Global Capital and Economic Nationalism (Part 2)

Against the Current, No. 88, September/ October 2000

Kim Moody

A NUMBER OF aspects of global capitalism changed rapidly at the end of the 1980s.  The most obvious was the collapse of most of the Communist states and the initiation of their integration into the world capitalist system.  While the impact of this has yet to be fully felt in the West, it is in effect a giant “enclosure” (privatization) movement on a scale and at a speed never before seen in the transition to capitalism anywhere.[See note 1]

The weight of this massive impoverished new proletariat in the world economy and its downward pressure on world-wide wages and conditions can only be guessed, but it is certain to be large.  This is one reason, no doubt, why the AFL-CIO was so focused on keeping China out of the WTO, even though that is unlikely to slow the process down much.

The second and in some ways more immediately important change was the collapse of Japan’s “bubble economy,” its descent into crisis, the virtual collapse of several of its major auto producers, and its subsequent disqualification as U.S. capital’s major competitor and possible successor to global “hegemony.”

Followed as it was by the Asian crisis of the late 1990s, the economic retreat of this former keystone in the “end of U.S. hegemony” theories has left much of U.S. capital in a stronger position in the shifting geography of economic domination than most pundits thought possible only a few years ago. At the same time, the relative decline of Japan as an economic superpower also deflates its value as a scapegoat for job loss.

A third important development was the end of both military rule and (until recently in a couple of places) serious guerilla activity in Latin America, and the political triumph of neoliberalism.  Along with Mexico’s transition to technocratic neoliberalism, this opened the way for a rapid expansion of investment in the region.  While U.S. direct investment in the European Union doubled from 1990 through 1997, it tripled for Latin America and the Caribbean.

In this period, even before the major Asian financial crisis, U.S. investment in Asia slumped and was surpassed by that in Latin America.  The U.S. corner of the global triad of economic powers and regions was strengthened by all of these developments.  Its political, military and economic position in the post-1980s world approached the level that pertained during the alleged height of American “hegemony” in the 1950s and 1960s, even though its share of total exports and production could not match that period.

Overall, then, the casting of the United States as a victim in the world economy lost a good deal of its credibility by the late 1990s, opening the way for an anti-corporate consciousness that challenged, if not vanquished, the older economic nationalism.

On top of this, this new economic strength accrued to capital, not labor.  Unlike in the 1950s or 1960s, this phase of expanding international trade and investment (imperialism) brought no new benefits home to the majority.  In fact, it took them away.

For the vast majority, imperialism had backfired.  Working conditions were further battered with the spread of lean production and wages remained low and were dragged down by the creation of millions of low-wage service jobs. Incredibly, despite recent gains in real wages, the real weekly earnings of production workers were 14% below their 1972 level at the close of 1999.

Of the 12 million net increase in jobs from 1995 through January 2000, 71% were in low-wage retail or service industries.  Almost half of U.S. households (hence, a majority in the working class) saw their real income fall from 1989 through 1998 despite the growing number and/or proportion of working household members and multiple job holders.

Under fierce attack by most large employers, the “private welfare state” became the terrain of class warfare against global corporations most of which no longer needed or wanted classic trade protection.  The class nature of the new period of expansion was further underlined as the gap between the rich and the rest grew, and the soaring stock market brought still greater income and wealth to the super rich.

Corporations merged or divested to better position themselves in the world markets, taking on a size and global reach that dazzled the rich themselves.  At the world level half the richest “economies” were corporations, not nations.  By 1998, a mere 200 billionaires had a net worth equaling the income of 41% of the world’s population.  The pressures from below on the working class on the one hand, and the high profile prosperity at the top on the other, revealed globalization as the class phenomenon it always was.

Furthermore, by the 1990s that foreign “other”-imported goods (as final assembler, marketer or retailer) and exported jobs (as overseas investor)-increasingly wore a well-known American corporate logo. The opening of the other third of the world to capitalism in the 1990s meant even more production abroad, with China taking its place alongside other poor nations as a site of sweated labor and prison-like export zones-capitalist exploitation defended by bureaucratic means.

As a new generation of student activists helped point out for all to see, the well-known, popular sports and fashion products that flooded the U.S. market and sprouted sweatshops across the world were imported by U.S. companies (and universities) touting American casual styles as the standard for the world.  The growing flood of car parts or consumer durable components bore U.S. trademarks more often than not. Follow the money, and the trail led back home again and again.

There is at least one other side of the post-1980s phase of global capitalist expansion that marks it off from the earlier post-World War II period.  For the developed industrial nations, the growing internationalization of capitalism from the war’s end through the 1960s, at least, occurred as a largely gradual and more or less invisible economic process.

This process entailed a simple expansion of trade and to a lesser extent overseas investment, aided to be sure by government programs like the Alliance for Progress and by overt and covert military interventions in several countries.  The bumps in the process were experienced by most people in the economic North as a part of the rivalry of two conflicting social systems embodied in the Cold War or the distant echo of national liberation movements.

Following the defeat of French colonialism in Algeria and Indochina, only the war in Vietnam provided a decade-long storm that cost lives on a massive scale and shook the faith of some in the system.  This imperialist war, however, was not so much about markets or overseas investment, much less colonialism, as about geopolitical strategy and systemic rivalry-the Cold War turned hot in a distant place.

The 1990s of course lacked the Cold War to divert attention from deeper economic trends in global capitalism.  Further, this decade revealed the fact that while international expansion is innate to capitalism, the process of globalization in the particular neoliberal incarnation propagated by business, academic and governmental “experts” alike was by no means natural or inevitable.

There were, in fact, massive contradictions and roadblocks within the dynamics of capitalist internationalization.  One way to think of this is that the glue and discipline among the capitalist imperial powers, imposed by the Cold War rivalry of systems, lost its force when Communism’s bureaucratic alternative virtually disappeared.

At a deeper level was the fact that creating an organized world market system, with some center capable of preventing the crisis or chaos that intensified competition, was no simple matter.  Indeed, as global capitalism’s crises circulated from Europe to Asia to Latin America, the instability of the system became clearer.

The contradictions of intensified competition imposed on rival capitalist blocs and nations by the rapid expansion of the system had gained still more force as the size and number of rival transnational corporations grew-from 37,000 with 175,000 overseas affiliates in 1990 to 60,000 with over 500,000 foreign affiliates in 1998.

The deeply rooted systems of internal, as well as external, national protection came into open conflict with one another as well as with the new global regime.  These made the eight-year Uruguay Round of the GATT that finally created the World Trade Organization a long and rocky process.

We saw some of these conflicts in the breakup of the WTO Ministerial Meeting in Seattle.  These included not only the inevitable conflict of interest between the developed and developing nations, but the clash between the United States and the European Union over agricultural policy.

Globalization was increasingly something that had to be imposed by political means both nationally and internationally.  Thus in the 1990s, the political side of globalization was revealed in a series of battles over trade and investment policy, beginning with NAFTA in the United States, Maastricht in Europe, and then the ratification of WTO here, along with two rounds of defeated fast track legislation, and most recently the fiasco of the WTO Ministerial Meeting.

Win or lose, these were high-profile political events that brought home the importance of globalization to big business, the nature of the political forces backing it, and some of the difficulties capital itself confronted in pushing its version of globalization well past what any market by itself could accomplish.

The Battle in Seattle underscored the vulnerability of the process as well as the fact that this was no force of nature, but a contest of power.  Anti-corporate consciousness was given a political dimension at the same time that international awareness was increased for more and more working-class people and union members.

Ultimately, international capital as employer has been its own worst propagandist.  What group of workers threatened with job loss, concessions, speedup, outsourcing, etc. has not been told that it’s all a matter of global competition?  This corporate-sponsored education in the realities of international capitalism has not been lost on the millions of workers and their families who have been subjected to it-often more than once.

The result is that as of 1999, 52% of those surveyed by the Pew Research Center said they thought the global economy would hurt them in the future.  Among households earning less than $50,000 a year, it was 63% who had a negative view of globalization.  While such an opinion can as easily reflect economic nationalism as much as a new internationalism, it is a rejection of capitalism’s primary agenda for the 21st century.

Contradictory Consciousness, Contradictory World

By the late 1990s, the U.S. working class faced not only its own declining conditions, but the incredible expansion of wealth at the top, the closely related growth of gargantuan corporations confronting domestic labor from inside and outside the nation, a series of high-profile political fights that revealed globalization as a power struggle, and a corporate propaganda assault that turned on itself.

As a result anti-corporate, anti-big business sentiment has been on the rise in the United States.  It shown through in a 1999 Harris Poll in which 52% sympathized with the “anti-business themes” of Seattle and thought “business now has too much power.”[See note 2] It was also expressed in the popular support for high profile strikes like those at UPS, GM, and USWest.

On the more sinister side, this anger found expression through the demagogy of Pat Buchanan.  But it also arose in positive fashion in the many hard-fought strikes and lockouts of recent years such as Ravenswood in the early 1990s; the Detroit newspapers, A.E. Staley, and Caterpillar strikes/lockouts in the mid-1990s; the half a dozen steel strikes in the late 1990s; the many immigrant-based strikes on the West Coast throughout the decade; the long string of GM local strikes that began in 1994, as well as the popular strikes mentioned above.

The rise of a new student movement focused on sweatshops and global issues is another symbol of and boost to a new anti-corporate consciousness with a global outlook.  Perhaps more than most events, the inspiring confrontation in Seattle united these currents in the streets-not only providing eye-catching TV coverage for millions, but sending thousands of activists back home with a greater understanding of globalization as a deeply embedded aspect of the capitalist system.

Labor’s official line in Seattle reflected the newly forming contradictory outlook of both top labor leaders and many union members.  On the one hand, there was a real effort to make the labor rally and march on November 30 an internationalist event with an anti-corporate tone. Representatives from labor federations and unions abroad shared the stage with top AFL-CIO officials.  The AFL-CIO produced endorsements of the event from a hundred overseas labor federations.

Yet a nationalist core in the message was hard to ignore.  It was still focused on “American jobs.” The Steelworkers called for a ban on foreign steel “dumping,” which President Clinton in fact granted them in February 2000.  The Teamsters continued the union’s call for a ban on Mexican trucks and truckers that didn’t meet U.S. standards, but now in blatantly nationalist terms-including Hoffa Jr’s veiled ethnic slurs about drug trafficking in Mexican trucks.  The attempt to play up internationalism through a dialogue with Mexican unionists during the reform presidency of Ron Carey had been discarded.[See note 3]

This dual consciousness in which economic nationalism coexists with a new-found internationalism was widely advertised in the post-Seattle pages of one union magazine after another.  Steelabor, the magazine of the Steelworkers, for example, condemned global exploitation, rhapsodized about the new alliance fighting “worker and environmental exploitation across the globe,” while protesting wire rod imports.  As noted earlier (in the first part of this essay, ATC 87) USWA President George Becker regularly expresses this duality in public speeches.

This approach not only reveaed an old style of nationalism, but its crude anti-Communism allowed Becker to obscure that fact that as serious as China’s residual Stalinism might be, its emerging capitalism is the problem when it comes to globalization and job loss here. In comparison, the multinational corporations along with their authoritarianism, job cutting, and ideological opposition to labor get off easy.

The political duality in the AFL-CIO’s outlook is not easy to overcome, because it is not economically irrational from the vantage point of defending union jobs and conditions-even though Cold War retro excesses like Becker’s certainly are.

In all likelihood, one or another form of this duality is stronger among the ranks who actually face the danger of job loss than among the top union officials who do not. At the same time, there are counter trends that affect the working members more immediately and consistently.

Shared Ideas, Divergent Actions

Views on globalization and internationalism within organized labor are changing among the leadership, the activist layer, and the broader ranks.  Probably, many leaders and activists share some of the same contradictory mixture of old nationalist and newer internationalist ideas.  At the same time, the situation today reflects the often noted fact that while the union ranks will often follow their leaders ideologically in normal times, they will also sometimes act differently in the heat of struggle.

In doing so, minds are opened and sometimes changed.  The current situation is full of such dichotomies and promises, nowhere more openly paraded than in Seattle at the WTO meeting.  Beneath the officialdom, different contradictory urges were at work in Seattle as they often are in any struggle.  As one Teamster reformer who reported back on the events in Seattle to a meeting in Detroit put it, “There was a big difference between the actions of the union leaders and the rank and file in Seattle.”

The leaders worked to keep the labor demonstration peaceful and away from the militant events that directly confronted the WTO meeting.  Their message was one of moderate reform.  Yet a sizable minority of the ranks numbering in the thousands (three to five thousand by different estimates) broke from the peaceful march to join “the kids” in the confrontation that closed the WTO down for a day.

At the center of these unionists were ILWU members fresh from a series of political work stoppages in support of British dockers and Mumia Abu-Jamal, steelworkers locked out by Kaiser Aluminum, and Teamster reformers particularly from IBT Local 174 in Seattle, a large local union led by an Asian-American member of the Teamsters for a Democratic Union.

These labor militants would return day after day to defend the arrested demonstrators and sometimes to join the direct action.  One TDUer, now a staff person for Local 174, wrote in the TDU paper Convoy-Dispatch how it felt to be at the center of events:

“It was a very empowering experience to be surrounded by thousands of demonstrators from all kinds of progressive, religious, social, labor and other groups and all united against corporate greed as personified by the WTO.”

The same participant went on to describe how Local 174 officers, staffers and members marched to the “no protest zone” on Wednesday and how they stood with residents of Capitol Hill, a diverse and largely gay neighborhood, when the police invaded later that night.  Indeed, the actions of the Teamster reformers were different from the “official” Teamsters at the events in Seattle.

Hoffa “left town just when things were getting interesting,” wrote the TDUer.  He continued, “It was rank and file members and reform leaders who were in the streets when the going got tough.  Our International and Joint Council leadership never took a position or offered help when the rights of all citizens were being violated in the city of Seattle.”

It can be argued, of course, that these Teamster reformers are not typical of the U.S. labor movement.  They have been through the educational experience of the nation’s longest standing and most effective rank-and-file reform movement and have been in dialogue with socialists who have played an important role in it.

If you’re looking for an example of consciousness transformed by self-activity and self-organization, you couldn’t do better than the activists of Teamster Local 174.  Yet the behavior of many steelworkers, sheet metal workers, longshore workers and members of other unions was not that different.  This is expressed in terms not simply of street militancy, but of consciousness-the sense of being “empowered” by the crowd and “united against corporate greed personified by the WTO.”

These workers, too, were an example of how mass action can transform consciousness in a relatively short period-above all when many of these same workers have been through previous struggles.  Specifically, they had experienced the protection of the crowd, rather than that of the border, and it was empowering.  What they had confronted was not just one’s employer, but transnational capital itself, “personified by the WTO.”

The political difference between the ranks and the leaders was also clear at the November 30 labor rally.  Yet another Teamster reformer who was in Seattle noted the political difference between the official AFL-CIO position and that of the vast majority of the thousands who attended the rally, as he wrote in a letter to Convoy Dispatch:

“At the big labor rally, whenever a speaker called for getting labor protections in the agreements, the response was lukewarm.  But when ever a speaker called for getting out of the WTO altogether, the crowd went wild with enthusiasm.” The crowd also cheered when a South African miner, despite earlier efforts by leaders to censor him, quoted Marx in a call for the workers of the world to unite.

The Seattle experience contributed to the already growing anti-corporate class-based consciousness gone international.  It’s not necessarily a systemic understanding of capitalism or its international dynamics, but it is a consciousness that clashes with the economic nationalism rooted in the “private welfare state” as well as older nationalistic ideas.

Even if the old nationalism is still present, this is a new consciousness that values the very struggle that can transform consciousness still more. The high-profile political fights against NAFTA, fast track and the WTO, unlike the protectionist campaigns of earlier decades, were fought against the well-financed and highly visible opposition of corporate capital.[See note 4]

Thus the further irony: While economic nationalism and even “Buy American” sentiment brought many union members to Seattle, involved others in fights against NAFTA and fast track, and provided the unifying ideology on scores of picket lines in the last decade, nonetheless the “protection” found or sought in these confrontations with international capital gave birth to a deeper sense of class and a broader international outlook for many who participated.

For the labor bureaucracy, however, the reaction to this experience was more mixed.  Seattle, along with the earlier fights, no doubt spurred the move to the “new internationalism” and increased talk of coalitions.  At the same time, it causes some to think twice about militant direct action and coalitions with those committed to disruption even when nonviolent.  This caution was evident in the choice of the AFL-CIO to organize its own peaceful lobby on April 12, and only belatedly to endorse the police-permitted actions on April 16.

The Steelworkers, however, provide an even more interesting example of the ambivalence of the labor bureaucracy.  This union has faced a series of strikes and lockouts in the last several years, none has been more desperate than the lockout of 3,000 workers at Kaiser Aluminum in the Pacific Northwest.

Kaiser workers were among the most militant to join the fight in the streets in Seattle.  Even before Seattle they pioneered an alliance with environmental activists in that region, inspiring the International Union to look for allies among students.  The Steelworkers, Central Labor Councils and a variety of environmental and social justice organizations in the area called for days of action against Kaiser, including civil disobedience and a huge rally planned for Tacoma, Washington, on March 25-27.

The language of the call referred to the coalition of forces that “banded together in the streets of Seattle to protest the most powerful, undemocratic institution on earth, the World Trade Organization.  Now this same coalition will stand together again to challenge corporate greed in our own region.”

Yet only days before the actions, the Steelworkers International Union unilaterally called it all off. The excuse was fear of actions that would make the union liable and somehow hurt the cause of the locked-out workers.  The ranks of Kaiser workers were furious and frustrated, but the fear of top leaders that things might get out of control was greater than the fear of member reaction.

It also seems likely that the more recently called April 12 lobby against China’s PNTR and WTO status was something the Steelworkers’ International Union leaders prioritized.  Thus, caution combined with the old pull of economic nationalism and politics as usual undermined the Kaiser actions, as they had headed off a unified action at the IMF/World Bank meetings on April 16.  Much of the radical momentum from Seattle and the protection of the crowd it had afforded was lost.

Socialists and Changing Dual Consciousness

The most obvious job of socialists in this new situation is to fight for continued mass action, the protection of the crowd, the coalition in the streets that made this possible, and for the growth of internationalism in consciousness and practice.

This implies an open critique of economic nationalism among workers.  But it ought not imply opposition to these workers or the posture of know-it-all preachers.  For one thing, while we are not economic nationalists, we are not free traders either!

We distinguish between the nationalism of the oppressed and that of the oppressor (the imperialist nations) and do not oppose the protectionism of developing nations.  We are, in fact, for democratic economic planning everywhere, hence for planned trade and investment, not free trade or the free flow of capital.

Furthermore, socialists certainly support many or even most of the “non-tariff barriers” that protect the environment, food and health standards, income supports, agricultural subsidies, health care programs, regulation and public ownership, and labor rights the WTO was erected to eliminate.  Nor do we object to workers and their unions fighting to save jobs. Indeed, we organize for this resistance wherever possible.

For another thing, socialists ought to actively assess and appreciate the directions in which contradictory consciousness is pushing, feeding as it is both class and international awareness.  As mentioned above, it was the contradictory combination of growing class awareness, anti-corporate sentiment, and economic nationalism that brought the AFL-CIO and so many union members to Seattle in the first place-as it had previously brought them to important fights like that over NAFTA, fast track, etc.

The contradiction here is not just between old ideas and new, but between old ideas and methods, on the one hand, and actions and experiences that open minds to broader perspectives and transform perceptions of what is possible.

Seattle gave the protection of the crowd a new credibility.  It gave workers engaged in difficult, often losing struggles, a new perspective on what works, or might work. The planned mass days of action in support of the locked out Kaiser workers was a clear spin-off of Seattle and an example of seeing new possibilities.  Unfortunately, it is also an example of how bureaucratic priorities can set back such gains.

All this points to four elements of a socialist policy toward international economic issues.  The first is to emphasize mass action by labor in coalition with students, environmentalists, and other social movements against the public and private institutions of global capitalism, including individual corporations.  This is the protection of the crowd that sets the stage for changing consciousness and combating nationalism.

The second is to promote rank-and-file union involvement both because of the necessarily contradictory and conservative leanings of the labor leadership in most unions and because it is ultimately the ranks that have the power and the numbers.

Third is to emphasize the role of the corporations, particularly U.S. multinationals, and of U.S. foreign policy in the globalization process.  This points both to the systemic nature of the problem and to the role of U.S. imperialism.  No one said it better than that ultimate imperial hawk, Henry Kissinger, who told an audience just last year, “What is called globalization is really another name for the dominant role of the United States.”

This will also help to combat economic nationalism and its jingoistic and racist corollaries in the context of activism and mass mobilization.

Finally, while most of the battles against imperialism or corporate-dominated globalization will be fought on national terrain here and abroad, it is important we develop direct international ties and, wherever possible, coordination with socialists, trade unionists and social movement activists across the world.  Nothing promotes the idea of internationalism as much as practicing it.

  1. “Enclosure” refers to the fencing of communally held lands by private interests in the development of industrial capitalism in England, For a discussion of “primitive accumulation” in Russia and China see, Nancy Holstrom and Richard Smith, “The Necessity of Gangster Capitalism: Primitive Accumulation in Russia and China,” Monthly Review, Vol. 51, No. 9, February 2000.
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  2. Quoted in William K. Tabb, “After Seattle: Understanding the politics of globalization,” Monthly Review Vol. 51, No. 10, March 2000, 5.
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  3. The question of excluding Mexican trucks and drivers from most of the country involves domestic safety regulations, not traditional trade issues or protectionism in the usual sense.  Under NAFTA, however, such “non-tariff barriers” as safety regulations are considered restraint of trade.  The corporations that want this ruling are the transportation users, mostly manufacturing and retailing corporations, who want lower costs.  The Teamsters Union is not wrong to uphold the domestic safety regulations involved.  Here it matters how the fight is waged.  In general Ron Carey made an effort to avoid nationalistic rhetoric and to work with Mexican unionists-not always successfully.  Hoffa, on the other hand, explicitly appeals to nationalism bordering on racism with his warnings about Mexican drug trafficking.
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  4. There are, of course, exceptions.  Anti-union textile baron Roger Milliken has long funded economic nationalist and protectionist projects.  There is also Ross Perot.
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This first part of this article appeared in our previous issue (ATC 87).  Kim Moody is a staff writer for Labor Notes and author of An Injury to All and Workers in a Lean World (Verso).

ATC 88, September-October 2000