Rising powers, multipolarity and capitalism’s ‘final crisis’

August 21, 2023
John Smith
John Smith: 'New technologies, containerisation and the internet allowed companies to speed up the turnover time of capital, in principle doubling the rate of profit.' Inset: John Smith. Photo: @JohnSmith-wc4we/Youtube

In Part 2 of our interview, John Smith, author of Imperialism in the Twenty-First Century: Globalization, Super-Exploitation and Capitalism’s Final Crisis, discusses Russia, China, multipolarity and anti-imperialism today with Green Left's Federico Fuentes. (You can read Part 1 of the interview here.)

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How do you view Russia and China fitting into the global imperialist system?

While I have focused on how imperialism manifests itself in global manufacturing production, very much connected to this, but also quite different from it, is how imperialism manifests itself in the exploitation of nature.

The super-exploitation of factory workers in Bangladesh and China entails the extraction of super-profits from living labour.

Resource imperialism — sometimes called extractivism — involves the plunder of natural wealth. Resource imperialism is one way to understand, for instance, Russia’s invasion of Ukraine.

It is really important to read the speech that Russian President Vladimir Putin gave a few days before the invasion in February last year. He spent nearly half of it denouncing Lenin and the Bolsheviks for Ukraine’s very existence.

Ukraine was part of Russia — there was no such country as Ukraine, according to Putin. There is actually very little in his speech about NATO and its expansion to Russia’s borders. Instead, he revealed that his real motive was to reestablish the Russian Empire.

Ukraine has a lot of very important and valuable resources. Ukraine’s geopolitical position also makes it extremely important for all who seek to dominate Eastern Europe and Central Asia, which of course includes the imperialist states grouped together in NATO.

Russia felt that it could strengthen its position vis-à-vis its imperialist rivals by crushing Ukraine’s independence.

I have no problem describing that as imperialism. It is a different form of imperialism — in many ways it is a more traditional form of imperialism than the one implemented by the West since 1980, but it deserves the title of imperialism.

One thing I would add is this: it is in the DNA of every capitalist to become an imperialist; every capitalist wants to have a monopoly and preserve it at all costs in order to get more profit than their rivals. This is just as true of Russian and Chinese capitalists as it is of those residing in Germany, Britain and the US.

There is plenty of debate about whether we can describe China as a capitalist country. But there is no disputing that there are many capitalists in China, including in the leadership of the Chinese Communist Party, and that it is in their DNA to become imperialist.

You seem hesitant to define China as imperialist…

First of all, as you know, there is a lot of politics going on around this issue; there are a lot of people who hurl the term imperialist against China and Russia in order to present the West as the defenders of humanity against these new imperial powers. It is important to be totally intransigent in the face of this type of propaganda.

But if we look at China, we can see that due to the one-child policy and various other factors, there has been big labour shortages. That has meant that the market position of Chinese workers has improved and, with it, their wages.

In response to this, Chinese companies have been shifting production to countries where wages are much lower, such as Myanmar, Vietnam, Cambodia and others.

This is identical — albeit on a much smaller scale — to the processes of globalisation that saw transnational corporations in North America and Europe shift their production to low-wage countries, such as China.

What we have, therefore, is a country that exhibits imperialist characteristics, but that is still in net terms a donor of surplus value to capitalists in imperialist countries.

Today, the world seems to be turning away from globalisation and towards rival trading blocs and potentially global war. Do you see this as being the case?

When I began working on my thesis, which then became a book, the big question on my mind was why had the crisis not happened yet? In my book, I said there were three fundamental factors that together help to explain how capitalism escaped from its systemic crisis in the 1970s.

It seemed to me that the globalisation of production and the outsourcing of production to low-wage countries were absolutely fundamental.

The second factor was the arrival of new revolutionary technologies, containerisation and the internet. These allowed companies to speed up the turnover time of capital, so that they could make their money in 12 months rather than 24 months, in principle doubling the rate of profit.

The third factor was the massive expansion of debt. Throughout the 40 years of neoliberalism, global debt has increased at a rate three times faster than global GDP [gross domestic profit].

What would have happened if global debt had remained at the same proportion of GDP? Instead of anaemic growth, we would have had a decade-long global slump!

Claudio Borio, chief economist of the Bank of International Settlements called this “debt-fueled growth”, and noted that the return of inflation and higher interest rates meant this era of debt-fueled growth is now over.

This is tremendously destabilising: one of the most important sources of growth and stability has been shut off.

What is there on the horizon that could replace this? Nothing. That is why we no longer live in the post-World War II world, we are living in the pre-World War III world.

I thought a lot about the subtitle of my book: “Globalisation, Super-Exploitation and Capitalism’s Final Crisis”. We have been talking about a “final crisis” for 100 years. But the whole point of the story about the boy who cried wolf is that, in the end, the wolf does come.

Today, there is a widespread, basic awareness that things cannot continue in the way that they have been. Of course, people find all kinds of reasons to remain in denial, especially if they have become accustomed to extracting relative privileges and if they have been indoctrinated with a chauvinist mentality.

Others, who see the need for revolutionary changes, draw very pessimistic and fatalistic conclusions because the odds seem so stacked against us.

I would argue some also misplace their hopes in false solutions, such as multipolarity or the BRICS trading bloc (Brazil-Russia-India-China-South Africa)…

The idea that social revolution is inconceivable and that the best we can hope for is an end to US/Western hegemony and the emergence of a multipolar world has been gaining ground among opponents of Western imperialism around the world.

In reality, a multipolar capitalist world, a world of rival hegemons and would-be hegemons contesting for power, is a world at war.

And the idea that we should back one side or another, that we should see the corrupt, brutal, thuggish regimes in power in China or Russia as saviours of human civilisation seems to me absurd.

Instead, we need to understand the nature of the crisis that we are in. I would argue that the crisis we face today places socialist revolution on the agenda again — not tomorrow, but in the decades to come, and we need to begin preparing for this now.

Once we understand the significance of outsourcing production to low-wage countries; how the expansion of the global workforce led to a massive increase in the creation of surplus value due to these new additions to the global working class being subject to much higher rates of exploitation than workers in the imperialist countries; and how decisive all this was to giving capitalism another thirty or forty years of life, then we can begin to understand just how deep the crisis is for capitalism.

There is no peaceful capitalist way out of this crisis. And neither the rulers of China nor of Russia, or of any other government — with the extremely important exception of the revolutionary government in Cuba — are pointing to a socialist solution to the crisis facing humanity.

Even though it might seem that the subjective factor is so weak as to make this extremely unrealistic — well, this does not alter the fact that, objectively, social revolution is the only way out of the existential crisis facing humanity.

I think that huge and increasing numbers of workers and young people are open to this truth. Convincing people that socialism is necessary is not so difficult; what is much more difficult is to convince people that socialism is possible.

Wherever we are subjectively, objectively, the necessity to begin a transition towards communism is posed by this existential crisis. Anything that distracts us from this, any sort of fantasy that some kind of a multipolar world will be better in any way, must be dispelled because we do not have any more time to waste.

[Abridged and edited from a longer interview at links.org.au.]

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