Source: redchinacn.net
John Bellamy Foster is a professor of sociology at the University of Oregon, US and also the editor of Monthly Review. His writings focus on the political economy of capitalism, the economic crisis, the ecological crisis, and Marxist theories. He has published over one hundred articles, written and edited over a dozen books, given over one hundred conference papers and invited to speak at lectures all around the world. He has received numerous awards and honors. His work has been published in at least twenty-five languages.
On October 20th, 2013，Professor Foster made a keynote speech, Marx and the Rift in the "Universal Metabolism of Nature": Capitalism and the Development of Ecological Crisis, for an international conference, Marx2013, in Stockholm, Sweden. This conference was organised by several leading Marxist and radical theoretical study groups, associations and periodicals in Sweden.
It is our great honor to have this opportunity to briefly interview Professor John B. Foster after the conference. During the interview, Professor Foster made a deep analysis of the current economic crisis, ecological crisis, imperialism, financialisation and globalisation, particular regarding China and the US. We believe that this interview will be very helpful for leftist and radical Chinese youths to understand the crisis, the system, the world and the problems we are facing.
The following texts were edited according to the live interview recording.
Q1: In your recent paper, The Epochal Crisis, while you compared the average annual per capita GDP between the developing countries and G7 (the US, Japan, German, France, the UK, Italy and Canada), you excluded China from the developing countries. Why did you make this decision?
I think it had to do with the UNCTAD data set we were using, which is not an uncommon practice. China was treated as an extreme outlier and was excluded from the data or set aside in some way. China is a special case. And economically it is quite different compared with India and the other developing countries. China has kept a very high, sometimes two-digit, annual economic growth rate going for the last three decades and its economic model and circumstances are very different from that most other countries. Also the Chinese economy had gone through a vast change in its economic model over the period being looked at so that the data was not strictly comparable between one period and another where it was concerned. I don’t think the inclusion of China would have altered the results much but it would have skewed them.
Q2: Some intellectuals, as well as governments in China and other developing countries, have argued or at least implied that the current model of economic development and neo-liberal policies are necessary for the developing countries to pull hundreds of millions of people out from poverty. For example, in China today there are still approximately 150 million people with a living standard below USD1.25 per day and around 500 million people living on less than USD2 per day, and so we need to put economic development first, and the ecological and environment issues are only side issues.
Sure, we have to support economic development in the poor countries, but it does not have to be the same as the economic development we’ve had within the last few decades. Poor people need to change their life, but the questions are always what kind of development is required and who benefits from the development.
The current development is very inefficient in terms of meeting peoples’ needs and ecologically destructive. We need a form of sustainable development to emerge in poor countries.
Actually, while the rich countries are still the main causes behind climate change and global ecological devastation in general, not to mention the global economic problems, those people in developing countries are really the ones who are most affected. Look at Haiti for example, how can they benefit from the current path of economic development?
Simple income figures cannot explain the reality of life for most people in the global South. The global poverty line is those below $2 a day (U.S). But this is not a very good measure. Peasants who have land may live with monetary incomes well below this but nevertheless be better off than the urban poor living on $2 a day. The access of means of production like land is very important. Actually the so-called poverty line, USD2 per day, is set up by the World Bank to justify and advocate their policies of depeasantization throughout the world.
The drive for profits causes massive economic waste and distortion of the exporting economy, and it is necessary to think about how to respond to the needs of the society and the environment. For example, regarding the land reform at the end of 1970s and early 1980s in China, I will say that this kind of policy changes was in many ways destructive. Today in China production is heavily dependent on 150 million people in the floating population (migrant workers) who work in extremely exploitative conditions.
The current economic development model in China creates an extraordinary wealth gap between the rich and the poor, and also massive environmental destruction. It leads to a distorted society, unrelated development and dramatic inequality for Chinese people. I will say that current economic policies and the development model in China are not sustainable.
Q3: On the 20th of September, the Financial Times published an article on perspectives of China with the headline ‘How long can the Communist party survive in China?’ Just a few days after that, the website of redchinacn.net, a prominent Marxist-Leninist-Maoist Chinese website published an editorial, How long can capitalism with Chinese characteristics survive?” The two articles both predicted a coming social and ecological crisis in China within the next few years from different angles. What do you think about the future of China?
This is also a big question. It is not easy to simply predict outcomes in China of course. China is still huge economy, and the government has control of some key industries and economic policies, including power over the banking industry. Compared with the United States, the Chinese government has a much more stronger direct influence on the economy and its development, and could characterized as semi-planned.
The big question is how long they could keep the Chinese economy going at this heated pace. The high growth rates can’t continue with out encouraging massive economic instability and environmental destruction.
One cannot exclude the possibility that, in an uncertain future, there will be a mass social upheaval in China.
Q4: In 1894, F. Engels wrote an letter to Friedrich A Sorge and stated, “...As soon as Chinese competition sets in on a mass scale, it will rapidly bring things to a head in your country and over here, and thus the conquest of China by capitalism will at the same time furnish the impulse for the overthrow of capitalism in Europe and America...” So, is the current capitalist development in China directly linked with the recent financial crisis? And does the rise of emerging economies, such as China and India, in the long run imply a global shift in the international strategic pattern?
Actually Marx also made similar expressions. No, the current financial crisis is not directly linked with the capitalist development in China, at least it is not a cause. Global economic shift and global labour arbitrage is a long-standing phenomenon. In the world capitalist market, industries always relocate to low wage countries and enhance related exports there.
In term of a shift of production, the effects are not entirely clear and quite complex. Because we are talking about global mass production, it does not necessarily matter where the production really takes place. What matters is how it organises more and more on the global basis, who gets the profits and who gets value added from the process.
Thus, for example currently iPhones are being produced in China. The whole process of production mainly occurs in China, but the western capitalists get high value added, while China only gets 3% of the whole revenue.
We are talking about countries, but if we look at the 500 largest global corporations excluding the state-owned enterprises, the 500 largest corporations account for 30-40% of global revenue. They are incredibly powerful and control most of the strategic technologies. And almost all of them are still based in the rich countries.
The Chinese economy has surpassed that of Japan and Germany, but in terms of the control of technologies and the benefits of production these are still being monopolized by the global north. Some countries, like China and India, grow rapidly, but the shift of production locations has not resulted in a similar kind of shift in the global power balance.
Q5: The former chief economist of the World Bank, Professor Justin Yifu Lin, puts the blame for the financial crisis on the US in his latest book, Against the Consensus: Reflections on the Great Recession, and several related speeches. He believes that the problem is the lack of regulation of financial markets in the US, and the global role of the US dollar makes the crisis global. Since the US has to borrow money to finance the wars in Afghanistan and Iraq, this has also worsened the problem. Do you think that the US war policy is linked with the financial crisis?
It is part of what makes the system work. In this sense he is right, but he only looks at one aspect of the problem.
The US dollar is still the hegemonic currency. And the US is still able to centrally print money in order to maintain its imperialist policies and military presence abroad. All are derived from its global role and part of its hegemonic function. That has effects on the US debt and the finance of the entire world.
China has been expanding on the basis of the export to the US and the rest of the global north. Without that demand created by those means Q5: The former chief economist of the World Bank, Professor Justin Yifu Lin, puts the blame for the financial crisis on the US in his latest book, Against the Consensus: Reflections on the Great Recession, and several related speeches. He believes that the problem is the lack of regulation of financial markets in the US, and the global role of the US dollar makes the crisis global. Since the US has to borrow money to finance the wars in Afghanistan and Iraq, this has also worsened the problem. Do you think that the US war policy is linked with the financial crisis?
It is part of what makes the system work. In this sense he is right, but he only looks at one aspect of the problem.
The US dollar is still the hegemonic currency. And the US is still able to centrally print money in order to maintain its imperialist policies and military presence abroad. All are derived from its global role and part of its hegemonic function. That has effects on the US debt and the finance of the entire world.
China has been expanding on the basis of the export to the US and the rest of the global north. Without that demand created by those means, China would find it far more difficult be able to develop rapidly.
China has trillions of dollars of reserves in its hands, so it is naturally worried about the hegemony of the dollar. And China would like to have a bigger financial role within the global economy, which means the US dollar has to be moved away from the central position it has today.
But China, at least the current Chinese economic development model, has also been based on this dollar-centric system. So in a sense, the U.S. and Chinese economies are tied together. In some way, you can say it is one system. You cannot say that we like this part of it, but not that part.
The US tolls trillions of dollars from China as its foreign reserve. If you owe a million dollars to another country, you are in trouble maybe, but if you owe trillions of dollars to another country, they are in trouble. Thus, China is naturally worried about the stability of the dollar and this has, in a sense, keep China in line with the US and its economic policies.
Q6: What do you think about the real causes of the crisis? How is it linked with the US military and globalisation?
In my paper, The Epochal Crisis in the October 2013 issue of Monthly Review, I explained that there are three mutually reinforcing trends: monopolization, stagnation and financialisation, as causes for the current crisis.
The global financial crisis came to be widely recognized after the collapse of Lehman Brothers in 2008. However, it is pretty clear that the Western rich economies have stagnated for decades. In the US, Canada, Europe and Japan, all these countries’ real economic growth rates have been slowing down. The growth rates in the 1970s were below those of the 1960s, 1980s below 1970s, so on and so on; the growth rate in the first decade of this century is slower than that of the 1990s. We do not know about this current decade yet, but it appears slower still. The economy is slowing down on the basis of stagnation of investment. In our Marxist interpretation it is the problem of over-accumulation. This situation has been developing over a long period of time.
The strategy of profit maximization has monopolized all corporations. As I mentioned before, the top 500 global corporations in 2006 (before the crisis) accounted for 30% - 40% of the global revenue. In the US, the top 200 corporations accounted for approximate 30% of gross profit nationally.
Now, on one hand the advanced economies of the West can obtain most value added even without production, since basically monopoly powers still control technologies, global production systems and markets. On the other hand, this grabbing of the economic surplus of much of the world does not really help developed economies to grow rapidly, because of over-accumulation. The giant firms cannot re-invest very easily in the developed economies. Wages and salaries of working people in the Western economies are paralyzed because of globalisation in many ways, such as internationalisation of production, or they might call it global labour arbitrage; and indeed labor share of income is falling simultaneously in most countries of the world.
The only way to lift the US economy out of stagnation in the 1960s was military spending, such as Cold War military spending, and spending on the Korea War and Vietnam War and so on. The US maintained a high level of military spending, as high as possible, during these wars. The military spending had not been enough to maintain the system at the beginning of the 1980s. The financialisation of the system becomes responsible for economic stagnation. The surplus capital was being invested in and subsequently flooded into the financial sector, a phenomenon of over-accumulation.
The financial sector also created all kinds of financial instruments, such as derivatives, junk bonds and so on. The debt structure of the economy, particularly the debt of private non-financial and financial corporations, and that of households (now less evident) has been growing for decades, but the underlying economy is stagnant.
This means that you have financial bubbles, which periodically bursts. The US Federal Reserve and other countries’ central banks have the responsibility and the resource to bail out the financial sector, but it’s becoming harder and harder for them to manage and control this system by themselves.
Although growth has slowed this has not helped the environment much, because as the economy slows down the main forms of ecological damage do not recede proportionately. The system is trying to find a way to pull the economy from stagnation, and one of the things that it does in such circumstances is encourage all sorts of waste and relax environmental regulations. This worsens environmental problems.
Q7: What do you think about the inter-relation between imperialist powers, the ecological crisis and the global power shift?
Imperialism is a traditional term. We today can also refer to ecological imperialism and unequal ecological exchanges. This has been known for a long time but never analyzed in a proper way. And other imperialist problems are still there, such as military dominance, neo-colonialism and economic unequal exchanges.
Obviously, if a country as big as China has rapid growth, it must have global environmental effects. But today the main environmental problem, I think, is still concentrated in the rich countries. It raises the question about the really wealthy countries, whether they go beyond the current level to promote even more economic waste rather than to meet peoples’ real needs and it could wage destruction on all the economies.
The problems are different and the effects are different. For instance, the difference in wages between the developed countries and developing countries is more than the difference in their productivities. The more advanced globalising countries rob the global South’s resources and send the wastes to the global south. A child born in the US uses maybe 80% more per capita in terms of resources than somebody born in India or South Asia.
The US military expenditure is about as much as the rest of the world as a whole. The military needs to show its muscle. They see the military as a way to keep geo-political power and to control fossil fuels with multi-national corporations. The wars and interventions in Persian Gulf, Central Asia, and North Africa are mainly about the geopolitics of oil. As long as the US ensures it keeps control of main oil regions globally, particularly the Persian Gulf and East Africa, it has the power to keep a control on the flow of oil.
The US, as a global imperial power, cannot really separate the power of dollar from its imperialist polices. The fact that oil is priced in dollars is very important financially and strategically for the US imperialist power. Oil is sold in dollar denominations, and while it could also be sold in some other currencies, today countries have to keep US dollars as a reserve currency for the oil trade. In addition, both its financialisation strategies and environmental strategies are mainly designed to keep the fossil fuels flowing, and these cannot be separated from considerations of oil.
The US often thinks that it can intervene alone, but there are some shifts in the US strategy. The US is trying to co-operate with Europe and Japan to operate as a unit to control the globe.
Q8: What are your views on “peak oil” theories and the new wave of unconventional oil? Could the “peak oil” help reduce carbon emissions?
I have written several pieces on this issue, and the most recent article is ‘The Fossil-Fuels War’ published in Monthly Review.
People believed that we were approaching the peak of conventional oil, sometimes it is also called “cheap oil”. It is true that conventional crude oil is running out. But there are all sorts of unconventional, more expensive fossil fuels to replace it.
James Hansen, a leading US climate scientist, argues that if we could avoid burning coal and unconventional fossil fuel, such as tar sands oil, ultra deep sea oil, cracking oil and gas, it means that we could stabilize the level of carbon emissions below the trillion ton cap and therefore 2 degrees of global temperature increase.
If we bring in unconventional fossil fuels, many of which are dirtier than conventional fossil fuels and more expensive than burning coal, nobody knows what is going to happen. Between now and 2040 the world will hit the turning point, the exploitation of unconventional fossil fuels will make climate changes irreversible and out of human control.
Thus, how to prevent unconventional oil is becoming a major battle in the US, e.g. the recent Keystone XL pipeline struggles.
Q9: Could you tell us more about the details of the Keystone XL pipeline struggle?
The Keystone XL pipeline extends from Alberta, Canada to the refineries on the southern coasts of Texas with two separate legs. It is about moving the tar sands oil to the Gulf Coast of the U.S. where it can be refined and sold internationally.
In the US, at the moment the leading part of the movement is focusing on the northern part of the pipeline, which will cross the border between Canada and the US, and which has not been approved by the US government. But the really strategic part of the pipeline is in the southern part of the pipeline, because all those oil have to pass down to the Texas Gulf coast, and in the southern leg of the pipeline the different routes meet. The Keystone XL pipeline battle is becoming an important symbolic and a direct struggle aimed at stopping the usage of unconventional fossil fuels in North America.
I do not know too much about the movement in Canada. It is led by an indigenous movement, “Idle No More”, with which some trade unionists and environmental groups are connected. They are also trying to stop the transportation of tar sands by railroad.
In the US, the battle becomes a real mass movement. Tens of thousands of people have been involved in this and tried to block the pipeline, and over 1,000 people were arrested during the protests and demonstrations.
Now the strategy of the US movement is basically to make the fossil fuel industry into the “No. 1 Enemy” instead of capitalism. It is a sort of ‘Popular Front’ strategy, like in the 1930s when the strategy was to create a popular front against fascism rather than against capitalism itself, and actually ‘the popular front’ at the time was allied with a part of the capitalist class against fascism.
The movement that is led by Bill Mckibben and 350.org is trying to organize divestment campaigns aimed at the fossil fuel industry along with carbontracker.org. The idea is that if we burn the unconventional fossil fuels we will break through the carbon budget and impair the conditions of the climate of the entire planet. This means that most fossil fuels are not in fact burnable and that the fossil fuel assets, which investors have put their capital into, are actually nothing but a huge financial bubble, demanding divestment.
However, it is very hard to really stop oil companies and the fossil fuel industry just by divestment, because they are all tied up with other corporations. There are a lot of questions and issues to work out.
Q10: what is your solution to the fossil fuel war and the “epochal crisis” ecologically and economically?
Labeling the fossil fuel industry as the enemy is a rational way to build up the movement, but ultimately we have to confront capitalism itself on this question.
The basic point is that, in the age of global monopoly-finance capitalism, we do not produce things based on our needs, but based on profits and over-accumulation.
Economically, we do not have much time to reduce carbon emissions drastically. We have to proceed with technology and infrastructure development, such as solar power and wind power, though technologies and material conditions co-exist.
Politically, if we want to resolve the issue of climate change and limit the level of carbon emissions, it must be based on a global planned economy or certain international agreements between different countries and different blocs.
We have to slow down our waste production and make these things more politicised than ever before. The whole population will criticize the carbon emissions.
James Hansen proposed collecting carbon tax and 100% distribution of this to the public on a per capita basis. The dividend would put money in the hands of the public, allowing them to purchase vehicles and other products that reduce their carbon footprints and thus their taxes. The working class will also benefit from this tax. Effects will permeate through the society. It is just a small example, but it could also mobilise the population and let us question most of the waste we produce now and who makes the decisions, and so on.
In the US, the 400 richest individuals have as much wealth than the bottom 150 million Americans, namely half of the American population. The whole society has become much more unequal.
Every year, trillions of dollars are being spent on military, trillions of dollars are spent on marketing, 400 billion dollars on public security, 400 billion dollars on private security, and 170 billion dollars on highways.
They are all irrational expenses for the society as a whole. As a result we do not have enough money for education. In some counties and states, They are supposed not to teach students physical education, music, arts and sciences anymore. The schools are only teaching grammar, reading and writing. They strip money away from schools, but we have spent 40% more on public and private security.
It is like they do not care that there is no future in the US. All have been privatised, it is absolute madness.
Capitalism creates so many contradictions, so many irrationalities and so much waste and destruction. All these problems have to be dealt with, and it is not an easy task.
In order to accomplish this task, We have to restructure the global economy and social relations. Technology can help in the long-term, but cannot be implemented in an effective way fast enough. We have so much wealth, power and abilities to meet peoples’ needs and transform our society into a more rational one, and we do not need this endless growth. We should develop new means of production and set up a planned production on a democratic basis.
We have to mobilise the masses and rely on mass uprisings. Through that, we can achieve a lot very quickly. Neverthless, leadership in the global struggle will come from the global South.
As a socialist now, you have so many issues that need to be confronted, sometimes it is very difficult to even put them together and consider how rationally and sustainably to meet the interests of the world population as well as to prevent an ecological disaster.
We have no choice but to try our best to achieve something on this.
More about John Bellamy Foster:
http://monthlyreview.org/author/johnbellamyfoster
http://sociology.uoregon.edu/faculty/foster.php
Papers and books by John Bellamy Foster：
1. Paper: The Epochal Crisis
http://monthlyreview.org/2013/10/01/epochal-crisis
2. Paper: The Fossil Fuels War
http://monthlyreview.org/2013/09/01/fossil-fuels-war
3. Paper: The Planetary Emergency
http://monthlyreview.org/2012/12/01/the-planetary-emergency
4. Book: The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China
http://monthlyreview.org/press/books/cl3133/
5. Book: What Every Environmentalist Needs To Know about Capitalism - A Citizen’s Guide to Capitalism and the Environment
http://monthlyreview.org/press/books/pb2419/
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