Monday, 26 August 2013

THE FUTILITY OF US POLICY TOWARD SYRIA

The futility of US foreign policy in Syria is that there is no winning strategy other than simply working with Russia, China and the UN, without excluding Iran, toward a political solution.  That the US wants to pursue a military solution in Syria is actually the norm of US foreign policy in the post-Cold War era when there is no Russian Communism as the arch enemy to antagonize.  In other words, the surprise is not that the US is anxiously pursuing all kinds of excuses for military intervention, but that it would actually seek a political solution on the basis of a multilateral foreign policy approach intended to stabilize instead of destabilizing the Middle East.  Anything short of a political solution along these lines with these powers having a role would result in a resounding failure, just as the US interventions in Iraq and Afghanistan have resulted in similar failures and the beneficiaries would not be the US and its NATO allies, but China economically and Iran geopolitically.

Although Syria has agreed to UN inspectors for the sights near the capital where chemical weapons were used, the White House has been projecting the military option as a first resort, instead of a last one; this before a UN investigation has even concluded its work, before any proof presented by the accusers. This is amazingly similar to what Bush did in Iraq, where the evidence for weapons of mass destruction had to be invented so the US could justify its military solution. Another similarity between Bush and Obama policy is that both want UN Security Council, NATO, and Arab League backing. What if they do not receive such support? Then there are the "peddlers of military solutions", everyone from "guns-for-hire" consultants to journalists arguing for a precision strike against Syria, so as to minimize the deaths and injuries of innocent people. These are of course the worst elements that prepare public opinion for military solution as the only option, even if it has to be precision strike - a sort of "kinder, gentler warfare". If Assad is guilty of such crimes against humanity, why resort to surgical strikes, why not an all-out war intended to bring him down?

Assumptions on the purpose for the US-led military strike against Syria:
US official goal is to deter future use of chemical weapons.
Critics charge that the US wants a military conflict because:
1. war distracts from the controversial debt ceiling issue and allows for congress to approve it;
2. war allows the US to keep the Russians and especially Chinese away from the energy-rich Middle East;
3. war means that Syria's gas reserves eventually fall under pro-West elements;
4. war keeps the Arabs divided and Israel strong;
5. war sends a strong message to Iran to be careful about expanding its influence;
6. war against Syria weakens Hezbollah, encourages Kurdish separatists to rebel against Iran;
7. war helps defense and energy companies make greater profits;
8. war keeps US allies in line;
9. war further unifies the American public against external enemies and keeps them docile;
10. war validates US military superpower status used as leverage to exert influence globally.

It is difficult to predict how the hawkish elements in Washington, Tel Aviv and Paris would react to global pressure to resist a military solution and opt for a political one. However, the military solution is an absolute predictable failure, while the political one can be adjusted along the way if it is not to the liking of the parties in question. Militarism has its own dynamic and besides defense contractors and consultants making money from military adventures, often there is just the raw irrational tendency to just act and think about the multiple consequences of military action later. This is exactly what the Bush administration did in the first decade of 2000 and the results were hardly surprising to those who warned about reckless policy.

After reports of alleged use of chemical agents (neuro-toxins) by Syria's Assad regime, the US along with its NATO partners immediately announced that a military solution was an option. This is even before UN and other inspectors had the opportunity to verify what chemical agents were used, how they were used and above all who actually used them. That Israel was the main source of the accusations on the issue is unsettling, given that Israel has a history of constantly proposing US and NATO military action again Muslim countries, especially against its neighbors with whom it does not have cordial relations.

That Russia and China vetoed UN resolutions for further sanctions on Syria on 19 July 2013, and that they called for a political instead of a US-led military solution on 24 August 2013 has forced the pro-war French-Israeli-US position to be temporarily reconsidered, at least until some concrete evidence emerges about whether the Assad government, the pro-West Islamist rebels or both parties used chemical weapons. Given that the US has presented zero evidence that the Syrian regime used chemical weapons, and given that it lacks the UN Security Council legal cover to strike Syria, the unilateral strike will be seen as part of another jingoistic racist measure by the White Christian West against the non-white Muslim Middle East. Even worse, it is entirely possible that the chemical weapons used in the attack against civilians could have come from the West and used by the rebels, as the Assad government claims.

The issue of chemical weapons in Syria is not new. That the rebels have committed numerous war crimes, including using chemical weapons and executing prisoners in front of video cameras has gone unnoticed by the Western media. That the rebels include al-Qaeda elements and others that are interested in establishing a medieval institutional structure that the US and its NATO partners would probably have to overthrow if these rebels come to power has also gone unnoticed. That the US and its NATO partners have resounding failures with military solutions in Iraq, Afghanistan, and Libya has gone unnoticed, as the fact that the US-backed Arab Spring rebel movements of two years ago became a nightmare for the US because some of the Islamist regimes (Egypt most famously) that emerged turned out to be anti-Western and anti-Israel. That on 26 August 2013 snipers fired at UN inspectors ought to concern those proposing military solutions, because more than likely the snipers were rebels.

If the UN inspectors find that indeed the Syrian regime used chemical weapons, and assuming this is an honest and clean inspection, then people would understand some sort of US-led military hit on Syria. But let us assume that the UN inspectors find the Syrian government did not use chemical weapons. What would the US be prepared to do at that point? Would it propose going to war against the rebels that it has armed and financed? And what of the fact that the anti-Assad elements include Islamists from at least two dozen countries, including al-Qaeda that are presumably the arch-enemy of the West and the core of Islamic terrorism? More alarming, would not the majority of the Syrians arrive at the conclusion that the rebels are furthering a Western agenda, and many rally around the regime because the West will bomb Syria? Would not the bombing actually strengthen Assad, at least politically at home and make Muslim world over more resentful of the "Crusading West"? Playing the world's policeman only works if the office of the sheriff's office has credibility and the power for follow through that would accomplish the mission.

In the last analysis, if we examine the timeline of US policy toward Syria, the evidence indicates that Washington has been long planning an attack. The day that the US announced considering air strikes against Syria, the Greek premier revealed that on 8 August 2013 Obama asked for US rights to air landing and naval operations in Crete and the mainland from which to carry out the strikes. The Russian intelligence services insist that the US has drawn plans for military strikes over a year, but waited for the opportune moment to determine use. Not that the US should be concerned, but Vladimir Putin has decided to send  rocket cruiser Moskva and an anti-submarine vessel to join Russian naval forces in the Mediterranean. I am convinced that Russia is simply staking out its sphere of influence in no uncertain terms, but under no circumstances will it use any fire power.

The US went to war in Iraq on the basis of lies regarding weapons of mass destruction, and it is unlikely that it learned anything from that experience, given that it wants to repeat that mistake with Syria, if it finds the opportunity of least possible consequences at the regional and global levels. The US continued making the mistake of "Vietnamizing" Afghanistan on the basis of fighting a "war on terror in their soil", not ours, as though "terrorism", use of unconventional warfare has borders and cannot be conducted everywhere. These assumptions are deeply imbedded in the psyche of the American culture with a segment of the elites and media that now is immersed in the "war on terror" mindset as the foundation of keeping society living in fear and docile to military solutions for crises that cry out for political solutions.

Not that the US will relax having interfered throughout the Middle East and North Africa that are weaker and more divided than ever. Iran remains on the US imperial radar screen s the next and the ultimate target. Those familiar with the capabilities of Iran may be scratching their heads about a possible US or Israeli git on Iran, but I would not rule it out. So far, we have had a policy of US encirclement and containment of Iran with the ultimate goal of hitting it at some point. There are congressional voices, both from isolationists and anti-war elements, arguing that the White House needs congressional approval on the basis of the War Powers Act of 1973 in order to proceed, and that there must be a broader strategy that explain why striking Syria is warranted to benefit the US in terms of the regional balance of power.

But what if the punitive strikes against Syria were to have no impact on Assad, what comes next? Invasion like Iraq and Afghanistan, both ending with massive losses to the US public debt and nothing to show in terms of economic or geopolitical gains? If there is futility to US foreign policy toward Syria, it is because the assumptions and results of that policy are naive and based on short-term immediate gratification thinking; a sort of fast-food approach to foreign policy, fast and immediately gratifying to the senses, but bad for your entire health long-term.

The balance of power in the Middle East is very delicate, and the last thing the US wants to do is upset it to the degree that it further benefits Iran, Russia and China. While the US is the clear world military superpower, its power is its own detriment, because it weakens its geopolitical and economic position in the world every time that it opts for a military solution. Given that neither China nor Russia will strike at pro-US targets in retaliation of the US strike on Syria, the US figures that it is worth risking the adventure to satisfy the defense industry, Israeli lobby, hawkish elements, and distract from the massive public debt and debt ceiling matters. However, the price the US will pay will be incalculable, largely because Obama came in office to change the tarnished US image in the world, but has proved that US foreign policy is indeed bipartisan and he is not much different than Bush who was at least honest about his war mongering.

It is safe to assume that as a modern empire, the US would behave as an imperial power for to do otherwise would mean it is only an empire in title and not in reality. Exercising imperial power, however, also means paying the the price of predicable and unpredictable consequences. In a world where the other Great Powers and regional ones would seek to protect themselves from imperialism, the US is realistic enough to expect all sorts of problems arising from its policies of military action. Unlike Winston Churchill, who counted on the US to do the right thing, after exhausting all other possibilities, I am counting on the US to pursue military solutions where none are needed to further its national interests.

Friday, 23 August 2013

PHARMA CORRUPTION AND WELLNESS OF SOCIETY

When a friend from Cyprus informed me that the cost to have a pacemaker runs around $1,500, I had to investigate why it goes for as much as $75,000 in the US. Actually the price of the unit in the US is roughly the same as it is in Cyprus. While the unit price runs around $1,500, the patient will pay between $25,000and $75,000, depending on the hospital. Why is that?  One answer is the enormous corruption that takes place in pharmaceutical companies, scandals that are world-wide and involve bribes that go to doctors directly, hospital unit management, as well as others in health ministry positions.

Eli Lilly is the latest company in headlines for bribery of millions of dollars to Chinese doctors. However, Lilly is not alone, for there is hardly a company that does not engage in bribery to push its products. How does the system work? Just to enter the national market, the drug company has to go through several steps where along the way it could be required to grease palms of officials to secure its drugs in the domestic market and to keep generics off the shelves. It was not until the IMF-EU austerity teams across southern Europe that the issue of generics vs. brand names arose as a major cost factor and burden to the government budget and to the EU that subsidizes pharmaceutical products.

The next step is for the sales force to contact the hospitals where administrators and unit managers also need to have their palms greased to accept the product of machinery. For example, if an eye laser machine costs $500,000, the price will rise based on the bribes paid along the way until that machine reaches the hospital. In some hospitals in Greece, for example, there are machines waiting to be used because there are no operators trained to use them. Then comes the individual doctor who actually uses the machine or prescribes the drug, and finally the pharmaceutical association and wholesale pharmaceutical companies. All along the chain, the price tag for the product rises and the final cost is then passed on to the consumer, and/or the taxpayer if the product is one that receives a subsidy.

The bribery scandals are routine on the part of US and EU drug makers and medical devices companies. Besides the chain of bribery I mentioned above, there is another level of bribery that takes place and it has to do with bribing government officials directly to keep generics at a minimum in the market.  Because drug companies bribe tens of thousands of doctors, hospital and pharmaceutical personnel, and government officials, and because the money runs into tens of millions, the cost of health care is enormous. Even so, how do we explain that health care is ten to fifty times higher in the US than it is in many non-Western countries where bribery is more commonplace?

Even for bribes taken into account, why does a pacemaker cost up to $75,000 in the US and it is only a fraction of that cost in Cyprus? Why does health care cost twice as much in the US as it does in Canada? Clearly, that cannot be the bribery so commonplace around the world perpetrated by the same US and EU drug companies doing business in the US. 

Some reasons for high medical costs include:
1. over-prescribing of drugs and procedures (the notorious overly-medicated society issue that is now spreading beyond the US);
2. excessive profits by drug companies, insurance, and health care providers;
3. waste and inefficiency, fraud and bribery;
4. absence of government regulation to streamline procedures and products, so as to eliminate wild price variations - as in a pacemaker costing $25K in one hospital and $75K in another;
5. multimillion-dollar compensation packages for top management and executives that are at the core of the corruption scandals; and
6.  lack of preventive care services.   

Big pharmaceutical companies have always argued that research and development costs warrant both protection from generics as well as high prices. However, many of them make incredible profits marketing drugs for long-term incurable, but temporarily treatable diseases. This means taking medication in order to live in relatively high level of pain and/or vegetative mode. Naturally, the family of the patient will go along with the doctor who recommends the treatment and/or procedure, even though the patient will suffer and die within a few months.

This "disease management" mode is where the big money rests with big pharma, whether the disease is chronic mental disorder or physical one. Even worse, extremely costly procedures that cause immense pain for the patient in the last few months of life is where big profits rest for health care providers and big pharma. What are some answers to benefit the patient, family members and protect society from big pharma that is interested in "disease management" and prolonging the life by a few months, a few weeks, a few days? Government must protect the patient first as well as society from predatory big pharma. But what if people who are in government receive substantial political campaign contributions and some individuals in key positions receive bribes to protect the big profits of big pharma?

Although health care is very costly, the costliest in the world for Americans, does this translate into longer and better life? Absolutely not. Ironically, the life expectancy for the US is not as good as one would think, given that it ranks 27th among 34 of its peers - 51st in the world - or about the same as financially bankrupt Cyprus where pacemakers cost 20-65 times less than they do in the US. Even worse, the US has experienced a rise in chronic disabilities caused by poor dietary habits, smoking, physical inactivity and alcohol. This despite the fact that the US is the world's largest consumer of legal drugs, just as it is of illegal ones.

The lesson from all this is that globalization has been spreading the US drug culture around the world, even if it means using bribes to impose its pharmaceutical and medical devices products on the rest. But even if we accept bribery as a part of doing business, is the end result an improvement in the quality of the consumer's life? Judging from the US statistics on life expectancy and health wellness, the end result is not good. The neoliberal (laissez-faire) approach to the health of people is a crime that only government can stop. But what if government is itself corrupted by the criminals dishing out money legally for campaigns and illegally for favors?

Wednesday, 21 August 2013

ISRAEL BEHIND THE EGYPTIAN MILITARY COUP?

On August 20, 2013, Prime Minister Recep Tayyip Erdo─čan insisted that he has evidence Israel was behind the military coup that ousted Egypt's first democratically elected president Mohammed Morsi and unleashed the de facto civil war of the last two months. It is no secret that Erdogan has been faced with domestic opposition from secularist (Kemalist) elements concentrated mainly in urban centers and mostly in the Western parts of Turkey. Perhaps he lashed out at Israel to prove a wider conspiracy against Islamist politicians like Erdogan. Perhaps he was simply trying to use the opportunity to unify his own popular base and to let the Mulsim world know that the enemy is still Israel and the West supporting Tel Aviv. 
It is also possible he was sending a message to the domestic elites, everyone from businesspeople to the armed forces and street protesters that there is a conspiracy rooted in Israel, backed by the West, to keep the Middle East weak and divided. Therefore, this is no time for questioning legitimately-elected authority. Whatever, the Prime Minister's motives, he certainly attracted the attention of Washington, the "mother protector of Israel". Naturally, Washington could admit that Erdogan was correct, nor could it say that its own policy, one from backing both Turkish and Egyptian protesters contributed to destabilizing the duly-elected regimes. The only response of the US was that Erdogan is wrong to accuse Israel of a conspiracy. 

Does Turkey have any evidence? The evidence is a recorded meeting in France between Israeli Justice minister and a French scholar where it was said before Egypt's 2011 elections that even if the Muslim Brothers win the ballot box, there can be no government, because democracy is more than just elections. That is the extent of the evidence Erdogan presented, unless of course the Russians or other intelligence services have provided him with more evidence he has not disclosed in order not to compromise his sources. It is literally impossible to determine by the very thin evidence Erdogan has disclosed to the press whether Israel is behind the military coup in Egypt. My reading of events tells me that we need to follow the current financial and diplomatic support of the Egyptian armed forces to see who is for and who is against the military dictatorship.

The US, EU and the conservative Arab states, led by the Saudi regime, all backed the anti-Morsi movement and the armed forces that staged the coup amid the protests. When the situation was becoming out of control and people were killed on both sides, the US as well as EU had to come out6 publicly and advise restraint on the parts of all parties. At the same time, they had to threaten that they would cut off aid. However, this is for public consumption only. The reality is that the US and EU did not want Morsi and prefer the military dictatorship that they can count on to remain in the Western camp in exchange for aid. Erdogan knows that foreign aid is behind the Egyptian armed forces, so he asked why is it that $16 billion has been pledged to the military dictatorship in just a few days, but nothing comparable to the Morsi government in the last eighteen months. Moreover, Tel Aviv made the mistake to declare publicly its support for the Egyptian military and to urge EU and US to back the dictatorship of the armed forces, thus raising suspicions among the already "conspiracy-minded" Muslims and non-Muslims alike. Naturally, Tel Aviv made a dreadful mistake even commenting on the Egyptian situation, but I suppose the right-wing government could not contain its enthusiasm.

Even with hard evidence that Tel Aviv was behind the coup, it really does not matter. The bottom line is to follow the money, and that has a trail leading right back to the same suspects that want a military dictatorship allied to the West and to Israel. The situation becomes even more complicated because the US government has been following a public diplomacy that is not the same as the private one, something a number of administration critics, including Sen. John McCain pointed out. After all is said and done, it seems to me that while the CIA coup of 1953 was very plausible, the military coup of Morsi is much more complicated, and it could not possibly have taken place without mass public opposition to Morsi.

That some secularist anti-Morsi politicians initially backed  the military, but then backed out is an indication that they too want to  distance themselves from the military dictatorship enjoying the support of reactionary Arab states, Israel, the US and EU. Regardless of the public statements by the EU and US about permitting peaceful protests and demonstrations to take place, in the end the West will only support a pro-West regime not very different from the Mubarak one that was overthrown during Arab Spring. Ultimately, responsibility for the political turmoil in Egypt rests inside the country, no matter the external forces pulling from different directions so they can serve their own agenda.

While Erdogan is right that the conservative Arab states and the West did not help Morsi, and actually undermined his regime by refusing massive aid so it can stabilize, long-term solutions still rest inside Egypt. I had written during the Arab Spring uprising that Egypt will not see systemic changes because of internal resistance to change but also because the US and EU can only support a regime that can serve their military and economic interests. I hope to be proved wrong, but this is where we are today and this is where we will be in the near future.The lesson from all of this is the blatant hypocrisy of the West that continues to insist it supports freedom and democracy, even if it means direct military intervention to impose a pro-West regime at gunpoint, or if it means backing a military force that imposes the same at gunpoint. Long live Western democracy!


Tuesday, 13 August 2013

MYTHS AND REALITIES OF THE MODERN POLITICIAN

In an interesting study that the Los Angeles Times published a study on 15 June 2009, it was revealed that politicians share personality traits with serial killers.  Those traits include: "superficial charm, an exaggerated sense of self-worth, glibness, lying, lack of remorse and manipulation of others."
 As fascinating as the LA Times article may be, I am not interested in comparing politicians, American or others, to serial killers. This is largely because I dread that many politicians throughout history actually have done far greater harm to humanity than all of the world's serial killers combined in all of human history. Instead of making the unpleasant comparison between politicians and serial killers, I have compiled my own list that I believe applies to all politicians regardless of ideological orientation.

I am not presenting the following traits as exclusive to politicians, but rather as a reflection of society and what citizens expect and tolerate of their politicians in modern times. In short, I believe that people recognize that politicians in the last analysis are a reflection of the broader society and their traits reflect those of the rest of humanity. This does not mean that all politicians throughout the world have the traits I have listed below, but many, if not most of them do, and that is largely why they are successful in achieving their personal goals.

1. Myth: Politicians are idealistic, driven by high moral principles rooted in social good.

Reality: Politicians are pragmatic, driven by opportunism that often goes against the public good but benefits the politician and a narrow group of people in his/her circle of power.

2. Myth: desire to serve the "public" and to do "good" for all people.

Reality: boundless ambition to accumulate power and wealth along the way by serving the narrow interests of the elites

3. Myth: Passion and hard work for public service and promotion of institutions designed to further the public good.

Reality: Passion to rise as high up the hierarchy as possible and to remain there for as long as possible, always without regard to the public good and often to its detriment.

4. Myth: Confronts crises with truthfulness toward citizens and does not take risks that jeopardize the majority interest to serve narrow interests.

Reality: Blatant lies are at the root of a politician who tries to appear as though he/she is telling the truth while lying in order to harm the public welfare for the benefit of elites that sustain the politician in power. Even worse, the politician tries to cover up or justify the lie when caught by surprise and asked to account for it.

5. Myth: Public accountability. In policy-making, the politician takes into account the welfare of the people and not small interest groups that have powerful ties to the regime.

Reality: Policy making is a process of competing powerful interest groups with access to the regime, and the welfare of society at large is rarely, if ever, an issue. Public accountability is only a factor for the politician's PR machine and not at the root of policy.

6. Myth: Politicians must be able to persuade voters with rational, just, and socially-beneficial policy proposals that would result in the material progress of society and its overall edification. Therefore, politicians sacrifice themselves for society and its interests.

Reality: Politicians must be able propagandists, have an ability to appeal to people's emotions instead of intellect, manipulate public opinion so that the narrow interests the politicians are advancing appear to be one and the same as the interests of society as a whole.

7. Myth: Politicians are patriotic and genuinely have the national interest in making policy.

Reality: Politicians must appear patriotic, convince the public that they genuinely represent the national interest, and that their policies are best for the nation, which equals all people. All of this is at the level of rhetoric, while the reality is that the business, military and other politically powerful elements define patriotism and national interest on behalf of the rest of society.

8. Myth: Politicians must have integrity and honesty, rather than sink into the spiraling hole of telling people what they want to hear for the sake of retaining popularity.

Reality: It is simply impossible to be a politician and have the traits of honesty and integrity, but it is equally difficult to be a successful politician without appearing to have those traits, as Nocolo Machiavelli wrote five centuries ago in THE PRINCE.

9. Myth: Politicians are generally more intelligent than the average person, and they surround themselves with other intelligent people, experts of all sorts to make "the right decisions" for society's benefit.

Reality: In general, politicians are about average intelligence or slightly above. Their IQ as well as their aides have zero relevance to the policies they pursue because those policies are not a reflection of intelligence but of tangible specific interests. The intelligence level of a politician and that of their aides is not particularly as significant as the will to carry out policies that advance social justice. The real driver behind policy is the powerful elites on whose behalf the politicians conduct policy. Intelligence is only important to justify to the public why the government is advancing narrow special interests, and to make those appear as best for society.

10. Myth: A charismatic, self-confident, well-communicating leader that inspires the citizens.

Reality: All of the above are essential for the public to have confidence in their politician, because all such traits are significant to convince the public to vote for the candidate and to further convince citizens that government works for their interests, instead of the interests of the elites. At the same time, the traits stated above are not as important because image-makers create the appearance of charisma, self-confidence, and well-communicating leader.

11. Myth: Politicians rise to the top of the heap because of a merit-based system that he/she supports and tries to advance for all people.

Reality: The only way politicians rise to "the top of the heap" is through some societal mechanism - business, military, political machine - that propels them to the top and then expects them to carry out policies that reflect the interests of those who advanced the politician. Although the politician may have a college degree, speak several languages, and is even a great golfer, merit has nothing to do with the rise to power and sustainability of it. Paying dues to the machinery that propelled the politician to the top is the only criterion that matters.

If these are the traits of politicians, does this mean that people revert to non-civic participation, lapse into cynicism and fatalism, or remain idealistic and try to take matters into their hands? Do we refuse to accept that there is a better system, arguing that Plato was correct to construct The Republic, and utopias exist not in society but inside our own minds? Actually, the common thread is that politicians are arbiters of the social contract. But if socioeconomic, military and political elites have highjacked the social contract, then it is up to citizens to change the system so that it serves them.

Sunday, 11 August 2013

IS CAPITALISM IN DECLINE? GLOBALIZATION and SOCIAL DISCONTINUITY

There have been more social uprisings, more civil unrest, more political upheaval around the world in the last five years than at any time since the 1960s amid the Vietnam War and the civil rights and feminist movements in the US.  Despite the fall of Communism and the triumph of capitalism over the entire world, it appears that the political economy rooted on the capitalist system and supporting institutions are showing signs of aging and deterioration, instead of revitalization.

Whether the opposition comes from leftist groups, non-Marxist progressive secular ones, or from conservative religious groups in the Christian and Islamic communities, there is definitely an ever larger popular undercurrent against capitalism. The question is whether these mass popular trends are fairly innocuous for the political economy or whether they actually mean that the system's inherent contradictions are becoming more obvious. Can the system deliver the best possible life for the majority of the population, or is it fooling people to believe in this dream that will never materialize?

If there are tangible signs that globalization is signaling a long decline of capitalism, then we are currently living the nascent stage of social discontinuity that is not very different from the periods of social discontinuity between the ancient to the Medieval world (200-500 A.D.), and from the Medieval to the Modern period (1300-1700).  The classical theory of the decline of capitalism is rooted in Marxist political philosophy that argues the system develops contradictions and despite its attempting to find solutions out of them the contradictions become even more glaring and the structural crisis deepens to the point of the mode of production unraveling toward eventual demise. 

Besides leftist scholars who believe that the system develops contradictions that lead to  social discontinuity, critics from the non-Marxist camp argue that the system has become 'too statist' and deviates from Adam Smith's classical theory of economics based on free enterprise. Some point to the fact that capitalism is decline in the West that was its birthplace, and a new type of capitalist system is emerging in non-Western regions that will permit the system to survive for a number of centuries. In short, capitalism is merely shifting its core from West to East, and that transition appears as though it is declining when in fact it is rejuvenating.

Still, other theories advocate that a new social structure will emerge that will replace the current bourgeois-dominated one, while keeping aspects of the capitalist system in a mixed political economy where the state is a much stronger arbiter that imposed rigid regulation over markets. Finally, there are those who argue that "the old capitalism" based on fairness, prudent transactions and above all ethical has given way to the new predatory capitalism where legitimate banks with global reach are involved in money laundering for drug lords. Therefore, capitalism is rotten and distorted because its 'harmonious nature' has changed owing to the unethical greedy people in the system that ha-s been reduced to "mafia-style economics" under political regimes that uphold such a system.

Although there is some truth in every argument about the causes for the decline of capitalism, the question is whether it is possible to predict a permanent decline of the existing economic system and the imminent emergence of social discontinuity that goes hand in hand with the structural demise of a mode of production. If capitalism has been evolving since the 14th century, how do we know that it is not currently evolving and instead it is in decline? After all, scholars have been predicting the demise of the system for the past two centuries. In a book entitled Imperialism: The Highest Stage of Capitalism, Vladimir Lenin argued the same thing during the outbreak of the Great War. The Bolshevik Revolution did take place, as did other social revolutions that overthrew capitalism, but less than a century later, those regimes and economic systems have reverted to capitalism. So how can we be so sure that globalization is the beginning of capitalism's decline?

Partly because of the global recession of 2008-2013, some have argued that at the very least, 'democratic capitalism' is finished because globalization has replaced it with neoliberal policies that are anti-democratic, anti-labor, and undermine social justice. Globalization has diminished the social welfare, while strengthening the corporate welfare state. Moreover, globalization has strengthened international finance capitalism that could not possibly survive in the absence of vigorous government intervention to sustain it. But is it a fair assumption that the capitalist system can only survive under bourgeois representative democracy, considering that it evolved under a large political umbrella that includes everything from absolutist regimes and Nazism to Norwegian-style social democracy and the current one-party Communist state in China.

If we follow the dialectical materialism based on Hegel's concept of thesis-antithesis-synthesis model, it may stand to reason that globalization represents the decline of the capitalist world-economy, a decline that could potentially take as three to five centuries until a new synthesis (mode of production) emerges. After all, social discontinuity, from the ancient world's mode of production (master-slave social structure) took several centuries to evolve into the Medieval (Lord-serf), and so did the modern capitalist mode take several centuries (14th to the 17th) in order to consolidate. In fact, the issue of social discontinuity is key to understanding how modes of production evolve; an issue with which the great French scholar Fernand Braudel had dealt in his studies (The Mediterranean; Civilization and Capitalism).

In The Poverty of Historicism, Karl Popper, one of the philosophical pillars of modern neo-conservatives, argues against Hegelianism and the famous dialectic. Popper dismisses the assumptions that old modes of production can be predicted to fall and new ones to rise on the basis of studying social discontinuity trends. Popper dismissed the idea that there are laws of development in history which can be discovered  by man in the manner that Sir Isaac Newton discovered the laws of gravity or that Albert Einstein discovered the theory of relativity. 


While history was a social science operating on Hegelian laws as far as  Marx was concerned, it was a branch of the "humanities" for Popper.  The reality of the socioeconomic gap in the advanced capitalist countries, and geographical gap (northern v. southern hemisphere) is widening rather than closing (the BRICS nations notwithstanding), despite the promise of prosperity if only people accept globalization and neoliberal policies. There is a great deal of truth to Popper's basic thesis that there are no laws of historical development in the same manner as there are laws of physics. It is true that human beings are complex and multidimensional - rational, irrational, spiritual, spontaneous etc., and their actions and institutions they build cannot be reduced to the same category as Newtonian laws. However, is history and long-term historical trends an indication of anything that we can study and from which we can arrive at some logical conclusions as those who advocate dialectical materialism believe?

The Marxist version of historicism based on dialectical materialism has a great deal of truth which can be proved by what has transpired in history during the transition periods (social discontinuity) from the ancient world to the medieval (see Ferdinand Lot, Recueil des travaux historiques) and from the feudal-manorial system to the capitalist (Fernand Braudel, The Mediterranean World in the Age of Philippe II ). Hegel and Marx have given scholars the theoretical tools to explain social discontinuity. Globalization does not represent social discontinuity. It will continue because of modern technology, means of transportation and communication, and of course, merging of capital. But is it a catalytic stage in human history, or even a trend that will not itself be transformed by the dialectical forces of human beings?  

The vast majority of people go about their daily lives today, as they have for centuries, never thinking if they support the existing political economy and mainstream institutions that they simply believe there is nothing they can do about them except to adjust their lives within the societal milieu. Social discontinuity, therefore, is not something that anyone thinks about or plans, but it simply happens over a very long period of time, to the degree that it goes unnoticed until there is a systemic change in society, at which point people assume that too is as natural as what existed before.  It may be argued that capitalism has survived for as long as it has because it best reflects the irrational tendencies in human nature, and that any system based on rationalism cannot survive because human beings would quickly undermine it, as they value social justice and rationalism in society far less than they do competition and inequality that we find in nature.

It is obvious that the capitalist world economy is not about to become extinct during this generation, and not even during this century. But it is also true that no mode of production has lasted forever, because they become obsolete in meeting the needs of people, thus useless to maintain life the feudal-manorial system. Could revolutionary change come from the weaker state structures as it did in the 20th century in Russia, China, Eastern Europe, Vietnam and Cuba? Or will revolutionary change that will m,ark definite signs of social discontinuity come from the most advanced "Old World" countries, including the US, that will be unable to compete globally and would constantly be reducing living standards for the middle classes that sustain the bourgeois institutional structure?  Will social discontinuity come as a result of financial collapse (unsolvable public and private sector debt crisis), or from a series of military conflicts that will absorb precious capital from the civilian economy to the detriment of the majority of the population?

Because throughout the history of capitalism the state has been the catalyst to its existence, and because the role of the state in the political economy has become much more significant as we move forward in time - it is more significant today that it was in the 19th century - the question is whether a supposedly 'free enterprise' system can possibly survive in any form other than the current corporate welfare phase. Would the banks in the capitalist countries have survived from 2008 to 2013 if the state had not intervened to save them with taxpayer money? If the state uses public capital to strengthen the private sector, and if the state constantly subsidizes the private sector through the fiscal system, then the private sector is very ill and the only question that remains is when will the world see the death of this system.  


Sunday, 4 August 2013

CHINA's ROLE IN LATIN AMERICA

China is investing heavily throughout the world, but especially in Africa and Latin America, areas with cheap raw materials and low-cost labor as well as the potential for a growing domestic market that would absorb greater share of Chinese exports in this century. While China had close ties with Cuba during the pre-capitalist era, it now has very close commercial ties with Brazil that accounts for 41% of Chinese trade with the Latin American republics, followed by Chile at 23% and Argentina at 16%. Overall, China is interested in raw materials, especially extractive industries that were the domain of British companies before WWI, and US companies for most of the 20th century. That China-Latin America trade has increased 1,200% in the first decade of the 21st century, going from $10 billion to $130 billion, and rising to one-quarter of a trillion in 2012 is indicative that China sees its future as the region's major trading partner that could eventually replace the US.

Chinese investment is strategic, driven by the nation's needs, but Beijing has also taken advantage of the irrational Cold War-style ideological confrontation between a number of Latin American governments, among the most important Venezuela, to secure a substantial market share. The investment is in metals, oil, soybeans and other agricultural products, with some manufactured products playing a secondary role in trade. Because Chinese products are low-cost, they are securing an ever larger market share from those of other countries. Given that the economy of China is so well integrated with the world economy, China's investment in Latin America, 85% of which is in extractive industries, as are 60% of its loans, it would be misleading to see this issue from the prism of national interests or the US losing ground to its Asian rival. In fact, the beneficiaries of China-Latin American trade include Western multinational corporations.

Those with most to lose in Latin America are actually manufacturing companies faced with increased Chinese competition, just like manufacturers in other parts of the world. In this sense, China actually poses a greater threat to the hopes of national industrial development and national capitalism vs. dependent capitalism, than it does to the US as the traditional hegemonic country in the Western Hemisphere. This issue is political and it has to do with what kind of integration model Latin America wants in the 21st century.

The most serious issue before all of Latin Americans today is the model of integration that the US has been pursuing, a model based on a patron-client relationship of dependency, a model based on the old concept of spheres of influence that Great Britain established in the 19th century. Not only is the traditional patron-client model that the US has been pursuing coming under enormous pressure in a number of countries, most notably Argentina and Venezuela, but the rapidly changing economic power structure with Asia as the new core of the capitalist economy is also contributing to dilute Latin American dependence on the US.

Although Brazil and Argentina have been unique and in a class of their own in Latin America, Chile may actually represent more of a mainstream republic for the region in terms of the development of its institutions that include the labor movement.  All of Latin America experienced a period of external dependence on Great Britain during the 19th century and until the Great Depression. The US began to challenge British imperialism during the Spanish-American War by eliminating Spain as a political entity in countries where the US enjoyed economic dominance, i.e. Cuba.  All of Latin America fell under US hegemony during the Great Depression and remained so until the Cuban Revolution challenged US imperialism. The only way for the US to maintain its hegemony in Latin America was to work with military dictatorships, something it had started doing even during the FDR presidency. Using the Cold War and the threat of Communism, especially after Castro took over Cuba, the US managed to keep in line Latin American governments through various organization from the OAS to LAFTA and NAFTA.

Today, the challenge ton the US patron-client model of integration comes from Venezuela, Bolivia, Nicaragua, Ecuador and Argentina, to mention the most important ones. However, the reality is that China through massive investment and trade is also diminishing the role of the US in Latin America. The once monopoly of hegemonic power that the US enjoyed is gone, because of the multi-dimensional economic dependence of Latin America in  a multi-polar world that includes EU and Japan as major players. It is up to Latin American political and socioeconomic elites how to play the new world balance of power in order to forge a new integration model. Maybe Venezuela is not the perfect example, though in my view Chavez at least tried to chellenge the patron-client relationship, but something other than the old spheres of influence patron-client relationship is needed to lift the entire region and its people. The 21st century will continue to change the US-Latin America relationship largely because the US cannot keep using fear and threats to keep regimes in line.

Considering that from 2005 to 2010, China has invested $75 billion in loans to Latin America, and that in 2010 China's loans to the republics amounted to sums greater than the World Bank, Inter-American Development Bank, and US Exim-Bank combined, the question if whether Latin Americans are trading one patron for another. Why would China be any different, any better for the living standards of Latin Americans than the US was in the 20th century? One answer to this question is that Beijing is offering loans without imposing fiscal and monetary policy conditions IMF-style that keep a national economy weak and externally dependent with few prospects for growth and development. Although China offers lower interest rates than the US EX-IM BANK, China Development Bank (CDB) loans carry more austere repayment terms that those of the World Bank and there are no environmental preconditions to China's loans as there are of the World Bank.

One could argue that China has no choice but to offer loans on better terms than the US or EU, because the goal of Beijing is to become a major player in Latin America and to capture market share from the other industrialized nations. Once again, I would caution that this issue cannot be viewed in terms of national economies in competition, because China's economy is so thoroughly integrated into the global economy. Therefore, its role in Latin America is not harming the US national economy, but actually helping raise more profits for Western corporations operating in China. The more fundamental question is whether Latin America will be better off with China as a major trading partner than it was with Great Britain in the 19th century under imperialist conditions, and the US in the 20th century under military interventionist and neo-imperialist conditions.

According to China's EX-IM Bank, the purpose of its loans is to: 
1. Fund manufacturing projects, infrastructure construction projects and social welfare projects in
the borrowing country, which can generate promising economic returns or good social benefits;

2. Finance the procurement of Chinese mechanical, electronic products, complete sets of equipment,
technology and service and other goods by the borrowing country
.


From the above conditions, it seems that the loan recipient ought to benefit. However, the Chinese EX-IM BANK actually operates not much differently than its US counterpart. This means that the money is spent mostly to fund export of products and services to the loan recipient where the project is to take place, instead of helping to develop the national economy of the loan recipient. In short, loan funds are spent inside China to help strengthen Chinese firms, not Latin American ones. How is this different than the US EX-IM BANK? It is not, especially given that the investment is in those sectors of the loan recipient's sectors intended for export rather than meeting internal demand.

Having spent decades researching, writing, and publishing on Latin America, I fear that the republics are not likely to see much difference in the 21st century with China as the newest trading partner operating under the patron-client integration model and perpetuating external dependency. The only way for Latin Americans to escape this fate is to demand the kinds of terms for loans and investment that South Korea and Taiwan demanded and the US along with Japan permitted, not necessarily for economic reasons but for geopolitical, namely, owing to the fear of Communism. 

My replies to comments from LINKEDIN readers:

  CHINA DEFENSE SPENDING for 2012: $100 billion
Defense spending as % of GDP for 2004-2007: 1.4%
China defense spending as % of GDP declined from 7% of GDP in mid-1980s to just a bit over one percent today!


USA DEFENSE SPENDING for 2012: $940 billion - excluding the numerous intelligence agencies as well as numerous security operations domestic and foreign.

USA defense spending as % of GDP for 2004-2007: 3.6%

The US spends ten times as much on defense as China, or roughly half of the defense spending in the world is spent by the US!

China has a proven record that it is interested in global economic hegemony, whereas the US that enjoyed economic, political, and military hegemony is now the world's sole superpower and it is using that status to secure all kinds of economic concessions around the world. The strategy is very different with China that uses capital investment, instead of following the US model. China's rise to global economic preeminence has not been peaceful by anyone's standards, while the US rise to global prominence was with the use of gunboat diplomacy and imperialist policies that it adopted from the mother country. (see William Appleman Williams, EMPIRE AS A WAY OF LIFE).



Saturday, 3 August 2013

CONSUMERIST CULTURE, GLOBALIZATION, AND REVOLUTION

When we live in a culture of consumerism, when our identity is inexorably linked to consumer products and services,even those we do not need but feel that we WANT, when we feel better because we shop, when our social status and social circles are determined by our consumerist lifestyle, then of course this means that people as consumers will tolerate exploitation of wage laborers and destruction of the environment because their value system is all about consumption.

Is the mass consumer necessarily dumb, or apathetic at best? My view is that the consumerist culture permeates society and social classes across the broader spectrum. One reason is that the consumerist culture is now one and linked with the popular culture. It is not that people have no free will, to the degree that human biology and societal constraints permit, but that they have been born into a culture that has thoroughly indoctrinated them.

While I am not suggesting that the solution to consumer culture is to replace it with a spiritual one, I am suggesting that in worshiping consumer products and services people have lower regard for humans, animals the earth itself. Moreover, they give meaning to their lives quantitatively in terms of what they are able to purchase. Again, I am not suggesting that people live in shantytowns and eat meat once a year. However, the quest for accumulation of wealth, the bottomless pit of consumption is a disease that the West, and much of the rest of world as well, are selling as triumph of the marketplace. Where is the triumph exactly when there is no end to consumerism that absorbs the individual and does not permit her/him to see outside these perimeters?

Consumerist nations, presumably democratic with employee rights and regulations, import products from nations that have no such regulations and are lacking in environmental laws. Not all nations have signed on to the various international environmental treaties, largely because they argue to do so would be costly and hold them back from rapid industrial development. The argument is why should the consumerist West dictate to the producing Asians how to regulate labor and the environment?

Moreover, the nations trying to industrialize note that the West has already industrialized, so it is now using environmental issues after it has already made the most detrimental damage to the planet ecological system. The consuming Western nations have no problem buying products from non-Western countries with few labor and environmental laws because Western corporations are either operating directly or through subsidiaries in China, Bangladesh, India, etc. This make the Western corporations richer, so the mother country of the Western corporation is in a difficult position to complain that one of its companies is a polluter and abuses labor rights. In short, globalization, the thorough integration of the world economy makes it difficult to blame a nation for specific policies when in fact it is specific corporations to blame because they are the ones benefiting, as do their consumers.If the West define success by pushing on the rest of the world a consumerist culture, why is it complaining that the rest of the world is trying to catch up by polluting the environment and abusing labor rights? 

The contradictions and hypocrisy with the culture of consumerism do not end with the West demanding that the non-Western nations pay closer attention to labor rights, human rights, safety in the workplace,etc. The biggest contradiction and hypocrisy is that the economic system itself is such that it promises more consumerism but makes less of it possible to the mass consumer because of the appropriation process built into the system and backed by the state. The poor unemployed person in Detroit, Manila or Madrid knows very well that the system is pushing consumerism like a drug dealer is pushing crack. However, only the wealthier individuals can afford the pleasures of consumerism. It is as though the system itself is toying with the individual, playing with her/his mind.

Now with globalization, the instant communications networks, and varieties of information and consumer outlets, the individual around the world feels the pressure of consumerism and its inherent contradictions more than ever. If the system cannot deliver on its own promise, then do people have the right, indeed the obligation as subjects under a social contract, to overthrow it by revolutionary means? The English philosopher John Locke certainly made a case for revolution by arguing that the subjects in the social contract know when the sovereign ruler has violated their rights and interests, so they have the right to demand a new social contract through revolutionary means. Of course, it sounds absolutely absurd that people would carry out a revolution because the existing political economy is not delivering on its promise to permit the majority of the people to enjoy in the bounty of consumerism. But is this not what the capitalist apologists themselves have created as a value system, a culture, a mass mindset?