Saturday, December 16, 2006

HM Conference

I said I'd write up a little report on the Historical Materialism conference (pdf.) last weekend. So here it is.

First of all, I have to say (a little shamefacedly) that I didn't make it to the paper on George A. Romero - the one I was enthusing about before I went. The problem was that this paper was presented at 9 O'Clock in the morning and that I had been out a-boozin' the night before. It just didn't work out the way I planned. Never mind.

One of the difficulties I encountered at the conference (apart from the absolutely mad starting times - 9 in the morning... 9 in the morning??!!) was that there was just too much to take in. This isn't a criticism of the conference of course (no one was forced to attend all the slots after all). I suppose I am just trying to register my disappointment about the particular limits to human concentration and endurance. I found that by the last slot in the evening my mind had turned to slush and that I really couldn't take in what anyone was saying. I'll just provide a synopsis here, then, of those papers which I attended when still in full possession of my mental faculities and which I found particularly interesting (and during which I remembered to take notes).

The most fascinating set of papers - a plenary session on 'China and the Future of the Global Economy' - was by far the best attended. It was held in the dungeon pit of the UCL Students' Union (at least I think that's what it was) and was absolutely full to bursting. The speakers were Andrew Glyn, David Harvey and Simon Clarke. I'm afraid that I didn't take any notes on Clarke's speech because he spoke last and by that time my capacity for concentration had collapsed. Glyn's paper consisted really of a run through of a set of facts and figures about Chinese growth and its significance for the global economy. His main argument was that the huge reserves of cheap labour in China would progressively undermine wages and living standards in the advanced West. He also argued interestingly, that some of the old Marxian predictions about a progressive declining share of income for labour under capitalism, although they seem to have been confounded over the course of the late 19th and 20th centuries, would over the course of the next few years be proved right - ie that this prediction was right in terms of long term tendencies.

Glyn started by pointing out that the centre of world capital accumulation is now shifting from the US and Europe to China (and to India, too, although to a lesser extent than to China). At the moment the level of China's exports is no larger than Japan's - but of course China has huge capacity and, in particular, a huge labour force (or, at least, potential labour force - it has a huge reserve of rural peasants yet to be proletarianised). The key thing to understand about Chinese growth, and its potential for further growth, Glyn pointed out, was the level of wages in that country. Despite huge growth in the Chinese economy and despite rising levels of productivity there has been no increase in wage levels in that country as compared to US wages (not sure what the time scale is here - the main thing is that wage levels are held down much lower than rates of productivity gain and much much lower than in the US and Europe). The rate of profit in China is about twice that of the US and Europe. So, Glyn pointed out, China (and India) are a huge pole of attraction for foreign investment. Glyn admitted that there was not yet the flood of investment going to China that you might expect (more on this later) - FDI from global north to global south (which of course includes China and India) is still only about 4% of the level of FDI between countries of the north. But an increasing share of global FDI was now going to China and India and this, Glyn argued would soon turn from the 'trickle' it was now to a 'flood'. He pointed out the rate of growth in capital stock in the north from 1945 to the mid 60s was about 45%. It is now about 2 - 2%. Under these conditions China and India with much higher rates of growth and rates of profit will look increasingly attractive to northern investors. In other words the working class in the north is doomed. As is the welfare state and anything else which reduces the 'competitiveness' of the northern economies in relation to those of the booming economies of the south.

Glyn finished up by providing a kind of periodisation of the fortunes of northern labour. He pointed out that labour's share of income in the period from the publication of Smith's The Wealth of Nations to the publication of Marx's Capital was declining (and this, of course, shaped Marx's analysis). However in the period up until the 'profits squeeze' of the 1970s labour's share of income improved. It was in this period, of course, that Crosland and others argued that the injustices of capitalism had been (or were in the process of being) ironed out - that Marxist economics were outdated. But since the 1970s labour's share of income has been falling again. Competition from low wage economies in this period has been one factor (amongst many) in this drop off in the share of income going to labour. Now, with the emergence of China as a global super-economy boasting low wages and relatively high productivity levels and rates of profit, labour's share of income in the north will start to drop off dramatically.

All very doom and gloom. However, Alex Callinicos made the point from the floor that low wages are only one (very minor) determinant of investment levels. He pointed out that if Glyn's thesis about a coming slump in western living standards was true we would expect to see much more than a 'trickle' of northern FDI going to China right now. In fact there are many factors which investors hold to be more important that wage levels when deciding on where to invest - these include proximity of the place of investment to affluent markets, the level of skill of labour, the infrastructural provision on offer and the political and economic stability of the place of investment. In fact Glyn's argument seems to replicate a lot of the wilder claims of the 'hyper-globalists' in the globalisation debate of the 1990s. Glyn's argument was quite comprehensively dealth with by 'sceptics' such as Hirst and Thompson in that debate to my mind.

Harvey was up next. If you've ever read the first chapter of the Communist Manifesto - you'll know that it provides the most extraordinary grand sweeping vision of historical development - a vision, in particular, of the merciless dynamism of capitalist development. It manages to be electrifying and terrifying at the same time. Well, Harvey's speech was a bit like that. I can't really do it justice here - but he provided a description of Chinese growth in terms that just made the hairs on the back of my neck stand on end. It was this sweeping description of the development of economic and political forces which are quite out of control.

He started out by telling us how he explained the concept of over-accumulation to his students. Quite useful I thought. What he does is he tells them to imagine a day in the life of a capitalist. He or she starts off with x amount of capital and (if things work out how they should) he or she ends the working day with x amount of capital plus a bit more. The problem for the capitalist, then, is to work out what do do with this extra capital - how to absorb the surplus. He or she will, under pressure of competition from rivals, have to find a productive outlet for it. This happens, of course, day after day, week after week, with the capitalist having to find something to do with an accumulating amount of extra capital. There come periods when there is so much surplus that capitalists simply can't find outlets for it and the system becomes unstable. The other problem is that capitalists will have invested a lot of this surplus in building extra capacity - and there will come a point when this capacity becomes surplus to requirements - ie they just can't shift the stuff they are producing and they just don't need those 5 extra factories. Harvey argues that one method of dealing with these crises of overaccumulation is for the state to take on responsibility for the absorption of the surplus in order to stabilise the system (the other option I suppose is to induce or allow some sort of mass devalorisation of capital - a slump - to get rid of the surplus and get rid of inefficient capitals). He argued that quite often the surplus is absorbed in projects of massive urban regeneration. In 1848 the French state dealt with a crisis of overaccumulation by re-engineering Paris - famously, the boulevards of that city were greatly widened and the narrow streets of Paris cleared out. Similar re-engineering of city centres has occurred in New york, Los Angeles and Chicago. The 20th Century rise of the surburbs, Harvey argues, was a response to overaccumulation crises.

But the absorption of capital isn't simply conducted at national scale. There is also an international dimension - Harvey argues for something called a 'spatial fix' where excess capital is diverted overseas to a new 'space'. Harvey's argument was that the epicentre of global surplus absorption - the current point of 'spatial fix' - is now China. There is a massive project of construction and development going on in that country. Harvey has, apparently visited China on a few occasions - and he describes the rate of construction there as absolutely 'scary'. It is a boom economy completely out of control. It is Chinese demand for materials that is driving the world economy. Apparently it's Chinese demand for copper, for example, which is driving the growth of Chile and China is currently consuming half the world's cement supplies! But much of this frantic construction in China is unnecessary. Harvey pointed out, for example, that in one valley in China (don't know how big) they had built 5 airports in the past few years - when they only needed one. There are many other examples of unsustainable construction. Harvey pointed out that in one small village he visited the local authorities were building a state of the art school and hospital which, as I remember, was far too big for local requirements. But of course, not everyone in China is enjoying the fruits of the boom - as Glyn pointed out, the Chinese working class is being paid extremely low wages. Interestingly, though, the new Chinese rich are not just from the government bureaucracy or well connected party members. Some peasants were wise enough to draw up contracts with construction firms - so that, in return for giving their land over for appartment construction, they arranged ownership of, say, the first floor of the building and have now become quite rich in renting out the rooms to incoming labourers. Those labourers of course work 12 hours a day or something, often don't get paid (because construction firms go bust all the time) and live in squalid conditions. As an aside, Harvey referred to a conversation he had with some Chinese new rich party members - he asked them what they thought of the growing inequalities in their country. He was told that they deserved their money because they had worked hard to attain it. As Harvey pointed out - clearly, very few people in China have ever heard of the concept of surplus value.

Anyway, Harvey's argument was that there is now massive over-investment in China - that there is a growing crisis of over-accumulation in what is now the epicentre for the absorption of the global surplus. Already, he pointed out, the Chinese are starting to expand outwards - to look for their own 'spatial fix' - they are expanding car production abroad for example. In another aside Harvey told us that he (in his capacity as a rep of a US university) had been offered 60 million dollars on the spot by a Chinese vice-chancellor (or whatever the Chinese equivalent of that role is) - it was to go his university and in return, staff from his university would work for 6 months in the year at the Chinese university (clearly, the Chinese universities want US knowledge). It shows just how much excess money there is sloshing around in China.

Harvey finished up by pointing to the huge environmental problems being stored up by this out of control growth. Things aren't great in China ecology-wise it seems. He also pointed, of course, to the hugely unstable nature of this global arrangement. There was some cross over between Harvey and Glyn in that Harvey also pointed out that the only way that the US and Europe could compete with this rousing giant in the long run would be to force down the wages of its workforce. He ended his speech with a suggestion. It was that the only alternative to this out of control nightmare was socialism or something.

Anyway, this post is now far too long, so I think I'll leave the rest of it for another time. I still want to write something up about Poulantzas and Miliband briefly - and also the Socialist Register stuff about ecological crisis.

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