Empire of Capital

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* Book: Ellen Meiksins Wood. Empire of Capital. Verso, 2003

URL = http://www.versobooks.com/books/94-empire-of-capital


"What does imperialism mean in the absence of colonial conquest and imperial rule?

Capitalism makes possible a new form of domination by purely economic means, argues Ellen Meiksins Wood. So, surely, even the most seasoned White House hawk would prefer to exercise global hegemony in this way, without costly colonial entanglements. Yet, as Wood powerfully demonstrates, the economic empire of capital has also created a new unlimited militarism.

By contrasting the new imperialism to historical forms such as the Roman and Spanish empire, and by tracing the development of capitalist imperialism back to the English domination of Ireland and on the British Empire in America and India, Wood shows how today’s capitalist empire, a global economy administered by local states, has come tom spawn a new military doctrine of war without end, in purpose or time." (http://www.versobooks.com/books/94-empire-of-capital)


(W. I. Robinson / Historical Materialism 15 (2007) 71–93)

William I. Robinson:

"The dynamics of the emerging transnational stage in world capitalism cannot be understood through the blinkers of nation-state-centric thinking. In her study Empire of Capital, Ellen Meiksins Wood exhibits the reification and outdated nation-state-centric thinking that plagues much recent work on world capitalism and US intervention, expressed in the confusing notion of a ‘new imperialism’. Th e overarching problems in Wood’s study – and, by extension, in much of the ‘new-imperialism’ literature – is a reified notion of imperialism, a refusal to draw out the analytical, theoretical, methodological, and epistemological implications of capitalist globalisation, and an incessant reification of the state. Instead of a ‘new US empire’, the current epoch is best understood as a new transnational phase in the ongoing evolution of world capitalism, characterised in particular by the rise of truly transnational capital, globalised circuits of accumulation, and transnational state apparatuses. ‘US imperialism’ refers to the use by tansnational élites of the US state apparatus to continue to attempt to expand, defend and stabilise the global capitalist system. US militarisation and intervention are best understood as a response to the intractable contradictions of global capitalism." (http://www.soc.ucsb.edu/faculty/robinson/Assets/pdf/woods.pdf)


Globalisation vs. nation-state imperialism

William I. Robinson:

"Wood puts forward as a key tenet of her thesis the continued existence and causal centrality of national capitals. Th e global capitalist system, for Wood, is characterised by discrete national economies, national capitals, and national circuits of accumulation connected through an international (not fully integrated) market, that is, by trade and financial flows. Asserting that ‘the national organization of capitalist economies has remained stubbornly persistent’,7 she repeatedly refers to ‘US’ capital, to other competing national capitals, and to economic competition among core nation-state rivals. Over and again, we find this insistence on the existence of ‘US’ capital and its defence as the driving force in the ‘new imperialism’. We are told that globalisation represents the continuation of a US effort to expand, not markets more generally for transnational capital, but ‘its own markets’,8 and that globalisation is all about ‘changing the specific rules of the world economy . . . in keeping with the changing needs of US capital’ (my emphasis).9 ‘

The purpose of military power shifted decisively away from the relatively well defined goals of imperial expansion and interimperialist rivalry to the openended objective of policing the world in the interest of (US) capital’ (parenthesis around ‘US’ is in original, but emphasis mine).10 US foreign policy is an effort on the part of Washington to shore up ‘its own domestic capital’ (my emphasis),11 to ‘compel other economies to serve the interests of the imperial hegemony in response to the fluctuating needs of its own domestic capital’,12 and so on and so forth.

We are expected here to assume, as Wood does, without providing one shred of empirical evidence, that capital remains organised, as it was in earlier moments of the world capitalist system, along national lines and that the development of capital has stopped frozen in its nation-state form. Yet this insistence on a twenty-first-century world of national capitals flies in the face of all the empirical evidence we have of the transnationalisation of capital. The actual evidence strongly suggests that the giant conglomerates of the Fortune 500 ceased to be ‘US’ corporations in the latter part of the twentieth century and increasingly represented transnational capitalist groups.13 Indeed, one is hard pressed to understand what Wood is referring to by ‘US’ capital.

That the global capital conglomerates that dominate the world economy represent distinct national capitalist groups is something that must be demonstrated, not assumed. Wood’s essay is entirely void of any empirical evidence to support its proposition that what predominates in the world is not transnational but ‘US’ and other national capitals. We have entered a world, according to Wood, of ‘universal capitalism’ (a proposition with which I agree), yet, at the same time, we are to suppose that this universal capitalism remains organised as national capitals in competition with one another.

On what basis does Wood reject the notion of the transnationalisation of capital? First, she says, ‘the most elementary point is that so-called “transnational” corporations generally have a base, together with dominant shareholders and boards, in single nation states and depend on them in many fundamental ways’.14 Yet she presents no evidence for this assertion. Th e mounting body of evidence actually does suggest the process of the transnationalisation of share ownership, of boards of directors, and so on, is well underway.15

Second, says Wood, the globalisation thesis is off the mark because markets are not necessarily more integrated that in earlier moments of the world economy. In fact, the data does show, contrary to Wood, that global trade integration is considerably greater in the twenty-first century than at any previous time. But this is largely a straw-man argument (the first of several such straw-men) because the globalisation thesis is not particularly concerned with the quantitative increase in trans-border trade but rather with what is qualitatively different in the world economy in the current epoch. Earlier integration was through ‘arms-length’ trade in goods and services between nationally based production systems. In that period, national capitalist classes organised national production and service chains and produced commodities within their own borders that they then traded for commodities produced in other countries. It is in contrast to the transnationalisation of the production of goods and services. Suffice it to note that up to two-thirds of world trade by the turn of the twenty-first century was not arm’s length trade but intra-firm trade. Such intra-firm trade, far from the arm’s length transactions in an international market between discrete nation-state-based economic agents that characterised pre-globalisation world trade, is itself but a commercial expression of the rise of a globally integrated production system.

Marxist analyses of globalisation are less concerned with trade flows, as Wood suggests, than with transnationalised circuits of production, accumulation, and finance. The transnationalisation of capital in the late twentieth and early twenty-first centuries is qualitatively different from internationalisation processes of the early twentieth century, in that it involves not merely the geographical extension of economic activity across national boundaries (a phenomenon that may be consistent with Wood’s thesis) but also the functional integration of such internationally dispersed activities. Th e globalisation of production has entailed the fragmentation and decentralisation of complex production chains and the worldwide dispersal and functional integration of the different segments in these chains. Th e formula for the circuit of capital, M-C-P-C'-M', representing accumulation, has transnationalised. In the earlier period, the first part of this circuit, M-C-P-C', took place in national economies. Commodities were sold on the international market, and profits returned home, where the cycle was repeated. Under globalisation, P is increasingly globally decentralised, and so too is the entire first part of the circuit, M-C-P. Globally produced goods and services are marketed worldwide. Profits are dispersed worldwide through the global financial system that has emerged since the 1980s and which is qualitatively different from the international financial flows of the earlier period. Th is transnationalisation of production involves not merely the spread of transnational corporate activities, but the restructuring, fragmentation, and worldwide decentralisation of the production process. Global capitalism is, therefore, not a collection of ‘national’ economies. It is not, as Wood insists, made up of discrete national economies, national capitals, and national circuits of accumulation connected through a (not fully integrated) international market.

Th e restructuring crisis that began in the 1970s signalled the transition to a new transnational stage of world capitalism, in which truly transnational capital has emerged through globally integrated production and financial circuits made possible by information technology and organisational innovations in capitalist production, and that have modified how value is created, circulated, and appropriated.16 Transnationally-oriented capitalists in each country shift their sights from national markets to global markets. Th ese circuits are global in character, in that accumulation is embedded in global markets, involves global enterprise organisation and sets of global capital-labour relations, especially deregulated and casualised labour pools worldwide. Competition dictates that firms must establish global as opposed to national or regional markets. Each ‘national’ economy has experienced over the past several decades a rearticulation through globalisation that has affected capital, labour, and the state in all their dimensions and is linked to global circuits of accumulation, not the national economy of the US or any other particular country (or sets of national economies in competition).

Th e picture Wood paints of discrete national economies and national capitals in a not-fully integrated market is what I term a world economy, put in place during the formative centuries of the world capitalist system. In this world economy, each country developed a national economy and the different national economies were linked to each other through trade and finance in an integrated international market. Different national economies and modes of production were ‘articulated’ within a broader social formation. Nation-states mediated the boundaries between a world of different national economies and articulated modes of production. In the new transnational phase of the capitalist system, we are moving from a world economy to a global economy, in which the increasing globalisation of the production process itself breaks down and functionally integrates national circuits into expanding global circuits of accumulation.

Yet this unprecedented fragmentation and decentralisation of production processes has involved as its flip side the unprecedented concentration and centralisation of worldwide economic management, control, and decisionmaking power in transnational capital and its agents. Th ere is a new transnational bourgeoisie or transnational capitalist class (TCC), a fraction of capital grounded in global markets and circuits of accumulation over national markets and circuits. Th is TCC is comprised of the owners of transnational capital, that is, the group that owns the leading worldwide means of production as embodied principally in the transnational corporations and private financial institutions. Th is class fraction is transnational because it is tied to globalised circuits of production, marketing, and finances unbound from particular national territories and identities, and because its interests lie in global over local or national accumulation. Th e TCC therefore can be located in the global class structure by its ownership and/or control of transnational capital.

Th is does not mean, as Wood would suggest in her rejection of the globalisation thesis, that there are no longer local, national, and regional capitals, or that the TCC is internally unified, free of conflict, and consistently acts as a coherent political actor. We can study the relationships among these different capitals and between them and transnational capital. Such relationships may be contradictory and conflictive. Nonetheless, the TCC has established itself as a class group without a national identity and in competition with locally or nationally-based capitals. What distinguishes the TCC from national or local capitalists is that it is involved in globalised production and manages globalised circuits of accumulation that give it an objective class existence and identity spatially and politically in the global system above any local territories and polities, and a set of class interests distinct from local and national capitalists.

Transnationally-oriented fractions achieved hegemony over local and national fractions of capital in the 1980s and 1990s in most countries of the world. Th ey captured a majority of national state apparatuses (or key branches within those states), and set out to advance their project of capitalist globalisation and to achieve a transnational hegemony. Transnational capital constitutes the ‘commanding heights’ of the global economy and has become the hegemonic fraction of capital on a world scale. Globalisation creates new forms of transnational class alliances across borders and new forms of class cleavages globally and within countries, regions, cities, and local communities, in ways quite distinct from the old national class structures and international class conflicts and alliances that frame Wood’s analysis.

Wood points out that labour still remains subject to national borders and distinct national jurisdictions, an observation with which I concur. In my view, the continued existence of the nation-state becomes functional to global capitalist accumulation and to the power of transnational capital over popular classes worldwide. But there is nothing in this observation that justifies the conclusion that the world is still characterised by national capitals in competition, rather than the conclusion that a fragmentation of formal political authority is functional to global capital accumulation. In fact, I believe there have been major changes in the nature of state power, class relations, and domination in the epoch of globalisation, as I will allude to below. But, even when we acknowledge the particular political structure of a nation-state-based world order in which economic globalisation has unfolded, there is no logical reason to conclude, on this basis alone, as Wood does, that capital therefore still remains national capital. Th e one does not flow from the other.

Th e national state, for Wood, is more important than ever before, and hence ‘popular struggles for truly democratic states, for a transformation in the balance of class forces in the state, with international solidarity among such democratic national struggles, might present a greater challenge to imperial power than ever before’.17 While no one in their right mind is suggesting that popular forces should abandon struggles for local (national) state power, the fact is that capitalist globalisation in recent years has altered the global balance of class and social forces away from popular and working classes and towards transnational capital and its allies and agents.18 Th e globalisation of the circuit of capital and concomitant processes unfolding under the global economy redefine the phase of distribution in the accumulation of capital in relation to nation-states. Specifically, the circulation of capital tends to become de-linked from production and removed more directly from nation-state-based political and institutional control relative to earlier epochs.19 Th is ‘liberation’, by help ing to free emergent transnational capital from the compromises and commit ments placed on it by working and popular classes in the nation-state phase of capitalism, dramatically altered in the late twentieth century the balance of forces among classes and social groups in each nation of the world and at a global level towards emergent transnational capitalist groups. Th is was expressed as the enhanced structural power of transnational capital over the direct power of nation-states and nationally-based popular classes in the momentary historical juncture of the late twentieth and early twenty-first centuries, as such popular and revolutionary forces in Cuba, Brazil, Venezuela, and elsewhere discovered. Th is does not mean that we should abandon struggles for local state power. Rather, we need more than ever to link these to transnational popular struggles, political strategies, and transformative projects, well beyond the ‘international solidarity among democratic national struggles’ that Wood calls for." (http://www.soc.ucsb.edu/faculty/robinson/Assets/pdf/woods.pdf)

The Transnational State?

(W. I. Robinson / Historical Materialism 15 (2007) 71–93)

William I. Robinson:

"Wood dismisses the proposition that a ‘global state’ – or what I have termed in my own work a transnational state (TNS) apparatus – may be coming into existence because, in her view, any such argument is based on the idea that the territorial state is increasingly obsolete. In Wood’s view, those who refer to current world processes as globalisation define them as ‘the decline of the territorial state’.22 Yet this is an outright straw-man. No one, beyond a few bourgeois commentators,23 suggests that the nation-state is disappearing. I know of no Marxist or critical analysis of globalisation that maintains that capital can now, or ever has been able to, exist without a state. Wood’s claim that global capital needs (local) states is neither original nor particularly controversial. Indeed, I, among others, have argued for many years that a fundamental contradiction of global capitalism is that, for historical reasons, economic globalisation has unfolded within the political framework of a nation-state system. Th e real issue is not whether global capitalism can dispense with the state – it cannot. Rather, it is that the state may be in a process of transformation in consort with the restructuring and transformation of world capitalism. Th e question is: to what extent and in what ways may new state forms and institutional configurations be emerging, and how may we theorise these new configurations?

Wood, here as elsewhere,24 sees the nation-state not as an historical outcome but as immanent to capitalist development. But why should we assume that the nation-state is the only possible political form for organising social life in the capitalist system? Wood’s reasoning in emphasising territoriality seems to be tautological: capital needs the state and the states that we have happen to be national states. What is the theoretical justification for assuming that the state is necessarily territorial? If the state is an institutionalised class relation, why must it have to be territorially conceived? Concomitantly, why should we assume that social classes – and specifically with regard to the topic at hand, the capitalist class – are necessarily organised along national lines? That they have been is something which must be problematised, that is, explained with reference to how the course of history actually unfolded and not by reference to some abstract law or principle of the capitalist system and the modern world. Th e nation-state system, or inter-state system, I suggest, is an historical outcome, the particular form in which capitalism came into being based on a complex relation between production, classes, political power and territoriality.

In order to understand the transformation of the state and the rise of a TNS, not to mention twenty-first-century imperialism, we need to return to an historical-materialist theoretical conceptualisation of the state, not as a ‘thing’, or a fictional macro-agent, but as a specific social relation inserted into larger social structures that may take different, and historically-determined, institutional forms, only one of which is the nation-state. Nothing in the current epoch suggests that the historic configuration of space and its institutionalisation is immutable rather than itself subject to transformation. Th is is to say that the political relations of capitalism are entirely historical, such that state forms can only be understood as historical forms of capitalism.25

There are vital functions that the national state performs for transnational capital, among them, sets of local economic policies aimed at achieving macroeconomic equilibrium, the provision of property laws, infrastructure, and, of course, social control and ideological reproduction – and, here, Wood and I are in agreement. However, there are other conditions that transnational capitalists require for the functioning and reproduction of global capitalism. National states are ill-equipped to organise a supranational unification of macroeconomic policies, create a unified field for transnational capital to operate, impose transnational trade regimes, supranational ‘transparency’, and so forth. Th e construction of a supranational legal and regulatory system for the global economy in recent years has been the task of sets of transnational institutions whose policy prescriptions and actions have been synchronised with those of neoliberal national state that have been captured by local transnationally-oriented forces. Marxists who theorise a TNS apparatus do not argue, as Wood would have us believe, that supranational institutions such as the IMF or the WTO replace or ‘render irrelevant’ the national state. Rather, 25. Although the proposition cannot be explored here, I suggest that the explanation for the particular geographic expression in the nation-state system that world capitalism acquired is to be found in the historical uneven development of the system, including its gradual spread worldwide. Territorialised space came to house distinct market and capital accumulation conditions, often against one another, a process that tended to be self-reproducing as it deepened and became codified by the development of national states, constitutions, legal systems, politics and culture, and the agency of collective actors (e.g., Westphalia, nationalism, etc.). This particular spatial form of the uneven development of capitalism is being overcome by the globalisation of capital and markets and the gradual equalisation of accumulation conditions this involves.

We cannot, as Wood does, simply shrug off the increasingly salient role of a transnational institutional structure in co-ordinating global capitalism and imposing capitalist domination beyond national borders. Even if one were to disagree with my particular thesis of a TNS, this transnational institutionality needs to be theorised. Clearly, the IMF, by imposing a structural adjustment programme that opens up a given country to the penetration of transnational capital, the subordination of local labour, and the extraction of wealth by transnational capitalists, is operating as a state institution to facilitate the exploitation of local labour by global capital, and is hence engaging in imperialism as defined by Wood. How are we to understand these IMF practices? Standard dogma would reduce them to instruments of ‘US’ imperialism. Yet I know of no single IMF structural adjustment programme that creates conditions in the intervened country that favours ‘US’ capital in any special way, rather than opening up the intervened country, its labour and resources, to capitalists from any corner of the world. Th is outcome is in sharp distinction to earlier imperialism, in which a particular core country sealed off the colonised country or sphere of influence as its own exclusive preserve for exploitation. Th erefore it is more accurate to characterise the IMF (or for that matter, the World Bank, other regional banks, the WTO, etc.) as an instrument not of ‘US’ imperialism but of transnational capitalist exploitation."


In Summary:

"We argue that the national state is being transformed and increasingly absorbed functionally into a larger transnational institutional structure that involves complex new relations between national states and supra- or transnational institutions, on the one hand, and diverse class and social forces, on the other. A TNS apparatus is emerging under globalisation from within the system of nation-states. An emergent TNS apparatus need not have a centralised form as historically developed in modern nations; it may exist in both transnational institutions and the transformation of national states. Transnational bodies such as the IMF and the WTO have worked in tandem with national states to re-articulate labour relations, financial institutions and circuits of production into a system of global accumulation. As national states are captured by transnational capitalist forces, they tend to serve the interests of global over local accumulation processes. Th e TNS, for instance, has played a key role in imposing the neoliberal model on the old Third World and therefore in reinforcing the class relations of global capitalism."

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