Globalisation: the end of the age of imperialism?

By Andrew Flood, A-Infos News Service, Workers Solidarity, No 58, October 1999

IT HAS BECOME increasingly fashionable to use the term globalisation as a description of the international economy and international political relations. Globalisation is meant to have taken over from imperialism, when a handful of large states openly and directly ran most or the world. The bosses' magazine, The Economist, ran a major article on this New World Order called ‘The New Geopolitics' last July. It described this supposed transformation: “The imperial age was a time when countries A, B and C took over the governments of countries X, Y and Z. The aim now is to make it possible for the peoples of X, Y and Z to govern themselves, freeing them from the local toughs who deny them that right.”

Many on the left, including some anarchists, have critically adapted this description of the New World Order. Central to this is the idea that the rapid movement of money made possible by the ‘information age’ and the growth of multinationals means that the age of imperialism—when powerful nation states dominated the world—has been replaced by a more abstract and invisible but equally powerful rule by capital which is not tied to any state.

At first sight such a description seems compelling, it is ‘common sense’ that international trade has increased and that treaties like the European Union are breaking down the old nation state. But does globalisation provide us with an accurate description of how the world works?

In fact the Economist article admits that “…before the first world war some rich countries were doing almost as much trade with the outside world as a proportion of GDP as they are doing now (and Japan was doing far more)”. Assuming ‘rich’ to be a polite word for ’imperialist’ here, what has changed is in fact the sheer volume of world trade (and wealth) along with the fact that smaller countries are now far more involved.

End of the nation state?

But this is not the end of the nation state. In fact since 1914 the number of states had rocketed from 62 to 74 by 1946 and today it stands at 193. The other surprise is that in the wealthy nations state spending as a percentage of GDP (a measure of the relative wealth of a country) has actually increased since 1980. The central idea of globalisation—capital becoming increasingly independent of any particular nation state therefore has to be questioned. Again the Economist is unusually honest here in asking what is “the central reason why a state remains”. It answers “the State is still the chief wielder of organised armed force”.

Recent wars clearly divide into two types. Some involve geographic neighbours fighting each other, commonly over border demarcations like India and Pakistan. Others involve interventions by countries that may be 1000's of km's away, most commonly on the basis of ‘humanitarian intervention’ as with the UN interventions in Iraq and Somalia or the NATO intervention in Kosovo. But when we look at these second type of interventions we find that, far from the distant countries being a random collection or selected according to size, every single one of these interventions has been led by one country, the USA.

Beyond this the second and third most important forces in the intervention will also be drawn from a very small pool of countries including Britain, France and Italy. Clearly, on the military side at least, such interventions are not random but are dominated by a small number of what the more old fashioned amongst us would term imperialist powers.

The US is the dominant power and, with its NATO junior partners, has proved able to dictate to any and every other nation on the planet. Indeed NATO has no realistic rivals. The closest you might come is an imaginary alliance of China and Russia. This would face a power with not only a larger and far better equipped military force but which also has over ten times the economic muscle (NATO's GDP in 1997 was 16,255 billion dollars, Russia's was 447, China's 902).

However the spread of democratic ideas, and knowledge about other countries, has meant that ’old style’ imperialism has lost its popularity. That is why imperialism today is far more likely to hide behind ‘humanitarianism’ and a whole range of supposedly international bodies. When we look at these ‘international’ bodies, however, we find that they are constructed in such a way that only the major powers have a real say in decision making.

The United Nations

The United Nations was the great hope for many as an alternative to war, or to a peace where rich countries could do as they please. Even today many well-meaning people all too often refer to the UN as if it was an alternative to US or NATO domination of the globe. The UN may claim to be a global body representing all countries, but in reality—for effective intervention—it may only act with the say so of a tiny number of powerful military powers. These are the five permanent members of the Security Council (USA, Britain, France, Russia and China), each with the ability to veto any intervention that goes against their interests.

In effect the UN is a cover behind which these countries can wage war when it suits them—as when the UN supposedly went into Iraq to protect Kuwaiti sovereignty in the 1991 Gulf war. But they can stop the UN acting in other cases, so for instance no UN body invaded the US to protect Nicaraguan sovereignty when the Reagan administration were mining its harbours in the 1980's.

Even where the smaller countries disapprove and partly block military action behind the UN banner, the NATO countries have proved adapt at ignoring calls for negotiated solutions and using UN resolutions as an excuse for war as in the ongoing bombing of Iraq. Often these excuses are astounding hypocritical. NATO could bomb Serbia supposedly to protect ethnic Albanians living in Kosovo from Serbian paramilitaries yet stands by while Turkey (a NATO member) massacres ethnic Kurds.

The Security Council mechanism by which the major powers control the UN and hence military intervention is quite well known on the left. However what is not so widely realised are the similar mechanisms that exist by which—without resorting to arms—the major imperialist powers, and the US in particular, can control the world economy. Once this is revealed the idea of globalisation becomes no more then a cheap card trick designed to disguise and take away our attention from the imperialist domination of the world.

Economic control—Debt, the World Bank and the IMF

One aspect of this economic control has recently got a lot of attention, if perhaps a little indirectly. That is the massive debt owed by ’Third World’ countries. The Jubilee 2000 campaign, which demands that ‘unpayable’ debt be abolished, has had considerable success in mobilising tens of thousands on demonstrations in support of this demand. Some 800,000 people in Ireland alone have signed the petition for the abolition of the debt. What is seldom mentioned is the central part debt plays for the western powers in dictating how third world economies are organised.

The debt crisis of the late 1970's and early 1980's proved an ideal leverage for the western powers to force ‘free trade’ on the ‘third world’. This occurred when third world countries faced with falling incomes and rising interest rates defaulted on their loans.

Before this many countries had followed a policy of ‘import substituionism’ which meant that they tried to manufacture goods like, for instance, cars that they had previously imported. Without suggesting this sort of policy offered a positive alternative role it did have one big disadvantage for the imperialist powers, it tended to deny them both markets and cheap raw materials.

What the imperialist powers wanted, and what they essentially have won, was a system where the third world provided cheap raw materials & labour and acted as a market to consume the products of companies with their bases in the imperialist countries. But for obvious reasons this would not be a popular policy for the people of those countries, except perhaps the few who could be promised a share of the profits generated if they would administer the system.

When the debt crisis hit in the mid-1980's, starting with Mexico's declaration that it was unable to repay loans in 1982, the World Bank and the International Monetary Fund stepped in. Despite the fact that these institutions are household names most people have very little idea of what they do or how they function. Until recently they were quite happy to keep things that way.

One dollar—one vote

In summary, both these bodies are designed in a way which favours the powerful western nations— they are based on the pro-business principle of “one dollar—one vote”. What is more, their internal decision making structure gives the US a veto—enabling it to block any decisions that go against it's economic interests. They are technically part of the UN structure, but in reality the western powers have an even greater say in them then they have in the UN. In the case of the IMF the US holds 17% of the vote while only 15% is required for a veto. In the case of the World Bank it has managed to insist that every single president is a US citizen. Thanks in particular to the debt crisis, the power of these institutions is so great that no country can defy their dictates without losing the ability to engage in foreign trade.

The debt crisis forced most developing nations to hand over control of at least part of their economies to the IMF and World Bank. This occurred in the 1980's when individual countries became unable to repay loans. At that stage the IMF and World Bank would step in and ‘offer’ to facilitate re-structuring of the loans providing the country concerned implemented an IMF dictated ‘Structural Adjustment Program’.

Typically these involve removing barriers to imports and removing whatever protection of workers ‘rights' and pay exists. This is usually achieved through high inflation, privatisation and anti-union laws (and indeed physical repression). Alongside this, spending on education and health are slashed. In the 1980's an official of the Inter-American Development Bank described these as “an unparalleled opportunity to achieve, in the debtor countries, the structural reforms favoured by the Reagan administration”.

The payoff

It shouldn’t be imagined, through, that this means the local ruling class likes these policies. In reality today most Latin American economies are controlled by locally born but US educated economics graduates. As Latin American intellectual Xavier Gorostiaga observed “Neo- liberalism has united the elite's of the South with those of the North and created the biggest convergence of financial, technological and military power in history”.

In 1960, the income of the wealthiest 20% of the world's population was 30 times greater than that of the poorest 20%. Today it is over 60 times greater. The top 20%, though, is too crude a measure. According to the UN “the assets of the 200 richest people are more than the combined income of 41% of the world's people.”

This highlights what is perhaps the major post- war change to the imperialist system. Before the war the old colonialist countries like Britain and France had controlled it. They favoured a very obvious system of direct rule with the local ruling class being composed of people sent out from the imperialist country for that purpose. This system caused great resentment amongst the local middle class as it denied them the possibility of promotion into these roles, and more often than not the racist nature of the imperialist power meant the local middle class had to put up with all sorts of petty oppressions.

The post-war years saw many anti-colonial revolts in which the working class and peasants, under middle class leadership, united to throw out the imperialists. With the growth of these movements, and the growth in the military and economic might of the US, the old imperialist powers were frequently defeated and a section of the local ruling class would take over the running of the country, often with American aid but sometimes with Russian aid.

As US dominance grew a post-colonial system was constructed where, in return for accepting terms of trade favourable to US business, the local ruling class would be allowed some local control. Some, of course, were not happy with this but by the 1980's the debt crisis on the one hand and the collapse of the USSR on the other meant they had little choice and most came over.

The US has constructed a ‘New World Order’ in which it pulls almost all the economic and military strings. With such control there is no need for it to rely on ‘old fashioned’ direct imperialist control. Through the IMF/World Bank and the World Trade Organisation (WTO) it can set the rules of global trade with its junior partners of the G7 nations (the seven most powerful economies).

Recently it has not flinched from using these powers on its ‘junior partners' in particular with its attempts at imposing Genetically Modified foods on reluctant European states. The handful of ‘rogue’ states that are reluctant to accept its rule have been easily contained, militarily and economically in the case of North Korea and Cuba or bombed into the stone age in the case of the ongoing war against Iraq.

Those who suffer from this new imperial order include the workers and peasants of the developing world. Real wages in most African countries have fallen by 50-60% since the early 1980s and in Mexico, Costa Rica and Bolivia average wages have fallen by a third since 1980. But workers in parts of the developed world, and in particular the US, have also seen falling living standards and wages.

This global economic order had given new weapons to the major companies by which they can dictate economic policy to even the governments of the developed world. The threat of mass withdrawal of investment has essentially ended the post- war social democratic compromise throughout Europe, in particular in countries like Britain.

The nation state continues to be central to this ’New World Order’. Multinationals may trade everywhere but their headquarters, administrative and research facilities are concentrated in the imperialist nations. The recent trade war about bananas grown in the Caribbean, for instance, was fought between US and European based transnationals, despite the fact that neither grows significant quantities of bananas.

Limited space here only allows a brief exploration of these bodies behind which US imperialism hides. Importantly I haven’t touched on resistance to this domination that has taken many forms. This July saw over 250,000 Turkish workers demonstrating against IMF imposed ’reforms'.

June saw the global J18 day of action; this November will see widespread action against the WTO summit to be held in Toronto, Canada. But what should be obvious is that before we can decide on the most effective form of action against imperialism we need to identify its real nature—despite whatever mask it may choose to hide behind.