Thursday, 7 July 2011


 From the Commercial Revolution to the present, global economic integration has exacerbated geographic and social polarization. The rich-poor chasm would have been greater if it were not for revolutions of the bourgeois revolutions in the 18th and 19th centuries, and worker/peasant revolutions in the 20th century. Despite the recent rise of the small middle class in China, India, and former East Bloc countries, World Bank and UN studies confirm that in the past forty years poverty has been rising. 

Similarly, there has been a widening gap between rich and poor nations. Nor is the solution the dissemination of the consumerism doctrine in underdeveloped regions and among lower social classes in the advanced capitalist countries. As Maxime Laguerre correctly emphasizes in Innovation & Growth, “Only through the acceptance of the dogma that growth in consumption equals a growth in happiness does every capitalist system legitimize itself.” Therefore, it is the multifarious and ceaseless ubiquitous marketing of the illusion imbedded in the “consumption equals growth dogma” that is far more significant than the reality of material progress and human happiness. 

Despite economic growth figures based on GDP, uneven social and geographic development and rising poverty are among the reasons that the legitimacy of capitalism and the illusion that it engenders happiness comes to question. Besides the planet’s rapid environmental degradation, the decline in the idyllic bourgeois lifestyle, now characterized by consumption and abuse of legal and illegal substances, entails that the broader middle classes are governed more by fear and anxiety than comfort that capitalism promises in the marketing of the “growth and happiness dogma”. 

Alhough there are many complex variables, among them objective conditions of the evolving capitalist system, for asymmetrical geographic development and unequal socioeconomic conditions, progressives throughout the world have an undeniable responsibility either for surrendering to the status quo or surrendering to fatalism. While co-optation of leftists is hardly a new phenomenon, it has accelerated since China’s economic integration into the global market system, and since the disintegration of the Soviet Bloc. Co-optation of progressives, their causes, factions, and political parties is not inevitable, despite the fact that we live in an unhistorical epoch.
History’s most destructive holocaust may unfold in the next three years as one billion poor fight just to be fed unless the richest nations that control most of the wealth act fast to lessen the crisis. Although international organizations and even some heads of state have been waning about this issue almost on a daily basis, there is yet no concerted action by the G-8 in cooperation with other nations, especially oil producers to bring the poverty crisis under control. 

Meanwhile, there is no shortage of PR-type events warning about the rise in global poverty owing to everything from speculation on energy to the $1 trillion US credit crisis. The poverty holocaust will have social and political implications and cause instability and further weaken the world economy as the UN has warned to the shrugs of the richest nations responsible the crisis. To deflect attention from the impending poverty holocaust that may worsen if nothing is done, the EU is accusing China of neo-colonialism in Africa. I

have no doubt that Africans are amused at blatant European hypocrisy at a time that food, water, and medicine are the key issues for hundreds of millions. The former European colonial masters that ravaged the Dark Continent for centuries, the neo-colonial exploiters since de-colonization now claim they are genuinely concerned about the long-term consequences of Africa-China commercial ties impacting ‘human rights’. After all, look at China’s behavior in Tibet and the way they handled the Olympic games in 2008.

Never mind China’s monstrous deals with most EU and US multinational corporations that have been exploiting workers, EU is now seriously concerned about African workers. While it is true that the EU has high standards on human rights in comparison with China and the US for that matter, such standards apply to its members and prospective members only, although EU human rights record is not exactly free of blemishes given how African and Muslim immigrants are treated. Moreover, Europe has the worst human rights record in the history of the modern world and it is mainly responsible for Africa’s structural underdevelopment and chronic poverty. 

Along with the US after WWII, Europe (England and France the worst among imperialists) has been exploiting Africa’s rich raw materials and cheap labor, thus perpetuating poverty and underdevelopment in the continent and the ensuing social and political instability. EU hypocrisy is made worse by the fact that it is currently following the US lead amid this global economic crisis in having the working class of its own member states pay for finance capitalism’s speculative practices. 

EU members continue to demand that workers take smaller pay raises, lower welfare and social security benefits and increase in retirement age, less job security and more part time and limited contract work, greater privatization of public enterprises to the private sector that ‘economizes’ by cutting jobs and paying fewer benefits. In short, Europeans as well as the US practice neo-colonialism against their own workers. Yet, with a straight face they are now complaining that China is trying to play their game of neo-colonialism in the Third World. How dare China not be content as the beneficiary of EU-US-Japan neocolonial exploitation, how dare China emulate the masters of neo-colonialism at a time that western finance capitalism is in trouble?

It seems that the decade of the 1990s has been squandered by irresponsible US fiscal policies favoring a tiny percentage of the richest Americans, a trade policy undercut by a weak dollar and prejudicial quotas, and of course the exorbitant defense spending that has added enormous debt and left the bill to the next several generations. These facts are only partly to blame for the mini financial and economic crisis the world is currently facing, at a time that the world economy should have been far better. 

The convergence of the integration of former Communist countries into the world-capitalist system in the1990s, low energy/raw materials prices for most of the decade, the dance of the million created by new revolution in technology, the consolidation of the Euro as a reserve currency to back the weak dollar, relatively cheap labor in the Third World and in the advanced countries where trade unionism has been eroding along with real wages would have been sufficient to keep the cycle of capitalist expansion going, had the state and (International Financial Institutions) IFIs done a better job in managing/directing the economy. 

Difficult to be precise about stock market losses around the world in the past 20 days, one estimate is close to one trillion dollars. The key to the current crisis rests partly with the role of the IFIs that pressured governments to privatize, liberalize, and strengthen the strongest within the private sector. As much as the US banking crisis, chronic external equilibrium problems, and wasteful defense spending have contributed to this crisis, as much as Russia is correct that the US is not doing a very good job managing the economy, the recent European central bank’s decision was even more irresponsible than anything Washington has done during the recession of 2008-2011. 

The idea of fighting inflation amid rising unemployment and economic stagnation is one that only the IMF would recommend on behalf of finance capitalists who are the ones that benefit under such conditions at the expense of all others. Neither the middle class nor workers and farmers can be helped by anti-inflationary policies when the world economy is in a deep stagflation made worse by a strong euro. That the EU central bank made the announcement when the Rome conference on global poverty was ending indicates incredible confidence in IMF-style monetarist policies that invariably redistribute income toward the wealthy. 

Because it is not the case that either the EU central bank or any one else in an official position believes that the world economy is heading toward higher growth, the only conclusion is that EU banking policy is in fact lowering the workers’ income throughout the world. Instead of providing more liquidity in the civilian economy, the EU central bank is cutting it; instead of raising taxes on high income groups, the EU is providing more subsidies and making it easier for further consolidation. 

In 2007, I wrote for the WAIS blog that 2008 will be the worst year since 1968. I was optimistic that a deeper crisis would be avoided and  if a coordinated three-pronged approach were adopted, and governments in each country would make a pledge to provide special assistance for the poorest segments of their own population and for the Third World to stimulate growth through consumer spending. 

Four years later, we know that governments adopted fiscal and labor policies designed to absorb capital from the lower segments of the population to strengthen finance capital. The most devastating consequences were for the world's poor. How is it possible that a world-system ostensibly based on liberty and equality of opportunity (that elusive dream people are asked to chase) terrorize two billion people living on under two dollars a day, not knowing if their children will die so that capitalism can preserve its unwavering predatory course?

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