(Presented at the 9th National Congress of BISIG, 24-25 May 2003, Ciudad Christhia, San Mateo, Rizal)

This historical moment is marked by the universalization of capitalism, as depicted in the process of neo-liberal globalization.  Capitalism’s logic  – of accumulation, commodification, profit-maximization, and competition – has penetrated just about every aspect of human life and nature itself.  It is within this orbit of globalizing capitalism that structural changes, as well as structural continuity, in the world in general and in the Philippine society in particular has to be contextualized.  The drive for capital accumulation is, of course, not the only process at work but it is hard to make any sense of the changes in the Philippine society without closely examining it. 

As socialists struggling for human emancipation, we are tasked to take seriously capitalism’s fundamentally oppressive reality in this moment when market forces control the world.  As globalization unfolds its real process of the completion of the world market, a thorough critique of capitalism is most urgently needed.    

The Emergence of Neo-liberal Globalization

The failure of liberalism (laissez faire economics) in the mid-19th century to early 20th century; and the subsequent collapse of Keynesianism that had reigned during the Second World War until the world structural crises in the 1970s and the 1980s have given rise to a new policy called neo-liberalism, the return to liberalism with new configurations.  Neo-liberalism has become the sensibility behind the process of globalization.  This new configuration of capitalism has dramatically reorganized production through the intensification of new technologies and the introduction of financial innovations that are geared at satisfying capital’s crave for further accumulation and, at the same time, addressing capital’s desperate attempt to contain its own crises.  Moreover, the process of proletarianization and the combined and uneven character of development have become integral to capitalism’s logics of accumulation, commodification, and competition under the discipline of neo-liberal globalization.


Neo-liberal globalization enforces the new power of finance that is essential to the construction of contemporary capitalism.  Together with the introduction of new technologies, finance has: (1) contributed to reversing the falling productivity of real capital by facilitating shifts in the surplus across sectors; (2) delivered the macro liquidity for the venture capitalists that – for all their excesses – contributed to maintaining the technological leadership of the US; (3) created a market for risk to offset business uncertainty in an environment of flexible exchange rates and global markets; and (4) provided an effective service to productive capital – comparable to other services like transportation – at historically low prices. 

            With the aim of the completion of the world market and the global imposition of the disciplines central to capitalist reproduction, neo-liberalism promotes a ‘sound’ macro-economic framework, along with structural reforms – national and global liberalization, and privatization – and associated regulatory innovations.  As a result, neo-liberal globalization likewise represents an ideological assault to working class forms of power.  At the heart of this process is a drive to bring workers directly under the control of capital and thereby creating circumstances in which the majority are proletarianized, and have no other option but to offer themselves for employmet in a labor market thoroughly permeated by the logic of capitalist competition.  The accumulation of capital is multiplication of the proletariat.  It is this process of proletarianization that brings the capitalist mode of production into being, creating both capital, and wage-laborers, and developing a ‘reserve army of labor’ alongside them.

            At the onset of neo-liberal globalization is the emergence of a single capitalist system spanning multiple competing capitalist states that have interest in the general conditions for capital accumulation and realization.  And as a consequence of the process of combined and uneven development, domestic configurations and locations in the global economy will give rise to distinct arrays of interests and distinct projects from state to state in the system.  Shaped by this process, capitalist enterprises are obliged to compete with each other to lower the cost of labor and increase the individual rate of profit.

            Neo-liberal globalization – with the crucial role of finance and technology, and the processes of proletarianization and combined and uneven development in operation – has indeed demonstrated the totalizing power of capital to penetrate all aspects of social relations in the world. Yet, despite the several reconfigurations capitalism has undertaken, it has remained an oppressive, uneven, unstable, contradictory, and conflict-ridden global system.  The system of global capitalism itself, including the market-driven governments and organizations, has created these contradictions, conflicts, and crises that capital itself is unable to resolve.  As always, capitalism is obsessed to growth, undermining its harsh social, ecological, and geopolitical effects; it is about changes in technology and lifestyle; and it is conflict-ridden, unstable, and crisis-prone.

Capitalism as a system of contradictions

It is important to note that our historical moment is also marked by the universality of the contradictions inherent in global capitalism.  The task, then, of resubordinating the market forces that now control the world comes not only in understanding them but on understanding their inherent contradictions.  The ‘contradictions’ do not merely refer to tensions and conflicts; but on the systemic contradictions that result from the dependence of capitalism on structural relationships.  And as results of the contradictions of globalizing capitalism, the human development costs associated with it have been extremely harsh and are likely to get worse.

The growth obsession of capitalism, which is a tendentially global system, has resulted in the economic, financial, ecological, and social problems.  These problems arise because for decades both productivity growth and real interest rates have been considerably higher than real growth rates.  These manifest the declining profit rate on capital in most parts of the world.  For the defenders of the capitalist order, the most obvious and convenient way out of the precarious situation of increasing unemployment and inequality on a global scale appears to be the stimulation of economic growth, which is seen as a panacea capable of resolving each and every global problem.  But not only are there economic obstacles to an increase of real growth rates, there are also serious ecological limits to further quantitative growth.

            Ecology limits capital’s drive for growth and productivity.  Even with the introduction of new technologies the reproduction of capital(ism) as a whole remains crucially dependent on (surplus) value which can only be produced by labor. Technology, with its tendency to excessively use fossil resources, and which is used as substitute to living labor, produces greenhouse effects and other ecological evils. Ecological degradation is one of the tangible manifestations of capitalist contradictions today.  Market cannot simply save nature because capital’s short-term imperative for profitability greatly contradicts every humane people’s desire for long-term sustainable development.

Notwithstanding the relentless drive for capital accumulation, there is poverty amidst plenty.  In the face of the veneration on vast networks and advances in information and communications technology, most people on earth live outside the gates of electronic innovations in another world of poverty and despair.  The poor and the disconnected experiencing both the social and psychological pains have been increasing in this global system of private appropriation. 

Indeed, there is certainly no system of appropriation more private than the capitalist one.  Yet there is no system that implicates the whole society in the way that private appropriation in capitalism does.

Capitalism in crisis

Insecure as ever, capitalism is unstable and crisis-prone.  Even with the promotion of neo-liberal globalization, which was born out of a series of structural crises in the 20th century, the world economy has continuously stumbled, experiencing slow growth that presents grave difficulties for capitalism in realizing its long-term capital accumulation.  The declining profit rate – which is a key variable in a functioning capitalism because it determines the efficiency of resources, guides marketing strategy, and stimulates demand, among its other significant functions – combined with other phenomena such as the globalization of economic crisis tendencies, financial meltdowns, severe economic disruptions in the periphery, the unleashing of a new imperialist war without limit, and the spread of the anti-globalization movements pose a global crisis in economic, political, and social terms for capitalism.

            Capital’s introduction of neo-liberalism, as a response to slow growth and the resulting limits on the profits that businesses could make, appears to be a desperate measure to manage the crisis of capitalism.  Capitalism continues to be haunted by its own internal logic.  Even when it is not at war and even when it is not involved in the old-forms of inter-imperialist rivalry, it is subject to the constant tensions and contradictions of the regime of capitalist competition.  This regime thus reveals the self-contradictory nature of capitalism: the system’s powerful tendency to expand production disrupts the flow of its foremost objective of profitability.

In the latter years of the 20th century, the international economy was stumbling.  The 1997 Asian financial crisis had affected the societies and economies of the rest of the world as manifested by the crashes in the stock markets and currencies.  Economies such as Russia and Brazil were falling into bankruptcy and recession.  The relatively strong economies of Japan and the United States of America were not immune in the crunch; they too slipped back into recession.  These events manifest the inherent tendency of capitalism to create crises.   

Beyond their own triumphalistic rhetoric, the global managers of globalizing capitalism are all too aware of capitalism’s contradictions and crises. It is for this reason that globalization is presented not only as a blueprint for continuing development through the market but also as a project of crisis management. As a result, capital calls for, if not forces, the ‘restructuring’ of the world economy – targetting the policies of welfare and developmentalism – along the conditions that satisfy capitalist profit.

Crises have become an ongoing part of the capitalist landscape.  Yet even if these do not lead to any generalized collapse of the system they do create opportunities for challenging the rationality of the system that depends on the perpetual creation of misery, oppression, and exploitation.

Conflicts in Capitalism

The unstable and conflict-ridden nature of emergent global capitalism comes with class struggle as reflected in the efforts of capitalists and pro-capitalist political forces to secure, and of subordinate classes to resist, the hegemony of capital over labor upon which capitalist reproduction ultimately depends.  As capitalists continue to pursue the growth imperative and thereby following the intrinsic tendency of capitalism to keep expanding and to carve out new areas for investment a large section of the world population suffer from misery and alienation.

The antagonistic character of capitalist accumulation combined with a set of characteristic features of capitalism – proletarianization, alienation, the subjection of the worker to the dictates of capital, and the systematic mystification of these processes in bourgeois ideology – makes an accumulation of misery a necessary condition, corresponding to the accumulation of wealth.  The self-expansion of capital is a dynamic but uneven process that reinforces the neo-liberal agenda of the real subsumption of labor to capital. Neo-liberal globalization, as an ideological assault to the working class, promotes the process of proletarianization that forcibly deprives free producers of access to the means of subsistence, in order to convert them into an available proletariat.  This process is one of the requisites of capitalism: the great majority of the population should have no other means of survival than to offer themselves for work at the market wage.

            The processes of profit-making, accumulation, and institutional regulation, which give a degree of security to this private system of appropriation, simultaneously produce insecurity on all levels of social and individual life.  Throughout the history of capitalism, capital always profits from uneven development, the differentiation of social conditions among national economies, the preservation of low-cost labor regimes, and hence the reproduction of relative poverty.

Capitalism Exploiting Non-Class Identities

The drive for capital accumulation is not the only oppressive process at work in the contemporary world.  Phenomena on some aspects of gender, race, ethnic, and religious subordination reflect a relationship of domination that pre-date capitalism.  Patriarchy, for instance, has already existed long before the conception of capitalism.

As socialists struggling against all forms of oppression and exploitation, we recognize that the issues of gender, race, ethnicity, nationalism, and religion have until long been at the center of conflicts.  These issues are thus necessary to be looked in its own historical and geographical contexts.  We recognize that gender, racial, ethnic, national, and religious identities – which are highly regarded values to the lives of many people – are not just ‘differences’ or ‘natural’ phenomena but these identities are closely associated with the historical evolution of capitalism.  We therefore support the legitimate aspirations and demands associated with these identities.  And we find it necessary to struggle against the global capitalist order with these non-class identities.

Still, other aspects of differences in gender, race, ethnicity, and religion are themselves products of capitalist development.  We see that capital has ways to appropriate and extract surpluses from differences in gender, race, ethnicity, and religion.  And since these differences have been implanted within the geographical landscape of capitalism and have been subjected to the logic of capitalist accumulation, we are to shape common strategies of resistance against the capitalist system.

The Philippine Society

Global capitalism has altered the economic, political, and cultural terrains of the Philippine society.  As a society integrated in the international political economy, the Philippines is subjected to the logic of global capitalism in which capital profits and thrives from uneven development, the differentiation of social conditions among national economies, the preservation of low-cost labor regimes, and the reproduction of relative poverty.  Apparently, the Philippine state itself has authored its subjection to the competitive logics and exigencies of international production, trade, and finance.  Its membership to multilateral institutions such as the World Bank, the International Monetary Fund, and the World Trade Organization at the time when the determining power of capital is more powerful than ever before has put the Philippines and its people under the harsh and alienating disciplines of neo-liberalism.

Class Structure

The locking-in of the Philippine society under the disciplines of neo-liberalism has resulted in tremendous change in its social and class structure.  Class structure in the Philippines does not only revolve between the polarized, antagonistic classes of capitalists and workers; it also includes the loosely located classes in the societal structure – specifically, the middle class, the underclass, and the class alliances.

The capitalist class as well as the elites in various economies need to compete with each other, as well as cooperate, in order to maintain and further the hegemony of capital over labor.  This highlights the emergence of a new reckoning force, the ‘transnational capitalist class’, which crosses national borders in pursuit of prospective markets.

The Economic Terrain

The economic history of the Philippines underscores the change in form and the continuity of substance of capitalism.  The Philippines have experienced subsistence economies during the pre-Hispanic period, to the period of reconstruction brought about by war, to import-substitution industrialization, to export-oriented industrialization, and to neo-liberalism to date.  But the capitalist mode of production remains.  (Of course, there was feudalism, which was a relationship of domination during the pre- and early Hispanic periods).  The system of appropriation that is very much private has continuously endured since the establishment of the Philippine nation-state in the 1940s.  It can be said that the economic history of the Philippine nation-state is a history of capitalism. 

Poverty remains.  Tremendous unemployment, inequality, and social immobilization appear to be a permanent fixture in the Philippine capitalist society.  The base, in the triangular, hierarchical structure of the Philippine society, is widening while the apex is getting stronger and more affluent.  The Philippines remains a Third World (developing) economy following the prescriptions of macroeconomic policies of the World Bank, structural adjustment programs of the International Monetary Fund, and free trade policy of the World Trade Organization.  Paradoxically, the neo-liberal policies of globalization it has authored and advanced carry no general solution for third world development.

The neo-liberal policies of privatization, liberalization, and regulatory innovations adopted by the Philippine economy are geared towards the management of globalization, which has been presented by its pushers as a brute fact, divorced from human agency.  Neo-liberalism, with its message that there is no alternative, obliges all countries on pain of extinction to follow the laws of global competition.  As a result, globalization becomes an all-purpose alibi, justifying direct international intervention in domestic policy-making around the globe and obliterating sovereignty. 


In this environment of global competition for market share, the Philippine state, like almost all states, is driven towards making its territory hospitable to capitalist investment, whether foreign or domestic.  Following the neo-liberal agenda, it has removed obstacles to the free range of capital with the introduction of the Philippine Privatization Program in the late 1980s, and the removal of protection, and cuts the costs of its operation by reducing taxes and promoting ‘efficient’ systems of targeted welfare from the 1990s to date. 

Moreover, the Philippine capitalist economy has recognized the neo-liberal formulation that: capital, which has spilled over at the global scale, cannot live by the logic of the self-regulating market alone, but needs supporting government policies and social (non-market) institutions in order to accumulate wealth.  With this recognition, the Philippines has implemented in its domestic economy a neo-liberal form of governance in which economic policies are separated from political accountability in order for governments to be more responsive to market forces than to popular-democratic forces.  This form of governance is obviously geared towards serving the interests of a globalizing transnational capitalist elite, and hence the exigencies of global competitiveness.

The Political Terrain

Like its economic history, the political history of the Philippines has undergone change in form but not in substance of elitism.   We have experienced changes in form of our politics – from the baranganic societies during the pre-Hispanic period to colonial politics/government under Spain, Japan, and America; to authoritarianism/dictatorship; to the so-called ‘restoration of democracy’.  But the political history of elitist politics in the Philippines endures.

With the advent of neo-liberal globalization, we have not witnessed the by-passing of the state.  Instead, we can see very active states like the Philippines and highly politicized sets of capitalist and pro-capitalist forces working hard to secure new international regimes that define and guarantee the global and domestic rights of capital.  As a result, the Philippine state has also become ‘risk absorber’ of the failures and bankruptcies of competing capitalisms.

At the domestic level, the Philippines has remained a ‘weak state’ resulting from the absence of a relatively autonomous state independent from direct management and control of the dominant capitalist class.  It has faithfully performed the indispensable functions the state has to perform in a capitalist society (i.e., guaranteeing property rights, contracts, dismantling obstructions to markets and ensuring the soundness of money).  At the regional and world levels, the Philippine state has authored regimes – through international treatises, obligations, commitments, and agreements – that lock-in its own people to the exigencies of global competitiveness.

The Cultural Terrain

The cultural history of the Philippines recognizes the fact that it is a melting pot of several cultures (Chinese, Malay, Spanish, Japanese, American, etc).  While it can be said that there are patterns of continuities of local identities and cultures, the operations of capital in this epoch of globalization threaten our heritage.  Competing capitalisms affect culture both in a homogenizing project (i.e., Westernization or homogenization of culture) and in differentiating project (that embraces the principle of market choice).

In the epoch of globalization, two cultural globalization trends are seen in the Philippine society.  One process features a cultural imperialism in which dominant cultures of the West and the US, including the flow of cultural goods and lifestyle, are swamping our local cultures in processes of homogenization.  This is the strategy employed by advanced American and Western economies so as to prepare local cultures to the importation of their goods; and hence meet their economic interests.  Another process at work is the classic way of capitalism of producing diversity, heterogeneity and difference that are translated by international and domestic capital into niche markets.  This strategy of capital in the production of difference is part and parcel of the process of capital accumulation that has transformed the realm of culture into an arena of fierce competition for profit-making.

Towards a Strategy for Socialist Practice

Our analysis of the contradictions, conflicts, and crises of globalizing capitalism is to be used in our struggle for change because they open opportunities where we can advance socialist practice.  Socialism has always been a logical, sound, and viable alternative to the oppressive capitalist system because it has very powerful ideological counter-offensives in bringing fundamental change.    

The universalization of capitalism does not only represent the measure of its success but it does also express a source of weakness. Capitalism can become universal but it cannot be universally successful.  It can only universalize the contradictions, conflicts, and crises that lie within its own logic; and the polarizations between the rich and the poor. 

Capitalism is a disease, a cancerous growth that destroys the social fabric and nature itself.  It is an inhuman and inegalitarian system of exploitation that, like all other human constructs, is not destined to last forever but can and must be overthrown and replaced by socialism as soon as possible.

The universalization of capitalism is not just a defeat for us but an opportunity as well – and that, of course, above all, means a new opportunity for class struggle. Indeed, this is the moment when a thorough critique of, and a fearless struggle against, capitalism is most urgently needed, one that not only makes demands for constitutional and legal safeguards against abuses of basic citizens’ rights but also posing a collective challenge to, and assertion of democratic control over, capital.