Trump, China and globalization

of Lorenzo Battisti (International Department of Italian Communist Party and Pci Paris)

Trump has long been accused of putting an end to the “magical” globalization. In reality, his policies are the result of the new world balances generated by the emergence of the Brics and in particular by the economic and political development of China.

Globalization and neoliberalism: the unipolar phase of imperialism

Much has been written in recent years on globalization, often in a smoky way. The characteristics to describe it have referred to different elements, all partial. Some have taken as reference the openness to trade. Others referred to the freedom of capital to move from one country to another. Still others the diffusion of information due to the new digital technologies that allows to be informed about distant facts in an instant and to create a “global village”. All these elements, even though they are part of globalization, do not grasp the root of the phenomenon.

I think that globalisation can be defined as the imperialism in its unipolar phase. If before the Second World War imperialism had to face internal divisions due to the emergence of Nazi Germany and Japan, after 1945 it found itself in a bipolar world, where the imperialist powers, aligned behind the American hegemony, had to face the common threat coming from the Soviet Union and the states of the socialist bloc. A threat that, after the success against the Nazis, became more and more dangerous because of the successes of the communist progression: China, Cuba, Vietnam, the anti-colonial struggles etc…

With 1989 the bipolar world ended and there were no more limits to the economic and political expansion of the capitalist powers, with the USA in the lead. Suddenly, a half of the world, a virgin field, opens up to the invasion of foreign capital. A half of the world that, capitalistically speaking, starts from zero, and represents an enormous reserve of natural resources, of qualified and low-cost manpower in which to relocate production to increase profits, as well as end markets for finished products.

Without any limits, without opponents, under the pressure of the U.S. all restrictions on the movement of goods and capital have fallen. This was necessary in order to make the most of the new possibilities opened up by the lack of an antagonist. Removing customs barriers and leaving capital free to move around are not neutral decisions: regulations always serve to protect the weaker party against the strong one. In this case, the strong side, the one that has gained the most from it, was the USA, and in the alternative, the other Western powers and Japan. Apparently neutral trade agreements were imposed on the former colonial and former socialist countries, such as to impoverish these countries and concentrate wealth towards the capitalist centre. The freedom of movement of capital allows the instantaneous movement of investments, the control through debt of the target countries and, if necessary, the creation of local crises in the event of behaviour that does not conform to expectations.

In essence, the end of the socialist bloc has freed monopolistic capital, giving it the possibility of moving around the globe, without limits or constraints, and giving it an advantage over local capitals. In particular, this process has benefited American capital, that of the hegemonic country, to the detriment of that of the other countries of what Samir Amin called the Capitalist Triad. This unipolar phase of imperialism has been called globalization.

In this way we can also understand the spread of neoliberalism, that set of economic policies aimed at freeing capital from pre-existing constraints and lowering the protection of labour, the welfare state and public services and which has represented, in recent decades, the main enemy of the neo-social-democratic left. The absolute freedom of capital to move puts different territories in competition, in a race to lower standards of living and work without end. Without the counterweight (and at the same time the constant danger and threat) of an alternative such as the socialist bloc, these policies are imposed on all the peoples of the world and have been carved into the treaties that form the basis of the European Union.

Trump and the end of globalisation

Reading the newspapers in recent years, there has been a unanimous attack on President Trump, who is apparently guilty of putting an end to globalisation through his neo-protectionist and ‘isolationist’ policies. In short, it shatters the coveted paradise of the global village, a promise of prosperity and peace between peoples. Of course, this was the case for the world’s middle class, but for two thirds of the world it was a nightmare that came true.

How is it possible that the American power, the one that imposed globalization and liberism and that derived the greatest benefits from them, implements policies of de-globalization? Is it the fault of one man, crazy, who in a cunning and incorrect way took power with the collaboration of Putin’s Russian hackers?

It is undeniable that his election represented a break with the classic alternation of Democrats and Republicans (or, if you like, between the two American royal families, that of the Bush and that of the Clinton), being a spurious element and representative of a little American bourgeoisie that suffers and that has withdrawn the delegation to the two big parties. But it is far from being alone in command. In fact, Trump was also supported by a part of the establishment and the bosses who considered a direct and immediate clash with the Russia-China bloc (this was the strategy of Obama and the Clinton) impossible at this time. It was necessary to wait and work to divide the two countries, which otherwise together represent an impossible obstacle even for the U.S.. From this point of view, the exit of the US from NATO, or its weakening, represents the offer to an increasingly weak and struggling Putin to break out of China.

But above all, the US needs to dissolve its economic dependence on China. Not so much from the point of view of debt, now held for the most part by the Chinese: in the event of war, this would be disavowed and China would find itself with mountains of waste paper in its reserves. The productive (and therefore technological) and commercial dependence must be rather dissolved. The objective of Trump and of the block that supports it, is that of balancing the trade imbalance between the US and China: the productions relocated to that country must now return to American soil. In particular, the technological ones. You can’t make war on those who produce almost all your technology and most of the intermediate and consumer goods. Moreover, this delocalization has allowed the transfer of technology and knowledge to the Chinese enemy, allowing it to progress and thus reduce the technological gap that separated it from the United States. So, while Trump gradually brings down the clash with Russia, the clash with China increases, launching a trade war whose objective is to force American companies to bring production back to the United States. Once the US has returned technologically and productively independent, and if it has succeeded in dividing China and Russia, at that point the doors of the Third World War will really open.

It is clear that this new phase of confrontation is incompatible with globalisation and neo-liberalism. The economy must return under the control of politics, to prepare and organize the clash with the new threat looming (for the American monopolistic capital), represented by China. Capital and goods are no longer allowed to move freely in search of maximum profit, because this anarchy has produced a weakening of the American productive and economic apparatus that has been exploited by the Chinese enemy. The rules must therefore be changed and new customs and regulatory barriers must be raised to prepare the resistance to the advance of the new emerging powers, former colonies of the West, which no longer accept a subordinate role at world level and to live in conditions of underdevelopment, but seek an independent way of new economic relations and equal policies at world level.

In essence, after having passed from a bipolar to a unipolar world, today we are going through a phase of transition, perhaps long and let us hope not painful, towards a multipolar world, without hegemonic powers. A world in which the current imperialist power and the other powers subordinated to it, such as those of Europe and Japan, have everything to lose.

In essence, globalization and neo-liberalism have not been defeated by the no global movement; not even by the experiments of localist secession, or by the happy degrowth with the decolonization of the imaginary; or by a social democracy that instead acted as the spearhead of this process; nothing could the multitudes of cognitaries fighting for the Commonse against the Empire; it was not the fair forms of market, or the experiments of ethical exchange with the South of the world that put an end to the policies of global exploitation. Only with the emergence of the Brics, with the challenge that their autonomous development has posed to the dominant power in economic terms and political power, has the process of globalization and liberalization been reversed.

In all this we can see the lags of the entire European left and of many communists, who, especially in Italy, have considered international politics as an element of gossip rather than as a central element of political struggle. Having often abandoned dialectics, the ability to identify the main contradiction and the world’s development trends has been lost. In order to reverse the trend, the focus was on a neo-social-democratic drift aimed at regaining the European populations for programmatic proposals that provided for a greater role for the state, without, however, wondering why these policies had lost their appeal in the 1980s or whether world power relations had an influence on the drift of these positions. Often this new trend was accompanied by a Eurocentrism (or a Occidentocentrism) that saw with hostility China (considered ethically and politically unsustainable because undemocratic) and post-Yeltsin Russia (not seeing that behind Putin’s authoritarianism, Russia tried to break free from the game of the West and come out of hunger and misery). The Brics were fine, but only as long as they remained subordinate to the Westerners. Or rather, as long as they remained recipients of Western aid and their condition of hunger and misery could be used to arouse pity and compassion and show their ethical and moral stature. Solidarity turned into hostility when these countries sought (and partly found) their own independent way of development. At that point, hostility is expressed mainly through moralistic reprimands for the lack of democracy in these countries. As if this existed instead in western countries.

All this has made the European Left blind to the great changes that were taking place and therefore irrelevant to the situation of the Western workers themselves, whose condition has continued to deteriorate without it having been possible to organize a resistance or a reversal of the trend. Losing the world perspective of the struggle, forgetting the true meaning of internationalism, we focused on the internal level, asking at most for a redistribution of wealth and coordinating with the left that still remained of social democracy. In all this, credit must be given to the PCI, to represent an exception in the European panorama.

Some examples

Here are some examples that seem to me to be particularly significant in indicating this change in trend in current policies.

The process of American deindustrialisation over the last 40 years has gone so far as to put the very production of arms at risk. As we read in this article

“Last September, the Pentagon published a report drawing attention to the fact that an increasing number of crucial components for the operation of national defence systems are supplied by manufacturers located in other foreign countries.”

The causes of this phenomenon are to be found in the liberalisation policies implemented since the Reagan Presidency

“It was thanks to the colossal Reagan rearmament plan that the military-industrial complex and all the companies connected to it came to occupy about 600,000 more workers, while civilian manufacturing lost something like 1.6 million jobs. Most of them suddenly ‘reappeared’ in those third world countries characterized by depressed exchange rates (also thanks to the impact of the debt crisis), low wages, poor labor protection and ‘cheerful’ taxation where U.S. industries moved their production facilities to escape the prohibitive conditions that had been created at home because of the credit crunch launched by the Fed and the policy of the strong dollar. The phenomenon, which in its initial phase manifested itself in the form of subcontracting by large retailers, spread very quickly to a number of sectors, however, producing very heavy results for the U.S. manufacturing fabric, both in terms of deindustrialization and loss of strategically important skills. All the more so because many of the sectors affected by the phenomenon are central to war production. […] It is because of the “erosion of American manufacturing that has occurred in the last twenty years […] that today we depend […] on external production chains” that very often belong to countries that are not always allies of the United States, such as the People’s Republic of China, where electronic components and aluminium products necessary for the US defence system are manufactured.”

And it is the militaries themselves who demand, and obtain from President Trump, the reversal of the process of globalization of production:

“Now, the Pentagon loudly calls for a halt to “China’s market distortions, because they risk causing the United States to lose the technologies and industrial capabilities that underpin our military power”. Some measures adopted by the Trump administration, starting with those to defend national technologies and those aimed at reindustrializing the country (or at least repatriating strategically crucial productions), undoubtedly go in the direction desired by the military.”

The influence of the new world balances has also touched our continent and our country, which has been at the forefront of the liberalisation process, in particular with the centre-left governments (starting with the governments Ciampi, Amato and Prodi), which have dismantled the role of the state in the economy, both from the point of view of ownership (with the privatizations and the end of the IRI and the presence of the state in the production) and from the point of view of regulation (with the liberalizations, that is with a drastic reduction of the regulation of the market, among which we remember the “sheets” of Bersani, the Fornero reform, the Jobs Act of Renzi).

European policy, and therefore Italian policy, has focused on preventing the creation of monopolies or oligopolies at continental level, which would reduce price competition on the European market. However, this has apparently prevented the creation of European companies of such a size that they can compete with American and Chinese companies, thus making European companies possible prey for larger competitors. In addition, any state participation in these companies has been prevented.

All this no longer meets the needs of European capital, so much so that the same historical prophets of liberalism and competition carry out sudden conversions in senile age:

“On the front of the critics of the ban [on European mergers], the German (Peter Altmaier) and French (Bruno Le Maire) ministers of industry, who signed the “Franco-German manifesto for a European industrial policy for the 21st century” on February 19, joined by the German and French industrial confederations, as well as figures such as Romano Prodi, Guy Verhofstadt and Angela Merkel herself, were first and foremost positioned. Even if with different tones, all of them hope for the emergence of real European champions, capable of presiding over a global market projected towards 2030, where the presence of American giants and more and more Chinese (Indians, Koreans, Brazilians?) risks generating high barriers to entry to external competitors, who can also be very strong in technological innovation but penalized by smaller production and trade dimensions.”

Reason is quickly said:

“Can a strict competition policy, in which the interests of consumers and users have always been at the centre, conflict with a modern (not unrealistic and protectionist) industrial policy? In an Astrid seminar in Rome on 28 March, Gustavo Ghidini pointed out the risk of a paradoxical heterogeneity of aims if European antitrust, in order to avoid the creation of too large European companies on the internal market, actually favoured scenarios in which large non-European groups even marginalise competitors on the global market and on the European market itself.”

The cause of this conversion is not an offensive of the anti-liberalist left, but the challenge launched by China to the Western technological monopoly:

“It should not be forgotten that, while today the failure to merge Siemens-Alstom prevents the emergence of a railway giant with a turnover of EUR 15 billion and 62 000 employees, the Chinese Crrc with substantial state aid invoice (so far only on its own market) 26 billion and has 190 000 employees.”

In front of this threat falls suddenly one of the taboos of the last 40 years, that of the presence of the State in the economy and in particular in the capital of private companies. What, until very recently, was considered a violation of competition to be sanctioned, is now becoming a policy to be promoted:

“On 5 February, in launching the German 2030 industrial strategy, Minister Altmaier went so far as to state that, in the presence of fundamental challenges for the national economy, “the State should, for a limited period of time, be able to acquire shares in private companies or provide state aid to facilitate the necessary mergers between companies“. If it is not a dangerous leap forward for a non-colbertarian liberal, it is rather a sign of the times to redesign industrial and competition policies less conditioned by the dominant neoclassical ideology, more open to a Schumpeterian vision that looks to the pursuit of dynamic national and European competitive advantages. A policy where the consumer-worker, present and future, is better defended if there are companies that create sustainable jobs because they are competitive on the global market.”

Any further comments seem superfluous to me. I hope, however, that the European Left and the Communists will rethink their mistakes over the last few decades just as quickly. We owe it to the workers.