Globalization and Exchange

Globalization predates capitalism. Nevertheless, it has occasionally been argued that contemporary globalization is no more than the elaboration of the original chance exchange between two communities. In every standard economics textbook published since the eighteenth century, the simple exchange is counted the foundation for globalization. There are gains in trade.

Today critics of globalization, such as right wing white nationalist Steve Bannon, are eager to highlight not the gains, but the costs, from trade. Whenever an individual exchanges a good common in her community for a good rare in hers but common in another community, it is not only a foreign, alien, good that enters her community. In the exchange, she ties the fortunes of her community to the fortunes of the other. And, to this degree, she weds a foreign system of social production to the system of social production in her own community. Each community sacrifices some small quantum of its sovereignty. Each community joins a larger, more abstract, more universal, homogenized community. Globalization is predicated upon exchange.

Right wing white nationalists feel that exchange dilutes their racial and cultural pool. They feel there is a net loss, not gain, in exchange. In exchange, communities lose their particularity, their unique identity.

But right wing white nationalists are not the only political actors to advance this argument. Some individuals on the left take Karl Marx to have advanced a similar argument in volume 1 of Capital, part one, chapter two:

The exchange of commodities begins where communities have their boundaries, at their points of contact with other communities, or with members of the latter. However, as soon as products have become commodities in the external relations of a community, they also, by reaction, become commodities in the internal life of the community. Their quantitative exchange-relation is at first determined purely by chance. They become exchangeable through the mutual desire of their owners to alienate them. In the meantime, the need for others’ objects of utility gradually establishes itself. The constant repetition of exchange makes it a normal social process.

Capital 1.1.2

And we are off to the races, so to speak. That is to say, from the first chance exchange we see an unbroken line leading directly to the universal equivalent (whatever that might be) and, from there, to abstract value.

In the course of time, therefore, at least some part of the products must be produced intentionally for the purpose of exchange. From that moment the distinction between the usefulness of things for direct consumption and their usefulness in exchange becomes firmly established. Their use-value becomes distinguished from their exchange-value. On the other hand, the quantitative proportion in which the things are exchangeable becomes dependent on their production itself.

The particular kind of commodity to which it sticks is at first a matter of accident. Nevertheless there are two circumstances which are by and large decisive. The money-form comes to be attached either to the most important articles of exchange from outside, which are in fact the primitive and spontaneous forms of manifestation of the exchange-value of local products, or to the object of utility which forms the chief element of. indigenous alienable wealth, for example cattle.

It could therefore be argued that the Marxian critique of globalization begins not with labor, but with exchange; and not with exchange within a discrete community, but with exchange between communities. In other words, the exchange of commodities between communities initiates a dialectic that “bursts its local bonds . . . [and] expands more and more into the material embodiment of human labour as such.”

Even were Marx himself not critical of globalization (and there is no evidence that he was), contemporary Marxian theorists cannot ignore the implications of Marx’s analysis for “globalization and its discontents.” Is there not, at the very least, an implicit criticism of the destruction of “local bonds” and the impending transition into a “material embodiment of human labor as such”?

I actually don’t think so. First, insofar as Marx’s analysis contemplates working through the contradictions immanent to capitalism, it is not likely that in this instance he was contemplating a Rousseauean/Frankfurtschule restoration of antediluvian isolation. More importantly, if Marx grounded his dialectic of history in the production function — i.e., in the difference between any good’s material form of appearance and its abstract value — then it would be odd for him to revert in this instance to what could only be an uncritical reproduction of GWF Hegel’s Logic. Which is not to say that communities might not generate out of their own practical regimes certain kinds of directional dynamics not grounded in the commodity form’s immanent dialectic. Such directional dynamics, however, would be socially and historically specific, perhaps limited even to single communities. What distinguishes the dialectic immanent to the commodity from these others is the two-fold commodity form itself, which will not make its appearance, at the very earliest, before the fourteenth century.

Marx’s analysis in 1.1.2 points to transient, purely episodic, ephemeral encounters. “The universal equivalent form comes and goes with the momentary social contacts which call it into existence. It is transiently attached to this or that commodity in alternation.” Which distinguishes it qualitatively from capital. Capital acquires its universal, global, validity not in the act of exchange, but in the act of measuring the value of human action marginally, i.e. measuring the marginal product of labor as ΔQ [a change in some quantity] divided by ΔL or ΔK [a change in labor or capital]. Once measured marginally, as the ratio of a change in quantity divided by a change in labor and/or capital, investors are henceforth compelled to maintain or increase that ratio. This compulsion will bring them to cross every boundary, every border, raze every mountain top, fell every tree, and excavate every valley.

Gains in trade, or gains through exchange, therefore, does not merely indicate, as Carl Menger believed, that a good is valued more by one party than another. It means, first, that both parties value the goods they are exchanging in terms of the same abstract substance. But, second, unless the exchange is episodic, ephemeral, and transient, it also means that the communities are members of a social formation that includes both communities. Finally, in commodity societies, the abstract substance in which all goods are valued is the socially generalized, average of the aggregate cost of abstract labor: the cost of bringing any value-bearing good to market and placing it in relationship to other value-bearing goods (or the universal equivalent itself) with which it might be exchanged.

When right wing white nationalists invoke protectionism on goods and labor, they therefore do no more than change the rules by which investors will fleece consumers. A barrier on the southern border (for labor, not capital) will increase the marginal value of labor, which, in this case, is the constrained commodity. It will therefore increase the cost of producing the good dependent on that constrained commodity. Investors are perfectly happy to take advantage of the higher prices. But, even should we throw the borders open, flooding the market with lower-priced labor, lowering prices on goods produced by this labor, the increased volume of goods and lower labor costs will, in this case, attract investors to the higher returns. Protectionism is one way to generate returns. Free trade is another. In neither case, however, is the relationship between abstract value and its material form of appearance altered in any way.

At least where globalization and exchange are concerned, the real problem with extreme right wing white nationalism (and its left-wing cousins) is that both mistake surface forms of appearance for underlying social logics. Under capitalism, investors are as well equipped to value local idiosyncrasies as they are international law. They are masters of the art of arbitrage. Exchanges at borders often yield far higher returns for investors than exchanges where there are no borders. Borders have value. Which is why the one place working families need to go, is the one place extreme right wing nationalism will not take them. Working families need policymakers to decouple value from human action; they need policymakers to restore the public character of wealth: res publica.

To do so would not resolve the problems of globalization. But it would resolve the problem of homogenization and universalization. How? By eliminating the substance that all goods hold in common under capitalism. Once the values of goods are measured not in terms of their marginal product, but in terms of their satisfaction of human desire and need, we could then live into the highly differentiated world that capitalism promises, but never delivers.

Exchange must have appeared very early on the Savanah plains. Capitalism appeared in the fourteenth century at the earliest. We need ways to differentiate between what has happened to human beings over the past 2.4M years and what has happened to them in the last 500 years. Exchange is not the problem. Globalization is a problem, but it is not unique to capitalism. Capitalism is the problem.

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