US is capable of acting as a surrogate global State

By Prabhat Patnaik

Political Affairs 09/14/2004

"Globalisation" is the term under which imperialism presents itself in its current phase. The term however is a misnomer. The mistake here lies in confusing the mobility of finance for the mobility of productive capital. There are two very distinct hurdles to the pursuit of employment -promoting policies by States in the current epoch.

• The first is the fact that finance capital opposes such policies; and
• the second is the fact that while the States are nation- States, finance capital in today’s world is international finance capital.

If instead of nation-States there was a global State then the second of these reasons would have ceased to be operative. Since there is no actual global State it would have to be a surrogate global State that can at all contemplate pursuing employment-promoting policies for the world economy as a whole.

The State of the leading capitalist country, the US, though it is capable of acting as such a surrogate global State, and does play this role in certain respect, is nonetheless too much of a nation-State to take on the employment-promoting role of a possible global-State. It would therefore have to be a whole group of nation-States acting in concert that can act as a surrogate global State for purposes of employment-promotion. But even if such a group of nation-States could be persuaded to act in concert to promote global employment, it would still have to confront the opposition of globalised finance capital, i.e. the first hurdle mentioned above. It is not surprising therefore that globalised finance capital uses a whole gamut of weapons to prevent employment-promoting policies, by an entire group of nation-States acting in concert, from taking effect. And one important weapon is to shift the focus to the so-called "export of jobs" to the third world.

In India the peasantry had been insulated against a decline in its terms of trade, arising from factors such as those mentioned above, because of the system of public procurement and distribution that had been in place for quite some time. But with liberalisation this system became substantively inoperative. In short, there is a fundamental contradiction between the adoption of neo-liberal policies and the preservation of democratic institutions. New Age is a publication of the Communist Party of India.