Finance capital on global stage

Published : Dec 20, 2002 00:00 IST

Global Finance Capital on Rampage by N.M. Sundaram, Adhyayana Prakashana, Sirsi, Karnataka, 2002; pages 158, Rs.60.

IT is often said that what sets apart this age of capital from other, earlier ones is the dominating influence of finance capital. Although speculative excesses have been an essential part of capitalism through history, from the Tulip Mania in 17th century Holland to the recent collapse of Enron, the unchallenged dominance of finance capital is stunning in its sweep and effect. The collapse of social institutions across the world - and the social compact that brought them into being - have allowed capital to acquire a demonic status.

Trade unions and social activists fighting against the rising tide of neoliberalism have borne the brunt of the assault launched by finance capital. Popular movements and trade union movements have been termed `irrelevant' in a situation in which history is said to have all but ended. Trade unions have faced the brunt of the privatisation process that has unrolled all over the world, leaving nothing untouched in its wake. But they have had to pick up the pieces to join the battle. In India, the All India Insurance Employees Association (AIIEA), which is the strongest workers union in the financial sector and which represents the most unionised industry in India, has successfully stopped the insurance industry from being completely sold to private and foreign interests. One of the strengths of the AIIEA has been its willingness to learn through its fight against what is termed LPG (liberalisation, privatisation, globalisation) policies, which were set in motion in the last decade by successive governments in India. One of the reasons for the AIIEA's wider appeal when compared to other unions has been its ability to take up issues that go beyond workplace-related demands of its own rank and file.

The book, a collection of 22 articles that were published in the AIIEA's journal, The Insurance Worker, enables a wider audience to understand the process by which finance capital operates on the global stage. The first part - chapters 3 to 9 - form the core of the book. Sundaram, the General Secretary of the AIIEA, explains in a lucid style how this era of globalisation differs from previous ones. In its essence, globalisation means the seamless movement of investment, trade and production. Liberalisation is the positioning of the regulatory framework in individual countries to facilitate the objectives of globalisation. While these have been essential features of capitalism throughout its history, what marks its current epoch distinctly is the dominance of finance capital as never before. Sundaram points out that everyday, two trillion dollars of "footloose capital", used for speculative purposes, is rapidly moving around the world. A world constantly under pressure from these speculative agents, is unlikely to be stable. Governments everywhere are under pressure to reform. Sundaram points out that once a country's policy-makers accept globalisation as a policy objective, there can be no "calibration" of the process. Once they have decided to participate in the process of globalisation, countries find it extremely difficult to extricate themselves from the logic and methods that globalisation has come to acquire.

Proponents of the established viewpoint suggest that since capital is in short supply in developing countries such as India, foreign direct investment (FDI) is needed to finance development. However, the overwhelming portion of FDI originating in advanced countries is not invested in productive enterprises but is used in the acquisition of companies in the capital-receiving countries.

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