to overlook this pattern.

Less than two decades after the end of the great imperialist war, Japan, Italy, and Germany had begun quests of imperialist expansion, often at the expense of the empires of other great powers like the UK and France.

At mid-century, the Cold War confrontation and the threat of nuclear annihilation tempered the danger of global war, yet wars of both national liberation and anti-insurgency raged-- imperialist wars. In many cases, economic aggression replaced military aggression, as former colonial masters sought to establish neo-colonial relations.

Despite this backdrop of persistent, unending imperialist competition and conflict, multipolaristas imagine a coming era of multilateral cooperation and mutual respect. 

They imagine that India and Pakistan will establish an unprecedented harmony; that Japanese claims to the Kuril Islands will dissolve; that Balkan rivalries and Armenian and Azerbaijan conflicts will magically resolve; that the long-standing and always simmering rivalries in the Middle East will disappear; and that the struggle to control the vast wealth of the Democratic Republic of the Congo will wither away and be settled peacefully, once US imperialism is contained.

They see no ominous signs in the growing belligerence and greatly expanded military budgets of Germany and Japan. They hail global realignments and new alliances as steps toward peace, rather than potential sources of conflict.

The war in Ukraine unleashed a far greater threat to local, regional, and even global war than we have seen in fifty years. As Ian Buruma has noted, the war has licensed Germany to expand its war budget by 100 billion euros, while loosening the post-war shackles on this former instigator of the last global war, a moment that Chancellor Scholz calls a “historic turning point.”

Buruma cites a commitment that Japanese prime minister Kishida makes to increase military spending by 50% in 5 years, a dangerous break with Japan’s constitutional fetters. This is an omen of the utopian multipolarity to come? 

Like Kautsky’s theory of ultra-imperialism, this theory of a peaceful and harmonious world of capitalist powers is a radical departure from what history teaches and from today’s realities. And like Kautsky, its proponents have lost touch with the dynamics of capitalism in the era of imperialism. Kautsky saw the basic contradiction of his time between competitive capitalism and monopoly capitalism, with the “cartelization” of empires eliminating global rivalries.

Today’s multipolaristas see the struggle between unipolarity and multipolarity as the principal contradiction facing the world. As with ultra-imperialism, this is an illusion that allows them to evade the great contradiction of our time: the struggle between an overripe, failed system-- capitalism-- and socialism.

Since the demise of Soviet socialism, advocacy of socialism has fallen out of fashion. To most on the left, socialism is, at best, a far-off dream, well beyond our reach. No doubt this despair-- unmatched even by the most desperate times of the past-- informs the attraction of multipolarity, something that appears within reach.

But intellectual integrity requires that we go where the truth takes us. And the truth in our day-- like the truth in Kautsky’s day-- demands that we recognize that capitalism generates war. And the final solution to war is socialism.

Greg Godels

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