ARTICLES & SPEECHES, 1991 - 2000
November 21, 1997
ACCELERATED DESTRUCTION OF PRODUCTIVE FORCES
I wish to express my solidarity with all the participants in the People's Conference Against Imperialist Globalization: Continuing the Resistance, from November 21 to 25, as well as with those in the NO to APEC International Youth and Student Caucus on November 27.
I congratulate the NO! to APEC Coalition for its successful preparatory work and I wish the aforesaid conference and caucus the utmost success in continuing the resistance to APEC and the monstrosity that is imperialist globalization.
You hit the nail on the head when you speak of imperialist globalization. The monopoly capitalists, their political stooges in states and their reformist "civil society" apologists try to bamboozle people with the term "globalization" as if it were a brand-new fact of life that one cannot do anything about, except to adjust to it or at best plead to the monopoly capitalists and their states to reform and improve themselves.
Retrogressive Meaning of "Globalization"
"Globalization" is a term to which the imperialists and their camp followers attach a retrogressive meaning, denoting the hoary dogma of "free trade" and the entire antipeople train of liberalization, deregulation and privatization. The neoclassical and neoliberal terminology of free competition capitalism simply does not apply to the reality of monopoly capitalism and neocolonialism.
We are still very much in the era of imperialism and proletarian revolution, especially because of the betrayal of socialism in the Soviet Union since 1956 and in China since 1976 and the persistent predominance of monopoly capitalism. The higher technology that is now available and that further compresses the globe has a higher social character than the earlier electro-mechanical technology and is far more suitable to socialism than before. But unfortunately, the capitalist social relations and the private methods of appropriating the product of labor have become even more avaricious and antisocial.
As the imperialists use the term, globalization means a policy shift from Keynesian or social-democratic methods to neoliberal methods, or rather to the use of neoliberal jargon to rationalize the unmitigated greed of the monopoly capitalists. It is meant to disparage the idea and experience of state intervention for social welfare, economic development and coping with the crisis even within the world capitalist system and, most of all, to counter the cause of socialism.
The neoliberal bias disdains fiscal measures and favors the use of monetary measures in running the economy and letting the monopoly capitalists have the utmost free play in the market. At any rate, the monopoly capitalists still use both fiscal and monetary measures to aggrandize the monopoly capitalists.
It is untrue that there is a growing separation between the multinational corporations and banks on the one hand and the states on the other hand. States have always been the instrument of the ruling class, now the monopoly bourgeoisie. It is also untrue that multinational firms and banks have no national basing. National stockholders own and control each of them, even as their predatory operations are borderless.
The 18 chiefs of state in the APEC Summit are subdivisible into the representatives of a few imperialist states and the more numerous client-states. They are all servants of monopoly capitalism. Under the neoliberal policy shift, pushed vigorously by Reaganism and Thatcherism since the 80's, these states shamelessly abandon social pretenses, accelerate the delivery of public resources to the monopoly capitalists and push corporate welfare at the expense of social welfare in the very centers of global capitalism and prevent economic development in the neocolonial hinterlands.
For a long time, until the '70s, the traditional imperialists had to adopt the fiscal measures of state intervention in order to cope with the crisis of overproduction during the Great Depression, to run war economies in the course of World War II, to combat socialism and national liberation movements in the aftermath of World War II and subjugate Soviet monopoly bureaucrat capitalism in the Cold War.
Destructive Character of "Globalization"
In comparison, the neoliberal policy-shift is proving to be far more destructive to the forces of production and far more shortlived. In the last ten years, from 1987 to 1997, we have witnessed a series of worsening crises, the stock market crash of 1987, the debt crisis and hyperinflation in Latin America in the late '80s, the Mexican peso collapse and the current economic and financial turmoil. Also within the last decade, the growth rate of all the OECD countries have fluctuated between 1 and 3 percent, despite the extremely speculative overvaluation of assets and the more than 30 times overvaluation of the real value of world output.
The national profit rates in the three global centers of capitalism, the United States, Japan and the European Union have drastically fallen. Winning monopoly firms maximize profits by putting in more capital into new technology and by downsizing their labor force, generating mass unemployment and increasingly utilizing untenured and part-time labor under the so-called flexible labor policy in both imperialist and client states.
The United States has relatively the strongest economy among the imperialist powers because it uses its technology lead and its politico-military strength and attracts funds into its stock and bond markets from the weaker and more stagnant imperialist economies. It benefits most from the investment and trade liberalization that it is pushing most vigorously under the WTO and through trade blocs like APEC and NAFTA.
However, the accumulated costs of the Cold War and imperialist preeminence as well as the decline of its client economies reduce and adversely affect the growth of the US economy. The United States is still suffering from a huge debt burden and trade deficits, even as its export drive has undercut Japan and the European Union and such old tigers as South Korea and Taiwan.
Since its economic bubble burst in 1990, Japan has continued to languish in economic decline, despite its exceptionally heavy deficit-spending on public works, shifting plants abroad, export of supplies for export-oriented manufacturing in East Asia, investments in US bonds and financing real estate speculation mainly through Honking banks. The European Union suffers from an official rate of unemployment at 12 percent and has adopted austerity measures.
Seventy to 75 percent value-added by multinational corporations is still being produced in the imperialist countries. The process of concentration through mergers and acquisitions, assisted by bankruptcies, continues unabated. Only 100 MNC's or 0.3 percent of the total number own one-third (USD1.8 trillion) of the total of foreign direct investments.
Seventy per cent of the total global flow of direct investment is concentrated in the three global centers of capitalism and some neighboring countries. In turn, 30 percent is concentrated in only some ten so-called emergent markets, with East Asia taking the lion's share. Up to the eve of the current economic and financial turmoil which conspicuously started in Southeast Asia last July, the imperialist finance companies and multinational firms put their funds into the so-called emergent markets in Southeast and Northeast Asia because they could get here the highest rates of profit in the world.
Surplus capital from the global centers of capitalism went into financing in the client states of East Asia budgetary and trade deficits, privatization of state assets, importation of luxury goods, supply of components for low value-added export-oriented manufacturing, sale of telecommunication equipment, real estate development and other speculative activities. If the most conspicuous construction under Keynesian economics was that of public roads and bridge, that under neoliberal economics has been that of office and residential towers and golf courses.
Of course, the overborrowing and overspending by the "emergent markets" must come to a dismal end. Now, there is gross overproduction in low value-added, labor-intensive export-oriented manufacturing. The oversupply of garments surfaced in 1994, followed by that of consumer electronics in 1996. The old tigers also find their higher value-added products squeezed by the US export drive and the continuing decline of the Japanese economy.
The debt problem of Southeast Asia has gone from bad to worse at an accelerated rate. The causes have also gone from bad to worse. Whereas up to the late '70s the debt problem involved heavy borrowing and spending for infrastructure and expansion of raw- material production, it has now involved frenzied use of private speculative capital from abroad to sustain upper class consumption, real estate speculation and other antipeople and antidevelopment activities.
Obscurantism in the APEC
The current economic and financial turmoil now shaking the entire world capitalist system is inevitably the focus of discussion in the APEC summit. The summiteers are bound to expose themselves as obscurantists when they gloss over the rotten fundamentals of the world capitalist system, especially because of the neoliberal policy-shift, push further for trade and investment liberalization under the WTO and promote the entire range of prescriptions in the Multilateral Agreement on Investments from the OECD.
There is massive capital flight from the "emergent markets" in East Asia. Austerity measures are certain to be applied on them. They are being required to accept new conditionalities from the IMF in exchange for bail-out funds, now running at more than USD80 billion for a number of East Asian countries. The deterioration of economic conditions in the client-states in the Asia-Pacific region means further shrinkage of the market and a dwindling source of superprofits for the United States, Japan and the European Union.
The crisis of the world capitalist system is certain to worsen, pushing the imperialist powers to redivide the world because of the shrinking market and reduction of superprofits. The client states are also driven to compete with each other in producing goods for export and in pushing down wage and living conditions and producing goods for export.
Volatility in the world capitalist system is induced by a large bloat of speculative capital, including the daily flows of more than USD1.2 trillion through foreign exchange markets and USD55 trillion traded in the derivatives market. In the stock markets, the multinational corporations buy back their own stocks or engage in cross sales of stocks with their sister companies to conjure the illusion of recovery. But in real terms, they are losing markets and profits and have to reduce production.
All the while, the overwhelming majority of third world countries, which have been brought down economically by the global overproduction of raw materials since the late '70s continue to sink in further underdevelopment, poverty and civil strife. Foreign exploitative capital have gone only in trickles into these countries, in contrast to the large amount poured into East Asia since the late 80's. At any rate, they continue to be crushed by the debt burden and ever deteriorating terms of trade for their raw-material exports.
The former Soviet bloc countries have been plunged into third world conditions. The most rapid destruction of productive forces is demonstrated by Russia, where production has gone down by more than 40 percent since 1991. Surplus goods from the West rather than productive capital have been dumped on Russia, which now is more than ever dependent on the export of oil and other raw materials. In the former Soviet satellite countries, production has gone down in the range of 16 to 30 percent.
Capitalist Crisis and Proletarian Revolution
The imperialist countries are themselves reeling from the crisis of their system and the class struggle between the monopoly bourgeoisie and the proletariat is coming to the surface. The old tigers and all the later "emergent markets" are in serious economic trouble fraught with social and political unrest. In Southeast Asia, the Filipino people are demonstrating to neighboring peoples that protracted people's war is possible and necessary. China which has gotten the lion's share of speculative capital for "emergent markets" has compradorized and made its economy lopsided, is now in economic decline and is vulnerable to renewed social turbulence.
In general, the third world countries and former Soviet-bloc countries are sinking deeper into lower levels of povety and misery and discontent. The people in these countries suffer stagnation and destruction of productive forces and the worst forms of oppression and exploitation. They are weighed down by the global unemployment of more than one billion people and a debt burden of more than USD2 trillion. They have no way out but to wage revolutionary struggle.
Conditions in the world capitalist system are now comparable to those during the Great Depression and even worse in several respects. The stage is set for far worse capitalist crisis and interimperialist war as well as for proletarian revolution and national liberation movements in the 21st century. I am confident that in the revolutionary struggles of the proletariat and the people in the forthcoming century, the cause of national liberation, democracy and socialism will win victories greater than those in the 20th century.
I express my admiration for the organizers and participants of the People's Conference Against Imperialist Globalization for carrying on the criticism and repudiation of monopoly capitalism, the imperialist and client states and the reformists who use the slogan of "civil society" to inveigh against revolutionary mass struggles and who wish to keep the people within the confines of the capitalist system and neocolonialism. You help to light the way towards a new and higher level of revolutionary anti-imperialist struggle for national liberation, democracy and socialism.
Once more, I congratulate you. I hope that your conference
will inspire more people to continue the struggle against
imperialism. Thank you.