The current global economic system is arguably experiencing the worst crisis in its 500 year history. Professor William I. Robinson seriously argued that the existing world economic system has experienced a profound restructuring through globalisation over the past few decades and has been transformed in ways that make it fundamentally distinct from its earlier incarnations. Similarly, the current crisis exhibits features that set it apart from earlier crises of the system and raise the stakes for humanity.
To avert the disastrous outcomes, it is imperative to understand both the nature of the new global capitalism and the nature of its crisis. Analysis of globalisation provides a template for probing a wide range of social, political, cultural and ideological processes in this 21st century. According toProfessor William I. Robinson, following Marx, we want to focus on the internal dynamics of capitalism to understand crisis. And following the global capitalism perspective, we want to see how capitalism has qualitatively evolved in recent decades.
The system-wide crisis people face is not a repeat of earlier such episodes such as that of the the 1930s or the 1970s precisely because capitalism is fundamentally different in the 21st century. Globalisation constitutes a qualitatively new epoch in the ongoing and open-ended evolution of world capitalism, marked by a number of qualitative shifts in the capitalist system and by novel articulations of social power. Professor William I. Robinson highlight four aspects unique to this epoch.
First is the rise of truly transnational capital and a new global production and financial system into which all nations and much of humanity has been integrated, either directly or indirectly. We have gone from a world economy, in which countries and regions were linked to each other via trade and financial flows in an integrated international market, to a global economy, in which nations are linked to each more organically through the trans-nationalisation of the production process, of finance, and of the circuits of capital accumulation. No single nation-state can remain insulated from the global economy or prevent the penetration of the social, political, and cultural superstructure of global capitalism.
Second is the rise of a Transnational Capitalist Class, a class group that has drawn in contingents from most countries around the world, North and South, and has attempted to position itself as a global ruling class. This Transnational Capitalist Class is the hegemonic fraction of capital on a world scale.
Third is the rise of Transnational State apparatuses. The Transnational State is constituted as a loose network made up of trans and supranational organisations together with national states. It functions to organise the conditions for transnational accumulation. The Transnational Capitalist Class attempts to organise and institutionally exercise its class power through Transnational State apparatuses.
Fourth are novel relations of inequality, domination and exploitation in global society, including an increasing importance of transnational social and class inequalities relative to North-South inequalities.
Most commentators on the contemporary crisis refer to the Great Recession of 2008 and its aftermath. Yet the causal origins of global crisis are to be found in over-accumulation and also in contradictions of state power, or in what Marxists call the internal contradictions of the capitalist system. Moreover, because the system is now global, crisis in any one place tends to represent crisis for the system as a whole.
The system cannot expand because the marginalisation of a significant portion of humanity from direct productive participation, the downward pressure on wages and popular consumption worldwide, and the polarisation of income, has reduced the ability of the world market to absorb world output. At the same time, given the particular configuration of social and class forces and the correlation of these forces worldwide, national states are hard-pressed to regulate trans-national circuits of accumulation and offset the explosive contradictions built into the system.
Is this crisis cyclical, structural, or systemic? Cyclical crises are recurrent to capitalism about once every 10 years and involve recessions that act as self-correcting mechanisms without any major restructuring of the system. The recessions of the early 1980s, the early 1990s, and of 2001 were cyclical crises. In contrast, the 2008 crisis signaled the slide into a structural crisis. Structural crises reflect deeper contradictions that can only be resolved by a major restructuring of the system. The structural crisis of the 1970s was resolved through globalisation.
Prior to that, the structural crisis of the 1930s was resolved through the creation of a new model of redistributive capitalism, and prior to that the structural crisis of the 1870s resulted in the development of corporate capitalism. A systemic crisis involves the replacement of a system by an entirely new system or by an outright collapse. A structural crisis opens up the possibility for a systemic crisis.
But if it actually snowballs into a systemic crisis in this case, if it gives way either to capitalism being superseded or to a breakdown of global civilisation is not predetermined and depends entirely on the response of social and political forces to the crisis and on historical contingencies that are not easy to forecast. This is an historic moment of extreme uncertainty, in which collective responses from distinct social and class forces to the crisis are in great flux.
Hence the concept of global crisis is broader than financial. There are multiple and mutually constitutive dimensions economic, social, political, cultural, ideological and ecological, not to mention the existential crisis of our consciousness, values and very being. There is a crisis of social polarisation, that is, of social reproduction. The system cannot meet the needs or assure the survival of millions of people, perhaps a majority of humanity. There are crises of state legitimacy and political authority, or of hegemony and domination.
National states face spiralling crises of legitimacy as they fail to meet the social grievances of local working and popular classes experiencing downward mobility, un- employment, heightened insecurity and greater hardships. The legitimacy of the system has increasingly been called into question by millions, perhaps even billions, of people around the world, and is facing expanded counter-hegemonic challenges. Global elites have been unable counter this erosion of the systems authority in the face of world wide pressures for a global moral economy.
And a canopy that envelops all these dimensions is a crisis of sustainability rooted in an ecological holocaust that has already begun, expressed in climate change and the impending collapse of centralised agricultural systems in several regions of the world, among other indicators. By a crisis of humanity it mean a crisis that is approaching systemic proportions, threatening the ability of billions of people to survive, and raising the specter of a collapse of world civilisation and degeneration into a new “Dark Ages”.