The two-edged sword of capitalist globalisation

China has the longest continuous tradition of applying the dialectical method to social analysis. The School of Yin and Yang emerged in the third century BC, and the dialectical method has remained central to Chinese philosophy ever since. Capitalist development is inherently dialectical. Arguably the two most profound analyses of capitalism’s contradictory character are those of Adam Smith and Karl Marx.

Peter Nolan

Peter Nolan is the Chong Hua Professor of Chinese Development (emeritus) at the University of Cambridge, and Director of the China Centre, Jesus College, Cambridge.

For each of them, the ‘two-edged sword’ is the essence of capitalism. For Smith, the balance between the dynamic power of the ‘invisible hand’ of market competition and the ethically-guided ‘visible hand’ of government regulation were the counterbalanced themes of his two books the Wealth of Nations and the Theory of Moral Sentiments. For Marx, the necessity to regulate the contradictions of capitalism in the interests of the whole human species is the essence of communism, which grows logically out of the character of capitalism itself.
Since ancient times in both East and West, the exercise of individual freedom has been inseparable from the expansion of the market, driven by the search for profit. This force, namely capitalism, has stimulated human creativity and aggression in ways that have produced immense benefits. In the era of globalisation, since the 1980s capitalism has greatly broadened its scope and these benefits have become even greater. However, capitalist freedom is a two-edged sword.
In the era of capitalist globalisation, its contradictions have intensified. As human beings took their ability to free themselves from fundamental constraints to new heights through the operation of the market mechanism, so they also reached new depths in terms of the uncontrollability of the structures they created. This brought to a new peak the contradictions analysed by Marx in the Manifesto of the Communist Party: “Modern bourgeois society with its relations of production and of exchange, is like the sorcerer, who is no longer able to control the powers of the nether world whom he has called up by his spells.” The profound contradictions of capitalist globalisation present a Darwinian challenge for the survival of the human species.
The recent era of capitalist development has witnessed a radical expansion of the international character of capitalism alongside explosive industrial concentration at a global level. Global regulation is still in its infancy. The necessary global regulation of ‘wild capitalism’ in order to resolve its profound contradictions presents complex challenges. Although global markets have been established for a wide array of activities, people live mainly in separate countries, with their own identity and interests. The relationship between around one billion citizens of the high-income countries (the ‘West’) and around six billion citizens (rising to around eight to nine billion later this century) of the low and middle-income countries will be central to the possibility for achieving the cooperation that is necessary in order to regulate ‘wild capitalism’.
China has become a central part of the global political economy, and it will have a central role to play in the long, evolutionary search for global regulation in the interests of the mass of the planet’s inhabitants. As the ‘wild animal’ of global capitalism became more powerful, it became increasingly important that human beings establish a moral framework to regulate its activity and prevent the wild animal from devouring its creator, humanity. In order to resolve the contradictions of capitalist globalisation, there is no choice other than to grope towards international cooperation. The way in which people choose collectively to exercise that intelligence is governed by their ethics. Ethics are the ‘pole star’ to guide humanity on its journey through history.
Global regulation of the wild animal of capitalist competition in the common interest of ‘all under heaven’ (tian xia wei gong) requires benevolence across different cultures and countries at different levels of development and with different national interests. The very depth of the challenges that human beings now face may shock them into the action necessary to ensure the survival of the species. Alongside human beings’ competitive and destructive instincts are their instincts for species survival through benevolence and cooperation. The approach of the ‘final hour’ as humanity looks into the abyss, with the threat of nuclear and cyberwarfare looming in the background, may be the final impulse to produce the cooperative solution that is immanent in the unfolding of global capitalism: “The owl of Minerva spreads its wings only with the falling of the dusk” (Hegel, Philosophy of Right). Globally cooperative solutions constitute the essence of communism in the 21st century. Communism is the ‘choice of no choice’ (mei you xuan ze de xuan ze) for the survival of the human species.
The relationship between China and the West is centrally important in humanity’s attempt to grope a way forward in this extraordinarily dangerous time. China is trying to ‘learn from the past in order to serve the present’ (gu wei jin yong). At the core of this is the philosophy of dynamic balance between the forces of yin and yang in order to find the ‘middle way’ (zhong yong) in positive-sum fashion. It has the potential to make a rich contribution to resolving the contradictions of the two-edged sword of capitalist globalisation.
Over the course of 2000 years, China accumulated rich experience in integrating the dynamic force of the ‘invisible hand’ of market competition with the pragmatic, non-ideological regulation of the market through the ‘visible hand’ of the government, in order to serve the interests of the mass of the population. This philosophy can make an invaluable contribution to the establishment of a harmonious, ethically-guided global political economy, which resolves incrementally the contradictions of capitalist globalisation in the interests of the whole human species. This is a form of ‘groping for stones to cross the river’ for the whole of humanity, towards the ‘other bank’, which is a world in which all the world’s inhabitants live in peace and security, with equal access to the means for self-fulfilment.
This article is taken from Peter Nolan’s forthcoming book, China and the West: Crossroads of Civilisation, Routledge, 2018.