18.

2
GLOBALIZATION
Charles Wolfe
What is globalization?

■ Globalization refers to the process of integrating governments, cultures, and financial

markets through international trade into a single world market. (Openstax, 2014)
■ Globalization has also led to the development of global commodity chains, where
internationally integrated economic links connect workers and corporations for the
purpose of manufacture and marketing (Plahe, 2005).
International Trade

■ Societies in ancient Greece and Rome traded with other societies in Africa, the Middle
East, India, and China. Trade expanded further during the Islamic Golden Age and after
the rise of the Mongol Empire. The establishment of colonial empires after the voyages
of discovery by European countries meant that trade was going on all over the world. In
the nineteenth century, the Industrial Revolution led to even more trade of ever-
increasing amounts of goods. (Openstax, 2014)
The general law of capitalist accumulation

■ This perpetual movement of capital also spreads cost-reducing innovations across sectors
-establishing a law of profitability which forces all capitals to maximize profits , irrespective of
the political and social configuration in which they find themselves. Conversely, when
profitability falls, there is nothing that can be done to re-establish accumulation short of the
"slaughtering of capital values" and the "setting free of labor" which re-establish the conditions of
profitability. (Endnotes, 2010)
■ [E]xpansion ... is impossible without disposable human material, without an increase in the
number of workers, which must occur independently of the absolute growth of the population.
This increase is effected by the simple process that constantly "sets free" a part of the working
class; by methods which lessen the number of workers employed in proportion to the increase in
production. Modern industry's whole form of motion therefore depends on the constant
transformation of a part of the working population into unemployed or semi-employed hands.
(Marx, 1867)
■ As efficiency and innovations generalize across markets it becomes possible to produce the same
amount of value with far less workers and a lower production cost
Automation

■ InThe World Is Flat, Thomas Friedman (2005) argues that technology is a

driving force behind globalization, while the other forces of social change
(social institutions, population, environment) play comparatively minor
roles. (Openstax, 2014)
■ Computers not only have rapidly decreasing labor requirements
themselves (the microchips industry, restricted to only a few factories
world-wide, is incredibly mechanized), they also tend to reduce labor
requirements across all lines by rapidly increasing the level of
automation. (Endnotes, 2010)
Conditions for globalization and Capital
Accumulation
■ After 1973, the situation changed. Markets for manufactures were becoming saturated,
and it was increasingly the case that a few countries could provide the manufactures for
all of the world. Thus the resulting crisis of the capital-labor relation, which is to say, a
combined crisis of over-production and under-consumption, signaled by a global fall in
the rate of profit and issuing in a multiplication of forms of unemployment and
precarious employment.
Formal and Real Subsumption

■ Formal subsumption remains merely formal precisely in the sense that it does not involve capital's transformation of a given
labor process, but simply its taking hold of it. Capital can extract surplus value from the labor process simply as it is given
-with its given productivity of labor-but it can do so only insofar as it can extend the social working day beyond what must be
expended on necessary labor.
■ The subsumption of the labor process under the valorization process of capital becomes "real" insofar as capital does not
merely rest with the labor process as it is given, but steps beyond formal possession of that process to transform it in its own
image. Through technological innovations and other alterations in the labor process, capital is able to increase the
productivity of labor. Since higher productivity means that less labor is required to produce the goods which the working
class consumes, capital thereby reduces the portion of the social working day devoted to necessary labor, and concomitantly
increases that devoted to surplus labor.
■ “As capital's simple taking hold of the labor process, the formal subsumption of labor under capital can be understood as the
transition to the capitalist mode of production: it is "the subsumption under capital of a mode of labor already developed
before the emergence of the capital relation ". (Marx, 1864) Marx describes the transformation of slave, peasant, guild and
handicraft forms of production into capitalist production -as producers associated with these forms were transformed into
wage-laborers -as a process of formal subsumption. It is only on the basis of this formal subsumption that real subsumption
can proceed historically. (Endnotes, 2010)
Surplus population

■ Over the last 40 years average GDP has grown more and more slowly on a cycle-by-
cycle basis in the US and Europe, with only one exception in the US in the late 90s,
while real wages have stagnated, and workers have increasingly relied on credit to
maintain their living standards.
■ Just as de-industrialisation in the high-GDP countries entails both the exit from
manufacturing and the failure of services to take its place, so also the explosive growth
of slums in the low GDP countries entails both the exit from the countryside and the
failure of industry to absorb the rural surplus.
References

■ Endnotes. (2010). Misery and the Value Form. Endnotes vol. 2.

■ Marx, K. (1864). Results of the Direct Production Process.

■ Marx, K. (1867). Capital. Volume I: The Process of Production of Capital.

■ Marx, K. (1894). Capital, Volume III.

■ Openstax, H. G.-R. (2014). Introduction to Sociology 2e.

■ Plahe, J. (2005). The Global Commodity Chain Approach (GCC) Approach and the Organizational Transformation of Agriculture. Retrieved from
http://www.buseco.monash.edu.au/mgt/research/working-papers/2005/wp63-05.pdf