(The following article I translated from Internationale Samenwerking (May 2002, p.31-33), a monthly published free by the Dutch Ministry of Foreign Affairs. For the benefit of my anti-Dutch Marxmail critics I should perhaps point out that I mail this because I think it's interesting. Wallerstein can reduce complexity to simplicity and tell a story, a skill I value highly. But I don't agree with everything he says, just as I have many books on my shelf that I don't fully agree with. For example, Wallerstein oversimplifies capitalist behaviour, as leftists typically do. In reality - as Wallerstein probably knows quite well - foreign investment strategy is not simply guided by lower wages, but by a combination of factors which provide an acceptable, stable rate of return. The biggest part of investment is usually the fixed capital outlay, not wages, and that is especially true if the wages themselves are low. Even if wages are low, this doesn't necessarily mean that an investor will take the risk of having a plant built somewhere, many other factors are involved including social stability, legal frameworks, production chains, proximity to markets, and all sorts. As I said on a previous occasion, there are numerous influences affecting the rate of profit, which is why schematic Marxist falling-rate-of-profit theories often look so weird. So anyway just because you have low wages, this doesn't automatically mean you will attract investment; most of the capital flows today are between rich countries. Also, when Wallerstein foresees the collapse of capitalism, this is just false, just as when Mandel predicted the collapse of capitalism by the year 2000 twenty years ago. As Lenin remarked at the second Comintern Congress, there are no absolutely hopeless situations for capitalism in crisis, you have to kill it in order to end it. For example, the economy of Argentina may have collapsed, but that doesn't mean capitalism has collapsed there, that is a social and political question - JB).
HISTORY IS ON NOBODY'S SIDE - Interview with Immanuel Wallertein by Barbara Coolen Immanuel Wallerstein made his name in the middle of the 1970s with his book The Modern World System, about the emergence and growth of the capitalist world economy. Three decades and innumerable publications later the sociologist announces the end of capitalism. Twenty-five, maybe fifty years, then the world system will collapse. What will take its place ? Nobody knows. Wallerstein looks surprisingly young at 71. The American, who in the past has been called the new Marx, talks vigorously and with big gestures. His story is just as big. He hops with great leaps through five centuries of history, from North to South and back again, from The Netherlands to Porto Alegre in Brazil. There Wallerstein attended the World Social Forum last February, opposing the negative effects of globalisation. Q: You call globalisation a hype. Why is that ? IW: Because it's nothing new under the sun. Globalisation is as old as capitalism itself. The building materials used for ships rolling off the wharves in 17th century Amsterdam came from here, there and everywhere. Just like the workers. Cross-border production and trade are therefore nothing new. At the same time, globalisation is described as something positive and inevitable, prescribed really. You have to open your borders, because that's better for everybody.But there is a lot of hypocrisy in this discussion. The European Union is in favour of free trade, but not for farm products. The USA wants France to open its borders for American movies, but their own borders remain closed for Third World textiles. Or steel. Q: You say that globalisation is part of capitalism. Elsewhere you claim that capitalism is justabout dead. Why ? IW: It is defeated by its own success. Capitalism begins and ends with the limitless accumulation of capital. A capitalist amasses capital so that he can generate more capital in order to gain even more capital. Looked at from the outside, it's a strange system really: it has no function beyond its own driving force, it must move forwards. For the first time in 500 years I now see real obstacles for further capital accumulation. The limits have been reached, the sources of growth are being exhausted. Q: In what way ? What keeps capitalism going ? IW: For capital accumulation you need profit; the difference between costprices and salesprices. The price of products can only be driven up to a certain level. Beyond that more profit can only come out of driving down production costs. The principal costs - wages, raw materials and taxes - have risen enormously in the last two to three hundred years. And they will continue to do that. Q: Is this inevitable ? IW: Yes, ultimately it is. Labour ultimately always organises itself everywhere, to negotiate better pay. This causes enterprises at some point to flee and shift production to low wage countries. There you can make more profits for the simple reason that people there are prepared to do the same work for less money. Historically these are people who have just migrated from the countryside to the cities. They settle in the slums of the cities and for them low wages mean a rise in their income. They are happy, the capitalists are happy too. Q: That sounds positive. IW: Yes, but 25 years later the migrants understand their situation better, they are used to city life by then and starts to organise themselves, demanding better wages. Another 25 years later the wages have become so high that the capitalists again go elsewhere. In this way you can trace the whole history of the world system backwards in terms of the migration of capital. This process does demand a continuous stream of cheap labour. The world urbanises at an unprecedented high speed. The USA and Europe no longer have a rural population of any significance anymore. Q: But the urban poor do need an income, however small... IW: Sure, because why does an African, South American or Asian shift from the countryside to these terrible slums ? Because he is actually better off there. This means that in one way or another he has a higher income. That creates the informal economy. And that has been the same story the last 500 years as well. Q: This suggests that the informal economy is able to feed everybody. IW: No, those people suffer terribly, but that does not deny the fact that their minimum wage is much higher than 50 years ago. The second concern of the capitalist is to keep raw materials costs low. It sounds strange, but you do that by not paying your bill. For example, you don't pay for the replacement of natural resources or for the detoxification of the water that you pollute. Q: Who ends up being responsible for that ? IW: Well, somebody: society, the state, the government. The state can commit mountains of money for it, but that means taxes rise again. Moreover it doesn't make much sense if companies keep on doing what they were doing. So a government can therefore decide to charge firms for these costs. This is called the internalisation of costs. Even if the firms scream blue murder, this happens more and more often. But even this process is finite. One day there are no longer any treaas to cut down or rivers to pollute. A third structural brake on profits are taxes. These have risen gigantically. Capitalists always complain about that and on this score they are undoubtedly right. Q: Why have taxes risen so much ? IW: That is explained by the democratisation of the world. People demand three things of their government: education for their kids, health care and a certain guarantee for lifelong income. This all costs money. More and more people in the world demand this. And the expectations are also increasingly higher. A hundred years ago, people were happy with primary school, fifty years ago with highschool, now everybody wants to be able to send their kids to college. This happens not just in the Netherlands but also in countries like China and India. These means growing costs. They are paid for with tax money. Q: But these costs could also fall as we saw in the 1980s ? IW: Of course, the capitalists fight back. That is exactly what neo-liberalism is about: keeping down wages, costs and taxes. That is what Margaret Thatcher and Ronald Reagan did, what Bush does now, and to a lesser extent many European countries. If howver you look at the reality behind the rhetoric, then you see that they are able to reduce those costs much less than they would like. They are politically unable to do it. Even with merciless neo-liberals in power, there are political limits. Many of these costs therefore fell in the 1980s, but not as much as they increased between 1945 and 1975. Q: Doesn't the capitalist system prove already for 500 years that it is flexible enough to surmount obstacles ? IW:It has indeed proved remarkably flexible. But we should look at the mechanisms which made it so flexible. Point is, those mechanisms are structurally limited. Shifting production to low wage countries, internalisation of costs and taxes - the slack is almost gone. Q: I still don't see how this will lead to the end of the capitalist world system in fifty years.... IW: You should not take my time-frame too literally. But it is finite. We are already in a transition period, a period of big chaos and dissatisfaction. Just look at the rapid political changes, the political uncertainty and spectacular increase in violence. Look at 11 September. Q: Do you really see these terrorist attacks as proof of the terminal state of the capitalist world system ? IW: Sure ! This proves the incapacity to maintain a world order if a majority of the population doesn'taccept it as legitimate. A world order is not something you can maintain with violence alone, Machiavelli already knew this six centuries ago. A much simpler example of widespread dissastifaction is urban crime. I am old enough to remember how much crime has increased in cities like Amsterdam, New York, and in African metropoles. When I lived in Africa in the 1960s, people were hardly concerned about their personal safety. That has changed radically. That change is no accident. Violence doesn't increase by accident. Capitalism is polarising, that is the basis of it. People have not become more immoral. Q: So what has changed ? IW: There was an inbuilt optimism that the state could guarantee a better future. That was preached and believed. If people are convinced the system improves bit by bit, that their kids will do better, they are prepared to tolerate many unpleasant things in their daily life. That faith in the future has disappeared. The collapse of communism is one of the causes. Really this was the death-stab for capitalism. With the fall of the Berlin Wall the belief disappeared that the system could change from the inside. That there was a better world on the horizon. A consequence is that the state lost its legitimacy; a disaster for capitalists. A strong state is crucial for them. That makes semi-monopolies possible, the true profitmakers. And a strong state knows how to keep people calm with repression and concessions: education, healthcare, income security. Q: How does the weakening of the state contribute to the impending implosion of the world system ? IW: The growing anti-statism makes for fear and chaotic behaviour. We took a couple hundred years to create a role for the state as maintainer of order. Now people take it back into their own hands. They no longer believe that the state does the job properly. They distrust its capacity - or worse - its intentions. That means that people are for example less prepared to pay taxes or that they vote differently. This erodes the capacity of the state even further. In turn, this lowers confidence - in brief, a downward spiral. Q: On the other side, we can see that a number of regions in the world have clearly progressed in the last decades. Take for example Asia.... IW: Our world knows three categories of people: the first category, just one percent, is extremely well off. Then there's some 19 percent or so whose life is reasonable. These two groups have seen their income rise enormously in the past two hundred years. It is to those people that the protagonists of globalisation are always pointing. But globalisation has not done anything much for the other eighty percent. They are only faring worse. If you say that people in Asia are better off, then you mean the people in the second category. That group has increased maybe three to seven percent. You see that clearly in the cities. What you don't see are the people who are worse off. Q: Can development aid mean something for them ? IW: Development is a misleading term. For it implies that you can develop countries by means of policy. But development is not a matter of the correct set of policies. Point is, all countries are part of the same world system. And within that there is no space of development for everybody. If we look at the last 400 years, then you see that irrespective of the criteria that you use, the percentage of people doing well has more or less stayed the same. Q: Can the poor of the world look to a better future if capitalism does indeed collapse as you predict ? IW: Hope is a tricky concept. Everybody loves hope, especially people who don't really have any hope. What system we will have in 50 years, depends on countless, partly unknown decisions. The outcome is unpredictable. Q: But what are the options ? You should be able to say something about that. You are not just concerned with history, but also with what you call "futuristics', the study of what lies ahead. IW: I would rather not talk about political strategy. Political influence is small within this system anyway. The last 200 years many people have done mountains of work, with very little result. I expect that the future system is partly determined by who is able to mobilise people the most. Q: The rainbow coalition from Porto Alegre ? IW: That's a possibility. This loose alliance of different tendencies as yet doesn't have the characteristics that made the "old left" fail. The people of Porto Alegre don't feel the need to conquer state power in order to be able to change the world. The coalition doesn't strive for centralisation either and it doesn't exclude people who think differently. That is a gain compared with earlier oppositional groups. But if they will succeed, I don't know. It is a tricky question. Q: Tricky ? IW: The ruling elites will do everything to make sure that as little as possible changes. They will for example appeal to progressive ideals like human rights and loyalty. We have to stay alert and weigh their words constantly for their real meaning and consequences. In the chaos that lies ahead, human intervention is however potentially more influential than ever. If the system wobbles, then one small push can maybe cause a sea-change. Everything is possible, even progress is not inevitable. History is not on anybody's side.
