Distortions of Capitalism
As American manufacturing, relatively speaking, in world-structural terms, continues to decline, we are witnessing for that very reason an increasing reliance on the military implementation of US global hegemony—an ultimately losing stratagem in the face of the global rise of multiple power centers, notably, China, but also a more coherent EU, the standbys Russia and Japan, newcomers, e.g., Brazil, and gradually emerging Third World modernization. We are no longer top dog, unilaterally defining capital flows, trading patterns, etc., to our liking. As US economic prowess recedes, its militarism is brought to the fore in ambitious schemes pairing offensive power-operations with imposed trade partnerships, as in Obama’s Pacific-first strategic framework side-by-side with the Trans-Pacific Partnership.
In both cases, the target is China, the first, as an object of encirclement and containment, the second, by virtue of its exclusion, similar fencing in and hoped-for economic ostracism. Obama and his national-security mavens, long habituated to Cold War thinking, are spoiling for war (or, short of war, the use and popularization of counterterrorism, to reinforce America’s post-World War II posture—to the present–of counterrevolution).
In Smithian terms, capitalism was thought the harbinger of international peace, trade a universal solvent of friendly, if competitive, relations. Not so, then or now, and by the twentieth century, the cauldron of rivalries culminating in war. We have not entered a New World of global development, rather, the opposite, the regurgitation of war-provoking tensions principally stimulated by an international division of labor, America in the foreground of riding herd on less-developed nations. Not even autarky, bad as it is, is an option, for the US, in sacrificing its budget and resources to the militarization of capitalism, is falling behind in maintaining a vital industrial base, accompanied by crumbling infrastructure, declining educational standards, and, trying to play catch-up with itself, an increase in the frequency of bubbles, unemployment, and widening class differences.
With difficulties of this magnitude, self-inflicted in the first place, no wonder an American leadership beholden to the upper stratum of wealth, and bereft of imagination, moving inexorably toward more aggressive political-economic strategies to forestall further decline. Hence, intervention, regime change, drone assassination, massive surveillance at home, eavesdropping on world leaders, and the attempted tightening of spheres of interest and influence, from the Middle East to Central and East Asia. Preparation for international conflict is presently a leading growth industry, facilitated by a benumbed populace jaded by technological gadgetry and imagined or blown up major-party differences, as the engine of wealth-accumulation goes on, now under the banner (making everything more deceptive) of liberalism.
In America, capitalism is the only show in town, a situation unlikely to change for decades, if ever. One cannot help but wonder, however, what a shortened version of the end-of-times scenario would be, an awakening to democratic values, compelling the structural lessening of class differences, or, in contrast, a still more hierarchical social system, permanent underclass and all, driven by a rancid individualism to disguise naked privilege—the threshold of fascism perhaps already upon us.
I write, not as an alarmist, but one who seeks to measure the freedom of a society by such common indices as respect for the right of privacy, the commitment of national sources of wealth to the health and well-being of its people, not the opportunities (i.e., market penetration, ideological dominance) of conquest, and the creation of a social or public ethic which transcends and severely modifies the societal framework of corporatism at the heart of business development. At this point, the record is zero, contempt for privacy, diversion of wealth to death-sustaining forces, and privatization trumping the very concept of a social or public ethic (and the moral obligations to be observed through democratic governance).
My New York Times Comment on Ben Protess and Jessica Silver-Greenberg’s article, “Bank Tracked Business Linked to China Hiring,” (Dec. 8), which traces the JPMorgan Chase “Sons and Daughters” program in China, exposing through documents the bribery of public officials in state enterprises through the hiring of their children for bank positions, follows (same date):
Declined to comment. Declined to provide further details. Here we go again, the Obama administration and JPMorgan Chase dancing a minuet around the facts. Bribery, not surprising–hiring practices analogous to the revolving-door practice, whether China or the US. What astonishes me is that SEC even investigates at all, although it is unlikely we will see criminal prosecutions over bribery. (Already NY executives of the firm are claiming no knowledge of the content of “Sons and Daughters,” thus providing themselves–probably with government connivance–deniability.)
American banking has reached a new low, not only because of buying influence in China, but also buying influence in the US, as in the abrogation of Glass-Steagall under Clinton, itself part of the wider trend of deregulation and, at bottom, the FINANCIALIZATION of American capitalism. The structural/systemic outcome is not confined to banking, for with this emphasis we also see the decline of American manufacturing, thus making for a growing distortion in the nation’s economic make-up and future.
The SEC is a microcosm of the administration: friendly to nonexistent regulation, as government becomes increasingly severed from pursuit of the general welfare. No, Morgan has not been caught with its pants down. These revelations will become transmogrified into praise, as the hustle and ingenuity of American business abroad.
Norman Pollack is the author of The Populist Response to Industrial America (Harvard) and The Just Polity (Illinois), The Humane Economy, The Just Polity, ed. The Populist Mind, and co-ed. with Frank Freidel, Builders of American Institutions. Guggenheim Fellow. Prof. Emeritus, History, Michigan State. He is currently writing The Fascistization of America: Liberalism, Militarism, Capitalism. E-mail: email@example.com.