1] INTRODUCTION
Incorporating Lenin’s concepts of imperialism and international class conflict into the theory of economic growth and stagnation, the Global South, predominantly low developing countries (LDCs) were in the clutch of Global North Western economic and political domination, especially during the colonial period.
Capitalism arose not through the growth of small competitive firms at home-country but through the transfer from abroad of advanced monopolistic businesses with monopoly-capital attachment and or alignment. When capitalism took hold, the bourgeoisie (the corporate capital and compradore capitalists) in country, seeked allies among other classes, initially with monopoly-capitalism in Global North, and post-1957 increasingly adopted an economic nationalism construct to engender a cohort of ethnocratic kleptocrates, and subsequently tapped upon emerging rise of the ethnocapital clientel capitalism class.
2] FROM NEOLIBERAL POINTS
What often not stated that economic development in underdeveloped countries is profoundly goodness to the dominant interests in the advanced capitalist countries. The “backwardness” of the developing world is not infrequently hidden as the rich hinterland of the highly developed Global North capitalist West to be “developed”, but exploited.
Development discipline tends to frame within the bounds of national territorial boundaries of a nation-state. The primary theories then regard development based on stages of growth, diffusionism, and modernization-developmentalist with paradigm’s proponents from Rostow (1960), Pye (1962), Parsons (1964) to Hoselitz (1960), Lerner (1965), and McClelland (1967) contending that socio-economic progress (or the lack of it) was due to the presence (or absence) of resource, institutional or psychological-sociological cultural ingredients in each respective nation-state that were necessary for development to occur. Early development understanding posits an ideal developed society couched on a Western value framework.
We have the ‘Washington Consensus’, first articulated by World Bank economist John Williamson, focusing on a neo-liberalization thrust in trade, investment and the financial sector and the deregulation and privatization of nationalized industries. Often the conditionalities are attached without due regard for the borrower countries’ individual resulting in the loss of a state’s authority to govern its own economy as national economic policies are predetermined under The World Bank and its International Monetary Fund packages. These “packages” have negative social outcomes such as reduced investment in public health and education, but still have sufficient capital expenditure beneficial to local compradors, industrial-capitalists and later ruling regimes’ ethnocapital as well as definitely monopoly-capitalists globally.
We may also can have a premise where a country is poor because it was previously so poor that it could not save and invest as once justified by Jeffrey Sachs (2005) primarily ‘Poverty itself is the cause of economic stagnation.’
Sach’s premise followed closely to the vicious circle theory as presented by Ragnar Nurkse in his 1953 book- The Problems of Capital Formation in Underdeveloped Countries – where poverty perpetuates itself in mutually reinforcing vicious circles on both the supply and demand sides. In fact, low per capita income is both the cause and the effect of poverty whence, however, through settlement colonialism, and later within neo-colonialism, the wealth of nations had been expropriated many times again and again.
On the other had, Rosenstein-Rodan was of the opinion that a major indivisibility lies in infrastructure, such as power, transport and communications. This basic social capital should reduce costs to other industries. The IBRD (the former World Bank’s International Bank for Reconstruction and Development) encouraged a country like Malaysia to borrow large loans to construct these high-cost infrastructure, tied to “packages”, resulting to consequent indebtedness and a stagnant economy when the Asian Financial Crisis and Global Financial Crisis came visitings.
Then, we have Hischman’s view that low-income countries need a development strategy that spurs investment decisions. He suggests that since physical resources and managerial skills and abilities are scarce in LDCs, a big push is sensible only in strategically selected industries within the economy. Growth is then likely to spread from one sector to another (similar to Rostow’s concept of leading and lagging sectors); thus, Malaysia went for industrialization, but with poor labour employment by TNCs, labour alienation and union bustings and an under-developed and unsettled peasantry.
According to Hirschman, agriculture does not necessarily would stimulate linkage formation so directly as other industries. However, it is not that accurate to say that exertion in Malaysia where large agrobusiness Big Farms are benefitting Caterpillar and John Deere. In the process, envisaged in the midst of the Vietnam war, the FELDA (Federal Land Development Authority) schemes is a corridor sanitarian to corral rural Malay communities with modern built-in infrastructure – with clinics, schools, roads and bridges – ensuring subsistence dependence loyalty to the ruling class and a transnational corporation domain that is technological-based in FTZs and EFTZs to mop-up precarious labor (see Precarious Labor in Industrialization Capitalism and Precarious Labour in a Digitalised Economy; refer to Hao Qi, (Sept 2019), “Semi-proletarianization in a Dual Economy: the Case of China”, Review of Radical Political Economics, to forestall possible Urban-Agrarian collaboration and cooperation for revolutionary changes towards a new political economy in Malaysia.
3] NEO-IMPERIALISM UNDER MONOPOLY-CAPITALISM
That what is widely referred to as neoliberal globalization in the twenty-first century is in fact a historical product of the shift to global monopoly-finance capital or what Samir Amin calls the imperialism of “generalized-monopoly capitalism.”
Since the 1974-1975 recession, there was a growth rate slowdown in advanced capitalist economies with hurtful economic effects on the poorest countries. Scouting for wider markets to sustain capitalism, a proliferation of corporations begins setting up assembly lines across borders in different nations, especially the developing countries – the Global South – where in 2010, more than half of all foreign direct investment (FDI) went to third world and transition economies. With this strategic positioning in place, and world production dominated by a relatively few transnational corporations (TNC) exercising considerable monopoly power over states and labour, the migration towards the international concentration of capital clearly reflected on the work of Lenin (Imperialism, the Highest Stage of Capitalism, New York: International Publishers, 1939) and, on the other hand, confirms Amin’s imperialism of generalized-monopoly capitalism and Emmanuel’s unequal exchange under Neo-Imperialism.
Jason Hickel, Dylan Sullivan and Huzaifa Zoomkawala contended in the New Political Economy – published online: 30 Mar 2021 – that wealth drain from the Global South remains a significant feature of the world economy in the post-colonial era; rich countries continue to rely on imperial forms of appropriation to sustain their high levels of income and consumption. The Global North appropriated from the Global South commodities worth US$2.2 trillion in Northern prices that are enough to end extreme poverty 15 times over. Over the 1960–2018 period studied, the value drain from the Global South totalled US$62 trillion (constant 2011 dollars), or US$152 trillion when accounting for the Global South countries’ lost growth. Indeed, it is found that the appropriation through unequal exchange represents up to 7% of Global North’s GDP and 9% of Global South GDP.
During this era in imperialism of generalized-monopoly capitalism, there is a shift of manufacturing industry from the Global North to the Global South. In 1980 the share of world industrial employment of developing countries had risen to 52 percent; by 2012 this had increased to 83 percent. By 2013, 61 percent of the total worldwide inward flow of foreign direct investment (FDI) was in developing and transitional economies, up from 33 percent in 2006 and 51 percent in 2010.
Thus, by the twenty-first century imperialism is thus taking on a new, more developed phase related to the globalization of production and finance.
4] THE MARXISM PERSPECTIVE
The disparity in wealth-sharing can be perceived in another frame. A part of the imperialist rent remains in the peripheral country and is not transferred to the center, but constitutes rather a payment to local ruling classes for their roles in the globalization game. About $21 trillion of this global tribute, meanwhile, is currently parked abroad in tax-haven islands, “the fortified refuge of Big Finance”, see International Consortium of Investigative Journalists on their Fin-Tech files, and the Guardian, “£13tn Hoard Hidden from Taxman by Global Elite” July 21, 2012, and Nicholas Shaxson, Treasure Islands (London: Palgrave Macmillan, 2011), 7.
Marx (1818-83) had professed that the capitalist system would – in the initial stage grow due to increased profit (surplus value which was the result of exploitation of labour) – but would also provide funds for accumulation. Owing to the fact that since wages were pegged at the subsistence level, due to the existence of a huge reserve army of unemployed, the capitalists would suffer from a realisation crisis. They would not be able to realise the profits embodied in already produced goods. And, according to Marx, the under consumption of the masses is the root cause of all crises.
Inevitably, Neo-Imperial domain of monopoly-capitalism in international concentration of capital would give birth to the introduction of international monopoly-finance capital that ensues the emergence of financialization capitalism (see John Bellamy Foster, The Financialization of Accumulation, Monthly Review vol:62, issue 05 October 2010). Financialization capitalism becomes prominent because the TNCs are unable to find sufficient investment outlets for their huge economic surpluses from production, increasingly turn to speculation within the global financial sphere, (see John Bellamy Foster and Fred Magdoff, The Great Financial Crisis (New York: Monthly Review Press, 2009).
This historical trend is basically following the trend in the capitalism route to a pathway from monopoly-capitalism to neo-imperialism:
Firstly, with a slowing down of the overall rate of growth among developed countries in Global North, followed by secondly, the internationalisation of monopolistic transnational corporations (TNCs) especially crossing borders to third world countries in the Global South, and then the introduction of, and emergence in, the “capital accumulation process” or financialization capitalism
5] TOWARDS A SOCIALISM HORIZON
If one were to take on the classical theory of David Ricardo (1772-1823), then a pessimistic view about the possibility of sustained economic growth would also surface. For Ricardo, who expressed that with little continuing technical progress, growth was limited by scarcity of land. The major tenet of Ricardo’s underlying understanding lies with the law of diminishing returns.
The central theme in the diminishing returns concept is that owing to population growth and a fixed supply of land would threaten economic growth. Ricardo believed that only technical change or improved production techniques (which might not likely to happen) to avert, possibly temporarily, the operation of the law of diminishing returns. Therefore, increasing capital was seen as the only way to offset this long-run threat.
However, any fall in the rate of capital accumulation would lead to eventual stagnation. Ricardian stagnation might result in a Marxian scenario, in which wages and investment would be maintained only if property were confiscated by society and payments to private capitalists and landlords stopped.
Marx, in fact, made certain predictions about the growth, maturity and stagnation of capitalism. He predicted that the capitalist system would ultimately collapse for want of markets and would yield place to socialism.
Unfortunately, history has not obliged Marx. The year 1989 saw the collapse of socialism (especially in erstwhile USSR and its satellite countries) and with it the abandonment of the centralised planning system and the emergence of newborn post-socialist countries.
All these countries have embraced the market system which is now thought to be a more efficient mechanism for solving society’s economic problems, promoting faster economic growth and improving the living standards of the people.
That is, until the financial crisis of 2007–2008, also known as the Global Financial Crisis (GFC 2007/8), that was of such a severe worldwide economic crisis until the present COVID-19 recession, that many economists considered this Ecological-Epidemiological-Economic crisis to be the most serious financial crisis since the Great Depression.
China, on the other hand, went the other way in 1989, when she went for market opening in terms of trade, but was much more cautious in terms of capital account liberalisation, adopting a strong developmental state and gradualism in policy implementation.
Between authoritarianism and the growing role of government under the post-war Keynesian philosophy, the neo-liberal ideology had idolised free markets, but ignored (politically) the growing negative effects of social inequality, climate change, human identity crisis in the face of insecurities from technological disruption, massive human migration and geopolitical rivalries as even Tan Sri Andrew Sheng, formerly of World Bank, Hong Kong Monetary Authority and Bank Negara Malaysia, now agreed.
The only way out of the impasse may be a proletariat and peasant revolution, say expropriating (FELDA) land and (ethnocractic) capital, and establishing a new regime based on collective effort, sharing of distributed wealth and the creed of the predominance of interests of society over the interests of a selected ethnocapital few.
Towards The Malaysia Narrative 