Overview: the politics of global competitiveness
This essay gives a general outline of the politics of global competitiveness, which is the logic of global capitalism and the all-embracing world market, advocated and practiced by its apologists and identified with all its contradictions in Marx’s critique of political economy. Writing in the early 1840s, on the basis of their observation of the industrial revolution, Marx and Engels predicted that if capitalism, or as they called it, the bourgeois mode of production, was not overthrown it would develop on a global scale, obliging every nation to adopt it and transforming societies in the process. This is what Marx later described in a notebook early in 1858 as the ‘universalising tendency of capital, which distinguishes it from all previous stages of production’. Capital must ‘conquer the whole earth for its market,’ he wrote, ‘and annihilate space with time, or reduce to a minimum time spent in motion from one place to another’. In the same place he added, as a kind of shorthand note to himself, ‘If labour time is regarded not as the working day of the individual worker, but as the indefinite working day of an indefinite number of workers, then all relations of population come in here’. This is the starting point for the politics of global competitiveness. It is grounded in the historical materialism of Marx and Engels, its sphere of operation is the world market, and it is first and foremost about workers in that world market, and the relationship between capital and labour.
Capitalists must compete with each other in order to make profits and add to their capital. So, they must drive down the cost of production, either by reducing wages or by investing and innovating to make each worker more productive. This imperative to compete is ever-present, inherent in the concept of capital. As the world market grows, and exerts more influence, states come increasingly under pressure to adopt the bourgeois mode of production ‘on pain of extinction’, as Marx and Engels say in the Communist Manifesto (1848). However, states do not necessarily adapt their national institutions and regulations smoothly to its logic. How far they do ultimately depends on the balance of class forces within their territory, the class character of the government, and the position of the state in the world market. In the German Ideology, the first substantial text Marx and Engels wrote together, when Marx was in his mid-twenties and Engels in his early twenties, they note that within each nation the development of the bourgeois mode of production proceeds only very slowly, without destroying everything that has gone before it. Its various stages and interests are never overcome but only subordinated to the prevailing interest, and trail along beside the latter for centuries afterwards; the form of the state and its laws may reflect a previous combination of circumstances, or conjuncture, and such political reforms, transformations or revolutions as take place may not bring the state directly into line with the universal logic of capital. This is why it is essential to take the world market, not the state or the system of states, as the space within which the politics of global competitiveness plays out, and why international organisations may have a critical role to play.
Marx and Engels said, again in the German Ideology, that with the spread of large-scale industry separate individuals have become ‘more and more enslaved under a power alien to them, a power which has become more and more enormous, and in the last instance turns out to be the world market’. Marx would later suggest that it is only in the world market that all the contradictions of capital come into play. Of course, the emergence of a world market long predates the emergence, let alone the predominance, of the bourgeois mode of production. That is important, as postcolonial and decolonial writers among others point out. Just as important is Marx’s observation that in all forms of society there is one specific kind of production that predominates over the rest, whose relations thus assign rank and influence to the others. In bourgeois society, he adds, capital is the all-dominating power, so it increasingly shapes the world market as a whole. Non-capitalist or ‘pre-capitalist’ relations of production can still be found today, but they are dominated by capital and reshaped accordingly. Even so, it was only with the Second World War, the breakdown of the British, Dutch, French, Portuguese and Russian empires between 1947 and 1989, and the abandonment of socialism in China that a genuinely global world market dominated by capitalism came into being.
Now, forget about the discipline called economics. When Marx talks about the universalising tendency of capital, he is concerned with the social relations to which it gives rise. Engels wrote, when he was just 22, and before he met Marx, that the inevitable consequence of large-scale industry would be the polarisation of the world’s population into two classes: capitalists and workers, or the bourgeoisie and the proletariat. Marx called the relationship between capital and labour the ‘capital relation’, and placed it at the centre of his analysis. This is important. The world market is not a market in the narrow sense of a space of exchange, but a social realm in which capital rules, and production for use, that is to sustain life, gives way to production for the purpose of accumulation. Marx says in Capital, capitalist production ‘reproduces and perpetuates the conditions under which the worker is exploited. It incessantly forces him to sell his labour power in order to live, and enables the capitalist to purchase labour power in order that he may enrich himself. The capitalist process of production, therefore, seen as a total connected process, that is, as a process of reproduction, produces not only commodities, not only surplus value, but it also produces and reproduces the capital relation itself. ‘On the one hand the capitalist, on the other the wage labourer’. Or more succinctly, ‘this incessant reproduction, this perpetuation of the worker, is the absolutely necessary condition for capitalist production’. This the politics of global competitiveness. The process of proletarianisation, turning previously independent individuals into workers, with no alternative but to offer themselves to capitalists for employment, is central to it. Capitalists need workers they can exploit for a profit. Ideally, such workers will be healthy, well-nourished, and educated to a level sufficient for them to perform the tasks required of them. But above all they must be available for work, obliged, that is, to work for a capitalist for a wage in a system in which the capitalist owns what they produce, and accumulates more capital as a result.
The maximum level of global competitiveness will be achieved if there are no barriers to competition in the world market itself, and if individual states see to it that their own institutions and regulations promote competitiveness within their own territories. In the first case, this requires freedom of movement for capital, goods, and labour across national boundaries. In the second, it means that capitalists are denied subsidies, state support or other privileges, and obliged by competition law to compete, while workers are healthy and educated, and have no alternative but to offer themselves for work in competitive labour markets. A central argument of this book is that two international organisations in particular, the OECD (Organisation for Economic Cooperation and Development) and the World Bank, latterly in cooperation with the European Commission, have made it their business to drive this agenda forward on a global scale.
Capitalists must compete with each other in order to make profits and add to their capital. So, they must drive down the cost of production, either by reducing wages or by investing and innovating to make each worker more productive. This imperative to compete is ever-present, inherent in the concept of capital. As the world market grows, and exerts more influence, states come increasingly under pressure to adopt the bourgeois mode of production ‘on pain of extinction’, as Marx and Engels say in the Communist Manifesto (1848). However, states do not necessarily adapt their national institutions and regulations smoothly to its logic. How far they do ultimately depends on the balance of class forces within their territory, the class character of the government, and the position of the state in the world market. In the German Ideology, the first substantial text Marx and Engels wrote together, when Marx was in his mid-twenties and Engels in his early twenties, they note that within each nation the development of the bourgeois mode of production proceeds only very slowly, without destroying everything that has gone before it. Its various stages and interests are never overcome but only subordinated to the prevailing interest, and trail along beside the latter for centuries afterwards; the form of the state and its laws may reflect a previous combination of circumstances, or conjuncture, and such political reforms, transformations or revolutions as take place may not bring the state directly into line with the universal logic of capital. This is why it is essential to take the world market, not the state or the system of states, as the space within which the politics of global competitiveness plays out, and why international organisations may have a critical role to play.
Marx and Engels said, again in the German Ideology, that with the spread of large-scale industry separate individuals have become ‘more and more enslaved under a power alien to them, a power which has become more and more enormous, and in the last instance turns out to be the world market’. Marx would later suggest that it is only in the world market that all the contradictions of capital come into play. Of course, the emergence of a world market long predates the emergence, let alone the predominance, of the bourgeois mode of production. That is important, as postcolonial and decolonial writers among others point out. Just as important is Marx’s observation that in all forms of society there is one specific kind of production that predominates over the rest, whose relations thus assign rank and influence to the others. In bourgeois society, he adds, capital is the all-dominating power, so it increasingly shapes the world market as a whole. Non-capitalist or ‘pre-capitalist’ relations of production can still be found today, but they are dominated by capital and reshaped accordingly. Even so, it was only with the Second World War, the breakdown of the British, Dutch, French, Portuguese and Russian empires between 1947 and 1989, and the abandonment of socialism in China that a genuinely global world market dominated by capitalism came into being.
Now, forget about the discipline called economics. When Marx talks about the universalising tendency of capital, he is concerned with the social relations to which it gives rise. Engels wrote, when he was just 22, and before he met Marx, that the inevitable consequence of large-scale industry would be the polarisation of the world’s population into two classes: capitalists and workers, or the bourgeoisie and the proletariat. Marx called the relationship between capital and labour the ‘capital relation’, and placed it at the centre of his analysis. This is important. The world market is not a market in the narrow sense of a space of exchange, but a social realm in which capital rules, and production for use, that is to sustain life, gives way to production for the purpose of accumulation. Marx says in Capital, capitalist production ‘reproduces and perpetuates the conditions under which the worker is exploited. It incessantly forces him to sell his labour power in order to live, and enables the capitalist to purchase labour power in order that he may enrich himself. The capitalist process of production, therefore, seen as a total connected process, that is, as a process of reproduction, produces not only commodities, not only surplus value, but it also produces and reproduces the capital relation itself. ‘On the one hand the capitalist, on the other the wage labourer’. Or more succinctly, ‘this incessant reproduction, this perpetuation of the worker, is the absolutely necessary condition for capitalist production’. This the politics of global competitiveness. The process of proletarianisation, turning previously independent individuals into workers, with no alternative but to offer themselves to capitalists for employment, is central to it. Capitalists need workers they can exploit for a profit. Ideally, such workers will be healthy, well-nourished, and educated to a level sufficient for them to perform the tasks required of them. But above all they must be available for work, obliged, that is, to work for a capitalist for a wage in a system in which the capitalist owns what they produce, and accumulates more capital as a result.
The maximum level of global competitiveness will be achieved if there are no barriers to competition in the world market itself, and if individual states see to it that their own institutions and regulations promote competitiveness within their own territories. In the first case, this requires freedom of movement for capital, goods, and labour across national boundaries. In the second, it means that capitalists are denied subsidies, state support or other privileges, and obliged by competition law to compete, while workers are healthy and educated, and have no alternative but to offer themselves for work in competitive labour markets. A central argument of this book is that two international organisations in particular, the OECD (Organisation for Economic Cooperation and Development) and the World Bank, latterly in cooperation with the European Commission, have made it their business to drive this agenda forward on a global scale.