October 2016- Daniel Campos
I The Current Crisis of Capitalism
V Global Corporations
VI General Conclusions
What joy moves us Marxists when it comes to honoring 100 years of the publication "Imperialism" by Vladimir I. Lenin! This extraordinary text that has become a classic was written by Lenin in Switzerland between the months of January and June 1916, under the terrible conditions of exile, the persecution of the Tsarist police, the hostility of the imperialist governments of Europe, and of the socialists of the Second International. "Imperialism, the highest phase of capitalism" such the true title of the work, is presented in the prologue in this way: "I wrote this pamphlet, which I offer to the attention of the reader, in Zurich during the spring of 1916."
Left: Copy of Lenin's "Imperialism" from 1925 in France. Right: Example in Italy 1956
Lenin himself calls his book a "pamphlet" ! But even if it seems unbelievable that the author himself uses an adjective that may sound derogatory regarding his own work, the reality is that "Imperialism" is a text of barely ... 50 pages! That is why Lenin speaks of it as a "brochure" ! Few times in history has such a short text had such transcendence in the theoretical and political field, it has been the result of so much controversy and debate, read and studied throughout the world, translated into all languages and become a pillar of Marxist theory. at the same level as the Communist Manifesto, Capital or the Transition Program. "It is painful to reread now, in the days of freedom, the passages of the pamphlet mutilated, compressed, squeezed with iron tongs, thinking about the tsarist censorship", Lenin explains to us in his prologue, allowing us to see why "Imperialism" could not be a longer text.
And we do not do this tribute at any time. We do so with the greatest crisis in the history of capitalism before us. The logical concern of asking ourselves really arises: What would Lenin say today in front of the spectacle of the crisis of capitalism that we are experiencing? What would he say seeing the more than 1000 trillion dollars, equivalent to 10 times the global GDP involved in the crisis? What would you say in the face of the horrendous spectacle of between 4 and 5 billion people, 2/3 of the global population, living in poverty?
The crisis of capitalism is so serious that it has pushed all those economic indices back to levels of 70 years ago, almost to the time when Lenin published Imperialism! Thus, the Marxists of the 21st century have become privileged witnesses of the greatest crisis in the history of capitalism, which our teachers would have given their lives to witness. And if Lenin could witness it, he would see with satisfaction how his fundamental theses are clearly and categorically confirmed.
"I would like to hope that my pamphlet will help to orient ourselves to the fundamental economic problem, without the study of which it is impossible to understand anything...", Lenin explained to us in his preface. And wow, his brochure helps us understand. Without the scientific category of Imperialism, it is absolutely impossible to understand the current crisis of capitalism, and the entire world political situation that has the world crisis of capitalism as a fundamental element, for whose understanding it is essential to return to Lenin's work.
As the Theory of Imperialism is logical and natural, after a century of being presented, in many aspects it has lagged behind the changes that have taken place in the world capitalist system since its appearance until today and requires updating. It is true that "Imperialism" is a historical category for an entire stage of humanity and the history of capitalism. We must bear in mind that prior to the imperialist stage, capitalism went through 2 major stages, the stage of original accumulation between the 9th and 16th centuries, and the stage of boom or apogee, around the 17th and 19th centuries.
Both stages of the evolution of capitalism lasted several centuries, and what "Imperialism" posits is that by locating the monopolies as of 1903 in the center of the capitalist system, it entered in historical terms, in its superior and final stage, of decadence, a stage whose duration is open. In the century that we have been since the publication of "Imperialism" we can verify the existence of profound changes in the capitalist system that ratify Lenin's Theory of Imperialism.
For example, the Global Corporations arose, the companies that went bankrupt en masse in 2007, huge monopolistic conglomerates that control various branches of commerce, industry and finance on a global scale. These companies suppose an accumulation and centralization of capital of a magnitude superior to the monopolies, trusts and cartels that Lenin describes in his "Imperialism" of 1916. But even so, the changes operated in capitalism ratify Lenin, and at the same time, force to update the Theory of Imperialism, which is the objective of this work.
In this material we will first see brief outlines of the current crisis of capitalism, to then understand how capitalism came to this situation and the new elements that it is necessary to incorporate into the Marxist theory in order to update the Theory of Imperialism. In this way we will be able to achieve that the Theory of Imperialism becomes a more powerful, clear and valid theoretical tool than ever. Our tribute to Lenin's work cannot remain anecdotal, to be just a "memory". Our tribute must be lively and current, applying its fundamental laws to explain reality, because the best tribute we can pay to our teachers is to apply their teachings to the revolutionary processes that we are facing in the 21st century. This is the challenge we face with this work.
Buenos Aires, May 2016
Author clarification: This work was published in 2016, when the global pandemic of COVID-19 had not yet occurred, and many data may have become out of date. Even so, the data differences do not change the general content of the work.
Chapter I- The Current Crisis of Capitalism
We are going through the greatest crisis in the history of imperialist capitalism. In this crisis, the most serious since 1929, a sharp peak was unleashed in the years 2007-09 with the general bankruptcy of Global Corporations and large companies that dominate the world economy. Multinational Corporations could only get out of bankruptcy through bailouts, that is, huge injections of money made by the central banks of the US, Germany, Japan, France, Great Britain, the main imperialist countries and China.
This is not one more crisis of the many that capitalism has suffered, it is not a cycle or a periodic crisis, nor a conjunctural movement of capitalism. It is a deep crisis whose dimension can be appreciated with a review of the data, figures and indices that show its astonishing magnitude without comparison in history. The crisis involves a colossal overaccumulation of capital, more than 1000 trillion dollars, equivalent to 10 times the global GDP. At the same time, there are between 4 and 5 billion people, 2/3 of the global population, in poverty whose situation worsens day by day. Never in history has such a large number of human beings suffered from these conditions in absolute or relative terms.
There is a historic credit and money crisis expressed in the collapse of interest rates that have been at 0% for almost a decade, and in the emergence of negative interest rates. There is a brutal decline in world trade, the price of commodities, oil, and the speed of money circulation, which returned to levels of 70 years ago. There is a general bankruptcy of large companies and states, whose debts reach unsustainable levels and includes, for the first time in history, all the imperialist states in unison. The magnitude of the crisis is directly related to the magnitude of the large companies that have gone bankrupt, the Global Corporations, and the over-accumulated capital that they imply.
The accumulation of capital caused by Global Corporations is on such a colossal scale, that the burning of capital necessary to solve the current crisis of capitalism reaches historic proportions. At the same time, given the size of the companies involved in the crisis, the bailouts and the injection of public money into large companies, it reached the highest levels in history between 40 and 50 billion US$ (trillions in English and Portuguese ).
Understanding the nature of the crisis makes it necessary to carry out an update of Lenin's Theory of Imperialism, to understand what Global Corporations are. These companies, which went bankrupt on a massive scale in 2007, control various branches of commerce, industry and finance on a global scale, and represent an accumulation and centralization of capital of a magnitude greater than the monopolies, trusts and cartels that caused the crisis of '30, as well as like post-war multinationals. They are so big that economists and analysts who defend capitalism have called them with a term that became popular as "Too big to fail" (in English "Too big to fail ").
The Marxist currents that speak of the "financialization" of the economy, or of the "financial crisis" deny the Theory of Imperialism, because in reality, for Marxism, there is no "financial sector" on the one hand and an "industrial" sector, on the other. If we consider Lenin's central theses in "Imperialism" valid for more than a century, banking and industrial capital have been fused. This analysis by Lenin has been ratified by the reality of the current crisis of capitalism, given that when the Global Corporations went bankrupt, the crisis affected all branches of production, commerce and industry in unison, hitting both the stock markets and the oil industry, trade like steel, tech companies like banks.
This explains why the billionaire bailouts took place. It is because the bankruptcy of the Global Corporations is not a "financial" crisis but puts the whole capitalist system in jeopardy. The only one that went bankrupt was Lehman Brothers and from there imperialism defined that for now it cannot allow any more bankruptcy. Global Corporations began to emerge in the 80's, and are the largest monopoly company that capitalism has engendered, whose laws and operation ratify Lenin's Theory of Imperialism and all Marxist analysis.
Bailouts do not solve the crisis
The bailouts have been developed through programs such as QE in the US, "Abenomics" in Japan, Europe or England that have transferred billions of dollars to Global Corporations with which imperialism imposes a giant vacuum cleaner of profits and capital on all the world. But this printing of money, far from solving the problems of capitalism, exacerbates them. The bailouts accelerate the historical and current contradictions of capitalism in the long term, inflation, bankruptcies, deficits, trade wars, currency crises, recession, the prices of metals and commodities are, among other phenomena, expressions of this aggravation.
The world economy is bordering on recession, with no close prospects for recovery. If the recession is considered as a rate of 2%, before the outbreak of the crisis the economy was growing far from recession at an annual rate of 5% in values of 5.3% in 2004; 5% in 2005; 5.1% in 2006; and 5% in 2007 (1) But after the outbreak of the crisis the global economy fell to 2.8% in 2008 and plunged into recession with -0.9% in 2009. After the first bailouts of Bush and Obama rebounded to 5.1% in 2010, but fell again towards 2011 to 3.9%, and from there it hovered around 3%, bordering on recession in subsequent years: 3.4% in 2012; 3.3% in 2013; 2.6% in 2014 and 3.1% in 2015 (2)
This state of the economy on the verge of recession is the perspective that the main leaders and analysts of imperialism recognize that it can last many years, what the president of the IMF Christine Lagarde calls the "New Mediocrity " (3) that is to say a poor economic performance, mediocre, a reality that the bailouts, nor the rescue plans that pump billions of dollars to the Multinational Corporations have managed to modify.
It is necessary to establish a characterization of the crisis of capitalism to know its dynamics and perspective. This crisis can last between 30 and 40 years, it will have peaks of recovery and decline, and it will have new acute episodes such as that of 2007 or the Wall Street crash of the last century. The Wall Street crash of '29 was the sharp peak of a crisis that lasted from 1912 to 1945 for 33 years, caused by the exhaustion of the monopolies. In the course of which the 1st and 2nd World War, the Russian Revolution, the 1st and 2nd German Revolution, the Spanish Revolution, the rise and fall of fascism, among other historical events, occurred.
A similar crisis occurred between 1966 and 1982, in which capitalism underwent a strong disturbance of the expanded reproduction process that manifested itself in the form of a chronic crisis of the economy. During this crisis caused by the exhaustion of the multinationals, great political events occurred such as the French May, the Prague Spring, the fight for civil rights in the United States, the triumph of the revolution in Vietnam, the Carnation Revolution in Portugal , the Iranian, Nicaraguan, and Salvadoran revolutions, among others.
One difference between the current crisis and the post-war crisis is that while there was a chronic crisis with periodic recovery episodes, now there is a fall with no recovery in sight that is not deeper due to the effect of the bailouts. And on the other hand, while that crisis developed from the periphery to the center, this one goes from the center to the periphery. But like its two predecessors, it is a qualitative disturbance of the enlarged reproduction process brought about, in this case, by the depletion of Global Corporations.
The data shows that the crisis is at the center of the imperialist capitalist system, the economy of the imperialist countries. The US has averaged recession since the outbreak of the crisis. It grew to 0% in 2008, -2.6 in 2009; 3% in 2010, 1.8% in 2011, 2.8% in 2012, and 2.2% in 2013 (4) These indices show that the world's No. 1 economy is bordering on recession despite bailouts, is the epicenter of the crisis and cannot get out of it. China, the 2nd economy in the world where a growth of 6% is considered a recession, began a decline that took it from 10.3% in 2010, to 9.3% in 2011, 7.7% in 2012; and 7.7% in 2013 and the fall into recession with 6.5% in 2014 (5)
The 3rd largest economy in the world, Japan remains in recession, falling from 4% in 2010 to -0.8 in 2011, -0.6% in 2012, and 1.5% in 2013 (6) despite the huge bailouts that were implemented with the economic program of Prime Minister Shinzo Abe known as "Abenomics". The same thing happens in the Euro zone where the economies of France and Germany are located. Europe as a whole remains in recession of 0.5% in 2008; -4.1% in 2009, 1.8% in 2010, 1.4% in 2011, -0.6% in 2012, from -0.4% in 2013 (7)These data irrefutably indicate that the crisis goes from the center to the periphery if we observe that the imperialist economies as a whole grew at a percentage of 0.2% in 2008; -3.2% in 2009, 3.1 in 2010; 1.7% in 2011; 1.5% in 2012 and 1.4% in 2013 (8) All the data confirm that the crisis is installed in the center, in the heart of the global capitalist-imperialist economy.
The crisis shows horrific figures of hunger, misery, poverty for billions of people throughout the world. Out of a total of 6.7 billion people in the world population, 1 billion "survive" with an average of 2 dollars per day, of which 70% are women. Three billion are not enough to cover basic needs in food, housing and health. More than 24,000 people die every day from hunger, 840 million people are malnourished, of which 200 million are children under 5 years of age. More than 1.8 billion human beings do not have access to drinking water. More than 1,000 million people lack estimable housing, 2,000 million people suffer from iron deficiency anemia, 880 million people do not have access to basic services and 2,000 million people lack access to essential medicines (9)
At the other extreme, those who pocketed the money from the bailouts, the first 20 super millionaires on the Forbes list together concentrate a figure calculated at 109.5 billion US$ (10) , which is equivalent to more than what is necessary to end hunger. and poverty in the world. The select club of super millionaires in the Forbes ranking went from 1,125 members in 2008 to 793 in 2009. Those 109.5 trillion U$S of accumulated wealth in the hands of "millionaires" exceeds the world GDP, that is, the annual wealth produced by all countries, which is around US$ 100 billion.
The data on poverty and misery together with the data on the acceleration of the agglomeration of human masses in the megacities, processes of which both the migration of masses from the countryside to the city, as well as the migration from backward countries to imperialist countries, reaffirm the laws of Accumulation formulated by Karl Marx in relation to the development of capitalism. For Marx, the accumulation of capital at one pole and of human masses and workers at the other, is a process that with the crisis has only worsened. The drop in living conditions throughout the world in general and in particular, in the imperialist countries is the result of the response of the capitalist governments to the crisis, the economic plans of their governments and international economic organizations.
The plans of the capitalist governments of the entire G7 world have deepened the adjustments and levels of super-exploitation, with budget cuts that extend over several years, increased working hours, decreased labor wages, social wages , dismantling of all labor conquests, precariousness of working conditions, exploitation of immigrant labor, minorities, women and children. Undoubtedly, the ideal economic model to which capitalist governments aspire, is constituted by a front that both the multinational Wal-Mart and the Chinese state are part of, which are at the forefront of super-exploitation of workers, job insecurity, low wages and the elimination of the most basic democratic rights
This global offensive is causing an unprecedented worsening of the social and living conditions of peoples throughout the world. The imperialist and capitalist governments of the backward countries seek, to resolve the crisis through a brutal offensive against the masses in Europe, the US, Japan and the backward countries, but in doing so they provoke a sharpening of all the political and economic contradictions. Is this sharpening constitutes a spur that triggers the mobilization of the masses throughout the world, of the workers and the people who have begun to confront this offensive with strikes and mobilizations that are going through the US and Europe at the moment and that are even beginning to emerge. in China. Capitalist governments seek to defeat these struggles in order to impose higher rates of exploitation and overcome this crisis.
The bailouts prevent the destruction of excess capital, by hindering the necessary burning of capital. Companies that should have gone bankrupt are rescued, which causes the existence of dead bodies, which keeps the organic composition of capital high, because an enormous mass of fixed capital, machinery, workshops, infrastructure, and capital continues to subsist, as well as fictitious capital that does not exist. they obtain a necessary rate of profit and therefore act as an obstacle to the production of new value.
The rise in the organic composition of capital caused by the bailouts acts as an obstacle to the exit of capitalism from the crisis, and they become another structural factor of the same that exacerbates the effect that bourgeois economists call "the liquidity trap", that is, they are masses of capital that make it difficult for investment to relaunch the world economy. The crisis made it possible to corroborate the central role that the United States maintains as the world protector of capitalism, and the Federal Reserve (Fed), the US central bank, as the world's central bank. The dollar and Treasury Bonds became the main refuges against the global collapse. Despite the fact that the crisis broke out in the heart of the US economy, paradoxically the reaction of investors and countries was to protect their assets and reserves in dollars.
The dollar strengthened because it began to be demanded by banks around the world, after the successive paralysis suffered by interbank loans. At the sharpest and most dramatic peak of the crisis, nothing more quickly refuted the groups of intellectuals and analysts who were beginning to put forward the thesis of the " loss of US hegemony", also known as the "Decoupling Theory" . The fact that excludes reality is that in the midst of the biggest crisis in the history of capitalism and the US economy, the only thing that strengthened was the dollar. All the G7 countries, and most of the backward countries ran for cover and protect their dollar reserves and US Treasury assets. The demand for the dollar in the midst of the crisis is the clearest sign that the big companies, countries and capitalist powers consider the United States with its 7 fleets, its military dominance and arms power as the greatest guarantor of last resort of capitalism, in the face of any eventuality that questions it.
The so-called "BRICS" (Brazil, Russia, India, China, South Africa) extremely dependent on imperialist capital countries that act as sub-metropolises in different regions of the globe. The economic growth of these countries in the first years after the outbreak of the crisis was much higher than that of the imperialist countries, which led analysts and bourgeois economists to suggest that they were the "new marvel" of the capitalist economy, the locomotive with China at the head, which brought capitalism out of the crisis. Even more absurd theories have formulated that a "New Order" is emerging around the BRICS capable of competing with and displacing the US and the imperialist countries from the center of the economy, impose their currency displacing the dollar, and challenge the global imperialist order. The development of the crisis from the center to the periphery did nothing more than make all these statements ridiculous.
The panorama of the BRICS and the backward countries is that slowly all of them have been adding to the global crisis with inequalities and different rhythms. Some analysts and economists of capitalism call this the "crisis of the emerging countries", but in reality it is the truth that the BRICS economies are backward capitalist semi-colonies, which act as sub-metropolises over other poorer economies, although all of them under the control of the Multinational Corporations.
The crisis of capitalism is a tsunami that reaches every corner and spares no one: Brazil grew at 6% when the crisis began, now it grows at 0%, in recession, Russia collapses from 8% to 2%, South Africa falls from 5% to 4%, China is starring in an acute episode of the crisis that formed the "Black Monday" of August 24, 2015. There is a global drop in the price of commodities determined by the global slowdown of the economy, and in particularly that of China. The recession caused the collapse of the prices of oil, precious metals, agricultural products, wheat, corn, soybeans, and other energy goods such as coal and gas, whose prices tend to fall due to the drop in demand .
This process hits the economies of backward countries hard, which live from the sale of commodities or raw materials, whose economies, if they fail to reconvert or change their economic axis, inevitably tend to regress due to the drop in exports, the lack of investment, and the economic suffocation due to the fall in capital income.
Latin America is being particularly hit by the crisis. The 2 most important economies, Mexico and Brazil are in difficulties. Mexico is suffering the brunt of the crisis in the US and the drop in oil prices, while in Central America the slowdown is less, although a serious crisis is unfolding in Puerto Rico and Cuba. The Southern Cone has as its protagonist the crisis in Brazil that is hitting the rest of the region, such as Venezuela, which fell from almost 9% when the crisis began to 5%, Argentina fell from 10% to 4%, and the remaining economies suffer the onslaught. product of the backwardness and dependency in which they find themselves.
The future evolution and development of the economic crisis essentially depends on the class struggle. We Marxists do not conceive of the economy as something detached from political and social processes, as does the bourgeois economy, but as Political Economy, that is, linked to the development of the national and international class struggle. It will be in the streets and in the cities where the course of economic events will be defined. Imperialism and the capitalist governments of backward countries will seek a higher rate of exploitation, and a burning of capital necessary to get out of the crisis.
In turn, the workers and popular sectors vigorously defend their living conditions, their health, education and their future. The future of the evolution of the world capitalist economy depends on this clash, and it will decide the course of the economy and the crisis. world capitalism. Trying to answer where this global crisis of capitalism is going leads us directly to retake Lenin's analysis to update the Theory of Imperialism, a task that we will begin to develop from the next chapter.
(1) and (2) World Economic Outlook. IMF October 2007, October 2008, October 2009, October 2010, October 2011, October 2012, October 2013, October 2014, July 2015
(3) and (4) IMF. April 2015
(5) (6) (7) and (8) World Economic Outlook. IMF October 2007, October 2008, October 2009, October 2010, October 2011, October 2012, October 2013, October 2014, July 2015
(9) UNCTAD 2012 report
(10) Boston Consulting Group (BCG) World Wealth Report 2008
II- The Monopolies
From left to right: The executive board of Standard Oil, the logo of the Rockefeller company, the logo of the German monopoly Krupp, the monopoly bourgeoisie
To speak of Imperialism at the end of the 19th century and the beginning of the 20th century was to speak of Monopolies. And just as it was at that moment in the development of capitalism that Lenin wrote his "Imperialism" about him, he perfectly described them in his work. Since that moment, capitalism has come a long way that led to this crisis that we are going through today. How did capitalism come to the enormous crisis that it is going through today?
In order to determine how the current crisis of capitalism began, it is necessary to establish the changes that have taken place in the capitalist system during this century since the publication of "Imperialism" until today, and the political and social events that occurred in relation to the changes. economic. The thesis that we develop in this work is that within the imperialist stage, capitalism has developed 3 different Forms of Accumulation, which are typical of the Imperialist stage or the decadence of Capitalism.
These 3 Forms of Accumulation that have been developed from 1903 to today are the following: 1) Monopolies from 1903 to 1945 2) Multinationals from 1945 to 1980 3) Global Corporations from 1980 to today. Since these 3 Forms of Accumulation belong to the Imperialist stage of capitalism, they are Monopolistic Forms of Accumulation, that is, forms of accumulation that tend to liquidate competition, and establish a monopoly over branches of industry, commerce, and finance.
From now on we are going to analyze these 3 different Forms of Accumulation, and the respective accumulation regimes that arose together with their development. In order to carry out this analysis, we first want to clarify the concepts of Forms of Accumulation, Accumulation Regime, Pole of Accumulation and Axis of Accumulation, concepts proper to the General Law of Capitalist Forms of Accumulation.
Forms of Accumulation: We define as Forms of Accumulation, the companies owned by the capitalist class to accumulate capital in a given historical period. Throughout history, capitalists have never used a single form of capital accumulation. There have always been different forms of accumulation, that is, different commercial, productive and financial companies that acted with the aim of accumulating capital. The development of these companies, in turn, reflects the different sectors of the capitalist class.
Accumulation Regime: The Forms of Accumulation do not have the same category, but rather have a hierarchical relationship with each other. A Form of Accumulation is the one that drives the economy for a period, and predominates over the others. The other Forms of Accumulation are ordered around it, which is why we call this company the Predominant Form of Accumulation.
The various Forms of Accumulation make up an economic structure that revolves around a Predominant Form of Accumulation. This structure that the capitalist system reaches at a certain moment, is what we define as the Accumulation Regime, that is, the interrelation of the different Forms of Accumulation around the predominant Form of Accumulation, during a period.
Pole of Accumulation: We define the Pole of Accumulation as the branch of production and technology, around which the entire economic regime is structured.
Axis of Accumulation: We define the Axis of Accumulation as the region and set of economies or countries that capitalism uses as a platform for its development in a given period.
Let us now see the general picture of the Forms of Capitalist Accumulation that have emerged from the 9th century to today:
General Table of the Forms of Capitalist Accumulation (9th to 21st Centuries)
Both the concepts of Forms of Accumulation, Accumulation Regime, Pole of Accumulation and Axis of Accumulation, as well as this classification that appears in this table, are typical of the General Law of the Forms of Capitalist Accumulation, which we have presented in the work The End of the Corporations (1) All this elaboration is sustained, in turn, in the process of Capital Accumulation that Marx developed in the General Law of Accumulation in Chapter XXIII of Book I of Capital.
In that chapter, Marx defines capital accumulation, or expanded reproduction, as the process by which capitalists accumulate means of production at one pole and wage workers at the other pole, with the aim of accumulating more capital. This is how Karl Marx explains it: " ... reproduction on a larger scale, that is, accumulation, reproduces the capitalist relationship on a larger scale: more capitalists or larger capitalists at this pole, more wage-earners at that ... Capital accumulation is therefore, the increase of the proletariat ... All individual capital is a greater or lesser concentration of means of production, with the corresponding command over a greater or lesser army of workers.All accumulation becomes means at the service of a new accumulation ..." (2)
The fundamental goal of capitalism is for capitalists to accumulate capital and make a profit. To achieve this, the necessary precondition is that the means of production and exchange be privately owned, an objective that the capitalists achieved through a historical process that placed productive, commercial, and financial companies under their ownership, to the extent that they expropriated the government. rest of the social classes. This happened during the period of Original or Primitive Capitalist Accumulation that took place between the 9th and 18th centuries.
This is how Karl Marx explains it: " The process that creates the capital relationship, then, cannot be other than the process of split between the worker and the property of his working conditions, a process that, on the one hand, transforms into capital the means of production and social subsistence, and on the other hand it converts the direct producers into wage earners. The so-called original accumulation is, therefore, nothing more than the historical process of split between the producer and the means of production. It appears as "original" because configures the prehistory of capital and the mode of production corresponding to it" (3)
The stage of primitive capitalist accumulation affected above all the large rural masses, who were expelled from the countryside, while their traditional forms and rights of access to the means of production, natural resources, communal rights, compascuo, rights open field, and others. In England, between the last third of the 15th century and the beginning of the 16th century, feudal retinues were dissolved as a result of the violent expulsion of peasants and the usurpation of communal lands by noble lords to transform them into pastures for cattle.
The second wave of expropriations was between the 17th and 18th centuries when ecclesiastical property was confiscated and distributed among the oligarchy and its peasant inhabitants were expelled. The process of Primitive Capitalist Accumulation continued with the development of the colonization of the rest of the nations and continents from the geographical discoveries of the 15th and 16th centuries. This process led to the brutal crushing of pre-capitalist civilizations and modes of production in the Americas, Asia, Africa and Oceania, which allowed the expropriation of millions of indigenous peoples and peoples who lived in savagery, barbarism or Asian civilizations.
Once the capitalists began to accumulate capital through the various Forms of Accumulation under their ownership, these developed and surpassed each other through the centuries and the different stages of capitalism. We are now going to see how the transition from a predominantly inferior Form of Accumulation to another superior Form of Accumulation took place throughout history.
The transition to a higher Form of Accumulation
The mechanism by which the transition from a predominantly inferior Form of Accumulation to a superior one is produced is through a violent process of destruction of productive forces or burning of capital. In this way, capitalism made its way throughout history through a process of destruction of productive forces that made possible the concentration and centralization of capital. Said process in turn implies the permanent destruction and liquidation of social classes and sectors of classes through wars and revolutions.
In the development of this mechanism, we observe that after each violent process of destruction of productive forces, there was a new centralization of capital that allowed a predominantly superior Form of Accumulation, which will be the one that from then on begins to dominate the economy throughout. a period. The Forms of Accumulation that arise, placing themselves at the center of economic development, go through phases of emergence, boom and stagnation, which are linked to extended periods of expansion or stagnation of the capitalist economy.
In the phase of emergence and rise of the predominant Form of Accumulation, an extended period of expansion of the capitalist economy takes place, a period during which the economy grows at a sustained rate, and the predominant Form of Accumulation allows an important development of the forces productive. With the exhaustion of the predominant Forms of Accumulation, the period of expansion ends and a long period of economic stagnation begins, which inevitably leads to a new process of destruction of productive forces. In other words, the exhaustion of the predominant Forms of Accumulation leads to the development of destructive forces.
These phases of long expansion or long stagnation of the capitalist economy have had different durations, sometimes barely a decade or sometimes 60 or 70 years and even longer. That is, the long periods of expansion or stagnation of the economy are determined by the rise or exhaustion of the predominant Forms of Accumulation. Having in our hands now the concepts of Accumulation, Forms of Accumulation, Accumulation Regime, Accumulation Axis and Accumulation Pole, we are going to analyze then how the emergence of Monopolies happened, and the entire transition process from Industry to the Monopolies.
The phase of emergence of the Industry coincided with the apogee of the capitalist mode of production between the 18th and 19th centuries, which allowed a sustained expansion of the economy, since the Industry allowed with unusual force a spectacular development of the productive forces. Economic crises occurred all the time, resulting from the development of the contradictions of capitalism, but they were part of the period of economic expansion.
From left to right: The Spinning Jenny, the machine that revolutionized the textile industry, and work in the industry
From industry to monopolies
The revolutionary character in production that Industry signified developed, in turn, with greater intensity all the contradictions of capitalism. The drop in the rate of profit began to occur chronically and permanently, precipitating the economy to suffer permanent crises and falls, even when it was experiencing a period of expansion as a whole. At the height of industry, the leveling of the rate of profit developed more rapidly, and at the same time this process developed more rapidly and convulsively. This is how Engels explained it:"...industry, which thanks to its incessant revolutions of production reduces more and more the manufacturing costs of merchandise... On the other hand, it levels the profit rates of the different branches of commercial and industrial businesses, reducing them to a single general rate of profit and, thanks to this leveling, ensures industry the position of strength that corresponds to it, by removing all the obstacles that until then prevented the transfer of capital from one branch to another." (4)
At the beginning of the 19th century the industries began to enter their phase of exhaustion, which unleashed a new and violent wave of wars and revolutions. The industry produced a rapid development that collided with the internal customs and the social formations inherited from feudalism, and from the regime of manufacturing accumulation, for which reason the revolutions and civil wars that brought the bourgeoisie to power were followed by new revolutions and wars. civilians in which the bourgeoisie eliminated internal customs, expanded the internal market, imposed national borders and modern states emerged.
With the revolutions of 1820, 1830 and 1840, especially those of 1848, the modern countries that we know today were forged in the revolutions and wars that swept through France, Italy, the Austro-Hungarian Empire, the American civil war of 1862, and in Germany in 1866. This entire process of destruction of productive forces opened the way to a higher Form of Accumulation, monopolies, a product of the fact that the wars and revolutions of those decades allowed the development of countries, national unity and their internal market.
At the same time, in this stage of the heyday of capitalism, both Banks and Credit were developed as a Form of Accumulation of financial capital, institutions that make up the modern banking system. Both, although they had antecedents with the first Banks in Genoa and Venice, are the true expression of the capitalist mode of production, which made the old demands of the bourgeoisie against usury and the merchants who monopolized financial capital throughout the entire stage come true. of primitive accumulation.
The credit was born as a rejection of usury, a Form of Accumulation that together with the banks expressed the beginning of the consolidation of the capitalist mode of production. For Marx: "The development of credit is carried out by reaction against usury... It means neither more nor less than the subordination of interest-producing capital to the conditions and needs of the capitalist mode of production... it is the starting point of the system of modern credit The credit associations, which were established in Venice and Genoa in the 12th and 14th centuries, arose from the need in which maritime trade and the wholesale trade based on it found themselves, to free themselves from the domination of the methods of usury and of the monopolizers of the money trade" (5)
Precisely the ruling class of financial magnates, acted by founding the banks that began to issue debt papers and distribute credit, at the same time that they are part of the state that arises and promotes the operation of the Banks. This class is born inextricably linked to the State and the State to this sector of capitalists, as Marx explains: "Although the banks themselves, founded in those republics, appear at the same time as public credit establishments that advanced money to the State on the taxes to be collected, it should not be forgotten that the merchants who constituted these associations were in turn the notables of said states and were as interested in liberating their government from usury as in liberating themselves, and at the same time affirming and reinforcing the subjugation in which they maintained the State." (6)
Private usurer magnates had control of precious metals, and that control enabled them for centuries to make loans at usurious rates that ruined generations of small merchants, as well as peasants and farmers. But the foundation of the banks meant placing those reserves of precious material, gold and silver in warehouses, in order to later be able to issue money in representation of that accumulated wealth, which would give more fluid access to credit, and possible for social sectors that previously did not could access credit. In turn, credit is now established in banking institutions that have clear rules linked to the development of industry and commerce, as well as serious statistics.
This is how Karl Marx explains it: "This violent attack against usury, this demand for the submission of interest-producing capital to industrial capital, is nothing more than the precursor sign of the organic creations that in the modern banking system establish the conditions of production." capitalist: the banks, on the one hand, deprive usury capital of its monopoly, by concentrating and throwing into the financial market all the inactive and as if dead money reserves, and on the other hand, they limit the monopoly of precious metals by creating money of credit" (7)
The foundation of the first officially recognized Bank was the Bank of England in 1694, six years after the triumph of the Revolution led by Oliver Cromwell. Like the Bank of France, the Bank of England began not as a state bank, nor as a crown company, but as a private bank, controlled by the Rothschild clan, the European banking dynasty that handled finances in England, France, Germany , Austria and Italy, together with their associated houses Khun & Loeb, Lehman, Warburg, etc.
Subsequently, the Bank of England was nationalized in 1946 after the end of World War II, as was the Bank of France. If industrial production revolutionized all aspects of production and achieved a mass of goods like never before seen in the history of mankind, in the same way credit achieved accumulation and the constitution of a mass of capital money rarely seen. But along with this, credit rapidly developed tendencies towards the concentration and centralization of capital, leaving thousands of small capitals in ruins, to allow large capital to expropriate smaller capitalists, allowing the centralization of capital.
From left to right: The central banks the Bank of France, and the Bank of England
This is how Karl Marx explains it: "This not only becomes a new and powerful weapon in the competitive struggle. By means of invisible threads, it attracts into the hands of individual or associated capitalists the money means that, in greater or lesser masses, are dispersed throughout the world. It is the specific machine for the concentration of capital...credit...becomes a new and terrible weapon in the competitive struggle, finally transforming itself into an immense social mechanism for the centralization of resources. capitals... To the same extent that capitalist production and accumulation develop, competition and credit, the two most powerful levers of centralization, also develop." (8)
The growing centralization of capital promoted by credit and banks, was laying the foundations for the development of monopolies, cartels and trusts that opened the way to the stage of the decadence of capitalism, the imperialist stage, when financial capital began to predominate over the industrialist. As Frederick Engels explained: "... these changes tend to concentrate in the hands of stock market speculators all industrial and agricultural production, the whole of commerce, as well as the media and exchange agencies, so that the Stock Market becomes becomes the most eminent representative of capitalist production itself. In 1865 the Stock Exchange was still a secondary element in the capitalist system..."
"Today things are different. Since the crisis of 1866, accumulation has been carried out with increasing speed ... A progressive transformation of industry into joint-stock companies then follows. All branches, one after another, succumb to this fate ... mining, iron and steel, the chemical industry, textiles ... the same applies to commerce ... with banks ... the same thing occurs in the field of agriculture. Banks are becoming more and more mortgagees, if this continues it is possible to foresee that English and French lands will also fall into the hands of the Stock Market. Finally, all investments abroad are made in the form of shares ..." (9)
Monopolies: Form of Monopolistic Accumulation of the Imperialist Bourgeoisie
When Lenin develops "Imperialism" he perfectly describes the companies that dominate the world economy, which are the Monopolies. We are now going to analyze how the monopolies from 1903 come to be placed at the center of economic life. First let's go to the definition: What are monopolies? A group of companies that come together to dominate a branch of production in a country and agree on prices, production goals, distribution, benefits, etc., to eliminate competition. For Lenin: "...they agree among themselves regarding the conditions of sale, payment terms, etc. They share out the sales markets. They set the quantity of products to be manufactured. They establish the prices. They distribute the profits between different companies, etc.
This is how Lenin defines in his book "Imperialism" the historical stage opened in capitalism with the appearance of monopolies: "1) the concentration of production and capital reaches such a high degree of development that it creates monopolies, which play a decisive role in economic life; 2) the merger of banking capital with industrial capital and the creation, in the field of this "financial capital", of the financial oligarchy; 3) the export of capital, unlike the export of goods, acquires a particularly great importance; 4) international monopolistic associations of capitalists are formed, which divide the world among themselves, and 5) the territorial division of the world between the most important capitalist powers has finished..." (11)
With the rise of monopolies, the stage of "free competition" in capitalism ended. Through these agreements, the companies formed a kind of league or union that allowed them to advance in the domain of a branch of production in their country, while also trying to extend that domain internationally. These leagues or unions developed from 1860, especially in the US under the name of trusts and in Germany under the name of cartels, derived from the German word "Kartell".
In the US they had a central management of magnates such as the Mellons, Morgan, Rockefeller, etc. The emergence of monopolies went through three moments according to Lenin: " 1) 1860-1880, culminating point of development of free competition. Monopolies are nothing more than barely perceptible germs. 2) After the crisis of 1873, long period of development of the posters, but they are still an exception, they are not yet solid, they still represent a passing phenomenon 3) The rise of the end of the 19th century and the crisis of 1900-1903: the posters become one of the bases of life economic capitalism has been transformed into imperialism" (12)
That is to say, the Monopolies, as we saw, although they arise from 1860, they become the predominant Form of Accumulation only from the beginning of the XX century. The structure they presented turned out to be complex, due to the fact that, although they dominated a branch of production, they are combined companies that concentrated several branches within them based on the dominance they acquired over one of them. This is how Lenin explains it: "An extremely important feature of capitalism, which has reached its highest degree of development, is the so-called combination, that is, the coming together, in a single enterprise, of different branches of industry that represent themselves or successive phases of the elaboration of a raw material... or different branches that play an auxiliary role in relation to each other ..." (13)
But although the Monopolies are combined companies, we must not lose sight of the fact that the combination is at the service of the domain of a branch of production. For example, taking the metallurgical branch, its cartelization is based on the fact that the group of unionized companies agrees on the distribution and advances in the control of commercial companies; agrees on production goals and advances in the control of companies that provide raw materials, machinery and inputs; agrees loans and credits and advances in the control of the banks. That is, the cartel incorporates into its structure companies from various branches of production, but at the service of controlling a branch. That is why we define monopolies as a group of companies that establish agreements to dominate a branch of production in a country.
Among the most relevant companies, cartels and trusts of all that time, the names Carnegie Steel & Co. stand out. which later gave rise to United Steel & Co., Standard Oil, First National Bank, AT&T, General Electric Co., General Motors Co., Westinghouse, Kuhn, Loeb & Co., Western Union, Polaroid Co., Ford Motors & Co. and the National City Bank. In Germany Krupp, Scheneider, Skoda, Thyssen, Siemens, Gelsenkirchener, Bayer, Deutsche Bank, IG Farben, BASF, Hoechst, etc, among others.
Monopolies tended to be international because of the existence of the capitalist world market, but the scope of their international domination of the branches of production, trade and finance at the beginning of the 20th century was still very limited. Some of them had branches in other countries, in the oil industry for example, and attempted operations for their global expansion. But its world dominance did not achieve the dimensions that it did achieve, as we will see, the Multinationals in the postwar period or the Multinational Corporations from 1980 and 1990, which are superior monopolistic forms.
Stages of Emergence, Peak, and Depletion of Monopolies
The emergence and development of monopolies from 1860 allowed a development and expansion of capitalism for several decades, which was crossed by crises between the years 1873, 1893 and 1907. First, the crisis of 1873, a true international crisis that began with the The crash of the Vienna Stock Exchange on May 9, 1873, swept across Europe and struck the United States with the bankruptcy of the Philadelphia Bank Jay Cooke & Co on September 18, 1873. This was a systemic economic crisis of capitalism that plowed through continents and marked the beginning of a harsh economic depression of global scope, which lasted until 1879.
As Lenin indicates in "Imperialism" this crisis expressed the stage of full development of the monopolies. A new crisis broke out in 1893 after which the economy entered a serious depression, it was also a world crisis linked to the investments of the Baring House in Argentina, the financial panic in the United Kingdom and the fall of trade in Europe. In the United States it caused a series of bank failures, followed by the bankruptcies of the Northern Pacific Railway companies, UP, in addition to more than 15,000 companies and 500 banks.
From left to right: Friederich Bayer owner of the German monopoly Bayer, Friederich Alfred Krupp owner of the German monopoly Krupp, John Davison Rockefeller owner of the US Standard Oil monopoly, John Pierpont Morgan owner of the US Morgan monopoly
In 1907 a new crisis occurred called "The financial panic of 1907". This financial crisis took place in the United States when the New York Stock Exchange fell about 51% from its peak the previous year, and spread across the country when many national and local banks and businesses went bankrupt. Both the crisis of 1873 and that of 1893 were part of the process of expansion and growth itself, of the rise and rise of Monopolies. On the other hand, the crisis of 1907 already expressed the certain exhaustion in the process of capital accumulation caused by the monopolies.
The crisis was so serious that it exposed the non-existence of a central bank in the US that could help and bring order to a crisis. This prompted officials to establish the creation of a Central Bank in the US, for which a National Monetary Commission of Congress was created under the responsibility of Senator Nelson Aldrich who traveled to Europe to advise on the necessary requirements to create the Bank. Central, and then met in 1910, at the famous secret meeting at the "Jekyll Hunt Club" on Georgia's Jekyll Island, in which A. Andrew Platt, Paul Warburg and Frank Vanderlip of the Kuhn-Loeb & Co. conglomerate participated, with Henry Davidson, Benjamin Strong, and Charies Norton of the JP Morgan conglomerate.
This is how the US Central Bank, called the Federal Reserve (Fed), arose under the control of the monopolies. The Federal Reserve Bill passed Congress in 1913 and President Woodrow Wilson signed the bill, allowing Paul Warburg of Kuhn-Loeb & Co. to become the first governor of the Federal Reserve Board of Directors. JP Morgan's Benjamin Strong to become the first governor of the Fed's New York branch, the strongest and most influential branch of the US central bank.
The world economy, with ups and downs, began to go through a period of decline and stagnation that led to the crash of '29. This process of stagnation of capitalism occurred as a consequence of the depletion of monopolies as a Form of Accumulation. Why did the cartels and trusts deplete? Because to the extent that they took control of the economy, the monopolies sharpened to the extreme all the contradictions of capitalism.
In the first place, because by realizing the concentration and centralization of capital in the different branches of production, they sharpened the contradictions between the social nature of production and the individual nature of the appropriation of the wealth produced. The socially produced wealth was concentrated in a few hands, those of the monopoly owners, to a much greater extent than what capitalism had done in the industrial period, in which it developed the exploitation of child and female labor and they were thrown growing masses of workers to misery and poverty, which crowded into large cities and large cities.
The monopolies brutally exacerbated those already existing social inequalities, not only due to the extreme social differentiation between rich and poor, but also due to tensions and confrontations within the capitalist class itself, a product of which economic concentration also led to bankruptcy and disappearance of sectors of minor capitalists, at the hands of the most powerful trusts and cartels. Widespread poverty and the decline of the middle classes of the population, aggravated by monopolies, caused a drop in consumption and a general slowdown in the economy. Secondly, the monopolies sharpened the contradiction between the global character of production and the national states because they came to dominate branches of production and trade on a country scale, at the same time that they tended to develop internationally.
As they began to dispute the world market, brutal fights broke out between them over markets, which was the basis of both the 1st and 2nd world wars. These contradictions showed the limitations of the cartels and trusts to achieve domination of the branches of world production and trade. The wars were clashes and confrontations between the imperialist states, to settle which of those states would impose their monopolies, and in turn the clear sign that the monopoly as a form of accumulation had entered the stage of its exhaustion.
Capitalism needed a superior form of accumulation, which would leap to dominance of entire branches of production and commerce on a world scale, and that magnitude of centralization and elimination of capital and capitalists was only possible through war. This contradicts what many economists claim that state stimulus policies like Roosevelt's New Deal brought the US economy out of recession. Nothing is further from reality.
The New Deal did not lift the US economy, or the world economy, out of crisis. On the contrary, between 1937 and 1938, the economy suffered a serious relapse: "Against all the forecasts and efforts to reactivate the economy and control the stock market, restrict large operations, etc., the depression had not ended. On the contrary , from August 1937 to March 1938, there was a 50% drop in the stock market and unemployment exceeded the figure of 10 million..." (14)
The Great Depression found no solution in the measures of the capitalist governments of his time, it was not the plans of Franklin Delano Roosevelt, nor that of Edouard Daladier in France, nor Neville Chamberlain in England, nor Adolf Hitler in Germany, which brought out the economy of the crisis. For Galvao: "What put an end to the Great Depression was not the return to production for consumption, but the recourse to the means of destruction of capital released with the Second World War. Unemployment ceased to be a problem only when the Millions of workers were absorbed into the armed forces and war production." (15)
The outbreak of the Second World War in September 1939 was what began to reactivate the economy of the main capitalist countries, which invested enormous sums in military spending. It is estimated that the investment made by the states oscillated between 260,000 and 338,000 million US$ at the time, almost 4 to 5 trillion US$ today. The millionaire investments of the capitalist governments, were an enormous change in the capital investment flows from the preparation of the war budgets that supposed enormous sums for the preparation of the war conflict.
Images of World War II, from left to right: Atomic bomb on Hiroshima, children in concentration camps, Hitler and a Nazi act in Germany
These budgets involved adjustment plans that caused hardship and suffering to the masses, because they consisted of cuts in social spending and tax increases. Even so, all this was insufficient for the resources of the time, the vast majority of governments had to borrow heavily to meet the costs of the war, and the indebtedness led governments to resort to issuing money without gold backing, which which generated high inflation.
International trade had operated since 1870 with the gold standard, that is, the use of gold to settle international transactions and debts, as a "standard value", nations set the parity of their currency with this standard value. But the masses of capital necessary for the purchase of weapons far exceeded the gold reserves stored in the central banks, which pushed the governments of the capitalist powers to undertake the replacement of these fixed rates by floating rates, that is, the price of financial transactions and exchange rates were fixed by governments unilaterally, without taking into account the "gold" standard.
Contrary to what was happening in the main imperialist countries involved in the war, the neutral countries, net exporters of weapons or raw materials and food, filled their reserves with gold. For example, the US went from having 26% of the world's gold reserves in 1913 to 39% in 1918. The growing need for capital to finance war spending and the growing use of fiduciary money and paper printing without gold backing, was what caused the great hyperinflationary processes of the '20s, for example, in Germany and Austria.
The lack of a stable payment system caused the fall of world trade. The pound sterling, which had been the reference currency until then, began to be displaced by the dollar. In turn, in the field of industrial production, the needs of the war definitively introduced mass production techniques in Europe, as well as numerous other improvements in the organizational techniques of industry.
There was also the development of advertising and the rapid expansion of the advertising and propaganda poster as a means of communication. Large amounts of money were allocated to the research and development of all kinds of weapons and as a result, the chemical industry advanced remarkably. The need for soldiers, as well as their massive death already during the course of the war, left an industry in full expansion without manpower, a fact that led to the appearance of women in heavy industry, which came to be more than 40 % of the total composition of workers, and gave a formidable boost to the movement to demand equal rights for women.
Capitalism thus began the path out of the crisis that began in 1907, which had suffered a sharp peak in 1929, through a colossal development of the arms industry, that is, a colossal development of the destructive forces of humanity. The Second World War involved more than 100 million mobilized soldiers, equivalent to almost the entire US population at the time; it also implied the destruction of cities, infrastructure, concentration camps and the Holocaust. Also the 2nd war meant for the first time the use of nuclear weapons in a military conflict, and the final result was around 70 million victims between dead and wounded.
After six years of war, a large part of Europe was devastated because the fighting had taken place practically throughout its geography, covering an area much larger than that affected in the First World War. Because of the aerial bombardments, the cities were badly damaged and the industrial areas that had been the main targets of these bombardments were also badly damaged. Berlin and Warsaw were reduced to mountains of rubble; London and Rotterdam were badly destroyed, the economic structure of the continent, which for centuries was the center of the development of capitalism, was reduced to ruins, with millions of people destitute.
In 1944 famine broke out, the product of the general devastation of agriculture that caused a wave of famine first in the Netherlands and then throughout Europe, aggravated by the harsh winter of 1946-1947 in the northeast. After the war, the threat of death from hunger was a reality for millions of people, food shortage was one of the most serious problems, and the situation became especially worrying in Germany, because between the years 1946-1947 the daily consumption average, it was only 1,800 calories per person, an insufficient amount to maintain good health in the long term.
The lack of coal, whose reserves dwindled enormously after the winter of 1946-47, also aggravated. In German homes, without heating of any kind, hundreds of people died of cold, railways, bridges and roads, which had been the main target of aerial bombardments, were destroyed. The cargo ships had been sunk, the small municipalities due to the lack of transport networks were practically isolated, physically and economically.
Product of the lack of growth of the economies, the high rates of unemployment and the scarcity of food, strikes and revolts followed one another in all the countries, revolutionary movements that questioned capitalism. Two years after the end of the war, the economies still had not reached pre-war levels, agricultural production was 83% of what it had been in 1938, industrial production was 88% and exports only 59%. The Second World War was the end of an economic period of capitalism marked by crisis, stagnation, and paralysis. But after the war in 1945, capitalism resumed its march and entered an opposite period, that of enormous growth at high rates for almost 30 years, known as the postwar "boom ." How did capitalism get out of the crisis of '29 and go from there to the "boom"? What changes occurred in the world economy that made this possible?
One of the elements that allowed this change was the emergence of the Multinationals, a monopoly Capitalist Form of Accumulation superior to the monopolies, which contains, and overcomes them. After the 2nd war, fundamental changes took place in the world capitalist system, which in addition to allowing the "boom", meant the need to advance in updating Lenin's Theory of Imperialism. The arrival of the Multinationals at the center of the world capitalist economy, the analysis of the Multinationals and the changes operated in the capitalist-imperialist system are the subject of analysis in the following chapter.
(1) Daniel Campos. The End of the Corporations. Amazon. 2012
(2) and (3) Karl Marx: Capital, First Book, chap. XXIII, The general law of capitalist accumulation
(4) Federico Engels: Supplement and Complement to Book III of Capital
(5), (6), (7) and (8) Karl Marx: Capital, Book III chapter XV
(9) Federico Engels: Supplement and Complement to Book III of Capital
(10) (11), (12), and (13) Lenin. Imperialism, Superior Phase of Capitalism. (1916)
(9), (10), (11), (12), and (13) Federico Engels: Supplement and Supplement to Book III of Capital
(14) and (15) João Henrique Galvão, Brazil "The historical significance of the crisis of '29"
III- The Multinationals
From left to right: The multinational ESSO, the multinational Ford, the multinational General Electric, and the multinational McDonalds
Talking about Imperialism in the 20th century is talking about Multinationals. We are going to analyze them now, locating them as a Monopoly Form of Accumulation of the imperialist bourgeoisie, which at the time that Lenin writes "Imperialism" are companies that did not have a determining weight and existence in the capitalist economy, as the Monopolies did. However, we will analyze how monopolies emerge and displace themselves from the center of the economic life of capitalism, and the implications that this has for the Theory of Imperialism. As we have seen, after the Second World War, all imperialisms emerged destroyed and it was only the US, with its extraordinary development of the productive forces, who was in a position to take command of the world economy. This materialized with the implementation of the Marshall Plan that produced a change in capitalism: modern Multinationals displaced Monopolies from the center of the world economy.
What are the differences between Multinationals and Monopolies? As we have seen, Monopolies are essentially cartels and trusts, unions or leagues of companies that dominate a branch of production in a country. Multinationals, on the other hand, dominate a branch on a global scale. They are not a league of companies, they are a single company that dominates a branch on a world scale, while the monopolies dominate a branch in a country. That is to say, the Multinationals meant a qualitative leap in the process of monopolization of capitalism.
Being a company that dominates branches of production, trade and finance on a global scale, the Multinationals constituted a superior form of accumulation, which contained and surpassed the monopolies. The Marshall Plan, the economic assistance to Europe, by the United States established after the Second World War, was not a disinterested measure but with it the United States sought to extend its monopolies and finance military bases abroad to consolidate its world dominance. The US monopolies took advantage of the formidable business of the capitalist reconstruction of Europe to massively export their goods, promote economic recovery and at the same time establish themselves there, using Europe as a bridgehead for their global expansion .
As Peter Dicken puts it: "It is not surprising that at the forefront of the postwar expansion were corporate America, which drew on the unprecedented might of its domestic economy, its technological superiority, and its vast reserves of investment capital. In 1960, the United States accounted for almost 50% of foreign direct investment in the world (the share of England was 18%, and that of Germany and Japan a meager 1.2% and 0.7%"...) (1) For Noam Chomsky:"...The Marshall Plan "created the framework for the investment of large amounts of American money in Europe, laying the foundation for modern multinationals...As Reagan's Commerce Department later explained, the Marshall Plan "prepared the stage for large amounts of direct private investment in Europe from the United States", laying the groundwork for the Transnational Corporations that increasingly dominate the world economy" (2)
In other words, with the contribution of the North American state to Europe, the US monopolies were transformed into multinationals. A good example is the car-producing monopoly Ford, from the United States, which created an organization throughout Europe as early as 1967. The mutation of monopolies into modern multinationals is the fundamental, structural change, in the productive field, of the division international labor and trade, which develops in capitalism, from which the Keynesian Regime of Capitalist Accumulation is also established.
Thus, the capitalist system adopted the physiognomy that we know today, as Nahuel Moreno pointed out: "... The fact that I want to point out is the emergence of transnationals ... This is a new phenomenon. Until the 2nd World War, no monopoly It had branches ... with the exception of the oil companies ... that is to say, they are companies that have ten, twenty companies in different countries and all are coordinated and work together." (3)
Lenin had pointed out that monopolies are national entities, but that they tend to spread internationally. Thirty years later, and after the great imperialist conflagration of World War II, the US imposed its monopolies globally. Thus, the 2nd war allowed capitalism to go from a lower form of accumulation and concentration of capital to a higher one, since monopolies such as General Electric, Ford, Coca Cola, etc., which had managed to dominate a branch of production in the US. Through a complex process of mergers and acquisitions, the US became a single global company, with a strongly centralized command.
The internal structure of multinationals
The internal structure of Multinationals differs substantially from that of Monopolies. The Board of Shareholders of the Multinationals are no longer organizations that enter into complex negotiations within the syndicate of companies to agree production and marketing goals as in cartels and trusts. For the period 1945/47, the US multinationals are a single command, which imposes production and marketing goals, counting in its favor that it has an immense world market with almost no limits and no competition, because the monopolies of others imperialist countries are destroyed after the 2nd world war, and therefore, at an economic and financial disadvantage.
Secondly, in the years 1946/47 the directorates of the US multinationals imposed production and marketing goals, counting in their favor the existence of a very high rate of exploitation as a result of the deteriorated living conditions of the masses of Europe and The USA also had a political agreement, Yalta and Potsdam, which guaranteed their investment and implantation because it acted as a political shield against riots or revolutions that could have expropriated them or harmed their interest in obtaining profits.
From left to right: The signing of the Marshall Plan, advertising posters for the Marshall plan in ruined Berlin, advertising poster for the Marshall Plan, advertising poster for Coca Cola in post-war Paris
The political and economic conditions of the 1945/46 situation were more than favorable to dominate the world market. The directory of companies of the Multinationals is a centralized command, which in turn leads to production and marketing units in different countries, in which it has branches and can plan the development of production with an international division of labor within the company.
Multinationals can manufacture different parts of the merchandise and assemble them in different nations, calculating in advance their benefits according to the exploitation conditions that they obtain by negotiating with different governments. In other words, from the point of view of capital accumulation and the supreme objective of capitalism, which is profit, multinationals are a form of capital accumulation that is qualitatively superior to cartels and trusts, the monopolies that emerged in the 19th century.
These new forms of accumulation were found in 1946/47 with the enormous possibilities of super-exploitation of workers in Europe and the US, with the Yalta and Potsdam agreements, and with the investments of the US imperialist state, which puts money to provide all the infrastructure, transportation, routes, bridges, supplies, etc., everything necessary for its development. What more can a capitalist ask for? That is to say, the transformation of the US monopolies into multinationals, and the existence of these companies as the predominant Form of Accumulation, is the most important, structural explanation of the changes that occur in capitalism after the Second World War. The establishment of US hegemony, the Keynesian regime and multinationals are the 3 elements that explain the "boom" postwar period and the historical rates of growth, investment and production achieved since 1945.
US hegemony, and dominance of the world economy
After the Second World War, US imperialism imposed its world hegemony, as explained by Nahuel Moreno: "... All the old existing colonial empires came out completely destroyed from the war ... From the postwar period, all the The capitalist world, including the imperialist countries, has to accept US leadership and dominance ... The logical anti-imperialist friction cannot change this situation, US hegemony is imposed on the capitalist world and its leadership" (4)
The growth of US hegemony was a trend in the economy and in the global political situation of capitalism that had been developing for several decades. Leon Trotsky had already anticipated this trend in the structure of the world capitalist system in 1926, which changed completely after 1945 : "In recent years, the economic axis of the world has shifted considerably. Relations between the United States and Europe have radically modified ... this evolution was prepared from ancient times; there were symptoms that indicated it, but it has only recently become an accomplished fact, and now we are trying to realize this formidable change effected in the human economy and, consequently, in human culture ... the US owns the capitalist world." (5)
In 1945, in the midst of a world in ruins after World War II, the US economy accounted for one third of all export operations in the world, held two thirds of all existing gold reserves, and it was the producer of 50% of all the merchandise in the world market of manufactured goods. The hegemony and colossal development of the productive forces of the United States was the lifeline that the postwar capitalist economy found to emerge from the crisis, and the lever to rebuild capitalism.
From the Marshall Plan, senile capitalism emerged from the 2nd world war functioning in a peculiar way, an uneven and combinedly developed phase of the world economy, which we call the Keynesian regime of accumulation. This Accumulation Regime was a historically given form of operation of the capitalist system or economic formation, also known as the "welfare state", consisting of high wages, full employment, economic concessions to the masses, social conquests and increases in social wages, plans of public works and a great process of industrialization imitating aspects of the model imposed by Roosevelt in the US as a response to the crack of '29.
The Keynesian regime began in the '40s, developed in the '50s, '60s and petered out in the '70s, having the automobile and war industries as a pole of accumulation. How and why did the Keynesian regime emerge? To understand the political reasons that gave rise to the Keynesian regime, we must go back a few years and analyze the responses that capitalism had to the crisis of '29. From the political point of view, capitalism had two responses to the crisis of '29, at that time the most serious of the capitalist system. In the US the response was the New Deal, while in Germany it was the Nazi regime.
Both political regimes, although diametrically opposed, had as a common denominator that they sought to respond to the global crisis. While the New Deal sought a way out of the crisis through agreements and maneuvers against the workers and their organizations, the Nazi regime, on the other hand, through the crushing of the workers and their organizations, with concentration camps where the most advanced methods of production were tested. aberrations with the aim of optimizing the profits of monopolies and large companies.
The Nazi regime obeyed the defeat of the workers' revolution in Germany, while in the US the New Deal was a defensive regime of the US bourgeoisie, the product of the resistance of the working class that the big companies had not been able to break. This is how Leon Trotsky explained it: "Currently there are two systems that compete in the world to save capital...: they are Fascism and the New Deal (New Pact). Fascism bases its program on the dissolution of labor organizations, on the destruction of social reforms and the complete annihilation of democratic rights...The politics of the New Deal, which tries to save imperialist democracy...is only accessible in its great breadth to the truly wealthy nations, and in In this sense it is an American policy par excellence". (6)
Another common denominator between both political regimes was Wall Street . Large US corporations, monopolies and bankers fueled the war industry to relaunch the economy in both Germany and the US and financed Hitler's rise to power. Wall Street financed the development of the industrial arms monopoly IGFarben, which was the basis of the power of the Nazi war machine.
This is how Antony C. Sutton explains it "Without the support of the German industrial cartel IG Farben, Hitler would have remained an obscure historical note... Without the capital supplied by Wall Street, there would have been no IG Farben in the first place, and almost with most certainly no Adolf Hitler...The Farben industrial cartel was created by 3 Wall Street corporations: Dillon, Read & Co., Harris, Forbes & Co., and National City The Duponts, Standard Oil, International Harvester, General Motors and Ford, which were companies controlled by JP Morgan, had facilitated the rearmament of Germany...companies such as International Telephone and Telegraph (ITT), General Electric, International Business Machines (IBM), Alcoa and Dow Chemical also were involved..." (7)
Toby Rogers, a journalist for The Guardian, published in September 2004 on the history of the Bush family: "Former President George W. Bush's grandfather, Senator Prescott Bush, was a director and shareholder of companies that benefited from their relationship commercial with the financiers of Nazi Germany...During the decades of the public life of the Bush family, the North American press has worked hard to ignore a historical fact - that through the Union Banking Corporation (UBC) , Prescott Bush, and his brother-in-law, George Herbert Walker, together with the German businessman Fritz Thyssen, financed Adolf Hitler before and during World War II" (8)
The Nazis and the Nazi regime were crushed in the war by the allied armies, product of a formidable mobilization of the European masses, with which they disappeared as a possible alternative to capitalism. Meanwhile, the Keynesian regime developed in the US, taking advantage of the low wages and unemployment of the working class after the depression and relied on new technologies that allowed the development of mass production for mass consumption. The boost to the war industry made it possible to massively export tanks, planes and weapons to the allied states and to develop "the military-industrial complex " that became an important accumulation pole of the Keynesian regime in that period. But from the years 1945-47, to the extent that the US imposed its hegemony in the world capitalist economy, this way of functioning of capitalism was established on an international scale.
In order for the US to impose the Keynesian regime on the entire world, it first had to establish international agreements with the retreating powers, such as England, and fundamentally, it had to agree with Stalin and the Communist Party of the Soviet Union. It would have been impossible for the US to start the round of investments that the Marshall Plan entailed, without previously agreeing with Stalin and the CPSU of the Soviet Union, given that during the war and at the end of it, great revolutionary processes were taking place in Europe, first to defeat the Nazis and liberate the countries from Nazi-fascism, and later, to face the general post-war hunger and misery.
Processes such as the maqui resistance in France, or the partisans in Italy and Yugoslavia had allowed the workers to have power in their hands in France and Italy after the Second World War and the Red Army had taken control of Berlin and liberated the East of Europe. Communist militants had been part of the leadership and spearheaded the resistance and defeat of the Nazis in most European countries. An order from the Kremlin was enough for Europe to become socialist, and the main economies of the world such as France, Germany and Italy, would become Workers' States, which would have completely changed the destiny of humanity.
But the government of the USSR, led by Stalin and the Stalinist bureaucracy that led the victory against the Nazis, decided to come to an agreement with the allied powers, the United States and Great Britain, and start the capitalist reconstruction of Europe. This constituted one of the greatest betrayals of the world proletariat and the international socialist revolution on the part of Stalin and the bureaucracy that led the USSR. Stalin agreed with Churchill, representative of the old English imperialism in retreat until then, exercising the leadership of the world capitalist economy, and Roosevelt, the president of the United States, representative of the emerging imperialist power.
This is how the so-called "World Order" was born with the Yalta and Potsdam agreements. As Nahuel Moreno put it: "... a front is established... between imperialism and the Kremlin bureaucracy, on the basis of peaceful coexistence, materialized in Yalta, Potsdam and the new world order: the UN, the distribution of influence zones...Although the "cold war" and deep friction take place...they generally act in agreement and defend this new world order... Stalin and Roosevelt divide the world into two blocs controlled by North American imperialism and the Kremlin with the aim of stopping, diverting, crushing or controlling the workers' revolution in the world". (9)
After the international agreements of Yalta and Potsdam from the year 1947, the "Marshall Plan" was launched in Europe, through which the US invested millions of dollars, which allowed the reconstruction of the world economy, taking advantage of the massive liquidation of productive forces, famine, the brutal unemployment and low wages of the proletariat and the European masses after the war. We insist that the US was able to implement the Marshall Plan because after World War II its economy accounted for one third of all world exports, had two thirds of the gold reserves and produced half of all manufactured goods.
Yalta Summit: Winston Churchill, Franklin Roosevelt, Joseph Stalin, February 1945. Potsdam Conference: Clement Attlee, Harry Truman Joseph Stalin at the Potsdam Conference, July 1945
After the launch of the Marshall Plan, the world capitalist economy experienced growth at historic rates for several decades. The possibilities of obtaining a high rate of exploitation for the capitalist companies, product of the brutal reduction in the conditions of life, work and wages that had been consolidated with the war, among the masses of Europe, turned out to be a magnet for investments and the capitalist governments of Europe used these "comparative advantages" to their advantage to attract them.
The Keynesian Accumulation Regime allowed the "boom" of the world economy, with historical growth rates for several decades. This was the economic basis of the enormous social conquests achieved by the masses in the US, Europe, Japan and some backward countries. The "boom" gave stability to the political situation of the imperialist countries, based above all on the important public works plans for the reconstruction of Europe and Japan, whose infrastructure had been seriously destroyed by the war.
In the "boom", the world economy reached very important growth peaks, in Great Britain a rate of 17.5%, in the USA a peak of 17.7% in 1950 and 17.0% in 1969. In Japan a peak of 36.5% in 1969, while in Germany and the rest of Europe the economy reached growth rates of 19% in 1968 (10) Toyotism and Taylorism became basic techniques of the technological pole, to increase labor productivity and both trade and the international division of labor were structured around the US-European axis.
The exploitation of the proletariats of both regions placed them at the center of the world economy and consolidated the Atlantic as the center of world trade. Regarding financial capital, the Keynesian regime was characterized by a strong repression of speculative capital with the enactment of the Glass-Steagall Act in 1933, the Robinson-Patman Act in 1936, and the Miller-Tydings Act in 1937, which were combined with previous ones such as the anti-monopoly Sherman of 1890 and Clayton of 1914. These laws sought to separate deposit and investment banking, stop large chains, unfair competition and veto the participation of bankers in company councils. The anti-trust legislation of the US Keynesian regime repressed the speculative capital that was located in the City of London. Anyway, big US companies.
We already have the general picture of the Keynesian Regime. Its success was based on the super-exploitation of the workers of the United States and Europe, the largest, most concentrated and culturally important proletariats in the world, whose wages and living conditions were greatly deteriorated by the crisis of the '30s and war. The "German miracle", for example, was the product of US investments taking advantage of the brutal reduction in the standard of living of the proletariat, achieved among others by Hitler and his concentration camps, as well as by the division of Germany, and its working class, the most powerful in Europe, which facilitated the exploitation of the German working class.
The name of the plan went down in history due to the surname of the US Secretary of State, George Marshall, who participated in the Yalta and Potsdam summits, and was the inspiration for the model, together with the English economist Lord Keynes. US hegemony was made clear in the way world trade was restored after the war, under conditions imposed by Washington. In July 1944, a new international monetary system was established at the Bretton Woods International Conference, which established agreements to replace the international monetary system, of floating rates that was imposed after the Great Depression of the '30s for war expenses.
The main objective of the new adopted financial system was to return to the fixed convertibility of currencies tied to the gold standard and Bretton Woods established the dollar as the standard currency of the international monetary, commercial and financial system, backed by the gold that was stored in the Federal Reserve of The US Together with the dollar-gold parity, the creation of the International Monetary Fund (IMF), the World Bank (WB) and the International Bank for Reconstruction and Development (BIRF) was agreed to regulate the newly created system.
Rise, Peak and Exhaustion Phases of Multinationals
Like all Forms of Accumulation, the Multinationals sharpened all the contradictions of capitalism. We must not forget for a moment two key elements in the transition from the predominance of Monopolies to the predominance of Multinationals. The first is that both the US hegemony, the Keynesian Accumulation Regime and the Multinationals are the product of the brutal destruction of productive forces that the Second World War entailed. In other words, as a result of the existence of private ownership of the means of production, the entire process of centralization of capital that meant the transition from the predominance of Monopolies to the predominance of Multinationals, was carried out at a high cost for humanity.
That is to say, the overcoming of one form of accumulation by another, meant the liquidation of classes and class sectors, not only between the dominant and dominated classes, but also between the same sectors of the dominant class through wars, which meant a colossal destruction. of productive forces. When studying the transition from Monopolies to Multinationals, the economic and political laws formulated by Marxism are the ones that explain why the cost of sustaining private property meant millions of deaths for humanity, liquidation of infrastructure, and devastated productive forces.
The second element is that the post-war "boom" in no way meant that capitalism came out of its imperialist stage, of decadence. On the contrary, it occurred within that stage indicated by Lenin, so that the Multinationals are a monopolistic Form of Accumulation and, like the Monopolies that emerged in the 19th century, they are Forms of Accumulation of the imperialist stage of capitalism. This is of fundamental importance to understand why the postwar "boom" ended up aggravating the crisis of capitalism.
The development of the predominance of the Multinationals did not act by resolving the historical crisis of the capitalist system, but on the contrary, it aggravated it and opened a huge crisis in capitalism at the end of the 1960s. Let's see how it came about. With the reconstruction of Europe and the "boom", the multinationals as a Form of Accumulation became general to the extent that the imperialisms that had been destroyed in the war were recovered, England, Germany, Japan, France, etc., they also developed in this way, their own multinationals.
Fall in the rate of profit in the main imperialist economies between 1950 and 2000. Source "The boom and the bubble" Robert Brenner
The Multinationals first aggravated the contradiction between the global nature of production and the national states. For Nahuel Moreno: "... More than ever, the transnational responds to the law of monopoly, that is, it needs the national state ... There are trends and semi-Marxists who say that they are colossal because they are inevitably going to destroy the nation states ... then they are going to unify Europe, and then Europe with the US, and then the US with Japan, and then we go to the famous empire made by the transnationals ... That's a lie, the transnationals sharpen the competition between them, it is increasingly brutal ..." (11)
The other contradiction that the multinationals exacerbated to the extreme is the one between the social nature of production and individual appropriation, given that in the field of wealth accumulation in a few hands, the multinationals caused an unprecedented process of capital accumulation. This is how Nahuel Moreno explained it: "The process of internationalization of the economy and its centralization of US imperialism and the great international monopolies - the "transnationals" -, added to the speed of communications, allows a dizzying pace of obtaining surplus value, distribution of profit and accumulation and over accumulation of capital. This same rhythm accelerates the crisis of the imperialist economy". (12)
In other words, being a superior Form of Accumulation, the multinationals achieved an unprecedented Accumulation and accumulation of capital, much higher than that achieved by the Monopolies. But at the same time, the accelerated process of over-accumulation aggravated and sharpened the fall in the rate of profit. How did this come about? This is how Moreno explains it: "Each enormous increase in the mass of surplus value recovers the rate of profit and makes it possible to overcome the conjunctural crisis. But it prepares a greater crisis: by colossally increasing capital, there is an excess accumulation of capital, which seeks investments where make profits; and since the mass of surplus value remains the same and the capital has increased, the rate of profit falls abruptly, originating a new conjunctural crisis" (13)
The enormous over-accumulation of capital that the multinationals implied, acted by collapsing the rate of profit and forced the capitalists to seek ever higher rates of exploitation to sustain the equivalent of the magnitude of capital they accumulated. By not achieving a higher rate of exploitation among the masses of Europe and the US, the enormous fortunes and capital accumulated by the capitalists with the Multinationals acted to collapse the rate of profit and aggravated the crisis of capitalism.
This is explained because that same accumulated capital requires more and more and more exploitation to maintain the rate of profit. This caused the outbreak of the chronic crisis of the world economy, which developed with recessive peaks that began to follow one another, without capitalism being able to overcome it.
As Nahuel Moreno explained: "The ultimate key to begin to understand all the phenomena that have occurred in the international arena since the late 1960s is the chronic crisis that the world economy has been dragging down since that time...it is constantly deepening and has caused crises approximately every five years. increasingly intense conjunctural... The chronic crisis has been advancing from the periphery to the center. This is a law that has been in place, at least, since 1966 -we believe that in all of this post-war period...it has had three peaks or crises acute conjunctural The first of 1966-67, led to a fall in the rate of profit and North American production... The second crisis occurred between 1973 and 1975 and affected all the capitalist and imperialist countries. The third was born in 1979 and was also generalized to the entire world economy..."(14)
These recessive peaks occurred because the fall in the rate of profit was greater and greater and capitalism found it increasingly difficult to overcome the crises derived from its fall. Between 1970 and 1990 the rate of profit of factories in the G7 economies it fell 40% compared to the period 1950/70. By 1990, the rate of profit fell 27% in relation to 1973 and close to 45% in relation to its maximum level of 1965 (15)
The recovery of the world economy after the war contradictorily weakened the US economy: "... it had suffered a first stagnation in the second half of the '50s. Between '61 and '66 the GDP grew at an annual average of 2.3%, well below the averages of 6.1 between 1931 and 1950, or 5.2% between 1950 and 1955" (16) With multinationals, the entire process of accumulation and over accumulation of capital and its speed changed qualitatively, as a result of the increase and speed in the accumulation of capital that they achieved.
This accelerated the rate of decline in profit rates and thus also qualitatively accelerated the rate of the crisis of capitalism. This aggravation of the contradictions of capitalism opened a dynamic that led the Keynesian regime to its exhaustion and end. In turn, the depletion of the Keynesian Regime expressed the depletion of the Multinationals as a Form of Accumulation, which developed from the years '66/'67 to the '80s, the decade in which the new Forms of Accumulation that are the Corporations emerged. multinationals.
Transition from Multinationals to the Global Corporations
In the exhaustion phase of the Multinationals and the Keynesian Accumulation Regime, the trade and exchange relations of the Bretton Woods agreement, agreed upon during the Yalta and Potsdam agreements, exploded. In 1971, the US gold reserves barely reached a quarter of its total official debts and the Nixon government launched a coup by proclaiming the free convertibility of the dollar. He did it by signing the Smithsonian Agreement by which he devalued the dollar by 7.89% in relation to gold, and thus made US debts and merchandise cheaper to strengthen US products in the world market.
In February '73, the dollar devalued another 10%. Europe and Japan also abandoned the gold parity of their currencies and thus brought an end to Bretton Woods. In relation to exchange relations, the world capitalist system returned to floating rates, with which inflation began to grow, beginning a long inflationary stage that began to rise and destroy post-war agreements and wages. World inflation worsened with the oil crisis of the years '74-'75, which pushed up the prices of crude oil and raw materials throughout the world. Faced with the crisis of the Keynesian regime, capitalism, which needed high rates of exploitation to reverse the crisis, increasingly aggressively directed its capital to the Third World, where conditions of exploitation began to be superior to those existing in Europe and the United States.
But in the Third World, after the Second World War, an enormous series of revolutionary processes, wars and convulsions had developed, product of the crisis of the old colonial powers France, England, Japan, and Germany. These declining imperialisms had dominated those regions, but they emerged destroyed from the Second War, which had weakened the chain of their colonial rule. This produced a spectacular process of national liberation and the emergence of new nations in the former colonies, a process in which the new emerging imperialism, the US, began to fulfill its role as gendarme and defender of capitalism globally.
From Algeria to Vietnam, from Korea to China, Latin America or the Middle East, there were invasions by the US armed forces and the armies of the imperialist countries to defeat these revolutionary processes. This is the fundamental difference between the postwar period and the 1st and 2nd world wars. If during the 1st and 2nd World War, the wars consisted of the confrontation between different imperialist countries, in the postwar period the wars essentially consisted of clashes between the imperialist armies with nations, peoples and revolutionary processes of the Third World countries.
As Moreno explains: " After the war, the entire capitalist world, including the imperialist countries, has to accept US leadership and domination... and the impossibility, for the moment, of new inter-imperialist wars... A stage in the character of wars is closing and a new one is beginning. The stage of inter-imperialist wars is closing and the stage of counterrevolutionary wars is entering" (17) The confrontation between the imperialist armies and the revolutionary processes From the economic point of view, it meant a spectacular development of destructive forces similar to that produced in the Second World War.
Although revolutionary processes and wars developed globally in the Third World, a fundamental epicenter was the Southeast Asian region, where the greatest process of destruction of productive forces took place. As a result of this process, a new axis of accumulation emerged in Southeast Asia, which was a key factor in the transition between the Keynesian regime and that of globalization.
During the Keynesian regime of capitalist accumulation, the accumulation axis was the US- Europe tandem. But that changed after the exhaustion of the Keynesian regime, after which the new axis of accumulation became the US-Southeast Asian Tigers. Let´s see how this change in the capitalist accumulation axis came about in the transition from the Keynesian accumulation regime to the other accumulation regime that followed it.
In Southeast Asia there was a brutal cycle of destruction of productive forces, which had begun with the atomic bombs on Hiroshima and Nagasaki and continued with the Korean War between 1950 and 1953, in which 778,000 were killed, wounded and maimed in the US side and 1,187,000 to 1,545,000 on the North Korean side, a total of 2.5 million civilians killed or wounded, 5 million left homeless, and more than 2 million refugees.
A new chapter opened in Southeast Asia with the Japanese withdrawal from Vietnam. After expelling the troops from Japan, the Vietnamese masses defeated French imperialism and declared the independence of Vietnam whose liberation war spread to Laos, Cambodia and China. To stop the revolutionary process, the US in 1964 began the invasion of Vietnam, an unequal war, where the US armed forces committed all kinds of historical horrors, violations of human rights and yet suffered a historic defeat. The triumph of the Vietnamese masses and of the world was extraordinary, but the balance of destruction of productive forces that the Vietnam War implied was chilling. In the war, 281,896 soldiers died and there were 300,000 wounded in the US military camp. For the Vietnamese people it was a true catastrophe: 5 million, one hundred thousand civilians dead, 1 million 100 thousand soldiers and guerrillas killed in combat and a minimum of 600 thousand wounded.
Images of the war in Vietnam
The US Armed Forces dropped a total of seven million tons of bombs, including a large number of chemical weapons, Napalm, bacteriological, defoliants, etc., prohibited by the 1925 Geneva Protocol. World War, all the sides in conflict unloaded a total of one million two hundred thousand tons of bombs and explosives. Vietnam exceeded almost 6 times that figure. The defoliant Agent Orange, used in US bombings until 1971, continues to contaminate the country today.
In the rest of the region, imperialism continued to perpetrate serious destruction of productive forces, as was the case in Indonesia where, with the Suharto coup with the support of the CIA, the dictatorship perpetrated massacres between 1965 and 1967 with 1.5 million dead. In Cambodia, the Stalinist dictatorship of Pol Pot between 1975 and 1979 exterminated 2 million people, almost a third of the population. In China, the failure of the economic plan called "The Great Leap Forward" produced almost 32 million deaths from famine in the midst of natural catastrophes, which gave way to mobilizations and growing discontent among the masses.
The Stalinist bureaucracy headed by Mao had barely managed to contain the rise of the masses in the Cultural Revolution, but in the face of the failure of the "Great Leap..." it feared a new outbreak. Faced with the prospect of defeat in Vietnam, the US changed its policy in Southeast Asia and relocated to the agreement with the Chinese bureaucracy, taking advantage of the crisis of the Mao government. Mao's Stalinist regime needed another plan and faced with the pressure of the masses and the Soviet bureaucracy that threatened to intervene, it agreed with the US. China promised to stop the revolution in Vietnam, in exchange for US capital and investment to revitalize the economy.
And he stuck to the deal, even invading Vietnam in '79. For Moreno: "Another colossal opportunity opened up when the Vietnamese people, supported by millions of Americans who were mobilizing against the war, defeated the US Armed Forces. Nothing was easier than extending that victory to Laos, Cambodia and the entire world." continent.... But the Maoist leadership, five years later, attacked and invaded Vietnam...Vietnam, Laos and Cambodia suffer the same or worse penalties, because of the treacherous leaderships " (18)
After the Nixon-Mao summit in December 1971, and with the guarantee of the Chinese bureaucracy to stop the revolution in Southeast Asia, capitalism launched to invest in the provinces of the maritime coast of China, where the "special zones" arose a slow process of penetration of multinationals. The process of arrival of investment, establishment of companies and capital took advantage of the non- existence of a traditional proletariat in the region, the secular famine of the peasantry and the betrayal of Beijing to the revolutionary process.
This is how the famous "Tigers" Thailand, Malaysia, Singapore, Taiwan, Hong Kong also arose, all countries with dictatorial regimes that violate the most basic democratic rights and that crush all attempts at union organization. The "Tigers" of Southeast Asia acted as a magnet for investment because they offered a "paradise" for the voracious multinationals that associated with the native bourgeoisies. This is how the new "miracles" arose , the "Japanese miracle" and the miracle of the "Tigers" of Southeast Asia, which are the product of brutal processes of destruction of productive forces in the region. From the establishment of these processes, the Japan- Southeast Asia- USA accumulation axis was established, in the transition from the Keynesian Regime to the Globalization Regime.
The restoration of capitalism in the USSR, Eastern Europe, Cuba and China
The process of destruction of productive forces also extended to the former workers' states. Between the '40s and the '70s, as a result of the defeat of the Nazis, the general crisis of the old imperialisms and the revolutionary processes in various regions of the Third World, capitalism was expropriated in the countries of Eastern Europe, China, Cuba, Vietnam, North Korea, etc. Twenty years later, starting in the 1970s, those countries began to return to capitalism, which meant the loss of important gains obtained with the revolutions.
The return of those countries to capitalism was not the product of the choice of the masses, but the product of 70 years of Stalinist policies that violently repressed the workers and the peoples. The restoration of capitalism was a formidable process of destruction of productive forces that had several milestones with millions of deaths such as the invasion of the USSR by the white army, the triumph of Stalinism with millions of deaths with dramatic events such as the Holodomor, the Nazi invasion of the USSR, the cold war, and the massacres of the uprisings in Eastern Europe. Stalin's crimes in the USSR between 1924-1953 caused the death of millions between purges, famines, forced collectivizations and ethnic cleansing of Ukrainians, Chechens, etc.
In Yugoslavia, an estimated 2 million Yugoslavs died as a result of the ferocious repression of the Tito government between 1944 and 1977. The masses of the socialist countries confronted these dictatorships, but those political revolutions that challenged the Stalinist dictatorship with the intervention of direct military action and the recourse of the troops of the ex-USSR that brutally repressed the workers of Berlin in 1953, the workers' councils of Hungary in 1956, the process in Czechoslovakia in 1968 and the multitudinous process of Solidarity in Poland in 1981. This is how historically, they were preparing the conditions for the restoration of capitalism, which cost forty or fifty million dead
The restoration of capitalism also meant a serious development of the destructive forces, as the culmination of 70 years of political betrayals by the "official world left", by Stalin, Mao, Khrushchev, Castro, Deng Xiaoping, Brezhnev and Gorbachev. The restoration of capitalism in those countries was also the product of the policy of socialism "in one country" and its systematic and permanent refusal to federate to build workers' states. His entire policy of dissolving the Third International, at the request of the capitalist powers as part of the Yalta and Potsdam agreements, made this brutal setback possible. The establishment of single- party dictatorships that perpetrated massacres and persecutions, as well as the liquidation of all opponents and revolutionary Marxists like Leon Trotsky, ended up crowning a policy of support for multinationals "from the left" and a formidable tool to give them a survival of the capitalist system.
The End of the Keynesian Regime: What Keynesian Economists Hide
The growth achieved by capitalism with the Keynesian regime was clear, those who defend it and call themselves "Keynesians" or "Neo-Keynesians" try to demonstrate that capitalism is capable of having a successful model that allows economic achievements to be granted to the masses. These same economists hide the reasons that explain why in the period between 1945/ 68 capitalism achieved the "boom". When "Keynesians" like Paul Krugman, Joseph Stiglitz and Nouriel Roubini affirm that capitalism can recreate the "Keynesian Regime" today and loudly demand economic stimuli, public works, income taxes, and affirm that with these measures can be taken out of the serious crisis opened in 2007, they simply lie. They hide that the regime inspired by Lord Keynes was possible because cities, bridges, roads, counties, municipalities and factories were previously destroyed.
Best-known neo-Keynesian economists from left to right : Joseph Stiglitz, Noriel Roubini, Paul Krugman
The Keynesian Regime of Capitalist Accumulation had as a condition prior to its development, the destruction of thousands of buildings, warehouses and transportation. And the most important, millions of human lives were destroyed, in the battlefields, in the concentration camps and with the atomic bombs. With the war, capitalism confirmed its decadence, its cruelty and its capacity to inflict serious suffering on the masses.
With the 1st and 2nd world wars, imperialism overcame the crisis through the colossal development of destructive forces and the classic mechanism that Marx called the burning or annihilation of capital. The destruction of productive forces that preceded the Keynesian regime was a formidable business for large companies and a colossal leap in the development of destructive forces with its highest expression, the war industry.
Since the outbreak of the world economic crisis, millions of people in the world, and movements such as "Occupy Wall Street", 15-O and the outraged of the world speak out against the Multinationals. Many Keynesians approach the movements and sympathize with them. Are Keynesians for or against Multinationals? When Krugman, Roubini, Stiglitz or other Keynesians start the siren song against multinationals, it is worth asking them a simple question: How did multinationals come to be? The answer is simple: from the Keynesian Regime.
Perhaps many believe those who claim the Keynesian Regime as a form of functioning of world capitalism. Perhaps they will believe when they are told that it allowed a relative development of the productive forces, high growth rates and repression of financial capital. Those decades of the "boom" they seemed to contradict the Marxist theses about the capitalist economy being in the imperialist era, of decadence and dominance of financial capital. However, the study of the Keynesian regime confirms the decadence of capitalism, because it shows that thanks to it the Multinationals arose, a form of accumulation and concentration of capital far superior to its predecessors, the Monopolies. The Keynesian was an economic regime that did not need financial capital for a short period, because it arose and developed thanks to US investments in Europe.
In other words, it had a first level investor: the US imperialist state. Multinationals and Keynesianism are complementary elements, one is the Form of Accumulation of the Keynesian Regime, the other is the Accumulation Regime of Multinationals. Keynesians' critiques of multinationals are hypocritical and a denial of the history of capitalism, not its ancient history, but its modern history. The Multinationals raised the crisis of capitalism to such a level that in order to solve it the capitalists found themselves compelled to launch increasingly brutal offensives against the masses.
This is how Nahuel Moreno explained it: "Only by achieving a permanent, practically unlimited increase in exploitation will imperialism be able to overcome the next short-term crisis or crises and the chronic crisis, since the increase of capital is incessant and vertiginous. (19) The contradictions of The Keynesian regime that evolved and worsened prepared the conditions for the end of the "boom" and the transition to a new world economic regime, diametrically opposed to the Keynesian one: Globalization.
What developed from here on was a difficult, traumatic and convulsive transition phase from the Keynesian Accumulation Regime to the Globalization Accumulation Regime, to try to resolve the contradictions and crises of capitalism. The update of Lenin's Theory of Imperialism continues with the analysis of the emergence of Global Corporations and, with them, the regime of Accumulation of the Globalization.
This is how the current capitalist crisis can be understood. For this we are going to address the study of the Global Corporations and their complex structure, the Forms of Accumulation that emerge and dethrone the Postwar Multinationals. And with them, we will analyze the Globalization Accumulation Regime that is developed in the next chapter.
(1) Peter Dicken "Multinational companies, nation states" source https://www.globalizacion.or/desarrollo
(2) Report to Noam Chomsky, https://www.ecaminos.org/leer.php/4920
(3) Nahuel Moreno. School of Economics cadres (1984)
(4) Nahuel Moreno. Update of the Transition Program. (1980)
(5) Leon Trotsky. Europe and America. The two poles of the labor movement and the finished type of reformism. 1926 The new roles of America and Europe
(6) Leon Trotsky. Fascism and the New Deal. Marxism and our time.
(7) Antony C. Sutton "Wall Street and the Rise of Hitler"
(8) Toby Rogers. The Guardian. September 2004
(9) Nahuel Moreno. Update of the Transition Program. (1980) Thesis VII "Thirty years of great revolutionary triumphs"
(10) Long wawes, institutional changes, and historical trends. Minqi Li, Feng Xia, Andong Zhu. Tsinghua University, Beijing, China
(11) Nahuel Moreno. School of Economics cadres 1984.
(12), (13) and (14) Nahuel Moreno. Thesis on the World Situation. (Project of the International Secretariat of the LIT, October 20, 1984). I. The chronic crisis of the world economy
(15) Robert Brenner "Turbulence in the world economy" Cap III The beginning of the crisis
(16) Robert Brenner "Turbulence in the world economy" Cap II The long rebound
(17) Nahuel Moreno. Update of the Transition Program. Thesis VII. Thirty years of great revolutionary triumphs
(18) and (19) Nahuel Moreno. Thesis on the world situation- International Secretariat of the LIT- CI, 10/20/84
III Global Corporations
From left to right: Global Corporations Bank of America (BofA), Credit Suisse, Goldman Sachs, JP Morgan Chase
Talking about Imperialism from the 80's of the 20th century, and in the XXI century it's talk about Global Corporations. The entire process of destruction of productive forces in the postwar period prepared the conditions to move from a lower centralization of capital, the Multinationals, to a higher one, the Global Corporations. These companies constitute a process of centralization and superior capital accumulation, which exceeds and at the same time contains the modern post-war Multinationals.
In this way, we are going to begin the analysis of the current crisis of capitalism around the emergence of Global Corporations and the Capitalist Accumulation Regime of Globalization that is constituted around them. These companies, whose name has been popularized by economists and analysts who defend capitalism as "Too Big to Fail" (in English "Too big to Fail") are the ones that explain the severity of the current crisis of capitalism. With the presentation of the Global Corporations, and the analysis of the Globalization regime, we continue the presentation of the General Law of Capitalist Forms of Accumulation (LGFAC).
Global Corporations are companies that simultaneously dominate several branches of commerce, industry and finance worldwide. If the characteristic of the modern post-war Multinationals was the dominance of a branch of production on a world scale, the Global Corporations are a superior Form of Accumulation because they monopolize several branches simultaneously, which allows them to achieve a capital accumulation superior to that achieved by the modern postwar multinationals.
The dominance over various branches of production, trade and finance achieved by Global Corporations is the product of a convulsive process of mergers and acquisitions (in English, M&A, Merger and Acquisitions), which developed increasingly from the the 80's. The colossal accumulation of capital that this new Form of Accumulation entails, caused a spectacular development of speculative and fictitious capital, which participated in the M&A process.
This over-accumulation is colossal, the largest produced by capitalism ever, currently consisting of almost 700 billion US$ in derivative financial products registered by the Bank of Basel in mid-2008, but adding other speculative businesses, it reaches a financial mass that it would be exceeding US$ 1,000 trillion, equivalent to around 10 times the world GDP. The process of centralization of capital took a gigantic leap in 20 years. By the year 2002, 200 transnationals out of 65,000 concentrated 30% of the world GDP. 91% of the 500 largest are from the US, Europe and Japan (1)
"48% (239) of the top 500 firms are American ... 31% (154) from Western Europe and only 11% (64) from Japan. Third World, Asian, African and Latin American nations , have only 4% (22)...the top 5 firms are all American: 8 of the 10 largest are American and 64% (16) of the 25 largest are also American... 28% (7 ) ... are European and 8% (2) Japanese ... at the apex of global power the American-European multinationals...have no rivals" (2)
The M&A are buying and selling of companies, commercial movements that express deep clashes between sectors of the imperialist bourgeoisie among themselves, with sectors of the bourgeois class of backward countries and the workers and peoples of the world. The strongest sectors liquidate the weakest, as part of a hard and stark battle for control of markets and capital. Fictitious capital in the period 2000-2009 took a monumental leap and grew 10 times from US$95 trillion to US$1000 trillion.
Fictitious capital is a concept used for the first time by Marx, when he referred to loan securities whose value is imaginary and illusory and only materializes when they are exchanged for money or goods. The credit created by banks is the creation of fictitious capital because they make available money that they do not have: "...Not only are most of the bank's assets fictitious, since it is made up of titles and this kind of wealth in imaginary money...As the interest-bearing capital and credit system developed, all capital seems to double and sometimes treble...Most of this "money-capital" is purely fictitious.All deposits except the trust fund reserve, are nothing more than balances held by the banker, but they never exist on deposit." (3)
The exponential development of fictitious capital represented by Global Corporations has caused capital of diverse origins, from tax havens and organized crime, to rotate and circulate in an increasingly accelerated and convulsive manner, which causes serious turbulence and imbalances in the economy. Mega mergers and the M&A process is neither natural nor spontaneous. Clinton signed the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act, and Depression-era antitrust legislation to facilitate the pooling of capital. The complex structure of the Global Corporations that emerge from the M&A process can be analyzed by looking at the case of several of them.
Let's see, for example, the JP Morgan Chase Investment Bank, which emerged in the year 2000 from the merger of the large economic groups Chase and Morgan, two traditional and aristocratic groups in the US, the House of Rockefeller and the House of Morgan. JP Morgan Chase includes shares of 78 companies from 11 countries from the most diverse branches of production and commerce. This structure of the Multinational Corporations, which dominate several branches of production, trade and finance simultaneously that we observe when analyzing JP Morgan Chase, is the same structure that we can observe when analyzing other Corporations such as Goldman Sachs, BNP Paribas, UBS, Barclays, Dexia, BofA, etc., which are Multinational Corporations, because they dominate several branches on a global scale simultaneously.
Investment banks are the heart of Global Corporations
The complex structure of the Global Corporations is explained by the location of the Investment Banks, which concentrate their activity on the control of the immense masses of capital that M&A implies. Lenin anticipated the importance of banks in the process of concentration and centralization of capital: "... By keeping a current account for several capitalists, the bank, it seems, performs a purely technical operation... But when this operation grows in gigantic proportions, it turns out that a handful of monopolists subordinates the commercial and industrial operations of the entire capitalist society..." (4)
Investment Banks should not be confused with commercial banks, because although linked, they are absolutely different. While commercial banks specialize in credit for companies and individuals for the purchase of all kinds of merchandise, Investment Banks specialize in credit for the purchase and repurchase of exclusive merchandise: companies. Investment Banks buy and sell parts of multinationals and large companies, through the issuance and creation of titles and assets such as derivatives, and in this way, they control capital flows, investments, placement of shares, and the M&A process. In globalization, the development of multinational corporations placed Investment Banks at the heart of their structure and since Global Corporations were the predominant form of accumulation in capitalism, Investment Banks became, in turn, the heart of the capitalist system.
How and where did Investment Banks come from? Let's take a brief look at its history and development. Since the development of monopolies, cartels and trusts in the second half of the 19th century, both investment capital and the purchase and repurchase of companies were the domain of wealthy individuals and families. These oligarchies and families controlled the flows of capital and investments, the Vanderbilts, Whitneys, Carnegies, Rockefellers, Morgan and Mellons in the US, the Delesserts and Pereires in France, the Mevissen, Warburgs and Siemens in Germany, the Rothschilds throughout Europe. and the House of Rothschild or the House of Baring Brothers in England.
Top 10 Global Corporations
These oligarchies made their fortunes by financing wars such as the Secession Wars in the US, the Napoleonic Wars in Europe, or the Crimean War, controlling the arms industry, the steel industry, and the railways. Morgan Bank was the monopoly issuer of war bonds for England and France, as well as invested in supplies for war equipment for both countries. US Steel Carnegie, a steel company of the Morgan group, was in 1901 the largest company in the world, and the Rockefellers dominated the oil industry with Standard Oil.
The financial oligarchies that controlled the most important cartels and trusts in Europe and the US also promoted the telegraphs and developed the mining industry under their control to possess precious metals such as silver or gold and provide metal to the Central Banks of the countries. most powerful capitalist states. Several banks were founded by these families to encourage investment such as Crédit Mobilier, a bank that raised capital for the construction of the French railway network, but which, at the same time, provided credit to the State, founded the Gas and Omnibus, the Maritime Company and the new trams of Paris. The Mobilier also made investments to build railways in Spain, Switzerland, Austria-Hungary and Russia. In 1853 the Bank of Darmstadt was founded in Germany.
In the US, banks such as JP Morgan or Goldman Sachs had significant development. But in the midst of the Great Depression, capital and Investment Banks suffered restrictions due to the crisis that caused the rampant speculation that they had promoted. The enactment of the Glass-Steagall law and other regulations in the 1930s were a repression of speculative capital, for example, J. P Morgan was forced to choose between developing commercial banking or investment banking activities, choosing the first because it was seen as more profitable at the time. Faced with this change, many JP Morgan partners decided to create the group now known as Morgan Stanley.
This caused that after the 2nd world war, in the Keynesian regime, the Investment Banks had a marginal participation in the economy. It was not until the 1980s, with the Reagan government, that they reemerged again and led large-scale speculative maneuvers, hostile mergers and acquisitions of companies, asset liquidations, bankruptcies, bankruptcies, mass layoffs, and scandals. They starred in the 1987 crash and the 1989 RJR Nabisco financial scandal.
Derivatives emerged from Investment Banks
By the early 1990s, Investment Banks began to return to center stage in the global economy. The Investment Banks Shearson Lehman Hutton, KKR, Fortsmann Little & Co., Morgan Stanley, Goldman Sachs, Merrill Lynch, or Drexel Burnham Lambert were already operating. But when all the antitrust legislation of the Great Depression was repealed under the Clinton Administration on November 12, 1999, and replaced by the " Financial Services Modernization Act" better known as Gramm-Leach-Bliley Act, the entire development process of Global Corporations took a huge leap forward.
From there arose increasingly complex speculative operations, such as "leveraged buy- out", (LBO), or "Private Equity" operations. These followed the tradition of commercial capital to buy low and sell high, for example with LBO's large companies with significant debts were acquired, anticipating a minimum capital and requesting loans, which is called "leverage".
Private Equity had a "boom" between the years 2003-2007 acting in a similar way, only operating with companies outside the stock market, to restructure them with the objective of profits. All these speculative maneuvers were developed using derivatives as instruments, papers that constitute insurance on the future price of a commodity that "derive" from possible increases or decreases in its price in the future, hence its name.
Derivatives are a special type of fictitious capital that emerged in '93 in the US, from the studies of investment banks, especially JP Morgan Chase. These products spread to the world, and today they constitute between 60 and 70% of the mass of 1,000 trillion fictitious capital. They are extremely complex financial products, among which products of even more extreme complexity were developed, the so-called "synthetic" financial products, which are debt paper and options that are sold all together in a "package."
Money towers show colossal debt in derivatives from left to right Bank of America $50 billion, Citibank $52 billion , Goldman Sachs $44 billion, and JP Morgan Chase $70 billion
They are euphemistically called "toxic assets" because they are of very different origin and reliability and contain bad debts that act like a veritable time bomb. The Investment Banks developed a process of concentration of enormous masses of fictitious capital, of imaginary and illusory value that devalue the economy as a whole, and to the extent that it is not valued, prepare a serious crisis. The entire M&A operation is a threat because it implies enormous levels of leverage and credit, which leaves corporations with high debts in money and debt paper. This mass of papers and derivatives constitutes a threat because the papers that are exchanged contain many and diverse types of debts, which means that a single declaration of non-payment can cause widespread bankruptcy.
Currently, an index is used to know the financial state of large companies called EBITDA (Earning Before Interest, Taxes, Depreciation and Amortization) that reflects the state of profit and loss of a company. For example, the EBITDA index of the companies that make up the S&P, the top ten corporations, shows that they issued billions of debt between the years 2003-2007, but their profits fell after 2006 and those billions are pending payment.
The PER (Price Earning Ratio) is a very important indicator used in the Stock Market, being the number of times that the annual net profit is contained in the price of a share. When there is a high PER, this indicates the dimension of the speculative process because it is expressing that the shares have a high price, several times the real price of the share, which does not reflect the reality of the company. Taking the S&P index of the New York Stock Exchange, both in 1929, 1966, 1972 and 1987, a PER of 20 times the value of the share was reached, which was repeated in 2007. For Moody's of the 10 largest purchases made For Private Equity, only 4 have their companies in a stable situation, while the other companies are bordering on bankruptcy. (5)
The Investment Banks promoted the hedge funds (in English Hedge Funds) and the capitalist states promoted the Sovereign Investment Funds. All these economic entities are made up of rich speculators who defraud the entire world with other people's money. The Sovereign Investment Funds, for example, are state financial institutions from countries such as Norway, Abu Dhabi, Singapore, China, etc. They invest trade surpluses and are in some cases more important than many of the top 50 banks in the world.
Fictitious capital rotates between these entities. Among a network made up of Multinational Corporations, Investment Banks, Investment Funds, Sovereign Investment Funds and also through informal channels such as offshore centers or commonly known as "tax havens". These are entities where capital rotates located in small countries where deposits do not pay taxes, companies can be founded that are not required to publish accounts, or lists of directors or shareholders.
The rotation of capital carried out by the "tax havens" allows capital laundering with total impunity, which attracts great wealth, and produced a true "boom" of off-shore centers where dollars of capital of diverse origin are laundered, be it from production, industry, trade, such as fraud, evasion, illegal business, drug trafficking and arms sales, through accelerated development.
In 1960 there were only 7 tax havens, currently there are around more than 100. They started on the islands of Bermuda at the beginning of the 20th century, and in the 1970s they developed in Monaco, the Channel Islands, and later in Ireland, Hungary, Romania, Cyprus, Madeira, Singapore, Hong Kong, Finland and Gibraltar. At the end of 1998 there were already 60 jurisdictions that grouped 4,000 offshore banks with assets estimated at US$5 trillion. (6)
The Regime of Accumulation of the Globalization
After the end of the Keynesian regime, in the early 80s of the last century, from the governments of Thatcher in Great Britain and Ronald Reagan in the United States, a period of capitalism began in which it was consolidated and unequally and combined a new Regime of Capitalist Accumulation, called "Neoliberalism", "Globalization", or "New Economy" and that we will call "Globalization", its better known name.
Globalization is a Regime of Accumulation diametrically opposed to the Keynesian one. If in the Keynesian Regime there were relative economic concessions to the masses, globalization meant a violent economic, political and military counteroffensive against the masses of the entire world, to impose low wages, deregulation, privatization and the dismantling of worker and popular conquests, to the time a recolonization of backward countries by the capitalist powers.
Globalization was the product of a serious process of destruction of productive forces developed in the postwar period in the Third World countries that allowed moving from a lower centralization of capital, the Multinationals, to a higher one, the Global Corporations. Throughout this period, together with the process of concentration of capital, the tendency towards the concentration of the impoverished masses and the world proletariat developed, which was expressed in the emergence of the megacities that we analyze in detail at the end of this book.
In Globalization there was no sustained "boom" of the economy for several decades as in the Keynesian Regime. There were alternating periods of growth and economic decline. The decade of the '90s was one of great growth, although it occurred within the framework of a general downward trend and serious turbulence, imbalances and imbalances in the economy that were the product of a spectacular growth of financial and parasitic capital. The development of this type of capital aggravated to paroxysm all the contradictions of capitalism.
Let's see a comparison between the growth rates of the world economy in the Keynesian Regime and the Globalization Regime. In the "boom" of the Keynesian regime, the economy grew at an average annual rate of 4.9% between 1950 and 1973. Between 1974 and 1979 that rate dropped to 3.4%, while in the 1980s the rate dropped The rate dropped again to 3.3%, and in the '90s it dropped to 2.3%. In relation to the growth of the industry, comparing the period '73-'79 with the period '79-'90 fell 33% in the G7, and if we compare the period '79-'90, with the period '90-'96 the fall is greater since the US GDP fell 25% and that of the G7 fell 45%. In the 90's the GDP grew at a rate of 3.01% below the 4%, in the 50's and 60's, from 3. (7)
Regarding productivity growth, between '91 and 2001, the rate grew at 1.81% per year, better than the 1.38 of the '80s, but below the 1.94% of the '70s and far from the 2.84 of the '60s and the 2.80 of the '50s." (8) The 1997 profit rate in the US for Dumènil and Levy was one of the best in the 1990s, but compared to the rates of the Keynesian Regime it was half the value of 1948, and between 60 and 75% of its value of the years 1956-65. (9) Viewed as a whole, this general tendency shows that globalization is a regime that expresses a general fall in production levels, and thereby a general decline of capitalism.
The beginning of globalization: the violent exploitative offensive in the 1980s
The 1980s, which ushered in the globalization regime, was a decade of violent attacks against the working class. Between 1973 and 1990, workers in the US lost 12% of their real hourly wages in the private sector and 14% in manufacturing. In contrast, in the period 1890/1973 prior to globalization, the annual growth rate of the real hourly wage was 2% and there was no decade, in which it was less than 1.2%, but in globalization those rates for the first time in 80 years they became negative.
The leaders that started Globalization. From left to right: Ronald Reagan, Ronald Reagan and Margaret Thatcher, Thatcher and George Bush Sr.
This is how Nahuel Moreno described it in 1985 : "US imperialism has managed to overcome its last crisis. Since 1982 its production has increased. It achieved this by super-exploiting all the countries and workers in the world, including the North Americans, to a degree never before possible." seen in recent decades...Marxists who believe that US imperialism overcame its crisis through the colossal borrowing of the Reagan administration see only the outward appearance of the phenomena.In reality, Reagan got the loans and capital he needed because the exploitation of workers around the world has increased dramatically in recent years. Thus, it has raised the rate of profit - reflected in the rate of interest - and this has attracted capital" (10)
There was also the suction of wealth from backward countries with the foreign debt mechanism, through which millions were transferred to the coffers of multinationals. The economic offensive was accompanied by a political and military counteroffensive against the revolutionary processes, such as the "contra" guerrillas in Nicaragua or the IDE (Strategic Defense Initiative) a missile shield in Europe aimed at the Kremlin. Despite the friction and contradictions between the USSR and the US, the global anti-worker counteroffensive was led by the governments of Ronald Reagan in the US and Margaret Thatcher in the UK, but accompanied by the governments of the USSR, the countries of Eastern Europe and China, as a result of which Gorbachev and Deng Xiao Ping also advanced in a harsh anti-worker offensive.
The "Perestroika", Gorbachev's plan opened the economy to the installation of Multinationals and advanced in the dismantling of the social conquests obtained in those countries through the revolutions that had expropriated capitalism. Neither Reagan, nor Thatcher, nor Nakasone, nor Gorbachev achieved historical, nor definitive, political defeats over the masses, but they carried out coups, maneuvers and advances on the workers' economic conquests, which caused an enormous advance in social inequalities.
Capitalism achieved great economic growth in the 1990s. But even in those phases in which there was growth, the indices obtained were lower than in the "boom" years and never reached the levels of the Keynesian Regime. For Brenner: "The rates registered during the economic cycle of the 1970s and 1980s...were...below those of the long postwar expansion...during the 1990s the behavior of the group of advanced capitalist economies (G7)...was no better than the 1980s, which in turn was worse than the previous decade and much lower than the 1950s and 1960s." (11)
In globalization, the pole of accumulation changed, the old industries that were the pole in the Keynesian regime were displaced, and a new pole of accumulation was established around the telecommunications, information technology, biogenetics, and pharmaceutical industries. If the automobile was the basic merchandise of the Keynesian regime, the computer was that of globalization. As Moreno pointed out:"...All the old dominant industries and monopolies are being displaced. The auto, steel, coal, aviation, domestic industries are in a crisis with no way out...I agree...in pointing out that the system The Keynesianism no longer works... There are several new branches on which the hopes of capitalism are at stake: information technology, space sciences, genetic engineering, automation... Some say that all the problems are going to be fixed after 1990 when these branches begin to produce in immense quantities for a hungry market." (12)
Changes in trade with globalization
In relation to trade, with Globalization there were important changes with respect to the Keynesian regime. These reached their peak when the World Trade Organization (WTO) was created in 1995. This implied a set of regulations that favored Global Corporations such as intellectual property, patents on technological advances, the payment of royalties and royalties, the establishment of subsidies and settlement facilities for corporations in countries, regions, municipalities and states. where they found themselves tax-free, with more favorable labor regulations for the search for profit.
The configuration of world trade was at the service of guaranteeing Global Corporations geographic areas and regions in which they could dominate the exchange at will. Thus, they advanced in the consolidation of their profits, eliminating competition, colonizing the economies of backward countries and favoring the manipulation of prices, thanks to the monopoly of the productive branches that they exercised in the free trade areas. The WTO made it possible to take advantage of education and health services, placed at the service of large companies.
A historical change is that after centuries in which the Atlantic Ocean was the center of world trade, with Globalization the center of world trade began to be the Pacific Ocean. Due to the development of the accumulation axis of Southeast Asia, supported by the Japanese economy, the rise of the tigers and the "boom" of China, all this caused this change from the mid-'90s. Another of the important changes in world trade with globalization is that since the 1970s there has been an incessant increase in prices and a permanent process of world inflation, which affected raw materials and oil.
This increase in prices brought with it the increase in food, the cost of living and the growing dispossession of workers' wages, in addition to worse living conditions for the vast majority of the world's population. Inflation growth was very important in the '70s, lower in the '80s and then rising in the '90s and the first decade of the 21st century. Inflation is an element with two aspects: firstly, it is a clear symptom of the serious crisis that capitalism has been dragging down since the two world wars and that both the "boom"after the war, as the superior monopolistic forms of accumulation such as the Multinationals only worsened. But on the other hand, it is a formidable tool of the capitalist state to lower wages and facilitate the global exploitation process that benefits Global Corporations.
Let's analyze this question. In globalization, there are huge masses of capital that began to turn massively to financial speculation with assets such as oil, food, currencies, companies, etc., which caused a systematic and permanent upward trend in prices that devastated with the standard of living of the majority of the world's population. From these immense masses of capital, the banks extracted portions on a small scale to provide loans at usurious rates to the workers and popular sectors. But these masses of capital are, above all, the basis of the enormous credits that allow big businessmen to carry out all kinds of speculative maneuvers. How were these masses of capital formed? They are constituted by reserves, in metals, dollars, titles and other currencies, resulting from the commercial surpluses, from the industry, from the countries that supply oil, gas, mining and agro-industrial products , and arise from the exploitation of the workers and peoples of the world. whole.
This is how Nahuel Moreno explained it: "The explanation given by some Marxists according to which the imperialist economy overcomes its crises simply by creating purchasing power through credit is totally wrong. If it were so, capitalism would develop without difficulties or crises , creating purchasing power with loans. In reality, the capital that is lent comes from the exploitation of workers and the looting of other countries" (13) The enormous mass of capital constituted in globalization is surplus value, that is, over unpaid work of the millions of workers in the countryside and cities that make up the laboring masses of the entire world.
The phenomenon that Marxism defines as "surplus value" is a job, and therefore a value that is in the merchandise that is negotiated in world trade, but that the businessmen do not pay for it, they save it and it returns to them as revenue. This surplus value is the inexhaustible source of capital that contributes to establishing "global liquidity." For Marx: " In fact, profit is the form in which surplus value is manifested... In surplus value, the relationship between capital and labor is exposed... that is, between capital and surplus value as it appears" (14)
In the composition of this global liquidity there is not only surplus value that comes from the direct exploitation of millions of workers, there is also suction of indirect surplus value through the mechanism of external debt and the unequal exchange of world trade of backward countries, for Moreno: "Imperialism plunders backward countries, subjecting them to an increasingly unequal exchange, directly extracting large masses of surplus value from the investments of the monopolies that are sent to their parent companies and through the mechanism of foreign debt" (15)
In globalization, the exploitative offensive combined mechanisms of direct exploitation that made it possible to obtain what Marxism calls absolute surplus value and mechanisms of indirect exploitation, which allow obtaining the so-called relative surplus value. The various mechanisms of direct exploitation are the extension of working time and the working day, the intensification of work rhythms, or "sweat shops" in Southeast Asia, the extension of overtime, the migration of Multinational Corporations from areas with less union presence such as Southeast Asia and China, the attack on labor agreements and conquests, the exploitation of immigrant workers, the proletarianization of masses of peasants, etc.
All these mechanisms that allow the extraction of absolute surplus value are the ones that became general in the 80's with the Reagan and Thatcher governments. They are directly exploited because they tend to increase the quantity and productivity with the aim of increasing surplus labor, which the bosses do not pay for. This is how Moreno defines absolute surplus value: "... Marx says that absolute surplus value is everything that exceeds the necessary value of labor power... Everything that exceeds four hours is absolute surplus value and that is the basis of capitalism, which is work more than what the workers need...." (16)
Inflation is also a mechanism of exploitation, only indirectly. It makes it possible to obtain the so-called "relative surplus value" and is highly effective in indirectly lowering the wages of workers and allowing large companies to obtain higher profit margins. Analyzing inflation, Moreno considers it an essential element for the extraction of relative surplus value: "What is inflation... We must stop because it is the phenomenon of phenomena, in a huge number of countries... inflation is (surplus value) relative... more sophisticated forms of exploitation like this have arisen... Inflation is a permanent drop in wages and an increase in the rate of surplus value, for me, relative" (17)
Combining direct and indirect exploitation mechanisms and achieving absolute and relative surplus value, an enormous mass of capital was structured that turned massively to financial speculation. This is the profound, structural reason why globalization developed a systematic and permanent upward trend in prices that increasingly affected the standard of living of the majority of the world's population.
The role of the US Federal Reserve
But in addition, inflation is the result of economic measures promoted by the G7 states to consolidate the dominance of multinationals over the world economy as a whole and the measures taken by the governments of the capitalist powers to promote speculation of all kinds of assets and merchandise. The central banks of the imperialist countries are what allow the achievement of price manipulation in world trade and exchange, above all, the US Federal Reserve, whose role we will see below.
Let's look at the role of the US Federal Reserve, known as the "Fed." Founded on December 23, 1913, all US banks are, by law, associated with the Fed, both state and private banks and Investment Banking, so the Fed functions as a consortium of mixed ownership. that combines public and private entities. The central entity of the United States has the functions of issuing dollars, setting interest rates, lending money to the State, and regulating and controlling the financial market, through so-called "open market" operations. The Fed's structure is made up of a Board of Governors, the Federal Open Market Committee, 12 regional affiliates, and the network of member private banks.
Since the 100 most powerful banks in the US are located in New York, and the headquarters of the Global Corporations are located there, this subsidiary is in fact the head of the Fed. The Board of Governors constitutes an independent agency, and expresses, to Global Corporations, especially the New York Fed. Its decisions do not necessarily have to be approved by the President or by someone in the executive or legislative branch of government. The members of the Board and its president, who is the head of the Federal Reserve, are appointed by the US President and confirmed by the Senate, and that is how the current one, Alan Greenspan, was elected in the 1970s (18)
From left to right: 1) Wilbur G. Kurtz Sr., signing the Federal Reserve Act of 1923. 2) The structure of the Federal Reserve System, and 3) Federal Reserve Building in Washington DC
Until the creation of the Fed, there was no sustained upward trend in the general price level. Inflation occurred during wars or catastrophes, but prices then gradually declined to their previous levels. Since the founding of the Fed, a continuous and constant trend of price increases has been established, caused precisely because the Fed is the only institution that has the power to print the dollars that circulate throughout the world. Throughout the history of capitalism, the bourgeoisie has manipulated prices and money.
One way to analyze how this occurs in contemporary capitalism is by analyzing how the Fed regulates the price of money, taking into account that the Fed is the entity that has control and the ability to manipulate the price of the dollar in its hands. , issuing banknotes or not issuing them, speculating on interest payments on the holding of government securities, or acquiring them. When the Fed buys government securities, it circulates masses of dollars whose price becomes cheaper, which causes interest rates to fall. When it sells public securities, the Fed absorbs money, dries up the cash or liquidity markets, which makes the price of the dollar more expensive and raises interest rates. In both cases, it is about speculative maneuvers to manipulate the price of the dollar, which may or may not have a real relationship with gold support or the progress of the economy, but which act decisively influencing the prices of all merchandise, and turns the dollar on the most important of all.
The Fed is actually the Central Bank of the world, and with its discretionary budget, its own air force of dozens of jets and cargo planes, fleets of vehicles, and managerial salaries of several hundred thousand dollars a year, it acts by impacting with its decisions, taken in line with the highest level of government in Washington, and the heads of Multinational Corporations, in determining prices and the development of the world economy.
The origin of unbridled speculation finds its explanation in this role of the Fed and whoever can suppose that the emergence of investment funds and speculative panels of increasing magnitude and the growth of informal speculative markets are a construction outside the Fed and the Central Banks of the G7 countries, only have a naive vision of the world economy. All global financial speculation, securitization and venture capital are permanently driven and stimulated by the Fed, the Bundesbank, the Bank of England and the central banks of the G7 countries.
This action by the central banks is the expression of the policy of the G7 states and the ruling classes, which pursue mechanisms that facilitate the exploitation of workers and the profits of multinational corporations. For Moreno: "...The most important intervention of the State is to extract a greater mass of surplus value from the semi-colonial countries and from the proletariat. Also the other: organize the bourgeoisie, try to avoid the greatest anarchy, but that It is impossible, because the transnationals continue to fight. In other words, there is a role of arbitrator. But the true role of the State is to guarantee in foreign policy, the exploitation of colonial peoples, the defense of the transnationals... the role of the state It is fundamental, decisive..." (19)
Unbridled speculation causes a true tragedy among the masses and the workers of the world, because the markets speculate with all existing merchandise and assets, currencies, oil, food, household items, energy, etc., which permanently raises the price of the same and represents a brutal attack on the living conditions of millions who have increasing difficulties to acquire these goods. But speculation is driven and supported by the central banks themselves, which sponsor investment funds and banks.
"Twin deficits" sustain the world economy
The intervention of the Fed is the expression of the growing intervention of the US State in the world economy that led it to impose its hegemony. As a result of this intervention, the US fiscal deficit grew geometrically, up to today's astronomical figures. In 1940 the US fiscal deficit was US$50,696 million. Today it exceeds 13,786,615 million U$S. For Moreno: "The over-accumulation of capital means that a large mass of it is not turned over to production, and is transformed into fictitious, usurious, loan capital... A spectacular example is the fiscal deficit of the United States ." (20)
Capitalist economists call the United States "twin deficits" the combined performance of 2 deficits: On the one hand The fiscal deficit is added to the trade deficit, which has been called among economists "twin deficits". What role do twin deficits play in the development of capitalism? The evolution of the "twin deficits" expresses, in the first place, that the bulk of world trade is supported by the US, which imports a high percentage of the products manufactured in the world. The products come from the same US multinationals located in backward countries, which exploit cheap labor. Thus, the massive entry of these products is what causes the "trade deficit" of which almost a third occurs in trade with China.
The US absorbs much of the world's industrial production and thus supports corporations. On the other hand, the US state needs a daily amount of millions of debt per day in order not to be beaten, which gives rise to the fiscal deficit of the United States. The fiscal deficit is the combined result of several factors such as the reduction of taxes for large companies, the bailouts, and the debt generated by the US state that issues debt bonds to finance itself. In order to function, the American state needs to have buyers of bonds, that is, companies, countries, and organizations that buy their bonds all the time, who are called the "bondholders" of the United States. USA
One of the largest US "bondholders" in China. In turn, China exports a large part of its production to the US, which produces a trade deficit between the two countries in favor of China. But this is how the multinationals from the US and the G7, installed in China, make huge profits, first obtaining cheap labor and then ensuring the placement of their products in the US market. The trade deficit with China is compensated because the government of the Chinese CP invests its surplus in US Treasury bonds, and this allows a large part of the capital that "leaves" the US to invest in China, "returns" to grant funds to the US Treasury USA
This is how the US-China tandem works. The US bourgeoisie makes gigantic investments in China, these investments generate millions of industrial products that China sells to the whole world, especially to the US itself, and then the profits are used to buy US Treasury bonds. With which China becomes one of the largest supporters of the US fiscal deficit, helping to finance the state deficit, and feeding back the circuit. Thus , China is the best example of the complementary nature of the twin deficits.
Through the sale of its bonds, the US acts as a "vacuum cleaner" for a whole part of the surplus value extracted in other regions of the world, and the twin deficits work in this way complementary, reaching the highest daily figures in history. If both trade and fiscal deficits complement each other, it is worth asking: What role do they play in shaping trade and the development of the world economy?
From left to right 1st box in the blue line the "fiscal deficit" collapses in record levels to -14% of GDP, while in the black line the "commercial deficit" collapses in record levels to -7% of GDP. The 2nd table shows the main "bond-holding" countries in the world. In the 3rd table, the dollar is 62% of the world's currencies, the Euro 20%. Source IMF, Deutsche Bank, Bloomberg
A sector of economic analysts point to the US deficit as one of the elements of the greatest crisis in the world economy. Is it really so that the US deficit is an element of crisis? Or is it exactly the opposite? This is how Nahuel Moreno explained it: "... I have doubts about the meaning of the US fiscal deficit. Instead of being an element of crisis, is it not the strongest element of stability?... I am afraid that the interpretation of the deficit as a serious symptom of crisis is a vulgar Marxist reasoning The trade deficit was the basis of the dominance of English imperialism, which for decades and decades maintained huge deficits... The reason, which has been studied over and over again by Marxism, is that the deficit allowed it to exploit more than ever... Their ships were the ones that transported the goods, their companies were the ones that insured, their companies invested in almost all the countries of the world, their railways, their loans, filled their coffers with sterling pounds that more than compensated for their trade deficit... I may be wrong,but I have the impression that the world economy has not yet exploded thanks to the American deficit" (21)
As Moreno put it, it is precisely the US deficit and the complementary nature of the twin deficits, which sustains the economy of most of the world's countries, world trade, Multinational Corporations, and ultimately, to capitalism. Those who see the US deficit as a sign of crisis do nothing more than ignore the reality data, which is conclusive in this regard. Precisely, the year in which the US deficit was the highest in relation to its GDP, was 1946, the year that the US launched to conquer the world.
That year the US debt reached 108.6% of its GDP, and precisely that allowed it to launch itself into the conquest of the world economy, and the consolidation of its monopolies as the dominant modern multinationals. For Daniel Munevar: "...the projected increase in public debt over the next decade is an unprecedented event in the post-war period both in terms of the speed of debt accumulation and in total amounts. Even so, the levels of indebtedness Expected at the end of this decade are far, in relative terms, from the peak of 108.6% of GDP reached in 1946. It is therefore noteworthy that this situation does not represent a significant obstacle to the establishment of the political, economic and military hegemony of the States. United in the West." (22)
Rise, Peak, and Demise of Global Corporations
We have already seen how an enormous mass of capital developed that is the product of the exploitation of the masses of the world, and how these masses of capital, in the hands of the Global Corporations and backed by the Fed, are a structural component of the globalization regime. Now we will see how these enormous masses of capital gave rise to the phases of boom and emergence of the Global Corporations, moments that were characterized by the great speculative maneuvers characteristic of globalization between the decades of the '80s, the '90s. We will also see how these maneuvers were related to political and social events, and we will also analyze how this entire process led to the exhaustion of Globalization and Global Corporations in the first decade of the 21st century, a process we are experiencing today.
Let's start in the late '70s. The increases in raw materials and especially oil in the late '70s, gave countries and oil companies huge profits. With the "high oil" and rising price inflation that followed the end of Bretton Woods, the profits made by big business gave rise to a mass of capital known as "petrodollars." The Reagan administration lured these petrodollars by raising the interest rate and the price of the dollar. With the "high dollar", the US government sucked capital from all over the world, which gambled by buying gigantic masses of the ticket.
Entrepreneurs from all over the world, of all nationalities, multinationals, large companies, countries, municipalities and bankers, bet on the dollar, buying gigantic masses of the bill, which caused an immense massive flow of capital to the US, from all sources. The pairing "high oil" and "high dollar " caused a global speculative bubble, an immense mass of capital that allowed Reagan to grant credit to the population to access the purchase of houses, cars, electrical appliances and to carry out a university degree. This mass of credits and "easy money", which stimulated the speculative activity of the multinationals, spurred one of the oldest frauds of capitalism: the buyback of shares.
For Moyer and McGuigan: " Since the 1980s, share buybacks have become increasingly popular...during the period from 1983 to 1997..." (23) Companies contracted credit to make purchases of its own shares and share buybacks caused company values to rise, not reflecting company profits. Fraudulent operations became widespread with tax evasion and false accounting, euphemistically called "creative accounting."
At the center of this speculative maneuver were the savings and loan entities (in English, Savings and Loan). The "Reagan bubble" recreated the atmosphere of speculation, cheap credit, and false "sense of wealth" typical of the 1980's. The social sectors that expressed this phenomenon arose, the brokers and yuppies, lumpen sectors of the bourgeoisie dedicated to speculation. But the increase in the dollar pushed the North American industry into bankruptcy, whose products became expensive compared to the European and Japanese multinationals.
A crisis began in the US economy that hit Savings and Loans. In 1985, the Plaza Accords were signed in New York, between the US, Europe and Japan, to save the US industry. A drop in the dollar and a revaluation of the yen and European currencies were agreed, but the crisis in The US economy led to the bankruptcy of Savings and Loans in 1986, which precipitated the 10/19/87 crash called "Black Monday" on Wall Street with the largest percentage drop in one day.
Thus ended and thus the "Reagan bubble" which caused a crisis of such gravity that it led the capitalist powers to seek an agreed mechanism for banking regulation, credits and transactions. Under the name of Basel I is known the agreement published in 1988, in Basel, Switzerland, by the Basel Committee, made up of the governors of the central banks of Germany, Belgium, Canada, Spain, the USA, France, Italy, Japan, Luxembourg, the Netherlands, the United Kingdom, Sweden, and Switzerland. This agreement, called Basel I, was a set of treaties that sought to prevent future bubbles and the crises they could cause.
Basel I made recommendations to establish a minimum capital that a bank should have based on the risks it faced, and came into force in more than 130 countries. But the mass of over-accumulated capital that continued to grow despite Basel I, took on colossal dimensions and adopted a growing composition of fictitious capital by dedicating itself exclusively to speculative activity, which produced a serious development of dangerous bubbles with a highly destructive content.
We define bubbles as the brutal and rapid massive injection of capital into a commodity that can be country bonds, currencies, industries, or raw materials. These capitals multiply in the first successes, attract more capitals and generate a ball that goes up, with no roof in sight. At the first hint that the country, industry, region or raw material is going down, panic ensues, capital flees, the ball deflates and the trail of bankruptcies, poverty, paralysis and recession remains. The effects of bubbles on the economy are similar to those of nuclear weapons, where they go through, nothing is left, only scorched earth.
In the 1990s, as a result of the increase in the rate of exploitation achieved by capitalism in backward countries and mainly in China, the profit rate grew and multinationals multiplied their capital. But if the growth of over-accumulated capital was significant, speculative activity grew much more. As Brenner states : "...the profit picture has improved significantly for US corporations, between 1989 and 1997...they increased by 82% and the corporate profit rate by 27.8% ... However, these increases in profitability cannot justify the tripling of stock prices..." (24)
From this time and more precisely from December 5, 1996 is when Alan Greenspan, then president of the Fed, described this speculative explosion of capitalism saying the famous phrase that there was an " irrational exuberance" in the markets. This was the way he found to describe the serious imbalances that overvalued financial assets were causing. Speculative bubbles continued to develop throughout the 1990s, as a distinctive mark of Globalization.
In 1989 the bubble of Japan developed, a country that was said to be the new world power that would dominate the world in those years, as was said after China. This bubble began from the so-called "Plaza Agreements" that took place on September 22, 1985 between France, Japan, Germany, the United Kingdom and the United States, so called because they were held at the Plaza Hotel in New York. They all agreed to depreciate the US dollar against the Japanese yen and the German mark by intervening in the currency markets. This helped reduce the US trade deficit problem, but severely hurt the Japanese economy, structured around exports to the US.
The high yen caused the crisis of the Japanese industry, which could not continue selling to the United States in the same quantities, but also added as an aggravating circumstance that the other countries of Southeast Asia flooded Japan with cheaper merchandise, due to the appreciation of the and in. The flow of capital was diverted from the industry and directed towards speculation, mainly real estate speculation, and Tokyo soon generated a speculative bubble, around the sale of real estate. The value of Tokyo in 1989 multiplied by 75, equivalent to 5 times the territory of the US A district of the capital (Chiyoda-ku) was worth more than Canada and the Tokyo Imperial Palace was worth the same as California. When it burst, the "real estate bubble "Tokyo and Japan's bubble had a lethal result, the Japanese economy was ironed for decades. In 1995, to save Japan's economy, the "Plaza II Accords" were signed, which lowered the yen and revalued the dollar.
The attacks and speculative movements of investors and speculators continued against the price of currencies from different countries, for example Soros against the pound sterling in 1992, which defeated the Bank of England. After the "Tequila effect" of 1994 against the Mexican peso, which caused losses to the Central Bank of US$4 billion and the collapse of its GDP in '95, until 1997, when the enormous overaccumulation of Capital caused by the development of the Multinational Corporations originated a general drop in the rate of profit.
And with it, new speculative bubbles were produced, of which the one that had the greatest impact on the development of globalization was that of Southeast Asia or the "dragon effect", which was produced as a result of the fall in the profit rate from the years '96/'97 that was a hard blow to the world economy: "... In 1995, the returns of these companies increased by 13%. In 1996 they reached 23.3%. But in 1997, this growth of profits decreased to 7.8%" (25)
This fall in the rate of profit caused, in turn, a fall in the investments of the Global Corporations that had been on the rise since 1992: "...they registered a gigantic expansion of 17.3% in '93, 16% in the 1994 and grew again by 27.5% in 1995. But they fell 0.7% in 1996... It was the reduction of these investments, caused by the fall in the rate of profit, that began the crisis process... leading to the debacle of Southeast Asia, Russia, Brazil, etc." (26)
The fall in the rate of profit led to a general decline in investment in the "Tigers" of Southeast Asia. For 1997 the drop in investment in Thailand was 21.3%, in Malaysia 43.4% and in Indonesia 22.9%. This was combined with the "Plaza II Accords" between the US, Europe and Japan to lower the yen, which affected the export- oriented tiger industries and multinationals to Japan. For Brenner: "Since the "Reverse Plaza Agreement" in the spring of 1995, reached between the G-3 governments to prevent the collapse of the Japanese economy, the dollar has appreciated substantially against the mark and the yen by 20% and 50% respectively" (27)
As the yen fell and the dollar rose, the products of the Tigers became expensive, which led to the bankruptcy of the Tiger industry. The pressure that the devaluation of the yen exerted on the economies of the Tigers, forced their currencies to be devalued to avoid the bankruptcy of the industrial groups. This unleashed a speculative attack on the currencies, first of Thailand, the bath, whose economy had grown between 1985 and 1996 at 9% per year. The stock market fell 75%, Finance One, the largest financial company, collapsed, the Thai "boom" ended and GDP fell 7%.
The crisis spread to Indonesia, which fell 15%, to South Korea, which fell 7%, and to the Philippines, which grew zero in 1998. The consequences of the "dragon effect" were devastating: the value of almost all currencies, stock markets, and companies fell. the region. GDP fell 31.7% in one year, millions of people fell below the poverty line between 1997 and 1998 and the most affected countries were Indonesia, South Korea and Thailand. The IMF intervened with bailouts to all these countries, which also constituted an important business and unleashed a process of M&A of bankrupt companies. "Plaza II" failed because it did not achieve a recovery in Japan and sank the " Tigers ", which had been a dynamic pole and support of the world economy. The "dragon effect" produced a structural change in capitalism since it liquidated the Tigers as the Axis of Accumulation of the world economy together with the US, a role that the region had fulfilled in the transition from the Keynesian Regime to Globalization.
The blow that the "dragon effect" produced in the world economy was so great that it reduced the price of oil, which affected the oil-producing countries, and especially Russia, and unleashed the speculative attack on Russia or "vodka effect" of the '98. Then came the speculative attack on Brazil or "samba effect" which suffered a capital flight and lost US$35 billion in 4 months, which led to the collapse of the Sao Paulo stock market and the devaluation of the real. The "samba effect" preluded Argentina's "tango effect" of 2001, which also forced a devaluation of its 1-to-1 dollar-pegged currency and sparked the popular outcry that toppled the government.
The blow that the "dragon effect" produced in the world economy was indicative that the boom phase of the Global Corporations was ending. From then on, the severity and continuity of the bubbles, each time larger and more destructive, indicated that the Global Corporations were entering their phase of stagnation, which began to cause increasingly dangerous convulsions for the global capitalist economy and the regime of the globalization.
The beginning of the current crisis of capitalism
The governments of the capitalist powers convened the Financial Stability Forum (FSF) in 1999, in which the ministries of finance, central banks and international financial organizations participated, with the aim of stopping convulsions and crises, achieving some international financial stability , through the mechanism of supervision and surveillance of economic institutions and transactions. But this attempt failed completely and the crisis radiated from the periphery to the center.
The top officials of global capitalism made up what TIME magazine called the "Committee to Save the World" between Robert Rubin, US Secretary of the Treasury, Larry Summers, Under Secretary of the Treasury, and Alan Greenspan Chairman of the Federal Reserve who worked together in the face of the Asian crises, the Russian and Mexican crises, and all the bursts of the speculative bubbles that threatened Wall Street. This crisis avoidance team and all the Basel measures ultimately failed and could not prevent the crisis of capitalism from breaking out.
From left to right: Image 1 Alan Greenspan, president of the US Federal Reserve, author of the famous phrase "irrational exuberance" of the markets with Larry Summers y Robert Rubin the "Committee to save the world" Image 2 Reagan at the Plaza Accords Image 3 Gerhard Stoltenberg, Pierre Bérégovoy, James A. Baker, Nigel Lawson and Noboru Takeshita at the Reverse Plaza Accords
The following crises developed not in backward countries but in the US economy. At the end of the '90s and the beginning of the 21st century, 3 serious crises broke out and combined: 1) That of the Long-Term Capital Management hedge fund ( LTCM) 2) The bankruptcy of Enron Corporation, one of the most important energy companies in the world and the 7th in the US 3) The crisis of the "dot.com".
1) The bankruptcy of the hedge fund Long-Term Capital Management (LTCM), caused a shock on Wall Street, and had to be rescued with an important bailout made by several Multinational Corporations. LTCM had many assets in Russia and was violently hit by the "vodka effect." The LTCM rescue operation was in many respects a preview of what would come with the bailouts of Global Corporations 9 years later.
2) The bankruptcy of Enron Co. hit the US economy hard since it was one of the most important energy companies in the world and the 7th largest in the US. On the other hand, Enron's bankruptcy was accompanied by scandals, complaints , lawsuits and litigation between those who starred in it, which exposed the corrupt nature of capitalism.
3) The explosion of the "dot.com" opened the crisis in the industrial branch of globalization, information technology. The rapid consumption of these products by millions of people produced a bubble around their companies that pushed the Nasdaq index up to 5,000 points in the year 2000. After the bubble burst, the Nasdaq dropped to 3,500 and 1,300 in 2002. The explosion of the "dot.com" caused the bankruptcy and disappearance of 4,854 companies, in the midst of fraud scandals, such as the World.com case. The 3 crises combined opened the world recession of the years 2000-2003.
The recession of the years 2000-2003, already expressed the process of exhaustion of the Global Corporations as a predominant form of accumulation and of globalization as an accumulation regime. The enormous masses of fictitious capital had produced a fall in the rate of profit, but also an accelerated process of devaluation of the economy. The capitalist powers needed to counteract these tendencies and overcome the crisis, but to do so required a round of destruction of productive forces and burning of capital of a magnitude far greater than that perpetrated in World War II or the postwar period.
In the period between the years 1980 and 2000 with globalization, the degree of destruction of productive forces was significant. There had been the 1st war in Iraq and the wars in Yugoslavia, Chechnya, Afghanistan, Rwanda, the 2 wars in the Congo and Bosnia, which added to the development of poverty, extreme misery, the growing process of destruction of nature and development of the arms industry, had developed a process of enormous destruction of the destructive forces.
But this process of destruction of productive forces was insufficient for capitalism to achieve a superior form of accumulation that would surpass Global Corporations. Let us remember that after the exhaustion of cartels and trusts, capitalism developed a process of destruction of productive forces that gave rise to a superior form of accumulation, the multinationals.
In the postwar period, the brutal process of destruction of productive forces in the backward countries, allowed that after the exhaustion of the modern multinationals, a superior form of accumulation emerged: the Multinational Corporations. But by the year 2000, faced with the exhaustion of the Multinational Corporations, the capitalist powers needed to develop a process of destruction of productive forces that would allow them to move on to a higher Form of Accumulation.
The crisis was already at the heart of the world economy, the US economy, and the bursting of the "dot.com" bubble had opened a severe recession. These tendencies could only be countered by overcoming the multinational corporations through a process of centralization of capital, with an enormous development of the destructive forces. With this objective, the Bush Administration launched the strategy of the Project for a New American Century (PNAC) after the attacks on the Twin Towers on September 11, 2001.
This strategy consisted of a global political, economic, and military counteroffensive, whose motto was the "war on terror" and the defeat of the "axis of evil." The PNAC strategy sought to overcome the serious open crisis in capitalism and get the economy out of recession, for which it established a major military operation and the development of a far-reaching and long-term war, with the aim of putting a brake on the revolutionary processes in the Middle East, while disciplining the workers and peoples of the world.
The PNAC also sought to sustain high spending and development of the military-industrial complex, carrying out an important development of the destructive forces. It was impossible for the US state to carry out this strategy with the opposition of the American people, for this reason, the Bush government took advantage of the impact produced by the terrorist attack of 9/11 to establish a profoundly undemocratic regime within the US .UU with a pillar in the Patriot Act (in English, Patriot Act), which sought to limit the democratic freedoms and expression of workers and the people of the United States, and silence any voice that wanted to oppose its strategy.
The Patriot Act regime was a de facto constitutional reform, which placed the Executive Branch, the army and the security services at the center of the US political regime, attempting to erase with a stroke of the pen the historical democratic conquests of the North American people. At the same time, a set of laws and decrees produced a significant curtailment of democratic freedoms, the attack on immigrants, especially those of Muslim origin, and the criminalization of opponents. The PNAC was a strategy at the service of giving a heavy blow to the struggles of the peoples of the world who dared to challenge the power of the capitalist powers and, at the same time, sought to resume the offensive against the masses of the advanced countries.
The 3 combined crises that unleashed the current crisis of capitalism: 1) John Meriwether founder of LTCM praised by BussinesWeek "The Trader" 2 ) The brutal fall of ENRON Co. between the years 2001/02 3) The bursting of the "dot.com" bubble between the years 1999/2001
The campaign of the "global fight against terrorism" was promoted from the US, but it was adopted by all the governments and capitalist states of the world. The political-military front that was articulated around the PNAC, expressed in the military Coalition that carried out the invasion of Iraq in 2003, was one of the largest in the history of capitalism. In the economic field, Bush sought to relaunch the economy, copying Reagan with a bubble based on credits for mass consumption, focused in this case on housing credits.
Millions contracted these loans attracted by the facilities, and this is how the bubble of "second category mortgages" (in English, "sub-prime") took flight, which began in 2002 and burst in 2007. The entire structure The world financial firm contracted sub-prime paper, which promised to be a fabulous business that grew and grew without ceasing, providing fabulous profits. The development of the wave of house purchases caused the construction industry to take a leap, and with it, inflation soared.
The prices of all construction materials rose, dragging all prices down with it. To curb the wave of inflation that was unleashed, the Fed raised the interest rate, which in 3 years went from 1% to 5.75%, but this operation to raise interest rates made loans granted to very humble families more expensive and aggravated the debts and defaults. Investment Banks began to issue MBS's (Mortgage Backed Securities) and CDO's (Collateralized Debt Obligation) papers that served as insurance to cover possible defaults.
Those papers were traded around the world and became part of the coffers of the entire global financial system. Given the magnitude of the gigantic credit bubble that was brewing, the G7 states called the Basel II agreement in 2004, seeking to overcome the limitations of Basel I, which ignored an essential aspect of credit: the quality of credit. the same and probability of default of the loans.
To overcome these limitations, Basel II proposed in 2004 a new set of recommendations that were useless, because the Bush administration had already launched a huge bubble that pushed capitalism over the abyss. The entire world financial system was filled with "sub-prime" paper , MBS and CDO's, whose value fell sharply. In turn, by 2006, the US military and the Freedom Coalition were bogged down militarily by the heroic Iraqi resistance against the invasion, as well as the resistance of the US people against the regime's repression. of the Patriot Act and the growing unpopularity of the Iraq war, plunged the Bush Administration into disrepute.
In this way, the two fundamental pillars of the PNAC's political, economic and military strategy were suffering increasing wear and tear. The military defeat in Iraq meant the final blow to the PNAC strategy and opened a political crisis for the Bush government. In turn, this political crisis was combined in the economic field, with the disaster caused by the sub-prime bubble. The increase in interest rates that the Fed had pushed to curb inflation caused debtors to default on their loans, the bubble burst, and banks filled with bad loans.
By the year 2006 there were fifty bankrupt financiers, millions of foreclosures, and investment banks together with Global Corporations and the entire world financial system comprised by them faced the threat of bankruptcy. The Bush Administration had achieved that 1 million 200 thousand Americans were defrauded and more than achieving the dream of their own home, they have been expelled from their homes. In 2007, the sub-prime crisis broke out and became global, which revealed the paradox that if the "Reagan bubble" was the beginning of the globalization regime; the "Bush bubble" of 2007 was the end of it.
The bursting of the "sub-prime bubble" revealed the exhaustion of Globalization as an Accumulation Regime and that of Multinational Corporations as the predominant Form of Accumulation. The US military defeat prevented the burning of capital and the process of destruction of productive forces that was necessary to reach a higher level of centralization of capital that would respond to the process of exhaustion of multinational corporations.
When we talk about the process of destruction of "necessary productive forces", we are not affirming that there was no destruction of productive forces between the end of the 20th century and the beginning of the 21st century. There was, and it was horrible, for example, the invasion of Iraq turned this country, which was one of the most beautiful in the world, heritage of the emergence of humanity, into a true ruin. If we add to this conflagration what happened in Afghanistan, the destruction is terrible. But horrible as that is, it was a process absolutely inferior to the round of destruction carried out by the imperialist armies in the post-war period of the 20th century.
A simple comparison allows us to appreciate the magnitude of the phenomenon: The Vietnam War in the 20th century, for example, lasted 11 years and was part of a larger process of destruction of productive forces that spanned decades, in vast regions of the planet. The war in Iraq, on the other hand, was resolved in barely 3 years, with the defeat of the United States. The defeat of the PNAC had immediate effects on the economy, not only due to the crisis that erupted in 2007, but also from In her, the process of centralization of capital fell, which is verified in the figures of the M&A process that suffered a hard blow with the crisis and fell 50% with respect to the levels prior to 2007.
The data from the M&A process show that with the defeat of the PNAC, the capital centralization process, instead of advancing, suffered a strong setback. Thanks to the bailouts, it recovered around 2010 when M&As reached $2.4 trillion, an increase of 23% compared to 2009 and the strongest in the entire period since 2008, according to Thomson Reuters. But the data indicates that capitalism failed to reach a level of capital centralization that it needed to overcome the exhaustion of the Multinational Corporations because the crisis pushed back the M&A process in relation to the levels it had had before 2007.
Why did capitalism not achieve in globalization, that is, in the entire period from the 1980s to the present, a process of destruction of productive forces that was similar to the levels reached in the postwar period? Why were the powers unable to overcome the crisis caused by the depletion of corporations? Why didn't they achieve a superior form of capital accumulation? We find the explanation by analyzing some of the most important political events of the 20th century.
The fall of the Berlin Wall: The blow to globalization
The fall of the Berlin Wall on November 9, 1989 was a heavy blow to capitalism and globalization. When the Wall fell, the governments of the capitalist powers and the Stalinist regimes worked in partnership, advancing a brutal exploitative offensive and jointly renewing the Yalta and Potsdam agreements. But the popular mobilization that overthrew the pro-capitalist dictatorships of those countries hampered the joint plans of the imperialist powers, since without their Stalinist partners, the capitalist governments of the G7 found it difficult to carry out the offensive against the masses of the major economies.
Pictures of the fall of the Berlin Wall
In turn, the chain of popular uprisings deepened and after the Stalinist collapse in the countries of Eastern Europe, came the collapse of the dictatorships in the USSR and in the republics under its orbit. The consequences for capitalism were very important, because after the fall of the Berlin Wall, the conditions that had allowed the super-exploitation of the European and German working class changed.
A fundamental condition to facilitate the exploitation of European and German workers in the postwar period was to maintain their division with the Wall. Its collapse allowed a process of unification of the powerful European and German working class, among the most qualified, concentrated, with the greatest social conquests and the highest cultural level in the world. In turn, the oppressed nationalities that had been put by fire and blood under the boot of imperialist domination in the postwar period began a process of liberation, which swept the borders of Yalta and Potsdam.
Thanks to the Stalinist leaders who fell after 1989, imperialism had managed to survive the defeats in Vietnam, China, and Korea, it had been able to continue its systematic destruction of productive forces. He had transformed those political defeats into even greater hardships for the masses, which allowed large profits for the multinationals. But after the fall of the wall, these leaders of the "official world left", which had rendered great services to capitalism, no longer had that power.
The postwar "world order" collapsed, and the "new world order" actually resulted in terrible "disorder." This is the explanation of why in Globalization, capitalism failed to match the economic successes of the Keynesian Regime. The fall of the Berlin Wall prevented globalization from having a global global political agreement of the stature of Yalta and Potsdam that allowed the postwar "boom" . These agreements were liquidated by the fall of the Berlin Wall, and with them, the economic and political order that sustained the world economy for more than 40 years.
The G7 governments, analysts and journalists of all stripes proclaimed that the fall of the Berlin Wall was the "triumph of capitalism" and the "End of Socialism". Many believed that story, and most on the left fell into brutal confusion. We will not develop here the debates that the events produced at that time, we refer to verifying the impact they had on the economy. The best demonstration of the blow that the fall of the Berlin Wall meant for capitalism and the course of the globalization regime is China. In China the opposite happened, there the Wall did not fall, the mobilization of the masses in Tiannanmen Square against the pro-capitalist dictatorship of the Chinese CP was brutally repressed and defeated. From those events, China was consolidated as the "paradise" of the Multinational Corporations, and the Axis of Accumulation of the Globalization Regime.
After the defeat of the mobilizations, the Chinese dictatorship made progress in obtaining higher rates of exploitation and all kinds of facilities for multinationals to establish themselves. China alone shows the implications of the fall of the Berlin Wall for the world economy, given that if the fall of the CP dictatorships had complicated the plans of the capitalist powers in Europe, the triumph of the Chinese CP dictatorship transformed it. into a bastion and lifeline of capitalism. With the triumph of the Chinese PC, the capitalist powers obtained a huge market of millions of workers that the Chinese dictatorship disciplined to offer low wages, super-exploitative working conditions, which allowed, as we have seen, a growth of the global capitalist economy in the 90s. Imperialism took advantage of these "comparative advantages " which helped the economy grow and gave a recovery of the rate of profit in the '90s that was maintained for almost the entire decade.
Capitalism achieved a victory in China, which gave it a great economic breather. But with the fall of the Berlin Wall, their strategic plans suffered a tremendous blow, because the parties and leaders who provided great services to capitalism fell, agreeing on the capitalist reconstruction of Europe, allowing the development of modern multinationals and stopping the revolutionary processes. The fall of the Yalta and Potsdam agreements that had allowed the "boom", it was a strategic coup for capitalism. This is the central explanation of why the capitalist powers could not develop in globalization a round of destruction of productive forces greater than the Second World War or the postwar period, which would allow them to overcome the exhaustion of the Multinational Corporations.
Thus, the fall of the Berlin Wall is the necessary prologue to the fall of Wall Street, 10 years later. In turn, the fall of the wall and the crisis of the Tigers modified the axes of accumulation of the world economy. As we have seen, the economy in the Keynesian Regime developed around the US-European axis, but the recovery of the proletariats and the masses of those countries in the postwar period prevented capitalism from returning to the high rates of exploitation that allowed the "boom".
This is what explains why when the Multinationals entered the Depletion phase, the Axis of Accumulation of the world economy became the US-Southeast Asia (Japan and Tigers), in the transition from the Keynesian Regime to Globalization . But the Accumulation Axis of the world capitalist economy was modified again with the Globalization Accumulation Regime from the consolidation of the capitalist dictatorship of the Chinese PC, through which the world economy began to articulate around the US-China axis.
We have seen then the globalization regime, its complex structure, the emergence of a huge mass of capital destined for financial speculation, the fictitious and parasitic nature that are a fundamental component of this capital that rotates permanently in the economy. We have also seen the rise of Multinational Corporations, and the role of Investment Banks at the heart of their structure and of the world economy.
This structural framework allows us to understand how each of these constituent elements of capitalism acted at the time of the outbreak of the current crisis. We have also seen the trends that are developing, which indicate that globalization is coming to an end, and capitalism needs to establish a new Regime of Accumulation, as well as new forms of Accumulation that overcome the exhausted and bankrupt Multinational Corporations. This is the challenge that the governments of the capitalist powers must face in the coming years, challenges that will undoubtedly find their most serious obstacle in the contradictions of the capital accumulation process, on the one hand, and the resistance of the mass movement and the class. worker for the other. In the most important crisis in its history, capitalism will face the most powerful mass movement, and the largest and most powerful world working class in history, as we will see below.
The accumulation of working and popular masses, and the emergence of megacities
We have observed up to now how the greatest accumulation of capital has been produced in the globalization regime in a magnitude never seen in the history of humanity, now we will see that the greatest accumulation of working masses and unemployed has also been created, producing a colossal amount of goods, also never seen in history. This accumulation of masses of workers and unemployed is the absolute Law of Accumulation.
This is how Karl Marx explains it: "The proportional magnitude of the industrial reserve army, then, increases along with the powers of wealth. But the greater this reserve army is in proportion to the active workers' army, the greater will be the mass of plus consolidated population or the working classes whose misery is in inverse proportion to the torture of their work.The greater, finally, the layers of the working class made up of sickly needy and the industrial reserve army, the greater will be the official pauperism This is the general, absolute law of capitalist accumulation." (28)
There exists today in the world, a mass of surplus population of workers, poor, sick and unemployed of which Marx speaks as never seen in the history of capitalism. In the 2008 UN report, the following can be read : "In 2008, the world reached an invisible but transcendental milestone: for the first time, more than half of its human population, 3.3 billion people, will live in urban areas. It is expected that by 2030, that amount will have reached almost 5 billion" (29)
This urban overpopulation was developed by Multinationals and Global Corporations. These Forms of Accumulation have caused revolutionary changes in the demographic structure of countries and regions, the development of social classes, the geographic location of populations, their composition, the displacement of workers and migrations that have a huge impact on the political and social situation of the world.
That is to say, parallel to the development of Global Corporations and the process of concentration of branches of production, trade and wealth under their ownership; there was also the concentration of the world population in cities. In the first place, large urban concentrations arose such as Mexico City, Sao Paulo, New York, Bombay, New Delhi, Tokyo, etc., and along with them the new metropolitan poles defined as megalopolises, which arose as a result of the enormous migrations to the inside the countries.
Migratory movements are permanent movements with successive waves, true demographic revolutions that deeply impact the social structure of all the countries of the world, modifying the conformation of all social classes, fundamentally, the working class. These demographic changes produced the enormous development, growth and extension of the world working class with the proletarianization and urbanization of enormous masses of peasants and popular sectors throughout the world.
Population growth and global development of migrations
The world population is close to 7,000 million between the years 2011-2012 and the UN predicts that by 2050 the world population will be greater than 11,000 million. The fastest growing regions are Africa, Asia, Latin America and the Caribbean in which the population will increase by almost 50% and in turn within this lot the poorest countries will double the size of their population. Africa will double its population by 2050, which will reach 2 billion. Only China with 1,330 million inhabitants and India with 1,147 million represent almost 40% of the world population and the calculations of the Indian census bureau project that in less than two decades, India may surpass China in number of inhabitants . After the two world wars, the genocides, massacres and massive destruction of productive forces carried out by the capitalist powers, caused the enormous migrations to be a global phenomenon.
The World Migration Report 2015 estimates that there are 232 million international migrants and 740 million internal migrants worldwide. Nearly 50% of all international migrants reside in ten highly urbanized high-income countries: Australia, Canada, the United States, France, Germany, Spain, the United Kingdom, Russia, Saudi Arabia, and the United Arab Emirates. In the Asia-Pacific region, an estimated 120,000 people are migrating to urban areas daily. With this rate, the number of people living in urban areas is expected to increase by 63% in 2050 in that region.
Africa has also witnessed a rapid increase in its urban population. In 1960 the only city in sub-Saharan Africa with a population of more than 1 million people was Johannesburg. Ten years later there were four cities. By 2010 that number had ballooned to 33 cities. Of all the cities that both internal and international migrants have chosen as their new home, some stand out as the most popular. Host cities with more than 10 million inhabitants are, in alphabetical order: Beijing, Buenos Aires, Guangzhou, Istanbul, Jakarta, Kinshasa, Kolkata, Lagos, London, Los Angeles, Manila, Mexico City, Moscow, Mumbai, New Delhi, New York, Paris, Rio de Janeiro, Sao Paulo, Shanghai, Shenzen and Tokyo.
The United Nations Population Division has estimated that the stock of migrants grew at a rate of 1.9% per year, a higher rate than the total growth of the world population, which was 1.8% per year during the same period. For José Moreno Pau: "...The imperialist plunder pushes the workers of the colonies and semi-colonies to look for salvation in the metropolis... the need for cheap labor in the metropolis results in the movement in recent decades, coupled with the aging of the European population and the need for cheap labor.We are facing the opposite phenomenon to that which occurred between the 19th century and the first decades of the 20th century when some 55 million Europeans emigrated to other continents mainly to America..." (30)
These migratory flows go in two directions, on the one hand migration from underdeveloped countries to advanced countries and on the other from rural regions to cities. In both processes, the global number of emigrants is on the rise and they have the same final destination: cities, which increasingly combine different races, cultures, languages and customs, which change the composition of classes and, above all, of the working class, which incorporates the immigrant proletariat as one of its most combative components.
Migration to the G7 countries is broken down as follows: 50% go to the US, 40% to the EU, 5% to Canada and just over 3% to Japan. Immigration to the EU comes from the Middle East, North Africa and Eastern Europe, as well as other regions. The EU hosts approximately 80% of the Arab/Muslim immigration that reaches Western societies. The migratory waves go to the developed countries that are closest geographically.
Europe is 78% of the immigration from Eastern Europe, 79% of the immigration from the Middle East and 93% from North Africa. The US is the chosen destination for 98% of immigration from Central America and Mexico. At the other end of the world, Japan's immigrant population comes almost exclusively from East Asia. In the case of the US, the phenomenon is changing its social structure, and people who define themselves as Hispanic, Latino or Chicano are becoming the first minority, surpassing African-Americans, for the first time in US history.
After the Second World War, with the rise of modern multinationals in the midst of the capitalist reconstruction of Europe, capitalist governments and states led and stimulated this internal migration from the countryside to the city to supply labor for the new emerging industries that spearheaded the "boom" of the world economy, which allowed the reconstruction and reconstitution of the powerful European proletariat.
This is how José Moreno Pau explains it : "... It must be remembered that the industrial reconstruction of the main European imperialist powers, after the Second World War , was made based not only on the Marshall Plan but also at the cost of the displacement of millions of workers from the southern Europe, Turkey and North Africa to industrial areas..." (31) Turks constitute the largest immigrant group in Europe, with a sizeable presence in Germany, Denmark and the Netherlands. But the disastrous situation in which immigrants from Europe live is the same as that experienced by their comrades from the US, Japan and the other imperialist countries.
This is how José Moreno Pau explains it: "...immigrant workers have once again been the most exploited sector, occupying the least qualified and hardest jobs (construction, agriculture, industry, cleaning, domestic service...). These sectors are the ones with the highest subcontracting and precariousness index, and for this reason immigrant workers are the most affected by accidents at work (32) .
With the development of the Globalization Regime, there has also been a greater migration of more qualified labor from backward countries to develop areas and sectors that suffer from labor shortages, such as the information production and use industries, communication and high technologies. This import of "gray matter" and qualified personnel or professionals in agreement with the governments that have established "green cards" or special permits since the 80s.
For José Moreno Pau: "... On the other hand, they also import qualified labor that in recent years have joined the army of scholarship holders and researchers who work for multinationals with much lower wages and with minimal health rights. This is part of the brain drain that implies an impoverishment for the countries of origin, which see how the investment in their training is lost.The immigrant labor force arrives in the city at working age, with which the receiving states are they have saved years of healthcare and education..." (33)
In short, the imperialist countries develop and promote immigration as part of their global plans to advance worker exploitation, according to José Moreno Pau: "... The imperialist countries of the EU use immigrant labor to divide the working class keeping them with lower and lower wages, increasing working hours, substituting social benefits for the care of the sick and the elderly and children with domestic workers... the contribution of immigrants to the percentage of the population in developed countries. .Today they represent between 10% and 20% of the population of the central European countries..." (34)
Migrations in Africa have several components, on the one hand migration to oil-producing countries, on the other hand migration from the poorest countries to the most developed ones, and on the other hand migration as a movement of refugees from wars being the The region with the largest number of refugees rose from 3 million in 1985 to 6.8 million in 1995. In Asia and the Pacific, Japan, Malaysia, Korea, and Taiwan joined Hong Kong and Singapore as labor-importing countries. In all regions, the capitalist governments have a policy of systematically crushing and curtailing the rights of immigrants with the aim of facilitating their exploitation and the use of these workers as cheap labor and cannon fodder for the imperialist armies.
With increasingly tough immigration laws, the situation for immigrant workers is getting worse. This is how José Moreno Pau explains it: "...they suffer exploitation, the division between those with papers and those without papers, between nationalized and non-nationalized, and finally the division by nationality continues to be promoted. The imperialist governments offer immigrants to join the Invading armies, such as the one from the United States, went to Afghanistan in exchange for papers and permits to be able to live in the country with his family, but even so, the group of immigrants suffered from racism and xenophobia, the formation of ghettos and clandestinity. .." (35)
However, for decades immigrants have been leading increasingly important struggles to defend their residence and labor rights. Particularly important have become the struggles in the middle of the first decade of the 21st century against anti-immigration laws in France and the US, which placed them at the center of world politics. Specifically, between 2005 and 2006 some of the most important struggles for the rights of immigrants in recent decades took place.
In November 2005, thousands of French youths carried out a two-week revolt that had its stamp on burning thousands of cars in regions of Paris where more than half of the population under 15 years of age is from Africa. These same young people mobilized again, together with thousands of French youth, months later in March 2006 to confront the legislation of the Chirac-Villepin government and the "First Job Contract" (CPE), which triggered the opposition of working student youth, because it tried to liquidate the aspects favorable to workers by establishing job insecurity and allowing employers to take young people and fire them without reason within two years.
Evolution of the world population in history From the beginning of capitalism the world population curve rises and multiplies 10 times. Source: Population Reference Bureau and United Nations, World Population Projections to 2100 (1998)
A year later, in 2006, the fight against Law HR4437 and the legislation that curtailed the rights of immigrants, mainly Latinos, broke out in the US. This attack had been preceded by brutal discrimination and persecution of Muslim immigration after the events of 9/11. The entire process of immigrant struggle was crowned with a great national mobilization on May 1, 2006, which brought together millions in all US cities to fight against the voracity of large companies, especially in the construction industry. , meat and services, which sought serious cuts to the rights of Latinos to ensure cheap labor from workers who, having no rights, are forced to give up their labor for coins.
The great Latino mobilization precipitated the sub-prime crisis, because the expansion of the real estate sales business was always based on the exploitation of immigrant labor in the construction industry, made up mostly of Latino labor. In 2015 Europe experienced one of the most significant influx of migrants and refugees in its history. Driven by the terror of the civil war in Syria and by the need for a better life, in the face of the crisis of capitalism, hundreds of thousands of people have fled the Middle East and Africa, risking their lives along the way.
The scale of the crisis has put enormous pressures on some destination countries, notably Greece, Austria and Hungary. At least 350,000 migrants crossed EU borders in January-August 2015, compared with just 280,000 for all of 2014. And that 350,000 figure, an International Organization for Migration (IOM) estimate, does not include the many who crossed a border without being detected. Among the forces driving people to take such risks are the conflicts raging in Syria and Afghanistan, and human rights abuses in Eritrea. The majority - 62% - of those who have arrived in Europe by boat so far this year are from these three countries. There are also people settling from Libya, Sudan, Pakistan, Nigeria, Kosovo, Iraq, Iran Darfur,
The concentration and growth of the working class gave rise to the megacities
The large urban concentrations that arise from migrations are the megacities. These conglomerates did not exist 60 years ago, but due to the fact that half of humanity is migrating from the countryside to the city and from the most backward economies to the most advanced ones, they are developing convulsively and dramatically. The term megalopolis was introduced by the French geographer Jean Gottmann in the 1960s, more precisely in his book "Megalopolis, the urbanized northeastern maritime border of the United States" .
Gottman in this book referred to that urban system that had a population equal to or greater than 10 million inhabitants, the nucleus of large cities that is expanded with satellite cities creating a megalopolis. These huge urban concentrations are placed at the center of the world political situation, because it is there where the fundamental political processes of the mass movement, the most important mobilizations, insurrections and revolutions take place.
Trends of poblation in 10 main urban populations
But also, and as we will see immediately, because these megacities are huge concentrations of workers. Vast sectors of the mass movement are not only concentrated in the megacities, along with the subsequent social groups and class sectors such as the unemployed, the lumpen and marginal, and the rich and poor middle-class sectors. An enormous and powerful working class is developing in these gigantic conglomerates, which, as we will see, already covers the 5 continents and colors the fundamental political processes of the world with its mobilization.
The ongoing world urbanization and demographic transformations show the degree of development achieved by the working class with globalization. As explained in his excellent work "Workers of the World" Chris Harman gives the following figures: "...The working class (exists) as never before as a class in itself...with a core of perhaps 2 billion people ", around which there are another 2 billion whose lives are "subject to important ways to the same logic as its core... 2.474 million people participated in the global non-domestic labor force in the mid-1990s. of a fifth, 379 million people, worked in industry, 800 million in services, and 1,074 million in agriculture".
And he continues: "...Capitalism has created a world working class in the last century and a half. Industry and wage labor exist today in virtually every part of the globe. The industrial working class has a world presence. But uneven development and combined of the system implies that it is very unevenly distributed between the different regions.Rough calculations indicate that 40% of the almost 270 million industrial workers are in the OECD countries, in China, Latin America and the former USSR, around 15% in each country, in Asia about 10% and about 5% in Africa..." (36)
The installation of multinationals in China and India, which cause a growth of the proletariat in those countries, did not prevent the growth of the proletariat in developed countries, as Harman points out "...in 1998 the number of workers in industry was close to 20% higher than in 1971, almost 50% higher than in 1950..." (37) In the remaining first world countries the number of industrial workers grows unevenly, in Japan the industrial labor force has grown by more than doubled between 1950 and 1971 and had another 13% increase in 1998.
In Great Britain it fell by a third, and in France by more than a quarter, but overall there are 112 million in 1998 industrial workers in the G7 countries, an increase in the number of industrial workers in the most developed countries of 25 million compared with 1950. The weight of the working class is decisive in the most important country in the world, the United States. For Harman "...Overall there are a minimum of 42 million "service sector workers" in manual occupations or routine white-collar jobs in the United States. If we add the 33 million workers in traditional manual industries, we have about Three-fourths of the American population is made up of workers." (38)
In Great Britain it fell by a third, and in France by more than a quarter, but overall there are 112 million in 1998 industrial workers in the G7 countries, an increase in the number of industrial workers in the most developed countries of 25 million compared with 1950. The weight of the working class is decisive in the most important country in the world, the United States. For Harman "...Overall there are a minimum of 42 million "service sector workers" in manual occupations or routine white-collar jobs in the United States. If we add the 33 million workers in traditional manual industries, we have about Three-fourths of the American population is made up of workers." (39)
Baldoz, Koeber and Kraft state: "... There are now more Americans employed in the manufacturing of cars, buses and auto parts than at any time since the Vietnam War...". (40) According to data from the World Bank, the total number of workers worldwide is growing faster than ever before in history, the world labor force has increased from 1,887 million people in 1980 to 3,102 million in 2008, that is, , an increase of 1,215 million workers in the last 30 years.
The world proletariat is growing in great proportions. Only in China are 18 million internal migrants per year who find employment in the industry. Worldwide, according to previous data, at least a fifth of the total increase of 1,215 million between 1980 and 2008, are industrial workers, which means that the industrial proletariat grows and spreads worldwide . Globally, the working class has a more complex structure with various layers due to the changes produced.
In Great Britain it fell by a third, and in France by more than a quarter, but overall there are 112 million in 1998 industrial workers in the G7 countries, an increase in the number of industrial workers in the most developed countries of 25 million compared with 1950. The weight of the working class is decisive in the most important country in the world, the United States. For Harman "...Overall there are a minimum of 42 million "service sector workers" in manual occupations or routine white-collar jobs in the United States. If we add the 33 million workers in traditional manual industries, we have about Three-fourths of the American population is made up of workers." (41)
Baldoz, Koeber and Kraft state: "... There are now more Americans employed in the manufacturing of cars, buses and auto parts than at any time since the Vietnam War...". (42) According to data from the World Bank, the total number of workers worldwide is growing faster than ever before in history, the world labor force has increased from 1,887 million people in 1980 to 3,102 million in 2008, that is, , an increase of 1,215 million workers in the last 30 years. The world proletariat is growing in great proportions. Only in China are 18 million internal migrants per year who find employment in the industry. Worldwide, according to previous data, at least a fifth of the total increase of 1,215 million between 1980 and 2008, are industrial workers, which means that the industrial proletariat grows and spreads worldwide . Globally, the working class has a more complex structure with various layers due to the changes produced.
This is how Roberto Antunes explains it: "... our first challenge is to try to understand what the working class is today, what the proletariat is today, in the broadest sense of the term, not understanding the workers or "the proletariats of the world". "As exclusively the industrial proletariat...comprises the totality of wage earners, men and women who live from the sale of their labor power and who are dispossessed of the means of production...the working class today incorporates the totality of social work , the totality of collective labor that sells its labor power in exchange for wages" (43)
Antunes analyzes the various layers of the world working class: "... the working class also includes the wide range of wage-earners in the service sector, but who do not directly create value...also incorporating the rural proletariat that sells its workforce for capital, the so-called "swallows" from the agro-industrial regions... to the precarious proletariat... which is part-time, which is characterized by temporary work, by precarious work such as the workers of McDonald's , of services...according to ILO data, there are today more than one billion working men and women who are precarious and underemployed... or are unemployed..." (44)
One of the most spectacular examples of the growth and strength of the world working class is precisely China. In that country in 1986, 30 million peasants migrated to the cities, which in 1988 became 50 million, in 1989 between 60 and 80 million and in 2003 migration reached the figure of 98 million. In 2001, the industrial proletariat in China numbered more than 160 million workers, a figure higher than the number of industrial workers in the OECD (131 million), India (25 million) and Indonesia (13 million).
The same phenomenon has occurred in India, and in all the countries of Southeast Asia, especially the "Tigers", which were the dynamic pole of the world economy in the transition from the Keynesian regime to globalization. In those regions, 50 years ago, the powerful proletariats that exist today did not exist, but their growing presence only confirms the Marxist laws that capitalism is what engenders the proletariat. That is, the capitalist development in those regions has given rise to the new working class of Southeast Asia.
If we consider the existence of these hundreds of millions of workers who did not exist 50 years ago, the development of the working class in the rest of the colonial countries and the fact that in the G7 countries the working class has grown, we can then consider that in this imperialist phase of capitalism with the Accumulation Regime of globalization constituted around the Multinational Corporations, the working class reached a magnitude and the most important weight in the entire history of capitalism.
This final data is not minor. For Marxists, the weight and importance of the working class in the world does not have merely sociological significance. Its weight and influence is vital to determine the course of political and social events that we are experiencing today, and to locate the social dynamics of the social rebellions that global capitalism faces at the dawn of the 21st century. Precisely, the globalization regime and the Global Corporations have given rise to this working class, powerful as never before, which is called to put an end to both that brutal economic regime and the companies that dominate the world economy today.
(1) y (2) UNCTAD, World Investment Report 2002, pág. 85. Sara Anderson y John Cavanagh, Top 200 - The Rise of Corporate Global Power, Institute for Policy Studies, Washington, 2000, pag 3
(3) Karl Marx Capital Book I Chapter XXIII The General Law of Capitalist Accumulation
(4) VI Lenin. Imperialism, the superior phase of capitalism Cap II Banks and their new role (sub. ours)
(5) Moody's "$640 billion and 640 days later: how companies that produced private equity behaved during the US recession"
(6) U.S. International Banking Facilities (IBFs) Japanese Offshore Market (JOM) Bangkok International Banking Facilities (BIBFs)
(7) Robert Brenner Turbulence in the world economy
(8) The New Economy: What's New, What's Not. John B. Harms Tim Knapp
(9) Gerard Dumenil y Dominique Levy, "The Profit Rate: Where and Houch Much Did it Fall? Did it Recover?" (USA 1948-1097), 2005
(10) Nahuel Moreno. Thesis on the world situation- International Secretariat of the ITL-CI, 10/20/84
(11) Robert Brenner Turbulence in the world economy
(12) Nahuel Moreno. "Opinion: The crisis has already begun" International Mail 18, 1986
(13) Nahuel Moreno Thesis of the LIT on the world situation. 1985 (our underlining)
(14) Marx: Capital, third book, chap. II, The rate of profit, (underlining ours)
(15) Nahuel Moreno Thesis of the LIT on the world situation. 1985 (our underlining)
(16) and (17) Nahuel Moreno. School of Economics cadres. January '85 (our underlining)
(18) "Although officially concealed, the issue of private ownership of Federal Reserve member banks has been challenged several times in federal courts, such as in the case of Lewis v. USA, which was decided by the 9th Circuit of the Court of Appeals which ruled that the Reserve banks are independent, privately owned and locally controlled corporations." Stephen Lendman Research Associate of the Center for Research on Globalization.
(19) Nahuel Moreno. Thesis on the world situation. LIT-CI (1984)
(20) Nahuel Moreno Thesis of the LIT on the world situation. 1985 (our underlining)
(21) Nahuel Brown. Opinion. "The Crisis Already Begun" International Mail 18, 1986, p.8
(22) Daniel Munevar www.cadtm.org
(23) Charles Moyer, James Mc Guigan Contemporary Financial Administration, page 505
(24), (25), (26), (27) Robert Brenner "Turbulence in the world economy"
(28) Karl Marx. C apital Book I Chapter XXIII The general law of Capitalist Accumulation
(29) UN. State of the World Population (2007)
(30), (31), (32), (33), (34), (35) José Moreno Pau "Immigration in Europe" . With the collaboration of Jan Talpe. Marxism Alive 15 year 2007
(36), (37), (38) and (39) Chris Harman. "The workers of the world" (Part 1) Source: International Socialism 96 Date: 12/6/2003
(40) Baldoz, Koeber and Kraft "The critical study of work: work, technology, and world production"
(41) Chris Harman. "The workers of the world" (Part 1) Source: International Socialism 96 Date: 12/6/2003
(42) Baldoz, Koeber and Kraft "The critical study of work: work, technology, and world production" "The new proletarians of the world at the turn of the century" . Roberto Antunes Living Marxism June/ September 2000
(43), (44) "The new proletarians of the world at the turn of the century" . Roberto Antunes Living Marxism June/ September 2000
VI- General Conclusions
We have shown throughout this work the changes that the world capitalist system has undergone from the moment Lenin published "Imperialism" to the present. In the development of the changes that capitalism has undergone in its imperialist phase, we observe 3 Forms of Accumulation that have predominated from 1903 to today; First of all, the Monopolies that unequally and combined became the Predominant Form of Accumulation between the years from 1903 to 1945.
Then, in second place, we looked at the development of Multinationals that became the Predominant Form of Accumulation between the years 1945 to 1980. Finally, in third place, we analyzed the emergence of Global Corporations that became the Predominant Form of Accumulation since 1980 until today. Since these 3 Forms of Accumulation belong to the Imperialist stage of capitalism, they are Monopoly Forms of Accumulation that ratify the laws and movements formulated by Lenin and confirm the entire Theory of Imperialism raised by Lenin in 1916.
From Left to Right: Monopolies, Multinationals, and Global Corporations, the Forms of Accumulation characteristic of the imperialist stage of capitalism
In the first place, these Forms of Accumulation carry out the process of Capital Accumulation or expanded reproduction, that is, they carry out the movements of concentration and centralization of capital formulated by Karl Marx in the General Law of Capitalist Accumulation in Volume I of The Capital. As a result of this movement, secondly, given that they are monopolistic forms of accumulation that tend to liquidate competition and establish a monopoly over branches of industry, commerce and finance, the levels of concentration and centralization of capital are much higher than all other capitalist enterprises that have been its predecessors.
Once the trends derived from the General Law of Capitalist Accumulation formulated by Karl Marx have been established, we now establish the particular conditions of Accumulation by applying the General Law of Capitalist Forms of Accumulation. The particular conditions in relation to the levels of concentration and centralization of capital cause an unprecedented overaccumulation of capital. Thirdly, this generates a new phenomenon, the fact that these very high levels of overaccumulation of capital sharpen all the contradictions of capitalism in a more accelerated and convulsive way.
This is how the phenomenon that the development times of the economic processes of capitalism are shortened in historical terms is produced. To take a case, if with Manufactures in the 16th century the entire process of developing a rate of profit in different branches of production, of equalizing said rates of profit and of falling rates of profit took centuries, now, product from the colossal levels of overaccumulation of capital caused by Monopolies, Multinationals and Global Corporations, all these processes take place in just decades.
Fourthly, we have seen how the development of the different predominant Forms of Accumulation gives rise to their respective Capitalist Accumulation Regimes, which arose together with their development. The Monopolies gave rise to the Monopoly Accumulation Regime, the Multinationals to the Keynesian Accumulation Regime, and the Global Corporations to the Globalization Accumulation Regime. These Accumulation regimes successively went through phases of emergence, apogee, and exhaustion, which led to the end of the regimes and the process of superseding some accumulation regimes by others. The Keynesian regime contains and surpasses the monopoly regime, and after entering its exhaustion stage, the Keynesian regime is surpassed and contained by the Globalization regime.
Fifth, we locate that given that the very high levels of capital overaccumulation shorten in historical terms the development times of the economic processes, this is what explains why the accumulation regimes of the imperialist stage have a very short period of duration in historical terms. For example, the Keynesian Accumulation Regime lasted only 35 or 40 years, which can be considered a long period of time in relation to the existence of a few generations of workers, but it results in an extremely short period in relation to the set of historical and social processes. of history.
Sixthly, based on the study carried out, it is possible to unravel the mechanism by which the transition from a predominantly inferior Form of Accumulation to a superior one occurs, and thus to be able to understand, for example, how the transition from Monopolies to multinationals. We have seen that this process is the result of a violent process of destruction of productive forces, or "burning of capital" as formulated by Karl Marx, who developed the laws of capital accumulation that explain how this process unfolds from the beginning. economic point of view.
It remained to be known how this process of burning capital is done in combination with political and social factors, an issue that becomes evident when observing that the burning of capital necessary to move from one Form of Accumulation to another requires a process of destruction of forces. productive for the centralization, and accumulation of capital that implies the permanent destruction, and liquidation of social classes and sectors of classes.
In seventh place, we find that through wars and revolutions, the transition from a lower Form of Accumulation to a higher one occurs. These theses link the laws of Marxist economics with historical materialism, because they show that the mechanism of annihilation and burning of capital that capitalism developed to solve its crises, and advance in the forms of accumulation and centralization of capital, is explained fundamentally due to the role of private property and social classes. Private ownership of the means of production and exchange gives rise to the bourgeoisie as the ruling class and within it the different sectors of the bourgeois class that permanently dispute capital and profits.
That is why it is necessary to locate in eighth place that behind the Monopolies, Multinationals and Global Corporations are the social classes that own these different means of production and the different sectors of that ruling class. And that it is the fight for the defense of private property, interests, and profits is what explains why capitalism evolves in different Forms of Accumulation. In turn, these different Forms of Accumulation are overcome and transformed. For example, the monopolies continue to exist, but they are overcome and contained in turn by the Multinationals in a process of evolution that deposits the Forms of Accumulation one on top of the other, like the different geological layers.
Ninth, we observe the development of this mechanism by which, after each violent process of destruction of productive forces, there was a new centralization of capital that allowed a higher Form of Accumulation, and began a period of long expansion of the capitalist economy. These Forms of Accumulation reach their peak, but as all the contradictions of capitalism develop in an accelerated and convulsive manner, the exhaustion of the predominant Form of Accumulation begins, which leads to the end of the expansion phase and a long period of growth begins. stagnation of the economy, which inevitably leads to a new process of destruction of productive forces.
These periods of long expansion or long stagnation of the global capitalist economy have had different durations, sometimes barely a decade or sometimes several decades, but none of this implies the existence of regular or permanent cycles. On the contrary, the economy does not move by "cycles" or "waves", but by the economic movements carried out by the Forms of Accumulation through which the phenomenon of the emergence of a new predominant Form of Accumulation and its boom, that explain moments of expansion or growth of the capitalist economy, while the opposite movement, that of the exhaustion of the predominant Forms of Accumulation, is what explains the long periods of stagnation, or regression of the capitalist economy.
Capitalism suffers crises all the time, as an expression of the development of the contradictions inherent to it as an economic system. These crises and disturbances are minor and do not put capitalism at risk, which is why they are quantitative crises. But in turn, these permanent, small, chronic, and systematic crises combine and are dialectically related to the periods of stagnation or expansion determined by the rise or exhaustion of the predominant Forms of Accumulation. When a Form of Accumulation and its corresponding Accumulation regime enter the Depletion stage, they configure more important crises, which endanger the entire capitalist mode of production. We call this crisis the qualitative crisis, or qualitative disturbance of the extended reproduction process.
The two crises, the Quantitative Disturbance, and the Qualitative Disturbance combine all the time, in the process of Capitalist Accumulation. All these concepts are typical of the General Law of the Forms of Capitalist Accumulation, and allow us to understand more fully the development of the crises of capitalism. It allows us to understand that the crisis is not a single phenomenon, but that there are two types of crises, and thus overcome old schemes such as the old vision that capitalism in its heyday stage had essentially developed the productive forces for a long period of time. , and then in its decadent stage it had developed only the destructive forces.
With the General Law of the Forms of Accumulation, this scheme is definitively overcome. It is clear that capitalism has alternated in all its stages and phases the development of productive forces and destructive forces simultaneously. And that the engine of evolution of the economy and the overcoming of one Form of Accumulation by another is the development of destructive forces and war. In the General Law of the Forms of Capitalist Accumulation it does not try to discern whether there is a development of the productive forces, or destructive ones, we know that capitalism develops these two movements simultaneously all the time. It is about knowing which of the two movements is predominant. The engine of the evolution of capitalism, which allows progress from a lower to a higher Form of Accumulation,
Nahuel Moreno anticipated some of these conclusions in his last economics courses and expressed doubts about the progressive character of capitalism, about whether throughout its history, capitalism evolved in a contradictory way with the development of the productive forces . He expressed it this way:"I have doubts...if capitalism was not always a contradictory phenomenon, which developed technology and destroyed nature and man. And if it is not a permanent law of capitalism. I have great doubts, personally...I am very scared of the numbers of the Indians, and the numbers of the African blacks that capitalism destroyed in the 16th-17th century. In other words, there are horrifying calculations. Almost 90% of the indigenous people were liquidated in 50 years... So I don't know if capitalism doesn't permanently have a baleful face against the development of the productive forces... It was very progressive with respect to technique, it is the stage of great technical development, but objectively, from its beginning... it leads to barbarism. That is, what we are seeing now is not a consequence that it was wonderful and changed, and it became bad,but before it was sinister as now, and more and more sinister, more sinister, more sinister..."
"The question is whether it began with imperialism... or it began when capitalism arrived... which is the first production system that does not work for consumption, which is already such an irrational thing... which is something irrational from the outset, it is against the development of the productive forces from the outset, so it is a highly contradictory phenomenon from the outset. Technically it is the one that develops the most, precisely because it does not produce for consumption...But at the same time it is the one that destroys nature the most, the most destroys everything from the beginning. And today it is the monstrosity of a law that was permanent" (1)
The End of the reign of Global Corporations
When the contradictions appear, and the predominant Forms of Accumulation enter their stage of exhaustion, the capitalist states, analysts, and defenders of capitalism of all stripes are perplexed by the forceful performance of the economy, whose profound laws they do not understand. These characters are increasingly confined to explanations based on trickery, periodic or secular cycles, luck, providence, the horoscope and ultimately, the divine will of some superior being that determines events.
This explains why all the policies of the G7 governments that seek to solve crises by intervening in the world market or trade, manipulating prices, stimulating credit or manipulating portions of the world capital flow, fail systematically and resoundingly. Policies to resolve the crisis through interventions in the field of circulation and trade, only aggravate it because the crisis is expressed in trade, but it develops in the process of Accumulation that goes through the entire economic process.
Capitalist government officials, economists who defend capitalism, and even some analysts who are considered Marxists observe the origin of the crisis in the market, trade, the sphere of the circulation of merchandise or the consumption of goods, which the leads to classify the crisis as overproduction, underproduction or low consumption. With the knowledge of these movements and laws, we can then define the character and nature of the current crisis of the diagnosis of the current crisis of capitalism: Capitalism is undergoing a process of Qualitative Disturbance of the Expanded Reproduction Process.
That is to say, we are experiencing a process of exhaustion of the current predominant Forms of Accumulation, the Global Corporations. These capitalist companies by virtue of the Update of Lenin's Theory of Imperialism, are the current Imperialism, and their bankruptcy as well as the support with bailouts express that they are Forms of Accumulation that have entered their phase of exhaustion. The successors of the Modern Multinationals have been rescued, but these crises, when they develop in the midst of the exhaustion phase of the globalization regime, the successive injections of gigantic masses of capital on credit carried out by the central banks with the bailouts, manage to revive the economy. world, but they gave as a response the weakest economic indicators of the last decades.
A long-lasting, historic crisis has opened from now on, which will go through depressions and momentary recoveries. Even so, the response capacity of the world's capitalist governments, both imperialist and semi-colonial, has been effective, coordinated, and has formally prevented the bankruptcy of the Global Corporations. QE and the global interventions of the states, not exempt from crises and contradictions, seek to stop the collapse.
Regardless of the pace that the situation acquires, whether or not a new fall is carried out, whether the economic assistance of the G7 states, which continues, is combined with new global or partial bailouts, what we are witnessing is the end of the economic regime of globalization, and the beginning of a new phase, or regime that has all the elements of barbarism, heralding some of the tendencies towards the decomposition of capitalism.
In the last period, an important controversy has been unleashed about the meaning of the bailouts, whether they will succeed in moving the world economy forward or not, and what consequences they will have for the development of capitalism. We already know what effect these monstrous masses of capital that have been injected into the world economy will have. They will allow conjunctural relief, they will allow the circulation process, credit and money that have collapsed to be partially restored. But they will be developing even stronger all the contradictions of the capitalist system, the crises and with it, the shocks and social uprisings that herald a greater crisis.
Dying and decadent capitalism threatens to drag humanity into disaster and the conditions are ripe for the transition from one mode of production to another. Everything that happens today in the world capitalist-imperialist system confirms Lenin and the Theory of Imperialism. But the transition from the capitalist to the socialist mode of production is not to be found in the terrain of the economy, but will be determined by the course of the next events of the class struggle.
No matter how much credit and financial capital act accelerating the dissolution of capitalism, no matter how much the bailouts put this perspective in a fast and precise movement, no matter how much the acceleration of all contradictions is rising to paroxysm, capitalism is not going to disappear, because its fall is not an economic movement, although the economic movement raises the possibility of its fall.
It is in the political field, where it will be defined whether or not capitalism will continue to exist, and in what way, if it survives, it will do so. If there is something important about the current debate on the situation of the world economy, it is precisely that of making progress in the elaboration that our teachers advised us to follow, such as Nahuel Moreno who, compared to the study of the economy, advised us to give definitions of class, while time to face the scientific study of it: "It is good that we agree once and for all what it means for a Marxist to study Marxist political economy... For example, there is a tendency to allow ourselves to be wrapped up in formulas or by economic laws as if they had life by themselves, as if they acted by themselves". (2)
For Moreno, the formulas, the laws, and the analysis of the economic processes, although they are fundamental, are worthless if they are developed by themselves, isolated from the political and social phenomena and from the class analysis. And just as history is made by the classes, Moreno advised us not to forget for a minute that the economy is also made by the classes. This is how he explained it : "For me the decisive factor is the class character of everything...it is the key to everything...Marxist economists almost always forget that. If history is made by classes, economies too They are made by the classes. What do I mean by this?...If there is something that belongs to the classes, it is the economy...we should not lose ourselves and isolate ourselves from the class process when doing economic analysis" (3)
The current crisis of capitalism is the current crisis and the exhaustion of Global Corporations, entities that express the highest degree of accumulation achieved by capitalism, have gone bankrupt, and their bankruptcy expresses the exhaustion of globalization. When we describe his agony, we are talking about the crisis and agony of a social class; that of the owners of the multinationals, that of the tycoons and big capitalists who dominate the world economy as a whole and have ownership of almost all the most important means of production and exchange. All the analysis and theoretical formulation to define the current crisis of capitalism can be defined in a few words: We are living "The End of the Corporations". The crisis of these colossal companies that have reached the highest levels of capital accumulation in human history, worsens to the extent that millions of workers around the world rise up and refuse to submit to their designs, but in their collapse they sink to the capitalist mode of production, which gave rise to them.
The Update of the Theory of Imperialism developed in this work then has this objective. Leaving solid theoretical bases standing that allows us to launch a global political offensive that allows us to give the workers and popular struggles that move the world today, a destiny and a Program. We put this work at the service of the mass insurrections that are shaking the world globally. This is the best tribute we can pay to Lenin 100 years after his book: Intervene in these revolutions and insurrections with the aim of giving them a clear course to impose Global Socialism, defending the foundations of Marxism, and ending this cruel system in the midst of the biggest crisis in history that shakes him to his foundations.
(1), (2) and (3) Nahuel Moreno. School of Economics cadres 1985