04.11.2004

Autumn colours or: Green turns to orange... and brown?

Michael Woodin, Caroline Lucas Green alternatives to globalisation: a manifesto Pluto Press, 2004, pp262, £11.99

Before the launch of the ‘war on terror’, how to respond to ‘globalisation’ and to the ‘anti-globalisation movement’ was a principal topic of discussion on the left. The ‘anti-globalisation movement’ survives, but it has been overshadowed by the apparent turn of the US to unilateral military aggression on a large scale. The ideas of the enthusiasts for capitalist ‘globalisation’ are clearly low-grade apologetics. But the underlying issue is the consequences of the financialisation of the world economic order and shift towards free movement of capital which has taken place since the 1980s. This remains a fundamental strategic question for the left.

Michael Woodin, who died recently, was one of the ‘principal speakers’ for the Green Party. Caroline Lucas is the Green MEP for the South-East constituency. Their book claims to set out an alternative to capitalist globalisation. It is in some respects a Green Party response to George Monbiot’s The age of consent (published in 2003 and reviewed on these pages by Ben Lewis Weekly Worker January 8 2004). Monbiot argued that there is no going back from global economic integration: what is needed is the political integration - global democracy - to match it.

Of course, Monbiot had not the least idea of how to get to this result except mobilising ‘public opinion’, and perhaps building on the interest of other states in resisting US dominance (coded as the dominance of the ‘rich world’). Woodin and Lucas, in contrast, argue that we can go back from global economic integration and the essence of the ‘Green alternatives’ is localisation. Unlike Monbiot, they have an idea of how to get to the result they seek: through states resisting globalisation. Equally unlike Monbiot, their goal is plainly a politics of nostalgia, of going back to an imagined past.

The first section of Green alternatives to globalisation (GAG) is called ‘Assessing the damage’. Four chapters characterise globalisation as ‘The economics of insecurity’, ‘Democracy for sale’, ‘A world in decline’ and ‘Globalising poverty, inequality and unemployment’. Much of the content of these chapters is journalistic description that is uncontroversial on the left and, for that matter, among liberals and social democrats. In chapter one, however, we also find some of the theoretical premisses of the ‘localisation’ argument.

‘Green economic theory’
Chapter one defines ‘economic globalisation’ as “the ever-increasing integration of national economies into a giant, one-size-fits-all global economy through trade and investment rules and privatisation, aided by technical advances, and driven by corporate power” (my emphases p6).
This definition has the advantage of defining globalisation down to the phenomena of the recent past. Its major disadvantage is that it is Hamlet without the prince and without the ghost. First is the absence of the central player: the turn in the economic geopolitics of the United States as a state from the late 1970s onwards, which has led the US to push ‘free trade’ and privatisation through all the numerous instruments in its possession.

Second is the absence of the central player’s reasons for acting as it did: the historical context of that turn. This was the relative decline of the material productive economy of the US, and the failure of the geopolitical strategy of ‘containment’ of communism which had predominated between 1948 and the mid-1970s. ‘Containment’ underlay the Breton Woods world of managed trade and mixed economies. This was, in reality, a system of concessions by the US to the working class in Europe, the US and Japan, and to the nation-states and capitals in the ‘third world’, in order to hold together a coalition against the ‘communist bloc’. It failed because US relative decline meant that the cost of the Vietnam war led to a breakdown of the international monetary system, and because the US and European working classes and the peoples of the ‘third world’ began to demand too much - leading, among other things, to US defeat in Vietnam. The core of modern US policy is thus ‘No return to the 70s!’
Both these issues appear later in GAG, in chapter six, with an interpretation misleadingly concerned solely with ‘north-south’ relations. The point here is that in chapter one ‘globalisation’ is considered as an abstract phenomenon driven by ‘corporate power’, when it is actually a policy imposed by a concrete nuclear-armed state, the USA.

Following their definition in chapter one, Woodin and Lucas proceed to discuss the “flawed theory of globalisation” (pp6-10). They argue that the core is Adam Smith’s theory of ‘comparative advantage’: “do what you do best, and trade for the rest”. What is wrong with this theory, they argue, is, first, that international trade is not conducted between equals, because states create artificial advantages; and, second, that free movement of capital results in movement to countries where the costs of business are most freely ‘externalised’ onto workers, purchasers and the general environment, so that profits are highest. This nullifies the theory of comparative advantage, which, they argue, serves only the interests of transnational corporations.

The Green ‘alternative economic theory’ they offer is founded on “equity, ecology, democracy”:
“First, the economic system must respect the dynamics and limits of the earth’s natural systems on which it depends ... Second, economic policy must pursue equity and social justice as an overriding aim. Third, the economy must be democratically regulated to ensure that production is driven by need rather than profit, and that the methods of production are consistent with the first two principles. This should be achieved both through formal channels of democratic accountability and through maximising the contact between producers and consumers.”

At first sight this looks like a case for socialist reorganisation of the economy. Marxist socialists share the view that capitalism tends to destroy the metabolic relation between the human animal and the natural world of which we are part (see John Bellamy Foster Marx’s ecology 2002). That production should be “driven by need rather than profit” is fundamental to our long-term aims (eg, Karl Marx Critique of the Gotha programme, part one: “From each according to his ability; to each according to his needs”).

Marxists stand for democratic control rather than democratic regulation of production: ‘regulation’ is a weasel word much favoured by the advocates of capitalist globalisation, and one which usually means the negation of democracy through law. But Marxists favour not only “maximising the contact between producers and consumers”, but overcoming the antagonism between production and consumption that is inherent in capitalism.

“Equity and social justice” are also weasel words, and they stand in contradiction both to the object of production for need, and to that of democracy (compare both the Critique of the Gotha programme, cited above, and my own critique of the Monbiot-Yaqoob ‘Principles of unity’ document, Weekly Worker October 23 2003).

Nonetheless in spite of these problems it looks as though Woodin and Lucas are, in a muddled way, advocating socialism. But then we discover (pp15-16) that what they mean by “maximising the contact between producers and consumers” is the return not merely to localism, but to petty artisan production: “If the butcher sells meat to the baker he will bear in mind, when calculating his mark-up, that he will need to visit the bakery in the morning to buy his bread. Should the candlestick-maker be discovered to be oppressing her apprentice, word is likely to spread round the town and her trade will suffer.” Though they are anti-capitalist, they follow David Korten (The post-corporate world 1999), quoting his belief that “the relationship of capitalism to a market economy is that of a cancer to a healthy body”. Woodin and Lucas are left Greens who would no doubt repudiate this with indignation, but it would not be a long step from this metaphor to the idea that capitalism is a ‘foreign’ or ‘Jewish’ cancer on the healthy body of the small-scale market economy.

‘Economic localisation’
Sections two and four of GAG address in more detail the concrete proposals of Woodin and Lucas for an alternative to globalisation based on ‘economic localisation’.

Chapter five argues that “Economic localisation actively discriminates in favour of more local production and investment whenever it is, as Keynes said, ‘reasonable and conveniently possible’”. The ‘local’ will thus “differ from one place to another and from one product to another” (p69). It is to be “a political and economic framework for people, local government and businesses to rediversify their own economies” (p70).

This project has several building blocks. First, localising the financial system, which implies some form of the ‘Tobin tax’ on speculative currency transactions. On the other hand, the authors propose “policies” (it is not clear what policies) “that support smaller, locally based banks and loan schemes, credit unions, local bond issues, and local exchange and trading schemes”; and the replacement of stock-market-based pension funds with mutualised funds restricted to investments in public infrastructure.

Second is the use of a combination of tariffs and subsidies to force transnational corporations (TNCs) to “site here to sell here”. These could extend down to sub-national localities in the case of food, but might need to be very large areas in the case of, for example, computers.

Third is ‘green taxes’, aimed to hit transport and especially motors and aviation. If the costs of transport were properly internalised, Woodin and Lucas argue, production would tend to move closer to its raw-material resources, to the advantage of ‘third world’ countries. Green taxes would be supported by tariff barriers against ‘ecological dumping’ by countries that decline to impose them.

To back this up at an international level implies a major revision to the current General Agreement on Tariffs and Trade (Gatt), replacing it with a ‘General Agreement on Sustainable Trade’ (Gast). Selling the whole system to the ‘third world’ would be the task of a ‘Green Marshall Plan’ involving the substantial cancellation of ‘third world’ debt, a procedure for state bankruptcy, and a large increase in development aid as ‘reparations’ for past colonialism and exploitation, but tied to agreements on localisation, the environment, human rights and corruption.

Woodin and Lucas argue that the idea of global democracy is illusory because of scale. Global institutions should therefore only deal with issues that can only be dealt with globally, like global warming. Democracy in the nation-state should be improved by proportional representation, state funding of political parties, and the introduction of a ‘citizen’s income’ to replace existing benefits and reduce inequality. Intellectual property rights (IPRs) would be in some way ‘rebalanced’ to reduce the ability of TNCs to exploit them.

Chapters nine and 10 go into a little more detail on the argument for some aspects of this alternative. Chapter nine, ‘Local food - the global solution’ focuses on the irrationalities of the present world food market and argues for ‘local food security’ to be the principal goal of policy. Chapter 10, ‘Localising money’, rehearses standard arguments against the euro, and argues positively for local exchange and trading schemes (Lets) and for steps to reduce the role of the dollar as a world currency.

Strategy
As we will see shortly, this is not a viable alternative for humanity in the 21st century. But, even if it was, it would pose the question: how to get there? Section three and chapter 11 address, or purport to address, strategy.

Chapter six, ‘Connecting hearts and minds’, argues that the fall of the Berlin Wall, the end of apartheid, and the defeat of the Nazi regime show that empires can be defeated, and external opposition is essential. Globalisation, Woodin and Lucas claim, is already losing its grip on hearts and minds: shocks to the regime are due to come from India and China, and even such prominent figures as George Soros and Joe Stiglitz have begun to argue for pulling back.

Chapter seven, ‘Learning from history’, argues that ‘globalisation’ is the US’s strategic response to the pressure of the ‘south’ in the 1960s and for reform of the terms of world trade and development. The history shows that the “Breton Woods institutions” - IMF, World Bank - and the WTO are “systematically antagonistic to the localisation agenda in general and the interests of the south in particular ... Left to their own devices, the institutions will not even begin to produce meaningful reform from within. What is required is a revolution from without” (pp127-128).

Chapter eight, ‘Storming the citadels: sacking Breton Woods and the WTO’, argues for “a programme of action that challenges the existing institutions at every turn, by mixing idealism with pragmatism and protest with persuasion”. The “vision for a new world order” is the abolition of the WTO and Breton Woods institutions, and the creation of new regulatory bodies to oversee ‘economic localisation’ and the ‘Green Marshall Plan’. “Getting there” means a “programme of obstruction and deconstruction”, which consists of “achievable and incremental institutional reforms that would shift the existing institutions step by step in the direction of the new settlement”. In relation to the WTO, for example, the proposals include: an end to secrecy; regulation of the trade rounds to exclude corporate influence; abolition of the present arrangements for fixing the agenda; and the creation of a parliamentary agenda. Governments which oppose the WTO should paralyse the dispute-settlement mechanism by flooding it with complaints.

The real core strategic idea is provided in chapter 11, ‘A new context for multilateralism’. At page 213 we are told that “it can also be introduced in any individual economic unit that is politically and economically powerful enough to face down the TNCs and international capital markets without first waiting for the outbreak of a global consensus or the dawning of a new and perfect age of global democracy. This would be difficult for any individual nation, but is more likely to succeed initially at the level of a regional bloc such as the EU or perhaps Asean in South-East Asia or Mercosur in South America.” In other words, the regional blocs are to develop tariff systems, deploy debt repudiation, etc in violation of the existing Gatt/ WTO arrangements.

Green, orange, brown
Woodin’s and Lucas’s policy proposals come from the Green Party and start from the politics of ‘sustainability’. But in their present form they are ‘orange’: that is, they display the Liberal Democrat rank and file’s characteristic mixture of democratic aspirations and nostalgia for the ‘Butskellite’ (from Tory Rab Butler and Labourite Hugh Gaitskell) consensus politics of the 1950s and 1960s. The benign reading of their policy would, in fact, be a return to the international trade regime of this period.
There is, however, a darker side. If the policy of ‘localisation’ actually obtained mass support under present-day capitalism, it would do so as a politics of purity against ‘the foreign capitalist cancer’ and ‘foreign influences’ - a proto-fascist politics. It would tend to recreate the 1930s: a regime of trade blocs moving towards settling their accounts by world war. In this sense the Woodin-Lucas localisation policy, like their party’s politics more generally, could all too easily slip from green/orange to brown(shirt).

The reasons for this are that, first, the economic project is grossly unrealistic: it picks up a scrap of economic analysis from here and there, but assumes the capitalist world order it aims to supersede is more stable than it is. The vision of ‘localisation’ is a reactionary utopia. Second, Woodin and Lucas base their policy on a rose-tinted view of small-town and rural societies dominated by the petty proprietors. The real political representatives of this class and its reactionary-utopian aspirations were Joseph Stalin and Adolf Hitler. Third, there is a silent participant at the feast: the coercive-bureaucratic state. The power of the United States in the formation of today’s world order appears, as it were, in brackets; the whole policy of ‘regulation’ to create localisation is an appeal to the state against the effects of unfettered markets, and the strategy for winning localisation is one which in substance calls for the creation of a state rival to the US.

Division of labour
A fair starting point is the ‘butcher, baker and candlestick-maker’ of Woodin and Lucas and Korten’s idea that Adam Smith saw market economies (in the words of the authors, paraphrasing Korten) as “place-based, and consist[ing] of small, locally owned enterprises that are geared to meet the needs of the community and function within an ethical framework that enjoys its support” (p16).

This hardly seems to be the Adam Smith who wrote that “The surplus produce of America, imported into Europe, furnishes the inhabitants of this great continent with a variety of commodities ... The discovery and colonisation of America, it will readily be allowed, have contributed to augment the industry, first, of all the countries which trade to it directly ... The exclusive trade of the mother countries tends to diminish, or, at least, to keep down below what they would otherwise rise to, both the enjoyments and the industry of all those nations in general ...” (A Smith The wealth of nations book IV, London 1976, pp104-105).

If the suggestion is that Smith wrote in a world free of corporations and their manipulations and of the movement of capital, one need only remember that he was writing (in 1776) more than 50 years after the great financial crash of South Sea Bubble (1720), and 70 years after party-political polemic in the reign of queen Anne spoke of the conflict between the ‘landed interest’ and the ‘moneyed interest’ and the supposed indifference of the ‘moneyed interest’ to national interests.

The market for the butcher, the baker and the candlestick-maker of the Woodin-Lucas morality tale, if they lived in an 18th century English small town, was supported by the labour of agricultural labourers whose wages were held down by statutory regulation. Push the town back into the middle ages and it was supported by the exactions of lords and clergy from a serf peasantry. Push it back into classical antiquity and the farmers who provided the grain for the baker’s flour and the butcher’s meat would be slaveowners, a “fully equipped farm” in a Roman sale or lease contract including slave herdsmen, ploughmen, water-carriers, etc. The iron for the butcher’s knives, baker’s trays, and so on, would be dug from the ground by convict slaves.

The narrative could be varied from country to country, but the point is the same. At the end of the day the small artisan is part of a social division of labour much larger than the regulated small-town market. Equally the peasant - the family farmer - has from earliest times been part of a larger division of labour which included, for example, specialised flint miners in Stone Age Britain. It was one of Smith’s great merits to identify this division of labour underlying money economics.

Now how this is relevant to the ‘localisation agenda’ today is this. The reason the division of labour has progressed to the extent it has is not just the malign interests of ‘corporations’. The reality is that the development of technology and of the division of labour reduces the human labour inputs necessary to economic activities. Thus agriculture, which in Smith’s time employed the majority of Britain’s population, today employs a small minority - and yet is more productive than in Smith’s time. This improvement in productivity frees human labour-time for the development of numerous and various other productive and unproductive activities. Among other developments, the production of a large social surplus product supports the scientists who study, for example, global warming, and who enable us to know that the earth is warming up and that it may be necessary to do something about it.
Localisation is a proposal to - at least partly - unwind the clock of the division of labour. It may well be the case that, if we were making decisions in a global democratic society, we might come to the conclusion that unwinding the division of labour - producing increased duplication of economic activities, on a smaller scale - was desirable in some fields. For example, Woodin and Lucas make a tolerably good case that it is undesirable to engage in large-scale transport of food round the globe in obedience to market imperatives.

But what Woodin and Lucas propose is not a carefully thought out specific decision to ‘localise’ food production, taking into account (for example) the need to provide surpluses and the need to produce, store and be able to transport them in case natural conditions produce crop failure in one part of the world. It is to make localisation and unwinding the division of labour into a general principle, allowing the division of labour to operate only where a positive case can be made for long-distance exchange. The result would be to replace capital’s arbitrary preference for the accumulation of money with an arbitrary preference for ‘the local’. In fact, to the extent that we actually implemented localisation as a principle, it is probable that we would lose the ability to grasp collectively the impact of our activities on the world on a global scale or to identify which activities would be better carried out on this scale.

Real-world capitalist economics
More immediately, Woodin and Lucas radically misunderstand the US’s turn to financial globalisation as merely a device to control, and extort resources from, the ‘third world’ (chapter six). But this turn is also two other things. First, it is a response to the fact that the regime of the 1950s and 60s produced a working class in the ‘advanced countries’ which was too strong and began to threaten capitalist control. Second, it is a response to the relative decline of US productive capital, weakening the general position of the US. It responded by imposing ‘structural adjustments’ and various other mechanisms which in effect force other capitals - and the world’s workers, artisans and peasants - to pay tribute to US capital.

The result has been hyper-financialisation. Most of the world’s economy is now deeply enmeshed in the international financial system. There is an enormous bubble in this system which has to be kept inflated, because if it is allowed to collapse it will bring down with it most of the world’s banks and result in no-one being paid at the end of the week, pensions becoming valueless on an enormous scale, etc. Argentina got a foretaste of what this would be like in 2001. The Iraq war, among its other roles, helped to keep the bubble wobbling on: the outbreak of hostilities calmed prior jitters on the US financial markets and, according to The Economist, permitted a modest recovery in the US economy.
Now the point here is not that we are in a position to bring the whole regime down. The point is that there are really massive stakes invested in financial globalisation and, however much a Stiglitz or a Soros may want to find a way out of the problems of financial globalisation, no-one really has any idea of how do so without bursting the bubble. The underlying reason why not is that any return to the ‘real economy’ would be massively disadvantageous to the dominant capitals - those of the US.

In this context the ‘pragmatic’ and limited proposals of Woodin and Lucas for reform of the international financial and trade order are both ridiculously ambitious and absurdly limited. They are ridiculously ambitious because in advance of a crash of the financial markets there is no chance any government would adopt them, since they would clearly devalue important financial investments and thereby bring the crash on. They are absurdly limited because if a crash happened they would be like sticking-plaster on an axe wound: keeping people fed would require, even for capitalist governments, expropriations and state-planning intervention in the economy on a massive scale.

Class
Woodin and Lucas imagine a small market-town world in which “Should the candlestick maker be discovered to be oppressing her apprentice, word is likely to spread round the town and her trade will suffer” (p15). Nothing is more unlikely. It was the world of small market-town household production which gave us the legal doctrine that a husband may use ‘reasonable force’ to ‘correct’ his wife or children, a master his apprentice, and in which - in 18th century England - it was seriously argued that a cobbler hitting his apprentice over the head with an iron tool fell within this doctrine of ‘reasonable correction’. It was the artisans and peasants who formed the social base of catholic anti-semitism in late 19th century Europe and the German petty-proprietor Mittelstand who backed Hitler.

The reality is that small household producers linked by a market - however ‘regulated’ - are driven by the dynamics of the market to compete with one another in the exploitation of their wives, children and apprentices. If they fall behind in doing so, they will be undercut by their competitors. This necessity gives us the political ideologies of patriarchy and the doctrine of ‘reasonable correction’.

The good and the lucky get bigger and take on more apprentices and journeymen; the less successful lose their businesses and are driven to work for other craftsmen. The same dynamic affects peasants. In both cases the effect was visible in medieval England and Italy. Petty-proprietor producers tend to differentiate into capitalists and proletarians. If we regulate the market strongly enough to prevent this effect, it ceases to have the dynamics of a market and becomes a pure corporatist arrangement. But what then happens is that competition mutates into manipulation of the state regulation system (see, for example, Sheilagh C Ogilvie State corporatism and proto-industry - the Württemberg Black Forest, 1580–1797).

Peasant farmers linked by a market, but not under the pressure imposed by capitalist food markets and banks, have another disadvantage from the point of view of ecologists. They have exactly the same problem as larger capitalists - that their decisions about what to produce have to be made in isolation (otherwise they would not be in competition with one another) and with a view to what they expect the market to do: not to “production for need”. In addition, since their children are part of their labour force, each petty proprietor seeks more sons (daughters, however, are in many societies a financial disaster). Societies predominantly composed of peasants therefore are subject to the dynamic falsely identified by Malthus as universal: that population tends to grow until it hits natural limits and is forced down by starvation. They therefore tend to produce deforestation and desertification. Again, collective management or regulation can reduce these problems. But to the extent that this is operated we are no longer in a market society.

This is all old hat. It is drawn from Marx’s and Engels’ critiques of Proudhon and similar writers. The problem is that both the history since the times of Marx and Engels and more recent studies of earlier history tend to confirm it. It is tedious that the Greens should resurrect this old crap and set about reinventing the square wheel.

Marx’s and Engels’ fundamental ground for thinking that the working class is the only class that can lead the way to collective management is simple: because the workers lack property in the means of production, therefore they both need collective cooperation to defend their interests under capitalism and are not barred from cooperation by their commitments to defending their liberty, as petty proprietors linked by the market. For exactly the same reasons, the working class is the only social group which is really capable of creating a politics which reintegrates the relationship of humanity to nature.

State/s
At page 134 Woodin and Lucas propose that “the processes used to negotiate new trade agreements must be regulated strictly to limit corporate influence”. Just who is going to oversee this ‘regulation’? Regulation generally supposes a regulator: that is, the bureaucratic state (factory inspectors, trading standards officers, and so on). But the trade rounds are diplomatic meetings of the representatives of states. A state regulator can regulate because behind him or her there is the coercive power of the state. Who has power of this sort to regulate diplomatic meetings between sovereign states?

Yet this is by no means the end of the problem. In chapter six Woodin and Lucas recognise that capitalist globalisation is the result of a turn in the policy of the US. Why is the US able to force this turn on everyone in the world? The answer - which should be blindingly obvious - is because of its military-political power. The threat behind the economic inducements to ‘structural adjustment’ and so on is the use of US military force to overthrow governments which fail to pay their debts or otherwise respect the ‘human rights’ of US corporations. The dollar is the general reserve currency because it became the general reserve currency in the wake of World War II: that is, of US military victory over its capitalist rivals.

And it is in that context that we have to see the suggestion of Woodin and Lucas that the policy of localisation “can also be introduced in any individual economic unit that is politically and economically powerful enough to face down the TNCs and international capital markets” (p213). In fact, such an ‘economic unit’ would also need to be militarily powerful enough to face down the USA; and already economically diverse enough to deal with US financial and trade blockade and other ‘economic sanctions’.

It is in this sense that the ‘Green alternatives’ of Woodin and Lucas only fully be understood as a policy for creating a competing trade-military bloc against the US - a policy comparable to the rival empires that led to 1914-18 and 1939-45.