America’s Self-Imposed Iron Curtain: Denial of Global Aggression

A social psychiatry is needed to apprehend the mammoth collective defense mechanism within which the US has become comfortably ensconced to hide, particularly from itself, its treachery and perfidy on the world scene. The convenient amnesia of belligerence and wrongdoing has reached its apogee under Obama, who has proven far worse than Clinton, if that were possible, or rather together in the consolidated process of Empire-building of US Monopoly Capitalism. A case in point: We are told an impending financial decline in the world is exclusively China’s fault, i.e., its failure to maintain its phenomenal rate of growth in the tightly structured context of globalization. The burden of the world’s prosperity rests on China’s shoulders. Nonsense.

The US, supplemented by its designated shock troops, the World Bank, IMF, WTO, has created a solipsistic fortress of political righteousness to energize while covering over the unrestrained growth of a corrupt/besotted capitalism engaged in promoting fictitious values rather than the presumed goal of production for the market. Even by Marxian standards, American capitalism has lost its way, the expected consequences of alienation and profit maximization, bad enough when judged alongside humane standards of societal betterment, instead descends into the veritable hell of debt-financed war-making looking to maintaining unilateral global supremacy as the condition of fending off a catastrophic depression affecting, foremost, itself.

This encasement in mythic Exceptionalism, a recognizable mental disorder because tenable only when positioned within an authoritarian state of of extreme ego-loss, in turn calling forth the projection of an Enemy or Enemies to ward off doubts of inadequacy and the perpetration of evil, is where we’re currently at: China, and to a lesser extent now, Russia, vindicates the US posture of war, intervention, covert action, regime change, whatever the mind of the tyrant or bully can conceive—as setting up a barrier to self-awareness of international war-criminality and domestic accelerated destruction of democracy.

Seemingly little things matter, for they illuminate the criminal framework of the whole, here, the nuts-and-bolts of the Trans-Pacific Partnership, Obama’s cherry atop the cake of American-defined globalization, an insidious ploy to ensure US market penetration by stealth rather than, in the good old days, by battleship, Gallagher and Robinson’s famous Imperialism of Free Trade, written decades ago, and considerably advanced in modern form. Under the radar (for disgracefully, the terms have still not been made public, and an ironclad fast-track process of approval provided worthy of any totalitarian regime, vote up or down, no deliberation—jam it through!), we see the US Chamber of Commerce exerting pressure to eliminate anti-smoking laws among the signatories, or John Castellani, president of the Pharmaceutical Research and Manufacturers of America, lobbying to ensure patent extensions on drugs, to the detriment of the world health community. TPP stands for market exclusivity—it also stands for America’s right to foist its products, at the expense of lung disease and availability of generics, on a global populace.

It gets worse, on domestic content regulations, currency stabilization, whatever one-sided arrangements benefit America, yet even then, we have not begun to tap the use of trade for geopolitical (read: anti-Chinese) objectives, the re-defining of the world structure to prevent America’s own decline. US capitalism, I grant, is capable of multitasking: advancing financial-commercial goals, simultaneously militarizing strategic planning in order to hem-in and isolate China on the world scene. Confrontation becomes the surrogate for economic growth. In fact, this is not multitasking. The two are inseparable, market expansion, the lifeblood of US capitalism, given its fashioning of underconsumption and labor degradation in its formative stages of industrial development, which otherwise would have resulted in endemic recession, has always been accompanied by the use or threat of military support. For America, trade rivalry has been either cause or consequence of war, knocking its Exceptionalism into a cocked hat because a condition rooted in capitalism itself.

We play the game of imperialism perhaps better than other powers because recognizing quite early that colonialism is not worth the candle, and, going further, valuing unilateralism to wield a free-hand in international politics and economics. There she stands: business giantism at the end of its tether, and in search of scapegoats to erase the memory of its past and contemporary egregious performance, from the standpoint not only of growth, wealth distribution, provisions of health and social welfare, infrastructure improvement, but also, more importantly, human rights at home and abroad. Symbolically, Obama’s record-breaking drone assassinations speaks to the moral bankruptcy of military capitalism, a practice largely suppressed in the American psyche. And if a nation can get away with reigning down death from the skies with impunity (or bombing a clearly demarcated hospital), its behavior in the larger arena (drone assassination being only the proverbial tip of the iceberg and/or microcosm of US intent and planning) hardly surprises.

The Iron Curtain of the Cold War has given way to a more porous New Cold War with respect to China primarily, as if to say Russia has already been reduced to second-class status. (Not so, of course, except in the arrogant mindset of American political and military leaders). Ironically, though, the psychoanalytic characteristics of the Old have now been directed inward, perhaps the enormity of the war crimes fostering a depth of denial which erases all traces of wrongful conduct, as in the way we speak of collateral damage (a euphemism to explain away deliberate actions leading to the murder of innocent people—as e.g., in targeting wedding parties among others). Whether in Iraq or Afghanistan—a recitation of America’s global military presence can be suggested ad infinitum—or the longer term containment of Russia which translates into the dangerous policy of encirclement, antidemocratic/prowar tendencies in American society are taking their psychological toll, more xenophobia, more pent-up hostility, more ethnocentrism, delusions of grandeur, all teetering on the point of a massive explosion.

And now China, the full-dress rehearsal for a new ball game, focalizing discontents on a target imputed to harbor aggressions which, mirror-like, reflect America’s own inner feelings, needs, conception of the future. The Trans-Pacific Partnership sans China is the signal for aggression, first through trade, and then, as with the EU and NATO, its conversion from a commercial to a military alliance system, America, as elsewhere, the chief architect of the arrangement. Let me turn now to a rather bland (given its usual China-bashing) New York Times article by Neil Gough entitled “Discordant Financial Messages From China Spur Global Unease,” (Oct. 20), to gain a further sense of what the TPP entails. As his title implies, China is to blame for global financial concerns. The principal reason, reading between the lines, is not a slowing of the growth rate, but a failure to proceed rapidly and thoroughly enough with privatization.

Gough writes: “China’s bungled stock market bailout was a significant setback to its decades-long efforts to build a modern financial system.” Circumlocutions notwithstanding throughout the article, that financial system must include none other than privatization. His complaint over currency devaluation (which TPP itself is designed to prevent, although not stated here) is less important than, if presumably related to, said privatization: “A highly anticipated package of overhauls to sprawling state-owned companies was a crushing rebuke to hopes that China would move to privatize such businesses. Instead of reducing their stakes, the Communist Party said it would increase its controls over such companies.” Is there an economic equivalent of the phrase, “Better dead, than red,” for that seems to be the American prevailing thought—perhaps enough eventually to go to war over, should such companies not be wrested from the clutches of the Communist Party.

Poor China; to Gough it is practically falling apart, resulting from its failure to adopt capitalism across the board. (In passing, capitalism is not satisfied unless it is completely totalized, mixed elements, as actually now exists in China, being unacceptable to the US and the investor class.) Thus he continues: “To many global policy makers and investors, China’s spate of surprises [i.e., favoring and/or protecting state-owned enterprises] is driven by the government’s need to get the economy back on track.” Evidently the wrong track. Only 6.9% growth rate in the third quarter, as reported Oct. 19—probably the envy still of Western countries. He goes on: “While President Xi Jinping says the country is committed to financial reform, the resulting measures send the message that China is backpedaling on those efforts. It is a new and shifting landscape that is proving difficult for the rest of the world to navigate.”

For illustration, Gough quotes Fraser Howie, long-time banker in Asia and co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise,” who put the matter succinctly: “’People say reform is coming, but you’re giving back your reforms. That defeats the whole purpose; YOU EITHER EMBRACE MARKETS OR NOT.’” (Emphasis mine) So we enter the coded world of IMF-World Bank semantics in which embracing markets can have only a capitalist referent, leaning toward American multinationals in an American-tailored trading system. Moreover, China is beyond the pale, its technocrats and competing agencies making for a “collective result” that is “difficult to discern” about “exactly what is happening in China.” Officials are backward thinking as well as sowing confusion among the investor class. “From the outside,” Gough notes, “officials appear to be changing course on long-held reform plans that are broadly considered critical for the health of the economy.”

Capitalism uber alles, no compromises here from the US perspective, and even then China’s admission to the TPP would have to wait till hell freezes over. China’s stock market tumbled following its finance minister’s planned assistance to corporate start-ups (which he has now rescinded), eliciting this response from Matthew Goodman, Asian trade expert, of the Center for Strategic and International Studies: “’The stock-market rescue revived questions regarding the leadership’s commitment to economic liberalization and whether that is even what the administration means by reform. It is now pretty clear that things are not going according to plan.’” Perhaps they are, perhaps China is having second thoughts about capitalist totalization.
Andrew Batson, of Gavekal Dragonomics, a financial consultancy in Beijing, seems to think so, that Xi Jinping is taking greater control of the economy, to the detriment of a flat-out capitalist market philosophy and economy: “’The focus on centralizing authority has been a big theme of Xi’s, and also this more politicized and nationalist environment that Xi has inaugurated has had very clear effects on the progress of economic reform. That is not necessarily 100 percent negative. But it’s certainly not the universally pro-market reform agenda that some people were expecting.’”

To Barack Obama it is not 100 but 200 percent negative, financial reform admitting of only one interpretation. But for those, I include myself, who value a socialist economy and society for its redistributive-justice potential, its moral outlook of humanism, its assault on alienation–rooted in the commodity structure of capitalism, and grant capitalism a subsidiary or nondominant role in the organization of political economy, culture, and wealth-allocation, democratization the criterion for its continued operation, then it is crucial to be illusion-free concerning China. For it, too, has thus far conceded more to capitalism and its institutional framework than I would wish to see if socialism is to remain a vital and viable world pattern of development. China, like Russia, may well be at a tipping point (in Russia’s case possibly already over the edge), not that a mixed economy is to be eschewed, but that the superimposition of concentrated wealth and power into a unified hierarchical political order, which I conceive capitalism to be, rejects and repudiates the world’s progressive future.

China, under Xi, appears caught in-between, the dismantlement of socialism a tendency which is difficult to reverse when once started. The US’s confrontational posture, carried well beyond TPP to the military pivot to the Pacific, conceivably could compel China’s return to socialism in light of the hostile world order awaiting it—but there are no assurances that capitalism would be arrested in China. Gough reports that Prime Minister Li Keqiang “met with the leaders of some of China’s biggest banks on Friday [October 16] and issued a broad promise to prop up companies in financial trouble.” Li: China “’will not cut or withdraw loans to those companies with difficulties but good market prospects.’” And it will “’give necessary capital support to companies undergoing bankruptcies or regrouping.’” Yet, keeping in mind the American-sponsored equation of reform and privatization, there is some promise of a trend-reversal, as witness the Communist Party Central Committee’s “bluntly rul[ing] out loosening the party’s grip on state firms.” This party leadership “’is vital to ensuring the socialist direction of their development.’”

My New York Times Comment on the Gough article, same date, follows:

“Financial reform” = privatization. Nothing less will satisfy the West and investors in general. Is 6.9% growth, given the rest of global performance, to be ridiculed? Nothing in the article indicates that it is corporate DEBT in the developed economies that is at the heart of the current financial downturn. China can handle its debt problems with state-owned enterprise. It is not the cause of looming recession (if not worse), yet China makes a convenient scapegoat for US and other corporations which are heavily indebted and market questionable financial products.

It is too soon to proclaim capitalism triumphant, or at least the kind of capitalism predicated on greed and behaving like a loose cannon. The Times emphasizes chaos and confusion in China, and yet without the state sector one would see far worse damage to the world economy.

Norman Pollack Ph.D. Harvard, Guggenheim Fellow, early writings on American Populism as a radical movement, prof., activist.. His interests are social theory and the structural analysis of capitalism and fascism. He can be reached at