Crisis of Globalization or capitalism: Can Neo-liberalism be an escaped route with restructuring of the world economy as a production relation between the capital and wage labour

By Faruk Arslan

“The development of transnational capitalism has been introduced as globalization”, which is strengthening the dominance of a world capitalist economic system, replacing the primacy of the nation state by transnational corporations and organizations, and destroying local cultures and traditions through a global culture (Singh, 2009). A new stage of techno-capitalism has involved a fundamental restructuring and reorganization of the world economy, politics, and cultures as “an escape route named the neo-liberalism, while others routes described Globalization and Financialization” (Singh, 2009). Both Marxists and Weberian advocates of the world’s system theories beside other contemporary theorists are converted and implemented, stating globalization as a distinguished trend at the present moment. The Marxist theory of capitalism and its child globalization became irrelevant because class struggle, democracy, access to economic resources, and communist manifesto had become irrelevant under the pressure on crisis of production in capitalism (Singh, 2009). In this paper, I will be debating on the neo-liberal globalization as a new economic mode of production, and the rule of this globalization position for exchange relations and capital flows proposes the new global mode of production model means of production that maximize profits cruelly as soft powers, and overcome the one-sidedness and violence involved in the most national state. My argument is that the discourse of globalization, especially North-South relations, can be conflicted even nearer to the future in terms of labour, work, race, gender and class social relations because the new form of capitalism has been forced with neo-liberalism that “entrained politically, economically, and culturally on globalization through Americanization”, and also solves contradiction over accumulation problems as a production relation (Harvey, 2005-p 41).

First of all, the capitalist world implemented with Reaganism and Thatcherism later when the “One World Order” had been implemented with Bush’s administrations openly since 2000, and then the U.S. nationalism was ahead of the interests of a wide swath of multinational corporations and promoted free trade regimes. Reaganism had no intention with government functioning of the economy, but destroyed two camp worlds and ended military camps, while energy resources became important right after the Soviet Union and the idea of socialism had collapsed. Japan developed with liberal capitalist models as a perfect example to the world over the last 50 years. There has been a crash-based argument happening, including that of globalization since the 1990’s. Globalization is nothing more than a capitalist mode of production, and now the American middle class’s dream life has become unsafe because of international relations in the 1980’s. The crisis of globalization is the crisis of capitalism ( Singh, 2009). The Free trade delivers unfair trades, such as NAFTA in which “the richer countries maintain their collective advantage over the poorer” (Harvey, 2005-p 133). It was neo-con conservatives’ type of capitalism on Globalization, also named “multilateralism” (Harvey, 2005-p 68). “America’s entire war on terror is an exercise in imperialism”, for instance, using the Iraq and Afghanistan wars to support military production in which is the “major engine of American economy” in order to develop global rules risks turning globalization towards a harmful direction (Ignatieff, 2002; Singh, 2009).

Marx was right that capitalism and its new form of globalization bring violence as a new imperialism, and historical-geographical materialism as well; for example, the American army invaded Iraq and Afghanistan, killing over a hundred thousand civilians in each country when only the American’s military industry had won this war. After the global crisis and recession had been the issue and effects of poverty and injustice, G-7 remained and yet still remains quite comfortable with their causes. The G-8 even stops talking about debt once the pressure’s off, and now G-20 tries to rescue the world in which it seems like “no one is in charge” (Friedman, 1999). The victims of injustice and inequality particularly though are not exclusively in the South, but also their allies yet are of the North. NAFTA, WTO and IMF are supposed to decrease inequality and exploitation, but they were even more diminished because these institutions established to serve Americanization at advance in the first place. Within the recent recession, a new liberal globalization is restructuring over the accumulation problem again, and still “a new landscape to accommodate both endless accumulation and political power” is an important phase and transaction between capitalists and wage labour (Harvey, 2005-p 135-137). The problem of capitalism is over accumulation, meaning that it’s far over its capacity to produce or improve to produce and compete more, in which is a contradiction between production forces and production relations with what has been produced and what has been consumed.

The capitalism problem is not reducing to capacity even though it is providing more inequality, and actually, it is systemically encouraged by the state (Singh, 2009). New liberalism has been introduced since the newly elected president Obama and his administration, in which is not more than globalization or another form of capitalism with a soft power, will lead the world to Americanization again. The South is a structural adjustment in the developing world that has been expecting fair international and economic relationships from the North, but the North is trying to implement neo-liberalism as a new imperialism, old capitalism as a mode of production to change their masks, and integrate developing countries to Americanization. The escape proposal of neo-liberalism will remove all restriction for international capitalist investments and their interest in the South, reduce education services, cut down labour rights, chase cheap labour, and never rescue third world country economies, but exploit more with soft power.

Secondly, one of the biggest fears for globalization is leading the greatest inequality, with discriminating race, gender, labour, work, class struggle and social relations because the North-South relation has shown many manufacturers moving to their facilities where cheap labour and cheap materials exist, such as China and India, to exploit wage labour, maximize profit, and especially “get surplus values from unpaid labour work” (Singh, 2009). High-wage manufacturing labour isn’t being wiped out because of capitalist interests, but low wage labour is becoming unemployed, just as a shift changes from manufacturing to a minimum wage service job in industrialized countries. Far more advanced technologies increasingly use, for instance Wall-Mart, labour wage inequality and exploitation that is getting to be a bigger issue because of globalization that makes already rich people richer and already poor people poorer. Poverty is increasing rapidly when transnational corporations and organizations such as IMF get into third world countries and control their economy. For example, the documentary movie named “the Life and Debt” has shown that the Jamaican economy have gotten worse when the IMF and multinational companies had changed their agriculture system and held their natural resources.

The Life and Debt documentary proved that the Jamaican potato business was exploited and that farmers had soon gotten poorer when American companies had offered free seeds, and then made the free trade agreement, also replacing fresh milk to milk powder which is what destroyed the existing dairy industry in Jamaica (Stephanie, 2001). The Jamaican economy has paid real prices for the current globalization policies as exploitation. Capitalist institutions, such as the International Monetary Fund and the World Bank and Inter-American Development Bank, have almost destroyed this poor country’s economy when supposed to help develop Jamaica. The case of Joseph Stiglitz had included Globalization, and, with his case being named Its Discontent, had become true, and the “story of the failed development does have villain and it is the IMF” (Friedman, 1999- pp 50). IMF had always been favoring the interest of creditors and rich elites rather than workers, peasants or other poor people (Friedman, 1999). Jamaican farmers, food producers, and policy makers coerced the IMF to dismantle their own prodigious food industries so that subsidized foreign competitors can crush them in the local market.

The IMF assumes that the combination of increased interest rates and cutbacks in government spending will shift resources from domestic consumption to private investment. It is further assumed that keeping the price of labor down will be an incentive for increasing employment and production. Increased unemployment, sweeping corruption, higher illiteracy, increased violence, prohibitive food costs, dilapidated hospitals, and increased disparity between the rich and poor characterize only part of the present day economic crisis. Neo-liberalism is not offering more than the current capitalist economic mode of production and political economic system in which supports a few corporate elites to own and create media monopoly. As a matter of fact, the media oligarch has been easily assimilated to the masses and conforms to society without a hassle for both government and corporate interests, but this poison of politics is causing the derailment of democracy and the dreams of the free society. After the September 11 event, diversity of opinion and thought hasn’t been important any more too publicly because both the corporate and the government are working together for propaganda to shape the direct opinion to what they want interest in directly. Helping manipulate the masses in times of war, for instance in the Iraq and Afghanistan wars, allows both the corporate media and the government to advance their respective interests; an example would be “General Electric, one of the world’s largest military contractors and owner of NBC and its sister stations” (Chomsky, 1993).

Living in the consumption culture in the west industrialized countries with standards increasingly defined by the purchasing of status given had positional goods with which were through globalization. Capitalist owners have defined consumer’s needs in brand names, and the desire for more, and then had created a spiraling of consumption as people strive to maintain their social standing. Truly, media audiences globally are always losing and spend far more than what they really need only because advertising is a very powerful tool that confuses their minds, in which nobody can escape or runaway from. The capitalist media owners are producing certain kinds of programs, stories, or news in which follow the corporate lead and advertising products, and even prevent reporters from investigating in particular business issues because reports being told of such stories would be published for owner interests. The world has become a market for fear mongering and the public is buying it because of propaganda and manipulation. Remarkably, consumers are being told that the only way to prevent this perpetual state of fear is to give up all rights, democracy, and freedom, and not to question anything. The capitalists control media for maximizing profits, as for instance, the US mass media is responsible for most of the media’s income, and corporations have become far over dependant since mass media is largely financed through billion-dollar industries of advertising. Many advertisements are designed to generate increased consumption of brand name products and services throughout mass media. Mass media has been created full of ideas of mass consumption, in which has shaped a ‘world cultural convergence’ to homogenize consumer tastes and engineer a “convergence of lifestyle, culture and behaviors among consumer segments across the world” in the terms of globalization without saying that it is nothing more than capitalism, imperialism or just new colonialism ( Hudson, 2008).

Thirdly, globalization is not only a replacement term for imperialism and modernization with destruction processes in the economy, polity, culture, and everyday life, but is also a transnational corporation and organization taking over the national state and its natural resources, even invading their own culture without military invasion for exploitation ( Friedman, 1999). Globalization itself is bound up with capitalist modernity and the expansion of the capitalist system and relations of production as Marx suggested. The development of a new global market economy and shifting system of nation-states, and also the rise of global culture, are emerging as a result of computer and communication technologies, and a consumer society with its panorama of goods and services, transnational forms of architecture and design, and a wide range of products and cultural forms that are traversing national boundaries are becoming part of a new world culture. For example, major sports events, entertainment programs, and advertisements have all been spread out over the world as like a global village. New technologies are changing the nature of work and creating new forms of leisure, including the hyper reality of cyberspace, new virtual realities, and new modes of information and entertainment.

Capitals are producing a new techno-culture, a new form of the entertainment and information society, and everything from education to work to politics and everyday life is dramatically changing (Singh, 2009). Globalization is just promoting homogeneity and sameness as the Westernization associated or even Americanization. Of the world, there are many forms of resistance that have been raised to protect the national state or reject globalization under the influence of the resurrection of tradition, ethno-nationalism, and religious fundamentalisms. Under the pressure of competition with American imports, Jamaican, Somalia, and Turkish agriculture industries have collapsed many times, and that’s why the consequences of globalization have been neither easy nor attractive for the developing countries. The Free Trade Zones are exploiting domestic workers who work five-six days a week for American corporations to earn the legal minimum wage. As Marx mentioned that century ago, now the newly “rich get more wealth” who are semi-capitalists that are developing countries into the economy to develop the world in which is the global economy (Singh, 2009). For example, the US, Canada and Mexico have all signed the NAFTA agreement in which made US more powerful on Canada and Mexico, and now this free trade agreement is giving privileges to the US for controlling Canada and exploiting Mexico more. When capitalists enter the free market, they are chasing and gaining access to cheap labour, reaching easily to natural resources, violating the environment, breaking union resistances and removing the state policy barriers for their investments. Globalization is struggling to extent accumulation because national states don’t agree with removing all state control for allowing free laws and capital sakes. For example, Russia, Brazil and Turkey have a strong resistance for the Americanization process since the 2002’s when oil prices went up. This is a new problem for globalization and neo-liberalism. Russia and Brazil didn’t give up from their natural resources and kicked out international companies from their strategic fields. Finance is the centre of the entire crisis. There are also financial and real economies existing. Financial economies disconnect the real economy of manufacturing and agricultural businesses because they are not over accumulating the production then and so it’s profitable; for example, if farmers don’t want to follow an overproduction rule of capitalism, destroy what is produced if they are doing more than consuming. This is the main conflict and contradiction. The financing economy became hyper active in the Wall Street, while the real economy become struggling in much lower cases because this disconnection is not accidental, and the financial economy is making up the real economy. Total disaster is the disconnection between profits and real values because without manufacturing and producing values, producing values becomes unreal. This is called the “bubble” profit. Everything is depending on the peak of the crisis made off system, with the speculative fake economy; after all, democracy is only used for slogans in capitalism (Singh, 2009).

In Conclusion, “the capitalist holding money capital wish to put it wherever profits can be had, and typically seeks to accumulate more capital”, which is why globalization is nothing more than capitalism (Harvey, 2005-pp 27). It is promoting the one-sided economy, culture, and politic, bringing more inequality, exploitation and general poverty within modernity, and forcing to adapt to only one model of modernization named Americanism. It is clear that “Globalization is Americanization” as a hegemonic power (Friedman, 1999). Marxist theory often describes this capitalism as a process of dispossession on the other that has shaped the historical geography of capitalism. Globalization has been in use of instruments such as IMF, the World Bank, NAFTA, EU, and the Inter-American Development Bank (IADB) among other international lending agencies. Globalization has inhuman faces and values; for instance, the IMF case in Jamaica helped us understand how globalization and the Marxist capitalism work in real life. For example, IMF’s failure on Jamaica’s case -similar to Stiglitz’s case- was a human tragedy that IMF has forced in keeping the price of labor down in which were “increased unemployment, sweeping corruption, higher illiteracy, increased violence, prohibitive food costs, dilapidated hospitals, increased disparity between rich and poor characterize only part of the present day economic crisis” (Stephenie, 2001). Capitalist relations of production still structure most social orders and the hegemony of capital in which is still the restructuring force of most dimensions of social life because of the dramatic change and innovation as technological development and expansion. Expectations of the American economy recovery in which is related to global economy and globalization dangerously depends on the “US based recovery of consumerism”; in other words, the world’s economic crisis and recession will be solved only within the Americanization context (Harvey, 2005-pp 227). Marxist’s thesis of “the crisis tendencies of capitalism” is under consumption, and the general sufficient effective demand now hits every of our daily lives (Luxemburg, 1968). “Capitalism theory of class struggle, democracy, and the communism manifesto had become irrelevant because of over production or over accumulation” and that crisis of Globalization or capitalism can be an escaped route with neo-liberalism restructuring of the world economy as a production relation between the capital and wage labour (Singh, 2009). The globalization of neo-liberalism may be an escaping route, but indeed no such alternative is needed either because neo-liberalism means corporate politics or the media’s corporate is controlled all over the world through the new soft power of Americanization.



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