‘Multipolar’ . . . but purely capitalist

‘We’re the United States of America, for god’s sake! The most powerful nation in the world, not in the world, but in the history of the world’. This was Joe Biden’s response in October to the question of whether the US could aid Ukraine and Israel at the same time. If George Bush Sr. or Bill Clinton had boasted similarly when they occupied the White House, many Americans might have nodded in agreement, but it rings hollow or even comical today. Signs that the ‘indispensable nation’ is in decline – militarily, economically, politically, and ideologically – can be seen everywhere.

The decline of US global power raises the hope among many that a new ‘multipolar world’ is emerging that would be more stable and just. The hope is understandable. No one likes a bully, and no country has acted more like one over the past 30 years than the United States of America (for god’s sake). Now that the US government is fighting Russia to the last Ukrainian and supplying Israel with the weapons to massacre civilians in Gaza, it seems clear to many that the world is a dangerous place when one nation wields too much power.

But even if the US is pushed off centre stage, or graciously decides to allow other actors to play a part, the working-class audience would still be watching the same old tragicomedy – a tale about unending conflict arising from unbounded greed – because multipolarity is premised on capitalism and its competitive logic.

History shows that countries united one day to oppose a hegemon, can be at each other’s throats soon after the bully has been cowed. After all, as William Morris pointed out, capitalism is a social system ‘based on a state of perpetual war’ – whether it be the struggle between classes, the competition between capitalists, or the conflicts between nations.

No friendships, just interests
In talking about a ‘multipolar world’ the adjective ‘new’ is often attached, but there is nothing new about multipolarity. It has been the norm throughout the history of capitalism. After World War II, when it seemed that the world was neatly divided between two great blocs, that ‘bipolar world’ saw conflicts within each camp, whether tensions between the Soviet Union and Yugoslavia, China, and other ‘Communist’ states, or trade disputes between the United States and its allies. Behind the ideological smokescreen of ‘communism’ or ‘democracy’, each nation-state pursued the interests of its ruling class.

Even during the supposed ‘unipolar moment’ that followed the collapse of the Soviet Union, the United States was hardly able to impose its will everywhere (although it tried its hardest).US military power proved incapable of eliminating resistance in Iraq or Afghanistan, and the economic sanctions the US imposed around the world often did more to isolate itself than the targeted country. Much to its consternation, the US saw ‘unfriendly governments’ pop up here and there, including some that had the chutzpah to do so in ‘America’s backyard’ in Central and South America.

The more aggressively the US has wielded its economic and military power, the more it has created enemies and exposed the reality of ‘multipolarity’. However, even though the ‘project for a new American century’ only lasted about as long as Hitler’s ‘thousand-year Reich’ before the wheels started to come off, its neocon architects continue to act as if the whole world envies and fears the United States and is willing to follow its ‘rules-based order’ (Rule 1: Do as we say, not as we do.)

Much of the hope placed in ‘multipolarity’ could be described as a natural and healthy reaction against the aggressive and unpredictable foreign policy of the United States. Other nations cannot help but appear responsible and trustworthy in contrast. It would be naïve, however, to imagine that relations between nation-states can be founded on lasting trust. Nevertheless, cheerleaders for multipolarity do just that in assuming that the BRICs nations are bound by common values or that the ‘friendship without limits’ between China and Russia can be taken at face value.

Here again it helps to look at history, which provides many examples of alliances that were formed from the existence of common enemies or mutually beneficial economic interests, and then dissolved when conditions changed. A case in point was the falling out between the US and USSR after the defeat of Germany. Since no one denies that US foreign policy has pushed China and Russia closer together, it is not unlikely that the two could reconsider their relationship if the US retreats from Europe and East Asia.

The point here is not to predict that China and Russia will fall out of love, but to emphasise that each nation pursues its ‘own interests,’ which means defending the core interests of the capital class. There is no place for lasting friendship among states in this capitalist world.

Under a multipolar world nation-states will continue to pursue their interests and seek alliances with other states accordingly. The motto for the nation-state will remain (to paraphrase Lord Palmerston): ‘No eternal allies, no perpetual enemies: only the duty to follow our own (capitalist) interests.’

The Chinese model?
Another hope placed in multipolarity is that it might be a shift away from ‘neoliberalism’. This is the view that China, Russia, and other BRICs nations have economies centred on the production of material goods for the benefit of its citizens, while the ‘collective West’ has a financialised economy designed to benefit a tiny parasitic elite.

In a 2022 article titled ‘Finance Capitalism Versus Industrial Capitalism’, the influential economist Michael Hudson (a self-described ‘Marxist’), argues that the current rivalry between the United States and China comes down to a ‘clash of economic systems’, with ‘finance capitalism’ on one side and ‘industrial capitalism’ on the other. What is ‘at stake’ in this ‘new Cold War’ is ‘whether the state will support financialization benefiting the rentier class or build up the industrial economy and overall prosperity’.

Hudson describes ‘socialism’ as the ‘natural evolution of industrial capitalism’, attributing this view to Marx. Somewhere in Vol. 1 of Capital (Hudson doesn’t say where), Marx argued that ‘as industrial capitalism evolved toward more enlightened management, and indeed toward socialism, it would replace predatory usurious finance, cutting away the economically and socially unnecessary rentier income, land rent, and financial interest and related fees for unproductive credit’. Apparently, the United States was also on this evolutionary path to socialism until its system of industrial capitalism was undermined by the forces of ‘finance capitalism’ or ‘pro-rentier fascism’.

In Hudson’s interpretation, Marx explained that industrial capitalism makes its profits ‘by investing in means of production to employ wage labor to produce goods and services to sell at a markup over what labor was paid’. This view of profit as an arbitrary ‘markup’ typifies the way Hudson presents capitalism (or ‘industrial capitalism’) as an efficient means of producing material goods, rather than a system founded on the exploitation of labor. The culprit for Hudson is not the pursuit of profit but ‘finance capitalism’, which ‘has eroded [the] core circulation between labor and industrial capitalism’ in which ‘capitalist employers pay wages to their workers and invest profits not paid to employees into factories and equipment’.

A lot more could be said about Hudson’s understanding of terms like ‘capitalism’ and ‘socialism’, not to mention his freewheeling interpretation of Marx, but the important point is that his view that China and other BRICs nations are following a more progressive or socialistic economic model is shared by many others.

In reality, China looks a lot more like the capitalist past than a socialist future. Its manufacturing-based, export-driven economy is modelled in many ways on Japanese capitalism. Japan had the sort of ‘industrial capitalism’ that would earn high marks from Michael Hudson. Indeed, many observers at the time claimed that Japan had pioneered a superior model of capitalism. But in the 1990s, much as the United States had done a decade earlier, Japan offshored much of its industry and carved up its welfare state, in a bid to restore profitability.

Hudson seems confident that the Chinese system will not fall into the sorts of problems that have ensnared the US and Japan. He writes that ‘socialist China’ has been able to ‘keep down the cost of living and business’ by ‘keeping money and credit creation public instead of privatizing it’ and has ‘been able to avoid a debt crisis by forgiving debts instead of closing down indebted enterprises deemed to be in the public interest’.

So what would Hudson have to say about the recent forced liquidation of the property developer Evergrande? The collapse leaves the company’s creditors owed around $300 billion, not to mention the millions of Chinese homeowners who sank their life savings in properties now worth a fraction of their former value. The situation looks a lot like the ‘debt leveraging’ in the US that Hudson bemoans, which ‘makes investors, speculators, and their bankers wealthy but raises the cost of housing (and commercial property) for new buyers, who are obliged to take on more debt in order to obtain secure housing’.

These recent developments suggest that either ‘finance capitalism’ has already taken root in China, or that the clear distinction Hudson and others draw between that model and ‘industrial capitalism’ is nonsense.

The champions of multipolarity and the BRICs, like Hudson, would have us pin our hopes on capitalism gradually ‘evolving’ into socialism. This might seem plausible to the many who mistake ‘socialism’ for state capitalism, but the real solution lies elsewhere. Instead of the competitive, multipolar world of production to generate profit, we desperately need to move toward a cooperative, borderless world of production to meet human needs.


Next article: An ‘anarcho-capitalist’ explains ➤

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