How Globalism Digests Nations: Deindustrialization and the International Division of Labour

The following aims to explore how integration into the international system requires that states and societies acquire a specific role in the global division of labour—the economic architecture of the existing balance of power between states and non-state entities. 

This role involves the subordination of some states by others and, beyond this, of states by international institutions and corporations. 

We may polemically (and accurately) describe this integration-cum-subordination as ‘globalism.’

The above is approached through a specific case study: that of Spain following the death of dictator Francisco Franco, focusing on this country’s integration into the European Economic Community (ECC). I am following the research of Alicia Melchor Herrera, as presented in her essay “Privatization and De-Industrialization during the Transition [to Democracy].”

The present exploration, together with Energy Transition as Class Warfare and National Subordination and The Political Economy of Speed, is in part meant as a corrective against conservatism’s deference to what we may describe as anglo-liberalism and its naive empiricism, on account of which the Right tends to treat economic inequality and political structures deterministically as the result of impersonal forces (such as the market) and organic processes, rather than as products of elite-negotiation and consensus.

The Anti-Worker Left

In recent history (since the latter half of the Cold War onwards), the principal political agent of such elite consensuses (the basis of ‘globalism’ and its international division of labour) has been what we may describe as the anti-worker Left: that is, a global, left-wing brand that makes nonsense of any defence of the working class, its job stability, and purchasing power. 

Ultimately, this trajectory would lead mainstream leftism to embrace new social cleavages in its quest to build a new electoral base. Thus the anti-work, pro-woke Left we see today.

In the case of Spain, we have a very specific date to which we may ascribe the end of older species of leftism: 1974. 

The Spanish Socialist Party (PSOE) was re-founded in the 1970s by foreign financiers, whereupon it was tasked with the mission of directing the Spanish transition to democracy in such a way as might be profitable to them. 

This involved giving up on a defence of the working class by engaging in full-spectrum privatisation of industry. The superficial expectation that the Left looks out for the interests of workers, together with its connections to the trade unions, probably allowed it to carry this out more easily than the establishment Right could have. 

The re-founding of the PSOE was led by the ‘Friedrich Ebert Stiftung’ (FED), a German foundation connected to the Social Democratic Party (SPD) and financed through grants from, among other sources, government ministries. 

Contacts between the FED and the PSOE began to take place in the 1960s. However, under the leadership of Spanish socialist Rodolfo Llopis, these ties were cut in 1970. It seems that Llopis was suspicious of the FED and its interest in Spain’s politics.

Soon after, however, a new crop of socialist leaders would reverse this decision. During the 1972 party congress in Toulouse (we should recall that Spain was still under Franco and so the socialist party was in exile), the PSOE fragmented between Llopis-supporters and the so-called ‘Renewed’ party under the direction of Spain’s future Prime Minister, Felipe González. 

The latter faction would come to solidify itself as the party’s new direction two years later, during another congress in Suresnes. At this point, they decided to embrace FED support, moving closer to the German SPD. It is for this reason that old-school leftists, Melchor Herrera among them, take 1974 to be the date of the current Spanish socialist party’s birth, and not the earlier, official date of 1879—since that older PSOE would de facto constitute a different political party from the one in existence today. 

Having established its relationship with the party, between 1975-1980 the FES would oversee the investment of $20 million in the PSOE and the Spanish left-wing trade union UGT. Correspondingly, Felipe González was endorsed by SPD leader Willy Brandt and went on to win Spain’s 1982 elections, remaining in power until 1996.

The European Division of Labour

For their part, the German socialists were prominent in the western Left, given that Willy Brandt headed the Socialist International between 1976-92. During this time, the International’s vice-president was a Venezuelan politician called Carlos Andrés Pérez (president of his country between 1974-79 and 1989-93). It is no surprise, then, that in 1982, Pérez contributed financially to the new PSOE, together with his countryman, investor Gustavo Cisneros. 

Following his ascent to power, Prime Minister Felipe González would repay Cisneros by selling him the Galerías Preciados business, a subsidiary of the expropriated Rumasa Group. The sale went through for 1,500 million Spanish pesetas (the country’s then currency). Cisneros only paid half this sum, however; the other half was eventually waived by Rumasa in 1985. The Venezuelan investor would also benefit from Spain’s granting loans to the tune of 11,5000 million pesetas to Galerías Preciados. In 1987, Cisneros in turn sold the Galerías for 30,000 million pesetas. The connection between Venezuelan Left figures, who were close to the Socialist International, and the PSOE has endured to this day, as evidenced by former socialist Prime Minister Rodriguez Zapatero’s relationship with Hugo Chavez.

Focusing on Germany, however, the case of Friedrich Flick is interesting to note. Scion to a wealthy industrialist family, Flick was the target of controversy when a 1981 tax audit revealed that he had made payments to politicians across the German party spectrum, apparently in return for tax breaks. Beyond Germany, these payments included donations to Spanish and Portuguese political actors, amounting to some €3.3 million in the period between 1978-81. Prime Minister González emphatically denied having received any money from Flick. After his tenure in office, however, he would admit to (and justify) having received German funding. 

The period between 1985-96, during which González was head of government, was marked by privatisations, where the state would sell its enterprises, as well as ‘divestments,’ where it would sell its shares in a company on the stock exchange. The second of these included many economically significant entities, such as telecommunications, hydrocarbon distribution, electricity production and distribution, oil and gas exploration and refining, and automobile production. This continued after González’s tenure. All told, it seems that beginning in 1984, with Spain’s entry into the EEC, the country sold its public companies for just over €55 million, according to SEPI, a governmental entity (Sociedad Estatal de Participaciones Industriales). 

Crucially: It is in this context that we may suggest the PSOE’s complicity with German interests in de-industrializing Spain and facilitating a certain European division of labour, with clear differences in value-added sectors from the continent’s centre to its periphery.

The under-selling of Spanish state assets, combined with economic policies oriented towards reducing the purchasing power of the working and middle classes, have generally been spearheaded by the PSOE, with the centre-Right putting up what has ultimately amounted to merely nominal resistance, acting as a sort of social escape-valve and rear-guard for the establishment Left. 

The country’s resulting economic under-performance ensures that the integrated European economy, including the Euro, is undervalued with respect to, for example, the German economy, a set-up that was partly brought about by German agents working in tandem with the Spanish Left. Thus was the European division of labour between states maintained during a phase of EEC expansion.

The International Division of Labour 

The German Left’s tutelage of the new Spanish socialists more or less aligned with US geopolitics, such that the PSOE would oversee Spain’s integration not only into Europe but into the wider (non-Soviet) international system. In this context, just as Spain’s economic sovereignty had been dismantled, its interests in certain theatres would have to be renounced, a process the socialists would be responsible for spearheading:

José Manuel Otero Novas, Minister of the Presidency and Education in the 1970s, serving under Spain’s first democratically elected head of government, Adolfo Suárez, claimed that during his tenure, a CIA communiqué was intercepted making it clear that if Spain did not join NATO, the U.S. would continue strengthening separatists in the Canary Islands.

It would be González who oversaw Spain’s entry into NATO, just as his party would go on to renounce Spain’s defence of an independent Western Sahara (beginning with Prime Minister Rodriguez Zapatero and ending with the current government, under Pedro Sanchez): 

Whatever strategic importance the Canary Islands might have also applies to the nearby Western Sahara … Assuming Otero Novas is telling the truth, supporting a transition away from Spanish sovereignty did not end up being practical in the case of the Canary Islands—in the case of the Western Sahara, however, it is understandable that, for the U.S., rule by a close ally like Morocco should be preferable to an independent state. 

Spain’s party-political Left (both the PSOE and the newer Podemos) has for decades been characterised by a consistent hostility to positions that would contribute to Spain’s geopolitical interests, raise the country’s profile, and allow it to leverage its position.

It is in this context that its status as a foreign agent comes through the clearest. By kowtowing to Morocco, Spain loses out not only in terms of geopolitical projection but, potentially, in terms of rare-earth mineral exploitation off the coast of the Western Sahara (considering the Moroccan maritime border would expand). The PSOE is not only conforming to U.S. concerns with respect to the western Mediterranean, therefore. It is also preventing Spain from gaining new sources of wealth, and so acting to maintain the European balance of power which it secured by de-industrializing the country under the tutelage of the SPD.

Stereotypes and Geopolitical Conformity

To the degree that conservatism adopts anglo-American, liberal tropes, it operates to render certain political realities palatable by presenting them as merely natural developments. 

The clearest ideological support for this line of thinking involves a naive application of free-market determinism. Here, acceptance of economic and power-political disparities relies on seeing them as the result of neutral economic forces and an impersonal accrual of merit. (Correspondingly, acceptance of international, ideological consensus relies on valuing these above older, traditional institutions.) 

Some cultures or countries are understood to be competent (innovative, productive, etc.) compared to others, where the latter’s under-performance can be chalked up to ‘soft,’ cultural endogenous causes, rather than ‘hard,’ external causes like foreign actor interference. 

The idea that some Europeans (PIGS: Portugal, Italy/Ireland, Greece, and Spain) suffered from the consequences of the 2008 economic crisis more than others on account of such endogenous cultural features is a good example (especially if, as we have suggested, other economies in Europe were stronger because they benefited from the EU economy being undervalued with respect to them after having promoted the de-industrialization of their partners). 

This is not to deny that culture does, indeed, play a role, but just as social behaviours can be altered by economic policy, such that populations come to adopt more economically-productive schedules, for example (see Ha Joon-Chang’s Bad Samaritans), the opposite can happen. Writes Joon-Chang: “There are good reasons why low-earning countries … are engaged in less productive activities—they lack the capabilities to do more productive ones.” This capacity can be purposefully reduced, as the socialists did in Spain throughout the 1980s and 1990s.

Acceptance of a culture’s inferiority in terms of its ability to prosper economically (a discourse that sectors of the Right are fond of) goes hand in hand with the abandonment of traditional institutions and the promotion of modernising trends (which the Left is fond of): “Stereotypes can function as political instruments … [They] can be deployed as a castigating form of categorization: an ordering of the world that harasses nations out of their aesthetic and spiritual confidence.” Both accepting one’s political and economic subordination and doing away with one’s traditional culture (believing the latter to be a cure for the former) lead to greater integration into the international system as it operates today (I have written about this here, here, and here):

One retort against the above is that, if a nation can be propagandised into viewing itself as inferior—ceasing to address external, structural reasons for its troubles and instead lashing out against its own culture—then its people must not have had much confidence in it to begin with. This is a bit like arguing that if a mother can be convinced to abort, her baby’s life must not have been all that valuable in the first place.

What I have described as anglo-liberalism and market determinism (and which so often substitutes itself for genuine conservatism) precisely operates by ignoring the distinction between what Christian theologians call the ‘natural,’ as opposed to ‘gnomic,’ will (the will’s orientation to its Logos as opposed to fluctuating inclinations, subject to all sorts of external conditioning). But this is a philosophical digression. 

Conclusion

In closing, we should summarise the above by simply stating that 

1. Participation in the international system, both in terms of its political character and as a web of economic integration, generally involves accepting one’s place within a division of labour. In such a division, some countries are kept from developing value-added sectors or, if they have done so from without that system, must be enticed into de-industrializing.

(As an aside, we may add that understanding how deindustrialization is key to the progress of Globalism does not require that we endorse all the consequences of the earlier historical phase during which societies industrialised. Indeed, the socially disaggregating effects of mass production are of a piece with later negative developments. A coherent conservatism would aim to integrate new productive technologies into older social forms that are conducive to human flourishing.)

2. This is now taking place, not as a division of labour primarily between states, but rather involving non-state, international institutions and corporations. 

Until recently, a country (at the ‘periphery’ of the international system) would move away from autocracy so that other countries (at the system’s ‘core’) could benefit from its labour and markets along mercantilist lines. Nowadays, however, we find that even countries at the centre of this centre-periphery schema are having the purchasing power of their middle and lower classes dynamited. The UN’s Sustainable Development Goals, and specifically the ‘green’ transition, represent the primary framework through which this is happening.

The centre is no country. 

The centre now consists—more clearly than ever—of institutional-corporate entities hostile to all countries.

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