Cracking the code of cancerous capitalism

Mike Phipps reviews three books which take a look at the left's response to "globalisation". The Threat of Globalism, a special double edition of Race and Class, price £9.00. The Cancer Stage of Capitalism, by John McMurtry, published by Pluto, price £15.99 pbk. Socialist Register 1999: Global Capitalism versus Democracy, edited by Leo Panitch and Colin Leys, published by Merlin.

The editors and authors of these three books all agree: the left needs to refine its understanding of globalism. The Threat of Globalism (from Race and Class) is a good place to start and Jerry Harris's article emphasises the sheer scale of the problem. Computerised international transactions on the financial markets are now estimated to exceed $1.5 trillion daily. Speed is of the essence: software creating a ten-second advantage has made one company millions in profits.

The biggest market is in foreign exchange, where transactions are sixty times larger than the world trade in manufactured goods, Put simply, the main concern today of a western investor in a Third World plant is not so much whether the product is saleable (market risk) nor whether the government might nationalise the plant (political risk) but rather the changes in the value of the currencies involved. A dramatic example was the Mexican economic crash of four years ago. Fearing the currency was overvalued, western electronic capitalists withdrew their billions - in less than three days - recovering their profits but simultaneously creating a 1930s scale depression for millions.

At first glance, governments seem powerless in such a situation. Government bonds sold on the markets to finance domestic expenditure can be manipulated by conservative money managers. "Since social programmes are seen as inflationary, which devalues money, bond holders can dump their holdings, drive up interest rates and slow economic growth." This is precisely the menace facing many fragile Third World economies.

But it's wrong to suggest that the state is powerless in the face of rising globalism - as many New Labour politicians do to justify their opposition to economic intervention. As John McMurtry points out in a new book covering similar themes, the global free marketeers envisage a central role for the state both as debt collector and corporate underwriter. While demanding freedom from government intervention in the economy - and increasingly the fields of education, housing, health, pensions and benefits - they are happy to call for more government roads, police, subsidies for corporations and defence contracts. For free marketeers, "big government" is a problem only if it helps people; spending $1 billion a day on the military, as Reagan did, is fine.

Boris Kagarlitsky develops this line in the new Socialist Register. If multinationals see the importance of using nation-states to secure their aims, the left too needs to re-engage with the state. Given the complete absence of democratic institutions at the global level, the state must be the starting-point for developing an economic alternative to globalism. Once the left realises the anti-capitalist potential of democracy at the national level, it can begin to confront the international order more effectively.

These books cover a range of globalism issues. Perhaps one of the most original is the Race and Class interview with Angela Davis on what she calls the "prison industrial complex". The term reflects the huge growth in the US prison population to two million people - 70% of them people of colour, with Black women the fastest growing group - and the fact that much of the apparatus for this is in private sector hands. Thus the corporate profit motive is pushing towards the same goal of social destruction as the US military industrial complex, the tie-up between the Pentagon and arms producers that fuelled the Vietnam war.

Globalisation initiatives like the North American Free Trade Agreement may have devastated parts of the US manufacturing economy, but they've meant good business for the private prisons industry. It has targeted and mopped up in those communities where unemployment and social exclusion have pushed people to the wrong side of the law. Inmates make a captive workforce too, typically paid $1 a month with no rights whatsoever. It's estimated that 5% of all US jobs now take the form of prison work. By the end of the century, private prisons will outnumber state ones threefold and have a combined revenue of $1 billion. And Britain, under this Government and the last, is already following the US lead.

The Cancer Stage of Capitalism presents this drive for corporate profits as a danger to the future of humanity. McMurtry's analysis comes with some solutions and a ringing endorsement from Susan George.

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