Wednesday, 29 August 2012


The cost of higher education has been rising steadily in the past four decades, essentially doubling in real terms from 1970 to 2010, and it is expected to skyrocket by 2030. This will not be limited to the US, but it is expected to be a global phenomenon. Moreover, the high cost of college education will coincide with a massive surplus of college graduates and very difficult economic conditions, unless the current neo-liberal model of development is replaced with a mixed economy that produces new wealth and is not parasitic as is finance capitalism resting on the state for constant support and periodic bailouts.If higher education is a mirror of society as well as the source for change and progress, is it time to consider new models that will best serve society and not just a very narrow segment linked to the corporate structure?  

1. Where is the cost of education headed and what are the causes of high cost?

In just 18 years from now, the average cost for an elite private university could be as much as $130,428 a year, while the cost for a state university could be as much as $57,609, assuming an average annual rise of 7% during the period in question. The situation isn't much better if you go the public route. The price tag includes room and board, but no beer and books that are essential to survive four years of higher education. Of course, one could assume an annual rise in costs of 5%, which would drop the cost from $130K, to $92K for private school, and from $57K to $41K for state college; still a significant amount for a family that wants to educate more than one child.

As a former university professor, I always heard the college administration argue that the costs of higher education follow the costs of medical care in the US, and that the rest of the world then emulates the American 'business' model of education and health, at least in some respect. This prospect should concern citizens, largely because it means that a fair percentage of the population will be excluded from having access to higher education owing to cost, just as is the case in health care and likely to continue.

College costs have been rising well above the inflation rate in the last six decades, but the big rise linked to the 'business model' of higher education is the result of the Reagan-Thatcher neo-liberal era whose legacy the Western World and other countries continue to emulate to this day; in short, it is the result of slashing funding from the welfare state and the concept of providing access to education to all, so that higher education, especially quality schools, is increasingly limited to those who are rich, with only token minorities and poor to prove they are not elitists!

Who is to blame for the high cost of college? Taxpayers that want low taxes; college administrators that have created massive expensive and corrupt bureaucracies; parents that do not save enough for college; politicians that allocate smaller funds to colleges; societal values that do not appreciate higher education;  college professors who are under-worked and overpaid; banks that make moeny off student loans; all of the above and other?

2. Where is the money going? 

In 2010 in the US, college students owed more than one trillion dollars for loans, or about one-third more than credit card debt for the entire nation. Who benefits from this massive business of college loans and where is the money going?

One could argue that large schools with top research labs and highly paid scholars justifiably cost more. This argument would be valid only if the cost in non-research four-year and community colleges would not rise as rapidly as in the top schools. So where is the money going? One answer is that administrators whose compensation was not much than a highly paid full professor in 1970, receive pay packages with all the perks comparable to a CEO of a small corporation. The idea that there are college administrators making more money than many US and most European corporate executives should be alarming to the public.

That college administrators receive high compensation is comparable to administrators in charity organizations receiving the bulk of the funds received to run the organization.  Even more alarming, the only accountability of administrators is to politicians and business leaders, regardless of effectiveness of the campus. As long as funds pour into the campus, that translates into good administration, without actually looking at the quality of education students receive. Mechanism of accountability resting with political parties and business leaders means that higher education cannot possibly be merit based as it is advertised to the public. This holds true as much for Harvard University that has a history of admitting the children of the rich and famous and produces some of the most tyrannical rulers and ruthless business executive on earth, as it does for the local community college where a powerful political machine and business bosses decide on the role of the college.

Colleges and universities have become highly bureaucratized and administration salaries bloated, while part-time faculty have skyrocketed. Today's college administrators are not rooted in scholarship not do they have any commitment to creativity and scholarship that actually impede their role as a 'business-like' executive. Instead, they are “business managers,” who see themselves in an antagonistic relationship with the faculty, the enemy of the administration, and they see students as 'paying customers', while business contributors are the real 'asset' of the campus and not the faculty and students.One reason for all of this is that the political and business elites want a business model higher education. Given that the share of the state's contribution to colleges and universities has been declining steadily since 1960, and especially after the Reagan-Thatcher era, it was inevitable that colleges and universities would turn to the private sector for money and in return the private sector would demand higher education be shaped to fit the precise needs of business.

3. Does higher cost of college mean high quality of education?

University and college administrators who command very high salaries and numerous perks insist that the cost of higher education is justified by the 'value', which to them means 'cash-value returned' over a lifetime based on averages. Even if that is true today, which it is not, if we break down the college graduates and not lump them together and average them out, will the same hold true in 2030 and beyond? If total college debt in 2010 was $1 trillion, how much will it be in 2030, and how many years of their lives will graduates have to devote to pay it off, and in what career fields?

We may be transitioning from mass consumer-mass producer education to elites education, and we could very well come full circle in another generation; that is to say, return to the days of when universities were created in Europe and the well-to-do middle class sent off its sons to secure an education so they could secure a respectable career and status in society. Of course, modern technology makes it possible to become self-educated without ever attending college, but that too implies a life of leisure associated with some wealth. Even so, as admirable as self-education may be, it is not a ticket to securing a career for which college degrees are essential.

Does the fact that students are trained to be good test takers make them well-rounded in a solid university education that includes subjects as diverse as arts appreciation and biochemistry, or are they so focused on doing well in their 'major' while they are fairly and deliberately oblivious to all other subjects that would contribute to their self-discovery and creativity. 

4.  How does higher education benefit students and society?

Are colleges and universities adding value to the quality of education to the students and to society because tuition is rising, or are the beneficiaries administrators with high-paying salaries? Articles and books dealing with the high cost of higher education is the abuse and corruption in college administration and the bureaucratized structure of colleges and universities. Another criticism is that along with tuition inflation, there has been grade inflation from the top universities to the community college. Without a corresponding value added to the student's education, neither the student nor society can possibly benefit from higher education that promotes itself as holding the Enlightenment ideals of meritocracy, but in reality not practicing what it preaches. The result is an undereducated college graduate who must receive more training either by pursuing a graduate degree or training in the field.

An even larger question is what will society do with all of the college educated people, given that the structure of the economy is not evolving to absorb applicants at the rate they are graduating. Whereas fifty years ago it was possible for a high school graduate to experience upward social mobility and move from a working class to a middle class background, that is not possible in the early 21st century and it will become even more difficult two decades from now. On the contrary, increasingly college graduates, even some with advanced degrees, find it difficult to secure employment in their chosen profession. The US Department of Labor notes that the average college graduate will change several careers in a lifetime; not necessarily a bad thing, assuming this is because the move is up and not down or parallel out of necessity.

While it is still true that the average college graduate will earn higher income than the average high school graduate, it is also true that in the past half century, especially in the past twenty years, the bulk of income gains have gone to an elite of college graduates, invariably with advanced degrees, especially in business.
This is fine, except that in the past twenty years wealth has been accumulated mostly through parasitic financial services - stock, bond, currency, bulk mortgage sales, and other financial product trades - rather than creating new wealth that would be able to create new jobs and new wealth for the next generation. College degrees have helped to create mostly a generation of people who are struggling to stay in the middle class and a few who are part of the top 10% making money mostly through parasitic enterprises. The question is what is the value of these people to society, and what does this say about their own values?

5.College education and the 'Brain Drain'.
The brain drain is continuing and becoming even more pronounced with each contracting economic cycle.It costs enormous public wealth for India and Pakistan to train its doctors and engineers, but a large number leave their countries for wealthy nations, including US and Europe where they are well compensated. The same hold true for Russia and Eastern and Southern Europe that has seen its educated population leave for US, Canada, Australia, Germany and other wealthy nations. Each time there is a global economic contraction, as has been the case from 2008 until the present, a new wave of educated people, some of the most talented that could be helping their struggling nations, head for the wealthy countries. In short, college education that represents a major drain on society, especially in poor nations like India and Pakistan, to some degree benefits the wealthy nations that are mostly but not exclusively responsible for creating the structural conditions for economic contraction.

At the same time that the brain drain takes place, the poorer countries are slowly moving toward the American business (neo-liberal) privatization model of higher education. This model not only means excluding those at the bottom of the socioeconomic ladder from having access to higher education, it means that a segment of the prospective graduates will leave for the wealthy nations, thus perpetuating the vicious circle of the brain drain that is as old as imperialism.   

6. Conclusions and prospects

Higher education emerged in the Renaissance as a result of society's changing needs during a period of transition from a feudal/manorial structure to a mercantile urban-based structure that depended on long distance trade as well as commercial agriculture, animal husbandry, fisheries and mining. Society needed more doctors amid the plague and other epidemics, more lawyers to deal with an increasingly urban money-market economy, more chemists and mathematicians, more educated people to shape a new world. Although the irony of all this is that witch hunts ran parallel to the rise of higher education, progress in science led to progress in every sector from technology to military and political institutions and government bureaucracies that needed educated people for greater efficiency.

Ideally, higher education ought to serve the goal of self-discovery, creativity, and social responsibility and advancement. However, there is nothing wrong with higher education as a vehicle for a personal career, especially if that entails upward social mobility, even if the ideals are absent. What if today's higher education does not translate to any of these goals, and it is simply a business like any other collecting prospective students and treating them as 'paying customers'; and after they are no longer paying customers they are on their own holding debt and trying to compete with others in a saturated market of surplus graduates for jobs?

Higher education is in fact a mirror of society, a mirror of what it is today and where it is headed. Political and business elites should be very concerned with what they see in that mirror, sacrificing higher education for short-term profits, and sociopolitical conformity. If the solution is to come from any side, it cannot come from those responsible for the crisis in higher education as a business model, namely, from the politician and business elites, and least of all from college and university administrators who are more corrupt and ruthless than their political and business patrons. The solution can only come from the grassroots, from society itself that higher education is supposed to serve instead of exploiting it. 

Monday, 20 August 2012


It is very difficult to make prognostications about the political economy during hard times amid a general climate of pessimism, but the same holds true when the economy is expanding and most people believe there is no end to the expansion. Public opinion surveys about economic conditions in the next decade and the possibility of upward social mobility indicate more pessimism on the part of most people than optimism, especially in advanced capitalist countries that one would not normally associate with pessimism about the political economy. Given that the world economy has been in contracting mode in the past five years, and socioeconomic mobility has been experiencing stagnation to downward pressure in the past thirty years, one cannot be surprised that people are pessimistic abut the near future.

Just as significant, the 'business as usual' mentality and the absence of structural changes in the political economy amid revelations of massive banking scandals and speculative schemes in every sector from mortgages to hedge funds that contributed to global economic contraction does not leave room for optimism on the part of the masses that governments ask to bailout the financial sector. In part, pessimism stems from the reality that people know they will have to bailout the corporate sector, thus sacrificing upward mobility for themselves and for the next generation.

How did we arrive at such a difficult scenario for the world economy, after all signs seemed to be optimistic when the Cold War ended two decades ago? As I argued in a recent article about the distinct possibility of an economic depression in the 2030s, to make any kind of a rational assessment about the rest of the century is impossible. Nevertheless, structural aspects of the political economy's record of the past and present indicate that at least the first half or so may be very turbulent and it could cause social and political instability of a great magnitude. The world economy could experience an upturn in the second half of the century, but only intermittently if there are no systemic changes. There are legitimate questions to ask about where the global economy is headed in the 21st century:

1. Sustainable growth or long-term contraction?
Can the level of steady growth and development that the US, Japan and Western Europe experienced during the early Cold War, or the kind of growth that China, India and Brazil experienced in the last two decades be sustainable and carry with it the rest of the world economy? Was such growth  achieved at the expense of periphery nations exporting raw materials and importing manufactured goods, and could the uneven trade and income relationship on a world scale continue to provide sustainable development in the 21st century? Some believe this would be the case, but if the basic geographic and socioeconomic structure does not change, is it not reasonable to conclude the same problems will exist down the road, thus precipitating contraction within spurts of growth regionally instead of sustainable growth globally?

2. Globalization under the Neo-Liberal Model.
Will the era of globalization under the neo-liberal model persist, regardless of its detrimental impact on the welfare state and on laboring and middle class incomes? If the current model does not persist, will there be a trend toward regional blocs that will become increasingly protectionist? Will there be new models of integration in Europe and US to compete with China, or will there be increased tendency toward national economic sovereignty? This a difficult question to answer, for it challenges the imagination to see how globalization under neo-liberalism can proceed without precipitating self-destructive tendencies in the economy, and creating extreme social and political volatility.

3. Does the Bretton Woods best serve the 21st century economy?
Will international agencies, especially the International Monetary Fund (IMF) and World Bank continue to play the significant role they have been in the last fifty years, or will there be a revision of Bretton Woods as the focus for economic growth shifts from West to East? Helping to manage the world economy has been easy for the IMF and World Bank because they have had the backing of governments, commercial banks and corporations behind them. How long this will last is a matter of public confidence in the political and financial institutions that back the IMF and World Bank. What if the consensus widens that these financial institutions are impediments to growth and national sovereignty, serving only very large corporate interests?

4. Concentrated Wealth and Chronic Poverty
Will there be a greater concentration of wealth or better distribution to allow for lessening of poverty and upward social mobility? Will the chronic problem of endemic poverty be solved around the world, or will it actually worsen and increasingly spread to  advanced countries as statistics currently indicate? There are optimists, arguing that endemic poverty can come to an end and upward social mobility can be realized. Maybe some day egalitarianism can be achieved, but it would have to come after systemic change in society and I seriously doubt that it will be in the 21st century that seems to be repeating some structural patterns of Imperialism in the 19th century, especially 1880-1914.

5. Global Struggle for Raw Materials
Will the struggle for water, minerals, and raw materials in general intensify and cause regional conflicts? All indications are that nations will fight on behalf of their corporation for control of raw materials and markets, using all kinds of ideological and political justifications to stake their claim. The struggle for raw materials and markets is never a ending one and it could explode into a global war in this century after a possible large-scale depression in the 2030s. However, the fear of mutual destruction owing to massive weaponry, including nuclear on the part of a number of countries, may be a deterrent.

6. What is the European Union's role in the world economy? 
At the start of this decade, the situation appears more dire for the full and associate members of the Europe Union, once the envy of the world as the most progressive integration model of a regional bloc, but on the verge of an uncertain future. In 1947, President Harry Truman realized that without a strong and stable Europe, the US could not possibly be strong politically, economically and militarily. To some degree, this remains true today in the age of even greater inter-depedence in the world economy, and with Asian economic ascendancy threatening the traditional Western balance of power. Given that the US has spent its way into a weak monetary situation owing to record public debt and balance of payments deficits, it is in no position to help stabilize Europe as it did in 1947 with the Marshall Plan. This means that the Western nations face a very serious crisis that is at its root political but manifesting itself in the economy with social and political consequences. 

7. Can Developing Nations provide the stimulus for 21st century growth?
Can Africa, Latin America and smaller Asian and Eurasian nations that account for less than 20% of the world's GDP provide the impetus for growth and sociopolitical stability in the 21st century, given that US, Western Europe and Japan seem to have reached a point of irresolvable contradictions in the political economy? The Third Third has the largest reserves of raw materials and cheapest labor with the largest potential for growth and development. Developing (or more accurately, underdeveloped nations) is where China certainly is investing for the 21st century, followed by the traditional G-7 nations also competing for markets and raw materials, especially strategic minerals.

Regional blocs, including the recently formed CELAC that includes 33 Latin American and Caribbean countries, but excludes the US and Canada, may have an impact on containing the globalization/neo-liberal momentum that swept across the world in the last two to three decades. Could regional blocs, nationalism and sociopolitical instability preclude the rapid growth and development of developing nations needed to provide a stimulus for the world economy in the 21st century? Does the fact that there is a heavy-handed foreign policy on the part of the US and its European partners help or hinder the development of underdeveloped nations like Iraq, Afghanistan, Middle East and Africa? Could the clash of civilizations - East versus West - continue to impede growth and development in the Islamic world that the US and the West has stigmatized with the war on terror?

8. Is finance capitalism at the root of economic volatility and decline? 
The combination of a number of things could mean a very difficult three to five years for the world economy, but longer-term there may be even bigger structural problems unless governments begin to do a better job of regulating, monitoring, and enforcing mechanisms of accountability. The idea of securing profits for the financial sector at the expense of the rest of society - profiting  when times are good and still profiting when times are bad - is not one that workers and the middle class will tolerate forever.

One can imagine a world in which banks and finance companies determine everything from monetary and fiscal policy to labor and social policy; a world where socioeconomic polarization is even worse than it was one hundred years ago on the eve of the Great War in 1914. This scenario does not have to play out, but given the current trends in the political economy of the West as well as other nations like Russia and India, it may be very plausible.

Society will not tolerate forever numerous banking scandals involving illegal activities, including deals with drug lords and other underground entities engaged in international weapons trade, while the taxpayer pays for bank bailouts. Perpetual manufactured speculation on government bonds that drives up rates and prevents a quick economic recovery in every sector from housing to manufacturing and keeping unemployment high is not something that society will tolerate forever.

The lack of a coordinated monetary policy on the part of central banks, with the ECB playing games with rhetoric instead of adopting a realistic monetary policy to free the regional bloc from its downward trend indicates that the creditor-debtor nation gap will impede growth and development, not just regionally, but globally. In the absence of monetary and fiscal policy intended to absorb the large unemployed and underemployed population and raise living standards does not leave room for optimism. Not only will there not be steady economic growth and development given the policies intended to concentrate capital in the top one percent of the world's population, but there will not be harmonious social and political conditions in the rest of the decade or the rest of the century.

9. Can the BRIC nations save the world economy?
So where do we go in this century, given where we have been in the past and were we are currently with the BRIC nations providing some light at the end of the economic contraction cycle? The global economy at the start of the 21st century is not off to a good start, although the notable exceptions are Brazil, Russia, India and China (BRIC) countries with enormous potential but with the largest percentage of the world's population and the world's poor. Besides having a serious poverty problem, BRIC nations are not exactly models of social justice or Norwegian-style democracies. Moreover, they have the potential of sociopolitical instability owing to the contradiction of rapid short-term GDP growth, while the poor-rich gap persists due to a very slow upward mobility that would account for a strong middle class. In short, the 'Asian-Eurasian' miracle has a limited time span with some structural risks.

10. Is there a Science/techno fix for society?
Can science and technology provide a solution to economic problems and can science and technology alter the consumerist atomistic values that go along with the existing political economy, or is the solution strictly political? Every government and every international organization from the UN agencies to the OECD emphasize that innovation is key to societal economic and social health in the 21st century. Science and technology will make vast strides to improving the quality of life, but that quality of life would be too expensive to afford for the majority of the earth's population. Science and technology available today can solve world hunger and water shortage problems, but if it is not profitable for corporations to do so, it does not take place. Science and technology can provide medical assistance to children in sub-Saharan Africa and Central America, but if it is not profitable for pharmaceutical companies, they will do nothing. The science/techno-fix is a mirage unless policy is behind it to support its application to humanity, all of humanity.

11. Lessons from history
After the end of the Cold War, a number of scholars from around the world tried to determine what geopolitical model the world resembles, agreeing that most likely it is that of pre-1914. The world's political economy based on globalization and neo-liberalism, combined with raw US-NATO military intervention in non-Western areas as a means of resolving conflict certainly suggests that we may be back in the pre-1914 era. However, history may resemble itself but never exactly repeats itself because conditions change on a daily basis. The world of regional blocs today is very different than the spheres of influence in the pre-WWII era, or even in the Cold War eras when the Soviet bloc, the US-bloc and the non-aligned represented a certain order with a degree of predictability. Today we have very distinct signs of instability in the political economy, signs that may predict sociopolitical instability.

a. Expansionary Cycle of neo-liberalism and globalization1980-2000
 Easy credit/low interest rate era of 1980-2000 coincided with the Reagan-Thatcher launch of strengthening corporate welfare capitalism at the expense of social welfare and middle class incomes. This era was also known for neo-liberal triumph and globalization embolded by the downfall of the Communist bloc. Finance capital took advantage of the impetus that neo-liberalism provided to free itself of many regulatory restrictions that had been in place as a safety net in periods of economic contraction. Although the credit economy under a regime of regulations can function to best serve a pluralistic society, the credit economy cannot possibly be blamed because finance capitalists abuse, manipulate and corrupt the credit system in order to score quick and large profits, knowing that the entire house of cards will come down crashing as it did when the Lehman Brothers case erupted to trigger the current global recession.

Despite the deep economic contraction of the market economy from 2007 until the present, neo-liberals continue to defend the exact same system that caused the contraction. Refusing to accept that capital concentration causes vast distortions as it chokes off demand and leaves surpluses that the market cannot absorb, they argue that government is at fault because government has monopoly on the money supply and the fiscal system. This is true, except that government monetary and fiscal policy follows whatever direction finance capital wishes, because the 'national interest' is currently identified with finance capitalism - to some degree even in quasi-statist China. Anything that impedes finance capitalism, such as social welfare programs and a progressive tax system, is deemed dangerous to the political economy that has proved self-destructive and ruinous to the general welfare of society.

Added to this era of ebullient neo-liberalism and globalization was the advent of China that helped to provide an immense stimulus to the world economy. That China took a global lead in capitalism, although its own brand of a mixed economy, emboldened the apologists of globalization under the neo-liberal model. What went wrong in the process of all of the global economic growth was the loosening of regulations and relaxed oversight to the degree that banks were dealing with drug international lords and illegal gun dealers, to say nothing of fixing Libor rates and manipulating the bond market through hedge funds/CDS products, buying government debt and concealing it so that creditworthiness is not impacted, etc.; all of these illegal or at the very least highly questionable activities under the watchful eye of the political class that did nothing while receiving funding to run political campaigns, or bribes to supplement personal wealth.

We are now witnessing the convergence of a number of factors accounted for the beginning of the 21st century crisis, which entailed using the public debt as a pretext to transfer income from the middle class and workers to the corporate and finance capital sector, as well as capital transfer from the periphery countries to the core where capitalism has been suffering from its worst crisis since the Great Depression of the 1930s. Given the structure of the political economy from 1980 to 2000, which followed finance capital's directives as evidenced by fiscal and monetary policies, in essence central banks serving the markets instead of regulating them for the general welfare of society, the contracting cycle was inevitable.
b. Recessionary Cycle 2007-present: Public Debt Crisis and Austerity
The manufactured war on terror after the tragedy of 9/11, combined with a new wave of defense spending in the first decade of the 21st century, and the wars in Iraq and Afghanistan that cost an estimated one trillion dollars, put an enormous strain on the global civilian economy. The crisis of finance capitalism promoted by the 'below prime' and other speculative enterprises caused public debt crises not just in the US and core nations (G-7), but sent public debts of many nations into risky territory that allowed for speculators to bid for higher interest rates until it became prohibitive to borrow in the free market.

Austerity policies imposed across Southern and Eastern Europe, something that was unthinkable two decades ago, suggests a heavy handed neo-imperialist direction, given that such policies have been reserved for Third World nations far too vulnerable to resist the power of core nations imposing austerity. In essence this means that the EU is creating a two-tiered economy with the strong and thus hegemonic economies on the northwest tier and the weaker and “dependent” economies in the south and east. Especially amid this crisis, creditor countries demand from weaker EU members lower taxes for direct foreign investment, fewer restrictions on capital movement, liberalization of all vital sectors of the economy, including privatization of public enterprises so that foreign investment penetrates and eventually dominates such sectors.

In return, they extend loans with interest rates higher than most home mortgages, and they saddle the debtor countries with cumulative foreign debt that will keep them perpetually dependent in every respect, from finance and trade to technology and essential pharmaceuticals. In an environment where the strong capitalist countries have been trying to perpetuate their economic, financial, monetary, trade, military, ideological and political hegemony over weaken nations the world is now experiencing a redefinition of the integration models based on some level of reciprocity. Clearly, the regional blocs were and remain in a state of realignment, as the models of integration are changing to reflect a sphere of influence scenario - as in pre-1914 - rather than mutual benefit scenario as globalization and neo-liberalism had promised.

c. Declining incomes and the specter of economic nationalism 
Statistics regarding working class and middle class incomes in most countries, including the G-7, suggest a steady decline for the past three decades or so. For example, in 1978, the US average hourly wage was $8.96 in real terms as compared with $8.57 in 2008, reflecting not just wage stagnation, but real downward socioeconomic mobility. It is estimated that 80% of the total income increase in the last three decades has been going to the top 1% of income earners, while the middle and bottom income groups resorted to increased borrowing at the same time as the public sector that was spending to buttress the corporate welfare system.

As workers and the middle class feels the downward income pressure amid rising personal debt, and as they are not optimistic about their children's future, the tendency is to become more inclined to support economic nationalism. As time passes, economic nationalism of both the left and right ideological orientations is gaining momentum at the grassroots level. Europeans are losing faith in the common currency - Southern and Eastern Europeans losing faith for different reasons than northwest Europeans. Economic nationalism is also finding expression as a reaction to globalization in Latin America and around the world, in areas where people identify globalization with the corporate structure of the G-7. It is possible that popular support for economic nationalism increases throughout the first half of this century, expressing itself in a variety of political parties, business circles and social movements. This would entail an uphill battle for the continuation of globalization under the neo-liberal model.

12. The Population vs. Resources Debate
If population were to remain frozen for the next two decades, would the world avoid a possible great depression in 2030s; even if population were to drop by one billion, and resources across the board were to rise by 20% would the capitalist economy avoid a major contracting cycle under the model of massive capital concentration, uneven economic development, speculative, parasitic and corrupt banking and corporate practices, a state fiscal structure intended to buttress finance capital?

Finally, if poverty rises during contracting cycles, why has much of the Western World experienced downward social mobility in the past four decades amid a period of economic growth? Even if the state were to do everything that finance and corporate capital requested, short of allowing people to die of starvation in the streets, is it theoretically possible that the market economy can avoid economic contractions in the future, and a major one in the 2030s?

The projections for the rise in the population from the current 7 billion to 11 billion by the middle of the 21st century, and the limited energy, water, and food resources will be a major source of global sociopolitical instability, especially since the exploitation of natural resources rests primarily in the control of Western multinational corporations. Considering that the US has just under 5% of the world's population but accounts for 25% of the world's consumption, or 5% more than China and India combined whose population is more than seven times higher than the US. It is troubling, if not the ultimate social injustice, that 12% of the world's population in North America and Western Europe currently accounts for 60% of the world's private consumption spending, while one-tird of the world people living in Asia and sub-Sahara Africa account for just 3.2 percent of the world's private consumption.

Some are optimistic that urbanization in Asia and Africa will result in higher living standards. While it is true that no rural-based economy has reached high income levels, and that rich countries are urban, it is not true that all urban countries are rich. If that were the case, Latin America with a large concentration of its population in urban areas should have been as developed as US and Canada. In the first decade of the 21st century, the average annual  urbanization growth was 2%, while in the Middle East and Africa it was 3%, and in Asia Pacific 2.7%. Concerned about rapid population growth and the lack of resources to meet the rising demand, the UN has warned about a global labor market recession especially in the underdeveloped nations and possible social unrest.
UN figures show that 324 cities with a population of over 750,000 has a rise of 20.0% in the last decade, with Africa, Middle East, Asia Pacific and Latin America as leaders. Currently at one billion people, Africa will see a doubling of its population in the next half century, thus accounting for 20% of the world's population. Multinational corporations are counting on a continued surplus labor force that will keep consumption expanding horizontally, while keeping wages low.

13. The Green Solution - Cyber-Eco-Bourgeois Revolution?
Some have argued that 21stcentury economics means thinking 'green', but I have argued that the green movement is not much more than a Trojan Horse of finance capitalism. (Green Movement: Corporate Trojan Horse) To a large degree, not just governments, but a large segment of the population chose to surrender national  sovereignty to finance capital in exchange for the promise of consumerist paradise. Prevalent in developed and semi-developed countries, the cyber-eco-bourgeoisie (1970s-present) are now on the verge of a new revolution that is redefining the foundations of bourgeois liberal democracy. There is a “cyber-eco-bourgeois revolution” currently unfolding; a systemic change not in the mode of production but in thought and way of life that is a continuation of the Enlightenment spirit. Technology and contradictions in the political economy will continue to foster the evolutionary development of this post-web middle class. The cyber-eco-bourgeoisie will become more evident once it emerges from its nascent stage and reconfigures the entire social and institutional structure just as the mercantile bourgeoisie and their successors did in their time. 

Cyberspace-Eco Social Order is inevitable with the evolution of the bourgeoisie, largely because objective conditions will bring it about. The working class or at least a segment will be co-opted into the cyberspace-eco-bourgeois movement in more conservative countries like the US and UK, where institutions are under the firm control of traditional socioeconomic and political elites. In countries with a history of strong working-class consciousness labor will maintain greater socio-political cohesion and may forge alliances with other radical groups–students and cyber-eco bourgeoisie–as a way of retaining political influence. Whether co-opted by or antagonistic to the cyber-eco bourgeoisie, the comprador bourgeoisie inside and outside the formal economy, as well as the working class and its role in society will be influenced, if not largely determined, by the new middle class. Though this is already a reality in the rapidly evolving division of labor for the most advanced countries in high-tech sectors, it will become a reality for the entire world for that is at the core of the both the mode of production and mode of technology.

14. Conclusions

a. Social Discontinuity
Capitalism has been evolving in the past five centuries and it will continue to evolve in the 21st century in order to meet the economic, social and political conditions of societies and the nation-state. Short of grassroots revolutions in the core nations spreading to the periphery, I do not see social discontinuity threatening the capitalist system for the next one hundred years. This is because the system still has enormous room to grow and expand geographically and to continue integrating more segments that are currently on the fringes but have tremendous market-based potential. None of this spells good new for social justice, just as it entails continued uneven social and economic growth on a world scale under very tenuous political and social conditions.

b. War and Revolution
In the distinct absence of political multilateral solutions to conflicts, the advanced capitalist countries will resort to militarist hegemony solutions that will impede economic and social progress. Small wars and uprisings will likely be on the rise during this century. These are always an impediment to economic growth and development, especially for the countries on whose soil the conflict unfolds. Given current trends on the political economy, wars on a small scale as well social unrest not just in developing but also in advanced capitalist countries are a certainty owing to the reality that instant information and communications systems have made people more aware of the social injustice that exists and options before them. In fact, the 21st century may experience much worse social turbulence than the second half of the 20th century. In such social uprisings, and not the kind funded from foreign governments like those in Libya and Syria, may rest the seeds of systemic change and the hope for a better future.

c. Value System Change
For culture to survive and flourish society must have a degree of shared values it is willing to wholeheartedly embrace – spiritual as Hoffman maintains or material as Marxists argue – but also prosperity even if concentrated within a small group of people, hegemonic elites that foment the growth of the education, the arts, sciences and other cultural endeavors. At the same time, hegemonic elites that essentially create and propagate the dominant or mainstream culture are invariably successful in convincing the majority of the population to revere the cultural values and aesthetic achievements emanating from it only if there is not only an idealistic ultimate goal but a practical aesthetic aspect to culture.

While economic determinism has an impact in cultural trends–in everything from elite to popular culture–economic determinism is by no means alone in shaping culture from ancient to modern times. Value system change is inevitable and with it will come systemic change. However, throughout history there are rare examples of the elites that hold power yielding it voluntarily. This means that the 21st century will go through very difficult times as societies struggle to change in order to best serve the majority of the people and not an increasingly small minority.

Thursday, 16 August 2012


WIKILEAKS founder Julian Assange has been held up in Ecuador's embassy in London for about two months, seeking asylum from the government in Quito. The allegations that Assange is facing in Sweden are sexual assault, so the Swedish government has requested that UK extradite the WIKILEAKS founder. I have written in in past that Assange is an flamboyant individual whose work does have very positive journalistic value. That Ecuador offered him asylum is a political issue, but so is the case against Assange by Sweden. Regardless of the merits of the sexual assault case against Assange, the larger issue is that Sweden would likely extradite Assange to the US where he could face a military or a special court without any due process is what could amount to a trial no different than those reserved for 'enemies of the state'.

Ecuador requested that Swedish officials and lawyers interview Assange inside the embassy in London, and that the merits of the case pending against him be made much clearer so that there is no appearance of a political witch hunt. Ecuador further asked for assurances that if he were extradited in case the evidence legitimately pointed against him, Sweden would guarantee that his human and civil rights be respected and he would not be extradited to the US to face a political trial, in essence trumped up charges related to the publication of secret documents that have proved embarrassing to US foreign policy. Sweden has refused to cooperate. The UK has similarly refused any cooperation with Ecuador in order to arrive at a political/diplomatic solution to the Assange case that the US wants to use as an example to anyone wishing to follow the type of  blatant WIKILEAKS journalism exposing government secrets. 

Ecuador has similarly asked the US for assurances that it would respect the human rights of Assange and follow international law and not deny him due process; in other words not treat him like a Guantanamo Bay terrorist. The US has refused any cooperation with Ecuador, placing government privileges to secrecy above human rights, due process, freedom of the press, or freedom of speech. In a surprising move, the UK boldly threatened that it would capture Assange, violating international law and falling into the trap of a double-standard, given that UK has been an outspoken defender of embassy compounds as integral parts of the sovereign nation they represent.

Why would Britain commit such a blunder, given that so many former UK diplomats argue this is not the way to proceed? Why would Britain knowingly risk Ecuador mobilizing the friendly nations of Latin America and others around the world against it? Why would Britain be so blatant about such a high-profile matter when it really does not impact its national interests in any manner other than the fact that Assange is in London? Even if the UK intended to storm the Ecuadoran embassy or capture Assange on route to the airport, why not just do it; why make an announcement about it and give both domestic and international critics time to mobilize and place the entire strategy in doubt?

1. Did the Foreign Office acted in such a direct manner in order to bring the issue out into the open and take the pressure off itself, while proving to the US that it 'really tried', knowing all along that it cannot possibly violate international law without consequences down the road? After all, the UK has many enemies that can easily use this case to storm embassy compounds around the world.

2. Did the Foreign Office issue a imperialist style warning to a small Latin American nation that is close to Venezuela so that it can 'fish out' the level of international support, including US and Swedish reaction? Ecuador immediately appealed to its Latin American neighbors, placing the US in a very difficult position, because an extra-continetal power has in essence threatened to violate the sovereignty of an OAS member. The US is obligated by treaty to vote with Ecuador on this issue, but it cannot, thus finding itself in a defensive position with the rest of its neighbors.

3. Did the Foreign Office act on orders from Washington, or at least in consultation after it had an agreement with Sweden to test the waters of violating international law? If so, was this intended to force the government in Quito to negotiate a solution before giving asylum? Even after Ecuador announced its decision on Assange, the Foreign Office remained committed to a negotiated settlement - in theory, while unofficial sources hint at no change in UK policy, until further notice as domestic and international mounts against London.

4. Did the UK deliberately choose this confrontation, knowing that Russia and specifically Vladimir Putin's circle would use the case to argue that the West is guilty of a double-standard and must be condemned for not respecting human rights, freedom of speech, due process, or international law? Would not other governments not so friendly to the West not do the same and with justification? Can one imagine the US or UK trying to make a human rights case against China or Iran? Would the West have any moral authority to say a word about the behavior of any government violating international law and human rights, if it is also guilty of the same crimes?

There may be other scenarios and eventually some truth will surface. For now, what we have before us is a case of a small nation accusing a former colonial power of behaving like a neo-colonial bully. Disrespecting international law, human rights, freedom of the press and freedom of speech, while resorting to force reflects poor judgement on the part of the Foreign Office, assuming the threats were in earnest and not in essence intended to rid the case by undercutting the position of the US in a sly way.

Stand up in court is the central issue for those seeking justice in this case, but what kind of court, in what nation, under what conditions, etc. so that it is genuinely a fair trial to determine guilt or innocence on the charges of sexual assault. Neither the UK or Sweden 'US puppets', for they have enormous leverage and can easily resist US pressure on issues of vital national interests, so we cannot place the UK and Sweden in the same category as a weak Third World country over which US pressure can easily work. The WIKILEAKS issue simply means that there is 'policy convergence' between US, UK and Sweden. The informed reader on the WIKILEAKS issue knows that it smells of political persecution.
That there has been such an immediate and immense outcry against the handling of the case by former UK diplomats, to say nothing of the media that is leaning more toward Assange and less toward the Foreign Office only helps Ecuador that has stood up to the UK and US that appear to want to violate international law but insist the rest of the world must not do so. The larger question is the one of a double-standard, or as they say in the US 'EXCEPTIONALISM' in policy - policy only applies to the smaller and weaker nations, while the great powers are exempt!

Saturday, 4 August 2012


America's quest for hegemony, that is, pursuing a geopolitical, economic and ideological/political integrative policy  (transformation policy after WWII) from the McKinley administration to the present drives the US and its junior partners to pursue the same policy. Whether Iran today, Iraq yesterday, Vietnam in the 1960s existed or not what one needs to analyze and focus on is the policy, and not try to demonize the object of that policy in order to justify hegemony in the form of Pax Americana. ( for more see Kofas, Independence from America: Global Integration and Inequality. 2005)

If Iran never existed, another Iran-like nation would have to take its place so that the transformation policy could continue, for without it the American empire cannot justify its existence as currently constituted institutionally. Does the fact that US is pursuing transformation policy mean that Iran is a perfect state and that it does not violate human rights? Not at all the case, nor should we try to use one issue as distraction for the other; instead put both on the table for analysis. According to the UN as well as many governments and independent human rights organizations, including Israeli ones, Israel violates the human rights of the Palestinian people. Does the US adopt any punitive measures against Israel for violating human rights? Instead, the US obstructs any action in the UN, and, owing to the powerful Israeli lobby, it rewards Israel for violating human rights. What must one conclude given the blatant hypocrisy of US foreign policy?

 When the Soviet Union was about to collapse, Georgy Arbatov, intermediary of the KGB and Politburo and an adviser to Gorbachev stated that Moscow was about to do something extremely horrible to the US, namely deprive it of a long-standing enemy. Having recognized that the USSR had lost the Cold, Arbatov asked what would the US do without an enemy to justify its quest toward a global integrative policy, a very question given the domestic institutional structure was inexorably linked to the expansionist integrative policy. Well, we now know what the US did; it found a new enemy in "Islamist terrorism", broadening the definition to include any Islamic organization or regime that dares to reject the US integrative policy, and dares to declare a multidimensional foreign policy, especially one that condemns Israel for its treatment of Palestinians. This too would be fine, except that the US has found ground for convergence with al-Qaeda in a number of countries where there have been popular uprisings, including Libya and Syria.

Has transformation policy reached its limits, especially now that China and Russia are part of the global market economy, and does this mean that the US must resort to military solutions to impose transformation policy? There are those who advocate that 'war means peace' and that the US must support war against Iran, or at least permit Israel to hit Iranian targets. War advocates pushing an agenda of hegemony and destruction I can understand if their position is rooted in tangible interests of weapons manufacturers waiting to profit, security/intelligence for hire, politicians who see tangible political benefits from advocating war, and from all 'for-hire' analysts whose job is to push war in return for a paycheck.

In all honesty, I cannot understand advocates of war on ideological grounds, so I have concluded that they are:
1. delusional, refusing to see all of the bad consequences for all parties concerned;
2. suffer from some form of psychosis, owing to bad experiences in childhood or as adults as a result of detrimental personal experiences, in which case a visit to a doctor may go a long way in improving the psyche;
3. suffer from lack of knowledge about the many complex issues surrounding consequences of war;
4. suffer from an absence of morality rooted in humane and humanist values;
5. enjoy playing the devil's advocate
6. any combination from the above.

Transformation policy is finished because it has run its course and it is now bankrupting the US owing to immense defense spending that comes from selling bonds to the Chinese, Japanese and Arabs. Enlightened policies abound, but they are waiting for enlightened politicians to implement them. Neither Obama nor Romney measure up, for they are both committed to the anachronistic Cold War transformation policy.