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International Socialism, March 1997


Peter Morgan

Capitalism Without Frontiers?


From International Socialism 2:74, March 1997.
Copyright © International Socialism.
Copied with thanks from the International Socialism Archive.
Marked up by Einde O’Callaghan for ETOL.


Nigel Harris
The New Untouchables
I.B. Tauris 1995

Towards the end of his new book on immigration, Nigel Harris gives the following definition of ‘globalisation’:

Global integration is making the movement of commodities, of finance and of workers, greater and greater – movement increases faster than output. The world economy, it seems, has by now passed the point of no return, and we are set upon the road to a single integrated global economy, regardless of the wishes of governments and citizens. Indeed, any efforts to reverse the process, spell catastrophe. [1]

It is true that one of the tasks that governments throughout the world set themselves in the 1980s was the ability to move huge sums of money and capital at speeds not imaginable in the past – deregulation of the financial markets, combined with enormous advances in technology made this possible. But there is, however, one problem in all this. Why is it that the so-called globalisation and integration of the world’s economy has gone hand in hand with greater restrictions in the movement of the world’s population? Why is it that such enormous numbers of the world’s population are subject to even more stringent and draconian controls? Unfortunately this is the question that Nigel Harris is not able to answer in his new book.

Europe provides a good example of how both processes develop simultaneously. On the one hand there is the attempt to move towards greater integration between the European economies. This is what lies behind the whole EMU project – the lowering of restrictions between the various European economies, convergence of the currencies, greater political co-operation, and supposedly, the free movement of labour between member states – globalisation, if you like, on a smaller scale. But this is fraught with tensions, splits and fallouts as each government’s overriding concern with its national economy often brings it into conflict with the need for greater European integration. This has also gone hand in hand with the European governments becoming less hospitable to migrants and asylum seekers.

In Britain, the Tory government passed the 1995 Immigration and Asylum Act making it even harder for those fleeing persecution and repression overseas to enter Britain. The Italian government recently passed a decree making it easier for them to expel immigrants, Holland has brought its law into line with other countries and allows virtually no new immigrants, and Germany has spent the last few years trying to plug the gaps in its once ‘liberal’ immigration laws. And all the European Union’s members recently agreed to narrow the definition of who may qualify for asylum. This poses the question of why, as the world economy supposedly becomes more integrated, the ruling governments feel compelled to be more repressive.

In one of the stronger sections of Harris’s book, he makes it clear that migration is nothing new to the capitalist system. Indeed the great economies of the world have been built by migrant labour. Between 10 million and 20 million Africans were forced to cross the Atlantic and work the plantations of America, and ‘possibly some 50 million Indians and Chinese (between 1840 and 1930) were recruited by the gangsters of empire for work in California, Southeast Asia and Africa’. [2] And even in Europe the demand for labour from countries outside the region was necessary for economic growth. As Harris observes:

… the historical record would suggest that any reasonable level of economic growth in Europe would lead to labour demand exceeding local supply. Far from Europe being sharply distinguished from the Americas – the so-called ‘countries of immigration’ – all advanced industrialising powers required immigration to sustain growth ... it is important not to forget that immigration is by no means a modern phenomenon. Everyone in Europe is ultimately descended from immigrants, some more recently than others. [3]

The movement of large sections of the world’s population is a peculiar feature of the capitalist system, and people will always endeavour to seek jobs and a better standard of living despite the restrictions and boundaries that are placed in their way. As Eric Hobsbawm notes, the middle of the 19th century marked the beginning of the greatest migration of peoples in history, and it was not merely from one country to the next, but rather it was, as he says:

the rural exodus towards the cities, the migration between regions and from town to town, the crossing of oceans and the penetration of frontier zones, the flux of men and women moving back and forth... Population movements and industrialisation go together, for the modern economic development of the world both required substantial shifts of people, made it technically easier and cheaper by means of new and improved communications, and of course enabled the world to maintain a much larger population. [4]

By the mid-1800s an annual average of approximately 250,000 people left Europe each year. But however enormous this was, it was modest compared to what was to come: in the 1880s between 700,000 and 800,000 Europeans migrated each year and in the years just after 1900 it was between 1 million and 1.4 million. [5] This went hand in hand with the movement of people from the country to the city – migration and urbanisation went together. In the second half of the 19th century those countries chiefly associated with migration (the US, Australia, Argentina) had a rate of urban concentration unsurpassed anywhere except in Britain and the industrial parts of Germany.

Today there are still large sections of the world’s economy that are heavily dependent on migrant labour. As the Far Eastern Economic Review said, ‘Malaysia is now home to almost 1 million foreign workers; tiny Hong Kong has more than 100,000 maids from Southeast Asia; and within China there exists a floating population of up to 150 million people, 10 million of whom are now an integral part of the Guangdong economy’. [6] And one of the strengths of Harris’s book is the wealth of statistical detail on the movement of labour, particularly during this century, and the way in which governments have encouraged such movements. He gives the example of the Philippines which, by the early 1990s, was the second biggest exporter of labour (after Mexico), with some 600,000 leaving annually, predominantly to be employed as seamen, nurses or domestic labour. This movement was encouraged by the Philippine government. In 1975 President Marcos established a policy of promoting work abroad with the intention of forcing the migrants to return a proportion of their income to bank accounts in the Philippines. This led to an explosion of illegal recruitment agencies promoting the availability of Philippine labour overseas, often at appalling rates of pay.

Today Asian women are the fastest growing group of migrant workers in the world (and one of the most exploited and abused). According to the International Labour Organisation about 1.5 million Asian women are working abroad, many in slave-like conditions in domestic service or the ‘entertainment’ industry. Further illegal migration, often through well organised and underground syndicates, is estimated to account for well over half of the total migration flows in some countries. The ILO states that, ‘were it not for illegal recruitment agencies, overseas employment promoters, manpower suppliers and a host of other legal and illegal subsidiaries, Asian labour migration would not have reached such a massive scale’. [7]

But if immigration is so central to the workings of capitalism, what is the logic for an increase in immigration controls? At times of economic boom, there are few or no restrictions on immigration. Indeed, governments actively encourage migration. This was particularly the case following the end of the Second World War in Britain. A report in 1949 from the Royal Commission on Population recommended that immigration into Britain should be encouraged, and British employers were pleased to welcome Indian and Caribbean workers. The problems arise, however, when the economy goes into recession, as it did in Britain in the 1970s. Prior to then bosses had a pool of labour who lived in other parts of the world and were encouraged, often financially, to move to Britain. But with the onset of recession and the accompanying rise in unemployment, they were able to call upon an excess pool of labour which existed in the home country without the inconvenience of importing migrants who could then become a problem the government no longer needed, and no longer wanted to support. So their entry was increasingly restricted, by both Tory and Labour governments.

Harris looks at the restrictions on migrants purely in terms of the capitalist system as a whole and he concludes that they have no logic either during times of boom or during recession. He presents a convincing body of argument against those who favour greater restriction. Firstly, it is not true that increased immigration leads to increased unemployment. Harris quotes Borjas, who argues that ‘modern econometrics cannot find a single shred of evidence that immigrants have an adverse impact on the earnings and job opportunities of natives of the United States’. [8] And he gives the example of the Los Angeles economy which expanded in the 1970s, largely as the result of increased demand caused by legal and illegal immigration. Likewise the increase in immigration in Britain in the 1950s and 1960s did not lead to increased unemployment – rather the massive explosion in unemployment levels in the 1970s and beyond was caused by the boom-bust cycle of the capitalist system itself.

Secondly, immigrants and refugees are not a drain on the social security system – in fact, as Harris shows, they contribute far more to the ‘system’ than they receive in return. Whether you look at Caribbean immigrants who came to Britain in the 1960s, few of which drew retirement pensions, or whether you take Mexican migrants to California, where a 1980 study found that less than 5 percent received any assistance from welfare services, and in all sectors, except education, they paid far more than they received – a net balance sheet shows that the ‘host’ nation gains far more than it gives in return. Furthermore, migration has another very favourable benefit for the ruling class in the ‘host’ country – namely that they don’t have to contribute to the cost of raising and educating the immigrant worker.

But reiterating the logical economic argument does not help explain why restrictions on the movement of labour are still in place, and are becoming more draconian. In order to square the circle, Harris argues that we are moving to a global economy in which increased movement of both commodities and labour will become unhindered:

The idea that people of necessity are permanently located in one national entity is also under challenge. World economic integration continually increases rates of mobility, so that in the future it is going to be as difficult internationally to give an unequivocal answer to the question ‘Where are you from?’ as it already is in developed countries. Native places are in decline and often the complex of origins is well beyond the conventional mythology. The marks of identity may remain individual, ancestral, tribal, occupational – and even religious – rather than national. [9]

He bases this assumption on the argument that the nation state is disappearing as the economic imperatives of the market and globalisation force greater integration and co-operation: ‘...these processes will lead to the creation of a single integrated global economy with geographically diversified sources of growth … [and] as governments have been driven, to different degrees, to end the old social contract with their citizens, to dismantle the socialised state, so has the emergence of global labour markets made for continuously increasing rates of worker mobility’. [10]

In reality, however, the functions of the state are not dwindling. On the contrary, what characterises late 20th century capitalism is both the political and economic importance of the state in defending and supporting ‘their’ own capitalist interests. Chris Harman in the last issue of International Socialism (No. 73) attacked the globalisation thesis that assumes firms are becoming increasingly independent from their ‘home’ states. He draws on the work of Paul Hirst and Grahame Thompson who demonstrate that there are limits to the extent that so-called globalisation has taken place. They show how the multinationals that dominate the global economy today are still ‘tied’ and dependent upon their ‘own’ nation state and its market for their trade and profits:

The home oriented nature of MNC [multinational corporation] activity ... seems overwhelming. Thus MNC’s still rely upon their ‘home base’ as the centre for their economic activities, despite all the speculation about globalisation...[and] it would not seem unreasonable to suggest that between 70 and 75 percent of MNC value added was produced in the home territory. [11]

For American multinationals, 64 percent of manufacturing sales and 75 percent of service sales are to the home market. For Japanese multinationals it is 75 percent of manufacturing and 77 percent for services. And a look at the assets of these companies shows that they are similarly concentrated in their ‘own’ economy. Both US and Japanese multinational corporations have the majority of their assets concentrated at ‘home’, and for European countries the picture is the same if Europe as a whole is considered the home region.

Capitalism needs states – to regulate relations between firms, sometimes by the use of violence; to impose common laws and currency which aid capital accumulation; to organise labour markets and the provision of education, transport and healthcare and to try to prevent recession turning into economic collapse. In fact the deeper the crisis, the greater the tensions between firms, the more the competition heats up, the more the state is needed to impose some sort of ‘order’. So today, far from the state disappearing, it plays an increasingly important function in the regulation of the world economy such as we see in Europe and the EMU.

However, Harris is unable to come to terms with a crucial fact – that the state also has a role to play in aiding and assisting in the exploitation of the workforce – hence the use of immigration controls and racism. On the one hand those who own and control the wealth want the freedom to make as much profit whenever and however they want. But at the same time the system is based on oppression and exploitation, so they demand the right to restrict the freedom and movement of labour. These restrictions take the form both of attacking trade unions at ‘home’, and also controlling those that are forced to move abroad. In a crisis ridden system this has a logic that is both economic and political – immigration controls lead to racism which increases divisions and facilitates greater exploitation. Indeed the attempt to create and perpetuate racist divisions within the working class has always been an essential feature of the capitalist system. This was a point that Marx recognised over 100 years ago when he talked about the racism directed by English workers against migrant Irish workers. He called this antagonism the ‘secret of the impotence of the English working class ... It is the secret by which the capitalist class maintains its power.’

Because Harris overstates the case for globalisation, or the shift from what he calls ‘semi-closed’ national economies to an open world economy, this has all sorts of implications for how he sees the ‘irrationality’ of immigration controls. Firstly he concludes that we are heading towards the end to the wars ‘which were the product of the heyday of national egotism’, a conclusion that does not fit well with the fact that war deaths have increased since 1989 or a comparison of the period since the Second World War with the previous ‘peacetime’ period, the inter-war years. Secondly he suggests that the increased movement of labour can be regulated by an international forum:

where governments negotiate – as they do in GATT and now the World Trade Organisation, mutual concessions on the restrictions to movement – a General Agreement on Migration and Refugee Policy. Such a forum could provide a body capable of reprimanding governments which seek to use resident foreigners as scapegoats for domestic discontents or cat-paws in their foreign policy. [12]

But the GATT agreement was concerned with the main capitalist countries’ increasing exploitation of the ‘developing’ economies and is a symbol of everything that is rotten about the capitalist system. The 20th century has been characterised by the bosses setting up organisations and agreements to try and regulate the problems of the system – such as the League of Nations, the Dollar Standard, the IMF, the World Bank or the United Nations, or the G7 economic summits. And each time the attempt has resulted in a breakdown of agreements and more conflict between the various powers as the interests of each state conflicts with others and the needs of the system as a whole. The breakdown either results in war, or in deeper recessions and a more prolonged crisis. The idea that the ruling class would come to some sort of agreement or create a body that would represent the interests of labour (migrants) instead of capital, flies in the face of all historical empirical evidence (all the more surprising when you find that earlier in the book Harris goes to great lengths to go through the various restrictions and legislation that have been passed by various capitalist governments against immigrants during the 20th century).

Harris therefore has to reconcile his argument that we have an antiquated system of nation states being replaced by greater globalisation, with the fact that an increase in the movement of labour is being hindered by illogical and outdated restrictions. This he does by calling for a new ‘world morality and a world system of law’, or ‘a new universal morality – like Hegel’s Spirit of Reason’, which he says are ‘struggling to be reborn after the long dark night of nationalism’. [13]

Instead it is important to reassert the point that the nation state is not some outdated relic from the past that has outlived its usefulness. Rather it plays a very specific function in the modern capitalist economy with regard to migrants – regulating their movement, creating divisions and increasing exploitation. As the problems of the modern global capitalist economy become more acute, as the gulf between rich and poor becomes greater so too will the desire of the capitalist class to use all weapons – in particular that of racism – to divide working people. The response is not to hope that some ‘universal morality’ will prevail, rather it is to fight for the common interest of working class unity.


1. N. Harris, The New Untouchables (I.B. Tauris 1995), p. 226.

2. Ibid., p. 3.

3. Ibid., p. 3.

4. E. Hobsbawm, The Age of Capital 1848-1875 (Abacus, London 1995), p. 228.

5. Ibid., p. 229.

6. Room at the Innp.  , Far Eastern Economic Review, 29 December 1994 and 5 January 1995, p. 5.

7. L. Lim and N. Oishi, International Labour Migration of Asian women: Distinctive Characteristics and Policy Concerns (International Labour Organisation), 1996.

8. N. Harris, op. cit., p. 194.

9. Ibid., p. 217.

10. Ibid., p. 216.

11. P. Hirst and G. Thompson, Globalisation in Question (Polity 1996), pp. 96–97.

12. N. Harris, op. cit., p. 224.

13. Ibid., p. 228.

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