John McMurty is a philosophy prof. He has written a book The Cancer Stage of Capitalism anticipating Timeworks' recent remark.
CHeers, Ken Hanly
ER2000-08-#02 A Failed Global Experiment: The Truth About the US Economic Model (Economic Reform, Vol. 12, No. 7 July 2000) The Civil Commons A Failed Global Experiment: The Truth About the US Economic Model by John McMurtry Ever since the 1997 Asian economic collapse, the US has been held up to the world as an economic model. The media daily trumpet its slogans as final truths. Experts venerate its "historically unprecedented combination of high growth, low unemployment and low inflation." What is concealed is that the US economy is jettisoning its human, social and environmental capital for the short-term competitive gains of investors and consumers. Cheaper goods and costs come by the loss of tens of millions of secure domestic jobs. Real lower taxes for upper income brackets are achieved by stripping social assistance programs for the poor and unemployed. Equity values are increased by non-productive mergers, laundered drug billions, internet stocks with no earnings, and leveraged debt and asset-flip money. Low unemployment figures are achieved by massive increases in part-time and starvation-wage jobs and a staggering 2,000,000 citizens in prison off the unemployment rolls (over 12 times the number of US citizens caged as in 1968, and about six times the West European rate). The new regime rules the globe behind bars of money and iron. On one level, the "restructuring" of the US economy is the revenge of the rich against those who advocate a more democratic and egalitarian social order. "The booming US economy" is, in essence, their after-tax profits masked by global figures and averaged aggregates. Government has been, in effect, bought as their servant -- privatising the public sector into subsidised for-profit services, enforcing corporate world rule by rafts of new trade and investment laws, and spending hundreds of billions of public revenues on police, prisons and weapons to terrorise te increasingly dispossessed across borders. It is not just a social hollowing-out which we see here. The US economy is in decline on monetary indicators too. Its current account deficit with the world -- the measure of how much product and credit it imports compared to what it exports -- has skyrocketed. It is now on the road to doubling since 1998, and is poised to pass 5% of GDP -- the international bankers' marker of an economy in deep trouble. The surface prosperity rests on three shaky props -- windfalls of off-shore and portfolio money diverted from the Asian meltdown and the European doldrums, feverish leveraging of credit to stratospheric highs of citizen indebtedness (what Federal Reserve Chairman Greenspan celebrates as peoples' "new freedom" in his Senate confirmation hearings), and a no-standard regime of transnational trade that opens all gates to the competitive costs of near-slave foreign labour. Underneath its saturation of the globe with "free market" slogans and its artificially ballooned domestic demand inputs, the underlying economy is running more and more on empty. What is not understood by conventional economists anywhere is that growth of real money demand on wealth is not growth of wealth. It has become the eating away of wealth -- the real wealth of human, social and natural capital upon which the economy depends. Corresponding to the new floods of money demand loose in the US economy is ever more degeneration of the atmosphere and air, the water tables, the forests and the fishstocks, an obesity rate that has grown by 50% in less than a decade as the poverty of the bottom 60% of the population grows, and deteriorating conditions of civil life at every level. The US and world economy it leads are, in fact, sliding into a black hole. The giant sucking sound you hear is the rush of Canada and other imitators racing to follow. Beyond the US Mirror: While the US corporate propaganda machine manages to keep the country's accumulating decline of life conditions out of all economic discussion, another fact goes unobserved. Other nations have done much better in even monetised prosperity by investing in their social infrastructures and in public goods. Ireland has recently led the world in economic growth. But despite all the flatulent talk of lower corporate taxes, the growth has been undergirded by the most developed credit union sector in the world, by massive spending on public infrastructure financed by European Union public revenues, and by major and increasing investment in higher education. Credit is not monopolised by big banks selecting for paper profits without productive gain. Interest returns to credit unions are ploughed back into small-business (such as family bed-and-breakfast establishments which are the backbone of the country's rural and village economy). At the same time, all qualified citizens can access higher education -- the most important public good for citizens in a knowledge economy. University and college fees have been abolished. Debt slavery is not, as in the US and now Canada, the price of being educated. Then there is Norway. Wages have not been kept down by the blunt instrument of central bank interest hikes which disemploy workers and ruin small businesses. Wages have been established by partnership with labour in a national Stability Alternative. The nation's oil royalties are not given away to foreign oil corporations as they are here, but are invested back in the social infrastructure. Recent budget surpluses are not spent on tax cuts favouring the upper tax brackets, but are retained as public revenues. On the basis of policies which look to the long-term common interest rather than short-term money gains of stock markets and consumers -- the "sound fundamentals" of reality -- Norway's economy has grown at double the European average, controlled inflation, achieved near full employment, reduced inequality, and advanced democratic control over the economy. Holland is another case. Like Norway, Holland has built its success on the basis of worker agreement with national economic policies. (Recall here that the US Labor Advisory Council, required by law to participate in foreign trade agreements, was handed the 2200-article NAFTA the day before its passage.) Since the late 1980s, Holland has quartered the official unemployment from 12% to 3.2% by means of the Wassenaar Agreement, a social agreement in which labour unions accepted wage restraint in exchange for shorter work time and state commitment to job creation. A higher rate of job creation was in this way managed than in the US -- without draconian welfare cutbacks or labour forced to work for starvation wages. But where do you read or hear of these successes? The corporate media can only talk about "lower taxes," "less government," "more flexible labour markets" and "free capital flows." But the program of financial deregulation and privatisation once hymned as the source of economic miracles has precipitated declines in real life conditions everywhere. New Zealanders recently woke up, and returned a government to retax the rich and to re-invest in the country. Other nations have been less fortunate. The 1984 social experiment on New Zealand was imposed on other societies with still greater aggression. Among the consequences of the mindless program were the destruction of Russia's economy, the meltdown of South-East Asia, and the bankruptcies of Mexico and Brazil. Why does no one yet talk about "the US's failed global experiment"? One reason is the control of the world's mass media by those who have multiplied their personal and corporate fortunes by the experiment. Another is the billion-dollar-a-day NATO war-machine which is used for strategic genocide of any developing nation pursuing an economic alternative -- from the Soviet Union and Nicaragua to Iraq or Yugoslavia. Canada's Quisling Class: But the US global experiment carries on in Canada as if no history had intervened. Funded by the banks and transnational corporations, and aped by financed politicians, media flaks, and director-in-waiting bureaucrats, the Reagan tax-cut revolution of the 1980s is retreaded as a Bold New Idea. The program grows more life-blind as the impoverishing of the social sector is force-fed to the public who in survey after survey prefer other social priorities. What has been kept very quiet during the corporate media campaign to lower taxes is the fact that 70% of Canada's taxed citizens have less than $30,000 in annual income, and receive virtually nothing from existing or demanded tax-cuts. Yet CRAP pitbull and KKK-friend, Tom Long, calls for a hacksaw 17% tax-rate on the richest citizens, as the governing Liberals give over 20 times more to tax-cuts favouring the wealthy than to health and education. But the US model they mimic is in an accelerating downslide in the life economy that counts -- from the junk food its 33%-obese population lives on to its higher illness and birth fatality rates than poor neighbouring Cuba, from its world-leading social insecurity indices and private health-disaster system to its third-world inner cities, bought elections in which the majority no longer vote, and the tragically growing void of meaningful work for future generations. Behind the money aggregates flashed on the cave walls, the reality is that an economy that feeds on the life capital of its people is structured to ruin. John McMurtry is professor of philosophy at the University of Guelph, Ontario. Selected Sources: . John McMurtry, The Cancer Stage of Capitalism. London G.B. and Sterling US: Pluto Press, 1999. . Tom Schlesinger and Jane D'Arista, 'The repeal of the Glass-Steagall Act,' US Fed Alert, December 21, 1999 (ER, April 2000, pp. 4, 14) and Timothy A. Canova, 'Can Mr. Greenspan Tame the Big Bull?,' Economic Reform, April 2000, pp. 10-11. . Anders Hayden, 'Dutch Model or Dutch Disease' and Jim Stafford, 'Tax-Cutter's Guide to the Class Structure of Canada,' Newsletter of the Progressive Economics Forum, November 1999, pp.3, 13. . Christian Debrie, 'Thick as Thieves' and Noelle Burgi and Philip S. Golub, 'The States We Are Still In,' Le Monde Diplomatique, April 2000, pp. 6-9. . 'Footsoldiers in war on deficit get little budget benefit, Most budget goodies go to those who need them least,' CCPA Monitor, May 2000, pp. 8-9. . 'Hog Nation,' Earth Island Journal, Spring 2000, p.23. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Copyright © 2000 John McMurtry (COMER Publications, used by permission). "Economic Reform" is the monthly journal of the Committee on Monetary and Economic Reform (COMER), a Canada-based publishing think-tank. Annual subscription, 12 issues, is CD$30 in Canada, US$30 United States, and US$35 Overseas. COMER Publications Suite 107 245 Carlaw Avenue Toronto ON M4M 2S6 Telephone (416) 466-2642 Fax 466-5827 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ BOOKSHELF ========= MELTDOWN : money, debt and the wealth of nations : how zero inflation policy and deregulation have turned the world economy into a global casino : as documented in the first decade of Economic Reform (The John Hotson memorial series) Includes bibliographical references and index. ISBN 0-9680681-2-X 400 pages 6X9 SC To order a copy of MELTDOWN, send $25 + $5 postage and handling ($30) to the above address. Credit card orders may be placed at Chapters.ca http://www.chapters.ca/books/details/default.asp?ISBN=096806812X ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ To unsubscribe from this group, send an email to: [EMAIL PROTECTED]
