Imperialist Capitalism and Neo-Liberal Globalisation

This pamphlet is based on the text of a talk presented on behalf of the DSP National Executive to the Marxism 2000 conference, held in Sydney, January 5-9, 2000.

By Doug Lorimer

A lot has been written, and will doubtless continue to be written, about how Marx's theory of capitalist development is a relic of a bygone era, irrelevant for understanding the complex dynamics of the "globalised", "post-industrial", "financialised" capitalism that is supposed to have emerged only at the end of the 20th century. Contemporary capitalism, however, can only be scientifically understood using Marx's theory of capitalist development.

The proof of such an assertion is demonstrated by the fact that Marx himself, in analysing the dynamics of capitalist economy in the 1860s, predicted that its further development would give rise to the fundamental features that characterise contemporary capitalism.

Marx's analysis of capitalism

Marx began his analysis of capitalism by discerning that it was an economic system in which the direct producers of goods and services are dispossessed of the means of production and forced to sell their ability to produce goods and services to those who possess the means of production as capital, as means to accumulate surplus labour in the form of monetary values. In the capitalist system, capital is accumulated through buying the commodity labour-power.The two basic social classes that are engendered by the capitalist system are the "personification" of this process. The working class are those people, Marx says, "who produce and valorise `capital' and are thrown onto the street as soon as they become superfluous to the need for valorisation possessed by `Monsieur Capital'." They're people, for instance, who comprise many different kinds of workers, engaged in many different kinds of social activity, and who dress in many different kinds of clothes. But whether they wear a suit or overalls or are highly or poorly educated, or live in a comfortable surburban house or a squalid inner-city slum, if their income is solely derived from having to sell their labour-power to owners of capital, they are members of the class of wage-workers. Everyone, Marx quips in the first volume of Capital, "who lives only so long as they find work, and who finds work only so long as their labour increases capital" is a member of this class. In the Communist Manifesto Marx and Engels observed that "who must sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vissitudes of competition, to all the fluctuations of the market".(1)

Here, of course, one's class definition hinges on one's relationship to the process of accumulation of capital. Marx put a lot of emphasis in his theory of capitalism on this process. He describes in almost glowing terms its prodigious power to burst through every historical and geographical restriction it encounters, its power to conquer the world of social wealth, creating a whole array of new values along the way. Yet, at the same time, Marx was appalled by the brutality the process of accumulation of capital unleashes, by the horrors it inflicts upon the human race.

The drive to accumulate capital, Marx explains, pits capitalist against worker and worker against worker. But it also pits capitalist against capitalist. It subordinates, Marx says, "every capitalist to the immanent laws of capitalist production, as external and coercive laws". So, as capitalists strive to accumulate capital, as their actions become mere functions of the process of capital accumulation, they inevitably clash with other capitalists.

But over time the process of capital accumulation and the competition between capitalists leads to the concentration and centralisation of capital in the hands of fewer and fewer capitalists as big capitalist fish gobble up the little capitalist fish. According to Marx, this enhances the scale of operations for both capital and wage-labour, leading both of them to become increasingly socialised in their actual operations.

The labour of each individual worker becomes interdependent upon the labour of other workers, not just within the their direct place of employment, but across whole branches of production within a nation and between nations.

The effects of concentration and centralisation of capital upon the capitalists also accelerates the socialisation of capital. This is because competition and the obligatory development of the credit system become powerful levers for the merging of private capitals into associations of capital -- into joint-stock companies, in which capital in the form of the means of production is no longer the possession of any individual capitalist but of an association of capitalists.

The formation of joint-stock companies leads, Marx says in the third volume of Capital, firstly, to a "tremendous expansion of the scale of production" which would be impossible for individual capitalists operating on their own. Secondly, it leads to a situation in which one or a few firms are able to dominate whole spheres of social production. The production enterprises controlled by these firms no longer produce goods and services for a handful of wealthy people, but for the entire society, and they have thus become in fact social enterprises. Thirdly, it leads to the owners of capital ceasing to be the managers of the labour process, of the direct process of production of goods and services. This function is turned over to salaried employees, while the capitalist becomes, as Marx puts it, "a mere owner, a mere money capitalist".

From this analysis of the nature and dynamic of joint-stock companies, Marx drew the conclusion that joint-stock companies, which were only just beginning to be formed in the second half of the 19th century, represented "capitalist production in its highest development" because they are the "abolition of the capitalist mode of production within the capitalist mode of production itself" and are therefore the "necessary point of transition towards the transformation of capital" as means of production "back into the property of the producers, though no longer as the private property of individual producers, but rather as their property as associated producers", that is, as social property.

Joint-stock companies are "abolition of the capitalist mode of production within the capitalist mode of production itself" because they contradict the essence of capitalist relations of production. That is, rather than private ownership of means of production for private production of wealth, joint-stock companies give rise to social ownership of means of production for social production of wealth. But they do so within the framework of the private appropriation of the surplus labour embodied in the wealth of goods and services that are produced.

As this contradiction develops, Marx says, it "presents itself as such a contradiction even in appearance" by, firstly, giving "rise to monopolies", which in turn demand increasing state intervention in economic activity and by, secondly, producing a "new financial aristocracy, a new kind of parasite in the guise of company promoters, speculators and merely nominal directors, an entire system of swindling and cheating with respect to the promotion of companies, issues of shares and share dealings."

In a supplementary note to the first edition of Volume 3 of Capital, Engels wrote in 1894 that when Marx wrote these words in 1865, "the stock exchange was still a secondary element in the capitalist system", but that since then "a change has occurred that gives the stock exchange of today a significantly increased role, and a constantly growing one at that, which, as it develops further, has the tendency to concentrate the whole of production, industrial as well as agricultural, together with the whole of commerce -- means of communication as well as the exchange of function -- in the hands of stock-exchange speculators, so that the stock exchange becomes the most pre-eminent representative of capitalist production as such."