---- Original Message -----
From: Tony B.
To: Cy
Sent: Saturday, November 27, 2010 12:53 PM
Subject: Capitalism and It's Discontents
Cy,
Don't know whether you might be interested in this or not...it's a tiny-tad
behind the 'times' ..but, really, not much. The piece was only ever
published in our local 'Mayday' mag (Hamilton, couple thousand
readers)...and I gots to thinking that it deserved a better fate. It might,
in fact, serve as a nice overview of the present world economic
crisis....Anyways, if you care for it, it's yours for the website...
Cheers,
Tony
PS I've here stitched the 3 parts together into one essay..
Capitalism and It's Discontents
The Political Economy of Global Dispossession
(Part One)
Listening to the steady, hypnotic drone of the well-disciplined phalanxes of
corporate and Wall Street apologists, one would never guess that the present
crisis in American - indeed, global - capitalism is anything other than the
unfolding of some, more or less, natural physical law. Just a quirk, a blip,
a stumble, a curious aberration, an ineluctable 'storm' on the high seas of
high finance. Just something the 'market' sometimes does.
But then, hopefully, that is if one is not fatally in thrall to the spell
cast by the high priests of 'classical' economics who, over the past three
decades, have raised the 'free market' to the status of a secular religion,
one wakes to remember the facts of the case. And the facts, in a nutshell,
are these:
Despite being an 'engine of technical innovation' and of having delivered a
relative consumer 'paradise' to a minority subset of the world's population,
capitalism, today, has done so at the expense of roughly 2.8 billion people
who live on less than $2 a day; 1.2 billion of whom live on less than a
dollar a day.
It has done so at the expense of the 30,000 people (85% of whom are children
under the age of 5) who die every day from starvation, malnutrition and
easily treatable diseases - in short, of poverty, and whose preventable
deaths would cost a trifling fraction of a per cent of the war (-crime) in
Iraq, or of the funds just spent to rescue Wall Street from its own
debt-pyramiding schemes.
It has done so at the expense of deliberately ensnaring (as I'll discuss in
Part Two) the entire Third World within a spider web of unsupportable - and
ultimately unpayable - loans in what, effectively, amounts to a global
loan-sharking operation of such staggering scale as to leave any respectable
Mafia racketeer starry-eyed in wonder.
It has done so at the expense of forging a dramatically increasing
polarization of wealth - both beyond and within the core of the First World
itself.
It has done so at the expense of global security and peace through the
creation and exponential growth of a state/private military-industrial
complex that has finally achieved what Orwell only imagined - a culture,
ideology and practice of endless war.
It has done so at the expense of whatever limited domain of political
democracy has ever been achieved in this tyranny-prone world.
And it has done so at the expense - perhaps irredeemable - of the natural
capital and life-support systems of the planet.
Still, these constitute a mere representative sample of the obscenities
inherent in an economic way of life whose essential structure of
exploitation and concentration of oligarchical power is mostly obscured from
view by a system of indoctrination (the media) that is integral to its very
operation and continued existence. Occasionally, however, the curtain is, a
la the Wizard of Oz, inadvertently drawn back to reveal the naked greed and
parasitism of the whole shebang. Precisely such an opportunity has been
afforded us by the present US financial meltdown, to which we now turn.
Socialism For The Rich....
The US Treasury's takeover of Fannie Mae and Freddie Mac (the two giant
quasi-government enterprises that, together, hold over 80% of the home
mortgages in the United States) in early September added a cool $5.3
trillion to the US government debt, effectively doubling it. The prime
motivation for the takeover was not, however, to protect US mortgage holders
(ha!) - millions of whom have already lost their homes with millions more
likely to default over the coming year, and whose only 'bailout' so far has
consisted of little more than some patronizing advice on 'how to refinance'
their personal catastrophes - but was, instead, driven by the foreign
central banks of the likes of China and Japan which hold $1.7 trillion of
Fannie and Freddie's debt. These latter were showing signs of preparing to
dump their holdings of said worthless paper (see 'Into the Abyss' , #37), an
action which would have threatened a good part of the whole crazy process
that sees foreign-held US dollars recycled back into the United States in
order to finance the $800 billion per year US trade deficit (part and parcel
of so-called 'dollar hegemony', more on that in Part Two). Without those
foreign dollars being recycled into the US Treasury and into US securities
Washington would, apart from being virtually bankrupt, be unable to finance
its imperial wars.
Not to worry. The (financial) world breathed a sigh of relief when the US
Treasury Secretary, Henry Paulson, stepped in to guarantee Fannie and
Freddie's debt. The only question - a big one, as it turns out - is whether
the Treasury has saved Fannie and Freddie, or Fannie and Freddie have sunk
the Treasury. Stay tuned.
It wasn't long, however, (a few days in fact) before a further spate of
bankruptcies brought a number of Wall Street icons tumbling to earth and
before the US Treasury announced a further $700 billion (!) bailout for the
nation's banking system. What was one to make of it all? Well, according to
the well-disciplined phalanxes, these were just more 'rough seas'. Okay,
maybe very rough seas, and maybe the result of a little 'lax' regulation,
but, hell, these things happen.
For the rest of us the answer is a little more sanguine, a touch more
substantive:
The failure of the US financial system is the direct result of the criminal
deregulation of the process of capital accumulation and profit-making which
has led to an almost complete separation of the systems of material
production and financial investment. In other words, instead of investing in
industry and manufacturing, i.e. in the real economy, finance capitalism has
chosen to gamble its way to super profits through a debt-pyramiding scheme
that involved betting up the prices of already issued stocks, bonds and
'derivatives' - including, fatefully as it turns out, bundled mortgages - in
a phenomenon known as asset-price inflation. The US Federal Reserve
sanctioned and promoted this sort of hanky-panky through a policy of easy
credit, lax regulation and a philosophy that equated asset-price inflation
with the creation of actual productive wealth, i.e. of flesh-and-blood
things. [Yes, these are the kind of geniuses who run the world].
For those at the top who could occasionally afford to step back and cash in,
these purely fictional (from our point of view) paper assets were then
turned into real, material objects - a home in the Hamptons perhaps, or a
100 foot yacht, a private jet, or a chalet in the Swiss Alps. Now those
things are real and are thus a claim on someone's actual work, skill and
time - what is otherwise known in the everyday world as 'money'. This
amounted to the transfer of vast sums of real wealth from one sector of
society (the 'bottom') to another (the top). All of this was further
reinforced by regressive fiscal policies that shifted the (already minimal)
taxation of the FIRE sectors (finance, insurance and real estate) entirely
onto industry and labour.
In short, virtually the entire edifice of high finance in the United States
had become less a vehicle for wealth creation, than a parasitic system of
economic vampirism. Eventually, there was so much paper debt chasing after
so little real value that the system finally collapsed. The bubble burst.
[As a brief aside it is worth recounting the basic theme of the subprime
mortgage scandal that set the whole rotten edifice tottering: The idea is
that mortgages were bundled together into so-called collateral debt
obligations (CDOs) and sold and re-sold to investors like any stock, bond or
derivative. The more often they were sold, or the more of them that were
sold, the more the brokers made their fees, the more the CDOs inflated in
price, and, generally, the more money everyone made. The point is that the
whole whacky system depended on the sheer volume and 'velocity' of the
transactions, not their underlying value. That's when local mortgage agents
began to receive 'incentives' from bankers and the big investment firms to
lend out NINJA mortgages (no income, no job) to every Tom, Dick and Harriet
who could lift a pen and sign on to the bottom line of what, by anybody's
definition, was a straight Ponzi scheme. All of this, naturally, entailed
the intimate complicity of government legislators, 'regulators', and
credit-rating agencies.]
Back to the bursting bubble. There had been other bubbles before this one,
of course, but now the slack in the system was spent. All the usual tricks
of the trade (which effectively meant paying for old debt by creating new
debt, thus accounting for the whole series of real estate and stock market
bubbles over the past two decades) were exhausted. Besides, the sheer scale
of the scamming, the gambling, and the fraudulent book-keeping was now so
staggering as to surpass belief [As I mentioned in April's issue, the
derivative market alone was registering at more than 10 times the entire
global GDP!] There was nothing left but to pass on the whole fetid mess and
resulting debt to the people at the bottom - you know, the under class, the
rubes, the suckers, the booboisie; in short, the taxpayer.
....Debt Bondage For The Rest
Now, just to step back a bit, it is worth noting that this economic
vampirism didn't just spring out of nowhere, but evolved from a 'crisis of
profitability' back in the early 1970's. It was then that the long campaign
to roll back the great post-WW2 'social compromise' between capital and
labour began in earnest. Over the ensuing three decades - and gathering
particular momentum following the demise of the Soviet Union - the
capitalist class (and yes, 'class' really is more than just a plaything of
academia) systematically dismantled the Western 'welfare' state, demolished
labour and collective bargaining rights, shredded pension plans, privatized
utilities, enacted pro-corporate 'free trade' deals and, generally, engaged
in open class warfare.
What we are now witnessing with the collapse of the US financial system is,
then, merely the penultimate crescendo of this recent historical process. I
say 'penultimate' because, of course, the consequences arising from the
present financial debacle will inevitably (unless they rise up to do
something about it) flow through and be borne by the majority of ordinary
Americans in an ever growing maelstrom of poverty, unemployment,
homelessness and social misery.
Ironically, the means by which the toiling classes within the heart of
empire have become enslaved to various and sundry forms of debt bondage at
the service and profit of their masters, is not so dissimilar to the
structural dynamics by which the Third World has, over the same historical
period, become permanently indebted to that of the First. And it is to this
fascinating, if woeful, tale that we'll turn in Part Two.
(Part Two)
I ended last month's essay by stating that the present US - and now,
global - economic meltdown was hardly some historically isolated incident,
but was, instead, the ineluctable result of a process that had begun in the
early 1970's. It was then, I said, that a 'crisis of profitability' had
beset the capitalist class and from which they sought escape through a 35
year campaign of open class warfare.
Still, the question of how this 'crisis of profitability' had arisen in the
first place was left unanswered. To address this missing provenance I
propose to take a brash and breezy tour (actually, a detour) through 20th
century American economics - after which, I promise (in part 3), we will
once again rejoin the theme of 'debt-bondage' as it is today playing out in
the tragically immiserated and exploited 'Third World'.
Depressions, Wars and Business as Usual
By the end of WW1 both Great Britain and France were heavily indebted to the
United States. So indebted, in fact, that it was largely as a consequence of
the likelihood of their losing the war against Germany - and so defaulting
on their payments to Washington - that the US decided to enter the war and
come to their 'aid'.
But, following the war, the US, like any good loan shark, demanded that its
'bosom allies' pay up. They did, but only by extracting, in turn, punishing
reparations from the already broken German economy, an economy which, then,
quickly plummeted into chaos. This led directly to the rise of German
fascism and the Second World War.
However, it wasn't only the German economy that was hurt by these
debt-leverage financial machinations. In Great Britain and France, economic
demand began to slump as well. The United States, burdened with its own
economic inequality and facing a collapse of demand from abroad, soon found
itself in a classic 'crisis of overproduction', i.e. too many goods facing
too few people able to buy them. And so, just as in the economic meltdown of
today, the collapse of the stock market in 1929 merely signalled the
culminating event of a process long in the making.
Here we see, by the way, one of the quintessential contradictions of our
whole economic way of life, i.e. the fact that the labouring class from
which capital extracts its profits and 'surplus value' is, at one and the
same time, the consumer class on which it depends to sell its products. This
contradiction, as we'll elaborate on later, is only overcome - and that only
temporarily - by forcibly exploiting external markets, resources and labour
sources. In short, by resorting to imperialist expropriation.
Now, during WW2, the United States once again declined, initially, to enter
into hostilities preferring, instead, to proffer 'aid' to the beleaguered
British through the Lend-Lease Act. The latter was premised on a guarantee
from Britain, post-war, to selectively dismantle its Imperial Preference and
allow the US to trade with Commonwealth countries unburdened by their usual
intra-imperial tariffs. Essentially, then, Lend-Lease was the instrument by
which Washington was able to penetrate and economically colonize Britain's
imperial domains. With this trump card - and the nuclear card - in its hip
pocket, and the fact that it alone amongst the major powers had escaped more
or less totally unscathed by the war, the US emerged from the conflict as
the undisputed economic and military power on earth.
By way of cementing this power Washington quickly set up a world economic
and political order to its liking. Thus, in Bretton Woods, New Hampshire, in
1944, the US strong-armed its European allies (and 40 or so other countries)
into a system that established the dollar as the pre-eminent global
currency. It was here that the International Monetary Fund (IMF) and the
World Bank were established as ostensibly 'international' funding agencies,
but which (because the US retained majority control) were, effectively,
merely wings of the US Treasury Department. On the political front, the
United States, having previously rejected the League of Nations, now saw fit
to launch its own highly tailored and self-serving version of multi-lateral
governance in the form of the United Nations. On the military front NATO was
formed both to confront its (all along) real 'enemy', the Soviet Union, and
to bind, mafia-like, its Western allies as sub-imperial partners (this
after having first quashed the war-time resistance movements and their
aspirations for implementing radical democratic changes, and after then
re-installing the old, pre-war reactionary elites).
Finally, the Marshal Plan (not, as many believe, a showering of beneficent
grants, but, in fact, a calculated debt-bondage system of loans and credits)
was strategically deployed to a) reconstruct and procure markets for
American goods, b) create a Western European bulwark against Bolshevism, and
c) guarantee that the US military-industrial complex would remain the
central pillar of the, by now, permanent war economy of the United States.
There were, of course, a few positive changes to the pre-war status quo.
Bretton Woods also established a system of tight regulatory control over
markets and fostered a regime of high wages and relative peace between
labour and capital. These were, in part, an explicit recognition of the need
to acknowledge the general sacrifice of war and to satisfy the high
expectations of returning soldiers. It was also, however, an implicit
acknowledgment of the fact that both Big Business and the ruling classes
had, pre-war, not only overseen a pro-longed depression, but had overtly
supported the fascist states and leaders that were later to plunge the world
into global conflict. This was not soon forgotten.
The System Breaks Down
All was then hunky-dory for a while (well, if you don't count, that is, the
2 million killed in the Korean War, the brutal re-establishment of various
European imperial colonies, as well as McCarthyism and such). But then
gradually the economic 'peace' unravelled. This was a consequence of both
the emergence of newly industrializing economies like Brazil, South Korea
and Taiwan, and the re-emergence of Germany and Japan as economic
competitors. These together injected enormous productive capacity onto
global markets which quickly became saturated. The latter was exacerbated by
the growing inequalities (and thus, purchasing power) in those Third World
nations on the imperial periphery who were, as we've seen, acting as fodder
and resources for the imperial metropoles (the US and Western Europe).
Another 'crisis of overproduction' - and of profitability - had reared its
ugly head.
By the early 1970's, then, the capitalist world was beset by stagnant growth
and high inflation ('stagflation'). Just as significantly, the United
States, which had previously acted as global creditor (sheerly with respect
to its own imperial, loan-sharking interests you understand) now found
itself - and this due in large part to the cost of its two imperial wars in
Korea and Vietnam - as a global *debtor*. Now, one might think that such
would spell economic ruin for the world's number one superpower. And that
would be true for your average run-of-the-mill nation. But we're talking
about an empire here, and empires, as it turns out, entertain a very
peculiar and remarkable capacity. They have the ability to print money at
will - and force everyone else to accept it. In short, they have what all of
us can only dream of: virtually unlimited credit.
Global Tribute .or how to get something for nothing
This magic credit card is otherwise known as 'dollar hegemony', a term which
refers to the fact that, for decades, the US dollar has been the 'reserve'
or 'fiat' currency to which the rest of the world has been enjoined (by
virtue of both American military and economic might) as the pre-eminent
medium of exchange.
The beginnings of this decidedly unequal arrangement stemmed straight from
the original Bretton Woods shindig, though what really launched it into the
stratosphere was a collusive agreement between Washington and the Saudis
following the Arab Oil Embargo of 1973 to the effect that all future oil
international oil transactions were to be denominated in dollars.
Henceforth, without dollars, no matter how well off a country was - no oil.
These machinations were later buttressed by 'globalization' and 'neo-liberal
restructuring' (the so-called 'Washington Consensus' - part 3) which allowed
giant US-based 'hedge funds' to launch speculative attacks on a nation's
currency. It has, thus, become necessary for foreign nations to store large
quantities of dollars in their central banks to stave off these speculative
attacks. [Indeed, it was precisely such an attack by US-based hedge funds
that triggered the Asian financial crisis of 1997.]
The ramifications of all this are, briefly, as follows:
First, the US itself has, as we've already noted, been able for many years
to run a massive trade deficit. It is able to sustain this deficit by simply
handing over paper (i.e. dollars) for actual stuff (i.e. material goods). It
can get away with this because everyone requires the paper for protecting
their currencies, and for purchasing oil and a host of other commodities.
However, these foreign accounts of dollars represent a danger. This is
because too much US currency floating onto the international market would
eventually lead to a drop in the dollar - and consequent relative rise in
their value of their own currency - which would result in a potentially
catastrophic decline in the exports of those countries. Countries whose
chief market is, don't you know, the United States.
Thus, the second major ramification of dollar hegemony: To stave off a
collapse of their export economies many nations (i.e. China, Japan, Saudi
Arabia etc) are forced to reinvest their surplus dollars in the US (mostly
in the form of US Treasury bonds).
[Digression: They are not allowed to buy strategic American industries and
assets, this under threat of war - that's the significance of the 'military
might' part - though they have been allowed to buy, fatally, toxic
mortgages].
The circle is now complete. America has gotten a bunch of more or less free
'stuff' *and* its inflated paper surplus back to boot. The latter has served
not only to finance America's imperial wars, but also its long series of
speculative financial bubbles.
Basically what all this amounts to, then, is a form of global tribute. It is
predicated on two things: American military might, and the incestuous
coupling and interdependence of major foreign economies with the US consumer
market.
Still, the system is riven with contradictions, not the least of which is
that the original problem, the 'crisis of profitability' deriving from the
early 1970's, has not at all been solved, but merely papered over. And the
desperate attempt to evade this deep dwelling Achilles heel of First World
capital accumulation has lead to a diabolical three pronged strategy, the
three tips of which have struck like daggers at the heart of the Third World
over the last thirty years. And it is to this open wound that we will turn,
as a final denouement, in part 3.
(Part Three)
Let me begin this concluding part of the trilogy by first dispensing with
the particularly irritating and ludicrous myth - manufactured by the
corporate media in their attempt to redirect the public's attention from the
true nature (and the true authors) of the present global meltdown - to the
effect that the current massive intervention of the state into the 'free'
market is some form of socialism.
Nothing, of course, could be further from the truth. The hundreds of
billions - soon to be trillions - of tax payer dollars being funnelled into
world financial structures have, in fact, absolutely zero in common with
actual socialist redistributive policies. Indeed, they represent precisely
the inverse dynamic. Thus, the money is flowing conspicuously in the
opposite direction, that is, *from* the working classes *to* the very
financial swindlers (meaning virtually the entire upper echelon of
government, corporate and financial elites) who engineered the giant Ponzi
scheme in the first place. The whole point of the process, then, is not by
way of dismantling or even taming capitalism, but of saving it. Saving it so
it can live and rob another day.
Now, as I delineated in parts one and two, the present financial collapse
originated (in terms of its immediate historical antecedents) in a 'crisis
of overproduction' and hence of profitability in the 1970's. The desperate
*final* attempt to solve this 'crisis' involved the so-called
'financialization' of the economy, a process which witnessed the separation
of finance capital from productive investment in favour of what was,
effectively, a blatantly criminal, debt-pyramiding scheme. Preceding this
paroxysm of fraud and gambling mania, however, were two rather more
traditional, more sedate strategies of capital accumulation.
The Washington Consensus
The first attempt, then, to escape the cul-de-sac of global capitalist
overproduction ('overproduction' with respect to profits that is, not actual
need) took the form, as I mentioned in part one, of a direct assault on the
post-WW2 'social compromise'. To this end did the capitalist class
systematically dismantle the Western welfare state, demolish labour and
collective bargaining rights, shred pension plans, privatize utilities,
enact pro-corporate 'free trade' deals and remove virtually all state
controls on the mobility of capital and wealth. The first wave of this
'neo-liberal' restructuring was kicked-off in 1980 when, in the United
States, President Reagan broke the air-traffic controllers' strike (by
firing them all), and when, in Britain, Prime Minister, Margaret Thatcher,
crushed the coal-miners' strike. Over the next two decades - and lent added
impetus by the ideological vacuum created by the fall of the Soviet Union -
this orgy of capitalist triumphalism engineered a dramatic redistribution of
wealth from the poor and middle classes to the rich. In short, faced with a
'crisis of profitability' the rich simply turned the poor upside down and
emptied their pockets.
Still, none of this solved the original problem. Thus, whereas global growth
had averaged 3. 5% in the 1960's and 2.4% in the 1970's, it averaged only
1.4% and 1.1% respectively in the 1980's and '90's.
The second attempt, then, to escape the steady decline of capitalist
profitability took the form of 'globalization'. Fuelled in part by new
advances in communications technology, but enabled largely by American
military might, the First World metropoles sought to integrate previously
unexploited 'second' and 'third' world peripheral regions into the
capitalist juggernaut. A vigorous program was thus set in motion to a)
relocate manufacturing and industrial processes to areas of cheap labour, b)
penetrate and pry open protectionist national economic policies, c)
privatize state social programs, d) reconfigure nationalist agricultural
interests away from the growing of food for local consumption and towards
the production, instead, of cash crops for export, and, finally, e) ensnare
poorer countries, both by fraud and by force, in a spider-web of
unsupportable loans that have resulted in a system of debt-bondage valued at
more than $2.5 trillion. For 'globalization' then, we can dispense with the
civilized niceties and read simply, 'economic imperialism'.
It is worth noting at this point that though these economic 'strategies'
were targeted largely at the Third World, it is nevertheless the case that
the so-called 'Second World' (i.e. the former Soviet Union and its satellite
countries, amongst others) suffered grievously by them as well. In fact,
following the demise of the Soviet Union, the West so viciously pillaged the
rump Russian state as to have reduced its GDP by half (!). The mass poverty
that resulted likely contributed (as Noam Chomsky has recently highlighted)
to as many or more deaths (i.e. in the many millions) as did the purges and
the war-induced famine of the Stalin era.
Also worth noting is the fact these 'neo-liberal restructurings' were not
just limited to the Second and Third Worlds, but also targeted the working
and middle classes in the First. In Canada, for instance, the so-called
'Free Trade' deals had precious little to do with either freedom or trade,
but were, instead, primarily agreements that enshrined investor and
corporate rights over the democratic rights of citizens - and the democratic
state itself - whilst also securing our natural resources for the imperial
center. The latter tactic, of course, was also integral to the
'globalization' process involving the Second and Third Worlds. The
successive attacks and/or invasions of such as Panama, Yugoslavia,
Afghanistan and Iraq - and just recently, Somali - not to mention the
too-numerous-to-relate 'covert' operations against various and sundry Latin
American and African states, must be seen in the light of this 'economic
imperialist' project. Indeed, the overarching theme within which
'globalization' must be largely couched is the growing failure of American
economic supremacy, a decline which has been compensated for by an overt -
and historically all to familiar - campaign of military imperialism.
These 'notes' aside, it is high-time we took a closer look at how these
'neo-liberal' and 'globalization' strategies have played out in the Third
World itself.
How The Other Half Die
There is an arresting scene in the Hollywood epic, 'Apocalypse Now', where
the main protagonist, Willard (played by Martin Sheen), casually shoots a
helpless, mortally wounded Vietnamese woman in the head. The rest of the
crew on the small river gun-boat is shocked - this after they have,
themselves, just (gratuitously) shot-up and killed everyone else aboard the
tiny sampan. We hear only Willard's internal thoughts as he retreats to the
sanctuary of his own company, ".It was a way we had over here with living
with ourselves. We cut 'em in half with a machine gun and give 'em a
band-aid. It was a lie."
'Cut 'em in half, and give 'em a band-aid'. As a metaphor that about
encapsulates the effect of Western 'aid' policies towards the Third World.
This with the proviso that, in truth, our so-called 'aid' is actually worse
since most of it is, itself, conditionally tied to implementing the same set
of 'neo-liberal' policies that necessitated the 'aid' in the first place. To
lend the bite of the concrete to this abstract indictment, let us now follow
through, as in a flow diagram, a generic case study of this process. In this
instance, we'll focus on the structural roots of the present hunger crisis.
The story goes something like this:
Chapter One: Teams of 'private' experts from, say, the US (but who are, in
truth, allied covertly with the state), descend on your backward little
country - but which is, nonetheless, self-sufficient in feeding itself - and
convince its business elite ('convince', meaning bribe if necessary) that a
mega-project of some sort is both necessary and feasible, neither of which
is true. Normally, even with the bribes and sundry inducements this might
prove problematic except for the fact that US Treasury (and its affiliated
'international' lending institutions, i.e. the IMF, World Bank etc) have
graciously extended a cheap credit policy. The bate is taken, and lo and
behold, only a few short years later, the mega-projects have gone bust and
this same business 'elite' is in hawk up to its eyeballs. To cover their
debt these same characters foist their responsibilities on to the state
(such is hardly a problem, being oh so wonderously facilitated by the
revolving door between government and the 'private sector'). Mysteriously,
the once private debt has now become the 'peoples' debt. The state then
turns officially to the IMF and the World Bank for more loans to cover
shortfalls on the payment of the old (now nationalized) debt.
Chapter Two: The IMF, the World Bank (and thus the US Treasury) now have
your country by the short and curlies. They soon demand their pound of flesh
in the form of 'structural changes' to your economy (and, okay, a coerced
vote or two at the UN, and perhaps an agreement to join some 'coalition of
the willing' or other). These necessitate the prying open of the nation's
investment policies, the destruction of all and sundry social programs (to
prevent funds, you understand, from being channelled to the people in lieu
of paying 'their' debt), and the demolition of any protective trade
barriers. These latter include, naturally, the agricultural sector which is
soon swamped by subsidized food from the First World (whose farm subsidies,
in both Europe and the US, register in the many hundreds of billions of
dollars). As a result, all of your small and medium size farmers are driven
out of business. These displaced farmers flee to the urban slums of your
now, grievously indebted nation where, of course, they face little or no
social support programs. Meanwhile, the vacant land has been taken over and
concentrated in the hands of giant agro-business firms and rich plantation
owners. These then focus on growing crops for export. The final result is
that our backward - but formerly self-sufficient - little nation is now a
country where virtually the entire agricultural sector is devoted to
exporting food (and so-called, 'cash crops', i.e. coffee, cotton etc) whilst
simultaneously being home to millions who are starving. That's when the
NGOs and the band-aids arrive, and we all feel good about ourselves.
Though somewhat over simplified, versions of this basic story have,
nevertheless, played out in country after country across the globe. And
though it is true that additional, independent factors (including increased
food-import demands from China and India, and increased energy costs) have
factored into the most recent food crisis, it is also the case that
increased commodity speculation - which itself derives from the collapse of
the speculative real estate bubble world-wide - has also become a prime
mover of the hunger of hundreds of millions.
* * * * *
Ferdinand Lundberg, whilst once reflecting on the sheer economic (elitist)
determinism of much of the thought processes of the top American capitalist
ideologues, remarked that they 'reminded him of nothing so much as inverted
[vulgar] Marxists in yachting clothes'. To continue the naval metaphor: As
the good ship S.S. Capital lists badly in the water, its crew bailing
furiously, the deck classes already drowning, and with the unavoidable
iceberg of the planet's natural limits looming in the mist.the passengers in
first class can be heard, between glasses of champagne, singing rollicking
bars of a ditty first sung by Louis XV, "Apres moi, le deluge" [Rough
translation: 'To hell with you all']
Antony Black
t...@cogeco.ca
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