Neoliberalism and Globalization: Capitalism in the Modern Era

Introduction: Capitalism as a Global System

Globalization may be an overused word, although the new version of international capitalism is still recent enough that the actual system on the ground has outrun the scientific and theoretical vocabulary used to describe it. As a system, international capitalism is rapidly eliminating geographical and political boundaries, as Marx predicted in the nineteenth century. In the global, postmodern economy, branding also involves relentless synergy and tie-ins between diverse lines of products. Films and cartoons market their images to toy companies, fast-food restaurants, and cereal manufacturers, generating billions of dollars of revenue annually, as does the commerce in seeds, genetic materials, and even human body parts. Western science and technology have been synonymous with modernization and development in India and other Asian nations, even though this paradigm ignores the historical and cultural knowledge that has existed in many civilizations over the centuries.

Marx also maintained that capitalism would become a global system that would eventually absorb the labor and resources of the entire planet into itself, and that this process was already well underway in his lifetime. Traditional and tribal societies, old customs, religions, and social arrangements would give way to a capitalist system that broke down all barriers in its search for profits. Contemporary Marxist theorists like Immanuel Wallerstein and Leslie Sklair have also noted that this process has been occurring for centuries and is accelerating today, as an international capitalist class, culture, and corporate system now dominate the world, just as Marx predicted long ago.

Wallerstein, Sklair, and the Transnational Capitalist Class

In recent times, Marxist theorists like Immanuel Wallerstein and Leslie Sklair have taken the position that capitalism has been transformed into a global or transnational system, driven by continuing changes in technology, communications, and transportation. A global capitalist class has come into existence, and a global culture and political system is also emerging. Western corporations, culture, and images now pervade the planet in a system characterized by "increasing connectivity and interdependency" (Appelrouth and Edles, 2011, p. 558).

Wallerstein agreed with Marx that the process of globalization began with European colonization in the sixteenth and seventeenth centuries and the development of modern capitalism in the core Western nation-states. Today, through global organizations like the European Union, the World Trade Organization (WTO), and the International Monetary Fund (IMF), it has established a form of capital control over most of the world. He and Sklair also maintain that Western capitalism is homogenizing the world, although there has been considerable resistance from nationalists, traditionalists, and religious fundamentalists to this "McWorld" or "Coca-colonization" (Appelrouth and Edles, 2011, p. 563). As in the past, the peripheral and semi-peripheral areas of the world are still being exploited for their cheap labor and raw materials, while history is being driven forward by capitalism's "never-ending drive for profit" (Appelrouth and Edles, 2011, p. 569).

Klein, Virilio, and the Culture of Corporate Globalization

In No Logo, Naomi Klein was highly critical of globalized capitalism and the consolidation of giant corporations and highly standardized brands and chain stores like Wal-Mart, the Gap, and Starbucks. All of these companies are attempting to become that "one overarching brand under which we consume, make art, [and] even build our homes" (Klein, 1999/2009, p. 130). Even retail outlets are completely uniform and clone-like, with one Kinko's, Blockbuster, or McDonald's looking essentially the same as any other. By 1998, Wal-Mart had become the biggest retailer in the world by following these policies, with over $137 billion in sales. It consistently builds stores two or three times larger than its competitors and buys its products in bulk from low-wage countries like China, reselling at prices that smaller retailers cannot match. Suburban malls and discount centers have drained "community life and small businesses out of the town centers," and smaller retailers cannot even buy their products wholesale for the same price that Wal-Mart sells them retail (Klein, p. 134).

In his book The Information Bomb, Paul Virilio provides a more general and theoretical description of the technological underpinnings of global capitalism. He describes "extreme science" as a danger to all science as it has been known, since it risks becoming detached from reality (Virilio, 2005, p. 3). This has created new problems for governments and military and police organizations as well, since new technology is rapidly abolishing specific political and social geographies. Just as the modern nation-state replaced older feudal and monarchic states, the new global, high-technology version of capitalism is poised to abolish the nation-state itself. Mobile phones, for example, have made drug dealing, terrorism, and other illegal activities far more difficult to control than in the past. Cable and satellite television, along with the Internet, have made worldwide real-time surveillance possible for the first time in history — all of which reflect the "extreme reduction of distances" that is one of Virilio's central themes (Virilio, p. 13). Advertising, as Klein also points out, is no longer like its nineteenth-century ancestor that simply informed consumers about the existence of a product, but has become a kind of "universal comparative advertising" that goes far beyond promoting single products or brands (Virilio, p. 60).

Conclusion: Marx's Predictions and the Limits of Global Capitalism

Karl Marx was correct in his predictions that capitalism would eventually evolve into a global system and that it would continue to face resistance from the oppressed and exploited, as well as severe recessions and depressions. The global recession that Marxists and socialists had been predicting for years came as a shock to the more uncritical supporters of global capitalism. As late as 2005, most mainstream economists did not foresee the disaster looming ahead, despite warning signs such as the Asian meltdown of 1997–98 and the dot-com crash a few years later. Free-market and free-trade economists proclaimed that the nation-state was dead, along with Keynesian economics, redistribution of wealth, and Fordist mass-production industries. Instead, they argued, the new centers of economic growth would be regional and local economies finding niches within the global system, such as the call centers and financial services of Ireland and India.

New financial instruments — multiples and derivatives — served as high-tech replacements for traditional money, and the unregulated markets that bought and sold these instruments of very doubtful value were major contributors to the great crash. Even supposed capitalist success stories like China suffer from uneven development and regional imbalances between coastal areas and the interior, a problem that became more acute during the Great Recession and a major concern to the Chinese leadership. In Marxist terms, this is a "contradiction," and indeed, China and other developing nations have been reexamining their economic models in light of recent events, potentially moving toward improving internal markets and consumption levels rather than relying excessively on exports to the West and international capital flows. Capitalist monopolies and oligopolies will also continue to consolidate, as they always do during recessions. All the longer-term trends of globalized capitalism — the Internet, high technology, and open borders — will persist into the future. Even so, the recent crash of the world economy was the worst since the 1930s, and only massive pump-priming, deficit spending, and money-printing by central banks preserved the system from total collapse.

References

Appelrouth, S., & Edles, L. D. (2011). Sociological theory in the contemporary era: Text and readings (2nd ed.). SAGE Publications.

Klein, N. (1999/2009). No logo. Vintage Canada.

Ohmae, K. (2005). The next global stage: Challenges and opportunities in our borderless world. Pearson-Prentice Hall.

Scheper-Hughes, N. (2005). The last commodity: Post-human ethics and the global traffic in "fresh" organs. In A. Ong & S. J. Collier (Eds.), Global assemblages: Technology, politics and ethics as anthropological problems (pp. 145–167). Blackwell Publishers.

Shiva, V. (2004). Biotechnological development and the conservation of biodiversity. In A. Abbas & J. N. Erni (Eds.), Internationalizing cultural studies: An anthology (pp. 30–42). Blackwell Publishing.

Shiva, V., & Hulla-Bhar, R. (2004). Piracy by patent: The loss of the neem tree. In A. Abbas & J. N. Erni (Eds.), Internationalizing cultural studies: An anthology (pp. 146–159). Blackwell Publishing.

Virilio, P. (2005). The information bomb. Verso.