File spoon-archives/bhaskar.archive/bhaskar_2003/bhaskar.0307, message 54


Date: Sat, 19 Jul 2003 13:17:54 +0100
Subject: BHA: Bello on Crisis of the Globalist Project (II)




THE NEW ECONOMICS OF THE GEORGE W. BUSH

The interlocking crises of globalization, neoliberalism, capitalist 
legitimacy, and overproduction provide the context for understanding the 
economic policies of the Bush administration, notably its unilateralist 
thrust. The globalist corporate project expressed the common interest of 
the global capitalist elites in expanding the world economy and their 
fundamental dependence on one another. However, globalization did not 
eliminate competition among the national elites. In fact, the ruling 
elites of the US and Europe had factions that were more nationalist in 
character as well as more tied for their survival and prosperity to the 
state, such as the military-industrial complex in the US. Indeed, since 
the eighties there has been a sharp struggle between the more globalist 
fraction of ruling elite stressing common interest of global capitalist 
class in a growing world economy and the more nationalist, hegemonist 
faction that wanted to ensure the supremacy of US corporate interests.
As Robert Brenner has pointed out, the policies of Bill Clinton and his 
Treasury Secretary Robert Rubin put prime emphasis on the expansion of 
the world economy as the basis of the prosperity of the global 
capitalist class. For instance, in the mid-1990s, they pushed a strong 
dollar policy meant to stimulate the recovery of the Japanese and German 
economies, so they could serve as markets for US goods and services. The 
earlier, more nationalist Reagan administration, on the other hand, had 
employed a weak dollar policy to regain competitiveness for the US 
economy at the expense of the Japanese and German economies. With the 
George W. Bush administration, we are back to economic policies, 
including a weak dollar policy, that are meant to revive the US economy 
at the expense of the other center economies and push primarily the 
interests of the US corporate elite instead of that of global capitalist 
class under conditions of a global downturn.

Several features of this approach are worth stressing:

- Bushs political economy is very wary of a process of globalization 
that is not managed by a US state that ensures that the process does not 
diffuse the economic power of the US. Allowing the market solely to 
drive globalization could result in key US corporations becoming the 
victims of globalization and thus compromising US economic interests. 
Thus, despite the free market rhetoric, we have a group that is very 
protectionist when it comes to trade, investment, and the management of 
government contracts. It seems that the motto of the Bushites is 
protectionism for the US and free trade for the rest of us.

- The Bush approach includes a strong skepticism about multilateralism 
as a way of global economic governance since while multilateralism may 
promote the interests of the global capitalist class in general, it may, 
in many in stances, contradict particular US corporate interests. The 
Bush coteries growing ambivalence towards the WTO stems from the fact 
that the US has lost a number of rulings there, rulings that may hurt US 
capital but serve the interests of global capitalism as a whole.

- For the Bush people, strategic power is the ultimate modality of 
power. Economic power is a means to achieve strategic power. This is 
related to the fact that under Bush, the dominant faction of the ruling 
elite is the military-industrial establishment that won the Cold War. 
The conflict between globalists and unilateralists or nationalists along 
this axis is shown in the approach toward China. The globalist approach 
put the emphasis on engagement with China, seeing its importance 
primarily as an investment area and market for US capital. The 
nationalists, on the other hand, see China mainly as a strategic enemy, 
and they would rather contain it than assist its growth.

- Needless to say, the Bush paradigm has no room for environmental 
management, seeing this to be a problem that others have to worry about, 
not the United States. There is, in fact, a strong corporate lobby that 
believes that environmental concerns such as that surrounding GMOs is a 
European conspiracy to deprive the US of its high tech edge in global 
competition.

If these are seen as the premises for action, then the following 
prominent elements of recent US economic policy make sense:

- Achieving control over Middle East oil. While it did not exhaust the 
war aims of the administration in invading Iraq, it was certainly high 
on the list. With competition with Europe becoming the prime aspect of 
the trans-Atlantic relationship, this was clearly aimed partly at 
Europe. But perhaps the more strategic goal was to pre-empt the regions 
resources in order to control access to them by energy-poor China, which 
is seen as the US strategic enemy.

- Aggressive protectionism in trade and investment matters. The US has 
piled up one protectionist act after another, one of the most brazen 
being to stall any movement at the WTO negotiations by defying the Doha 
Declarations upholding of public health issues over intellectual 
property claims by limiting the loosening of patent rights to just three 
diseases in response to its powerful pharmaceutical lobby. While it 
seems perfectly willing to see the WTO negotiations unravel, Washington 
has put most of its efforts in signing up countries into bilateral or 
multilateral trade deals such as the Free Trade of the Americas (FTAA) 
before the EU gets them into similar deals. Indeed the term free trade 
agreements is a misnomer since these are actually preferential trade 
deals.

- Incorporating strategic considerations into trade agreements. In a 
recent speech, US Trade Representative Robert Zoellick stated explicitly 
that countries that seek free-trade agreements with the United States 
must pass muster on more than trade and economic criteria in order to be 
eligible. At a minimum, these countries must cooperate with the United 
States on its foreign policy and national security goals, as part of 13 
criteria that will guide the US selection of potential FTA partners. New 
Zealand, perhaps one of the most doctrinally favourable governments to 
free trade, has never the less not been offered a free trade deal 
because it has a policy that prevents nuclear ship visits, which the US 
feels is directed at it.

- Manipulation of the dollars value to stick the costs of economic 
crisis on rivals among the center economies and regain competitiveness 
for the US economy. A slow depreciation of the dollar vis-a-vis the euro 
can be interpreted as market-based adjustments, but the 25 per cent fall 
in value cannot but be seen as, at the least, a policy of benign 
neglect. While the Bush administration has issued denials that this is a 
beggar-thy-neighbor policy, the US business press has seen it for what 
it is: an effort to revive the US economy at the expense of the European 
Union and other center economies.

- Aggressive manipulation of multilateral agencies to push the interests 
of US capital. While this might not be too easy to achieve in the WTO 
owing to the weight of the European Union, it can be more readily done 
at the World Bank and the IMF, where US dominance is more effectively 
institutionalized. For instance, despite support for the proposal from 
many European governments, the US Treasury recently torpedoed the IMF 
managements proposal for a Sovereign Debt Restructuring Mechanism (SDRM) 
to enable developing countries to restructure their debt while giving 
them a measure of protection from creditors. Already a very weak 
mechanism, the SDRM was vetoed by US Treasury in the interest of US 
banks.

- Finally, and especially relevant to our coming discussions, making the 
other center economies as well as developing countries bear the burden 
of adjusting to the environmental crisis. While some of the Bush people 
do not believe there is an environmental crisis, others know that the 
current rate of global greenhouse emissions is unsustainable. However, 
they want others to bear the brunt of adjustment since that would mean 
not only exempting environmentally inefficient US industry from the 
costs of adjustment, but hobbling other economies with even greater 
costs than if the US participated in an equitable adjustment process, 
thus giving the US economy a strong edge in global competition. Raw 
economic realpolitik, not fundamentalist blindness, lies at the root of 
the Washington's decision not to sign the Kyoto Protocol on Climate 
Change.

THE ECONOMICS AND POLITICS OF OVEREXTENSION

Being harnessed very closely to strategic ends, any discussion of the 
likely outcomes of the Bush administrations economic policies must take 
into account both the state of the US economy and the global economy and 
the broader strategic picture. A key base for successful imperial 
management are expanding national and global economies, something 
precluded by the extended period of deflation and stagnation ahead, 
which is more likely to spur inter-capitalist rivalries.

Moreover, resources include not only economic and political resources 
but political and ideological ones as well. For without legitimacy, 
without what Gramsci called the consensus of the dominated, that a 
system of rule is just imperial management cannot be stable.

Faced with a similar problem of securing the long-term stability of its 
rule, the ancient Romans came up with the solution that created what was 
till then the most far-reaching case of collective mass loyalty ever 
achieved till then and prolonged the empire for 700 years. The Roman 
solution was not just or even principally military in character. The 
Romans realized that an important component of successful imperial 
domination was consensus among the dominated of the "rightness" of the 
Roman order. As sociologist Michael Mann notes in his classic Sources of 
Social Power, the "decisive edge" was not so much military as political. 
"The Romans," he writes, "gradually stumbled on the invention of 
extensive territorial citizenship. The extension of Roman citizenship to 
ruling groups and non-slave peoples throughout the empire was the 
political breakthrough that produced "was probably the widest extent of 
collective commitment yet mobilized." Political citizenship combined 
with the vision of the empire providing peace and prosperity for all to 
create that intangible but essential moral element called legitimacy.

Needless to say, extension of citizenship plays no role in the US 
imperial order. In fact, US citizenship is jealously reserved for a very 
tiny minority of the world's population, entry into whose territory is 
tightly controlled. Subordinate populations are not to be integrated but 
kept in check either by force or the threat of the use of force or by a 
system of global or regional rules and institutions--the World Trade 
Organization, the Bretton Woods system, NATO--that are increasingly 
blatantly manipulated to serve the interests of the imperial center.

Though extension of universal citizenship was never a tool in the 
American imperial arsenal, during its struggle with communism in the 
post-World War II period Washington did come up with a political formula 
to legitimize its global reach. The two elements of this formula were 
multilateralism as a system of global governance and liberal democracy.

In the immediate aftermath of the Cold War, there were, in fact, 
widespread expectations of a modern-day version of Pax Romana. There was 
hope in liberal circles that the US would use its sole superpower status 
to buttress a multilateral order that would institutionalize its 
hegemony but assure an Augustan peace globally. That was the path of 
economic globalization and multilateral governance. That was the path 
eliminated by George W. Bush's unilateralism.

As Frances Fitzgerald observed in Fire in the Lake, the promise of 
extending liberal democracy was a very powerful ideal that accompanied 
American arms during the Cold War. Today, however, Washington or 
Westminster-type liberal democracy is in trouble throughout the 
developing world, where it has be en reduced to providing a facade for 
oligarchic rule, as in the Philippines, pre-Musharraf Pakistan, and 
throughout Latin America. In fact, liberal democracy in America has 
become both less democratic and less liberal. Certainly, few in the 
developing world see a system fueled and corrupted by corporate money as 
a model.

Recovery of the moral vision needed to create consensus for US hegemony 
will be extremely difficult. Indeed, the thinking in Washington these 
days is that the most effective consensus builder is the threat of the 
use of force . Moreover, despite their talk about imposing democracy in 
the Arab world, the main aim of influential neoconservative writers like 
Robert Kagan and Charles Krauthammer is transparent: the manipulation of 
liberal democratic mechanisms to create pluralistic competition that 
would destroy Arab unity. Bringing democracy to the Arabs is not so much 
an afterthought as a slogan that is uttered tongue in cheek.

The Bush people are not interested in creating a new Pax Romana. What 
they want is a Pax Americana where most of the subordinate populations 
like the Arabs are kept in check by a healthy respect for lethal 
American power, while the loyalty of other groups such as the Philippine 
government is purchased with the promise of cash. With no moral vision 
to bind the global majority to the imperial center, this mode of 
imperial management can only inspire one thing: resistance.

The great problem for unilateralism is overextension, or a mismatch 
between the goals of the United States and the resources needed to 
accomplish these goals. Overextension is relative. That is, it is to a 
great degree a function of resistance. An overextended power may, in 
fact, be in a worse condition even with a significant increase in its 
military power if resistance to its power increases by an even greater 
degree. Among the key indicators of US overextension are the following:

- Washingtons continuing inability to create a new political order in 
Iraq that would serve as a secure foundation for colonial rule

- its failure to consolidate a pro-US regime in Afghanistan outside of 
Kabul

- the inability of a key ally, Israel, to quell, even with Washington's 
unrestricted support, the Palestinian peoples uprising

- the inflaming of Arab and Muslim sentiment in the Middle East, South 
Asia , and Southeast Asia, resulting in massive ideological gains for 
Islamic fundamentalists  which was what Osama bin Laden had been hoping 
for in the first place

- the collapse of the Cold War Atlantic Alliance and the emergence of a 
new countervailing alliance, with Germany and France at the center of it

- the forging of a powerful global civil society movement against US 
unilateralism, militarism, and economic hegemony, the most recent 
significant expression is the global anti-war movement;

- the coming to power of anti-neoliberal, anti-US movements in 
Washington's own backyard --Brazil, Venezuela, and Ecuador -- as the 
Bush administration is preoccupied with the Middle East

- an increasingly negative impact of militarism on the US economy, as 
military spending becomes dependent on deficit spending, and deficit 
spending becomes more and more dependent on financing from foreign 
sources, creating more stresses and strains within an economy that is 
already in the throes of stagnation.

In conclusion, the globalist project is in crisis. Whether it can make a 
come back via a Democratic or Liberal Republican presidency should not 
be ruled out, especially since there are influential globalist voices in 
the US business community among them George Soros, that are expressing 
opposition to the unilateralist thrust of the Bush administration. In 
our view, however, this is unlikely, and unilateralism will reign for 
sometime to co me.

We have, in short, entered a historical maelstrom marked by prolonged 
economic crisis, the spread of global resistance, the reappearance of 
the balance of power among center states, and the re-emergence of acute 
inter-imperialist contradictions. We must have a healthy respect for US 
power, but neither must we overestimate it. The signs are there that the 
US is seriously overextended and what appear to be manifestations of 
strength might in fact signal weakness strategically.

Copyright 2003 Focus on the Global South







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