Theory and Practice in Political Philosophy (Jon Kofas, Greece)

Posted on November 15th, 2010

There have been a number of scholarly studies dealing with the important issues of how there is lack of convergence in theory and practice in political philosophy. Such studies usually begin with Plato’s Republic and end with the works of Marx & Engels. Plato’s work is indeed a good starting point, insofar as it demonstrates that inherent limitations in human nature, flaws of human beings carried into their various endeavors and into societal institutions necessarily entails limits of politics. If indeed the Republic could never become reality, why then bother with political philosophy? The answer is the same for Plato as it was for Aristotle, for Machiavelli, for Hobbes, Locke, and of course Marx.

As any undergraduate philosophy major knows, political philosophy is as much about the study of human nature and assumptions that philosophers make about it in crafting a political theory as it is about arriving at a vision of utopia. Was the Republic designed to be actualized, did it reflect Plato’s views about Athenian politics and its citizens (adult male–no slaves, foreigners or women), was it intended as speculative or scientific thought, did it have any relevance to the realities of Athenian society? Was the ultimate goal of Plato to engage in an intellectual exercise or to strive for what he believed–conditioned by his own world of Athens and Eastern Mediterranean–the best society that would deliver social justice as he defined it?

Machiavelli’s The Prince and Hobbes’s The Leviathan, both the foundations of modern political philosophy, raise equally intriguing questions about human nature, based on the two thinkers’ largely Christian assumptions. Written during the Renaissance era during the rise of Absolutism that coincides with the emergence of the bourgeoisie and the Commercial Revolution, the works of Machiavelli and Hobbes reflect their contemporary epochs in Europe and are designed both as critiques of existing institutions and of human nature as well as alternatives to a status quo they perceived as implausible thus harmful to society. Were the ultimate goals of Machiavelli and Hobbes any different than those of Plato, namely to analyze what they believed were the traits of political institutions that reflected human nature and thus to provide for what they believed was an ideal model of society? Opposed to Hobbes’s assumptions that human beings are predisposed to chaos and destruction because of innate irrational traits, Locke assumed that human beings are rational and it is the environment that shapes them and their institutions.

Living in the later part of the 17th century with the benefit of the Glorious Revolution that finally brought compromise and stability to England, Locke’s political philosophy Treatises on Government reflects the experience and limitations of his era in his own country above all, but also developments in northwest Europe, especially Holland. Lockean Liberalism became the main philosophical foundation for Enlightenment thought and inspired both the French and American revolutions. Lockean Liberalism advocates political freedoms and rights of the people, an admirably humane political philosophy on which Western democracies are based ideologically. However, the reality is that regimes, including the US when it was founded, that based their constitutions on Lockean Liberalism excluded the vast majority of the people from the political process, thus proving the enormous gap between the theory of Liberalism and practice of government.

Regimes rooted in Lockean Liberalism, and varieties of that theory as it was embraced and modified by other thinkers, practiced: a) Slavery; b) excluded women from the institutional mainstream; c) excluded natives (Indians) and foreign laborers (Chinese for example) from the institutional mainstream; d) practiced Liberalism for the small propertied male elites at home, while denying the same to the people that they colonized in non-white lands.

In short, we see that there is an immense gap between the otherwise seemingly egalitarian and socially just theory of Liberalism and the reality of how it unfolded as regime. This brings us to Marx and Engels, whose works of course are vast in number, very difficult and complex to understand, and subject to varieties of interpretations by Marxists and non-Marxist alike. In a recent posting, Alain de Benoist made this point, something that those who have actually studied the works of Marx & Engels already know no matter whether they agree or not with Marxism, but Alain was unfortunately misunderstood by a few individuals hastily refusing to permit the merits of his arguments interfere with preexisting notions they entertain, preferring instead to circumvent scholarly discussion in favor of populist rhetoric befitting talk-radio show seeking higher ratings.

While the works of Marx and Engels may or may not have sold more copies than the Bible, the reality is that they are widely known globally and many people seem to have opinions about Marxism, without really having studied the voluminous works of these thinkers, or realizing that indeed there is the “Early Marx” who was closer to Rousseau and to the humanist spirit of the Age of Reason; or that Engels exerted considerable influence on Marx on social and economic issues.

Profoundly influenced by the Enlightenment, the Industrial Revolution and the era of European colonialism as a method of global economic integration, Marx and Engels cannot be understood any differently than Plato or Locke. In short, their works can only be understood in their own historical context properly placed in their environment. One reason I always advised my undergraduates to study the historical context of philosophers and not only their ideas in isolation, is so that they could gain greater appreciation of the ideas. Many scholars, Marxists and non-Marxists alike, appreciate the philosophical contributions that the two thinkers made in analyzing the dynamics of “Industrial capitalist society” that was in rapid transition amid social uprisings (1848) and military conflicts.

Where non-Marxist scholars have difficulty and categorically reject Marxism is with the atheism of Marx & Engels, with the political philosophy that became the foundation for revolutionary social change, with regimes that relied on Marxism to impose their own style of government, and with the Hegelian historicist goal that ultimately society will evolve into a classless system.

Unlike Plato, Hobbes, and Locke, Marx and Engels crafted an eclectic political philosophy that took into account social justice from the bottom up: working-class perspective. They were by no means the first to do this, nor the only ones during the 19th century, as Engels recognized in his writings. However, they were among the more articulate to craft a working-class political philosophy at a time that bourgeois society appeared to be omnipotent and its challenges came from disparate elements that lacked a coherent ideology. Any undergraduate who has studied the “intellectual history of Europe” knows that not just Marxism but no political philosophy was ever put into practice in the manner that it was conceived in theory; that there is indeed a sense of faith (religious aspect if you like) not only in Marxism but to some degree in any political philosophy, for it deals with assumptions about human nature, social institutions and above all ideal solutions of the future (visions of utopia, paradise on earth). This is especially the case in the modern era (since the French Revolution) when traditional religions are not at the core of societies because in secular society political ideology has essentially contributed to affording political philosophy a religious aura–people want to believe in a better future here on earth.

Political philosophers strive to uncover the essential elements for what could be the ideal society, the perfect solution that would best serve humanity; an endeavor indicative that human beings realize their own imperfection and strive for perfection through institutional means. Finally, each individual understands political theory, whether it is Liberalism, Marxism or any other, very differently and interprets it so. To a Liberal, Marxism is an anathema that only disturbed individuals advocate. Therefore, a Liberal finds no redeeming qualities in Marxism and seeks to simplify through one-dimensional interpretations and demonize not just the regimes that have claimed to rely on the theory but the theory itself, taking it out of its historical context. Similarly, a Marxist seeks to expose only blatant flaws and contradictions in Liberalism, deliberately omitting all other aspects that may both reflect and best serve the individual and secular society. These are reflections of the imperfections in people that necessarily takes us back to the old debate between Locke and Hobbes about the rational vs. irrational in human nature.

The EU & Ireland’s Debt Crisis (Jon Kofas, Greece)

Posted on November 14th, 2010 

 A poll conducted for Wall Street investors indicates that the majority believe Greece and Ireland will default on their public debt in the next 18 months, with Portugal coming in a close third and Spain a distant fourth.
The fiscal scare across EU has sent bond rates higher for Ireland as well as Southern and Eastern Europe, and it has resulted in a drop of the euro at a time that Germany is trying to keep the currency steady and struggling to convince Washington that the Fed has to stop its stimulative monetary measures. To calm the markets, deliberately leaked sources have revealed that within a few days Ireland will probably receive a bailout package in the order of 80 billion euros to service its debt beginning in 2011 when Dublin will be facing serious liquidity shortfalls. The problem with Ireland is not just the public debt as is the case of Greece, but the very weak banking system that will need massive capital injections to remain afloat. Whereas Ireland was expected to suffer a budgetary deficit of 12% of GDP in 2010, bailing out the banks will cost at least one-third of GDP, money that must come from deep cuts in the public sector and higher indirect taxes. This development comes on the heels of possible defaults for Greece and Portugal, or at the very least major debt restructuring, as I have written in previous postings when analyzing the massive EU public debt problem and its repercussions on the social and political arenas. If one of the smaller EU members actually defaults, or proceeds with debt restructuring, then Spain, the fourth largest eurozone economy, will have problems servicing its debt because interest rates will rise sharply. Because Spain has the additional problem of massive private sector debt which competes with the public sector for new credit, interest rates will rise further for Spain and the rest of Europe. A number of Eastern European countries, Romania and Czech Republic among them, are also on investors “watch list” as default candidates. To prevent the ripple effect, Ireland’s debt crisis will be addressed more or less in the same manner as it was in Greece, namely rigorous austerity measures that will cripple labor and the middle class. Like the Greek press and government earlier this year, Irish Prime Minister Brian Cowen blamed German Chancellor Angela Merkel for making public remarks that do not help EU debtor nations in the south and East. On the postive side of all this, EU officials will act more rapidly in the case of Ireland than they did in Greece, given that there is the 750 billion euro stabilization fund set up by the European Union and International Monetary Fund. Patrick Honohan, governor of the Irish central bank, tried to calm investors a few days ago by stating that there will be budgetary cuts, which of course translate into IMF-style austerity measures once Ireland accepts the EU-IMF bailout package. The cuts will be very painful for workers and the middle class that have already endured the pain of previous measures. It has now become necessary to ask bond investors to share in the sacrifice for the sake of long-term stability. French Finance Minister Christine Lagarde has stated that “all stakeholder must participate in the gains and losses” of the bonded debt. Merkel made similar remarks, apparently hinting that debt crises by EU members will entail at some point down the road, depending on how serious the problem becomes for EU monetary and economic stability, that debtor nations like Greece and Ireland (possibly Portugal and Spain) will only pay the interest and not the principal; a model of public financing that has long historical roots going back to the 19th century. The Irish crisis comes amid a US-China currency-valuation controversy that implies lack of consensus on a number of issues from trade to fiscal policy among the G-20, a phenomenon that can only lead to increased economic nationalism. China is about to cool its economic growth at a time that the global economy needs stimulus and the US is already on record for reducing the deficit by adopting what we have come to know as “austerity-style” measures. Both organized labor and conservatives have already reacted with sharply negative remarks about austerity-style measures that they otherwise support but not in their own country. AFL-CIO President Richard Trumka said: “The chairmen of the Deficit Commission just told working Americans to ‘Drop Dead,’” Grover Norquist, a Republican activist, was sharply critical of the Commission’s recommendation to raise $1 trillion in tax increases during the next 10 years. By 2015 when Obama asked for a balanced budget, the Bowles-Simpson proposals would reduce budgetary deficits by $380 billion in 2015. Interest payments, however, which currently account for $13.7 trillion, just $1 trillion under annual GDP, would be exempt from the Bowles-Simpson proposal, thus leaving the US with budgetary deficits not that different from EU’s worst cases like Greece, Ireland, Portugal and Spain who must comply with the rule of 3% budgetary deficit of GDP once the austerity measures are complete. At the heart of Greece’s and Ireland’s debt crisis, as well as those pending across southern and Eastern Europe, is the double standard that creditor and debtor nations belonging in the G-7 impose on weak debtor nations. “Out of the world’s 75 largest economies, the United States has the 20th largest as debt-to-GDP ratio, standing at 94.3%, with a gross external debt of $13.454 trillion and an annual GDP $14.26 trillion. In fact, out of the largest 75 economies, this number is just above the worldwide average of 90.8%. Western-European and North American countries dominate the upper end of the spectrum, with Switzerland (422%) and the United Kingdom (408%) at the #2 and #3 spots, respectively, and Ireland representing the most drastic debt-to-GDP ratio. According to the most recent World Bank data, Ireland’s number stands at a staggering 1,267%.”   http://www.cnbc.com/id/33506526
If Germany which enjoys a substantial surplus had agreed to the formula that French finance minister is now proposing about bond investors “sharing in the gains and losses,” if the US had agreed with its G-20 counterparts to impose greater regulation on banks and investment firms and moved to cut defense spending and end swiftly the futile wars of Iraq and Afghanistan, while forcing Israel to negotiate peace in good faith, the world economy would have been far better better off than it is expected to be in 2011. If the G-20 had agreed on partial debt forgiveness, cost-sharing with investors, and debt rescheduling for debtor nations whose living standards are falling off the cliff as is the case not just for Ireland and Greece, but many mid-sized and small economies in all continents. The political decision to support finance capital at the expense of the middle class and labor remains at the heart of global crises, whether it is Ireland and Greece or the US that is about to bathe in some austerity-style measures that weak debtor nations have endured.

Racism and Human Nature (Jon Kofas, Greece)

Posted on November 13th, 2010

Do economic crises and wars exacerbate racism among all social classes and result in greater social tensions and political polarization to the degree that moderate conservatives more farther to the right and moderate centrists inadvertently find themselves defending the left? There is certainly ample proof that economic crises do result in higher crime rates against people and property, but do they result in hate crime expressed in subtle and overt ways? During the Enlightenment the concept of the “universality of human nature” prevailed among philosophers from Rene Descartes (precursor to the era) to David Hume and Immanuel Kant, who claimed that they did not consider any factor such as skin color, religion, ethnicity, body size, or any trait other than intellectual capacity and artistic creativity. Enlightenment thinkers believed that human progress cannot take place with stereotypes, prejudice, and intolerance and only when human beings rest on reason and empirical criteria can they be closer to the truth and be able to make a contribution to the edification of humanity.
In theory, this was based largely on an empiricist philosophy–racism is learned behavior and not an integral part of human nature that has always existed and will always exist. The Enlightenment was indeed a great step forward for Europeans that were at the time engaged in the trans-Atlantic slave trade and colonizing, frequently with very violent wars against non-whites with the sole purpose of exploiting their labor and resources, while a select few intellectuals argued the boundless horizon of reason and the limitations of the irrational. Racism in European society (and in the North American colonies) became prevalent because there was a motive of power and profit. Therefore, racism was deeply ingrained in the minds of white Europeans, including prominent philosophers like Hume among others who believed that non-whites differed (were inferior) from whites who were presumed “civilized” for it was widely believed northwest Europe was God’s chosen center of the universe. Euro-centrism that included racism remained a characteristic of European culture, shared by American colonists who were born into a society of prejudice, intolerance, and stereotypes that served domestic and foreign policy goals, military schemes, economic interests, and of course social interests. Racism was as natural as colonialism. Whites grew up believing in their biological–physical and mental–and their moral (linked to Christianity) superiority that fed into innate human proclivities of fear, anxieties, insecurities about identity, potentialities, and abilities, and guilt, all projected on the other of a different race lower down the evolutionary chain; the other that is the ubiquitous enemy looking back from inside the mirror with a menacing look. Racism also goes hand in hand with militarism. We see a substantial rise of racism in all facets of Western societies during the era of colonialism that resulted in the 19th and 20th-century wars of imperialism, wars that intensified racism among whites. Similarly, we see that the rise of Japan as an economic power in the late 19th century and its subsequent rise as a regional military power, after it defeated Russia in 1905, resulted in the rise of racism against the Chinese and Koreans, later to include other Asian nationalities. Besides irrational proclivities in human beings, as Enlightenment thinkers correctly identified as the source of prejudice and intolerance, power, especially military power afford human beings a sense of superiority that in popular culture it translates into prejudice, stereotypes and intolerance. Modern society is still operating under the ideals of the Enlightenment, the last intellectual revolution of the Western World, and it does so because there is societal consensus that harmony and progress cannot take place in the absence of tolerance in an increasingly multicultural world. Racism is not good politics, it is not good business, it is not good for any institution that endeavors to project an image of responsibility and constructiveness in society. The question, however, is the degree to which human beings, when they are all alone or with others who think like them, do not candidly reveal the irrational racist self because it “feels good” to feel a sense of superiority–man playing God. Therefore, while constitutions and laws provide for punishment of racism and encourage tolerance, in the real world–whether in the streets of Chicago among poor teenagers of different ethnic and racial groups or in New York’s, London’s or Tokyo’s corporate board rooms or in the battlefield in Iraq or Gaza–the enemy is still objectified and reduced to a racially inferior being, for that is the essence of power many human beings worship more than they value any virtue in theory. Far more dangerous and destructive than any direct or overt racially motivated act or speech is the subtle form of racism as we have witnessed since Obama became president by people who are too ignorant to recognize that he is as quintessentially “establishment” as any other president and represents the white Anglo-Saxon value system as much as he does finance capitalism. Nevertheless, the Tea Party and especially Glenn Beck have launched repeated attacks on America’s first black president and his Jewish supporters like billionaire George Soros. The irony of such racially motivated attacks is the sheer ignorance and stupidity of those delivering the divisive rhetoric, as Salon magazine exposed in an article about Beck, Palin and Soros. “Given Soros’s alleged role plotting to destroy the United States, Beck and his Fox viewership might be surprised to learn that one of Sarah Palin’s top aides has been on Soros’s payroll for years.That would be Republican lobbyist Randy Scheunemann, Palin’s foreign policy adviser and a member of her small inner circle. He runs a Washington, DC consulting firm called Orion Strategies. Scheunemann and a partner have since 2003 been paid over $150,000 by one of Soros’s organizations for lobbying work, according to federal disclosure forms reviewed by Salon. The lobbying, which has continued to the present, centers on legislation involving sanctions and democracy promotion in Burma.”
http://www.salon.com/news/politics/war_room/2010/11/12/orion_soros_palin/index.html

IT'S SPRINGTIME FOR McCARTHYism

Unless there is some reason such as clarifying something I have written hastily and sloppily, which I often do, or there is some an educational purpose, I usually try, but I do now always succeed, to resist the temptation to reply to fellow-WAISers who at times of understandable emotional impetus may yield to the temptation of focusing not on the merits of ideas as they would like their readers to know, but on demonizing the author of ideas contrary to theirs. This is a rather cheap and pedestrian method to discredit the validity of ideas with which one disagrees. Senator Joseph McCarthy was an expert at demonizing and stigmatizing political opponents without ever examining the substance of issues he was raising, the consequences of what he was doing, or the value of engaging in tactics solely intended to lift his political career as had Nixon before him. Of course, it was Senator Richard Nixon who started the Red Scare trend during the Truman administration amid the nascent Cold War that chose confrontation instead of co-existence with Moscow because it served strategic and economic interests and a domestic agenda of social conformity to engage in such conduct. In 2010 when America is faced with lingering economic contraction, high unemployment and rising poverty levels, rising budgetary and balance of payments deficits, loss of US global prestige owing to the disasters of Iraq and Afghanistan wars, and China rapidly becoming the presumptive preeminent power on earth, there is a right-wing emergence in the form of the Tea Party, behind which are varieties of people from very wealthy individuals to Christian fundamentalists that believe it is Springtime for McCarthyism. One of those who believes in Springtime for McCarthyism is Mr. Nigel Jones who in a recent posting argued that the American people 'nodded off' during the 2008 election when they elected Obama, and presumably they have awakened from a deep left-liberal sleep inspired by Mao and Stalin to see the light shinning above the brilliant minds of "Republican Tea Party" politicians. Emboldened by indisputable 'web-based facts' that the biased mainstream media has ignored regarding the role of William Ayers in the Obama biography, Mr. Jones went to castigate me for criticizing 'McCarthyism' as a phenomenon that has made its grand revival under the banner of Tea Party. Mr. Jones wrote: "Jon Kofas jeered at “McCarthyism” in a post yesterday. Say what you will about the crude and drunken late Senator, subsequent research has revealed that in essence, Joseph McCarthy was right. The New Deal administration was honeycombed with Communists and Soviet agents. Alger Hiss, his wife and his brother, were Soviet spies. The Rosenbergs did pass the secrets of the Hydrogen bomb to Stalin. And McCarthy may have stalled a few Hollywood careers but he did not kill anybody. Communism and its helpers killed hundreds of millions."

I have already suggested that some of Mr. Jones ' postings would make good source for satire, especially Garrison Keillor's PRAIRIE HOME COMPANION show. Now that Mr. Jones is defending McCarthyism, I think that he has given Broadway producers some good ideas for a musical similar to THE PRODUCERS (1968) that Mel Brooks wrote and directed. Instead of Hitler and Nazism as misunderstood, misinterpreted and maligned by liberal and leftist intellectuals and biased media controlled by liberals and leftists, SPRINGTIME FOR McCARTHYISM, written by none other than ghost-writer William Ayers, only so he can atone for sins already committed as leftist intellectual, would have Senator McCarthy as the theme with Sarah Palin and Glen Beck as the stars, with Rush Limbaugh playing a key role as 'information minister'. Of course, Beck does not believe that McCarthy was 'enough of a McCarthyist', but he along with Palin and Limbaugh as the stars will be trying to convince the American people that Republicans who have just taken control the House of Representatives there is an urgent need to establish a new House on Un-American Activities Committee (HUAC) that would never dissolve until and unless the land is safe from all Un-Americans parading around as OBAMA-philes. This (Tea Party-inspired) committee would be just like the one originally established in 1937 under the chairmanship of Martin Dies who received a telegram from the Ku Klux Klan congratulating him: "Every true American, and that includes every Klansman, is behind you and your committee in its effort to turn the country back to the honest, freedom-loving, God-fearing American to whom it belongs."   John Rankin and John S. Wood were members of HUAC who defended the Klan: "The threats and intimidations of the Klan are an old American custom, like illegal whisky-making." Led by soloists Palin-for-President and Beck-for-vice President singing it's SPRINGTIME for McCARTHYISM, the musical show would have a chorus of Tea Party Christian fundamentalists delivering THE WORD through song across America. The traveling show would be trying to convince misguided (OBAMA-phile) voters concentrated mostly in large cities in the northeast, upper Midwest and West coast that the land is threatened by a wave of Communists and other Un-American elements like Muslims on a crusade to destroy Christianity, liberal and leftist intellectuals, gays in and outside the military diluting the good image of American militarism, feminists like Hilary Clinton and 'her type' of ball-busting feminist politicians, illegal immigrants and many legal ones whose disloyalty to America is exposed by voting for Obama, and anyone who has ever voted for or contributed to a Democrat campaign. SPRINGTIME FOR McCARTHYISM chorus would warn 'real Americans' through song and dance that all sectors of public and private life since Obama took office are now under the control of disloyal citizens under suspicion who must be investigated by HUAC and exposed for daring to elect a black man with an Arab-sounding name and an African father; a man with college friends who read THE COMMUNIST MANIFESTO, but failed to study how the RED SCARE era actually saved America from Communists that had infiltrated the State Department, Pentagon, and even the White House under both presidents Truman and Eisenhower! All subversive books would be banned, starting with Ray Bradbury's Fahrenheit 451 that criticizes a futuristic police-state society based on hedonistic values where critical thought based on book reading is outlawed, followed by Arthur Miller's THE CRUCIBLE, which tries to show that Puritanism is deeply ingrained in white Anglo-Saxon American culture and psyche, shaping attitudes and values that are destructive to a pluralistic society. Song titles in SPRINGTIME FOR McCARTHY would include: "we are real Americans and we want to save America from disloyal Americans; we tell the truth that comes to us directly from God through the mouths of  Rush Limbaugh,. Glen Beck and Sarah Palin; we ruin peoples' lives because we love America, we believe in righteousness, and we are rooting out evil to save America!" Clothed in the American flag and holding a shining gold-plated cross on the right hand and a picture of Joe McCarthy on the left, SPRINGTIME FOR McCARTHYISM cast members would deliver the gospel truth about the evils threatening the 'American way of life' as God intended it. To deliver their holy message inspired by the Holy Spirit as reflected in the brilliant mind of Senator McCarthy, the chorus would sing memorable quotes from Senator McCarthy himself, like the one that made him (in)famous. "I have here in my hand a list of two hundred and five [people] that were known to the Secretary of State as being members of the Communist Party and who nevertheless are still working and shaping the policy of the State Department." Demanding that the new and improved Un-American Activities Committee investigate, castigate, and imprison all OBAMA-phile suspects without a trial, the SPRINGTIME FOR McCARTHYISM show would then investigate its own members until there is no one left to investigate, with Palin and Beck accusing each other of lacking sufficient McCarthyist loyalty and Rush Limbaugh as the judge deciding that neither Beck nor Palin have sufficient McCarthyist credentials.

China and the Global Balance of Power (Jon Kofas, Greece)

Posted on November 10th, 2010

China’s role in the 21st century has been the subject of many books, scholarly journal articles, government and NGO studies, think-tank and private business studies, and of course blog essays. It has been the focus of all countries, especially the larger ones that find themselves competing and cooperating with China out of necessity and self interest. Unlike the postwar miracles of Germany, Japan, to a lesser degree South Korea and Taiwan, China’s economic ascendancy comes with a centuries-long history as a major power, recently (past half century) a nuclear power, and more recently with the ability to influence the entire world’s course in a number of areas from economic to military. The question of how China is integrated China into the world power structure is key for policy makers in Beijing, US, EU, Japan, Russia, India and the rest of the world.
Depending on the perimeters that Beijing sets on its military, political, and economic power, depending on the models of political, military and economic integration it chooses, the world could be much more prosperous or poorer and polarized, more harmonious experiencing fewer conflicts or more divided and more bloody than the 20th century. What limits do the Chinese want to impose on the various facets of their power as it increases? This is a difficult question because there are disparate Chinese groups that do not agree about the course of their country. Do they want to become militarily hegemonic as People’s Liberation Army (PLA) Senior Colonel, Liu Mingfu, is demanding, or does China want to reach a balance of military power with Russia, US, India and EU and live under constructive and peaceful co-existence? If China follows the US-USSR arms-race model during the Cold War, the entire world will be less safe, far less prosperous and much more dangerous with regional conflicts more frequent. The Chinese government, many academics, journalists and businesspeople claim that they want a peaceful and harmonious global ascendancy, unlike the economic, military and political ascendancy of western Europe, US and Japan that came during the Age of Imperialism at the expense of underdeveloped countries, including China that Europe, US, and Japan divided into spheres of influence and exploited. Not all Chinese agree with this model of ascendancy. “As long as China seeks to rise to become world number one … then even if China is even more capitalist than the US, the US will still be determined to contain it,” writes colonel Liu. Rivalry between the two powers is a “competition to be the leading country, a conflict over who rises and falls to dominate the world,” says Liu. “To save itself, to save the world, China must prepare to become the (world’s) helmsman.”
Because the Chinese Communist regime is under pressure from the military to use the country’s economic might to become the world’s strategic power, the US has been trying to strengthen India to counterbalance China. But to what degree does India wish to play the role the US wishes to assign to it, instead of pursuing its long-standing foreign policy of balancing its interests between Russia, China, and US? For now, India too wishes great power status in the economic and military domains. India is securing strategic assistance from US, Japan and Russia as well as massive injections of investments from US, Japan and western nations that will help raise India to a global technological competitor. India’s rise to power is one way that China’s ascendancy can be mitigated, with Japan and South Korea holding the East Asia balance of power. But that will hardly be sufficient to counterbalance China to the degree that Japan, US, and EU wish in order to prevent the inevitability of China’s preeminent global role in the century. The limits of China’s power may come from the ongoing global competition for minerals, including strategic ones, as well as raw materials in general. Between now and 2035 China’s energy needs will increase by an estimate 133%, of which 60% will come from coal that China has in abundance. The Cold War was in large measure a struggle for control of the world’s raw materials, especially oil and strategic minerals. By 2035, oil will reach peak capacity at 110 million barrels per day, more or less sufficient to meet demand… and then the long decline after 2035.
China has signed strategic partnership deals with energy-rich Russia, but as Joseph Stalin feared when Mao took power, it is not in Moscow’s interest to have a powerful neighbor, so Russia is balancing its interests by looking to the EU. Well aware of the delicate balance of power that the other great powers are engaged in, China is trying diplomacy of commerce and currently using its surplus as leverage for global influence. In 2011 it is estimated that debtor countries around the world will borrow an amount that is approximately 20% of the world’s GDP. The largest borrower will be the US, which is expected to hit the markets for around $4.5 trillion, a good percentage of it from China. The Chinese are taking credit for saving the world economy from suffering an even deeper world recession than they would otherwise, if it were not for Beijing putting together a $600 billion economic stimulus package in November 2008 to finance public works that employed over 20 million people. With the ultimate goal of maintaining socio-political stability and steady economic growth at home, China has been busy making multi-billion-dollar commercial deals with countries in all continents, while at the same time proceeding with massive infrastructural development programs that includes the world’s largest and fastest rail system. China has been taking these steps while NATO countries have neglected infrastructural development, instead focusing on maintaining defense spending at Iraq War levels.
In 2009 the world economy’s purchasing power parity grew by 0.19%, while China’s grew by 1.19%, thus preventing a much deeper economic contraction. While the world economy was contracting in 2009, China grew by 9%. From 2000 to 2008, China accounted for 22% of global domestic demand, while in 2009 amid the depths of the recession China contributed 46 percent of global domestic demand. If it were not for the massive demand in China, much of the export trade in Latin America, Africa and Australia would have suffered more than it did owing to decline in exports to the EU and US. At the same time, China has become a major trading partner for European nations small like Greece and large like Germany that is equally influenced by economic developments in China as it is by those in France or the UK. If China had not increased imports in 2009 and 2010, EU and US would have suffered a much worse economic fate.”Clearly, it (China) made a significant contribution,” stated Vivek Arora, assistant director of the IMF’s Asia-Pacific department. China is now one of the world’s largest IMF and World Bank contributors, advising its trading partners to adhere to IMF-World Bank monetary and fiscal policy advice. Yet China has been feeling the pressure from the US and other countries to change its own monetary and fiscal policy, that is, to adjust its undervalued currency and to stimulate greater consumerism at home. Already there are signs that Beijing is yielding to some of the external pressures, but only to a small degree as one would expect of the presumptive preeminent power of the future. At the same time, it has taken steps to become technologically and scientifically independent. While external pressures help to influence China’s policy on the road to hegemony, ultimately it is domestic factors that will decide its future. As the social structure is changing very rapidly and a wealthy as well as middle class is forming and has a voice in society, will this mean that the Communist regime will be able to survive without making major reforms expected of an open society, or even survive at all? To what degree will the reform movement have an influence and to what degree will the current regime, or the one that succeeds it yield to pressures for delivering social justice instead of merely invoking vacuous Marxist rhetoric without doing anything about rural poverty, especially in Western China? If the PLA continues to exert pressure that China focus more on its military might at the expense of becoming a consumerist society, will China evolve into a monolithic power and continue the path of one-party state rule like the old USSR, or will it evolve into a multiparty state structure? If it chooses to retain the one-party regime that neglects the rapidly changing social structure, it may face eventual decline owing to inevitable tensions that contradictions of the market economy invites, especially if combined with expensive and destabilizing militarist ventures.
As India and Russia also become more prominent in the world economic-strategic-political power structure, will China seek the kind of “natural” alliance with the US that Mao and Zhou Enlai (Chou En-lai) envisioned during the Civil War, and later Mao when he invited Nixon to Beijing? Finally, while China holds many cards to influence the world’s future, the manner in which the other great powers behave toward China will determine how China reacts, just as the manner that the West behaved toward the USSR largely determined Moscow’s conduct. If the US and its partners choose a new containment policy toward China, setting limits on China’s power through pressure and conflict and if China does not choose to set its own containment perimeters, the world will be less stable and prosperous and much more dangerous in the 21st century.

Obama and Marxism (Jon Kofas, Greece)

Posted on November 9th, 2010

 Power is an aphrodisiac with tangible benefits for those who hold it. Now that Bush has published his memoirs of eight years of economic and foreign policy disasters, now that Republicans are in a good bargaining position, right-wing ideologues, their opportunistic financial backers can taste more power coming their way in 2012. The Tea Party has gained legitimacy, Obama feels the pressure and apparently he “got the message.” The corporate world is using the Republican sweep of the House of Representatives to dilute if not eliminate Obama’s proposals for greater government regulation of banks, insurance companies, and corporations responsible for the global crisis of 2008-2010 and the skyrocketing public borrowing which will amount to $4.5 trillion in 2011, or about one-third of GDP. A combination of very wealthy people, Tea Party activists, mainstream Republicans who see an opening for more gains, right-wing media using Joe McCarthy-witch-hunt tactics energized by the recent mid-term election will use all kind of dirty tactics to depict Obama and the Democrats as “radicals,” even Marxists by association. Why not, given that a percentage of the people are predisposed to believe right-wing propagandists and not think, not question, not use reason and common sense to reach their own conclusions. Either I. Kant was right after all that people are intellectually lazy, or it is the case that human beings rarely absolve their minds of deep-seated ideological/religious convictions regardless of empirical evidence. There are many websites and media outlets devoted to the “Obama Marxist” theory. The conspiracy theorists have certain common traits that include using Obama’s full name to remind the public that this president has an Arab-sounding name instead of an Anglo-Saxon Christian name at a time that US is at “war with Muslim terrorists,” that he is a black man with a father from Africa with Muslim roots, that in college his mentors were Communists, and he associated with “academic Marxists” throughout his life. The same ultra-right wing media, now more legitimate behind the Tea Party, depict Muslims, and specifically Arabs as terrorists; they present wealthy Obama supporters like George Soros as “Communists,” part of a global mafia to undermine the market economy for their personal gain (implying of course that there is a left-wing Jewish conspiracy as well, given that Soros is ideologically progressive); they argue that Putin and other devious world leaders like the Chinese are out to dilute America’s power; they point to his health care, immigration, and other social policies as proof that he is interested in “Marxist creative destruction.” There are more than one million web site hits dealing with the Obama a Marxist theory. What proof do these ultra-right wing media outlets offer for the countless accusations that Obama is a Marxist?
Obama had associations with Marxists during his college days and retained ties to such people. Is there any college-educated (even high-school graduate) person in the US or in the entire Western World that has not had contact with academic Marxists/Marxism, even if they were educated in private religious schools? And if such people exist, to what degree are they “educated” and are they proud to admit they are ignorant of Marxist influences in the various fields of academic studies? Those who have studied Marxism and not simply heard about it from Glenn Beck and Rush Limbaugh, or read a thing or two from rabid anti-Marxist ideologues who see no redeeming value to the ideology’s multifarious influences in the world of academia and in the real world, know that there are many varieties of this complex ideology that has influenced every field from sociology and economics to psychology and anthropology. In the past century-and-a-half all great thinkers and political leaders have been profoundly influenced by Marxism whether they admit it or are even aware of it. From scientists like Albert Einstein to great economists like John Kenneth Galbraith, from leaders who left a rich legacy in their countries like Franklin D. Roosevelt to Gamal Abdul Nasser, both non-Marxists, were influenced by Marxism. Many people of course equate the Communist regimes, especially the USSR and Eastern Europe with Marxism, and to the degree that those regimes claimed Marxism as their ideological foundation, they deserve severe criticism for their failed regimes. However, Marxism exists in society beyond the old Communist bloc and even central banks, yes, the Fed’s monetary policy is partly based on Marxist theory. In fact, every US president from FDR to the present was influenced by Marxism in conducting fiscal, economic, social, or labor policy. Obama is no different that past presidents in that regard. Considering the source of funding for Obama’s 2008 campaign, it is difficult to prove a Marxist conspiracy. “Goldman Sachs donated nearly a million bucks to Obama. Citigroup and JPMorgan Chase donated nearly $1.5 million to the Obama campaign while Morgan Stanley pitched in over a half million dollars. When you break it out by individual companies, you find that employees of Goldman Sachs gave more to Obama than workers of any other employer. Goldman Sachs is followed by employees of the University of California, UBS, JPMorgan Chase, Citigroup, National Amusements, Lehman Brothers, Harvard and Google… Obama has a three- or four-to-one fund-raising advantage over McCain.” New York Times (July 1, 2008).
In the 2012 presidential race, wealthy people and businesses will make enormous contributions to the Obama campaign, and will buy influence–not express their First Amendment right as the US Supreme Court has ruled by equating campaign contributions with free speech. And once Obama wins the election as he probably will once the economy picks up in 2012, unemployment declines, and he moves more to the right to win the conservative Democrat voters, lobbyists from powerful corporations will continue to exercise influence in shaping policy because that is how “democracy” in America–currently governed by a “Marxist” president–works! Meanwhile, the McCarthy-style attacks continue from those making a living at it, many like Rush Limbaugh prospering with right-wing populist rhetoric that promotes an agenda, all in the name of “free speech” because it comes from the right–”anti-democratic speech” if progressive academics or journalists provide analysis and commentary about how finance capitalism is equated with democracy; “hate speech” if one argues that the state regardless of regime is potentially the most destructive instrument of terrorism.

Gold Standard vs Credit Economy (Jon Kofas)

Posted on November 8th, 2010

On 8 November 2010, World Bank president Robert Zoellick proposed “employing gold as an international reference point of market expectations about inflation, deflation and future currency values.” Less concerned about China’s undervalued currency than the IMF that has sided with the Fed, the World Bank, which enjoys a cordial relationship with China, made the ”gold standard proposal” ahead of this week’s G-20 meeting.
Given the sensitivity of the monetary policy question and the war of words that has erupted between various countries, Zoellick is proposing something that countries with reserve currencies can agree in order to engender greater international financial and trade cooperation. Zoellick added that: “This new system is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi that moves towards internationalization and then an open capital account.” The World Bank proposal is attractive to monetarists, to the IMF and to creditor countries like Germany pushing tight monetary policy because it is to their benefit. In recent interviews, Wolfgang Schäuble, Germany’s finance minister, castigated Fed policy for pursuing a “stimulative monetary policy” while at the same time criticizing China for doing the exact same thing. “It is not consistent when the Americans accuse the Chinese of exchange rate manipulation and then steer the dollar exchange rate artificially lower with the help of their [central bank's] printing press,” Schauble told the press.
Who gains and who loses under a gold regime based on a basket of currencies is the key question before the G-20. In 1971 Nixon, under pressure from Japan and Europe and with the advice of the IMF that had secretly warned Washington about its current account deficit and weak dollar since 1957, ended the link between dollar and gold established during Bretton Woods in 1944. “Bretton Woods II” began in 1971 and it seemed to serve the US and countries with strong currencies that held dollars as reserve currency. China, Russia, India and Brazil were not part of the equation in launching “Bretton Woods II,” the EU did not have a common currency, and there was no economic crisis to the degree the world is confronting today.
There are a number of reasons that the World Bank proposal will not be adopted. First, creditor nations trying to develop their economies amid global economic contraction would suffer disproportionately under the World Bank’s proposal. Second, the Organization for Economic Cooperation and Development (OECD) has recently trimmed growth forecasts for 2011 and cautioned central banks about raising interest rates that would further choke off growth. In 2011 US and EU will perform by 40-50% under what the OECD estimated six months ago, and they will not reach 3% growth as was expected for 2011 until 2012. “OECD warned that the economic crisis of the last two years had ‘pushed public deficits and debt to unsustainable levels.’ OECD Secretary General Angel Gurria said: ‘Simply stabilizing debt relative to gross domestic product in most countries will require a historical consolidation effort of anywhere from 6.0 to 9.0 percent of GDP.” Third, if the World Bank proposal is adopted, growth will suffer and unemployment will rise, as will the sharp gap between the rich creditor nations and the poor debtor countries. Fourth, trade will increase between rich nations, but it will slow in many parts of the underdeveloped world to the degree that there will be a return to bartering at the local level. The gold standard proposal raises the political question of how society ought to measure the “wealth of the nation,” a question that Adam Smith tried to answer during the nascent stage of industrial capitalism. Should we return to a regime of neo-Bullionism? Adopting the World Bank’s “gold standard” proposal will entail lower inflation, stable reserve currencies, absence of currency wars, fewer cases of “out-of control budgetary deficits,” and very strong banking/finance capital sector. The clear winners in this scenario would be the banks and financial institutions in general. It would also mean that politicians would be surrendering power of monetary policy to the banks. Given that the public sector accounts for a very large percentage of the economy’s GDP–larger in China than in the US–and given that monetary policy impacts economic and social policy, should the elected representatives of the people have the power over monetary policy, or should it be the banks, insurance companies, and investment firms? If the World Bank gold proposal was in effect, could the FED buy $600 billion of long-term bonds, the day after the election, in order to stimulate the stock markets and indirectly the real economy? Taking the long view, if countries stuck to the gold standard when the Great Depression erupted, how much greater would be the cost for people? There are economists who argue that the gold standard was a factor that caused the Great Depression, and those who believe that gold standard regime severely restricts economic growth. Right-wing ideologues, and of course financial elites in general, though they are by no means of one mind on monetarism, want government to have as little influence in money supply policy as possible. Finally, the monetary policy debate that the World Bank is proposing as “food for thought” more than a plausible alternative implies that tight monetary policy best serves society because it engenders “monetary stability.” Putting aside the OECD warning about a tight monetary policy, the more significant question is that the culture of capitalist economics has convince people around the world that inflationary policies are detrimental, while deflationary policies are beneficial. And there is no doubt that hyper-inflation is detrimental as is inflation accompanied by IMF monetarist policies that severely curtail wages and benefits in order to curb consumer spending.
Examining the periods of inflationary vs. monetarist policies, in almost every case what we see is that the financial elites do not fare as well under inflationary climate as they do under a tight monetarist regime, but upward mobility definitely takes place during inflationary cycles and downward mobility during deflationary cycles as the world is currently experiencing. Truth and wisdom on monetary policy are not the domain of one ideological school of thought or the other. Rather the issue before us is about social interests; it is an issue of what social groups benefit and what social groups are harmed if tight monetary policy and/or the gold standard is followed as the large banks, conservative ideologues and the IMF and World Bank wish.