Imperialism in the Era of Globalization
We are posting these series of articles that came out late in 2015 in Monthly Review because of their relevance to developments in the Middle East over the last few decades.
Capitalism is preeminently a money-using system where a large part of wealth is held either in the form of money or as money-denominated assets, namely financial assets. For the system to work, it is essential that the value of money should not keep declining against commodities; otherwise people would move away from holding money, and it would cease to be not just a form of wealth, but even a medium of circulation.
Hence, capitalism seeks to ensure the stability of the value of money in a number of ways. One is the maintenance of a vast reserve army of labor, not just within the metropolis but also in the third world. This “distant” reserve army keeps down not only local money wages, and hence the prices of raw materials produced there, but also the money wages of workers in the metropolis, who are threatened with unemployment through capital outflows to the third world, if they insist on higher wages.