‘Globalization’: simply a stage in the internationalization of capital or a new form of organization of capital?



Nothing new?

Is globalization only a slow, long-term progression?  


Share of international trade as % of national product in developed countries:

·      In 1913 > 12.9%

·      In 1993 > 14.0%

·      In 1938 > 6.2%


Flow of direct foreign investment as % of developed country GDP:

·      In 1913 > 3%

·      In 1990 > 4%


Ø  1st overseas subsidiary of Ford in 1913 in Britain, followed by one in 1916 in Canada

Interaction between liberalization and globalization

A 15-20-year process


Permanent movement:

·      Ongoing concentration of capital


End of cycle:

·      Profits are not repatriated, but also not reinvested in productive activity. Eurodollars from 1960s on. Progressive reconstitution of a mass of capital that seeks realization by financial means because of growing difficulties of realization through production. Amplification with petrodollars in 1970s.

·      System of flexible exchange rates after abroagation of Bretton Woods system in 1979

·      Economic crisis of 1974/75

·      Rise of public debt – Sharp exchange-rate fluctuations



New ‘behaviour of direct investors

Polarization and marginalization >> modification of uneven development


More concentrated capital, more oriented toward other developed countries, less toward countries of ‘periphery’

More unstable, more volatile capital (‘footloose’)

Ø   Spreading risk

Ø   While constantly seeking optimal return on investment


The US target


The ‘foreign’ share of the US doubled in 7 years (from $405 bil. to $883 bil.)

The US and Britain are the only two countries where this proportion has increased absolutely and relatively.



The rising share of ‘foreign’ capital in domestic activity



Firms in the globalization process

Firms as agents of globalization


Partial or total denationalizations and privatizations:

Ø  Acquisitions, redeployment


Free circulation of capital:

Ø  Increased freedom in allocation of resources, investments and internal financial flows


Ongoing tendencies to concentration


Centralization of treasuries (‘cash pooling’):

Ø  facilitated by ICT

Ø  as insurance against exchange rate fluctuations

Ø  direct intervention in financial markets and creation of financial products


A >>>> M >>>> A’

A  >>>>>>>>>    A’

Overcoming the contradictions of really existing capitalism

Shifting forms of organization of labour and valourization of capital

Marx lives !


·       The tendency of profit margins to erode (falling tendency of the rate of profit)

·       Market uncertainty (production for sale and to realize surplus-value)

… and social uncertainty:

·       Mobilization of the labour force in the service of profitability is never guaranteed in advance

·       Disciplining the labour force (e.g. turnover) and cost-cutting

·       The political and social dimension of the organization of labour

·       How can capitalism end its dependence on the knowledge of wage-earners?

>> Different combinations in different periods of: external market pressures + internal discipline + material and symbolic incentives

>> From authoritarian paternalism to Taylorism and Fordism (and Toyotism)

Firms are social constructions

Development of strategies for competitiveness

·       Development of production technology; standardization of procedures, products, management technic and skill levels

Ø  Producing what has already been sold; saving on fixed and variable costs (subcontracting)

·       Development of products, value added and start-up risk (high-speed trains, space shuttle, big planes, new medicines, etc.)

·       Development of social relations of forces

·       Development of markets, market organization and effective demand

Ø    Impact of market openness = overcapacity

·     Historical evolution: from manufactures to networking multinationals




·       Geographical variation: between centre and periphery (delocalization of factories in the 1970s)

The example of the pharmaceutical industry

A decade of mega-fusions

Centralization of resources to reduce risk

The case of research in the pharmaceutical industry


Average cost of launching an innovative new medicine

(including amortization of failures)



à 2000/2001 average: $880 billion


From multinationals to world groups

Variations on the theme of investment optimization

Very prevalent in the past and still a bit today:

·      Delocalizations in search of lower costs (labour, taxes, energy)

A bit in the past and very prevalent today:

·      To gain access to a national or regional market

Finding the optimal organization of resources by relying on globalization:

·      Groups organize on a world scale, in networks, and in matrix form


Ø   Old forms of organization ‘by country’ are being left behind

Matrix organization

Centralizing and globalizing operational responsibility




Deconcentration of production (‘small is beautiful’) and financial concentration

Making resources flexible

A = Global or regional managements

B = Factories producing for the national, regional or global market; C = Subcontractors and outside suppliers

X = Nationally functional company

Groups are demassified by giving greater autonomy to ‘profit centres’, operating under rigorous profitability requirements

The coercive power of financial markets


·       Reality and myths on pension funds and speculative funds

·       The goal: a 16% rate of return

·       The pressure of stock markets; the speculative boom around new technologies (‘the new economy’)


Ø   An (almost perfect) capital market:

Ø   Very great capital mobility

Ø   The function of placement steadily replaces every other function

Ø   For the first time in history, the profitability of big firms can be compared day-by-day. Other financial actors can punish excessive profitability gaps every day.

Shareholder tyranny



·       Need to combine price competition with competition through quality and innovation. Need for reactivation, linking spheres of expertise and capacity to anticipate.

·       Outcome: Casualization + cooperation

·       The final judge (of firms, managers and wages): stock prices and shareholder satisfaction.

·       Managers and employees have immediate access to the efficiency norm imposed on everyone. The financial market sets the performace norm to be reached. Market discipline ‘mobilizes’ the labour force.

·       This notion of efficiency has spread even onto the shop floor. It is rational inasmuch as it forces wage earners to cooperate in improving their performance.


A new productive order shaped during the depressive phase

More efficient, making it possible to reinforce the competitiveness of cutting-edge firms





recessive phase

1st cycle



2nd cycle



3rd cycle



4th cycle




A new mode of capital accumulation

·       New industrial and financial structures

·       New predominant type of wage relation

A type of new productive forms

·       New technical bases

·       Implementation of a new mode of labour organization

A new international division of labour

·       New hierarchy

A specific process of economic and social regulation

Wage earners up against their globalized firms
A growing number of employees in global groups

The real boss is farther and farther away

The new scale of wage conflicts

A new and complicated strategic framework


·      Disjunction between the strategic and juridical space of the big groups and that of political and social regulation.  National manoeuvering room for arriving at specific compromises is shrinking.

·      Crisis of systems in which social regulation is too costly (e.g. Japan)

·      Crisis of national law and weakening of national governmental organs

·      Rise of infra-regional and continental spaces of accumulation



The neoliberal firm is neither efficient nor rational



·      The cases of ENRON and ANDERSEN

·      Corporate bureaucracies, corruption and wasted resources

·      The average annual salary of a member of a global board is between € 300.000  and € 1.200.000 — before stock options and without retirement plan.

(between 25 and 66 times the average wage in France)

The impasses:

·      The hypocrisy of antitrust procedures and controls

·      The mirage of Corporate Government

·      The false solution of social and environnemental ‘dues’

What strategies for trade unions and the left?



·                  The question of law in a context of structural weakening of national social legislation (where it exists)

·      The debate on constraints on speculative capital flows (Tobin Tax). Is this effective in influencing corporate restructuring?

·      The debate on the internationals institutions (WTO, European Union, Nasdac, etc.). What to do with them?

·      The debate on workers’ rights in e.g. European firms

Global justice and firm reorganization



Once more the issue of delocalizations. The debate on European ‘deindustrialization’ >> which is also a debate about economic flows and therefore about the environment


What kind of solidarity do we need inside the big global groups?


And ‘how to struggle’? >> Crisis of trade unionism, for lack of adequate responses — due not only to pressure of unemployment but above all destabilization of work collectives



Open-ended programmatic questions

A strategic debate that has barely begun and lags far behind social and economic reality


·      On the working class, its organization and its struggles

·      Increased proletarianization of intellectual labour

·      On new forms of solidarity to be created and organization of common struggles in the big global groups

·      On the relationship between workplace struggles and social struggles outside workplaces; the notion of social appropriation can also come from outside the firm (e.g. ecological issues)

·      On workers’ democracy and trade-union democracy (the issue of groups and subsidiaries from one firm to the next)

Globalization & social formations

A strategic debate that has barely begun and lags far behind social and economic reality


Industrial delocalizations past and present

The question of China

A new ‘uneven and combined development’ ; evolution of centre/periphery relations

Debate on the proletariat and the revolutionary subject:

·      Massification, concentration, expansion of the working class … what’s going on?

·      Reminder of Trotsky’s analyses of the Russian working class in uneven and combined development and our debates about permanent revolution … And our debates about the ‘working-class majority’

·      The effects of dislocation of the welfare state in Europe today


No anti-capitalist strategy without an analysis of social formations



·      Do not confuse: social class, class consciousness, class mode of organization

·      Do not evade the debate on internal segmentations, divisions and stratifications – sources of division and differentiated consciousness

·      The (universal) issue of growing inequality within the working class, and between the working class and the growing masses of the unwanted


A new configuration of global capitalism, new social formations ... and a new political practice