Friday April 18th, 2014, 9:53 pm (EDT)

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Contextualizing Globalization

Comments on Du Boff and Herman

William K. Tabb is professor of economics and political science at Queens College and the Graduate Center of the City University of New York. He is the author of The Postwar Japanese System (1995).

In the June 1997 issue of MR, I wrote an essay, “Globalization is an Issue, the Power of Capital is the Issue.” Richard Du Boff and Edward Herman, two economists whose work I respect and whose books I have used in my classes, now polemicize against “Tabb’s unwillingness to acknowledge that globalization…has anything to do with the victories of capital over labor….” I wrote no such thing, as readers can verify for themselves by going back to that June issue. Such a view (which I do not hold) is indeed unreasonable and wrongheaded. They in fact attribute a number views to me which I do not hold. They propose “alternatives” and I agree with a number of these.

I suggested the need for a two part analysis as a way of addressing those who think everything has changed because of “globalization” The first, and the project of my essay, was to describe the continuities in the capitalist system. The second project and the one Du Boff and Herman are interested in (aren’t we all) is in how the dynamics of capitalism have changed since the postwar era, and the role of the complex developments, generally lumped together into the construct “globalization.” They do not think there is any reason for the first of these tasks because while “Tabb may know some leftists who have swallowed the ‘myths’ of globalization and believe ‘there is no alternative’” Du Boff and Herman do not. I’m glad they don’t know any such people. I know quite a few and believe that the acceptance, conscious or subconscious, of a view of such inevitability has served to disempower and weaken the left.

They continue that “even if we ever find any we are sure they will be outnumbered by leftists whose first aim is to debunk globalization.” What should be debunked? The idea of an all-encompassing all-determining globalization? That is what I set out to do. It should be debunked. But debunk the idea that globalization is happening? I would hope not, because it is occurring. The point is what is not new and what is. Globalization, as they write, and as I argued in my essay, represents a continuation of a historical process.

I quoted the Communist Manifesto on the way “the world market gives a cosmopolitan character to production and consumption in every country.” What was true then is more true now. I explained how the two World Wars and great depression interrupted this trend in many ways and that it now has been renewed with a vengeance. I note what has happened to unions (but nowhere say, and certainly do not believe that unions have “abandoned struggles for workers welfare at home”). I certainly did not say that these changes have “little basis in economic fact” or that globalization in the present period “has no significant political consequences.”

They make much of my statement that the nation-state has, in theory, the means to control transnational capital. They ask what meaningful relation can that have to practical politics? The rlation is that many people believe it unrealistic to think that capital in a global market economy can be so controlled. Before some people can believe and struggle for the political control of transnational capital within the nation-state, they have to be shown, (as economists such as Jim Crotty, Gerry Epstein and John Eatwell have shown) that the obstacles are political, and not some operation of “natural” economic law. Du Boff and Herman write, “Tabb’s analysis of the role of the state has a formalistic, and non-Marxist quality.” Why? Because I say deregulation and indeed regulation, are not technologically determined but the outcome of class struggle and so of political choices. They twist this to mean that I say: “If the United States has made a ‘political choice’ to encourage a race to the bottom for its workers or to tie material life more closely to market relations, it can choose otherwise! Let’s just do it!” I said no such thing.

The quote they offer from Dani Rodrik is one with which I certainly agree, but as Rodrik also writes (in the same source from which they quote), “globalization is not occurring in a vacuum. It is part of a broader trend that we may call marketization.” He has in mind the shrinking of social obligation, receding government, and deregulation, and after listing such factors concludes “globalization could not have advanced this far without these complementary forces.” It is this larger context of how capitalism works which I stress.

There are differences among capitalist countries. For example only in the United States and Britain does the data show over the most recently available ten year period a double digit increase in earnings inequality. Politics and class struggle matter. That globalization plays a part in this is a view we share. But what kind and how much of a part? I note for example that manufacturing output in the United States is five times higher than it was in 1950 but is produced with fewer workers. The United States has not become a service economy simply because our clothing is made in China and elsewhere in the Third World, our computers and other electronics assembled abroad, and that internationalization of economies continue.

Taking the most dramatic case, that of the less educated, lower wage worker, who is most affected disproportionately in the garment and electronics assembly industries, there have been a number of econometric studies, which (while they are not unflawed) show globalization as accounting for 20 percent or so of the problem. For example, the decreased demand for less educated workers arising from the trade deficit accounts for as much as 15 percent of the increased high school-college wage differential (good summaries of research on the causes of increased inequality have been presented by Richard Freeman and Lawrence Katz). But then, by itself, the precipitous drop in the unionized share of the work force explains 20 percent of the overall wage dispersal among male workers. Reagan did not break PATCO or Dole campaign against the teachers unions because of globalization. Other factors are also involved, and too easily forgotten, by exponents of “globalization did it all” thinking. If globalization is “a primary factor” in growing inequality, it is also (according to most studies) less “primary” than displacement by technology, and the decline of union density.

I said in my essay that capitalism has been pursuing “a new low wage strategy.” Du Boff and Herman explain that “globally this is accomplished in two ways.” I would suggest that there are more than “global” ways, and indeed more than these two even when we discuss global forces. The foreign direct investment flows are yet more complicated in East Asia than Du Boff and Herman indicate in their “critique” (as I discuss in my book, The Postwar Japanese System: Cultural Economy and Economic Transformation, Oxford University Press—a plug I include because the authors would have it that I have never thought about these issues). They cannot deal with all these aspects in a short comment, nor did I intend to write an essay which included all my thinking on globalization.

They explain that what is going on is a process of combined and uneven development. I agree here also. Readers interested in my analysis of combined and uneven development are encouraged to look at what I have written on the subject (with Arthur MacEwen) in our essay “Instability and Change in the World Economy,” in the MR book by the same title which we edited. I make these references because reading Du Boff and Herman one would get the idea I disagree with these analytic points. I do not, and have written extensively on most of them.

I have never liked polemics (even when I have not been the target) because it is a genre which is redolent with bombast, a strong tendency to misstate the views of others, and accusations of betraying the cause. All of these modalities characterize the Du Boff and Herman piece. So, why did they write it? I cannot know of course, and perhaps it is foolish to speculate on motivation, but do take note of their closing paragraph which is critical of the recent direction of MR. Perhaps that is what they should have written about directly. I myself believe MR has performed an admirable and necessary task is debunking postmodernist ideological mystifications. I also do not read MR as having “sought to downgrade globalization” but rather to understand it.

Essays in this series…