Globalization

11
Jun

Washington Squandered the Unipolar Moment

By Fareed Zakaria
Foreign Affairs, July-August 2019

Sometime in the last two years, American hegemony died. The age of U.S. dominance was a brief, heady era, about three decades marked by two moments, each a breakdown of sorts. It was born amid the collapse of the Berlin Wall, in 1989. The end, or really the beginning of the end, was another collapse, that of Iraq in 2003, and the slow unraveling since. But was the death of the United States’ extraordinary status a result of external causes, or did Washington accelerate its own demise through bad habits and bad behavior? That is a question that will be debated by historians for years to come. But at this point, we have enough time and perspective to make some preliminary observations.

As with most deaths, many factors contributed to this one. There were deep structural forces in the international system that inexorably worked against any one nation that accumulated so much power. In the American case, however, one is struck by the ways in which Washington—from an unprecedented position—mishandled its hegemony and abused its power, losing allies and emboldening enemies. And now, under the Trump administration, the United States seems to have lost interest, indeed lost faith, in the ideas and purpose that animated its international presence for three-quarters of a century.

U.S. hegemony in the post–Cold War era was like nothing the world had seen since the Roman Empire. Writers are fond of dating the dawn of “the American century” to 1945, not long after the publisher Henry Luce coined the term. But the post–World War II era was quite different from the post-1989 one. Even after 1945, in large stretches of the globe, France and the United Kingdom still had formal empires and thus deep influence. Soon, the Soviet Union presented itself as a superpower rival, contesting Washington’s influence in every corner of the planet. Remember that the phrase “Third World” derived from the tripartite division of the globe, the First World being the United States and Western Europe, and the Second World, the communist countries. The Third World was everywhere else, where each country was choosing between U.S. and Soviet influence. For much of the world’s population, from Poland to China, the century hardly looked American.

The United States’ post–Cold War supremacy was initially hard to detect. As I pointed out in The New Yorker in 2002, most participants missed it. In 1990, British Prime Minister Margaret Thatcher argued that the world was dividing into three political spheres, dominated by the dollar, the yen, and the deutsche mark. Henry Kissinger’s 1994 book, Diplomacy, predicted the dawn of a new multipolar age. Certainly in the United States, there was little triumphalism. The 1992 presidential campaign was marked by a sense of weakness and weariness. “The Cold War is over; Japan and Germany won,” the Democratic hopeful Paul Tsongas said again and again. Asia hands had already begun to speak of “the Pacific century.”

U.S. hegemony in the post–Cold War era was like nothing the world had seen since the Roman Empire.

There was one exception to this analysis, a prescient essay in the pages of this magazine by the conservative commentator Charles Krauthammer: “The Unipolar Moment,” which was published in 1990. But even this triumphalist take was limited in its expansiveness, as its title suggests. “The unipolar moment will be brief,” Krauthammer admitted, predicting in a Washington Post column that within a very short time, Germany and Japan, the two emerging “regional superpowers,” would be pursuing foreign policies independent of the United States.

Policymakers welcomed the waning of unipolarity, which they assumed was imminent. In 1991, as the Balkan wars began, Jacques Poos, the president of the Council of the European Union, declared, “This is the hour of Europe.” He explained: “If one problem can be solved by Europeans, it is the Yugoslav problem. This is a European country, and it is not up to the Americans.” But it turned out that only the United States had the combined power and influence to intervene effectively and tackle the crisis.

Similarly, toward the end of the 1990s, when a series of economic panics sent East Asian economies into tailspins, only the United States could stabilize the global financial system. It organized a $120 billion international bailout for the worst-hit countries, resolving the crisis. Time magazine put three Americans, Treasury Secretary Robert Rubin, Federal Reserve Chair Alan Greenspan, and Deputy Treasury Secretary Lawrence Summers, on its cover with the headline “The Committee to Save the World.”

THE BEGINNING OF THE END

Just as American hegemony grew in the early 1990s while no one was noticing, so in the late 1990s did the forces that would undermine it, even as people had begun to speak of the United States as “the indispensable nation” and “the world’s sole superpower.” First and foremost, there was the rise of China. It is easy to see in retrospect that Beijing would become the only serious rival to Washington, but it was not as apparent a quarter century ago. Although China had grown speedily since the 1980s, it had done so from a very low base. Few countries had been able to continue that process for more than a couple of decades. China’s strange mixture of capitalism and Leninism seemed fragile, as the Tiananmen Square uprising had revealed. continue

Category : Globalization | Hegemony | US History | Blog
1
Dec


 

October 2018:An exchange prompted by the essay 

The Precariat: Today’s Transformative Class? 


A headshot of Bill Fletcher

Bill Fletcher
Taking a long view of precariousness as an inherent feature of capitalism can shed light on the contemporary debate on “the precariat.”
 Read


A headshot of Nancy Folbre

Nancy Folbre
The focus on “the precariat” is useful but limited: the fight over distribution isn’t just between labor and capital.
 Read


A headshot of Azfar Khan

Azfar Khan
A universal basic income is key to delivering security and autonomy to people in a precarious world. 
Read


A headshot of Alexandra Köves

Alexandra Köves
Beyond policies like a universal basic income, a transition to a equitable and sustainable society requires the redefinition of well-being, needs, and work itself.
 Read


A headshot of George Liodakis

George Liodakis
There is no “precariat,” per se—the working class as-a-whole remains the necessary agent for transformation.
 Read


A headshot of Ronaldo Munck

Ronaldo Munck
Work in the Global South has always been precarious, but the resurgence of global labor organizing offers a way forward.
 Read


A headshot of William I. Robinson

William I. Robinson
The “precariat,” rather than a new class, is part of the global proletariat, on whose struggle with transnational capital our fate depends.
 Read


A headshot of Pritam Singh

Pritam Singh
A basic income alone is not transformative, but a feature of a broader ecosocialist vision of dismantling capitalism. 
Read


A headshot of Eva-Maria Swidler

Eva-Maria Swidler
Workers in the Global North have a lot to learn from the past struggles of workers in the Global South (as well as in their own countries). 
Read


A headshot of Evelyn AstorA headshot of Alison Tate

Alison Tate and Evelyn Astor
Labor unions must continue to play an important role in the fight for economic justice and against precariousness. 
Read



A headshot of Guy Standing

Author’s Response
Guy Standing addresses points raised by the contributors to this roundtable. Read
 

Category : Capitalism | Globalization | Hegemony | Marxism | Organizing | Strategy and Tactics | Theory | Working Class | Youth | Blog
25
Nov

By Guy Standing

October 2018

Since 1980, the global economy has undergone a dramatic transformation, with the globalization of the labor force, the rise of automation, and—above all—the growth of Big Finance, Big Pharma, and Big Tech. The social democratic consensus of the immediate postwar years has given way to a new phase of capitalism that is leaving workers further behind and reshaping the class structure. The precariat, a mass class defined by unstable labor arrangements, lack of identity, and erosion of rights, is emerging as today’s “dangerous class.” As its demands cannot be met within the current system, the precariat carries transformative potential. To realize that potential, however, the precariat must awaken to its status as a class and fight for a radically changed income distribution that reclaims the commons and guarantees a livable income for all. Without transformative action, a dark political era looms.

Introduction

We are living in a painful time of turbulent economic change. A global market system continues to take shape as the United States petulantly threatens the international order that it helped to create and from which it has gained disproportionately. This era, which began around 1980, has been dominated institutionally by American finance and ideologically by the economic orthodoxy of “neoliberalism.” A hallmark of this transformation has been the increasing redistribution of wealth upwards as rents to those owning property—physical, financial, and “intellectual.” As “rentier capitalism” has risen, working classes have foundered, as those relying on labor have been losing ground in both relative and absolute terms.

In brief, during the past forty years, the global economy has been shaped by neoliberal economics, which, accentuated by the digital revolution, has generated two linked phenomena: global rentier capitalism and a global class structure in which the precariat is the new mass class. Rentier capitalism is making the hardships borne by the precariat much worse.

Industrial capitalism produced a property-owning bourgeoisie and the proletariat; contemporary capitalism is roiling this class structure. Today, the mass class is the precariat, characterized by unstable labor, low and unpredictable incomes, and loss of citizenship rights. It is the new “dangerous class,” partly because its insecurities induce the bitterness, ill-health, and anger that can be the fodder of right-wing populism. But it is also dangerous in the progressive sense that many in it reject old center-left and center-right politics. They are looking for the root-and-branch change of a new “politics of paradise,” rather than a return to a “politics of laborism” that seeks amelioration within dominant institutions and power structures.

The precariat’s needs cannot be met by modest reforms to the existing social and economic system. It is the only transformative class because, intuitively, it wants to become strong enough to abolish the conditions that define its existence and, as such, abolish itself. All others want merely to improve their position in the social hierarchy. This emergent class is thus well-placed to become the agent of radical social transformation—if it can organize and become sufficiently united around a shared identity, alternative vision, and viable political agenda.

The key to understanding the precariat’s transformational position lies in the breakdown of the income distribution system of the mid-twentieth century. To succeed, a new progressive politics must offer a pathway to an ecologically sustainable system that reduces inequalities and insecurities in the context of an open, globalizing economy.

The Rise of Rentier Capitalism

Between 1945 and 1980, the dominant socioeconomic paradigm in industrialized countries outside the Communist Bloc was social democratic, defined by the creation of welfare states and labor-based entitlements. Although there were modest falls in inequality coupled with labor-based economic security, this was no “golden age,” as some historians label it. The period was stultifying and sexist. Putting as many people as possible (mainly men) in full-time jobs under the banner of Full Employment was hardly an emancipatory vision worthy of the Enlightenment values of EgalitéLiberté, and Solidarité.

As the social democratic era collapsed in the 1970s, an economic model emerged now known as “neoliberalism.” Its advocates preached “free markets,” strong private property rights, financial market liberalization, free trade, commodification, privatization, and the dismantling of all institutions and mechanisms of social solidarity, which, in their view, were “rigidities” holding back the market. While the neoliberals were largely successful in implementing their program, what transpired was very different from what they had promised.

The initial outcome was financial domination. The income generated by US finance, which equaled 100% the size of the US economy in 1975, grew to 350% in 2015. Similarly, in the UK, finance went from 100% to 300% of GDP. Both countries experienced rapid deindustrialization as the strength of finance led to an overvalued exchange rate that, by making exports uncompetitive and imports cheaper, destroyed high-productivity manufacturing jobs. Financial institutions, most notably Goldman Sachs, became masters of the universe, their executives slotted into top political positions in the US and around the world.1

Finance linked up with Big Pharma and Big Tech to forge a global architecture of institutions strengthening rentier capitalism, maximizing monopolistic income from intellectual property. The pivotal moment came in 1995 with implementation of the World Trade Organization (WTO)’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), in which US multinational corporations helped secure the globalization of the US intellectual property rights system. This shift gave unprecedented rent-extracting capacity to multinationals and financial institutions.

Patents, copyright, protection of industrial designs, and trademarked brands have multiplied as sources of monopolistic profit. In 1994, fewer than one million patents were filed worldwide; in 2011, over two million were filed; in 2016, over three million. By then, twelve million were in force, and licensing income from patents had multiplied sevenfold. Growth was similar with other forms of intellectual property.

The rent-extracting system was enforced by over 3,000 trade and investment agreements, all entrenching property rights, topped by a mechanism (Investor-State Dispute Settlement) that empowers multinationals to sue governments for any policy changes that, in their view, negatively affect their future profits. This has had a chilling effect on policy reform efforts, notably those seeking to protect health and the environment.

Rentier capitalism has also been bolstered by subsidies, a financial system designed to increase private debt, privatization of public services, and a plunder of the commons. But it contains two possibly fatal flaws. First, the rentiers have been winning too much by rigging the system, raising questions about social and political sustainability. Second, the architects proved mistaken in thinking this framework would bolster the US economy, along with other advanced industrial economies to a lesser extent, at the expense of the rest of the world.

In particular, they underestimated China. When TRIPS was passed, China was inconsequential as a rentier economy. After it joined the WTO in 2001, it started to catch up fast. In 2011, China overtook the US in patent applications; by 2013, it accounted for nearly a third of global filings, well ahead of the US (22%). In 2016, it accounted for 98% of the increase over 2015, filing more than the US, Japan, the Republic of Korea, and the European Patent Office combined.

The main outcome of rentier capitalism, exacerbated by globalization and the digital revolution, is an inexorable erosion of the income distribution system of the twentieth century—the implicit sharing of income between capital and labor that emerged after the Second World War, epitomized by the 1950 pact between the United Auto Workers union and General Motors known as the Treaty of Detroit. Now, all over the world, the share of income going to capital has been rising; the share going to labor, falling. Within both, the share going to forms of rent has been rising.

The social democratic consensus was based on implicit rules. When productivity rose, so did wages. When profits rose, so did wages. When employment rose, so did wages. Today, productivity and employment are rising, but wages remain stagnant or falling.

One factor depressing wages has been the growth of the global labor force, which has expanded by two billion during the past three decades, many of whom have a living standard that is a tiny fraction of what OECD workers were obtaining. Downward pressure on real wages will continue, especially as productivity can rise faster in emerging market economies and the technological revolution makes relocation of production and employment so much easier. Meanwhile, the rentiers will be protected. Antitrust legislation will not be strengthened to cut monopolistic rent-seeking, since governments will continue to protect national corporate champions.

Without transformative changes, those relying on labor will continue to lose; no amount of tinkering will do. Average real wages in OECD countries will stagnate, and social income inequalities will grow. Progressives must stop deluding themselves. Unless globalization goes into reverse, which is unlikely, trying to remedy inequality by forcing up wages, however desirable, will not do much. Raising wages substantially would merely accelerate the displacement of labor by automation.

A Global Class Structure

Just as industrial capitalism ushered in a new class structure, so, too, has rentier capitalism. The emerging structure, superimposed on old structures, is topped by a plutocracy, made up of a small group of billionaires who wield corruptive power. Although mostly in the West, a growing proportion of plutocrats are in Asia and other emerging market economies. Under them is an elite, who serve the plutocracy’s interests while making substantial rental income themselves. Together, these comprise what is colloquially known as the 1%, but, in fact, is much smaller than that.

Below them in the income spectrum is a salariat, a shrinking number of people with labor-based security and robust benefits, from health care to stock ownership. In the post-1945 era, economists predicted that by the end of the twentieth century, the vast majority in rich countries would be in the salariat, with growing numbers in developing countries joining them. Instead, the salariat is shrinking. It will not disappear, but its members are increasingly detached from those below them in the class spectrum, largely because they too gain more in rentier incomes than in wages. Still, their politics may be shaped by what they see happening to their sons and daughters, as well as their grandchildren.

Alongside the salariat is a smaller group of proficians, freelance professionals, such as software engineers, stock traders, lawyers, and medical specialists operating independently. They earn high incomes selling themselves frenetically, but risk early burnout and moral corrosion through excessive opportunism. This group will grow and are influential beyond their number, conveying an image of autonomy. But for the health of this untethered, hard-driving group—and society’s—they need social structures to enforce moral codes.

Below them in income terms is the proletariat, the epitome of the “working class” in the European sense, the “middle class” in the American sense. In the twentieth century, welfare states, labor law, collective bargaining, trade unions, and labor and social democratic parties were built by and for this group. However, it is dwindling everywhere and has lost progressive energy and direction.

Those who pine for the proletariat should reflect on the downside of the proletarian life and what most had to do just to survive. There should be respect for what it achieved in its heyday, but nostalgia is delusional. In reality, many are falling into the emerging mass class, the precariat, which is also being fed by college graduates and dropouts, women, migrants, and others.

Understanding the Precariat

The precariat consists of millions of people in every advanced industrial country and in emerging market economies as well.2 It can be defined in three dimensions: distinctive relations of production (patterns of labor and work), distinctive relations of distribution (sources of social income), and distinctive relations to the state (loss of citizenship rights). It is still a “class-in-the-making” in that it is internally divided by different senses of relative deprivation and consciousness. But in Europe at least, it is becoming conscious of itself as a coherent group opposed to the dominant power structure (a “class-for-itself”).

The distinctive relations of production start with the fact that the precariat is being forced to accept, and is being habituated to, a life of unstable labor, through temporary work assignments (“casualization”), agency labor, “tasking” in Internet-based “platform capitalism,” flexible scheduling, on-call and zero-hour contracts, and so on. Even more important is that those in the precariat have no occupational narrative or identity, no sense of themselves as having a career trajectory. They also learn they must do a lot of work-for-labor, work-for-the-state, and work-for-reproduction of themselves.3 The need to adapt capabilities in a context of uncertainty leads to the precariatized mind, not knowing how best to allocate one’s time and thus being under almost constant stress.

The precariat is also the first mass class in history in which their typical level of education exceeds that required for the kind of labor they can expect to obtain. And it must work and labor outside fixed workplaces and standard labor hours as well as within them.

The precariat exists in most occupations and at most levels within corporations. For example, within the legal professions, there are elites, a squeezed salariat, and a precariat of paralegals. Similar fragmentation exists in the medical and teaching professions, with paramedics and “fractionals” (i.e., those remunerated for only a fraction of full-time). The precariat is even spreading into corporate management with a concept of “interim managers,” some of whom are well-paid proficians (depicted by George Clooney in Up in the Air), others of whom fall in the precariat.

Along with the rise of unstable labor, the second dimension is distinctive relations of distribution, or structures of social income.4 The precariat relies mainly on money wages, which have been stagnant or falling in real terms for three decades, and which are increasingly volatile. The precariat’s income security has fallen correspondingly. Also, as many must do much unpaid work, the wage rate is lower than it appears if only paid labor time is taken into account. This trend will only intensify with the spread of “tasking” through online platforms.

Further, the precariat has been losing non-wage forms of remuneration, while the salariat and elite have been gaining them, making the growth of social income inequality greater than it appears in conventional income statistics. The precariat rarely receives paid holidays, paid medical leave, subsidized transport or accommodation, paid maternity leave, and so on. And it lacks the occupational benefits that came with belonging to a professional or craft guild.

The precariat has also lost entitlement to rights-based state benefits (welfare). The international trend towards means-testing and behavior-testing has hit them hard and engulfed many in regimes of workfare. Means-testing creates poverty traps, since benefits are withdrawn when earned income rises. Going from low state benefits into low-wage jobs on offer thus involves very high marginal “tax” rates, often over 80%. The precariat also faces “precarity traps”: obtaining benefits takes time, so if you succeed in obtaining them, it would be financially irrational to leave for a low-paying short-term job alternative.

The precariat has also been losing access to family and community support, as well as to commons resources and amenities, all of which have been underestimated sources of income security for low-income groups throughout the ages. For the precariat, they are just not there. Instead, many are driven to food banks and charities.

Key to the precariat’s income insecurity is uncertainty. Uncertainty differs from contingency risks, such as unemployment, maternity, and sickness, which were core focuses of welfare states. For those, one can calculate the probability of such events and develop an insurance scheme. Uncertainty cannot be insured against; it is about “unknown unknowns.” The social security part of the distribution system has also broken down, and social democrats should stop pretending it could be restored.

The precariat also suffers from an above-average cost of living. They live on the edge of unsustainable debt, knowing that one illness, accident, or mistake could render them homeless. Needing loans and credit, they pay much higher interest rates than richer folk.

The third defining dimension consists of the precariat’s distinctive relations to the state. The proletariat went from having few rights to having a rising number—cultural, civil, social, political, and economic. By contrast, the precariat is losing such rights, often not realizing so until need for their protection arises. For instance, they usually lack cultural rights because they cannot belong to communities such as occupational guilds that would give them security and identity. They lack civil rights because of the erosion of due process and inability to afford adequate defense in court; they often lose entitlement to state benefits on the whim of unaccountable bureaucrats. They lose economic rights because they cannot work in occupations they are qualified to perform.

The loss of rights goes with the most defining feature of the class: the precariat consists of supplicants. The original Latin meaning of precarious was “to obtain by prayer.” That sums up what it is to be in the precariat: having to ask for favors, for help, for a break, for a discretionary judgment by some bureaucrat, agent, relative, or friend. This intensifies uncertainty. To be in the precariat, it has been said, is like running on sinking sand.

Experience of supplicant status leads to the precariat’s growing consciousness. Chronic insecurity induces anxiety, but as with all emerging classes, there are different forms of relative deprivation. The precariat is split into three factions, which has hindered its becoming a class-for-itself and is challenging for those wishing to develop and organize a progressive response.

The first faction is the Atavists. They have fallen out of the proletariat, or come from old working-class families or communities whose members once depended on full-time jobs. Some are young; many are older, looking back wistfully. Their deprivation is about a lost Past, whether real or imagined. Having relatively little schooling or education in civics, history, or culture, they tend to listen to the sirens of neo-fascist populism.

They have been voting for the likes of Trump, Putin, Orban, Marine Le Pen, Farage and other Brexiteers, and the Lega in Italy. It is not correct to call them the “left behind,” since they are expected to function inside a new labor market. But they are bitter, eager to blame others for their plight. Those they demonize comprise the second faction of the precariat, the Nostalgics. This group is composed of migrants and minorities, who feel deprived of a Present, with nowhere to call home. For the most part, they “keep their heads down,” doing whatever they can to survive and move forward.

The third faction is best described as the Progressives, more educated and mainly young, although not exclusively so. Their defining sense of deprivation is loss of a Future. They went to university or college, promised by their parents and teachers that this would lead to a defining career. They emerge without that, often with debt stretching into that future. Beyond their own future, more and more despair about the planet’s ecological future.

A challenge for aspiring politicians is to build a broad policy strategy for bringing all three factions together in common cause. That is beginning to happen, so it is unnecessarily pessimistic to think a new progressive politics cannot be forged for the precariat as a whole.

The Dangerous Class

The precariat is today’s “dangerous class,” because it is the part of the emerging class system that could carry forward social transformation. For Marxists, the term “dangerous class” is associated with the “lumpen-proletariat,” those cut off from society, reduced to crime and social illness, having no function in production other than to put fear into the proletariat. But the precariat is not a lumpen. It is wanted by global capitalism, encapsulating new norms of labor and work. continue

Category : Capitalism | Globalization | Strategy and Tactics | Theory | Working Class | Youth | Blog
19
Jan

Keynote Speech by H.E. Xi Jinping

President of the People’s Republic of China

At the Opening Session

Of the World Economic Forum Annual Meeting 2017

Davos, 17 January 2017


President Doris Leuthard and Mr. Roland Hausin,


Heads of State and Government, Deputy Heads of State and Your Spouses,


Heads of International Organizations,


Dr. Klaus Schwab and Mrs. Hilde Schwab,


Ladies and Gentlemen,


Dear Friends,


I’m delighted to come to beautiful Davos. Though just a small town in the Alps, Davos is an important window for taking the pulse of the global economy. People from around the world come here to exchange ideas and insights, which broaden their vision. This makes the WEF annual meeting a cost-effective brainstorming event, which I would call “Schwab economics”.


“It was the best of times, it was the worst of times.” These are the words used by the English writer Charles Dickens to describe the world after the Industrial Revolution. Today, we also live in a world of contradictions. On the one hand, with growing material wealth and advances in science and technology, human civilization has developed as never before. On the other hand, frequent regional conflicts, global challenges like terrorism and refugees, as well as poverty, unemployment and widening income gap have all added to the uncertainties of the world.


Many people feel bewildered and wonder: What has gone wrong with the world?


To answer this question, one must first track the source of the problem. Some blame economic globalization for the chaos in the world. Economic globalization was once viewed as the treasure cave found by Ali Baba in The Arabian Nights, but it has now become the Pandora’s box in the eyes of many. The international community finds itself in a heated debate on economic globalization.


Today, I wish to address the global economy in the context of economic globalization.


The point I want to make is that many of the problems troubling the world are not caused by economic globalization. For instance, the refugee waves from the Middle East and North Africa in recent years have become a global concern. Several million people have been displaced, and some small children lost their lives while crossing the rough sea. This is indeed heartbreaking. It is war, conflict and regional turbulence that have created this problem, and its solution lies in making peace, promoting reconciliation and restoring stability. The international financial crisis is another example. It is not an inevitable outcome of economic globalization; rather, it is the consequence of excessive chase of profit by financial capital and grave failure of financial regulation. Just blaming economic globalization for the world’s problems is inconsistent with reality, and it will not help solve the problems.


From the historical perspective, economic globalization resulted from growing social productivity, and is a natural outcome of scientific and technological progress, not something created by any individuals or any countries. Economic globalization has powered global growth and facilitated movement of goods and capital, advances in science, technology and civilization, and interactions among peoples.


But we should also recognize that economic globalization is a double-edged sword. When the global economy is under downward pressure, it is hard to make the cake of global economy bigger. It may even shrink, which will strain the relations between growth and distribution, between capital and labor, and between efficiency and equity. Both developed and developing countries have felt the punch. Voices against globalization have laid bare pitfalls in the process of economic globalization that we need to take seriously.


As a line in an old Chinese poem goes, “Honey melons hang on bitter vines; sweet dates grow on thistles and thorns.” In a philosophical sense, nothing is perfect in the world. One would fail to see the full picture if he claims something is perfect because of its merits, or if he views something as useless just because of its defects. It is true that economic globalization has created new problems, but this is no justification to write economic globalization off completely. Rather, we should adapt to and guide economic globalization, cushion its negative impact, and deliver its benefits to all countries and all nations.


There was a time when China also had doubts about economic globalization, and was not sure whether it should join the World Trade Organization. But we came to the conclusion that integration into the global economy is a historical trend. To grow its economy, China must have the courage to swim in the vast ocean of the global market. If one is always afraid of bracing the storm and exploring the new world, he will sooner or later get drowned in the ocean. Therefore, China took a brave step to embrace the global market. We have had our fair share of choking in the water and encountered whirlpools and choppy waves, but we have learned how to swim in this process. It has proved to be a right strategic choice.


Whether you like it or not, the global economy is the big ocean that you cannot escape from. Any attempt to cut off the flow of capital, technologies, products, industries and people between economies, and channel the waters in the ocean back into isolated lakes and creeks is simply not possible. Indeed, it runs counter to the historical trend.


The history of mankind tells us that problems are not to be feared. What should concern us is refusing to face up to problems and not knowing what to do about them. In the face of both opportunities and challenges of economic globalization, the right thing to do is to seize every opportunity, jointly meet challenges and chart the right course for economic globalization.


At the APEC Economic Leaders’ Meeting in late 2016, I spoke about the necessity to make the process of economic globalization more invigorated, more inclusive and more sustainable. We should act pro-actively and manage economic globalization as appropriate so as to release its positive impact and rebalance the process of economic globalization. We should follow the general trend, proceed from our respective national conditions and embark on the right pathway of integrating into economic globalization with the right pace. We should strike a balance between efficiency and equity to ensure that different countries, different social strata and different groups of people all share in the benefits of economic globalization. The people of all countries expect nothing less from us, and this is our unshirkable responsibility as leaders of our times. 


Ladies and Gentlemen, Dear Friends,


At present, the most pressing task before us is to steer the global economy out of difficulty. The global economy has remained sluggish for quite some time. The gap between the poor and the rich and between the South and the North is widening. The root cause is that the three critical issues in the economic sphere have not been effectively addressed.


First, lack of robust driving forces for global growth makes it difficult to sustain the steady growth of the global economy. The growth of the global economy is now at its slowest pace in seven years. Growth of global trade has been slower than global GDP growth. Short-term policy stimuli are ineffective. Fundamental structural reform is just unfolding. The global economy is now in a period of moving toward new growth drivers, and the role of traditional engines to drive growth has weakened. Despite the emergence of new technologies such as artificial intelligence and 3D printing, new sources of growth are yet to emerge. A new path for the global economy remains elusive.


Second, inadequate global economic governance makes it difficult to adapt to new developments in the global economy. Madame Christine Lagarde recently told me that emerging markets and developing countries already contribute to 80% of the growth of the global economy. The global economic landscape has changed profoundly in the past few decades. However, the global governance system has not embraced those new changes and is therefore inadequate in terms of representation and inclusiveness. The global industrial landscape is changing and new industrial chains, value chains and supply chains are taking shape. However, trade and investment rules have not kept pace with these developments, resulting in acute problems such as closed mechanisms and fragmentation of rules. The global financial market needs to be more resilient against risks, but the global financial governance mechanism fails to meet the new requirement and is thus unable to effectively resolve problems such as frequent international financial market volatility and the build-up of asset bubbles.


Third, uneven global development makes it difficult to meet people’s expectations for better lives. Dr. Schwab has observed in his book The Fourth Industrial Revolution that this round of industrial revolution will produce extensive and far-reaching impacts such as growing inequality, particularly the possible widening gap between return on capital and return on labor. The richest one percent of the world’s population own more wealth than the remaining 99 percent. Inequality in income distribution and uneven development space are worrying. Over 700 million people in the world are still living in extreme poverty. For many families, to have warm houses, enough food and secure jobs is still a distant dream. This is the biggest challenge facing the world today. It is also what is behind the social turmoil in some countries.


All this shows that there are indeed problems with world economic growth, governance and development models, and they must be resolved. The founder of the Red Cross Henry Dunant once said, “Our real enemy is not the neighboring country; it is hunger, poverty, ignorance, superstition and prejudice.” We need to have the vision to dissect these problems; more importantly, we need to have the courage to take actions to address them.

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Category : Capitalism | China | Globalization | Infrastructure | Socialism | Blog
23
Apr

Editor’s Note: We are quite aware that the author below is no Marxist. But his views on world affairs are always interesting, and have recently been taken seriously by both Obama and Sanders, but not Clinton. So with more than a grain of salt, he’s worth a read.

By Zbigniew Brzezinski

The American Interest

April 17, 2016 – As its era of global dominance ends, the United States needs to take the lead in realigning the global power architecture.

Five basic verities regarding the emerging redistribution of global political power and the violent political awakening in the Middle East are signaling the coming of a new global realignment.

The first of these verities is that the United States is still the world’s politically, economically, and militarily most powerful entity but, given complex geopolitical shifts in regional balances, it is no longer the globally imperial power. But neither is any other major power.

The second verity is that Russia is experiencing the latest convulsive phase of its imperial devolution. A painful process, Russia is not fatally precluded – if it acts wisely – from becoming eventually a leading European nation-state. However, currently it is pointlessly alienating some of its former subjects in the Islamic southwest of its once extensive empire, as well as Ukraine, Belarus, and Georgia, not to mention the Baltic States.

The third verity is that China is rising steadily, if more slowly as of late, as America’s eventual coequal and likely rival; but for the time being it is careful not to pose an outright challenge to America. Militarily, it seems to be seeking a breakthrough in a new generation of weapons while patiently enhancing its still very limited naval power.

The fourth verity is that Europe is not now and is not likely to become a global power. But it can play a constructive role in taking the lead in regard to transnational threats to global wellbeing and even human survival. Additionally, Europe is politically and culturally aligned with and supportive of core U.S. interests in the Middle East, and European steadfastness within NATO is essential to an eventually constructive resolution of the Russia-Ukraine crisis.

The fifth verity is that the currently violent political awakening among post-colonial Muslims is, in part, a belated reaction to their occasionally brutal suppression mostly by European powers. It fuses a delayed but deeply felt sense of injustice with a religious motivation that is unifying large numbers of Muslims against the outside world; but at the same time, because of historic sectarian schisms within Islam that have nothing to do with the West, the recent welling up of historical grievances is also divisive within Islam.

Taken together as a unified framework, these five verities tell us that the United States must take the lead in realigning the global power architecture in such a way that the violence erupting within and occasionally projected beyond the Muslim world—and in the future possibly from other parts of what used to be called the Third World—can be contained without destroying the global order. We can sketch this new architecture by elaborating briefly each of the five foregoing verities.

First, America can only be effective in dealing with the current Middle Eastern violence if it forges a coalition that involves, in varying degrees, also Russia and China. To enable such a coalition to take shape, Russia must first be discouraged from its reliance on the unilateral use of force against its own neighbors—notably Ukraine, Georgia, the Baltic States—and China should be disabused of the idea that selfish passivity in the face of the rising regional crisis in the Middle East will prove to be politically and economically rewarding to its ambitions in the global arena. These shortsighted policy impulses need to be channeled into a more farsighted vision.

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Category : China | Globalization | Hegemony | Middle East | Russia | Blog
3
Jan

Rising tide

 

By William I. Robinson,

Truthout | News Analysis

Jan 1, 2016 – We are nearing 2016, the year when the richest 1 percent of humanity will own more than the rest of the world, according to projections made by the nongovernmental organization Oxfam.

This is up from the 1 percent owning 44 percent of the world’s wealth in 2010 and 48 percent in 2014. If current trends continue, the 1 percent will own 54 percent by 2020.

The top 80 billionaires were worth $1.9 trillion in 2014, an amount equal to the bottom 50 percent. These 80 billionaires saw a 50 percent rise in their wealth in just four years, from 2010 to 2014, during which time the poorest 50 percent saw a drop in their wealth. In other words, there has been a huge transfer of wealth in a very short period of time from the poorest half of humanity to the richest 80 individuals on the planet.

Capitalism produces social inequalities as a consequence of its own internal workings.

What should we do in the face of these escalating worldwide inequalities? In his worldwide bestseller, Capital in the Twenty-First Century, French economist Thomas Piketty argued for a global tax on capital and redistribution through progressive tax reform. The book has gained traction globally perhaps because its prescriptions converge with the reformist agenda of a rising number of transnational elites and intelligentsia, who have become concerned that the turmoil sparked by such egregious inequalities may destabilize global capitalism and threaten their control. Like Piketty, they have been calling for mildly redistributive measures, such as increased taxes on corporations and the rich, a more progressive income tax, the reintroduction of social welfare programs and a "green capitalism."

This reformist approach to global inequality, however, is entirely inadequate because it bypasses the questions of power and of corporate control over the planet’s productive resources that are at the very heart of global capitalism and its crisis. Any resolution to this crisis requires a radical redistribution of wealth and power downward to the poor majority of humanity. Social justice requires a measure of transnational social governance over the global production and financial system as a necessary first step in this radical redistribution, which in turn must be linked to the transformation of class and property relations.

Seen in this perspective, the elites’ reformist approach has more to do with averting such a transformation than with resolving the plight of the poor majority. The power relations that are at stake become clear by exploring what accounts for social inequalities under capitalism.

Causes of Rising Inequality

What accounts for escalating worldwide inequalities that have so alarmed transnational elites? As Marx analyzed in Capital, there is something going on in the capitalist system itself beyond sets of government policies that generates inequalities. Simply put, capitalists own the means of producing wealth, and therefore appropriate as profits as much as possible of the wealth that society collectively produces. Capitalism produces social inequalities as a consequence of its own internal workings.

The global market has not been able to absorb the output of the global economy.

But such inequalities end up undermining the stability of the system, since the mass of working people cannot purchase the wealth that pours out of the capitalist economy to the extent that capitalists and the well-off retain more and more of total income relative to that which goes to labor. If capitalists cannot actually sell (or "unload") the products of their plantations, factories and offices, then they cannot make a profit.

This is what in critical political economy constitutes the underlying internal contradiction of capitalism, or the overaccumulation problem. Left unchecked, expanding social polarization results in crisis – in recessions and depressions, such as the 1930s Great Depression or the 2008 Great Recession. Worse still, it engenders great social upheavals, political conflicts, wars and even revolutions – precisely the kinds of conflicts and chaos we are witnessing in the world today.

In the view of the reformers, however, it is not the capitalist system itself, but its particular institutional organization that is to blame for inequalities. They believe it can be offset by increased taxes, social welfare programs and other reformist measures.

The Class Warfare of the Transnational Capitalist Class

The sharp escalation in inequalities coincides with capitalist globalization from the 1970s and on. The high rates of inequality registered in the wake of the Industrial Revolution, and that reached a peak in the late 19th and early 20th centuries, had diminished somewhat in the heartlands of world capitalism in the wake of two world wars and the Great Depression. Inequalities in the rich countries were diminished in part thanks to colonialism and imperialism, which resulted in the transfer of surplus wealth from the periphery to the metropolitan centers of world capitalism and made possible the rise of a "labor aristocracy" in these centers.

What became known as the "Fordist-Keynesian" social order that took shape in the 30 years following World War II involved high growth rates, a rise in living standards for substantial sectors of the working class and a decrease in inequalities in the developed core of world capitalism.

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Category : Capitalism | Globalization | Militarism | Neoliberalism | Blog
15
Apr

Coming to Terms With the American Empire

[Editor’s note: The following interesting piece is from an ‘independent’ group of private US intelligence analysts, and reflects the views of ruling elites. We should note, however, that there is nothing accidental or new in the US empire, embodied from the early days of the Republic in the widely embraced notion of ‘Manifest Destiny.’]

By George Friedman
Stratfor’s Geopolitical Weekly

April 14, 12015 – "Empire" is a dirty word. Considering the behavior of many empires, that is not unreasonable. But empire is also simply a description of a condition, many times unplanned and rarely intended. It is a condition that arises from a massive imbalance of power. Indeed, the empires created on purpose, such as Napoleonic France and Nazi Germany, have rarely lasted. Most empires do not plan to become one. They become one and then realize what they are. Sometimes they do not realize what they are for a long time, and that failure to see reality can have massive consequences.
World War II and the Birth of an Empire

The United States became an empire in 1945. It is true that in the Spanish-American War, the United States intentionally took control of the Philippines and Cuba. It is also true that it began thinking of itself as an empire, but it really was not. Cuba and the Philippines were the fantasy of empire, and this illusion dissolved during World War I, the subsequent period of isolationism and the Great Depression.

The genuine American empire that emerged thereafter was a byproduct of other events. There was no great conspiracy. In some ways, the circumstances of its creation made it more powerful. The dynamic of World War II led to the collapse of the European Peninsula and its occupation by the Soviets and the Americans. The same dynamic led to the occupation of Japan and its direct governance by the United States as a de facto colony, with Gen. Douglas MacArthur as viceroy.

The United States found itself with an extraordinary empire, which it also intended to abandon. This was a genuine wish and not mere propaganda. First, the United States was the first anti-imperial project in modernity. It opposed empire in principle. More important, this empire was a drain on American resources and not a source of wealth. World War II had shattered both Japan and Western Europe. The United States gained little or no economic advantage in holding on to these countries. Finally, the United States ended World War II largely untouched by war and as perhaps one of the few countries that profited from it. The money was to be made in the United States, not in the empire. The troops and the generals wanted to go home.

But unlike after World War I, the Americans couldn’t let go. That earlier war ruined nearly all of the participants. No one had the energy to attempt hegemony. The United States was content to leave Europe to its own dynamics. World War II ended differently. The Soviet Union had been wrecked but nevertheless it remained powerful. It was a hegemon in the east, and absent the United States, it conceivably could dominate all of Europe. This represented a problem for Washington, since a genuinely united Europe — whether a voluntary and effective federation or dominated by a single country — had sufficient resources to challenge U.S. power.

The United States could not leave. It did not think of itself as overseeing an empire, and it certainly permitted more internal political autonomy than the Soviets did in their region. Yet, in addition to maintaining a military presence, the United States organized the European economy and created and participated in the European defense system. If the essence of sovereignty is the ability to decide whether or not to go to war, that power was not in London, Paris or Warsaw. It was in Moscow and Washington.

The organizing principle of American strategy was the idea of containment. Unable to invade the Soviet Union, Washington’s default strategy was to check it. U.S. influence spread through Europe to Iran. The Soviet strategy was to flank the containment system by supporting insurgencies and allied movements as far to the rear of the U.S. line as possible. The European empires were collapsing and fragmenting. The Soviets sought to create an alliance structure out of the remnants, and the Americans sought to counter them.

The Economics of Empire

One of the advantages of alliance with the Soviets, particularly for insurgent groups, was a generous supply of weapons. The advantage of alignment with the United States was belonging to a dynamic trade zone and having access to investment capital and technology. Some nations, such as South Korea, benefited extraordinarily from this. Others didn’t. Leaders in countries like Nicaragua felt they had more to gain from Soviet political and military support than in trade with the United States. (Continued)

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Category : Capitalism | Globalization | Hegemony | US History | Blog
7
Jul

 

By Harry Targ

Committees of Correspondence for Democracy and Socialism (CCDS)

For presentation at the  upcoming “Moving Beyond Capitalism” Conference, Center for Global Justice, San Miguel de Allende, Mexico July 29-August 5, 2014

Introduction

The deepening 21st century crises of capitalism-from growing economic impoverishment to neo-fascism to literal destruction of planet earth-demand movements and visions of change unparalleled in quantities and qualities of response. Anti-capitalist responses to these crises range from helplessness to spontaneous activism. Often political reactions ignore the history and context of the crises and the movements that have come before that have planted the seeds of fundamental social change. This paper will survey movements of social change in the era of neoliberal globalization suggesting both the breadth of such movements and the historical context from which they came. The tasks for today still require an analysis of the nature of existing systems and responses, visions of desirable alternatives, and contextualized discussions of moving from here to there. “Moving Beyond Capitalism” requires such a grounding of the future in the past and the present.

21st Century Imperialism: Post-Cold War Perspectives on Global Political Economy

The collapse of the Soviet Union transformed world affairs, scholarly analyses of international relations, punditry, and rationales for imperial foreign policies. A new buzzword became part of political discourse to describe the international system: “globalization.” Almost immediately a large literature was generated suggesting that the world had changed. Globalization was replacing the system of often hostile nation-states that had characterized the world since the sixteenth century.[1]

While interpretations of globalization varied, the common conception of the term suggested that a process of relations was occurring in which interactions between nations, business and financial organizations, groups, and peoples had become so frequent and intense that they were creating one global society.[2] Major globalizing institutions included multinational corporations, especially the 200 largest global corporations with production, distribution, and decision-making facilities in many countries, and international financial institutions engaged in speculative activities all across the globe. At the cultural level a handful of media conglomerates produced a large percentage of the cultural products, images, artistic endeavors, and print and electronic information that the world consumed. Finally, international institutions such as the World Bank, the International Monetary Fund, and the newly created World Trade Organization brought international influence to bear on states that resisted the globalization process.

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Category : Capitalism | Democracy | Globalization | Marxism | Socialism | Blog
27
Jun

 

Farsi News Service Interviews Professor William I. Robinson

Prof. William I. Robinson: Global Capitalism Is In the Midst of Its Most Severe Crisis

Interview by Kourosh Ziabari

June 24, 2014 – TEHRAN (FNA)- Prominent American sociologist Prof. William I. Robinson believes that the United States government is the biggest perpetrator of terror in the world and its military adventures across the globe have claimed the lives of millions of innocent citizens.

According to Prof. William I. Robinson, “if we define terrorism as the use of violence against civilians for political objectives, then the US state is the world’s leading terrorist.”

“US intervention abroad in the 20th century – the forging of a US empire – claimed tens of millions of victims, inflicted untold suffering, and set back the aspirations of freedom and democracy in dozens of countries,” said Prof. Robinson in an exclusive interview with Fars News Agency.

Prof. Robinson also went on to say that capitalism, which is the predominant economic and political worldview of the United States and other imperial powers is in the midst of its most severe crisis in close to a century, even worse than the crisis in the 1930s, “because we are on the precipice of an ecological holocaust that threatens the very earth system and the ability to sustain life, ours included, because the means of violence and social control have never before been so concentrated within a single powerful state, and because the global means of communication is also extraordinarily concentrated in the hands of transnational capital and a few powerful states.”

William I. Robinson is a professor of sociology, global and international studies, and Latin American studies at the University of California at Santa Barbara. His latest book entitled “Global Capitalism and the Crisis of Humanity” was just published in 2014. In the early 1980s, he worked as a journalist in the war-torn Nicaragua. From 1984 to 1990 he was a member of the Union of Nicaraguan Journalists. His articles and writings have appeared on such news websites as Al-Jazeera, Huffington Post and Truth Out.

Prof. Robinson took part in an exclusive, comprehensive interview with FNA and responded to our questions about the demise of capitalism, the future of globalization, the setbacks and failures of the US foreign policy and the human consequences of Washington’s military adventures. What follows is the text of the interview.

Q: What’s your viewpoint regarding the consequences of the US military expeditions across the world, including the devastation of the natural resources of the countries that are attacked, the killing of the unarmed civilians, the forced migration and displacement of the war-hit population, the pollution of the air, the infliction of irretrievable damages on the environment and the erosion of democratic institutions in these countries? Who is going to compensate for these losses?

A: The US state is acting as the gendarme for global capitalism at a time when global capitalism is in deep crisis. It is the core institution in what I have referred to as the transnational state, and in my view it represents at this time the interests of transnational capital, of a transnational capitalist class.

The United States has committed successive war crimes and crimes against humanity in recent years. However, let us recall that this is the continuation of a long historical pattern, what we used to call imperialism, and some still do refer to as imperialism. The United States as a country was born on the basis of the slavery of Africans and other peoples and genocide against the native populations of North America.

Expansion from the original East Coast colonies began from the very inception of the Republic. Texas was annexed from Mexico in 1836 by white Southern slavers who were seeking to expand cotton plantation based on the slavery of Africans. This expansion continued in 1848 as the United States annexed one half of Mexican territory in a war of aggression justified by “Manifest Destiny”. US rulers then launched extra-territorial expansion, starting with the invasion, occupation, and colonization of Puerto Rico, the Philippines, and Cuba in 1898, and followed by literally hundreds – perhaps thousands – of interventions in the 20th century, including convert operation, the orchestration of coup d’etats, counter-insurgencies, military invasions, occupations, and so forth – throughout Latin America, Africa, the Middle East, and Asia, but also in Southern and Eastern Europe. US intervention abroad in the 20th century – the forging of a US empire – claimed tens of millions of victims, inflicted untold suffering, and set back the aspirations of freedom and democracy in dozens of countries – yet US rulers had the arrogance and cynicism to claim that its aggression against the world’s people was in the name of freedom and democracy.

Of course the United States does not hold a monopoly on such expansionism and interventionism in the modern era of capitalism. Over the past two centuries, and even earlier, England, France, Spain and other European powers were carving out their own colonial empires, unleashing unfathomable brutality and suffering. The culprit here, beyond a particular nation-state, is an outwardly expanding capitalism involving imperialism and colonialism. The United States stands out because it became the dominant world power in the wake of World War II and set about to construct a truly global empire, the likes of which the world had not previously seen.

However, and this is the key point I wish to highlight here, US intervention around the world clearly entered a qualitatively new period after September 11, 2001. This new period should be seen in the context of emergent 21st century global capitalism. Global capitalism is in the midst of its most severe crisis in close to a century, and in many ways the current crisis is much worse than that of the 1930s because we are on the precipice of an ecological holocaust that threatens the very earth system and the ability to sustain life, ours included, because the means of violence and social control have never before been so concentrated within a single powerful state, and because the global means of communication is also extraordinarily concentrated in the hands of transnational capital and a few powerful states. On the other hand, global inequalities have never been as acute and grotesque as they are today. So, in simplified terms, we need to see the escalation of US interventionism and the untold suffering it brings about, including what you mention – the killing of unarmed civilians, the destruction of the environment, forced migration and displacement, undermining democracy – as a response by the US-led transnational state and the transnational capitalist class to contain the explosive contradictions of a global capitalist system that is out of control and in deep crisis.

You ask me who is going to compensate for these losses. That will depend on how the world’s people respond. There is currently a global revolt from below underway, but it is spread unevenly across countries and has not taken any clear form or direction. Can the popular majority of humanity force the transnational capitalist class and the US/transnational state to be accountable for its crimes? Mao Zedong once said that “power flows through the barrel of a gun.” What he meant by this, in a more abstract than literal way, I believe, is that in the end it is the correlation of real forces that will determine outcomes. Because the United States has overwhelming and “full spectrum” military dominance, it can capture, execute, or bring to trial people anywhere around the world… it has “free license”, so to speak, to act as an international outlaw. We don’t even have to take the more recent examples. In December 1989 the United States undertook an illegal and criminal invasion of Panama, kidnapped Manuel Noriega – whether or not he was a dictator is not the point, as the United States puts in power and defends dictators that defend US and transnational elite interests, and brought him back to US territory for trial. What country in the world now has the naked power “flowing through the barrel of a gun” to invade the United States, capture George Bush, Dick Chaney, Donald Rumsfeld, and other war criminals, and bring them somewhere to stand trial for war crimes and crimes against humanity?

Q: In your writings, you’ve warned against the growing gap between the rich and the poor, the slant accumulation of the global wealth in the hands of an affluent few and the impoverishment of the suppressed majority. What do you think are the reasons for this stark inequality and the disturbing dispossession of millions of people in the capitalist societies? You wrote that the participants of the 2011 World Economic Forum in Davos were worried that the current situation raises the specter of worldwide instability and civil wars. Is it really so?

A: We have never in the history of humanity seen such a sharp social polarization between the haves and the have-nots, such grotesque levels of inequality, within and among countries. There have been countless studies in recent years documenting the escalation of inequalities, among them, the current bestseller by Thomas Piketty, “Capital in the Twenty-First Century.” The pattern we see is that the notorious “1 percent” monopolizes a huge portion of the wealth that humanity produces and transnational corporations and banks are registering record profits, but as well that some 20 percent of the population in each countries has integrated into the global economy as middle class and affluent consumers while the remaining 80 percent has experienced rising levels of insecurity, impoverishment, and precariousness, increasingly inhabiting what some have called a “planet of slums.”

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Category : Capitalism | Globalization | Hegemony | Marxism | Blog