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I have written repeatedly on the structural crisis in the world-system, most recently in New Left Review in 2010.
So, I shall just summarize my position, without arguing it in detail. I
shall state my position as a set of premises. Not everyone agrees with
these premises, which are my picture of where we are at the present
time. On the basis of this picture, I propose to speak to the question,
where do we go from here?
Premise No. 1 is that all systems—from the astronomical
universe to the smallest physical phenomena, and including of course
historical social systems—have lives. They come into existence at some
point, which needs to be explained. They have “normal” lives, the rules
of which need to be explicated. The functioning of their normal lives
tends, over time, to move them far from equilibrium, at which point they
enter a structural crisis, and in due course cease to exist. The
functioning of their normal lives has to be analyzed in terms of
cyclical rhythms and secular trends. The cyclical rhythms are sets of
systemic fluctuations (upturns and downturns), in which the system
regularly returns to equilibrium. However, it is a moving equilibrium
since, at the end of a downturn, the system never returns to exactly
where it was at the beginning of the upturn. This is because secular
trends (slow, long-term increases in some systemic characteristic) push
the curve slowly upward, as measured by some percentage of that
characteristic in the system.
Eventually, the secular trends move the system too near its
asymptotes, and the system is unable to continue its normal, regular,
slow upward push. Thereupon, it begins to fluctuate wildly and
repeatedly, leading to a bifurcation—that is, to a chaotic situation in
which a stable equilibrium cannot be maintained. In such a chaotic
situation, there are two quite divergent possibilities of recreating
order out of chaos, or a new stable system. This period we may call the
structural crisis of the system, and there is a system-wide battle—for
historical social systems, a political battle—over which of two
alternative possible outcomes will be collectively “chosen.”
Premise No. 2 is the description of the most important
characteristics of how the capitalist world-economy has operated as a
historical social system. The driving underlying objective of
capitalists in a capitalist system is the endless accumulation
of capital, wherever and however this accumulation may be achieved.
Since such accumulation requires the appropriation of surplus value,
this drive precipitates the class struggle.
Serious capital accumulation is only possible when one firm or a
small group of firms has a quasi-monopoly of world-economy-wide
production. Possessing such a quasi-monopoly depends on the active
support of one or more states. We call such quasi-monopolies leading
industries, and they foster considerable forward and backward linkages.
Over time, however, all such quasi-monopolies are self-liquidating,
since new producers (attracted by the very high level of profit) are
able, in one way or another, to enter the market and reduce the degree
of monopoly. Increased competition reduces sales prices but also reduces
the level of profit and therefore the possibility of significant
capital accumulation. We can call the relation of monopolized to
competitive productive activities a core-periphery relationship.
The existence of a quasi-monopoly permits the expansion of the
world-economy in terms of growth and allows for trickle-down benefits to
large sectors of the world-system’s populations. The exhaustion of the
quasi-monopoly leads to a system-wide stagnation that reduces the
interest of capitalists in accumulation through productive enterprises.
Erstwhile leading industries shift location to zones with lower costs of
production, sacrificing increased transactions costs for lowered
production costs (notably wage costs). The countries to which the
industries are relocated consider this relocation to constitute
“development,” but they are essentially the recipients of cast-off,
erstwhile core-like operations. Meanwhile, unemployment grows in the
zones in which the industries are relocated, and former trickle-down
advantages are reversed, or partially reversed.
This cyclical process is often called Kondratieff long waves, and has
in the past tended to last an average of fifty to sixty years for the
entire cycle.
Such cycles have been occurring over the past five hundred years. One
systemic consequence is a constant slow shift in the location of the
zones that are most favored economically, without, however, changing the
proportion of zones that are so favored.
A second major cyclical rhythm of the capitalist world-economy is
that involving the interstate system. All states within the world-system
are theoretically sovereign but actually highly constrained by the
processes of the interstate system. Some states are, however, stronger
than others, meaning that they have greater control over internal
fragmentation and outside intrusion. No state, nonetheless, is wholly
sovereign.
In a system of multiple states, there are rather long cycles in which
one state manages to become for a relatively brief time the hegemonic
power. To be a hegemonic power is to achieve a quasi-monopoly of
geopolitical power, in which the state in question is able to impose its
rules, its order, on the system as a whole, in ways that favor the
maximization of accumulation of capital to enterprises located within
its borders.
Achieving the position of being the hegemonic power is not easy, and
has only been truly achieved three times in the five-hundred-year
history of the modern world-system—the United Provinces in the
mid-seventeenth century, the United Kingdom in the mid-nineteenth
century, and the United States in the mid-twentieth century.
True hegemony has lasted, on average, only twenty-five years. Like
quasi-monopolies of leading industries, quasi-monopolies of geopolitical
power are self-liquidating. Other states improve their economic, and
then their political and cultural, positions and become less willing to
accept the “leadership” of the erstwhile hegemonic power.
Premise No. 3 is a reading of what has happened in the
modern world-system from 1945 to 2010. I divide this into two periods:
1945 to circa 1970; circa 1970-2010. Once again, I summarize what I have
argued at length previously. The period 1945-circa 1970 was one of
great economic expansion in the world-economy, indeed by far the most
expansive Kondratieff A-period in the history of the capitalist
world-economy. When the quasi-monopolies were breached, the world-system
entered a Kondratieff B-downturn in which it still finds itself.
Predictably, capitalists since the 1970s have shifted their focus from
the production arena to the financial arena. The world-system then
entered the most extensive continuous series of speculative bubbles in
the history of the modern world-system, with the greatest level of
multiple indebtednesses.
The period 1945 to circa 1970 was also the period of full U.S.
hegemony in the world-system. Once the United States had made a deal
with the only other militarily strong state, the Soviet Union (a deal
rhetorically called “Yalta”), U.S. hegemony was essentially
unchallenged. But then once the geopolitical quasi-monopoly was
breached, the United States entered into a period of hegemonic decline,
which has escalated from a slow decline into a precipitate one during
the presidency of George W. Bush.
U.S. hegemony was far more extensive and total than those of previous
hegemonic powers, and its full decline promises to be the swiftest and
most total.
There is one other element to put into the picture—the
world-revolution of 1968, which occurred essentially between 1966 and
1970, and took place in all three major geopolitical zones of the
world-system of the time: the pan-European world (the “West”), the
Socialist bloc (the “East”), and the third world (the “South”).
There were two common elements to these local political uprisings.
The first was the condemnation not only of U.S. hegemony but also of
Soviet “collusion” with the United States. The second was the rejection
not only of dominant “centrist liberalism” but also of the fact that the
traditional antisystemic movements (the “Old Left”) had essentially
become avatars of centrist liberalism (as had mainstream conservative
movements).
While the actual uprisings of 1968 did not last very long, there were
two main consequences in the political-ideological sphere. The first
was that centrist liberalism ended its long reign (1848-1968) as the
only legitimate ideological position, and both the radical left and the
conservative right resumed their roles as autonomous ideological
contestants in the world-system.
The second consequence, for the left, was the end of the legitimacy
of the Old Left’s claim to be the prime national political actor on
behalf of the left, to which all other movements had to subordinate
themselves. The so-called forgotten peoples (women,
ethnic/racial/religious “minorities,” “indigenous” nations, persons of
non-heterosexual sexual orientations), as well as those concerned with
ecological or peace issues, asserted their right to be considered prime
actors on an equal level with the historical subjects of the traditional
antisystemic movements. They rejected definitively the claim of the
traditional movements to control their political activities and were
successful in their new demand for autonomy. After 1968, the Old Left
movements acceded to their political claim to equal current status for
their demands, in place of deferring these demands to a
post-revolutionary future.
Politically, what happened in the twenty-five years succeeding 1968
is that the reinvigorated world right asserted itself more effectively
than the more fragmented world left. The world right, led by the Reagan
Republicans and the Thatcher Conservatives, transformed world discourse
and political priorities.
The buzzword “globalization” replaced the previous buzzword
“development.” The so-called Washington Consensus preached privatization
of state productive enterprises, reduction of state expenditures,
opening of the frontiers to uncontrolled entry of commodities and
capital, and the orientation to production for export. The prime
objectives were to reverse all the gains of the lower strata during the
Kondratieff A-period. The world right sought to reduce all the major
costs of production, to destroy the welfare state in all its versions,
and to slow down the decline of U.S. power in the world-system.
Mrs. Thatcher coined the slogan, “There is no alternative” or TINA.
To ensure that, in fact, there would be no alternative, the
International Monetary Fund, backed by the U.S. Treasury, made as a
condition of all financial assistance to countries with budgetary crises
adherence to its strict neoliberal conditions.
These draconian tactics worked for about twenty years, bringing about
the collapse of regimes led by the Old Left or the conversion of Old
Left parties to adherence to the doctrine of the primacy of the market.
But by the mid-1990s, there surfaced a significant degree of popular
resistance to the Washington Consensus, whose three main moments were
the neo-Zapatista uprising in Chiapas on January 1, 1994; the
demonstrations at the Seattle meeting of the World Trade Organization in
Seattle, which scuttled the attempt to enact worldwide constraints on
intellectual property rights; and the founding of the World Social Forum
in Porto Alegre in 2001.
The Asian debt crisis in 1997 and the collapse of the U.S. housing
bubble in 2008 brought us to our current public discussion of the
so-called financial crisis in the world-system, which is, in fact,
nothing but the next-to-last bubble in the cascading series of debt
crises since the 1970s.
Premise No. 4 is the description of what happens in a
structural crisis, which the world-system is in at the present time, has
been in at least since the 1970s, and shall continue to be in until
probably circa 2050. The primary characteristic of a structural crisis
is chaos. Chaos is not a situation of totally random happenings. It is a
situation of rapid and constant fluctuations in all the parameters of
the historical system. This includes not only the world-economy, the
interstate system, and cultural-ideological currents, but also the
availability of life resources, climatic conditions, and pandemics.
The constant and relatively rapid shifts in immediate conditions make
even short-term calculations highly problematic—for the states, for
enterprises, for social groups, and for households. The uncertainty
makes producers very cautious about producing since it is far from
certain that there are customers for their products. This is a vicious
circle, since reduced production means reduced employment, which means
fewer customers for producers. The uncertainty is compounded by the
rapid shifts in currency exchange rates.
Market speculation is the best alternative for those who hold
resources. But even speculation requires a level of short-term assurance
that reduces risk to manageable proportions. As the degree of risk
increases, speculation becomes more nearly a game of pure chance, in
which there are occasional big winners and mainly big losers.
At the household level, the degree of uncertainty pushes popular
opinion both to make demands for protection and protectionism and to
search for scapegoats as well as true profiteers. Popular unrest
determines the behavior of the political actors, pushing them into
so-called extremist positions. The rise of extremism (“The center cannot
hold”) pushes both national and world political situations toward
gridlock.
There can be moments of respite for particular states or for the
world-system as a whole, but these moments can also be rapidly undone.
One of the elements undoing the respites are sharp rises in the costs of
all the basic inputs both to production and daily life—energy, food,
water, breathable air. In addition, the funds to prevent or at least
reduce the damages of climate change and pandemics are insufficient.
Finally, the significant increase in the living standards of segments
of the populations of the so-called BRIC countries (Brazil, Russia,
India, China, and some others) actually compounds the problems of
capital accumulation for capitalists by spreading out the surplus-value
and thus reducing the amounts available for the thin upper crust of the
world’s populations. The development of the so-called emerging economies
actually compounds the strain on existing world resources and thereby
also compounds the problem for these countries of effective demand,
threatening their ability to maintain their economic growth of the last
decade or two.
Davos versus Porto Alegre
All in all, it is not a pretty picture, and brings us to the
political question, What can we do in this kind of situation? But first,
who are the actors in the political battle? In a structural crisis, the
only certainty is that the existing system—the capitalist
world-economy—cannot survive. What is impossible to know is what the
successor system will be. One can envisage the battle as one between two
groups that I have labeled “the spirit of Davos” and “the spirit of
Porto Alegre.”
The objective of the two groups is totally opposite. The proponents
of “the spirit of Davos” want a different system—one that is
“non-capitalist” but still retains three essential features of the
present system: hierarchy, exploitation, and polarization. The
proponents of “the spirit of Porto Alegre” want the kind of system that
has never existed heretofore, one that is relatively democratic and
relatively egalitarian. I call these two positions “spirits” because
there are no central organizations on either side of this struggle, and
indeed, the proponents inside each current are deeply divided as to
their strategy.
The proponents of the spirit of Davos are divided between those who
proffer the iron fist, seeking to crush opponents at all levels, and
those who wish to co-opt the proponents of transformation by fake signs
of progress (such as “green capitalism” or “poverty reduction”).
There is division as well among the proponents of the spirit of Porto
Alegre. There are those who want a strategy and a reconstructed world
that is horizontal and decentralized in its organization, and insist on
the rights of groups as well as of individuals as a permanent feature of
a future world-system. And there are those who are seeking once again
to create a new international that is vertical in its structure and
homogenizing in its long-term objectives.
This is a confusing political picture, compounded by the fact that
large parts of the political establishments and their reflections in the
media, the punditry, and academia still insist on talking the language
of a passing, momentary difficulty in an essentially equilibrated
capitalist system. This creates a fog within which it is difficult to
debate the real issues. Yet we must.
I think it is important to distinguish between short-term political
action (the short term being the next three to five years at most) and
medium-term action aimed at enabling the spirit of Porto Alegre to
prevail in the battle for the new “order out of chaos” that will be
collectively “chosen.”
In the short term, one consideration takes precedence over all
others—to minimize the pain. The chaotic fluctuations wreak enormous
pain on weaker states, weaker groups, weaker households in all parts of
the world-system. The world’s governments, increasingly indebted,
increasingly lacking financial resources, are constantly making choices
of all kinds. The struggle to guarantee that the cuts in revenue
allocation fall least on the weakest and most on the strongest is a
constant battle. It is a battle that, in the short run, requires left
forces always to choose the so-called lesser evil, however distasteful
that is. Of course, one can always debate what the lesser evil in a
given situation is, but there is never an alternative to that choice in
the short term. Otherwise, one maximizes rather than minimizes the pain.
The medium-term option is the exact opposite. There is no halfway
house between the spirit of Davos and the spirit of Porto Alegre. There
are no compromises. Either we shall have a significantly better
world-system (one that is relatively democratic and relatively
egalitarian) or we shall have one that is at least as bad and, quite
possibly, far worse. The strategy for this choice is to mobilize support
everywhere at every moment in every way. I see a medley of tactics that
might move us in the right direction.
The first is to place great emphasis on serious intellectual
analysis—not in a discussion conducted merely by intellectuals, but
throughout the populations of the world. It must be a discussion
animated by a large openness of spirit among all those who are inspired,
however they define it, by the spirit of Porto Alegre. This seems
anodyne to recommend. But the fact is that we have never really had this
in the past, and without it we cannot hope to proceed, much less to
prevail.
A second tactic is to reject categorically the goal of economic
growth and replace it with the goal of maximum decommodification—what
the movements of indigenous nations in the Americas are calling buen vivir.
This means not only resisting the increased drive to commodification of
the last thirty years—of education, of health structures, of the body,
of water and air—but decommodifying as well agricultural and industrial
production. How this is done is not immediately obvious, and what it
entails we shall only know by experimenting widely with it.
A third approach is an effort to create local and regional self-sufficiencies, especially in the basic elements of life such as food and shelter. The globalization we want is not a single totally integrated division of labor but an “alterglobalization” of multiple autonomies that interconnect in seeking to create a “universal universalism” composed of the multiple universalisms that exist. We must undermine the provincial claims of particular universalisms to impose themselves on the rest of us.
A fourth derives immediately from the importance of the autonomies.
We must struggle immediately to end the existence of foreign military
bases, by anyone, anywhere, for any reason. The United States has the
widest collection of bases, but it is not the only state to have such
bases. Of course, the reduction of bases will also enable us to reduce
the amount of the world’s resources we spend on military machines,
equipment, and personnel, and permit the allocation of these resources
for better uses.
A fifth tactic that goes along with local autonomies is the
aggressive pursuit of ending the fundamental social inequalities of
gender, race, ethnicity, religion, sexualities—and there are others.
This is now a piety among the world left, but has it been a real
priority for all of us? I do not think so.
And, of course, we cannot expect a better world-system circa 2050 if,
in the interim, any of the three pending supercalamities occurs:
irrevocable climate change, vast pandemics, and nuclear war.
Have I created a naive list of non-realizable tactics by the world
left, the proponents of the spirit of Porto Alegre, for the next thirty
to fifty years? I do not think so. The one encouraging feature about a
systemic crisis is the degree to which it increases the viability of
agency, of what we call “free will.” In a normally functioning
historical system, even great social effort is limited in its effects
because of the efficacy of the pressures to return to equilibrium. But
when the system is far from equilibrium, every little input has great
effect, and the totality of our inputs—made every nanosecond in every
nanospace—can (can, not will) add up to enough to tilt the balance of the collective “choice” in the bifurcation.
Source: http://monthlyreview.org/2011/03/01/structural-crisis-in-the-world-system
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