The Global Organic Crisis

Posted on February 22 2010 by admin

Paradoxes, Dangers, and Opportunities

“The central contradiction of global capitalism is not
that between capital and democracy as such.
The concentration of capital allows for socialization of the means of production,
and thus a solution to this problem.
The main contradiction we face is deeper and The wide-ranging and
challenging nature of the global “organic” crisis may seem intractable.
But the solution requires mobilization of progressive social forces that can politically press for measures
that are sustainable and that are not one-sidedly implemented on behalf of capital.
The global stalemate over the future of the planet cannot last indefinitely.”
by Stephen Gill

The capitalist world has experienced its deepest economic meltdown since the Great Depression of the 1930s.  Paradoxically, whereas the earlier period saw the breakdown of liberal capitalism, the rise of fascism and Nazism, and the Soviet alternative to liberal capitalism, today neo-liberalism and capitalist globalization still remain powerful, and apparently supreme, on the stage of world history.  Despite the financial implosion on Wall Street and its “near-death experience,” few coherent left programs have commanded sufficient political organization or popular support to mount a serious challenge to the G8′s somnambulant political leaders and to pose credible alternatives to financial capitalism.

So, what arguments can progressive political forces use to begin to mobilize transformative resistance in ways that can give credibility to new forms of politics and society?  We start with the simple observation that appearances can be deceptive and indeed this is to be expected in the present politically paradoxical global conjuncture.  This conjuncture corresponds, in part, to the Chinese character for crisis, a character that combines moments of danger and opportunity.  It is linked to the fact that the current global political situation involves far more than a crisis of capitalist accumulation since it is pregnant with the following paradox: “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.”1

In this period of morbid symptoms, the future of the world is pregnant with a multiplicity of intersecting and interrelated crises, each of which presents moments of danger and opportunity for different political forces.  Together these moments combine in what I call, following Gramsci, a “global organic crisis,” in ways that shape the potentials for transformation of society and culture on a global scale.  In other words, the present world order is in a state of organic crisis due to both a political impasse for the old frameworks of politics and a search for new directions.  This crisis therefore goes well beyond questions of capital accumulation and it indeed poses fundamental questions concerning the ethics and politics of the making of our collective future.  It poses, in an acute way, the issue of whether that future is sustainable in a political, social, and ecological sense.

A swift review of some of the features of the present global situation reveals that many morbid symptoms are truly global but experienced unequally in the global North and the global South, with the recent catastrophic experiences in Haiti — the effects of hurricanes and a devastating earthquake compounding the effects of debt imperialism, dictatorship, and foreign intervention — underlining the vast disparities in life chances across classes and nations.  We live in a world characterized by the ever greater exploitation of human beings and nature by capital, whose power is increasingly concentrated in fewer giant corporations.  At the same time, contestation is emerging over questions of lifestyle and sustainability — problems linked to hyper-consumerism, mass advertizing, and the suffocating dream-worlds of commodified desire that help sustain ecological myopia.  Deadlocks over climate change and food and health security are linked to political struggles over corporate domination and private control of world agriculture, life sciences, medicine, and pharmaceutical industries.2 Related to the above is the accelerated privatization of water, land, natural resources, and public goods such as education and health systems at the very moment when broad swathes of public opinion support social protection and universal access to public education and health care.  The global organic crisis is further exacerbated by these “new enclosures” which involve the expropriation of the “social commons.”  This process of dispossession is paralleled by the wholesale defunding of the development potentials of many of the poorest countries in the world as they struggle to pay their accumulated debts, typically to the very foreign bankers who have made reckless, highly leveraged investments — the financial derivatives and profit strategies that have been at the center of the recent financial meltdown in the USA and Europe.

Third World indebtedness constitutes a means of expropriation akin to what Marx characterized as primitive accumulation through colonization.  It has been estimated that many of the poorest countries such as Haiti pay up to 20% of their annual fiscal revenues in foreign debt servicing, often in repayment of debts whose principal has already been repaid several times over, even though the original loans may have been used to fill the coffers of dictators and potentates — now in offshore bank accounts.  These “public” debt obligations are overseen by combinations of private banks and public institutions such as the IMF and World Bank along with the governments of wealthier countries.  In the case of Haiti, for example, many of these debts were incurred by the notorious Duvalier regime, a veritable kleptocracy of thugs and gangsters that terrorized the population for decades, supported by the United States and its allies on the grounds that Duvalier was on the “right” side of the Cold War struggle.3 This general dispossession of much of the global South has come with high opportunity costs of development alternatives forgone.  The trillions of dollars paid by the global South for the debt servicing since at least the early 1980s has come at the expense of cuts in social programs, which particularly affect women and children, especially with respect to education and health care.  Put differently, recurring financial and debt crises, with their devastating social and economic effects, are not new in the global South, even though, up until recently, they have been largely avoided in much of the global North.

The present global impasse is therefore much more profound than a crisis of capitalist accumulation, let alone a necessary self-correction aided by macroeconomic intervention and bailouts.  It reflects the conjunction of a global organic crisis which has already been deepening for decades in the global South and the globalizing contradictions of what we call “market civilization” — an individualistic, consumerist, privatized, energy-intensive and ecologically myopic, unequal and unjust pattern of lifestyle and culture that is currently dominant in world development.4

The outcome of this organic crisis will depend on the political struggles that emerge in response to that contradiction: the need for conditions of secure and indeed progressive social reproduction and development under conditions of ecological sustainability versus the intensified power and discipline of capital.  This global contradiction has important gender and racial dimensions.  For instance, a majority of the world’s work, including caring work, is done by women and a majority of the world’s poor are women in the global South.5

Nevertheless, the forces of disciplinary neo-liberalism have retained the upper hand in defining the responses; so far the various lefts of the world have appeared relatively weak or internationally isolated, though a number of notable exceptions exist, for instance in Latin America.  In my view, therefore, the principal challenge for the progressive political forces and political economists in the coming decade is mobilizing forces and arguments — as well as policies and governance proposals — to create a new “common sense” that can address the global organic crisis.  In so doing progressive forces will help to foster new forms of political agency, involving both men and women in the North and the South: what I call a new, diverse, and creative “post-modern Prince.”6

Immediate challenges for progressive policies include specific policy responses to the costs of gigantic bailouts, which run into many trillions of dollars, and which could have been used in much more productive and socially creative ways.  Neo-liberal governments, assuming they are able to hold onto power, will ultimately seek to download the burden of payment on the backs of ordinary people in the form of wage cuts, reductions in social benefits and health expenditures, privatization of education, and other measures in an attempted return to fiscal and social austerity — the very types of ongoing surplus extraction that have characterized Third World development for much of the past three decades.  Indeed, despite the recent recovery in stock market prices and output partly caused by huge injections of money into the main capitalist economies by the central banks, unemployment is still high and rising (although very unevenly distributed across countries), world hunger is growing, and serious social dislocations have already emerged not only in the global South but also increasingly throughout the North as a result of further cuts in public provisions, health care, and wages.

One key “new constitutional” feature of the era of disciplinary neo-liberalism is the emergence of “independent” central banks, which have proliferated since the early 1980s.  Indeed, this independence gave central banks substantial latitude to act as a lender of last resort and thus to massively bail out private banking interests in the global financial crisis of 2008-09.  Whilst central banks are independent of governments, their boards of governors are largely drawn from the ranks of private financial interests (not from trade unions or from the ranks of progressive political economists).  Battles over future fiscal stringencies to pay for the gigantic bailouts of big firms and banks can therefore be anticipated on the political horizon over coming years.  One code word for these battles is “exit strategies.”  What this means is that the globalizing elites of the G8 and Davos (the World Economic Forum) who dominate global capitalism will seek to impose on the Northern population solutions akin to those long practiced in the Third World: for example, extending the retirement age and raise indirect and direct taxes, as well as continuing to cut government expenditures on social programs, health, and education.7

What of the relationship between capital and the environment?  Various proposals for “green capitalism” widely discussed prior to the financial meltdown should be judged in terms of whether they address not only specific ecological challenges, but also the general crisis of social reproduction and livelihood that compound the ecological problem.  Indeed, much of the current problems of global starvation are linked to the shift in production away from food grains to heavily subsidized bio-fuels over the past decade, which has massively increased the world food prices so that the world’s poor cannot afford to buy food.

Of course it is desirable for capital to be constrained from completely reckless exploitation of global resources and forced to use energy more efficiently.  However, green capitalism is entirely compatible with the prevailing forms of consumerist growth associated with market civilization, even if such consumption might be reconciled with lower levels of fossil fuels use, lower amounts of chemical fertilizers, and the introduction of more renewable sources of energy.  It can also go with wider use of genetically modified seeds and new technologies of control over life-forms, e.g. bigger feedlots and expanded use of hormones to feed meat-based diets.  Indeed, green capitalism is still characterized by the contradiction of private accumulation and enclosure of the social commons versus social needs.

Moreover, the question of intellectual property rights is at the heart of the impasse between the global North and the global South in the climate change negotiations.  The same applies to agricultural technologies, including the private control over seeds.  Private corporations want rents for their technologies which poorer farmers and poorer countries can ill afford to pay.  Green capitalism will do very little to address the intensification of economic and social insecurity of a majority of people throughout the globe.  The left arguments that address this question must be based on the view that technologies to ameliorate environmental problems should be global public goods — not mechanisms of control by corporations, codified as they currently are by intellectual property rights in national legislation in the bigger nations (e.g. USA and EU) and in the new constitutional organizations such as the WTO which has gained jurisdiction over intellectual property rights, redefining them as tradable commodities.

What will this mean for countries’ fiscal strategies?  To answer this question we need to address two prior questions: who pays for the bailouts, and what are the real costs of the bailouts?  The G8 strategy, as suggested above, will be similar to that practiced by the IMF and World Bank throughout the Third World debt crises.  Of course the scope and depth of its implementation and effects will vary according to the balance of forces and the fiscal situation in each location.  Dominant forces will attempt to restore the principal aspects of disciplinary neo-liberalism and, in so doing, force adjustments on to the backs of working people in the form of lower wages, privatization of public services and health, etc. — in short an assault on workers, public goods, and the social commons in both the global North and the global South.

What will this mean politically in the affluent countries?  In most of the North Atlantic countries about 70% of workers are in services, many in public services now threatened with further privatization.  However, in Germany, and elsewhere in much of Western Europe, many still act as if G8 leaders could resolve the crisis and return capitalism to “normalcy.”  Indeed many “protected” workers who are members of trade unions are shielded from some of the worst effects of the crisis (i.e. partly as a result of Keynesian automatic stabilizers such as unemployment insurance), whereas insecurity is increasing for the vast majority of workers worldwide, who are “unprotected” and who may not be eligible for state assistance.

However, the idea of an early return to such “normalcy” is delusional in light of the global financial situation which is far worse than G8 leaders can admit publicly (the plight of much of the Third World and a powerful nation such as Japan as a result of a protracted financial crisis are harbingers of what might transpire in the G8 more widely).  Moreover the “normalcy” of the past few decades itself meant not only a deep crisis of social reproduction but also relentless environmental destruction, ever-increasing and obscene levels of inequality, and global economic stagnation.8

The question of “normalcy” is therefore a global question.  If its return means “exit strategies” and the renewal of disciplinary neo-liberalism and the primitive accumulation of the global sovereign debt regime, it will deepen the global organic crisis.  We can therefore expect global political conflict to begin to increase; the question is how to channel this for progressive ends.

In this conjuncture, a progressive left might begin to argue more systematically that economic emergency measures could have been targeted in ways that would have been less costly and more socially efficient, e.g. strengthening public goods for the social, health, and educational commons, and promoting democratic control over the commanding heights of the economy so that they are also made less risky and more stable.  Concrete steps in that direction would be to advocate much more progressive and fair taxation (e.g. particularly for the top 20% of wealthy people), a crackdown on tax evasion and offshore centers (both of which would alleviate fiscal problems), and the promotion of tax regimes and pricing strategies designed to channel production towards more socially and ecologically useful ends.  A progressive strategy would also be international: the global organic crisis mandates strategies for global redistribution with a qualitative component (e.g. to provide the means to healthier food and improvements in medical care globally).

I would therefore argue that the central contradiction of global capitalism is not that between capital and democracy as such.  The concentration of capital allows for socialization of the means of production, or at least their “commanding heights,” and thus a solution to this problem.  The main contradiction we face is deeper and much broader and it is dramatized by a global struggle of power and resistance.  It concerns the degree to which the continuation of neo-liberal globalization will intensify what feminists have called a crisis of social reproduction and, with it, the restructuring of our basic social institutions for health care, welfare, and livelihood.

The wide-ranging and challenging nature of the global “organic” crisis may seem intractable.  But it is at least clear that the solution requires mobilization of progressive social forces that can politically press for measures that are sustainable and that are not one-sidedly implemented on behalf of capital.  The global stalemate over the future of the planet cannot last indefinitely.

Notes:

1 Antonio Gramsci, Selections from the Prison Notebooks, New York: Progress Publishers, 1971, p 276.

2 The world food crisis involves global patterns of malnutrition — 25% of the world is obese or overweight; 25% is starving.  See Robert Albritton, Let Them Eat Junk: How Capitalism Creates Hunger and Obesity, New York: Pluto, 2009.

3 The Duvaliers ruled Haiti from 1957 until 1986.  Papa Doc came to power using his private militia, the Tontons Macoutes, and this power was further consolidated on his death when his 19-year-old son, Baby Doc, was named president for life in a dictatorship that plundered billions of dollars from the people of the poorest nation in the western hemisphere, most of it deposited in offshore (e.g. Swiss) bank accounts.

4 The Pentagon’s strategic doctrine since the 1990s has been premised on “full spectrum dominance” (ability to dominate all adversaries in all aspects of warfare and surveillance) to sustain the global disparities that favor dominant US interests — in an unequal world increasingly divided between the “haves and have-nots.”

5 The UN Population Fund has stated that the single biggest cause of global health inequalities — as well as the principal cause of death for women — is childbirth.

6 Stephen Gill, Power and Resistance in the New World Order, London and New York: Macmillan-Palgrave, 2008, pp 237-69.

7 In the debates and struggles over the making of the future world order, it is therefore important to emphasize why such economic emergency measures as just undertaken by the G8 and G20 governments and central banks only occur when the vital financial interests are jeopardized or indeed when the capitalist market system as a whole is threatened — not to deal with social needs, the sustainability of the biosphere, or the plight of poor countries in the wake of financial and natural disasters.  Indeed, it is also worth mentioning that key problems of the Third World debt crises resulted from reckless lending by the very same commercial banks that caused the meltdown in the global financial markets over the past two years.  Then as now their losses were socialized, albeit in different modalities.  During the 1980s the private banks succeeded in having global public institutions such as the International Monetary Fund and the World Bank as well as the main G-7 governments to step in and absorb their debts. The multilateral financial institutions then renegotiated the sovereign loans, forcing indebted countries to continue to service the debts.  Debt cancellations were not on offer.

8 This is despite rapid growth in some countries, such as China and India, involving intensification of consumerism, a new plutocracy of billionaires, and enormous ecological costs and huge social dislocations associated with new patterns of primitive accumulation.  See Isabella Bakker and Stephen Gill (eds) Power, Production and Social Reproduction: Human In/security in the Global Political Economy, New York: Palgrave Macmillan, 2003.


Stephen Gill is Distinguished Research Professor at the Department of Political Science of York University.

URL: mrzine.monthlyreview.org/2010/gill150210.html
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