They insist that the working class adapt itself to the nation-state framework. Suppose that the productive forces are doubled, so that the worker is now able to reproduce the value of his labour power in just two hours, rendering six hours of surplus labour to the capitalist. The increasing internationalisation of capital in this period—the growth of international trade, expansion of investment, the search for new sources of raw materials, as well as markets—meant the struggle for markets and profits was transformed from a local, or even national, conflict into a struggle between the major capitalist powers for global domination, leading inexorably to the outbreak of World War I. The question is, why do they go to such lengths to propagate them? And it is not merely a question of capital moving offshore to cheap labour countries. Russia, the Mensheviks argued, was a backward country with a low level of economic development, in which the working class was a small minority of the population in comparison to the overwhelming majority, the peasantry. However the profits of the banks, which lent money to industry, were being severely affected, so much so that in the late 1970s, real interest rates turned negative. The figures for productivity growth were 1.8 percent, 1.9 percent and 4.5 percent for the same periods. It seemed as if, Trotsky continued, the law of the productivity of labour had lost its force. But once the social democrats and Stalinists had done their work in ensuring restabilisation, a shift in orientation took place. The abandonment of fixed exchange rate regimes in South-East Asia touched off an unravelling process that has exceeded everyone's worst fears, including my own. The old policies, based on trade union struggles—to apply pressure to the national state—retain their viability. How would this take place? But even as these vast changes were taking place, capital in the productive form remained within the confines of the national state. The driving force of globalization is certainly the progress of technology. It had to reject the defence of the fatherland and undertake the construction of a new socialist economy as a practical matter of the day, not as a far-off distant goal, buried in the programs of the parties of the Second International. The assembly-line brought together a series of innovations from the meat-packing and food-canning industries, changes in metallurgy and metal cutting, the manufacture of standardised metal parts, the use of electricity to allow a more rational factory floor organisation and changes in management and organisation. According to the World Bank, the share in world output of multinational affiliates increased from 4.5 percent in 1970 to 7.5 percent in 1995, while their share in manufacturing output rose from 12 percent in 1977 to 18 percent in 1992. In other words, an even finer international division of labour now takes place. For the latter, internationalism is reduced to nothing more than verbal solidarity between national-based organisations, and is therefore destined to break apart when the first pressure is applied. That first attempt failed. It was the culmination of a struggle waged by the industrial bourgeoisie, from the time of the great depression in the 19th century, to develop new methods to cut costs and increase productivity. But this should not lead us to dismiss or ignore the forms of control and social improvement that could be achieved relatively rapidly with a modest change in attitudes on the part of key elites. By the early months of 1943, with the defeat of the Nazi armies in the Battle of Stalingrad and the push forward by the Red Army, it was clear that the defeat of the Axis powers was only a matter of time. Bourgeois politicians the world over were acutely conscious that unless major concessions were made to the working class —in the form of full employment policies and the implementation of social welfare measures—they would face major class battles, with potentially revolutionary consequences. But the economic processes they are involved in bear no necessary relationship to that national state. But the old planet refuses to be turned over. But the development of the productivity of labour through technological advances has a contradictory effect. The rapid growing significance of information in all types of productive activities and marketization are the most important factors for economic globalization. In their expanding global operations, these huge ... companies have created the demand for free access to money across all borders ... "[21]. The Russian Revolution of 1917 represented the first attempt by the international working class to resolve this crisis and take mankind forward by means of the world socialist revolution. When Marshall unveiled the plan in June 1947, he made clear that funds would not be allocated to individual states as such, but to bring about European integration, enabling the free movement of commodities and capital. Socialist society, Trotsky insisted, could only be built on the basis of the highest advances made by capitalism in the development of the productive forces and the productivity of labour. In other words, in complete contradistinction to the conclusion drawn by the middle class radicals—that nothing fundamental has changed—a new period of wars and revolutionary struggles is being prepared. Globalisation is important to expand the markets and enable a business to make a sensible utilisation of the available resources. The longer the upswing proceeded, the more the relative superiority of the US over its rivals was undermined, and the dollar shortage began to turn into a surplus. Cooperation was based on the Bretton Woods Agreement of 1944. We often hear the word globalization in many contexts and repeated frequently as a concept The decline in the rate of profit signified the exhaustion of a production regime based on assembly-line methods. World peace, he declared, "will always be gravely jeopardised by the kind of international economic warfare which was so bitterly waged between the two world wars". We have seen that, at the most basic level, the economic and political history of the 20th century turns on the contradiction between the world wide development of the productive forces and the nation-state system in which capitalist private property and profit is rooted. ", These sentiments formed a central plank of the Bretton Woods agreement. "[7], For the Spartacists, economic globalisation is really so much "hullabaloo". And this policy was eminently successful, as US companies moved in heavily, setting up multinational enterprises. As the overall mass of surplus value remains stagnant, or even contracts, so each section of capital strives to maintain or increase its share at the expense of its rivals by reducing its costs, developing new production methods, slashing its labour force, seeking out cheaper sources of labour, intensifying exploitation and so on. Let me recall that there was an extended discussion both in the commissions and especially during the plenary sessions. Lowers the cost of customer services. Surplus value is extracted by productive capital on a global scale. Whereas in the decades after the war, fundamental antagonisms were contained beneath various political and state structures, now a new era had opened which would see the open clash of antagonistic class forces. Many statistics point to the vast change in the structure of the world capitalist economy over the past two decades. They are simply the product of the "cowardice, incompetence or lack of solidarity" by union leaders. But business potentials are not discovered in the same way as one discovers a mineral deposit. Marx explained that the theoretical conclusions of the Manifesto were not inventions of a would-be universal reformer, but expressed in general terms "actual relations springing from an existing class struggle, from a historical movement going on under our very eyes."[9]. Globalization represents historical transformation in the economy, politics and culture (Mittelman, 2006, p. 64). But as more and more firms adopt new technologies, the total amount of surplus value extracted by capital as a whole declines. Productivity rates show a corresponding decline; from 4.0 percent growth between 1960-67, to 3.7 percent between 1967-73 to 1.6 percent between 1973-84. Reforms and concessions are a by-product of revolution—either of past revolutionary struggles or of a developing revolutionary movement of the working class. A recent article by the American radical, Kim Moody, is a typical example. By means of war. Faced with this situation, other capitalists are forced to follow suit and develop new methods of production. It was characterised by two interconnected processes. In other words, in order to maintain the Bretton Woods system it would have been necessary to bring about a sustained recession. Those companies which do not do so, will find that globally mobile shareholders' funds will shift out of their stocks—thereby lowering their price on the market and raising the cost of new capital—or that credit rating agencies will lower their rating, lifting the interest rate at which they can borrow. Opposition to the free movement of finance capital flowed, not from any economic theory, but rather from an understanding of the political situation confronting the capitalist class. Globalization is an unstoppable process for Kosovo, and a hope for integration and development that will impact on economic development and integration into the European Union. 6-7, (Emphasis added)[back] 6. Workers in a globally-organised transational company are situated in a particular location, within a nation-state. To the great chagrin of Reactionists it has drawn from under the feet of industry the national ground on which it stood. The International Monetary and Financial Conference held at Bretton Woods, New Hampshire in July 1944 laid the basis for the post-war financial system. Like their fellow radicals, the Spartacists maintain that "globalisation" is a myth: there is nothing qualitatively new about the structure of world capitalism today; capitalism is an international system and always has been. The Bretton Woods-Marshall Plan system laid the foundations for a new capitalist equilibrium. But by 1970 the Bretton Woods system was coming under increasing pressure. Role of Globalization is Structuring Economy In order to understand economic structures associated with globalization, it is important to relate them with economic history. Rather business possibilities are created in the way that one creates a work of art – by combining a range of variables in a unique manner.The only thing that we can say for certain about the future's most successful international entrepreneurs is that we certainly cannot know what they will build their business ideas upon. The globalisation of production is not only bringing the antagonism between the working class and the bourgeoisie to the "extreme point", it is creating the foundations for the construction of a socialist society. But the economic expansion that formed the basis of this outlook did not overcome the contradictions of the capitalist mode of production. All that is solid melts into air, all that is holy is profaned, and man at last is compelled to face with sober senses, his real conditions of life, and relations with his kind."[10]. The working class is that class with nothing to sell but its labour power, stripped of all ownership of the means of production and any independent means of support. In recent decades, they argue, world capitalist economy has only been returning to the norms that were established by the pre-1914 imperialist order, when the operation of the international gold standard "assured a degree of financial integration among the advanced capitalist countries which has never been matched since."[8]. The struggle for socialist internationalism this century is bound up with the figure of Leon Trotsky and the theory of permanent revolution, which he first advanced during the course of the 1905 Russian Revolution. In order to try and prove this, they take up a theme, repeated in various publications, that capitalism was more internationalised under the gold standard regime and the free movement of international capital, which prevailed in the period leading up to 1914. International regulations and organisations to support economic integration at the global level were created after World War II. Advances in metallurgy led to the creation of coins; advances in transportation led to the building of roads connecting the major empires of the day; and increased agricultural production meant more food could be trafficked between locales. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. A new equilibrium involved more than the reconstruction of the international trading and financial system, crucial as that was. But these forces of production have completely outgrown that framework. Marxists insist that the defence of these interests requires a struggle for the political independence of the working class, on an internationalist program, aimed at the conquest of power. For this agenda, too, is ultimately carried out at the national level."[23]. To the consciousness that the result of its efforts 'will be the international brotherhood of peoples'—a phrase borrowed from the bourgeois League of Peace and Freedom, which is intended to pass as equivalent to the international brotherhood of the working class in the joint struggle against the ruling classes and their governments. The capitalist, like every other commodity owner, has the right to consume the commodity he has purchased and receive its use value. The socialist revolution would arise when the conditions in the given national state had matured sufficiently for it, at which time the bourgeoisie would simply surrender its place to the proletariat. Marx's criticism pinpoints the division between genuine internationalism, which strives for a joint struggle of workers against the ruling classes and their governments, and national opportunism, which maintains that the working class must confine itself to the "framework of the present-day national state". Therefore, globalization of education must be a necessary part of higher education. Many statistics point to the qualitative changes in world capitalism at this time. But this did not mean that it should strive for its emancipation, as the program declared, within the "framework of the present-day national state". Trotsky once remarked that while the workers' state was threatened by the imperialist armies, of far greater danger were the cheap goods coming in their wake. The export of goods amounted to 31 percent of global GDP in 2006 as compared to 12 percent in 1970. There were attempts to impose speed-up and extract greater productivity, but these only provoked greater militancy and factory revolts. These very organisations, however, were to play one of the key roles in undermining Washington's control of the international financial system. The establishment of socialism involves the negation of the whole pre-history of mankind in which he was dominated either by natural forces, over which he had no control because of the poverty of his means of production, or by the products of his own creation. It is important for us to benefit from globalization. Ultimately, they reflected the fact that the dollar—the currency of a national state—was called on to play the role of world currency. They write: "This book is written with a mixture of scepticism about global economic processes and optimism about the possibilities of control of the international economy and of the viability of national political strategies. "The capitalist economies of the Asia Pacific," we wrote, "are based on ... brutal exploitation of the working class. Since 1985 transactions in foreign currency and international securities have increased more than tenfold. "By means of the national state," Trotsky wrote, "capitalism has revolutionised the whole economic system of the world. Those conditions have now ended. Is it possible to say anything about the relationship of these two tendencies, or is the outcome indeterminate? Cultural globalization, phenomenon by which the experience of everyday life, as influenced by the diffusion of commodities and ideas, reflects a standardization of cultural expressions globally. During the nineteenth century the English pound sterling was the generally accepted currency of international business and many other countries introduced the gold standard. "It is not the case currently," they write, "that radical goals are attainable: full employment in the advanced countries, a fairer deal for the poorer developing countries, and more widespread democratic control over economic affairs for the world's people. The nation-state, moreover, is not a geographical, but a political formation—a political structure created by the bourgeoisie to fight for its needs and interests. While the isolated Soviet economy was able to achieve a certain level of industrialisation, that very industrialisation posed new and more complex economic tasks. "Crisis and boom blend with all the transitional phases to constitute a cycle or one of the great circles of industrial development. Globalization: Its Meaning and Importance Category: Business , Economics , Essays and Paragraphs On September 20, 2016 By Victor Globalization is a word that is all too familiar because it’s often used in the mainstream media … Trotsky's struggle against the counter-revolutionary Stalinist apparatus was based on the most far-reaching scientific understanding of the implications of the entire trend of economic processes in the 20 th century. In conducting this review I will be basing my analysis upon one of the most fruitful and important theoretical advances made by Trotsky. The radicals, who today either deny the significance of globalisation or oppose it in the name of defending the national state, play the same role as the various "socialists" ridiculed by Marx in the Manifesto. Here we have to take account of the basic social relations of capital. It is very vital for the companies operating in today’s … The Roosevelt administration's State Department began to consider what economic order would have to be constructed when the war was over. The world socialist revolution was not an abstraction, much less a summing up of national-based struggles, but a process arising from the dynamic development of the productive forces themselves, which were beating convulsively against the nation-state framework. Let us, with all the qualifications raised previously, grant them this last point. Europe buys no goods, pays no debts, and, in addition, arms herself. The real issue is: what conclusions should be drawn? In his report to the Fourth Congress, in November 1922, Trotsky summed up the discussion as follows: "The Third Congress theses on the world situation characterised the basic traits of our entire epoch quite correctly as those of the greatest historical crisis of capitalism. The short term cycles are characterised by the fact that the booms are very vigorous, while the downturns, even though they may be quite sharp, are of relatively short duration and followed rapidly by an upturn. The native bourgeoisie defend the 'export strategy' preferred by the International Monetary Fund with military-police dictatorships, rooted in state systems which preserve semi-feudal vestiges that have never been swept away by genuine democratic revolutions. According to the program, the "working class strives for its emancipation within the framework of the present-day national state" and, in so doing, is conscious that the result of its efforts "will be the international brotherhood of peoples.". Foreign direct investment (establishing or buying up companies abroad) has increased twice as fast as trade. A decade earlier, Keynes, who, together with Harry Dexter White, was the chief architect of the Bretton Woods agreement, had stated: "There may be some financial calculation which shows it to be advantageous that my savings should be invested in whatever quarter of the habitable globe shows the greatest marginal efficiency of capital or the highest rate of interest. We posed and sought to answer the crucial question: what is the significance of these changes for the whole structure of world capitalism? Tariffs above 70% exist for some products. The organisation of the coal and steel industries had to be tackled. The fact that capitalism continues to oscillate cyclically after the war merely signifies that capitalism is not yet dead, that we are not dealing with a corpse. On the one hand, the social democrats maintained that the upturn in capitalist economy was proof that their opposition to the Russian Revolution, and the "adventurism" of the Bolsheviks, had been correct. The essence of the struggle for socialism is to bring into being the next great step in the historical development of mankind: the assumption by man of conscious control of his own economic and social organisation. These problems both gave rise to, and were to some extent the consequence of, the upsurge of the working class and oppressed masses in the period 1968-75. As soon as a revival took place in the world economy, all the factors which led to the crisis would have reasserted themselves. But the re-establishment of capitalist equilibrium by no means involved a restoration of the pre-World War I system, based on free trade and the global movement of investment capital and finance. In the last few decades, international trade has grown significantly faster than total production. Technology has not only played a role in ushering in the age of globalization, it has been the main catalyst for its advancement. This was signalled by the coming to power of the Thatcher government in Britain and the elevation of Paul Volcker as chairman of the US Federal Reserve Board in 1979, followed by the installation of the Reagan administration in 1980. The 'Bretton Woods system' meant that nations had fixed currency exchanges in relation to the US dollar, which in turn was fixed to the gold standard. In developing the perspective of the Comintern, Trotsky undertook an examination of the relationship between the business cycles of capitalism—the fluctuations of boom, bust, recession and recovery—and longer-term processes, which he designated as "the curve of capitalist development". The outflow of capital from the United States continued, reaching nearly $11 billion in 1970 and $30 billion in 1971, compared to previous peaks of $3.4 billion in 1960 and 1968. The balance of payments deficit would have had to be cut dramatically, through restrictions on investment outflows and the erection of tariff barriers to slow the flow of imports. It was a market operation. That, after all, is where workers live, work and fight. In its drive to accumulate surplus value, capital has now reduced necessary labour time to a mere fraction of the working day. The epoch in which humanity lives nowadays is constantly changing and there are a number of reasons for that. In practice GATT became the international organisation which set the framework for several important steps towards increased global free trade, particularly via successive reductions in industrial tariffs. Trotsky, First Five Years of the Comintern, Volume II, p. 258 [back] 18. The kronor had the same value in all three Scandinavian countries and the currency in each of the countries could be used interchangeably in daily transactions. Breaking down the aggegrated figures also reveals that this upswing was brought about by an extension of the more productive methods developed in America to the other major capitalist countries. Commentary In the past year, various potential risks of economic globalization have gradually surfaced. The absolute and active predominance of the world economy over all national economies, including that of the United States, is a basic fact of modern life. By 1976, a recovery had begun, but there was no return to the conditions of the 1960s. Historically, capitalism began with the accumulation of absolute surplus value, via the lengthening of the working day. By the time of the Third Congress of the Communist International in June-July 1921, it was clear that the revolutionary upsurge out of which the Russian Revolution had emerged had subsided, and that a certain restabilisation was taking place in capitalist Europe. European cooperation has widened and deepened. The fall of the Berlin Wall in 1989 can be seen as a suitable starting point then for the third wave of globalisation. The Marxist movement has always been based on a global perspective. The economic pre-conditions for socialism were nowhere near in existence. What would it have taken to maintain the dollar-gold parity? That is, to maintain Bretton Woods meant keeping the world economy in a permanent state of recession. Certainly, the positions of the middle class radicals amount to a series of absurdities. By 1992, the positions were reversed: the central banks held $278 billion in reserves while daily trade averaged $623 billion. The major source of pressure on the social welfare state in Europe, for example, is not cheaper labour countries in Asia, but the United States, and, within Europe itself, Great Britain. According to this outlook, the capitalist nation-states were essentially independent entities moving towards socialism at their own pace of development ... some more advanced than others. Two interconnected processes were set in motion: the drive for sources of cheap labour and the development of new production technologies which cut costs by eliminating vast areas of labour, first in the production process and then in management and information systems.
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