Globalization of Capital and the Theory of Imperialism
I believe that the following would be accepted more or less as constituting certain 'stylized facts^ about the capitalist world economy of today.
First, there is a tremendous globalization of capital in the form of finance, so much so that trade-related financial flows account for just about two per cent of total cross-border financial flows.
Secondly, notwithstanding sharp increases in the DFI flows internationally, their total magnitude still remains comparatively small; they still have not broken free from the situation where the North invests largely within the -North; and even within the South they tend to come only to those countries which have high levels of domestic savings anyway. In short, a break with the historical pattern of DFI flows highlighted by Nurkse and others to a point where capital-in-production is so mobile that merely removing barriers to its flow would automatically shift it to low-wage countries, is nowhere in sight. To put these first two points sharply, what we have witnessed so far is globalization ofcapital-as-finance but not globalisation of capital-in-production.
Thirdly, this tremendous financial fluidity has undermined the ability of the nation-State to intervene in the economy to maintain high levels of activity. This explains to my mind not only the high levels of unemployment prevailing in the capitalist world, but also the crisis which afflicts all 'isms' which invoked an interventionist State, viz. Keynesianism, Social Democracy, Socialism, Third World Nationalism, and even Communism.
Fourthly, notwithstanding differences among the advanced capitalist countries on numerous issues, and their rivalries in matters of trade, the present conjuncture is marked on the whole by a far greater degree of unity among them than has been the case over the last hundred years (except the post-war situation when there was a sort of artificial unity imposed by U.S. 'superimperialism' upon the vanquished and the rest of the victors of the war alike). This unity in turn owes not a little to the fluidity of finance which has attenuated the scope for the activities of the nation-State.
* Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi.
Social Scientist, Vol. 24, Nos. 11-12, November-December 1996