November 23, 2010
From Seoul to Lisbon: A Band of Warring Brothers
First in Seoul and then in Lisbon, world elites met at the G20 and NATO to craft a path between diverging economies and a fragile world security order.
In a stagnant global economy, where recovery has been pegged at 2% per year for the near future by the OECD, and where developed and emerging markets are on radically different paths, between American deflation and Chinese inflation, the majority rejected an American plan for trade imbalance corrective measures.
Instead there was a voluntary consensus that nations shouldn’t wage currency wars, that they should regulate financial institutions more thoroughly, and for a conclusion to the Doha World Trade Organization talks to further global trade.
But exactly the opposite is occurring. The United States is injecting $600 billion to depreciate its currency and demanding that China and other emergent markets inflate theirs to make American products more competitive at home and abroad.
And the Doha trade round that began in 2001 is stalled as developed nations have refused to remove trade barriers on goods such as agricultural products that emerging markets could provide at a much cheaper cost, while developed nations like the United States dumps its subsidized food products, like corn, on emerging markets like Mexico.
What the fifth G20 meeting reveals is that while the financial crisis of 2008 drove nations to cooperate for stimulus spending, some $20 trillion globally, there is no consensus on how to rebuild the market. Rather, there is a descent into national competition to see who can be made to pay the price for devalued assets - weaker national capitals through inflation and trade barriers, and workers through austerity deficit programs.
As the Korean Confederation of Trade Unions pointed out at the Put People First Counter-Summit, President Lee Myung-bak’s regime has de-regulated the financial system, promoted precarious employment, and has attempted to lift the trade union certification of half of KCTU members, in construction, transport and education. Lee also led the way at the G20 to promote a new model of Low Income country development that is ‘growth’ not aid driven – or completely dependent on private interests.
In Lisbon, 48 nations, either in or allied to NATO, met to find a way out of the Afghan morass and to focus on other potential, and bigger, risks like Iran and China.
On Afghanistan, another ‘aspirational’ agreement was signed to ‘Afghanize’ the war against the Taliban. This time western forces will leave combat in 2014 and, in smaller numbers, act as trainers and support for an expanded Afghan army and police. This substitution will be for groups where desertion rates are 25% and where the population is more afraid of the police than the Taliban. As well, it was agreed that aid projects would be administered directly by the Karzai government, whose record for corruption led such contracts to be taken away from it.
In Canada’s case, this means that from a promise to withdraw in 2011, Canadian soldiers will remain for another three years at $500 million a year, while the Kandahar civil aid mission has been closed.
This shifting of the goal posts, with no parliamentary vote, has only been possible for the Conservatives with the active collaboration of the Liberals, of Bob Rae, foreign affairs critic, and Michael Ignatieff, the national leader. Indeed Ignatieff has claimed we should stay ‘to protect civilians’, whose casualties have only risen as more NATO troops have flooded the country.
But there are much bigger stakes than Afghanistan. NATO’s larger agenda has been to entice Russia back into an alliance relation (after the disaster with Georgia’s aggression in 2008) with a new START treaty with the United States, to share information on missile defence against rogue states like Iran and North Korea, and to serve as an ally in Afghanistan. Perhaps NATO could even play a role in mediating the India-Pakistan dispute in a way that would stabilize south-west and south Asia, and isolate China further.
At the heart of the G20 and NATO’s quest for world order lies imperial (i.e., great power) competition, especially between the United States and China.
From a Marxist perspective, two warring tendencies are at work: capitalism’s internationalization of productive forces and nation-states nationalization of productive relations.
As theorists like Karl Kautsky, Rosa Luxemburg, and Rudolf Hilfering described it before 1914, modern industrial capitalism developed as one world system by the late nineteenth century. This internationalization of capitalist production, trade and finance was pioneered by British free trade and responded to by the development of formal empires by its competitors.
But Kautsky and Luxemburg differed on possible outcomes. Kautsky, the leading theoretician of the world’s largest socialist party, the German Social Democrats, was so impressed by capitalism’s global reach that he argued the market was capable of overcoming its antagonistic tendencies to be coordinated by the great powers in one great trust. Workers could then peacefully capture state power and gradually remake this global economy as a socialist entity. Kautsky described this phase of organized global capitalism as ‘ultra imperialism’.
Luxemburg in The Accumulation of Capital, and after her, Lenin (Imperialism: The Highest Stage of Capitalism) and Nikolai Bukharin (Imperialism and World Economy), argued this was nonsense – as was proved by two World Wars and the Great Depression. Nation-states would rely on military as well as market competition, on nationalizing productive relations, in the face of other nation-states competing to limit their accumulation – and as Trotsky argued, justified by the barbaric logic of fascism.
It was only after World War Two, with American market dominance, that a new round of the internationalization of productive forces could proceed, now with such institutions as the World Bank, the International Monetary Fund, and the General Agreement on Trade and Tariffs (today’s World Trade Organization). Even then, the bureaucratic state capitalist regimes of the USSR and the People’s Republic of China stood as barriers to a full resumption of one explicit market global system.
No more. Since 1991, with the collapse of the USSR, and China’s conversion to market economics with the Four Moderns in 1978, a second full global market era has dawned.
This second global market era, however, is characterized by all the old tendencies – a rush to internationalize capitalism’s productive forces in a new global division of labour with China as one of the world’s great workshops – and a renewed nationalization of productive relations with currency and trade wars, and wars of colonial occupation in Iraq and Afghanistan.
For many liberals and social democrats, however, we are in a new era of ultra imperialism – of a United Nations with an International Criminal Court, a duty of protection in peacekeeping operations, reorganized institutions like the IMF and the G20 that reflect a broader market reality, and a global security organization, NATO.
For socialists, we are only at the beginning of a new era of the old barbarism, capitalist imperialism – of UN hypocrisy, G20 competition, and NATO bolstering of unjust orders.
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