Editorial from Irish Political Review, January 2010
China & Greece
Is the capitalist development of the world endangering its existence? We don't know. It might be that Climategate has exposed the whole thing as a scientific sham. Or it might be that the world is being destroyed by capitalism. If capitalism is destroying the world, the nature of the system is such that there is little prospect that it will stop doing it.
For many centuries China was the biggest and most economically developed civilisation in the world. It never endangered the existence of the world. It never even interfered with the way of life of other societies with the object of making the whole world a replica of China. It let the rest of the world be and it was not tormented by the thought that there were great differences in it. It was content to live its own life and let others live theirs.
Napoleon, who has often been depicted as a megalomaniac, advised Europe to let China be. But Napoleon lost and Britain won, and so China could not be let be. The pacific giant had to be poked and kicked and tormented so that England might achieve the destiny, set for it by Milton, of teaching nations how to live.
It has taken China a long time to recover from the destruction wrought on it by Britain, and by others following its example, and to establish a viable existence for itself in the destructive world order pioneered by Britain and consolidated by Britain's offspring, the United States.
The first Opium War on China was launched 170 years ago by the great liberal ideologue, T.B. Macaulay, the British Minister for War. China was compelled to become part of the world market being established by Britain—in the first instance by opening itself to the sale of opium by British merchants in India under a State monopoly established by the Imperial masters of India.
Having gone through many experiments, China has now opted for a kind of capitalism. And it is militarily secure. That means it has the capacity to destroy the world by nuclear bombings. A capacity to destroy the world by nuclear weapons has been the only sure means of defence ever since the wanton nuclear bombing of Japan by the USA in August 1945 in a war that it had already won.
China could only establish its independence by breaking with the capitalism that had been implanted in it by the imperialists. It withdrew from he world market in order to become sovereign. But such a vast proportion of the world's population living outside the Ameranglian system was seen as intolerable by capitalist civilisation. China in that phase was not seen as a rival by the West but as a force of evil which there could be no relations of normal hostility with. It is not very long since the chances of taking out China in a first-strike nuclear war, using Formosa/Taiwan as the moral detonator, was being seriously thought about. But now China has re-shaped itself into a rival within the capitalist world market, and so the fundamentalist fervour of the capitalist West, which compelled it to become capitalist, is no longer functional against it.
Capitalist China now has a capitalist grip on the heartland of imperialist capitalism and the West is in a dilemma.
Twenty years ago, when Japanese capitalism was doing too well in the world market, the USA ordered it to row back. And the American car unions seconded the virtual ultimatum issued by Washington. They reminded the Japanese of what they had already done to it once, and indicated that they were ready to do it again. And, since Japan was a helpless Cold War construction in world affairs (disarmed in defeat, but only lightly punished, and provided with a hot-house economic environment so that it might be a bastion against Communism), it rowed back.
Many other States, less spectacularly successful than Japan, who had been accorded 'corruption' and protectionist privileges for Cold War purposes, had those privileges withdrawn when the Cold War ended in a capitalist victory. Indonesia is the outstanding case in point. A Cold War regime was established there in the mid-1960s, in which a million people were killed with the active support of the USA and Britain. Then in the 1990s it was told that the party was over; a comparatively stable regime which had been built on the ultra-violent coup of 1960 was subverted, and the country was thrown into turmoil.
The dilemma facing the West now is that it cannot deal with the unexpected development of the evil Cold War enemies as it dealt with the buffer states constructed against those enemies.
China is safeguarded by nuclear weapons and capitalism. The same kind of moralising fundamentalist fervour cannot be hyped up against a trade rival as it could against the Evil Empire. At least not on the spur of the moment. (It is true that it was done against Germany by Britain in 1914 and by the USA against Japan in 1941, but that was before the West went through the traumatic experience of seeing half the world taken away from its market, and campaigning for half a century to convert its Communist enemies to trade rivals.)
China will have the capitalist development that the West insisted on. So will Russia. And so will every country that does not see its destiny as being a passive victim of Western capitalism.
And, if that means the destruction of the planet, so be it. Capitalism is incapable of self-restraint. It exists in a medium of competition internally and internationally. The market must expand, regardless of the degree of development of the productive forces, otherwise there will be catastrophic economic collapse. Marx has not yet been proved wrong. Expanded reproduction of capital in the medium of the "universal equivalent" of all values (money)—which tends to reduce all values to market values, and to accord a market value to every feature of human life—that is how it works. And, if the planet is not robust enough to survive general market competition—well, Poor Planet!
The Copenhagen Climate Change Summit highlighted the fact that the world now hinges on two great capitalist Powers, the USA and China. The USA, which is still the driving force, will not diminish itself. And China will no forgo the development into which Britain and the USA forced it.
And Europe whimpers in the sidelines, moralising about the awfulness of things, and trying to patch up the problems threatening its own little world, problems which it has brought on itself.
Greece is not balancing its books. Why not? Because it invested in the new capitalist States in Eastern Europe which the West retrieved from Russian hegemony at the end of the Cold War and used as frontier states in the attempt to destroy Russia. Those States had their mushroom growth of externally-driven capitalism. The Greek banks invested in them. There is no such thing as Saving in mature capitalism, only Consumption and Investment. Saving that is not invested withers. So the Greek banks invested in the boomtown capitalism of anti-Russian Eastern Europe. And financial links developed between Greece and Dubai, one of the pseudo-states set up by Britain and maintained by the USA on the Arabian side of the Gulf. And Dubai, spending its unearned income too lavishly on frivolous projects which collapsed because of the recession in the West—such as the artificial island in the shape of Ireland as a novelty tourist resort for the stinking rich—collapsed financially. And the facade called the United Arab Emirates, which it took to be its guarantor, refused to bail it out. After this abyss opened, a rescuer appeared in the shape of Abu Dhabi, but it was too late: 'investor confidence' was badly damaged.
So Greece suffered through having participated in two mirages projected by the West. It failed to balance its books. It got into a scale of deficit financing exceeding the limits set by Germany for countries in the Euro zone.
It was run by a capitalist Government until this Autumn. When a Socialist Government took over, it found that its predecessor had cooked the books, and that the actual deficit was much bigger than was said. The European Union demanded drastic cuts in wages and public spending. The Greeks refused to comply fully. So the Euro finds itself in a dilemma. What will happen to it if the EU lets Greece go bust? And how does a Euro-State go bust?
Ireland gave a bad example to the EU by surrendering to the demand that it hold a second Lisbon Referendum to reverse the results of the first, and then by cutting to order. Of course, the case of Ireland is not at all comparable to that of Greece. Ireland had been through ten years of a wild and reckless boom—though a kind of necessary recklessness—and had built up fat which might be reduced while leaving a substantial net gain. It had to concede to EU demands, but it was advantageous for it to concede. Nevertheless, it gave bad example to the European centre about what to expect from States on the margin.
Greece behaved prudently by comparison with Ireland. But prudence is not a reliable virtue in lottery capitalism. So Greece is in trouble. But Greece is a more substantial society than Ireland—it is more substantially itself—so there is a possibility that it might defy the EU to do its worst.
A class factor is now clearly visible in the EU. What is required from States is clear signs of action against wages and social services.
The EU itself now has a kind of existential problem. It no longer knows what it is. It now has an incoherent triple or quadruple structure:
A. the core States,
B. the Euro-States,
C. the States added at the same time as Britain, which are Euro-States,
D. the States added at the same time as Britain, which are not Euro-States,
E. Britain, and
F. the more recently added States which are not Euro-States.
Many of the latter are in economic collapse, but that does not affect the Euro.
But the outstanding anomaly is that the core States have admitted Britain to the core, while allowing it to be outside the Euro.
Currencies will speculate against each other. It's natural where currencies are convertible. If the market is accepted as the medium in which the world must exist, there can be no reasonable complaint about speculation. When the EU constructed the Euro and allowed Britain to opt out, it accepted an enemy within the Union—a legitimate Quisling.
It is Ireland that suffers particularly from British currency autarky. It is the only European country with a land border with Britain, which has targetted it as an easy market. It makes no sense that the Irish economy should have to compete within the EU against an EU economy which is free to engage in currency devaluation against it. What is required is an EU ultimatum to dissolve Sterling into the Euro in short order, or face EU tariffs in the Euro-States.
Charlie McCreevy Doesn't Get It
Charlie McCreevy is the outgoing EU Commissioner for the Internal Market. In this job he has facilitated the rampage of the 'Anglo' version of capitalism in the Union. He is to be replaced by Michel Barnier, nominated by President Nicolas Sarkozy of France. This appointment was certainly a blow to the Anglos. Prime Minister Gordon Brown took his eye of the ball in the recent jockeying for positions. He tried to get the Presidency for Blair and further/or in the alternative tried to get the post of Foreign High Representative for either Baroness Ashton or Peter Mandelson. He paid less attention to the Commissioner posts. As a result Britain failed to get any of the vital economic portfolios. When Brown realised that a Frenchman was to get the Internal Market portfolio, he is said to have rung Commission President Barroso and begged him to strip out the financial services element of the job. Barroso wavered, but it is quite likely that France and Germany told him that such an innovation was unacceptable. Brown had to rest content with having officials of British origin prominent in Barnier's team.
In a speech to the Association of European Journalists in Dublin on 18th December, McCreevy lambasted Sarkozy for describing the appointment of Barnier as "a defeat for Anglo Saxon capitalism". He continued:
"President Sarkozy has laid to rest once and for all the myth that EU commissioners, certainly French ones, when they go to Brussels, are expected to leave aside their home member state national interests and political priorities and act exclusively in the community interest… like many of his fellow countrymen, he does not see the European Commission as a commission for the advancement of European interests. He sees it as a commission for the advancement of French interests…" (19.12.09 IT).
What McCreevy has missed is that a defeat for Anglo-capitalism, which he represented, is not just a French gain: it is a gain for European Social Capitalism, based on Christian-Democratic ideals, on which the EU was founded. Anglo Capitalism has run the world into deep financial crisis, and that has given France, Germany and the rest the self-confidence to call a halt to its rampage through the Union. To put it into the prevailing shorthand: the appointment of Barnier represents a victory of Berlin over Boston.
CONTENTS
China & Greece.
Budget 2010?.
Copenhagen, Deja Vu All Over Again.
European Jewish Nation.
Charlie McCreevy Doesn't Get It.
China On Climate Change.
Editorial Digest
David McWilliams And The Crisis.
UN Authority For Afghan War?
Save €1/4 Million By Withdrawing Irish Troops From Afghanistan.
Libya & Megrahi.
Kilmichael & First Dáil.
Shorts from the Long Fellow).
Nina Fishman.
An Antidote To Remembrance.
Es Ahora
The Londonderry Line.
The Cynical Sindo Hijacking Of Joe Sherlock.
Biteback: Bashing Israel?
Does It Stack Up?
Johnston And The Lost Revolution.
The Great Hunger.
Labour
Comment
Unions Fail To Save Social Partnership.