“The Endless Crisis – How Monopoly-Finance Capital Produces Stagnation and Upheaval from the
USA to ,” by John Bellamy Foster & Robert W McChesney, 2012 China
Live in the
? Hoping to go back to the 50s? Hoping the good times will return? Is history circular? Does it oscillate? It is like a pendulum? Is it purely linear? Does it always get better? Do you know? In this book, supporters of the Monthly Review tendency, probably the most vital in U.S. Marxism on a theoretical basis, extend their analysis of what happened in the U.S. in 2007-2008 to the whole world. Historical economics, they would agree, is dialectical – and now it has fully entered the international stage, which, barring the discovery of another livable planet, should be the final stage of capitalism. They call this final stage, “international monopoly-finance capital,” a mouthful, but still accurate. U.S.
This book is a continuation of Foster’s first book on this subject, “The Great Financial Crisis,” (reviewed below), and of course, based on the seminal work of Baran & Sweezy, “Monopoly Capital.” (Also reviewed below.) One of its pluses is that it is a very good overview of economic debates within the left, and also against bourgeois economic theory since the turn of the century. It is written, like all their books, in a clean, clear prose, with lots of repetition to make the points. The authors go back to Marx frequently to show how his ideas were germinal in their analysis. The authors pay special attention to the issue of growing world-wide monopoly (oligopoly) among multinational corporations in most industries, and how these oligopolies actually destroy the price theory of capitalism. I.E. oligopolistic corporations do not compete through price, as it is too destructive, but only through advertising, squeezing labor costs and other efficiencies. As such,“prices” are not set by the market, but by the oligarchs.
Concurrent with this is the thesis that the apparent conflict, let us say between several massive world airlines, software, plane or auto manufacturers, is a reflection of the oligopoly in those industries, and nothing more. Foster/McChesney present much data to back up their claim that the expansion of multinational corporations world-wide has led to larger oligopolies, not the ending of oligopoly, or monopoly, as is the blinding myth presented by bourgeois economics.
Oligopolies, due to their dominant position in the state, in the political system and in the economic system, are able to increase profits to the point where they see no need to expand production. Hence, the MR thesis that ‘over-accumulation’ of profits and surplus value by oligopolistic multi-nationals leads to economic stagnation. This stagnation is dealt with instead by playing in the financial casino markets – the ‘only game in town,’ as I once called it. They also point out that the attempts by U.S. & European governments to prop up the financial firms is an acknowledgement that finance capital IS the most profitable sector, and that particular ‘goose’ should not be killed.
The authors say kind words about Keynes on this subject, showing him to be close to Marx on the growth of finance capital. (Keynes never read Marx…) Marx predicated that sometimes his famous theory – M-C-M+ - could just be – M-M+ - meaning that money would just make more money, and avoid producing any commodity whatsoever. This is an elegant picture of financialization, one which Keynes agreed with. Krugman, America's leading "Keynesian," has read Marx, however, and does not have that excuse. The authors point out Krugman’s support for ‘globalization’ and low wages (like Thomas Friedman, his ostensible opposite…) places him as a loyal supporter of world capitalist expansion. Krugman’s liberalism always stopped at the border’s edge anyway.
These theories, which I think are basically correct, bring up a key question. The authors repeatedly talk about a ‘new invention’ that might mitigate the stagnation thesis. Marxists in the past have cited the steam engine, the railroad and the automobile as key inventions that spurred capital from the outside, as it were. I would suggest that the computer – ‘the digital revolution’ as even they call it – has done so since the early 1980s, the period they focus on. It has enabled globalization, the increase in unemployment, the increase in corporate size and the increase in surplus value due to its spurring of productivity. The authors are aware of some of these effects – but barely. They do not admit that without the invention of the computer and extensive digitalization of so many areas, much present industrial manufacturing would not exist.
Of note, the most profitable sector in the world now is technology infrastructure, which is definitely digitally-related. In 2012, of the top 10 firms in
market value, 5 are digitally-related – Apple, Microsoft, IBM, Google & AT&T. Apple, Microsoft and IBM are in the top 10 firms in profitability. (CNN Money) I do not know what percentage the industries connected to digitalization have overall – software/ tele-communications/ internet sites/ tech infrastructure/ computer-phone-etc. hardware manufacturing – but without their existence industrial production in the world would be much smaller. It is literally dragging every other sector into its orbit. Even cars, toasters, washing machines and refrigerators are being digitized. Newspapers are disappearing, as digitization affects all media and all entertainment. Travel agencies have disappeared. Schools are becoming internet-based. Anyone that cannot work a computer cannot get a job in many industries, even blue-collar ones like machinists and automobile mechanics. To me, the authors, in their desire to proclaim industry dead and financialization supreme – ignore the very real existence of this new industrial sector. U.S.
Yet, the digital revolution doesn’t change some basics. It has also created oligopolies in every area – Verizon & AT&T; Microsoft & Apple; Intel & AMD; IBM, HP & Lenovo; Cisco & Qualcomm, etc. It is rife with planned obsolescence and the ‘wit’ of advertising fetishism – just look at any Apple product. Employment in these industries, like the finance industry, is not as extensive as in automobile manufacturing. And the digital revolution is now beginning to slow down, no doubt, in line with the MR thesis. Digitalization is no panacea for capital, but it is still the single manufacturing event that has breathed life into that sector, and produced massive profits, which also have gone into state capture and the Wall Street/ City/ Bourse etc. casino.
As Foster/McChesney point out, the unfettered rule of the multinationals is creating the largest working class in world history. Marx noted this long ago, as capitalism creates workers alongside surplus value. As of last year, there are now more workers in the world than any other class, and the majority of people now live in cities. To those who think the working class disappeared – just look to the global South, where according to the authors, the numbers are now 71% of the world total. Alongside the absolute increase in the world working class is the pauperization of that class, its ‘precariousness’ (See reviews of “The Precariat,’ “Planet of Slums,” and “Tropic of Chaos,” below). Foster/McChesney even quote Marx in detail on the part-time nature of many workers in the reserve army, undermining any thesis that this is a 'new' class, unexpected by Marxism. The ‘reserve army of the unemployed’ and semi-employed is one of the largest armies the world has ever seen. It is essential to the process of monopolization. So too is the monopolization of the political contours of each country.
As Foster/McChesney note as an aside, in the
U.S. and other countries like , two parties of the oligopoly compete for our votes, mirroring the economies on which they sit. India
As Foster/McChesney note as an aside, in the
As is typical, Foster/McChesney ignore the role the workers’ state economies played in stabilizing the world economic system in the past. Their ending (minus some small effects of the weaker markets and role of the state in
Cuba, Vietnam, North Korea and ), is noted here only in the context of expanding the range of capital’s ability to directly exploit millions more workers. Central Europe is now a low-wage colony for western European capital, and China's workers have become one for the U.S. They go into great detail at the end of the book on why China will not pull world capitalism out of its decline. The reasons are legion - increased labor and farmer struggles, the massive bubble in Chinese property values and construction overbuilding, the domination of the private 'shadow banking sector,' an extreme disparity of wealth, where 250,000 families control 70% of assets - and the very real, impossible limitations of escaping an export model with an internal consumer economy based on ... very low wages. For more on this, read Minqi Li's "The Rise of China." (reviewed below.) China
The MR crew point out that the upshot of the multi-national takeover of the world economy is that their problems of finance & debt; their methods of paying low wages; their political tactics of divide and conquer of the world’s workers; their rape of the environment - is being visited on almost every citizen in some way. It is not sustainable or long-lasting – it is a perversely disruptive gold rush that destroys much of what it touches. Only the oligarchs and their footman benefit. Which is why there is a possibility that a world-wide revolution is more possible now than in the past, given the broad and simultaneous nature of capital’s effects.
And I bought it at May Day Books!
October 28, 2012