05 Feb Realities on the Ground: David Harvey replies to John Smith
By David Harvey
John Smith is lost in the desert and dying for water. His trusty GPS system tells him there is fresh water ten miles to the East. Since he believes ‘for East to West’ one should ‘read South to North,’ he heads off to the South never to be seen again. This is alas the quality of the argument he makes against me.
The East whereof I speak when I comment that wealth has moved from West to East in recent times, is constituted by China, now the second largest economy in the world (if Europe is not considered as one economy) followed by Japan as the third largest economy. Add in South Korea, Taiwan and (with a bit of geographical license) Singapore and you have a power block in the global economy (once referred to as the ‘flying geese’ model of capitalist development) that now accounts for roughly a third of total global GDP (compared to North America that now accounts for just over a quarter). If we look back at the world as it was ordered in, say, 1960, then the astonishing rise of East Asia as a power center of global capital accumulation will be blindingly obvious.
The Chinese and the Japanese now own large chunks of a spiraling US government debt. There has also been an interesting sequence of each national economy in East Asia taking its turn in searching out a spatial fix for the massive amounts of surplus capital being accumulated within their borders. Japan began capital export in the late 1960s, South Korea in the late 1970s, Taiwan in the early 1980s. A lot of that investment went to North America and Europe.
Now it is China’s turn. A map of Chinese foreign investment in 2000 was almost totally empty. Now a flood of it is passing not only along the ‘One Belt One Road’ through Central Asia into Europe, but also throughout East Africa in particular and into Latin America (Ecuador has more than half its foreign direct investment from China). When China invited leaders from around the world to attend a One Belt One Road conference in May of 2017, more than forty world leaders came to listen to President Xi enunciate what many there saw as the initiation of a new world order in which China would be a (if not the) hegemonic power. Does this mean China is the new imperialist power?
There are interesting micro-features to this scenario. When we read accounts of awful super-exploitative conditions in manufacturing in the global South it often transpires that it is Taiwanese or South Korean firms that are involved even as the final product finds its way to Europe or the United States. Chinese thirst for minerals and agricultural commodities (soy beans in particular) means that Chinese firms are also at the center of an extractivism that is wrecking the landscape all around the world (look at Latin America). A cursory look at land grabs all across Africa shows Chinese companies and wealth funds are way ahead of everyone else in their acquisitions. The two largest mineral companies operating in Zambia’s copper belt are Indian and Chinese.
So, what does the fixed, rigid theory of imperialism to which John Smith appeals have to say about all of this?
According to John Smith I failed to take up the question of imperialism in The Limits to Capital. I mentioned it only once, he says. The index records some 24 mentions and the last chapter is entitled “the dialectics of imperialism.” It is perfectly true that I there found the traditional conception of imperialism derived from Lenin (and subsequently set in stone by the likes of John Smith) inadequate to describe the complex spatial, interterritorial and place-specific forms of production, realization and distribution that were going on around the world.
In this I was later intrigued to find a fellow spirit in Giovanni Arrighi who in The Geometry of Imperialism (written around the same time) abandons the concept of imperialism (or for that matter the rigid geography of core and periphery set out in world systems theory) in favor of a more open and fluid analysis of shifting hegemonies within the world system. Neither of us deny that value produced in one place ends up being appropriated somewhere else and there is a degree of viciousness in all of this that is appalling. This is, however, the process (and I emphasize the significance of ‘process’) we endeavor to chart, to uncover and to theorize as best we could. Marx taught us that the historical materialist method does not start with concepts and then imposes them on reality, but with the realities on the ground in order to discover the abstract concepts adequate to their situation. To start with concepts, as does John Smith, is to engage in rank idealism.
So, on the basis of what is happening on the ground, I prefer to work with a theory of uneven geographical development, proliferating and differentiating divisions of labour, an understanding of global commodity chains and spatial fixes, of place production (urbanization in particular – a vital topic of which John Smith is oblivious) and the construction and destruction of regional economies within which a certain ‘structural coherence’ (or ‘regional value regime’) might form for a time, until powerful forces of devaluation and of accumulation through dispossession set in motion the forces of creative destruction. These forces affect not only what is happening in the global South but also in the deindustrializing North.
I try to look at this carefully through the prism of the differential geographical mobilities of capital, labour, money and finance and to look at the rising power of rentiers and the shifting power balance between various faction of capital (e.g. between production and finance) as well as between capital and labour. This is what I substitute for the crude and rigid theory of imperialism that John Smith espouses. It does not deny the immense accumulation of money power taking place within the hands of a few corporations and a few wealthy families or the dreadful conditions of life to which much of the world’s population is reduced. But it does not imagine that the working classes of Ohio and Pennsylvania are living in the lap of luxury either. It acknowledges the significance of Marx’s theory of relative surplus value which makes it possible for the physical standard of living of labour to rise significantly even as the rate of exploitation increases to dramatic levels impossible to achieve through the absolute surplus value gained in the more impoverished arenas of capital accumulation that often dominate in the global South. Furthermore, as Marx long ago pointed out, geographical transfers of wealth from one part of the world to another do not benefit a whole country; they are invariably concentrated in the hands of privileged classes. In recent times in the United States the Wall-Streeters and their hangers-on have done splendidly while the erstwhile workers of Michigan and Ohio have done very badly.
Let us look backwards on all of this. In the 1960s privileged sectors of the working class were largely protected within the boundaries of their nation states in the global North and could strive for political power within their space. They achieved welfare states through tactics of social democracy and received some of the benefits that came from rising productivity. The capitalist counter was to try to weaken that power and bring wages down by encouraging immigration. The Germans looked to Turkey, the French to the Maghreb, the Swedes to Yugoslavia, the British to its erstwhile colonies and the US reformed its immigration laws in 1965 to open to the whole world. John Smith forgets that this was all subsidized by the capitalist state at the behest of the capitalist class. But that solution did not work. So, from the 1970s onwards some (but by no means all) capital went to where the labour forces were cheapest. But globalization could not work without reducing barriers to commodity exchange and money flows and the latter meant opening a Pandora’s box for finance capital that had long been frustrated by national regulation. The long-term effect was to reduce the power and privilege of working class movements in the global north precisely by putting them into competitive range of a global labour force that could be had at almost any price. I stand by the claim that the working classes within the global structure of contemporary capitalism are far more competitive with each other now than they were in the 1960s.
At the same time, technological change has been making labour less important in many spheres of economic activity (e.g. Google and Facebook). While new structures connecting the intellectual and organizational labour of the global north with the manual labour of the global south have by-passed traditional working-class power in the global north leaving behind a desolate landscape of deindustrialization and unemployment to be exploited by whatever other means possible.
One final comment that typifies the kind of polemic that Smith engages in as a substitute for reasoned critique. He mocks at the way I supposedly ‘pine for‘ a return to ’a more benevolent New Deal imperialism’ in The New Imperialism. The context shows that I was saying this was the only possible path within a capitalist mode of production. At that time (2003) it was clear that there was no global working-class movement that was remotely able to define an alternative to capitalism and that capitalism was headed for a nasty shock of the sort that occurred in 2007-8 (yes, I clearly predicted the likelihood of that in The New Imperialism in 2003). Given that the subsequent predictable crisis was resolved by further dispossessing whole populations of much of their wealth and asset values, then I think it would have been better for the left then to support a Keynesian alternative (which was, incidentally, later implemented by China).
This was, in my political judgment at that time, the only way that a breathing space could be created for the left to offset the drift, at that time clearly laid out by the neoconservative movement, for a violent militaristic and super-exploitative solution that echoed what happened in the lead-up to World War 2. I think in retrospect I was right in this even though I recognize that many will disagree with me. This dilemma is, alas, still with us. But reasoned critique is one thing and needlessly mocking polemics is another.
David Harvey is the Distinguished Professor of anthropology and geography at the Graduate Center of the City University of New York.
Featured Photograph: David Harvey speaking on Subversive Festival 2013 in Zagreb.