(...continued) ------------------------------------------------------------------------ Each of these capitalist phases, competition, shakeout, and monopoly, provides its own characteristic investment vehicles which are able to ferry the ever-growing capital pool to the succeeding phase. These same three phases have played out in sequence in many places and at many scales of manifestation. Occurring first in in Britain and then other countries, first in national economies and later in colonial empires, this sequence of phases is now being played out in the global economy. These upward changes of scale are the macro-level regime evolution by which capitalism has punctuated its ongoing growth. Although the rhetoric of "global free trade" is increased competition and efficiency, the reality is simply a redeployment of the oft-proven sequence of first competition then shakeout and finally monopoly. In the rhetoric of capitalist apologists the shakeout phase is presumed to be an extension of the competition phase in which the less efficient operators fall by the wayside. But as we have seen, the IMF chooses which economies, and hence which operators, to destroy. The culling of competitors is not on the basis of efficiency, but on the basis of elite choice. Similarly in the American robber-baron era of the previous century, it was not only efficiency which led to domination by Standard Oil, US Steel, and others, but the skill by which elite operators were able to carry out predatory practices against their competitors, and the skill by which the regulatory regime could be influenced to their selective advantage. Although the impersonal pressure of the capital pool provides the wind for the ship of capitalism, it is elites who are at the helm. Whenever a regime change has been required -- when it has come time to take a new tack in order to further the ship on its course -- elites have chosen which particular tack to take and hence determined which operators could survive the change of regime. One of the myths of globalization is that it represents a relative decline of Western interests, that market forces will allow other regions to make inroads against traditional Western domination. With the postwar economic rise of Japan and later Southeast Asia, this myth in fact gained considerable credibility. But as the postwar boom began to level out, and a new regime of growth became necessary, it has become clear that the global capital elite remains primarily a Western elite. The IMF is in fact dominated primarily by Western-based interests, and its power has been used to selectively cull non-Western operators. While the IMF culls competitors using the power of the purse strings, the US and NATO accomplish the same objective in other ways. In the case of the petroleum market, where limiting supply is crucial to maintaining desired global oil prices, geopolitical machinations have been employed to restrict at various times the production of Iran, Iraq, Libya, and others. By encouraging the split up of Yugoslavia, which competed in several world markets including automobile production, additional culling was accomplished. As capitalism enters its global era, it is doing so under the control of the Western capitalist elite. This elite dominates the leading Western nations politically, even more firmly controls the foreign policies (geopolitical policies) of those nations, and totally controls the policies of the IMF, the World Bank, and the other institutions of the global governmental apparatus. All the potent agencies which determine the course of global societal evolution are firmly in the control of the Western elite. But in another sense the decline of the West is not myth but reality. Western elites remain in firm control and continue to prosper under globalization, but Western societies are in fact in decline -- economically, culturally, and politically. This decline is intentional, planned and implemented by the capitalist elite as a societal change designed, as always, to create growth opportunities for the capital pool. This particular episode of Western societal engineering is called the neoliberal revolution and it was formally launched with the candidacies of Ronald Reagan in the US and Margaret Thatcher in the UK, and with the adoption of the Maastricht Treaty in Europe. The agenda of the neoliberal revolution is summed up in the all-too-familiar mantra free trade, deregulation, privatization, and reform. The true meaning of this agenda can be easily found by analyzing each transaction in terms of its consequences for capital growth. Free trade, whose practical definition must be inferred from the terms of the international free-trade agreements, in fact means the elimination of national sovereignty over the flow of capital and goods. The consequence is that TNC's have more flexibility in optimizing production and distribution, and in exploiting the opportunities created by the culling of competitors. This flexibility is the growth vehicle provided by the free-trade plank of the neoliberal platform. Deregulation refers to the elimination of national sovereignty over corporate concentration, corporate operations, pricing, and product standards. Again the benefit is clear. Greater freedom in concentrating ownership, operating without environmental or other restraints, raising prices, and reducing standards -- these all provide vehicles for growth in this neoliberal phase of capitalism in Western economies. Privatization refers to the sale of national assets to corporate operators and the transfer of control over national infrastructures to those operators. Each such transfer creates an immediate growth vehicle for capital, in the exploitation of the asset and the infrastructure. In addition the transfers have been in fact sweetheart deals where negotiators on both sides of the transactions have represented the interests of the same capitalist elite. Asset values have been heavily discounted, through various tried-and-true trickeries of accounting, and the "sales" have in fact represented immediate transfers of wealth from public ownership directly into corporate coffers. The sale transactions themselves are growth vehicles. Reform, besides referring to generic compliance with the neoliberal agenda, also means reducing the taxes of corporations and the wealthy, eliminating social services, and generally cutting back the functions of government. Obviously these tax changes serve to grow the capital pool. The elimination of social services also serves as a growth vehicle in two ways. Workers become hungrier for employment, creating a downward pressure on wages. New enterprises can be started in order to provide the services formerly provided by government (medical care, insurance, etc). The general cutting back of government functions is simply part of the sovereignty transfer from national governments to the centralized regime of global institutions. As power and administration is concentrated globally, the role of national governments is being reduced and refocused. As has been long true of governments in much of the Third World, the role of Western governments is devolving toward three major functions: conforming to the dictates of the global regime, making payments on the national debt, and controlling the domestic population. The paramilitarization of police forces, the rise in prison populations, and the extension of police powers are very necessary societal changes required to enable the full implementation of the neoliberal agenda. It is no accident that in the USA, where the neoliberal agenda has been most thoroughly implemented, the collateral police-state apparatus is also most thoroughly deployed. Swat teams, midnight raids, property confiscations, mandatory and draconian sentencing, a booming prison-construction industry, increased surveillance and monitoring of individuals and organizations -- these are all an increasing part of the American scene. Government officials have stated that Americans must expect even more dramatic security measures, and that military vehicles and weapons can be expected in domestic situations where warranted by security concerns. The neoliberal agenda in fact amounts to the dismantlement of Western societies, undoing what was in some sense many decades of social progress. Although the dominant global elite remains based in the West, strong Western societies are no longer required under the global regime, as they were in the era of competitive nationalism. Just as the IMF devastates non-Western societies in ways that provide growth vehicles, so the neoliberal revolution devastates Western societies for the same purpose, if at a somewhat more gradual pace. Police-state regimes, whether or not acknowledged by that name, are an inevitable necessity if Western nations are to be kept in line as the neoliberal dismantlement, which is still in its early days, continues to unfold. The implementation of the global regime, a colossal project of societal engineering, sets the stage for an ultimate growth phase of the capital pool. The process of globalization, as we have seen, comes with a whole spectrum of growth vehicles of its own, some (privatization) deployed in the West and others (IMF destabilizations) elsewhere. As these vehicles provide their temporary ride for capital, the global regime is being consolidated. With all political and economic power fully centralized, and with global wealth and commerce concentrated in a small number of elite-selected TNC's, the ultimate phase of capital growth will be accomplished by the maximum practical exploitation of this awesome power and wealth. The centralized global institutions contain not only "front line" organizations such as the World Bank, the IMF, and the WTO, but they also contain background organizations, think tanks and planning commissions, entities such as the The World Information Products Organization (WIPO) and the Organization for Economic Cooperation and Development (OECD). There is no reason to speculate about how global capital might exploit its ultimate global power, for these background organizations are busily documenting the elite agenda for this ultimate phase of growth. Absolute power, systematized in elite institutions, is unleashing incredibly imaginative schemes for creating investment vehicles. Whole new kinds of property are being created by decreeing that life forms can be patented, that pre-existing processes can be claimed and owned, and that previously free public information can be incorporated into corporate-owned databases and then protected by strong copyright. Such new kinds of property and property rights, and there are others, create whole new information property marketplaces as vehicles for capital growth. Other creative stratagems include seeds genetically-engineered to be resistant to pesticides, not only creating markets for premium-priced seeds, but also opening room for growth in pesticide sales. Seeds are being forced on the market which are infertile, requiring farmers to buy new seeds each year, no longer able to save useful seeds from last year's crop. Bans on the sale of non-prescription vitamins and health foods are being drawn up, which will allow that market to be taken over by large pharmaceutical and medical operators, offering substitute products (perhaps of identical composition) at higher prices and under prescription. Developments in genetic engineering are enabling factory production to replace on-the-land agriculture, creating room for capital growth by cutting production costs of traditionally agricultural products. These are only a few examples, and the global regime is only beginning to flex its creative muscles. With full control over technology development, pricing, distribution, and the regulatory regime, together with direct control over markets, capital, and resources, one cannot predict what imaginative investment vehicles will be created and deployed in the ultimate growth phase of global capitalism. Under globalization, the capitalist transformation of society will have in some sense run its course. As we have seen, countless schemes for minor changes which create ever more investment vehicles are possible. But with power and wealth fully centralized under the control the Western capitalist elite, and with the mechanisms of societal engineering systematized in corporate institutions, it would seem that capitalism will have largely reached its ideal, unimprovable world. But every phase of capital growth has always run up eventually to an external barrier, a barrier that cannot be overcome within the framework of the current regime. In the case of the global corporate regime, that barrier is the finiteness of the Earth itself. Whether you look at water resources, fisheries, topsoil, overall use of biomass, or any number of other measures, the evidence is clear that the overall collection of growth vehicles -- the global economy -- simply cannot continue to grow much longer, and certainly not at the rate required by capitalism. As overall growth of the capital pool becomes increasingly difficult to maintain, one obvious elite stratagem will be to seek the reallocation of ownership of the capital pool itself, to transfer non-elite capital to elite hands. Consider for example pension funds, which are the property of millions of workers and their families, but which are under privatization coming under the management of corporate financial institutions. These funds are invested and become part of the global capital pool, supporting the regime of economic growth. As regulations continue to be dismantled, these funds become vulnerable to dramatic speculative losses, as occurred with Bearings Bank and earlier with the American Savings and Loan industry. Just as IMF diktats can destroy a society and cull its productive competitors from global markets, so can deregulation selectively make funds and industries vulnerable to speculative looting. The net consequence of a looting episode is that wealth is transferred from one community of capital investors to another -- the ownership of the capital pool itself becomes more concentrated. In fact ownership of capital is already highly concentrated, with xxx individuals, for example, owning xx% of common stock. As the global economy approaches the barrier of the finite Earth, and overall growth stagnates, we can expect all manner of engineered market collapses and industry failures resulting in the near total concentration of wealth and consolidation of societal operations into the hands of the remaining clique of TNC megacorps and a small wealthy elite who own most of the stock. This elite, assuming they maintain their political hegemony, can take society as close to the brink of global disaster as they see fit, and they can even take society right over the edge into the breakdown of civilization or perhaps the end of human life on Earth. But such universally dire outcomes would hardly be characteristic of the human ingenuity exhibited every time a previous barrier has been reached. One can expect, I suggest, a more creative solution to moving beyond this final growth barrier, a solution which leads to a favorable outcome for the capitalist elite, who after all must live on the Earth and in society. In a world where everything is run by a few megacorps which are owned by a small global elite, and where that elite has available effective means of maintaining global and civil order, then the landscape begins to resemble much earlier worlds. The globe will have become a single empire, administered by central institutions, and ruled according to the wishes of a small wealthy elite who literally own the world. Nations become provinces, to be run by designated governors on behalf of the global regime. Populations become a mass of human resources and consumers, the disempowered bottom end of the global hierarchy. What is being described here is an autocratic global system based on the absolute power of an elite oligarchy. It seems that the era of capitalism and of Enlightenment doctrine, based supposedly on the quest for political and economic liberty, is in fact to bring the world full circle back to elite tyranny. Ultimately the question of capital growth becomes a non-issue in such a world. The elite own the megacorps, the megacorps run the world, and growth can simply be defined as a non-goal. Stock markets can be eliminated, having served their purpose of concentrating wealth in a few hands. It will then be possible to run the economy within the bounds of a finite Earth, but how much of that Earth will still be in viable condition is an open question. ------------------------------------------------------------------------ a political discussion forum - •••@••.••• To subscribe, send any message to •••@••.••• A public service of Citizens for a Democratic Renaissance (mailto:•••@••.••• http://cyberjournal.org) ---------------------------------------------------------- Non-commercial reposting is hereby approved, but please include the sig up through this paragraph and retain any internal credits and copyright notices. .--------------------------------------------------------- To see the index of the cj archives, send any message to: •••@••.••• To subscribe to our activists list, send any message to: •••@••.••• Help create the Movement for a Democratic Rensaissance ---------------------------------------------- crafted in Ireland by rkm ----------------------------------- A community will evolve only when the people control their means of communication. -- Frantz Fanon
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