Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
DOUBLE YOUR DONATION!
We don’t run corporate ads. We don’t shake our readers down for money every month or every quarter like some other sites out there. We provide our site for free to all, but the bandwidth we pay to do so doesn’t come cheap. A generous donor is matching all donations of $100 or more! So please donate now to double your punch!
FacebookTwitterGoogle+RedditEmail

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.

Weekend Edition
October 19, 2018
Friday - Sunday
Jason Hirthler
The Pieties of the Liberal Class
Jeffrey St. Clair
A Day in My Life at CounterPunch
Paul Street
“Male Energy,” Authoritarian Whiteness and Creeping Fascism in the Age of Trump
Nick Pemberton
Reflections on Chomsky’s Voting Strategy: Why The Democratic Party Can’t Be Saved
John Davis
The Last History of the United States
Yigal Bronner
The Road to Khan al-Akhmar
Robert Hunziker
The Negan Syndrome
Andrew Levine
Democrats Ahead: Progressives Beware
Rannie Amiri
There is No “Proxy War” in Yemen
David Rosen
America’s Lost Souls: the 21st Century Lumpen-Proletariat?
Joseph Natoli
The Age of Misrepresentations
Ron Jacobs
History Is Not Kind
Ramzy Baroud
The UN ‘Sheriff’: Nikki Haley Elevated Israel, Damaged US Standing
Robert Fantina
Trump, Human Rights and the Middle East
Jill Richardson
Identity Crisis: Elizabeth Warren’s Claims Cherokee Heritage
Sam Husseini
The Most Strategic Midterm Race: Elder Challenges Hoyer
Maria Foscarinis – John Tharp
The Criminalization of Homelessness
Robert Fisk
The Story of the Armenian Legion: a Dark Tale of Anger and Revenge
Jacques R. Pauwels
Dinner With Marx in the House of the Swan
Dave Lindorff
US ‘Outrage’ over Slaying of US Residents Depends on the Nation Responsible
Ricardo Vaz
How Many Yemenis is a DC Pundit Worth?
Elliot Sperber
Build More Gardens, Phase out Cars
Muhammad Othman
Let Us Bray
Gerry Brown
Are Chinese Municipal $6 Trillion (40 Trillion Yuan) Hidden Debts Posing Titanic Risks?
Rev. William Alberts
Judge Kavanaugh’s Defenders Doth Protest Too Much
Ralph Nader
Unmasking Phony Values Campaigns by the Corporatists
James Bovard
Groped at the Airport: Congress Must End TSA’s Sexual Assaults on Women
Jeff Roby
Florida After Hurricane Michael: the Sad State of the Unheeded Planner
Wim Laven
Intentional or Incompetence—Voter Suppression Where We Live
Bradley Kaye
The Policy of Policing
Cesar Chelala
The Catholic Church Fails Sexual Abuse Victims
Kevin Cashman
One Year After Hurricane Maria: Employment in Puerto Rico is Down by 26,000
Dr. Hakim Young
Nonviolent Afghans Bring a Breath of Fresh Air
Karl Grossman
Irving Like vs. Big Nuke
Dan Corjescu
The New Politics of Climate Change
John Carter
The Plight of the Pyrenees: the Abandoned Guard Dogs of the West
Ted Rall
Brett Kavanaugh and the Politics of Emotion-Shaming
Graham Peebles
Sharing is Key to a New Economic and Democratic Order
Ed Rampell
The Advocates
Louis Proyect
The Education Business
October 18, 2018
Erik Molvar
The Ten Big Lies of Traditional Western Politics
Jeffrey St. Clair
Lockheed and Loaded: How the Maker of Junk Fighters Like the F-22 and F-35 Came to Have Full-Spectrum Dominance Over the Defense Industry
Lawrence Davidson
Israel’s “Psychological Obstacles to Peace”
Brian Platt – Brynn Roth
Black-Eyed Kids and Other Nightmares From the Suburbs
John W. Whitehead
You Want to Make America Great Again? Start by Making America Free Again
FacebookTwitterGoogle+RedditEmail