Monday, 31 October 2011


Over the past months and years, I have written a great deal on the US containment policy toward Iran, and on the need by the US to encircle Iran and prevent it from exercising a hegemonic role in the Middle East. US policy in the past decade has created a power vacuum that Iran has filled, given that the US destroyed both Afghanistan and Iraq, and consistently undermined Syria, thereby inadvertently giving Iran the opportunity to inject itself into a hegemonic role along with Turkey. When the alleged Iran-Mexico plot to assassinate the Saudi ambassador broke out in October 2011, I wrote in this blog and elsewhere that the plot lacked credibility, that we need to wait for all the evidence to surface, and that even if it were true, Saudi Arabia and the UN should have been in the forefront of this surreal story, not the US.

On 15 October 2011, the US made a great deal of noise about an alleged Iran plot in connection with Mexican drug lords to assassinate the Saudi Ambassador. Iran immediately denied that there was such a plot in which the government or any of its agents were involved. The Saudi government took some time before it said that it would consider what action to take against Iran.

Manssor Arbabsiar, the defendant in the plot, has pleaded not guilty in U.S. District Court in New York, but the US Justice Department insists that Arbabsiar has admitted his role in a $1.5 million plot. Iran maintains that a key player in the plot was a Mexican Zeta drug cartel hit man hired to carry out the job for $1.5m, but he turned out to be a Drugs Enforcement Agency (DEA)informant. It has been alleged that Arbabsiar and the DEA informant planned to bomb the Israeli embassies in Washington and Argentina, while simultaneously using the Middle East as a drug-traffic zone.

Although the story of "Iranian terrorism joining forces with Mexican drug lords" had enough appeal for most Americans and the world, the problem was the lingering absence of hard evidence that the government in Tehran was behind it, and the increasingly obvious sings that the US had manufactured the story for a number of reasons as I stated when I first wrote on this in mid-October. What is amazing that news organizations around the world picked up the story and ran it as indisputable fact, without waiting for the evidence.

What is even stranger is that to this day, 1 November 2011, Saudi Arabia is officially stating that it will allow Iranians to visit Mecca for the Hajj pilgrimage, and that it is still considering how to deal with the alleged Iran-Mexico plot. And if the US takes the matter before the UN Security Council, will it face Russian-Chinese opposition and questions about Iran demanding an apology and compensation for the stigma that Washington visited on Tehran by accusing it as the instrument behind the plot?

Former CIA officer Robert Baer, a former CIA has stated that the "Quds Force has never been this sloppy, using untested proxies, contracting with Mexican drug cartels, sending money through New York bank accounts, and putting its agents on U.S. soil where they risk being caught... The Quds Force is simply better than this." That many prominent analysts have dismissed the credibility of this alleged plot, and that the US has not provided any evidence or followed through in this case to prove that indeed Tehran was behind this plot send troubling signals across the world about the lengths to which the US would go to pursue containment policy toward Iran.

Can the US secure a conviction in this case to save face domestically and internationally? I can think of no US court that would not accept the Justice Department evidence against the defendant, and I can think of no US official not linking the defendant found guilty as charged of having links to the government of Tehran, or even of the Justice Department not convincing the defendant to 'confess' as much so that he would suffer a lighter sentence. The absurdity of this story is reminiscent of similar ones of the early Cold War in which the CIA  was involved. Except that in the early Cold War, the US ran a tight ship and there was a sense of mission (better dead than Red!) that justified any conspiracy or plot of any type. 

The current Iran-Mexico plot is so surreal that since it made news, the US has used back channels to ameliorate relations with Iran, just as it is trying to contain it. The response from Iran to Secretary Hillary Clinton's calls for dialogue have not been well received.

On 28 October 2011, Iran launched a formal complaint against the U.S. over false claims about the Iranian government's involvement in the alleged plot to kill Saudi Arabia's ambassador. The Swiss embassy in Tehran that represent U.S. interests delivered the Iranian complaint that charges the US with violations of international rules and regulations. Iran demands a U.S. apology and compensation for "material and moral damages of this baseless accusation."
On 28 October 2011, Iranian Foreign Minister Ali Akbar Salehi stated that the US is pursuing contradictory policy toward Iran, of trying dialogue while applying more sanctions. This is not to say that the US as a world power does not have the right to assert its authority regarding regional balance of power matters, or that Iran can use this alleged plot that seems to have been manufactured in Washington as a pretext to have a free hand on unrelated issues from human rights to political reform. However, the US is obsessed about following a schizophrenic policy toward Iran that basically undermines its position and seem to strengthen the country that Washington wishes to contain.


The issue for the EU today is whether it can survive an Italian public debt crisis, perhaps combined with a Spanish crisis. Italy constitutes 25% of the eurzone's GDP, as compared with Greece that is a mere 2% and only symbolically significant. Partly because the US has been a strong advocate for Greece in the last sixty years and responsible for lobbying on its behalf to become an EU member and join the eurozone, Greece has been more or less forced upon Europe, although it is true that European multinationals control a good deal of the Greek market that is a gateway to the Balkans and the Middle East.

For all intents and purposes, Greece is no longer as relevant with regard to the broader EU public debt crisis - the recent haircut may be the last gesture EU makes toward Greece before its exodus. On the other hand, Italy is really the focal point as it proved last week when it tried borrowing from the markets at a rate that reflects serious investor concern and what the future holds. I listened to Silvio Berlusconi castigating bond speculators; I read about Italian trade unions threatening a series of labor strikes, if Berlusconi makes good with a threat to cut 300,000 public sector jobs; I listened to Italian politicians trying to define the solution for Italy's transition from the debt crisis, and I recalled that officials in Greece, Portugal and Spain going through the same rhetoric only to go along with what Germany and the IMF dictated.

Today, the bond market looks very bad for Italy, Spain and Belgium, and the question remains whether EU will survive an Italian public debt crisis, and if it does what kind of European union will it be? That China is reluctant to help EU unless it receives not just commercial but political concessions (on human rights, etc.), and that EU is willing to bargain at all cost, no matter what is said publicly, reveals a great deal of EU's future. On the other hand, the EU is under pressure from both the US and UK to adopt decisive steps on the public debt crisis, indlucing easing interest rates and pouring more money into bailouts, a policy that would substantially weaken the creditor nations like Germany. How long can international pressures on the EU continue without erupting into a major political crisis is another interesting question.

Saturday, 29 October 2011


Is a pluralistic society best served with a weak, docile, and/or politically dependent labor movement? Was Franklin D. Roosevelt wrong in strengthening trade unionism as an integral part of his New Deal, or was Ronald Reagan correct in trying to weaken, and in some cases dismantle, trade unions? To what degree was the American social structure advanced (middle class and workers) and democracy strengthened as a result of FDR pro-union policies and to what degree did the American social fabric disintegrate from Reagan to the present? 

Two years after the Wagner Act (1935) legalized collective bargaining amid the depression and against powerful political and business opposition, a public opinion poll indicated that at least 70% of Americans favored trade unionism. The Great Depression had radicalized a percentage of the American people. FDR co-opted them through trade unions (especially through the CIO, given that the AFL was much more conservative/status quo) that became a permanent popular base of the Democrat party.

The late 1930s and early 1940s marked the zenith of American trade unionism. The same is true of Latin American trade unionism that the CIO supported, but not for Europe struggling to recover from WWI, then economic depression followed by another global war. The Cold War politicized the labor movement not only of the US, but of the entire world that was divided into pro-US, pro-Soviet, or non-aligned.

Unions were only useful as tools of regimes toward their political ends, something that businesses generally supported. In the case of the US, the unions' role was to contain worker radicalism, help foster conformity to the market economy, and align workers behind the anti-Communist campaign. Radicalism entailed Communism, thus the unions actually undermined their own cause as they only stressed 'bread and butter issues' while backing mainstream bourgeois political parties. This was not only in the US but in Latin America and Europe during the Cold War.

Co-opted by government, American trade unions became complacent. With some like the Teamsters, the chronic problems of corruption and ties to organized crime contributed to the stigma that trade unionism is to be feared. Corruption notwithstanding, the more serious issue for the AFL-CIO and organized labor in general was that it became bureaucratized and lost the grass roots support it enjoyed in the 1930s when political and social conditions favored unions. There were few efforts to organize service sector workers, although the economy was changing fast.

As the US economy was leveling off in the 1960s and began the course of a long decline after Vietnam, the media, conservative politicians, journalists, and think tanks and especially businesses and business schools in colleges blamed unions for the lack of competitiveness. Every time the economy suffered a recessionary cycle and unemployment rose, it was the unions' fault because if they did not make outrageous demands of employers, more people would have jobs and America would be competitive. Although workers in automotive, electrical, and select areas including high tech did well in terms of income in the second half of the twentieth century, the long decline in living standards after the recession of 1986-87 negatively affected those sectors as well.

In a recent public opinion poll, about 40% of Americans have positive view of unions, the lowest in the last seventy years. The media and politicians have convinced the public that when government bailed out the automotive industry it was throwing money at overpaid UAW workers, not the overpaid and bureaucratized management. Let us accept that as true. Were union workers at fault for the hundreds of billions thrown to bail out banks and insurance companies? AIG alone cost US taxpayers $160 billion and the company was offering bonuses of $165 million to its executives with taxpayer money until the the press caught the story.

When right-wing governors from Wisconsin, Ohio, Maine and other states complain that there is no money, they blame the unionized public employees and it is just the beginning of an assault on labor and the middle class. There is not a word about all the tax breaks that states give to corporations to come to the state, nothing about the infrastructure costs designed to attract and accommodate corporate interests, nothing about the fiscal structure that favors the wealthy and corporations. Let us assume there were no unionized public workers in Wisconsin, would the state have escaped the current crisis, or is it the case that the fanatic right-wing governor and businesses want unionized workers to bail them out by cutting benefits and driving wages as close to minimum as possible?

This is not to excuse the institutional abuses of the politically co-opted American trade union movement or the individual trade union officials that have not always served the rank-and-file or used resources to recruit in the low-paid service sector. However, the larger question that must be asked is whether a democratic society is best served with weak or non-existing trade unions simply because capitalism is predatory and because Mrs. Smith and Mrs. Jones from suburban America can't order a cut of veal to their specifications after 6:00 pm, but cannot owing to unionized butchers? Have we really sunk this low in our values that in the name of consumerism we dismantle institutions that are the pillars of American society, and have very little to do with the recession of 2007-2011?

The American people have been bombarded by a vociferous anti-labor campaign in the last three decades, and the result is that there is a large number who are convinced that if unions go away America will become what it was under Truman and Eisenhower. The 'labor aristocracy' issue is a reality, namely, organized workers make more money as they are usually more skilled, usually in manufacturing, than unorganized workers mainly in the service sector. 

Is the problem that a small percentage of workers make more than minimum wage. or should those making minimum wage earn income that reflects the value of their labor and contributions to the economy? Unfortunately, the media, business and politicians have brainwashed the masses into believing that economic recessions are not built into the market economy but that it is the fault of 'overly-paid union workers', as opposed to the 'underpaid CEOs' making 400-500 times more than the average worker.

In the last thirty years, unions were reluctant to go on strike and to confront capitalism's predatory practices. When workers struck, employers with political support hired non-union workers. Hence, the view of many Americans that the unions cannot protect jobs, when in fact employers were firing union labor as well as shipping jobs overseas to secure much larger profits. As far as the media, think tanks, business schools, and politicians were concerned, the solution was to pay a worker in Cleveland lower wages to compete with workers in Guatemala, India, etc. Globalization drove the final stake into the heart of trade unionism, not just in the US but across the world as businesses were threatening each location with relocation of their operations. 

Are the American people willing to support populist right wing governors and mayors, and sacrifice the long-standing democratic tradition of Jefferson, Lincoln and FDR? In the broader spectrum of things during the last three-four years of the US (and global) recession, amid big business corruption (Lehman, AIG, Goldman Sachs, Citi, Bank of America, etc.); amid all the crimes by the wealthy protected under the political cloak of government that they finance with campaign contributions; amid all the institutional hurdles to fostering a rationalized market economy; amid declining competitiveness; amid all that and more, are trade unions the real problem in the economy and society at large; are trade unions the root cause of America's economic calamities, or is their decline a manifestation of a systemic crisis that needs a new 'New Deal' political solution?

An interesting historical fact is that the Great Depression, coming just a few years after WWI and the Bolshevik Revolution radicalized American workers, while the recent global recession taking place during the Iraq and Afghanistan wars has actually polarized Americans without necessarily resulting in the kind of radicalization of the 1930s. Will the social fabric be healthier and will America as a society be better off in the 21st century during the twilight of organized labor?
Let us assume that by magic trade unions are no more when we wake up tomorrow, will the economy perform a miracle? Yes, for the top 10% and misery for the vast majority.

Even amid the twilight of trade unions that helped build America, we continue to endure inane propagandist arguments lacking any empirical foundation that society's problem rests with unions? The day may come when America will have very few or no unionized workers, but that day America will be poorer and far less democratic than it was under FDR, JFK, or even anti-union presidents like Reagan and Bush - father and son. Of course, one never knows how social dynamics evolve in a society as status quo as the US, and how social forces in the 21st century may create a new wave of pro-union sentiment.

Friday, 28 October 2011


When I wrote the posting regarding Argentine-Greece comparisons, I knew some of the details of the 50% haircut on the Greek debt. The so-called "haircut" is in essence a technical default, at least as far as Fitch among others see it, but it temporarily solves the problem of Greece in the following respects: Greece will be staying in the eurozone for now, it will be making sure that it continues to service its public debt, at least for the next two years, the banks are safe as long as they secure guaranteed loans, and the austerity program continues for the next ten years according to terms that the IMF and Germany have dictated. 

A number of politicians including President Sarkozy and German officials argue that Greece should have never entered the eurozone, because it did so by reporting false key statistics - the so-called 'Greek statistics' - regarding its economy and finances. This is undeniable, but what is also true is the role of Goldman Sachs involved in credit SWAPS with the full knowledge and complicity of all EU governments and of the European Central Bank. The question is why did the EU permit 'credit SWAPS' to be used in a fraudulent manner, and why did the EU not call for an investigation and why it permitted Greece to join knowing it was a high risk member? The current debt crisis, and haircut are the part of the price that taxpayers across EU are paying because governments permitted large financial firms like Goldman Sachs to make millions in profits.

Analysts agree that the details of the 50% haircut deal are not all in, and we still need to see the fine print of the broad deal on the Greek debt as well as the reinforcement of the European Financial Stability Facility (EFSF). From what we do know, it is essential to note that the haircut does not apply to the entire public debt of roughly 360 billion euros (165% of GDP) but to 210 billion. Of the roughly 100 billion haircut, Greek banks will need 30 billion in government-guaranteed loans (buffer loans) - money that Greece will have to borrow - and the pension funds will sustain losses of about 10 billion, as far as we know today. This may change within weeks, if not days.

While Angela Merker who dictated terms of the haircut has stated that she wants Greece to have aggregate public debt of 120% of GDP by 2020, or the same level as 2009, the IMF and EU are estimating that Greece will need a minimum of additional 220 billion to 444 billion euros in the next ten years. Of course, no one knows what the needs will be because it is difficult to estimate GDP growth, among other factors such as political changes. 

Let us consider that the same IMF team leader that is heading the TROIKA group for Greece today, argued just two years ago in London that Greece had a 'serviceable public debt' and there was no cause for concern. Moreover, 18 months ago the same TROIKA convincingly argued that Greece would be able to return to the private markets for its borrowing needs and that GDP growth would be positive in 2012, arguments that had to be revised substantially. 

The same TROIKA insisted a year ago that the only road to growth is austerity, and that GDP growth comes via fiscal austerity. The IMF and TROIKA now admits that it has made serious mistakes in its assumptions, but continues to insist that fiscal austerity, privatization, and sharp curbing of consumption is the road to growth - no talk of a development plan, unless of course individual companies and private investors wish to invest amid such a climate that exists in Greece.

Many who have no reason to bother with details of such international loan agreements may not realize that while the EU is now asking surplus countries like China to invest in bonds through the newly-established EFSF that is far more secure than investing in bonds of individual countries, the IMF-EU austerity dictates that the borrowers under austerity like Greece, Ireland and Portugal cannot borrow beyond the perimeters that TROIKA approves. Those who have studied imperialism know that in the 19th and early 20th century the US and Western Europe would purchase the public debt of debtor nations and then locked them in on borrowing terms, as well as trade, investment, labor and other policies.

For example, if the Greek government wishes to borrow 25 billion euros from Russia or China to build an aluminum plant - given the availability of bauxite and the widespread usage of the specific metal in many sectors from construction to manufacturing - it would have to ask for TROIKA's permission to borrow. Given that the IMF and EU oppose government-owned enterprises and advocate strengthening private enterprise, and given that there are French and other European countries interested in the aluminum business, TROIKA would vehemently object to any public borrowing for a development project. This is largely because such a move is contrary to the neo-liberal model that the IMF and EU advocate and more practically because a public enterprise would cut into the profits of existing private companies. 

This is only a tiny example of how a nation under austerity losses its sovereignty. Is Greece in a comparable position as Argentina ten years ago? In some respects it is better off so far. But the worst is yet to come and this is something that the average person knows as well as politicians. Would Greece under IMF-EU austerity be better off in 2020 than Argentina is ten years after it decided to end the austerity regime and go the route of national capitalism?

Thursday, 27 October 2011


In the 1980s I was fortunate to meet professor L. S. Stavrianos, author of many books and articles, and a progressive scholar whose work was shaped as much by his Greek-Canadian background, as by the culture of the Cold War. He had just published Global Rift: The Third World Comes of Age, and I asked him to write a foreword for one of my books. In discussing our mutual interest in the Third World, he mentioned to me that an interesting study would be one that compares the Balkans and Latin America, a work that eventually Joseph Love approached from a theoretical perspective in a book entitled Crafting the Third World: Theorizing Underdevelopment in Rumania and Brazil, a book that I was asked to review. 

L. S. Stavrianos explained to me that both Latin America and the Balkans were "underdeveloped" by underdeveloped empires, namely Spain and Portugal in the case of Latin America and Ottoman Empire in the case of the Balkans. Today, we have a situation where comparisons between Greece under austerity and technically bankrupt make a good case for comparative study wi5th Argentina ten years ago.   
The comparison between Argentina of a decade ago and Greece of today is one that has attracted the attention of many analysts as well as politicians within and outside Greece. For example, many, including prominent economists and investors, have written that Greece could pull an Argentine-style default. Others, argue that the comparisons between the two cases are many, except that Greece is an EU member and lacks the substantial economic base of Argentina, thus it is more restricted today than Argentina was a decade ago. Still others note that even in 2011, Argentina has not reached pre-default economic levels, but given the latest IMF-EU report that Greece will remain under austerity and will not be able to borrow from the private sector for at least a decade, one may wonder if Greece would be better off 'to pull and Argentina-style default'. 

Argentina defaulted on $100 billion debt, mostly in foreign hands, froze bank accounts, and the experiment of pegging the peso to the dollar ended. While Argentina's annual fiscal deficit was around 3% of GDP, that of Greece is above 10% in 2011, and while Argentina had a gross public debt of 54% of GDP, Greece suffers a deficit of 165% of GDP that will soon rise close to 200%, thanks to the brilliant policies of the IMF-EU team, and the Greek politicians trying to implement austerity measures but always careful not to do much damage to the chronic problem of rampant corruption and baksheesh capitalism. 

What do Greek politicians say is the solution out of this crisis? That depends on the political party. The ruling PASOK (Socialist party) argues that there is no other option but the one that the IMF-EU presents. The New Democracy Party (Conservative) argue that it can renegotiate a better deal with the EU and it will try to bring growth together with fiscal austerity, if it wins the next election. How do the Conservatives intend to bring growth? Invite foreign capital to buy assets that are now extremely cheap, and a labor market that will revert to values of the 1980s if not the 1960s. Arab investors are interested, and so are many Germans, some French, some Russians and of course Chinese. 

The smaller political parties from left to right have all kinds of solutions, ranging from "Greece must leave the EU" and socialize all large businesses, to Greece must get tough with official corruption and put an end to the Soviet-style bureaucracy that is a burden on the budget - just a reminder that those who have studied Greek history know that the US actually helped put together the so-called "Soviet-style" bureaucracy.

That the Argentina option is not often mentioned is a matter of pride for Greeks, many of whom believe that, as the 'other chosen people', their country is certainly 'better' if not superior than a Latin American republic - again an illusion at all levels, because those who have studied the history and institutions of Latin America and Greece know that are many similarities. The country is doomed to return to the past, perhaps as far back as the 1960s in terms of socioeconomic polarization, living standards, mass exodus of people seeking work around the world, and political instability that goes along with such conditions. The future of Greece is the past. 

While conditions are better in many Western nations than they are in Greece, I have to wonder if Greece is not the canary in the mine every time I read about mass protests throughout Western nations against the political economy impoverishing society. Have we reached a point that a bit of Third World exists within developed countries, just as my mentor Stavrianos wrote three decades ago?


In contemporary society education systems have 'politicized' and 'hyper-commercialized' role, following the 'business model' footprints, a model that serves only narrow interests and has questionable and uneven returns for its investors. Education's use by governments as a social engineering tool is an issue connected with the evolving social structure and thus with social discontinuity, and of course potential social upheavals.

In the US, conservatives today under the Tea Party label and in the last several decades under different stripes complain that education is highly politicized with a 'Liberal bias', given that the vast majority of educators, especially in colleges and universities consider themselves centrists or leftists. What conservatives want of course is a system to serve their values and interests. By contrast, a percentage of progressive educators complain that the educational system is an appendage of the corporate structure and it has lost the Renaissance and Enlightenment ideal of educating the individual for the purpose of 'self-discovery and creativity to the benefit of both the individual and society'. What they aspire to is a system that never actually existed in the real world but only as an ideal.

Whether in the US with its tragic history of racism that had a profound impact on the educational system especially in the southern states throughout its history, or in Europe where nationalism and ethnic identity have deeper historical roots, education has always reflected the value system of the dominant (privileged) social classes and regimes catering to the privileged social group.  Whether monarchies, liberal bourgeois democracies of the 19th century, interwar dictatorships like those of Hitler, Mussolini, Franco, Salazar, or contemporary elected governments of the right, center of center-left that rhetorically promote pluralism in education, all have manipulated educational systems, though not individual faculty, courses, or specific schools, through fiscal policy for political purposes, above all, as a means to social engineering.

The larger question is how does the commodity that contemporary education produces, namely the student who in today's marketplace is a surplus commodity as an extension of social capital intended to yield a return on investment, fit into society? And how does this commodity play a catalytic role in political and social transformation? As I have argued before, today's college graduate as a surplus commodity finding it difficult or impossible to realize the goal of upward mobility using education as the vehicle will become an agent of change in the cyber-eco-bourgeois evolution, if not revolution in the inevitable process of social discontinuity, inadvertently hastened by rapid advances in cyber-tech development and inescapable social engineering.

But is the educational system, in today's society that much different in terms of its politicized role than it has been in the history of the western world at least - not that the rest of the world is very different even without a Renaissance and Enlightenment to influence concepts of education's role - and is it not true that some scholars believe it is great that education is a means to social engineering (how a society educates its people. After all, how else can society organize itself and make progress - a concept that a number of philosophers including Alfred North Whitehead and modern 'systems theory' advocates have raised? A critic of educational systems that contributed to societal stagnation, Whitehead wrote:
"In the history of education, the most striking phenomenon is that schools of learning, which at one epoch are alive with a ferment of genius, in a succeeding generation exhibit merely pedantry and routine. The reason is, that they are overladen with inert ideas. Education with inert ideas is not only useless: it is, above all things, harmful—Corruptio optimi, pessima."

Does the contemporary educational system suffer from 'inert ideas', from hyper-politicized process, from ubiquitous business influences in education, or is it a reflection of society at large as it always has been? From ancient times to the present, education has invariably reflected the values of the dominant social classes and served established institutions; this is true as much for ancient Egypt and Greece as it is for ancient China - judging by the social class of students, the curriculum and uses of educated people.

Society accorded educated people status, in part because they already enjoyed social status, whereas today in societies of mass politics and mass education that produces surplus commodities from all classes, of which a limited number can be absorbed by the market, the prestige and status issue is problematic. An African-American working class child in Cleveland becoming a biology professor can only use education and career up to a certain degree to transcend race and class. Education in the times of Pericles, Augustus Caesar, Charlemagne and Henry II as primarily the domain of the nobility, primarily designed to serve that privileged class, primarily a status symbol of the dominant class whose value system it reflected meant something much more than today because it was for an exclusive club in a highly stratified society.

Renaissance coinciding with the Black Death changed the western concept of education that was almost the exclusive domain of noble males serving monarchy and church. Education in Tudor England under Edward VI underwent changes to reflect not only the changes that the Reformation was ushering in Europe, but the transition from Medieval to modern era with characteristics of humanism and nationalism influencing educational institutions, while the Commercial Revolution and Black Death made it necessary to train lawyers, while the gradual rise in the population as the Black Death was waning made it necessary to train more doctors. Education in Tudor England was different than it was during the the Victorian era whose values and societal structure educational institutions reflected technological, economic and social changes.

In 1837 when young Q
ueen Victoria took the throne, children of working class status worked (see Henry Mayhew, London Labour & the London Poor) under appalling conditions because labor received subsistence wages. By the end of the Queen's reign the second industrial revolution had created economic, political, and social conditions that made compulsory education a necessary reality for 19th century England as well as other western countries. It is not the case that the Western world did not know about compulsory education, for the idea was first introduced in Plato's REPUBLIC, repeated  by German theologian Martin Luther, popularized by the Enlightenment and bourgeois revolutionaries in France at the end of the 18th century, and advocated by various intellectuals from liberal and leftist ideological orientations in the 19th century, some daring to go as far as to suggest women must be included! Nevertheless, in the US, the state of Mississippi was the last in the union to introduce a compulsory law in 1918, and in agrarian societies around the world the concept made no sociopolitical and economic sense until the 20th century.
In the West during the Cold War, 'politicized education' was what existed in Communist countries where students were required to take courses in Marxism-Lenism, and pass exams in same, while courses in a number of areas from religion and theology were omitted from the curriculum. Communist governments argued that the purpose of education was to strengthen the revolutionary regime and the development of socialist society. Critics in the West called Communist education 'indoctrination', and to a large degree it was exactly that. However, to what degree was and is education as a system in 'open societies' (not in individual disciplines, courses, teachers, or certain books/articles), a tool of indoctrination designed to create a citizen obedient to the regime and conformist to the economic system, social structure, and culture?

During the Cold War, the US supported Muslim schools as tools of anti-Communism. After 9/11, however, it turned adamantly against the 'Madrasah' that has its roots in the 9th century. US, EU and other countries now regard such Muslim educational institutions as the source of militant indoctrination and training that must be stopped. The educational system in the Muslim world has always reflected the value system, traditions, history, and institutions of the country and/or region, no different than in the West, and very influential in the process of cultural diffusion during the Renaissance. Islamic education that has historically made many contributions to western education was virtuous during the Cold War and worthy of support as a social engineering tool because it served NATO-US political purpose, but the source of evil and terrorism today because it teaches that the Judeo-Christian West is the enemy.

Can there be an educational system that is free of social engineering, one that is free of political or business manipulation, an educational system that promotes free thought, creativity and self-discovery? Optimists believe that a 'world citizen consciousness' is emerging and it will prevail over ethnocentrism,  nationalism, and regionalism/localism, no matter what the state does with education as a tool of social engineering. This is also a position that UNESCO has adopted, among others that aim at 'spiritualizing/universalizing' education, gearing it toward more 'green-sustainable development goals'; a system designed to promote human understanding of all people on the planet. As much as I admire UNESCO and the globalist goals of many scholars, the rhetoric in all seriousness would be more fitting of beauty queens uttering one-liners on the runway.

In the real world where real people live, education remains a tool for a) career and income, b) social status and upward mobility, c) a better quality of personal and social life. What are the obstacles to those goals in the early 21st century? Simply put, money for the most part. More and more working class people cannot afford not only college education, but even to have their kids finish high school in a modern super-concentrated socioeconomic pyramid.

Until the 1960s in most advanced capitalist countries an undergraduate degree was a guarantee for upward mobility, a good career and income, a good bet that the children also would go to college, and better quality of personal and social life - a chance to move to the suburbs. In the early 21st century, a college degree, well known in society as a 'dummied-down' degree, is as good as a high school diploma in the 1960s. Graduate and professional degrees are more useful, but not by much for here too the 'post-graduate commodity' is in surplus amid a market that cannot possibly absorb the overly-educated product.

Only the select few who have attended the very best graduate schools and have some connections have real opportunities, while the rest must wait their turn for years, or turn to another career in order to pay the rent. US government informs graduates to be prepared to change careers - not jobs - an average of seven times in their lifetime! Such is the situation with the surplus commodity that mass education has over-produced in a two-tiered system, one serving the well-connected elite with few cases of working class students so they can still cling to the claim of 'democratic, fair, and pluralistic process' - all the meaningless politically-correct jargon educators and politicians use to convince society that 'democracy works'!

One could argue that we ought to judge educational systems by their results, the way we judge companies by quarterly profit reports. But what if the educational system 'cooks the books' the way companies do? And even if they are honest, that may not be as simple, given that some countries produce excellent students who are then lost to the brain drain process - the exodus from their countries for better opportunities elsewhere, mainly in the advanced capitalist nations that pay well. We may also use the status of the economy as criteria to determine if education best serves society. But is it not the case that government policies may be such that they retard economic growth and deny opportunities to educated people?

Is it the fault of the US educational system because the financial elites in their quest for greater profits sunk the US and world economy into recession in the past three years? Is it the fault of Italy's educational system, one with a very high percentage of educated people, that the economy cannot absorb the surplus students? Is it the fault of the educational system or the government for doing very little to stimulate a jobs growth economy and using the educational system to keep unemployment low?

On the one hand, mass education - in the case of US prisons as well as mass education - serves to keep the unemployment level down, and that too is a significant (utilitarian) part of social engineering, no matter where one stands regarding the ethical dimension of the issue. If modern societies were to declare that society will not need any more pharmacists, doctors, biologists, English majors (to quote Garrison Keillor), and, oh yes, history and philosophy majors,  the legitimate question to ask is what role will the 'surplus commodity' of college-educated people play in shaping the future of society?

In previous postings, I have addressed the issue of faculty who have a shared responsibility along with corrupt and business-style university administrations interested in self-promotion and personal career advancement without advancing the education of students; faculty and administrators as willing collaborators in social engineering. One problem here is human nature itself, namely, that somehow in many institutions 'lighter elements invariably float to the top of the ladder in positions of authority', while those with some weight remain on the bottom to the detriment of the entire system. Besides human nature however, the institutional role of the private sector and (central and local) government in education as structural impediments to a sound system is really a reflection of larger society. Again, the question is what role will the surplus educated commodity play as part of the emerging cyber-eco-bourgeoisie in the distant future as agents of social change?

Wednesday, 26 October 2011

BANKS AND THE STATE: National or International Capitalism?

On 26 October 2011, the police in Atlanta, assisted by SWAT teams, arrested a number of protesters part of the anti-Wall Street movement that is now a national grass roots movement. On the same day, the international bank lobby negotiated a deal with EU on the debtor nations and on recapitalizing the banks that will have to write off a percentage of the Greek debt. Markets cheered and lit up the boards with green lights!

On the same day, Rajat Gupta, former Goldman Sachs executive, was to appear in federal court in New York as part of a large hedge fund insider trading case also linked to former hedge fund fraudster Raj Rajaratnam who was convicted of insider trading.The FBI and the US attorney's office is not commenting, but it is unlikely that Gupta will escape a minimum security prison term.

To the casual observer, these two individuals that the justice system caught, and a few others here and there, demonstrate that the system works, therefore, the anti-Wall Street protesters should go back home and start looking for work instead of demonstrating in city parks and streets. The system works, because 'a few bad apples' are never far from the reach of the law, while the system is above the law!

A closer look at the role of banks in the political economy and the impact of that role in modern society reveals that the social contract is a trust rooted in welfare finance capitalism, something very far from what any one contemplating the theory of a democratic society would have envisioned. Big banks keep their profits and grow bigger during expanding economic cycles, but they are too big for the state to allow to fall when contracting economic cycles take place.

Therefore, big banks operate risk free with taxpayer support, receiving government money to recapitalize, engage in buyout mergers, etc., and imposing their interests that are above all other interests. What type of capitalism is this when the banks enjoy all the benefits and none of the risks of the 'free market'? What kind of capitalism is this when the banks impose upon nations, upon the entire world, policies intended to serve the narrow interests of finance capital that the political economy has identified with 'the national interest?'

The question is how do smaller debtor nations nations deal with the powerful lobbying muscle of banks? Certainly the US, Japan, Germany and all of the strong capitalist countries have no problem keeping the banks in check. Surplus countries regardless of their size have nothing to worry about either, as long as they run a surplus, but watch out once they sustain a deficit owing to complex factor ranging from expensive weapons purchases to political corruption involving public works contracts - ageless issues from the time of Egypt and the Suez Canal project to the present. But amid the era of globalization when banks are imposing their hegemony over the political economy, what leverage does the state with a weak fiscal structure have?

One answer within the market economy, an answer that has been around and tested well in the past two centuries is national capitalism - and a inward-oriented economic growth program - as a counterweight to international capitalism that dominates the key sectors of national economies and reduces the national economy into a quasi-protectorate. The international cartels cannot survive within the context of the national economy, and their host nations need to find markets for them globally so that they can continue the process of capital accumulation. Germany, Japan and the US, for example, cannot survive in the absence of selling the surplus products and services around the world.

But does the same hold true for nations that do not have international cartels, mostly debtor nations like Argentina of a decade ago, or southern Europe today? That they have a hand full of international businesses - from telecommunications to shipping - does mean that their economies need to survive on export growth strategy at the expense of shrinking the domestic market, it does not mean that the state is powerless from forging a solution toward national capitalism, just as Argentina did a decade ago to lessen the suffering of IMF-imposed austerity that was driving almost half of the population into poverty?

The phenomenon of the 'supranational' state power exercised today complicates the case for national capitalism as a method to defend against international capital that swallows everything from the local supermarket to the local electronics store. In the case of the stronger EU nations over the weaker nations the supranational state works with multiple mechanisms ranging from monetary to fiscal and trade policy measures. In the case of the US, the supranational state works through international organizations, among them the IMF that imposes austerity measures whose ultimate goal is absolute and unmitigated economic contracting and impoverishment of a large segment of the middle class and workers.

The weak state structure, regardless of whether a nation enjoys a surplus or deficit, entails that the international cartels organized behind international organizations with a supranational institutional front can easily impose their interests to the detriment of the rest of society. Given that mainstream political parties, from conservative to Euro-Socialist are committed to the same model of a finance-capital-dominated global economy, and given that the mainstream political parties have co-opted most essential institutions from church to trade unions, there is not much room for dissent, even for the kind of dissent that proposes national capitalism vs. international capitalism dominated by finance capital.

Even when one points to examples where national capitalism has succeeded, at least to a degree in helping to stimulate sustainable economic development - China, India, Russia, Brazil, Argentina - it is still very difficult to have those in power - political and economic - consider the possibility of a policy mix that takes a strong dose of national capitalism and inward-oriented growth strategies into account. Why does this take place, why do they wear blinders, given that they are fairly intelligent?

Is it because the media has brainwashed people into believing that international capitalism, which is responsible for the current global recession and to a large degree for the public debt crises, has no alternative - is there no other God but the one that large international banks worship because that is the one and only God that promises deliverance? Has faith in the 'one and only system' become detrimental to people seeking salvation from the higher power of big banks?


There is a 21st century version of "the scramble for Africa", a continuation of what started in the 19th century (1880-1914) by the Europeans who pillaged the continent's resources, systematically exploited its people, caused tribal and regional wars, destroying its culture; and all of it by invoking social Darwinism and other Eurocentric theories, including ethnocentrism and 'Exceptionalism', to justify white hegemony.

Is there a new round of neo-colonial race to carve up Africa's lucrative agricultural lands, or is it all radical rhetoric by hyper-enthusiastic NGO's, irresponsible activists who probably hate themselves and in need of psychotherapy, misguided liberal and leftist western intellectuals looking for a 'politically-correct' causes and who feel guilty about sins that their white ancestors committed in the Dark Continent - the 19th century expression to describe sub-Saharan Africa?

According to the World Bank (September 2010) more than 110 million acres of farmland (the size of California and West Virginia combined) were sold during the first 11 months of 2009. This was all in a mad rush of foreign private and government investors to secure cheap land (and labor to work the land), and all during the most serious economic recession in the postwar period. Between 1998 and 2008, the World Bank provided $23.7 billion for agribusiness around the world, much of it in Africa promoting what it calls 'efficient and sustainable' agriculture.

In 2010 the International Finance Corporation (IFC) has invested an estimated $100 million for agribusiness in Sub-Saharan Africa, compared with merely $18 million a year in the last decade. Naturally, (IFC) and World Bank investment which runs into the billions also focuses on corporate agriculture that displaces the small farmer. This despite the advice from experts in sub-Saharan countries who argued that the best use of farmland is to distribute it to villagers (about 12 hectares per family) and give them the means to cultivate it to end hunger, and begin to generate a surplus for trade. Foreign-owned agribusiness produce commercial crops for export, while the native population remains poverty-stricken. It should be noted that foreign aid for Africa's agriculture dropped by 75% since 1980, thus creating the need for private foreign investment in the sector.

In the last one hundred years, agriculture in the industrialized countries has undergone a revolution that has resulted in just a small segment of the labor force earning its living from farming and animal husbandry. Technology and science applied to the sector has raised production and made agriculture less labor intensive just as specialization and concentration has resulted in higher productivity. Modernization of the primary sector of production entails that large commercial operations, backed by favorable government policies, have taken over the sector that requires expensive agrochemicals and machinery, and a distribution network to secure steady profits.

With each recessionary cycle more small farmers around the world are squeezed out of the business. If they remain, they merely subsist and make more money on side-jobs than in farming or animal husbandry. The transition from subsistence to commercial agriculture in first in Western Europe and then in US freed the surplus labor force for the manufacturing and service sectors of production. In the case of Africa, however, there is no manufacturing or service sector large enough to absorb the surplus labor force that is uprooted from subsistence farming and animal husbandry.

The assumption by governments, banks, and mainstream economists is that commercial agriculture in the form of agribusiness is a necessary development of modernization. Another assumption is that only large-scale agribusiness, which is subsidized by government and international organizations like the World Bank and IFFC among others, can meet the rising demand the world's rising food demand while keeping costs low.

Given the trend toward corporate agriculture, in the last ten years, governments and private firms from around the world have been investing in sub-Sahara Africa. Besides agribusinesses acquiring more land in Africa, banks, hedge and pension funds, commodity traders, foundations and individual investors have been buying land as part of portfolio investments for an average of $1 per hectare. This is in an attempt to cash in on low-cost land and labor amid a growing demand for raw food products and bio-fuels.

The EU is hoping to reduce carbon emissions by using at least 10% bio-fuel of all fuel products by 2020. The US is aiming to reduce its foreign dependence on oil by 70% in the next 15 years. With the help of the World Bank and IFC, both EU and US have been looking to Africa - more than 700 million hectares appropriated for agribusiness - as the continent to invest in bio-fuels. Latin America is also a target for bio-fuel and other agrarian investment.

In the past decade, India, China, Japan, and Arab countries have joined the 'new scramble for Africa', in some cases because governments are concerned about soil, water, and natural resources conservation in their own countries. Private investors and governments are aggressively seeking to partition Africa's rich agricultural land as the costs of agricultural  commodities is expected to rise once the current recession ends. Saudi Arabia has set aside $5 billion in low-interest loans to Saudi agribusinesses to invest in agriculturally attractive countries.

Another reason for the new scramble for Africa is because of what the UN Food and Agricultural Organization calls 'spare land', areas not under cultivation, or underutilized.
On 22 September 2010, I wrote a brief piece on UN & GLOBAL POVERTY, focusing on the Millennium Development Goals, noting that the political and business establishment of most countries is behind this effort because there are immense profits to be made in corporate farming in Africa.

Africa has been used by the developed countries for its raw materials and as a consumer of imported manufactured products and foreign business services. In short, Africa remains semi-colonial and continues to become increasingly dependent on developed countries for manufactured products and services while exporting raw materials. The EU and US quest for bio-fuel development in Africa, and for that matter in Latin America, has nothing to do with 'sustainable development' or engendering greater 'self-sufficiency' or helping to 'develop' Africa - rhetoric that the UN, World Bank, western governments and multinational corporations are using to make 'the new scramble for Africa' more palatable to the world.

Will the people of Africa solve the chronic problems of poverty and disease as a result of the exploitation of land and labor to satisfy the demand for food and bio-fuels in Western nations? Africa's food requirements will double in the next two to three decades, a point that foreign agribusinesses, governments and IFC and World Bank are using to justify the commercialization of agriculture under foreign ownership.

In the process of the neo-colonial land-grab, evictions of peasants and small farmers, entire villages uprooted, civil unrest, and citizens' complaints of 'land grabbing' have been common. Nevertheless, protests owing to social injustice does not stop governments from approving agribusiness deals backed by powerful forces. One common justification used for the new scramble for Africa is that the acquired territories are not utilized or 'wasteland'. Governments often do not charge agribusiness for the water they use. Just a single agribusiness belonging to an Arab investor in Ethiopia uses as much water as 100,000 people - water of course is the most precious commodity in many parts of Africa. All of it is justified by various arguments including 'no country has developed with two-thirds of its labor force living off the land', foreign investment is needed for 'development'.

It is an interesting coincidence that just as sub-Sahara Africa has been targeted by drug lords in the last few years, it is also targeted by corporate farm investors whose mode of operation is to use the low-valued land and labor and corrupt public officials in order to serve foreign market demands. Rural poverty will rise as a result of foreign corporate investment in African agriculture.

As Richard Hancock recently pointed out, between 1960 to the present, Africa experienced the highest population growth in the world, an astonishing 200%, while it suffered the lowest living standards on the planet. Will the 'new scramble for Africa' by corporate investors result in the elimination of famine and disease; will it result in higher rising living standards for the native population, or will it be another form of neo-colonialism in the name of progress?

In January 2009 and again in October 2010, I wrote about Africa's structural problems that have contributed to a thriving narcotics trade. Given that in sub-Saharan countries the percentage of labor force involved in agriculture and animal husbandry ranges from 50 to 75, the result of agribusiness will be to create a larger percentage of poor people, some of who will choose to make a living in illegal activities like gun and narcotics trade, others in piracy, still others in the thriving human trafficking and teenage prostitution business that has a ready market around the world.

The social fabric disrupted yet again by 'the new scramble for Africa', continued political instability is a guarantee as much as a rise in crime and social unrest. Amazingly, the same institutions that contribute to Africa's devastation claim that they are acting in the name of 'progress, sustainable development and efficiency, helping to raise productivity and exports, to create jobs by bringing foreign investment,' etc.; the modern versions of "The White Man's Burden".

The 'politically palatable' rhetoric of 'efficiency and sustainability' has resulted in an outward-oriented agrarian sector catering to foreign markets instead of inward-oriented economy designed to meet the rapidly rising population's food needs. In 16th century England, farmers switched to animal husbandry owing to rising demand for wool textiles. Peasants starved as the cost of grain increased, thus "sheep ate people". In this century, 'agribusinesses will be eating Africans'.


To what degree is Europe responsible for the underdevelopment of Africa, and do Arabs have any role in that process? Some have advanced the following arguments to blur the lines between the role of Arabs and Europeans in Africa in the past centuries. These apologists of European exploitation of Africa and the attempt to argue that Arabs were the first slave traders is partly political, arising from the US-EU war on terror, which is a war against Muslim fanatics using unconventional military means to secure their political goals.

Parts of sub-Sahara Africa traded with the Arabs, long before the Europeans arrived. Arab trade relationships were not based on unequal and exploitative terms as were European trade relationships with Africa. There was limited economic integration between the continent and the outside world before the 15th century, but for the most part Africa enjoyed relative economic self-sufficiency and autonomy, both gone once the Europeans began colonizing and enslaving Africans. Europeans were after gold and trade routes that Arabs controlled.

Moreover, hegemony over the Indian Ocean that was the key to commercial success. Africa was an incidental arena, but one that proved very profitable for Europe that enjoyed the military tools to colonize Africa. The process of Africa's integration with Europe started the process of underdevelopment which means that the development of the Iberian peninsula was taking place as a result of the colonial empire that Portugal and Spain established in Africa, Latin America and Asia. The ports of Lisbon and Cadiz were the key to overseas colonies, but those ports were also the link with northwest Europe where much of the Iberian gold and silver eventually ended up. Just for the record, scholarship in this field owes a great deal of gratitude to Fernand Braudel, especially his monumental work La Méditerranée et le Monde Méditerranéen a l'époque de Philippe II (3 vols).

While people commonly mistake the concept of underdevelopment with the concept of 'undeveloped', let us clarify that Africa was "undeveloped" before European colonization, but became underdeveloped afterward and remains so to this day. What does it mean to go from 'undeveloped' to underdeveloped? 1. slavery-based labor system; 2. native land appropriation by colonizers; 3. transition from self-sufficiency to monocultural economic process that the colonizers impose a division of labor intended to serve the metropolis.

Whereas sub-Sahara Africa was organized into tribes and lacked the military means to defeat the invading Europeans, it was very difficult for any country in the world to subject Communist China to 'underdevelopment', because it had nuclear weapons, the world's largest standing army, the world's strongest state structure, and a highly organized managed economic structure and supporting institutions. All of this was lacking in China from the First Opium War until Mao too over in 1949. The idea that China in the recent past proves that dependency theory, despite all its limitations, is outmoded is indeed simplistic and absurd.

It is true that slavery is slavery no matter what the particular circumstances, but is there a difference between slavery under Muslims and Christians, is it all the same, and who has responsibility for Africa's exploitation in the past 500 years - Muslims or Christians? Early Egyptians (estimated as early as 3,500 BC) engaged in slave raids in Africa. Muslims continued in the 7th or more likely 8th century the trans-Saharan slave trade, especially promoted by Ghana, Mali, Songhai, and Kanem-Bornu. Europeans added the following in the African trans-Atlantic slave trade that makes it different than what the Arabs were doing.
The uniqueness of European slave trade is a. racism and ethnocentrism were at the core of the European slave trade; and b. Extreme violence was associated with European slave trade that became a basic component of European and American civilization. The 'African Holocaust' is invariably a European affair, not a Muslim one, especially given that the Europeans have been exploiting Africa for five centuries and continue to do so to this day. 

But let us consider the arguments of those that try to equate Arab and European roles in Africa.
a. Arabs conducted slave trade in African before white Europeans. European Christians simply continued what Arab Muslims had started;
b. Slave trade is slave trade. Therefore there is equivalence at all levels (moral, economic, social, cultural, etc. in terms of destruction to the land and people subjugated);
c. If Europeans are responsible for under developing Africa and/or undermining society, so are the Arabs who were there before the Europeans.
Conclusion: Europeans have no more responsibility for Africa's condition in the past five centuries than Arabs. In short, Europeans did not do anything that Arabs did not do in Africa, so why conclude that Europeans are any more responsible for exploiting the continent for five centuries than Arabs?

First, I wonder if this argument can stand on scholarly grounds, given that the military, economic and political power that Europe exercised over Africa cannot possibly be compared with the minimal role of Arabs who themselves became victims of European colonization.
Second, I wonder if such arguments are not intended to lessen the monumental responsibility that Europe had in the last five centuries and continues to have to this day, and will have throughout this century in exploiting Africa. Third, where is the scholarship that makes such claims?
Fourth, if one were to conduct a public opinion poll among college-educated Africans, African-Americans, and Africans in the diaspora, what would they say about the role of Europeans vs. Arabs in the past five centuries?

Arabs were slave traders (see his comment to my earlier posting of 27 June). Slavery is slavery no matter what the particular circumstances, but is there a difference between slavery under Muslims and Christians, is it all the same, and who has responsibility for Africa's exploitation in the past 500 years--Muslims or Christians? Early Egyptians (estimated as early as 3,500 BCE) engaged in slave raids in Africa. Muslims continued in the 7th or more likely 8th century the trans-Saharan slave trade, especially promoted by Ghana, Mali, Songhai, and Kanem-Bornu. Europeans added the following in the African trans-Atlantic slave trade, that makes it different than what the Arabs were doing.

a. Racism and ethnocentrism were at the core of the European slave trade;
b. Extreme violence was associated with European slave trade that became a basic component of European and American civilization.

The "African Holocaust" is invariably a European affair, not a Muslim one, especially given that the Europeans have been exploiting Africa for five centuries and continue to do so to this day. The tragedy is that Europe continues to exploit Africa (see my postings on agriculture and fishing), and it will continue to so in the 21st century.

One last point on statistics. It is impossible to know numbers of the slave trade and not a single source is accurate. There are African-American who claim that the trans-Atlantic slave trade involved as many as 30-36 million people, and that one-third perished on the way or shortly after arriving in the Western Hemisphere. Throwing out statistics on how many slaves the Muslims trade vs. how many Christians traded is futile, and it makes more sense to look at the forest and not the trees. The tragedy is that Europe continues to exploit Africa (see my postings on agriculture and fishing), and it will continue to so in the 21st century.


Mass killings in the form of state-sanctioned warfare have always carried a sense of glory, virtue, and honor, although the end result is mass destruction. By contrast, individual acts of political violence, including political acts the state labels "terrorism", imbue the general public with extreme fear, categorical condemnation, and demands for severe punishment of the 'criminals' behind the random acts of political violence. In the first three days of November 2010, a number of low-tech, low level mail-bombs targeting various embassies and political offices in Athens, as well as French President Sarkozy, German Chancellor Merkel and Prime Minister Berlusconi caused concern in EU and US about a wave of terrorism that comes after mass strikes and demonstrations in Athens, Paris, and various other European cities. 
These developments come about a week after the package bombs from Yemen to the US. Greek police are working with EU and US anti-terrorism experts to uncover the organization behind the wave of mail bombings designed more for maximum publicity and stirring authorities into a state of panic. The random pattern of postal bombs discovered so far are 14, included countries as diverse as Bulgaria, Mexico, Chile, Russia, Switzerland, Germany, Netherlands, and Belgium does not provide clear clues about the political and ideological purpose of the group behind the operations. 
The two young men under arrest, described as amateurs by police, and those on the list of suspects are allegedly anarchists (Conspiracy of the Cells of Fire). Living in well-to-do middle class suburbs of Athens and having connections to other anarchist groups, Cells of Fire appears to follow in the footsteps of older organizations that used violence against 'establishment targets' to send a political message and raise social awareness in an age of widespread political apathy. Greece has a history of such random bombings and political assassinations linked to the infamous November 17th organization that emerged out of resistance to the Junta in the early 1970s. 
The bombings taking place a few days before local elections that the PASOK regime has tried to make into a referendum on the current IMF-EU austerity measures, and after Germany proposed that any EU member (like Greece) failing to observe the Maastricht Treaty rules regarding budgetary deficits above 3% of GDP annually would suffer fines as well as lose EU voting rights. Considering that Germany accounts for 30% of Eurozone's GDP, and it has resolved to alter the original EU integration model from interdependent into a patron-client model that the US has been practicing with Latin America, there is a sense in Greece and other EU members that weaker European countries will not only be marginalized economically but they will also sacrifice their national sovereignty and be reduced into semi-colonies of northwest Europe. 
In short, Europe of the 21st century future will be more like Europe of the 19th century past. The striking realization on the part of people in the weaker economies of the EU (Southern and Eastern Europe) that they are in fact reduced  into a lower status (peripheral or Third World-like) while theoretically they are equal with the Europeans of northwest Europe accounts for the extreme anger that manifests itself in political violence by a mere handful of people driven by disparate ideological, political, psychological factors to take justice into their own hands and send a message to the world. But is there a link between the immense financial, economic, and social problems of Greece and the recent bombings? 
That the young anarchists carrying out these acts are amateurs, acting independently of other organizations, as far as police are aware so far, trying to attract attention is beyond dispute. Ultimately, the question is who benefits from these mail bombings and who is harmed. Without engaging in a lengthy analysis of 'the ethics of terrorism', analysis that can be approached from different ideological perspectives, the bottom line is that terrorism in any form always benefits the political, economic, and social status quo. 
Moreover, terrorism is fundamentally an expression of desperation, fear, and fatalism but always with immediate massive publicity that captures public attention. Historically, terrorism has never accomplished the goal of social justice that it ostensibly intended by using 'unconventional warfare'. This is because the state and established institutions targeted by terrorist organizations is far more powerful instrument of violence on a sustained basis than any individual organization. The state mobilizes public support for itself and institutions it protects, while the majority of the population falls in line with the state that presents itself as 'protector' of public interest. 
Angela Merkel has already called for the US and EU to tighten 'security gaps', and Greece was forced to cancel all outgoing mail for at least 48 hours. The clear winners of the Greek mail-bombs are not the labor unions whose rank-and-file is suffering deep cuts so that welfare capitalism can continue to thrive; nor has the leftist political opposition anything to gain from political violence. Leftists are merely crying out against the IMF-EU austerity measures crippling the majority of the population and likely to keep it weak for the entire decade with lower living standards and loss of hope for the future of their children. 
Political violence (terrorism) as a form of protest against the establishment will be on the rise not just in Greece, but in many parts of Europe and the world for many years, and not just in the Middle East that the US has on its radar for its own geopolitical, ideological and political reasons. In the age of widespread apathy among the masses throughout the world, and against the background of a political economy serving a small percentage of the population concentrated in a few countries to the detriment of the vast majority of people and nations, in an age when the dynamics for social revolution are absent, terrorism - acts of political violence against the state, which represents a political, economic, and social system of injustice - is inevitable. 
As futile as terrorism may be in accomplishing the stated goals of social, economic, and political justice, the political economy as it is today not just in Greece but throughout the world feeds and promotes terrorism that actually strengthens the political and economic elites and helps to preserve the social order. Terrorism helps to keep the public living in fear, asking for more authoritarian-like measures, and willing to sacrifice human rights in return of the 'safety and security' that the state promises. Terrorism helps to keep people in conformity mode, it keeps labors unions and other social activists more docile, it prevents social mobilization against the status quo, and it elevates the 'benevolent' image and status of the political and financial elites.


In August 2010, the press announced that the world’s richest people (a few dozen billionaires) tentatively agreed to give away to the charities of their choice half of their wealth, which amounts to $3.5 trillion, or just over one-quarter of the EU’s GDP. At that time, the world was unaware that Egypt's Mubarak was one of the wealthiest person's on the planet, though his wife made certain to publicize her 'charity activities'.

It is estimated that three dozen families own 6% of the world’s wealth, while 80% of the world’s population share 20% of the world’s wealth, making billionaire charity a godsend gift to the earth’s wretched. About 1000 people on the planet, according to Forbes, own roughly 10% of the world’s GDP, while one billion people do not have access to drinking water largely because a handful of multinational corporations, in which the billionaire philanthropists own most of the stock, own water rights around the world and charge exorbitant rates.

Interestingly, countries like India, Mexico, Russia, and Brazil, which have a large percentage of poor, also have billionaires whose fortunes of course are not invested in their own countries to benefit the national economies. About two billion people are victims of chronic malnutrition and lack of medicine, largely because the multinational corporations in which billionaire philanthropists own most of the stock, do not make it affordable for people to eat and have medicine.  The World Bank's recent announcement that global poverty has risen by 44 million since the announcement was made about the billionaire philanthropists and that it will continue rising is simply an indication that finance capitalists are well aware of the problem.

Water, food, health and education scarcity are among the problems that billionaire philanthropists want to address. The economic system, which made the same philanthropists billionaires, created the aforementioned problems in the first place. As I have stated in a previous posting, exploitation of the public by a handful of fraudulent investors determined to continue manipulating markets so they can amass greater wealth is indeed a Constitutional right under free speech protection.

Will global poverty end if the 1000 richest people and the next one million richest donate all their wealth? Of course not! Charity has never been the solution to the problem of unequal distribution of wealth and labor values. The economic system that has been with us for about 500 years in different forms causes social and geographical poverty and inequality on a global scale. As the core of the capitalist world-economy shifts from the US to Asia in the course of the 21st century, there will be increased poverty in the West and relative rising affluence in underdeveloped countries.

The irony of mostly Western billionaires donating in large measure to non-Western areas is that in the 21st century the West may experience the same Third World conditions. Nor is the solution “made in America” (Germany, France, UK, etc.) because at the core of cyclical crises of capitalism is not to make each country more competitive–lower wages and higher quality products–as the apologists of the system insist and Obama argued recently. At the core of the system rests the assumption that capital chases the highest profits wherever it can secure them with the help of the state.

That US GDP in 2010 is estimated at $13-14 trillion, about same level as in 2006, while China’s GDP has doubled during the same period is not a good sign. Not that EU is doing much better. Despite the fact that its GDP has risen by about $3 trillion since 2006, EU has expanded to include more countries. In fact, the same structural problems of weakened fiscal structures in Western countries, traditionally the core of world capitalism, entail rising public debt and rising balance of payments deficits.

Western bourgeois societies that have become used to certain living standards will have to re-examine their lifestyles in the future. The alternative to adjusting their lifestyles is to replace the system that is at the root of the problem, a very unlikely possibility given the “Liberal” (in the Lockean sense of the word) ideological entrenchment of Western populations that has permeated their value system. Will the uprisings of North Africa and the Middle East eventually spread to western societies where the socioeconomic gap is widening?

Thursday, 20 October 2011


The most significant challenge of Africa in the next few decades will be to transform itself from a largely informal and semi-legal “dependent outward-oriented” economy to a legitimate inward-looking one that is integrated intra-continentally under a model that is comparable to that of the EU and develops more equitable terms of trade with developed countries.

To achieve that goal Africa would need more than NGOs and UN intervention that only targets emergency areas, and more than regional integration that the World Bank has been advocating and without success by its own admission. The G-20, currently pre-occupied with planning to lift the world economy from the current mini-depression, could and must deal with Africa, especially now that the US has a president whose roots are African. As a first step, the G-20 should agree to transform Africa’s public foreign debt into a UN/World Bank sustainable-development-continental-integration fund designed to foster an economic model that is inward-oriented–serving the needs of the indigenous population, instead of outward-looking (mass producing primary export products) catering to EU, US, and Asian markets.

Though more than 200 organizations have been formed in the past 60 years in order to promote regional integration as a way of helping with sustainable development in Africa, such efforts have failed to extricate the continent out of cyclical debt crises and endemic poverty. This is largely due to internal political causes, though not exclusively. A new centralized Africa super-fund administered by UN/World Bank offices would be a beginning toward easing the continent’s problems.

Foreign investment in Africa, under terms no developed country would permit, must also be regulated. Otherwise the drain of natural resource wealth will continue with Africa earning the lowest labor values on the planet. To attract foreign capital investment, African countries have to provide local financing under government-guaranteed loans and very generous terms that include profit repatriation, liberal terms on the environment, and minimal labor protection. The process of de-capitalization amid the current crisis only increases the problems with the informal economy that is a mere extension of the overall outward-oriented dependent economy and a colonial remnant that gives rise to illegal activities.

East Africa around the Gulf of Aden is already the pirate center of the world, and this in addition to the weapons trade. Everything from illegal handicraft items to diamonds and gold are illegally traded. West Africa is slowly transforming itself into the new world center for South American narco-traffickers. Guinea, Mauritania, Guinea Bissau, Ghana, Benin, Sierra Leone, and Senegal are among the most significant intermediary narco-traffic countries linked to the Colombia-Venezuela coca trade. In 2002 West Africa authorities confiscated a mere 95 kilos of coca, while in 2007 the number rose to 6.4 tons.

It is estimated that more than 50 tons of coca goes through West Africa, with an estimated wholesale value of $2 billion. The low risk of transporting by planes and ships along West Africa waters and through African countries vs. the high risk of transporting through the Caribbean makes transport more lucrative, especially given Africa’s proximity to the end users–the Europeans.

Drug use and trafficking has increased substantially not only in Europe, but in the former Soviet bloc and especially Russia where oligarchs of varying types are the real power behind the regime that gave birth to them. During the “just say No!” campaign of the Reagan era the US had the highest per capita use–US population was around 4% but consumed 40% of the world’s illegal drugs–and this is not to say that a legal pill-for-everything panacea in the US is not at its root a cultural trait.

Today, however, both UK and Spain surpass the US in per capita use of cocaine, and both countries along with Portugal and France are the major destinations for coca that comes from Latin America through West Africa. Wholesale drug traffic requires cooperation of key officials, corrupt shipping companies, and of course banks. It is cheaper and easier to bribe everyone from policemen to military officials, all the way up to govt. ministers and entire political parties in poor African countries than other parts of the world. But considering that multinational corporations from Shell Oil to Siemens have a long history of bribing African officials as they do non-Africans, narcotics traffickers’ mode of operation is no different than that of “legitimate” businesses. And if the opportunity presents itself to make a living why is “dirty money” any less valuable than “clean money,” the latter of which seems to be less than $500 a year for most Africans?

Judging on the basis of postwar recessions when per capita income has dropped as much as 50%, this means that in this current crisis Africa will not only suffer greater impoverishment than the rest of the world, but its economic problems will cause more ethnic and tribal conflict, more epidemics, more intra- and inter-continental emigration, and more political turmoil than any developed nation can expect. Such a climate is ideal for more piracy, more weapons and narcotics transfer, more human trafficking, and all of it part of the colonial and neo-colonial legacy of outward oriented economy benefiting the developed countries.

My guess is that although Brazil is a major player in the G-20 and President Lula has made some noise about the role of “lesser players” (Brazil, Russia, India and China), deliberately merciless neglect not only for Africa but for the Third World is inevitable because it is advantageous for the advanced countries as well as the semi-developed ones that have an intermediary (comprador) role.

Though the continent is in need of debt-relief and development assistance for the short-term, the solution for the people of Africa is inside the continent. Uniting and organizing to end racist neo-colonial exploitation whether in the form of the formal economy based on mineral and agricultural exports or in the informal economy that includes narcotics is the only solution for Africans. Working toward sustainable development can only come from indigenous movements that first change the externally-dependent political regimes and then undertake to change the social order that would engender economic growth under an inward-oriented model.

Given the deep historical tribal and ethnic antagonisms in Africa for which westerners are partly to blame, and the even stronger western neo-colonial foundation the prospects of any of this taking place in the forthcoming decades is highly unlikely. Africa will remain the continent of contradictions with the world’s poorest people, but some of the world’s richest natural resources.


From 1969 to 2010 the world's GDP has risen by 160%, and throughout the last four decades the US share of world GDP has remained steady at 25%, while Africa's share remains at around the 1970s levels. In 1976 Africa’s share of the world’s GNP was 1.2%, but its percentage of population stood at 7.5%. With about 4% of the world’s population the US enjoyed around 25% of GNP. Life expectancy is about 40 years for Africans, while it is almost twice that for Americans and most Westerners and Japanese. Why is this rich continent filled with the world's poorest people? Who owns the wealth of Africa, who enjoys the fruits of African labor and resources?

In the last four decades not much has changed in Africa or in the benign neglect at best, highly exploitative manner at worst, that the advanced countries deal with the continent. Even after Nelson Mandela’s triumphant return to power in South Africa that held the promise of systemic change in Sub-Sahara Africa, life is worse today than in the 1990s. In a speech before foreign diplomats in June 1978, Tanzanian President Julius Nyerere argued that neo-colonialism denied the people of Africa self-determination and sovereignty. Nyerere’s speech is as applicable today as it was then.

We must reject the principle that external powers have the right to maintain in power African governments that are universally recognized to be corrupt, or incompetent, or a bunch of murderers, when their peoples try to change. The peoples of an individual African country have as much right to change their corrupt government…as in the past the British, French, and Russian peoples had to overthrow their own rotten masters. Are African peoples to be denied that same right? Exactly three years before Nyerere’s speech, Mozambique’s President Samora Machel delivered a somewhat similar speech, warning that the institutions left behind by European colonialists were “profoundly retrograde and reactionary” and changing them was the challenge for Africans.

Besides the legacy of colonialism, Africa’s de-colonization took place during the Cold War when exploitation at all levels and for various reasons by both East and West made it even difficult to develop sovereign and healthy institutions. Both Machel and Nyerere made the exact same points that progressive African leaders and intellectuals from Kwame Nkrumah to Samir Amin have been saying for decades about the imperialist West that has been exploiting Africa’s natural resources and cheap labor for five centuries.

Breaking the continent’s monocultural dependence and export-oriented growth of the primary sector of production, Africa’s best bet in order to evolve toward self-sufficiency is a combination of continental integration, import-substituting industrialization, and inward-oriented primary sector – foodstuffs, building materials, and manufacturing production to meet the domestic population’s needs. None of this can be done unless government is committed to a) peaceful co-existence in the continent, and b) promotion of socioeconomic justice instead of serving the small comprador bourgeoisie, military, political elites, and of course foreign interests.

China and India could help Africa, but like their western counterparts India, which has a large community scattered throughout the continent and part of the elite, and China as a more recent trading partner will concentrate on merely purchasing raw materials from Africans and selling finished products to them at unfavorable terms of trade. China and India could play a constructive role to improve the declining terms of trade, especially given that the World Trade Organization (WTO) is so dominated by advanced capitalist countries and unlikely to introduce favorable terms for Africa. There is also a debt relief program that the IMF/World Bank Group have in place for a number of years; a program that applies to the poorest countries in the world.

Merely expanding that program during the current crisis to include more African countries would not be sufficient to make up for financial retrenchment by foreign multinationals and individuals who have taken money out and decapitalized the continent amid the current world economic crisis. Unlike advanced capitalist countries, African nations have a much weaker and more corrupt state and very anemic fiscal structure, while the multinational corporations and IFIs with international lending consortiums behind them enjoy enormous influence. In the absence of systemic societal change–political, social, and economic–the state in African countries cannot and will not rise to the level of the West.

After Movimento das Forcas Armadas staged a revolution in Portugal in April 1974, the USSR reached an agreement with Cuba to back Angolan rebels (1976), to support for the Soviet-backed regime in Ethiopia, and the rebel movement against the corrupt Zaire regime (1978). Robert Mugabe’s election in Zimbabwe in March 1980 was symbolically significant for all Africa, perhaps more so than that of Tanzanian president Nyerere. But with the exception of South Africa that is under majority rule and trying to make progress although very slowly in raising living standards for the majority population, where is the rest of the continent’s progress and where is it headed in this century?

What happened to all the idealist African leaders, and that includes Mugabe who started out so deeply committed to social justice but has ended up a tyrant like so many others that the West and/or East backed because they served their geopolitical and economic interests to the detriment of Africans? History in the last half century has taught that very little progress has been made in comparison with the rest of Southern Hemisphere: Asia and Latin America.

De-colonization, the USSR and US manipulating African countries and various tribes within countries during the Cold War and suffering the deadly consequences; African countries experimenting with varieties of regimes, everything from authoritarian/militarist to Marxian revolutionary; yet, nothing has worked to lift peoples’ quality of life comparable with any other continent on earth. China’s role in Africa today is commercial and geopolitical, rather than a campaign for Afro-Asian solidarity aiming to develop it toward a self-sufficient economic course under a socialist order as Chou En-Lai once proclaimed.

In the 1960s the Chinese came out strongly against white neo-colonialism in Africa and even opposed white European Socialist activities in the continent. Because China had suffered a legacy of Western imperialism, and internal strife and wars as a result, and because Mao was seeking Asian leadership before and during the Cultural Revolution, China enunciated principles of mutual respect for territorial integrity, peaceful co-existence, non-interference in the other nation’s internal affairs, and equality of relationships as the foundation for Afro-Asian solidarity against the Western international order (imperialism) rooted in capitalist integration and unequal relationships.

Africa’s future cannot be either with East or West, because China is no interested in the welfare of the African people than US or UK. In the absence of a leader like Nasser who tried to forge solidarity with Sub-Saharan as well as North African leaders, in the absence of a non-aligned bloc, in the absence of a UN that has the continent at the bottom of its priorities there does not seem to be much hope for Africa, except for grass-roots uprisings similar to those of northern Africa.

As long as there are tribal and ethnic conflicts that have resulted in hundreds of thousands dead and injured, and an estimated nine million refugees; destruction comparable to a third world war by European standards.
Grass roots movement and pan-African solidarity is the only way to compel African leaders to form a strong economic and political bloc to make a competitive play for East and West in the same manner as the old non-aligned bloc countries, the continent will remain the poorest and most exploited on the planet.
Africa will remain a continent exporting cheap raw materials to the more advanced countries, a continent where the narcotics trade will continue to flourish along with piracy, the weapons trade and other illegal activities like human trafficking. Africa will remain a continent in the grip of the chronic external dependence. Only if sub-Sahara Africa breaks the cycle of tribal and civil wars, and only if it follows the example of grass roots uprisings of the northern Islamic African nations is there hope for a better tomorrow.