No Workers Win In Imperialist Economic Competition

By  Ramsin Canon

It would be an odd democratic socialism that acted as an engine for more acute international economic competition, because the features of international economic competition are features of late capitalist imperialism. To say it simply, if democratic socialism achieved nationally maintains the international system of international capitalistic competition, it isn’t really democratic socialism at all–it’s a house of cards.

To the contrary, democratic socialism is a process meant to achieve the end of the international system of capitalistic competition. It has to be, because if it doesn’t, the imperialism that characterizes late capitalism will undermine and destablilize democratic socialist systems, whether in the “metropolitan” (core capitalist) countries or in the “peripheral” or developing countries, and rest itself on top of a pyramid of international exploitation of resources and labor that is today accelerating worker alienation, social decay and environmental devastation–it would be “socialism” in big cartoony quotes, built on rapacious exploitation, which is ersatz socialism to say the least.

It’s a good practice to ask ourselves what “competition” with other nation states means for democratic socialists. What are the nations engaged in international economic competition “competing” for? They’re competing for a comparative economic advantage–that is, they want to maximize the surplus value created in the production of commodities, to advantage domestic capitalists and bring down commodity prices for their domestic population.

In plain language, international competition between states only expresses itself in one way: rich  countries exporting capital to poorer countries in order to extract the maximum value from local labor and keep the “negative externalities” of resource exploitation, like pollution and social dysfunction, out of the home country. Despite what starry-eyed “internationalists” will tell you, this also impedes orderly economic development in those countries, because domestic accumulation of capital becomes difficult if not impossible in those countries–that is, it keeps foreign countries poor, unstable, and polluted.

This is a bit of a simplification, but at its simplest, the name of the game for richer countries is to relentlessly seek maximum “surplus value” (the value of labor less the cost of production captured by capitalists) in foreign labor markets by squashing domestic economic development in that country, thus dominating the labor market (keeping labor costs low) and avoiding the costs of environmental and social regulations. We know this is the case because it happens internally, too: when big non-union companies and VC capital go into a poorer region in the U.S., they wipe out local competitors with higher labor costs, create public dependency on that capital and those firms, and encourage a “race to the bottom” wherein regions are pitted against each other to attract the capital accumulated by those firms. (Amazon HQ2, anybody?) In the end, no worker is protected from this race to the bottom. The infection always spreads; union strongholds become right-to-work states. Where workers are disadvantaged somewhere locally, that disadvantage will spread globally.

This is not a question of American workers being charitable to the rest of the world; it is a question of whether democratic control of the economy is possible when an imperialist international system that pits national economies against each other to develop internally to the detriment of foreign workers is even possible. Short answer: it isn’t. Just as right-to-work and the race to the bottom has infected the entire U.S. economy, seeking relative advantages between workers internationally will always weaken worker control of the economy.

Participating in this international economic competition results naturally in concentration and monopolization, particularly of the firms that export the capital, that is, financial firms. In the “late-stage” of capitalism, ever-more commodities are produced at ever-lower cost, but ever-fewer firms and individuals capture the benefits — the financial firms which can survive crashes and which dominate regional and domestic economies.

This pattern  is particularly true after the 2008 financial crisis, which like most capitalistic economic crises led to a concentration of capital in fewer and fewer firms with international reach; after 2008, five U.S. banks were left standing as the only firms with global capital investment reach (so-called “Bulge Bracket” banks): Goldman Sachs, JP Morgan, Bank of America, Merrill Lynch, Citigroup.

What does this process mean for the U.S. worker, the Chinese worker, the Bangladeshi worker, the Congolese worker? This isn’t a “rising tide lifts all boats” situation. While “comprador bourgeoisie” groups do tend to arise when foreign capital heats up competition, and relative material benefits (usually cheaper consumer goods) temporarily accrue to the “victor” state workers, workers everywhere stay in a state of alienation and dependence. Workers never “win” in this competition; democratic socialism can’t arise where workers in one nation use the channels of international capital to seek to gain an advantage over workers in another.

This is the “domestic infection of empire”: what does it mean for the U.S. if we empower the state or capital firms like international banks to extract value from foreign workers? It means empowering the very entities that thrive on exploitation. When we see anti-insurgency hardware and tactics on the streets of Ferguson, Missouri, the result of War on Terror consultants and war profiteers selling to domestic agencies, we’re seeing the domestic infection of empire. When we seek prosperity through the relative disadvantage of workers in another nation, we end up with a legally-immune Foxconn plant in Wisconsin. So long as the infection persists, democratic socialism is impossible.

U.S. workers will win democratic control of the economy when the infection is cured; that means when the machinery of imperial domination of other nations is ended. Until that happens, the risk of infection persists, and victories are short term, precarious, and illusory. Ending the international system that pits workers against each other is a necessary part of democratic socialism.

Ramsin Canon is Co-Director of Political Education for the Chicago Chapter of DSA. He lives in Chicago with his dog, Rosalita

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