Twilight of the Gods - Götterdämmerung over the "New World Order" - Stefan Engel - ebook

Twilight of the Gods - Götterdämmerung over the "New World Order" ebook

Stefan Engel

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For the title of this book, author Stefan Engel employs an allegory from German mythology: in the götterdämmerung, the "twilight of the gods", the end of the world engulfs the worn-out gods of an antiquated age, and out of the world conflagration grows an admirable new world of peace an full, joyous live. The parallel with the decline of the present ruling stratum of world society and the preparation of a new future well worth living is intended! The book wrests this vision from the realm of mythology and places it on a scientific foundation. It conveys a perspective to all those for whom the götterdämmerung of ruling world finance capital does not signify the end of history but the starting point for an new epoch of the social develooment of humanity - without hunger, exploitation and war.

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Twilight of the Gods –Götterdämmerungover the “New World Order”

June 2003Editorial Team Revolutionärer Wegheaded by Stefan EngelBuerer Str. 39, D-45899 Gelsenkirchen, GermanyVNW – Verlag Neuer Weg GmbHAlte Bottroper Strasse 42, D-45356 Essen, GermanyAll rights reserved.Twilight of the Gods –Götterdämmerungover the “New World Order”First published in German in March 2003 in the seriesRevolutionärer Weg, Nos. 29–31, 2003Alte Bottroper Strasse 42, D-45356 Essen, GermanyE-mail: [email protected] 3-88021-342-9eISBN 978-3-88021-426-2

Stefan Engel

Twilight of the Gods –Götterdämmerungover the“New World Order”

The Reorganization ofInternational Production

Verlag Neuer Weg

Contents

Twilight of the Gods –Götterdämmerungover the “New World Order”

Preface

Introduction

Part I: Essential Changes in the Political Economy of Imperialism

1. The Building of International Monopolies

2. The Battle of the International Monopolies for the World Market

3. The Development of Food Production Under the Dictates of the International Monopolies

4. The Emergence of an International Industrial Proletariat

5. Changes in the Class Structure as a Result of the Internationalization of Capitalist Production

6. International Big Banks as Driving Force of the Internationalization of Capitalist Production

7. The Role of the Stock Exchange in the Process of the Internationalization of Capital

8. The Reign of Finance Capital over the World Economy

9. The People’s Republic of China – A Rising Social-Imperialist Power

Part II: The Reorganization of International Production Ushers in a New Phase in the Development of Imperialism

1. The Breakdown of the Soviet Union Against the Background of the Internationalization of the Capitalist Production

2. The Fifth Investment Period of State-Monopoly Capitalism in the FRG

3. Exploitation Offensive as Basis of the Reorganization of International Production

4. The Reorganization of International Production

5. The International Monopolies Undermine the Role and Function of the National States

6. Sweeping Privatization of State-Owned Enterprises and Facilities

7. The Chronic Crisis of State Finances and the Redistribution of National Income

8. Changes in State Subsidy Policy as Exemplified by Ruhrkohle AG

9. The European Union as Instrument of the International Monopolies

10. International Forms of Organization of Finance Capital

11. The Devastating Effects of Neoliberalism on the Neocolonially Dependent Countries

Part III: The Reorganization of International Production Exacerbates the Crisis of the Imperialist World System

1. The International Structural Crisis on the Basis of the Reorganization of International Production

2. New Phenomena in the First World Economic Crisis of the New Millennium

3. Interaction Between Overproduction Crisis, Stock Exchange Crisis and Bank Crisis

4. The Crisis of State Regulation

5. The International Competitive Struggle of Finance Capital Prevents Effective Measures Against the Global Environmental Crisis

6. The International Tendency Towards Dissolution of the Bourgeois Family System

7. A New Phase in the Struggle for the Redivision of the World

8. The Chronic Political Crisis and the Fight Against “International Terrorism”

9. The Crisis of the Bourgeois and Petty-Bourgeois Theories of Globalization

Appendix:

Bibliography

Index of Tables

Index of Charts

Preface

For the title of the book, author Stefan Engel employs an allegory from German mythology: in the götterdämmerung, the “twilight of the gods,” the end of the world engulfs the worn-out gods of an antiquated age, and out of the world conflagration grows an admirable new world of peace and full, joyous life. The parallel with the decline of the present ruling stratum of world society and the preparation of a new future well worth living is intended! The book wrests this vision from the realm of mythology and places it on a reliable scientific foundation.

United States President George Bush arrogantly heralded a “New World Order” in 1991. But this pompous proclamation merely disguised the open claim to leadership over the entire world by the sole remaining superpower, the USA.

The author comprehensively analyzes how this “new world order” has become a world disorder which no one can bring under control anymore. With the reorganization of international production as the economic essence of the social changes, a multitude of devastating crises, wars and collapses have resulted. The revolutionary productive forces drive to unfold worldwide – and are stifled by the corset of the outdated social structures of imperialism. Because the capitalist system cannot solve these problems, its decline hastens. But at the same time all material prerequisites ripen within it for a truly new world order: the revolutionary overcoming of the imperialist world system in an international socialist revolution, and the emergence of the united socialist states of the world.

This captivating book is marked not only by a refreshing culture of debate but also a stringent scientific method with which an impressive volume of facts and materials is investigated and interpreted. It conveys a perspective to all those for whom the götterdämmerung of ruling world finance capital does not signify the end of history but the starting point of a new epoch of the social development of humanity – without hunger, exploitation and war.

Publishing House Verlag Neuer Weg

Essen

 

March 15, 2003

Introduction

Since the dissolution of the Soviet Union and its empire we have been witnessing a breath-taking process of the economic and political reorganization of the world. Under the misleading heading “globalization,” a flood of publications on the subject by bourgeois and petty-bourgeois economists has appeared. But hardly a one can stand up to scientific scrutiny and, above all, satisfy the demand to reveal the social causes of this development from all sides.

In the international Marxist-Leninist and working-class movement, too, as yet only a few important analyses of individual aspects of this process exist. An accurate and all-sided general assessment is still lacking. This can lead to misinterpretation of the new developments in society, with serious consequences, and to wrong conclusions for the struggle against imperialism and for socialism.

This book underscores the general validity of the analyses of imperialism by Lenin and of state-monopoly capitalism in Germany by Willi Dickhut1. At the same time it directs fullest attention to the new manifestations, the essential changes, in the imperialist world system. They are summed up as the reorganization of international capitalist production.

The political starting point of this reorganization was the end of the era of the social-imperialist Soviet Union, sealed by the abortive putsch attempt of Soviet military men in August 1991. The continued existence of the Soviet Union and the Council for Mutual Economic Assistance (CMEA) as an economic area relatively isolated from the rest of the world could no longer be maintained. The scientific and technological revolution caused by microelectronics and full automation and the internationalization of capitalist production had largely undermined the economic and political basis of superpower Soviet Union. The full integration of the Soviet spheres of influence into a unified world market and the relative assimilation of their relations of production to the far more productive relations of production in the West had become an immediate economic necessity.

The ensuing upheavals in Russia and the other countries of the former Soviet Union and the former CMEA did not, of course, have a general system-changing character. The Soviet Union already had lost its socialist character since the Twentieth Party Congress of the CPSU in February 1956. With the seizure of power by a new bourgeoisie from the central bureaucracy of the party, economy and state, the Soviet Union degenerated into a bureaucratic state-monopoly capitalism of a new type. The only thing it then had in common with socialism was the name.

The propaganda of the “end of socialism,” yes, even the “end of history,” was merely the triumphant cheering of the victorious Western powers which had defeated their social-imperialist rival in an unrelenting battle of competition. It mainly served to manipulate the oppressed and exploited all over the world who, in growing discontent, increasingly are looking for an alternative to capitalist society.

It was not socialism but the modern revisionism of Khrushchov, Brezhnev and Gorbachov that was defeated when the Soviet Union dissolved. This modern revisionism was the philosophical underpinning of the rule of the new bourgeoisie in the Soviet Union and of its aspirations to excel its arch-rival, the USA, and itself gain ascendancy as the world’s leading imperialist superpower.

The bankruptcy of the social-imperialist Soviet superpower was a manifestation of the rottenness and erosion of the imperialist world system in general and of Soviet-style bureaucratic state-monopoly capitalism in particular. This failure engendered a deep crisis of modern revisionism and its aligned parties. It opened the way for the international Marxist-Leninist and working-class movement to fundamentally assess this negative development and overcome it. In a protracted ideological-political process, the causes and effects of and the conditions for the revisionist degeneration and the restoration of capitalism in all formerly socialist countries, without exception, must be completely clarified. This must be accompanied by reconstituting the ranks of the Marxist-Leninists all over the world on the basis of creative conclusions for the future of the revolutionary liberation struggle and for a new upsurge of the international struggle for socialism/communism.

The reorganization of international production is a temporary culmination point in the internationalization of the capitalist mode of production. It introduced a new phase in the development of the imperialist world system.

Because several major obstacles to the free unfolding of the world market were eliminated, a tremendous leap in the development of the productive forces occurred at the end of the twentieth century. No country in the world could and can remain unaffected by it. An unprecedented process of cross-border concentration and centralization in industry, agriculture, trade and banking was set in motion and profoundly changed the economic and political landscape.

The new, unified world market, to which the international monopolies have relatively free access, radically calls into question all traditional and still mainly nationally organized structures of production and exchange and the corresponding forms of communication, competition and cooperation. However, the ruling powers do not even come close, on an international scale, to creating relations of production and a functioning political superstructure which correspond to this revolutionization of the forces of production.

For all the bourgeois songs of praise for the allegedly salutary “globalization,” the capitalist relations of power and property as the social basis of the changes were not touched, of course. On the contrary, the globally operating stratum of international finance capital revealed its predatory and inhuman essence with a clarity that can hardly be topped. More than ever it imposes its conditions on the individual economies and the non-monopolized bourgeoisie of all countries.

The national states were forced to throw their borders wide open and dispense with national protection measures against the international competition. Like swarms of locusts, the international monopolies invaded the neocolonially dependent economies of Asia, Africa and Latin America, appropriating their labor, raw material bases, state institutions, lucrative industries, and subjugating their markets in an unprecedented plundering raid. The USA as the biggest imperialist economic power profited most from this neocolonialist spoliation.

The reactionary governments of the neocolonial countries in most cases willingly opened their doors to imperialist finance capital. They hoped to get an appropriate share of the spoils from the sellout of their countries. But everywhere traditional industries had to give way to the international systems of production of highly productive monopoly industry or to the low-price trade streams from all over the world. And so these countries often were deprived of the last vestiges of economic sovereignty and independence.

Accompanied by the deceptive propaganda of neoliberalism, a worldwide process of privatization and monopolization of state-owned enterprises and government institutions set in, ruthlessly gorging often hard-won social gains which had long appeared to be secure.

At the same time the traditional role of the bourgeois state as central regulator of the national economy increasingly gives way to a system of worldwide competition between the national states for providing the best services to the international monopolies for the optimum expansion of their capital and a favorable political environment.

At the center of the reorganization of international production is the tendency towards the relative dissolution of the national-state organization of the relations of production and exchange, which is replaced by the international linking of the most progressive modes of production and exchange under the rule of international finance capital. A wave of cross-border mergers and takeovers began to restructure the corporate landscape. The competitive struggle between the international monopolies adopted the character of a mutual battle of annihilation.

At the same time, in the production places of the international monopolies and the special economic zones that go with them an international industrial proletariat emerged which in the main is integrated into a world-spanning production system.

The rapid development of telecommunications, in particular the Internet, brought international finance capital extraordinary growth in the second half of the 1990s. Fantastic speculative profits gushed out of the stock markets. This was accompanied by enormous leaps in the productivity of wage and salary earners as lean production was introduced in industry and administration and all-round flexibilization of working hours prevailed. This led the capitalist exploitation of human labor power into a new dimension. The international carousel of mergers turned ever faster until it became bogged down in a new world economic crisis at the start of the new millennium.

The reorganization of international production is a vain attempt to stay the destabilization of the imperialist world system by subjecting the entire world still more thoroughly to the dictates of international finance capital. It was unable to solve a single problem of the imperialist system, however. On the contrary, it has aggravated and deepened the system’s proneness to crisis. A new international structural crisis thus developed, becoming the pacemaker of a worldwide crisis of overproduction at the start of the third millennium. The crisis of the system of neocolonialism became even deeper. The global environmental crisis has intensified threateningly. Growing unemployment, underemployment and poverty, mass destruction of the livelihoods of small peasants, call the circumstances of life of the world’s masses into question. The chronic crisis of the bourgeois family system has become an international manifestation. The more or less pronounced economic convulsions of the national economies sharpen the latent political crisis in all countries. Even the previously relatively stable imperialist countries were not unaffected by this. Because the imperialist world system is increasingly coming off the hinges, the ruling powers seek safety more and more in expanding the state force apparatus and dismantling bourgeois-democratic rights and liberties.

The uneven development has initiated a new phase of the struggle for the redivision of the world among the largest international monopolies and the biggest imperialist powers. War and reaction is the central message of an outmoded social system.

What was once pretentiously heralded as a “New World Order” by US President George H.W. Bush has turned out to be a new international political disorder. This destructive and self-destructive process has assumed vast and general dimensions. The law-governed striving towards a fundamental solution must, of course, remain an unrealizable illusion within the narrow limits of capitalist society. A way out is imaginable ultimately only on an international scale and in the form of revolutionary transformation to a socialist societal system.

The imperialist world system is characterized by an allround intensification of all fundamental contradictions and growing instability. This justifies speaking of a new, fifth phase of the general crisis of capitalism since the beginning of the 1990s.

The development of the productive forces manifestly has initiated a new historical phase of transformation which finds visible expression in the higher development of the international class struggle. The exploited and oppressed all over the world do not want to sink in capitalist barbarism and are looking for a societal way out. In the imperialist centers, after long years of relative calm the class consciousness of the working class has reawakened on a broad front. In a series of countries neocolonially exploited and oppressed by imperialism, in Latin America in particular, the destabilization of society has progressed to an extent that a process of transnational revolutionary ferment has set in. A worldwide “anti-globalization,” environmental and peace movement is fighting the inhuman effects of the reorganization of international production and the political disorder accompanying it.

In the early 1990s, Willi Dickhut put forward the farsighted thesis that the response to the internationalization of capitalist production must be the international proletarian revolution. As basis thereof, the international proletariat must exercise its leading role in relation to the proletarian and nonproletarian masses in the struggle against imperialism.

It remains the task of the Marxist-Leninists to comprehensively analyze the new phenomena of the imperialist world system and to give answers to the arising ideological, political and organizational questions of the proletarian class struggle. It is crucial to discover those factors in the new social development that are an expression of the accelerated material preparation for a new society without exploitation and oppression and that pave the way for a new upsurge of the struggle for socialism/communism.

This book is meant as a contribution to the ideological and political discussion and unification within the international Marxist-Leninist and working-class movement. It is intended to show the flag and propagate the way of the international proletarian revolution. That includes the struggle of world outlooks against the main reformist, revisionist or adventurist theories and practices which the international proletariat must come to grips with in fulfilling its historical mission. Without gaining victory in this preparatory battle in the ideological-political field, it will be impossible, in practice, for the international proletarian revolution to win.

January 2003

Stefan Engel

1 Willi Dickhut (1904–1992). KPD functionary 1926–1966. Then prominently involved in building the MLPD. Under his direction, numbers 1 to 24 of the MLPD theoretical organ, Revolutionärer Weg (Revolutionary Way), were worked out.

I. Essential Changes in the Political Economy of Imperialism

1. The Building of International Monopolies

Foundations of the Formation of International Monopolies

In his work, Capital, Karl Marx analyzed the concentration and centralization of capital as a law of the capitalist mode of production. He understood concentration in the stricter sense to mean the growth of capital in the process of extended reproduction. This is “limited by the degree of increase of social wealth” or the growth of the capitals in the individual enterprises (Marx, Capital, Vol. I, p. 586). The process of centralization concerns the

concentration of capitals already formed, destruction of their individual independence, expropriation of capitalist by capitalist, transformation of many small into few large capitals. (ibid.)

This is effected by the merger or acquisition of enterprises. Centralization does not create any new capital; it merely means a shift in the control of existent capital between different owners of capital. It speeds up the general process of concentration of capital beyond the degree of increase of social wealth.

Concentration and centralization of capital constitute the basis for the building and development of monopolies as “a general and fundamental law of the present stage of development of capitalism” (“Imperialism, the Highest Stage of Capitalism,” Lenin, Collected Works, Vol. 22, p. 200). Regarding the process of the emergence of monopolies, the book, State-Monopoly Capitalism in the Federal Republic of Germany (FRG), by Willi Dickhut, states:

The concentration of capital had grown so much in the last century that it necessarily led to monopoly. This development took place under the influence of great advances in technology in the latter third of the nineteenth century, especially owing to the introduction of electric power, the invention of the dynamoelectric machine (generator) and the electric motor, the steam turbine and the internal-combustion engine. (Vol. I, p. 10)

Comprehensive processes of concentration and centralization as a rule are very closely associated with revolutionary changes in the forces of production, and often are required to accomplish these changes. Conversely, of course, technical innovations necessitate greater accumulation of new capital, which in turn accelerates the concentration process.

Following the economic crisis of 1900 to 1903, the monopolies became the basis of all economic life. Lenin realized that the establishment of dominant monopolies represented a higher stage in the development of capitalism:

Competition becomes transformed into monopoly. The result is immense progress in the socialisation of production. In particular, the process of technical invention and improvement becomes socialised. (“Imperialism, the Highest Stage of Capitalism,” Lenin, Collected Works, Vol. 22, p. 205; emphasis added)

The formation of monopolies must not be seen merely as an accumulation of capital. Rather, the formerly free market and free competition now were made subject to the dictatorship of the monopolies. Lenin pointed to this fact:

Domination, and the violence that is associated with it, such are the relationships that are typical of the “latest phase of capitalist development”; this is what inevitably had to result, and has resulted, from the formation of all-powerful economic monopolies. (ibid., p. 207)

The dominating position of the monopolies naturally changed the capitalist relations of production. Willi Dickhut explained

that the monopolies control the command posts of the entire economy of the advanced capitalist countries. All other capitalists of the nonmonopolized branches of the economy depend on the monopolies, either directly, as their component suppliers, or indirectly, through the monopolies’ price dictate. Others are bought up by the monopolies, and again others are driven into bankruptcy. In monopoly capitalism, it is no longer the interests of capitalism as a whole which are of decisive significance, but those of monopoly capital. (State-Monopoly Capitalism in the Federal Republic of Germany (FRG), Vol. I, p. 20)

Lenin aptly defined capitalism’s new stage of development as imperialism, which exhibits the following essential features:

Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed. (Lenin, Collected Works, Vol. 22, pp. 266–267)

From the beginning, capitalism possessed a tendency towards internationalization of production. Karl Marx wrote in his work, Capital:

Hand in hand with this centralisation, or this expropriation of many capitalists by few, develop, on an ever-extending scale, the co-operative form of the labour-process, the conscious technical application of science, the methodical cultivation of the soil, the transformation of the instruments of labour into instruments of labour only usable in common, the economising of all means of production by their use as means of production of combined, socialised labour, the entanglement of all peoples in the net of the world-market, and with this, the international character of the capitalistic régime. (Marx, Capital, Vol. I, pp. 714–715; emphasis added)

Despite all the destructive elements, Lenin saw in this law-governed development

the progressive historical work of capitalism, which destroys the age-old isolation and seclusion of systems of economy (and, consequently, the narrowness of intellectual and political life), and which links all countries of the world into a single economic whole. (Lenin, Collected Works, Vol. 3, p. 67)

With the emergence of imperialism this “historical work of capitalism” took on a new quality. Lenin described it in the following words in “Preface to N. Bukharin’s Pamphlet, Imperialism and the World Economy”:

At a definite stage in the development of exchange, at a definite stage in the growth of large-scale production, namely, at the stage which was attained towards the turn of the century, exchange so internationalised economic relations and capital, and large-scale production assumed such proportions that monopoly began to replace free competition. (Lenin, Collected Works, Vol. 22, p. 104; emphasis added)

Imperialism thus not only was defined by the transition from free competition to monopoly but also by internationalized economic relations and capital.

It was on this foundation that international cartels formed. They acquired a position of dominance not only in the home market of a country but also in the world market. Lenin recognized in the establishment of such cartels a new stage of world concentration of capital and production:

Capitalism long ago created a world market. As the export of capital increased, and as the foreign and colonial connections and “spheres of influence” of the big monopolist associations expanded in all ways, things “naturally” gravitated towards an international agreement among these associations, and towards the formation of international cartels.

This is a new stage of world concentration of capital and production, incomparably higher than the preceding stages. Let us see how this supermonopoly develops. (Lenin, Collected Works, Vol. 22, p. 246; emphasis added)

The Marxist-Leninist economic theorist Eugen Varga concerned himself from 1925 to 1928 chiefly with the study of the formation of international cartels. He wrote on the subject in the quarterly reports on economics and economic policy issued by the Communist International (Comintern). In the 1920s numerous international cartels arose in raw material production and heavy industry. But many failed because of insurmountable inter-imperialist contradictions and were dissolved again quickly. Accordingly, the formation of international monopolies prior to the Second World War was not yet a general phenomenon but remained a peculiarity of economic life. Varga drew the sobering conclusion:

If we analyze specific international trust entities, as, for instance, the international electrical trust (Trufina), they appear to have great significance: but if we compare the actual volume of capital held by each single bourgeoisie with the portion that is internationally interlocked, the latter part is still an insignificantly small fraction. (Internationale Pressekorrespondenz, No. 12, 1928, p. 223)

Multinational Corporations After the Second World War

A new stage in the formation of international monopolies asserted itself on the basis of the complete emergence of state-monopoly capitalism during the Second World War. The monopolies totally subordinated the state apparatus, and their organs fused with the organs of the state. They established their rule over all of society.

During the long economic boom from 1952 to 1970 the monopolies acquired the character of multinational corporations. Willi Dickhut summarized their character and significance:

Multinational corporations are enterprises which form daughter companies in several countries beyond their own national borders with the help of capital export (direct investment), the daughter companies working as production plants, assembly plants or sales companies, following the instructions of and being controlled by the mother company.

Market situation, low labor costs, existence of raw materials, short routes and cheap means of transportation, incentives for investment like elimination or reduction of taxes, exemption from or reduction of customs duties, low real estate prices, and so forth, with the state taking over the biggest part of the risk, decide which country will be chosen for setting up business. (State-Monopoly Capitalism in the Federal Republic of Germany (FRG), Vol. II, pp. 160–161)

There had been isolated instances of such multinational corporations before. But subsequent to the Second World War they became the characteristic feature of the world economy. As early as in 1969 the United Nations put their number at 7,300. Together with their 27,300 affiliates they already accounted then for about 25 percent of world trade and easily 10 percent of world production. Willi Dickhut summed up this new development in 1979:

The internationalization of production indicates a new phase in state-monopoly capitalism, an extension and at the same time a stronger concentration of the monopolies. (ibid., p. 171; emphasis added)

Due to quickening accumulation of capital by the monopolies and chronic stagnation of the growth rates in the domestic markets, the striving for export of capital became ever greater. As a result, the internationalization of capitalist production accelerated tremendously in the 1970s and 1980s. Willi Dickhut commented on this process:

The concentration of capital assumes vast international dimensions, the business activities of multinational corporations being guided by international criteria. There are cartel arrangements, mutual share holdings or even mergers among the international corporations, which divide the markets among themselves in order to heighten the domination over the world market. (ibid., p. 161; emphasis added)

In the 1990s the merger of international corporations into world market dominating supermonopolies came to the fore. The global market for mergers and takeovers experienced an unparalleled boom. Whereas in the six years from 1987 through 1992 the worldwide volume of all national and international mergers totaled US$2,763 billion, in the period from 1993 to 2000 it grew to an average US$1,768 billion per year. A record was established in 2000 with almost 37,000 mergers and takeovers having a total value of US$3,498 billion. The central factor was a sharp increase in cross-border jumbo mergers with volumes of more than US$1 billion. These alone accounted for US$866.2 billion in 2000.

In 2001 the UN body UNCTAD reported more than 65,000 multinational corporations with 850,000 affiliates. The number of parent corporations had risen rapidly to nine times that of 1969, while the number of affiliates even increased 31-fold. By the year 2000, multinational corporations were accounting for 70 percent of world trade and 80 percent of worldwide investment. As early as in 1997 they had raised their share of world production to over 25 percent. Much as Lenin revealed in the monopolies the “transition from capitalism to a higher system” (Lenin, Collected Works, Vol. 22, p. 266), so has the domination of capitalist world production by international supermonopolies led to a new, higher system. A comprehensive reorganization of international capitalist production has taken place.

International Production in the Focus of Monopoly Policy

In a conversation back in 1991, Willi Dickhut voiced the assessment “that imperialism today has changed from national production to international production and politics. The national aspect of imperialism has receded in relation to the international aspect” (memo dated October 7, 1991; emphasis added).

In contrast, Winfried Wolf, former PDS member of the federal parliament and leading German Trotskyite, asserts in his book, Fusionsfieber oder: Das große Fressen (Merger Fever or: The Big Gorge), that “the percentage which multinationals produce outside their home markets, compared with their total sales revenues, is still small” (pp. 110–111).

Of course, he has neither a concrete analysis nor evidence to offer to prove this completely unreal thesis. The fact is, in the year 2000 the stock of German direct investment abroad already reached 572 billion euros. German multinational corporations held shares in 31,722 companies abroad. They generated foreign sales of 1,253 billion euros. This was more than double the German exports in that year. Exports had still accounted for 34.2 percent of total revenues in Germany in 1999.

Wolf excels in stubborn ignorance if not with his use of facts:

The big corporate groups that dominate the world are indeed “transnational” insofar as they produce their products all over the world, their bosses are transnational rovers, often “armed” with several passports, and, as “men without a fatherland,” pursue their business of staff reduction, labor intensification, outsourcing, privatization, that is to say, profit maximization, for the greatest part transnationally, ignoring language barriers and national differences. But that is nothing new. (ibid., pp. 109–110)

Of course, it was not new for the monopolies “to produce their products all over the world.” This has been a central element in their evolution since they emerged. But the fact that these activities have become the principal aspect, that international production and the world market decisively influence the economic development of every country, and that the world economy today is dominated by international supermonopolies, all of this adds up to a qualitative change in the development of society.

From the development of the foreign activities of several leading international monopolies from Germany we can clearly see the great extent to which international production dominates today.

Relatively early, the top monopolies of the chemical industry, BASF, Bayer and Hoechst, became international monopolies operating mainly on the world market. Hoechst merged in 1999 with Rhône Poulenc to form Aventis, headquartered in Strasbourg (France).

Chart 1:Sales revenues and output of BASF, at home and abroad, 1980 through 2000 (in millions of euros)

In 1980 the foreign share of sales at BASF already came to 53.3 percent, and to 72.9 percent at Bayer. At BASF, already 46 percent of these international sales were attained through production abroad in 1980, and even 71.7 percent at Bayer. By 2000 the foreign sales of BASF had almost quadrupled to 28,049 million euros, and the portion of foreign sales accounted for by production abroad rose to 76 percent.

At Bayer, production abroad likewise grew from 1980 to 2000, just about tripling, and already accounted for over 80 percent of foreign sales and 69 percent of total output in the year 2000. At Bayer the majority of the workforce, 55 percent, was employed in foreign factories; at BASF it was 47.4 percent. So in the meantime BASF and Bayer produce mainly in their international production plants.

Chart 2:Sales revenues and output of Bayer, at home and abroad, 1980 through 2000 (in millions of euros)

In the electrical engineering industry this trend did not become so sharply apparent until between 1990 and 2000, in the process of the reorganization of international production.

Siemens already obtained 54.1 percent of its sales abroad in 1980; the figure increased to 75.6 percent in 2000. But these sales had been obtained mainly with exports. Siemens’ production abroad was no more than 21.8 percent in 1980. But that decisively changed in the 1990s, with the share of production abroad rising to 64.3 percent by the year 2000 and accounting for 85.1 percent of the international sales. Of Siemens’ investments, 57.6 percent already were going abroad in 2000. In that same year, 59.8 percent of all employees were at work in foreign production facilities, as opposed to just 31.7 percent in 1980.

Chart 3:Sales revenues and output of Siemens, at home and abroad, 1980 through 2000 (in millions of euros)

Bosch, too, boosted its international sales to 72 percent by 2000, and at Bosch, too, the dramatic leap in production abroad and number of foreign employees took place between 1990 and 2000. In 2000, 53.8 percent of Bosch employees were working abroad.

The big automobile monopolies also underwent decisive changes.

DaimlerChrysler, or to be precise, its predecessor Daimler-Benz, already obtained 55.4 percent of its sales abroad in 1980, but increased this share throughout the 1990s to 84 percent in 2000. Production abroad rose even more conspicuously. Whereas it only made up 14.7 percent of total output in 1980, it already accounted for 68.9 percent in 2000.

Chart 4:Sales revenues and output of DaimlerChrysler, at home and abroad, 1980 through 2000 (in millions of euros)

At Volkswagen (VW), in 1980 the share of foreign sales already came to 64.4 percent and increased just slowly to 70.6 percent by 2000.

Chart 5:Sales revenues and output of VW, at home and abroad, 1980 through 2000 (in millions of euros)

In the steel industry the foreign operations formerly were not so extensive. But in 1980 the foreign sales of Thyssen-Krupp (or to be precise, Thyssen alone at that time) already made up 43 percent and then increased from 47.2 percent in 1990 to 65 percent of total sales in 2000. Here again, the growth of production abroad made the difference. In 1980 the rate was still 14.7 percent, but already reached 46.1 percent in 2000, accounting for more than two thirds of sales abroad.

Chart 6:Sales revenues and output of ThyssenKrupp, at home and abroad, 1980 through 2000 (in millions of euros)

Deutsche Telekom and Deutsche Post were privatized in the course of the 1990s; they had taken up extensive foreign operations just a few years earlier. By the year 2000 Deutsche Telekom already obtained 19 percent of its revenues abroad, which were generated entirely by production abroad. 29.4 percent of the workforce was employed abroad as compared to 8.5 percent in 1996, when the Telekom went public.

At Deutsche Post the foreign revenues already came to 29.2 percent in 2000, 21.8 percentage points higher than in 1990; capital spending, with a foreign share of 57.4 percent, was clearly geared to further international expansion.

Chart 7:Growth of foreign sales of Telekom, 1996 through 2000 (in millions of euros)

The retailing giant Metro almost tripled its sales abroad between 1996 and 2000, from 7,107 million to 19,789 million euros.

Chart 8:Growth of foreign sales of Metro, 1996 through 2000 (in millions of euros)

Taken together these examples show how a number of leading German monopolies have turned into international monopolies for which domination of the world market is the uppermost principle. This trend could be observed in all imperialist countries. Of course, this had serious consequences for the process of production and reproduction, which today, in the main, no longer takes place within the framework of societies organized as national states but primarily functions on an international level.

But there is no room for new developments like this in the political economy of Winfried Wolf, and in his opinion they can never occur simply

because capital needs a state like a fish needs water – whether it be a world state or an integrated EU state. And since neither the one nor the other exists, but only national states, the global corporations are simply national corporations. (Fusionsfieber oder: Das große Fressen, p. 119)

This “reasoning” stands the Political Economy of Marxism smack on its head: since capital needs a state, and there are only, and there can only be, national states in the age of capitalism, according to Wolf’s logic there can only be national corporations. It is a truism that the rule of capitalism is bound to national states. But the revolutionary character of the productive forces as analyzed by Marx consists precisely in that they cannot accept the tight fetters placed upon them by the capitalist relations of production (which include, most prominently, the national-state organization of capital) and, ever anew, must call them into question.

Stalin drew attention to the fact that the changes in the relations of production

always begin with changes and development of the productive forces, and in the first place, with changes and development of the instruments of production. Productive forces are therefore the most mobile and revolutionary element of production. First the productive forces of society change and develop, and then, depending on these changes and in conformity with them, men’s relations of production, their economic relations, change. This, however, does not mean that the relations of production do not influence the development of the productive forces and that the latter are not dependent on the former. While their development is dependent on the development of the productive forces, the relations of production in their turn react upon the development of the productive forces, accelerating or retarding it. (History of the Communist Party of the Soviet Union (Bolsheviks), Short Course, pp. 121–122)

In reality, the sharpening contradiction between the national-state organization of capitalism and the internationally organized production and distribution, which break up all national frontiers, becomes an essential factor in the destabilization of imperialism. But the roots of Wolf’s loss of his sense of reality probably can be found right here: after all, the politics of the PDS, the “Party of Democratic Socialism,” start from a phase of stabilization of the capitalist world system which PDS reforms must help to shape.

Promptly, the wildest theories are hatched up according to the motto, what must not be, cannot be. These wild theories include the rejection of mergers since they allegedly are “not objectively necessary, let alone unstoppable processes of the growth of capital” (Fusionsfieber, p. 247). Having thus “disposed of” the law-governed process of centralization and concentration of capital in passing, Winfried Wolf draws the daredevil conclusion:

If projects of this sort fail or are prevented, the world will continue to go round in the same rhythm. The only things that will have changed is that there will be a few jobs more “at the bottom” and some influence less “at the top.” (ibid.)

Nothing goes round in this world without being driven by laws! The crucial motivating force behind monopolist activities is now the striving to achieve a world market dominating position in the international production system. The maximum profits economically necessary for the monopolies cannot be obtained in any other way today. Wolf may or may not approve of this. In any case, objectively, i.e., independent of the will of individuals, it necessitates extensive changes in the worldwide process of production and reproduction of capital, changes such as find expression in the cross-border mergers. The latter in turn enormously increase the hunger for capital and the aggressiveness with which the monopolies operate in the world market, but also the ruthlessness and cynicism with which they exploit wage workers in their factories or subject entire national economies of neocolonially dependent countries.

Trying to “secure” jobs by preventing mergers and to “limit” the influence of the monopolies, as Wolf proposes, is trite and nothing but a pipe dream! One might as well demand that the monopolies forgo maximizing profit. What may, at first glance, appear to be honorable, is, however, either incredibly naive or a deliberate deception of the masses. Of course, the working class can and must wage the struggle against the anti-labor consequences of the reorganization of capitalist production. But this struggle can never be more than a school of the class struggle. In order to abrogate the law-governed process of the reorganization of international capitalist production, the capitalist system of exploitation itself must be overcome.

2. The Battle of the International Monopolies for the World Market

By world market dominating international monopolies we mean monopolies or monopoly groups which occupy a dominant position in their industry, or parts thereof, in reference to their revenues, number of employees and market capitalization, and which, on this basis, can exercise decisive influence on the world market, the world market prices, and world production. To do that today, in general the control of a world market share of 10 to 20 percent for a product or product category is required. This can be achieved by way of the direct market share, or indirectly, by way of a frequently sheer impenetrable network of shareholdings, joint ventures, licenses, etc. Lenin wrote:

The big enterprises, and the banks in particular, not only completely absorb the small ones, but also “annex” them, subordinate them, bring them into their “own” group or “concern” (to use the technical term) by acquiring “holdings” in their capital, by purchasing or exchanging shares, by a system of credits, etc., etc. (“Imperialism, the Highest Stage of Capitalism,” Lenin, Collected Works, Vol. 22, p. 211)

The world market dominating international monopolies today include the 500 largest industrial, banking, insurance and trade monopolies in the world. Lenin called them “supermonopolies” because they occupy such a position among the national monopolies that they can subject the latter to their economic and political interests.

In 2000 the world’s 500 supermonopolies together obtained revenues of US$14 trillion. This is equal to about 45 percent – that is, almost half – of the world gross domestic product. An investigation of individual industries makes the world market dominating position of these supermonopolies yet clearer.

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