Global Financial Crisis 2008 – Article No 08
by Humphrey McQueen
Globalisation
To announce that “we live in a global economy” has all the explanatory power of saying that “The earth is pretty much round.” The implosion of world finances both confirms and challenges the conventional wisdoms flowing from two decades of gabble about globalisation. On one hand, liabilities continue to spread throughout the banking sector, from Boston to Belgium. The slicing of sub-primes to reduce risk has infected every cranny of the system, even Iceland.
On the other hand, the claim that globalisaion has rendered nation-market-states redundant has taken as big a battering as the Australian dollar. Who, if not nation-market-states, have been riding to the rescue of the globalisers? Those financiers got their $700bn bailout via the US imperium, not from the corporations that were supposed to rule the world by themselves.
One rung down from the big picture of a borderless – indeed, a “flat” - world, we find that even the most powerful regional grouping, the European Union, has fractured. Germany broke ranks to guarantee its saving-bank deposits. At most, its oldest members are “sticking apart”.
“Globalisation” became like an overcoat concealing a multitude of ignorances, many of them willful. The globalisation pap could get traction because the Left had submitted to the bourgeois phrase “nation-state”, which omits the very practice - “market” - that capital needs is state apparatuses to uphold. Hence, Marxist-Leninists need to argue in terms of nation-market-states and imperial-market-states.
Nation-market-states are there to preserve the interests of clusters of capitalists. Above all, they exist to sustain class rule inside their own borders. To repeat: the state organises capital and disorganises labour.
Ellen Mieskins Wood reminded us that capital needs the state in ways that slavery and feudalism do not. Surplus value has to be realised in sales from as widespread a market as possible, before the profits must make their way back. Those pathways have to be policed against competitors and workers.
Not all nation-market-states are equal. Hence, globalisation has weakened some of them, both within their home sphere of operations, and also in relation to the empire-market-states, primarily, the US of A. However, that hollowing out could not be allowed to go too far. The dangers were as exposed during the 1997 Asian meltdown as that crisis unravelled the IMF’s “tough-cop” packages of structural adjustment which had been compelling governments to abandon swathes of social action, such as health and education.
The revolt against Indonesia’s Suharto precipitated a new stratagem from the World Bank. The soft cop swung its checkbook behind building “effective” states, meaning those that could control their populations when they rose against the economic blows.
Each crisis has its contingent features. Globalisation is not one of them since capitalism was born global in the Venetian and Dutch merchants, to be weaned on the triangular trade of slaves and sugar/cotton from Africa to North America and onto England. Nor is there anything new in global reverberations from financial flops. For instance when bad loans in the Argentine rocked Barings Brothers in 1889, the shockwaves hit Marvellous Melbourne; gold bars had to be rushed from Paris to stabilise “The City” of London.
Next: Not October 1929