Caribbean economists: In search of petit-bourgeois utopias (Part 2)

Trevor A. Campbell, Contributor

As promised at the end of Part One, I will now bring the analysis to the present and provide some definite answers as to 'where have our Caribbean economists been' and why they have returned with very little of practical value to offer either the emerging modern bourgeoisie or the working class of the region.

Let me begin the discussion by providing you with excerpts from two seminal pieces, which together reveal how capitalist production is being reconfigured in the contemporary world. I will then present some ideas to explain why neither the older intelligentsia, nor the newer generations, are prepared to deal with the demands this new situation is imposing on them.

In his article, 'An iPod has global value: ask the (many) countries that make it' (The New York Times, June 28, 2007), UC Berkeley economist Hal R. Varian graphically illustrates how the process of manufacturing, like all the other aspects of contemporary capitalist production, has become a globally integrated project. In his exposition, Varian underscores how the conventional notion of so-called national economic-development strategies - and its supporting doctrine, development economics - have become obsolete. Consider two of Varian's key questions and answers:

"Who makes the Apple iPod? Here's a hint: It is not Apple. The company outsources the entire manufacture of the device to a number of Asian enterprises, among them Asustek, Inventec Appliances and Foxconn. But this list of companies isn't a satisfactory answer either - they only do final assembly. What about the 451 parts that go into the iPod? Where are they made and by whom?"

Globally integrated

The answer to these important questions are supplied by three researchers at the University of California, Irvine - Greg Linden, Kenneth L. Kraemer and Jason Dedrick - who applied some investigative cost accounting to data contained in a Portelligent Inc report that examined all the parts that went into the iPod.

Their Sloan Foundation-sponsored study offers a fascinating illustration of the complexity of the global economy, and how difficult it is to understand that complexity by using only conventional trade statistics.

The global supply chain behind the iPod and other modern products is made possible by the emergence of globally integrated enterprises (GIEs). Here is Samuel Palmisano, the CEO of IBM - one of the primary leaders of this new organisational structure, which is designed to facilitate the accumulation of capital, under the conditions of the ongoing scientific and technological revolution - describing how it differs from the older multinational corporation:

"The emerging business model of the 21st century is not, in fact, 'multinational'. This new kind of organisation - at IBM we call it 'the globally integrated enterprise' - is very different in its structure and operations. Many parties to the globalisation debate mistakenly project the 20th-century multinational on to 21st-century global reality. This happens as often among free-market advocates as among those opposed to globalisation.

"Let me describe this new creature. In a multinational model, companies built local production capacity within key markets, while performing other tasks on a global basis. They did this in response to the rise of protectionism and nationalism that began with the First World War and carried on late into the 20th century. As an example, American multinationals such as General Motors, Ford and IBM built plants and established local workforce policies in Europe and Asia, but kept research and development and product design principally in the 'home country'.

"By contrast, today's globally integrated enterprise fashions its strategy, management and operations to integrate production - and deliver value to clients - worldwide. That has been made possible by shared technologies and shared business standards, built on top of a global information technology and communications infrastructure. Because new technology and business models are allowing companies to treat their functions and operations as component pieces, companies can pull those pieces apart and put them back together in new combinations, based on judgements about which operations the company wants to excel at and which are best suited to its partners." ('Multinationals have been superseded' by Samuel Palmisano, Financial Times, London, June 12, 2006.) (See also: 'India becoming a crucial cog in the machine at IBM' by Saritha Rai, The New York Times, June 5, 2007.)

In spite of these realities, most university-based economists and the political leaders whom they sometimes advise continue to peddle, in a mindless fashion, the outdated conceptions that are contained in the textbooks.

It is interesting to note, however, that even without the benefit of advice from Caribbean economists, some sections of the Jamaican bourgeoisie (in this case a group of retailers) are aggressively modernising their operations by adopting some of the technical innovations of cutting-edge retailers in the US: "MegaMart, the popular shopping retail chain founded and run by Gassan Azan, celebrates its 10th anniversary this month and continues to expand its footprint across the country and is eyeing a presence in the wider Caribbean.

"Back in 1998, Azan and his partners were taking an overview of the retail landscape in Jamaica and discovered there was no corporately structured retail side to the business. At the time, he noted the impact that big retail structures like Walmart, and CostCo were having in the United States and thought he could emulate and execute this right here in Jamaica, where the concept did not exist. For decades, retail shops were run by family concerns and were small and limited in scope and offerings, but Azan set about changing all that." ('MegaMart celebrates its 10th anniversary', Jamaica Observer, December 11, 2009).

Backward outlook

Contrast the above approach with the backward-looking petit bourgeois utopian outlook of Arnold Bertram, which David C. Wong critiqued in the concluding segment of his four-part series on economic growth.

Said Wong: "The old, petty bourgeois nationalist ideology persists and is pervasive. Witness Arnold Bertram in The Sunday Gleaner on October 31. He claims that higglers are "the most enterprising and resourceful group of entrepreneurs in the country". According to Mr Bertram, higglers and other petty traders could lead the redevelopment of Kingston as a 21st-century city because of the historical role they played in developing Jamaica's internal marketing system.

Wong elaborates: "Most producers and traders in this sector are essentially engaged in non-capitalist activities with the objective of eking out a living. They are simply not capitalists who can accumulate capital and develop the productive forces, since their objective is not profit-maximisation.

"Objectively, the role of this sector is as a reservoir of labour power and other mostly marginal resources. These resources can be better used to promote economic growth. However, this requires government policies to help those petty producers and traders - who have the potential to become capitalists - to do so by providing them with small-business loans, technical assistance and other resources, and to educate and train others to become productive workers."

While Bertram makes no claim to be a professional economist, or a political economist, his thinking, nevertheless, reveals the continuing influence of the petit bourgeois utopian economic doctrines that dominated the discourse during the late '60s and '70s.

Ideas Out of Step with Modern World

In the editorial, 'Where have our Caribbean economists been?' the Observer pointed out: "Caribbean economists since the late 1960s have been bereft of original thinking. Much of the work is sterile empiricism or Caribbeanisation of economic thinking which originated from outside the region. Ironic for an intellectual cadre that spurns ideas from outside the region in favour of indigenous thought.

"It is time to restore scholarship to the Caribbean economics profession so it can once again make practical policy recommendations for the economic development of the region."

The sterile empiricism, to which the editorial refers, is a product of the very narrow training that most of the economists receive. They are not trained to grasp the complexities of a world in constant motion. And this is not exclusive to the Caribbean!

Unprepared

To illustrate, let me share with you an experience that two of my good friends/ colleagues (Reggie Nugent and Hilbourne Watson) and I had at a pub in Washington, DC, last August. We were having a discussion about several economic issues and a young man at a nearby table politely asked if he could join us because he was intrigued by the topics we were covering. He informed us that he had not too long ago received his PhD in economics from Yale and was now working in a fairly important position at one of the Federal agencies in the Capitol.

We were not entirely surprised (but appreciated his honesty) when he admitted that his training at Yale did not prepare him to engage, in any sustained fashion, in a discussion about the complex social-class relationships that are embedded within the capitalist system of social production. He and his fellow students were trained to deal primarily with the relationship between things, not the relationships between people who are engaged in the process of producing these things. To them, that was outside the province of economics and belonged in the category of political economy. The young man then told us that courses on the history of economy thought had very little currency at universities like Yale, which he now regrets.

The truth is this: Very few professional economists, including those in the Caribbean, if they were to be asked, could present a coherent theory of the process of capitalist accumulation that would include:

(1) An outline of the historical periodisation of the stages of development of the capitalist mode of production, including the main technologies that served as the material base at each stage of the process;

(2) An outline that locates the historical origins of the various economic theories that seek to explain how capitalism functions; identify what was/is the primary focus or object of the author/s' analysis; examine the logical consistency of the theoretical arguments and explore how they relate to the objective needs of the various social classes that are embedded within the structure of the system.

Real basis of the crisis

And finally, let me reiterate a point that Reggie Nugent and I made in our 2003 piece, 'Globalisation and the crisis of the Caribbean intelligentsia':

"The real basis of the crisis lies in the fact that the ideas of the present leadership of all existing political parties are out of step with the realities of a modern world that is being integrated by the process of globalisation. What we are witnessing is the disintegration of a world that this leadership has become accustomed to and was prepared for. This was the world that was configured around an agenda of managing the process of nation-building in a postcolonial reality and the protectionist economic arrangements that were bequeathed by British colonialism. Today, this world is being fast left behind, and with it the ideas and leadership that it spawned. The question before us is whether the present political leadership can be retooled to manage the new economic landscape that is shaping global competition and the contradictions between the contending classes in the spatial context of the Caribbean. Herein lies the basis for the crisis of the Jamaican and Caribbean intelligentsia."

Trevor A. Campbell is the moderator of the online forum, Caribbean Dialogues. Email feedback to columns@gleanerjm.com and tcampbell@eee.org.