Post-war Global Accumulation and the Transnationalisation of Capital

Transcription

1 Cyrus Bina and Behzad Yaghmaian 107 Post-war Global Accumulation and the Transnationalisation of Capital The authors argue that the periodisation of history of modern capitalism in conjunction with the internationalisation of circuits of social capital is a powerful tool for the analysis of transnational economy. It is shown that the post- World War II import substitution and export-led industrialisation strategies are both a part and parcel of the internationalisation of capital. The state s task in this highly globalised capitalist era is more complex and contradictory than in the earlier stage. The state s role in the present period is to pursue national policies within an increasingly transnational environment. Here the contemporary nationstate has no choice except to go beyond itself in order to meet the challenge of encroaching transnational capitalist social relations. The global development of capitalism has been the subject of a growing controversy since the beginning of the century. The earlier debates on the subject were primarily motivated by practical political necessities and the way in which the actual development of capitalism had necessitated a search for adequate explanation (Lenin 1939, Kautsky 1970, Bukharin 1973). Further globalisation of capital and the subsequent changes in the international division of labour added new Introduction

2 Capital & Class # dimensions to this controversy in later years. The elimination of outright colonialism and the emergence of a large number of newly established nation-states that have collectively been called the Third World (Wallerstein 1989) became the main focus of debate in the Post-War years. The Third World has been subject to continuous transformations in the Post-War era due to dynamic developments in the structure of international capitalism, the particularities of internal development of individual countries, and the resulting changes in the international division of labour. The global development of capitalism has been replete with intrinsic contradictions manifested in the unity (and struggle) of opposites. Each stage in the development of the international division of labour has in turn produced hostile forces, striving for the restructuring of the old and the construction of a new international division of labour. Changes have occurred as a result of the contradictory unity of international factors (responding to the direct needs of global accumulation) and local (national) factors (responding to the requirements of internal dynamics of individual nation-states). The phenomenal growth in the internationalisation of production, the intrinsic need to go beyond the boundaries of nation-states, and to relocate production sites in markets across the world on the one hand, and the Third World struggle against the economic problems emanating from the colonial division of labour, on the other, gave rise to the import-substitution industrialisation (ISI) as a common strategy in the immediate Post-War era. The Third World was further integrated into the international capitalist system through the globalisation of production and implementation of the policy of importsubstitution industrialisation. Historically, however, capitalism has gradually overcome the barriers of precapitalist social structures as it has tended to create new barriers of its own. In this connection the complexity of this transformation has been considerable, especially from the standpoint of the emerging global social relations. The Post-World War II transformation of the Third World implies that, qualitatively, our modern global economy is already beyond the stage of colonial world system in which the politico-military dominance of centre over the periphery was the sine qua non of global relations. Instead, in this modern global configuration, the influence of economic relations is predominant. At the same time, growth and rapid industrialisation, and the emergence of the Newly Industrialising Countries (NICs)

3 Post-war Global Accumulation and the Transnationalisation of Capital in the 1970 s, introduced new controversies and claims in this debate ranging from characterisations such as, the end of the Third World (Harris 1986), to dependent industrialisation (Landsberg 1979, 1984), successful capitalist industrialisation (Barone 1983), among others. In the traditional development literature, export-led industrialisation (the growth path pursued by the NICs) was celebrated as the triumph of the neoclassical theory of trade and development, and the practical failure of import-substitution industrialisation as an alternative strategy of development. Developing countries could sustain high growth rates, it was argued, by relying on market forces in resource allocation and the determination of output and prices over time (Krueger 1986). The neoclassical explanation of the Post-War international developments and the experience of the NICs have been challenged on a number of grounds. In our opinion, despite its rigor in the application of mathematical economics, the neoclassical scenario remains an empty shell which suffers from an extreme poverty of theory. It is non-historical and blind to the developments of the world economy. The neoclassical paradigm is a naive application of the theory of comparative advantage (Ricardo 1976) that was constructed as a theoretical justification for the era of colonial trade, having to do with the preservation of British hegemony in the 19th century world market. Its emphasis on the application of unregulated market forces is a faithful adherence to a regime of accumulation that was at best applicable for a short period of time in early capitalism. In sum, the neoclassical paradigm fails to understand the phenomenon of capital as a global social relation of production (Yaghmaian 1990), in conjunction with the necessary role of state (economic and political) in the present stage of the world economy (Evans and Alizadeh 1984, Streeten 1986, Bienefeld 1982, Chaudhuri 1981). In what follows, we shall develop an alternative explanation of a number of important aspects of the Post- War economic development of less developed countries (LDCs) within the context of the theory of the internationalisation of capital. Contrary to the neoclassical theory (Krueger 1986, Balassa 1981, Lee 1981) and the radical theories of development (Amin 1976, Frank 1971), the theory of the internationalisation of capital (Palloix 1977, Weeks 1985a, Bina and Yaghmaian 1988) enables us to study the process of LDC development within the context of capital and its internal dynamics. We argue that industrialisation and the capitalist transformation of LDCs have been the result 109

4 Capital & Class # of the internationalisation of productive capital, and the globalisation of production beyond the national boundaries in the Post-War era. Import-substitution industrialisation and export-led industrialisation are two stages in the mature phase of the internationalisation of capital and not two separate alternative strategies of development. The internationalisation of capital has been achieved through comprehensive state intervention in the economic reproduction during both import substitution and export-led industrialisation. On the Necessity of Global Analysis Today, the need for an appropriate unit of analysis is nowhere more important than in the study of complex developments such as in the transnational economy. This is especially important in the light of recent global economic developments, and the attempt by various theorists in search of a comprehensive framework, which may capture the organic interrelation between the nation-state and the global economy (Radice 1975, 1984, Fine and Harris 1979, Ch. 9, Vernon 1971, Jenkins 1986, 1987, Warren 1980, Willoughby 1986). Given the above context, we contend that an autonomous configuration such as the national economy can no longer be made the starting point of any analysis which seeks to understand the complex unity of nation-state and the global accumulation. Thus, the argument about the mutual exclusivity of nation-state and the global economy, perceived in their traditional forms, is a misleading framework for the analysis of global capitalism (see, for example, Gordon 1988). In our opinion, a proper periodisation of capitalist social relations, from the so-called primitive accumulation to the development of capital accumulation on a global scale, is the key to a fruitful analysis of international capitalism. If indeed the accumulation of capital in contemporary capitalism goes beyond national boundaries, the study of capital s transition from de jure to de facto requires an adequate periodisation (Fine and Harris 1979, Ch. 7). The periodisation of the recent history of modern capitalism enables us to understand the uneven development of capitalism both inter-nationally and intra-nationally, and to reveal the inadequacy of using the nation-state frame of analysis for the study of modern capitalism. The theory of internationalisation of capital thus must be entwined with a useful periodisation for the analysis of the dynamics of global economy. The internationalisation of capital approach to the analysis of the world economy is a stage theory of capital accumulation based on the identification of the circuits of

5 Post-war Global Accumulation and the Transnationalisation of Capital capital that illustrates the unity of the spheres of production and exchange within the global economy. The internationalisation of capital approach simply seeks to analyse the social structure of the Post-World War II economy, a global economy which is preceded by the old colonial world system and is distinguished by its omnipresent reproduction of fetishised capitalist social relations (Palloix 1975, Cypher 1979, 1990, Radice 1984, Berberoglu 1987, Bina 1988, 1989a, l989b, 1990, Yaghmaian 1988). Global capital is not the algebraic summation of the existing national capitals, constantly moving across the globe from one country to another, but rather an organic supranational social relations of production (see Gordon 1988 for the contrary arguments which we hope to be able to combat in this essay). The process of capitalist accumulation is one of uneven development. The global expansion of capital and the transformation of pre-capitalist modes of production have been an uneven process replete with intrinsic contradictions. The analysis of the global economy must necessarily include these contradictions, and their evolution and consequences. In our view, the theory of the internationalisation of capital provides us with a useful theoretical framework for the analysis and understanding of these contradictions. 111 The Internationalisation of Capital and the Study of the Post-World War II Global Economy I. General Overview The Post-World War II international division of labour presupposes three interrelated processes: (1) the concentration and centralisation of capital both in manufacturing (industrial capital) and banking (financial capital); (2) the formation of finance capital and further development of credit system for expanded reproduction; and (3) the consequent internationalisation of all circuits of capital and globalisation of production through the medium of transnational corporations (TNC s). For capital to become a de facto global entity, there had to be an international circuit of capital in all its forms. The internationalisation of production is the culmination of three historically distinct stages of the internationalisation of commodity capital, money capital, and productive capital.

6 Capital & Class # The internationalisation of the circuit of industrial capital has been the result of a series of interrelated and mutually reinforcing developments in the last part of the 19th century, including the concentration and centralisation of capital, and the formation of joint-stock companies in banking and manufacturing; the expansion of the credit system and its growing importance in capital accumulation; and consequently, the formation of finance capital the interlocking of the financial capital of large banks with the capital of very large and concentrated industrial concerns. Finance capital and the internationalisation of all circuits are historically specific developments that have left unprecedented effects on precapitalist socio-economic formations. The internationalisation of the circuits of commodity, money, and productive capital represents different aspects of the process of self-expansion of capital on a global scale. The internationalisation of commodity trade (given the development of the world market) and the circuit of commodity capital (C' M' C...P...C') was the first stage in the internationalisation of capital. From the standpoint of global development of capitalism, the first phase in the internationalisation of capital coincided with the extraction of absolute surplus value in most parts of the world, even though there existed many nation-states (in Western Europe and elsewhere) whose accumulation processes have been based on the production of relative surplus value. Colonial trade, which was so graphically justified in the earlier version of comparative advantage, (i.e. the import of raw materials from the precapitalist regions of the world by the advanced capitalist countries and the export of manufactured consumer goods to the colonies) was in fact the main feature of the world trade in this period. By the end of the 19th century, the circuit of money capital (M C...P...C'...M) largely and the circuit of productive capital (P...C' M' C...P) initially had also been internationalised. The early internationalisation of the circuit of money capital occurred mainly but not exclusively through loans to the colonial (precapitalist) states. Money capital exported to underdeveloped countries played a dual role. On the one hand, it strengthened the political position of precapitalist ruling classes. On the other hand, it facilitated as a leading wedge in the capitalist transformation of precapitalist social relations (Weeks 1985b). Thus, although the export of money capital did not result in a qualitative transformation of the colonies, it nevertheless set the stage for the transition towards a fully integrated global capitalist economy in later years.

7 Post-war Global Accumulation and the Transnationalisation of Capital The internationalisation of the circuit of commodity capital has been associated with the growth of world trade and the realisation of values in the world market. The internationalisation of money and productive capital has been identified with the expansion of global capital movements and the rise of TNCs (Jenkins 1987). The early internationalisation of productive capital occurred primarily through the expansion of TNC activities in the extractive and primary sectors of precapitalist economies in the late 19th and early 20th century (in the case of oil see Bina 1985, 1988, 1989b). The internationalisation of productive capital significantly grew with the penetration of TNCs in manufacturing activities, particularly in the Post-World War II era. Having a direct control over an intricate network of many labour processes around the world, TNCs tend to exploit labour globally through the circuit of P...C' M' C...P (Marx 1976b, Palloix 1975). The export of commodity capital by itself did not result in the socio-economic transformation of less developed countries (Weeks 1985a, l985b). During the early stage of the development of world capitalism, the transformation of precapitalist relations was not quintessentially vital to the interest of capital exporting countries. A complete capitalist transformation of the less developed countries was not a necessary condition for the export of commodity capital at this stage. The precapitalist relations of production in these countries thus were preserved or often strengthened through the alliance of ruling precapitalist classes and foreign merchant bourgeoisie during this period (Weeks and Dore 1979). Although the internationalisation of commodity capital did not result in the capitalist transformation of the colonies, nevertheless, in some cases, it contributed to the development of their productive forces. This contradictory process which was summed up by Marx in the case of British rule in India as follows: 113 England has to fulfil a double mission in India: one destructive, the other regenerating... I know that the English millocracy intends to endow India with railways with the exclusive view of extracting at diminished expenses the cotton and other raw materials for their manufactures. But when you have once introduced machinery into the locomotion of a country... you are unable to withhold it from its fabrication... The railway system will therefore become, in India, truly the forerunner of modern industry (Marx 1976a, ).

8 Capital & Class # Marx s assessment of the British rule in India has been a source of a major controversy about the progressive or retarding role of colonialism. While some have emphatically emphasised the destructive role of colonialism and imperialism for that matter (Communist International, VIth World Congress 1982, for instance), others have ignored the two-fold character of colonialism by onesidedly emphasising its positive effects on the development of productive forces (Warren 1980). During the colonial period and the early stage of the internationalisation of capital, the international division of labour was geared towards facilitating the realisation and expanded reproduction of capital in the advanced capitalist nations. The advanced and the less developed capitalist countries were persuaded to specialise in the production and export of commodities based on the ideological principle of comparative advantage. During this stage, naturally the balance of payments of the less developed countries were marked by severe imbalances and huge deficits. Many raw material exporting nations, faced with shortages of official reserves and tradable currencies, were forced to borrow funds from international money markets to finance their imports. The result was that those nations were plagued by both trade deficits and the ever increasing amounts of foreign debt. In the early 1950s, a growing opposition to the existing international division of labour developed in LDCs, a wellknown version of which is attributed to Raul Prebisch, a development theorist at the United Nations (Prebisch 1950,1959). Central to Prebisch s thesis was the deterioration of the LDCs terms of trade arising from the existing international trade relations. Prebisch s solution to this problem was import-substitution industrialisation (ISI) and the encouragement of domestic production of imported manufacturing goods. Similar arguments were also later advanced by the neo-marxian school and the advocates of unequal exchange thesis (Emmanuel 1972). Prebisch s voice at the United Nations was indeed the crystallisation of the opposition registered by LDCs local bourgeoisies to the old (and long eroding) colonial international division of labour. Although the sporadic implementation of ISI had begun in some countries in Latin America and Asia (including Mexico, Brazil, Iran, South Korea, India among others) long before, nonetheless, its widespread global application as a full-fledged strategy of development dates back to the Post-World War II era.

9 Post-war Global Accumulation and the Transnationalisation of Capital The project of import-substitution industrialisation contained a seemingly contradictory duality. While representing the class interest of the local capitalists of developing nations at a certain historical juncture, ISI was also international capital s early response to the tendency for global expansion in the sphere of production, leading to the internationalisation of capital in all its essential aspects. In developing nations, ISI represents the contradictory unity of a concrete form of socioeconomic struggle by the fresh and growing capitalist forces within LDCs against the declining precapitalist classes and relations of production, as well as competition with international capital. ISI was actively pursued by the local capitalists of developing nations as the strategy of securing a protected home market for their manufactured goods. Import substitution was also viewed as an effective way for utilising the state apparatus to win the battle of competition against other capitals in the global market, in order to build independent national economies in the aftermath of the colonial era. Thus, ISI came to represent the economic manifestation of a decisive class struggle on both local and international levels. But, on the other hand, partly due to the lack of necessary capital and technology manifested in the underdevelopment of productive forces in the less developed countries, and partly due to the hegemony of international capital, the project of import substitution became operational only through the involvement of the advanced capitalist countries. Less developed countries demand for import-substitution industrialisation was thus promoted by the internationalisation of production. ISI was the early form of the expansion of operations of transnational corporations which enabled them to exploit new resources on a global scale and to move towards a globally integrated network of capitalistic production and exchange. Thus at a certain historical conjunction, importsubstitution industrialisation had to be promoted by the competing forces of local and international capital associated with developing and advanced capitalist countries respectively. 115 II. Embryonic and Fully Developed Global Capitalism In order to realise the significance of the accumulation of capital in general, one has to recognise the importance of its historical precondition; a precondition which is necessary but not sufficient in setting in motion the perpetual reproduction of capitalist social relations. In fact, the establishment of the capitalist mode of production necessitates the self-

10 Capital & Class # perpetuating process of capital accumulation that is uniquely internal to capitalism and has a self-limiting characteristic. Hence, primitive, or original, accumulation is a point of departure, both in its early form or in its 20th century development, for further development of capitalist social relations. As Marx put it:... the accumulation of capital presupposes surplusvalue; surplus-value presupposes capitalist production; capitalist production presupposes the availability of considerable masses of capital and labour-power in the hands of commodity producers... which we can only get out of by assuming a primitive accumulation (the previous accumulation of Adam Smith) which precedes capitalist accumulation; an accumulation which is not the result of the capitalist mode of production but its point of departure (Marx 1977, 873, emphasis added). The secret of primitive accumulation in its early classical period cannot be fully revealed without its broad ramification pertaining to the domestic economy of the advanced countries and to their colonial counterparts in the 18th and 19th centuries. Here, the conquest of the domestic social relations in the advanced colonial countries (namely of Europe) in conjunction with the control of colonies by capital set the stage for the internationalisation of commodity capital. From the standpoint of the globalisation of capitalist social relations this is indeed the very first stage in the emergence of world capitalism. This stage is actually the point of departure of classical primitive accumulation that is so entwined with the emergence of the colonial world market in the early stage of capitalism. In the colonies, where capital had not yet taken over the mode of production, having been subordinated to the dominant precapitalist social relations, there first developed a sort of formal subsumption of labour to capital. Here the internationalisation of commodity capital tended to determine the character of the colonial world market. It would be instructive to realise that the global character of capital here in this stage is implicit, which likewise lives in embryonic form within the structure of the nation-state, whose classical task is primarily none other than the reproduction of social relations. That is why the nation-state has become the unit of analysis in the traditional study of political economy. This periodisation allows us to recognise the domination of world market (or the international economy for that matter) by the early nationstates. According to Marx,

11 Post-war Global Accumulation and the Transnationalisation of Capital The different moments of primitive accumulation can be assigned in particular to Spain, Portugal, Holland, France, and England, in more or less chronological order. These different moments are systematically combined together at the end of the seventeenth century in England; the combination embraces the colonies, the national debt, the modern tax system, and the system of production. These methods depend in part on brute force, for instance the colonial system. But they all employ the power of the state, the concentrated and organised force of society, to hasten, as in a hothouse, the process of transformation of the feudal mode of production into the capitalist mode, and to shorten the transition. Force is the midwife of every old society which is pregnant with a new one. It is itself an economic power (Marx 1977, , emphasis added). With the internationalisation of productive capital all the three circuits of social capital have become internationalised. This phase in the internationalisation is indeed a point of departure of the real subsumption of labour to capital, which would provide the basis for the transnational capitalist social relations. According to Marx, If the production of surplus value was the material expression of the formal subsumption of labour under capital, then the production of relative surplus value may be viewed as its real subsumption (Marx l977, l025). The real subsumption so described is none other than the total subordination of the existing social structure to the social relations of capital, which is pointing to the seizure of the objective conditions of labour by capital historically (Marx l973, ). Contrary to the early stage, the advanced stage of global primitive accumulation has been entwined with the internationalisation of productive capital. This implies the emergence of a global tendency to real subsumption of labour under capital, which is the characteristic of transnational (as distinct from international) capitalist social relations. This is significant in view of the sporadic development of capitalism in the colonial and semi-colonial countries early in the 20th century, especially in the inter-war period. But the post-world War II massive transformation of social relations within the increasing number of post-colonial states marks an intensified level of the internationalisation of productive capital. Here, the 117

12 Capital & Class # extensive state-assisted land reform programmes that facilitated the application of import substitution industrialisation and the subsequent export-led industrialisation, in conjunction with transnational capital s inter-penetration of advanced capitalist countries, are the main ingredient of the present global social relation. This transformed global entity has, indeed, a determining impact upon the nature of the nation-state. In this context, the imposed land reform programs of the 1950s and 1960s were none other than the point of departure for such a global transformation. Pointing to the historical mission of early primitive accumulation, Marx argues: In the history of primitive accumulation, all revolutions are epoch-making that act as lever for the capitalist class in the course of its formation; but this is true above all for those moments when great masses of men are suddenly and forcibly torn from their means of subsistence, and hurled onto the labour market as free, unprotected and rightless proletarians. The expropriation of the agricultural producer, of the peasant, from the soil is the basis of the whole process. The history of this expropriation assumes different aspects in different countries, and runs through its various phases in different orders of succession, and at different historical epochs. Only in England, which we therefore take as our example, has it the classic form (Marx 1977, 876). To sum up, two historically significant phases can be distinguished in the development of global capitalism. First is the early primitive accumulation in the so-called metropolitan countries. This was the point of departure upon which the internal development of capitalist social relations developed and which, together with colonial trade, corresponds with the internationalisation of commodity capital; followed by the internationalisation of money or finance capital. The above transformations emerge within the boundaries of the nationstate whose primary task is the domestic social reproduction, and whose very mechanism internalised the embryonic form of global capital. The second phase in the development of world economy is the unfolding of the advanced stage of primitive accumulation upon which the colonial and/or semicolonial states were integrated into the contemporary transnational economy. Here, with the internationalisation of productive capital, all the circuits of social capital become transnationalised. The import-substitution and export-led industrialisation programmes belong to this historical phase.

13 Post-war Global Accumulation and the Transnationalisation of Capital Accordingly, there has been a marked change in the nature of the nation-state, having to do with the transformed character of capital, from its embryonic form to a fully developed global entity. Hence the modern nation-state and its contradictory global character. 119 III. Internationalisation of Productive Capital and the socalled Primitive Accumulation The internationalisation of production resulted in the acceleration of capital s tendency for the transformation of precapitalist relations of production globally. The export of productive capital and accumulation on a global scale necessitated the structural transformation of LDCs into capitalist relations of production. At this higher stage of the development of capitalism, the widespread removal of precapitalist obstacles in less developed countries, including the transformation of class relations, was the prerequisite for the global accumulation of capital. The completion of the primitive accumulation of capital in LDCs was, therefore, a necessary condition for the global expansion of capital in all its forms and ultimately as a global social relation. Internationalisation of productive capital presupposes the generalised commodification of labour power on a global scale. The so-called primitive accumulation is nothing else than the historical process of divorcing the producer from the means of production (Marx 1967a, 714). The above process results, on the one hand, in the tendential proletarianisation of the peasantry, artisans and other petty commodity producers, and, on the other hand, the expropriation of wealth for the purpose of initial accumulation of capital from precapitalist classes. The process that clears the way for the capitalist system, argued Marx, is none other than the process which takes away from the labourers the possession of the means of production; a process that transforms, on the one hand, the social means of subsistence and of production into capital and, on the other, the immediate producers into wage labourers (Marx 1967a, 714). Capitalism presupposes the existence of a class which possesses nothing but the ability to work. Capital presupposes wage labour; wage labour presupposes capital. They condition each other; each brings the other into existence (Marx 1976b, 32). Thus, the socalled primitive accumulation simultaneously leads to the proletarianisation of immediate producers, and the formation of a new class of capitalists.

14 Capital & Class # The process of primitive accumulation is indeed an uneven process which assumes different aspects, and runs through its various phases in different orders of succession, and at different periods (Marx 1967a, 716). One important variant of this uneven process in the Post-War era has been the implementation of various land reform policies enacted by the state in LDCs. The institution and implementation of the Post-War land reform programmes have indeed deepened the tendential proletarianisation of the peasantry in LDCs, which in turn resulted in an immense source of surplus labour for the emerging import substituting industries (Araghi and Bina 1989, Araghi 1990). Most of these reforms were supposed to be implemented in such a manner as to minimise the risk of political upheavals and social disturbances that would have otherwise had destabilising effects on the economy and policies of individual nations involved. This is why the Post- War land reforms were in many cases imposed from the above and accomplished through repressive and coercive measures. Most LDC land reform programs were implemented by historically backward states, while being supported by powerful and dominant factions of international capital and by the state in the advanced capitalist countries such as the US government. A principal objective of Post-War land reforms therefore lay well beyond the boundaries of any nation-state, attempting to facilitate a broad global primitive accumulation in order to produce the necessary socioeconomic preconditions for the implementation of import substitution and export-led industrialisation worldwide. We do not claim that the above land reforms and the way in which they were implemented constitute a universal approach to primitive accumulation in the 20th century, as we wish not to leave the reader with an impression that we are striving for a general theory. But one has to be aware of the near-universal effects of all the post-world War II land reform programmes and their common features. The so-called primitive accumulation was completed in some developing countries without a formal and state-sponsored land reform. In some colonies the proletarianisation of the peasantry was achieved through appropriation of land ( enclosures of commons ) by colonists with the help of colonial states. Where implemented, the results of the reforms have also varied in terms of the degree of proletarianisation of the peasantry, the extent of the destruction (or survival) of feudal and semi-feudal land tenure systems and the significance of

15 Post-war Global Accumulation and the Transnationalisation of Capital the introduction of capitalist farming in the country. Such variations have, in turn, left important impacts on the industrialisation and economic growth of the respective developing countries. The 18th century and the 20th century primitive accumulation constitute the early and advanced phases of the continuous process of global primitive accumulation (Bina and Yaghmaian 1988). The early phase of primitive accumulation coincides with the internationalisation of commodity capital and the early development of the world market while the period of advanced primitive accumulation entwines with the internationalisation of all circuits of capital and the resultant globalisation of production. 121 The process of industrialisation and the capitalist transformation of LDCs initially began with importsubstitution industrialisation. ISI coincided with the early phase of the internationalisation of productive capital and the creation of international markets that primarily tend to rely on the sphere of global production. As a general trend, in most cases import-substitution industrialisation has been a prelude to export-led industrialisation, a more general and higher phase of the internationalisation of production and exchange. Import substitution paved the way for the development of a capitalist home market in LDCs, while in turn setting the stage for export-led industrialisation and direct production for the world market (see also Lenin l960). The strategy of import-substitution industrialisation generally gave rise to a series of structural economic difficulties in developing countries. From the developing countries point of view, ISI was regarded as a dynamic process, leading to the creation of strong backward and forward linkages between various sectors and branches in the domestic economy. But, in most cases, ISI failed to generate the expected inter-sectoral and intra-sectoral linkages. ISI was perceived by developing nations as an effective way of combating the balance of payments difficulties and foreign exchange shortages through reducing the imports and import bills. But contrary to the early optimistic expectations, ISI generally resulted in a further aggravation of balance of payments problems, only causing a shift in developing countries import mix, while creating a relatively larger demand for the import of capital, including the import of intermediate goods. Thus, while accelerating the tendency for the capitalist transformation, ISI generally reproduced the basic Uneven Development and The Move from ISI to Export-Led Industrialisation

16 Capital & Class # economic difficulties within the developing countries that had once made import substitution an appealing strategy for development. The economic problems associated with ISI generated a new enthusiasm in some developing countries towards a more outward oriented strategy of development that appeared to potentially eliminate their foreign exchange shortages through the export of manufactured goods. Thus, in the l960s and l970s, the strategy of export-promotion industrialisation substituted ISI in a number of developing countries. The attraction towards export promotion was not exclusive to developing countries. We would argue that the new orientation and the renewal of interest towards export markets were also shared by the transnational corporations in their continuous derive for the creation of a truly integrated network of global production. By its nature, import-substitution industrialisation has been restricted by the size of the domestic market of a prospective developing country. Being restricted to separate local markets itself posed a constraint to accumulation on a global scale that had to be overcome by the true unification of the world market. Thus, capital s tendency for global expansion necessitated a further integration of the world market into a unified network of capitalistic production and exchange (Bina and Yaghmaian, l988). In this manner, export-led industrialisation has been international capital s response to this intrinsic need. The process of capitalist accumulation is one of uneven development. The Post-War internationalisation of capital, and industrialisation and the development of capitalism in LDCs are no exception. Thus, we are confronted with faster progress in some regions (or countries) and continuous economic backwardness in others. The initial start, depth of development, and the duration of import-substitution industrialisation and its transformation into export-led industrialisation have greatly varied in different parts of the world. There have also been significant variations with respect to the role played by foreign investment, loan capital, and the overall involvement of transnational corporations in the industrialisation of LDCs. It has been argued that the industrialisation of the NICs during import substitution and export-led industrialisation was heavily financed by the export of both money capital (loans and aid) and productive capital (foreign direct investment) (Griffith-Jones and Rodriguez 1984, Chaudhuri 1981, Haggard and Cheng 1987). In the

17 Post-war Global Accumulation and the Transnationalisation of Capital case of Korea, while some have attributed a major role to foreign (primarily Japanese) capital (Hamilton 1986, Landsberg 1979), others have argued for the relatively more significant role of indigenous capital in country s economic development (Barone 1983). In South Korea, 70% of total imports were financed by foreign aid between 1953 and South Korea also relied on foreign borrowing as a means of financing its industrialisation: the South Korean debt amounted to $46.7 billion by 1984 (Haggard and Cheng 1987, 94). Close to 85% of Taiwan s $l.l billion between l953 and l962 was financed by money capital in the form of aid from the United States (Haggard and Cheng l987, 86-87). Much of the Asian industrialisation in the earlier period was largely financed by direct investment from Japan. In Turkey, the IMF played a key role in facilitating and promoting the move from import substitution to export promotion. Here, simply an international state institution has been directing the country s national development in conjunction with fractions of indigenous capital. Despite these variations, we argue that neither import substitution, nor export-led industrialisation have been the accidental outcomes of incorrect or correct policies of states in the developing countries. On the contrary, it is our contention that both these strategies are an integral part of a general and unified tendency in the development of global capitalism. The internationalisation of all circuits of capital and the capitalist transformation of precapitalist social formations are two interrelated aspects of this tendential development. We view both import substitution and export promotion as two moments of this historically unique process. Although the Post-World War II development of the global economy has been uneven in nature, giving rise to a progressive economic differentiation in the Third World, some significant transformations have also been occurring that cannot be ignored. Given our discussion on the internationalisation of capital and the process of primitive accumulation, we argue that the internationalisation of production has made the capitalist transformation of the Third World an immanent tendency (also see Weeks, l985a,b). The depth and the form of these changes have greatly varied among different countries. In most cases, such transformations have resulted in the development of new social formations, characterised by the dominance of capitalist relations of production in the presence of remnants of the precapitalist structure. The relative significance of obstacle to capitalist social relations has also varied among different developing countries. This is in 123

18 Capital & Class # addition to the unevenness of capitalism itself. Complexities such as this have been a marked feature of capitalist development in the era of transnational capital and globalised production. Contrary to the common belief (especially prevailing among orthodox economists), most Newly Industrialising Countries have been developed on the basis of an industrial infrastructure inherited from the period of import substitution and a continuous state intervention in the market. Taiwan, South Korea, Brazil, Mexico, Turkey, and India are among many developing nations that followed a classical case of moving from import substitution to export-led industrialisation. In other cases, like Hong Kong and Singapore, industrialisation was started off directly by a general policy of export promotion. The move towards export promotion, in most cases, has not resulted in a complete elimination of import-substitution industrialisation. Where import substitution preceded by export promotion, ISI still continued in practice in various degrees alongside the new regime of export-led industrialisation, leading to the export of manufactured goods. The concrete form of export promotion, the export commodity mix, and the extent of the orientation of the economy toward exports also vary in different cases. For example, production for exports has played a more significant role in the economies of Hong Kong, Singapore, and South Korea than in the case of Brazil, India, Turkey, and Mexico. The success of the NICs has varied due to a multitude of interrelated factors including an improvement in agricultural productivity and industrial infrastructure created through (a) import-substitution industrialisation (Streeten l986); (b) relatively favourable access to international finance (Bienefeld l982, Griffith-Jones and Rodriguez l984); (c) the involvement of transnational corporations; and (d) the existence of a strong (repressive) internationally reliable regime, and the state control over industrial development (Bienefeld l982, Schmitz l984). State and Capital Accumulation A remarkable characteristic of global accumulation in the Post-World War II era has been the role of the state in economic reproduction. The internationalisation of capital at both phases of import substitution and export-led industrialisation has heavily relied on state intervention in the economic, political and social arenas (Streeten l986, Barone l983, Bienefeld l982, Chaudhuri l98l). Similar to the l8th century period of primitive accumulation in Europe, the Post-

19 Post-war Global Accumulation and the Transnationalisation of Capital World War II primitive accumulation in LDCs has occurred by way of state assistance and intervention. With further globalisation of capital the necessity of state intervention in organising the industrialisation process and directing the accumulation of capital has also increased. Once the study of accumulation and development of capitalist social relations is based on the global approach, it becomes necessary to reflect upon the very contradictory relationship of the state and global capital. Here, if capital will no longer remain a national entity (Radice l984), then the role of state as an agent of social reproduction would have to be transformed in such as manner that it may internalise the emerging contradictions that are global in nature. Thus, the traditional concept of nation-state needs to be reevaluated in order to capture the significance of these emerging realities (see also Picciotto, this issue). Nation-states do not cease to exist. But the economic environment within which they will operate becomes increasingly transnational in a manner that the national policies can no longer remain immune from the imposing character of global capital. Here there arises a fundamental contradiction between the task of reproduction of capitalist social relations domestically and the reproduction of counterparts within the transnational economy. This leads to the transformation of the nation-state and its traditional character. An important byproduct of the emergence of the transnational economy has been the new role of international financial institutions like IMF and the World Bank. In economic terms, the IMF has been increasingly adopting the status of an international state, implementing policies that are intended to achieve global capitalist accumulation and stability (Phillips 1983). With respect to developing countries, national economic policies and the well-known austerity measures imposed by the Fund are simply designed to promote global economic growth through national economic growth. Naturally such policies have differing and contradictory effects on the existing balance of class forces within such developing nations. While the IMF policies are directed towards disciplining the working class through various austerity programs, their impact on the various fractions of the capitalist class are not universally homogeneous. Those sections of developing countries bourgeoisie that are more active in the export sector have often benefited from the Fund s policies (i.e. through the depreciation of the domestic currency), while those more dependent on the import sector have indeed suffered. Thus, 125

20 Capital & Class # IMF policies often result in the further intensification of class struggle in developing countries, including the struggle among different segments of the bourgeoisie. We would argue that the state s role in this highly globalised capitalist era has been more complex and contradictory than in the earlier stage of capitalism. The state s task in this period has been to pursue national policies in an increasingly transnational environment. The task of the modern state is to resolve this contradiction. State in both advanced and less developed capitalist countries is a part and parcel of the contradictory development of capitalist social relations that are well beyond the parameters of the nationstate itself. Thus, in the case of less developed countries, both under ISI and export-led industrialisation, the nation-state itself has to promote the objective of the internationalisation of capital. State policies during import-substitution industrialisation and export-led industrialisation are characterised by this seemingly contradictory duality. During the ISI phase, national policies of the state are motivated ideologically by a pursuit of economic independence and by a fight to rectify problems associated with national economic categories that are no longer national. Such policies are at the same time internationalist policies that enhance the process of the internationalisation of production and accumulation on a global scale. The protection of infant industry in the less developed capitalist countries at this stage fulfils the dual task of developing local industries and satisfying the nationalist demands of the LDCs, while setting up production networks in many different parts of the globe in order to pave the ground for further globalisation of production. The transformation of ISI to export-led industrialisation has also been characterised by this two-foldedness. Export growth policies bring about a full integration of developing countries (called NICs in this case) into the world market, while advancing the process of the internationalisation of capital further towards transnational capitalist social relations. This is the very essence of global capitalism which goes well beyond the traditional boundaries of the nation-state. Conclusions The Post-World War II global accumulation has been the result of the internationalisation of all circuits of capital and the consequent globalisation of production. Import substitution and export-led industrialisation are two phases of the Post-War regime of accumulation. As a general tendency,