Globalisation — or Global Justice

Under capitalist globalisation, Western states and corporations continue to plunder the Global South. Any movement for social justice must break that cycle.

Organisation of Solidarity with the People of Asia, Africa and Latin America (OSPAAAL) poster in support of the people of Guatemala.

Once Francis Fukuyama had declared the end of history in 1992, it became impossible to challenge the idea that globalisation was both good and inevitable. The fall of the Iron Curtain, the removal of restrictions on capital mobility, and the growth of the multinational corporation would spread free market capitalism around the world, bringing peace and prosperity to the poorer nations.

The financial crisis shattered these illusions, and brought history back with a bang. Resistance to globalisation, once confined to protest movements in the Global South and anarchists in the Global North, began to mount in the very states most integrated into the global economy.

But while the Left has benefitted from the backlash against capitalism that has emerged since the crash, the Right has been more likely to benefit from the backlash against globalisation. The ease with which these two trends have been separated exposes the weakness of the Left’s critique of capitalism — because globalisation and capitalism are completely inseparable.

What we today call ‘globalisation’ — that neutral and inevitable force of human progress — has much in common with the process of imperialism that Lenin identified over a hundred years ago.

Lenin built on the work of Rudolph Hilferding, who argued that, as capitalism developed, profitable firms would envelop their competitors, becoming huge monopolies in the process. These firms would use their power to restrict production and repress wages, boosting their profits and consolidating their monopoly position. They would also develop symbiotic relations with the finance sector, which would provide the lending required to keep the system going, as well as managing the massive profits the monopolists generated, extracting fees and interest in the process.

Rather than investing domestically, where monopolisation limited returns, financiers would channel the capital accumulated by the monopolists into the periphery of the world economy, where the transition to capitalism was not yet complete. Just as Hilferding predicted, today’s global monopolies distribute vast sums to wealthy shareholders and invest what remains in financial assets, often via the huge asset managers, like Blackrock, that already manage billions of dollars’ worth of capital on behalf of wealthy savers from the Global North. And just as Lenin predicted, capital flows from North to South have allowed wealthy investors to buy up assets in the periphery and profit from growth in these states.

The imperialist circle is completed when the profits created by this process are sent back to financial institutions in the Global North. Sub-Saharan Africa loses three times more in capital flight than it gains in ‘development’ aid each year. Such an extractive system is not reproduced consensually. The concentrated power of finance capital is used to capture Western states, which then use their military prowess to dominate the rest of the world.

But it is not only through war that this power is exercised. In fact, it is often the last resort for imperialist powers which have far more efficient tools at their disposal. This is where international institutions like the World Bank, the IMF, and the European Union come in. Post-colonial states reliant on borrowing from the core have often found themselves unable to access capital markets — especially during the frequent financial crises endemic in modern capitalism — and therefore forced to appeal to these institutions for assistance.

The lending of the international financial institutions is conditional on the imposition of pro-market reforms which ‘open up’ states in the Global South to trade and investment. From the structural adjustment programmes of the 1970s to modern day Greece, the long arm of the imperial creditor has been used many times to subject peripheral states to the discipline of the market.

Economic and military interventions are both defended using the same ideologies once used to provide support for formal empire. Capitalist colonialism was initially justified through Orientalist discourses that pitted an enlightened, rational, and developed West against the dark, atavistic, and underdeveloped East. The fact that the colonial powers were more often destroying advanced and complex societies than creating them was conveniently overlooked. Colonialism was touted as a great civilising mission that would bring Christianity and the values of the Enlightenment to the dark corners of the Earth.

The responsibility to protect (R2P) doctrine is the latest manifestation of this mission civilisatrice. This appeal to humanitarianism was prominently mobilised in the run up to the disastrous war in Libya, but is curiously absent when the slaughter is confined to those parts of the world in which the West does not have a ‘strategic interest’.

The vast majority of citizens in the Global North are instinctively opposed to imperialism, as they know it makes them — and the world as a whole — far less safe. Working people in the Global North are sick of globalisation, sick of imperialism, and sick of the politicians and institutions that promote it. The Left has a huge opportunity to build an anti-imperialist, non-interventionist platform that would address these concerns, rather than ignoring them and giving a boost to the far right in the process.

But such a stance does not mean lining up behind the Putin or Assad régimes, or turning a blind eye to the suffering of the exploited and the oppressed. It means exposing the hypocrisy of those who want to carpet-bomb the planet, while they provide weapons and investment opportunities for the dictators they claim to oppose.

Such a stance means finally ending weapons sales to repressive regimes like Saudi Arabia, used to bomb civilians in the war in Yemen. It means preventing dictators, drugs traffickers, and warlords from all over the world from sinking their illicit cash into London property. It means shutting down the tax havens that, supported by the City of London, suck so much capital out of parts of the world we claim to want to develop. And it means withdrawing our support for the international institutions that recreate old colonial relationships in the modern world.

Far from the ideology that sees growth and prosperity in Wigan, Newport, and Kirkcaldy coming at the expense of that in Shenzhen, Bombay, and Dubai, most of these interventions would benefit workers in the Global North and South simultaneously. Too often, we forget that imperialism and capitalism are two sides of the same coin — and that we must fight them together.

You can now pre-order Grace Blakeley’s new book Stolen: How to Save the World from Financialisation.

About the Author

Grace Blakeley is an economic commentator at The New Statesman. She is the author of the forthcoming Stolen: How Finance Destroyed the Economy and Corrupted Our Politics from Repeater Books (2019).