Skip to Content

Cooking the Books: What is Like Gravity?

Where you have generalised production for the market, the production and distribution of wealth escapes from human control and comes to be dominated by economic laws - such as "no profit, no production", "minimise costs", "maximise profits", "accumulate more and more capital" - which impose themselves on those taking day-to-day economic decisions as if they were natural laws.
 
In fact, early students of how the capitalist economy worked such as Adam Smith and David Ricardo thought that they really were studying natural laws, but Marx pointed out that this was only the appearance: the economic laws of capitalism only arose out of the particular social and economic basis of capitalism under which the means of production belonged to a minority class and where everything was produced for sale on a market with a view to profit. If capitalism were to be abolished, these economic laws would cease to operate; on the other hand, they would continue to operate as long as capitalism existed.
 
In this sense Colin Hines, an economic adviser to the Green Party, was right when he wrote in the Guardian (25 April) that "Globalisation is not like gravity", meaning by globalisation the effects of the pressures exerted on the home economy by competition on the world market: "The fact that countries with higher costs haven't a hope of competing with those where labour is cheap seems crushingly obvious".

Yes, it is, and this is one of the economic laws of capitalism, but he then "Yet in Britain, only one party has grasped it: the Greens. They have realised that to help workers worldwide we must stop gearing economies to ruthlessly  out-compete each other. We need new goals: maximising self-reliance and ensuring that trade rules are governed by a pro-poor approach . . . Trade rules must be rewritten to discriminate in favour of domestic production".

But the existing trade rules, as for instance embodied in and enforced by the World Trade Organisation, are not just a voluntary policy option, but essentially a reflection of the economic laws of capitalism. Globalisation may not be like gravity, but it's not like putty either. In fact, as long as capitalism lasts, it is like gravity.

If the Green Party thinks that the trade rules/economic laws of capitalism can be changed so as to stop ruthless competition on the world market, and to be governed by a "pro-poor approach" or to permanently discriminate in favour of higher-cost domestic production, then they must be living on a different globe to the rest of us.