Capitalism Equals Peace?

In the immediate aftermath of the US occupation of Iraq in 2003, one of the first acts initiated by Paul Bremer, then de facto ruler of Iraq, was to reduce the rate of corporation tax from 40 to 15 percent. The flat tax had long been a goal of economic conservatives and was planned for Iraq in pre-war planning sessions with Iraqi exiles, despite its unpopularity among other members of the Coalition Provisional Authority. While leaving a few Hussein-era taxes in place, Bremer exempted his Coalition Authority, the armed forces, their contractors, and so-called ‘humanitarian organizations’ from paying any of these levies. Exempting occupation and some government personnel left only ordinary Iraqis to pay.

The spoils of empire are nowhere as obviously on display as in the middle-east, where after 2011 men in uniforms and sharp suits (and a few women such as Hillary Clinton) went about destroying welfare provision, state industry and price controls in Libya. In the words of the US State Department, “Libya faces a long road ahead in liberalizing the socialist-oriented economy and recovering from the losses of the ongoing conflict, but initial steps, including applying for World Trade Organization (WTO) membership, reducing some subsidies, and announcing plans for privatization, have laid the groundwork for a transition to a more market-based economy.” (July 2011)

Whatever one thinks of the Gadhafi regime, it is plain that, as has happened from Serbia to Iraq, multinational corporations and sections of Libyan society see a chance for enrichment beyond their previous dreams while the majority have found their lives much harder as their standards of living are ruined and their country occupied and divided along sectarian lines.

Writing in 2017 one academic outlines the events following the NATO-aided war of 2011 as “State collapse, never-ending conflicts between ever-changing alliances of armed groups, the expansion of the Islamic State.”  Nevertheless, the same academic argues that we should not be too hasty to attribute blame for the ensuing chaos to those who intervened: “the story of Libya’s collapse recalls the insights of Thucydides and Clausewitz about the intrinsic unpredictability of war. Collective violence unleashes dynamic processes, draws new social boundaries and creates new communities. The debate over whether the intervention was justified would do well to take the imponderables facing decision-makers in March 2011 as its starting point, rather than the current chaos in Libya.” An interesting study could be made of the number of times this excuse has been made by academics in the chaotic wake of the imperialist wars of the past century.

To this academic betrayal of  reality we can add the idea in mainstream political science that imperialism is good for the natives and brings capitalist stability in its wake. In line with past imperial adventures, twenty first century imperialism justifies itself according to a number of ideological propositions, which make plunder seem routine, benign in intent and, indeed, good for the natives. Where once it was the poets and clergymen who sang the praises of empire, that role now belongs to the pundits and social scientists. A routine example of this  can be seen in the assertion of American political scientist Erik Garzke that ‘capitalism, and not democracy, leads to peace’. In an article written with Dominic Rohner, Garzke argues that developed capitalist states no longer gain material benefit from direct imperial expansion, and that the next wave of empire could come from poorer countries: “political instability or dramatic price increases in critical resources could spark efforts [on the part of developing countries] to control mineral-rich regions. Global political competition could also ignite efforts to capture and control scarce minerals. We must hope that rising powers see themselves as beneficiaries of the global economy and endorse open markets in due course.”

Revealing the ideological nature of the mainstream academic writing on these subjects, Swiss academic Gerald Schneider, conceives of   “capitalist peace theory” as bulwark against radicalism, which “could serve as an antidote to the theory of imperialism and other “critical” approaches that see in capitalism a source of conflict rather than of peace”.

While for Garzke, Schneider and the many other defenders of “American exceptionalism” America’s role as a bringer and defender of free-markets is by definition benign, maverick economist Michael Hudson provides a more realistic description: “Finance is the new mode of warfare internationally. Finance aim for the same things that a military invasion aims for. It wants the land, it wants the mineral resources and it wants the nation to pay tribute.”

According to the mainstream fantasy, American military adventures involve what Garzke and Rohner call the “enforcement of a norm of territorial integrity” against those poor countries who would seek to undermine the sovereignty of other nations. America bombs countries and sets up military bases around the world for noble, nation-building reasons. It is developing countries (such as China?) that we must be wary of.

This idea that the market system makes it unprofitable for the USA to seek to control mineral-rich regions or undermine the sovereignty of nations and the idea that capitalism leads to peace are disproven by the reality from the streets of Athens to the bombed-out remains of Sirte.

The “capitalism brings peace” conceit has been also applied to the Northern Ireland situation. In March 2008 the Basra Development Commission toured Belfast ‘to learn how to rebuild a thriving economy in the midst of violent sectarian conflict’. Trevor Killen of the neo-liberal quango Invest Northern Ireland was seconded to the Basra Investment Promotion Agency. He informed the Basra agency that ‘[a]n improved economic climate, where people have a better stake in society, can play a great part in assisting with the improvement of stability and political development’. Killen is currently ‘Long Term Consultant – Private Investment Facilitation in Fragile Situations’ with the African Development Bank

In April 2011 the late Martin McGuinness told the New York Stock Exchange that “We need to replace competition on the island with cooperation to market and promote business.” McGuinness said that it was important to identify “our competitive advantage”…. We need the innovative thinking, the hard decision making, the dialogue that marked the process of political change. This is not just an issue for policy makers but all levels of our community and business sector,” he said.

Peace, prosperity and an end to sectarianism are all worthy goals but these things won’t be achieved, either in Ireland or anywhere else, if they are based on flimsy fantasies about the essentially benign and inclusive nature of capitalism.

Justin O’Hagan is a member of the Workers Party of Ireland. He blogs at thisjustinsite.wordpress.com


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