Harry Targ
“It could be that the change we wanted for so long is possible this time” said a joyous Salvadoran woman after the election Sunday, March 15 of the FMLN (FarabundoMarti Liberation Movement) candidate for president. Mauricio Funes was the first FMLN candidate to defeat the rightwing Arena party in Salvadoran elections since the civil war in that country came to an end in a UN brokered ceasefire in 1992.
The most bloody face of the Salvadoran began in 1979, when a so-called reform coup was carried out by junior grade military officers to stop brutal violence against the people. But, in short order, reformers were forced out by hard line military dictators who launched a campaign of slaughter, targeting domestic and foreign “subversives” for assassination.Progressive reformers from some 80 mass organizations, the Democratic Revolutionary Front(FDR), joined forces with a coalition of revolutionaries, the FMLN, to defend the masses of landless peasants, factory workers, students, teachers, and health care workers from assassination, imprisonment, and dictatorship.
Over the decade of the 1980s, the FMLN gained control of regions of the country, establishing “zones of popular control,” where peoples’ assemblies could build rudimentary political institutions. But the FMLN never assembled sufficient forces to defeat the Salvadoran military, treasury police, death squads and other instrumentalities of the 2 percent of the population that controlled 60 percent of the land, the so-called “14 families.”
Throughout the eighties, sympathetic church people were slaughtered, from US nuns in 1979, to Archbishop Oscar Romero in 1980, to six Salvadoran Jesuit priests in 1989.
Perhaps the most egregious omission in recent stories in the mainstream US press concerning last Sunday’s elections was the fact that the decade of violence, killing 70,000 Salvadorans and causing hundreds of thousands to flee the country, was fully encouraged and supported by United States foreign policy. Nearly $2 billion of military aid flowed from the US treasury to El Salvador, about 100 US militaryadvisors were in country to direct the war effort against the people, and US soldiers and airmen provided logistical, radar and other support to the Salvadoran military in their war from neighboring Honduras. If the US had not taken sides and given its full resources to the dictators, and their “elected” officials from the Christian Democratic and then Arena parties, the FMLN and the mass organizations who had joined with them would have been victorious by 1984, saving thousands of lives.
Back in the United States CISPES, the Committee in Solidarity With the People of El Salvador, created a national organization with over 100 chapters in cities and towns. CISPES members marched, rallied, lobbied Congress, raised money for sister city projects in the zones of popular control, and in other ways tried to show the people of El Salvador that there were Americans who opposed military dictatorship andgrotesque economic inequality in their country. CISPES stood against US imperialism in Central America.
When CISPES members marched to the chant of “The People United Will Never Be Defeated” they did not realize how long the struggle might take. The election of Mauricio Funes, however, does confirm that what was being chanted may in fact be coming true.
Monday, March 16, 2009
Thursday, March 5, 2009
Misconceptions of the Middle East
A Panel Discussion
March 3, 2009
Comments by Harry Targ
Introduction
We are all gripped by the growing economic crisis. Americans see that crisis as originating in the United States in the recent past and resonating around the world; first us, then Europe, then the countries of the Global South. This frame on the global economic crisis has even begun to extend to public discussion of issues of national security and political/military stability.
For example, Dennis C. Blair, president Obama’s new Director of National Intelligence, testified before Congress on Thursday, February 12 warning that global economic turmoil and possible political instability brought about by it could surpass terrorism as the number one threat to the United States. In addition, Blair said, the economic crisis would threaten the reputation of the United States’ “stewardship of the global economy.” Finally, the New York Times quoted Blair as suggesting that the economic downturn was “the primary near term security concern” and that if it continued it would imperil some governments (New York Times, February 13, 2009).
What I found constructive about this statement was that, for the first time in a long time, a US security spokesperson recognized a connection between economic wellbeing and political stability. By implication, if a bit of a stretch, it suggested that peoples around the world, as well as at home, had deep-seated and legitimate economic concerns.
What was less constructive was the suggestion that the economic crisis at home was recent; that economic crisis around the globe is a byproduct of the recent crisis at home; and that ordinarily there had been “US stewardship of the global economy.”
Recent Global Economic Context
I would like to suggest that, with some significant exceptions, most of the peoples of the globe have been living in economic crisis for at least thirty years and this long-term economic crisis has to be factored into any discussion of conflicts as seemingly intractable as that of the Middle East.
Looking at the last third of the twentieth century, Canadian economist James Davies, wrote in a study prepared by the World Institute for Development Economics Research released in 2006 that “income inequality has been rising for the past 20 to 25 years and we think that is true for inequality in the distribution of wealth.” In 2,000 the study showed, the top 1 percent of the world’s population accounted for 40 percent of the world’s total net worth, with the bottom half owning 1.1 percent. Edward Wolff, another economist participating in the study wrote that “”With the notable exception of China and India, the third world has drifted behind.” (New York Times, December 6, 2006).
The starkest interpretation of this kind of data was reflected in a 2003 article by Egyptian economist, Samir Amin, who claimed that the global economy is creating what he called “the precarious classes,” both in agriculture and manufacturing, who cannot count on day-to-day remunerative activity to survive. He estimates that 2/ 3 to ¾ of humankind are among the “precarious classes.”
Relevance to the Middle East
A financial publication called “Arab Banker” printed a summary of a World Bank study called “Two Years After London: Restarting Palestinian Economic Recovery” in 2007. The World Bank, the Arab Banker, and other sources indicated the following alarming data:
-the percentage of Gazans living in poverty has been steadily increasing from 1998 (21.6%) to 2006 (35%).
-Israeli policies isolating Gaza from the Israeli and global economy-work, imports, exports- made matters worse.
-without remittances and food aid the poverty rate in Gaza has risen to 67% since Israeli and US policies were put in place to punish the Hamas regime.
-restrictions on Gaza’s access to the global economy has led since 2006 to 90% decline of Gaza’s industrial operations.
-In 2007 95% of Gaza’s industrial operations were suspended due to an Israeli import-export ban
-industrial employment declined from 35,000 in 2005 to 4,200 in 2007
In addition, economic data on Israel and the occupied territories suggests that West Bank and Gaza gross national product per capita has been about 10 percent of that of Israel. In sum, the global distribution of wealth and income referred to above has been replicated in Israel and Palestine.
Let me just add two pieces of information about the United States to this condition of pain and suffering. First, as a recent Amnesty International report suggests, the United States has been Israel’s predominant military supplier for years. AI noted that under a current 10-year agreement, the US will provide $30 billion in military aid over the next 10 years. (AI has called for an arms embargo of weapons supplied to both Israel and Palestinian armed groups, who receive aid from Russia, Iran, China, and various underground sources).
Finally, the University of Maryland’s Program on International Policy Attitudes recently reported some findings of an attitude study that they carried out in seven predominantly Muslim countries and the Palestinian territories. Majorities in all these countries supported the US removing its bases and military forces from Islamic countries. In addition, they approved of attacks on US troops in Iraq and elsewhere in the Gulf and Afghanistan. However, only very small minorities approved attacks on American civilians and generally respondents opposed the use of violence to achieve religious or political goals. The authors say the respondents agree with al Qaeda’s goal of forcing the US to withdraw from the region but they disagree with their methods. And large percentages see the US as wanting to expand Israeli borders in the region even though 59% of Palestinians said the US wants to create a Palestinian state.
What Does This Mean?
First, I would argue that Intelligence Director Blair is largely correct. Violence and political instability in the world is intimately connected with economic wellbeing. What he does not mention is that the economic crisis we face today in the United States and the industrial capitalist world, is a crisis that countries of the Global South have experienced at least since the 1970s. He, and most pundits, refuse to articulate the view that violence in a multitude of forms is connected to the lack of economic justice.
Second, data suggests clearly that in the occupied territories the notion of “precariousness” is an apt way to describe the condition and daily consciousness of Palestinian peoples. Shifting currents in Palestinian politics, I hypothesize, are also connected to patterns of economic growth and decay. In the 1950s and 1960s, secular leaders in the Arab world, including Palestinians, offered a vision of economic change for their people that was processed in Washington, and European capitals as threatening to dominant economic interests. Paradoxically, the US began to support alternative political currents in the region with a religious agenda, such as the followers of Osama Bin Laden in Afghanistan and Hamas in Palestine. Subsequently, these groups, in their words and, to some extent, in their deeds more effectively respond to the sense of economic injustice that peoples like the Palestinians experience.
There is no easy solution but the United States and other wealthy countries must participant in a disinterested economic reconstruction of the occupied territories. Only that will break the back of anger, mutual hatred, and the kind of political instability Dennis Blair was talking about.
In addition, Israel must be prevailed upon to share the land and resources of the region. Economic development must be coupled with economic justice for all.
A Panel Discussion
March 3, 2009
Comments by Harry Targ
Introduction
We are all gripped by the growing economic crisis. Americans see that crisis as originating in the United States in the recent past and resonating around the world; first us, then Europe, then the countries of the Global South. This frame on the global economic crisis has even begun to extend to public discussion of issues of national security and political/military stability.
For example, Dennis C. Blair, president Obama’s new Director of National Intelligence, testified before Congress on Thursday, February 12 warning that global economic turmoil and possible political instability brought about by it could surpass terrorism as the number one threat to the United States. In addition, Blair said, the economic crisis would threaten the reputation of the United States’ “stewardship of the global economy.” Finally, the New York Times quoted Blair as suggesting that the economic downturn was “the primary near term security concern” and that if it continued it would imperil some governments (New York Times, February 13, 2009).
What I found constructive about this statement was that, for the first time in a long time, a US security spokesperson recognized a connection between economic wellbeing and political stability. By implication, if a bit of a stretch, it suggested that peoples around the world, as well as at home, had deep-seated and legitimate economic concerns.
What was less constructive was the suggestion that the economic crisis at home was recent; that economic crisis around the globe is a byproduct of the recent crisis at home; and that ordinarily there had been “US stewardship of the global economy.”
Recent Global Economic Context
I would like to suggest that, with some significant exceptions, most of the peoples of the globe have been living in economic crisis for at least thirty years and this long-term economic crisis has to be factored into any discussion of conflicts as seemingly intractable as that of the Middle East.
Looking at the last third of the twentieth century, Canadian economist James Davies, wrote in a study prepared by the World Institute for Development Economics Research released in 2006 that “income inequality has been rising for the past 20 to 25 years and we think that is true for inequality in the distribution of wealth.” In 2,000 the study showed, the top 1 percent of the world’s population accounted for 40 percent of the world’s total net worth, with the bottom half owning 1.1 percent. Edward Wolff, another economist participating in the study wrote that “”With the notable exception of China and India, the third world has drifted behind.” (New York Times, December 6, 2006).
The starkest interpretation of this kind of data was reflected in a 2003 article by Egyptian economist, Samir Amin, who claimed that the global economy is creating what he called “the precarious classes,” both in agriculture and manufacturing, who cannot count on day-to-day remunerative activity to survive. He estimates that 2/ 3 to ¾ of humankind are among the “precarious classes.”
Relevance to the Middle East
A financial publication called “Arab Banker” printed a summary of a World Bank study called “Two Years After London: Restarting Palestinian Economic Recovery” in 2007. The World Bank, the Arab Banker, and other sources indicated the following alarming data:
-the percentage of Gazans living in poverty has been steadily increasing from 1998 (21.6%) to 2006 (35%).
-Israeli policies isolating Gaza from the Israeli and global economy-work, imports, exports- made matters worse.
-without remittances and food aid the poverty rate in Gaza has risen to 67% since Israeli and US policies were put in place to punish the Hamas regime.
-restrictions on Gaza’s access to the global economy has led since 2006 to 90% decline of Gaza’s industrial operations.
-In 2007 95% of Gaza’s industrial operations were suspended due to an Israeli import-export ban
-industrial employment declined from 35,000 in 2005 to 4,200 in 2007
In addition, economic data on Israel and the occupied territories suggests that West Bank and Gaza gross national product per capita has been about 10 percent of that of Israel. In sum, the global distribution of wealth and income referred to above has been replicated in Israel and Palestine.
Let me just add two pieces of information about the United States to this condition of pain and suffering. First, as a recent Amnesty International report suggests, the United States has been Israel’s predominant military supplier for years. AI noted that under a current 10-year agreement, the US will provide $30 billion in military aid over the next 10 years. (AI has called for an arms embargo of weapons supplied to both Israel and Palestinian armed groups, who receive aid from Russia, Iran, China, and various underground sources).
Finally, the University of Maryland’s Program on International Policy Attitudes recently reported some findings of an attitude study that they carried out in seven predominantly Muslim countries and the Palestinian territories. Majorities in all these countries supported the US removing its bases and military forces from Islamic countries. In addition, they approved of attacks on US troops in Iraq and elsewhere in the Gulf and Afghanistan. However, only very small minorities approved attacks on American civilians and generally respondents opposed the use of violence to achieve religious or political goals. The authors say the respondents agree with al Qaeda’s goal of forcing the US to withdraw from the region but they disagree with their methods. And large percentages see the US as wanting to expand Israeli borders in the region even though 59% of Palestinians said the US wants to create a Palestinian state.
What Does This Mean?
First, I would argue that Intelligence Director Blair is largely correct. Violence and political instability in the world is intimately connected with economic wellbeing. What he does not mention is that the economic crisis we face today in the United States and the industrial capitalist world, is a crisis that countries of the Global South have experienced at least since the 1970s. He, and most pundits, refuse to articulate the view that violence in a multitude of forms is connected to the lack of economic justice.
Second, data suggests clearly that in the occupied territories the notion of “precariousness” is an apt way to describe the condition and daily consciousness of Palestinian peoples. Shifting currents in Palestinian politics, I hypothesize, are also connected to patterns of economic growth and decay. In the 1950s and 1960s, secular leaders in the Arab world, including Palestinians, offered a vision of economic change for their people that was processed in Washington, and European capitals as threatening to dominant economic interests. Paradoxically, the US began to support alternative political currents in the region with a religious agenda, such as the followers of Osama Bin Laden in Afghanistan and Hamas in Palestine. Subsequently, these groups, in their words and, to some extent, in their deeds more effectively respond to the sense of economic injustice that peoples like the Palestinians experience.
There is no easy solution but the United States and other wealthy countries must participant in a disinterested economic reconstruction of the occupied territories. Only that will break the back of anger, mutual hatred, and the kind of political instability Dennis Blair was talking about.
In addition, Israel must be prevailed upon to share the land and resources of the region. Economic development must be coupled with economic justice for all.
Saturday, February 28, 2009
The Second Rebuild America Rally
REBUILD AMERICA RALLY
February 28, 2009, 10 am
Riehle Plaza, Lafayette, Indiana
Organized by the United Steelworkers of America
Sixty-five workers, students, and peace activists listened to speeches and marched around the Lafayette Courthouse calling for a mass movement to “Rebuild America.”
Harry Targ spoke to the rally:
My excitement with this new year peaked early, seeing my folk singing hero, Pete Seeger leading 500,000 people at the Lincoln Memorial in a great rendition of “This Land is Your Land.” This song was written by Woody Guthrie in the late 1930s in the spirit of labor activism, leftwing politics, and New Deal policies creating jobs, advancing worker rights, and committing government to helping people survive in hard times.
Last February 11, 130 students showed up at an event organized by the Purdue Organization for Labor Equality (POLE) to hear two Honduran workers describe the corporate shut down of their factory because workers had decided to form a union. And these workers were producing products with a Purdue logo on them. Subsequently Purdue University canceled its contract with the company.
The next night February 12, a well-known historian gave a gripping lecture to about 120 people on the life of pro-worker New Deal photographer, Dorothea Lange.
Two days after that, the USW organized the first Rebuild America Rally. Organizers urged all of us to come together to build a movement to rebuild America.
In addition, recently peace activists in the community have been planning panels and films to challenge war policies and military spending. Environmentalists have been working hard to save what is left of the Celery Bog in West Lafayette. Two grassroots groups that worked on the Obama campaign have been building campaigns around volunteerism in the community, democratizing local politics, and one of the groups is discussing co-sponsoring training to support the Employee Free Choice Act. Meanwhile social concerns groups in many of our churches, synagogues, and mosques have been working on social justice issues with renewed vigor.
All these groups work on national, state and local issues. All the different groups are working on parallel and complementary issues: jobs and health care; jobs, healthcare, and peace; green jobs and economic development. Every group is concerned about fairness for workers, women, and people of color.
What we need to do now is join forces, work together on each others’ issues, coordinate our electoral work and maybe some day, all across this country, and this state we will be able to put our hands together and sing ‘This Land is Really Our Land.”
February 28, 2009, 10 am
Riehle Plaza, Lafayette, Indiana
Organized by the United Steelworkers of America
Sixty-five workers, students, and peace activists listened to speeches and marched around the Lafayette Courthouse calling for a mass movement to “Rebuild America.”
Harry Targ spoke to the rally:
My excitement with this new year peaked early, seeing my folk singing hero, Pete Seeger leading 500,000 people at the Lincoln Memorial in a great rendition of “This Land is Your Land.” This song was written by Woody Guthrie in the late 1930s in the spirit of labor activism, leftwing politics, and New Deal policies creating jobs, advancing worker rights, and committing government to helping people survive in hard times.
Last February 11, 130 students showed up at an event organized by the Purdue Organization for Labor Equality (POLE) to hear two Honduran workers describe the corporate shut down of their factory because workers had decided to form a union. And these workers were producing products with a Purdue logo on them. Subsequently Purdue University canceled its contract with the company.
The next night February 12, a well-known historian gave a gripping lecture to about 120 people on the life of pro-worker New Deal photographer, Dorothea Lange.
Two days after that, the USW organized the first Rebuild America Rally. Organizers urged all of us to come together to build a movement to rebuild America.
In addition, recently peace activists in the community have been planning panels and films to challenge war policies and military spending. Environmentalists have been working hard to save what is left of the Celery Bog in West Lafayette. Two grassroots groups that worked on the Obama campaign have been building campaigns around volunteerism in the community, democratizing local politics, and one of the groups is discussing co-sponsoring training to support the Employee Free Choice Act. Meanwhile social concerns groups in many of our churches, synagogues, and mosques have been working on social justice issues with renewed vigor.
All these groups work on national, state and local issues. All the different groups are working on parallel and complementary issues: jobs and health care; jobs, healthcare, and peace; green jobs and economic development. Every group is concerned about fairness for workers, women, and people of color.
What we need to do now is join forces, work together on each others’ issues, coordinate our electoral work and maybe some day, all across this country, and this state we will be able to put our hands together and sing ‘This Land is Really Our Land.”
Sunday, February 15, 2009
INDIANA IS MARCHING TO REBUILD AMERICA
February 15, 2009
Harry Targ
Seventy-five men and women, steelworkers, delegates from the Northwest Central Labor Council (AFL-CIO), anti-sweatshop student activists, representatives from Purdue’s Graduate Employees Organization, and other peace and justice activists from the community marched to “Rebuild America” on Saturday, February, 14, 2009 in Lafayette, Indiana. Organized by the United Steel Workers of America as part of four rallies around the state, steelworkers are calling on community activists, union and non-union alike, to “Join the Main Street Revolution.”
After two rousing speeches that called on government to marshal resources to rebuild America in the spirit of the New Deal of the 1930s, organizers led marchers from a public plaza to the Lafayette Courthouse. Participants then circled the old Indiana architectural wonder several times chanting for jobs, health care, investments in American industry, and union rights.
Using traditional symbols of the flag, patriotism, and appeals to God, organizers urged people of all parties, religions, and work statuses to join in future mobilizations. Some organizers urged peace, anti-sweatshop, and other activists to bring their placards to the next rally planned for February 28.
Three days earlier, Purdue Students for Labor Equality (POLE), hosted an evening educational event on the university campus to introduce two Honduran workers who were losing their jobs in a textile factory that was in process of organizing a shop floor union. POLE students are demanding that Purdue University honor its commitment to end contracts with companies, such as the one the Hondurans worked in, that produce products with the university logo that are produced in factories that deny workers rights to form unions. The event, a standing room crowd of 130, was largely made up of students. Several indicated that they had not been aware that their university had economic ties with corporations that used low paid sweatshop labor.
Images of the working class figured prominently in an event the next night at Purdue University. Distinguished progressive historian, Linda Gordon, gave a presentation on the life and work of the great documentary photographer, Dorothea Lange. Lange’s portraits of workers, Gordon argued, created in the American mind the reality of the Great Depression and its impacts. While her subjects, workers, women, African-Americans, Latinos, and Asian-Americans, had been primarily victims of the capitalist system, Lange’s subjects were also strong, pensive, proud people. For Lange, these were the people who built the country and cared for it, its families and communities. And while Lange did not take many pictures of demonstrations, protests, and strikes, Gordon said, Lange believed that those she had photographed were the kinds of workers who were on the front-lines of class struggle. They represented the democratic spirit, demanding that a new America be created, one based on principles of economic well- being and justice.
In the end no one can predict what these mobilizations in Indiana for worker rights will create. It does seem that everywhere around the country there is a new consciousness emerging. In North Central Indiana it is appearing among workers and students, on the streets and in the academy. In addition it is rising among local activists around a whole array of peace and justice issues. While these manifestations take different forms in different places, it does seem like people are beginning to make a new history.
We’ll have to stick around and see.
Harry Targ teaches Political Science at Purdue University and is a delegate to the Northwest Central Labor Council, AFL-CIO.
Harry Targ
Seventy-five men and women, steelworkers, delegates from the Northwest Central Labor Council (AFL-CIO), anti-sweatshop student activists, representatives from Purdue’s Graduate Employees Organization, and other peace and justice activists from the community marched to “Rebuild America” on Saturday, February, 14, 2009 in Lafayette, Indiana. Organized by the United Steel Workers of America as part of four rallies around the state, steelworkers are calling on community activists, union and non-union alike, to “Join the Main Street Revolution.”
After two rousing speeches that called on government to marshal resources to rebuild America in the spirit of the New Deal of the 1930s, organizers led marchers from a public plaza to the Lafayette Courthouse. Participants then circled the old Indiana architectural wonder several times chanting for jobs, health care, investments in American industry, and union rights.
Using traditional symbols of the flag, patriotism, and appeals to God, organizers urged people of all parties, religions, and work statuses to join in future mobilizations. Some organizers urged peace, anti-sweatshop, and other activists to bring their placards to the next rally planned for February 28.
Three days earlier, Purdue Students for Labor Equality (POLE), hosted an evening educational event on the university campus to introduce two Honduran workers who were losing their jobs in a textile factory that was in process of organizing a shop floor union. POLE students are demanding that Purdue University honor its commitment to end contracts with companies, such as the one the Hondurans worked in, that produce products with the university logo that are produced in factories that deny workers rights to form unions. The event, a standing room crowd of 130, was largely made up of students. Several indicated that they had not been aware that their university had economic ties with corporations that used low paid sweatshop labor.
Images of the working class figured prominently in an event the next night at Purdue University. Distinguished progressive historian, Linda Gordon, gave a presentation on the life and work of the great documentary photographer, Dorothea Lange. Lange’s portraits of workers, Gordon argued, created in the American mind the reality of the Great Depression and its impacts. While her subjects, workers, women, African-Americans, Latinos, and Asian-Americans, had been primarily victims of the capitalist system, Lange’s subjects were also strong, pensive, proud people. For Lange, these were the people who built the country and cared for it, its families and communities. And while Lange did not take many pictures of demonstrations, protests, and strikes, Gordon said, Lange believed that those she had photographed were the kinds of workers who were on the front-lines of class struggle. They represented the democratic spirit, demanding that a new America be created, one based on principles of economic well- being and justice.
In the end no one can predict what these mobilizations in Indiana for worker rights will create. It does seem that everywhere around the country there is a new consciousness emerging. In North Central Indiana it is appearing among workers and students, on the streets and in the academy. In addition it is rising among local activists around a whole array of peace and justice issues. While these manifestations take different forms in different places, it does seem like people are beginning to make a new history.
We’ll have to stick around and see.
Harry Targ teaches Political Science at Purdue University and is a delegate to the Northwest Central Labor Council, AFL-CIO.
Thursday, February 12, 2009
Ideological Justifications for the Permanent War Economy and the Globalization of Empire
Harry Targ
Constructing and maintaining a permanent war economy was a policy commitment made by virtually every U.S. administration and Congress since the 1940s. It meant that budget decisions would be based on the primacy of military spending. And, military spending served ever since World War II as an economic stimulus to overcome recessionary dynamics in the economy as a whole and to support secure contracts for huge corporations engaging in military production and service.
The permanent war economy paralleled and supported the fifty year development of U.S. capitalism on the world stage. During this time frame global capitalism shifted economic activity from direct investment in goods and services at home and abroad to financial speculation. Those corporations which continued to manufacture goods for domestic and international consumption shifted their productive operations to poor countries where lower wages could be paid. These changing features of the international political economy were extended by globalization, the dramatic increase in cross-national economic, political, and cultural interactions. In short, the global political economy of the last fifty years has been significantly shaped by the building of a permanent war economy, financialization, deindustrialization, and globalization.
While these processes are critical to understanding the U.S. role in the world, scholars, pundits, and most importantly politicians explained the U.S. role in the world in different ways. The American people were told that the U.S. faced diabolical enemies, that our place in world history was special, and that we had an obligation to bring the American experience to the world.
The ideological campaign for the Cold War was articulated in speeches by former British Prime Minister Winston Churchill in 1946 and President Harry Truman in 1947. The former, addressing a college audience in Fulton, Missouri warned that “…from the Stettin in the Baltic to Trieste in the Adriatic, an iron curtain has descended across the continent.” One year later, President Truman in his famous Doctrine speech argued that there were two ways of life in the world, one based on freedom and the other tyranny. The United States, he said must defend the forces of freedom against “totalitarianism.” Of course, the threat came from the Soviet Union.
Three years later, an “in-house” document, National Security Council Document 68 (NSC 68) was drafted and circulated in the Truman administration by Secretary of State Dean Acheson. It recommended that military spending be the number one priority of every administration. And the recommendation was necessary because the Soviet Union constituted a military threat and an economic challenge. When the Korean War started, NSC 68 became publicly articulated policy and vision (even though the document itself remained classified until the 1970s).
The ideological construct, “good versus evil,” “freedom versus totalitarianism,” was rigidly imposed on a frightened public in the 1940s and 1950s as anti-communism pervaded the society. What came to be known as “McCarthyism,” imported images of domestic traitors, subversives, and foreignness into the American cultural stream. The threat was so great at home as well as abroad that state repression was justified to protect the nation.
In addition, academia contributed to the public face of this ideology through its development of “modernization theory.” Economic historian and Kennedy and Johnson foreign policy advisor Walt Rostow described what the world faced: Communism was “…a kind of disease which can befall a transitional society if it fails to organize effectively those elements within it which are prepared to get on with the job of modernization.” The disease must be expunged so that poor countries could develop market-based economies as did Europe and the United States. The ideological ground was laid for Vietnam, the Dominican Republic, Chile, Central America, and Iraq and Afghanistan in our own day.
And, of course, we can reflect on the words of President Reagan who proclaimed shortly before he left office:
“We cannot escape our destiny, nor should we try to do so. The leadership of the free world was thrust upon us two centuries ago in that little hall of Philadelphia. In the days following World War II, when the economic strength and power of America was all that stood between the world and the return to the dark ages, Pope Pius XII said, 'The American people have a great genius for splendid and unselfish actions. Into the hands of America God has placed the destinies of an afflicted mankind.’ We are indeed, and we are today, the last best hope of man on earth.”
And finally in our own day, and when the Soviet “evil empire” was long gone, a new enemy, “international terrorism” was identified. And, like the former Soviet Union, this enemy threatened our being and necessitated a strong military response. President Bush said in 2002 (and again in a similar way just days before he left office):
“But the best way to secure the homeland is to find the enemy wherever they try to hide and bring them to justice. The best way -- make no mistake about it. You should not be confused about the nature of the people we're dealing with. They hate us, because we're free.They hate the thought that Americans welcome all religions. They can't stand that thought. They hate the thought that we educate everybody. They hate our freedoms. They hate the fact that we hold each individual -- we dignify each individual. We believe in the dignity of every person. They can't stand that.
And the only way they know to express themselves is through killing, cold- blooded killing. And so we need to treat them the way they are, as international criminals. And that's why my defense budget is the largest increase in 20 years. You know, the price of freedom is high,but for me it's never too high because we fight for freedom.”
In sum, while American imperialism has its roots in military spending, financialization, deindustrialization, and globalization, it has been explained to the American people in terms of high moral principle, coupled with a sense of the special mission that American brings to the world. For Puritan America, Ronald Reagan, and George Bush, America is “a city on a hill.” While peace activists need to work against military spending, oppose the speculative economy, demand worker rights at home and abroad, and oppose unbridled “free trade,” they must challenge the ideological justifications that have served to mobilize a troubled and pliant citizenry to support US policy for decades.
Constructing and maintaining a permanent war economy was a policy commitment made by virtually every U.S. administration and Congress since the 1940s. It meant that budget decisions would be based on the primacy of military spending. And, military spending served ever since World War II as an economic stimulus to overcome recessionary dynamics in the economy as a whole and to support secure contracts for huge corporations engaging in military production and service.
The permanent war economy paralleled and supported the fifty year development of U.S. capitalism on the world stage. During this time frame global capitalism shifted economic activity from direct investment in goods and services at home and abroad to financial speculation. Those corporations which continued to manufacture goods for domestic and international consumption shifted their productive operations to poor countries where lower wages could be paid. These changing features of the international political economy were extended by globalization, the dramatic increase in cross-national economic, political, and cultural interactions. In short, the global political economy of the last fifty years has been significantly shaped by the building of a permanent war economy, financialization, deindustrialization, and globalization.
While these processes are critical to understanding the U.S. role in the world, scholars, pundits, and most importantly politicians explained the U.S. role in the world in different ways. The American people were told that the U.S. faced diabolical enemies, that our place in world history was special, and that we had an obligation to bring the American experience to the world.
The ideological campaign for the Cold War was articulated in speeches by former British Prime Minister Winston Churchill in 1946 and President Harry Truman in 1947. The former, addressing a college audience in Fulton, Missouri warned that “…from the Stettin in the Baltic to Trieste in the Adriatic, an iron curtain has descended across the continent.” One year later, President Truman in his famous Doctrine speech argued that there were two ways of life in the world, one based on freedom and the other tyranny. The United States, he said must defend the forces of freedom against “totalitarianism.” Of course, the threat came from the Soviet Union.
Three years later, an “in-house” document, National Security Council Document 68 (NSC 68) was drafted and circulated in the Truman administration by Secretary of State Dean Acheson. It recommended that military spending be the number one priority of every administration. And the recommendation was necessary because the Soviet Union constituted a military threat and an economic challenge. When the Korean War started, NSC 68 became publicly articulated policy and vision (even though the document itself remained classified until the 1970s).
The ideological construct, “good versus evil,” “freedom versus totalitarianism,” was rigidly imposed on a frightened public in the 1940s and 1950s as anti-communism pervaded the society. What came to be known as “McCarthyism,” imported images of domestic traitors, subversives, and foreignness into the American cultural stream. The threat was so great at home as well as abroad that state repression was justified to protect the nation.
In addition, academia contributed to the public face of this ideology through its development of “modernization theory.” Economic historian and Kennedy and Johnson foreign policy advisor Walt Rostow described what the world faced: Communism was “…a kind of disease which can befall a transitional society if it fails to organize effectively those elements within it which are prepared to get on with the job of modernization.” The disease must be expunged so that poor countries could develop market-based economies as did Europe and the United States. The ideological ground was laid for Vietnam, the Dominican Republic, Chile, Central America, and Iraq and Afghanistan in our own day.
And, of course, we can reflect on the words of President Reagan who proclaimed shortly before he left office:
“We cannot escape our destiny, nor should we try to do so. The leadership of the free world was thrust upon us two centuries ago in that little hall of Philadelphia. In the days following World War II, when the economic strength and power of America was all that stood between the world and the return to the dark ages, Pope Pius XII said, 'The American people have a great genius for splendid and unselfish actions. Into the hands of America God has placed the destinies of an afflicted mankind.’ We are indeed, and we are today, the last best hope of man on earth.”
And finally in our own day, and when the Soviet “evil empire” was long gone, a new enemy, “international terrorism” was identified. And, like the former Soviet Union, this enemy threatened our being and necessitated a strong military response. President Bush said in 2002 (and again in a similar way just days before he left office):
“But the best way to secure the homeland is to find the enemy wherever they try to hide and bring them to justice. The best way -- make no mistake about it. You should not be confused about the nature of the people we're dealing with. They hate us, because we're free.They hate the thought that Americans welcome all religions. They can't stand that thought. They hate the thought that we educate everybody. They hate our freedoms. They hate the fact that we hold each individual -- we dignify each individual. We believe in the dignity of every person. They can't stand that.
And the only way they know to express themselves is through killing, cold- blooded killing. And so we need to treat them the way they are, as international criminals. And that's why my defense budget is the largest increase in 20 years. You know, the price of freedom is high,but for me it's never too high because we fight for freedom.”
In sum, while American imperialism has its roots in military spending, financialization, deindustrialization, and globalization, it has been explained to the American people in terms of high moral principle, coupled with a sense of the special mission that American brings to the world. For Puritan America, Ronald Reagan, and George Bush, America is “a city on a hill.” While peace activists need to work against military spending, oppose the speculative economy, demand worker rights at home and abroad, and oppose unbridled “free trade,” they must challenge the ideological justifications that have served to mobilize a troubled and pliant citizenry to support US policy for decades.
Thursday, February 5, 2009
The Global Political Economy and US Foreign Policy
(Excerpts from a presentation at the Deerfield Progressive Forum, Deerfield Beach, Florida, January 17, 2009)
“When people do not have sufficient access to income, tools, opportunity and ability to accumulate assets, their fundamental right to work and earn a livelihood is threatened. Around the world and in the United States, systemic injustices, disparities based on gender, race and class, market fundamentalism, reworking of trade agreements and the erosion of labor rights all contribute to the erosion of people’s ability to earn a living wage with dignity.” Unitarian Universalist Service Committee (www.uusc.org), 2006.
We would be remiss if we failed to see the connections between the historic development of the permanent war economy and the parallel and connected developments of the global capitalist system. The global economic crisis and attendant war and terrorism in rich and poor countries alike are the direct resultant of years of unbridled, unplanned capitalist expansion on the world stage. We can plot the transformation of the global political economy, that is the parallel and combined development of economic and political institutions since World War II, to understand how and why the crisis of today emerged. And, after reflecting on world history, we can begin to see what needs to be done to overcome the crises that befall us.
Economic Crisis and Shifts Toward Financialization, Deindustrialization, and Globalization
During the period from 1945 and 1968, the so-called “golden age” of the U.S. economy, multinational corporations and banks spread across the globe while domestic consumption soared. Except for short recessions, the US economy grew steadily. The permanent war economy resulted in massive military spending, U.S. troops and bases in dozens of countries, bilateral and multinational military alliances, and deepening wars in Asia and covert operations in Africa, the Persian Gulf, and Latin America.
Underlying the global thrust of the U.S. military was an economic expansion similar in scope to the British empire of the nineteenth century. For example, US invested capital rose from $11 billion in 1950 to about $70 billion in 1969. This was so because profit margins from foreign investments were almost twice those of domestic operations. The year 1969 was illustrative as profit rates were 6.8 percent on domestic investments and 12.5 percent on foreign investments. MacEwan wrote about the significance of enlarging investments around the world when he suggested that “the absolute growth of U.S. business interests abroad is impressive, but it should be seen in the context of the establishment of overwhelming U.S. dominance in the international capitalist economy” ( in Harry R. Targ, Strategy of an Empire in Decline: Cold War II, 1986, p.32.)
The growth of international banking paralleled the growth of private investments on a worldwide basis and the United States was one of the leading financial participants. “In 1960 eight U.S. banks operated 131 overseas branches with overseas assets of $3.5 billion …By 1970 there were seventy-nine banks with 583 branches with $77.4 billion in assets…For comparison’s sake, the total assets of all U.S. commercial banks in 1960 were $255.7 billion; in 1967 $448.9 billion; and in 1974 (June) $872.0 billion. Thus while total domestic assets grew about 3 and one-half times between 1960-74, overseas assets grew about 42 times” (James Hawley in Targ, p. 35).
But, for reasons of military excess and the contradictions of global capitalism, the golden age could not last. The 1970s brought economic crisis around the world: oil shocks; inflation; high unemployment; over production; growing economic competition among the United States, European nations, Japan, and the Socialist camp. To further complicate the picture, third world revolutionary movements and demands for a New International Economic order challenged the global domination of industrial capitalist powers.
From the standpoint of U.S. corporations and banks, the most critical part of the crisis was the squeeze on profits. Public policies were adopted to promote recovery, particularly in profit rates. For example, the Nixon administration withdrew the United States from the Bretton Woods system of fixed exchange rates so that investors could speculate in currencies.
In addition, the rulers of the International Monetary Fund and private banks began a massive campaign to pressure poor countries to borrow money. At that point the debt system as we know it was launched. It opened the doors for wealthy countries, from which corporations and banks came, to impose economic policies on loan recipients. As poor countries found themselves unable to continue to import oil at draconian prices, European and U.S. banks, flush with petrodollars from oil rich countries, made funds available. In exchange, demands grew from powerful countries and leading international institutions such as the International Monetary Fund to force borrowing countries to deregulate and privatize their economies and cut taxes. Poor countries were told that they would receive loans if they transformed their economies in ways to open the doors to foreign capitalist interests. Eventually, the changes demanded of poor countries were instituted in rich countries as well. In sum, the political agenda of imperial powers was to use the economic crises, particularly the oil shocks, to reverse the forty year commitment of the capitalist world to the welfare state.
In this 1970s context of global economic crisis three interconnected components of the capitalist system were set in motion. The first, as has been suggested, was financialization. This involved the dramatic growth over the subsequent years in lending and credit, debt servicing, and speculation (stocks, bonds, hedge funds, private equity funds, and other forms of paper, e.g. “the virtual economy). The second, deindustrialization, constituted a massive movement by investors of capital out of U.S. goods-production, or manufacturing, to more profitable speculative activities or to production overseas where labor costs, wages and benefits, were significantly cheaper. Finally, globalization stimulated a qualitative increase in the integration of the U.S. into the global economy and culture with shifts to overseas production, distribution, lending, and speculation.
The period since the late 1970s and most associated with the “Reagan revolution” represented the culmination of policies relating to financialization, deindustrialization, and globalization. The United States, the international financial institutions, and other capitalist powers, vigorously promoted so-called “neoliberal policies” everywhere. Countries that needed to borrow money to continue to purchase the oil they had become addicted to were forced to downsize their governments, cut back on public services, deregulate their economies, sell-off or privatize their publicly owned enterprises, and shift to producing products for export rather than domestic consumption.
At home, there were significant reductions in government programs relating to health, welfare, and education and radical increases in military spending. Sustained campaigns were initiated to destroy the labor movement. Tax cuts targeted the wealthiest Americans and breaks were given to corporations which shifted their manufacturing facilities to other parts of the world. And foreign policies were instituted to force poor countries to embrace the neoliberal policies described above. With minor variations such policies continued through forty years of Republican and Democratic party rule. Contemporary critics of these historic developments, such as Joseph Stiglitz and Kevin Phillips, refer to the economic program as “market fundamentalism” and the political vision of limited government, “negative government,” (limiting government programs to military spending and domestic police protection).
The Global Political Economy Today
We now can consider the structure of the global economy today, the impacts of these policies, and the reaction to them from those motivated to fulfill the fundamental needs of the world’s people.
Just a few pieces of data will illustrate what this historic process of economic and political transformation has come to:
First, economic concentration at the global level has reached extraordinary proportions. By 1996, the top 200 multinational corporations had combined sales exceeding the value of the Gross National products of all but the nine wealthiest countries and by 2002, these sales equaled 28 percent of the value of all goods and services produced in the world. In 2003, 52 of the world’s largest economies were corporations and 48 were nations. The largest corporation in the world today, Wal Mart, has the 19th largest economy among states, corporations, and banks. As to banks, twenty of them had assets of $425 trillion at the dawn of the new century and only 16 accounted for 60 percent of speculation on foreign exchange markets in 1999. Financial speculative transactions, reached a dollar value of $1.5 trillion a day in the 1990s.
Second, global debt continues to grow and is paralleled by expanding national and personal debt in the United States, thus increasing the vulnerability and precariousness of all peoples. Poor countries owed the international banks, public and private, $2.5 trillion in 2004 and between 1998 and 2002 poor countries paid back interest and principle on the debt $217 billion more than they received in new loans. And in the United States since the 1990s, American indebtedness has exceeded earned income.
Third, the processes of personal remuneration are being radically transformed on a worldwide basis. Over the last 100 years, the major activities workers of all kinds have engaged in to “earn a living,” have shifted from agriculture, (providing basic sustenance), to manufacturing (in many cases earning a livable wage), to service (working for lower and barely survivable wages), to struggling in the informal sector (desperately hustling on the streets, running drugs, prostitution, gambling, and selling commodities in public markets). Almost half those who seek to earn a living in Latin America today are now in the informal sector.
Fourth, inequality is expanding between countries and within countries and economic and political marginalization, or human precariousness is spreading. United Nations and others sources report that gaps between rich and poor people have grown over the last 40 years. Eighty percent of the world’s gross domestic product is controlled by one billion people and the other five billion share the remaining twenty percent of it. Nearly one quarter of humankind lives on $1 a day and almost half, 3 billion people, live on $2 a day. African economist, Samir Amin, has a name for this mal-distribution of income and wealth. He calls it human “precariousness” (Monthly Review, October, 2003). The growing inequality in the global system is paralleled by a similar dynamic within the United States, with at least ¼ of the population poor or working poor. And African American scholar Manning Marable reminds us that the growing precariousness of existence in the United States hits people of color disproportionately (“Globalization and Racialization,” http://www.greens.org/s-r/39/39-06.html)
Resistance to Empire Abroad and at Home
These and other data can be daunting, particularly if we fail to examine the varieties of resistance in global and national politics. Mass movements of workers, farmers, women, indigenous people, environmentalists, and peace activists have been mobilizing increasingly everywhere. One kind of example is the World Social fora, the annual meetings of so-called “anti-globalization” activists who meet and network every year somewhere around the world. Their rallying cry is “Another World is Possible.” For the first time, an annual meeting of the World Social Forum was held in the United States in June, 2007in Atlanta, Georgia. About 10,000 people attended, largely youth, women, people of color, and activists from or in solidarity movements with peoples of the Global South. Their energy, enthusiasm, and vision were inspiring.
At the level of governments, resistance to the global economic and political order that had been established after World War II is being challenged. Opposition is growing to rich country trade demands in the WTO, continued IMF penetration of poor countries, the debt system, and big power interference in the political and economic life of countries of the Global South.
In the United States during the recently concluded election season political interest and participation was high. Young and old became energized by the political process. Candidates were being pressured, by virtue of the mobilizations, to address issues relevant to workers, women, African Americans, and youth. They were forced, however inadequately, to address health care, the environment, racist government policies, and a neoliberal economic policy that privileges corporate and banking interests at the expense of workers in the United States and around the world.
All of these trends and forms of resistance have been highlighted within the last year by the emergence of a national and global financial crisis that has not been seen since the Great Depression of the 1930s. Global capitalism is experiencing over-production, under-consumption, rapidly declining profit rates, unrecoverable indebtedness, and massive unemployment. In addition, the very environment that sustains life is under serious challenge. It is possible that the capitalist development of the late twentieth century, including financialization, deindustrialization, and globalization, and fostered by neo-liberal policies and militarism has reached a moment in which its survival is at risk.
Whatever the future holds for the global capitalist system, progressives must work in the short-run to try to improve the physical, political, cultural, and psychological well being of the world’s citizens. In the twentieth century we saw various political movements and ideologies offering a vision of “positive government,” that is a vision that says that political (and economic) institutions can and should be created by
and for the vast majority of people. While many experiments in positive government failed, for a variety of reasons, the global movements of our own day are saying that we can establish new institutions that represent us all, and not just the rich and powerful. In the face of this deep crisis of capitalism and militarism, that is the continuing challenge of the 21st century.
Harry Targ teaches and writes on United States foreign policy and international political economy at Purdue University. He has a blog at www.heartlandradical.blogspot.com
“When people do not have sufficient access to income, tools, opportunity and ability to accumulate assets, their fundamental right to work and earn a livelihood is threatened. Around the world and in the United States, systemic injustices, disparities based on gender, race and class, market fundamentalism, reworking of trade agreements and the erosion of labor rights all contribute to the erosion of people’s ability to earn a living wage with dignity.” Unitarian Universalist Service Committee (www.uusc.org), 2006.
We would be remiss if we failed to see the connections between the historic development of the permanent war economy and the parallel and connected developments of the global capitalist system. The global economic crisis and attendant war and terrorism in rich and poor countries alike are the direct resultant of years of unbridled, unplanned capitalist expansion on the world stage. We can plot the transformation of the global political economy, that is the parallel and combined development of economic and political institutions since World War II, to understand how and why the crisis of today emerged. And, after reflecting on world history, we can begin to see what needs to be done to overcome the crises that befall us.
Economic Crisis and Shifts Toward Financialization, Deindustrialization, and Globalization
During the period from 1945 and 1968, the so-called “golden age” of the U.S. economy, multinational corporations and banks spread across the globe while domestic consumption soared. Except for short recessions, the US economy grew steadily. The permanent war economy resulted in massive military spending, U.S. troops and bases in dozens of countries, bilateral and multinational military alliances, and deepening wars in Asia and covert operations in Africa, the Persian Gulf, and Latin America.
Underlying the global thrust of the U.S. military was an economic expansion similar in scope to the British empire of the nineteenth century. For example, US invested capital rose from $11 billion in 1950 to about $70 billion in 1969. This was so because profit margins from foreign investments were almost twice those of domestic operations. The year 1969 was illustrative as profit rates were 6.8 percent on domestic investments and 12.5 percent on foreign investments. MacEwan wrote about the significance of enlarging investments around the world when he suggested that “the absolute growth of U.S. business interests abroad is impressive, but it should be seen in the context of the establishment of overwhelming U.S. dominance in the international capitalist economy” ( in Harry R. Targ, Strategy of an Empire in Decline: Cold War II, 1986, p.32.)
The growth of international banking paralleled the growth of private investments on a worldwide basis and the United States was one of the leading financial participants. “In 1960 eight U.S. banks operated 131 overseas branches with overseas assets of $3.5 billion …By 1970 there were seventy-nine banks with 583 branches with $77.4 billion in assets…For comparison’s sake, the total assets of all U.S. commercial banks in 1960 were $255.7 billion; in 1967 $448.9 billion; and in 1974 (June) $872.0 billion. Thus while total domestic assets grew about 3 and one-half times between 1960-74, overseas assets grew about 42 times” (James Hawley in Targ, p. 35).
But, for reasons of military excess and the contradictions of global capitalism, the golden age could not last. The 1970s brought economic crisis around the world: oil shocks; inflation; high unemployment; over production; growing economic competition among the United States, European nations, Japan, and the Socialist camp. To further complicate the picture, third world revolutionary movements and demands for a New International Economic order challenged the global domination of industrial capitalist powers.
From the standpoint of U.S. corporations and banks, the most critical part of the crisis was the squeeze on profits. Public policies were adopted to promote recovery, particularly in profit rates. For example, the Nixon administration withdrew the United States from the Bretton Woods system of fixed exchange rates so that investors could speculate in currencies.
In addition, the rulers of the International Monetary Fund and private banks began a massive campaign to pressure poor countries to borrow money. At that point the debt system as we know it was launched. It opened the doors for wealthy countries, from which corporations and banks came, to impose economic policies on loan recipients. As poor countries found themselves unable to continue to import oil at draconian prices, European and U.S. banks, flush with petrodollars from oil rich countries, made funds available. In exchange, demands grew from powerful countries and leading international institutions such as the International Monetary Fund to force borrowing countries to deregulate and privatize their economies and cut taxes. Poor countries were told that they would receive loans if they transformed their economies in ways to open the doors to foreign capitalist interests. Eventually, the changes demanded of poor countries were instituted in rich countries as well. In sum, the political agenda of imperial powers was to use the economic crises, particularly the oil shocks, to reverse the forty year commitment of the capitalist world to the welfare state.
In this 1970s context of global economic crisis three interconnected components of the capitalist system were set in motion. The first, as has been suggested, was financialization. This involved the dramatic growth over the subsequent years in lending and credit, debt servicing, and speculation (stocks, bonds, hedge funds, private equity funds, and other forms of paper, e.g. “the virtual economy). The second, deindustrialization, constituted a massive movement by investors of capital out of U.S. goods-production, or manufacturing, to more profitable speculative activities or to production overseas where labor costs, wages and benefits, were significantly cheaper. Finally, globalization stimulated a qualitative increase in the integration of the U.S. into the global economy and culture with shifts to overseas production, distribution, lending, and speculation.
The period since the late 1970s and most associated with the “Reagan revolution” represented the culmination of policies relating to financialization, deindustrialization, and globalization. The United States, the international financial institutions, and other capitalist powers, vigorously promoted so-called “neoliberal policies” everywhere. Countries that needed to borrow money to continue to purchase the oil they had become addicted to were forced to downsize their governments, cut back on public services, deregulate their economies, sell-off or privatize their publicly owned enterprises, and shift to producing products for export rather than domestic consumption.
At home, there were significant reductions in government programs relating to health, welfare, and education and radical increases in military spending. Sustained campaigns were initiated to destroy the labor movement. Tax cuts targeted the wealthiest Americans and breaks were given to corporations which shifted their manufacturing facilities to other parts of the world. And foreign policies were instituted to force poor countries to embrace the neoliberal policies described above. With minor variations such policies continued through forty years of Republican and Democratic party rule. Contemporary critics of these historic developments, such as Joseph Stiglitz and Kevin Phillips, refer to the economic program as “market fundamentalism” and the political vision of limited government, “negative government,” (limiting government programs to military spending and domestic police protection).
The Global Political Economy Today
We now can consider the structure of the global economy today, the impacts of these policies, and the reaction to them from those motivated to fulfill the fundamental needs of the world’s people.
Just a few pieces of data will illustrate what this historic process of economic and political transformation has come to:
First, economic concentration at the global level has reached extraordinary proportions. By 1996, the top 200 multinational corporations had combined sales exceeding the value of the Gross National products of all but the nine wealthiest countries and by 2002, these sales equaled 28 percent of the value of all goods and services produced in the world. In 2003, 52 of the world’s largest economies were corporations and 48 were nations. The largest corporation in the world today, Wal Mart, has the 19th largest economy among states, corporations, and banks. As to banks, twenty of them had assets of $425 trillion at the dawn of the new century and only 16 accounted for 60 percent of speculation on foreign exchange markets in 1999. Financial speculative transactions, reached a dollar value of $1.5 trillion a day in the 1990s.
Second, global debt continues to grow and is paralleled by expanding national and personal debt in the United States, thus increasing the vulnerability and precariousness of all peoples. Poor countries owed the international banks, public and private, $2.5 trillion in 2004 and between 1998 and 2002 poor countries paid back interest and principle on the debt $217 billion more than they received in new loans. And in the United States since the 1990s, American indebtedness has exceeded earned income.
Third, the processes of personal remuneration are being radically transformed on a worldwide basis. Over the last 100 years, the major activities workers of all kinds have engaged in to “earn a living,” have shifted from agriculture, (providing basic sustenance), to manufacturing (in many cases earning a livable wage), to service (working for lower and barely survivable wages), to struggling in the informal sector (desperately hustling on the streets, running drugs, prostitution, gambling, and selling commodities in public markets). Almost half those who seek to earn a living in Latin America today are now in the informal sector.
Fourth, inequality is expanding between countries and within countries and economic and political marginalization, or human precariousness is spreading. United Nations and others sources report that gaps between rich and poor people have grown over the last 40 years. Eighty percent of the world’s gross domestic product is controlled by one billion people and the other five billion share the remaining twenty percent of it. Nearly one quarter of humankind lives on $1 a day and almost half, 3 billion people, live on $2 a day. African economist, Samir Amin, has a name for this mal-distribution of income and wealth. He calls it human “precariousness” (Monthly Review, October, 2003). The growing inequality in the global system is paralleled by a similar dynamic within the United States, with at least ¼ of the population poor or working poor. And African American scholar Manning Marable reminds us that the growing precariousness of existence in the United States hits people of color disproportionately (“Globalization and Racialization,” http://www.greens.org/s-r/39/39-06.html)
Resistance to Empire Abroad and at Home
These and other data can be daunting, particularly if we fail to examine the varieties of resistance in global and national politics. Mass movements of workers, farmers, women, indigenous people, environmentalists, and peace activists have been mobilizing increasingly everywhere. One kind of example is the World Social fora, the annual meetings of so-called “anti-globalization” activists who meet and network every year somewhere around the world. Their rallying cry is “Another World is Possible.” For the first time, an annual meeting of the World Social Forum was held in the United States in June, 2007in Atlanta, Georgia. About 10,000 people attended, largely youth, women, people of color, and activists from or in solidarity movements with peoples of the Global South. Their energy, enthusiasm, and vision were inspiring.
At the level of governments, resistance to the global economic and political order that had been established after World War II is being challenged. Opposition is growing to rich country trade demands in the WTO, continued IMF penetration of poor countries, the debt system, and big power interference in the political and economic life of countries of the Global South.
In the United States during the recently concluded election season political interest and participation was high. Young and old became energized by the political process. Candidates were being pressured, by virtue of the mobilizations, to address issues relevant to workers, women, African Americans, and youth. They were forced, however inadequately, to address health care, the environment, racist government policies, and a neoliberal economic policy that privileges corporate and banking interests at the expense of workers in the United States and around the world.
All of these trends and forms of resistance have been highlighted within the last year by the emergence of a national and global financial crisis that has not been seen since the Great Depression of the 1930s. Global capitalism is experiencing over-production, under-consumption, rapidly declining profit rates, unrecoverable indebtedness, and massive unemployment. In addition, the very environment that sustains life is under serious challenge. It is possible that the capitalist development of the late twentieth century, including financialization, deindustrialization, and globalization, and fostered by neo-liberal policies and militarism has reached a moment in which its survival is at risk.
Whatever the future holds for the global capitalist system, progressives must work in the short-run to try to improve the physical, political, cultural, and psychological well being of the world’s citizens. In the twentieth century we saw various political movements and ideologies offering a vision of “positive government,” that is a vision that says that political (and economic) institutions can and should be created by
and for the vast majority of people. While many experiments in positive government failed, for a variety of reasons, the global movements of our own day are saying that we can establish new institutions that represent us all, and not just the rich and powerful. In the face of this deep crisis of capitalism and militarism, that is the continuing challenge of the 21st century.
Harry Targ teaches and writes on United States foreign policy and international political economy at Purdue University. He has a blog at www.heartlandradical.blogspot.com
Friday, January 30, 2009
The Permanent War Economy
Harry Targ
(Excerpts from a presentation at the Deerfield Progressive Forum, Deerfield Beach, Florida, January 17, 2009)
In the Beginning
After suffering the greatest economic depression in United States history, this country participated in a war-time coalition with Great Britain and the former Soviet Union to defeat fascism in Europe and Japanese imperialism in Asia. As a result of the economic mobilization for war, the United States economy grew to become the most powerful one by war’s end. By 1945, Americans were responsible for three-fourths of the world’s invested capital and controlled two-thirds of its industrial capacity. Near the end of World War II, General Electric CEO Charles Wilson recommended that the U.S. continue the wartime partnership between the government, the corporate sector, and the military to maintain what he called a “permanent war economy.” He and others feared the possibility of return to depression.
To justify a permanent war economy-ever increasing military expenditures, bases all around the world, periodic military interventions, and the maintenance of a large land army, navy, and air force-an external threat was needed. In 1947 President Truman told the American people that there was such a threat, “international communism.”
Many liberals and conservatives remained skeptical about high military expenditures. But, just before the Korean War started, permanent war economy advocates threw their support behind recommendations made in a long- time classified document, National Security Council Document 68, which recommended a dramatic increase in military spending. NSC-68 also recommended that military spending from that point on should be the number one priority of the national government. When presidents sit down to construct a federal budget they should first allocate all the money requested by military and corporate elites and lobbyists concerned with military spending. Only after that should government programs address education, health care, roads, transportation, housing and other critical domestic issues.
When the United States entered the Korean War, Truman committed the nation to a permanent war economy. Each subsequent president did likewise. According to Chalmers Johnson (Blowback, Sorrows of Empire), between 1947 and 1990, the permanent war economy cost the American people close to $9 trillion. Ruth Sivard (World Military Expenditures) presented data to indicate that over 100,000 U.S. military personnel died in wars and military interventions during this period. And, in other countries, nearly 10 million people died directly or indirectly in wars in which the United States was a participant.
Some influential Americans raised criticisms of the new permanent war economy. For example, while he subsequently complied with many of the demands for more military spending, President Eisenhower declared in one of his first speeches in office that “every gun that is made, every warship launched, every rocket fired, signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.” After eight years in the White House Eisenhower gave a prescient farewell address in which he warned of a “conjunction of an immense military establishment and a large arms industry” which was new in American history. And, he proclaimed; “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.” Incidentally, his original draft spoke of a “military-industrial-academic complex.”
Seven years later, in the midst of the Vietnam War, Dr. Martin Luther King Jr. proclaimed “Somehow this madness must cease. We must stop now. I speak for those whose land is being laid waste, whose homes are being destroyed, whose culture is being subverted. I speak for the poor of America who are paying the double price of smashed hopes at home and death and corruption in Vietnam. I speak as a citizen of the world, for the world as it stands aghast at the path we have taken.”
The Permanent War Economy Today
So we find ourselves in the midst of two wars today-Iraq and Afghanistan-that are already more costly than any war except World War II, against an enemy magnified, demonized, and mythologized as much or more than the cold war enemy to justify a $3 trillion price tag, the deaths of more than 4,000 soldiers, ten times that number of disabled veterans, and casualties and deaths of Iraqis and Afghanis probably approaching a million people. 9/11 afforded the Bush Administration the opportunity to launch a “war on terrorism” and the justification of preemptive war on any human target defined as a possible threat to the United States.The “terrorists” became the post-Cold War “international communists.” This is what the permanent war economy has come to.
Did the vision of Charles Wilson and the framers and advocates of NSC 68 bear fruit in terms of the domestic economy? The answer to this question is complicated but in the end clear. The U.S. economy is subject to cycles of growth and decay; expansion and recession; and periods of increased consumerism and low unemployment versus periods of declining product demand, lower wages, and high unemployment.
Looking at the period since World War II, bursts of increased military spending brought the U.S. economy out of the recessions of the late 1940s and 50s. The 60s economy boomed as the Vietnam war escalated before the economic crises of the 1970s. The so-called Reagan recovery was driven by dramatic increases in military spending. 1980s military spending equaled the total value of such spending between the founding of the nation and 1980.
In addition, military spending has benefited those industries, communities, and universities which have been the beneficiaries of such largesse. In our own day, Halliburton, Bechtel, and Kellogg, Brown, and Root have done quite well. For example, when Dick Cheney left his post as Secretary of Defense in 1993 to become the CEO of Halliburton, its subsidiary, KBR jumped from the 73rd ranked Pentagon contractor to the 18th.
Military spending pumped money into the economy to the advantage of selected multinational corporations and some communities. Usually recipients of defense dollars were part of what C. Wright Mills called, “the power elite,” those powerful individuals who, at the apex of government, corporate, and military institutions, influence policy. On the other hand, most citizens have not been beneficiaries of military spending.
“Indirect effects” of military spending, overwhelm the short-term stimulative effects of such spending. Military spending is “capital intensive,” that is the investment of dollars in military goods and services require less labor power to produce than the investment of comparable dollars in other sectors of the economy. Robert Pollin and Heidi Garrett-Peltier refer to spending on Iraq as a “job killer.” They estimate that $1 billion spent on investments in education, healthcare, energy conservation, and infrastructure would create anywhere from 50 to 100 percent more jobs than comparable spending on the war. They say; “Taking the 2007Iraq war budget of $138 billion, this means that upward of one million jobs were lost because the Bush Administration chose the Iraq sinkhole over public investment”(The Nation, March 31, 2008).
Further, military spending requires government to borrow money from private sources. Consequently, the more borrowing for the military, the less funds are available for non-military economic activity. Non-military spending gets “crowded out” by investment in arms.
Paralleling this, expanding investments in military reduce the resources of society that can be allocated for the production of goods and services that have use values. Military spending constitutes waste in that the resources that go into armies, navies, air forces, and weapons of human destruction cannot be put to constructive use. Looking at government spending alone, the 2008 federal budget increased by $35 billion in military spending, bringing the total to $541 billion. At the same time federal aid to state and local governments fell by $19.2 billion. The war on Iraq has already cost $522.5 billion and it was projected by distinguished economists that the total cost for the war, including paying debts, veterans benefits, and replacing destroyed equipment, will top $3 trillion (Linda J. Bilmes and Joseph Stiglitz, Washington Post, March 9, 2008, p.B01).
As a new administration enters office in the context of a deepening depression, 2009 military spending for two wars, over 700 military installations, and contracting with private armies operating everywhere, will push towards a trillion dollars. This prospective allocation of scarce government resources has to be evaluated in the context of President-elect Barack Obama’s call for a massive green-jobs economic stimulus package and bailout programs for some 40 states suffering from their own budget deficits.
The Permanent War Economy in One State
Citizens of Florida so far have spent $36 billion on the Iraq war. And, the National Priorities Project (www. national priorities.org) estimated that for one year of Iraq war expenditures the state of Florida could have provided 12.7 million people with health care, 25 million homes with renewable electricity, 575,000 music and arts teachers, 11.2 million scholarships for university students, and 613,000 elementary school teachers.
Looking at Broward County, taxpayers have paid $3.9 billion for the war so far. Instead of expenditures for the Iraq war, this money could have provided for one year the following:
-1,385,189 people with health care or
-2,760,979 homes with renewable electricity or
-90,432 public safety officers or
-62,714 music and art teachers or
-1,224,540 university scholarships or
-28,953 affordable housing units or
-2,169,806 children with health care or
-535,663 head start places or
-66,937 elementary school teachers
Andrew Bacevich summed up this tradition of permanent war in reviewing a biography of 1940s Secretary of Defense James Forrestal in The Nation (April 23, 2007):
“From Forrestal's day to the present, semiwarriors have viewed democratic politics as problematic. Debate means delay. To engage in give-and-take or compromise is to forfeit clarity and suggests a lack of conviction. The effective management of national security requires specialized knowledge, a capacity for clear-eyed analysis and above all an unflinching willingness to make decisions, whatever the cost. With the advent of semiwar, therefore, national security policy became the preserve of experts, few in number, almost always unelected, habitually operating in secret, persuading themselves that to exclude the public from such matters was to serve the public interest. After all, the people had no demonstrable ‘need to know.’ In a time of perpetual crisis, the anointed role of the citizen was to be pliant, deferential and afraid.”
It is the task of the peace and justice activists today to build a mass movement, mobilizing the citizenry to reject the role of “pliant, deferential,” and fearful citizens. The people must insist that President Obama say “no” to the semiwarriors.
(Excerpts from a presentation at the Deerfield Progressive Forum, Deerfield Beach, Florida, January 17, 2009)
In the Beginning
After suffering the greatest economic depression in United States history, this country participated in a war-time coalition with Great Britain and the former Soviet Union to defeat fascism in Europe and Japanese imperialism in Asia. As a result of the economic mobilization for war, the United States economy grew to become the most powerful one by war’s end. By 1945, Americans were responsible for three-fourths of the world’s invested capital and controlled two-thirds of its industrial capacity. Near the end of World War II, General Electric CEO Charles Wilson recommended that the U.S. continue the wartime partnership between the government, the corporate sector, and the military to maintain what he called a “permanent war economy.” He and others feared the possibility of return to depression.
To justify a permanent war economy-ever increasing military expenditures, bases all around the world, periodic military interventions, and the maintenance of a large land army, navy, and air force-an external threat was needed. In 1947 President Truman told the American people that there was such a threat, “international communism.”
Many liberals and conservatives remained skeptical about high military expenditures. But, just before the Korean War started, permanent war economy advocates threw their support behind recommendations made in a long- time classified document, National Security Council Document 68, which recommended a dramatic increase in military spending. NSC-68 also recommended that military spending from that point on should be the number one priority of the national government. When presidents sit down to construct a federal budget they should first allocate all the money requested by military and corporate elites and lobbyists concerned with military spending. Only after that should government programs address education, health care, roads, transportation, housing and other critical domestic issues.
When the United States entered the Korean War, Truman committed the nation to a permanent war economy. Each subsequent president did likewise. According to Chalmers Johnson (Blowback, Sorrows of Empire), between 1947 and 1990, the permanent war economy cost the American people close to $9 trillion. Ruth Sivard (World Military Expenditures) presented data to indicate that over 100,000 U.S. military personnel died in wars and military interventions during this period. And, in other countries, nearly 10 million people died directly or indirectly in wars in which the United States was a participant.
Some influential Americans raised criticisms of the new permanent war economy. For example, while he subsequently complied with many of the demands for more military spending, President Eisenhower declared in one of his first speeches in office that “every gun that is made, every warship launched, every rocket fired, signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.” After eight years in the White House Eisenhower gave a prescient farewell address in which he warned of a “conjunction of an immense military establishment and a large arms industry” which was new in American history. And, he proclaimed; “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.” Incidentally, his original draft spoke of a “military-industrial-academic complex.”
Seven years later, in the midst of the Vietnam War, Dr. Martin Luther King Jr. proclaimed “Somehow this madness must cease. We must stop now. I speak for those whose land is being laid waste, whose homes are being destroyed, whose culture is being subverted. I speak for the poor of America who are paying the double price of smashed hopes at home and death and corruption in Vietnam. I speak as a citizen of the world, for the world as it stands aghast at the path we have taken.”
The Permanent War Economy Today
So we find ourselves in the midst of two wars today-Iraq and Afghanistan-that are already more costly than any war except World War II, against an enemy magnified, demonized, and mythologized as much or more than the cold war enemy to justify a $3 trillion price tag, the deaths of more than 4,000 soldiers, ten times that number of disabled veterans, and casualties and deaths of Iraqis and Afghanis probably approaching a million people. 9/11 afforded the Bush Administration the opportunity to launch a “war on terrorism” and the justification of preemptive war on any human target defined as a possible threat to the United States.The “terrorists” became the post-Cold War “international communists.” This is what the permanent war economy has come to.
Did the vision of Charles Wilson and the framers and advocates of NSC 68 bear fruit in terms of the domestic economy? The answer to this question is complicated but in the end clear. The U.S. economy is subject to cycles of growth and decay; expansion and recession; and periods of increased consumerism and low unemployment versus periods of declining product demand, lower wages, and high unemployment.
Looking at the period since World War II, bursts of increased military spending brought the U.S. economy out of the recessions of the late 1940s and 50s. The 60s economy boomed as the Vietnam war escalated before the economic crises of the 1970s. The so-called Reagan recovery was driven by dramatic increases in military spending. 1980s military spending equaled the total value of such spending between the founding of the nation and 1980.
In addition, military spending has benefited those industries, communities, and universities which have been the beneficiaries of such largesse. In our own day, Halliburton, Bechtel, and Kellogg, Brown, and Root have done quite well. For example, when Dick Cheney left his post as Secretary of Defense in 1993 to become the CEO of Halliburton, its subsidiary, KBR jumped from the 73rd ranked Pentagon contractor to the 18th.
Military spending pumped money into the economy to the advantage of selected multinational corporations and some communities. Usually recipients of defense dollars were part of what C. Wright Mills called, “the power elite,” those powerful individuals who, at the apex of government, corporate, and military institutions, influence policy. On the other hand, most citizens have not been beneficiaries of military spending.
“Indirect effects” of military spending, overwhelm the short-term stimulative effects of such spending. Military spending is “capital intensive,” that is the investment of dollars in military goods and services require less labor power to produce than the investment of comparable dollars in other sectors of the economy. Robert Pollin and Heidi Garrett-Peltier refer to spending on Iraq as a “job killer.” They estimate that $1 billion spent on investments in education, healthcare, energy conservation, and infrastructure would create anywhere from 50 to 100 percent more jobs than comparable spending on the war. They say; “Taking the 2007Iraq war budget of $138 billion, this means that upward of one million jobs were lost because the Bush Administration chose the Iraq sinkhole over public investment”(The Nation, March 31, 2008).
Further, military spending requires government to borrow money from private sources. Consequently, the more borrowing for the military, the less funds are available for non-military economic activity. Non-military spending gets “crowded out” by investment in arms.
Paralleling this, expanding investments in military reduce the resources of society that can be allocated for the production of goods and services that have use values. Military spending constitutes waste in that the resources that go into armies, navies, air forces, and weapons of human destruction cannot be put to constructive use. Looking at government spending alone, the 2008 federal budget increased by $35 billion in military spending, bringing the total to $541 billion. At the same time federal aid to state and local governments fell by $19.2 billion. The war on Iraq has already cost $522.5 billion and it was projected by distinguished economists that the total cost for the war, including paying debts, veterans benefits, and replacing destroyed equipment, will top $3 trillion (Linda J. Bilmes and Joseph Stiglitz, Washington Post, March 9, 2008, p.B01).
As a new administration enters office in the context of a deepening depression, 2009 military spending for two wars, over 700 military installations, and contracting with private armies operating everywhere, will push towards a trillion dollars. This prospective allocation of scarce government resources has to be evaluated in the context of President-elect Barack Obama’s call for a massive green-jobs economic stimulus package and bailout programs for some 40 states suffering from their own budget deficits.
The Permanent War Economy in One State
Citizens of Florida so far have spent $36 billion on the Iraq war. And, the National Priorities Project (www. national priorities.org) estimated that for one year of Iraq war expenditures the state of Florida could have provided 12.7 million people with health care, 25 million homes with renewable electricity, 575,000 music and arts teachers, 11.2 million scholarships for university students, and 613,000 elementary school teachers.
Looking at Broward County, taxpayers have paid $3.9 billion for the war so far. Instead of expenditures for the Iraq war, this money could have provided for one year the following:
-1,385,189 people with health care or
-2,760,979 homes with renewable electricity or
-90,432 public safety officers or
-62,714 music and art teachers or
-1,224,540 university scholarships or
-28,953 affordable housing units or
-2,169,806 children with health care or
-535,663 head start places or
-66,937 elementary school teachers
Andrew Bacevich summed up this tradition of permanent war in reviewing a biography of 1940s Secretary of Defense James Forrestal in The Nation (April 23, 2007):
“From Forrestal's day to the present, semiwarriors have viewed democratic politics as problematic. Debate means delay. To engage in give-and-take or compromise is to forfeit clarity and suggests a lack of conviction. The effective management of national security requires specialized knowledge, a capacity for clear-eyed analysis and above all an unflinching willingness to make decisions, whatever the cost. With the advent of semiwar, therefore, national security policy became the preserve of experts, few in number, almost always unelected, habitually operating in secret, persuading themselves that to exclude the public from such matters was to serve the public interest. After all, the people had no demonstrable ‘need to know.’ In a time of perpetual crisis, the anointed role of the citizen was to be pliant, deferential and afraid.”
It is the task of the peace and justice activists today to build a mass movement, mobilizing the citizenry to reject the role of “pliant, deferential,” and fearful citizens. The people must insist that President Obama say “no” to the semiwarriors.
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