Mücadele Birliği (Struggle Unity, Türkiye)
I
The masters of the world are writing newspaper headlines announcing the end of capitalist civilization. These new “apocalypse” debates go beyond the recurring economic collapses and the political crises that follow them. The most frequently used phrases in global financial mouthpiece publications such as Foreign Policy, New York Times, and Project Syndicate are as follows: “Disintegration,” “destruction,” “fragmented society,” “exhausted democracy,” “decline of civilization.” All of them are summarized in a striking headline: “The West is now collapsing!”
What’s happening? The bourgeoisie, which bases its entire ideological hegemony narrative on the immortality of capitalism, has realized that the new financial crisis looming on the horizon also spells its own demise. Bourgeoisie have experienced many crises throughout history, but in the language of this class, crisis also meant opportunity. Crisis experiences have shown that these take the form of “creative destruction.” New monopoly groups rise and liquidate the old structure. That is why, whenever a crisis appears on the horizon for capital, it lies in wait like a wild animal that has smelled blood, preparing moves to eliminate its rivals. But this time, the situation is different: The masters of the world are warning all capital groups with the headlines above, as if saying: Don’t undermine each other because this crisis is not an opportunity. It will bring about the end of civilization. There is no way out, no “creative destruction”…
The main theme of this call, “not competition but solidarity,” is like the frog telling the scorpion riding on its back not to sting it, but the scorpion’s response is predictable: “What can I do? It’s in my nature.” Where does this hopelessness come from, leading to such a futile call to change the nature of the bourgeois scorpion? Or let’s put it this way: why is there no way out of the new financial collapse looming on the horizon?
Contrary to the despair among the world’s rulers, many circles claiming to be Marxist hold out hope that there is a way out. At a time when the bourgeoisie has declared the end of its own civilization, such miserable minds are competing to present evidence that the approaching crisis will result in a new form of capital accumulation and domination. According to their analysis, the period they call neoliberalism is now over. This closed period was merely a choice made by international capital to escape the crisis it entered in the 1970s. Capital, which chose neoliberalism by option, abandoned investment in industrial production and became financialized; it shifted production to dependent countries, creating a supply chain. At this stage, the imperialist centers have realized their mistake, recognized the “geopolitical” risks of deindustrialization and dependence on supply chains, and have now reversed course, closing the neoliberal era. Therefore, the new hegemonic structure that will emerge as a way out will result in imperialist centers abandoning financialization and returning to industrial production, etc.
This perspective (beyond instilling hope in the hopeless bourgeoisie) clearly contains significant errors in many respects. The most important mistake is to view the orientation of capital toward this or that structure as a simple matter of choice. In reality, capital fundamentally follows the course of development of the productive forces and has no alternative but to conform to all the laws and conditions of advanced commodity production, which is the current framework of development. Wherever capitalist private property conflicts with this development, the penalty is imposed either on capital or on the productive forces. In this sense, while capital pursues profit, it is forced to advance the socialization of production through the crises it is dragged into. At a certain point, the contradiction sharpens and revolutions become inevitable. Today’s capitalist commodity economy has reached a point where the socialization of production can only be conceived on a global scale. The penalty imposed by the social character of production on capitalist private property is global civil war.
The other mistake in this view concerns the nature of major crises; it reduces crises to accidents on preferred paths. Yet every crisis is a punishment meted out to the bourgeoisie, which fails to recognize the social character of production and lacks the ability to manage it. Let us express this in Engels’ words: “It is precisely this powerful reaction of the productive forces, which are developing with great vigour, against the qualities of capital, that is the great necessity of accepting their social character, which forces the capitalist class to behave towards them, at least to the extent that is possible within capitalist relations, as social productive forces.” Engels then cites the example of the alkali monopoly in England, which united 48 factories. Today, monopolies that far surpass this example dominate the world. Therefore, as the social character of production develops, the crises created by capitalist private property, which is in contradiction with it, take on a sharper, more destructive character. It is not the choice of the path that leads capital to crisis that is flawed, but its very existence, which is in contradiction with social production.
II
To concretize Engels’ analysis in the long historical development of capitalism, the simplification we will now make will, of course, be incomplete in many respects, but these shortcomings can be disregarded for now in order to grasp the subject closely.
The simplification is as follows: In the history of capitalism, there has been a “leading” branch of production that symbolizes the level of socialization that production has reached and, with this feature, has led and driven all other branches of production. In the mid-19th century, this leadership was in railroad construction. By the end of the century, this leadership was shared with the electrical and petrochemical industries. By the mid-20th century, leadership had shifted to the engine industry and machine manufacturing, and by the end of the 20th century and the first quarter of the 21st century, semiconductor technologies had taken on the same role. With each changing “leading” sector, the social character of production has advanced to a new stage. Products have become more complex, and the division of labor and cooperation have become more detailed.
Globalization is not a new phenomenon. From its early stages, capitalism has spread the division of labor and cooperation required by the level of development across the world, becoming a global system. Parallel to the change in the leading sector, this global division of labor and cooperation has also changed. Of course, it has been stamped with the character of capital, from whose hands blood and pus flow.
Compared to today’s development, railways correspond to a relatively simple, low-level division of labor. This simplicity is also evident in the global division of labor. In the colonialism of the 18th century, which caused the oppressed peoples to suffer greatly, the main goal was to seize the raw material resources that would feed the railways and the industries they brought with them, as well as the markets where these products could be sold.
Throughout its development, the leading sector also prepares the groundwork for the next pioneer. Telegraph lines, necessary for the management of railways, led to the development of electricity generation; the search for more powerful locomotives led to the emergence of internal combustion engine technologies. But the engine still had a long way to go. On the other hand, electricity production has undergone change at a much faster pace. With its production, distribution, and widespread use, electricity has created a multi-layered division of labor and cooperation level with a more complex and broader ancillary industry than railways. The chemical industry, which took off thanks to electricity, triggered the search for new raw materials in imperialist colonialism. Petroleum, which is widely used in electricity production, copper, which is used in communications, elements for lighting equipment, aluminum and other main metal groups, which are inputs for the chemical industry, have intensified the struggle between monopolies.
After all, these resources are not minerals like iron ore and coal, which are abundant in every region of the world. But raw materials like oil, which are only abundant in certain regions and can be profitably exploited, and the critical logistics routes that secure their supply, necessitated a new division of the world, not freely among monopolies, but in a hegemonic manner. In the First World War, largely due to the impact of the October Revolution, this hegemony issue remained unresolved. The Second imperialist war of redistribution, waged to complete what was left unfinished, gave rise to a socialist system that spread across one-third of the world. From that point on, imperialism could no longer sustain classical colonialism, which forcibly seized raw materials.
Under these new conditions, the imperialist-capitalist world restructured its domination over the former colonies and dependent countries that had gained political independence, led by the engine manufacturing industry. The new colonialism was suited to the nature of the engine manufacturing industry. This new series of products, much more complex than the previous ones, was based on combining hundreds of different parts. Division of labor and cooperation gave rise to new, qualitatively different stratifications. The production of highly complex engine blocks was combined with the production of relatively simple belts, gears, and plastic parts. From then on, the fate of dependent countries was shaped either by specializing in the production of certain simple parts or by working on the final assembly line where all parts were combined. The socialist system, which spread across one-third of the world, quickly exhausted the fuel of this phase of the imperialist capitalist system. In fact, this phase had come to an end in just 30 years.
The by-products of engine and machine construction were communication satellites encircling the world and optical machine tools capable of processing materials down to one-thousandth of a centimeter. Without this infrastructure, the semiconductor technologies that emerged in the 1950s would not have achieved a level of production that yielded profits for capital. However, these laser-guided optical machines were extremely expensive, and the resulting products were also extremely complex. This sector could only reach a level that guaranteed profit if a unified global market was established and if the production of each complex part was protected by patent licenses and standardized. Therefore, this sector first had to experience a high degree of monopolization and then be able to reach every corner of the world without hindrance via satellite connections. It was necessary to wait for the collapse of the Soviet Union for the leadership in semiconductor technology to be fully established.
With the semiconductor industry leading the way, a similar level of division of labor and specialization emerged in other industries, deepening the social character of production worldwide. Imperialist domination and exploitation gave shape to this new socialization. Dependent countries were rapidly drawn into a process of total economic subordination, and the markets of dependent countries became direct extensions of the production and circulation processes of imperialist metropolises.
III
During these long periods of transformation, economic crises functioned as a mechanism of “creative destruction,” preparing the next phase and clearing the obstacles in its path. The long depression of the 1870s put an end to the railway era. This crisis revealed a problem of overproduction, and the resulting deflationary cycle could only be overcome by the leadership of electricity and petrochemicals. The new leaders, monopolies born and developed in production, started to divide not only individual countries but entire continents among themselves. International trade, fueled by monopolistic competition, grew at double-digit rates every year, creating an urgent need for a universal paper currency to replace gold.
The system also needed a hegemonic power in this regard, and the First World War had not solved the problem, leaving gold on its throne. Therefore, the 1929 Crisis dragged on and on amid overproduction and the triggered deflationary cycle. The crisis was averted by the Second World War. A hegemonic power (the US) emerged, and a paper currency to be used in trade was found. The US dollar, pegged to the value of gold, attracted the new complex division of labor in the industrial phase focused on engine-machine manufacturing, first to Europe and then to all dependent countries, through many loan agreements such as the Marshall Aid.
The 1973 crisis ended the leadership of motor-machinery. The hegemonic power of the imperialist world, the US, ended the monetary system pegging the dollar to gold in order to escape the deflationary spiral that devalued capital. This was only the first step. The second was to force OPEC to increase oil prices tenfold. Thus, the whole world entered a cycle of inflation. Dependent countries, unable to pay their debts and energy bills due to suddenly skyrocketing interest rates, were forced to accept the imposed conditions of total economic subordination. Semiconductor technologies, a by-product of this universe (the engine-machine), perfected banking transactions based on balancing all account payments. Now, all stock and commodity exchanges, banking transactions, and all trade-based money movements around the world could accumulate in the same pool and be redistributed from there. Thanks to this development, the necessary monetary capital, i.e., the first step in the production cycle in the form of capital, was firmly established in order to design the extremely complex division of labor based on semiconductor production worldwide with the flexibility to keep pace with the development speed of this technology. The rest was simply a matter of drawing all dependent countries into a banking system that removed all obstacles to debt capital, with exports heavily dependent on imports. Led by semiconductor production, the capitalist world became part of the production-circulation system of a handful of giant financial capital groups.
Undoubtedly, the extraordinarily high fixed investments specific to semiconductor production, the use of such large quantities of raw materials and intermediate goods, dramatically increased the average organic composition of capital, leaving very little room for surplus value to be extracted from labor. This low profit could be compensated by the extraordinarily high exploitation of labor power in other branches of production (clothing, metal, food, etc.), otherwise continuing production would have made no sense from the point of view of capital. The financial sector became the umbrella (roof) for this compensation mechanism. In a sense, the enormous labor exploitation that Nestle extracted from coffee producers fed Apple’s lithography machines, and this transition was controlled by centers such as Wall Street. That is why the era led by semiconductors was seen as a “neoliberal” era in which finance alone determined everything.
However, after this stage, every fire on the roof (finance) would quickly spread across the world, and every small tremor that shook the delicate balance of the debt chain would cause major collapses. This period, mistakenly called neoliberalism, in which giant financial capital groups, formed by the merger of industry and banks, ensured the global division of labor through financial flows, would be a period of incessant global crises.
IV
The 1870 crisis was overcome by reviving international commodity trade; capital exports dragged commodities with them to every corner of the world.
The 1929 crisis was overcome by adding international currency trade to this dual flow, raising the US dollar, pegged to gold, to the level of a universal equivalent.
In the 1973 crisis, capital combined the production-circulation-expanded reproduction cycle to encompass all dependent country markets. The point reached is where capital cannot control the contradiction between the global social character of production and its capitalist private ownership. Beyond this point, there is no longer any possibility of maintaining the social character of production “at least within capitalist relations.” For this reason, semiconductor technologies could not create the ancillary industries that would prepare the next phase. The winds of change brought by Artificial Intelligence (AI) today are nothing more than extensions of the semiconductor phase that began in the 1980s. The contradiction of the current stage becomes most apparent with the collapse of US hegemony. The social character of production based on global division of labor and cooperation has begun to tear apart the straitjacket (i.e. the imperialist-capitalist relations) imposed on it.
The reason why the New Phase (as aptly conceptualized by C. Dağlı) entered by the imperialist capitalist system is also the final phase of capitalist civilization lies hidden in the social character of production and circulation. And this character can now only be revealed on a global scale. A handful of financial capital groups, which monopolize all the markets of the world, including all dependent countries, are losing control (which they themselves announce with the most tragic cries in their publications), and the reason for this is this social character. So this final stage is also a stage in which the global civil war is spreading and deepening, and uprisings are crowned with victory.
This analysis, which summarizes a historically quite long period in broad strokes, highlights the helplessness of today’s rulers. Now, let’s look at this helplessness, which has left its mark on the last 25 years, in more concrete terms, accompanied by facts.
At the end of the 1990s, when the semiconductor industry’s leadership was cemented, the slogan “the internet will change the world” drove fixed capital investments in this field to frenzied levels. The monopolies, known simply as dot-com, were presented as the masters of the world, just like today. (Few remember their names now). Banks and investment funds inflated the stock prices of these companies on the stock markets. Fiber optic cables, satellites, base stations, internet search engines, supercomputers, etc., attracted most of the fixed capital investments.
However, as Table I clearly shows, despite the dot-com craze, total fixed capital investments in imperialist countries continued to decline. This is because the profitability of dot-com investments, which offered little added value, was guaranteed by other sectors, and these sectors, since the 1980s, have flowed into dependent countries where capital is scarce and, due to this scarcity, wages are low and profits are high. We can track the speed of this flow in the “Financial Foreign Assets” column in the same table. Capital exports also play a major role in this amount, which rose from $100 trillion to $400 trillion in just 20 years. These twenty years (1980-2000) were years in which dependent countries were surrounded by conditions of total economic subordination, either individually or collectively. The lack of profit from fixed investments in dot-coms was offset by the high exploitation created by other industries that shifted towards dependent countries.
The 1998 Asian crisis marked a sharp and severe turning point. By the end of this crisis, the world was equipped with a financial flow system that secured the profits of extraordinarily high fixed investments in imperialist countries. The transformation accelerated to such an extent that it could be completed within a few years. Dependent country capital, collaborating with imperialist monopolies that control 70% of world trade, would henceforth send every penny it earned from international trade to imperialist centers and stock markets inflating dot-com company shares. The financial pool formed from the profits accumulated in these centers would be redistributed through debt and credit.
Table 2 summarizes the results of this redistribution. It also presents a picture of total economic subordination. The “Mark-Up” on which the table is based, translated from bourgeois economics into Marxist language, means monopoly profits earned above the average. Until the Asian crisis, the extra monopoly profits of imperialist monopolies and their collaborators in dependent countries were parallel. This is because the goods produced through this collaboration are generally consumed in the domestic market of the dependent country, and the profits realized in this way are shared between the imperialist monopolies and their collaborators in proportion to their share. Therefore, every increase in profit also increases the collaborator’s profit.
However, after the Asian Crisis, a divergence begins. While collaborators increasingly receive smaller shares of the above-average extra profit, the extra profits of imperialist monopolies skyrocket. This is because total economic subordination produces two important results in dependent countries. First, the collaborator now produces for world markets, not the domestic market; these products can find buyers at higher prices, especially in developed imperialist markets, and the imperialists pocket the enormous difference themselves. The second consequence is more significant: the collaborators lose their own capital accumulation opportunities; they are now forced to borrow from the imperialist money pool to start a business and increasingly carry out this production with imported intermediate goods and machinery, otherwise, the scale required to address broader markets cannot be achieved. We will discuss shortly how these two important changes rapidly transformed into the “Complete Economic Subordination Paradox” in the 2020s. But first, we need to look at how this global financial structure triggered the crises that began with the dot-com crisis and turned into a storm in 2000.