• Monthly
  • $25
  • $50
  • $100
  • $other
  • use PayPal

ONE WEEK TO DOUBLE YOUR DONATION!

We are inching along, but not as quickly as we (or you) would like. If you have already donated, thank you so much. If you haven’t had a chance, consider skipping the coffee this week and drop CounterPunch $5 or more. We provide our content for free, but it costs us a lot to do so. Every dollar counts.
FacebookTwitterRedditEmail

How Capitalism Flopped

In the struggle against global laissez faire capitalism that has brought the current economic collapse, protesters won an important victory last week in Britain, while stalemate continued in Greece. The alliance between the church, the main financial district called the City of London and Mayor Boris Johnson against the Occupy London protest crumbled. They had threatened legal action to remove peaceful demonstrators occupying an area near the London Stock Exchange for several weeks.

Legal moves against the protesters might lead to police action and violence. In particular, the readiness of St Paul’s Cathedral, the seat of the Bishop of London, to go to High Court split the church. Senior priests began to resign, signaling a crisis for the British establishment. Facing a growing sense of disquiet over possible use of force to remove peaceful demonstrators, the Corporation of London and St Paul’s Cathedral dropped the threat of immediate legal action.

In Greece, Prime Minister George Papandreou threw down the gauntlet to the two most powerful member-states of the European Union––Germany and France. To salvage the Greek economy and the European currency, they had agreed to finance a huge rescue plan, involving the International Monetary Fund and other sources, only days before. In the face of widespread demonstrations against draconian cuts in wages and public services, and rumors of a possible military coup, the Greek prime minister announced a referendum on the European Union rescue package.

Initially, the Greek cabinet gave its backing to the referendum plan, but the leaders of other EU member-states were furious. Deep political splits began to appear in Greece’s body politic. Germany and France have a lot to lose if Greece should default on its massive debt. Any government in Athens must have the people’s mandate to implement draconian austerity measures. Already, Greek people have started to take matters in own their hands.

Timing was of essence for Prime Minister Papandreou. First he agreed on a mega rescue deal with other European partners. When such a deal looked certain, he returned home and announced his referendum plan. European leaders, opposition politicians in Greece, even in his own Socialist Party, were surprised and angry. What might have been a straightforward move to secure a people’s mandate, if the timing was right, seemed to be an opportunistic attempt to save his government.

Chancellor Angela Merkel of Germany, leading paymaster of the euro bailout package, bluntly told Papandreou to accept the rescue deal with all conditions attached––or get out. Such warnings were bound to cause widespread offense in Greece, not least because the country had been under German occupation during the Second War. At the G20 summit in the French Mediterranean city of Cannes, European leaders waited to welcome the Chinese leader, Hu Jintao, hoping that China would contribute to the euro bailout.

Hu’s response: “To resolve the eurozone’s debt crisis, Europe still needs to rely on itself.” The Chinese are shrewd investors.

How did we get to this point? The question is posed frequently, though rarely answered truthfully.

The current globalization phase, beginning at the end of the Cold War around 1990, extended the markets across state boundaries. The movement of money, goods and services on a massive scale across national boundaries required regulations, but they also had to be relaxed in ways not seen before, to facilitate the ease of transfer. The Nobel Prize winning Columbia University economist Joseph Stiglitz points out that the ‘driver’ behind this phase of globalization is corporate interests.

Many transnational corporations are bigger than most national economies. Powerful corporations export not only goods and services, but also a certain culture of borrowing, cheap labor and money. Corporate interests are fundamentally linked to consumption, for profits are driven by consumption.

Corporate investments have flown to destinations of cheap labor and weak unions––China and Southeast Asia, India, Turkey, Southern European countries and South America. Factories in the United States and Western Europe have closed, new plants have spread in Asia and South America. Acceleration in this phenomenon in the last two decades has resulted in massive job losses in the industrialized world. Most products bought by Western consumers now come from the emerging economies.

Corporate profits have steadily grown, but the overall purchasing power of Western consumers has declined to alarming levels, caused by rising unemployment and shrinking incomes of those still in work. Government revenues, too, have been declining in the West, which has demonstrated a propensity to spend enormous sums of money on wars abroad and to cut public services at home.

For too long, consumers and governments tried to maintain the status quo by borrowing money at artificially low interest rates and cheap goods manufactured abroad. Loans secured on the real state to finance the lifestyle in the West sent property prices sky high. The crash had to come.

The case of the Greek tragedy is stark, but Greece is not alone. For a long time, its people have not been paying taxes they should have been paying. The country has been borrowing to maintain living standards, pay wages of government employees, to hold events like the Athens Olympics in 2004. The party had to be over one day–and that day has come. Less than a quarter century after long celebrations of victory over communism began in the West, capitalism has flopped.

Deepak Tripathi is the author of Breeding Ground: Afghanistan and the Origins of Islamist Terrorism (Potomac Books, Incorporated, Washington, D.C., 2011) and Overcoming the Bush Legacy in Iraq and Afghanistan (also Potomac, 2010). His works can be found at:http://deepaktripathi.wordpress.com and he can be reached at:dandatripathi@gmail.com.

More articles by:

Deepak Tripathi is a Fellow of the Royal Historical Society and the Royal Asiatic Society of Great Britain and Ireland. His works can be found at: http://deepaktripathi.wordpress.com and he can be reached at deepak.tripathi.writer@gmail.com.

bernie-the-sandernistas-cover-344x550
October 22, 2019
Gary Leupp
The Kurds as U.S. Sacrificial Lambs
Robert Fisk
Trump and the Retreat of the American Empire
John Feffer
Trump’s Endless Wars
Marshall Auerback
Will the GOP Become the Party of Blue-Collar Conservatism?
Medea Benjamin - Nicolas J. S. Davies
Trump’s Fake Withdrawal From Endless War
Dean Baker
Trump Declares Victory in China Trade War
Patrick Bond
Bretton Woods Institutions’ Neoliberal Over-Reach Leaves Global Governance in the Gutter
Robert Hunziker
XR Co-Founder Discusses Climate Emergency
John W. Whitehead
Terrorized, Traumatized and Killed: The Police State’s Deadly Toll on America’s Children
Evaggelos Vallianatos
A World Partnership for Ecopolitical Health and Security
Binoy Kampmark
The Decent Protester: a Down Under Creation
Frances Madeson
Pro-Democracy Movement in Haiti Swells Despite Police Violence
Mike Garrity
Alliance for the Wild Rockies Challenges Logging and Burning Project in Methow Valley
Chelli Stanley
Change the Nation You Live In
Elliot Sperber
Humane War 
October 21, 2019
Jeffrey St. Clair
The Wolf at the Door: Adventures in Fundraising With Cockburn
Rev. William Alberts
Myopic Morality: The Rehabilitation of George W. Bush
Sheldon Richman
Let’s Make Sure the Nazis Killed in Vain
Horace G. Campbell
Chinese Revolution at 70: Twists and Turns, to What?
Jim Kavanagh
The Empire Steps Back
Ralph Nader
Where are the Influentials Who Find Trump Despicable?
Doug Johnson Hatlem
Poll Projection: Left-Leaning Jagmeet Singh to Share Power with Trudeau in Canada
Thomas Knapp
Excuses, Excuses: Now Hillary Clinton’s Attacking Her Own Party’s Candidates
Brian Terrell
The United States Air Force at Incirlik, Our National “Black Eye”
Paul Bentley
A Plea for More Cynicism, Not Less: Election Day in Canada
Walter Clemens
No Limits to Evil?
Robert Koehler
The Collusion of Church and State
Kathy Kelly
Taking Next Steps Toward Nuclear Abolition
Charlie Simmons
How the Tax System Rewards Polluters
Chuck Collins
Who is Buying Seattle? The Perils of the Luxury Real Estate Boom
Weekend Edition
October 18, 2019
Friday - Sunday
Anthony DiMaggio
Trump as the “Anti-War” President: on Misinformation in American Political Discourse
Jeffrey St. Clair
Roaming Charges: Where’s the Beef With Billionaires?
Rob Urie
Capitalism and the Violence of Environmental Decline
Paul Street
Bernie in the Deep Shit: Dismal Dem Debate Reflections
Andrew Levine
What’s So Awful About Foreign Interference?
T.J. Coles
Boris Johnson’s Brexit “Betrayal”: Elect a Clown, Expect a Pie in Your Face
Joseph Natoli
Trump on the March
Ashley Smith
Stop the Normalization of Concentration Camps
Pete Dolack
The Fight to Overturn the Latest Corporate Coup at Pacifica Has Only Begun
Jeremy Kuzmarov
Russophobia at Democratic Party Debate
Chris Gilbert
Forward! A Week of Protest in Catalonia
Daniel Beaumont
Pressing Done Here: Syria, Iraq and “Informed Discussion”
Daniel Warner
Greta the Disturber
M. G. Piety
“Grim Positivism” vs. Truthiness in Biography
John Kendall Hawkins
Journey to the Unknown Interior of (You)
FacebookTwitterRedditEmail