I. Proof of Empire
II. Proof of Collapse
III. Rise of a New Economy
I. Proof of Empire
“War and imperialism are Siamese twins joined at the hip. Each thrives off the other. They cannot be separated. Imperialism is the single-greatest cause of war, and war is the midwife of new imperialist acquisitions.” Chalmers Johnson
While other nations realize it full well, Americans do not want to accept that the United States dominates the world through military power. Due to the extreme secrecy of the present administration, the American people are completely ignorant of the fact that the United States “garrisons the globe.” There is a huge network of military bases in more than 150 countries. It is called the new empire. It is the American Empire. Our government employs more than half a million soldiers, spies, technicians, teachers, dependents and civilians as well as civilian contractors all over the world. In addition to officially listed bases, the US has numerous secret bases not to be found on any government listing. Some of these bases are engaged in listening to people all over the world, including American citizens – keeping track of what they are saying, faxing and emailing.
This Empire began back in the 19th century, when the US declared Latin America as being under its “sphere of influence,” and proceeded to enlarge its territory while ignoring or slaughtering those who stood in the way; i.e., the indigenous peoples of North, Central and South America. Today we have a similar group of imperialists in power who, under the guise of the “war on terrorism” are expanding American bases all over the world, particularly in Middle Eastern countries.
It was after World War II that America emerged as the richest nation and became a natural successor of the British Empire, which floundered economically due to the heavy costs of the war. The Cold War of the 1970s justified the US government creating scores more bases, all to fight the communist threat. Government officials of course denied that the bases indicated global imperialism.
In 1991 the Soviet Union collapsed and there was no need for the US to continue maintaining bases in numerous countries. But, the US was too accustomed to controlling other countries and had no intention of giving up their authority. Thus we saw the continuation of various wars and so-called “humanitarian interventions” in the Panama, the Persian Gulf, Somalia, Haiti, Bosnia, Colombia and Serbia. It was an informal empire but quickly becoming formalized.(1) The attack on 9/11 caused dangerous changes in the mindset of our political leaders, who decided that the US is now equivalent to the Roman Empire, that it is no longer bound by international law or the opinions of allied and other non-allied countries. While during the Clinton years the nation had at least a semblance of multilateralism, now its actions became completely unilateral, and completely arrogant. Thanks to the American mainstream media, the common people knew nothing of its government and what it was doing in foreign countries. The Patriot Act came and only a handful of politically conscious people protested and continue to protest. The Patriot Act stripped Americans almost entirely of the political liberties granted to them in the U.S. Constitution two centuries ago. Earlier we were referred to as the lone superpower. But today, we are called the American Empire. To question this, to voice dissent, is to question Bush’s war on terrorism, which remains akin to treason. The media is completely complicit in the building and maintaining of American Empire, using politically appropriate vocabulary such as “collateral damage” (instead of “slaughtered innocent human beings”), regime change (instead of “imperialist invasion and occupation”), “illegal combatants” (meaning any civilian who does not tow the line of US occupation of Iraq and any other country it chooses to attack) and “preventive war” (There is no such thing as preventive war. Wars involve aggressive invasion by one country of another country.) With these cosmeticized terms in hand, the American public remains clueless about the crimes of our present government both outside and inside its borders.
There are presently more than 725 American military bases located all over the world. Generally these bases are established near oil pipelines, and its inhabitants are there to protect those pipelines above all else. While the US has had bases in places like Saudi Arabia, United Emirates and Qatar for several years, new ones have been built in Kosovo, Kyrgyzstan and Uzbekistan. As Chalmers Johnson writes:
“Our militarized empire is a physical reality with a distinct way of life but it is also a network of economic and political interests tied in a thousand different ways to American corporations, universities, and communities but kept separate from what passes for everyday life back in what has only recently come to be known as “the homeland.” (2)
Our present administration has let it be known to other countries that it prefers to deal with them through the use of threats, bullying or force instead of negotiations, commerce or cultural interactions. Now the US deals with countries through military-to-military confrontations instead of civilian relations. As Bush has mentioned in several speeches, we need to be ready for preemptive action whenever necessary to defend our liberty and defend our lives. Historian Arthur Schlesinger wrote after 9/11:
“One of the astonishing events of recent months is the presentation of preventive war as a legitimate and moral instrument of U.S. foreign policy … During the Cold War, advocates of preventive war were dismissed as a crowd of loonies .. The policy of containment plus deterrence won the Cold War. After the collapse of the Soviet Union, everyone thanked heaven that the preventive-war loonies had never got into power in any major country. Today, alas, they appear to be in power in the United States.”
As Johnson writes, there is bound to be payback for the misdeeds of Empire. A nation reaps what it sows. He says that it would take nothing less than a revolution to bring the Pentagon back under democratic control, or to abolish the CIA. But today, in the Congress and the Senate, the motto is: “Don’t ask, don’t tell.” He further says,
“As militarism, the arrogance of power, and the euphemisms required to justify imperialism inevitably conflict with America’s democratic structure of government and distort its culture and basic values, I fear that we will lose our country… The danger I foresee is that the United States is embarked on a path not unlike that of the former Soviet Union during the 1980s. The USSR collapsed for three basic reasons – internal economic contradictions driven by ideological rigidity, imperial overstretch, and an inability to reform…. The similarities are obvious and it is nowhere written that the United States, in its guise as an empire dominating the world, must go on forever.”
Roman democracy was also replaced by a dictatorship. The Romans eventually were overwhelmed by the number of enemies they had created. Until the end, they continued to claim that they represent the people of Rome. Yet then, as now, empires do not give up their empires voluntarily. The US government justifies its Empire in many ways: by claiming to spread American ‘market democracy’ via globalization; by open warfare against Latin American drug cartels and indigenous political reform movements; by isolation of ‘rogue states;’ and most of all today by an endless ‘war on terrorism’ which gives it the ‘freedom’ to do anything, including ‘preventive intervention’ against anyone.
Hitherto there had always been some constitutional restraints on the US armed forces. However, by 2002 these restraints vanished. The US no longer had a foreign policy; it had a military empire. This empire comprises the vast number of permanent naval bases, military airfields, army garrisons, espionage listening posts, and strategic enclaves on every continent of the earth. (3) So America has, not an empire of colonies (as in the British Empire) but an empire of military bases closely interwoven with and supervised by the US military-industrial complex. The bases are not there to fight wars. They are there as ‘pure manifestations of militarism and imperialism.” (4)
The US military enters countries on the pretext of liberating Afghan women from Islamic fundamentalists, or a natural disaster in the Philippines, or more recently Aceh, Indonesia, or claiming to protect Bosnians, Kosavars or Iraqi Kurds from campaigns of “ethnic cleansing.” But invariably what happens is that after the crisis is over, the Americans do not leave. They remain in their new bases to strut around in arrogance in their newly acquired territory. It is a short mental hop from imperialism to racism as a way of life. As David Abernathy writes, people who have superior power will quickly decide that their superiority extends also to intellect, morality and civilization.
From war come armies. From armies come debts and taxes. Armies, debts and taxes are the instruments for keeping many under the domination of a few. It was Woodrow Wilson who developed the rhetoric of ‘exporting democracy’ to the rest of the world, which is now used by today’s imperialists to justify their colonialist, capitalist invasions.
There is no longer any accountability of the Defense Department budgets. As Insight magazine reported, in May 2001 the deputy inspector general at the Pentagon admitted that $1.1 trillion was “simply gone and no one can be sure of when, where or to whom the money went.” (5) The amount is larger than the annual amount of $855 billion that Americans pay in income taxes. Yet, nobody minds or protests regarding this missing money.
The onset of militarism can be identified by three prominent characteristics: (1) the emergence of a professional military class and the glorification of its ideals; i.e., producing soldiers who will fight simply because they have been ordered to fight and not because they believe in what they are doing. It also includes civilian militarism. Reagan and Bush I learned that foreign policy should be more in the hands of so-called national security managers “who operated without the close scrutiny of the media, the oversight of Congress, or accountability to the involved public.” (6) These new civilian militarists, who themselves never served in war, take more and more power over the actual military/Pentagon. Hence we have people like Dick Cheney and Donald Rumsfeld, who themselves never served a day in the military, running American military operations around the world. The older military generals who dedicated a lifetime to serving in the US armed forces call these civilians “chicken hawks.” Tragically, it is noted that civilian militarism leads to an intensification of the horrors of warfare. Civilian militarists anticipate war more eagerly than the actual soldiers who know what war is. They also play a major role in making the actual combat more absolute, more terrible than ever before. Iraq is an example. People today involved in determining strategy over relations with China are militarists, not discriminating foreign policy thinkers and academics.
(2) The second characteristic of militarism is the preponderance of military officers and people from the arms and munitions corporations in high government positions. Colin Powell and Richard Armitage are examples. Peter Teets, former CEO of Lockheed Martin Corporation was made undersecretary of the air force. Former brigadier general and Enron Corporation executive Thomas White was made secretary of the army. James Roche, former executive with Northrop Grumman and former brigadier general was made secretary of the air force. The list continues. Former ambassador Richard Gardner figures that the present US administration spends sixteen times more money on preparing for war than on trying to stop war.
(3) The third characteristic of militarism is devotion to policies in which military readiness is the highest priority of the country. The US spends more than any other country on its military. It also spends more than any other country on global arms sales. The American nuclear arsenal, with its ability to destroy the entire earth many times over, is staggering. It comprises of 5,400 multiple-megaton warheads atop intercontinental ballistic missiles on land and at sea; 1,750 nuclear bombs and cruise missiles ready for launching by B-2 and B-52 bombers; another 1,670 nuclear weapons classified as ‘tactical.’ Ten thousand more nuclear warheads are stored in bunkers all over the US. What is the new American dream? It is to dominate the world militarily until the end of time. Is it realistic? No, because all empires one day fall. The US never hesitated to invade countries like Somalia, Haiti, Bosnia and Kosovo in the name of humanitarian intervention. Yet where were their responsibilities to the Rwandans, Chiapans, Chechens, Tibetans, Kashmiris, East Timorese and Palestinians? Chalmers Johnson writes as follows about the new American Empire:
“From the time of the Romans and the Han dynasty Chinese to the present, all empires have had permanent military encampments, forts, or bases of some sort. These were meant to garrison conquered territory, keeping restless populations under control, and to serve as launching points for further imperial conquests. What is most fascinating and curious about the developing American form of empire, however, is that, in its modern phase, it is solely an empire of bases, not of territories, and these bases now encircle the earth in a way that, despite centuries-old dreams of global domination, would previously have been inconceivable.
“Yet, although our own nation is filled with military installations – there are 969 separate bases in the fifty states – ours has, oddly enough, never been a warrior culture. Our people are largely not in uniform, nor (until the recent “war on terrorism”) were military uniforms common in our cities and airports; our streets seldom see a military parade; our concerts are rarely filled with martial music; and yet ours is also a thoroughly militarized empire – though our model of a warrior seems most likely to be a military bureaucrat. The modern American empire can only be perceived, and understood, by a close look at our basing policies, the specific way we garrison the earth. To trace the historical patterns of base acquisition and to explore our basing systems worldwide is to reveal the sinews of what has until very recently, for most Americans, been a largely hidden empire.”
Since 2000, the US government functions completely unilaterally in decision-making and in actions. A report put out by the Institute for Energy and Environmental Research and the Lawyers’ Committee on Nuclear Policy analyzed US response to eight major international agreements, including the Nuclear Nonproliferation Treaty, the Comprehensive Test Ban Treaty, and the Anti-Ballistic Missile Treaty, and concluded that the US has violated, compromised and acted to undermine every treaty mentioned. They further do not honor treaties that were ratified in previous administrations. They walked away from the Kyoto Protocol. They also walked away from the UN conference on racism in 2001. Today the US administration abides by international treaties only if it is personally convenient and not otherwise. Most stunning is its complete disdain and disregard for the International Criminal Court (ICC), the world’s first permanent war crimes tribunal. It says to the world that the US is not accountable to anyone for its actions – or its crimes against humanity! As journalist David Moberg wrote: “… Bush wants the United States to serve as the world’s investigator, policeman, prosecutor, judge, and executioner. This is an imperial ideal, not an assertion of sovereignty.” (7) So is there some fear on the part of Bush and his colleagues that one day the ICC may start proceedings to prosecute them for their war crimes?
“Two and a half years into the Bush administration, most of our allies had left us, our military was overstretched, and no nation on earth doubted our willingness to employ military power to solve any and all problems.”
Today the federal government can tap into our phone calls, faxes and email transmissions if it wants. The federal government has also begun arresting and imprisoning not only naturalized but also native-born citizens along with immigrants without bringing charges against them. Essentially the government does what it likes, and the president alone decides who is an “illegal belligerent” – another new term of this administration which can mean anything Bush wants it to mean. All of these actions are signs of a national security state – militarism.
Included in this global militarism is US domination of space. The Space Command’s policy statement says that “the globalization of the world economy will continue, with a widening gulf between ‘haves’ and ‘have-nots,’ and … the Pentagon’s mission is therefore to ‘dominate the space dimension of military operations to protect US interests and investments..’ A crucial goal of the US government is therefore “denying other countries access to space.” (8)
Today the Department of Defense has given a new interpretation to federal law and says that if any part of a university denies access to military recruiters, the entire university will lose all federal funds forthwith.
In 1878 the Posse Comitatus Act was passed, in order to prevent the military from ever again engaging in police activities without the consent of Congress or the president. It means the standing army will not have any role in policing American citizens in their own country. This distinction is nowhere today. Today the Pentagon is in the domestic policy business. Thanks to the very nebulous, flexible term of “terrorism,” the Pentagon today can do whatever it wants to American citizens. In the summer of 2002, the Bush administration directed its lawyers to review the Posse Comitatus Act and any other laws that could potentially restrict the Pentagon’s ability to engage in domestic law enforcement. In 2003 the Bush administration proceeded to tuck in an interesting proposal (within a broader intelligence authorization bill) which gives the military as well as the CIA authority to require Internet providers, credit card companies, libraries and many other organizations to hand over all kinds of records on US citizens – including phone records, bank transactions and email logs. Hitherto only the FBI could seek this information and that too only with a judicial warrant. Hence in just four years we have witnessed the transformation of the United States government from one following some semblance of democracy to one in which the executive branch in collusion with the Pentagon are operating more and more as a totalitarian democracy, including over its own citizens. Enemies are portrayed as “both white and black-skinned but have one trait in common – nearly all of them are unshaven.”
Another habit traditional for empires is to recruit foreigners to do the dirty work. Replacing homeland soldiers with local cannon fodder is at the top of the list for imperialist rulers. Setting one indigenous group against another indigenous group is also traditional for maintaining empire, as if the two groups are fighting (witness Sunnis and Shiites) it makes it easier for Empire to control them all and keep them down where they belong. It is not American soldiers who guard military checkpoints in Baghdad, but Nepalese gurkhas. Furthermore we have in Iraq today not necessarily the US military in charge but rather numerous private military companies who work hand in hand with the CIA and other intelligence agencies. It is the privatization of the US armed forces. It is these private military companies that have become indispensable to the military and who in fact keep the Empire running.
The total value of 725 recognized American military bases around the world is $118 billion. Of these, $38 billion are in Germany (with more than 47 bases) and $40 billion are in Japan – remnants from World War II, in the form of a secret enclave of military airfields, submarine pens, intelligence facilities and CIA safe houses in Okinawa). (9) Bases in South Korea account for $11.5 billion. The Pentagon did not yet include in its financial calculations the new military bases springing up like mushrooms all over the Middle East!
The high tech war and the fanatic attention to controlling mainstream media coverage of the war are the latest signs of American-style militarism and imperialism – or can we say, totalitarianism?
“At the August 2002 world summit on sustainable development in Johannesburg, the delegates wore badges asking, “What do we do about the United States?” Chalmers Johnson
The new American Empire of bases is militarized and unilateral. Since the last three-four years it has subverted commerce and globalization because militarism weakens international law and reciprocal norms on which trade is based. In the age of American militarism, globalization takes on a simple new definition, which is to force (if necessary) all countries to open themselves up to American exploitation and American-style capitalism. Libyan leader Muammad al Qaddhafi’s recent capitulation right after the capture of Saddam Hussein is a stunning example.
According to Johnson, the aftermath of September 11 has spelled the end of globalization. While Clinton propagated economic imperialism, Bush propagates military imperialism. Bush espouses unilateral preemptive military action, thereby flouting international rules and norms of globalization. Today in America, militarism has displaced and discredited US economic leadership.
WTO was created in 1995 and thereafter world trade expanded from $124 billion to $10,772 billion. It worked well, so long as the trade balance favored the US, and so long as the US could dictate the terms for trade so as to derive maximum benefit for US corporations.
In the mid-1980s Japan had replaced the US as the world’s leading creditor nation while America’s fiscal deficits and inability to cover the costs of imported goods quickly turned it into the world’s largest debtor nation. For this reason, the conservatives took action by reviving 19th-century capitalist fundamentalist theory, which they dubbed ‘neoliberalism.’ It meant, withdrawing the state as far as possible from economic participation; opening domestic markets to international trade and foreign investment; privatizing investment in public utilities and natural resources; ending protective labor laws; creating powerful domestic and international safeguards for private property rights, including the famous “intellectual property rights;” and carrying out conservative fiscal policies regardless of the impact on the welfare of the common people. In academic circles the term ‘neoliberalism’ became known as ‘neoclassical economics.’ In the public domain it was referred to as ‘globalization.’ It was a ‘gigantic repackaging’ of classical liberalism. Clinton actively propagated globalization. George Bush promoted ‘Free Trade Area of the Americas” – FTAA. The effect of these policies and regulations on third world countries was devastating. As Peruvian ambassador to the WTO, Oswaldo de Rivero, said, “the cost of the Soviet version of development was shortages and lack of freedom; today, that of the neoliberal, capitalist variant is unemployment and social exclusion.” (10)
In fact, globalization promotes both racism, genocide and ruthless, ravaging exploitation of third world, non-white-skinned people to the extreme. Hence the instruments of globalization, be it the World Trade Organization, World Bank, Free Trade Area of the Americas, or International Monetary Fund, must be charged with crimes against humanity! The damage they have wrought to third world countries is immeasurable. Joseph Stiglitz, former director of research at the World Bank and Nobel Prize winner gradually concluded that the international trade agreements are grossly unfair to countries in the Third World. There is not a single Third World country that has benefited in any way, shape or form from globalization. Rather, the per capita GDP, the plight of the common people in every country has been made far worse by this neoliberalism. De Rivero wrote that what globalization produced was not NICs (newly industrializesd countries) but about 130 NNEs (nonviable national economics) and sometimes UCEs (ungovernable chaotic entities)!! (11) Chalmers points out the following:
“In 1841 the prominent German political economist Friedrich List (who had immigrated to America) wrote in his masterpiece, The National System of Political Economy, ‘It is a very common clever device that when anyone has attained the summit of greatness, he kicks away the ladder by which he has climbed up, in order to deprive others of the means of climbing up after him.’ Much of modern Anglo-American economics and all of the theory of globalization are attempts to disguise this kicking away of the ladder.” (12)
In countries where the leaders had no option but to obey the US and its imperialist affiliates- the WTO, WB and IMF, where they began allowing ‘free’ trade, sell-offs of public utilities, no controls over capital movements – the results in those countries were a catastrophe.
The American people need to know that the World Bank and the International Monetary Fund (IMF) are simply surrogates for the US Treasury. Both organizations are located at 19th and H Streets, Northwest, in Washington, D.C. The voting rules of both organizations guarantee that they can do nothing without the approval of the secretary of the US Treasury.
The other cunning capitalist innovation carried out by the US was the system of fixed exchange rates among the currencies of all capitalist nations. Every other financial system was tied to the US dollar with an American guarantee that the dollars would be exchanged for gold if requested. Of course, the gold has long since gone out the window. Both Britain and the US were dedicated to the idea of a world economic order maintained by “enlightened governments” – aka the US and Britain, of course. It was Nixon who ended the gold standard and also the system of fixed exchange rates. From then on, currencies of different countries could float their currencies, whose values were set by demand in the international markets.
Since profits were huge and costs were low, American banks like Citicorp and Banker Trust began to make huge, risky loans to Third World countries. In economics this is called “moral hazard” – where bankers make outrageously irresponsible loans without any risk of having to absorb the loss or make good the money they might lose in the transaction. This was in the 1970s. By the end of the 1970s every country in Africa was in debt up to its eyeballs. In 1982 the US government put the IMF and the World Bank in charge of making loans to Third World countries, with the following instructions: (1) Keep those poor debtor countries paying something so as to avoid official defaults, and (2) squeeze as much money out of them as possible. (Sort of like our credit card companies do to the ordinary citizens here in America!)
So what exactly does the World Bank do to Third World countries? It gives loans. But there are conditions on the loans. To get the loan, the poor country must agree to the imposition of drastic socioeconomic conditions which feed the neoliberal agenda of transnational corporations. If the poor country does not agree to the terms of the World Bank, the Bank refuses all loans, thus helping to destabilize its economy. If the country still does not agree, then the World Bank will aid in setting up the country for a coup d’etat, organized by the CIA. The case of Chile comes to mind, along with the CIA-sponsored overthrow of democratically elected Salvador Allende and the CIA-installation of Augusto Pinochet who proceeded to torture, ‘disappear’ and slaughter thousands of his own citizens. In this manner, and under these threats by the World Bank and IMF, impoverished Third World countries quickly came into line and thus, by the late 1990s about 90 third world countries were getting “structurally adjusted” by the World Bank and IMF.
What are these “structural adjustment” programs of the so-called benevolent World Bank and IMF? In such a program, the IMF and WB require that the poor country in question give foreigners (which translates to American multinational corporations) free access to its economy. Further, the country is forced to reduce spending on social programs such as health care and education, in order to divert that money to repay their debt to the IMF/WB as well as foreign corporations. All subsidies to local agriculture must be eliminated – making local agriculture economically nonviable. Instead subsidies to agro-businesses growing crops for export are increased. The IMF further demands that countries allow foreign investors to buy up any state-owned enterprises they please – such as electric companies, power companies, telephone and transportation companies, natural resources and energy companies – yes, that would be the local oil companies.
And last but not least, the country must agree to maintain the convertibility of its currency. In other words, it must not prohibit the exchange of its own money for the money of another country. Maintaining free convertibility, regardless of the exchange rate, makes speculation about the currency’s future value possible. So how does any country benefit from such loans, with such draconian strings attached? It benefits in no way at all. It never achieves any kind of economic recovery from the loans. Instead it moves towards total economic collapse. It leaves governments of those countries so weakened that they often decline into kleptocracies – governments characterized by rampant greed and corruption! Cases in point would be the bankruptcy of Mexico in 1995, followed by Thailand, South Korea and Indonesia in 1997; Brazil and Russia in 1998; the horrendous collapse of the Argentinian economy in 2000, and Venezuela in 2002. These countries, in a state of near anarchy, continue to be compelled to depend on blood-sucking American corporations for virtually all their consumer needs. In the words of the great Filipino activist Walden Bello, IMF and WB loans result in nothing but “failure, spectacular failure.” (13) In signing papers with these two institutions, Bello said, they “signed away their right to development.” (Again, it reminds one of the credit card companies in the US – sucking the life force out of debtors with their 29 percent interest rates, and driving millions of simple citizens, unable to calculate the extreme capitalist exploitation of these banks, into bankruptcy!)
With clear proof of the unbounded destruction of the IMF and World Bank, the catastrophic consequences on the little people struggling to climb out of abject poverty, the question arises: Why do we need the World Bank, the World Trade Organization (WTO), or the IMF? The WTO was created because the US found it could be created, to use as a tool to make more money. The WTO’s two objectives (on behalf of US corporations) was (1) to manage the growing trade rivalry between western industrialized countries like the US, the EU and Japan; and (2) to make sure that Third World countries could not use trade as a means to their own industrialization – which would negatively affect the neoliberal global economic structure, i.e., the cessation of incoming profits to US. Before the creation of the WTO, agriculture was an independent entity in Third World countries. But with the advent of WTO, both the EU and the US could force the Third World to open up new markets (cash crops) for export. To succeed in this endeavor, the WTO had to first put local farmers out of business – drive them into bankruptcy. Second, those local farmers were to be replaced by giant agro-businesses.
At the “Uruguay Round” of agricultural negotiations which took place in Uruguay in 1995, the European Union (EU) and the US excluded all representatives from Third World countries and decided amongst themselves what would be the global rules concerning agriculture. They further prohibited Third World countries from protecting their own agriculture but exempted their own subsidies. Consequently, a huge mass of agricultural products began to inundate third world countries, driving local farmers bankrupt and forcing them to migrate to cities in search of survival. It means that the European Union also is an exploitative tool of capitalism. Really speaking, it means that Third World countries should not do any kind of business with First World, western, industrialized countries, because invariably western countries will exploit them. Western countries are not looking to help impoverished countries. Rather, by entering into any kind of business negotiations with wealthy countries, the Third World countries begin to experience unbounded economic hardship. Not the political leaders, but the masses – the common people!
As if this were not enough, the WTO introduced Trade-Related Intellectual Property Rights – also known as TRIPS, which allowed American and other transnational corporations to claim patents on indigenous products already used in Third World countries for centuries. The neem tree in India is an example. The common people have utilized the healing properties of its leaves and bark through the ages. Suddenly, Indians were faced with demands that it could no longer be used locally, as an American corporation now held the patent on this indigenous plant. Another example is the case of RiceTec, Inc. of Alvin, Texas, who in 1997 patented a hybrid of Indian basmati rice, which in fact has been grown in India for more than two centuries. These are just two examples of medical and agricultural exploitation of Third World countries by American corporations on the basis of laws incorporated into the WTO – an entity serving capitalism and capitalists alone! The WTO is nothing but a tool of American economic imperialism, controlled by rich nations who exploit and oppress poor nations.
Globalization and the WTO started sinking into trouble with the Asian Tiger collapse of 1997. This collapse, a direct result of neoliberalist policies of the US, caused the overthrow of the Indonesian government when the IMF tried to impose draconian reforms as a precondition for desperately needed loans. IMF policies began to generate a deep-seated hatred of US, which spread across the East Asian continent. Western powers tried to deflect this hatred, falsely claiming that the Asian countries collapsed due to internal corruption. According to New York Times columnist Thomas Friedman, globalization is the inescapable reality – and globalization has no name.
But in Seattle, Washington in 1999, outraged NGOs fighting for justice found some names to match the crimes – the names of IMF and World Bank officials responsible for creating the policies that wreaked economic havoc on Third World countries! These good people unmasked the imperialist, expansionist motives of the IMF, the World Bank and the WTO. They exposed how IMF voting rules are rigged to favor the rich countries. Only the US has the power to elect the president of the World Bank. By 2002 anti-globalization movements had spread around the world, doing their utmost to expose the exploitation of these capitalist institutions. As a result of the protests, the IMF changed the name of its program from “structural adjustment policies” to the new name of “poverty reduction and growth facility.” They are meaningless, hypocritical words invented to hoodwink the simple masses who have unbounded suffering and who do not understand the cause of their suffering or who creates all their torture.
When Argentina went belly under in 2000, the IMF agreed to help it with the same draconian stipulations: fire large numbers of government workers, cut pensions, reduce wages, and eliminate fringe benefits. The IMF gave loans telling the government to keep squeezing the poorest sections of the society so as to be able to repay the loans. No government could realistically meet the demands of the IMF. Those demands were the embodiment of cruelty, of torture, to the little people in the country. Finally the IMF refused to give more loans and Argentina collapsed through the floor – all thanks to neoliberalism, globalization and the IMF.
How has globalization changed since the year 2000? After 9/11, globalization was gradually replaced by munitions and war profiteering. There is no way for capitalists to make more money than to take a country to war and to get into the munitions business. The military-industrial complex and the Pentagon play a huge role in this kind of economy. However, arms manufacturing does not follow the rules of globalization. Normally there is one customer (the government) and it is not subject to market discipline. Risks of profit and loss are not taken into consideration. Hence, making and selling munitions is not an example of “free enterprise.” Rather it is state socialism. (14) While “industrial policy” is outlawed by the WTO, there is one glaring exception – that is the production and sale of weapons. So even while IMF imposes severe restrictions on a country in spending on health care or pensions for its common citizens, it will allow the same country to purchase unlimited number of weapons from – you guessed it – American munitions corporations. An example is when in October 2002 Columbia was about to purchase 40 Super Tucano light attack aircraft from Embraer of Sao Paulo, Brazil’s biggest exporter, for $234 million. Instead, General James T. Hill, head of the US Southern Command, wrote to Bogota saying that purchasing from Brazil would have a negative effect on support for future military aid to Columbia. General Hill instead suggested that Columbia buy C-130 airplanes from Lockheed Martin in Georgia. (15) Columbia dropped the deal with Brazil and coalesced with the US. Did it have any choice? However, with the election of Luis Lula da Silva, also in October 2002, the days of bending to US exploitation and arm-twisting may be over.
As Andre Gunder Frank says, the Pentagon is the world’s largest planned economy, with their goal being to redistribute income from poor to rich at home and abroad to blackmail friend and foe to do the same. Rumsfeld has completely privatized the war in Iraq. Hence the military-industrial complex is alive and kicking under the joint stewardship of Rumsfeld and Cheney. Between 1994 and mid-2003 the Pentagon made over 3,000 contracts valued at more than $300 billion. More than 2,700 of those contracts were given to just two companies: Kellogg Brown and Root (KBR), subsidiary of Cheney’s Halliburton, and to Booz Allen Hamilton. The result is called private military companies – PMCs. The number of mercenaries employed by PMCs is greater than that employed by the US and British military combined. (16)
II. Proof of Collapse
For the last decade, and particularly in the last four years, it has become a given that America is indeed an empire. And today, it is becoming clear that this empire is beginning to teeter on the brink of collapse – although we have to study a little harder to see the signs and connect the dots. The neoconservatives (neocons) who today walk the White House corridors are in love with their empire. They will not hear of its collapse. They will not see the signs or connect the dots. But the collapse will affect not just the rest of the world – it is going to affect the American people in ways they cannot begin to imagine.
According to Kirkpatrick Sale, it is in the nature of all empires to one day collapse. He provides four indicators. The first is environmental degradation. Empires invariably die because they have completely destroyed their environment – the land, the waters, the very air they breathe. In their ruthless desire to conquer and control, to make money, they ravage the land and poison the waters. We have all the indicators today of mounting ecological devastation. More than 15,000 species are threatened with extinction. Global warming is occurring far faster than atmospheric scientists ever imagined, due directly to carbon dioxide emissions of factories owned by greedy capitalists who do not care what happens to the environment or whether there is global climate change later on. They care about today, and about today’s profits. So in the name of exploitation for capitalist profit, we have widespread slaughter of forests around the world. We have pollution of freshwater resources – which comprise just two percent of the earth’s total water – it is a very small amount to nourish 6 billion people.
In America’s new wars (Kosovo, Afghanistan and Iraq) we have depleted uranium dust being used in a reckless, devil-may-care manner in such large amounts that it is already killing not just the so-called ‘enemy combatants’ but also American soldiers by the thousands. The dust is being picked up and carried by winds around the world, and will gradually cause thousands more deaths of civilians who will never know what hit them. This is again in the name of capitalist profit – the horrific drive on the part of American corporations to take over Iraq – to get their oil, to patent their indigenous seeds, to steal their gold, silver and other minerals. In other words, due to the insatiable greed of capitalists, of corporate owners, the earth is being destroyed. We are losing our ecological equipoise. Without ecological equipoise, human beings will not be able to sustain themselves. A Department of Defense report in 2004 predicts abrupt climate changes within the next ten years leading to ‘catastrophic’ water shortages, wars over fast dwindling water and energy resources. In addition there is vast erosion of top soils and beaches, overfishing, global deforestation, freshwater and aquifer depletion, soil salinization, depletion of oil and minerals, melting ice caps and glaciers and rising sea levels, which threaten to inundate New York, Boston, New Orleans and many other coastal cities around the globe..
Today the US is devoting more and more of its manufacturing assets to arms and munitions. Simultaneously it is becoming increasingly dependent on foreign imports for the basic necessities required by its citizens. In 2002 the US had a record trade deficit of $435.2 billion, and a near zero savings rate. As William Greider says, the US government, instead of facing its debts in a rational manner, continues to lecture its debtors with full arrogance and pomposity. He says that “… American leadership has … become increasingly delusional … I mean that literally – and blind to the adverse balance of power accumulating against it.” (17) What Mr. Bush and cohorts fail to realize is that if they only want to engage in military unilateralism, they fail to see the collateral damage it is causing to international trade. International trade depends upon mutually beneficial relationships between people in order to function nicely. By adopting a stance of unilateral military imperialism, other countries are not happy, and they are showing this displeasure by deciding not to invest in American goods and services. They are taking their business elsewhere – to China, for example. So while globalization has been devastating for the poor and neglected humanity, the new American militarism and imperialism will conceivably usher in a far worse scenario, affecting first and third world countries alike.
The US economy is built on a very fragile system wherein the world produces and the US consumes. US manufacturing at the end of 2004 was a mere 13 percent of GDP. Presently US has a $630 billion trade deficit with the rest of the world. In order to pay for that deficit, an inflow of cash is required to the tune of $1 billion every day. This is not happening. And this kind of excess is simply not sustainable over the long run. In addition the US has a $500 billion Federal budget deficit as part of a total national debt of $7.4 trillion as of Fall 2004. Then there is the military cost of one war after the other – first Afghanistan, then Iraq and soon Iran. It is costing more than $530 billion annually, without counting billions spent in covert operations never recorded by the Department of Defense. These figures are also not sustainable. The dollar has lost value everywhere. Since 2000 it has lost nearly 40 percent value against the Euro, and countries are beginning to raise their eyebrows. If the dollar value declines much further, it will be more than raised eyebrows, as one by one countries shift their financial operations to the Euro. According to Kirkpatrick Sale, China may well let the yuan float against the dollar, which will render the US bankrupt and powerless to control its own economic life, let alone foreign economies.
China is complicating (US-dominated) globalization. Globalization is supposed to benefit the US and other western, white-skinned people. But China is on the economic rise. As well, China and other countries around the world are tired now of American arrogance, racism, colonialism and imperialism. Countries are welcoming Chinese trade negotiations with open arms. At present China, Japan and US are the three most productive economies on the earth. But China is by far the fastest growing, with an average rate of 9.5 percent annually over the past two decades. In contrast, both US and Japan are riddled with heavy and mounting, unsustainable debts. If measured on the basis of purchasing power, China becomes the second-largest economy on the earth, based on actual production as opposed to prices and exchange rates. US GDP for 2004 was $10.4 trillion while China’s was $5.7 million, which gives China’s 1.3 billion people a per capita GDP of $4,385.00. Between 1992 and 2003 Japan was China’s largest trading partner, but in 2004 Japan fell to third place behind the European Union (EU) and the US. China’s trade volume for 2004 was $1.2 trillion – third after the US and Germany and certainly more than Japan’s $1.07 trillion. China’s trade with the US grew 34 percent in 2004, causing Los Angeles, Long Beach and Oakland to become America’s busiest seaports. (18) Three years after entering the WTO, China’s influence on the global economy has become crucial.
China’s growth rate is welcomed. However, the US and Japan fear the now obvious shifting of power from west to east, and specifically from the US to China. Because of this fear, the US as well as Japan take every opportunity to insult and upset China, particularly with regard to the status of Taiwan. As William Greider noted: “Any profligate debtor who insults his banker is unwise, to put it mildly…” (19) For example, if China gets tired of Bush-bullying and decides to shift some or all of its foreign exchange from the dollar to the euro, this would produce “the mother of all financial crises,” and the US would crash overnight, practically. Meanwhile, it is exciting to note the new bonds of trade taking place between China and Latin American countries, as well as Iran. China is beginning to replace the US as the major trading partner for these countries, leading to a situation of multipolarity – the preference for different, competing power centers rather than the ‘unipolarity’ of the US as a single superpower. Multipolarity is no longer a goal for the Third World. It is the reality! China is now close to the European Union, Latin American countries, Iran, and the Association of Southeast Asian Nations (ASEAN), which comprise the ten countries of Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam. The US was not invited to their recent joint meeting in Vientiane to discuss the forthcoming East Asian Summit in November, 2005. China has signed important trade agreements with Argentina, Bolivia, Chile and Cuba, while Hugo Chavez of Venezuela paid a recent visit to China and offered China wide-ranging access to his country’s oil reserves. China will be investing $350 million to extract oil and another $60 million in natural gas reserves, in Venezuela. (20)
In his recent article, “Is America Going Broke?” Steve Maich talks to David Walker. Walker is the comptroller general of the United States. He is an accountant, and he is the head auditor for the most powerful government in the world. According to Maich, Walker is trying hard to get a message out to anyone who will listen. He says that the US public finances are in a shambles, and getting worse. If something is not done soon, the world is going to face an “economic shakeup unlike anything ever seen before.” (21) Walker mentions the $43-trillion hole in America’s public finances that’s increasing daily. He says that Americans have no idea what they’re in for economically because they were born into relative affluence and have never known hard times. This is why the people are not believing him and not listening to him. Walker says that the present American lifestyles have been bought on credit, and very soon people will have to pay up, and there will be drastic consequences if they do not. Those consequences will spill beyond American borders over to Canada, which is so tightly interwoven with the US in terms of trade. No region or industry would be untouched by the financial shock Walker expects to occur in America.
Laurence Kotlikoff, professor of economics at Boston University, wrote a paper recently decrying the “fiscal fantasy” of the Congressional Budget Office (CBO). But, his voice was one alone in the wilderness. Nobody listened, nobody paid heed. Tax breaks and tax returns (to mostly the wealthy in America) proceeded on schedule. Then came 9/11 and ensuing wars with Afghanistan and Iraq, with their huge bills along with new costs for homeland security to the tune of US $87.1 billion. The budget surplus of $128 billion in 2001 vanished with stunning swiftness into a $412 billion deficit by the end of 2004 – the biggest annual shortfall in American history. Who noticed? Who objected?
As of February, 2005, the US national debt was $7.7 trillion. By the end of this year another record deficit of $427 billion is expected. These numbers still do not capture the real financial hole that the country is in. The Middle East wars will require another $80 billion. Social Security revamping will cost $2 trillion if implemented.
Our government has reneged and defaulted on nearly 40 percent of its trillion-dollar foreign debt, and nobody in America seems to mind! The value of the dollar is down now nearly 40 percent – from 80 cents to the euro to 133 cents today. It is quite likely that the dollar will hit rock bottom – zip in value. The same scenario happened in the 1930s. Because China and other East Asian countries have their money pegged to the dollar, so as the dollar slides in value, those countries are also losing a lot of money. The question is, when will they get fed up and pull out of the dollar – begin dumping the dollars they have? China is giving away hundreds of billions of dollars worth of real goods produced in China and consumed by the US, and receives paper dollar bills, then turns around and buys American Treasury bills – more worthless money! The US government has a domestic debt that is nearly 100% of GDP and consumption. (22) The federal debt is right now $7.5 trillion. The US has also arranged to earn 9 percent interest on all economic and financial holdings in other countries, while foreigners earn only 3 percent on their holdings. This arrangement brings in a lot of extra money for Uncle Sam. According to Andre Frank, the problem is that the US government saves no more than 2 percent of its income. The wealthiest 20 percent of Americans save no more than 2 percent. This is counterbalanced by deficit spending of 6 percent. Hence, the government maintains a $600 billion dollar plus deficit while itself living off the fat of the rest of the world – of countries generally called poor countries! US is getting annually more than $100 billion from European central banks, more than $100 billion from China, $140 billion from super-saver Japan, and tens of billions from many other countries around the world. For how many years now has the IMF been lending money to third world countries – more than they could possibly afford to repay – and then simply taken over their economies? As John Perkins writes in his latest book Confessions of an Economic Hit Man:
“our job is to build up the American empire… to create situations where as many resources as possible flow into this country, to our corporations, and our government and in fact we’ve been very successful. We’ve built the largest empire in the history of the world… primarily through economic manipulation, through cheating, through fraud, through seducing people into our way of life… my real job was deal-making. It was giving loans to other countries, huge loans, much bigger than they cold possibly repay…. Let’s say [to] Indonesia or Ecuador – and this country would then have to give 90% of that loan back to a US company, or US companies… a Halliburton or a Bechtel … a country today like Ecuador owes over 50% of tis national budget just to pay down its debt. And it really can’t do it. So we literally have them over a barrel. So when we want more oil, we go to Ecuador and say, ‘Look, you’re not able to repay your debts, therefore give your oil companies your Amazon rain [forests], which are filled with oil.’ And today we’re going in and destroying Amazonian rain forests, forcing Ecuador to give them to us because they’ve accumulated all this debt … [We work] very closely with the World Bank. The World Bank provides most of the money that’s used by economic hit men, it and the IMF.”
Whenever any country does not fall in line with the World Bank, and IMF and their representatives – the economic hit men – then it is time for what Perkins calls “the jackals.”
“Jackals are CIA-sanctioned people that come in and try to foment a coup or revolution. If that doesn’t work, they perform assassinations. Or try to. In the case of Iraq, they weren’t able to get through to Saddam Hussein. He had – his bodyguards were too good. He had doubles…. So the third line of defense is our young men and women, who are sent in to die and kill, which is what we’ve obviously done in Iraq.” (23)
Earlier we talked about how the American empire is represented by bases all over the globe. However, they are only bases. They are not occupying armies that can conquer the country in question. The reality is that the US army is not able to conquer even one nation – Iraq – despite all its high-tech military equipment and long-distance weapons systems. The US government, in its arrogance, had no idea of the mindset of the Arab people. The Arabs will never lie down and say, please stomp on us, please occupy our country, and please help yourselves to our oil. No, even if they have to fight with their sandals and their bare fists, the Arabs will never allow themselves to be occupied by a foreign invader. The history of British occupation of Iraq is proof of the mindset of Iraqis as regards occupation. If not today, then tomorrow the people of Iraq will drive out the US invaders and send them packing. It is a question of time. The US military has bases in more than 150 countries, but it cannot control or contain those countries if there is rebellion by the local citizens.
It was not US military power but US arrogance that caused people in Washington to create so many bases. The US is not going to win any war now or in future because it does not have the military capacity to do so. Countries like Iran, China, Venezuela and other South American countries are purchasing state-of-the-art weapons and planes from Russia and other countries, and are making themselves strong. They are prepared to fight and conquer the sagging American empire! As more and more countries refuse to coalesce to the “structural adjustment” policies meted out by the IMF on behalf of its blood-sucking, capitalist controllers, they will resist not only US economic hegemony but US military hegemony. With China growing exponentially in power both economically and militarily, and engaging in trade negotiations around the world – including South America and the Middle East – it is reaching the point where the world simply does not need America any longer. Soon we may see an East Asian currency – perhaps a mix of ASEAN countries plus China, Japan, South Korea and even India. The US is becoming more and more dispensable in the eyes of the world. On December 11-17, 2004 The Economist reported on the previous week’s summit of ASEAN plus three in Malaysia, where the Malaysian prime minister declared that this ASEAN summit will now lay the groundwork for an East Asian Community (EAC), which will “build a free-trade area, cooperate on finance, and sign a security pact… that would transform East Asia into a cohesive economic block … In fact, some of these schemes are already in motion… China, as the region’s pre-eminent economic and military power, will doubtless dominate … and host the second East Asia Summit.” The article mentions how in 1990 the US sabotaged a similar initiative so they would not lose their influence in the region. But today, the word is, “Yankee stay home!” Empire is now dispensable, and hence it is no longer an Empire!
Another very likely scenario is that Asian countries will simply decide to stop buying oil in dollars and will switch over to the mix of Asian currencies or the euro. In one stroke this would wipe out demand for the US dollar and send US economy crashing into netherland. It would start a chain reaction, with domestic holders of dollars selling them off lickety split, along with the central banks of countries around the world doing the same. As Frank writes, “Since selling oil for falling dollars instead of rising euros is evidently bad business, the world’s largest exporters in Russia and OPEC have been considering doing just that.” (24) The bottom line is, the US is a dispensable item in our world today.
According to Sale, empires make their final collapse when dissent from within goes out of control, when public outrage at home becomes unmanageable. Presently the level of dissent in the US has not reached that stage. Life is still too easy, with too many Americans having homes, food, cars, and jobs. However, these statistics are changing rapidly – despite all mainstream media claims to the contrary. In addition, even with relatively small dissent, the Bush administration is becoming more and more repressive, and publicly linking any kind of dissent to ‘terrorism’ and ‘terrorists.’ Along with repression of those who dare to speak out is the calculated program to dumb down the American masses via crude, low-grade entertainment, glamorized sports, television programs aimed at 13-year-olds with careful avoidance of all the real issues plaguing Americans such as no health care, no jobs, no pensions. In place of talking about real issues which are worrying Americans every day – such as their credit card debt and inability to make ends meet without incurring that debt – the Bush administration pays hundreds of thousands of dollars to TV commentators to push its agenda – be it social security elimination as we know it or Medicare and Medicaid elimination. Presently Bush propaganda is cloaked in a veil of religious fundamentalism. And while it is fooling the people today, there is only so long that the people can be fooled by religious rhetoric if they cannot pay their heating bill that month! Perhaps things need to get worse before Americans begin to organize and demand their fundamental, constitutional rights.
This author says, things are going to get much worse fast – maybe in just two or three years. In his new book, Collapse, Jared Diamond says that the traditional values which sustained America for the past 200 years are simply not going to work anymore, and Americans will have to change their mindset and adopt new, more selfless values. Americans celebrated capitalism, but capitalism is not working anymore, and it is time to develop a new economic model. Americans celebrated individualism, but there is too much individual suffering. Individualism needs to be replaced by thinking for the collective welfare. We need to feel the pain of our brothers and sisters without health care, without pension, without job, and without a home due to bankruptcy. The value of nationalism is outdated and completely racist and isolationist. It is time to replace nationalism with the concept of universalism – the idea that all people are brothers and sisters, free to move and settle anywhere on this earth without restrictions. Universalism means, we are one human family and one human culture. We are not to make racist distinctions based on external appearances and differences in language or dress. If Americans begin to make fundamental changes in their thinking and thereafter in their lifestyles, the economic collapse can conceivably be avoided. But Sale says that they won’t make these changes in time. It means that collapse of Empire is inevitable.
III. Rise of a New Economy
Once the economic collapse of America has occurred, what then? We need to study what our economic options are. Esteemed economist Shrii Prabhat Ranjan Sarkar has provided to the world a glorious vision of a new economic model called PROUT (Progressive Utilization Theory), which contains guidelines for the creation of a new economy. He says that regional, self-sufficient socio-economic units must be formed on the basis of common cultural, geographic, social and economic factors. These socio-economic units may be affiliated in a federated system, but they must possess sufficient self-determination in their own local economic regions to create and control developmental policy.
Every region’s economy should be organized into three types of enterprises: cooperatives, key industries, and small private enterprises. Cooperatives would form the core of the economy. Except for a few large-scale, key industries and small private enterprises producing nonessentials, all production is to be organized under worker-owned and controlled enterprises. Cooperatives increase worker motivation and job satisfaction because they give workers control of the business as well as a stake in its profits. When cooperatives have access to the requisite inputs of production—capital, entrepreneurship, skilled labor, and competent management—they invariably out-perform private, free-market enterprises. Cooperatives are controlled by their worker members on the basis of one member, one vote. All members must purchase a membership share in the cooperative. This initial capital contribution gives each worker member a financial stake in the business. Thus workers’ ownership rights are based on their functional role as workers, and not on the basis of their capital contribution.
Very complex, capital-intensive industries, such as utilities or industries producing raw materials or goods which are strategic to the regional economy, should be designated as key industries. As they play a crucial role in stimulating production and development for the region, they must come under community control, not worker control. Key industries should be controlled either by the local or regional government, or by an autonomous board. That board or local government operations would hire a plant management team. Participatory team management techniques should be used to insure maximum worker involvement. An effective incentive system should be used to motivate productivity. Key industries should operate on a no profit, no loss basis. The state should not subsidize their operation, nor should the industry reap profits. (25)
Small businesses—those having a maximum of about 5-8 employees—can be privately owned. Private enterprises should not be involved with producing or distributing staple commodities. Salaries of workers and income of owners should be subject to minimum and maximum standards established for the region. (In fact, today in Germany the people are on the streets demanding a minimum wage as well as a maximum wage for all workers!)
Economic planning should take place at the central, regional, and district levels. But, for the most part, planning authority should reside at the local level. The most basic unit of planning is the district. District boundaries should not be determined on the basis of political considerations, but on the basis of geographic factors, socio-economic requirements, common economic problems, and common aspirations of the people.
If planning is undertaken at the district level, it means that planners will better understand the major and minor problems of the area; local leaders can solve problems according to their own priorities; planning will be more practical and more readily implemented; local organizations can play an active role in mobilizing human and material resources; and most important, unemployment can be more easily prevented.
When planning at the district level, the following guidelines can be observed. The unit costs of production (including spillover/environmental costs) should be carefully determined, and the cost of producing a particular commodity should not exceed its market value. Every economic enterprise must be economically viable, and without need of state subsidy. A major objective of planning must be to increase people’s purchasing capacity. Hence there must be: (1) availability of commodities according to local demand, (2) stable prices, (3) periodic increases in wages, and (4) steady increase in collective assets (such as roads, energy generation systems, and communications infrastructure).
The economy should be organized such that it has the capacity to continuously increase its productivity. There should be maximum production according to the collective need, and full utilization of the productive units. Money should be properly invested, and not hoarded or squandered in unproductive ways. No economic development project should be undertaken which decreases the productive capacity of the environment or the vitality of local ecosystems.
Investment capital should be generated from within the region, or through interregional trade. Capital for large-scale development can come from developmental bank loans, worker shareholdings, and government grants. Small-scale enterprises can be capitalized through worker shareholdings, private investment, and loans from cooperative banks.
To avoid trade deficits and the loss of currency, interregional and international commerce should be conducted on a barter basis where possible. Locally produced basic commodities should be protected from competition with cheaper goods produced in other countries. To protect local employment opportunities, international and interregional trade in raw materials should be avoided, and only finished products should be sold outside a region. Regional economies should be largely self-sufficient in the production of basic commodities. Except for commodities protected from foreign competition, there should be free trade.
Workers must have the right to organize independent trade unions, and control of the unions must remain with workers, not with political party interests. Unions should give as much importance to making workers conscious of their responsibilities as they do to protecting their interests. In small and medium-sized cooperatives, there will be less need for worker representation by organized trade unions, as these are worker-managed businesses. But in large cooperatives, key industries, public service institutions, and government administration, unionization should be encouraged. In large cooperatives, unions will serve the interests of workers as workers, rather than their interests as worker-owners.
The prosperity of society depends on worker productivity. Hence incentives are essential to motivate workers to develop and use their full productive capacities. While productivity and talent should be rewarded, rewards should not be so large as to create unnecessary disparity in society. Society should set minimum and maximum income levels. The minimum level should insure sufficient income to purchase basic necessities according to the prevailing standard. The maximum level should balance society’s need to maintain high worker motivation with its need to distribute wealth equitably. Over time, the minimum and maximum income levels would rise with rising purchasing power, and the range between the minimum and maximum incomes should be gradually decreased – unless this has the effect of diminishing worker motivation. The practice of providing incentives should be incorporated into all productive activity. The forms of incentives which have most value and appropriateness can be as follows:
Special amenities. Individuals whose skills have special value to society should receive special amenities, preferably amenities which provide increased opportunity to utilize their talents—for example, special research equipment, or greater opportunities for education and travel.
Workers should be paid according to their skill level and their labor. This can be done through salary gradations, payment for piece work, or bonuses. Workers in cooperatives will receive dividends according to the profitability of their enterprise.
Non-material incentives are also very effective. Motivation increases when workers feel compatibility with their job, when their work environment is pleasant and safe, and when their work provides interest and challenge. Perhaps the most important psychological factor for increasing motivation is the ability to influence decision-making. Therefore, all enterprises should implement participatory management processes and teamwork to the greatest extent possible. Teamwork can reinforced by material incentives based on team performance.
Currency should be backed by bullion. If the state is required to guarantee the value of money by issuing bullion upon demand, this will check its tendency to engage in excessive deficit spending and thereby help prevent inflation.
Distribution of essential commodities should be done through consumer cooperatives, not through traders, middlemen, or the state. This reduces the possibility of hoarding, manipulating prices, and bureaucratic inefficiency in marketing essential products. There should also be a free flow of information about consumer products. Decentralization of production and marketing will reduce the possibility of expensive advertising campaigns designed to manipulate consumer demand.
Outside the Boxes
The forthcoming collapse of the American Empire will be disastrous – not only for America but for countries around the world. The reverberations will be global. Today American battleships are moving to the Eastern Pacific Ocean in proximity to North Korea. American bases are springing up all over the Middle East. It is a matter of time until US military activity steps up in the vicinity of Venezuela, Columbia, Ecuador and Bolivia. The costs of these perpetual American wars will be immeasurable. (26) They are unsustainable.
What is required today is the implementation of the above-described Prout principles, or guidelines. They can be implemented at the grassroots level. Struggles against capitalist exploitation can start locally, in each community, by for example demanding the removal of those companies from a region where the companies are not hiring local people but instead are outsourcing. People cannot be complacent or apathetic. Justice never walked through the door without a struggle. We have to fight hard without rest if we want to see justice, and this applies most acutely to economic justice. We need to learn about energy conservation and local grassroots energy production – through wind and solar power. We must make ourselves independent of huge energy corporations as the first step towards giving ourselves economic power – putting economic power into our own hands! In the first decade of the 20th century, 100 years ago, Upton Sinclair was writing vigorously against capitalism and the corporations of those days. How appalled he would be to see what demonic form capitalism has become today! We are seeing the worst excesses of capitalism in every country. We need to crush this demon – if necessary with our bare fists! In each and every region we must throw out the large capitalist businesses and pass laws that permit only cooperatives or small-scale enterprises comprising 5-8 employees. It means the common people, not one or two capitalists, will own the productive assets on which their lives depend. There will be no more illegitimate, exploitative foreign debts meted out by World Bank, IMF and other crooks. The common people will have the right to manage the flow of goods and money across their borders. The people will set their own economic priorities. No longer will rich countries be allowed to bully smaller countries and demand access to their markets or resources. Every business, and every corporation that wants to do business in a foreign country will be subject to the laws of that particular country alone. WTO, World Bank and IMF will be deleted, and replaced by global institutions whose sole goal is benevolence and magnanimity towards the little people of this world! In the Prout economy, unlimited greed will end. There will be a ceiling placed, by the people themselves, on the amount of wealth any one person can accumulate. The common people will establish what should be the minimum wage as well as what should be the maximum wage. This is exactly what people in Germany are demanding today!
“US imperialist wars (be it Iraq, Iran, Venezuela or Columbia) are all a symptom of unlimited human greed of a few individuals at the highest levels of power. That unlimited greed is given free license in the economic system called capitalism and now global capitalism or globalization. The harm to humanity as a consequence of this greed is incalculable, and must be stopped. The way to stop it is to convince the people from the ground up, from the grassroots level, that there are better economic systems being developed by the idealistic lovers of humanity, and these economic systems do not create stark disparities in wealth. These new economic systems cater fully to the largest number of people and particularly to the poorest of the poor. They ensure that every citizen has adequate purchasing power and the five minimum necessities of life, i.e., food, clothing, shelter, education and medical care. We need to go back to local people becoming self-sufficient by growing their own food, producing their own necessities and controlling the conditions of their lives. In this scenario, the issue of price and even GDP becomes irrelevant. It becomes our duty to study these systems and teach them to others, so as to finally put the economic power into the hands of the people.” (27)
We need to climb out of these two economic boxes – one called capitalism and the other called communism – and step outside into the fresh open air of new visions of economic and social understandings that will bring real benefit to the people. We need to spread these visions across continents and oceans and create huge international networks so that the global population moves together to implement these visions! As one global population fighting for moral economic justice, we can fight the WTO, the World Bank and the IMF, defy their so-called laws, and if necessary be ready to go to prison during that fight! We must speak out in protest in order to end the economic domination of these capitalist institutions. The Battle of Seattle was the first step, when more than 1600 organizations from 90 countries on every continent came to protest trade liberalization. They understood the suffering that WTO leaves in its wake! We need to create a massive global second step – leaving a footprint so deep that it cannot be removed. We need to bring the WB and IMF to their knees! This protest movement will have to be both an economic protest as well as a political protest against trade liberalization and those political leaders who greedily push neoliberalism onto third world countries knowing full well that they alone and not those countries will benefit monetarily. Using only the Internet, in 1998 a gigantic coalition of protestors brought enough pressure to bear so as to kill the OECD’s MAI. We need to do this again and again, this time specifically targeting the World Bank and IMF. We need to declare the complete illegality of all laws passed by these institutions, saying their laws do not represent the people of the world, and are hence invalid! We need to demand that the only laws acceptable to the global population are laws created and approved by that population. Those laws will have to do with an alternative, humane and sustainable international system of trade and investment relations. To be rid of unemployment and to rebuild healthy, sustainable societies, we need to take back our local economies. We need to support all-round localization! (28) If we can control our own regional economies, orient them towards serving the basic needs of the people, then the local people will have jobs and will be protected from any future unemployment. We will go back to small, locally-owned enterprises (maximum 5-8 employees) and cooperatives. No more mammoth corporations wherein the benefits of productive assets go to a handful of rich alone with nothing for the masses! Capitalism devours everything in its wake – people, communities, ecology – it becomes a cancer in the society. Margaret Thatcher said, “TINA – There is No Alternative.” Colin Hines along with this author declare today: “TIAA! There is an Alternative!” The great Ralph Nader says, it is now time to fight the good fight – to engage in civil disobedience and mass resistance at every rung of the ladder because, in the words of esteemed economist and lover of humanity, Prabhat Ranjan Sarkar,
“There is only one way to stop economic exploitation and alleviate the plight of the common people, and that is to implement a policy of decentralized economy in all the sectors of the economy. Successful planning can never be done by sitting in an air-conditioned office thousands of miles away from the place where planning is to be undertaken. Centralized economy can never solve the economic problems of remote villages. Economic planning must start from the lowest level, where the experience, expertise and knowledge of the local people can be harnessed for the benefit of the members of a socio-economic unit. All types of economic problems can be solved only when economic structures are built on the basis of decentralized economy.”
Localization means, workers everywhere will be protected. Communities and especially environments will also be protected. Localization translates to minimization of the need to trade with other countries in far off places, if basic goods and services can be produced and provided locally. So we need to change our mindset from the “beggar-your-neighbor” competition of globalization to one of “better-your-neighbor” localization. We will globalize not capitalism but localization! This will work for the people! No more debts to international bankers! We need to drop the flawed economic theory of comparative advantage in neoliberalism and instead move now towards overcoming the opposition of transnational corporations, including agricorporations, while developing and controlling our local economies. Policies will be based on “site-here-to-sell-here,” to guarantee local production. Money can remain local, with safeguards such as control over capital flows, Tobin-type taxes, control of tax evasions, including offshore banking, and the rejuvenation of local banks, credit unions, and LETS schemes. All these steps will lead to a more level playing field. Individuals and companies can be taxed according to their wealth, their income, and their land. Taxes raised will be used to help the poorer people in the society. Sustainable, regional, self-reliant projects and enterprises mean more and more local employment. It is about changing our economies at the grassroots level. With coming huge job losses predicted in the face of deflation (many countries have passed the 40 percent mark in unemployment) followed by huge inflation leading to innumerable bankruptcies, the people will have no choice but to move towards the alternative of economic localization. When the market flounders, when capitalism begins its crash to the ground, we need to be ready at that moment to take back our economy and convert it to an entirely local economy run by the local people. This is the alternative. This is the Prout economic model in action! Prout’s approach is to guarantee minimum requirements of life for all people, to guarantee maximum amenities for all, and to guarantee special amenities for people with special capabilities. These three guidelines will lead to ever increasing acceleration in the socio-economic sphere. These three steps are never-ending processes and will go on increasing according to the collective potentialities of the people. In the words of Shrii Sarkar:
“Prout is the panacea for the integrated process of human society. It aims to bring about equilibrium and equipoise in all aspects of socio-economic life through totally restructuring economics. Without PROUT, socio-economic emancipation will remain a utopian dream. Only PROUT can save the world from [economic] depression …. We are near the last stage of the capitalist era. If an impact is created, it will help the suffering humanity. It is the most opportune moment for creating an all-round revolution!” (29)
1 Chalmers Johnson, Sorrows of Empire,New York, Metropolitan Books / Henry Holt and Company, 2004.
2 Ibid, p. 5
3 Ibid, p. 23.
5 Ibid, p. 58
6 Ibid, p. 60.
7 Ibid, p. 74.
8 Ibid, p. 81.
9 Ibid, p. 199
10 Ibid, p. 261.
11 Ibid, p. 262.
12 Ibid, p. 262
13 Ibid, p. 268
14 Ibid, p. 277
15 Ibid, p. 280
16 Andre Gunder Frank, “Geopolitical Catch 22: Uncle Sam’s Paper Tiger Dollar,” at Center for Research on Globalization, www.globalresearch.ca, 18 January 2005.
17 Chalmers Johnson, Sorrows of Empire, p. 281
18 Chalmers Johnson, “No Longer the ‘Lone’ Superpower: Coming to Terms with China,” in JPRI: Japan Policy Research Institute, Working Paper No. 105 (March 2005).
21 Steve Maich, “Is America Going Broke?” in Macleans-Canada. http://www.macleans.ca/topstories/world/article.jsp?content-20050307_101541_101541
22 Andre Gunder Frank, “America’s Spiraling External Debt and the Decline of the US Dollar,” at Center for Research on Globalizatoin, www.globalresearch.ca, January 12, 2005.
25 Trond Overland, “Beyond Collectivism and Individualism: Structural Features of the Prout Economy,” at Prout World: http://proutworld.org/ideology/statepriv/structfeat.htm.
26 Garda Ghista, “Economic Consequences of Iraq Occupation,” at World Prout Assembly: http://www.worldproutassembly.org/archives/
28 Colin Hines, Localization: A Global Manifesto, London: Earthscan Publications Ltd. 2000, p. 239.
29 Shrii Prabhat Ranjan Sarkar, Proutist Economics, Kolkata: Ananda Marga Publications, 1992, p. 98-99.
Copyright The author 2005-2011