Nation States: Fossils Buried by Capitalism
Wall Street Journal - Companies Plow Ahead With Moves to Mexico, Despite Trump’s Pressure
Monopoly capitalism of the 21st Century suffers from the contradiction between the fossilized form of the nation state and the living substance of the world economy. The nation state has outlived its formerly progressive role; the profits obtained from the national market no longer suffice. The main substance of capitalist economy today is international: presaging the dissolution of the social order that is based on the nation state and the national market. Evolving political and social forms, such as the nation state, are drawn (as with a magnet) into correspondence with the dominant economic mode and relations of production of a given society. We have seen this unfold in history. The embryonic bourgeois class in medieval Europe, for example, slowly supplanted the rule of the feudal aristocracy and clergy (over many centuries). Nascent capitalist economy, welling up from the depths of necessity, encroached evermore upon feudal social relations, shifting the social edifice along bourgeois lines over time. Finally a stage was reached, like the boiling point of water, or the release of pent-up stresses in an earthquake, when the quanta of the centuries were transformed by a sudden leap of social revolution.
The classic bourgeois democratic revolution broke out in France in 1789. The hereditary and clerical ruling classes of feudal France, and corresponding economic and political forms, were overthrown by revolutionary means. The rising bourgeois middle classes of France ascended to state power on the insurrection of the commoners, and established the rule of capital within the republican nation state.
Capitalism today supersedes the nation state, but this has not always been the case. In the 16th Century, the monarchical and republican states of Europe, such as Spain, Portugal and the Netherlands, directed their industrial, mercantile and military classes during the first great colonial division of the global South. And during the rise of industrial capitalism in the 19th Century, relations between the state and capital were also mutually beneficial. Industrial capital compounded securely in the sheltered womb of the nation states, which were a means of protection for national capitalists and national markets. The states shielded domestic capital with tariff barriers and stimulated national entrepreneurs with subsidies. Armed bodies of men organized by the state, together with the law courts, enforced the policies of capital at home and abroad.
However, economic and social development is pregnant with sharp dialectical twists and turns. A nodal point in the economic history of industrial capitalism was reached. The nation states -- with their circumscribed markets -- became a restraint on the powerful productive forces brought to life by the burgeoning capitalist system. The various blocs in Europe on the eve of the Great Imperialist War of 1914-1918, for example, could produce far more than their respective national markets could profitably absorb. Fields for investment also dried up in the home countries. There was a need to capture new external markets for national manufactures, which meant conflict with competitors. There was urgency to exploit new fields of investment. The requirement to tap new pools of cheap labor was always present. (Profits, after all, derive from the exploitation of labor power in the production of commodities and services -- shown by the ratio between the wages paid to labor, and the value realized by sale in the market.)
By the turn of the 20th Century, then, the capitalist system based on nation states was coming apart at the seams. The productivity of labor, science and technique, could no longer be confined by the boundaries and the metabolism of the nation state. Economic necessity, that 'old mole' burrowing below the surface of events, had its way in the visible world once more. The subterranean currents of the world economy were about to erupt to the surface and change the course of economic and political history. A critical mass was reached which would soon explode into trade wars, world war and revolutions.
It was the birth of capitalist imperialism on an international scale, featuring the re-division and expansion of colonies, but it was also the beginning of the international transition from capitalism to socialism, which was first heralded in history by the breakthrough of the Great October Socialist Revolution of 1917.
Fast forward one hundred years to 2017. Monopoly capitalism with a narrow national focus is being replaced by transnational monopoly. The nation states of the West are still very useful for projecting military might in the struggle for market dominance, but they also become nagging annoyances to the cost-cutting capitalist elite who operate on an international scale. The mother nation states are now uncompetitive in the global market in terms of the cost of labor, social welfare burdens, and profit margins; the states and their denizens are rapidly becoming just so many inconvenient obstacles standing in the way of the designs of the transnational bourgeoisie. The global corporations only have loyalty to their bottom lines and their elite shareholders, and any concern for the welfare of the domestic masses, in the so-called 'home country,' can only be half-hearted and grudging, at best. The ears of the plutocrats are down low, listening to subterranean signals in the world economy, where their futures and fortunes lay. They have little inclination to lend an ear to the plight of the domestic working class.
Transnational monopolies now operate on the basis of truly international supply chains. They must exploit cheap labor in the global South, or perish in competition with adversaries. They abandon their countries of origin with no moral compunctions, thereby only expressing the unalterable DNA of capitalism that is integrated on a world scale. For in the current environment, the owner classes of the nation states must suppress domestic wages, and clawback social benefits, which were won in a far different era of economic expansion. But there can be no turning back the clock of economic history to some imagined utopia such as 'America First.' No president, not even the bully Trump, can bring back the jobs from the global supply chain by edict or by pleading with industrialists. Such exploiters can only be swayed by material factors like a drastic reduction of the price of labor power in the USA. And if Trump carries through his threats of tariffs against other nation state competitors, it will only add fuel to the fire and increase the tempo of disintegration of the capitalist order.
After all is said and done, however, monopoly capitalism does have a single redeeming feature that makes it fit for a higher human purpose: it prepares the way for the transformations of the socialist revolution.
Materially, monopoly capitalism has prepared the ground for socialism by its development of technique, science and labor productivity to the extent that a society of equality without scarcity is realisable today (if these assets were socially, and not privately, controlled). And monopoly, with its anti-social, anti-worker modus operandi, also prepares the way for the socialist revolution in the ideological sphere. Its very existence as a behemoth of injustice and rapine engenders tremors and disturbances from within the psychic superstructures of society. The turmoil is manifested in class struggles, protests, revolutionary organization, and mass movements of the workers and oppressed.
Ironically, by developing and concentrating the infrastructure of the world economy, and by raising labor productivity to unheard of heights, the monopolists have now become their own worst enemies and gravediggers. For here is the rub of transnational capitalism in its imperialist phase. The vast level of productive power that exists in the monopolies of the world could today adequately meet the basic needs (and more) of the entire world's population, if only it was liberated from the selfish grasp of private ownership. But as it stands, all this potential is wasted, hoarded by purely private interests. Today, eight mega-capitalists own as much as half the world's population, 3.5 billion people (Oxfam). This is no statistical anomaly, but the outcome of centuries of capitalist competition and monopolization (as predicted by Karl Marx). It is a scandal without comparison, a shame and reproach upon the powers that be, and an ominous omen of an approaching revolutionary storm.
For monopoly capitalism is like heavy hanging, rotten fruit. It is infested with parasites, and over-ripe for socialist revolution. The form of private ownership (and the nation state) are increasingly coming into conflict with the international social content of production and the needs of the worker slaves of the world, who keep the wheels turning. The nation states are being hollowed out in the service of international capital. Our epoch will therefore engender countervailing forces and struggles. The contradiction between private and public will culminate, sooner or later, in socialist revolutions, first on the scale of several nation states, and developing later into a worldwide socialist federation.
This is the only revolution and perspective for humanity that can save the world from barbarism and war. Only on this revolutionary road to socialism will truly democratic, rational and people-centered decision-making become possible. For without the abolition of private ownership of the means of production, without socialization of the monopolies, and without democratic control by the working people, there can be no effective tackling of the existential issues that we face today such as climate change, destruction of ecosystems, systemic racism, neo-colonialism, predatory war, gross and growing inequality, stagnant wages, mass unemployment, etc., etc. All of these problems and more are impossible to solve under monopoly capitalism with its infernal engines of private interest and profits at all costs.