Book Review: Corporate Power,Class Conflict,and the Crisis of the New Globalization by Ronald Cox

Using Marxian political economy, Corporate Power, Class Conflict, and the Crisis of the New Globalization, by Ronald Cox (2019), provides an up-to-date, detailed, and fluent description and explanation of the enormous power of supranational corporations and the endless ways they assert and expand their global domination over political and economic affairs in the neoliberal period, which started in the late 1970s and is alive and well today. Cox describes the period between 1945 and 1968 as the period of ‘regulated capitalism’ (the so-called ‘golden age of capitalism’), and he reminds us that capitalist firms experienced a steady decline in the profit rate between 1965 and 1982 (p. 4).

Through six chapters (with graphs and charts) that fill 150 pages, Cox methodically delineates how the global ruling elite tirelessly collude and compete to counter the inescapable law of the falling rate of profit in the present stage of capitalism. His focus is mainly on major transnational corporations that operate in the United States, Europe, and Japan, but he also references China, which is increasingly asserting its political and economic power around the world in various ways. In this vein, a major development has been the dramatic expansion of technology firms and production in China in recent years.

In the United States, big business has relied heavily on the Business Roundtable, established in 1972, to consolidate its economic and political hegemony at home and abroad. The European Roundtable of Industrialists, the European counterpart of the Business Roundtable, has been the main tool of European capital to extract surplus value nationally and internationally. And the chief organization of Japanese capital remains Keidanren, which was established in 1946. These entities are essentially the political/lobbying arms of capital in the United States, Europe, and Japan, respectively. They collude heavily with various ministries, governments, states, and political coalitions to advance transnational corporate interests. Cox also points out that the political systems within which major owners of capital operate today are viewed by the majority has having little legitimacy.

Cox shows that, to maximize profit as fast as possible, transnational monopolies in these regions engage in a dizzying array of over-lapping actions that include mergers and acquisitions, outsourcing, subcontracting, regional and bilateral investment agreements, segmented production, pyramid schemes, lower taxes, privatization, deregulation, union-busting, cutting social programs, state subsidies, quantitative easing, patent protections, intellectual property right protections, trademarks, licensing protocols, and more.

Through North American Free Trade Agreement (NAFTA), for example, the United States has brought all of North America under its imperialist dictate. It is worth noting that on 29 January 2020, after Cox’s book was published, President Donald Trump signed into law the Canada-US-Mexico Agreement (CUSMA), which replaces NAFTA. CUSMA further consolidates the political and economic hegemony of Canadian, US, and Mexican monopolies over the region, while lowering living and working standards for the majority. For the European Union, among other things, annexing many eastern European countries has been key to reinforcing the power of European capital. The Japanese elite, for their part, have expanded their economic and political tentacles into East Asia and neighboring countries where they have sought to avert falling profits through subordinating a large network of small and medium producers and distributors to the needs of Japanese cartels. But decades later, Japan’s economy remains very weak. (Many are now talking about the ‘Japanification’ of the economies of the North.)

Cox deploys several key concepts to frame his entire analysis and discussion. The key concept is ‘Transnational Interest Bloc’. Cox prefers this concept over the concept of ‘Transnational Capitalist Class’ because

[T]he concept of transnational interest bloc operates at a mid-range level of analysis that allows us to ground the formation of transnational capitalist coalitions within specific histories, and to be sensitive to the extent to which those histories still shape the orientation and objectives of rival capitalist interest blocs. On the other hand, the transnational capitalist class terminology operates at a high-range level of analysis, which is less equipped to examine specific contextual factors that enhance, limit, or impede the power of transnational capital. (pp. 14–15)

Cox does not reject the merit of the terminology ‘Transnational Capitalist Class’, he simply believes that the idea of ‘Transnational Interest Bloc’ offers a more refined and granular view of economic realities.

The other concept central to Cox’s analysis is the concept of ‘Global Value Chains’, also known as ‘Global Value Networks’. Cox notes that the political and economic hegemony of transnational corporations ‘is manifested by their coordination of global value networks that are responsible for about 80 percent of global trade’ (2019: 23). These global value chains consist of vast production and distribution networks comprised of a bewildering web of intermediaries such as ‘management consultants, legal services, recruitment agencies, traders, financiers, and standard-setters, as well as the political governing structures that help to establish global value networks’ (p. 24). Cox stresses that the global segmentation of production is key to new global value chains and reversing diminishing corporate profits. He rightly asserts that these global value chains dominated by transnational firms have harmed ‘workers, societies, and those that are most vulnerable’ (p. 146). They have also degraded the natural environment.

Cox should be commended for connecting macro-level developments with micro-level developments, and for upholding fundamental principles of political economy and not abandoning the law of the falling rate of profit as so many economists have over the years. Marxian political economy offers far greater explanatory power than other economic theories and remains the most compelling analytical tool available to make sense of modern-day economic realities.

While Cox described dozens of strategies and schemes used by major owners of capital to maximize profit in the neoliberal period, he did not address the historic role of large and small imperialist wars in reversing declining profits for the financial oligarchy. This is significant because trade wars often lead to hot wars, and there is no reason to believe that competing imperialist interests have abandoned war plans for the future. Iraq, Afghanistan, and Libya are perhaps the most obvious examples of recent wars instigated by big imperialist powers, but serious conflicts have been organized by major owners of capital in Venezuela, Iran, Syria, Yemen, North Korea, and elsewhere.

In the final analysis, Corporate Power, Class Conflict, and the Crisis of the New Globalization is a must-read for anyone interested in comprehending the micro, meso, and macro realities of neoliberal economics, and specifically how major monopolies dominate the globe economically and politically. This understanding, in turn, must, says Cox, be combined with a political praxis that shifts the balance of power from capitalists to workers. A brighter future depends upon it.