Imperialist Globalization and
the Fight for a Different Future

Part 3: Investment for Whom,
Development for Whom?

by Raymond Lotta

Revolutionary Worker #935, December 7, 1997

The ideologues of imperialist globalization argue that poor countries can break out of underdevelopment by attracting investment capital and combining it with their abundant supply of cheap labor. Cheap labor is supposed to be the "comparative advantage" of Third World countries in the world economy. But when capital can more easily move from location to location, what this actually leads to is a contest to offer up the lowest wages, cheapest infrastructure, and worst standards of social and environmental protections--in order to attract capital.

In South Korea, the risk of being killed in a factory accident is six times higher than in the U.S.--yet and still, Nike flees Korea for Indonesia, where workers are getting paid $2.20 a day. In the Shenzhen "special economic zone" of China, some workers earn as little as 12 cents an hour, working 12-13 hours a day, 7 days a week. That's the reality of "comparative advantage."

The imperialists proclaim that integration is the inevitable fate of nations. But look again. It is a cold-blooded selection process by which imperialism allocates capital to countries. In fact, foreign investment in the Third World has been highly concentrated. In 1995, three-quarters of it went to just 12 countries. Until two years ago, much of sub-Saharan Africa--where 50 percent of the population live in absolute, that is, potentially life-threatening, poverty--was basically quarantined by the imperialists. The global financial markets sent out their message: "let the people starve and kill each other off." And much of the capital flowing into the Third World is short-term. It whips in and out in response not just to local conditions but to global market developments.

But the problem is not that foreign investment is unfairly distributed or used unwisely. The problem is these investments themselves. Every dime of foreign capital is a chain around the necks of the oppressed. Why? Because these foreign investments and the capitalist development they bring about are based on super-exploitation. They produce misery. Investment capital is not some sort of "miracle growth hormone."

Capital enters a country like the Philippines dripping with blood from every pore --the blood of people from the sweatshops of Indonesia to the gold mines of South Africa to the fields of California. And capital leaves a country like the Philippines dripping with the blood of farmworkers in the countryside, the blood of women workers losing their youth in urban factories, the blood of children forced to sell their bodies in order to survive.

Certainly, foreign investment is capable of stimulating growth. But what kind of growth? This is twisted growth. It doesn't lead to balanced and integrated agricultural-industrial development. It doesn't promote a technology appropriate to local conditions. It increases dependency on imperialism for loan capital and markets. And growth for whom? Foreign investment doesn't promote the welfare of the majority of people. It doesn't liberate human potential.


Here we can make an economic and social reckoning of how these latest trends in the imperialist world economy are affecting the masses of the oppressed nations and of the imperialist countries:

  • The gap between developed capitalist countries and oppressed nations is as extreme as ever. True, a few of the so-called "newly industrializing countries" targeted for imperialist investment have closed some of the gap in economic output. But 89 Third World countries in 1995 were worse off economically than they were a decade or more ago. And while the gap in development between the rich and poor nations is wide, poverty and income inequality within countries are widening even more. The richest 20 percent of the world's population saw its share of global income rise from 70 to 85 percent in the last 30 years.
  • Brutal restructuring of the world's labor force. On the one hand, as I have discussed, global cheap-labor manufacturing is being expanded on the basis of deep poverty and vast reserves of surplus labor in the Third World. On the other hand, both in the oppressed and imperialist countries, labor is being utilized and controlled in new, more oppressive ways. We see the growing importance of flexible labor systems: workers more quickly taken on, shuffled about, and let go in response to changes in market conditions. Contract labor--which is typically short-term, low-wage, and without benefits and protections--is a growing worldwide phenomenon. There is a global speed-up of unprecedented proportions.
  • Massive social dislocations in the countryside of the Third World. Millions of peasants are being dislodged from production and forced to migrate to the cities. This is the result of accelerating concentration of land ownership and cutbacks in rural support programs stemming from IMF/World Bank adjustment policies; the result of the wider and deeper integration of local crop and livestock production into large-scale, world-based agrofood operations; the result of land speculation and the direct takeover of land by transnational corporations; the result of the growing power and penetration of imperialist biotechnology in world agriculture. Traditional agricultural and basic food production systems are being destroyed.

    Cities are growing chaotically. Their resource bases are being strained--as imperialist industry clusters in the urban areas and as peasants stream into shantytowns. As these trends gather greater force in the decades ahead, hundreds of millions more peasants will be uprooted.

    At the same time, existing alongside and combined with these trends in the Third World, is the continuing reality and reinforcement of semifeudalism in the countryside.

  • Effects on women. Globalization is bringing about the massive entry of women into the labor market in the Third World. But this labor is subject to special conditions of oppression. Women are heavily concentrated in extremely low-wage subcontracted work. Many women face strict controls--working in compound-like factories. Women are more likely to be temporary workers.

    At the same time, women in the peasant economy are often left with the entire burden of farming small plots of land to feed families--as men migrate to the cities and abroad. And in the urban and rural areas, the social costs of cuts in government expenditure on health, nutrition, and housing investments are falling disproportionately on women as providers of basic needs.

  • Ecological devastation. The pressure put on the economies of the Third World to produce as cheaply as possible, to export as much as possible, and to cut back on standards and regulations as much as possible is leading to ecological catastrophe. I am talking about sanitation crises in the maquila zones of Mexico, the depletion of natural resources in Indonesia, the destruction of rain forests in Brazil and of coral reefs in the Philippines.

    IN THE U.S.

    In the imperialist countries, and here my focus is the United States, crisis-induced restructuring of the '70s and '80s, globalization, and technological change have had enormous impacts on the labor force.

    This is sharply reflected in the decline of employment in the industrial manufacturing base. In the U.S., there has been extensive reorganization in basic industry. This involves permanent downsizing, global "sourcing" of parts, and relocation of manufacturing operations. It involves the adoption of high-tech, labor-displacing production systems. There has been de-unionization, the dramatic reduction of health and pension benefits, and the growth of temporary and part-time labor.

    All this has greatly affected the traditionally better-off sections of the U.S. working class and accelerated the decline of what in past decades were more stable middle-income jobs. It is estimated that as many as one-third of U.S. workers are in jobs subject to global relocation pressures--which enables capital to push down wages and working conditions. And increasingly in the 1990s, professional jobs have become the target of corporate reorganization. Job insecurity has heightened in U.S. society--between 1992 and 1995, 15 percent of people holding jobs for more than one year lost those jobs. At the same time, work intensity has increased.

    As for the most exploited and oppressed sections of the U.S. proletariat, they are facing ever-harsher conditions and what amounts to a "war on the poor." There is a growing army of low-wage workers, of downgraded workers with fewer benefits and protections, of sweatshop workers. Income inequality, social polarization, and poverty are intensifying in U.S. society. The welfare system is being dismantled. The ruling class has been aiming to reduce deficits by cutting social spending and to increase competition among the poorest workers. It is projected that one million more children will be thrown into poverty as a result of the repeal of basic welfare programs.

    An entire generation of Black youth--for whom there is little prospect of jobs--is being demonized, brutalized, and criminalized. One out of three young Black men is either in jail or under the authority of the criminal justice system. The state of California spends more money on prisons than on education. Immigrants, most of whom are concentrated in the lower rungs of the U.S. proletariat, have been targeted for chauvinistic and repressive campaigns. The U.S.-Mexico border is becoming militarized.

    The significance of what I am describing is two-fold. The U.S. ruling class is pressing ahead with its own cruel austerity program to enhance the international competitiveness of U.S. capital. At the same time, it is preparing for potentially increasing social disorder at home.


    There is another point I want to emphasize. The restructuring and globalizing I have been discussing are actually intensifying strains and disorder in the world economy.

    Look at the rapid "meltdown" of the Mexican economy. The fast-growing Mexican economy had been touted as the model for other Third World economies hoping to become "free-market industrial tigers." Well, in just a few days in late 1994, huge amounts of short-term and speculative capital invested in stock and bond markets fled Mexico. A peso crisis hit like a typhoon, leading to industrial collapse and a 50 percent drop in the value of workers' wages.

    As this crisis threatened to destabilize world financial and capital markets, the United States orchestrated a bail-out. It was the largest single financial package assembled since the Marshall Plan. Two years into the crisis, people's standard of living had fallen by 20 percent. That was the price of repayment for imperialism's emergency loans. People are eating tortillas where they used to eat vegetables, malnutrition is spreading in the countryside...and peasants are taking to arms.

    The point I'm making is this: restructuring and globalization have resulted in significant transformations in the world economy. But they have not created the conditions for stable and vigorous expansion.

    The IMF/World Bank program of export growth and depression of living standards that is being simultaneously pushed on Third World countries intensifies pressures to find markets. The fast-growing East Asian economies are highly dependent on access to export markets, and the conditions for Mexico-style financial crises exist in countries like Indonesia, Brazil, Thailand, and the Philippines. [This was written before the recent outbreak of financial and currency turmoil in in East Asia--ed.] The U.S.-Japan interrelationship--involving trade, currency alignments, and financial flows--is a potential faultline in the world economy.

    Globalization is hailed as the "wave of the future." But the future this system holds out--with all its technological capability--is heightened exploitation and oppression in the oppressed nations and in the imperialist countries. The future this system holds out--with all its global contact points--is to push hundreds of millions of people to the margins of economic activity. The future this system holds out--with all its investment--is more distorted economies, less able to feed and meet the needs of the people who work the land and factories.


    Now some people see the horrors of imperialism yet don't see much hope for going up against it. The imperialists try to intimidate us. They tell us that capital is so powerful and so mobile that we must bend to their every demand and requirement.

    But the conditions I have been describing bring forth protest, resistance, and rebellion--riots in Venezuela over price hikes, battles against land evictions in South America, struggles in India against World Bank hydroelectric projects that would displace tens of thousands from their ancestral lands, a general strike of public-sector workers in France in 1995.

    Jolts to the system can rapidly open new possibilities for struggle. And imperialist globalization is binding the world more tightly. Developments and struggles in one part of the world can greatly influence the situation in others.

    Look, we face enormous challenges... but there are also opportunities to advance our struggles, including revolutionary struggle. Because the system is not only vicious; it is also vulnerable. So what does this mean for our struggles?

    To begin with, wherever we confront this monster, we need to have an orientation of militant struggle, an orientation of fighting for the interests of the masses all the way through. And that requires giving full play to the activism and determination of the masses. That is the strength of a movement truly based on the people's interests.

    We need to have a global frame of reference. In the face of the attempts of the imperialists to divide us from each other, we have to find the ways to support each others' struggles. We have to break down barriers and develop links in our common struggle against imperialism. When farmers in India resisted the attempts by U.S. corporations to secure patent rights over their traditional farming techniques, their cause gained international support. When the North American Free Trade Agreement (NAFTA) was on the table, many different political forces made efforts to forge bonds and solidarity between North American and Mexican workers; and when the Chiapas uprising erupted, solidarity initiatives multiplied.

    We revolutionaries in the U.S. have a special responsibility to win broad sections of people to oppose U.S. domination in the Third World, and to oppose its bullying and military attacks against countries like Iraq. We need to win people to support all struggles against U.S. imperialism, especially when our class brothers and sisters rise up in revolutionary struggle.

    We need to learn from each others' experiences and struggles, through direct support and interaction, by communicating and spreading lessons.

    There is another crucial task before us. And that is to support-- and certainly not to oppose--the truly cutting-edge struggles of our time. Here I speak of the Maoist people's wars of Peru and the Philippines, and now Nepal, which have mobilized the peasant masses to heroically wage the armed agrarian revolution as the prelude to socialist revolution.

    Maoists believe that revolutionary war against imperialism is needed...because only by overthrowing imperialism and its local enforcers can a new world be brought into being...because only revolutionary war can tap the hatred and enthusiasm of the exploited and oppressed...because nothing short of revolution can solve the fundamental problems of the people.

    There is an alternative to the madness and suffering of the world imperialist system. This is the world proletarian revolution. It consists of two streams of revolutionary struggle. One stream is the anti-imperialist national-democratic, or new democratic, struggle waged by the nations and peoples subjugated by imperialism. The storm centers of revolution since World War 2 have been in the oppressed nations of the Third World. These struggles have been a tremendous source of strength and inspiration to people throughout the world, and they have greatly weakened imperialism.

    The other stream is the struggle of the proletariat and its allies for socialism in the imperialist citadels. Is revolution in the heartlands of imperialism possible? The 1992 Los Angeles rebellion showed the force of the "have-not's" in American society. Not just African-Americans, but people of different nationalities participated in this uprising. This rebellion revealed some of the elements that will go into making a revolution in the United States.

    These two streams of the world-proletarian revolution hold the key to transforming this nightmare of a world.


    You know I've spoken of the "dirty little secrets" of globalization. Well, there is another. One of the most strategic uses to which the imperialists put their global "information highway" and propaganda apparatus is to bombard and demoralize us with the message that this is the only possible world, that anything else is bound to fail and make things worse, and that the best we can do is to plead for better terms of victimization.

    But it is imperialism that is the failure, and whose prolongation will only intensify suffering. And, as I said, there is an alternative. It is what I call "a viable and visionary socialism": a socialism guided by a passion to turn the world upside down, a socialism that works in the real world. Such a socialism actually existed in revolutionary China. Not the phony socialism of the former Soviet Union. Not the China of today, which is a capitalist cesspool. But Maoist China.

    With political power in their hands, the workers and peasants of Maoist China were able to collectively tackle problems, to transform institutions, and to change their own thinking and motivations. Maoist China produced a model of economic development that is profoundly relevant to today's world. It delinked from the world imperialist system. A self-reliant economy was built that took the needs of the people--not profit, not the dictates of the world market--as its starting point. Agriculture was the foundation of the economy, and industry served agriculture.

    Technology was consciously developed and utilized to promote the aims of egalitarian economic and social development and to be mastered by people--rather than dominating, dehumanizing, and dislocating them. Workers and peasants took part in administrative, planning, and management tasks; managers and officials took part in production. Students went to the countryside to learn from peasants. The age-old differences between mental and manual labor, between industry and agriculture, and between city and countryside were being overcome. This was a revolution that waged struggle against the social relations and ideas that pit people against each other and keep women in a degraded state. This was a continuing revolution, one that waged struggle against old and especially new bourgeois and exploiting forces arising within socialist society. Maoist China was a base area for world revolution.

    But in 1976, this revolution was overthrown by capitalist roaders led by Deng Xiaoping. Now some people look at this defeat and the real difficulties that socialist revolution has faced and come to the conclusion that in a globalized world economy it is not possible to develop an independent socialist society and economy. They say that imperialism is too strong and the world is too integrated--and so we have to "reevaluate," or even abandon, the socialist project.

    We Maoists have two answers to this. To begin with, for 25 years, socialism was working in China--and it can work elsewhere. This is the first point. But socialist states have faced and will face tremendous challenges and obstacles. On a world scale, the forces of exploitation and imperialism are still stronger than are the forces of proletarian revolution. The economic and social relations, and the ideology and culture, of imperialism will continue to assert themselves. And sooner or later, imperialism will seek to violently seize back any of its lost positions.

    But this does not mean that revolution is impossible. What it does mean, and this is the second point, is that the fate of any individual revolution is ultimately linked to whether the world revolution advances. It means that wherever the masses break through to seize power and build socialism, the new society must first and foremost serve the advance of the world revolution.

    Socialist revolution is difficult and tortuous. But it is the only road to emancipation, towards overcoming the differences and inequalities of class society. It is the only road towards establishing a liberating socialist economy based on social control, mass participation, and the utilization of resources to meet the fundamental needs of the masses of people. It is the only road towards creating a society in which women "hold up half the sky," in which there is equality of national cultures and languages, in which the revolution is being carried forward and being spread to achieve a world without classes, communism.


    I have discussed many different aspects of imperialist globalization. Think about it: For this system to function, millions in the Third World must starve...millions in the imperialist countries must lose their jobs ...while in the richest country of the world, the U.S., jails and more jails are being built for the oppressed. This system is truly outmoded. But the vultures want us to believe it will last forever.

    We face a common enemy. Let us deepen our bonds and our solidarity. Let us learn from one another. Let us fight for a different future. We can emancipate ourselves and all of humanity.

    This article is posted in English and Spanish on Revolutionary Worker Online
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