Globalization the EU and the Road to Serfdom

by Frank Lee from OffGuardian

It might be a good idea to start with some theoretical clarifications. Firstly, nationalism should not be confused with national sovereignty. Nations which are effectively ruled by outside agents – from Greece to Honduras – are not sovereign; they are colonies or vassals of some larger agency. And since they are not sovereign, the cannot be democratic, since decision making, and policies have been abrogated to an external ruling power. Secondly, nationalism: the term which in general is generally regarded as the all-weather bête noire by the orthodox left, can be and often is aggressive, racist, imperialistic, and so forth.

But this is only half the story and there are ample reasons to believe that this view is both simplistic and narrowly focussed; ‘nationalism’ can be either a reactionary or a radical/progressive force, depending on the local and political circumstances. This is simply an historical fact. The latter phenomenon is particularly true of those nations which struggled under the yoke of imperialism – from Algeria to Vietnam both ex-French colonies – and who actively engaged in national repeat, national, liberation struggles involving a broad coalition of political forces.

However, according to the conventional wisdom of the hyper-globalists both nation states and the whole concept of national sovereignty are now defunct. Their reasoning is based upon the following premises.

1. Most products have developed a very complex geography – with parts made in different countries and then assembled somewhere else – in which case labels of origin begin to lose their meaning.
2. Markets when left unfettered will arrive at optimal price, allocative, and productive efficiency.
3. This means that capital, commodities and labour should be free to move around the globe without let or hindrance to achieve these goals.
4. Any barriers to this process – capital controls, trade unions, exchange rate controls, welfare expenditures, minimum wage legislation, wages and even public goods – will result in price and allocative distortions. Q.E.D.

Such globalization (neo-liberalism writ large) has come to be seen and defined by its proponents as the ‘natural order’, almost a force of nature; an inevitable and inexorable process of increasing geographical spread and increasing functional integration between economic activities. This current orthodoxy goes by various other names, Washington consensus, market liberalisation, neo-liberalism and so on and so forth. In fact, there is nothing ‘natural’ about this stage of historical development, since the whole phenomenon has been politically driven from the outset. (Of which more later).

It is important to note, however, the difference between contemporary imperialism in its present stage – i.e., globalization – and the classical imperialism of pre-1914 vintage which preoccupied Hobson, Lenin, Bukharin and Rosa Luxemburg. Classical imperialism was characterised by a shallow integration manifested in arms-length trade in goods and services through independent firms and international movement of portfolio capital and relatively simple direct investment. Note also that the British state granted Charters to investment entities such as the East India Company and the British South Africa Chartered Company to ‘develop’ (i.e. exploit) these colonial possessions.

Thus, even at this early stage the British state actively intervened to facilitate and open up markets for British capital in India and Africa. This was the liberal epoch trade of the 19th century. Full-on globalization did not develop, however, due to inter-imperialist rivalries and mercantilist policies being carried out by the competing imperial powers (which eventuated in WW1). The opening up and liberalization of markets – which did not at that time occur – was and still is the conditio sine qua non for the development of full-blown globalization, which even today is nowhere near total…

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