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Imperialist Globalization Crisis & Resistance. Economic Slowdown since 1970s. Declining Productivity. Slowdown in Capital Stock Formation. Decline in Profitability. Slowdown of World Economy.
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Slowdown of World Economy In the last decade, at least one major financial crisis erupted somewhere in the world every two or three years – Japan in 1990, Mexico, Argentina and Brazil in 1994-95, East Asia in 1997-98, Russia and Brazil in 1998-99, and so on.
Social Production Division of labor More trade; diverse products & inputs Ever widening scale of production & distribution under centralized control Private Profit Wage restraint Labor-displacement Anarchy of production M&As, layoffs vs. Constricted Markets Fundamental Contradiction in the Capitalist System Crisis of Overproduction
Countervailing the Crisis of Overproduction State Monopoly Capitalism
Keynesian State-interventionism • nature: expansionary programs to counter contracting markets & falling effective demand • economic basis: post-depression recovery (1930s) & post-war reconstruction (1950s-1960s) i.e. after massive destruction of productive forces • social basis: social unrest and agitation of trade union movement • political basis: anti-communist containment strategy
tight credit fiscal austerity laissez-faire erosion of social rights and entitlements even as monopoly capital continues to enjoy protection and support neoliberal policy conditionalities imposed by imperialist-controlled multilaterals (IMF-WB-WTO) on oppressed countries Neoliberal “Globalization”
Crisis of Overproduction Falling Profits • To Overcome Crisis of Overproduction & Boost Profits, monopoly capitalists must secure: • cheaper raw materials • cheaper labor • access to markets • “Globalisasyon” = estratehiya ng Imperyalista para makaalpas sa Krisis ng Sobrang Produksyon
Capital Exports takes on increasing importance FDI outflows increased 41 times # of TNCs = 64,592 as of 2001 # of Foreign Affliliates = 851,167 Sales = US$ 18.5 Trillion or 2 ½ times value of world exports (58% of Global GDP)
Centralization of Capital through M&As Most FDI in recent yrs. has been in the form of monopolies merging their existing productive capacity or monopolies taking over existing assets in other countries, rather than creating new productive capacity.
Monopoly Capital taking over key sectors For instance, there were US$438 million worth of M&As in the education sector in 2001 compared to just US$4 million worth in 1996. In the health sector, the value of M&As concluded jumped from US$336 million in 1996 to US$3.4 billion in 1997; this slowed in 2001 but was still worth a substantial US$1.9 billion.
Finance Capital The combined assets of 50 of the world’s largest banks and diversified financial companies account for 60% of the Economist’s estimate of a $20 trillion global stock of productive capital (Hoover’s Handbook of World Business, 1993).
scramble to control the world’s dwindling non-renewable energy reserves demand for oil continues to rise especially in the advanced industrialized countries. The imperialist countries have a greater dependence on oil today than at any other time in the past. the more desperately they struggle for control of territories in their attempts to corner oil reserves, there is not a crime that these giants will not commit: BP maintains paramilitary thugs in in Colombia Shell enlists services of army, with all the attendant brutality, in Nigeria BP was implicated in overthrowing nationalist Mossadeq regime in Iran Blood for Oil Profits “Oiligarchy” move smoothly from the industry’s boardrooms to the corridors of government
International Division of Labor The imperialist powers still monopolize both finance and productive capital and high value-added production. The majority of other countries, on the other hand, are consigned to raw materials production with a limited number allowed a place in low value-added assembly manufacturing for export.
Overproduction & Financial Speculation • In 1976, 80% of all international transactions involved the buying and selling of goods and services. By 1997 only 2.5% of international transactions involved the buying and selling of the same; some 97.5% were for speculation • In the last decade, at least one major financial crisis erupted somewhere in the world every two or three years – Japan in 1990, Mexico, Argentina and Brazil in 1994-95, East Asia in 1997-98, Russia and Brazil in 1998-99, and so on. • These crises have severe and enduring adverse impacts on working people while multinational creditor banks and financial speculators make a killing, literally and figuratively.
Destruction of Productive Forces “Accumulation of wealth at one pole is at the same time accumulation of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole.” - Karl Marx • Global unemployment = 160 M as of 2000. • 3 B or 1/3 of the world’s labour force are either unemployed, underemployed or earn less than is needed to keep their families out of poverty. • a growing share of the working population is forced into lower-income and insecure forms of employment. In unindustrialized countries, more and more people are forced to survive in the informal sector where earnings are low and erratic and labor standards are not enforced. • 1.2 B live on less than US$1 a day, around 1.1 billion people lack access to safe drinking water, and 2.4 billion lack access to improved sanitation
Third World Debt • * Cumulative debt service from 1980-2000 = US$4.2 trillion. • total debt stock has grown 33 times in just 3 decades. Now over US$2.4 trillion • 3W debt stock is now equivalent to 40% of the combined gross national incomes of these countries, from just over 10% in 1970.
