Is Globalization Coming to an End?

Today, the Trump administration, which attacks the remaining rights of workers within the country with neoliberal policies (“shrinking and streamlining the state,” liquidating social services, de-unionizing public employees, reducing corporate taxes, etc.), turns its back on the “free trade” motto of liberalism when it comes to foreign trade, or rather imports, and threatens its global competitors with customs duties and restrictions. These steps of Trump are evaluated by a diverse group of commentators as “the end of globalization,” “the last nail in the coffin of globalization,” “protectionism is back,” “inwardness/isolationism,” and so on.

It is very clear that these commentators do not understand globalization as the final point of capitalist-imperialist development, because if they did, they would not claim that globalization is ending since capitalism has not ended. Then, the first reason for their error is their denial of the existence of an objective phenomenon called globalization. We will elaborate on this shortly, but first, it is useful to address another methodological error. The methodological error of those who make such comments is that they take the statements of bourgeois politicians at face value, as if they were definitive data and absolute truth. Words spoken for political expediency, statements made for the sake of diplomacy, or steps taken are not events that have already happened, been clarified, or finalized. It is essential to distinguish between what has happened and what is happening, and to grasp processes with their internal contradictions. Processes should be understood not as a series of frozen snapshots, but as a living, transforming, holistic dynamic that progresses with its internal contradictions. We must uncover and comprehend what is hidden from us, not what is shown to us. Because politics –especially bourgeois politics– cannot be conducted without bluffing, lying, or intimidating the opponent. We must pay attention to these points when analysing Trump’s tactics in the trade war, or when evaluating his threats to break up or abandon the EU and NATO.

As we have emphasized, globalization should be considered as the current level reached by capitalist development and as an objective phenomenon. Whereas globalism, which is supposedly based on this objectivity and reflects the interests of the bourgeoisie, is an ideology. Just like capitalism is an objective phenomenon, while liberalism is an ideology. When this distinction is made, everything falls into place. Elif Çağlı’s 2005 study, Globalization – Uneven and Combined Development, comprehensively addresses this issue. In its most concise expression, globalization refers to the embracing of the entire globe and reaching its ultimate limit by capitalism, which has reached the stage of imperialism, creating a holistic economic system, and represents its mature form. The globalized world is a world in which all countries have become part of a global production line. Thinking that this level of international division of labour and labour productivity can be reversed by the decisions of crazy leaders like Trump means denying the internal laws of the capitalist economy.

Let us briefly recall. Starting from the 90s, the world bourgeoisie convened countless summits, signed agreements, and established global organizations and global trade courts, etc., to make world trade as fast and smooth as possible by reducing obstacles such as customs walls and quotas as much as possible. Everything was designed to ensure that world trade was conducted at the lowest possible cost and at the highest speed. Advances in transportation and communication technologies and the development of the internet provided the necessary objective basis for these steps. The internationalization of production activity has developed incredibly, and manufacturing industry in metropolitan countries has spread to other countries at an increasing rate. More importantly, the era when giant monopolies produced a product from scratch within the borders of a single country is completely over. The production process of each product has become distributed throughout the world. Products are divided into parts, and each part is produced in the most suitable country (through direct or contract manufacturing), and then assembled in the most suitable place and offered to the world market. Supply chains of raw materials and intermediate goods have been created accordingly. This production network as a whole is generally called the global commodity chain. So, for each product, there is almost a global assembly line system involving many countries (in some cases, dozens of countries): The production process itself has become internationalized.

This is the most important determinant of the phenomenon we call globalization. To decide which country a particular part will be produced in, many factors are taken into account, such as the cheapness of labour, raw materials, and energy, the incentives and tax policies in the country, the country’s proximity to sales markets, and the development and cheapness of logistics facilities. With globalization, issues such as which raw materials and intermediate goods will be produced in which countries, which countries will concentrate on which branches from agriculture to industry, etc., began to be determined in line with the interests of multinational monopolies, based on the experience accumulated up to that day, but under the pressure of monopolistic competition and the chaotic functioning of the world market. Eventually, a highly developed international division of labour was established that worked in favour of giant global monopolies, and this division of labour was imposed on weaker capital segments and countries. While the major imperialist powers at the helm determined this transformation in line with their own interests, these transformations were imposed on backward countries through various mechanisms. In some, agricultural lands began to be left idle, while in others, many industrial facilities were either shut down and scrapped as inefficient or offered to global monopolies at the lowest prices. As a result, the dominance of production and trade organized globally in line with the interests of giant global monopolies was established! Thanks to this, the world bourgeoisie found the opportunity to overcome the depression it entered in the 70s; thanks to the ever-advancing international division of labour, labour productivity leaped forward, profit rates rose once again, and the economy experienced a revival that would last until the turn of the millennium with new markets opened up to capitalism and the developing computer-cell phone-internet technologies.

In parallel, the service sector, especially finance, grew excessively in imperialist countries, and an extremely financialized economy emerged with the removal of all obstacles in front of capital movements. This also meant that capitalist decay was progressing on a massive scale: financial speculations reaching crazy dimensions, land and real estate speculation, and prices inflated by the artificial vitality created through the credit mechanism via the construction sector… Then, it was seen that the increase in productivity had reached its limits; while the problems of overproduction and profitability once again plagued capitalist countries, a huge debt mountain that had been accumulating for decades had emerged. This situation showed that the role played by the credit mechanism, which had given capitalism a great kiss of life following World War II, was also beginning to reach a dead end.[1]The tremors experienced at the turn of the millennium were the first signs that capitalism, with globalization, had made its last leap and exhausted its historical gunpowder. It became clear that a historical system crisis period had begun, in which economic crises became increasingly frequent and severe, and recovery periods shortened and became completely lifeless.

It is clear that globalized capitalism has brought great wealth to the USA and the EU. With China’s entry into the World Trade Organization in 2001, it was the turn of the Chinese bourgeoisie to benefit from the blessings of globalization. China managed to attract a portion of the manufacturing industry of Western imperialists with the cheap labour, cheap raw materials, and incentives it offered them. While the share of manufacturing industry declined in Western countries, China grew at a great pace and soon became the world’s second-largest economy and the largest manufacturer. Within a few years, while China’s exports to the USA increased exponentially, 2.4 million people had become unemployed in the USA, where the domestic manufacturing industry declined. The “China shock” did not much concern the American governments, because in this process, American monopolies became even richer by exploiting the cheap labour force of East Asia, especially China. But the situation of the American working class gradually worsened with the closure of workplaces and the transformation of cities into ghost towns.

Can Protectionism Return?

Now, is Trump trying to destroy this globalization phenomenon with his actions, to break up the integrated world market by returning to protectionism? Is he even trying to isolate the USA from the world (isolationism)? No matter which imperialist power we consider, breaking up the world market and free world trade is nothing but cutting off the branch it is sitting on, suicide.

Some, referring to the phenomenon of “inwardness,” “protectionism,” and “economic nationalism” that developed following the 1929 crisis, think that a similar situation is possible today, and therefore, they attribute the actions of people like Trump to this framework. Indeed, Trotsky, addressing the reactionary tendencies of those times, seems to describe today: “Only 20 years ago all the school books taught that the mightiest factor in producing wealth and culture is the world-wide division of labor lodged in the natural and historic conditions of the development of mankind. Now it turns out that world exchange is the source of all misfortune and all dangers. Homeward ho! Back to the national hearth!”[2]First of all, let us state that these efforts to turn back the wheel of history have dragged humanity into misery, massive destruction, and unprecedented massacres. The capitalist world, shaken by the system crisis that began in 1929, could not find another way out within the system, and the countries that had already stopped and collapsed and whose ties with each other were broken turned inward, raising customs walls again. In reality, this meant that they were all preparing for a new military confrontation with all their might. As a result of these policies called “economic nationalism” at that time, the world market, international division of labour, and free world trade, which developed and materialized with imperialism, also suffered a great blow, and the result was World War II, the greatest massacre in history.

Can the same inwardness happen again today? It is true that the bourgeoisie is facing a much deeper despair today. The segments of the bourgeoisie that rely on the nation-state in the face of the historical system crisis may be clinging to the dream of finding a way out by following the same path. Militarism and fascism are on the rise in all developed countries. However, many tendencies and phenomena developed by capitalism itself pose new obstacles to these reactionary dreams of the bourgeoisie.[3]The production process of every modern product is so globalized that the world economy cannot tolerate even temporary interruptions, let alone the reconstruction of production lines from scratch within the country.

We have said that the products of multinational monopolies, which constitute the overwhelming part of the world economy, are the products of a global machine, almost a global assembly line system. To make any of them producible again only within the borders of a single country, it is necessary to dismantle a huge production and supply network that has emerged over decades through both planning and trial and error, to discard the specialization and the accumulation of experience brought about by the division of labour, and to start everything from scratch again. This situation means that even for a single product type, it would take countless months, and the absence of those products would undoubtedly create a more or less significant chaos, depending on the nature of the product. Even if this chaos is overcome, a huge problem will be exacerbated: the decline in labour productivity as a result of the breakdown of the international division of labour, the increase in both labour costs and raw material and transportation costs! And consequently, the profitability problem that already puts capitalists in a difficult position will become completely insurmountable! An accompanying inflation tsunami, a wave of social rebellion that will be raised by labour whose purchasing power has fallen to the extreme!

The very fact that production itself has become so socialized and the production process itself has become so globalized means that an “economic nationalism” similar to that of the 1930s is not only much more destructive in our age, but also practically impossible. Leaving aside temporary attempts, mutual threats, blackmail, and bluffs, it is not possible for an economic giant like the USA to take permanent steps in this direction. Just as the monopolies that emerged and grew within free competition and came to dominate the entire economy express an irreversible objectivity, globalization is also an objective phenomenon brought about by capitalist development, it is irreversible. Even the limited restrictions imposed during the pandemic period are still fresh in memory in terms of what they caused in world trade and global economic functioning.

It is also worth noting one more point: The fact that the production process itself is so globalized, that a product emerges as a result of the operation of a production line consisting of countries, combined with primary factors such as military and technical reasons, plays a role in differentiating the way a world war takes place. The intertwining of production lines reduces the freedom of movement of rival imperialist powers and gets in their way. From a military point of view, we also see that the destructiveness of the means of destruction (although it cannot function as an ultimate deterrent) makes them act more cautiously. For example, despite its huge military power, Russia, against Ukraine, which is perhaps 20 times smaller than itself, cannot use nuclear weapons, let alone the most destructive of its conventional weapons; it cannot take the risk of the huge political/diplomatic/military problems that would arise if it used them. These developments also weaken the possibility of world wars of the kind that occurred in the past. But this situation did not and will not mean a peaceful world as liberals dream. In fact, it is no longer necessary to discuss this, a world war of a new style and form is already taking place before our eyes! These phenomena have made the ongoing world war in our time a war in which the imperialists cannot achieve a clear superiority over each other, and the possibility of stalemate is strong. The productive forces have developed so much on a global scale that the system’s mechanism of overcoming its problems with crises and wars can no longer function as before. We are in an age of endless wars! The contradiction is the contradiction of imperialist capitalism! The trouble is their trouble, but unfortunately, the world’s workers are paying the price!

Fascism’s opposition to globalism

With the globalization of capitalism, globalist nonsense such as the nation-states losing their meaning and being transcended, and peace, prosperity, and freedom coming to the world, was frequently defended by the bourgeois leftist, democratic, or liberal intelligentsia of various countries, especially the EU and the USA. But the result, as we predicted, was a fiasco. The cracks in the EU, seen as the crown of globalism’s victory, grew wider and wider, and eventually resulted in the secession of Britain, one of the largest founding partners. The rulers of the USA, the other stronghold of globalism, began to think that globalization had backfired on them due to China’s breakthrough. China, the globalism champion of our time, has since been talking about the blessings of globalization, the wealth and prosperity that free trade will bring, at all global summits. As for peace, democracy, and freedoms, which were promoted as the inevitable result of globalization, the lords of the totalitarian dictatorship in China do not even mention those issues!

It is clear that in globalized capitalism, the dominance of giant multinational monopolies has been unleashed, and workers have become even poorer all over the world. This wave of impoverishment not only hit backward countries, but also European and American workers, and people in dire straits, driven to misery all over the world, began to flock to these advanced countries in the hope of surviving or having a slightly better life. The social and economic problems exacerbated by this migration were presented by fascist movements as developments stemming from “globalist policies.” Thus, the problems sharpened by globalized capitalism were blamed on a footless globalization phenomenon formulated independently of capitalism, as if another kind of capitalism were possible in our time. Fascist movements, like some socialists, equate the phenomenon of globalization with globalist ideology. They oppose supranational or international institutions on this backward basis and glorify the nation-state.

Fascist criticisms of globalist ideology glorify the nation-state and cling to the demagogy of “economic independence.” In other words, the fascist ideologues of the bourgeoisie are desperately seeking solutions to their problems on the line of “economic nationalism,” which is both outdated and whose disastrous consequences are well known. By preaching salvation to the masses in this direction, they focus their attention not on capitalism itself, but on its most glaring excesses, and always blame foreign countries and immigrants for this. With their criticisms of globalism, they use sleight of hand on the masses and try to cover up the fact that globalization serves the interests of giant monopolies. Because they, like the globalists they criticize, are servants of these monopolies.

The world has been shaken for a quarter of a century by a deep system crisis and an accompanying imperialist struggle for sharing and hegemony. If the right-wing views that advocate eliminating globalization succeed in taking even a small step towards eliminating the global functioning of capitalism, the only meaning of this will be that both the economic crisis and the war will intensify even more. Nationalist policies, like globalist policies, cannot solve the current system crisis, cannot increase falling profit rates, cannot restore consumption to its former vitality, cannot melt debt mountains, and cannot eliminate the scourge of inflation. If they were to go beyond rhetoric and actually try to implement nationalist nonsense, they would themselves deal a blow to the capitalist system struggling in crisis and drag the world into a much more terrible chaos in every respect. The only solution to the problems that humanity is struggling with is not to try to eliminate the phenomenon of globalization in vain, but to build socialism on the material basis that it has matured. What will pave the way for this is the proletarian world revolution.