The Washington Post reports that Donald Trump now wants the US to rejoin the Trans-Pacific Partnership, a "multination trade agreement he pulled the United States out of shortly after taking office." It's often said that Trump's presidential run was successful in part because he appropriated an issue that's popular with the left and the working-classes: the decimation of US jobs by free trade. Elites like Obama and Clinton supported globalization and trade agreements with Europe, South America, and the Pacific Rim. Leftist radicals like Bernie Sanders did not. And with good reason. Globalization mostly benefits the rich, makes American labor precarious, and often contains clauses that favor trade over the environment. Trump only saw the issue as a political opportunity.
There was also a racial element in his sinister conflation of anti-globalization with America First. During his campaign, he regularly presented Asians as the baddies who are stealing work from white Americans. In one speech, he even described trade agreements with Asians and Mexicans as the rape of white Americans. This kind of imagery wasn't accidental; it didn't come out of nowhere. It forms the basis of The Birth of a Nation, a racist film about the Ku Klux Klan. It's the reason why so many black men hung from trees in the first half of the 20th century. Many of the white Americans who participated in and observed these lynchings are alive today and vote.
“The Trans-Pacific Partnership is another disaster done and pushed by special interests who want to rape our country,” Trump said in June 2016. “Just a continuing rape of our country. That’s what it is, too. It’s a harsh word — it’s a rape of our country. This is done by wealthy people that want to take advantage of us and that want to sign another partnership.”
Because many white Americans are addicted to racist imagery, they fell for Trump's trick. Now that all of that is behind him, Trump has nothing to lose by reversing his position on the issue and siding with his kind.
But even with all of Trump's dust kicking, the issue of globalization must remain lucid and return to the center of leftist politics for reasons that are dramatically and vividly captured in a set of new paintings by Dewey Crumpler, which form the current exhibit at Hedreen Gallery called Collapse. And tonight (at 6:30 p.m.), Crumpler will be at the gallery discussing how and why he visualizes the ecological and human catastrophe of globalization with the exhibit's curator, Sampada Aranke.
What these paintings reveal is the actual world we live in, the world that cannot sustain the international division of labor, and the worldwide movement of cheap goods. Advocates of this form of global economy often use the 19th century theory of comparative advantage to justify it. David Ricardo, one of the founders of political economy, claimed that Portugal should grow and sell wine to Great Britian because it had the advantage of a sunnier climate and richer soils. Free trade meant, according to this rosy picture (or ideology), that everyone had access to the best things that this or that region of the world had to offer. But this was mostly nonsense. The reason why Great Britain in the 19th century wanted free trade was to dump its surpluses onto other countries and obtain cheap food for its underpaid workers. Free trade was about importing cheap goods from poorer or developing countries of its times, like the US, to pacify its impoverished labor force, to keep wages low, and check the "tendency of the rate of profit to fall."
The US is in a similar situation today. Free trade is not about comparative advantage. Most of the things that are made in Asia or grown in Mexico can be produced locally and, as a consequence, with a much, much smaller carbon impact. Globalization in our day is about wage arbitrage (I explained this in my review of Collapse), and a suppression of prices that makes low or falling US wages politically feasible. The result of the system is, as we see in Crumpler's evocative paintings, the collapse not so much of the planet (it will survive), but the human world. This world cannot support a global economy that has as its foundation the endless growth of money: money making more money. The "M-C-M'" cycle, or, to use the language of François Chesnais, the "spiral form," is doomed.
Chesnais is French and an economist in a Marxist tradition that focuses on finance and begins with Rudolf Hilferding's 1910 book, Finance Capital. Chesnais's new work, Finance Capital Today: Corporations and Banks in the Lasting Global Slump, is very readable, and explains a number of complicated financial practices and instruments (CDO, CDS, CDOS, and the like) with surprising clarity. These practices (speculation) and instruments (derivatives) crashed the world economy in 2008, survived, and are now, to borrow an image from Jean Baudrillard's essay "Transeconomics," orbiting the Earth again. Derivatives form a part of a system of paper that Marxists call fictitious capital. This system includes government bonds, shares, securities, and so on. Many of us have never encountered fictitious capital of any kind, but they really do rule our world.
Interestingly enough, one of the best chapters in the book is not about finance, but its compliment: globalization (Chapter 6: "The Operational Modes of TNCs in the 2000s"). There are a number of powerful insights in this chapter, one of which concerns "non-equity modes." Again, those who support globalization claim that it sends money from places that have too much of it to areas of the world that desperately need it. This is called foreign direct investment (FDI). It's a win-win, the advocates say. But Chesnais points out that transnational corporations are less and less investing in developing economies (FDI), and more and more making them pay for the research, production, and even design of their products (non-equity). This means all they are really doing is promoting (branding) products in Western markets.
This is the case in electronics where major TNCs include Dell, Hewlett Packard and Apple. This growth is ‘driven by a number of key advantages for TNCs: (1) the relatively low upfront capital expenditures required and the limited working capital needed for operation ["non-equaity modes"]; (2) reduced risk exposure; (3) flexibility in adapting to changes in the business cycle and in demand; and (4) as a basis for externalising non-core activities that can often be carried out at lower cost by other operators’. To Marxists, these ‘advantages’ have a familiar ring. The first is recognisable as one of the factors counteracting the tendency for the rate of profit to fall... The second and third concern the shifting of risk onto subcontractors and component suppliers and the fourth is just a way of saying that the principal firm is using ‘other operators’ to increase absolute surplus value that it will appropriate.Do not be surprised if you notice a structural similarity between "non-equity modes" and Uber. With the former, the Global South becomes something like the latter in the sense of a "consumption fund" (the investments and goods owned and made by a household).
What this also means: People in developing countries are often not making things they need or suitable for their economy or climate, but making huge investments for the production of things that Americans consume. And if consumer tastes in the West change, the Global South pays the price, not Apple or Dell or other TNCs.
And so, with the madness of ecological destruction by the movement of cheap goods on massive cargo ships (the subject of Crumpler's recent paintings and also drawings), we have the raw exploitation of the working and middle classes in the Global South. It gets worse. On one side of the world, you have US corporations transferring R&D and plant investments to poor countries with often weak environmental regulations; and on the other side, you have US corporations not investing in the US but using the profits from cheap products to buy back stock. (A company buys its own stock to increase its value—Nick Hanauer makes the matter plain in his Atlantic essay "Stock Buybacks Are Killing the American Economy.") This transfers surplus value extracted from the Global South and the US service sector directly to the owners of fictitious capital.
[The economist William] Lazonick [in] 2014 calculates that between 2003 and 2012, the S&P 500 used 54 percent of their earnings to buy back their own stock, while dividends absorbed another 37 percent. He names these strategies ‘stock market manipulation.’
When you look at Crumpler's grim paintings, it's great to have these grim facts in mind; and if you read Chesnais's book, I recommend you begin with the "Conclusion," chapter 11, first. The fireworks are in that section. The rest of the book coolly considers the collapse that's happening right before our eyes.