Sunday, 28 April 2013


Questions about German hegemony in the EU

In April 2013, German Chancellor Angela Merkel denied that there is such a thing as "German hegemony over Europe", but she insisted that EU countries must cede more national sovereignty to overcome the debt crisis. The irony of Merkel's comments made in an audience with the Polish Prime Minister was that Poland like the rest of Europe fears Germany has learned no lessons of its 19th and 20th century quest for hegemony and it is now trying once again to achieve the same goals under the protective bloc mechanisms of the EU. As some scholars are trying to determine if the post-Communist world structure has any resemblance to pre-1914, it may be useful to also consider the controversial book by Fritz Fischer, World Power or Decline? This is not to suggest that contemporary Germany resembles pre-1914 or that the modern world power structure does either, but there are some very useful parallels to consider.

1. What is the future of Europe and the common currency, given that Germany has become the unquestioned master unchecked by any other partner in the euro zone?  Does this mean that the integration of Europe has a limited lifespan and eventually nationalism will prevail over the integration forces, or will the German quest be realized?

2. Is the recession at fault for the deep division in the European Union (EU) and especially in  the euro zone that has Germany as the dominant core country trying to compete with the US, China, and Japan in the 21st century? If Germany did not accomplish hegemony over Europe in the two world wars of the 20th century, has it finally accomplished its goal economically, or is it simply playing the same rules of globalization under neoliberal policies as is the US? Can Germany thrive and enjoy hegemony if it does not impose limits on its own power over the rest of Europe? This question has been prominent in German history from the era of Otto von Bismark to the present.

3. Is Germany pursuing hegemony because it is part of its culture going as far back as pos-1848 Prussia pursuing German unification under Bismark with the intent to enjoy European dominance? Or has the global political economy provided Germany with the opportunity to manipulate the EU so that it serves to perpetuate German economic dominance no matter how such a condition undermines politically, and socially pacts between government, businesses and trade unions, and more widely the "social contract" as the people of the EU understood it being a tool of "embourgeoisement" (upward social mobility)?  

Synopsis of Austerity and the German-imposed integration model on the EU

Many people have been betting on the end of the euro zone, the end of the EU, the end of an economic bloc that has been around since the 1950s under the aegis of the US. Those predictions came about because of the public debt crisis plaguing the periphery countries of the EU, mostly southern and eastern Europe, and because Germany followed very harsh monetarist policies that essentially result in massive transfer of capital from periphery debtor nations to the core surplus countries like Germany. The result is a recession for all of EU, unemployment above 10% for the entire economic bloc, perpetual social unrest and political volatility especially in Italy, Spain, Portugal and Greece.

The question is what alternatives are there to Germany's monetarism intended to strengthen the core creditors like Germany for the duration at the expense of the periphery debtor EU members. One alternative is a cheap currency, as many people have proposed. However, cheap currency, as Japan and US have done to stimulate their economies since 2008, does not secure Germany's hegemonic role at the same level as pursuing austerity for debtors who must cheapen all asset values from land to labor and make them attractive for foreign investment, primarily German.

European politicians, business people, academics, journalists, trade unionists, and many among the general population recognize that Germany has used its economic dominance in the European Union to introduce a new model of integration that allows for unquestioned hegemony and relegates the members to the south and east to periphery (Third World-style status) intended to serve a supporting role for Germany. This means substantial weakening of the public sector for the sake of strengthening the private sector, especially foreign enterprises that are dominant over the national bourgeoisie. The EU today is not the same as it was before 2008 because the world economic recession presented the opportunity to Germany to use its economic strength to become the single dominant power within the euro zone bloc. In short, any other nation in Germany's place would have done the same. Besides, the prescription Germany is following is one benefiting its banks and corporate interests and it will secure their long-term benefits at least for the earlier part of the 21st century.

Some critics have argued that the debt crisis and Germany's insistence on harsh austerity that worsens unemployment and lowers living standards and sociopolitical instability entails risking splitting Europe between north and south in a similar manner as the east-west Cold War division. This is true but such divisions in patron-client integration models already exist between the US that is hegemonic over its neighbors in Latin America and in Asia where Japan historically played a similar role over its neighbors. Do the German political and socioeconomic elites care if the political price to be paid for imposing a new stronger economic hegemony means that the rest of Europe depicts it as a Fourth Reich?

For the past fifty years, Germany has collaborated with the US, its major European partners, France, UK, and Italy, as well as the IMF, World Bank, OECD to provide development loans to a number of countries around the world, assuming the loan recipients followed market-oriented policies and were receptive to terms that foreign investors demanded. In the post-2008 recessionary era, Germany has the dominant role at the table among creditor nations and it is able to impose fiscal, trade, investment, labor, and all types of other policies on the loan and aid recipients. What gives Germany that power is its dominant contribution to the European Central Bank, the European Investment Bank, European Financial Stabilization Mechanism, and every other EU fund designed to strengthen the EU bloc economies - everything from health and education programs to cultural.

Germany and the end of the "Embourgeoisement Thesis"
A fundamental reason that countries wanted to join the EU and the euro zone was the promise of economic improvement through an integration model that would lift the weaker nations via financial help from the stronger ones. This would then translate into the promise of upward socioeconomic mobility for the majority of the population and the realization of stable pluralistic societies. In short, the EU model was rooted in the EMBOURGEOISEMENT THESIS (something more or less like the American Dream). Instead, the recession of 2008-present, and Germany's insistence on impoverishing the entire periphery area from southern to Eastern Europe has grossly undercut the embourgeoisement thesis.

To compete with China and all of the BRICS nations (Brazil, India, Russia and South Africa) as well as with the US and Japan, Germany had to abandon the 'embourgeoisement thesis' that promises incorporating more workers into the lower middle class. Politically, people believe they really have no choice but to reluctantly accept neoliberal policies and austerity. Given the end of the Communist bloc and failure of Communist regimes, what do the mainstream "middle of the road voters" do but follow whatever capitalism offers no matter how dreadful for their lives.

As a result of the embourgeoisement thesis taking root in capitalist culture, there is already decreased class consciousness, lack of working class solidarity, disillusionment with corrupt trade union leaders and with politicians claiming the label left, but when in office pursuing policies not very different than conservatives. Given this sociopolitical reality, why should Germany allow proposals that would result in a cheap currency through quantitative easing (as Japan and US), or issuance of an EU-guaranteed bailout fund backed by eurobonds, or any other proposal that would compromise the road to unquestioned German economic hegemony in the 21st century? The current IMF-EU austerity combined with neoliberal policies that result in a weak state structure only strengthen Germany that continues to strengthen its national economy and its state structure.

German neo-REALPOLITK or neoliberalism under globalization?
Some critics see Germany as the greatest threat to Europe because it is refusing to place limitations on its economic power. Others see it as following neo-RealPolitik policies that became famous under Chancellor Otto von Bismark from the 1860s until 1890, an era when Germany masterfully practiced domestic and diplomatic manipulation to become a Great Power all by containing the strengths of its neighbors and rivals at home and abroad. Prussian Junker Bismark disarmed his opponents by skillfully adopting a portion of their agenda to disarm them of a cause and coopt their followers, a strategy that worked, but that also had its limitations, given the continued rise of the left in the later half of the 19th century. Can RealPolitik work today, and has Germany made use of it? The reality of the EU and euro zone makes for very different circumstances, as does the fact that Germany is a Great Power overshadowed by the US, China, Japan, and to a smaller degree Russia.

It is true that German multinational corporations today have global influence because the government supports their expansion, just as it did from the Bismarkian era to WWI. Given that Russia has been closely cooperating with Germany, France having no choice but to cooperate because its capitalist enterprises benefit more under the patron-client integration model of corporate welfare than they would under a more costly social welfare model that existed before 2008, and having to deal with much weakened EU members, the German government can afford to impose its hegemonic policies and determine the future of the EU. The UK, outside the euro zone, would love to challenge Germany, but it has its own economic problems, and its banks and multinationals actually benefit from the weakening of the entire EU periphery because labor values and all assets become cheaper.

There are those who argue that Germany has gone back to 19th century ideology rooted in Ludwig von Rochau, Grundsätze der Realpolitik angewendet auf die staatlichen Zustände Deutschlands (1853)
If indeed some Germans among the political, economic and social elites believe that the imperative of nature on which the existence of states depends is fulfilled in the historically given state through the antagonism of various forces, then it is the realities of the current regional and global political economy that are responsible for it, and not any commitment to ideology. Assuming that the law of the hegemonic forces in society is similar to or a reflection of the laws of nature in its hierarchical patterns, then one must assume that if France, Sweden or any other country was in Germany's dominant economic position, and the international climate permit it, that country would follow the same path as the Angela Merkel government. In short, the structural patterns of the political economy domestically, regionally, and globally are far significant in how Germany is behaving than any ideology that is used subsequently to justify/explain those patterns.

Germany's NAZI past revived under EU austerity
Germany's Nazi past is one of the forces that is holding it back from being even more aggressively imperialist toward the rest of the EU members. When Die Welt, one of the largest publications openly asks the government to give serious consideration to the forced loans that Nazi Germany imposed on Greece and to consider the war reparations question it becomes a political problem with far reaching economic consequences.The reason for this is because Germany used Greece for the austerity experiment in the EU, and to a very large degree with relative ease proved that it is possible to impose all sorts of fiscal austerity policies on a euro zone member even if those policies violate the national constitution as well as EU protections accorded to its members.

To fight back, the Greek conservative led government, supported by all political parties, has decided to demand reopening the dormant argument of widespread damages that the Nazi occupying forces inflicted  during World War II. This translates to wartime reparations estimated as little as 55 billion euros to as much as half-a-trillion, an amount well above the entire Greek public debt. Because Greece was under the tutelage of the US that had the dominant influence in German foreign policy in the 1940s and 1950s, Greece essentially accepted whatever the US dictated from Germany for war reparations. At the Paris Conference on War Reparations in 1945, the USSR had suggested that Germany owes Greece $20 billion, but the US convinced the Greeks to demand half that amount. The Paris Conference finally decided that Greece would only receive $25 million in the form of machinery and other German supplies. This was a US decision opposed to Germany providing any heavy reparations that would essentially be paid by the US as Germany's protector. The US view prevailed, allowing Germany to put off paying further reparations as Greece demanded, and the government in Athens obeyed the US demand. 

As a NATO member since 1952 and a member of many European organizations since 1961 under the aegis of the US, Greece found it difficult to demand reparations. In March 1960, Germany offered 115 marks provided Greece never demands any future reparations. However, besides claims from the descendants of war crimes victims in Greece, there was also a forced loan from the Greek National Bank by the Nazi government, a loan estimated at $95 billion at current value, assuming 3% annual interest. If Germany recognizes the legitimacy of this forced loan, then it opens itself up for other countries to make demands as well. No one can possibly predict what will become of the Greek war reparations demands, and they will take years to come to any kind of settlement. Meanwhile, they serve to assuage the Greek public that has become angry at the Germans, and they provide a sense of shame for many Germans who feel that their government and businesses are exploiting a country of Nazi war crimes.

No doubt, the issue of war reparations is used now because Germany is perceived as a hegemonic trying to impose its policies on the rest of Europe and win today what it did not win in two global wars in the 20th century. The war reparations issue is very sensitive for Germany also because it understand that it has become increasingly unpopular with the rest of Europe, especially among workers and the middle class that has been seriously undermined by austerity policies. It is true that Germany has become the scapegoat for the problems that the debtor countries helped create because they had corrupt governments, unsound fiscal policies, engaged in unproductive investments, especially with EU funds, and manipulated public debt statistics with the help of firms like Goldman Sachs to show they enjoyed a surplus when they suffered huge deficits.  In the final analysis, Germany's quest for hegemony was made possible by the ineptness and corruption of the weaker EU members, but above all because the political economy favored as it still does the strongest core nations.

1. There are those arguing that the EU must end and let each country go its own way, so that Germany would not be compromising the national sovereignty of the rest of the continent. Even if that were to take place, and it could at some point, Germany would still have strongest economy, thus giving it greater leverage of the rest of Europe, but in a different form.
2. There are those who maintain that the EU was a political idea created by the US to counter the Communist bloc, and then accepted by the northwest Europeans as useful tool to regain global economic prominence. However, the EU before 2008 was created with Keynesian mechanisms, greater equalization of economic and social systems across Europe. Given that neoliberalism is prevalent in the age of globalization, this means that Keynesian era is now replaced with gross social, economic and geographic inequalities.  Germany is simply taking the lead to restructure the EU accordingly. When Merkel demands that the EU members cede national sovereignty, she is demanding that they comply with globalization marketplace realities, although such realities do lead inevitably to Germany hegemony.

3. There are those who warn that the division of EU into the rich and poorer nations is dangerous politically because it means social instability. In fact top EU leaders have been warning of this, much to the dismay of German government seen as the cause of sociopolitical instability. However,, this is not as realistic as it appears for the following reasons.
First, the political parties that take over governments, center-right or center-left, follow the same neoliberal policies and try to erase the Keynesian system of the past, thus projecting the illusion in the public mind that there is no alternative to neoliberalism. 

Second, there is no Communism to act as a threat to the West as there was during the Cold War. 

Third, trade unions that acted as a protective institution for workers are weak and cannot counter the power of finance capital backed by the state. 

Fourth, Europeans have lived under recession for five years and have not done much more than protest and elect leader following neoliberalism. Therefore, the idea that Europeans will stage revolution any time soon is unlikely, at least in the near future. Finally, the advocates of neoliebralism as well as those accepting of German hegemony in the EU believe that the economy will bounce back and people will see the new phase of anti-Keynesian capitalism as normal if not a good thing.
Meanwhile, the national sovereignty of the EU members would have been seriously compromised because a segment of capitalists within those countries will benefit from neoliberalism under German hegemony. As long as a segment of the national capitalist class retains benefits and the protection of the political class at the expense of the middle class and workers, then Germany will emerge as the unquestioned hegemonic power, no matter how clumsily Merkel tries to deny it.

Monday, 22 April 2013


SYNOPSIS: 19TH century-style labor conditions in the 21st century
I decided to write this article after recently watching on TV a group of Bangladeshi and Pakistani strawberry workers in southwestern Greece wounded by shotgun because they demanded six-month back pay wages,  I thought of South African mining workers shot by police for demanding improved working conditions and wages. Clearly, most workers go to their jobs and do not routinely face gunfire, nor do they live in squalid conditions like the South African miners and Pakistani and Bangladeshi field workers in Greece.

There is an anti labor climate globally that goes hand-in-hand with globalization operating under neoliberal policies, and there is an alarming rise in what I call “blood wages” to which tens of millions of workers are subjected in the early 21st century. “Blood wages” refers to a broad category of workers earning a living under extremely dreadful conditions, including human trafficking, child labor, semi-slave labor, immigrant labor, and what the International Labor Organization (ILO) refers to as “forced labor” of more than 21 million people. These conditions exist today when humankind presumably is more advanced and civilized than it was in the 19th century, when more countries claim to be open and democratic.

“Blood wages” were common in the 19th and early 20th century during the Industrial Revolution, prevalent from industrialized England to agrarian Russia, from the newly industrializing US to agricultural-mining producing Latin America. Government designed policy to support large agricultural, industrial and banking interests, while ignoring workers and peasants’ interests. “Blood wages and forced labor” conditions in the early 21st century are very similar to those in Latin America from 1850 to 1930, a period during which the economy and social structure were shaped by domestic oligarchic interests and foreign corporations whose interests the state protected using police and military against workers.

Literary authors described the plight of ‘blood wages’ in the formative era of industrial capitalism, authors like Charles Dickens whose novels dealt with child labor, Emile Zola dealing with the plight of miners, and Upton Sinclair dealing with the meat packing industry in Chicago. The literary world returned to the theme of worker’s plight during the Great Depression, but gradually abandoned such themes as middle class culture took over and the dream of working class people was upward social mobility through college education and a professional white-collar career.  

After the emergence of trade unions, labor laws, safety and environmental laws, human rights and civil rights legal protection amid the expansion of middle class society, one would assume that pluralistic societies protect workers better than in the 19th century. While many societies made much progress from the 1930s to the 1960s with regard to labor rights, it is ironic that in some respects conditions for workers today are much worse from those of the formative period of trade unionism in the Western World during the 19th and early twentieth century. This is a reflection of the shrinking lower middle class and difficulty toward upward social mobility in the past three decades.

Societal progress in the past three decades has not included workers sharing in the benefits of rising productivity, but rather limited to the upper middle class that benefit from the “blood wages” of workers around the world, especially during the era of globalization under neoliberal policies that have been in full force from the Reagan-Thatcher decade to the present. The safety net that took decades to build has been eroding in the last three decades to the degree that society is moving backwards toward the 19th century with regard to labor and social policies.

In the early 21st century in a number of countries, employers have private security guards, the police, and in some cases the armed forces arresting and in some cases shooting workers who demand better wages and working conditions. One may argue that such extreme incidents take place in developing or semi-developed nations, and rarely in the advanced capitalist countries. As we will see below, such incidents taking place in South Africa’s platinum mines, for example, are linked to Western corporate interests, and police clashing with workers or protesters representing labor interests takes place in Western countries.

Yet, the mass media does not expose the blood wages of the 21st century as symptomatic of globalization under a neoliberal political economy benefiting the small class of rich individuals to the detriment of society as a whole. On the contrary, the media and government treat such incidents as isolated and extreme, as though they fell to earth from an asteroid without any connection to the rest of society, as though they have no history, no connection to fiscal, economic, labor and social policies.

Egregious conditions from ‘blood wages’ to ‘forced labor’ in the field of labor exist across the world, but they rarely receive much publicity. Confrontations between workers and management have intensified in the last three decades as globalization has taken hold under neoliberal policies throughout most of the world and workers have been losing purchasing power along with the shrinking lower middle class. With the promise of greater prosperity for all under policies promoting greater prosperity for corporations, businesses and governments have become less tolerant of labor, and openly hostile to trade unions identified with political and financial corruption, as though the world of business is free of corruption.

The prevailing trend in the past three decades or so has been toward a weakened labor movement, which includes weakening trade unions, ending collective bargaining, promoting part time work that does not include benefits, and eroding the rights of workers. In the past three decades, governments have weakened labor laws, they have relaxed enforcement mechanisms and inspections of businesses violating workers’ rights and health and safety. Moreover, there has been a trend toward allowing more workers to earn below minimum wage, without social benefits, and without any protection accorded to unionized workers. This is not just in Asia and Latin America, but in the US, Germany and other advanced countries as we will see below.

Tens of millions of workers around the world live with the fear that they may never receive their pay; that they will lose their job because they demand to be paid or receive higher wages and better working conditions; and that they may face violence at the workplace by their employer backed by the police, judicial and political establishment. Finally, several million are part of a virtual slave labor supply, including sexual trafficking that operates from Asia to the US, all under the complicity of the authorities.

According to the ILO, three of 1000 people in the world are in forced labor/trafficking conditions in which they are trapped, 90% of which are exploited by corporations and individuals in private enterprise, and 26% of which are under 18 years of age. An estimated 4.5 million of the forced labor individuals are part of the sexual trafficking/exploitation industry, again confined primarily to the non-Western World. Most of these forced labor individuals come from the Asia-Pacific area (56%), followed by Africa (18%), and then Latin America (9%).

After the fall of Communism in Eastern Europe and USSR, there was a sharp rise in forced labor/trafficking activity, given that the region accounts for 1.6 million or 7% of the world’s total forced labor/trafficking activity. Cross border movement, especially from war-torn and civil war torn nations in Asia (Iraq, Afghanistan, Pakistan, and Bangladesh) account for a large percentage of legal and illegal workers in the ‘forced labor market’, including sexual exploitation.

Although child labor is a global phenomenon and it exists in developed nations, it is pervasive across Asia, Africa and Latin America. The economic crisis of 2008-present has exacerbated child labor from the plantations of El Salvador to the mines of Madagascar and the factories of China. The Central African Republic (CAR) is one of the more notable examples of a country serving the forced labor and trafficking industry, involving mostly children. Going from CAR to Cameroon, Rwanda, Nigeria, and the Congo, children are taken for various purposes, including sexual exploitation, rebel recruits, but mostly to work as agricultural workers.

Governments are not only aware of the forced labor and trafficking industry, they are in certain instance behind some of the operations. Furthermore, they pay lip service to UN demands about compliance to eliminate forced and child labor and trafficking, but in practice ignore the UN. Civil conflicts in a number of countries, including Chad, Sudan, and Congo make trafficking and forced and child labor even more attractive to those profiting from it. The destination of traffickers is not necessarily local, but for more distant locations, including Europe Union countries.  

China is now the world’s second largest economy, and according to the IMF it will become number one at some point in the first half of the 21st century. China is the new standard according to which countries measure their labor values, although China has the world’s largest population of working poor and conditions for workers are appalling by Western standards.

There have been many reports of slave labor in China, largely because it is politically a Communist country with a capitalist economic system well integrated with the world economy, yet, still a potential military rival to the US. The government rarely if ever prosecutes or convicts employers, often government entities, for what is a pervasive condition. China uses not only prison labor, but also the LAOGAI forced labor camp system where an estimated eight million work. Reminiscent of Stalinist camps, the LAOGAI system works on the basis of productivity quotas to food rations. American and global consumers enjoy the cheap products made by China’s forced labor, everything from athletic shoes to machines.

In January 2013, the government announced that it would end the forced labor camp system in place under varying forms for six decades, as part of a broader reform policy. Western critics, especially human rights activists have argued that the government used the forced labor system to punish everyone from criminals and substance abusers to dissidents. However, the system was part of a very lucrative process that allowed China to be extremely competitive with the rest of the world by having a segment of its work force work for food and lodging.

It is precisely the cheap Chinese labor system that other nations, including the West felt must be used as a basis for comparing Western labor values. In short, the cheap Chinese labor force became the pretext for the West and other countries in the name of “competitiveness” under globalization. Instead of pressuring China to raise internal consumer demand by raising wages, Western companies manufacturing and buying Chinese products stay silent because its companies made billions from Chinese cheap labor, including forced labor. When the recession of 2008-present spread across the world, the media, governments, and pro-business analysts argued in favor of lower wages. After all, how can the West compete with China?

One would not necessarily associate Greece with blood wages, but it actually built its economy from 1990 until the present on cheap legal and illegal immigrant labor from the northern Balkans, Asia and Africa. Although blood wages were confined mostly to this segment of the labor force, the IMF-EU austerity program has expanded the blood wages pool to include mainstream working class groups.

In April 2013, several immigrants working on strawberry farms received gunshot wounds from three managers (farm bosses) acting on the orders of the owner who was recorded while giving orders to exploit his workers by refusing to pay them and threatening their lives if they demanded payment. The workers were mostly illegal from Bangladesh and Pakistan who were not been paid for about six months the $25 per day. Twenty to forty men live on the farms in squalor conditions inside plastic tents used as part of abandoned greenhouses converted into makeshift homes, drinking polluted water, without any toilet or washing facilities.

The authorities are well aware of the situation of workers, but have turned a blind eye for a decade. This is because the agricultural enterprises provide the necessary bribes to officials in question, everyone from tax inspectors to local police and politicians, thus buying official complicity. Once the workers were shot and landed in the hospital under the eye of the TV cameras, politicians and public officials suddenly expressed surprise and outrage at this isolated incident that is by no means a reflection of working class conditions. These are the same officials systematically bribed to turn a blind eye for years. Blood wages for immigrant workers entailed immense profits for the owners and bribes for public officials – an estimate $130 million from the local strawberry fields annually, let alone other produce, while the government collects practically nothing in taxes from the producers who invest in bribing officials.

Pakistani-Bangladesh agricultural day laborers shot because they demanded back pay of the last six months alarmed many people. Most saw the incident as a mirror of the future for all workers and society as a whole. Given that the country is under IMF-EU austerity measures and suffers 28% unemployment, there are many currently working in the private sector without securing payment of wages by the employers on a timely basis. The deep recession has become a pretext to avoid paying workers and to simply dismiss them and hire new ones, exactly as what took place with the Pakistani-Bangladeshi immigrants.

The shootings of the strawberry workers took place a day after the EU Human Rights commission warned that Greece has a very high level of hate crimes, especially linked to the newly elected neo-Nazi Golden Dawn party that has around 10% vote support in all public opinion polls. Although the neo-Nazi party is vehemently xenophobic and racist, it has found appeal among the broader masses who feel that if the 600,000 immigrants were to leave, Greece would have no economic, social, or political problems of any kind. This kind of racism plays into the hands of the mainstream conservative ruling party that tries to project the image of embracing right-wing pluralism, on the one hand, but had adopted policies that promote racism, hate crimes, xenophobia, and social polarization reminiscent of the early Cold War. In short, the general population’s fear that blood wages could be spreading for a large segment of workers has polarized society into those openly or covertly embracing racist/xenophobic positions, and those wanting systemic institutional changes.

“Blood wages’ are not confined to the Pakistani-Bangladeshi strawberry workers, but they are an integral part of a larger policy that the domestic political and business elites have been promoting, with the IMF and EU, especially Germany arguing for reduction in labor values to make Greece attractive for foreign investment. How can the EU compete with cheap Chinese labor if the periphery member nations across Southern and Eastern Europe have wages comparable to those of Germany? What takes place in Greece with regard to blood wages is not isolated, but permeates the entire European Union and as we will see below, even Germany has a substantial segment of blood wages working force.

South Africa is now part of the BRIC miracle nations, Brazil, Russia, India and China. However, South Africa with all its progress to leave apartheid conditions behind after Nelson Mandela has not made much progress toward socioeconomic integration of the vast majority of blacks into the mainstream of white middle class society. On the contrary, South Africa had a political revolution, but the social and economic institutional structure has remained virtually the same in the last two decades.  

In February 2013, South African platinum mine security guards fired upon workers, wounding 13 in the process. This incident followed the one in August 2012 when South African police massacred 34 mining workers and wounded 78 others at the LONMIN mining operations. Known as the Marikana massacre, the incident was reminiscent of anti-apartheid-style clashes rooted in the deeply ingrained racist culture of South Africa. One issue was low wages and poor working conditions in the white-owned mines that the government supports. Refusing to condemn the police massacre, the government called for labor-management-government cooperation in a neo-corporatist style that would permit the state to project the image of intermediary, looking after the interests of black miners as well as white mining owners.

Although the regime is composed of blacks, racism and capitalism run hand-in-hand in post-apartheid South Africa. Accounting for 80% of the world’s platinum, Anglo American Platinum (Amplats) has a long record of very poor relations with miners, resorting to force as a means of resolving labor-management disputes. The media blamed the Marikana massacre and the mining clashes in January and February 2013 on rivalry between two mining unions (NUM and AMCU), when in reality wages and safety and the company’s use of police sent to resolve conflict by violence. The ILO has issued a report stating that hazardous work conditions, everything from falling rocks to high temperatures are the cause of death for an average of 20 miners annually at the LONMIN and AMPLATS mining operations.

Just like the Pakistani-Bangladeshi agricultural day laborers in Greece, South African miners live in filthy conditions in cheap housing the company provides at a cost of $450 per month, forcing a number of miners to live together in unsanitary conditions. Although this is well known to the government, it does absolutely nothing about it, except to denounce the companies making millions in profits, while refusing to pay decent wages.

Why do people work in the mines? There is no other work for them elsewhere, given that 60% of South Africans live on less than $1.25 per day and the government looks to the lucrative mining industry as the basis for its macroeconomic strength, while ignoring the microeconomic needs of the community. While there is a great deal of pride associated with the political changes after Nelson Mandela, South Africa has seen very few changes in the domain of social justice owing to the reality of an economy that remains focused on growing without benefiting its people.

Germany is the miracle growth country now leading the EU toward a new integration model where the eurozone will be divided into low-wage areas confined to Southern and Eastern Europe and higher wage one for the northwest core nations. However, within Germany there is a blood wage segment that Belgium exposed because it is concerned about unfair competition. Apparently, Germany has around seven to eight million East European and other immigrant workers earning less than five euro per hour and are not covered by social insurance programs in violation of EU labor laws.

Supported by France and the Netherlands, the Belgian government and the EU Commission have alleged that Germany's "mini-jobs" undermines EU competition rules because it has essentially created a “Maquiladora” enclave within its borders. Employing immigrant workers in what Belgium charges is a ‘mini-job’ regime, German companies are paying less than one-fourth of what the average worker earns doing the exact same job in other northern countries – 3 euro for the immigrant worker in Germany versus 12 euro for the Belgian worker. Moreover, the German companies do not pay into a pension system, thus saving an estimated 450 euro per month per worker. In short, Germany has created blood wage conditions within its own borders, just as Greece has using immigrant workers.

According to Belgian officials, the EU Commission must consider Germany’s blood wage conditions for the seven to eight million workers as a violation of EU social union. Although Belgium, France and the Netherlands are focused on the issue of unfair competition from Germany and not on the blood wage issue, the net result is that Germany is now exposed as the EU core country dominating the eurozone with its policies that violate EU rules. Because Germany has no minimum wage law, it can practice “blood wages” policies, forcing some companies in other parts of the EU to consider moving there. Contrary to the prevailing view outside of Germany, one-third of the workers earn well below 8.5 euro, which the OECD considers poverty level.

Considering there is global competition to lower labor costs, what is so alarming about ‘blood wage’ policies that Germany is practicing? The German model is appealing not only to periphery countries in the EU, but core countries like the UK are just as interested, because they too must remain competitive.    

The US has a history as a slave-owing country, followed by segregation with the blood wages of African-American workers. In addition, it also has a history of immigrant labor that was subjected to blood wages, as well as poor whites in the coal mines of West Virginia. Labor laws and social safety nets from the New Deal to the Great Society (1930s-1960s) corrected some of the abuses in the workplace, but migrant Latin American workers remained in the blood-wage category.

Today, the US has layers of working class groups, from well-paid elite workers to migrant day laborers and women working in the homes of the wealthy. The agricultural workers in the southwest, California and Florida present solid cases of blood wages, as it has been documented in articles and books over the past decades. Blood wages in the US must be examined in the larger context of declining wages for the entire working class in the past three decades, especially in the past five years amid the recession. While the total pay package of the average US manager has risen 40 times in the last two decades, wages have risen 50% less than the rate of productivity amid a period when high tech, the integration of the former Communist bloc countries and China’s miracle economic growth have created unprecedented wealth that is highly concentrated.

One reason immense wealth is concentrated, is because a substantial part of the labor force has lapse into the blood ages category. The US commercial agricultural industry, construction, and domestic labor represent a part of the “blood wage” labor force that officials know about but turn a blind eye. Many immigrant workers from Latin America work in below minimum wage conditions and live in deplorable conditions that are not much different than those I have described above for workers in Europe, Africa and Asia.

One would find it incredible that Mexican day laborers in Florida’s orange groves live in conditions no different than the Pakistani and Bangladeshi strawberry workers in southern Greece or the South African miners near Johannesburg. Nor would people believe that workers in the US are threatened with violence by their employers if they try to leave, no different than immigrant workers whose passport is taken away from them by their employers in Dubai. Involuntary servitude (forced labor) is not something that the average person within the US or outside of it would associate with America.

Despite the 14 Amendment that forbids forced unpaid labor, blood wages are a reality in America, from sweatshops to agricultural fields, from a welding factory in Tulsa, Oklahoma, employing Indian immigrants forced to pay recruiting fees and live in conditions not very different from those of other forced laborers in Africa, Asia and Europe. Refusing to pay these workers from India is easy because they are beholden to the employer who controls their fate. While sexual trafficking is something that one may associate with southern Asia and Africa, it is alive and well within the US. Prostitution and strip clubs are indicative of a thriving industry based on blood wages in the US, no different from Cyprus infamous for the sexual trafficking industry linked to Russian and Middle Eastern money laundering operations.

If the US is hardly an exception to the rule of blood wages, can there be much hope for smaller and weaker countries?  From the New Deal to the end of the Vietnam War, the US built a society on a solid working class and a thriving middle class. The alarming situation of blood wage conditions is what it represents, not that it is large enough at this stage to pose a threat. “Blood wage” is a fringe segment of the working class that shows how far the core nation of capitalism has drifted to create Third World enclaves within its border. Where this is headed is uncertain, but it is hardly encouraging for the US and for the rest of the world.

Industrial capitalism created blood wages in the class that social scientists know as "lumpenproletariat". The conditions for this underclass of the population is brilliantly described by Henry Mayhew, LONDON LABOUR AND THE LONDON POOR, Franz Fanon, WRETCHED OF THE EARTH, and others in articles and books about workers around the world.In the early 21st century as capitalism has evolved very rapidly after the integration of Eurasia and all of Asia into the capitalist system, business competition and the race for maximizing profits is much more intense than ever. The 'blood wage' phenomenon is symptomatic of globalization and it is a continuation of the lumpenproletariat class that Mayhew described in the mid-19th century, and Fanon in the mid-20th century.

Globalization may have created more millionaires, but it has done so precisely because it created a blood wage labor force, along with a weakened middle class. Unless pluralistic societies recapture some equilibrium among the various social classes, these social conditions will have political consequences that will mean the transition from the existing weakened democracy to a system of authoritarianism posing as democratic.

Wednesday, 17 April 2013


The tragedy of the "Boston Marathon bombing" awakened feelings, fears and anxieties of 9/11, not just within the US, but around the world. The restraint of the White House with regard to speculation about the guilty parties was remarkable, and indeed the only rational approach under the circumstances. Given the absence of leads in the FBI investigation, the government adopted the appropriate course of action, but some media analysts did not stop from speculating. One group argued that it is probably "Islamic terrorists", especially given the possible Arab suspect questioned. Another group of analysts noted that the bombing had the marking of a Timothy McVeigh, David Koresh-type; the ultra-right wing stamp on it because it was carried out on 15 April - tax deadline and on "Patriot Day". Another group argued that it was either Jihadists, domestic right-wing terrorists, lone bomber with whatever motive, the government, satanic cults or other fringe groups. 

Conservative analysts accused the liberal media of bias, because some analysts did not rule out domestic right wing groups, even Tea Party elements. It seems that many conservatives are disappointed that the media has not simply assumed that those responsible for the bombing were Muslims, and that the general assumption is they were more likely of the domestic right-wing variety. Be that as it may until the FBI actually makes an official announcement, the significant thing is that the media focused on the sensational aspects by zeroing in on the individual reactions of "people's feelings" who were justifiably outraged, and especially on small children holding candles. The media also cloaked the story as comparable to 9/11, even though the FBI does not have any evidence of a 9/11-style attack. The sensational nature of the manner that the media has been covering the story was then transmitted around the world, and copied by news organizations everywhere - usually done for convenience, cost factors, and routine way of covering domestic issues in US by non-US media.

What message does the media project about the tragedy in Boston, even before any FBI announcement?
The US is very vulnerable to 'terrorism' and needs to become even more of a police state than it is currently, as it has been evolving since 9/11. This is not to argue that the state ought to neglect its duty to safeguard the lives of its citizens, but should the bombing become the pretext for strengthening the quasi-police state? Moreover, if the US has been spending billions of security already, why did this tragedy take place? Does this mean that there is no such thing as full-proof protection from terrorism (random acts of violence with or without ideological/political purpose), as many critics have been saying for decades?

On the day that the world media reported on the Boston Marathon bombing, there were a number of other tragedies around the world that claimed the lives of many people. The most serious was a barrage of bombings in Iraq, followed by the earth quake along the border of Iran-Pakistan. The manner that the world media covered these events was very different than it did the Boston bombing. With the assumption that human life is of equal value whether in Boston or in the Middle East, the media could have given comparable focus to these stories as well.

For example, there were at least 42, possibly as many as 55 people killed and 257 injured in six different provinces in Iraq as a result of internal guerrilla warfare (otherwise labeled terrorism). Yet, this story had tiny coverage in comparison with the Boston story. The media has decided that the value of life in Iraq is hardly worthy of news coverage, because the root cause of the loss of life is the US war and occupation that currently yields political violence on a weekly basis owing to religious.sectarian, regional, political, and other differences. Moreover, why cover the deadly bombings in Iraq, given that they are almost routine, in comparison with those in the US where they are rare. Finally, why cover the bombings and deaths of Third World poor people, dark-skinned,Muslims at that, when middle class people in the center of world power are threatened? In short, the media itself reflects the imperial and imperious attitude of the Western government it covers, accepting the assumption that the value of life in Boston is far more precious and more worthy of media coverage than the life of a Muslim in Iraq.

The media has its own racist assumptions imbedded in political and ideological ones. Not only is this an issue of political and ideological decision on the part of the mainstream media, but it is also cultural rooted in a general prejudice against non-Western, non-white, non Judeo-Christians. There is something seriously wrong with the value system of the Western media when the funeral preparations for Margaret Thatcher receive massive media coverage, while the bombings in Iraq as well as similar tragedies in Afghanistan receive a mere mention. I support that the life of a single ancient Roman politician is worth a thousand mentions while the deaths of a thousand slaves in the Roman provinces are only important if they inconvenience the center of the Empire. How true then, how true today!

If the mainstream media had focused on the deaths of innocent people in Iraq and Afghanistan falling victims to acts of political violence, or CIA drone bombings in the case of Afghanistan, the public would want to know who are the powers responsible for the carnage and it would demand an end to it, just as Americans rightly demand an end to bombings targeting civilians. In short, the issue of American exceptionalism creeps its ugly head not only in government policy, but in the media that reflects and promotes government policy.

While everyone around the world has a moral obligation to strongly condemn what happened in Boston during the Marathon, is there no moral obligation to examine the violence and senseless killings in Iraq and Afghanistan where the US has left its lasting mark? Is moral equivalence reserved for comparisons of one Western nation with another? Does the public deserve to question the assumptions of the media rooted in ethnic, religious, ideological and political prejudices, all of them adding up to moral hierarchy reflected in the manner stories are reported?

Wednesday, 10 April 2013


In May 2011, I wrote an article entitled: TURKEY: WESTERN CLIENT STATE OR MIDDLE EAST ASCENDANCY? Since then, a great deal has changed in the Middle East, largely because of Arab Spring revolts and the Syrian civil war in which the US, EU and the pro-US Arab states are lined up behind the West to bring about regime change in Syria.

Turkey is the new regional power of the Middle East, largely thanks to the US war and occupation of Iraq, the Western support of Arab Spring uprisings that weakened most of the countries, including civil-war torn Syria. Israel and Iran are the only regional players that pose any kind of counterweight to Turkey, but owing to US-EU support for the Syrian rebels and the chronic anti-Iran campaign, Turkey is likely to become much stronger in the near and intermediate future. The question for Turkey is what does it want, what limitations is the West prepared to place upon it, what role will Russia, Iran and Israel play in containing its regional superpower role?

1. Does Turkey (Turkey's political, military, economic and social elites) wish to revive the once mighty role it enjoyed under the Ottoman Empire and have regional hegemony, as many analysts believe? If so, does this not conflict with the aim to conform to EU preconditions in order to qualify for membership?

2. Does Turkey wish to simply confine its role to become the next Brazil or India global economic success story under a neoliberal model (privatization of public enterprises and reliance on foreign investment) with a heavy dose of traditional crony capitalism politics that it has been pursuing? If so, is it willing to pay the price of inevitable social instability owing to the contradictions between economic growth and high poverty levels?

3. Does Turkey wish to have a military role commensurate to its economic power, thus challenging Israel and Iran? Is this why it has been spending heavily on defense? If so, will high defense spending undermine its economic growth prospects and its social programs required to keep peace among the masses?

4. Is Turkey interested in socioeconomic development, that is to say, reducing poverty that is about the same as in Brazil at about 22% and Turkey at 17% - those living slightly above poverty levels are estimated at 43%. Is Turkey interested in expanding the middle class by raising minimum wage to EU average levels, or does it want economic growth at the expense of uneven income distribution?

5. How do the lingering issues of the chronic conflict with the Kurdish minority, the divided Cyprus island with a Turkish minority, and not measuring up to Western standards on human rights at home become resolved? How does the government appease the rising radicalism among its own urban educated population that sees uneven income distribution and Islamic regime following neoliberal policies?

6. Does Turkey continue to fool its own population by having a government presenting itself as a defender of Muslims, especially Palestinians, while allowing the US and EU to use its soil as the base of operations in the Syrian civil war, a conflict in which well-know Islamist terrorists are on the same side as Turkey and the West?

A country of about 74 million people, Turkey ranks 17th in the world in terms of GDP, and economists believe it may become the next one trillion dollar economy, thus adding to the theory that Asia, of which Turkey is a part, will dominate the world economically in the 21st century, given India's and China's preeminent roles. Because China sees Turkey as one of the key Western Asian countries with a major geopolitical and economic role to play in the 21st century, it has invested heavily and it continue to expand its trade relations with Turkey.

In an effort to institutionalize the global war on terror and to use it as a pretext to integrate politically, militarily and economically as much of the Middle East and North Africa as possible, in lat 2003, the US introduced the Greater Middle East Initiative (GMEI) from which emerged the Middle East Partnership Initiative as its political instrument to support US Middle Eastern policies during the wars in Iraq and Afghanistan. The US injected the GMEI into G8 and NATO and renamed it Broader Middle East and North Africa Initiative at the Sea Island Summit of the G8 in June 2004.

Twenty-two Arab countries are involved in this initiative, including Turkey, with the aim to improving the economic, social and political situation in the Middle East, and to combat “extremism, terrorism, international crime and illegal migration”. Above all, the initiative stresses open markets and global economic integration, free elections, press liberty and human rights. In short, this US-led initiative was comprehensive, intended toward greater economic military and diplomatic cooptation amid the wars in Iraq and Afghanistan. As a country with an Islamic regime under premier Recep Tayyip Erdogan, Turkey would play a catalytic role because it presented itself as a defender of Muslims, especially Palestinians, while at the same time siding with the US and the West on all key policy issues.

The role that Turkey played and continues to play in helping to promote the US-NATO geopolitical agenda in the Middle East is invaluable, especially during the ongoing civil war in Syria. However, the falling out of Turkey and Israel placed enormous strain on the US Middle East initiative intended to use Turkey as the key country of operations to keep Iran contained, while trying to bring down ASSAD in Syria. The visit of US President Obama to Israel in March 2013, followed by US Secretary of State John Kerry visit to Turkey were intended to thaw relations between Ankara and Tel Aviv, especially after Turkey placed a multi-billion dollar defense contractor order in the US. US-Turkish trade reached $20 billion in 2011, and this is the reason that firms such as Bell Helicopter, Boeing, General Electric and Sikorsky arrived in Turkey on 3 December 2012 to secure contracts and partnerships; all backed the U.S. Commerce Department that regards Turkey a "priority market" in Europe.

US Government has been 'facilitating' US trade missions to Turkey, especially for defense contractors. However, in return for spending billions and pledge to spend billions more in the US, Turkey has demands of its own, demands that include a share of the natural gas in the Cypriot sea where exploration has started by the Greek-speaking Cypriot regime. Turkey also wants to have access to energy exploration rights in the Eastern Aegean in disputed territorial waters with Greece. The US-Turkey deal under the Framework for Strategic Economic and Commercial Cooperation facilitates US and Turkish company deals that compete with deals commercial agreements Turkey has signed with China, Russia and EU members.

For geopolitical, economic, military and economic reasons, the US needs Turkey to ameliorate relations with Israel, so that the Syrian regime will be brought down quickly, Iran weakened, if not becoming the next open target; given that it has been the covert target of US and Israeli hostilities. The US pressured Israel to apologize for nine Turks killed by Israeli forces in 2010, and it has also agreed that Israel must provide compensation, assuming exchange of ambassadors. These are measures that will then permit greater lobbying by the US in Brussels (EU) on behalf of Turkey. Above all, the US wants Turkish-Israeli energy cooperation estimated at $1 billion annually, something that would also result in numerous business deals between the two sides. Although Turkey-Israel trade is roughly ten percent of Turkey-US trade, diminishing further in the last two years, the hope of the US and Israel is to increase trade sharply. This would also mean Turkish-Israeli and Turkish-US and EU trade would reduce Turkey's already tense relations with Iran.

The financial/banking/economic crisis of Greece and Cyprus has opened new opportunities for Turkey to explore commercial expansion with its historic enemies. Greek-speaking Cyprus has no choice but to at least examine the possibility of unification with the Turkish-speaking north and with Ankara that is right next door and offers economic opportunities. Greece is already looking to expand relations with its neighbor to the East. Neither Cyprus nor Greece can possibly match the military might of Turkey, but that is a mute point because as a fellow NATO member in good standing with the US, Turkey would never make an adventurist military move unless it had Washington's approval. The Greek-Cypriot link is also the key to allowing Turkey to make some headway with EU membership. However, the catalyst for Turkey's relationship with Greece, Cyprus, and Israel is the US, much more than the EU. The benefits are immense to large corporations, from defense firms to energy for interested parties, above all the US.


1.  Where is Turkey going with its current agenda of trying to revive its regional status under the aegis of the US, while also pursuing a multidimensional foreign and economic policy that extends from China to Russia?
My view is that there is euphoria about the current phenomenal growth and the weakness of the country's neighbors that simply make Turkey appear much stronger than it is in reality.

2. Is Turkey prepared for the next economic contracting cycle and the sociopolitical turmoil it will cause domestically, or do its political and economic elites believe that expansion has no limits? My view is that Turkey is wasting resources on defense, lured by deals linked to other issues that its trading partners are promising. The economic contraction of Turkey will drive it right back to the IMF and that will mean a crushing blow to its growth prospects.

3. Can Turkey avoid falling back into a mere satellite or economic dependency and emerging into the status of world power to the level of India? The jury is out on this issue. Given that Turkey has been following neoliberal policies, with the predictable state-backed crony-style capitalist strategies, and given that foreign investment has played a key role in the country's growth, Turkey will not escape remaining a semi-dependency of the Great Powers.

4. Will Turkey realize its dream of regional power? It is already a major player, and it has the potential of becoming even stronger, depending on how weaker its neighbors become in the future. Iran will remain a major rival, one that the US and EU are trying to weaken by strengthening Turkey in many respects.